-----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, UInrQZzZVPh1XvXNja/ni/1ncHVDltTtMr/vC3eWjuS6XAujxdmI6zkGwDW7fOxw 5sKeLs+TyBLgo55iIPGb5A== 0000912057-00-013397.txt : 20000327 0000912057-00-013397.hdr.sgml : 20000327 ACCESSION NUMBER: 0000912057-00-013397 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20000324 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: OEA INC /DE/ CENTRAL INDEX KEY: 0000073864 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 362362379 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: SEC FILE NUMBER: 005-12466 FILM NUMBER: 577953 BUSINESS ADDRESS: STREET 1: 34501 E QUINCY AVE CITY: DENVER STATE: CO ZIP: 80250 BUSINESS PHONE: 3036931248 MAIL ADDRESS: STREET 1: P O BOX 100488 CITY: DENVER STATE: CO ZIP: 80250 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AUTOLIV INC CENTRAL INDEX KEY: 0001034670 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 510378542 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 3350 AIRPORT RD CITY: OGDEN STATE: UT ZIP: 84405 BUSINESS PHONE: 8016299800 MAIL ADDRESS: STREET 1: BOX 70381 STREET 2: SE 107 24 STOCKHOLM CITY: SWEDEN SC TO-T 1 SCHED TO-T - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE TO (RULE 14D-100) TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 OEA, INC. (Name of Subject Company (Issuer)) AUTOLIV, INC. OEA MERGER CORPORATION (Names of Filing Persons (Offerors)) COMMON STOCK, $0.10 PAR VALUE PER SHARE (INCLUDING ASSOCIATED RIGHTS) (Title of Class of Securities) 670826106 (CUSIP Number of Class of Securities) ------------------------ JORGEN SVENSSON VICE PRESIDENT--LEGAL AFFAIRS, GENERAL COUNSEL AND SECRETARY WORLD TRADE CENTER KLARABERGSVIADUKTEN 70 S-107 24 STOCKHOLM, SWEDEN 46(8) 587 20 600 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on behalf of Filing Persons) COPY TO: SCOTT V. SIMPSON SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP ONE CANADA SQUARE CANARY WHARF, LONDON E14 5DS 44 (20) 7519 7040 CALCULATION OF FILING FEE
TRANSACTION VALUATION*: AMOUNT OF FILING FEE: $219,493,280 $43,899
* Estimated for purposes of calculating the amount of the filing fee only. This calculation assumes the purchase of all outstanding shares of common stock, par value $0.10 per share of OEA, Inc. (the "Common Stock"), including associated rights to purchase common stock (the "Rights" and together with the Common Stock, the "Shares"), at a price per Share of $10.00 in cash. As of March 23, 2000, there were (i) 20,621,691 Shares outstanding and (ii) 1,327,637 Shares reserved for issuance for outstanding options, warrants and other rights to acquire Shares from the Company. The amount of the filing fee, calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50(th) of one percent of the value of the transaction. / / Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount previously paid: Not applicable Filing Party: Not applicable Form or registration no.: Not applicable Date Filed: Not applicable.
/ / Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: /X/ third-party tender offer subject to Rule 14d-1. / / issuer tender offer subject to Rule 13e-4. / / going-private transaction subject to Rule 13e-3. / / amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: / / - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- This Tender Offer Statement on Schedule TO relates to the third-party tender offer by OEA Merger Corporation, Inc., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Autoliv, Inc., a Delaware corporation ("Parent"), to purchase all of the issued and outstanding shares of common stock, par value $0.10 per share (the "Common Stock"), of OEA, Inc., a Delaware corporation (the "Company"), and the associated rights to purchase Common Stock (the "Rights" and, together with the Common Stock, the "Shares"), at a purchase price of $10.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 24, 2000 (the "Offer to Purchase"), a copy of which is attached hereto as Exhibit (a)(1)(A), and in the related Letter of Transmittal (the "Letter of Transmittal"), a copy of which is attached hereto as Exhibit (a)(1)(B) (which, together with the Offer to Purchase, as amended or supplemented from time to time, constitute the "Offer"). The information in the Offer to Purchase, including all schedules and annexes thereto, is hereby expressly incorporated herein by reference in response to all the items of this Schedule TO, except as otherwise set forth below. ITEM 1. SUMMARY TERM SHEET. The information set forth in the Summary Term Sheet in the Offer to Purchase is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION. (a) The name of the subject company is OEA, Inc., a Delaware corporation. The Company's executive offices are located at 34501 East Quincy Avenue, P.O. Box 100488 Denver, Colorado, 80250, telephone (303) 693-1248. (b) The class of securities to which this statement relates is the Common Stock, par value $0.10 per share, including the associated Rights, of the Company, of which 20,621,691 shares were issued and outstanding as of March 12, 2000. The information set forth on the cover page and in the "Introduction" of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer to Purchase is incorporated herein by reference. ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON. (a) This Tender Offer Statement is filed by Parent and Purchaser. The information set forth in Section 8 ("Certain Information Concerning Parent and Purchaser") of the Offer to Purchase and on Schedule I thereto is incorporated herein by reference. (b) The information set forth in Section 8 ("Certain Information Concerning Parent and Purchaser") of the Offer to Purchase and on Schedule I thereto is incorporated herein by reference. (c) The information set forth in Section 8 ("Certain Information Concerning Parent and Purchaser") of the Offer to Purchase and on Schedule I thereto is incorporated herein by reference. During the last five years, none of Purchaser or Parent or, to the best knowledge of Purchaser or Parent, any of the persons listed on Schedule I to the Offer to Purchase (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of such laws. 2 (d) The information set forth in the Offer to Purchase is incorporated herein by reference. Information concerning the Offer to Purchase can be found on the World Wide Web at http:// www.autoliv.com. ITEM 4. TERMS OF THE TRANSACTION. The information set forth in the Offer to Purchase is incorporated herein by reference. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. (a) The Company is a Delaware corporation with its principal executive offices located at 34501 East Quincy Avenue, P.O. Box 100488, Denver, Colorado, 80250. The Company's telephone number is (303) 693-1248. The Company produces high-reliability, propellant-actuated safety devices for the automotive and aerospace industries. Its automotive safety products division designs, develops, tests and manufactures propellant-actuated devices for use in automotive safety products, which are currently single-stage hybrid inflators (passenger, driver and side-impact) and electric initiators. These products are sold to automotive module and inflator manufacturers, which in turn sell their products directly to automobile manufacturers. The Company's aerospace division, among other things, designs, develops, and manufactures propellant and explosive-actuated devices used by the United States Government and major military and aerospace companies. The Company is a supplier of airbag initiators and airbag inflators to the Parent. Parent purchased approximately 8.8 million and 9.3 million airbag initiators during the calendar years ended December 31, 1999 and December 31, 1998 for an aggregate price of approximately $14.5 million and $19.6 million respectively. Parent purchased approximately 200,000 airbag inflators from the Company during the calendar year ended December 31, 1999 for an aggregate purchase price of $2.7 million. Parent purchased no airbag inflators from the Company during the calendar year ended December 31, 1998. Except as disclosed above in this Item 5(a), during the past two years, there have been no transactions that would be required to be disclosed under this Item 5(a) between any of Purchaser or Parent or, to the best knowledge of Purchaser and Parent, any of the persons listed on Schedule I to the Offer to Purchase, and the Company or any of its executive officers, directors or affiliates. (b) The information set forth in the Introduction, Section 10 (Background of the Offer and the Merger; Past Contacts or Negotiations with the Company) and Section 11 (The Merger Agreement) of the Offer to Purchase is incorporated herein by reference. Except as set forth in the Introduction, Section 10 and Section 11 of the Offer to Purchase, there have been no material contacts, negotiations or transactions during the past two years which would be required to be disclosed under this Item 5(b) between any of Purchaser or Parent or any of their respective subsidiaries or, to the best knowledge of Purchaser and Parent, any of those persons listed on Schedule I to the Offer to Purchase and the Company or its affiliates concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets. ITEM 6. PURPOSE OF THE TRANSACTION AND PLANS OR PROPOSALS. The information set forth in the Introduction, Section 10 ("Background of the Offer and the Merger; Past Contacts or Negotiations with the Company"), Section 11 ("The Merger Agreement"), Section 12 ("Purpose of the Offer and the Merger; Plans for the Company"), Section 13 ("Certain Effects of the Offer") and Section 14 ("Dividends and Distributions") of the Offer to Purchase is incorporated herein by reference. ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The information set forth in Section 9 ("Source and Amount of Funds") of the Offer to Purchase is incorporated herein by reference. 3 ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. The information set forth in the Introduction and Section 8 ("Certain Information Concerning Parent and Purchaser") of the Offer to Purchase is incorporated herein by reference. ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED. The information set forth in the Introduction and Section 17 ("Fees and Expenses") of the Offer to Purchase is incorporated herein by reference. ITEM 10. FINANCIAL STATEMENTS. Not applicable. ITEM 11. ADDITIONAL INFORMATION. (a) The information set forth in Section 11 ("The Merger Agreement"), Section 13 ("Certain Effects of the Offer") and Section 16 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by reference. (b) The information set forth in the Offer to Purchase and Letter of Transmittal is incorporated herein by reference. ITEM 12. EXHIBITS. (a)(1)(A) Offer to Purchase dated March 24, 2000. (a)(1)(B) Letter of Transmittal. (a)(1)(C) Notice of Guaranteed Delivery. (a)(1)(D) Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(1)(E) Letter to clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(1)(F) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(1)(G) Summary Advertisement as published on March 24, 2000. (a)(1)(H) Press Release dated March 13, 2000. (b) Credit Agreement dated March 22, 2000 among Autoliv ASP, Inc. as Borrower, Autoliv, Inc. as Guarantor, Skandinaviska Enskilda Banken AB (publ) as Lender and SEB Debt Capital Markets as Arranger. (d) The Amended and Restated Agreement and Plan of Merger, dated as of March 12, 2000, by and among Autoliv, Inc., OEA Merger Corporation and OEA, Inc. (g) None. (h) None. ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3. Not applicable. 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. AUTOLIV, INC. By: /s/ JORGEN SVENSSON ----------------------------------------- Name: Jorgen Svensson Title: VICE PRESIDENT--LEGAL AFFAIRS, GENERAL COUNSEL AND SECRETARY
OEA MERGER CORPORATION By: /s/ JORGEN SVENSSON ----------------------------------------- Name: Jorgen Svensson Title: VICE PRESIDENT AND TREASURER
Date: March 24, 2000 5 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ----------- ----------- (a)(1)(A) Offer to Purchase dated March 24, 2000. (a)(1)(B) Letter of Transmittal. (a)(1)(C) Notice of Guaranteed Delivery. (a)(1)(D) Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(1)(E) Letter to clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(1)(F) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(1)(G) Summary Advertisement as published on March 24, 2000. (a)(1)(H) Press Release dated March 13, 2000. (b) Credit Agreement dated March 22, 2000 among Autoliv ASP, Inc. as Borrower, Autoliv, Inc. as Guarantor, Skandinaviska Enskilda Banken AB (publ) as Lender and SEB Debt Capital Markets as Arranger. (d) Amended and Restated Agreement and Plan of Merger, dated as of March 12, 2000, by and among Autoliv, Inc., OEA Merger Corporation and OEA, Inc.
EX-99.(A)(1)(A) 2 EXHIBIT 99(A)(1)(A) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING ASSOCIATED RIGHTS) OF OEA, INC. AT $10.00 NET PER SHARE BY OEA MERGER CORPORATION AN INDIRECT WHOLLY OWNED SUBSIDIARY OF AUTOLIV, INC. - ---------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 24, 2000, UNLESS THE OFFER IS EXTENDED. --------------------------------------------------------------------------- THE OFFER (AS HEREINAFTER DEFINED) IS BEING MADE IN CONNECTION WITH THE AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, DATED AS OF MARCH 12, 2000 (THE "MERGER AGREEMENT"), BY AND AMONG OEA, INC. (THE "COMPANY"), AUTOLIV, INC. ("PARENT") AND OEA MERGER CORPORATION ("PURCHASER"). THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (I) DETERMINED THAT THE OFFER, THE MERGER (AS HEREINAFTER DEFINED) AND THE MERGER AGREEMENT ARE ADVISABLE, FAIR TO, AND IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS, (II) APPROVED THE MERGER, THE OFFER, THE MERGER AGREEMENT AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND (III) RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES (AS HEREINAFTER DEFINED) PURSUANT THERETO AND APPROVE AND ADOPT THE MERGER AGREEMENT. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER A NUMBER OF SHARES OF COMMON STOCK PAR VALUE $0.10 PER SHARE (THE ``COMMON STOCK") OF THE COMPANY, INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE COMMON STOCK (THE "RIGHTS" AND TOGETHER WITH THE COMMON STOCK, THE "SHARES"), WHICH REPRESENTS MORE THAN FIFTY PERCENT OF THE TOTAL ISSUED AND OUTSTANDING SHARES ON A FULLY DILUTED BASIS (EXCLUDING ANY SHARES HELD BY THE COMPANY OR ANY OF ITS SUBSIDIARIES) AND (II) THE EXPIRATION OR TERMINATION OF ANY AND ALL WAITING PERIODS APPLICABLE TO THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED. THE OFFER IS ALSO SUBJECT TO OTHER CONDITIONS. SEE SECTION 15. THE OFFER IS NOT CONDITIONED UPON PARENT OR PURCHASER OBTAINING FINANCING. The Information Agent for the Offer is: Georgeson Shareholder Communications Inc. 17 State Street, 10(th) Floor New York, N.Y. 10004 Brokers and Bankers Call Collect (212) 440-9800 Or All Others Call Toll Free (800) 223-2064 March 24, 2000 IMPORTANT Any stockholder desiring to tender all or any portion of such stockholder's Shares should either (1) complete and sign the Letter of Transmittal (or a manually signed facsimile thereof) in accordance with the instructions in the Letter of Transmittal; mail or deliver it and any other required documents to the Depositary indicated thereon, and either deliver the certificate(s) for such tendered Shares to the Depositary along with the Letter of Transmittal or tender such Shares pursuant to the procedures for book-entry transfer set forth in Section 2 of this Offer to Purchase, or (2) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for the stockholder. Stockholders having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if they desire to tender such Shares. Unless the context requires otherwise, all references to Shares herein shall include the associated Rights. The Rights are presently evidenced by the certificates for the Shares and a tender by a stockholder of such stockholder's shares of Common Stock will also constitute a tender of the associated Rights. A stockholder who desires to tender Shares and whose certificate(s) for Shares is not immediately available, or who cannot comply with the procedures for book-entry transfer on a timely basis, may tender such Shares by following the procedures for guaranteed delivery set forth in Section 2 of this Offer to Purchase. Questions and requests for assistance may be directed to the Information Agent at its address and telephone number set forth on the back cover of this Offer to Purchase. Requests for additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may also be directed to the Information Agent. Purchaser will not pay any fee or commission to any broker or dealer or to any other person (other than to the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. 2 SUMMARY TERM SHEET OEA Merger Corporation is offering to purchase all of the outstanding shares of common stock of OEA, Inc. and the rights to purchase common stock associated with the shares for $10.00 per share in cash. The following are some of the questions that you, as a stockholder of OEA, Inc., may have and the answers to those questions. We urge you to read carefully the remainder of this offer to purchase and the letter of transmittal because the information in this summary term sheet is not complete. Additional important information is contained in the remainder of this offer to purchase and the letter of transmittal. - - WHO IS OFFERING TO BUY MY SECURITIES? Our name is OEA Merger Corporation. We are a Delaware corporation and have carried on no business other than in connection with the merger agreement. We are an indirect wholly owned subsidiary of Autoliv, Inc., a Delaware corporation. See the "Introduction" and Section 8. - - WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER? We are offering to purchase all of the outstanding common stock of OEA, Inc. and the rights to purchase common stock associated with such shares. See the "Introduction" and Section 1. - - HOW MUCH ARE YOU OFFERING TO PAY, WHAT IS THE FORM OF PAYMENT AND WILL I HAVE TO PAY ANY FEES OR COMMISSIONS? We are offering to pay $10.00 per share, net to you, in cash. If you are the record owner of your shares and you tender your shares to us in the offer, you will not have to pay brokerage fees or similar expenses. If you own your shares through a broker or other nominee, and your broker tenders your shares on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply. See the "Introduction." - - DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT? Autoliv ASP, Inc., our direct parent company, will provide us with sufficient funds to purchase all shares validly tendered and not withdrawn in the offer and to provide funding for the merger which is expected to follow the successful completion of the offer. We anticipate that a significant portion of these funds will be obtained from the existing resources of Autoliv ASP, Inc., including short term borrowings in the ordinary course of business. For the remainder, Autoliv, Inc. has obtained a credit agreement dated March 22, 2000 among Autoliv ASP, Inc. as borrower, Autoliv, Inc. as guarantor, Skandinaviska Enskilda Banken AB (publ) as lender and SEB Debt Capital Markets as arranger. The offer, however, is not conditioned upon any financing arrangements. See Section 9. - - IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER? We do not think our financial condition is relevant to your decision whether to tender in the offer because the form of payment consists solely of cash. Autoliv, Inc. has arranged for a significant portion of our funding to come from the existing resources of Autoliv ASP, Inc., including short term borrowings in the ordinary course of business. For the remainder, Autoliv, Inc. has obtained a credit agreement dated March 22, 2000 among Autoliv ASP, Inc. as borrower, Autoliv, Inc. as guarantor, Skandinaviska Enskilda Banken AB (publ) as lender and SEB Debt Capital Markets as arranger. Additionally, the offer is not subject to any financing condition. See Section 9. 3 - - HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER? You will have at least until 12:00 midnight, New York City time, on Monday, April 24, 2000 to tender your shares in the offer. Further, if you cannot deliver everything that is required in order to make a valid tender by that time, you may be able to use a guaranteed delivery procedure, which is described later in this offer to purchase. See Section 1 and Section 2. - - CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES? Subject to the terms of the merger agreement, we can extend the offer. We have agreed in the merger agreement that we may extend the offer without OEA, Inc.'s consent in the following circumstances: - If necessary to satisfy any condition of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, we may extend for 40 business days; or - If any of the conditions to the offer, other than the condition that more than 50% of the outstanding shares of OEA, Inc. on a fully diluted basis (excluding shares held by OEA, Inc. or any of its subsidiaries), be validly tendered and not properly withdrawn, have not been satisfied or waived, we may extend the offer for up to 20 business days; - If all conditions to the offer have been satisfied or waived but less than 90% of the outstanding shares of OEA, Inc. on a fully diluted basis (excluding shares held by OEA, Inc. or any of its subsidiaries) have been validly tendered and not properly withdrawn, we may extend the offer for up to four successive five business day periods (i.e., up to 20 business days); - If any conditions to the offer have not been satisfied or waived, and another takeover proposal has been made or publicly disclosed by a person other than us, including OEA, Inc. and any of its subsidiaries and affiliates, or if we otherwise learn that such a takeover proposal has been made or publicly proposed, we may extend the offer until ten days after the termination of such other takeover proposal, but not later than the earlier of June 30, 2000 and the minimum time period necessary to satisfy all conditions that have not been satisfied or waived. - - HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED? If we extend the offer, we will inform First Chicago Trust Company of New York (which is the depositary for the offer) of that fact and will make a public announcement of the extension, not later than 9:00 a.m., New York City time, on the next business day after the day on which the offer was scheduled to expire. See Section 1. - - WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER? - We are not obligated to purchase any shares which are validly tendered unless the number of shares validly tendered and not properly withdrawn before the expiration date of the offer represents more than 50% of the outstanding shares of OEA, Inc. on a fully diluted basis (excluding shares held by OEA, Inc. or any of its subsidiaries). We call this condition the "minimum condition". - We are not obligated to purchase shares which are validly tendered if there is a material adverse change in the financial condition, business, operations, liquidity, property or assets of OEA, Inc. and its subsidiaries (considered as one enterprise) or if any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has not expired or been terminated. The offer is also subject to a number of other conditions. We can waive any of the conditions to the offer without OEA, Inc.'s consent other than the minimum condition. See Section 15. 4 - - HOW DO I TENDER MY SHARES? To tender shares, you must deliver the certificates representing your shares, together with a completed and duly executed letter of transmittal, to First Chicago Trust Company of New York, the depositary for the offer, not later than the time the tender offer expires. If your shares are held in street name, the shares can be tendered by your nominee through The Depository Trust Company. If you cannot get any document or instrument that is required to be delivered to the depositary by the expiration of the tender offer, you may get a little extra time to do so by having a broker, a bank or other fiduciary which is an eligible institution guarantee that the missing items will be received by the depositary within three New York Stock Exchange trading days. For the tender to be valid, however, the depositary must receive the missing items within that three trading day period. See Section 2. - - UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES? You can withdraw shares at any time until the offer has expired and, if we have not agreed by April 24, 2000 (or such later date as may apply if the offer is extended) to accept your shares for payment, you can withdraw them at any time after such time until we accept shares for payment. See Section 3. - - HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES? To withdraw shares, you must deliver a written notice of withdrawal, or a facsimile of one, with the required information to the depositary while you still have the right to withdraw the shares. See Section 3. - - WHAT DOES OEA, INC.'S BOARD OF DIRECTORS THINK OF THE OFFER? We are making the offer pursuant to the merger agreement, which has been unanimously approved by the board of directors of OEA, Inc. The board of directors of OEA, Inc. unanimously (1) determined that the offer, the merger and the merger agreement are advisable, fair to, and in the best interests of, its stockholders, (2) approved the merger, the offer, the merger agreement and the other transactions contemplated by the merger agreement and (3) recommends that its stockholders accept the offer and tender their shares pursuant thereto and approve and adopt the merger agreement. See the "Introduction." - - IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL OEA, INC. CONTINUE AS A PUBLIC COMPANY? No. Following the purchase of shares in the offer we expect to consummate the merger, and following the merger, OEA, Inc. no longer will be publicly owned. Even if for some reason the merger does not take place, if we purchase all the tendered shares, there may be so few remaining stockholders and publicly held shares that OEA, Inc. common stock will no longer be eligible to be traded on the New York Stock Exchange or on any other securities exchange, there may not be a public trading market for OEA, Inc. stock, and OEA, Inc. may cease making filings with the SEC or otherwise cease being required to comply with SEC rules relating to publicly held companies. See Section 13. - - WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE OEA, INC. SHARES ARE NOT TENDERED IN THE OFFER? Yes. If we accept for payment and pay for more than 50% of the outstanding shares of OEA, Inc., we will be merged with and into OEA, Inc. If that merger takes place, Autoliv ASP, Inc. (which in turn is owned by Autoliv, Inc.) will own all of the shares of OEA, Inc. and all remaining stockholders of 5 OEA, Inc. (other than us and stockholders properly exercising dissenters' rights) will receive $10.00 per share in cash. See the "Introduction" and Section 11. - - IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES? If the merger described above takes place, stockholders not tendering in the offer will receive the same amount of cash per share that they would have received had they tendered their shares in the offer, subject to any rights of appraisal properly exercised under Delaware law. Therefore, if the merger takes place, the only difference to you between tendering your shares and not tendering your shares is that you will be paid earlier and will not have appraisal rights if you tender your shares. However, if for some reason the merger does not take place, the number of stockholders of OEA, Inc. and the number of shares of OEA, Inc. which are still in the hands of the public may be so small that there no longer will be an active public trading market (or, possibly, there may not be any public trading market) for OEA, Inc. common stock. Also, as described above, OEA, Inc. may cease making filings with the SEC or otherwise being required to comply with the SEC rules relating to publicly held companies. See the "Introduction" and Section 13. - - WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE? On March 10, 2000, the last trading day before we announced the tender offer and the possible subsequent merger, the closing price of OEA, Inc. common stock reported on the New York Stock Exchange was $7.06 per share. On March 23, 2000, the last trading day before we commenced the tender offer, the closing price of OEA, Inc. common stock reported on the New York Stock Exchange was $9.63 share. We advise you to obtain a recent quotation for shares of OEA, Inc. common stock in deciding whether to tender your shares. See Section 6. - - WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER? You can call Georgeson Shareholder Communications Inc. at (800) 223 2064 (toll free). Georgeson Shareholder Communications Inc. is acting as the information agent for our tender offer. See the back cover of this offer to purchase. 6 To the Holders of Common Stock of OEA, Inc.: INTRODUCTION OEA Merger Corporation ("Purchaser"), a Delaware corporation and an indirect wholly owned subsidiary of Autoliv, Inc., a Delaware corporation ("Parent"), hereby offers to purchase all outstanding shares of common stock, par value $0.10 per share (the "Common Stock"), of OEA, Inc., a Delaware corporation (the "Company" or "OEA, Inc."), together with the associated rights to purchase Common Stock issued pursuant to the Rights Agreement, as amended, dated as of March 25, 1998 (the "Rights Agreement"), between the Company and LaSalle Bank, N.A., as Rights Agent (the "Rights" and, together with the Common Stock, the "Shares"), at a price of $10.00 per Share (the "Offer Price"), net to the selling stockholder in cash, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer"). Stockholders of record who hold Shares registered in their own name and tender their Shares directly to the Depositary (as defined below) will not be obligated to pay brokerage fees, commissions, solicitation fees or, subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes, if any, on the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a bank or broker should check with such institution as to whether they will be charged any service fees. However, any tendering stockholder or other payee who fails to complete and sign the Substitute Form W-9 that is included in the Letter of Transmittal may be subject to a required federal backup withholding tax of 31% of the gross proceeds payable to such stockholder or other payee pursuant to the Offer. See Section 2. Purchaser will pay all charges and expenses of Georgeson Shareholder Communications Inc., as Information Agent (the "Information Agent"), and First Chicago Trust Company of New York, as Depositary (the "Depositary"), incurred in connection with the Offer. See Section 17. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER THAT NUMBER OF SHARES WHICH REPRESENTS MORE THAN FIFTY PERCENT OF THE TOTAL ISSUED AND OUTSTANDING SHARES ON A FULLY DILUTED BASIS (EXCLUDING ANY SHARES HELD BY THE COMPANY OR ANY OF ITS SUBSIDIARIES) (THE "MINIMUM CONDITION") AND (II) THE EXPIRATION OR TERMINATION OF ANY AND ALL WAITING PERIODS APPLICABLE TO THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"). THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 15. For purposes of the Offer, "on a fully diluted basis" means, as of any time, on a basis that includes the number of Shares that are actually issued and outstanding plus the maximum number of Shares that the Company may be required to issue pursuant to obligations under stock options, warrants and other rights or securities convertible into shares of Common Stock, whether or not currently exercisable. The Offer is being made pursuant to an Amended and Restated Agreement and Plan of Merger, dated as of March 12, 2000 (the "Merger Agreement"), by and among Parent, Purchaser and the Company. The Merger Agreement provides, among other things, that, upon the terms and subject to the conditions therein, as soon as practicable after the consummation of the Offer, Purchaser will be merged with and into the Company (the "Merger"), with the Company being the corporation surviving the Merger (the "Surviving Corporation"). At the effective time of the Merger (the "Effective Time"), each outstanding Share (other than Shares held in the Company's treasury immediately before the Effective Time, and each Share held by Parent, Purchaser, any other subsidiary of Parent or any subsidiary of the Company immediately before the Effective Time, all of which will be cancelled, and other than Shares ("Dissenting Shares") with respect to which appraisal rights are properly exercised 7 under the Delaware General Corporation Law (the "DGCL")) will be converted into and represent the right to receive the Offer Price, subject to any applicable withholding taxes, without interest. See Section 11. THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY (I) DETERMINED THAT THE OFFER, THE MERGER AND THE MERGER AGREEMENT ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS, (II) APPROVED THE MERGER, THE OFFER, THE MERGER AGREEMENT AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND (III) RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER, AND TENDER THEIR SHARES PURSUANT THERETO AND APPROVE AND ADOPT THE MERGER AGREEMENT. The Board has received the written opinion of Deutsche Bank Securities, Inc. ("Deutsche Bank") stating that the proposed consideration to be received by the holders of shares of Common Stock pursuant to the Offer and the Merger is fair to such holders from a financial point of view. A copy of the written opinion of Deutsche Bank, which set forth the assumptions made, procedures followed, matters considered and limitations on the reviews undertaken, are included as annexes to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission (the "Commission") in connection with the Offer, a copy of which is being furnished to stockholders concurrently herewith. Stockholders are urged to read the full text of such opinion carefully. The Company has represented to Parent that as of March 12, 2000, there were 20,621,691 Shares outstanding and there were options and warrants to acquire 1,327,637 Shares outstanding. Neither Parent, Purchaser nor any person listed on Schedule I hereto beneficially owns any Shares. Accordingly, the Minimum Condition will be satisfied if 10,974,665 Shares are tendered in the Offer. The Merger Agreement provides that, promptly following the purchase of and payment for a number of Shares that satisfies the Minimum Condition, and from time to time thereafter, Purchaser shall be entitled to designate the number of directors, rounded up to the next whole number, on the Board that equals the product of (i) the total number of directors on the Board (giving effect to any additional directors elected by Purchaser) and (ii) the percentage that the number of Shares beneficially owned by Parent and Purchaser following the Offer bears to the total number of outstanding Shares, and the Company will take all action within its power to cause Purchaser's designees to be elected or appointed to the Board, including, without limitation, increasing the number of directors, and seeking and accepting resignations of incumbent directors; PROVIDED, HOWEVER, that before the Effective Time, the Board will have at least three directors who are directors on March 12, 2000. See Section 11. The designation of directors by Parent is subject to compliance with the requirements of Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In connection with the Offer and the Merger, the Board has approved an amendment to the Company's Rights Agreement to assure that the Rights are not exercisable as a result of the Offer or the Merger. The information contained herein concerning or attributed to the Company has been supplied by the Company, and all other information contained herein has been supplied by Parent and Purchaser. Although neither the Company nor Parent or Purchaser have any knowledge that would indicate that any statements contained herein based on the information provided by the other are untrue, neither the Company nor Parent or Purchaser take any responsibility for the accuracy or completeness of any information provided by the other or for any failure by the other to disclose events that may have occurred and may affect the significance or accuracy of such information but which are unknown to the Company or Parent and Purchaser, respectively. THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND YOU SHOULD READ THEM IN THEIR ENTIRETY BEFORE MAKING ANY DECISION WITH RESPECT TO THE OFFER. 8 THE TENDER OFFER 1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), Purchaser will accept for payment and pay for all Shares which are validly tendered and not properly withdrawn on or prior to the Expiration Date, as soon as practicable after the Expiration Date. The term "Expiration Date" means 12:00 midnight, New York City time, on Monday, April 24, 2000, unless and until Purchaser (subject to the terms and conditions of the Merger Agreement) shall have extended the period of time for which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by Purchaser, shall expire prior to the purchase of any Shares by Purchaser. The Offer is conditioned upon the satisfaction of the Minimum Condition and the other conditions set forth in Section 15 (collectively, the "Offer Conditions"). Subject to the provisions of the Merger Agreement, Purchaser may waive any or all of the conditions to its obligation to purchase Shares pursuant to the Offer other than the Minimum Condition. If by the initial Expiration Date or any subsequent Expiration Date any or all of the conditions to the Offer have not been satisfied or waived, subject to the provisions of the Merger Agreement, Purchaser may elect to (i) terminate the Offer and return all tendered Shares to tendering stockholders, (ii) waive all of the unsatisfied conditions and, subject to any required extension, purchase all Shares validly tendered by the Expiration Date and not properly withdrawn or (iii) extend the Offer and, subject to the right of stockholders to withdraw Shares until the new Expiration Date, retain the Shares that have been tendered until the expiration of the Offer as extended. Under the terms of the Merger Agreement, neither Parent nor Purchaser may, without the prior written consent of the Company, (i) decrease the Offer Price, (ii) decrease the number of Shares subject to the Offer, (iii) change the form of consideration payable in the Offer, (iv) impose conditions to the Offer in addition to the conditions set forth in Section 15, (v) except as provided in the Merger Agreement or as required by any rule, regulation, interpretation or position of the SEC, change the Expiration Date or (vi) otherwise amend any term of the Offer in a manner adverse to the holders of Shares. In addition, Purchaser may not, without the prior written consent of the Company, waive or amend the Minimum Condition. Notwithstanding the foregoing, Purchaser may, without the consent of the Company, extend the Offer beyond the initial Expiration Date in the following events: (i) if necessary to satisfy any condition of the HSR Act, for a period not to exceed forty (40) business days, (ii) if any of the Offer Conditions (other than the Minimum Condition) shall not have been satisfied or waived for a period not to exceed twenty (20) business days, (iii) if all the Offer Conditions are satisfied or waived, but the number of Shares validly tendered and not withdrawn is less than 90% of the number of then-outstanding Shares on a fully diluted basis (excluding Shares held by the Company or any of its subsidiaries), for four successive five (5) business day periods for an aggregate period not to exceed twenty (20) business days, or (iv) if any of the Offer Conditions (other than the Minimum Condition) shall not have been satisfied or waived and a proposal or offer for a merger or certain other extraordinary transactions (a "Takeover Proposal") has been made or publicly disclosed by a person other than Parent or Purchaser (including the Company and any of its subsidiaries and affiliates), or if Parent or Purchaser otherwise learn that a Takeover Proposal has been made or publicly proposed, for a period of up to ten (10) days after the withdrawal or termination of such Takeover Proposal, such date in no event to exceed the earlier of (x) June 30, 2000, and (y) the minimum time necessary to satisfy all such outstanding Offer Conditions. Subject to the applicable rules and regulations of the SEC and the provisions of the Merger Agreement, Purchaser also expressly reserves the right, in its sole discretion, at any time or from time to time, (i) to terminate the Offer if any of the Offer Conditions have not been satisfied and (ii) to 9 waive any Offer Condition (other than the Minimum Condition) or otherwise amend the Offer in any respect, in each case by giving oral or written notice of such extension, termination, waiver or amendment to the Depositary and by making a public announcement thereof. If Purchaser accepts for payment any Shares pursuant to the Offer, it will accept for payment all Shares validly tendered prior to the Expiration Date and not properly withdrawn, and will promptly pay for all Shares so accepted for payment. The rights reserved by Purchaser in the preceding paragraph are in addition to Purchaser's rights pursuant to Section 15. Any extension, delay, termination or amendment of the Offer will be followed as promptly as practicable 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, in accordance with the public announcement requirements of Rule 14e-1(d) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act, which require that any material change in the information published, sent or given to stockholders in connection with the Offer be promptly disseminated to stockholders in a manner reasonably designed to inform stockholders of such change), and without limiting the manner in which Purchaser may choose to make any public announcement, Purchaser shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. If Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, Purchaser will disseminate additional tender offer materials (including by public announcement as set forth above) and extend the Offer to the extent required by Rules 14d-4(d) and 14e-1 under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of the Offer, other than a change in price, percentage of securities sought or inclusion of or change to a dealer's soliciting fee, will depend upon the facts and circumstances, including the materiality, of the changes. In the SEC's view, an offer should remain open for a minimum of five (5) business days from the date the material change is first published, sent or given to stockholders, and, if material changes are made with respect to information that approaches the significance of price and share levels, a minimum of ten (10) business days may be required to allow for adequate dissemination and investor response. With respect to a change in price or, subject to certain limitations, a change in the percentage of securities sought or inclusion of or change to a dealer's soliciting fee, a minimum ten (10) business day period from the date of such change is generally required to allow for adequate dissemination to stockholders. Accordingly, if, prior to the Expiration Date, Purchaser decreases the number of Shares being sought or increases or decreases the consideration offered pursuant to the Offer, and if the Offer is scheduled to expire at any time earlier than the tenth business day from the date that notice of such increase or decrease is first published, sent or given to stockholders, the Offer will be extended at least until the expiration of such tenth business day. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. In connection with the Offer, the Company has provided Purchaser with the names and addresses of all record holders of Shares and security position listings of Shares held in stock depositories. This Offer to Purchase, the related Letter of Transmittal and other relevant materials will be mailed to registered holders of Shares and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. 10 2. PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES. VALID TENDERS. Except as set forth below, in order for Shares to be validly tendered pursuant to the Offer, the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message (as hereinafter defined) in connection with a book-entry transfer of Shares, 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 on or prior to the Expiration Date, and either (i) certificates representing tendered Shares must be received by the Depositary, or such Shares must be tendered pursuant to the procedure for book-entry transfer set forth below (and confirmation of receipt of such delivery must be received by the Depositary), in each case on or prior to the Expiration Date, or (ii) the guaranteed delivery procedures set forth below must be complied with. No alternative, conditional or contingent tenders will be accepted. SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of Transmittal (i) if such Letter of Transmittal is signed by the registered holder of the Shares tendered therewith, unless such holder has completed the box entitled "Special Payment Instructions" in the Letter of Transmittal, or (ii) if Shares are tendered for the account of a firm that is a member in good standing of the Security Transfer Agent's Medallion Program, (each being hereinafter referred to as an "Eligible Institution"). In all other cases, all signatures on a Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a certificate representing Shares is registered in the name of a person other than the signatory of the Letter of Transmittal (or a manually signed facsimile thereof), or if payment is to be made, or Shares not accepted for payment or not tendered are to be registered in the name of a person other than the registered holder, the certificate must be endorsed or accompanied by an appropriate stock power, in either case signed exactly as the name(s) of the registered holder(s) appears on the certificate, with the signature(s) on the certificate or stock power guaranteed by an Eligible Institution. If the Letter of Transmittal or stock powers are signed or any certificate is endorsed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by Purchaser, proper evidence satisfactory to Purchaser of their authority to so act must be submitted. See Instruction 5 of the Letter of Transmittal. BOOK-ENTRY TRANSFER The Depositary will establish accounts with respect to the Shares at The Depository Trust Company ("DTC") for purposes of the Offer within two (2) business days after the date of this Offer to Purchase, and any financial institution that is a participant in DTC's system may make book-entry delivery of the Shares by causing DTC to transfer such Shares into the Depositary's account in accordance with DTC's procedure for such transfer. However, although delivery of Shares may be effected through book-entry transfer at DTC, a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees, or an Agent's Message and any other required documents, must, in any case, be transmitted to and 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 guaranteed delivery procedures described below must be complied with. The term "Agent's Message" means a message transmitted through electronic means by DTC to, and received by, the Depositary and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares that such participant has received, and agrees to be bound by, the terms of the Letter of Transmittal. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. 11 GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's certificates representing Shares are not immediately available (or the procedures for book-entry transfer cannot be completed on a timely basis) or time will not permit all required documents to reach the Depositary prior to the Expiration Date, such Shares may nevertheless be tendered, PROVIDED that all of the following conditions are satisfied: (1) such tender is made by or through an Eligible Institution; (2) the Depositary receives, prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by Purchaser; and (3) the certificates representing all tendered Shares in proper form for transfer (or confirmation of a book-entry transfer of such Shares into the Depositary's account at DTC), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantees (or, in connection with a book-entry transfer, an Agent's Message) and any other documents required by the Letter of Transmittal are received by the Depositary within three trading days after the date of such Notice of Guaranteed Delivery. A "trading day" is any day on which the New York Stock Exchange is open for business. The Notice of Guaranteed Delivery may be delivered by hand, or may be transmitted by facsimile transmission or mail, to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. DETERMINATION OF VALIDITY. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tendered Shares will be determined by Purchaser in its sole discretion, and its determination shall be final and binding on all persons. Purchaser reserves the absolute right to reject any or all tenders of any Shares that it determines are not in appropriate form or the acceptance for payment of or payment for which may, in the opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in any tender with respect to any particular Shares or any particular stockholder, and Purchaser's interpretation of the terms and conditions of the Offer will be final and binding on all persons. No tender of Shares will be deemed to have been validly made until all defects or irregularities relating thereto have been expressly waived or cured to the satisfaction of Purchaser. None of Purchaser, Parent, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders, nor shall any of them incur any liability for failure to give any such notification. OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth above, a tendering stockholder irrevocably appoints designees of Purchaser as such stockholder's proxy, in the manner set forth in the Letter of Transmittal, with full power of substitution, to the full extent of such stockholder's rights with respect to the Shares tendered by such stockholder and accepted for payment by Purchaser (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after the date of this Offer to Purchase), effective if, when and to the extent that Purchaser accepts such Shares for payment pursuant to the Offer. Upon such acceptance for payment, all prior proxies given by such stockholder with respect to such Shares or other securities accepted for payment will, without further action, be revoked, and no subsequent proxies may be given by such stockholder nor any subsequent written consents executed (and, if given or executed, will not be deemed effective). Such designees of Purchaser will, with respect to such Shares and other securities or 12 rights issuable in respect thereof, be empowered to exercise all voting and other rights of such stockholder as it, in its sole discretion, may deem proper in respect of any annual, special or adjourned meeting of the Company's stockholders, action by written consent in lieu of any such meeting or otherwise. Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, Purchaser must be able to exercise full voting rights with respect to the Shares accepted by Purchaser for payment immediately upon such acceptance. Purchaser's acceptance for payment of Shares tendered pursuant to any of the procedures described above will constitute a binding agreement between the tendering stockholder and Purchaser upon the terms and subject to the conditions of the Offer. To prevent federal backup withholding tax on payments made to stockholders with respect to Shares purchased pursuant to the Offer, each stockholder must provide the Depositary with his correct taxpayer identification number ("TIN") and certify that he is not subject to backup withholding by completing the Substitute Form W-9 included in the Letter of Transmittal. Non-United States holders must submit a completed Form W-8BEN to avoid backup withholding. These forms may be obtained from the Depositary. See Instructions 10 and 11 of the Letter of Transmittal. 3. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer will be irrevocable, except that Shares tendered may be withdrawn at any time prior to the Expiration Date, and, unless theretofore accepted for payment by Purchaser as provided herein, may also be withdrawn on or after May 22, 2000 (or such later date as may apply if the Offer is extended). For a withdrawal of Shares tendered to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase or sent by facsimile transmission to the Depositary at the following numbers: (201) 324-3402 or (201) 324-3403 (please call (201) 222-4707 to confirm receipt of facsimile only). Any notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name(s) in which the certificate(s) representing such Shares are registered, if different from that of the person who tendered such Shares. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, the name of the registered holder and the serial numbers shown on the particular certificates evidencing such Shares to be withdrawn must also be furnished to the Depositary prior to the physical release of the Shares to be withdrawn. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution). If Shares have been tendered pursuant to the procedures for book-entry transfer set forth in Section 2, any notice of withdrawal must specify the name and number of the account at DTC to be credited with such withdrawn Shares and must otherwise comply with DTC's procedures. If Purchaser extends the Offer, is delayed in its acceptance for payment of any Shares tendered, or is unable to accept for payment or pay for Shares tendered pursuant to the Offer, for any reason whatsoever, then, without prejudice to Purchaser's rights set forth herein, the Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent that the tendering stockholder is entitled to and duly exercises withdrawal rights as described in this Section. Any such delay will be accompanied by an extension of the Offer to the extent required by law. Withdrawals of tenders of Shares may not be rescinded, and Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by again following the procedures described in Section 2 at any time prior to the Expiration Date. 13 All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by Purchaser, in its sole discretion, and its determination will be final and binding on all persons. None of Parent, Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal, nor shall any of them incur any liability for failure to give any such notification. 4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), Purchaser will accept for payment and will pay for all Shares validly tendered prior to the Expiration Date and not properly withdrawn, as soon as practicable after the Expiration Date. Purchaser expressly reserves the right to delay acceptance for payment of, or payment for, Shares in order to comply in whole or in part with any applicable law. If Purchaser desires to delay payment for Shares accepted for payment pursuant to the Offer, and such delay would otherwise be in contravention of Rule 14e-1(c) of the Exchange Act, Purchaser will extend the Offer. See Section 1. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates representing such Shares (or a timely confirmation of a book-entry transfer of such Shares into the Depositary's account at DTC, as described in Section 2), (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantees (or, in connection with a book-entry transfer, an Agent's Message), and (iii) any other documents required by the Letter of Transmittal. For purposes of the Offer, Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares tendered prior to the Expiration Date when, as and if Purchaser gives oral or written notice to the Depositary, as agent for the tendering stockholders, of Purchaser's acceptance for payment of such Shares. Payment for Shares so accepted for payment will be made by the deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering stockholders for the purpose of receiving such payment from Purchaser and transmitting such payment to tendering stockholders. If, for any reason whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer is delayed, or Purchaser is unable to accept for payment Shares tendered pursuant to the Offer, then, without prejudice to Purchaser's rights under Section 1, the Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares may not be withdrawn, except to the extent that the tendering stockholders are entitled to withdrawal rights as described in Section 3 and as otherwise required by Rule 14e-1(c) under the Exchange Act. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE BY REASON OF ANY DELAY IN MAKING SUCH PAYMENTS. If any tendered Shares are not accepted for payment and paid for, certificates representing such Shares will be returned (or, in the case of Shares delivered by book-entry transfer with DTC as permitted by Section 2, such Shares will be credited to an account maintained with DTC) without expense to the tendering stockholder as promptly as practicable following the expiration or termination of the Offer. If, prior to the Expiration Date, Purchaser increases the consideration to be paid for Shares pursuant to the Offer, Purchaser will pay such increased consideration for all Shares accepted for payment or paid for pursuant to the Offer, whether or not such Shares have been tendered, accepted for payment or paid for prior to such increase in the consideration. Purchaser reserves the right to transfer or assign in whole or in part to one or more affiliates of Purchaser the right of Purchaser to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve Purchaser of its obligations under the Offer and will in no way 14 prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. 5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash for Shares pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under state, local, or foreign tax laws. In general, a stockholder who tenders Shares in the Offer or receives cash in exchange for Shares in the Merger will recognize gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash received and the stockholder's tax basis in the Shares sold. Gain or loss will be determined separately for each block of Shares (i.e., Shares acquired at the same time and price) exchanged pursuant to the Offer or the Merger. Such gain or loss will generally be capital gain or loss if the Shares disposed of were held as capital assets by the stockholder and will be long-term capital gain or loss if such Shares have been held for more than one year. A stockholder who perfects his or her stockholder's appraisal rights, if any, under the DGCL will probably recognize gain or loss at the Effective Time in an amount equal to the difference between the "amount realized" and such stockholder's adjusted tax basis of such Shares. For this purpose, although there is no authority to this effect directly on point, the amount realized should generally equal the trading value per share of the Shares at the Effective Time. Ordinary interest income and/or capital gain (capital loss), assuming that the Shares were held as capital assets, should be recognized by such stockholder at the time of actual receipt of payment, to the extent that such payment exceeds (or is less than) the amount realized at the Effective Time. A stockholder who is a non-U.S. Holder will not be subject to United States federal income or withholding tax on the receipt of cash for Shares pursuant to the Offer or the Merger unless (i) the income from the Shares is effectively connected with the conduct by the non-U.S. Holder of a trade or business in the United States or (ii) in the case of an individual non-U.S. Holder, the non U.S. Holder is present in the United States for 183 days or more in the taxable year in which cash is received for the Shares pursuant to the Offer or the Merger and certain other conditions are met. As used herein, a "U.S. Holder" is a beneficial owner of a Share who is (i) an individual citizen or resident of the United States, (ii) a corporation or partnership organized in or under the laws of the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax regardless of source or (iv) a trust if a court within the United States is able to control all substantial decisions of the trust. A "Non-U.S. Holder" is a beneficial owner of a Share who is not a U.S. Holder. The foregoing summary is for general information purposes only and is based on the U.S. federal income tax law now in effect, which is subject to change, possibly retroactively. This summary does not discuss all aspect of U.S. federal income taxation which may be important to particular stockholder in light of their individual investment circumstances or to certain types of stockholder subject to special tax rules (including, but not limited to, insurance companies, tax-exempt organizations, financial institutions, or broker dealers, foreign stockholder and stockholder who have acquired their Shares pursuant to the exercise of employee stock options or otherwise as compensation), nor does it address state, local, or foreign tax consequences. Each stockholder is urged to consult his or her tax advisor regarding the specific U.S. federal, state, local and foreign income and other tax consequences of the Offer and Merger. 6. PRICE RANGE OF SHARES; DIVIDENDS. The Company's Common Stock is listed and traded on the New York Stock Exchange ("NYSE") under the symbol "OEA". The following table sets forth, for the fiscal periods indicated, the high and low sales prices for the Common Stock on the NYSE with respect to periods occurring in fiscal years 15 1998, 1999 and 2000 as reported by published financial sources. On November 24, 1998, the Company paid a cash dividend on its Common Stock of $0.08 per share of Common Stock. The Merger Agreement prohibits the Company from declaring, setting aside or paying any cash dividends prior to the earlier of the termination of the Merger Agreement or the Offer Completion Date.
COMMON STOCK ------------------- FISCAL YEAR HIGH LOW - ----------- -------- -------- FISCAL 1998: First Quarter............................................... $29.56 $ 17.5 Second Quarter.............................................. $20.63 $14.94 Third Quarter............................................... $16.38 $ 7.75 Fourth Quarter.............................................. $14.06 $ 8.06 FISCAL 1999 First Quarter............................................... $15.44 $ 8.25 Second Quarter.............................................. $11.56 $ 7.81 Third Quarter............................................... $ 9.38 $ 6.63 Fourth Quarter.............................................. $ 8.31 $ 4.31 FISCAL 2000 First Quarter............................................... $ 9.75 $ 4.50
The Rights trade together with the Common Stock. On March 10, 2000, the last full trading day prior to the public announcement of the execution of the Merger Agreement, the closing price per Share reported on the NYSE was $7.06. On March 23, 2000, the last full trading day before the commencement of the Offer, the closing price per Share reported on the NYSE was $9.63. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES. 7. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise stated in this Offer to Purchase, the information concerning the Company contained herein has been taken from or is based upon reports and other documents on file with the SEC or otherwise publicly available. Although neither Purchaser nor Parent have any knowledge that would indicate that any statements contained herein based upon such reports and documents are untrue, neither Purchaser nor Parent takes any responsibility for the accuracy or completeness of the information contained in such reports and other documents or for any failure by the Company to disclose events that may have occurred and may affect the significance or accuracy of any such information but that are unknown to Purchaser or Parent. GENERAL The Company is a Delaware corporation with its principal executive offices located at 34501 East Quincy Avenue, P.O. Box 100488, Denver, Colorado, 80250. The Company's telephone number is (303) 693-1248. The Company produces high-reliability, propellant-actuated safety devices for the automotive and aerospace industries. Its automotive safety products division designs, develops, tests and manufactures propellant-actuated devices for use in automotive safety products, which are currently single-stage hybrid inflators (passenger, driver and side-impact) and electric initiators. These products are sold to automotive module and inflator manufacturers, which in turn sell their products directly to automobile manufacturers. The Company's aerospace division, among other things, designs, develops, and manufactures propellant and explosive-actuated devices used by the United States Government and major military and aerospace companies. 16 FINANCIAL INFORMATION Set forth below is certain selected consolidated financial information relating to the Company and the Company Subsidiaries which has been excerpted or derived from the audited financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1999 and for the quarters ended January 30, 2000 and January 29, 1999, as contained in the Company's Quarterly Report on Form 10-Q for the quarters ended January 30, 2000 and January 29, 1999, which are incorporated by reference herein. More comprehensive financial information is included in such reports and other documents filed by the Company with the Commission. The financial information that follows is qualified in its entirety by reference to such reports and other documents, including the financial statements and related notes contained therein. Such reports and other documents may be examined and copies may be obtained from the offices of the Commission in the manner set forth below. OEA, INC. SELECTED CONSOLIDATED FINANCIAL DATA (IN THOUSANDS, EXCEPT PER SHARE DATA)
6 MONTHS ENDED YEAR ENDED JULY 31, --------------------------- ------------------------------ JANUARY 30, JANUARY 29, 2000 1999 1999 1998 1997 ----------- ------------- -------- -------- -------- (UNAUDITED) (UNAUDITED) INCOME STATEMENT DATA: Net Sales.................................... $119,592 $ 116,227 $248,805 $245,375 $211,557 Operating Profit (Loss)...................... (9,164) (3,198) 527 (5,588) 49,559 Earnings (Loss) Before Minority Interest and Income Taxes............................... (11,325) (5,415) (4,154) (13,931) 55,304 Minority Interest............................ -- -- -- -- -- Income Tax Expense (Benefit)................. (4,200) (1,697) 1,746 4,655 (19,863) -------- ------------- -------- -------- -------- Net Earnings (Loss) Before Cumulative Effect of a Change in Accounting Principle........ (7,125) (3,718) (2,408) (9,276) 35,441 Cumulative Effect of a Change in Accounting Principle.................................. -- -- -- (10,040) -- -------- ------------- -------- -------- -------- Net Earnings (Loss)...................... $ (7,125) (3,718) (2,408) (19,316) 35,441 ======== ============= ======== ======== ======== Basic Earnings (Loss) Per Share Before Cumulative Effect of a Change in Accounting Principle.................................. $ (.35) (.18) (.12) (.45) 1.73 ======== ============= ======== ======== ======== Basic Earnings (Loss) Per Share.......... $ (.35) (.18) (.12) (.94) 1.73 ======== ============= ======== ======== ======== Cash Dividends Per Share..................... $ -- .08 .08 .33 .30 ======== ============= ======== ======== ======== Weighted Average Number of Shares Outstanding During Period.............................. 20,615 20,598 20,602 20,581 20,540 ======== ============= ======== ======== ======== Total Number of Shares Outstanding at Year End........................................ -- -- 20,610 20,595 20,552 ======== ============= ======== ======== ======== BALANCE SHEET DATA: Current Assets............................... $116,272 108,302 95,875 117,578 127,319 Current Liabilities.......................... $147,834 29,824 34,192 31,461 36,031 Working Capital.............................. $(31,562) 78,478 61,683 86,117 91,288 Working Capital Ratio........................ 0.8 to 1 3.6 to 1 2.8 to 1 3.7 to 1 3.5 to 1 Total Assets................................. $311,054 319,664 298,358 328,759 331,556 Shareholders' Equity......................... $146,773 157,061 156,574 161,506 186,778 Book Value Per Share......................... $ 7.12 $ 7.62 7.60 7.84 9.09
17 AVAILABLE INFORMATION The Shares are registered under the Exchange Act. Accordingly, the Company is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is obligated to file periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Information, as of particular dates, concerning the Company's directors and officers, their remuneration, stock options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be disclosed in such proxy statements and distributed to the Company's stockholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection at the public reference facilities at the Commission's principal office at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the regional offices of the Commission located at 7 World Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The Commission maintains a site on the World Wide Web, and the reports, proxy statements and other information filed by the Company with the Commission may be accessed electronically on the World Wide Web at http://www.sec.gov. Copies of such material may also be obtained by mail, upon payment of the Commission's customary fees, from the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. CERTAIN PROJECTIONS. The Company does not, as a matter of course, make public any forecasts as to its future financial performance. However, in connection with Parent's review of the transactions contemplated by the Offer and the Merger, the Company has provided Parent with certain projected financial information concerning the Company. Such information included, among other things, the Company's projections of revenue, earnings before interest, income taxes, depreciation and amortization, and capital expenditure for the Company for the years 2000 through 2002. Set forth below is a summary of such projections. These projections should be read together with the financial statements of the Company referred to herein.
YEAR ENDED JULY 31, 2000 2001 2002 -------- -------- --------- (IN THOUSANDS) Revenue..................................................... $260,871 $353,667 $ 395,525 EBITDA(1)................................................... $ 29,906 $ 66,160 $ 75,120 Capital Expenditure......................................... $ 24,663 $ 24,929 $ 33,501
(1) Earnings before interest, income taxes, depreciation and amortization. It is the understanding of Parent and Purchaser that the projections were not prepared with a view to public disclosure or compliance with published guidelines of the Commission or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts and are included herein only because such information was provided to Parent and Purchaser. The projections do not purport to present operations in accordance with generally accepted accounting principles and the Company's independent auditors have not examined or compiled the projections presented herein, and accordingly assume no responsibility for them. These forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) are subject to certain risks and uncertainties that could cause actual results to differ materially from the projections. The Company has advised Purchaser and Parent that its internal financial forecasts (upon which the projections provided to Parent and Purchaser were based in part) are, in general, prepared solely for internal use and capital budgeting and other management decisions, and are subjective in many respects and thus susceptible to interpretations and periodic revision based on actual experience and business developments. The projections also reflect numerous assumptions (not all of which were provided to Parent and Purchaser) all made by management of the Company with respect to industry performance, general business, economic, market and financial conditions and other matters, including effective tax rates consistent with historical levels for the Company, all of which are difficult to predict, many of which are beyond the Company's control and none of which were subject to approval by 18 Parent or Purchaser. Accordingly, there can be no assurance that the assumptions made in preparing the projections will prove accurate, and actual results may be materially greater or less than those contained in the projections. The inclusion of the projections herein should not be regarded as an indication that any of Parent, Purchaser, the Company or their respective affiliates or representatives considered or consider the projections to be a reliable prediction of future events, and the projections should not be relied upon as such. None of Parent, Purchaser, the Company or any of their respective affiliates or representatives has made, or makes any representation to any person regarding the ultimate performance of the Company compared to the information contained in the projections and none of them intends to update or otherwise revise the projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the projections are shown to be in error. It is expected that there will be differences between actual and projected results, and actual results may be materially higher or lower than those projected. For further information on risks associated with forward-looking statements, please refer to the Company's 8-K filed with the Commission on June 4, 1998. 8. CERTAIN INFORMATION CONCERNING PARENT AND PURCHASER. Parent is a Delaware holding corporation with principal executive offices at World Trade Center, Klarabergsviadukten 70, SE-107 24 Stockholm, Sweden. The telephone number of Parent is +46 8 587 20 600. Parent, through its two wholly owned operating subsidiaries, Autoliv AB, a Swedish corporation, and Autoliv ASP, Inc., an Indiana corporation, is one of the world's leading suppliers of automotive occupant safety restraint systems with a broad range of product offerings including modules and components for passenger and driver-side airbags, side-impact airbag protection systems, seat belts, steering wheels, safety seats and other safety systems and products. Parent has production facilities in 26 countries and has as its customers almost all of the world's largest car manufacturers. Parent employs approximately 22,500 people and had sales in 1999 of $3.8 billion, approximately 70% of which consisted of airbags and associated products and approximately 30% of which consisted of seat belts and associated products. Parent's major markets are in Europe and the United States. Purchaser is a Delaware corporation with its principal offices located at 1320 Pacific Drive, Auburn Hills, MI 48326. The telephone number of Purchaser is (248) 475-0442. Purchaser is an indirect wholly owned subsidiary of Parent. Purchaser has not carried on any activities other than in connection with the Merger Agreement. The name, citizenship, business address, business phone number, principal occupation or employment and five-year employment history for each of the directors and officers of Parent and Purchaser are set forth in Schedule I hereto. Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, none of Parent, Purchaser nor, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or voting of such securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies. The Company is a supplier of airbag initiators and airbag inflators to the Parent. Parent purchased approximately 8.8 million and 9.3 million airbag initiators during the calendar years ended December 31, 1999 and December 31, 1998 for an aggregate price of approximately $14.5 million and $19.6 million, respectively. Parent purchased approximately 200,000 airbag inflators from the Company during the calendar year ended December 31, 1999 for an aggregate price of $2.7 million. Parent purchased no airbag inflators from the Company during the calendar year ended December 31, 1998. 19 Except as set forth in this Offer to Purchase, none of Parent, Purchaser nor, to the best knowledge of Parent and Purchaser, any of the persons listed on Schedule I hereto, has had any business relationship or transaction with the Company or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the SEC applicable to the Offer. Except as set forth in this Offer to Purchase, there have been no contacts, negotiations or transactions between Parent or any of its subsidiaries or, to the best knowledge of Parent, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets. None of the persons listed in Schedule I have, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). None of the persons listed in Schedule I have, during the past five years, been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to federal or state securities, laws, or a finding of any violation of federal or state securities laws. 9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by Purchaser to purchase Shares pursuant to the Offer and the Merger is estimated to be approximately $219,493,280. Purchaser will obtain such funds from Autoliv ASP, Inc., a Delaware corporation which is the direct parent of Purchaser and a wholly owned subsidiary of Parent ("Autoliv ASP") who will obtain a significant portion of such funds from its existing resources, including short term borrowings in the ordinary course of business. For the remainder, Autoliv, Inc. has obtained a $300 million Credit Agreement dated March 22, 2000 among Autoliv ASP as Borrower, the Parent as Guarantor, Skandinaviska Enskilda Banken AB (publ) as Lender and SEB Debt Capital Markets as Arranger (the "Credit Agreement"). The term of the Credit Agreement is from April 25, 2000 until September 25, 2000, subject to extension by mutual agreement and the interest rate for the loans borrowed under the Credit Agreement is LIBOR plus 0.5% and other applicable costs. In addition Autoliv ASP is not required to supply collateral to the Lender for any loan borrowed under the Credit Agreement. The Offer is not conditioned on any financing arrangements. 10. BACKGROUND OF THE OFFER AND THE MERGER; PAST CONTACTS OR NEGOTIATIONS WITH THE COMPANY. Executives of Parent are familiar with the business and operations of the Company because the Company is a significant supplier of Parent and because each of Parent and the Company conduct business in the same markets. In December 1999 Parent was initially contacted by Deutsche Bank, acting at the Company's instruction as the Company's financial advisors, with a view to determining whether Parent was interested in potentially acquiring the Company. Deutsche Bank informed Parent that several potential strategic buyers had been contacted to solicit their interest in the Company. On January 5(th) the Company and Parent entered into a confidentiality agreement and Parent subsequently received an offering memorandum and related materials about the Company. On January 22(nd) representatives of Parent attended a management presentation by the Company held in Denver, Colorado. As requested in the Company's bid sale process instructions, Parent submitted a preliminary, non-binding indication of interest on February 7(th). In February, representatives of Parent conducted a due diligence investigation of the Company. On March 9(th) in response to an invitation from the Company, Parent submitted a final written proposal to acquire the Company through a cash tender offer of $9.00 per Share for all outstanding 20 Shares. Parent's proposal included revisions to a form of merger agreement distributed by the Company. During March 9(th) and 10(th), a representative of Deutsche Bank and the management of the Company had discussions with management of Parent regarding outstanding due diligence issues and the economics and structure of Parent's proposal. During those discussions, Parent was requested by Deutsche Bank to revise its proposal and increase its offer price. On March 10(th), Parent was informed that the Board of the Company was scheduled to meet that afternoon and would consider any revision to Parent's proposal made at that time. Prior to the Board meeting, the chief executive officer of Parent contacted Deutsche Bank to modify the final proposal and increase the price of the offer per Share. On March 11(th) and 12(th), representatives of Parent and the Company negotiated the terms of the definitive merger agreement. On March 12(th) the Board of the Company met to review and unanimously approved the Offer and the Merger and the form of Merger Agreement, which was subsequently finalized. Following such meeting, Parent and the Company executed the Merger Agreement on March 12(th). Thereafter, the Company and Parent issued separate press releases announcing the transaction. On March 24(th), 2000, in accordance with the Merger Agreement, Parent commenced the Offer. 11. THE MERGER AGREEMENT. THE MERGER AGREEMENT. The following is a summary of the material provisions of the Merger Agreement, a copy of which is filed as an exhibit to the Tender Offer Statement on Schedule TO filed by Parent and Purchaser pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act with the Commission in connection with the Offer (the "Schedule TO"). The summary is qualified in its entirety by reference to the Merger Agreement, which is deemed to be incorporated by reference herein. THE OFFER. The Merger Agreement provides for the making of the Offer. The obligation of Purchaser to accept for payment and pay for Shares tendered pursuant to the Offer is subject to the satisfaction or waiver of the Minimum Condition and certain other conditions that are described in Section 15--"Certain Conditions of the Offer." Pursuant to the Merger Agreement, without the consent of the Company, Purchaser may not extend the Offer beyond April 24, 2000, except in the following circumstances: (i) if necessary to satisfy any condition of the HSR Act, for a period not to exceed forty (40) business days, (ii) if any of the Offer Conditions (other than the Minimum Condition) shall not have been satisfied or waived for a period not to exceed twenty (20) business days, (iii) if all the Offer Conditions are satisfied or waived, but the number of Shares validly tendered and not withdrawn is less than 90% of the number of then-outstanding Shares on a fully diluted basis (excluding shares held by the Company or any of its subsidiaries), for four successive five (5) business day periods for an aggregate period not to exceed twenty (20) business days, or (iv) if any of the Offer Conditions (other than the Minimum Condition) shall not have been satisfied or waived and a Takeover Proposal has been made or publicly disclosed by a person other than Parent or Purchaser (including the Company and any of its subsidiaries and affiliates), or if Parent or Purchaser otherwise learn that a Takeover Proposal has been made or publicly proposed, for a period of up to ten (10) days after the withdrawal or termination of such Takeover Proposal, such date in no event to exceed the earlier of (x) June 30, 2000, and (y) the minimum time period necessary to satisfy all such outstanding Offer Conditions. Subject to the foregoing restrictions, Purchaser has the right (but is not obligated), in its sole discretion, to extend the period during which the Offer is open by giving oral or written notices of extension to the Depositary in such offer and by making a public announcement of such extension. 21 The Purchaser will not, without the prior consent of the Company, decrease the Offer Price or the number of Shares sought pursuant to the Offer, or change the form of consideration in the offer, or otherwise amend or add any term or condition of or to the Offer, except as otherwise expressly permitted in or contemplated by the Merger Agreement. The Purchaser can waive any other condition to the Offer in its discretion. For information concerning directors of the Company prior to consummation of the Merger, see Section 12--"Purpose of the Offer; Plans for the Company." DIRECTORS. The Merger Agreement provides that effective upon the acceptance for payment of Shares, Purchaser shall be entitled to designate at least such number of directors, rounded up to the next whole number, on the Board that equals the product of (i) the total number of directors on the Board (determined after giving effect to the directors elected pursuant to this sentence) and (ii) the percentage that the aggregate number of Shares beneficially owned by Parent or Purchaser (including Shares accepted for payment pursuant to the Offer) bears to the total number of Shares then outstanding and the Company will, upon request of the Purchaser promptly take all actions necessary to cause the Purchaser's designees to be so elected, including, if necessary, seeking the resignations of one or more existing directors; PROVIDED, HOWEVER, that before the Effective Time, the Board will always have at least three members who have been in place since March 12, 2000 (the "Continuing Directors"). Following the election or appointment of the Purchaser's designees and before the Effective Time, any amendment or termination of the Merger Agreement by the Company, or any extension by the Company of the time for the performance of any of the obligations or other acts of Parent or Purchaser or waiver of any of the Company's rights thereunder, will require the concurrence of a majority of the directors of the Company then in office who are Continuing Directors. OPTIONS. Prior to the Expiration Date, the Company will use its reasonable best efforts to cause each person who holds an option to acquire Shares from the Company ("Options") to exercise, terminate or consent to their cancellation. As of the Effective Time, all remaining Options will be canceled, redeemed or repurchased by the Company, and each holder of Options will receive the aggregate Offer Price that such holder would have received pursuant to this Offer if the holder had tendered the Shares underlying such Options, less the aggregate exercise or purchase price of such underlying Shares (subject to any applicable withholding tax). THE MERGER. The Merger Agreement provides that as soon as practicable after the satisfaction or waiver of each of the conditions to the Merger set forth therein, Purchaser will be merged with and into the Company. Following the Merger, the separate existence of Purchaser will cease, and the Company will continue as the Surviving Company, wholly owned by Parent. If required by the DGCL, the Company shall call and hold a meeting of its stockholders (the "Company Stockholders' Meeting") promptly following consummation of the Offer for the purpose of voting upon the approval of the Merger Agreement. At any such meeting all outstanding Shares then owned by Parent or Purchaser or any subsidiary of Parent shall be voted in favor of approval of the Merger. Pursuant to the Merger Agreement, each Share outstanding immediately before the Effective Time (other than Shares owned beneficially or of record by Parent or any subsidiary of Parent or held in the treasury of the Company, all of which will be cancelled, and other than Shares which are held by stockholders, if any, who properly exercise their appraisal rights under the DGCL) will be converted into the right to receive the Offer Price except as described below. Shareholders who perfect their right to appraisal of their Shares under the DGCL shall be entitled to the amounts determined pursuant to such proceedings. See Section 12--"Purpose of the Offer; Plans for the Company." REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains customary representations and warranties of the parties thereto, including representations by the Company as to its corporate 22 existence and power, capitalization, corporate authorizations, Commission filings, financial statements, absence of certain changes (including: (i) any material adverse effect in the financial condition, business, operations or assets would be reasonably expected to have, either individually or in the aggregate, a Company Material Adverse Effect (as defined in the Merger Agreement) on the Company and its subsidiaries, taken as a whole; (ii) entry by the Company into an agreement which, under the rules and regulations of the Exchange Act, would be required to be filed as an exhibit to an Exchange Act filing; or (iii) changes by the Company in its accounting principles), government authorizations, absence of litigation, compliance with laws, employee matters, certain contracts, taxes, environmental, intellectual property, brokers, the opinion of the Company's financial advisor, noncontravention, product liability, recalls, required shareholder vote and rights agreement. COMPANY COVENANTS. The Merger Agreement contains various customary covenants of the parties thereto. A description of certain of these covenants follows: CONDUCT OF BUSINESS. Prior to the Effective Time, except as otherwise set forth in the Merger Agreement or approved by Parent, the Company will: (1) conduct its business in the ordinary course of business and consistent with past practices and such that, as of the Effective Time, the closing conditions set forth in the Merger Agreement will be met; (2) use reasonable efforts to (a) maintain the business organizations of the Company and its subsidiaries, (b) maintain all significant customer, supplier, contractor, distributor, licensor, licensee and other business relationships, and (c) retain officers and employees; (3) not engage in an extraordinary corporate transaction; (4) not amend its certificate of incorporation or bylaws; (5) not (a) authorize, issue or provide for the issuance of or sell, pledge, dispose of or encumber its capital stock or Options (other than with respect to disclosed Option plans), (b) enter into any contract with respect to the purchase or voting of capital stock, (c) split, combine or reclassify capitalization any material term of its capital stock or (d) make any other change in its capitalization; (6) not declare, set aside or pay dividends or distributions or purchase or redeem any capital stock or Options; (7) maintain its accounting policies in accordance with past practice and generally accepted accounting principles and not adopt any material changes in its reporting regarding taxation or accounting procedures except in accordance with such generally accepted accounting principles; (8) not: (a) modify the terms of any existing indebtedness or incur any new indebtedness unless such indebtedness (1) is in the ordinary course of business and (2) does not exceed the sum of total indebtedness on January 31, 2000 and $10,000,000; (b) make loans of more than $100,000 (except intercompany loans); (c) pay or discharge any claims, liens or liabilities involving more than $100,000 individually and $500,000 in the aggregate; or (d) write off any accounts or notes receivable other than in the ordinary course of business; (9) not take any action with respect to employees that would: (a) grant or increase any severance or termination pay; (b) adopt or establish a new employee benefit plan or make any material amendment with respect to an existing benefit plan; or (c) enter into or materially amend any employment or employment related agreement (including union or labor agreements) with any employees, directors, officers or consultants; 23 (10) not settle or compromise any suit or claim for an amount which would exceed $250,000 individually; and (11) not take any action or fail to take action that would result in: (a) any condition to the Offer not being satisfied; (b) a breach of any representation or warranty in the Merger Agreement or (c) an impairment by any party to the Merger Agreement to consummate the transactions contemplated in the Merger Agreement. NO SOLICITATION. The Company will not directly or indirectly (1) solicit, initiate or encourage any Takeover Proposal, (2) engage in negotiations or discussions concerning, provide any information to any third party relating to, or take any other actions to facilitate a Takeover Proposal or (3) enter into any agreement relating to a Takeover Proposal. The term "Takeover Proposal" is defined in the Merger Agreement to mean any proposal or offer for a merger or certain other extraordinary transactions. The foregoing will not prohibit the Company from complying with Rule 14e-2 under the Exchange Act. Notwithstanding the foregoing, the Company may furnish, at any time before the closing of the Offer, non-public information to, or enter discussions with respect to any unsolicited bona fide written proposal for a Takeover Proposal, but only to the extent (1) the Board determines after consultation with outside counsel and financial advisors that doing so is required by its fiduciary duties, (2) the Board reasonably determines that the Takeover Proposal is likely to lead to a Superior Proposal and (3) before taking action on such Takeover Proposal the Company receives an executed customary (as determined by outside counsel) confidentiality agreement. The term "Superior Proposal" is defined in the Merger Agreement to mean any Takeover Proposal: (a) which is more favorable to the Company's stockholders than the Offer and the Merger as determined by the Board based upon the written opinion of the Company's financial advisors; (b) in which the person making such proposal has or is reasonably likely to obtain the necessary funds to make the Superior Proposal; and (c) that will have a consideration greater than the Offer Price. The Board may not withdraw or modify its approval of the Offer and the Merger or approve any Takeover Proposal unless the Board determines after consultation with outside counsel and financial advisors that doing so is required by its fiduciary duties and such Takeover Proposal is a Superior Proposal. However, the Company may not enter into an agreement with respect to the Superior Proposal unless the Merger Agreement is terminated and the Termination Fee (as defined below) is paid to Parent and Purchaser simultaneously with the Board's approval of a Superior Proposal. The Company has agreed to notify Parent promptly after receiving a Takeover Proposal. INDEMNIFICATION. The Merger Agreement provides that for four (4) years after the Effective Time, the Surviving Corporation will indemnify and hold harmless each present and former director, officer, employee, fiduciary and agent from liabilities for acts or omissions occurring at or prior to the Effective Time to the fullest extent required under applicable law and the Company's certificate of incorporation and bylaws; and that the bylaws of the Surviving Corporation after the Effective Time will provide the same indemnification protection as the bylaws of the Company in effect on the date of the Merger Agreement. EMPLOYEES, EMPLOYEE BENEFITS. The Merger Agreement contains certain covenants relating to the treatment of employees of the Company for one year after the consummation of the Offer. Parent: (a) intends to cause the Surviving Corporation to provide benefits to employees who were employed by the Company on the date of the consummation of the Offer that are no less favorable than those for employees in comparable positions in the Surviving Corporation; (b) will honor all legally imposed obligations relating to employment matters; and (c) will recognize time served with the Company for determination of eligibility, vesting and level under benefit plans of the Surviving Corporation. 24 CONDITIONS TO THE MERGER. The obligations of Parent, Purchaser and the Company to consummate the Merger are subject to the satisfaction of the following conditions at or prior to the Effective Time: (1) if required by the DGCL, the approval of the Merger Agreement by the shareholders of the Company, the Parent and the Purchaser in accordance with such law; (2) the termination of any waiting period with respect to the HSR Act; and (3) the absence of any injunction, order, statute, regulation, rule order or judgment that shall prohibit consummation of the Offer or the Merger. In addition, the obligations of Parent and Purchaser to consummate the Merger are further subject to the satisfaction of the following condition at or prior to the Effective Time: (1) the Company shall have obtained all material consents, waivers, approvals or authorizations. The obligations of the Company to consummate the Merger are further subject to the satisfaction of the following condition at or prior to the Effective Time: (1) the Purchaser shall have purchased all shares validly tendered and not withdrawn pursuant to the Offer. TERMINATION. The Merger Agreement may be terminated at any time prior to the Effective Time: (1) by mutual written consent of Purchaser, Parent and the Company; (2) by Purchaser, Parent or the Company, if the Merger shall not have been consummated by June 30, 2000 (provided that the right to terminate shall not be available to any party whose failure to fulfill any obligation under the Merger Agreement has caused or resulted in the failure of the Merger to occur on or before such date, and such time periods shall be tolled for any time during which any party is subject to a non-final order or decree restraining, enjoining or otherwise prohibiting the consummation of the Merger); (3) by Purchaser, Parent or the Company, if any court or governmental entity prohibits the transaction by final, nonappealable order, decree or ruling permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger; (4) by Parent if, as a result of the failure of the conditions to the Offer, the Offer is terminated or expires without Purchaser purchasing Shares; (5) by the Company, if the Company executes an agreement relating to a Superior Proposal; or (6) by Parent, if (a) the Company has entered into an agreement with a third party to sell all or substantially all of the assets, any substantial equity in or enter into a business combination with, the Company or any of its subsidiaries, or (b) if the Board has withdrawn or modified its recommendation of the Offer or the Merger in a manner materially adverse to Parent or Purchaser. If the Merger Agreement is terminated, it will become void and there will be no liability on the part of the Company, Parent or Purchaser, except for obligations regarding the confidentiality agreement and certain fees and expenses payable pursuant to the Merger Agreement (see "Fees and Expenses"), PROVIDED, HOWEVER, that no such termination shall relieve any party from liability for any breach of the Merger Agreement prior to such termination. FEES AND EXPENSES. Except as otherwise specified in the following sentence, all costs and expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby shall be paid by the party incurring such cost or expense. 25 If this Merger Agreement is terminated as set forth below, the Company shall promptly pay to Parent, by wire transfer in immediately available funds, a fee of $6 million (the "Termination Fee"), plus interest from the date the Termination Fee is payable until paid at an interest rate of 8% calculated per annum. The Termination Fee applies where the Merger Agreement is terminated: (1) as a result of the Company executing an agreement relating to a Superior Proposal; (2) as a result of the Company entering into an agreement with a third party to sell all or substantially all of the assets or any substantial equity in or enter into a business combination with, the Company or any of its subsidiaries, or the Board withdrawing or modifying its recommendation of the Offer or the Merger in a manner materially adverse to Parent or Purchaser. AMENDMENTS AND WAIVERS. Any provision of the Merger Agreement may be amended or waived at any time; provided, however, that after adoption of the Merger Agreement by the shareholders of the Company, no amendment may be made which changes the form or decreases the Offer Price or in any other way materially and adversely affects the rights of such shareholders (other than termination in accordance with its terms) without the approval of such shareholders. 12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY. PURPOSE OF THE OFFER AND THE MERGER. The purpose of the Offer and the Merger is for Parent to acquire the entire equity interest in the Company. Through the Offer, Purchaser intends to acquire control of, and a majority equity interest in, the Company. Following the completion of the Offer, Parent intends to acquire any outstanding Shares not owned by Purchaser by consummating the Merger. Under the DGCL the approval of the Board and the affirmative vote of a majority of the holders of outstanding Shares are required to adopt the Merger Agreement. The Board has unanimously approved the transactions contemplated by the Merger Agreement, including the Offer and the Merger, and, unless the Merger is consummated pursuant to the short form merger provisions of the DGCL described below, the only remaining required corporate action necessary to consummate the Merger is the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the then outstanding Shares. If the Minimum Condition is satisfied, Purchaser will have sufficient voting power to cause the adoption of the Merger Agreement by the requisite vote of stockholders of the Company without the affirmative vote of any other stockholder. Under the DGCL, if Purchaser acquires at least 90% of the outstanding Shares, Purchaser will be able to adopt the Merger Agreement without a vote of the Company's other stockholders. The Merger Agreement provides that if Purchaser, or any other direct or indirect subsidiary of Parent, acquires at least 90% of the outstanding Shares, Parent, Purchaser and the Company will take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the expiration of the Offer without action by the other stockholders of the Company, in accordance with Section 253 of the DGCL. In the event that all of the conditions to Purchaser's obligation to purchase Shares in the Offer is satisfied or waived and the number of Shares tendered is less than 90% of the outstanding Shares on a fully diluted basis, Purchaser may extend the Offer for the purpose of attempting to reach the 90% threshold required for a short form merger. Under these circumstances, the Offer may be extended for four successive five (5) business day periods for an aggregate period not to exceed twenty (20) business days. See Section 1. If Purchaser is unable to satisfy the requirements for a short form merger, a significantly longer period of time may be required to effect the Merger, because a vote of the Company's stockholders would be required under the DGCL. PLANS FOR THE COMPANY. Except as otherwise set forth in this Offer to Purchase, it is expected that, initially following the Merger, the business and operations of the Company will be continued by the 26 Surviving Corporation substantially as they are currently being conducted. The directors of Purchaser will be the initial directors of the Surviving Corporation, and the officers of the Purchaser will be the initial officers of the Surviving Corporation. Upon completion of the Offer and the Merger, Parent intends to conduct a detailed review of the Company and its assets, corporate structure, capitalization, operations, policies, management and personnel. After such review, Parent will determine what actions or changes, if any, would be desirable in light of the circumstances which then exist. Thereafter Parent will implement any such actions or changes in accordance with, among other things, its corporate strategy. Except as described in this Offer to Purchase, neither Parent nor Purchaser has any present plans or proposals that would relate to or result in (i) any extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries, (ii) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries, (iii) any change in the Board or management, (iv) any material change in the Company's capitalization or dividend policy, or (v) any other material change in the Company's corporate structure or business, (vi) a class of securities of the Company being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, or (vii) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g) of the Exchange Act. APPRAISAL RIGHTS. No appraisal rights are available in connection with the Offer. However, if the Merger is consummated, stockholders of the Company may have certain rights under the DGCL to dissent, and demand appraisal of, and to obtain payment for the fair value of their Shares. Such rights, if the statutory procedures are complied with, could lead to a judicial determination of the fair value of the Shares (excluding any element of value arising from the accomplishment or expectation of the Merger) required to be paid in cash to such dissenting stockholders for their Shares. In addition, such dissenting stockholders would be entitled to receive payment of a fair rate of interest from the date of consummation of the Merger on the amount determined to be the fair value of their Shares. In determining the fair value of the Shares, a Delaware court would be required to take into account all relevant factors. Accordingly, such determination could be based upon considerations other than, or in addition to, the market value of the Shares, including, among other things, asset value and earning capacity. In WEINBERGER V. UOP, INC., the Delaware Supreme Court stated, among other things, that "proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court" should be considered in an appraisal proceeding. Therefore, the value so determined in any appraisal proceeding could be higher or lower than the Offer Price. 13. CERTAIN EFFECTS OF THE OFFER. EFFECT ON THE MARKET FOR THE SHARES. The purchase of Shares pursuant to the Offer will reduce the number of holders of Shares and the number of Shares that might otherwise trade publicly. Consequently, depending upon the number of Shares purchased and the number of remaining holders of Shares, the purchase of Shares pursuant to the Offer may adversely affect the liquidity and market value of the remaining Shares held by the public. Purchaser cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for, or marketability of, the Shares or whether it would cause future market prices to be greater or less than the Offer Price. STOCK QUOTATIONS. The Shares are currently listed and traded on the NYSE, which constitutes the principal trading market for the Shares. Depending upon the aggregate market value and the number of Shares not purchased pursuant to the Offer, the Shares may no longer meet the standards for continued listing on the NYSE. According to its published guidelines, the NYSE would give 27 consideration to delisting the Shares if, among other things, the number of publicly held Shares falls below 600,000, the number of holders of round lots of Shares falls below 400 (or below 1,200 if the average monthly trading volume is below 100,000 for the last twelve months) or the aggregate market value of such publicly held Shares falls below $8,000,000. Shares held by officers or directors of the Company or their immediate families, or by any beneficial owner of more than 10% or more of the Shares, ordinarily will not be considered as being publicly held for this purpose. If, as a result of the purchase of Shares pursuant to the Offer, the Shares no longer meet the requirements for continued listing on the NYSE, the market for the Shares could be adversely affected. In the event the Shares are no longer eligible for listing on the NYSE, quotations might still be available from other sources. The extent of the public market for the Shares and the availability of such quotations would, however, depend upon the number of holders of such Shares at such time, the interest in maintaining a market in such Shares on the part of securities firms, the possible termination of registration of such Shares under the Exchange Act as described below and other factors. EXCHANGE ACT REGISTRATION. The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application of the Company to the Commission if such Shares are not listed on a national securities exchange and there are fewer than 300 holders of record of the Shares. The termination of the registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to its stockholders and to the Commission, and would make certain of the provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) and the requirement of furnishing a proxy statement in connection with stockholders meetings and the related requirement of an annual report to stockholders, and the requirements of Rule 13e-3 with respect to going private transactions, no longer applicable with respect to the Shares or to the Company. Furthermore, if registration of the Shares under the Exchange Act were terminated, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired or, with respect to certain persons, eliminated. If the Shares were no longer registered under the Exchange Act, the Shares would no longer be eligible for NYSE listing. Parent and Purchaser intend to cause the Company to make an application for termination of registration of the Shares as soon as possible after consummation of the Offer if the Shares are then eligible for such termination. MARGIN SECURITIES. The Shares are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on such Shares as collateral. Depending on factors similar to those described above regarding listing and market quotations, it is possible the Shares would no longer constitute "margin securities" for purposes of the Federal Reserve Board's margin regulations and therefore could no longer be used as collateral for loans made by brokers. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be "margin securities." 14. DIVIDENDS AND DISTRIBUTIONS. As discussed in Section 11, pursuant to the Merger Agreement, without the prior approval of Parent or as otherwise contemplated in the Merger Agreement, the Company has agreed to not (i) declare, set aside, make or pay any dividend or other distribution in respect of any of its capital stock, except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) except as required by the terms of any security as in effect on the date of the Merger Agreement or expressly permitted under the Merger Agreement, amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary 28 to amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Common Stock or any option, warrant or right, directly or indirectly, to acquire any such securities, or propose to do any of the foregoing. 15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer, Purchaser will not be required to accept for payment or, subject to the Merger Agreement and any applicable rules and regulations of the Commission, including Rule 14e-1(c) promulgated under the Exchange Act, pay for, and (subject to any such rules or regulations) may postpone the acceptance for payment of or the payment for any tendered Shares and (except as provided in the Merger Agreement) amend or terminate the Offer if: (1) the Minimum Condition has not been satisfied prior to the expiration of the Offer; (2) any applicable waiting period under the HSR Act has not expired or been terminated prior to the expiration of the Offer; or (3) any of the following conditions exist at the expiration date of the Offer: (a) the representations and warranties of the Company set forth in the Merger Agreement shall not have been true or correct in any material respect as of the date of the Merger Agreement or there has been a breach by the Company which would have a Company Material Adverse Effect of any covenant or agreement set forth in the Merger Agreement which is not remedied within five (5) days (or by the date of expiration of the Offer if sooner) of written notice specifying the breach; (b) (i) there shall be any action taken, or any statute, rule, regulation, decree, order or injunction promulgated, enacted, entered into or enforced by any state, federal or foreign government or governmental agency or authority or by any court (domestic or foreign) that would (a) make the acceptance for payment of, the payment for, or the purchase of, some or all of the Shares by Purchaser illegal or otherwise materially restrict or prohibit consummation of the Offer or the Merger, (b) restrict or prohibit the ability of Purchaser, or render Purchaser unable, to accept for payment, pay for or purchase some or all of Shares in a manner that is adverse in any material respect to the transactions contemplated by the Offer or the Merger, (c) require the divestiture by Parent, Purchaser or the Company or any of their subsidiaries of material portions of their business, assets or property or any Shares, or impose any material limitation on their ability to conduct their business and own their assets, properties and Shares, (d) impose material limitations on the ability of Purchaser or Parent to acquire or hold or to exercise effectively all rights of ownership of Shares, including, without limitation, the right to vote any Shares purchased by Purchaser on all matters properly presented to the stockholders of the Company or (e) impose any limitations on the ability of Parent or Purchaser or any of their subsidiaries effectively to control in any material respect the business or operations of the Company or its subsidiaries; (ii) there shall have been instituted, pending or threatened (in writing or by public announcement) an action by a governmental entity seeking (a) to restrain or prohibit the making or consummation of the Offer or the consummation of the Merger or (b) to impose any other restriction, prohibition or limitation referred to in the foregoing sub-paragraph (i); (c) since the date of the Merger Agreement there shall have occurred any material adverse effect in the financial condition, business, operations, liquidity, property or assets of the Company and its Subsidiaries taken as a whole; PROVIDED, HOWEVER, that events or conditions that affect the automotive supply industry generally and affect all other 29 similarly situated companies in the automotive supply industry shall not be deemed a material adverse change for purposes of this paragraph (c); (d) 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) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) any material limitation (whether or not mandatory) by any governmental authority on the extension of credit by commercial banks or other commercial lending institutions, (iv) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the United States, or (v) in the case of any of the foregoing existing at the time of the commencement of the Offer a material acceleration or worsening thereof; (e) the Merger Agreement shall have been terminated in accordance with its terms; (f) the Board shall have withdrawn, modified or amended in any respect adverse to Parent or Purchaser its recommendation of the Offer and the Merger or resolved to do so in any manner adverse to Parent or shall have withdrawn its recommendation of the Offer, or shall have recommended acceptance of any Takeover Proposal or shall have resolved to do any of the foregoing; or (g) any corporation, entity or group (as defined in the Exchange Act), other than Parent and Purchaser shall have acquired beneficial ownership of more than 20% of the outstanding Shares, or shall have been granted any options or rights, conditional or otherwise, to acquire a total of more than 20% of the outstanding Shares and does not tender the Shares beneficially owned by it in the Offer; (h) the Rights have not been exercised; which in the reasonable judgment of Parent or the Purchaser, in any such case, and regardless of the circumstances giving rise to such condition, makes it inadvisable to proceed with the Offer and/or with such acceptance for payment or payments. The foregoing conditions are for the sole benefit of Parent and Purchaser and may be asserted by Parent and Purchaser regardless of the circumstances giving rise to any such condition, and, subject to the terms of the Merger Agreement, may be waived by Parent and Purchaser, in whole or in part, at any time and from time to time, in the sole discretion of Parent and Purchaser. The failure by Parent and Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any right, the waiver of such right with respect to any particular facts or circumstances shall not be deemed a waiver with respect to any other facts or circumstances, and each right shall be deemed an ongoing right which may be asserted at any time and from time to time. Should the Offer be terminated pursuant to the foregoing provisions, all tendered Shares not theretofore accepted for payment pursuant thereto shall forthwith be returned to the tendering stockholders. 16. CERTAIN LEGAL MATTERS. GENERAL. Except as described in this Section 16, based on a review of publicly available filings by the Company with the Commission and other publicly available information concerning the Company, Purchaser is not aware of any license or regulatory permit that appears to be material to the business of the Company and that might be adversely affected by Purchaser's acquisition of Shares pursuant to the Offer, or of any approval or other action by any governmental, administrative or regulatory agency or authority, domestic or foreign, that would be required for the acquisition or ownership of Shares by Purchaser pursuant to the Offer. Should any such approval or other action be required, it is presently contemplated that such approval or action would be sought, except as described below under "--State Takeover Laws." While Purchaser does not currently intend to delay acceptance for payment of Shares 30 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 required, would be obtained without substantial conditions or that adverse consequences would not result to the Company's business or that certain parts of the Company's business would not have to be disposed of in the event that such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, Purchaser may decline to accept for payment or pay for any Shares tendered. See Section 15. STATE TAKEOVER LAWS. The Company and certain of its subsidiaries conduct business in a number of states throughout the United States, some of which have adopted laws and regulations applicable to offers to acquire shares of corporations that are incorporated or have substantial assets, stockholders and/or a principal place of business in such states. In EDGAR V. MITE CORP., the Supreme Court of the United States held that the Illinois Business Takeover Statute, which involved state securities laws that made the takeover of certain corporations more difficult, imposed a substantial burden on interstate commerce and was therefore unconstitutional. In CTS CORP. V. DYNAMICS CORP. OF AMERICA, however, the Supreme Court of the United States held that a state may, as a matter of corporate law and, in particular, those laws concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without prior approval of the remaining stockholders, PROVIDED that such laws were applicable only under certain conditions, in particular, that the corporation has a substantial number of stockholders in and is incorporated under the laws of such state. Subsequently, in TLX ACQUISITION CORP. V. TELEX CORP., a federal district court in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as they applied to corporations incorporated outside Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in TYSON FOODS, INC. V. MCREYNOLDS, a federal district court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. The Company is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL ("Section 203") prevents an "interested stockholder" (including a person who owns or has the right to acquire 15% or more of the corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other actions) with a Delaware corporation for a period of three years following the date such person became an interested stockholder. The Board has taken all appropriate action so that neither Parent nor Purchaser is or will be considered an "interested stockholder" pursuant to Section 203. Neither Parent nor Purchaser has determined whether any other state takeover laws and regulations will by their terms apply to the Offer or the Merger, and, except as set forth above, neither Parent nor Purchaser has presently sought to comply with any state takeover statute or regulation. Parent and Purchaser reserve the right to challenge the applicability or validity of any state law or regulation purporting to apply to the Offer or the Merger, and neither anything in this Offer to Purchase nor any action taken in connection herewith is intended as a waiver of such right. In the event it is asserted that one or more state takeover statutes is applicable to the Offer or the Merger and an appropriate court does not determine that such statute is inapplicable or invalid as applied to the Offer or the Merger, Parent or Purchaser might be required to file certain information with, or to receive approval from, the relevant state authorities, and Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in consummating the Offer. ANTITRUST. Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (the "FTC"), certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the FTC and certain waiting period requirements have been satisfied. The purchase of Shares pursuant to the Offer is subject to such requirements. 31 Pursuant to the requirements of the HSR Act, Purchaser filed a Notification and Report Form with respect to the Offer and Merger with the Antitrust Division and the FTC on March 21, 2000. As a result, the waiting period applicable to the purchase of Shares pursuant to the Offer is scheduled to expire at 11:59 p.m., New York City time, fifteen (15) days after such filing. However, prior to such time, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material relevant to the Offer from Purchaser. If such a request is made, the waiting period will be extended until 11:59 p.m., New York City time, on the tenth day after substantial compliance by Purchaser with such request. Thereafter, such waiting period can be extended only by court order. A request is being made pursuant to the HSR Act for early termination of the waiting period applicable to the Offer. There can be no assurance, however, that the applicable 15-day HSR Act waiting period will be terminated early. Shares will not be accepted for payment or paid for pursuant to the Offer until the expiration or early termination of the applicable waiting period under the HSR Act. See Section 15. Any extension of the waiting period will not give rise to any withdrawal rights not otherwise provided for by applicable law. See Section 3. If Purchaser's acquisition of Shares is delayed pursuant to a request by the Antitrust Division or the FTC for additional information or documentary material pursuant to the HSR Act, the Offer will be extended in certain circumstances. See Section 1. The Antitrust Division and the FTC scrutinize the legality under the antitrust laws of transactions such as the acquisition of Shares by Purchaser pursuant to the Offer. At any time before or after the consummation of any such transactions, the Antitrust Division or the FTC could take such action under the antitrust laws of the United States as it deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or seeking divestiture of the Shares so acquired or divestiture of substantial assets of Parent or the Company. Private parties (including individual States) may also bring legal actions under the antitrust laws of the United States. Purchaser does not believe that the consummation of the Offer will result in a violation of any applicable antitrust laws. However, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made, or if such a challenge is made, what the result will be. See Section 15 for certain conditions to the Offer, including conditions with respect to certain governmental actions and Section 11 for certain termination rights. NON-U.S. ANTITRUST The German Act Against Restraints of Competition prohibits the Purchaser from purchasing and voting the Shares until notification has been filed with the German Federal Cartel Office (the "Cartel Office") and the Cartel Office has cleared the transaction. Upon receipt of the notification, the Cartel Office conducts a preliminary review with a maximum duration of 30 days. Upon conclusion of the preliminary review, the Cartel Office may either approve the transaction or initiate an in-depth review which may, at a maximum, take an additional 90 days if further examination is necessary to determine whether the transaction is compatible with the German Act Against Restraints of Competition. The Purchaser and the Company plan to jointly file the notification with the Cartel Office. There can be no assurances that the Cartel Office might not open an in-depth review to further examine the transaction under the German Act Against Restraints of Competition. 17. FEES AND EXPENSES. Parent and Purchaser have retained Georgeson Shareholder Communications Inc. to be the Information Agent and First Chicago Trust Company of New York to be the Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telecopy, telegraph and personal interview and may request banks, brokers, dealers and other nominees to forward materials relating to the Offer to beneficial owners of Shares. 32 The Information Agent and the Depositary each will receive reasonable and customary compensation for their respective services in connection with the Offer, will be reimbursed for reasonable out-of-pocket expenses, and will be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under federal securities laws. None of Parent or Purchaser will pay any fees or commissions to any broker or dealer or to any other person (other than to the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by Purchaser for customary mailing and handling expenses incurred by them in forwarding offering materials to their customers. 18. MISCELLANEOUS. The Offer is being made to all holders of Shares. Purchaser is not aware of any jurisdiction where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good faith effort to comply with any such state statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, Purchaser cannot comply with any such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF PARENT OR PURCHASER NOT CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. Parent and Purchaser have filed with the SEC a Tender Offer Statement on Schedule TO, together with all exhibits thereto, pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, furnishing certain additional information with respect to the Offer. In addition, the Company has filed a Solicitation/Recommendation Statement on Schedule 14D-9, together with all exhibits thereto, pursuant to Rule 14d-9 of the General Rules and Regulations of the Exchange Act setting forth its recommendation with respect to the Offer and the reasons for such recommendations and furnishing certain additional related information. Such Schedules and any amendments thereto, including exhibits, may be inspected and copies may be obtained from the offices of the Commission in the manner set forth in Section 7 (except that they will not be available at the regional offices of the Commission). OEA Merger Corporation March 24, 2000 33 SCHEDULE I INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER 1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. Set forth in the table below are the name and the present principal occupations or employment and citizenship and the name, principal business and address of any corporation or other organization in which such occupation or employment is conducted, and the five-year employment history of each of the directors and executive officers of Parent. The principal business address of Parent, and, unless otherwise indicated, the business address of each person identified below, is World Trade Center, Klarabergsviadukten 70, SE-107 24 Stockholm, Sweden.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, CITIZENSHIP AND MATERIAL NAME POSITIONS HELD DURING THE PAST FIVE YEARS - ---- ------------------------------------------------------ Gunnar Bark Chairman of the Board and Chief Executive Officer from May 1, 1997 until January 31, 1999. He has been Chairman of the Board since May 1, 1997. He is a Swedish citizen. Lars Westerberg President and Chief Executive Officer since February 1, 1999. Director of the Board. He is a Swedish citizen. Leif Berntsson Vice President Purchasing since May 1, 1997. He has been Vice President Quality of Autoliv AB since 1988 and Vice President Purchasing of Autoliv AB since 1992. He is a Swedish citizen. Hans Biorck Vice President and Chief Financial Officer since April 1, 1999. He has been Vice President, Treasurer since September 1998. Prior to such time, he held CFO positions in Esselte AB and EBS Inc. He is a Swedish citizen. Wilhelm Kull Vice President IT and Chief Financial Officer from May 1, 1997 until March 31, 1999. He is a Swedish citizen. Claes Humbla Vice President Human Resources since May 1, 1997. He has been Vice President Human Resources of Autoliv AB since 1989. He is a Swedish citizen. Yngve Haland Vice President Research since May 1, 1997. He has been Vice President Research of Autoliv AB since 1994. Prior to such time, he was Group Manager Research for Autoliv AB since 1989. He is a Swedish citizen. Benoit Marsaud Vice President Manufacturing since February 4, 1998. He has been Vice President Manufacturing of Autoliv AB since 1992 and was appointed President of Autoliv France in May 1997. He is a French citizen. Mats Odman Director of Investor Relations since May 1, 1997. He has been Director of Investor Relations of Autoliv AB since 1994. He previously held the same position in Fermenta AB and Gambro AB. Prior to such time, he was Investor Relations Manager of Pharmacia AB. He is a Swedish citizen.
34
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, CITIZENSHIP AND MATERIAL NAME POSITIONS HELD DURING THE PAST FIVE YEARS - ---- ------------------------------------------------------ Jan Olsson Vice President Engineering since October 1, 1997. He has been Manager of Engineering of Autoliv Sverige AB since 1989 and President of such company since August 1994. He is a Swedish citizen. Hans-Goran Persson Vice President Purchasing since July 1, 1999. He previously held the same positions at SKF, Volvo Cars and in the passenger car division of Saab-Scania. He is a Swedish citizen. Jorgen I. Svensson Vice President Legal Affairs, General Counsel and Secretary since May 1, 1997. He has been Legal Counsel of Autoliv AB since 1989, General Counsel since 1991 and Vice President Legal Affairs and General Counsel since 1994. He has also been Vice President and Treasurer of Purchaser since March 13, 2000. He is a Swedish citizen.
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. Set forth in the table below are the name and the present principal occupations or employment and citizenship and the name, principal business and address of any corporation or other organization in which such occupation or employment is conducted, and the five-year employment history of each of the directors and executive officers of Purchaser. The principal business address of Purchaser and, unless otherwise indicated, the business address of each person identified below, is the World Trade Center, Klarabergsviadukten 70, SE-107 24 Stockholm, Sweden.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, CITIZENSHIP AND MATERIAL NAME POSITIONS HELD DURING THE PAST FIVE YEARS - ---- ------------------------------------------------------ Hans Biorck President since March 13, 2000. He has been Vice President and Chief Financial Officer of Parent since April 1, 1999 and Vice President, Treasurer since September 1998. Prior to such time, he held CFO positions in Esselte AB and EBS Inc. He is a Swedish citizen. Jorgen I. Svensson Vice President and Treasurer of Purchaser since March 13, 2000. He has been Vice President Legal Affairs, General Counsel and Secretary of Parent since May 1, 1997. He has also been Legal Counsel of Autoliv AB since 1989, General Counsel since 1991 and Vice President Legal Affairs and General Counsel since 1994. He is a Swedish citizen. Michael Anderson Vice President and Secretary since March 13, 2000. He has also been Vice President and General Counsel of Autoliv ASP since March 31, 1998. He was previously Vice President and Special Counsel of Autoliv ASP from May 1, 1997 to March 31, 1998 and Vice President and General Counsel of Autoliv North America, Inc. from August 1994 to May 1, 1997. His business address is 1320 Pacific Drive, Auburn Hills, Michigan 48326. He is a U.S. citizen.
35 Manually signed facsimile copies of the Letter of Transmittal will be accepted. Letters of Transmittal and certificates for Shares should be sent or delivered by each stockholder of the Company or his broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below: The Depositary for the Offer is: FIRST CHICAGO TRUST COMPANY OF NEW YORK BY HAND: BY MAIL: BY OVERNIGHT COURIER: First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company of New York of New York of New York Attention: Corporate Actions Attention: Corporate Actions Attention: Corporate Actions c/o Securities Transfer and Suite 4660 Suite 4660 Reporting Services Inc. P.O. Box 2565 525 Washington Boulevard 100 William Jersey City, NJ 07303-2565 Jersey City, NJ 07310 Street--Galleria J New York, NY 10038 FOR INFORMATION CALL: (800) 251-4215
Any questions or requests for assistance may be directed to the Information Agent at its address and telephone numbers set forth below. Requests for additional copies of this Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent. Stockholders may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Offer. The Information Agent for the Offer is: [LOGO] 17 State Street, 10(th) Floor New York, N.Y. 10004 Brokers and Bankers Call Collect (212) 440-9800 Or All Other Call Toll Free (800) 223-2064 EX-99.(A)(1)(B) 3 EXHIBIT 99(A)(1)(B) LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE COMMON STOCK) OF OEA, INC. PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 24, 2000 BY OEA MERGER CORPORATION AN INDIRECT WHOLLY OWNED SUBSIDIARY OF AUTOLIV, INC. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 24, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- THE DEPOSITARY FOR THE OFFER IS: FIRST CHICAGO TRUST COMPANY OF NEW YORK BY HAND: BY MAIL: BY OVERNIGHT COURIER: First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company of New York of New York of New York Attention: Corporate Actions Attention: Corporate Actions Attention: Corporate Actions c/o Securities Transfer and Suite 4660 Suite 4660 Reporting Services Inc. P.O. Box 2565 525 Washington Boulevard 100 William Jersey City, NJ 07303-2565 Jersey City, NJ 07310 Street--Galleria J New York, NY 10038 FOR INFORMATION CALL: (800) 251-4215
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
DESCRIPTION OF SHARES TENDERED Name(s) and Address(es) of Registered Holder(s) Share Certificate(s) and Share(s) (Please Fill in Exactly as Name(s) Appears on Share Tendered Certificate(s)) (Attach Additional List If Necessary) Shares Share Represented by Number of Certificate Share Shares Number(s)* Certificate(s)* Tendered** Total Shares
* Need not be completed by stockholders tendering by book-entry transfer. ** Unless otherwise indicated, all Shares represented by certificates delivered to the Depositary will be deemed to have been tendered. See Instruction 4. IF CERTIFICATES HAVE BEEN LOST, DESTROYED OR STOLEN PLEASE SEE INSTRUCTION 8.
This Letter of Transmittal is to be completed by stockholders either if certificates representing Shares (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined in Instruction 2) is utilized, if delivery is to be made by book-entry transfer to the account maintained by the Depositary at The Depository Trust Company ("DTC") pursuant to the procedures set forth in Section 2 of the Offer to Purchase dated March 24, 2000 (the "Offer to Purchase"). Stockholders whose certificates are not immediately available, or who cannot deliver their certificates or confirmation of the book-entry transfer of their Shares into the Depositary's account at DTC ("Book-Entry Confirmation") and all other documents required hereby to the Depositary on or prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase), must tender their Shares according to the guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. / / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY AT DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution Account Number Transaction Code Number / / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holders(s): Window Ticket Number (if any): Date of Execution of Notice of Guaranteed Delivery: Name of Institution that Guaranteed Delivery:
2 NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to OEA Merger Corporation, a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Autoliv, Inc., a Delaware corporation ("Parent"), the above-described shares of common stock, par value $0.10 per share, including the associated rights to purchase shares of common stock (collectively, the "Shares"), of OEA, Inc. (the "Company"), pursuant to Purchaser's offer to purchase all of the outstanding Shares at a price of $10.00 per Share, net to the tendering stockholder in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 24, 2000 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, including any amendments or supplements thereto collectively constitute the "Offer"). Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates or subsidiaries, the right to purchase Shares tendered pursuant to the Offer. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer, the undersigned hereby sells, assigns, and transfers to, or upon the order of, Purchaser all right, title and interest in, to and under all of the Shares that are being tendered hereby (and any and all dividends, distributions and all other Shares or other securities or rights issued or issuable in respect thereof on or after March 24, 2000) and irrevocably appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any such other Shares or securities or rights), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (a) deliver certificates representing such Shares (and any such other Shares or securities or rights), or transfer ownership of such Shares (and any such other Shares or securities or rights) on the account books maintained by DTC, together in either such case with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser upon receipt by the Depositary, as the undersigned's agent, of the purchase price (adjusted, if appropriate, as provided in the Offer to Purchase), (b) present such Shares (and any such other Shares or securities or rights) for registration 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 any such other Shares or securities or rights), all in accordance with the terms of the Offer. The undersigned hereby irrevocably appoints Jorgen Svensson, Michael Anderson and any other designee of Purchaser, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution and resubstitution, to vote in such manner as each such attorney-in-fact and proxy or his substitute shall, in his sole discretion, deem proper, and otherwise act (including pursuant to written consent) with respect to all the Shares tendered hereby which have been accepted for payment by Purchaser prior to the time of such vote or action (and any and all dividends, distributions and all other Shares or securities or rights issued or issuable in respect thereof on or after March 24, 2000), which the undersigned is entitled to vote at any meeting of stockholders (whether annual or special and whether or not an adjourned meeting) of the Company, or by consent in lieu of any such meeting, or otherwise. This proxy and power of attorney is coupled with an interest in the Shares tendered hereby, is irrevocable, is granted in consideration of, and is effective upon, the acceptance for payment of such Shares (and any such other Shares or securities or rights) by Purchaser in accordance with the terms of the Offer. Such acceptance for payment shall revoke all prior proxies granted by the undersigned at any time with respect to such Shares (and any such other Shares or securities or rights) and no subsequent proxies will be given (and if given will be deemed to be ineffective) with respect thereto by the undersigned. The undersigned acknowledges that in order for Shares to be deemed validly tendered, immediately upon the acceptance for payment of such Shares, Purchaser or Purchaser's designee must 3 be able to exercise full voting and other rights of a record and beneficial holder with respect to such Shares. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby (and any and all dividends, distributions and all other Shares or securities or rights issued or issuable in respect thereof on or after March 24, 2000), and that, when the same are accepted for payment by Purchaser, Purchaser will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse claim. The undersigned, upon request, will execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any such other Shares or securities or rights). No authority herein conferred or agreed to be conferred in this Letter of Transmittal shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 2 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase, Purchaser may not be required to accept for payment any of the Shares tendered hereby. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price and/or return any certificates representing Shares not tendered or accepted for payment in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered." Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price and/or return any certificates representing Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the registered holder(s) appearing under "Description of Shares Tendered" at the address shown below such registered holder(s) name(s). In the event that either or both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the purchase price and/or return any certificates representing Shares not tendered or accepted for payment in the name(s) of, and deliver such check and/or return such certificates to, the person or persons so indicated. Stockholders tendering Shares by book-entry transfer may request that any Shares not accepted for payment be returned by crediting such stockholder's account maintained at DTC. The undersigned recognizes that Purchaser has no obligation pursuant to the "Special Payment Instructions" to transfer any Shares from the name of the registered holder(s) thereof if Purchaser does not accept for payment any of the Shares so tendered hereby. 4 -------------------------------------------SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) 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 / / certificate(s) to: Name(s): _______________________________________________________________________ ________________________________________________________________________________ (PLEASE PRINT) Address: _______________________________________________________________________ ________________________________________________________________________________ (ZIP CODE) ________________________________________________________________________________ (TAXPAYER IDENTIFICATION NO.) - ------------------------------------------------------ - ------------------------------------------------------ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) 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 / / certificate(s) to: Name: __________________________________________________________________________ (PLEASE PRINT) Address: _______________________________________________________________________ ________________________________________________________________________________ (ZIP CODE) ________________________________________________________________________________ (TAXPAYER IDENTIFICATION NO.) - ----------------------------------------------------- 5 SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY - -------------------------------------------------------------------------------- SIGN HERE (PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW) ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ Signature(s) of Owners Dated ___________________, 2000 Name(s) ____________________________________________________________________ ____________________________________________________________________________ (Please Print) Capacity (Full Title) ______________________________________________________ Address ____________________________________________________________________ ____________________________________________________________________________ (Include Zip Code) Daytime Area Code and Telephone Number ( )________________________________ (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 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, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) GUARANTEE OF SIGNATURE(S) (IF REQUIRED; SEE INSTRUCTIONS 1 AND 5) FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE BELOW: Authorized Signature(s) ____________________________________________________ Name _______________________________________________________________________ Name of Firm _______________________________________________________________ Address ____________________________________________________________________ (Include Zip Code) Area Code and Telephone Number _____________________________________________ Dated __________________, 2000 - -------------------------------------------------------------------------------- 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER (1) GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of Transmittal is required (i) if 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 DTC whose name appears on a security position listing as the owner of Shares) tendered herewith, unless such holder has completed the box entitled "Special Payment Instructions" on this Letter of Transmittal, or (ii) if such Shares are tendered for the account of a firm that is a member in good standing of the Security Transfer Agent's Medallion Program (each being hereinafter referred to as an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. (2) DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of Transmittal is to be completed by stockholders either if certificates representing Shares are to be forwarded herewith to the Depositary or, unless an Agent's Message (as defined below) is utilized, if tenders of Shares are to be made pursuant to the procedures for delivery by book-entry transfer set forth in Section 2 of the Offer to Purchase. Certificates representing all physically tendered Shares, or any book-entry confirmation of Shares, as the case may be, together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees, (or, in connection with a book-entry transfer, an Agent's Message) and any other documents required by this Letter of Transmittal must be received by the Depositary at one of its addresses set forth herein on or prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). If a stockholder's certificate(s) representing Shares are not immediately available (or the procedure for the book-entry transfer cannot be completed on a timely basis) or time will not permit all required documents to reach the Depositary on or prior to the Expiration Date, such stockholder's Shares may nevertheless be tendered if the procedures for guaranteed delivery set forth in Section 2 of the Offer to Purchase are followed. Pursuant to such procedure, (i) such tender must be made by or through an Eligible Institution, (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by Purchaser, must be received by the Depositary on or prior to the Expiration Date, and (iii) the certificates representing all tendered Shares, in proper form for transfer, or Book-Entry Confirmation of Shares, as the case may be, in each case together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with any required signature guarantees (or, in connection with a book-entry transfer, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in Section 2 of the Offer to Purchase. The term "Agent's Message" means a message transmitted through electronic means by DTC to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the DTC participant tendering the Shares that such participant has received, and agrees to be bound by, this Letter of Transmittal. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATE(S) REPRESENTING SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER. THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF SUCH DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted, and no fractional Shares will be purchased. All tendering stockholders, by execution of this Letter of Transmittal (or a manually signed facsimile thereof), waive any right to receive any notice of the acceptance of their Shares for payment. (3) INADEQUATE SPACE. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate signed schedule attached hereto. 7 (4) PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER SHARES BY BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any certificate submitted are to be tendered, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered." In such case, new certificate(s) representing the remainder of the Shares that were represented by the old certificate(s) will be sent to the registered holder(s), unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by certificate(s) delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. (5) SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face(s) of the certificate(s) without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and tendered hereby, no endorsements of certificates or separate stock powers are required, unless payment or certificates for Shares not tendered or accepted for payment are to be issued to a person other than the registered holder(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any certificates or stock powers are 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 Purchaser of such person's authority so to act must be submitted. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, the 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 on the certificates. Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution, unless the signature is that of an Eligible Institution. (6) STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, Purchaser will pay or cause to be paid any stock transfer taxes with respect to the transfer and sale of purchased Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if certificates representing Shares not tendered or accepted for payment are to be registered in the name of, any person other than the registered holder(s), or if tendered certificates 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) or such other person) payable on account of the transfer to such person will be deducted from the purchase price, unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. (7) SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check and/or certificates representing Shares not tendered or accepted for payment are to be issued in the name of a person other than the signer of this Letter of Transmittal or if a check is to be sent and/or such certificates are to be returned to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Stockholders tendering Shares by book-entry transfer may request that Shares not accepted for payment be credited to such account maintained at DTC as such stockholder may designate herein. If no such instructions are given, such Shares not accepted for payment will be returned by crediting the account at DTC designated above. (8) LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s) representing Shares has been lost, destroyed or stolen, the stockholder should promptly contact LaSalle Bank N.A., which is the Company's transfer agent, by calling 1-800-246-5761. The stockholder will then be instructed as to the 8 steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen certificates have been followed. (9) WAIVER OF CONDITIONS. The conditions to the Offer may be waived by Purchaser, in whole or in part, at any time and from time to time in Purchaser's sole discretion (subject to the provisions of the Merger Agreement referred to in the Offer to Purchase). (10) TAXPAYER IDENTIFICATION NUMBER AND BACKUP WITHHOLDING. U.S. federal income tax law generally requires that a shareholder tendering Shares pursuant to the Offer must provide the Depositary (the "Payor") with his correct Taxpayer Identification Number ("TIN"), which, in the case of a shareholder who is an individual, is his social security number. If the Payor is not provided with the correct TIN or an adequate basis for an exemption, such shareholder may be subject to a $50 penalty imposed by the Internal Revenue Service and backup withholding at the rate of 31% may be imposed upon the gross proceeds of any payment received hereunder. If withholding results in an overpayment of taxes, a refund may be obtained. To prevent backup withholding, each tendering shareholder must provide his correct TIN by completing the "Substitute Form W-9" set forth herein, which requires such shareholder to certify that the TIN provided is correct (or that such shareholder is awaiting a TIN) and that (i) the shareholder has not been notified by the Internal Revenue Service that he is subject to backup withholding as a result of a failure to report all interest or dividends or (ii) the Internal Revenue Service has notified the shareholder that he is no longer subject to backup withholding. Exempt shareholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. To prevent possible erroneous backup withholding, an exempt shareholder must enter its correct TIN in Part 1 of Substitute Form W-9, write "Exempt" in Part 2 of such form, and sign and date the form. See the enclosed Guidelines for Certification of Taxpayer Identification Number of Substitute Form W-9 (the "W-9 Guidelines") for additional instructions. If Shares are held in more than one name or are not in the name of the actual owner, consult the W-9 Guidelines for information on which TIN to report. If you do not have a TIN, consult the W-9 Guidelines for instructions on applying for a TIN, write "Applied For" in the space for the TIN in Part 1 of the Substitute Form W-9, and sign and date the Substitute Form W-9 and the Certificate of Awaiting Taxpayer Identification Number set forth herein. If you do not provide your TIN to the Payor within 60 days, backup withholding will begin and continue until you furnish your TIN to the Payor. NOTE: WRITING "APPLIED FOR" ON THE FORM MEANS THAT YOU HAVE ALREADY APPLIED FOR A TIN OR THAT YOU INTEND TO APPLY FOR ONE IN THE NEAR FUTURE. (11) NON-UNITED STATES HOLDERS. Non-United States holders must submit a completed Form W-8BEN to avoid backup withholding. Form W-8BEN may be obtained by contacting the Payor at one of the addresses on the face of this Letter of Transmittal. (12) REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance may be directed to the Information Agent at the address set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be obtained from the Information Agent at the address set forth below or from your broker, dealer, commercial bank, trust company or other nominee. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE THEREOF), TOGETHER WITH CERTIFICATES REPRESENTING SHARES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS, OR THE NOTICE OF GUARANTEED DELIVERY, MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE. 9 IMPORTANT TAX INFORMATION Under United States federal income tax law, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with such stockholder's correct social security number, individual taxpayer identification number, or employer identification number (each a Taxpayer Identification Number or a "TIN") on Substitute Form W-9 provided below. If such stockholder is an individual, the TIN is such person's social security number. The TIN of a resident alien who does not have and is not eligible to obtain a social security number is such person's IRS individual taxpayer identification number. If a tendering stockholder is subject to United States federal backup withholding, the stockholder must cross out item (2) of the Certification box on the Substitute Form W-9. If the Depositary is not provided with the correct TIN, the stockholder may be subject to a $50 penalty imposed by the IRS. In addition, payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to United States federal backup withholding. Certain stockholders (including, among others, all corporations and certain non-United States individuals) are not subject to United States federal backup withholding. In order for a non-United States individual to qualify as an exempt recipient, that stockholder must submit to the Depositary a properly completed IRS Form W-8BEN, signed under penalties of perjury, attesting to that individual's exempt status. Such forms may be obtained from the Depositary. Exempt stockholders, other than non-United States individuals, should furnish their TIN, write "EXEMPT" on the face of the Substitute Form W-9 below, and sign, date and return the Substitute Form W-9 to the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If United States federal backup withholding applies, the Depositary is required to withhold 31% of any payments made to the stockholder. Federal backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the IRS. PURPOSE OF SUBSTITUTE FORM W-9 To prevent United States federal backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder's correct TIN by completing the Substitute Form W-9 below certifying that the TIN provided on such form is correct (or that such stockholder is awaiting a TIN) and that (i) such holder is exempt from federal backup withholding, (ii) such holder has not been notified by the IRS that such holder is subject to federal backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified such holder that such holder is no longer subject to federal backup withholding (see Part 2 of Substitute Form W-9). WHAT NUMBER TO GIVE THE DEPOSITARY The stockholder is required to give the Depositary the TIN of the record owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidelines on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, such stockholder should write "Applied For" in the space provided for in the TIN in Part I, check the box in Part III, and sign and date the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary may withhold 31% on all payments of the purchase price until a TIN is provided to the Depositary. 10 PAYER: FIRST CHICAGO TRUST COMPANY OF NEW YORK PART II FOR PAYEES EXEMPT SUBSTITUTE FROM BACKUP WITHHOLDING FORM W-9 (SEE ENCLOSED GUIDELINES) PART I TAXPAYER IDENTIFICATION NO.--FOR ALL ACCOUNTS Enter your taxpayer identification ---------------- PART III number in the appropriate box. For SOCIAL SECURITY AWAITING TIN / / most individuals and sole NUMBER DEPARTMENT OF THE proprietors, this is your Social OR TREASURY INTERNAL Security Number. For other entities, ---------------- REVENUE SERVICE it is your Employer Identification EMPLOYEE PAYER'S REQUEST FOR Number. If you do not have a number, IDENTIFICATION TAXPAYER see "How to Obtain a TIN" in the NUMBER IDENTIFICATION NO. enclosed GUIDELINES. 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. CERTIFICATION--Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me); (2) I am not subject to backup withholding either 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 a failure to report all interest or dividends, or (c) the IRS has notified me that I no longer subject to backup withholding; and (3) Any information provided on this form is true, correct and complete. YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN AND YOU HAVE NOT RECEIVED A NOTICE FROM THE IRS ADVISING YOU THAT BACKUP WITHHOLDING HAS TERMINATED. 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 ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number within (60) days, 31% of all reportable payments made to me thereafter will be withheld until I provide a number. Signature Date
11 THE INFORMATION AGENT FOR THE OFFER IS: Georgeson Shareholder Communications Inc. [LOGO] 17 State Street, 10(th) Floor New York, N.Y. 10004 Brokers and Bankers Call Collect (212) 440-9800 All Other Call Toll Free (800) 223-2064 12 EX-99.(A)(1)(C) 4 EXHIBIT 99(A)(1)(C) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE COMMON STOCK) OF OEA, INC. BY OEA MERGER CORPORATION AN INDIRECT WHOLLY OWNED SUBSIDIARY OF AUTOLIV, INC. (NOT TO BE USED FOR SIGNATURE GUARANTEES) This form, or one substantially equivalent hereto, must be used to accept the Offer (as defined below) if certificates representing shares of common stock, par value $0.10 per share, including the associated rights to purchase shares of common stock (collectively, the "Shares"), of OEA, Inc., a Delaware corporation (the "Company"), are not immediately available (or if the procedure for book-entry transfer cannot be completed on a timely basis), or if time will not permit all required documents to reach the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase (as defined below)). Such form may be delivered by hand, transmitted by facsimile transmission or mailed to the Depositary at the addresses and facsimile number set forth below. See Section 2 of the Offer to Purchase. THE DEPOSITARY FOR THE OFFER IS: First Chicago Trust Company of New York BY HAND: BY MAIL: BY OVERNIGHT COURIER: First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company of New York of New York of New York Attention: Corporate Actions Attention: Corporate Actions Attention: Corporate Actions c/o Securities Transfer and Suite 4660 Suite 4660 Reporting Services Inc. P.O. Box 2565 525 Washington Boulevard 100 William Street--Galleria Jersey City, NJ 07303-2565 Jersey City, NJ 07310 New York, NY 10038 BY FACSIMILE TRANSMISSION (FOR ELIGIBLE INSTITUTIONS ONLY): (201) 324-3402 or (201) 324-3403 CONFIRM RECEIPT OF FACSIMILE BY TELEPHONE ONLY: (201) 222-4707 FOR INFORMATION CALL: (800) 251-4215
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. This form 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. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal or an Agent's Message (as defined in Section 2 of the Offer to Purchase) and certificates representing the Shares to the Depositary within the time period specified herein. Failure to do so could result in a financial loss to the Eligible Institution. Ladies and Gentlemen: The undersigned hereby tenders to OEA Merger Corporation, a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Autoliv, Inc., a Delaware corporation ("Parent"), upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 24, 2000 (the "Offer to Purchase") and the related Letter of Transmittal (which, including any amendments or supplements thereto, collectively constitute the "Offer"), receipt of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase. Number of Shares: Name(s) of Record Holder(s): Certificates No(s). (if available): (Please Print) / / Check if securities will be tendered by Address(es): book-entry transfer Name of Tendering Institution: (Zip Code) Account No.: Area Code and Telephone No(s): Dated: , 2000 Signature(s) Dated: , 2000
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED 2 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a member in good standing of the Security Transfer Agent's Medallion Program (each, an "Eligible Institution"), (a) represents that the above named person(s) own(s) the Shares tendered hereby within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (b) represents that such tender of Shares complies with Rule 14e-4 under the Exchange Act, and (c) guarantees delivery to the Depositary, at one of its addresses set forth above, of certificates representing the Shares tendered hereby in proper form for transfer, or confirmation of book-entry transfer of such Shares into the Depositary's accounts at The Depository Trust Company, in each case with delivery of a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantees, or an Agent's Message in the case of a book-entry transfer, and any other required documents, within three New York Stock Exchange trading days after the date hereof. Name of Firm: (AUTHORIZED SIGNATURE) Address: Name: (PLEASE TYPE OR PRINT) Title: Zip Code Area Code and Tel. No. Date:, 2000
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. 3 EX-99.(A)(1)(D) 5 EXHIBIT 99(A)(1)(D) 17 STATE STREET, 10(TH) FLOOR [LOGO] NEW YORK, N.Y. 10004
OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE COMMON STOCK) OF OEA, INC. BY OEA MERGER CORPORATION AN INDIRECT WHOLLY OWNED SUBSIDIARY OF AUTOLIV, INC. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 24, 2000, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- March 24, 2000 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by OEA Merger Corporation, a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Autoliv, Inc., a Delaware corporation ("Parent") to act as Information Agent in connection with Purchaser's offer to purchase all of the outstanding shares of common stock, par value $0.10 per share, including the associated rights to purchase common stock (collectively, the "Shares"), of OEA, Inc., a Delaware corporation (the "Company"), at a price of $10.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 24, 2000 (the "Offer to Purchase") and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"), copies of which are enclosed herewith. The Offer is being made in connection with the Amended and Restated Agreement and Plan of Merger, dated as of February 12, 2000 (the "Merger Agreement"), among Parent, Purchaser and the Company. The Merger Agreement provides, among other things, that Purchaser will be merged with and into the Company (the "Merger") following the satisfaction or waiver of each of the conditions to the Merger set forth in the Merger Agreement. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. For your information and for forwarding to your clients, we are enclosing the following documents: (1) The Offer to Purchase. (2) The Letter of Transmittal to be used by stockholders of the Company in accepting the Offer, including a Certification of Taxpayer Identification Number on Substitute Form W-9. Facsimile copies of the Letter of Transmittal (with manual signatures) may be used to tender Shares. (3) A letter to stockholders of the Company from Dr. Charles B. Kafadar, President and Chief Executive Officer of the Company, together with a Solicitation/Recommendation Statement on Schedule 14D-9, dated March 24, 2000 filed by the Company with the Securities and Exchange Commission, which includes the recommendation of the Board of Directors of the Company that stockholders accept the Offer and tender their Shares to Purchaser pursuant to the Offer. (4) A printed form of letter which may be sent to your clients for whose account you hold Shares in your name or in the name of your nominee with space provided for obtaining such clients' instructions with regard to the Offer. (5) The Notice of Guaranteed Delivery to be used to accept the Offer if certificates representing Shares are not immediately available or if time will not permit all required documents to reach the Depositary (as defined below) prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) or if the procedures for book-entry transfer cannot be completed on a timely basis. (6) Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. Stockholders who fail to complete and sign the Substitute Form W-9 may be subject to a required federal backup withholding tax of 31% of the gross proceeds payable to such stockholder or other payee pursuant to the Offer. See Section 2 of the Offer to Purchase. (7) A return envelope addressed to First Chicago Trust Company of New York (the "Depositary") for your use only. Your attention is directed to the following: 1. The tender price is $10.00 per Share, net to the seller in cash, without interest, upon the terms and conditions set forth in the Offer to Purchase. 2. The Board of Directors of the Company unanimously (i) determined that the Offer, the Merger and the Merger Agreement are advisable, fair to, and in the best interests of, the Company's stockholders, (ii) approved the Merger, the Offer, the Merger Agreement and the other transactions contemplated by the Merger Agreement and (iii) recommends that the Company's stockholders accept the Offer and tender their Shares pursuant thereto, and approve and adopt the Merger Agreement. 3. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Monday, April 24, 2000, unless the Offer is extended. 4. The Offer is being made for all of the outstanding Shares. The Offer is conditioned upon, among other things (i) there being validly tendered and not properly withdrawn prior to the expiration date of the Offer that number of Shares which represents more than fifty percent of the total issued and outstanding Shares on a fully diluted basis (excluding Shares held by the Company or any of its subsidiaries) and (ii) the expiration or termination of any and all waiting periods applicable to the transactions contemplated by the Merger Agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Offer is also subject to other terms and conditions. See Section 15 of the Offer to Purchase. 5. Stockholders who tender Shares will not be obligated to pay brokerage fees or commissions to the Information Agent or the Depositary or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), Purchaser will accept for payment and pay for all Shares which are validly tendered on or prior to the Expiration Date and not theretofore properly withdrawn pursuant to the Offer. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates representing such Shares (or a timely confirmation of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company, pursuant to the procedures described in Section 2 of the Offer to Purchase), (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantees (or, in connection with a book-entry transfer, an Agent's Message (as defined in Section 2 of the Offer to Purchase)), and (iii) all other documents required by the Letter of Transmittal. If holders of Shares wish to tender, but it is impracticable for them to forward their certificates or other required documents prior to the expiration of the Offer, a tender may be effected by following the guaranteed delivery procedures specified under Section 2 of the Offer to Purchase. 2 Purchaser will not pay any fees or commissions to any broker or dealer or to any other person (other than the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse you for customary mailing and handling expenses incurred by you in forwarding the enclosed materials to your clients. Purchaser will pay or cause to be paid any stock transfer taxes payable on the transfer of Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 24, 2000, UNLESS THE OFFER IS EXTENDED. Any inquiries you may have with respect to the Offer should be directed to, and additional copies of the enclosed materials may be obtained by contacting, the undersigned at (800) 223-2064 (call toll free). Very truly yours, Georgeson Shareholder Communications Inc. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF PURCHASER, PARENT, THE COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. 3 EX-99.(A)(1)(E) 6 EXHIBIT 99(A)(1)(E) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE COMMON STOCK) OF OEA, INC. PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 24, 2000 BY OEA MERGER CORPORATION AN INDIRECT WHOLLY OWNED SUBSIDIARY OF AUTOLIV, INC. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 24, 2000, UNLESS THE OFFER IS EXTENDED. ---------------------------------------------------------------------------- March 24, 2000 To Our Clients: Enclosed for your consideration is an Offer to Purchase, dated March 24, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") relating to the offer by OEA Merger Corporation, a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Autoliv, Inc., a Delaware corporation ("Parent"), to purchase all of the outstanding shares of common stock, par value $0.10 per share, including the associated rights to purchase common stock (collectively, the "Shares"), of OEA, Inc., a Delaware corporation (the "Company"), at a price of $10.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer. The Offer is being made in connection with the Amended and Restated Agreement and Plan of Merger, dated as of February 12, 2000 (the "Merger Agreement"), among Parent, Purchaser and the Company. The Merger Agreement provides, among other things, that Purchaser will be merged with and into the Company (the "Merger") following the satisfaction or waiver of each of the conditions to the Merger set forth in the Merger Agreement. WE ARE THE HOLDER OF RECORD (DIRECTLY OR INDIRECTLY) OF SHARES FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US OR OUR NOMINEES 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 to have us tender on your behalf any or all of the Shares held by us for your account, pursuant to the terms and subject to the conditions set forth in the Offer. Your attention is directed to the following: 1. The tender price is $10.00 per Share, net to the seller in cash, without interest, upon the terms and conditions set forth in the Offer to Purchase 2. The Board of Directors of the Company unanimously (i) determined that the Offer, the Merger and the Merger Agreement are advisable, fair to, and in the best interests of, the Company's stockholders, (ii) approved the Merger, the Offer, the Merger Agreement and the other transactions contemplated by the Merger Agreement and (iii) recommends that the Company's stockholders accept the Offer and tender their Shares pursuant thereto and approve and adopt the Merger Agreement. 3. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Monday, April 24, 2000, unless the Offer is extended. 4. The Offer is being made for all of the outstanding Shares. The Offer is conditioned upon, among other things (i) there being validly tendered and not properly withdrawn prior to the expiration date of the Offer that number of Shares which represents more than fifty percent of the total issued and outstanding Shares on a fully diluted basis (excluding Shares held by the Company or any of its subsidiaries) and (ii) the expiration or termination of any and all waiting periods applicable to the transactions contemplated by the Merger Agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Offer is also subject to other terms and conditions. See Section 15 of the Offer to Purchase. 5. Stockholders who tender Shares will not be obligated to pay brokerage fees or commissions to the Information Agent or the Depositary or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer. If you wish to have us tender any or all of your Shares, please complete, sign and return the instruction form set forth below. An envelope to return your instructions to us is enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the instruction form set forth below. Please forward your instructions to us as soon as possible to allow us ample time to tender your Shares on your behalf prior to the expiration of the Offer. The Offer is made solely by the Offer to Purchase and the related Letter of Transmittal and any supplements and amendments thereto. Purchaser is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good faith effort to comply with any such state statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, Purchaser cannot comply with any such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction. 2 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE COMMON STOCK) OF OEA, INC. PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 24, 2000 BY OEA MERGER CORPORATION AN INDIRECT WHOLLY OWNED SUBSIDIARY OF AUTOLIV, INC. The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated March 24, 2000, ("Offer to Purchase") and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") relating to the offer by OEA Merger Corporation, a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Autoliv, Inc., a Delaware corporation ("Parent") to act as Information Agent in connection with Purchaser's offer to purchase all of the outstanding shares of common stock, par value $0.10 per share, including the associated rights to purchase common stock (collectively, the "Shares"), of OEA, Inc. (the "Company"), at a price of $10.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer. This will instruct you to tender to Purchaser the number of Shares indicated below (or, if no number is indicated below, all Shares) held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. Number of Shares to be Tendered:* Account Number: Dated: , 2000 SIGN HERE Signatures(s) Print Name(s) and Address(es) Area Code and Telephone Number(s) Taxpayer Identification or Social Security Number(s)
- ------------------------------ * Unless otherwise indicated, it will be assumed that all of your Shares held by us for your account are to be tendered. Please return this form to the firm maintaining your account. 3 EX-99.(A)(1)(F) 7 EXHIBIT 99(A)(1)(F) 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., 000-000000. The table below will help determine the number to give the payer.
- ------------------------------------------------- GIVE THE FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY NUMBER OF - --------------------------------------------------- 1. An individual's account The individual 2. Two or more individuals The actual owner of (joint account) the account or, if combined funds, the first individual on the account(1) 3. Husband and wife (joint The actual owner of account) the account or, if joint funds, either person(1) 4. Custodian account of a The minor(2) minor (Uniform Gift to Minors Act) 5. Adult and minor (joint The adult or, if the account) minor is the only contributor, the minor(1) 6. Account in the name of The ward, minor, or guardian or committee incompetent person(3) for a designated ward, minor, or incompetent person 7. a. The usual revocable The savings trust grantor-trustee(1) account (in which grantor is also trustee) b. So-called "trust" The actual owner(1) account that is not a legal or valid trust under State law 8. Sole proprietorship The owner(4) account - ----------------------------------------------------- GIVE THE EMPLOYER FOR THIS TYPE OF IDENTIFICATION ACCOUNT: NUMBER OF - ----------------------------------------------------- 9. A valid trust, estate, or Legal entity (do not pension furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title)(5) 10. Corporate account The corporation 11. Religious, charitable, or The organization educational organization account 12. Partnership account held The partnership in the name of the business 13. Association, club or The organization other tax-exempt organization 14. A broker or registered The broker or nominee nominee 15. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments.
- -------------------------------------------------- - -------------------------------------------------- (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner, or the business or "doing business as" name. Either the social security number or the employer identification number of the owner may be used. (5) List first and circle the name of the legal trust, estate or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 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: -- A corporation. -- A financial institution -- An organization exempt from tax under section 501(a), or an individual retirement plan. -- The United States or any agency or instrumentality thereof. -- A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. -- A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. -- An international organization or any agency or instrumentality thereof. -- A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. -- A real estate investment trust. -- A common trust fund operated by a bank under section 584(a). -- An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). -- An entity registered at all times under the Investment Company Act of 1940. -- A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: -- Payments to nonresident aliens subject to withholding under section 1441. -- Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. -- Payments of patronage dividends where the amount received is not paid in money. -- Payments made by certain foreign organizations. -- Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: -- Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. -- Payments of tax-exempt interest (including exempt-interest dividends under section 852). -- Payments described in section 6049(b)(5) to nonresident aliens. -- Payments on tax-free covenants bonds under section 1451. -- Payments made by certain foreign organizations. -- Payments made to a nominee. EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICES. Section 6109 requires most recipients of dividend interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBERS.--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)(1)(G) 8 EXHIBIT 99(A)(1)(G) THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL SHARES (AS DEFINED BELOW). THE OFFER (AS DEFINED BELOW) IS MADE SOLELY BY THE OFFER TO PURCHASE DATED MARCH 24, 2000, AND THE RELATED LETTER OF TRANSMITTAL AND ANY AMENDMENTS OR SUPPLEMENTS THERETO, AND IS BEING MADE TO ALL HOLDERS OF SHARES. THE OFFER, HOWEVER, IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF, HOLDERS OF SHARES IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. PURCHASER (AS DEFINED BELOW) MAY IN ITS DISCRETION, HOWEVER, TAKE SUCH ACTION AS IT MAY DEEM NECESSARY TO MAKE THE OFFER IN ANY JURISDICTION AND EXTEND THE OFFER TO HOLDERS OF SHARES IN SUCH JURISDICTION. IN JURISDICTIONS WHOSE LAWS REQUIRE THAT THE OFFER BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON PURCHASER'S BEHALF BY ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION. NOTICE OF OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE COMMON STOCK) of OEA, INC. at $10.00 NET PER SHARE by OEA MERGER CORPORATION an indirect wholly owned subsidiary of AUTOLIV, INC. OEA Merger Corporation, a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Autoliv, Inc., a Delaware corporation ("Parent"), is offering to purchase all outstanding shares of common stock, par value $0.10 per share (the "Common Stock") of OEA, Inc. (the "Company"), together with the associated rights to purchase common stock issued pursuant to the Rights Agreement, as amended, dated as of March 25, 1998 (the "Rights Agreement"), between the Company and LaSalle Bank, N.A., as Rights Agent (the "Rights" and, together with the Common Stock, the "Shares"), at a price of $10.00 per Share, net to the selling stockholder in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 24, 2000 (the "Offer to Purchase") and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). Stockholders of record who tender directly to the Depositary (as defined below) will not be obligated to pay brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes, if any, on the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker or bank should consult such institution as to whether it charges any service fees. Purchaser will pay all charges and expenses of First Chicago Trust Company of New York, which is acting as depositary (the "Depositary"), and Georgeson Shareholder Communications Inc., which is acting as the information agent (the "Information Agent"), incurred in connection with the Offer. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 24, 2000, UNLESS THE OFFER IS EXTENDED. The Offer is conditioned upon, among other things, (1) there being validly tendered and not properly withdrawn prior to the Expiration Date of the Offer that number of Shares which represents more than fifty percent of the total issued and outstanding Shares on a fully diluted basis (excluding any shares held by the Company or any of its subsidiaries) (the "Minimum Condition") and (2) the expiration or termination of any and all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). The Offer is also subject to other conditions. See Section 15 of the Offer to Purchase. The Offer is not conditioned upon Parent or Purchaser obtaining financing. The Offer is being made pursuant to an Amended and Restated Agreement and Plan of Merger dated as of March 12, 2000 (the "Merger Agreement"), among Parent, Purchaser and the Company. The Merger Agreement provides, among other things, that following the completion of the Offer and the satisfaction or waiver, if permissible, of all conditions set forth in the Merger Agreement and in accordance with the General Corporation Law of the State of Delaware (the "DGCL"), Purchaser will be merged with and into the Company (the "Merger"), with the Company surviving the Merger as a wholly owned subsidiary of Parent. At the effective time of the Merger (the "Effective Time"), each outstanding Share (other than Shares held in the Company's treasury immediately before the Effective Time, and each Share held by Parent, Purchaser, any other subsidiary of Parent or any subsidiary of the Company immediately before the Effective Time, all of which will be cancelled, and other than Shares with respect to which appraisal rights are properly exercised under the DGCL) will be converted into the right to receive $10.00 in cash, without interest thereon. The Merger Agreement is more fully described in Section 11 of the Offer to Purchase. THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (1) DETERMINED THAT THE OFFER, THE MERGER AND THE MERGER AGREEMENT ARE ADVISABLE, FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS, (2) APPROVED THE MERGER, THE OFFER, THE MERGER AGREEMENT AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND (3) RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT THERETO AND APPROVE AND ADOPT THE MERGER AGREEMENT. For purposes of the Offer, Purchaser shall be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn when, as and if Purchaser gives oral or written notice to the Depositary of its acceptance for payment of such Shares. Payment for Shares so accepted will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from Purchaser and transmitting payment to validly tendering stockholders. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates representing such Shares (or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company ("DTC")), (ii) a properly completed and duly executed Letter of Transmittal (or facsimile thereof ) with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer and (iii) any other documents required by the Letter of Transmittal. The term "Expiration Date" means 12:00 midnight, New York City time, on Monday, April 24, 2000, unless and until Purchaser (subject to the terms and conditions of the Merger Agreement) extends the period of time for which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by Purchaser, shall expire prior to the purchase of any Shares. Purchaser may, without the consent of the Company, extend the Offer beyond the initial Expiration Date in the following events: (i) if necessary to satisfy any condition of the HSR Act, for a period not to exceed forty (40) business days, (ii) if any of the conditions to the Offer (other than the Minimum Condition) shall not have been satisfied or waived, for a period not to exceed twenty (20) business days, (iii) if all the conditions to the Offer are satisfied or waived, but the number of Shares validly tendered and not withdrawn is less than 90% of the number of then-outstanding Shares on a fully diluted basis (excluding Shares held by the Company or any of its subsidiaries), for four successive five (5) business day periods for an aggregate period not to exceed twenty (20) business days, or (iv) if any of the conditions to the Offer (other than the Minimum Condition) shall not have been satisfied or waived and a proposal or offer for a merger or certain other extraordinary transactions (a "Takeover Proposal") has been made or publicly disclosed by a person other than Parent or Purchaser (including the Company and any of its subsidiaries or affiliates), or if Parent or Purchaser otherwise learn that a Takeover Proposal has been made or publicly proposed, for a period of up to ten (10) days after the withdrawal or termination of such Takeover Proposal, such date in no event to exceed the earlier of (x) June 30, 2000, and (y) the minimum time necessary to satisfy all such outstanding conditions to the Offer. Purchaser shall cause any such extension by giving oral or written notice of such extension to the Depositary, which will be followed by public announcement thereof no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the right, if any, of a tendering stockholder to withdraw such stockholder's Shares. Under no circumstances will interest be paid on the purchase price to be paid for the Shares pursuant to the Offer, regardless of any extension of the Offer or any delay in making such payment. Tenders of Shares made pursuant to the Offer are irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment pursuant to the Offer, also may be withdrawn at any time after Monday, May 22, 2000. For a withdrawal of Shares tendered to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth in the Offer to Purchase. Any notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name(s) in which the certificate(s) representing such Shares are registered, if different from that of the person who tendered such Shares. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, the name of the registered holder and the serial numbers shown on the particular certificate evidencing the Shares to be withdrawn must also be furnished to the Depositary prior to the physical release of the Shares to be withdrawn. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in the Offer to Purchase) (except in the case of Shares tendered by an Eligible Institution). If Shares have been tendered pursuant to the procedures for book-entry transfer, any notice of withdrawal must specify the name and number of the account at DTC to be credited with such withdrawn Shares and must otherwise comply with DTC's procedures. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by Purchaser, in its sole discretion, and its determination will be final and binding on all parties. The receipt of cash in exchange for Shares pursuant to the Offer (or the Merger) will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign tax laws. See Section 5 of the Offer of Purchase. The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference. In connection with the Offer, the Company has provided Purchaser with the names and addresses of all record holders of Shares and security position listings of Shares held in stock depositories. The Offer to Purchase, the related Letter of Transmittal and other related materials will be mailed to registered holders of Shares and will be furnished to brokers, dealers, commercial banks, trust companies 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. THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Any questions or requests for assistance or for additional copies of the Offer to Purchase, the related Letter of Transmittal and other related tender offer materials may be directed to the Information Agent at the address and telephone number set forth below, and copies will be furnished promptly at Purchaser's expense. Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. THE INFORMATION AGENT FOR THE OFFER IS: GEORGESON SHAREHOLDER COMMUNICATIONS INC. 17 State Street, 10th Floor New York, New York 10004 Brokers and Bankers Call Collect (212) 440-9800 Or All Others Call Toll-Free (800) 223-2064 March 24, 2000 EX-99.(A)(1)(H) 9 EXHIBIT 99(A)(1)(H) Exhibit 99(a)(1)(H) [GRAPHIC] PRESS RELEASE AUTOLIV BID TO BECOME GLOBAL LEADER IN AIRBAG INITIATORS (STOCKHOLM, MARCH 13, 2000) - AUTOLIV INC. (NYSE: ALV AND SSE: ALIV) - THE WORLDWIDE LEADER IN AUTOMOTIVE SAFETY SYSTEMS - HAS REACHED AN AGREEMENT TO ACQUIRE OEA, INC. AND WILL COMMENCE A TENDER OFFER FOR ALL SHARES OUTSTANDING FOR $10.00 PER SHARE OR A TOTAL OF $206 MILLION. OEA IS AUTOLIV'S MAIN EXTERNAL SUPPLIER OF INITIATORS FOR AIRBAG INFLATORS. LAST YEAR, OEA'S SALES AMOUNTED TO NEARLY $250 MILLION. THE BOARDS OF AUTOLIV AND OEA HAVE UNANIMOUSLY APPROVED THE TRANSACTION. THE OFFER IS SUBJECT TO CUSTOMARY REGULATORY APPROVALS AND THE ACCEPTANCE BY OWNERS REPRESENTING AT LEAST A MAJORITY OF THE SHARES OUTSTANDING IN OEA. OEA is the world's second largest manufacturer of airbag initiators with production last year of 32 million such ignitors. In addition, OEA manufactures inflators for airbags and aerospace products. "We expect to be able to create large synergies by integrating OEA with Autoliv. The acquisition should therefore have a marginally positive effect on this year's earnings for Autoliv and a more pronounced effect already next year", explained Autoliv's President and C.E.O. Lars Westerberg. "At the same time, we will make Autoliv an even better supplier partner for our North American customers by adding expertise in airbag initiator technology to our own areas of competence. Although we have one company in Europe for airbag initiators, we have not had this specialized competence in-house in the U.S. where we produce most of our airbag inflators, all of which have at least one initiator. The planned acquisition would therefore be complementary". "The initiator market is poised for rapid growth due to the introduction of smart airbags, which has already begun. These airbags will require at least two initiators each, instead of only one in existing systems. In addition, each seat belt pretensioner uses one initiator, which means that there will be as many as 15 initiators in a car in the future. Consequently, the initiator market should grow substantially faster than the airbag market. OEA is also a leader in Intelligent Firings Squibs (IFS), which is the next generation of initiators. By programming each initiator to react only to its specific code, all initiators in a vehicle can use a bus system, i.e. the same harness circuit, which will reduce installation costs significantly for our customers." "OEA also produces airbag inflators, a business it began in 1996, which has caused substantial pressure on profits. Autoliv has a successful inflator operation in the U.S. which we will utilize to turn OEA's inflator into a profitable business", said Autoliv's President and CEO Lars Westerberg. The company also has an aerospace operation which specializes in life-saving, propellant-actuated devices for aircraft ejection systems. This represents less than 20% of sales. OEA, with headquarters in Denver, Colorado, has 1,700 employees with operation in Colorado, Utah, California and France. THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL SHARES OF THE COMPANY. AT THE TIME THE OFFER IS COMMENCED, AUTOLIV WILL FILE A TENDER OFFER STATEMENT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND OEA WILL FILE A SOLICITATION/RECOMMENDATION STATEMENT WITH RESPECT TO THE OFFER. THE TENDER OFFER STATEMENT (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER OFFER DOCUMENTS, AS WELL AS THE SOLICITATION/RECOMMENDATION STATEMENT, WILL BE MADE AVAILABLE TO ALL STOCK HOLDERS OF OEA, AT NO EXPENSE TO THEM. THE TENDER OFFER STATEMENT (INCLUDING THE OFFER TO PURCHASE, THE RELATED LETTER TO TRANSMITTAL AND THE OTHER OFFER DOCUMENTS FILED WITH THE COMMISSION) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL ALSO BE AVAILABLE AT NO CHARGE AT THE COMMISSION'S WEBSITE AT WWW.SEC.GOV. INQUIRES: Lars Westerberg, President & CEO, Autoliv Inc., Tel +46 (8) 58 72 06 20 Tom Hartman, President Autoliv Inflators, Tel. +1 (801) 625-9564 Mats Odman, Dir. Corp. Comm., Tel +46 (8) 587 20 623 or +46 (708) 32 09 33 Barry Murphy, Director Investor Relations, Tel. +1 (248) 475-0409 - -------------------------------------------------------------------------------- Autoliv Inc. Autoliv North America, Inc. Klarabergsviadukten 70, Sec. E 1320 Pacific Drive P. O. Box 703 81, SE-107 24 Stockholm, Sweden Auburn Hills, MI 48326-1569, USA Tel +46 (8) 58 72 06 00, Fax +46 (8) 411 70 25 Tel +1 (248) 475-0409, e-mail: mats.odman@autoliv.com Fax +1 (248) 475-9838 e-mail: barry_murphy@autolivasp.com
- -------------------------------------------------------------------------------- EX-99.B 10 EXHIBIT 99(B) AGREEMENT DATED 22 March, 2000 US$300,000,000 BRIDGE FACILITY FOR AUTOLIV ASP, INC. PROVIDED BY SKANDINAVISKA ENSKILDA BANKEN AB (publ) ARRANGED BY SEB DEBT CAPITAL MARKETS ALLEN & OVERY London BK:734366.4 - --------------------------------------------------------------------------------
INDEX CLAUSE PAGE 1. Interpretation.......................................................1 2. The Facility.........................................................9 3. Purpose.............................................................10 4. Conditions Precedent................................................10 5. Drawdown............................................................10 6. Repayment...........................................................11 7. Prepayment and Cancellation.........................................11 8. Interest Periods....................................................13 9. Interest............................................................13 10. Payments............................................................14 11. Taxes...............................................................15 12. Market Disruption...................................................16 13. Increased Costs.....................................................17 14. Illegality..........................................................18 15. Guarantee...........................................................19 16. Representations and Warranties......................................22 17. Undertakings........................................................26 18. Default.............................................................33 19. Fees................................................................36 20. Expenses............................................................36 21. Stamp Duties........................................................37 22. Indemnities.........................................................37 23. Evidence and Calculations...........................................38 24. Waivers and Remedies Cumulative.....................................38 25. Changes to the Parties..............................................39 26. Disclosure of Information...........................................39 27. Set-Off.............................................................40 28. Severability........................................................40 29. Counterparts........................................................40 30. Notices.............................................................41 31. Language............................................................42 32. Jurisdiction........................................................42 33. Governing Law.......................................................43
SCHEDULES 1. Conditions Precedent Documents............................................45 2. Calculation of the Mandatory Cost.........................................47 3. Form of Request...........................................................48 Signatories..................................................................49
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THIS AGREEMENT is dated 22 March, 2000 between: (1) AUTOLIV ASP, INC. (incorporated under the laws of the State of Indiana, U.S.A.) (the "BORROWER"); (2) AUTOLIV, INC. (incorporated under the laws of the State of Delaware, U.S.A.) (the "GUARANTOR"); (3) SKANDINAVISKA ENSKILDA BANKEN AB (publ) as lender (the "BANK"); and (4) SEB DEBT CAPITAL MARKETS as arranger (the "ARRANGER"). IT IS AGREED as follows: 1. INTERPRETATION 1.1 DEFINITIONS In this Agreement: "ACQUIROR" means OEA Merger Corporation Limited, a wholly-owned Subsidiary of the Borrower. "ACQUISITION" means the acquisition by the Acquiror of the Shares pursuant to the Acquisition Documentation. "ACQUISITION DOCUMENTATION" means, in relation to the Acquisition: (a) an offer to purchase to be dated on or about 24th March, 2000; (b) a letter of transmittal; (c) a notice of guaranteed delivery; (d) a letter from the information agent to brokers, dealers, commercial banks, trust companies and nominees; (e) a letter to clients for use by brokers, dealers, commercial banks, trust companies and nominees; and (f) an amended and restated agreement and plan of merger, dated as of 12th March, 2000, by and among the Guarantor, the Acquiror and the Target, and any other documentation relating to the Acquisition. - -------------------------------------------------------------------------------- 2 - -------------------------------------------------------------------------------- "AFFILIATE" means a Subsidiary or a holding company of a person or any other Subsidiary of that holding company. "BOARD" means the Board of Governors of the Federal Reserve System of the United States of America or any successor thereof. "BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London and New York. "CODE" means the United States Internal Revenue Code of 1986 and any rule or regulation issued thereunder from time to time in effect. "COMMITMENT" means US$300,000,000 to the extent not cancelled, transferred or reduced under this Agreement. "COMMITMENT PERIOD" means the period from the later of the date of this Agreement and 25th April, 2000 up to and including the Term Date. "DANGEROUS SUBSTANCE" means any radioactive emissions and any natural or artificial substance (whether in solid or liquid form or in the form of a gas or vapor and whether alone or in combination with any other substance) capable of causing harm to man or any other living organism or damaging the environment or public health or welfare including but not limited to any controlled, special, hazardous, toxic, radioactive or dangerous waste. "DEFAULT" means an Event of Default or an event which, with the giving of notice, lapse of time, determination of materiality or fulfilment of any other applicable condition (or any combination of the foregoing), would constitute an Event of Default. "DRAWDOWN DATE" means the date of the advance of a Loan. - -------------------------------------------------------------------------------- 3 - -------------------------------------------------------------------------------- "ENVIRONMENTAL CLAIM" means any claim by any person as a result of or in connection with any violation of Environmental Law or any Environmental Contamination which could give rise to any remedy or penalty (whether interim or final) or liability for any Obligor or the Bank. "ENVIRONMENTAL CONTAMINATION" means each of the following and their consequences: (a) any release, emission, leakage, or spillage of any Dangerous Substance into any part of the environment; or (b) any accident, fire, explosion or sudden event which is directly or indirectly caused by or attributable to any Dangerous Substance; or (c) any other pollution of the environment. "ENVIRONMENTAL LAW" means any national or supranational law, regulation or directive concerning the protection of human health or the environmental or concerning Dangerous Substances. "ENVIRONMENTAL LICENSE" means any authorization by any Environmental Law. "ERISA" means the United States Employee Retirement Income Security Act of 1974, as amended. "ERISA AFFILIATE" means each trade or business, whether or not incorporated, that would be treated as a single employer with any Obligor under section 414 of the United States Internal Revenue Code of 1986, as amended. When any provision of this Agreement relates to a past event, the term "ERISA AFFILIATE" includes any person that was an ERISA Affiliate of an Obligor at the time of that past event. "EVENT OF DEFAULT" means an event specified as such in Clause 18.1 (Events of Default). "FINANCE DOCUMENT" means this Agreement or any other document designated as such by the Bank and the Borrower. - -------------------------------------------------------------------------------- 4 - -------------------------------------------------------------------------------- "FINANCIAL INDEBTEDNESS" means any indebtedness in respect of: (a) moneys borrowed; (b) any debenture, bond, note, loan stock or other security; (c) any acceptance credit; (d) receivables sold or discounted (otherwise than on a non-recourse basis); (e) the acquisition cost of any asset to the extent payable before or after the time of acquisition or possession by the party liable where the advance or deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset; (f) any lease entered into primarily as a method of raising finance or financing the acquisition of the asset leased; (g) any currency swap or interest swap, cap or collar arrangement or other derivative instrument; (h) any amount raised under any other transaction having the commercial effect of a borrowing or raising of money; or (i) any guarantee, indemnity or similar assurance against financial loss of any person. "GROUP" means the Guarantor and its Subsidiaries. "INFORMATION" means: (a) information relating to the business plans, asset valuations and any envisaged disposals of the Target; and (b) the Original Group Accounts, provided to the Bank or the Arranger in connection with the Acquisition. "INTEREST PERIOD" means each period determined in accordance with Clause 8 (Interest Periods). "LIBOR" means:- - -------------------------------------------------------------------------------- 5 - -------------------------------------------------------------------------------- (a) the rate per annum which appears on Page 3750 on the Telerate Screen; or (b) if no such rate appears on the Telerate Screen, the rate quoted by the Bank to leading banks in the London interbank market, at or about 11.00 a.m. on the applicable Rate Fixing Day for the offering of US Dollars for a period comparable to the relevant Interest Period. "LOAN" means, subject to Clause 8 (Interest Periods), the principal amount of each borrowing by the Borrower under this Agreement or the principal amount outstanding of that borrowing. "MANDATORY COST" means the cost imputed to the Bank of compliance with: (a) the cash ratio and special deposit requirements of the Bank of England and/or the banking supervision or other costs imposed by the Financial Services Authority as determined in accordance with Schedule 2; and (b) any other applicable regulatory or central bank requirement relating to any Loan made through a branch in a jurisdiction of the currency of the Loan. "MARGIN" means 0.5 per cent. per annum. "MARGIN STOCK" has the meaning assigned to such term in Regulation U of the Board (including, without limitation, the Shares, so long as they constitute Margin Stock under Regulation U). "MATERIAL SUBSIDIARY" means any Subsidiary of the Guarantor: (a) (i) the book value of whose assets (consolidated if it itself has Subsidiaries) equals or exceeds 10 per cent. of the book value of the consolidated total assets of the Group; or (ii) whose revenues (consolidated if it itself has Subsidiaries) equal or exceed 10 per cent. of the revenues of the Group taken as a whole; or (iii) whose trading profits (consolidated if it itself has Subsidiaries) before interest and tax equal or exceed 10 per cent. of the trading profits before interest and tax of the Group as a whole, as determined by reference to the most recent accounts of the Subsidiary and the most recent consolidated accounts of the Group; or - -------------------------------------------------------------------------------- 6 - -------------------------------------------------------------------------------- (b) any Subsidiary of the Guarantor which becomes a member of the Group after the date of the latest consolidated accounts of the Group at the time of determination and which would fulfil any of the tests in (a)(i), (ii) or (iii) above if tested on the basis of its latest accounts (consolidated if it itself has Subsidiaries) and those latest accounts of the Group; or (c) prior to the delivery of each set of accounts pursuant to Clause 17.2 (Financial Information), any Subsidiary of the Guarantor to which has been transferred (whether by one transaction or a series of transactions, related or not) the whole or substantially the whole of the assets of a Subsidiary which immediately prior to such transaction or any of such transactions was a Material Subsidiary. "MULTIEMPLOYER PLAN" means a "multiemployer plan" within the meaning of section 3(37) or 4001(a)(3) of ERISA. "OBLIGOR" means the Borrower or the Guarantor. "ORIGINAL GROUP ACCOUNTS" means the audited consolidated accounts of the Group for the year ended 31st December, 1999. "PARTY" means a party to this Agreement. "PLAN" means an "employee benefit plan" within the meaning of section 3(3) of ERISA maintained by the Borrower or any ERISA Affiliate currently or at any time within the last five years, or to which the Borrower or any ERISA Affiliate is required to make payments or contributions or has made payments or contributions within the past five years. "RATE FIXING DAY" means the second Business Day before the first day of an Interest Period for a Loan (or such other day as is generally treated as the rate fixing day by market practice in the London interbank market). "REPAYMENT DATE" means 25th October, 2000. "REPORTABLE EVENT" means any of the events set forth in section 4043 of ERISA or the related regulations. - -------------------------------------------------------------------------------- 7 - -------------------------------------------------------------------------------- "REQUEST" means a request made by the Borrower for a Loan, substantially in the form of Schedule 3. "RESTRICTED MARGIN STOCK" means Margin Stock owned by either Obligor or any member of the Group, which represents not more than 33 1/3 per cent of the aggregate value (determined in accordance with Regulation U), on a consolidated basis, of the assets of both Obligors and all members of the Group (other than Margin Stock) that are subject to the provisions of Clause 17 (Undertakings) (including, without limitation, Clauses 17.8 (Negative pledge) and 17.9 (Transactions similar to security)). "SECURITY INTEREST" means any mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security. "SHARES" means the shares of the Target. "SUBSIDIARY" means an entity from time to time of which a person has direct or indirect control or owns directly or indirectly more than fifty per cent. (50%) of the share capital or similar right of ownership. "SYNDICATION" means any syndication and subsequent transfer by the Bank of a portion of its Commitment under this Facility to other banks in the manner and to the extent agreed by the Bank and the Borrower. "TARGET" means OEA Inc., incorporated under the laws of the State of Delaware, U.S.A. "TERM DATE" means the date falling one month prior to the Repayment Date. "UNRESTRICTED MARGIN STOCK" means any Margin Stock owned by either Obligor or any member of the Group which is not Restricted Margin Stock. "U.S.A." means the United States of America. - -------------------------------------------------------------------------------- 8 - -------------------------------------------------------------------------------- "US DOLLARS" and "US$" means the currency for the time being of the U.S.A. 1.2 CONSTRUCTION (a) In this Agreement, unless the contrary intention appears, a reference to: (i) an "AMENDMENT" includes a supplement, novation or re-enactment and "AMENDED" is to be construed accordingly; "ASSETS" includes present and future properties, revenues and rights of every description; an "AUTHORIZATION" includes an authorization, consent, approval, resolution, licence, exemption, filing, registration and notarization; "CONTROL" means the power to direct the management and policies of an entity by controlling 50 per cent. or more of voting capital, whether through the ownership of voting capital, by contract or otherwise; a "MATERIAL ADVERSE EFFECT" means: (1) a material adverse effect on the business or financial condition of either Obligor or the Group as a whole; or (2) a material adverse effect on the ability of any Obligor to perform its obligations under any of the Finance Documents. a "MONTH" is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that: (1) if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that calendar month; or (2) if an Interest Period commences on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which it is to end; a "PERSON" includes any individual, company, unincorporated association or body of persons (including a partnership, joint venture or consortium), government, state, agency, international organisation or other entity; a "REGULATION" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation; a "SCREEN" or a "PAGE" on a "Screen" in the definition of "LIBOR" includes any replacement screen or page nominated by the British Bankers Association as the - -------------------------------------------------------------------------------- 9 - -------------------------------------------------------------------------------- information vendor for the purpose of displaying British Bankers Association Interest Settlement Rates for deposits in various currencies; "WINDING UP" also includes amalgamation, reconstruction, reorganisation, administration, dissolution, liquidation, merger or consolidation and any equivalent or analogous procedure under the law of any jurisdiction (but, for the avoidance of doubt, "REORGANISATION" does not include a mere transfer of assets from one member of the Group to another whether the transferor continues to exist); (ii) a provision of law is a reference to that provision as amended or re-enacted; (iii) a Clause or a Schedule is a reference to a clause of or a schedule to this Agreement; (iv) a person includes its successors, transferees and assigns; (v) a Finance Document or another document is a reference to that Finance Document or other document as amended; and (vi) a time of day is a reference to London time. (b) Unless the contrary intention appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement. (c) The index to and the headings in this Agreement are for convenience only and are to be ignored in construing this Agreement. 2. THE FACILITY 2.1 FACILITY (a) Subject to the terms of this Agreement, the Bank agrees to make Loans during the Commitment Period to the Borrower up to an aggregate principal amount not exceeding the Commitment. (b) If the Borrower so requests prior to the Repayment Date, the Bank and the Arranger will enter into discussions (for a reasonable period of time) with the Obligors with a view to considering whether it will be possible to reach agreement on the terms on which the Facility might be extended for a further six months. Nothing in this paragraph shall prejudice in any way the rights of the Bank under this Agreement and it shall not be obliged to agree to any such extension. 2.2 CHANGE OF CURRENCY (a) If more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then: (i) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Bank; and - -------------------------------------------------------------------------------- 10 - -------------------------------------------------------------------------------- (ii) any translation from one currency or currency unit to another shall be at the official conversion rate recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Bank acting reasonably. (b) If a change in any currency of a country occurs, this Agreement will be amended to the extent the Bank specifies to be necessary to reflect the change in currency and to put the Bank in the same position, so far as possible, that it would have been in if no change in currency had occurred. 3. PURPOSE The Borrower shall apply each Loan towards financing the Acquisition. Without affecting the obligations of either Obligor in any way, the Bank is not bound to monitor or verify the application of any Loan. 4. CONDITIONS PRECEDENT 4.1 DOCUMENTARY CONDITIONS PRECEDENT The Borrower may not deliver the first Request until the Bank has notified the Borrower that it has received all of the documents set out in Schedule 1 in form and substance satisfactory to the Bank. 4.2 FURTHER CONDITIONS PRECEDENT The obligation of the Bank to make any Loan is subject to the further conditions precedent that on both the date of the Request and the Drawdown Date: (a) the representations and warranties in Clause 16 (Representations and warranties) to be repeated on those dates are correct and will be correct immediately after the Loan is made; and (b) no Default is outstanding or might result from the Loan. 5. DRAWDOWN 5.1 COMMITMENT PERIOD The Borrower may borrow a Loan during the Commitment Period if the Bank receives, not later than 11.00 a.m. three Business Days before the proposed Drawdown Date, a duly completed Request. Each Request is irrevocable. 5.2 COMPLETION OF REQUESTS A Request will not be regarded as having been duly completed unless: (a) the Drawdown Date is a Business Day falling on or before the Term Date; (b) the amount of the Loan is: (i) a minimum of US$50,000,000 and an integral multiple of US$5,000,000; or - -------------------------------------------------------------------------------- 11 - -------------------------------------------------------------------------------- (ii) the balance of the undrawn Commitment; or (iii) such other amount as the Bank may agree; (c) the amount selected under paragraph (b) above does not cause Clause 2.1 (Facility) to be contravened; (d) the first Interest Period selected complies with Clause 8 (Interest Periods); and (e) the payment instructions comply with Clause 10 (Payments). Each Request must specify one Loan only, but the Borrower may, subject to the other terms of this Agreement, deliver more than one Request on any one day. Unless otherwise agreed by the Bank, no more than five Loans may be outstanding at any time. 5.3 ADVANCE OF LOAN Subject to the terms of this Agreement, the Bank shall make the Loan available to the Borrower on the relevant Drawdown Date. 6. REPAYMENT The Borrower shall repay the Loans in full on the Repayment Date. 7. PREPAYMENT AND CANCELLATION 7.1 VOLUNTARY PREPAYMENT The Borrower may, by giving not less than five days' prior notice to the Bank, prepay any Loan on the last day of an Interest Period for that Loan in whole or in part (but, if in part, in a minimum of US$50,000,000 and an integral multiple of US$5,000,000). 7.2 AUTOMATIC CANCELLATION The Commitment shall be automatically cancelled at close of business in London on the Term Date. 7.3 VOLUNTARY CANCELLATION The Borrower may, by giving not less than five days' prior notice (or such shorter period as the Bank may agree) to the Bank, cancel the undrawn amount of the Commitment in whole or in part (but, if in part, in a minimum of US$50,000,000 and an integral multiple of US$5,000,000). 7.4 ADDITIONAL RIGHT OF PREPAYMENT AND CANCELLATION If: (a) an Obligor is required to pay to the Bank any additional amounts under Clause 11 (Taxes); or - -------------------------------------------------------------------------------- 12 - -------------------------------------------------------------------------------- (b) an Obligor is required to pay to the Bank any amount under Clause 13 (Increased Costs); or (c) interest on a Loan is being calculated in accordance with Clause 12.3(c) (Alternative basis), then, without prejudice to the obligations of either Obligor under those Clauses, the Borrower may, whilst the circumstances continue, serve a notice of prepayment and cancellation on the Bank. On the date falling five Business Days after the date of service of the notice: (i) the Borrower shall prepay all the Loans; and (ii) the Commitment shall be cancelled. 7.5 MANDATORY PREPAYMENT If, at any time after the date of this Agreement: (a) it is or becomes unlawful for either Obligor to perform any of its obligations under the Finance Documents; or (b) the Borrower is not or ceases to be a Subsidiary of the Guarantor; or (c) any single person, or group of persons acting in concert, acquires control of the Guarantor; or (d) the guarantee of the Guarantor is not effective or is alleged by either Obligor to be ineffective for any reason; or (e) the Acquiror is not or ceases to be a Subsidiary of the Borrower, then the Bank may, by notice to the Borrower: (i) cancel the Commitment; and/or (ii) demand that all or part of the Loans, together with accrued interest and all other amounts accrued under the Finance Documents, be repaid forthwith, whereupon they shall be repaid forthwith. 7.6 MISCELLANEOUS PROVISIONS (a) Any notice of prepayment and/or cancellation under this Agreement is irrevocable. (b) All prepayments under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to Clause 22.2 (Other indemnities), without premium or penalty. (c) No prepayment or cancellation is permitted except in accordance with the express terms of this Agreement. (d) No amount of the Commitment cancelled under this Agreement may subsequently be reinstated. - -------------------------------------------------------------------------------- 13 - -------------------------------------------------------------------------------- 8. INTEREST PERIODS 8.1 SELECTION (a) The Borrower may select an Interest Period for a Loan in either the relevant Request or, if the Loan has been borrowed, a notice received by the Bank not later than five Business Days before the commencement of that Interest Period. Each Interest Period for a Loan will commence on its Drawdown Date or the expiry of its preceding Interest Period. (b) Subject to the following provisions of this Clause 8, each Interest Period will be one, two or three months or any other period agreed by the Borrower and the Bank. (c) If the Borrower fails to select an Interest Period for an outstanding Loan in accordance with paragraph (a) above, that Interest Period will, subject to the other provisions of this Clause 8, be one month. 8.2 NON-BUSINESS DAYS If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period shall instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not). 8.3 CONSOLIDATION Notwithstanding Clause 8.1 (Selection), the first Interest Period for each Loan shall end on the same day as the current Interest Period for any other Loan. On the last day of those Interest Periods, those Loans shall be consolidated and treated as one Loan. 8.4 COINCIDENCE WITH REPAYMENT DATES If an Interest Period would otherwise overrun the Repayment Date, it shall be shortened so that it ends on the Repayment Date. 8.5 OTHER ADJUSTMENTS The Bank and the Borrower may enter into such other arrangements as they may agree for the adjustment of Interest Periods and the consolidation and/or splitting of Loans. 8.6 NOTIFICATION The Bank shall notify the Borrower of the duration of each Interest Period promptly after ascertaining its duration. 9. INTEREST 9.1 INTEREST RATE The rate of interest on each Loan for each of its Interest Periods is the rate per annum determined by the Bank to be the aggregate of the applicable: (a) Margin; - -------------------------------------------------------------------------------- 14 - -------------------------------------------------------------------------------- (b) LIBOR; and (c) Mandatory Cost. 9.2 DUE DATES Except as otherwise provided in this Agreement, accrued interest on each Loan is payable by the Borrower on the last day of each Interest Period for that Loan and also, if the Interest Period is longer than six months, on the dates falling at six monthly intervals after the first day of that Interest Period. 9.3 DEFAULT INTEREST (a) If an Obligor fails to pay any amount payable by it under the Finance Documents, it shall forthwith on demand by the Bank pay interest on the overdue amount from the due date up to the date of actual payment, as well after as before judgment, at a rate (the "DEFAULT RATE") determined by the Bank to be one per cent. per annum above the higher of: (i) the rate on the overdue amount under Clause 9.1 (Interest rate) immediately before the due date (if of principal); and (ii) the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for such successive Interest Periods of such duration as the Bank may determine (each a "DESIGNATED INTEREST PERIOD"). (b) The default rate will be determined by the Bank on each Business Day or the first day of, or two Business Days before the first day of, the relevant Designated Interest Period, as appropriate. (c) If the Bank determines that deposits in the currency of the overdue amount are not at the relevant time being made available by it to leading banks in the London interbank market, the default rate will be determined by reference to the cost of funds to the Bank from whatever sources it may select. (d) Default interest will be compounded at the end of each Designated Interest Period. 9.4 NOTIFICATION OF RATES OF INTEREST The Bank shall promptly notify the Borrower of the determination of a rate of interest under this Agreement. 10. PAYMENTS 10.1 PLACE All payments under the Finance Documents shall be made to the relevant Party to its account at such office or bank as it may notify to the other Party for this purpose. - -------------------------------------------------------------------------------- 15 - -------------------------------------------------------------------------------- 10.2 FUNDS Payments under the Finance Documents shall be made for value on the due date at such times and in such funds as the Bank may specify as being customary at the time for the settlement of transactions in US Dollars. 10.3 CURRENCY (a) Amounts payable in respect of costs, expenses and taxes and the like are payable in the currency in which they are incurred. (b) Any other amount payable under the Finance Documents is, except as otherwise provided in the Finance Documents, payable in US Dollars. 10.4 SET-OFF AND COUNTERCLAIM All payments made by an Obligor under the Finance Documents shall be made without set-off or counterclaim. 10.5 NON-BUSINESS DAYS (a) If a payment under the Finance Documents is due on a day which is not a Business Day, the due date for that payment shall instead be the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not). (b) During any extension of the due date for payment of any principal under this Agreement interest is payable on that principal at the rate payable on the original due date. 11. TAXES 11.1 GROSS-UP All payments by an Obligor under the Finance Documents shall be made without any deduction and free and clear of and without any deduction for or on account of any taxes, except to the extent that the Obligor is required by law to make payment subject to any taxes. If any tax or amounts in respect of tax must be deducted, or any other deductions must be made, from any amounts payable or paid by an Obligor, under the Finance Documents, the Obligor shall pay such additional amounts as may be necessary to ensure that the Bank receives a net amount equal to the full amount which it would have received had payment not been made subject to tax or any other deduction. 11.2 TAX RECEIPTS All taxes required by law to be deducted or withheld by an Obligor from any amounts paid or payable under the Finance Documents shall be paid by the relevant Obligor when due and the Obligor shall, within 15 days of the payment being made, deliver to the Bank evidence satisfactory to the Bank (including all relevant tax receipts) that the payment has been duly remitted to the appropriate authority. - -------------------------------------------------------------------------------- 16 - -------------------------------------------------------------------------------- 11.3 U.S. TAXATION - DELIVERY OF FORMS AND STATEMENTS (a) Within 31 days after the date of this Agreement, the Bank shall submit to the Borrower duly completed and signed copies of either: (i) Form W-8BEN (entitling the Bank to a complete exemption from withholding on all amounts to be received by it, including fees, under the Finance Documents); or (ii) Form W-8ECI (relating to all amounts to be received by the Bank, including fees, under the Finance Documents), of the United States Internal Revenue Service. (b) Any New Bank (as defined in Clause 25.2 (Transfers by the Bank)) shall comply with the provisions of paragraph (a) above within 31 days, or earlier if requested, of it becoming a New Bank under this Agreement. (c) Other than as set out in paragraphs (a) and (b) above, the Bank (and any New Bank) shall submit to the Borrower such additional duly completed and signed copies of the applicable forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may be: (i) reasonably requested by an Obligor from the Bank (or New Bank); and or (ii) required under then current United States law or regulations to determine the United States withholding taxes on payment in respect of all amounts to be received by the Bank (or New Bank), including fees, under the Finance Documents. (d) Upon the request of an Obligor, any New Bank that is a United States person (as such term is defined in Section 7701(a)(30) of the Code) shall submit to the Borrower duly completed Internal Revenue Service Form W-9, establishing that it is such a United States person. (e) If the Bank (or any New Bank) determines that it is unable to submit any form or certificate that it is obliged to submit pursuant to this Clause 11.3, or that any information or declaration contained in any such form or certificate previously submitted has either ceased or will cease to be true, accurate and complete in all respects, it shall promptly notify the Borrower and the Arranger of such fact. 12. MARKET DISRUPTION 12.1 MARKET DISRUPTION If the Bank determines that adequate and fair means do not exist for ascertaining LIBOR, it shall promptly notify the Borrower of the fact and that this Clause 12 is in operation. 12.2 SUSPENSION OF DRAWDOWNS If a notification under Clause 12.1 (Market disruption) applies to a Loan which has not been made, that Loan shall not be made. However, within five Business Days of receipt of the notification, the Borrower and the Bank shall enter into negotiations for a period of not more than 30 days with a view to agreeing an alternative basis for determining the rate of interest - -------------------------------------------------------------------------------- 17 - -------------------------------------------------------------------------------- and/or funding applicable to that and (to the extent required) any future Loan. Any alternative basis agreed shall be binding on all the Parties. 12.3 ALTERNATIVE BASIS If a notification under Clause 12.1 (Market disruption) applies to a Loan which is outstanding, then, for the purpose of calculating the rate of interest on that Loan pursuant to Clause 9.1 (Interest rate): (a) within five Business Days of receipt of the notification, the Borrower and the Bank shall enter into negotiations for a period of not more than 30 days with a view to agreeing an alternative basis for determining the rate of interest and/or funding applicable to that Loan and/or any other Loans; (b) any alternative basis agreed under paragraph (a) above, or certified under paragraph (c) below, shall be binding on all the Parties; (c) if no alternative basis is agreed, the Bank shall certify on or before the last day of the Interest Period to which the notification relates an alternative basis for maintaining that Loan; and (d) any such alternative basis may include an alternative method of fixing the interest rate, alternative Interest Periods or alternative currencies but it must reflect the cost to the Bank of funding the Loan from whatever sources it may select plus the Margin plus any Mandatory Cost. 13. INCREASED COSTS 13.1 INCREASED COSTS (a) Subject to Clause 13.2 (Exceptions), the Borrower shall forthwith on demand by the Bank pay to the Bank the amount of any increased cost incurred by it or any of its Affiliates as a result of: (i) the introduction of, or any change in, or any change in the interpretation of, any law or regulation; or (ii) compliance with any regulation made after the date of this Agreement, (including any law or regulation relating to taxation, change in currency of a country, or reserve asset, special deposit, cash ratio, liquidity or capital adequacy requirements or any other form of banking or monetary control). (b) In this Agreement "INCREASED COST" means: (i) an additional cost incurred by the Bank or any of its Affiliates as a result of it having entered into, or performing, maintaining or funding its obligations under, this Agreement; or (ii) that portion of an additional cost incurred by the Bank or any of its Affiliates in making, funding or maintaining all or any advances comprised in a class of advances - -------------------------------------------------------------------------------- 18 - -------------------------------------------------------------------------------- formed by or including the Loans made or to be made under this Agreement as is attributable to the Bank making, funding or maintaining the Loans; or (iii) a reduction in any amount payable to the Bank or any of its Affiliates or the effective return to the Bank or any of its Affiliates under this Agreement or (to the extent that it is attributable to this Agreement) on its capital; or (iv) the amount of any payment made by the Bank or any of its Affiliates, or the amount of any interest or other return foregone by the Bank or any of its Affiliates, calculated by reference to any amount received or receivable by the Bank or any of its Affiliates from any other Party under this Agreement. (c) As soon as practicable after becoming aware that the Borrower is liable, or will become liable, to pay any amount in accordance with the provisions of paragraph (a) above, the Bank will notify the Borrower accordingly. 13.2 EXCEPTIONS Clause 13.1 (Increased costs) does not apply to any increased cost: (a) compensated for by the payment of the Mandatory Cost; (b) compensated for by the operation of Clause 11 (Taxes); or (c) attributed to any change in the rate of, or change in the basis of calculating, tax on the overall net income of the Bank (or the overall net income of a division or branch of the Bank) imposed in the jurisdiction in which its principal office for the time being is situate. 14. ILLEGALITY (a) If it is or becomes unlawful in any jurisdiction for the Bank to give effect to any of its obligations as contemplated by this Agreement or to fund or maintain any Loan, then: (i) the Bank may notify the Borrower accordingly; and (ii) (A) the Borrower shall forthwith prepay all the Loans; and (B) the Commitment shall forthwith be cancelled. (b) (i) Other than as set out in sub-paragraph (b)(ii), if, at any time, the Commitment is cancelled by reason of illegality and the Borrower is obliged to prepay all the Loans in accordance with the provisions of paragraph (a) above, the Bank will reimburse to the Borrower an amount of the Upfront fee equal to: U minus ( U x d ), ( - ) ( D ) less all outstanding costs and expenses. Where "U" is the amount of the Upfront fee paid to the Bank in accordance with the provisions of Clause 19.1 (Upfront fee); - -------------------------------------------------------------------------------- 19 - -------------------------------------------------------------------------------- "d" is the number of days which have elapsed between the commencement of the Commitment Period and the date upon which paragraph (a) takes effect; and "D" is the number of days in the Commitment Period. (ii) The Bank shall not be liable to pay to the Borrower any amount under sub-paragraph (b)(i) above if: (A) it is or becomes unlawful for the Bank to give effect to any of its obligations under this Agreement, or to fund or maintain any Loan, due to any action of the Borrower; or (B) whether or not originally due to any action on the part of the Borrower, the unlawfulness giving rise to the events set out in paragraph (a) above could (in the reasonable opinion of the Bank) be remedied by means of action undertaken by the Borrower, and the Borrower does not use its best endeavours to take such action. 15. GUARANTEE 15.1 GUARANTEE The Guarantor irrevocably and unconditionally: (a) as principal obligor guarantees to the Bank prompt performance by the Borrower of all its obligations under the Finance Documents; (b) undertakes with the Bank that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, the Guarantor shall forthwith on demand by the Bank pay that amount as if the Guarantor instead of the Borrower were expressed to be the principal obligor; and (c) indemnifies the Bank on demand against any loss or liability suffered by it if any obligation guaranteed by the Guarantor is or becomes unenforceable, invalid or illegal. 15.2 CONTINUING GUARANTEE This guarantee is a continuing guarantee and will extend to the ultimate balance of all sums payable by the Borrower under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part. 15.3 REINSTATEMENT (a) Where any discharge (whether in respect of the obligations of either Obligor or any security for those obligations or otherwise) is made in whole or in part or any arrangement is made on the faith of any payment, security or other disposition which is avoided or must be restored on insolvency, liquidation or otherwise without limitation, the liability of the Guarantor under this Clause 15 shall continue as if the discharge or arrangement had not occurred. - -------------------------------------------------------------------------------- 20 - -------------------------------------------------------------------------------- (b) The Bank may concede or compromise any claim that any payment, security or other disposition is liable to avoidance or restoration. 15.4 WAIVER OF DEFENCES The obligations of the Guarantor under this Clause 15 will not be affected by an act, omission, matter or thing which, but for this provision, would reduce, release or prejudice any of its obligations under this Clause 15 or prejudice or diminish those obligations in whole or in part, including (whether or not known to it or the Bank): (a) any time or waiver granted to, or composition with, the Borrower or other person; (b) the release of either Obligor or any other person under the terms of any composition or arrangement with any creditors of any member of the Group; (c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, the Borrower or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; (d) any incapacity or lack of powers, authority or legal personality of or dissolution or change in the members or status of the Borrower or any other person; (e) any variation (however fundamental) or replacement of a Finance Document or any other document or security so that references to that Finance Document in this Clause 15 shall include each variation or replacement; (f) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security, to the intent that the Guarantor's obligations under this Clause 15 shall remain in full force and its guarantee be construed accordingly, as if there were no unenforceability, illegality or invalidity; or (g) any postponement, discharge, reduction, non-provability or other similar circumstance affecting any obligation of the Borrower under a Finance Document resulting from any insolvency, liquidation or dissolution proceedings or from any law, regulation or order so that each such obligation shall for the purposes of the Guarantor's obligations under this Clause 15 be construed as if there were no such circumstance. 15.5 IMMEDIATE RECOURSE The Guarantor waives any right it may have of first requiring the Bank (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 15. 15.6 APPROPRIATIONS Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, the Bank (or any trustee or agent on its behalf) may: - -------------------------------------------------------------------------------- 21 - -------------------------------------------------------------------------------- (a) refrain from applying or enforcing any other moneys, security or rights held or received by the Bank (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such a manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and (b) hold in a suspense account any moneys received from the guarantor or on account of the guarantor's liability under this clause 15, without liability to pay interest on those moneys. 15.7 NON-COMPETITION Until all amounts which may be or become payable by the Borrower under or in connection with the Finance Documents have been irrevocably paid in full, the Guarantor shall not, after a claim has been made or by virtue of any payment or performance by it under this Clause 15: (a) be subrogated to any rights, security or moneys held, received or receivable by the Bank (or any trustee or agent on its behalf) or be entitled to any right of contribution or indemnity in respect of any payment made or moneys received on account of the Guarantor's liability under this Clause 15; (b) claim, rank, prove or vote as a creditor of the Borrower or its estate in competition with the Bank (or any trustee or agent on its behalf); or (c) receive, claim or have the benefit of any payment, distribution or security from or on account of the Borrower, or exercise any right of set-off as against the Borrower, unless the Bank otherwise directs. The Guarantor shall hold in trust for and forthwith pay or transfer to the Bank any payment or distribution or benefit of security received by it contrary to this Clause 15.7 or as directed by the Bank. 15.8 ADDITIONAL SECURITY This guarantee is in addition to and is not in any way prejudiced by any other security now or subsequently held by the Bank. 15.9 CONSIDERATION AND ENFORCEABILITY (a) The Guarantor represents warrants and agrees that: (i) it will receive valuable direct and indirect benefits as a result of the transactions financed by the Loans; and (ii) these benefits will constitute "reasonably equivalent value" and "fair consideration" as those terms are used in the fraudulent transfer laws. (b) The Guarantor acknowledges and agrees that the Bank has acted in good faith in connection with the guarantee granted under this Clause 15, and the transactions contemplated by this Agreement. - -------------------------------------------------------------------------------- 22 - -------------------------------------------------------------------------------- (c) This Clause 15 shall be enforceable against the Guarantor to the maximum extent permitted by the fraudulent transfer laws. (d) The Guarantor's liability under this Clause 15 shall be limited so that no obligation of, or transfer by, the Guarantor under this Clause 15 is subject to avoidance and turnover under the fraudulent transfer laws. (e) For the purposes of this Clause, "fraudulent transfer laws" means applicable United States bankruptcy and state fraudulent transfer and conveyance statutes and the related case law. 16. REPRESENTATIONS AND WARRANTIES 16.1 REPRESENTATIONS AND WARRANTIES Each Obligor makes the representations and warranties set out in this Clause 16 to the Bank. 16.2 STATUS (a) It is a limited liability company, duly incorporated and validly existing under the laws of the jurisdiction of its incorporation; and (b) each member of the Group has the power to own its assets and carry on its business as it is being conducted. 16.3 POWERS AND AUTHORITY (a) It has the power to enter into and perform, and has taken all necessary action to authorize the entry into, performance and delivery of, the Finance Documents to which it is or will be a party and the transactions contemplated by those Finance Documents. (b) It has the power to enter into and perform, and has taken all necessary action to authorise the entry into, performance and delivery of, the Acquisition Documents to which it is a party and the transactions contemplated by them. 16.4 LEGAL VALIDITY Each Finance Document to which it is or will be a party constitutes, or when executed in accordance with its terms will constitute, its legal, valid and binding obligation enforceable in accordance with its terms. 16.5 NON-CONFLICT The entry into and performance by it of, and the transactions contemplated by, the Finance Documents and the Acquisition Documents to which it is a party do not and will not: (a) conflict with any law or regulation or judicial or official order; or (b) conflict with the constitutional documents of any member of the group; or (c) conflict with any document which is binding upon any member of the Group or any asset of any member of the Group. - -------------------------------------------------------------------------------- 23 - -------------------------------------------------------------------------------- 16.6 NO DEFAULT (a) No Default is outstanding or might result from the making of any Loan; and (b) no other event is outstanding which constitutes (or with the giving of notice, lapse of time, determination of materiality or the fulfilment of any other applicable condition or any combination of the foregoing, might constitute) a default under any document which is binding on any member of the Group or any asset of any member of the Group to an extent or in a manner which might have a material adverse effect. 16.7 AUTHORIZATIONS (a) All authorizations which would reasonably be considered to be required in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Finance Documents and (after the Acquisition) the Acquisition Documents to which it is a party have been obtained or effected (as appropriate) and are in full force and effect. (b) All acts, conditions and things required to be done, fulfilled and performed under the laws of the United States of America in order to make the Finance Documents admissible in evidence in the United States of America have been done, fulfilled and performed. 16.8 ACCOUNTS (a) In the case of the Guarantor, the audited consolidated accounts of the Group most recently delivered to the Bank (which, at the date of this Agreement, are the Original Group Accounts): (i) have been prepared in accordance with accounting principles and practices generally accepted in the U.S.A. consistently applied; and (ii) fairly represent the consolidated financial condition of the Group as at the date to which they were drawn up, and there has been no material adverse change in the consolidated financial condition of the Group since the date to which those accounts were drawn up. (b) In the case of the Borrower, its audited accounts most recently delivered to the Bank: (i) have been prepared in accordance with accounting principles and practices generally accepted in the U.S.A. consistently applied; and (ii) fairly represent its financial condition as at the date to which they were drawn up, and there has been no material adverse change in the financial condition of the Borrower since the date to which those accounts were drawn up. 16.9 LITIGATION (a) Other than as specifically disclosed to the Bank prior to the date of this Agreement, no litigation, arbitration or administrative proceedings are current or, to its knowledge, pending or threatened, which might, if adversely determined, have a material adverse effect. - -------------------------------------------------------------------------------- 24 - -------------------------------------------------------------------------------- (b) In respect of any litigation, arbitration or administrative proceedings disclosed to the Bank prior to the date of this Agreement, there has been no development in the conduct of those proceedings which might have a material adverse effect. 16.10 INFORMATION (a) As far as it is aware, after due and careful enquiry, the Information was true and accurate in all material respects as at the date thereof, except for the historical financial information set out in the Information which as far as it is aware, after due and careful enquiry, was true and accurate in all material respects at the date as at which it was prepared. (b) The opinions, projections and forecasts in it and the assumptions on which they are based were arrived at after due and careful consideration and enquiry and genuinely represented its views. (c) There are no material facts or circumstances which have not been disclosed to the Bank by the Information and which could make any of such information, projections, forecasts, opinions or assumptions untrue, incomplete, inaccurate or misleading in any material respect or which, if disclosed, might reasonably be expected adversely to affect the decision of a person considering whether to provide finance to the Obligors or for the purposes of the Acquisition. 16.11 TAXES ON PAYMENTS Under the laws of the United States of America, or any other relevant state, in force at the date hereof, it will not be required to make any deduction or withholding from any payment it may make to the Bank under the Finance Documents. 16.12 NO IMMUNITY In any proceedings taken in the United States of America, or any other relevant state, in relation to the Finance Documents, it will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process. 16.13 PARI PASSU RANKING The obligations of the Borrower to the Bank under the Finance Documents will rank at least pari passu with the claims of all its other unsecured creditors save those whose claims are preferred solely by any bankruptcy, insolvency, liquidation or other similar laws of general application. 16.14 WINDING UP: RE-ORGANISATION ETC. It has not taken any corporate action nor have any other steps been taken or legal proceedings been started or (to the best of its knowledge and belief) threatened against it for its winding-up, dissolution, administration or re-organisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of any or all of its assets or revenues. - -------------------------------------------------------------------------------- 25 - -------------------------------------------------------------------------------- 16.15 THE ACQUISITION (a) Neither it, nor the Acquiror, is in breach of any of its obligations under any Acquisition Documents nor, so far as it is aware, is any other party to those documents. (b) The Acquiror is, or will, immediately upon its purchase of shares in the Target in accordance with the Acquisition Documentation, be and remain, the beneficial owner of a majority of the shares of the Target free from any Security Interests. 16.16 ENVIRONMENTAL LAW Other than as specifically disclosed to the Bank prior to the date of this Agreement, each Obligor that directly or indirectly owns, leases, occupies or uses real property in the United States is and has been in compliance with all applicable Environmental Laws and Environmental Licences in all material respects and, so far as it is aware, there are no circumstances that may at any time prevent or interfere with continued compliance by it with all applicable Environmental Laws and Environmental Licences in all material respects. Other than as disclosed to the Bank prior to the date of this Agreement, no Environmental Claim is pending or, to the best of its knowledge, threatened against it or any of its properties. 16.17 ERISA Each Plan of the Obligors and their respective ERISA Affiliates complies in all material respects with all applicable requirements of law and regulation. No Reportable Event has occurred with respect to any Plan which might have a material adverse effect, and no steps have been taken to terminate any Plan. No Obligor or any Subsidiary or ERISA Affiliate of an Obligor has had a complete or partial withdrawal from any Multiemployer Plan or initiated any steps to do so. 16.18 INVESTMENT COMPANY ACT No Obligor is an "investment company" or a company "controlled" by an "investment company", within the meaning of the United States Investment Company Act of 1940, as amended. 16.19 PUBLIC UTILITY HOLDING COMPANY AND FEDERAL POWER ACT No Obligor is a "holding company", or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company", within the meaning of, or otherwise subject to regulation under, the United States Public Utility Holding Company Act of 1935, as amended. No Obligor is a "public utility" within the meaning of, or otherwise subject to regulation under, the United States Federal Power Act. 16.20 OTHER REGULATION No Obligor is subject to regulation under any United States Federal or State statute or regulation that limits its ability to incur or guarantee indebtedness. 16.21 MARGIN STOCK (a) The proceeds of the Loans have been and will be used only for the purposes described in Clause 3 (Purpose). - -------------------------------------------------------------------------------- 26 - -------------------------------------------------------------------------------- (b) No Obligor is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations U and X of the Board of Governors of the United States Federal Reserve System). (c) None of the transactions contemplated in this Agreement (including, without limitation, the borrowings hereunder and the use of the proceeds thereof) will violate or result in a violation of Section 7 of the Securities Exchange Act of 1934 (or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X). 16.21 SOLVENCY (a) The Guarantor has not incurred and does not intend to incur or believe it will incur debts beyond its ability to pay as they mature. (b) The Guarantor has made no transfer or incurred any obligation under this Agreement with the intent to hinder, delay or defraud any of its present or future creditors. (c) For purposes of this Clause: (i) "DEBT" means any liability on a claim; (ii) "CLAIM" means (A) any right to payment, whether or not that right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or (B) any right to an equitable remedy for breach of performance if that breach gives rise to payment, whether or not the right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured; and (iii) terms used in this Clause shall be construed in accordance with the applicable United States bankruptcy and New York fraudulent conveyance statutes and the related case law. 16.22 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES The representations and warranties set out in this Clause 16: (a) are made on the date of this Agreement; and (b) (with the exception of Clause 16.10 (Information)) are deemed to be repeated by each Obligor on the date of each Request and the first day of each Interest Period with reference to the facts and circumstances then existing. 17. UNDERTAKINGS 17.1 DURATION The undertakings in this Clause 17 remain in force from the date of this Agreement for so long as any amount is or may be outstanding under this Agreement or any Commitment is in force. - -------------------------------------------------------------------------------- 27 - -------------------------------------------------------------------------------- 17.2 FINANCIAL INFORMATION The Guarantor shall supply to the Bank: (a) as soon as the same are available (and in any event within 180 days of the end of each of its financial years): (i) its audited consolidated accounts for that financial year; and (ii) the audited accounts of the Borrower for that financial year; (b) as soon as the same are available (and in any event within 90 days of the end of the first half-year of each of its financial years): (i) its unaudited consolidated accounts for that half-year; and (ii) the unaudited accounts of the Borrower for that half-year. (c) as soon as the same are available (and in any event within 60 days of the end of each financial quarter): (i) its unaudited consolidated accounts for that financial quarter; and (ii) the unaudited accounts of the Borrower for that financial quarter. 17.3 INFORMATION - MISCELLANEOUS Each Obligor shall supply to the Bank: (a) all documents despatched by it to its shareholders (or any class of them) or its creditors (or any class of them) at the same time as they are despatched; (b) (unless already provided to the Bank) promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending, and which might, if adversely determined, have a material adverse effect on the financial condition of any member of the Group or on the ability of either Obligor to perform its obligations under this Agreement; and (c) promptly, such further information in the possession or control of any member of the Group regarding its financial condition and operations, or in relation to or in connection with the Acquisition, as the Bank may reasonably request. 17.4 NOTIFICATION OF DEFAULT Each Obligor shall notify the Bank of any Default (and the steps, if any, being taken to remedy it) promptly upon its occurrence. 17.5 COMPLIANCE CERTIFICATES The Guarantor shall supply to the Bank: - -------------------------------------------------------------------------------- 28 - -------------------------------------------------------------------------------- (a) together with the accounts specified in Clause 17.2(a)(i) (Financial information); and (b) promptly at any other time, if the Bank so requests, a certificate signed by two of its senior officers on its behalf certifying that no Default is outstanding or, if a Default is outstanding, specifying the Default and the steps, if any, being taken to remedy it. 17.6 AUTHORIZATIONS Each Obligor shall promptly: (a) obtain, maintain and comply with the terms of; and (b) supply certified copies to the Bank of, any authorization required under any law or regulation to enable it to perform its obligations under, or for the validity or enforceability of, any Finance Document. 17.7 PARI PASSU RANKING Each Obligor shall procure that its obligations under the Finance Documents do and will rank at least pari passu with all its other present and future unsecured obligations, except for obligations mandatorily preferred by law applying to companies generally. 17.8 NEGATIVE PLEDGE (a) Neither Obligor shall, and the Guarantor shall procure that no other member of the Group will, create or permit to subsist any Security Interest securing borrowed money on any of its assets (other than Unrestricted Margin Stock). (b) Paragraph (a) does not apply to: (i) any lien arising by operation of law in the ordinary course of business and securing amounts not more than 30 days overdue; (ii) any Security Interest disclosed in writing to the Bank prior to the execution of this Agreement which secures Financial Indebtedness outstanding at the date of this Agreement; (iii) any Security Interest arising in relation to set-off arrangements between cash balances and bank borrowings with the same bank which arise in the ordinary course of business; (iv) any Security Interest existing at the time of acquisition on or over any asset acquired by a member of the Group after the date of this Agreement which was not created in contemplation of or in connection with that acquisition, provided that the principal amount secured by such Security Interest and outstanding at the time of acquisition is not subsequently increased and the Security Interest is discharged within 3 months; (v) in the case of any company which becomes a member of the Group after the date of this Agreement, any Security Interest existing on or over its assets when it becomes a - -------------------------------------------------------------------------------- 29 - -------------------------------------------------------------------------------- member of the Group which was not created in contemplation of or in connection with it becoming a member of the Group, provided that: (A) the principal amount secured by such Security Interest and outstanding when the relevant company became a member of the Group is not increased; (B) no amount is secured by any such Security Interest which is not secured by the relevant Security Interest when the relevant company becomes a member of the Group; and (C) the Security Interest is discharged within 3 months; (vi) any Security Interest replacing any of the Security Interests permitted by paragraphs (iv) and (v), provided that the amount secured by any replacement Security Interest shall not exceed the amount outstanding and secured by the original Security Interest at the time of the creation of the replacement Security Interest, the value of the replacement asset over which the replacement Security Interest is created does not exceed the value of the asset over which the original Security Interest was held, the replacement Security Interest secures the same obligations as the original Security Interest and such replacement Security Interest is discharged within the original three-month period specified in paragraphs (iv) and (v); and (vii) any other Security Interest provided that at the time that the Security Interest is created, the aggregate amount of indebtedness secured by all Security Interests permitted under this Clause 17.8(b)(vii) (other than those permitted by sub-paragraphs 17.8(b)(i) - (vi) above) does not exceed 5 per cent. of the book value of the consolidated total assets of the Group, as determined by reference to the most recent consolidated accounts of the Group delivered pursuant to Clause 17.2 (Financial Information). 17.9 TRANSACTIONS SIMILAR TO SECURITY (a) Neither Obligor shall, and the Guarantor shall procure that no other member of the Group will: (i) sell, transfer or otherwise dispose of a material part of its assets (either in one transaction or a series of transactions, whether related or not) on terms whereby it is or may be leased to or re-acquired or acquired by a member of the Group or any of its related entities; or (ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms, except for the discounting of bills or notes in the ordinary course of trading, in circumstances where the transaction is entered into primarily as a method of raising finance or of financing the acquisition of an asset. (b) Paragraph (a) above does not apply to Unrestricted Margin Stock. 17.10 DISPOSALS (a) Neither Obligor shall, and the Guarantor shall procure that no other Material Subsidiary will, either in a single transaction or in a series of transactions, whether related or not - -------------------------------------------------------------------------------- 30 - -------------------------------------------------------------------------------- and whether voluntarily or involuntarily, sell, transfer, grant or lease or otherwise dispose of all or any substantial part of its assets. (b) Paragraph (a) does not apply to: (i) disposals made in the ordinary course of business of the disposing entity; or (ii) disposals of assets in exchange for other assets comparable or superior as to type, value and quality; or (iii) disposals made on an arms length basis for full market consideration; or (iv) disposals made with the prior written consent of the Bank; or (v) any disposal of assets from: (A) a Material Subsidiary to an Obligor or another Material Subsidiary; or (B) any other Subsidiary of the Borrower to any member of the Group, provided that all such disposals in this paragraph (v) are made for full market consideration, 17.11 CHANGE OF BUSINESS The Guarantor shall procure that no substantial change is made to the general nature or scope of the business of the Guarantor or of the Group from that carried on at the date of this Agreement. 17.12 MERGERS AND ACQUISITIONS (a) The Guarantor shall not finalise or effectuate any amalgamation, demerger, merger or reconstruction. (b) (i) No Obligor shall, and the Guarantor shall procure that no other member of the Group will, acquire any assets or business or make any investment (ii) Sub-paragraph (i) shall not apply to: (A) the Acquisition; or (B) any acquisition of assets or business or any investment made where the value of the assets, business or investment, when aggregated with the value of all other assets or businesses acquired or investments made by any member of the Group after the date of this Agreement (other than the Acquisition) does not exceed US$350,000,000. 17.13 INSURANCES Each Obligor shall, and the Guarantor will procure that the Group taken as a whole will, effect and maintain such insurance over and in respect of its property, assets and business with reputable underwriters or insurance companies and in such a manner and to such extent - -------------------------------------------------------------------------------- 31 - -------------------------------------------------------------------------------- as is reasonable and customary for a business enterprise engaged in the same or similar businesses and in the same or similar localities. 17.14 THIRD PARTY GUARANTEES No Obligor shall, and will ensure that no other member of the Group shall, without the prior consent of the Bank, grant any guarantee, bond, indemnity, counter-indemnity or similar instrument in respect of any material obligation of a person other than a member of the Group, save for: (a) on the terms of the Finance Documents; or (b) any guarantee related to the purchase or supply of goods and/or services by such Obligor or a member of the Group or a consortium or a group of companies of which such Obligor or a member of the Group is a party, which guarantee is given in the ordinary course of business. 17.15 THE ACQUISITION No Obligor shall, and the Guarantor shall procure that no other member of the Group will, amend, vary or waive any material term or condition of the Acquisition without the prior consent of the Bank (such consent not to be unreasonably withheld or delayed). 17.16 ENVIRONMENTAL MATTERS Each Obligor that directly or indirectly owns, leases, occupies or uses real property in the United States shall, in all material respects, comply with: (a) all applicable Environmental Law; and (b) the terms and conditions of all Environmental Licenses applicable to it, and for this purpose will implement procedures to monitor compliance with and to prevent any liability under Environmental Law. 17.17 NOTICE REQUIREMENTS Each Obligor will give the Bank prompt notice of the occurrence of any of the following events: (a) non-compliance with any Environmental Law or Environmental License of which it is aware in any material respect; (b) any Environmental Claim or any other claim, notice or other communication served on it in respect of any alleged breach of any Environmental Law or Environmental License which might have a material adverse effect; (c) any actual or suspected Environmental Contamination which might have a material adverse effect; (d) any Reportable Event; - -------------------------------------------------------------------------------- 32 - -------------------------------------------------------------------------------- (e) termination of any Plan maintained or contributed by the Obligor or any ERISA Affiliate or any action that might result in termination; or (f) complete or partial withdrawal from any Multiemployer Plan by the Obligor or any ERISA Affiliate or any action that might result in complete or partial withdrawal. In each notice delivered under this Clause, the Obligor will include reasonable details concerning the occurrence that is the subject of the notice as well as the Obligor's proposed course of action, if any. Delivery of a notice under this Clause will not affect the Obligor's obligations to comply with any other provision of this Agreement. 17.18 INVESTMENT COMPANY ACT No Obligor will, either by act or omission, become, or permit any other Obligor to become, an "investment company" or a company "controlled" by an "investment company", within the meaning of the United States Investment Company Act of 1940, as amended. 17.19 PUBLIC UTILITY STATUS No Obligor will, either by act or omission, become or permit any other Obligor or, as a result of its obligations under this Agreement, the Bank to become subject to regulation under the United States Public Utility Holding Company Act of 1935, as amended, or the United States Federal Power Act. 17.20 ERISA No Obligor will take any action or omit to take any action or permit any Subsidiary or ERISA Affiliate to take any action or omit to take any action with respect to any Plan that might result in the imposition of a lien or other Security Interest on any property of the Obligor or any Subsidiary or otherwise have a material adverse effect. 17.21 MARGIN STOCK The Obligors will use the proceeds of the Loans only for the purpose described in Clause 3 (Purpose). No Obligor will engage in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations U and X issued by the Board of Governors of the United States Federal Reserve System). The Obligors shall procure that none of the proceeds of the Loans will be used for any purpose that will violate or result in the violation of Section 7 of the Securities Exchange Act of 1934 (or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X). If requested by the Bank, the Borrower will furnish to the Bank in connection with any Loan hereunder a statement in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U. 17.22 SOLVENCY The Guarantor will, at all times, maintain sufficient capital to conduct its current and proposed business and operations, maintain its ability to pay its debts as they become due, and continue to own property having a value - both at fair valuation and at present fair saleable value - greater than the total amount of the probable liability of the Guarantor on its debts and obligations (including this Agreement). - -------------------------------------------------------------------------------- 33 - -------------------------------------------------------------------------------- 18. DEFAULT 18.1 EVENTS OF DEFAULT Each of the events set out in this Clause 18 is an Event of Default (whether or not caused by any reason whatsoever outside the control of either Obligor or any other person). 18.2 NON-PAYMENT An Obligor does not pay on the due date any amount payable by it under the Finance Documents at the place at and in the currency in which it is expressed to be payable and, if the non-payment is caused solely by administrative or technical error, or relates solely to non-payment of interest or fees, it is not remedied within three Business Days. 18.3 BREACH OF OTHER OBLIGATIONS An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 18.2 (Non-payment)), provided that, if such non-compliance is capable of remedy, such non-compliance remains unremedied for a period of 14 days. 18.4 MISREPRESENTATION A representation, warranty or statement made or repeated in or in connection with any Finance Document or in any document delivered by or on behalf of either Obligor under or in connection with any Finance Document is incorrect in any material respect when made or deemed to be made or repeated. 18.5 CROSS-DEFAULT (a) Any Financial Indebtedness of a member of the Group is not paid when due or within any applicable grace period provided for in the relevant documentation; or (b) an event of default howsoever described occurs under any document relating to Financial Indebtedness of a member of the Group; or (c) any Financial Indebtedness of a member of the Group becomes prematurely due and payable or is placed on demand as a result of an event of default (howsoever described) under the document relating to that Financial Indebtedness; or (d) any commitment for, or underwriting of, any Financial Indebtedness of a member of the Group is cancelled or suspended as a result of an event of default (howsoever described) under the document relating to that Financial Indebtedness; or (e) any Security Interest securing Financial Indebtedness over any asset of a member of the Group becomes enforceable, Provided that no Event of Default shall occur under this Clause 18.5 unless the aggregate amount of all the Financial Indebtedness with respect to which an event or events under paragraphs (a) to (e) (inclusive) above occurs or occur is at least US$20,000,000 (or its equivalent in other currencies). - -------------------------------------------------------------------------------- 34 - -------------------------------------------------------------------------------- 18.6 INSOLVENCY (a) An Obligor or any Material Subsidiary is, or is deemed for the purposes of any law to be, unable to pay its debts as they fall due or to be insolvent, or admits inability to pay its debts as they fall due; or (b) an Obligor or any Material Subsidiary suspends making payments on all or any class of its debts or announces an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or (c) an Obligor or any Material Subsidiary, by reason of financial difficulties, begins negotiations with one or more of its creditors with a view to the readjustment or rescheduling of any of its indebtedness. 18.7 INSOLVENCY PROCEEDINGS (a) Any step (including petition, proposal or convening a meeting) is taken with a view to a composition, assignment or arrangement with any creditors of an Obligor or any Material Subsidiary; or (b) a meeting of an Obligor or any Material Subsidiary is convened for the purpose of considering any resolution for (or to petition for) its winding-up or for its administration or any such resolution is passed; or (c) any person presents a petition for the winding-up or for the administration of an Obligor or any Material Subsidiary, other than a petition which is frivolous or vexatious, or which is dismissed within 30 days; or (d) an order for the winding-up or administration of an Obligor or any Material Subsidiary is made; or (e) any other step (including petition, proposal or convening a meeting) is taken with a view to the rehabilitation, administration, custodianship, liquidation, winding-up or dissolution of an Obligor or any Material Subsidiary or any other insolvency proceedings involving an Obligor or any Material Subsidiary. 18.8 APPOINTMENT OF RECEIVERS AND MANAGERS (a) Any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or the like is appointed in respect of an Obligor or any Material Subsidiary or any part of its assets; or (b) the directors of an Obligor or any Material Subsidiary requests the appointment of a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or the like; or (c) any other steps are taken to enforce any Security Interest over any part of the assets of an Obligor or any Material Subsidiary. - -------------------------------------------------------------------------------- 35 - -------------------------------------------------------------------------------- 18.9 CREDITORS' PROCESS Any attachment, sequestration, distress or execution affects any asset of an Obligor or any Material Subsidiary and is not discharged within 14 days. 18.10 ANALOGOUS PROCEEDINGS There occurs, in relation to an Obligor or any Material Subsidiary, any event anywhere which appears to correspond with any of those mentioned in Clauses 18.6 (Insolvency) to 18.9 (Creditors process) (inclusive). 18.11 CESSATION OF BUSINESS An Obligor or any Material Subsidiary ceases, or threatens to cease, to carry on all or a substantial part of its business. 18.12 MATERIAL ADVERSE CHANGE Any event or series of events occurs which, in the reasonable opinion of the Bank, could reasonably be expected to have a material adverse effect. 18.13 U.S. BANKRUPTCY LAWS (a) Any Obligor makes a general assignment for the benefit of creditors; or (b) any Obligor commences a voluntary case or proceeding under the United States Bankruptcy Code of 1978, as amended, or under any other United States Federal or State bankruptcy, insolvency or other similar law (collectively "U.S. BANKRUPTCY LAWS"); or (c) an involuntary case under any U.S. Bankruptcy Law is commenced against any Obligor and the petition is not controverted within 30 days and is not dismissed or stayed within 90 days after commencement of the case; or (d) a custodian, conservator, receiver, liquidator, assignee, trustee, sequestrator or other similar official is appointed under any U.S. Bankruptcy Law for or takes charge of, all or substantial part of the property of any Obligor. 18.14 ERISA (a) Any event or condition occurs that presents a material risk that any Obligor or any ERISA Affiliate may incur a material liability to a Plan or to the United States Internal Revenue Service or to the United States Pension Benefit Guaranty Corporation; or (b) an "accumulated funding deficiency" occurs (as that term is defined in section 412 of the United States Internal Revenue Code of 1986, as amended, or section 302 of ERISA), whether or not waived, by reason of the failure of any Obligor or any ERISA Affiliate to make a contribution to a Plan. 18.15 ACCELERATION (a) Upon the occurrence of an Event of Default described in Clause 18.13 (U.S. Bankruptcy Laws): - -------------------------------------------------------------------------------- 36 - -------------------------------------------------------------------------------- (i) the Commitment will immediately terminate; and (ii) the Loans, together with accrued interest, and all other amounts accrued under the Finance Documents, will be immediately due and payable. (b) On and at any time after the occurrence of an Event of Default (other than an Event of Default described in Clause 18.13 (U.S. Bankruptcy Laws)) the Bank may, by notice to the Borrower: (a) cancel the Commitment; and/or (b) demand that all or part of the Loans, together with accrued interest and all other amounts accrued under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or (c) demand that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand. 19. FEES 19.1 UPFRONT FEE The Borrower shall on the date of this Agreement pay to the Bank an Upfront fee computed at the rate of 0.175 per cent. of the Commitment. 19.2 COMMITMENT FEE (a) The Borrower shall pay to the Bank a commitment fee computed at the rate of 0.15 per cent. per annum on the undrawn, uncancelled amount of the Commitment during the period beginning on 25th April, 2000 and ending on the Term Date. (b) Accrued commitment fee is payable quarterly in arrears. Accrued commitment fee shall also be payable to the Bank on the cancelled amount of the Commitment at the time the cancellation comes into effect. 19.3 VAT Any fee referred to in this Clause 19 is exclusive of any value added tax or any other tax which might be chargeable in connection with that fee. If any value added tax or other tax is so chargeable, it shall be paid by the Borrower at the same time as it pays the relevant fee. 20. EXPENSES 20.1 INITIAL AND SPECIAL COSTS The Borrower shall forthwith on demand pay the Bank and the Arranger the amount of all costs and expenses (including legal fees) incurred by it in connection with: (a) the negotiation, preparation, printing and execution of: (i) this Agreement and any other documents referred to in this Agreement; and - -------------------------------------------------------------------------------- 37 - -------------------------------------------------------------------------------- (ii) any other Finance Document executed after the date of this Agreement; and (b) any amendment, waiver, consent or suspension of rights (or any proposal for any of the foregoing) requested by or on behalf of an Obligor or, in the case of Clause 2.2 (Change of currency), the Bank, and relating to a Finance Document or a document referred to in any Finance Document. (c) any other matter, not of an ordinary administrative nature, arising out of or in connection with a Finance Document. 20.2 ENFORCEMENT COSTS The Borrower shall forthwith on demand pay to the Bank the amount of all costs and expenses (including legal fees) incurred by it in connection with the enforcement of, or the preservation of any rights under, any Finance Document. 21. STAMP DUTIES The Borrower shall pay and forthwith on demand indemnify the Bank against any liability it incurs in respect of, any stamp, registration and similar tax which is or becomes payable in connection with the entry into, performance or enforcement of any Finance Document. 22. INDEMNITIES 22.1 CURRENCY INDEMNITY (a) If the Bank receives an amount in respect of an Obligor's liability under the Finance Documents or if that liability is converted into a claim, proof, judgment or order in a currency other than the currency (the "CONTRACTUAL CURRENCY") in which the amount is expressed to be payable under the relevant Finance Document: (i) that Obligor shall indemnify the Bank as an independent obligation against any loss or liability arising out of or as a result of the conversion; (ii) if the amount received by the Bank, when converted into the contractual currency at a market rate in the usual course of its business is less than the amount owed in the contractual currency, the Obligor concerned shall forthwith on demand pay to the Bank an amount in the contractual currency equal to the deficit; and (iii) the Obligor shall forthwith on demand pay to the Bank forthwith on demand any exchange costs and taxes payable in connection with any such conversion. (b) Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable. 22.2 OTHER INDEMNITIES The Borrower shall forthwith on demand indemnify the Bank against any loss or liability which the Bank incurs as a consequence of: (a) the occurrence of any Default; - -------------------------------------------------------------------------------- 38 - -------------------------------------------------------------------------------- (b) a change in the currency of a country or the operation of Clause 2.2 (Change of currency) or Clause 18.15 (Acceleration); (c) any payment of principal or an overdue amount being received from any source otherwise than on the last day of a relevant Interest Period or Designated Interest Period (as defined in Clause 9.3 (Default interest)) relative to the amount so received; or (d) a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment or (other than by reason of negligence or default by the Bank) a Loan not being made after the Borrower has delivered a Request. The Borrower's liability in each case includes any loss of Margin or other loss or expense on account of funds borrowed, contracted for or utilised to fund any amount payable under any Finance Document, any amount repaid or prepaid or any Loan. 23. EVIDENCE AND CALCULATIONS 23.1 ACCOUNTS Accounts maintained by the Bank in connection with this Agreement are prima facie evidence of the matters to which they relate. 23.2 CERTIFICATES AND DETERMINATIONS Any certification or determination by the Bank of a rate or amount under the Finance Documents is, in the absence of manifest error, conclusive evidence of the matters to which it relates. 23.3 CALCULATIONS Interest (including any applicable Mandatory Cost) and the fee payable under Clause 19.2 (Commitment fee) accrue from day to day and are calculated on the basis of the actual number of days elapsed and a year of 360 days or, where market practice otherwise dictates, 365 days. 24. WAIVERS AND REMEDIES CUMULATIVE The rights of the Bank under the Finance Documents: (a) may be exercised as often as necessary; (b) are cumulative and not exclusive of its rights under the general law; and (c) may be waived only in writing and specifically. Delay in exercising or non-exercise of any such right is not a waiver of that right. - -------------------------------------------------------------------------------- 39 - -------------------------------------------------------------------------------- 25. CHANGES TO THE PARTIES 25.1 TRANSFERS BY OBLIGORS Neither Obligor may assign, transfer, novate or dispose of any of, or any interest in, its rights and/or obligations under the Finance Documents. 25.2 TRANSFERS BY THE BANK (a) The Bank may, subject to paragraph (b) below, at any time assign, transfer or novate any of the Commitment and/or any of its rights and/or obligations under this Agreement to another bank or financial institution (the "NEW BANK"). (b) The prior consent of the Borrower is required for any such assignment or transfer, unless the New Bank is an Affiliate of the Bank. However, the prior consent of the Borrower must not be unreasonably withheld or delayed and will be deemed to have been given if, within five days of receipt by the Borrower of an application for consent, it has not been expressly refused. (c) A transfer of obligations will be effective only if the New Bank confirms to the Borrower that it undertakes to be bound by the terms of this Agreement as the Bank in form and substance satisfactory to the Borrower. On the transfer becoming effective in this manner the Bank shall be relieved of its obligations under this Agreement to the extent that they are transferred to the New Bank. (d) Nothing in this Agreement restricts the ability of the Bank to sub-contract an obligation if it remains liable under this Agreement for that obligation. (e) The Borrower shall not be liable for any costs arising in connection with a transfer which takes place under this Clause 25.2. 25.3 SYNDICATION (a) The Bank or the Arranger may at any time (after prior consultation with the Borrower) effect a Syndication. (b) In the event of any Syndication, the Borrower agrees to provide the Bank with all assistance and information that it reasonably requests in relation to such Syndication. 26. DISCLOSURE OF INFORMATION The Bank shall keep confidential any and all information made available to it by any Obligor pursuant to or in connection with the Finance Documents, save for information: (a) which at the relevant time is in the public domain; or (b) which, after such information has been made available to the Bank, becomes generally available to third parties by publication or otherwise through no breach of this Clause 26 by the Bank; or (c) which was lawfully in the possession of the Bank or its advisers prior to such disclosure (as evidenced by the Bank's written records or the written records of the - -------------------------------------------------------------------------------- 40 - -------------------------------------------------------------------------------- Bank's advisers) and which was not acquired directly or indirectly from an Obligor; or (d) the disclosure of which is required by law or any competent regulatory body or which is necessitated by any legal proceeding or audit requirement; or (e) the disclosure of which is made to an Affiliate of the Bank in circumstances where it is the Bank's usual practice to make such disclosure or where such disclosure is required as part of the Bank's management or reporting policies or where such disclosure is in the reason opinion of the Bank required to protect its position, or to assist in the recovery of amounts, hereunder; or (f) the disclosure of which is made to any person with whom it is proposing to enter, or has entered, into any kind of transfer, participation or other agreement in relation to this Agreement; or (g) which is disclosed by the Bank to its professional advisers; or (h) which is disclosed to another party to this Agreement. 27. SET-OFF The Bank may set off any matured obligation owed by an Obligor under the Finance Documents (to the extent beneficially owned by the Bank) against any obligation (whether or not matured) owed by the Bank to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Bank may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. If either obligation is unliquidated or unascertained, the Bank may set off in an amount estimated by it in good faith to be the amount of that obligation. 28. SEVERABILITY If a provision of any Finance Document is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect: (a) the validity or enforceability in that jurisdiction of any other provision of the Finance Documents; or (b) the validity or enforceability in other jurisdictions of that or any other provision of the Finance Documents. 29. COUNTERPARTS Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document. - -------------------------------------------------------------------------------- 41 - -------------------------------------------------------------------------------- 30. NOTICES 30.1 GIVING OF NOTICES All notices or other communications under or in connection with this Agreement shall be given in writing and, unless otherwise stated, may be made by letter, telex or facsimile. Any such notice will be deemed to be given as follows: (a) if by letter, when delivered personally or on actual receipt; (b) if by telex, when despatched, but only if, at the time of transmission, the correct answerback appears at the start and at the end of the sender's copy of the notice; and (c) if by facsimile, when received in legible form. However, a notice given in accordance with the above but received on a non-working day or after business hours in the place of receipt will only be deemed to be given on the next working day in that place. 30.2 ADDRESSES FOR NOTICES (a) The address, telex number and facsimile number of the Borrower are: Autoliv ASP, Inc. 3350 Airport Road Ogden Utah 84405 Fax No: +1 801 625 4853 Attention: Director of Finance or such other as the Borrower may notify to the Bank by not less than five Business Days' notice. (b) The address, telex and facsimile number of the Guarantor are: Autoliv, Inc, Box 70381 SE-107 24 Stockholm Sweden Fax No: +46 8 24 44 93 Attention: Vice President, Finance or such other as the Guarantor may notify to the Bank by not less than five Business Days' notice. (c) The address, telex number and facsimile number of the Bank are: Skandinaviska Enskilda Banken AB (publ) Skandinavia House 2 Cannon Street - -------------------------------------------------------------------------------- 42 - -------------------------------------------------------------------------------- London EC4M 6XX, Telex No: 8950281 Fax No: +44 20 7329 4178 Attention: Banking Administration Rachel Vanner or such other as the Bank may notify to the Borrower by not less than five Business Days' notice. 31. LANGUAGE (a) Any notice given under or in connection with any Finance Document shall be in English. (b) All other documents provided under or in connection with any Finance Document shall be: (i) in English; or (ii) if not in English, accompanied by a certified English translation and, in this case, the English translation shall prevail unless the document is a statutory or other official document. 32. JURISDICTION 32.1 SUBMISSION (a) For the benefit of the Bank, each Obligor agrees that the courts of England have jurisdiction to settle any disputes in connection with any Finance Document and accordingly submits to the jurisdiction of the English courts. (b) Without prejudice to paragraph (a) above and for the benefit of the Bank, each Obligor agrees that any New York State court or Federal court sitting in New York City has jurisdiction to settle any disputes in connection with any Finance Document and accordingly submits to the jurisdiction of those courts. 32.2 SERVICE OF PROCESS Without prejudice to any other mode of service, each Obligor: (a) irrevocably appoints: (i) Autoliv Ltd, Penner Road, Havant, Hampshire PO9 1QH, as agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; (ii) CT Corporation, 155 Washington Ave. Ste 200, Albany, New York 12210, as its agent for service of process in relation to any proceedings before any courts located in the State of New York in connection with any Finance Document; - -------------------------------------------------------------------------------- 43 - -------------------------------------------------------------------------------- (b) agrees to maintain an agent for service of process in England and in the State of New York until all Commitments have terminated and the Loans and all other amounts payable under the Finance Documents have been finally, irrevocable and indefeasibly repaid in full; (c) agrees that failure by a process agent to notify the Obligor of the process will not invalidate the proceedings concerned; (d) consents to the service of process relating to any proceedings by prepaid posting of a copy of the process to its address for the time being applying under Clause 30.2 (Addresses for notices); and (e) agrees that if the appointment of any person mentioned in paragraph (a) above ceases to be effective, the Obligor shall immediately appoint a further person in England or in the State of New York, as appropriate, to accept service of process on its behalf in England or in the State of New York, as appropriate, and, if the Obligor does not appoint a process agent within 15 days, the Bank is entitled and authorized to appoint a process agent for the Obligor by notice to the Obligor. 32.3 FORUM CONVENIENCE AND ENFORCEMENT ABROAD Each Obligor: (a) waives objection to the English and New York State and Federal courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with any Finance Document; and (b) agrees that a judgment or order of an English or New York State or Federal court in connection with any Finance Document is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction. 32.4 NON-EXCLUSIVITY Nothing in this Clause 32 limits the right of the Bank to bring proceedings against the Obligor in connection with any Finance Document: (a) in any other court of competent jurisdiction; or (b) concurrently in more than one jurisdiction. 33. GOVERNING LAW This Agreement is governed by English law. 34. INTEGRATION The Finance Documents contain the complete agreement between the parties on the matters to which they relate and supersede all prior commitments, agreements and understandings, whether written or oral, on those matters. - -------------------------------------------------------------------------------- 44 - -------------------------------------------------------------------------------- 35. WAIVER OF JURY TRIAL The Obligors and the Bank waive any rights they may have to a jury trial of any claim or cause of action based on or arising from any Finance Document or the transactions contemplated by the Finance Documents. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court. This Agreement has been entered into on the date stated at the beginning of this Agreement. 45 SCHEDULE 1 CONDITIONS PRECEDENT DOCUMENTS 1. BOTH OBLIGORS A copy of the memorandum and articles of association and certificate of incorporation of each Obligor. 2. BORROWER (a) A copy of a resolution of the board of directors of the Borrower: (i) approving the terms of, and the transactions contemplated by, this Agreement and resolving that it execute this Agreement; (ii) authorizing a specified person or persons to execute this Agreement on its behalf; and (iii) authorizing a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with this Agreement; (b) a specimen of the signature of each person authorized by the resolution referred to in paragraph (a) above; (c) a certificate of a director of the Borrower confirming that the borrowing of the Commitment in full would not cause any borrowing limit binding on either Obligor to be exceeded; and (d) a certificate of an authorized signatory of the Borrower certifying that each copy document specified in this Schedule 1 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement. 3. GUARANTOR (a) A copy of a resolution of the board of directors of the Guarantor: (i) approving the terms of, and the transactions contemplated by, this Agreement and resolving that it execute this Agreement; (ii) authorizing a specified person or persons to execute this Agreement on its behalf; and (iii) authorizing a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices to be signed and/or despatched by it under or in connection with this Agreement; (b) a specimen of the signature of each person authorized by the resolutions referred to in paragraph (a) above. - -------------------------------------------------------------------------------- 46 - -------------------------------------------------------------------------------- 4. OTHER DOCUMENTS (a) Evidence that the process agents referred to in Clause 32.2 (Service of process) have accepted their appointments under that Clause. (b) A copy of each Acquisition Document. (c) The Information. (d) Copies of all official consents and approvals (including the relevant regulatory and competition approvals) which are required in relation to the terms and conditions of both the Acquisition and this Agreement and other related documents. (e) Evidence (satisfactory to the Bank) that more than 50% of the common stock in the Target has been tendered by the existing shareholders. (f) Confirmation from the Guarantor that it is not in breach of any other agreement to which it is a party. (g) A copy of any other authorization or other document, opinion or assurance which the Bank considers to be necessary in connection with the entry into and performance of, and the transactions contemplated by, any Finance Document or for the validity and enforceability of any Finance Document. 5. LEGAL OPINIONS (a) A legal opinion of Allen & Overy, New York, legal advisers in the State of New York, U.S.A. to the Bank; (b) A legal opinion of legal advisers in the State of Indiana, U.S.A. to the Bank. (c) A legal opinion of Allen & Overy, London, legal advisers in England to the Bank. - -------------------------------------------------------------------------------- 47 - -------------------------------------------------------------------------------- SCHEDULE 2 CALCULATION OF THE MANDATORY COST (a) For the purpose of paragraph (a) of the definition of Mandatory Cost, the Mandatory Cost for a Loan for each of its Interest Periods is calculated in accordance with the following formula: F x 0.01 ________ % per annum 300 where on the day of application of a formula F is the charge payable by the Bank to the Financial Services Authority under paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations (but where for this purpose, the figure in paragraph 2.02b and 2.03b will be deemed to be zero) expressed in pounds per (pound)1 million of the fee base of the Bank. (b) For the purposes of this Schedule 2: (i) "FEE BASE" has the meaning given to it in the Fees Regulations; (ii) "FEES REGULATIONS" means the Banking Supervision (Fees) Regulations 1998 and/or any other regulations governing the payment of fees for banking supervision. (c) (i) The formula is applied on the first day of the relevant Interest Period. (ii) Each rate calculated in accordance with the formula is, if necessary, rounded upward to the nearest 1/16th of one per cent. (d) If the Bank determines that a change in circumstances has rendered, or will render, the formula inappropriate, the Bank shall notify the Borrower of the manner in which the Mandatory Cost will subsequently be calculated. The manner of calculation so notified by the Bank shall, in the absence of manifest error, be binding on all the Parties. - -------------------------------------------------------------------------------- 48 - -------------------------------------------------------------------------------- SCHEDULE 3 FORM OF REQUEST To: Skandinaviska Enskilda Banken AB (publ) From: Autoliv ASP, Inc. Date: 22 March, 2000 AUTOLIV ASP, INC. US$300,000,000 CREDIT AGREEMENT DATED 22ND MARCH, 2000 1. We wish to borrow a Loan as follows: (a) Drawdown Date: [ ] (b) Amount: [ ] (c) First Interest Period: [ ] (d) Payment instructions: [ ]. 2. We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Request. By: AUTOLIV ASP, INC. Authorized Signatory - -------------------------------------------------------------------------------- 49 - -------------------------------------------------------------------------------- SIGNATORIES BORROWER AUTOLIV ASP, INC. By: GUARANTOR AUTOLIV, INC. By: BANK SKANDINAVISKA ENSKILDA BANKEN AB (publ) By: ARRANGER SEB DEBT CAPITAL MARKETS By: - -------------------------------------------------------------------------------- EX-99.(D) 11 EXHIBIT 99(D) Exhibit 99(d) AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER dated as of March 12, 2000 among AUTOLIV, INC., OEA, INC. and OEA MERGER CORPORATION TABLE OF CONTENTS
Page AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER.......................................................1 ARTICLE 1 THE OFFER............................................................................1 1.1 The Offer..................................................................1 1.2 Company Actions............................................................3 1.3 Composition of the Board of Directors......................................4 ARTICLE 2 THE MERGER...........................................................................5 2.1 The Merger.................................................................5 2.2 Effect of the Merger.......................................................5 2.3 Consummation of the Merger.................................................5 2.4 Certificate of Incorporation; Bylaws; Directors and Officers...............5 2.5 Conversion of Merger Sub Common Stock......................................6 2.6 Conversion of Company Common Stock.........................................6 2.7 Surrender of Shares; Stock Transfer Books..................................6 2.8 Additional Rights..........................................................7 2.9 Taking of Necessary Action; Further Action.................................8 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................8 3.1 Organization...............................................................8 3.2 Capital Stock of the Company...............................................8 3.3 Authority Relative to this Agreement.......................................9 3.4 SEC Reports and Financial Statements......................................10 3.5 Certain Changes...........................................................10 3.6 Litigation................................................................11 3.7 Disclosure in Schedule 14D-9 and Offer Documents; Proxy Statement.................................................................11 3.8 Broker's or Finder's Fees.................................................11 3.9 Employee Plans............................................................11 3.10 Material Contracts........................................................12 3.11 Board Recommendation; Company Action; Requisite Vote of the Company's Stockholders....................................................13 3.12 Taxes.....................................................................14 3.13 Recalls...................................................................15 3.14 Product Liability.........................................................15 3.15 Environmental.............................................................15 3.16 Intellectual Property.....................................................16 3.17 Compliance with Laws......................................................16 3.18 Employment Matters........................................................17 3.19 Rights Agreement..........................................................17
i ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB.........................17 4.1 Organization..............................................................17 4.2 Authority Relative to this Agreement......................................18 4.3 Financing.................................................................19 4.4 Offer Documents; Proxy Statement..........................................19 4.5 Broker's or Finder's Fees.................................................19 4.6 Parent Not An Interested Stockholder......................................19 ARTICLE 5 CONDUCT OF BUSINESS PENDING THE MERGER..............................................19 5.1 Conduct of Business by the Company Pending the Merger.....................19 ARTICLE 6 ADDITIONAL AGREEMENTS...............................................................22 6.1 Shareholders'Meeting......................................................22 6.2 Proxy Statement...........................................................22 6.3 Employee Benefit Matters..................................................23 6.4 Fairness Opinions.........................................................24 6.5 Consents and Approvals....................................................24 6.6 Public Statements.........................................................24 6.7 Reasonable Best Efforts...................................................25 6.8 Notification of Certain Matters...........................................25 6.9 Access to Information; Confidentiality....................................25 6.10 No Solicitation...........................................................26 6.11 Indemnification and Insurance.............................................27 6.12 State Takeover Laws.......................................................28 6.13 Actions Regarding the Rights..............................................29 6.14 Options...................................................................29 ARTICLE 7 CONDITIONS..........................................................................29 7.1 Conditions to the Obligation of Each Party to Effect the Merger...........29 ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER...................................................30 8.1 Termination...............................................................30 8.2 Effect of Termination.....................................................31 8.3 Fees and Expenses.........................................................31 8.4 Amendment.................................................................31 8.5 Waiver....................................................................31 ARTICLE 9 GENERAL PROVISIONS..................................................................31 9.1 Notices...................................................................31 9.2 Representations and Warranties............................................32 9.3 Closing...................................................................32 9.4 Governing Law.............................................................32 9.5 Counterparts; Facsimile Transmission of Signatures........................33
ii 9.6 Assignment................................................................33 9.7 Severability..............................................................33 9.8 Entire Agreement..........................................................33 AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER SIGNATURE PAGE.........................................................................................34
iii AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of March 12, 2000 is among Autoliv, Inc., a Delaware corporation ("Parent"), OEA Merger Corporation, a Delaware corporation and wholly-owned subsidiary of Parent ("Merger Sub"), and OEA, Inc., a Delaware corporation (the "Company"). The Company and Merger Sub are hereinafter collectively referred to as the "Constituent Corporations." WHEREAS, all of the issued and outstanding shares of common stock, par value $.01 per share, of Merger Sub ("Merger Sub Common Stock") are held by Parent; WHEREAS, the respective boards of directors of Parent, the Company and Merger Sub, deeming it advisable for the respective benefit of Parent, Merger Sub, the Company and their respective stockholders, have approved the strategic alliance of Parent and the Company through the merger of the Company and Merger Sub (the "Merger"), upon the terms and subject to the conditions set forth in this Agreement; WHEREAS, in furtherance of the Merger, Merger Sub will make, subject to the terms and conditions set forth herein, a tender offer (as amended or extended from time to time, the "Offer") to purchase all of the issued and outstanding shares of Common Stock of the Company, par value $.10 per share ("Company Common Stock") and the associated Common Share Purchase Rights (the "Rights") issued pursuant to the Rights Agreement, dated March 25, 1998 by and between the Company and LaSalle Bank, N.A. at a price of $10.00 per share (and associated Rights) net to the seller in cash (such amount, or any greater amount per share paid pursuant to the Offer, being hereinafter referred to as the "Offer Price"); and WHEREAS, subject to its continuing duty to the stockholders of the Company, the board of directors of the Company has approved the Offer and the Merger, taken together, and has determined that the Offer and Merger are fair to, and in the best interests of, the holders of Company Common Stock and resolved to recommend the acceptance of the Offer and approval of the Merger by the stockholders of the Company; NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants contained in this Agreement and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Parent, Merger Sub and the Company, intending to be legally bound, hereby agree as follows: ARTICLE 1 THE OFFER 1.1 THE OFFER. (a) Provided that this Agreement shall not have been terminated in accordance with SECTION 8.1 hereof and that none of the events set forth on ANNEX 1 hereto shall have occurred or be existing, as promptly as practicable, but in no event later than within ten business days of the date of this Agreement, Merger Sub shall, and Parent shall cause Merger Sub to, commence the Offer. The obligations of Merger Sub to accept for payment and to pay for any shares of Company Common Stock tendered shall be subject only to the conditions set forth in ANNEX 1 hereto (the "Tender Offer Conditions"). The Tender Offer Conditions are for the sole benefit of Parent and Merger Sub and may be asserted by Parent and Merger Sub regardless of the circumstances giving rise to any such Tender Offer Conditions or may be waived by Parent and Merger Sub in whole or in part; provided that the Minimum Condition (as defined in ANNEX 1) may not be waived without the prior written consent of the Company. Without the prior written consent of the Company, provided that this Agreement shall not have been terminated in accordance with SECTION 8.1, Merger Sub shall not decrease the Offer Price, decrease the number of shares of Company Common Stock being sought in the Offer, change the form of consideration payable in the Offer (other than by adding consideration), add additional conditions to the Offer, or make any other change in the terms or conditions of the Offer which is adverse to the holders of shares of Company Common Stock, it being agreed that neither a waiver by Merger Sub of any Tender Offer Condition (other than the Minimum Condition) in whole or in part at any time and from time to time in its discretion, nor the extension of the Offer as permitted below, shall be deemed to be adverse to any holder of shares of Company Common Stock. The Offer shall be made by means of an offer to purchase and related letter of transmittal (the "Letter of Transmittal") (collectively, the "Offer to Purchase"). Merger Sub expressly reserves the right to increase the Offer Price or to extend the Offer as provided below. Upon the terms and subject to the conditions of the Offer, Merger Sub shall purchase the shares of Company Common Stock which are validly tendered on or prior to the expiration of the Offer and not withdrawn. The Offer shall expire at 12:00 midnight eastern time on the 20th business day following commencement of the Offer (such date and time, as extended in accordance with the terms hereof, the "Expiration Date"); PROVIDED, HOWEVER, that Merger Sub may, from time to time, extend the Expiration Date (i) for the minimum period of time necessary to comply with any provision of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), but in no event later than the 40th business day following the initial Expiration Date; (ii) if any of the Tender Offer Conditions have not been satisfied, for the minimum period of time necessary to satisfy such condition but in no event later than the 20th business day following the initial Expiration Date (subject, with respect to the Minimum Condition, to the provisions of clause (iii) hereof); (iii) if all of the Tender Offer Conditions have been satisfied but fewer than 90% of the issued and outstanding shares of Company Common Stock have been tendered in the Offer, for the minimum period of time necessary until 90% of the issued and outstanding shares of Company Common Stock have been so tendered, but in no event later than the fifth business day following the initial Expiration Date, which five business day period may be extended for three additional five business day periods; and (iv) if a Takeover Proposal (as defined in Section 6.10) shall be publicly disclosed or Parent or Merger Sub shall have otherwise learned that a Takeover Proposal shall have been made or publicly proposed to be made by any person (including the Company or any of its subsidiaries or affiliates) other than Parent, Merger Sub or any subsidiary or affiliate of either of them, and less than all of the Tender Offer Conditions have been satisfied, until ten days after the termination or publicly-announced abandonment of such Takeover Proposal, but in no event later than the earlier of (A) June 30, 2000 and (B) the minimum time period necessary to satisfy all such conditions. 2 (b) On the date the Offer is commenced, Parent and Merger Sub shall file with the Securities and Exchange Commission (the "SEC") a tender offer statement on Schedule TO (together with all amendments and supplements thereto, the "Schedule TO") with respect to the Offer. The Schedule TO shall contain (included as an exhibit) or shall incorporate by reference the Offer to Purchase (or portions thereof) and forms of the related Letter of Transmittal and summary advertisement, as well as all other information and exhibits required by law. Each of the parties hereto shall furnish all information concerning itself which is required or customary for inclusion in the Schedule TO. The information provided by any party hereto for use in the Schedule TO shall be true and correct in all material respects without misstatement of any material fact or omission of any material fact which is necessary or required to make the statements therein, in light of the circumstances under which they were made, not false or misleading and, in the event any party becomes aware prior to the Expiration Date of any information that should be included in the Schedule TO such that the Schedule TO shall not contain any misstatement of any material fact or omission of any material fact which is necessary or required to make the statements therein, in light of the circumstances under which they were made, not false or misleading, such party shall promptly notify the other parties thereof and, to the extent required by applicable law, an appropriate amendment to the Schedule TO shall be promptly prepared, filed with the SEC and disseminated to stockholders. No representation, covenant or agreement is made by any party hereto with respect to information supplied by any other party for inclusion in the Schedule TO. The Company and its counsel shall be given an opportunity to review the Schedule TO prior to its being filed with the SEC. Parent and Merger Sub agree to provide the Company and its counsel with any written comments Parent and Merger Sub or their counsel may receive from the SEC with respect to the Offer Documents promptly after the receipt of such comments. 1.2 COMPANY ACTIONS. The Company hereby consents to the Offer and represents that (a) its board of directors (at a meeting duly called and held) has by the requisite vote of such board of directors, subject to its continuing duty to the stockholders of the Company, (i) determined that the Offer and the Merger, taken together, are fair to, and in the best interests of, the holders of Company Common Stock, (ii) approved the Offer and the Merger subject to the terms and conditions set forth herein, and (iii) resolved to recommend that the stockholders of the Company accept the Offer and tender their shares of Company Common Stock thereunder to Merger Sub and approved and adopted the Merger and this Agreement; and (b) Deutsche Bank Securities, Inc. ("Deutsche Bank") has delivered to the Company's board of directors its opinion that the consideration to be received by the holders of Company Common Stock pursuant to the Offer and the Merger is fair to the holders of Company Common Stock from a financial point of view, subject to the assumptions and qualifications contained in such opinion. The Company shall file with the SEC as soon as practicable on or after the date of the commencement of the Offer, a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") containing the recommendations referred to in clause (a) of the preceding sentence subject to the fiduciary duties of the board of directors of the Company as advised by counsel. Parent, Merger Sub and their counsel shall be given the opportunity to review and comment on the Schedule 14D-9 and any amendment or supplement thereto prior to its filing with the SEC. If at any time prior to the expiration or termination of the Offer any event occurs which is required by applicable law to be described in an amendment to the Schedule 14D-9 or any supplement thereto, the Company will file and disseminate, as required, an amendment or supplement which complies in all material respects with the Securities Exchange Act of 1934, as amended (the "34 3 Act"), and the rules and regulations thereunder and any other applicable laws. In connection with the Offer, the Company will promptly furnish Merger Sub with mailing labels, security position listings and any available listing or computer list containing the names and addresses of the record holders of Company Common Stock as of the most recent practicable date and shall furnish Merger Sub with such additional information (including, but not limited to, updated lists of holders of Company Common Stock and their addresses, mailing labels and lists of security positions) and such other assistance as Merger Sub or its agents may reasonably request in communicating the Offer to the Company's stockholders. 1.3 COMPOSITION OF THE BOARD OF DIRECTORS. (a) Promptly upon the acceptance for payment of, and payment by Merger Sub in accordance with the Offer for, shares of Company Common Stock pursuant to the Offer, and from time to time thereafter as shares of Company Common Stock are acquired by Merger Sub, Merger Sub shall be entitled to designate such number of directors, rounded up to the next whole number, but at no time prior to the Effective Time (as hereinafter defined) more than three fewer than the total number of directors on the Board of Directors of the Company, equal to at least that number of directors which equals the product of the total number of directors on the Board of Directors (giving effect to the directors elected pursuant to this sentence) multiplied by the percentage that such number of shares of Common Stock so accepted for payment and paid for or otherwise acquired or owned by Merger Sub or Parent bears to the number of shares of Company Common Stock outstanding. The Company shall, at such time, cause Merger Sub's designees to be so elected; PROVIDED, HOWEVER, that such election may be effected by means of increasing the size of the Board of Directors of the Company or obtaining the resignation of incumbent directors and causing Merger Sub's designees to be elected; PROVIDED, FURTHER, that (i) notwithstanding the foregoing, Merger Sub shall not be entitled to elect a majority of the Company's directors under this SECTION 1.3(a) until such time as it owns more than fifty percent (50%) of the outstanding shares of Company Common Stock, (ii) the obligation to increase the size of the Company's board of directors is subject to restrictions contained in the Company's certificate of incorporation and bylaws, and (iii) to the extent the Company is so restricted from increasing the size of its board of directors, the Company will use its best efforts to obtain resignations from the members of its board of directors in order to effect the right of Merger Sub to elect designated members of the Company's board of directors and have such nominees elected to such board of directors. (b) The Company's obligations to cause designees of Merger Sub to be elected or appointed to the board of directors of the Company shall be subject to Section 14(f) of the `34 Act, and Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this SECTION 1.3, and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors as is required under Section 14(f) and Rule 14f-1. Parent and Merger Sub will supply to the Company any information with respect to either of them and their nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1. (c) After the time that Merger Sub's designees constitute at least a majority of the board of directors of the Company and until the Effective Time, any amendment or termination of this Agreement, extension for the performance or waiver of the obligations or 4 other acts of Parent or Merger Sub or waiver of the Company's rights hereunder, which amendment, termination, extension or waiver would adversely affect the stockholders or optionholders of the Company, shall also require the approval of a majority (or such higher percentage as is required under the bylaws of the Company) of the then serving directors, if any, who are directors as of the date hereof (the "Continuing Directors"). If the number of Continuing Directors prior to the Effective Time is reduced below three for any reason, the remaining Continuing Directors or Director shall be entitled to designate persons to fill such vacancies who shall be deemed Continuing Directors for all purposes of this Agreement. ARTICLE 2 THE MERGER 2.1 THE MERGER. At the Effective Time (as defined in SECTION 2.3 hereof), in accordance with this Agreement and the General Corporation Law of the State of Delaware (the "Delaware Law"), Merger Sub shall be merged with and into the Company, the separate existence of Merger Sub shall cease, and the Company shall continue as the surviving corporation. The entity surviving the Merger after the Effective Time is sometimes referred to hereinafter as the "Surviving Corporation." 2.2 EFFECT OF THE MERGER. When the Merger has been effected, the Surviving Corporation shall thereupon and thereafter possess all the rights, privileges, powers and franchises as well of a public as of a private nature, and be subject to all the restrictions, disabilities and duties of each of the Constituent Corporations; and all and singular, the rights, privileges, powers and franchises of each of the Constituent Corporations and all property, real, personal and mixed, and all debts due to either of the Constituent Corporations on whatever account, as well for stock subscriptions as all other things in action or belonging to each of such corporations shall be vested in the Surviving Corporation; and all property, rights, privileges, powers and franchises, and all and every other interest shall be thereafter as effectually the property of the Surviving Corporation as they were of the respective Constituent Corporations, and the title to any real estate vested by deed or otherwise, in any of such Constituent Corporations, shall not revert or be in any way impaired by reason of the Merger; but all rights of creditors and all liens upon any property of any of said Constituent Corporations shall be preserved unimpaired, and all debts, liabilities and duties of the respective Constituent Corporations shall thenceforth attach to the Surviving Corporation, and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it. 2.3 CONSUMMATION OF THE MERGER. As soon as is practicable after the satisfaction or waiver of the conditions set forth in ARTICLE 7 hereof, the parties hereto will cause the Merger to be consummated by filing with the Secretary of State of Delaware a certificate of merger in such form as required by, and executed in accordance with, the relevant provisions of the Delaware Law (the time of such filing being referred to herein as the "Effective Time" and the date of such filing being referred to herein as the "Effective Date"). 2.4 CERTIFICATE OF INCORPORATION; BYLAWS; DIRECTORS AND OFFICERS. The Certificate of Incorporation and bylaws of Merger Sub as in effect immediately prior to the Effective Time shall become the Certificate of Incorporation and bylaws of the Surviving Corporation until 5 thereafter amended as provided therein and under the Delaware Law. The directors of Merger Sub immediately prior to the Effective Time will be the initial directors of the Surviving Corporation and shall serve until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Corporation's Certificate of Incorporation and bylaws and the Delaware Law. The officers of Merger Sub immediately prior to the Effective Time will be the initial officers of the Surviving Corporation and shall serve until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Corporation's certificate of incorporation and bylaws and the Delaware Law. 2.5 CONVERSION OF MERGER SUB COMMON STOCK. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or any holder of shares of Merger Sub Common Stock, each share of Merger Sub Common Stock outstanding immediately prior to the Effective Time shall be deemed to be one share of Common Stock, par value $0.01 per share, of the Surviving Corporation ("Surviving Corporation Common Stock"). Each certificate which immediately prior to the Effective Time represents a number of outstanding shares of Merger Sub Common Stock shall, from and after the Effective Time, be deemed for all purposes to represent the same number of shares of Surviving Corporation Common Stock. 2.6 CONVERSION OF COMPANY COMMON STOCK. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or any holder of shares of Company Common Stock: (a) Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than any shares to be canceled pursuant to Section 2.6(b) shall be canceled and shall be converted automatically into the right to receive an amount equal to the Offer Price in cash (the "Merger Consideration") payable to the holder thereof, without interest, upon surrender of the certificate formerly representing such share in the manner provided in Section 2.7. (b) Each share of Company Common Stock held in the treasury of the Company and each share owned by Merger Sub, Parent or any direct or indirect wholly-owned subsidiary of Parent or of the Company immediately prior to the Effective Time shall be canceled without any conversion thereof and no payment or distribution shall be made with respect thereto. 2.7 SURRENDER OF SHARES; STOCK TRANSFER BOOKS. (a) Prior to the Effective Time, Merger Sub shall designate a bank or trust company to act as agent for the holders of shares of Company Common Stock in connection with the Merger (the "Paying Agent") to receive the funds to which holders of such shares shall become entitled pursuant to Section 2.6(a). Such funds shall be invested by the Paying Agent as directed by the Surviving Corporation, PROVIDED that such investments shall be in obligations of or guaranteed by the United States of America, in commercial paper obligations rated A-1 or P-1 or better by Moody's Investors Services, Inc. or Standard & Poor's Corporation, respectively, or 6 in certificates of deposit, bank repurchase agreements or banker's acceptances of commercial banks with capital exceeding $500 million. (b) Promptly after the Effective Time, the Surviving Corporation shall cause to be mailed to each record holder, as of the Effective Time, an outstanding certificate or certificates which immediately prior to the Effective Time represented shares of Company Common Stock (the "Certificates"), a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Paying Agent) and instructions for use in effecting the surrender of the Certificates for payment of the Merger Consideration therefor. Upon surrender to the Paying Agent of a Certificate, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be required pursuant to such instructions, the holder of such Certificate shall be entitled to receive in exchange therefor the Merger Consideration for each share formerly represented by such Certificate and such Certificate shall then be cancelled. No interest shall be paid or accrued for the benefit of holders of the Certificates on the Merger Consideration payable upon the surrender of the Certificates. If payment of the Merger Consideration is to be made to a person other than the person in whose name the surrendered Certificate is registered, it shall be a condition of payment that the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and that the person requesting such payment shall have paid any transfer and other taxes required by reason of the payment of the Merger Consideration to a person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Surviving Corporation that such tax either has been paid or is not applicable. (c) At any time following six months after the Effective Time, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) which had been made available to the Paying Agent and which have not been disbursed to holders of Certificates and, thereafter, such holders shall be entitled to look to the Surviving Corporation (subject to abandoned property, escheat or other similar laws) only as general creditors thereof with respect to the Merger Consideration payable upon due surrender of their Certificates. Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying Agent shall be liable to any holder of a Certificate for the Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. (d) At the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of shares of Company Common Stock on the records of the Company. From and after the Effective Time, the holders of Certificates evidencing ownership of shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares except as otherwise provided for herein or by applicable law. 2.8 ADDITIONAL RIGHTS. Parent and Merger Sub reserve the right after the termination or expiration of the Offer and prior to the Effective Time, and in accordance with applicable law, from time to time, to make, or cause any of its subsidiaries or affiliates to make, open market or privately negotiated purchases of shares, at such price or prices as they may determine in their sole discretion. 7 2.9 TAKING OF NECESSARY ACTION; FURTHER ACTION. Each of Parent, Merger Sub and the Company shall use all reasonable efforts to take all such actions as may be necessary or appropriate in order to effectuate the Merger under the Delaware Law as promptly as commercially practicable. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of either of the Constituent Corporations, the officers and directors of the Surviving Corporation are fully authorized in the name of their corporation or otherwise to take, and shall take, all such lawful and necessary action. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to Parent and Merger Sub, and covenants with each of them, as follows: 3.1 ORGANIZATION. The Company and each of the Company Subsidiaries (as defined below) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the corporate power to own its property and to carry on its business as now being conducted. The Company and each of the Company Subsidiaries is duly qualified and/or licensed, as may be required, and in good standing in each of the jurisdictions in which the nature of the business conducted by it or the character of the property owned, leased or used by it makes such qualification and/or licensing necessary, except in such jurisdictions where the failure to be so qualified and/or licensed would not individually or in the aggregate have a material adverse effect on the financial condition, business, operations, or assets of the Company and the direct and indirect subsidiaries of the Company (the "Company Subsidiaries") considered as a single enterprise (a "Company Material Adverse Effect"). Notwithstanding anything to the contrary herein, any change, effect, fact, event or condition which adversely affects the automotive supply industry generally and affects similarly situated companies in the automotive supply industry shall not be considered in determining whether a Company Material Adverse Effect has occurred. 3.2 CAPITAL STOCK OF THE COMPANY. (a) As of the date of this Agreement, the authorized capital stock of the Company consists of 50,000,000 shares of Company Common Stock, of which 20,622,625 are issued and outstanding. There are 1,397,075 shares of Company Common Stock held in the treasury of the Company. Such issued shares of Company Common Stock have been duly authorized, validly issued, are fully paid and nonassessable and free of preemptive rights. The Company has not, subsequent to July 31, 1999, declared or paid any dividend, or declared or made any distribution on, or authorized the creation or issuance of, or issued, or authorized or effected any split-up or any other recapitalization of, any of its capital stock, or directly or indirectly redeemed, purchased or otherwise acquired any of its outstanding capital stock. The Company has not heretofore agreed to take any such action, will not take any such action during the period between the date of this Agreement and the Effective Time of the Merger, and there 8 are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any outstanding shares of capital stock of the Company. (b) SECTION 3.2(b) of that certain letter of even date herewith from the Company to Parent (the "Company Disclosure Letter") lists all outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Company or any Company Subsidiary any capital stock of the Company or securities convertible into or exchangeable for capital stock of the Company, setting forth, in each case, the name of the holder of such options, warrants or rights, the number of shares subject to such options, warrants or rights which are currently exercisable, the number of shares subject to such options, warrants or rights which will become exercisable in the future, the date on which such options, warrants or rights become exercisable and the exercise price. The foregoing does not include the Common Share Purchase Rights outstanding under the Company's Common Share Rights Plan. There are no stock appreciation rights ("SARs") attached to the options, warrants or rights. 3.3 AUTHORITY RELATIVE TO THIS AGREEMENT. (a) The Company has the requisite corporate power to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company, the performance by the Company of its obligations hereunder and the consummation by the Company of the transactions contemplated herein have been duly authorized by the board of directors of the Company. The Board of Directors of the Company has approved the Offer and this Agreement such that Section 203 of the Delaware Law is inapplicable to the Offer and this Agreement and the transactions contemplated hereby. No other corporate proceedings on the part of the Company or any of the Company Subsidiaries are necessary to authorize the execution and delivery of this Agreement, the performance by the Company of its obligations hereunder and the consummation by the Company of the transactions contemplated hereby, except for the approval of the Company's stockholders as contemplated in SECTION 6.1. This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent that its enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization or other laws affecting the enforcement of creditors' rights generally or by general equitable principles. (b) Except as set forth in SECTION 3.3(b) of the Company Disclosure Letter, neither the execution and delivery of this Agreement by the Company nor the consummation by the Company of the transactions contemplated herein nor compliance by the Company with any of the provisions hereof will (i) conflict with or result in any breach of the Certificate or Articles of Incorporation or bylaws of the Company or any of the Company Subsidiaries, (ii) result in a violation or breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination, cancellation of, or accelerate the performance required by, or result in a right of termination or acceleration under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Company or any Company Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, contract, lease, agreement or other instrument or obligation of any kind to which the Company or any of the Company Subsidiaries is a party or by which the Company or any of the Company 9 Subsidiaries or any of their respective properties or assets, may be bound or (iii) subject to compliance with the statutes and regulations referred to in SUBSECTION (c) below, violate any judgment, ruling, order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any of the Company Subsidiaries or any of their respective properties or assets, other than any such event described in items (i), (ii) or (iii) which would not have a Company Material Adverse Effect. (c) Except for compliance with the provisions of the Delaware Law, the HSR Act, the `34 Act, the Securities Act of 1933 (the "`33 Act"), the rules and regulations of the New York Stock Exchange and the "blue sky" laws of various states and foreign laws, no action by any governmental authority is necessary for the Company's execution and delivery of this Agreement or the consummation by the Company of the transactions contemplated hereby except where the failure to obtain or take such action would not have a Company Material Adverse Effect. 3.4 SEC REPORTS AND FINANCIAL STATEMENTS. (a) Since August 1, 1996, the Company has filed with the SEC all forms, reports, schedules, registration statements and definitive proxy statements (the "Company SEC Reports") required to be filed by the Company with the SEC. As of their respective dates, the Company SEC Reports complied in all material respects with the requirements of the `33 Act, the `34 Act and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Reports, and none of the Company SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. None of the Company Subsidiaries is required to file any forms, reports or other documents with the SEC pursuant to Section 12 or 15 of the `34 Act. (b) The Consolidated Balance Sheets and the related Consolidated Statements of Operations, Consolidated Statements of Stockholders' Equity and Consolidated Statements of Cash Flow (including, in each case, any related notes and schedules thereto) (collectively, the "Company Financial Statements") of the Company contained in the Company SEC Reports have been prepared from the books and records of the Company and its consolidated subsidiaries, and the Company Financial Statements present fairly in all material respects the consolidated financial position and the consolidated results of operations and cash flows of the Company and its consolidated subsidiaries as of the dates or for the periods presented therein in conformity with United States generally accepted accounting principles ("GAAP") applied on a consistent basis during the periods involved (except as otherwise noted therein, including the related notes, and subject, in the case of quarterly financial statements, to year-end adjustments undertaken in the ordinary course of business). 3.5 CERTAIN CHANGES. Except as disclosed in the Company SEC Reports and SECTION 3.5 of the Company Disclosure Letter, since October 31, 1999, (i) there has not been any Company Material Adverse Effect, (ii) the Company has not become a party to any agreement or amendment to an existing agreement which would be required to be filed by the Company as an exhibit to its next Form 10-K, (iii) there has not been any change by the Company or the Company Subsidiaries in accounting principles or methods except insofar as may be required by 10 a change in GAAP; (iv) the Company and the Company Subsidiaries have conducted their regular business only in the ordinary course consistent with past practice; and (v) the Company has not taken any action that would have been prohibited under Section 5.1(b) if such section applied to the period from October 31, 1999 to the date of execution of this Agreement. 3.6 LITIGATION. Except as disclosed in the Company SEC Reports and SECTION 3.6 of the Company Disclosure Letter, there is no suit, action or legal, administrative, arbitration or order proceeding or governmental investigation pending or, to the knowledge of the Company, threatened (the "Company Cases"), to which the Company or any of the Company Subsidiaries is a party which, considered individually or in the aggregate, is reasonably likely to have a Company Material Adverse Effect. 3.7 DISCLOSURE IN SCHEDULE 14D-9 AND OFFER DOCUMENTS; PROXY STATEMENT. Neither the Schedule 14D-9 nor any of the information supplied by the Company for inclusion in the documents pursuant to which the Offer will be made (the "Offer Documents") shall, at the respective times the Schedule 14D-9, the Offer Documents or any such amendments or supplements are filed with the SEC or are first published, sent or given to shareholders, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Neither the proxy statement to be sent to the shareholders of the Company in connection with the Shareholders' Meeting (as defined in Section 6.1) nor the information statement to be sent to such shareholders, as appropriate (such proxy statement or information statement, as amended or supplemented, is herein referred to as the "PROXY STATEMENT"), shall, at the date the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to shareholders and at the time of the Shareholders' Meeting and at the Effective Time, be false or misleading with respect to any material fact, or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Shareholder's Meeting which has become false or misleading. The Schedule 14D-9 and the Proxy Statement shall comply in all material respects as to form and substance with the requirements of the Exchange Act and the rules and regulations thereunder. Notwithstanding the foregoing, Seller and the Company make no representation or warranty with respect to any information supplied by Parent or Merger Sub which is contained in any of the foregoing documents. 3.8 BROKER'S OR FINDER'S FEES. Except as disclosed in SECTION 3.8 of the Company Disclosure Letter, no agent, broker, person or firm acting on behalf of the Company or under its authority is or will be entitled to any advisory, commission or broker's or finder's fee from any of the parties hereto in connection with any of the transactions contemplated herein. 3.9 EMPLOYEE PLANS. Except as disclosed in SECTION 3.9 of the Company Disclosure Letter: (a) There are no Employee Benefit Plans. As used herein, the term "Employee Benefit Plans" means: (i) all employee benefit plans within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 11 whether or not any such Employee Benefit Plans are otherwise exempt from the provisions of ERISA; (ii) each other material employee benefit plan, fund, program, arrangement; and (iii) each material employment severance or other similar agreement in each case, that is sponsored, maintained or contributed to or required to be contributed to by the Company or by any trade or business, whether or not incorporated (an "ERISA Affiliate"), that, together with the Company would be deemed a "single employer" within the meaning of section 4001(b) of ERISA, or to which the Company or an ERISA Affiliate is party. (b) Each Employee Benefit Plan intended to be "qualified" (within the meaning of Section 401(a) of the Code) has received a favorable determination letter from the Internal Revenue Service and, to the knowledge of the Company no event has occurred and no condition exists that could reasonably be expected to result in the revocation of any such determination. (c) All material contributions and other payments required to be made by the Company to any Employee Benefit Plan (or to any person pursuant to the terms thereof) have been made or the amount of such payment or contribution obligation has been reflected in the financial statements contained in the Company SEC Reports. (d) Each Employee Benefit Plan is in compliance with all applicable laws (including ERISA, the Code and COBRA), except where the failure to comply would not result in a Material Adverse Effect on the Company. (e) No liability under Title IV or section 302 of ERISA has been incurred by the Company or any ERISA Affiliate that has not been satisfied in full, and no condition exists that presents a material risk to the Company or any ERISA Affiliate of incurring any such liability, other than liability for premiums due to the Pension Benefit Guaranty Corporation ("PBGC") (which premiums have been paid when due). (f) No Employee Benefit Plan provides medical, surgical, hospitalization, death or similar benefits (whether or not insured) for employees or former employees of the Company or any Company Subsidiary for periods extending beyond their retirement or other termination of service. (g) The consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event, (i) entitle any current or former employee or officer of the Company or any ERISA Affiliate to severance pay, unemployment compensation or any other payment, except as expressly provided in this Agreement, or (ii) accelerate the time of payment or vesting, or increase the amount, of compensation due any such employee or officer. (h) There are no pending or, to the knowledge of the Company, threatened or anticipated, material claims by or on behalf of any Employee Benefit Plan or by any employee or beneficiary covered under any such Employee Benefit Plan, involving any such Employee Benefit Plan (other than claims for benefits in the ordinary course of business). 3.10 MATERIAL CONTRACTS. The Company has filed as an exhibit to a Company SEC Report, or has delivered or otherwise made available to the Parent true, correct and complete 12 copies of all contracts and agreements to which the Company or any of the Company Subsidiaries is a party (a) that are required to be filed in an exhibit to an Annual Report on Form 10-K filed by the Company with the SEC as of the date of this Agreement, (b) that purport to limit, curtail or restrict the ability of the Company or any Company Subsidiary to operate or compete in any geographic area or line of business, or (c) that provide for any severance or other agreement with any employee or consultant pursuant to which such person would be entitled to receive any additional compensation or an accelerated payment of compensation as a result of the consummation of the transactions contemplated hereby, or that contain any change in control provision (collectively, the "Company Contracts"). Each of the Company Contracts is valid and enforceable in accordance with its terms (except to the extent that its enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, or other laws affecting the enforcement of creditor's rights generally or by general equitable principles), and there is no default under any Company Contract so listed either by the Company or any Company Subsidiary or, to the knowledge of the Company, by any other party thereto, and no event has occurred that with the lapse of time or giving of notice or both would constitute a default thereunder by the Company or any Company Subsidiary or, to the knowledge of the Company, any other party, in any such case in which such default or event would have a Company Material Adverse Effect. No party to any Company Contract has given notice to the Company of or made a claim against the Company with respect to any breach or default thereunder, in any such case in which such breach or default would have a Company Material Adverse Effect. 3.11 BOARD RECOMMENDATION; COMPANY ACTION; REQUISITE VOTE OF THE COMPANY'S STOCKHOLDERS. (a) The board of directors of the Company has, subject to its continuing duties to the stockholders of the Company and by resolutions duly adopted by the requisite vote of the directors present at a meeting of such board duly called and held on March 12, 2000, determined that the Offer and Merger, taken together, in accordance with the terms of this Agreement are fair to and in the best interests of the Company and its stockholders, approved and adopted this Agreement, the Merger, the Offer, and the other transactions contemplated hereby and recommended that the stockholders of the Company accept the Offer and approve and adopt this Agreement and the Merger. In connection with such approval, the Company's board of directors received from Deutsche Bank Securities, Inc. an opinion to the effect that consummation of the Offer and Merger on the terms set forth herein is fair to the stockholders of the Company from a financial point of view. The Company has been authorized by Deutsche Bank Securities, Inc., to permit the inclusion of such opinion in its entirety in the Offer Documents and the Schedule 14D-9 and the Proxy Statement, so long as such inclusion is in form and substance reasonably satisfactory to Deutsche Bank Securities, Inc. and its counsel. (b) The affirmative vote of stockholders of the Company required for approval and adoption of this Agreement and the Merger is and will be no greater than a majority of the outstanding Company Common Stock. No vote of any class or series of the Company's capital stock is necessary to approve any of the transactions contemplated by the Offer or this Agreement other than the Merger. 13 3.12 TAXES. (a) The Company and the Company Subsidiaries have timely filed all federal, state, local, and other tax returns required to be filed on or before the Effective Date by the Company and each Company Subsidiary under applicable laws and have paid all required taxes (including any additions to taxes, penalties and interest related thereto) due and payable on or before the date hereof and all such tax returns were true, complete and correct, except for such failures to file or failures to be true and correct as would not have a Company Material Adverse Effect. The Company and the Company Subsidiaries have withheld and paid over all taxes required to have been withheld and paid over, and complied with all information reporting and backup withholding requirements, including the maintenance of required records with respect thereto, in connection with amounts paid or owing to any employee, creditor, independent contractor or other third party, except for such failures to withhold or pay over and such failures to company as would not reasonably be likely to have a Company Material Adverse Effect. There are no encumbrances on any of the assets, rights or properties of the Company or any Company Subsidiary with respect to taxes, other than liens for taxes not yet due and payable or for taxes that the Company or a Company Subsidiary is contesting in good faith through appropriate proceedings. (b) No audit of the tax returns of the Company or any Company Subsidiary is pending or, to the knowledge of the Company, threatened other than as disclosed in Section 3.12 of the Company Disclosure Letter or for years for which the applicable statute of limitations has run. Except as disclosed in Section 3.12 of the Company Disclosure Letter, no deficiencies have been asserted against the Company or any Company Subsidiary as a result of examinations by any state, local, federal or foreign taxing authority and no issue has been raised by any examination conducted by any state, local, federal or foreign taxing authority that, by application of the same principles, might result in a proposed deficiency for any other period not so examined. Neither the Company nor any Company Subsidiary is subject to any private letter ruling of the Internal Revenue Service or comparable rulings of other tax authorities that will be binding on the Company or any Company Subsidiary with respect to any period following the Closing Date. (c) Except as disclosed in Section 3.12 of the Company Disclosure Letter, there are no agreements, waivers of statutes of limitations, or other arrangements providing for extensions of time in respect of the assessment or collection of any unpaid taxes against the Company or any Company Subsidiary. The Company and each Company Subsidiary have disclosed on their federal income tax returns all positions taken therein that could, if not so disclosed, give rise to a substantial understatement penalty within the meaning of Section 6662 of the Code. (d) Neither the Company nor any Company Subsidiary is a party to any safe harbor lease within the meaning of Section 168(f)(8) of the Code, as in effect prior to amendment by The Tax Equity and Fiscal Responsibility Act of 1982. None of the property owned by the Company or a Company Subsidiary is "tax-exempt use property" within the meaning of Section 168(h) of the Code. Neither the Company nor any Company Subsidiary has agreed, nor is it required to make, any adjustment under Code Section 481(a) by reason of a change in accounting method or otherwise. Neither the Company nor any Company Subsidiary 14 is or has been within the preceding five years a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code and Parent is not required to withhold tax on the purchase of the stock of the Company by reason of Section 1445 of the Code. 3.13 RECALLS. Section 3.13 of the Company Disclosure Letter lists all Recalls and Service Actions between January 1, 1995 and the date hereof with respect to the products of the Company and the Company Subsidiaries. As used in this Agreement, with respect to any product manufactured or sold by the Company or any Company Subsidiary, (i) a "Recall" means any mandatory recall instituted by the National Highway Traffic Safety Administration, or any similar governmental or quasi-governmental entity in any jurisdiction other than the United States, or a voluntary recall instituted pursuant to the terms of the National Traffic Motor Vehicle Safety Act, as amended, in each case, or similar law or regulation in any country other than the United States, and (iii) a "Service Action" shall mean any voluntary systematic campaign, silent warranty campaign or dealer network swap-out, instituted to remedy a product defect found to exist in a particular product application, but expressly excluding (a) a Recall or (b) warranty work conducted by the dealer network of an OEM in the ordinary course of business. 3.14 PRODUCT LIABILITY. As of the date of this Agreement there is no pending or, to the knowledge of the Company, threatened claim, action, suit or proceeding before any governmental entity in which a product produced by the Company or any Company Subsidiary is alleged to have a defect. 3.15 ENVIRONMENTAL. To the knowledge of the Company and except as set forth in Section 3.15 of the Company Disclosure Letter or which otherwise is not reasonably likely to have a Company Material Adverse Effect: (a) There are no conditions existing on any real property of the Company or any Company Subsidiary or resulting from operations conducted thereon that give rise to any material violation of any Environmental Law. (b) No real property of the Company or any Company Subsidiary nor the operations currently conducted thereon or by any prior owner of the real property, are subject to any pending or, to the knowledge of the Company, threatened action, suit, investigation, inquiry or proceeding relating to human health or environmental quality or any Environmental Laws by or before any court or other governmental authority. (c) All material permits notices and authorizations, if any, required to be obtained or filed in connection with the operation or use of any real property of the Company or any Company Subsidiary, including without limitation past or present treatment, storage, disposal or release of a Hazardous Substance or solid waste into the environment, have been duly obtained or filed, and the Company is in compliance in all material respects with the terms and conditions of all such permits, notices and authorizations. (d) "Environmental Laws" means any federal, state and local energy, public utility, health, safety and environmental laws, regulations, orders, permits, licenses, approvals, ordinances and directives including the Clean Air Act, the Clean Water Act, the Resources Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental Response, 15 Compensation, and Liability Act ("CERCLA"), the Occupational Health and Safety Act, the Toxic Substances Control Act and any similar foreign, state or local law. (e) "Hazardous Substance" means (a) any "hazardous substance," as defined by CERCLA, (b) any "hazardous waste," as defined by RCRA, or (c) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material or substance including ,but not limited to asbestos, buried contaminants, regulated chemicals, flammable explosives, radioactive materials, polychlorinated biphenyls, petroleum and petroleum products, within the meaning of any other applicable law of any applicable governmental authority relating to or imposing liability or standards of conduct concerning any hazardous, toxic, or dangerous waste, substance or material, all as amended or hereafter amended. 3.16 INTELLECTUAL PROPERTY. Either the Company or a Company Subsidiary owns, or is licensed or otherwise possesses legally enforceable rights to use the Intellectual Property (as defined below) employed by it in the conduct of its business ("Company Intellectual Property"), except to the extent the failure to have such rights would not be reasonably likely to have a Company Material Adverse Effect. The consummation of the Merger and the other transactions contemplated under this Agreement will not alter or impair such rights in a manner that would be reasonably likely to have a Company Material Adverse Effect. To the knowledge of the Company, there are no oppositions, cancellations, invalidity proceedings, interferences or re-examination proceedings pending at the date hereof with respect to the Company Intellectual Property. Except as set forth in Section 3.16 of the Company Disclosure Letter, to the Company's knowledge, the conduct of the business of the Company and the Company Subsidiaries does not infringe in any material respect on any Intellectual Property rights of any person, and neither the Company or any Company Subsidiary has received any written notice from any other person challenging the right of the Company or any Company Subsidiary to use any of the Company Intellectual Property material to the business of the Company. Except as set forth in Section 3.16 of the Company Disclosure Letter, neither the Company nor any Company Subsidiary has made any claim of a violation or infringement by others of its rights to or in connection with the Company Intellectual Property which is still pending. As used in this Section 3.16, Intellectual Property shall mean the following: (i) all U.S. and foreign registered and unregistered trademarks, trade dress, service marks, logos, trade names, corporate names and all registrations and applications to register the same (hereinafter "Trademarks"); (ii) all U.S. and foreign patents and pending patent applications, patent disclosures, and any and all divisions, continuations, continuations-in-part, reissues, reexaminations, and extension thereof, any counterparts claiming priority therefrom, utility models, patents of importation/confirmation, certificates of invention and like statutory rights (hereinafter "Patents"); (iii) all U.S. and foreign registered copyrights (including, but not limited to, those in computer software and databases) (hereinafter "Copyrights"); (iv) all categories of trade secrets as defined in the Uniform Trade Secrets Act including, but not limited to, business information; and (v) all licenses and agreements pursuant to which the Company has acquired rights in or to any Trademarks, Patents, or Copyrights, or licenses and agreements pursuant to which the Company has licensed or transferred the right to use any of the foregoing. 3.17 COMPLIANCE WITH LAWS. The Company and the Company Subsidiaries are in compliance in all material respects with any applicable law, rule or regulation of any Untied States federal, state, local or foreign government or agency thereof which materially affects the 16 business, properties or assets of the Company and the Company Subsidiaries, and no notice, charge, claim, action or assertion has been received by the Company or any Company Subsidiary or has been, filed, commenced or, to the Company's knowledge, threatened against the Company or any Company Subsidiary alleging any such violation that would be reasonably likely to have a Company Material Adverse Effect. All licenses, permits and approvals required under such laws, rules and regulations are in full force and effect, except where the failure to be in full force and effect would not be reasonably likely to have a Company Material Effect. 3.18 EMPLOYMENT MATTERS. To the Company's knowledge, no group of employees acting together has any plans to terminate their employment with the Company or any Company Subsidiary as a result of the transactions contemplated by this Agreement or otherwise. Neither the Company nor any Company Subsidiary has experienced any strikes, collective labor grievances, other collective bargaining disputes or claims of unfair labor practices in the last five years. To the Company's knowledge, there is no organizational effort presently being made or threatened by or on behalf of any labor union with respect to employees of the Company and the Company Subsidiaries. 3.19 RIGHTS AGREEMENT. The execution of this Agreement and any amendments thereto by the parties hereto and the consummation of the transactions contemplated hereunder shall not cause (i) the Parent to become an Acquiring Person (as defined in the Rights Agreement), or (ii) a Distribution Date, or a Shares Acquisition Date (as such terms are defined in the Rights Agreement) to occur, irrespective of the number of shares of Company Common Stock acquired pursuant to the Offer, and (y) the Rights (as defined in the Rights Agreement) shall expire or be terminated immediately prior to the consummation of the Offer. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUB Parent and Merger Sub jointly and severally represent and warrant to the Company as follows: 4.1 ORGANIZATION. Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of Parent and Merger Sub has the corporate power to own its property and to carry on its business as now being conducted. Each of Parent and Merger Sub is duly qualified and/or licensed, as may be required, and in good standing in each of the jurisdictions in which the nature of the business conducted by it or the character of the property owned, leased or used by it makes such qualification and/or licensing necessary, except in such jurisdictions where the failure to be so qualified and/or licensed would not individually or in the aggregate have a material adverse effect on the financial condition, business, operations, liquidity, or assets of Parent and Merger Sub and the direct and indirect subsidiaries of Parent (the "Parent Subsidiaries") considered as a single enterprise (a "Parent Material Adverse Effect"). Notwithstanding anything to the contrary herein, any change, effect, fact, event or condition which adversely affects the automotive supply industry generally and affects similarly situated companies in the automotive supply industry, shall not be considered in determining whether a Parent Material Adverse Effect has occurred. 17 4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. (a) Each of Parent and Merger Sub has the requisite corporate power to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement by Parent and Merger Sub, the performance by Parent and Merger Sub of their respective obligations hereunder and the consummation by Parent and Merger Sub of the transactions contemplated herein have been duly authorized by the respective boards of directors of Parent and Merger Sub, and no other corporate proceedings on the part of Parent or any of the Parent Subsidiaries are necessary to authorize the execution and delivery of this Agreement, the performance by Parent and Merger Sub of their respective obligations hereunder and the consummation by Parent and Merger Sub of the transactions contemplated hereby. This Agreement has been duly executed and delivered by Parent and Merger Sub and constitutes a valid and binding obligation of Parent and Merger Sub, enforceable in accordance with its terms, except to the extent that its enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization or other laws affecting the enforcement of creditors' rights generally or by general equitable principles. (b) Except as set forth in SECTION 4.2(b) of the Parent Disclosure Letter, neither the execution and delivery of this Agreement by Parent or Merger Sub, nor the consummation by Parent or Merger Sub of the transactions contemplated herein nor compliance by Parent or Merger Sub with any of the provisions hereof will (i) conflict with or result in any breach of the Certificate or Articles of Incorporation or bylaws of Parent or any of the Parent Subsidiaries or (ii) result in a violation or breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of Parent or any of the Parent Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, contract, lease, agreement or other instrument or obligation of any kind to which Parent or any of the Parent Subsidiaries is a party or by which Parent or any of the Parent Subsidiaries or any of their respective properties or assets may be bound or (iii) subject to compliance with the statutes and regulations referred to in SUBSECTION (c) below, violate any judgment, ruling, order, writ, injunction, decree, statute, rule or regulation applicable to Parent or any of the Parent Subsidiaries or any of their respective properties or assets other than any such event described in items (i), (ii) or (iii) which would not (x) prevent the consummation of the transactions contemplated hereby or (y) have a Parent Material Adverse Effect. (c) Except for compliance with the provisions of the Delaware Law, the HSR Act, the `33 Act, the `34 Act, the rules and regulations of the New York Stock Exchange and the "blue sky" laws of various states, no action by any governmental authority is necessary for Parent's or Merger Sub's execution and delivery of this Agreement or the consummation by Parent or Merger Sub of the transactions contemplated hereby except where the failure to obtain or take such action would not (i) prevent the consummation of the transactions contemplated hereby or (ii) have a Parent Material Adverse Effect. 18 4.3 FINANCING. At the Commencement Date, Parent will have sufficient funds or funding commitments to permit Merger Sub to purchase all of the shares pursuant to the Offer and the Merger. 4.4 OFFER DOCUMENTS; PROXY STATEMENT. The Offer Documents shall not, at the time the Offer Documents are filed with the SEC or are first published, sent or given to shareholders, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The information supplied by Parent for inclusion in the Proxy Statement shall not, on the date the Proxy Statement is first mailed to shareholders, at the time of the Shareholders' Meeting (as defined in Section 6.1) or at the Effective Time, contain any statement which, at such time and in light of the circumstances under which it shall be made, is false or misleading with respect to a material fact or shall omit to state a material fact required to be stated therein or necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Shareholders' Meeting which has become false or misleading. Notwithstanding the foregoing, Parent and Merger Sub make no representation or warranty with respect to any information supplied by the Company or any of its representatives which is contained in any of the foregoing documents or the Offer Documents. The Offer Documents shall comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder. 4.5 BROKER'S OR FINDER'S FEES. Except as disclosed in SECTION 4.5 of the Parent Disclosure Letter, no agent, broker, person or firm acting on behalf of Parent or under its authority is or will be entitled to any advisory, commission or broker's or finder's fee from any of the parties hereto in connection with any of the transactions contemplated herein. 4.6 PARENT NOT AN INTERESTED STOCKHOLDER. As of the date hereof, neither Parent nor any of its Affiliates is, with respect to the Company, an "interested stockholder" as such term is defined in Section 203 of the Delaware Law. ARTICLE 5 CONDUCT OF BUSINESS PENDING THE MERGER 5.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company covenants and agrees that, prior to the Effective Time, unless Parent shall otherwise agree in writing or except in connection with the transactions contemplated by this Agreement: (a) Except as set forth in SECTION 5.1 of the Company Disclosure Letter, the businesses of the Company and the Company Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practices, and the Company and the Company Subsidiaries shall use all reasonable efforts to maintain and preserve intact their respective business organizations, to keep available the services of their respective officers and employees and to maintain significant beneficial business relationships with suppliers, contractors, distributors, customers, licensors, licensees and others having business relationships with it; and 19 (b) Without limiting the generality of the foregoing SECTION 5.1(a), except as set forth in SECTION 5.1 of the Company Disclosure Letter, the Company shall not directly or indirectly, and shall not permit any of the Company Subsidiaries to, do any of the following: (i) acquire, sell, lease, transfer or dispose of any assets or securities or enter into any material commitment or transaction, in each case out of the ordinary course of business consistent with past practice; (ii) amend or propose to amend its certificate of incorporation or bylaws or, in the case of the Company Subsidiaries, their respective constituent documents; (iii) split, combine or reclassify any outstanding shares of, or interests in, its capital stock; (iv) declare, set aside or pay any dividend or distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock; (v) redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire any shares of its capital stock or any options, warrants or rights to acquire capital stock of the Company; (vi) except for the Company Common Stock issuable upon exercise of options outstanding on the date hereof and except for up to 10,000 shares of Company Common Stock issuable under the OEA, Inc. Directors Compensation Plan and the OEA, Inc. 1997 Employee Stock Purchase Plan, issue, sell, pledge, dispose of or encumber, or authorize, propose or agree to the issuance, sale, pledge or disposition or encumbrance by the Company or any of the Company Subsidiaries of, any shares of, or any options, warrants or rights of any kind to acquire any shares of, or any securities convertible into or exchangeable for any shares of, its capital stock of any class, or any other securities in respect of, in lieu of, or in substitution for any class of its capital stock outstanding on the date hereof; (vii) modify the terms of any existing indebtedness for borrowed money or incur any indebtedness for borrowed money or issue any debt securities, except indebtedness incurred in the ordinary course of business, but only if the amount of such indebtedness, when added to all other indebtedness of the Company then outstanding (determined in accordance with GAAP), does not exceed the sum of (a) the total amount of indebtedness outstanding on January 31, 2000, and (b) $10,000,000; (viii) assume, guarantee, endorse or otherwise as an accommodation become responsible for, the obligations of any other person, or make any loans or advances, except to the Company Subsidiaries or except for those not in excess of $100,000 in the aggregate; (ix) authorize, recommend or propose any material change in its capitalization, or any release or relinquishment of any material contract right; 20 (x) take any action with respect to the grant of or increase in any severance or termination pay; (xi) adopt or establish any new employee benefit plan or amend in any material respect any employee benefit plan or increase the compensation or fringe benefits of any employee (other than non-officers and non-management personnel) or pay any material benefit not required by any existing employee benefit plan; (xii) enter into or amend in any material respect any employment, consulting, severance or indemnification agreement entered into or made by the Company or any of the Company Subsidiaries with any of their respective directors, officers, agents, consultants or employees, or any collective bargaining agreement or other obligation to any labor organization or employee incurred or entered into by the Company or any of the Company Subsidiaries, except for such amendments to consulting agreements entered into in the ordinary course; (xiii) make or change any material tax election, enter into any closing agreement relating to taxes, consent to any waiver of the statute of limitations for any claim or assessment relating to taxes, or settle or compromise any liability for taxes or compromise, settle or otherwise resolve other litigation or legal proceedings involving a payment of no more than $250,000 in any one case by or to the Company or any of the Company Subsidiaries; (xiv) make or commit to make capital expenditures in excess of 10% (ten percent) over the aggregate budgeted amount set forth in the Company's fiscal 2000 capital expenditure plan previously provided to Parent; (xv) adopt any material accounting method relating to taxes or make any material changes in its reporting for taxes or accounting procedures other than as required by GAAP or applicable law; (xvi) other than in the ordinary course of business, pay or discharge any claims, liens or liabilities involving more than $100,000 individually or $500,000 in the aggregate, which are not reserved for on the balance sheet included in the Company Financial Statements; (xvii) write off any accounts or notes receivable except in the ordinary course of business; (xviii) knowingly take, or agree to commit to take, any action that would or is reasonably likely to result in any of the conditions to the Offer or any conditions of the Merger not being satisfied, or would make any representation or warranty of the Company contained in herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company, Parent, Merger Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation; or 21 (xix) enter into or modify any contract, agreement, commitment or arrangement to do any of the foregoing. ARTICLE 6 ADDITIONAL AGREEMENTS 6.1 SHAREHOLDERS' MEETING. (a) If required by applicable law in order to consummate the Merger, the Company, acting through its Board of Directors, shall, in accordance with applicable law and the Company's Certificate of Incorporation and Bylaws, (i) duly call, give notice of, convene and hold an annual or special meeting of its shareholders as soon as practicable following consummation of the Offer for the purpose of considering and taking action on this Agreement and the transactions contemplated hereby (the "Shareholders' Meeting") and (ii) subject to its fiduciary duties under applicable law as advised by counsel, (A) include in the Proxy Statement (as defined in Section 3.7) the unanimous recommendation of the Board of Directors that the shareholders of the Company vote in favor of the approval and adoption of this Agreement and the transactions contemplated hereby and (B) use its best efforts to obtain the necessary approval and adoption of this Agreement and the transactions contemplated hereby by its shareholders. At the Shareholders' Meeting, Parent and Merger Sub shall cause all Shares then owned by them and their subsidiaries to be voted in favor of approval and adoption of this Agreement and the transactions contemplated hereby. (b) Notwithstanding the foregoing, in the event that Merger Sub shall acquire at least 90 percent of the outstanding shares, the parties hereto agree, at the request of Merger Sub, subject to Article 7, to take all necessary and appropriate action to cause the Merger to become effective as soon as reasonably practicable after such acquisition, without a meeting of the Company's shareholders, in accordance with Section 253 of the Delaware Law. 6.2 PROXY STATEMENT. (a) If required by applicable law, as soon as practicable following consummation of the Offer, the Company shall file with the SEC under the Exchange Act, and shall use its best efforts to have cleared by the SEC, the Proxy Statement with respect to the Shareholders' Meeting. Parent, Merger Sub and the Company will cooperate with each other in the preparation of any Proxy Statement; without limiting the generality of the foregoing, Parent and Merger Sub, on the one hand, and the Company, on the other hand, will furnish to each other the information relating to the party furnishing such information required by the Exchange Act to be set forth in any Proxy Statement to be filed by the party receiving such information, and Parent and its counsel shall be given the opportunity to review the Proxy Statement prior to the filing thereof with the SEC. The Company, Parent and Merger Sub each agree to use its reasonable best efforts, after consultation with the other parties hereto, to respond promptly to any comments made by the SEC with respect to any Proxy Statement and any preliminary version thereof filed by it and cause such Proxy Statement to be mailed to the Company's shareholders at the earliest practicable time. 22 (b) As soon as practicable after the date hereof, the Company and Parent shall promptly and properly prepare and file any other schedules, statements, reports, or other documents required under the '34 Act (if any) or any other federal or state securities laws relating to the Merger and the transactions contemplated herein (the "Other Filings"). Each party shall notify the others promptly of the receipt by such party of any comments or requests for additional information from any governmental official with respect to any Other Filing made by such party and will supply the others with copies of all correspondence between such party and its representatives, on the one hand, and the appropriate government official, on the other hand, with respect to the Other Filings made by such party. Each of the Company and Parent shall use reasonable efforts to obtain and furnish the information required to be included in the Proxy Statement and any Other Filing and, after consultation with the other, to respond promptly to any comments made by any governmental official with respect to any Other Filing. 6.3 EMPLOYEE BENEFIT MATTERS. (a) For one (1) year following the Effective Time, the Surviving Corporation shall continue to provide to those individuals who are employed by the Company as of the Effective Time and who remain employed by the Surviving Corporation or any Subsidiary of the Surviving Corporation ("Affected Employees"), employee benefits pursuant to such employee benefit plans, programs, policies or arrangements which are maintained by the Surviving Corporation or any Subsidiary of the Surviving Corporation and which, in the aggregate, are not materially less favorable than those provided to employees of the Surviving Corporation in positions comparable to positions held by Affected Employees with the Surviving Corporation or its Subsidiaries; provided, however, that the foregoing shall not require the maintenance or continued maintenance of, or prevent the amendment or termination of, any particular benefit plan except as provided in Section 6.3(c)(iii). (b) The Surviving Corporation shall give Affected Employees full credit for their service with the Company for purposes of eligibility, vesting and determination of the level of benefits, under all employee benefit plans, programs, policies or arrangements which are maintained by the Surviving Corporation or any Subsidiary of the Surviving Corporation for such Affected Employees to the same extent recognized by the Company immediately prior to the Effective Time. (c) The Surviving Corporation shall (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Affected Employees under any welfare benefit plans that such employees may be eligible to participate in after the Effective Time, other than limitations or waiting periods that are already in effect with respect to such employees and that have not been satisfied as of the Effective Time, (ii) provide each Affected Employee with credit for any co-payments and deductibles paid prior to the Effective Time in satisfying any applicable deductible or out-of-pocket requirements for the year in which the Effective Time occurs under any welfare plans that such employees are eligible to participate in after the Effective Time and (iii) continue group health insurance coverage pursuant to COBRA for individuals covered under health insurance plans of the Company immediately prior to the Effective Time. 23 6.4 FAIRNESS OPINIONS. The Company shall receive a letter from Deutsche Bank Securities, Inc., financial advisor to the Company and the Company Subsidiaries, in form satisfactory to the Company to the effect that the Offer Price and the terms upon which Company Common Stock is to be converted into the right to receive the Merger Consideration are fair from a financial point of view to the stockholders of the Company. 6.5 CONSENTS AND APPROVALS. (a) The Company, Parent and Merger Sub shall each file or cause to be filed with the Federal Trade Commission and the United States Department of Justice any notifications required to be filed under the HSR Act and the rules and regulations promulgated thereunder with respect to the transactions contemplated hereby. The parties shall consult with each other as to the appropriate time of filing such notifications and shall use their best efforts to make such filings at the agreed upon time, to respond promptly to any requests for additional information made by either of such agencies, and to cause the waiting periods under the HSR Act to terminate or expire at the earliest possible date after the date of filing. (b) The Company, Parent and Merger Sub shall cooperate with each other and (i) promptly prepare and file all necessary documentation, (ii) effect all necessary applications, notices, petitions and filings and execute all agreements and documents, (iii) use all reasonable efforts to obtain all necessary permits, consents, approvals and authorizations of all governmental bodies and (iv) use all reasonable efforts to obtain all necessary Permits, consents, approvals and authorizations of all other parties, in the case of each of the foregoing clauses (i), (ii), (iii) and (iv), necessary or advisable to consummate the transactions contemplated by this Agreement or required by the terms of any note, bond, mortgage, indenture, deed of trust, license, franchise, permit, concession, contract, lease or other instrument to which the Company, Merger Sub, Parent or any of their respective subsidiaries is a party or by which any of them is bound; PROVIDED, HOWEVER, that no note, bond, mortgage, indenture, deed of trust, license, franchise, permit, concession, contract, lease or other instrument shall be amended or modified to increase materially the amount payable thereunder or to be otherwise materially more burdensome to the Company and the Company Subsidiaries considered as one enterprise in order to obtain any permit, consent, approval or authorization without first obtaining the written approval of Parent. The Company shall have the right to review and approve in advance all characterizations of the information relating to the Company; Parent shall have the right to review and approve in advance all characterizations of the information relating to Parent or Merger Sub; and each of the Company and Parent shall have the right to review and approve in advance all characterizations of the information relating to the transactions contemplated by this Agreement, in each case which appear in any filing (including, without limitation, the Proxy Statement) made in connection with the transactions contemplated hereby. The Company, Parent and Merger Sub agree that they will consult with each other with respect to the obtaining of all such necessary Permits, consents, approvals and authorizations of all third parties and governmental bodies. 6.6 PUBLIC STATEMENTS. The Company, Parent and Merger Sub shall consult with each other prior to issuing any public announcement, statement or other disclosure with respect to this Agreement or the transactions contemplated herein and shall not issue any such public 24 announcement or statement prior to such consultation, except as may be required by law or any listing agreement with a national securities exchange or trading market. 6.7 REASONABLE BEST EFFORTS. Subject to the terms and conditions herein provided, each of the Company, Parent and Merger Sub agrees to use reasonable best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable laws and regulations to consummate and make effective the Merger and the other transactions contemplated by this Agreement, including but not limited to obtaining all consents, approvals and authorizations required for or in connection with the consummation by the parties hereto of the transactions contemplated by this Agreement and the preparation of any disclosure documentation requested by Parent in order to facilitate the financing of any of the Transactions contemplated by this document. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, Parent and/or the Surviving Corporation shall cause the proper officers and directors of the Company, Parent and Merger Sub hereto to take all such action. In the event any litigation is commenced by any person involving the Company, Parent or Merger Sub and relating to the transactions contemplated by this Agreement, including any other proposal for a Takeover Proposal (as defined in SECTION 6.10), the Company, Parent or Merger Sub shall have the right, at its own expense, to participate therein. 6.8 NOTIFICATION OF CERTAIN MATTERS. Each of the Company, Parent and Merger Sub agrees to give prompt notice to each other of, and to use their respective reasonable best efforts to prevent or promptly remedy, (i) the occurrence or failure to occur, or the impending or threatened occurrence or failure to occur, of any event which occurrence or failure to occur would be likely to cause any of its representations or warranties in this Agreement to be untrue or inaccurate in any material respect at any time from the date hereof through the Effective Time and (ii) any material failure on its part to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this SECTION 6.8 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice. 6.9 ACCESS TO INFORMATION; CONFIDENTIALITY. (a) The Company shall, and shall cause the Company Subsidiaries and the officers, directors, employees and agents of the Company and the Company Subsidiaries, to, afford the officers, employees and agents of Parent and Merger Sub complete access at all reasonable times from the date hereof through the Effective Date to its officers, employees, agents, properties, facilities, books, records, contracts and other assets and shall furnish Parent and Merger Sub all financial, operating and other data and information as Parent and Merger Sub through their officers, employees or agents, may reasonably request. Parent and Merger Sub shall have the right to make such due diligence investigations as Parent and Merger Sub shall deem necessary or reasonable. (b) The provisions of the Confidentiality Agreement dated January 5, 2000 between Parent and the Company (the "Confidentiality Agreement") shall remain in full force and effect in accordance with its terms. 25 (c) No investigation by any party hereto shall affect any representations or warranties of the parties herein or the conditions to the obligations of the parties hereto. 6.10 NO SOLICITATION. (a) In light of the consideration given by the board of directors of the Company prior to the execution of this Agreement, the Company agrees that it shall not, nor shall it permit any of the Company Subsidiaries to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative of, the Company or any of the Company Subsidiaries to, directly or indirectly (i) solicit, initiate, or encourage the submission of, any Takeover Proposal (as hereinafter defined), (ii) enter into any agreement with respect to any Takeover Proposal or (iii) participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Takeover Proposal; PROVIDED, HOWEVER, that prior to the acceptance for payment of shares of Company Common Stock pursuant to the Offer, to the extent required to comport with the exercise of its fiduciary obligations, as determined in good faith by the board of directors of the Company under applicable law (after duly considering the advice of outside counsel and financial advisors to the Company), the Company may, in response to any unsolicited bona fide written proposal to the Company relating to any actual or proposed Takeover Proposal that the board of directors reasonably determines is likely to lead to a Superior Proposal, furnish information with respect to the Company to any person pursuant to a customary confidentiality agreement (as determined by the Company's outside counsel) and participate in discussions and negotiations with such person; and PROVIDED FURTHER that nothing contained in this SECTION 6.10(a) shall prohibit the Company or its board of directors from disclosing to the Company's stockholders a position with respect to a tender offer by a third party pursuant to Rules 14d-9 and 14e-2 promulgated under the `34 Act or from making such disclosure to the Company's stockholders which, in the good faith judgment of the board of directors (after duly considering the advice of outside counsel and financial advisors to the Company) may be required under applicable law. Upon execution of this Agreement, the Company will immediately cease any existing activities, discussions or negotiations with any parties conducted prior to such execution with respect to any of the foregoing. For purposes of this Agreement, "Takeover Proposal" means any proposal or offer (whether or not in writing and whether or not delivered to the stockholders of the Company generally) for a merger or other business combination involving the Company or to acquire in any manner, directly or indirectly, a material equity interest in, any voting securities of, or a substantial portion of the assets of the Company, other than the transactions contemplated by this Agreement. (b) Neither the board of directors of the Company nor any committee thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to Parent or Merger Sub, the approval or recommendation by such board of directors or any such committee of the Offer, this Agreement or the Merger or (ii) approve or recommend, or propose to approve or recommend, any Takeover Proposal; PROVIDED, HOWEVER, that the board of directors of the Company, to the extent required to comport with the exercise of its fiduciary obligations, as determined in good faith by the board of directors of the Company (after duly considering the advice of outside counsel and financial advisors to the Company) may approve or recommend (and, in connection therewith withdraw or modify its approval or recommendation of the Offer, 26 this Agreement and the Merger) a Superior Proposal (as hereinafter defined); PROVIDED, FURTHER, that any such approval or recommendation shall not (x) permit the Company to enter into any agreement with respect to such Superior Proposal or (y) affect any other obligation of the Company under this Agreement, unless this Agreement is terminated pursuant to SECTIONS 8.1(e) OR (f) simultaneously with the grant of such approval or recommendation and the Company simultaneously pays Parent the Termination Fee under SECTION 8.3(a). For purposes of this Agreement, "Superior Proposal" means a bona fide written proposal made by a third party to acquire the Company pursuant to a tender or exchange offer, a merger, a sale of all or substantially all its assets or otherwise on terms which the board of directors of the Company determines in its good faith judgment to be more favorable to the Company's stockholders than the Offer and the Merger (based on the written opinion of the Company's independent financial advisor) and believes in good faith (after consultation with its financial advisor) that the person making such Superior Proposal has, or is reasonably likely to have or obtain, any necessary funds or customary commitments to provide any funds necessary to consummate such Superior Proposal that the value of the consideration provided for in such proposal exceeds the value of the consideration provided for in the Offer and the Merger). No provision contained in this SECTION 6.10 shall affect any party's rights under SECTION 8.1 hereof. Nothing in this Agreement is intended to be, or shall be construed as, an impermissible delegation of the duties of the Company's board of directors under Delaware law. (c) The Company promptly shall advise Parent orally and in writing of any Takeover Proposal or any inquiry with respect to or which could lead to any Takeover Proposal and the identity of the person making any such Takeover Proposal or inquiry. The Company will keep Parent fully informed of the status and details of any such Takeover Proposal or inquiry (and will immediately provide to Parent copies of any written materials received by the Company in connection with any such Takeover Proposal or inquiry unless the receipt by the Company of such written materials is expressly conditioned on the nondisclosure thereof to Parent, in which case the Company will provide to Parent a summary of only the price and terms of any such Takeover Proposal). 6.11 INDEMNIFICATION AND INSURANCE. (a) The Bylaws of the Surviving Corporation shall contain the provisions with respect to indemnification set forth in Article IX of the Bylaws of the Company, which provisions shall not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner that would adversely affect the rights thereunder of individuals who at the date of this Agreement were directors, officers, employees or agents of the Company, unless such modification is required by law. (b) The Company shall, to the fullest extent permitted under applicable law or under the Company's Certificate of Incorporation or Bylaws and regardless of whether the Merger becomes effective, indemnify and hold harmless, and after the Effective Time, the Surviving Corporation shall, to the fullest extent permitted under applicable law, indemnify and hold harmless, each present and former director, officer, employee, fiduciary and agent of the Company or any of its Subsidiaries (collectively, the "Indemnified Parties") against any costs or expenses (including attorneys' fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any claim, action, suit, proceeding or 27 investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to any action or omission occurring prior to the Effective Time arising out of or pertaining to the transactions contemplated by this Agreement for a period of four years after the date hereof. In the event of any such claim, action, suit, proceeding or investigation (whether arising before or after the Effective Time), (i) the Company or the Surviving Corporation, as the case by be, shall pay the reasonable fees and expenses of counsel selected by the Indemnified Parties, which counsel shall be reasonably satisfactory to the Company or the Surviving Corporation, promptly after statements therefor are received, (ii) the Company and the Surviving Corporation will cooperate in the defense of any such matter, and (iii) any determination required to be made in connection with a claim for indemnification, with respect to whether an Indemnified party's conduct complies with the standards set forth under Delaware Law and the Company's or the Surviving Corporation's Certificate of Incorporation or Bylaws, shall be made by independent counsel mutually acceptable to the Surviving Corporation and the Indemnified Party; PROVIDED, HOWEVER, that neither the Company nor the Surviving Corporation shall be liable for any settlement effected without its written consent (which consent shall not be unreasonably withheld); and PROVIDED FURTHER, that neither the Company nor the Surviving Corporation shall be obligated pursuant to this Section 6.11 to pay the fees and disbursements of more than one counsel for all Indemnified Parties in any single action except to the extent that, in the opinion of counsel for the Indemnified Parties, two or more of such Indemnified Parties have conflicting interests in the outcome of such action; and PROVIDED FURTHER that, in the event that any claim or claims for indemnification are asserted or made within such four-year period, all rights to indemnification in respect of any such claim or claims shall continue until the disposition of any and all such claims. (c) In the event the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger of (ii) transfers all or substantially all of its properties and assets to any person, then and in each such case, proper provisions shall be made so that the successors and assigns of the Surviving Corporation, or at Parent's option, Parent, shall assume the obligations set forth in this Section 6.11. (d) This Section 6.11 shall survive any termination of this Agreement and the consummation of the Merger at the Effective Time, is intended to benefit the Company, the Surviving Corporation and the Indemnified Parties, and shall be binding on all successors and assigns of the Surviving Corporation. Parent shall cause the Company to honor its obligations pursuant to this Section 6.11. 6.12 STATE TAKEOVER LAWS. Notwithstanding any other provision in this Agreement, in no event shall any action taken by the board of directors of the Company referred to in Section 3.3 causing Section 203 of the Delaware Law not to apply to this Agreement or the other transactions contemplated herein be withdrawn, revoked or modified by the board of directors of the Company. If any state takeover statute other than Section 203 of the Delaware law becomes or is deemed to become applicable to the Agreement, the Offer, the acquisition of Shares pursuant to the Offer or the Merger or any of the other transactions contemplated herein, the Company shall take all action necessary to render such statute inapplicable to all of the foregoing. 28 6.13 ACTIONS REGARDING THE RIGHTS. The Company shall not modify or waive, except as specifically provided herein, the terms of its Rights Agreement, or take any action to redeem the Rights, except in connection with its accepting a Superior Proposal pursuant to and in accordance with Section 6.10(b) and except that the Company shall amend the Rights Agreement to provide for its termination immediately prior to the consummation of the Offer. 6.14 OPTIONS. The Company shall use its reasonable best efforts to cause all persons who hold options to acquire Company Common Stock either to exercise, terminate and/or consent to cancellation of such options prior to the Expiration Date; provided, that the Company may in certain circumstances take all actions necessary and appropriate to provide that, upon the Effective Time, each outstanding option to purchase shares (collectively, the "Options") granted under any Company stock option plan, whether or not then exercisable or vested, shall be cancelled and, in exchange therefor, each holder of such Option shall receive an amount in cash in respect thereof, if any, equal to the product of (i) the excess, if any, of the Merger Consideration over the per share exercise price thereof, and (ii) the number of shares subject thereto. ARTICLE 7 CONDITIONS 7.1 CONDITIONS TO THE OBLIGATION OF EACH PARTY TO EFFECT THE MERGER. The obligations of each of the Company, Parent and Merger Sub to effect the Merger shall be subject to the fulfillment at or prior to the Effective Time of the following conditions: (a) The Merger and the consummation of the transactions contemplated in this Agreement shall have been approved and adopted by the requisite vote of the stockholders of the Company, Parent and Merger Sub, as the case may be, required by the Delaware Law and their respective Certificates of Incorporation and bylaws. (b) Any waiting period (and any extension thereof) applicable to the consummation of the Merger under the HSR Act shall have expired or been terminated. (c) No preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, nor any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, shall be in effect that would make the acquisition of Company Common Stock pursuant to the Offer or Merger or the holding directly or indirectly by Parent of the shares of Common Stock of the Surviving Corporation illegal or otherwise prevent the consummation of the Offer or the Merger. (d) Except for the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, all waivers, consents, approvals and actions or non-actions of any governmental authority, commission, board or other regulatory body required to consummate the transactions contemplated by this Agreement shall have been obtained and shall not have been reversed, stayed, enjoined, set aside, annulled or suspended, except for such failures to obtain such waiver, consent, approval or action which would not be reasonably likely to have a Company Material Adverse Effect or a Parent Material Adverse Effect. 29 (e) Merger Sub shall have purchased all shares validly tendered and not withdrawn pursuant to the Offer; PROVIDED, HOWEVER, that this condition shall not be applicable to the obligations of Parent or Merger Sub if Merger Sub fails to purchase shares tendered pursuant to the Offer in violation of the terms of this Agreement or the Offer. ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER 8.1 TERMINATION. This Agreement may be terminated at any time prior to the Effective Time, whether before or after approval of this Agreement and the transactions contemplated herein by the respective boards of directors or stockholders of the parties hereto: (a) by mutual written consent of Parent, Merger Sub and the Company; (b) by either of Parent, Merger Sub or the Company if the Effective Time shall not have occurred on or before June 30, 2000; PROVIDED, HOWEVER, that the right to terminate this Agreement under this SECTION 8.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Effective Time to occur on or before such date; PROVIDED FURTHER that such time periods shall be tolled for any part thereof during which any party shall be subject to a nonfinal order, decree, ruling or action restraining, enjoining or otherwise prohibiting the consummation of the Merger; (c) by either of Parent, Merger Sub or the Company if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued an order, decree or ruling or taken any other action (which order, decree or ruling each of the parties hereto shall use all reasonable efforts to lift), in each case permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and such order, decree, ruling or other action shall have become final and nonappealable, or if any action seeking to restrain, prohibit, or challenge the legality of the consummation of the transactions contemplated by this Agreement is threatened by any government agency (which action the terminating party used reasonable efforts to cure, address, resolve or avoid such action); (d) by Parent if, due to any event, occurrence or non-occurrence, as the case may be, which results in or constitutes a failure to satisfy a Tender Offer Condition, the Offer is terminated or expires in accordance with its terms without Merger Sub having purchased any Company Common Stock thereunder; (e) by Parent if (i) the Company shall have entered into an agreement with a third party with respect to any acquisition or purchase of all or a substantial portion of the assets of, or any substantial equity interest in, the Company or any Company Subsidiary in accordance with the terms of this Agreement or any business combination with the Company or any Company Subsidiary by such third party or (ii) the board of directors of the Company shall have withdrawn, modified or amended in any manner adverse to Parent its approval of or recommendation in favor of the Offer, this Agreement or the Merger; or 30 (f) by the Company if the Company accepts a Superior Proposal as described in SECTION 6.10 and simultaneously therewith pays Parent the Termination Fee under SECTION 8.3(a). 8.2 EFFECT OF TERMINATION. Upon the termination of this Agreement pursuant to SECTION 8.1, this Agreement shall forthwith become null and void except as set forth in SECTIONS 6.9(b) AND 8.3, which shall survive such termination; PROVIDED THAT, nothing herein shall relieve any party from liability for any breach of this Agreement prior to such termination. 8.3 FEES AND EXPENSES. (a) If this Agreement is terminated pursuant to SECTION 8.1(e) OR (f), the Company shall promptly pay Parent a fee of $6,000,000, plus interest on such amount from the date payable until paid at a rate of 8% calculated on a per annum basis (collectively, the "Termination Fee"). (b) Except as set forth in this SECTION 8.3, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses, whether or not the Merger is consummated. 8.4 AMENDMENT. This Agreement may be amended by the parties hereto, at any time before or after approval of this Agreement and the transactions contemplated herein by the respective boards of directors or stockholders of the parties hereto; PROVIDED, HOWEVER, that after any such approval by the stockholders, no amendment shall be made that changes the form or reduces the amount of consideration to be paid to the stockholders or that in any other way materially adversely affects the rights of such stockholders (other than a termination of this Agreement in accordance with the provisions hereof) without the further approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. 8.5 WAIVER. Any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived at any time prior to the Effective Time by any of the parties entitled to the benefit thereof only by a written instrument signed by each such party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, representation, warranty, covenant, agreement or condition shall not operate as a waiver of or estoppel with respect to, any subsequent or other failure. ARTICLE 9 GENERAL PROVISIONS 9.1 NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, mailed by certified mail (return receipt requested) or sent by cable, telegram or telecopier to the parties at the following addresses or at such other addresses as shall be specified by the parties by like notice: 31 (a) if to Parent or Merger Sub: Autoliv, Inc. World Trade Center Klarabergsviadukten 70 SE-107 24 Stockholm, Sweden Attn: Vice President, Legal Affairs telecopy: 46(8) 24 44 93 with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036-6522 Attn: Scott V. Simpson telecopy: (212) 735-2000 (b) if to the Company: OEA, Inc. P.O. Box 100488 Denver, Colorado 80250 Attn: Dr. Charles B. Kafadar telecopy: (303) 693-0385 with a copy to: Davis, Graham & Stubbs LLP 370 17th Street, Suite 4700 Denver, CO 80202 Attn: Ronald R. Levine, II telecopy: 303-892-7400 Notice so given shall (in the case of notice so given by mail) be deemed to be given when received and (in the case of notice so given by cable, telegram, telecopier, telex or personal delivery) on the date of actual transmission or (as the case may be) personal delivery. 9.2 REPRESENTATIONS AND WARRANTIES. The representations and warranties contained in this Agreement shall not survive the Merger. 9.3 CLOSING. The closing of the transactions contemplated by this Agreement shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, or such other place as the parties may agree, as soon as practicable after the satisfaction or waiver of the conditions set forth in SECTION 7. 9.4 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUCTED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE 32 REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. 9.5 COUNTERPARTS; FACSIMILE TRANSMISSION OF SIGNATURES. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, and delivered by means of facsimile transmission or otherwise, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same agreement. If any party hereto elects to execute and deliver a counterpart signature page by means of facsimile transmission, it shall deliver an original of such counterpart to each of the other parties hereto within ten days of the date hereof, but in no event will the failure to do so affect in any way the validity of the facsimile signature or its delivery. 9.6 ASSIGNMENT. This Agreement and all of the provisions hereto shall be binding upon and inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations set forth herein shall be assigned by any part hereto without the prior written consent of the other parties hereto and any purported assignment without such consent shall be void; PROVIDED, HOWEVER, that Merger Sub may, without such consent and at any time prior to the Effective Time, transfer all of Merger Sub's rights, interests or obligations herein to any affiliate of Parent; PROVIDED, further, that no assignment of any rights, interests or obligations set forth herein shall release the assigning party from its obligations hereunder. 9.7 SEVERABILITY. If any provision of this Agreement shall be held to be illegal, invalid or unenforceable under any applicable law, then such contravention or invalidity shall not invalidate the entire Agreement. Such provision shall be deemed to be modified to the extent necessary to render it legal, valid and enforceable, and if no such modification shall render it legal, valid and enforceable, then this Agreement shall be construed as if not containing the provision held to be invalid, and the rights and obligations of the parties shall be construed and enforced accordingly. 9.8 ENTIRE AGREEMENT. This Agreement and the Confidentiality Agreement contain all of the terms of the understandings of the parties hereto with respect to the subject matter hereof and are not intended to confer upon any person other than the parties hereto any rights and remedies hereunder. [The remainder of this page is intentionally blank] 33 AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER SIGNATURE PAGE IN WITNESS WHEREOF, Parent, Merger Sub, and the Company have caused this Agreement to be executed as of the date first written above. AUTOLIV, INC. By: ------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- OEA, INC. By: ------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- OEA, MERGER CORPORATION By: ------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- S-1 ANNEX I The capitalized terms used herein have the meanings set forth in the Amended and Restated Agreement and Plan of Merger dated as of March 12, 2000 (the "Merger Agreement") to which this Annex 1 is attached. CONDITION OF THE OFFER Notwithstanding any other provision of the Offer, Merger Sub shall not be required to accept for payment, purchase or pay for any shares of Company Common Stock tendered and may terminate or (subject to the terms of the Merger Agreement) amend the Offer or may postpone the acceptance for payment, purchase of or payment for shares of Company Common Stock tendered, if before acceptance for payment for any such shares (whether or not any shares of Company Common Stock have theretofore been accepted for payment or paid for pursuant to the Offer) (i) there shall not have been validly tendered and not properly withdrawn pursuant to the Offer at least a majority of the issued and outstanding shares of Company Common Stock (the "Minimum Condition"), (ii) any waiting period under the HSR Act applicable to the purchase of shares of Company Common Stock pursuant to the Offer shall not have expired or been terminated, or (iii) any of the following shall occur: (a) Any representation or warranty of the Company in the Merger Agreement shall have been untrue or incorrect in any respect as of the date of the Merger Agreement or there has been a breach by the Company of any covenant or agreement set forth in the Merger Agreement which breach shall not be remedied within 5 days (or by the Expiration Date if sooner) of written notice specifying such breach in reasonable detail and demanding that same be remedied (except where such failure to be true and correct or such breach, taken together with all other such failures and breaches, would not have a Company Material Adverse Effect). (b) (i) There shall be any action taken, or any statute, rule, regulation, decree, order or injunction promulgated, enacted, entered into or enforced by any state, federal or foreign government or governmental agency or authority or by any court (domestic or foreign) that would (a) make the acceptance for payment of, the payment for, or the purchase of, some or all of the Company Common Stock by Merger Sub illegal or otherwise materially restrict or prohibit consummation of the Offer or the Merger, (b) restrict or prohibit the ability of Merger Sub, or render Merger Sub unable, to accept for payment, pay for or purchase some or all of Company Common Stock in a manner that is adverse in any material respect to the transactions contemplated by the Offer or the Merger, (c) require the divestiture by Parent, Merger Sub or the Company or any of their respective subsidiaries of material portions of the business, assets or property of any of them or any Company Common Stock, or impose any material limitation on the ability of any of them to conduct their business and own such assets, properties and Company Common Stock, (d) impose material limitations on the ability of Merger Sub or Parent to acquire or hold or to exercise effectively all rights of ownership of Company Common Stock, including, without limitation, the right to vote any shares of Company Common ANNEX 1 - Page 1 Stock purchased by Merger Sub on all matters properly presented to the stockholders of the Company or (e) impose any limitations on the ability of Parent or Merger Sub or any of their respective subsidiaries effectively to control in any material respect the business or operations of the Company or the Company Subsidiaries; (ii) there shall have been instituted, pending or threatened (in writing or by public announcement) an action by a governmental entity seeking (A) to restrain or prohibit the making or consummation of the Offer or the consummation of the Merger or (B) to impose any other restriction, prohibition or limitation referred to in the foregoing sub-paragraph (i). (c) Since the date of the Merger Agreement there shall have occurred any material adverse change in the financial condition, business, operations, liquidity, property or assets of the Company and the Company Subsidiaries considered as one enterprise; PROVIDED, HOWEVER, that events or conditions that affect the automotive supply industry generally and affect all other similarly situated companies in the automotive supply industry shall not be deemed a material adverse change for purposes of this PARAGRAPH (c). (d) 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) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) any material limitation (whether or not mandatory) by any governmental authority on the extension of credit by commercial banks or other commercial lending institutions, (iv) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the United States or (v) in the case of any of the foregoing existing at the time of the commencement of the Offer a material acceleration or worsening thereof. (e) The Merger Agreement shall have been terminated in accordance with its terms. (f) The Company's board of directors shall have withdrawn, modified or amended in any respect adverse to Parent or Merger Sub its recommendation of the Offer and the Merger or resolved to do so. (g) Any corporation, entity or "group" (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934), other than Parent and Merger Sub shall have acquired beneficial ownership of more than 20% of the outstanding shares of Company Common Stock, or shall have been granted any options or rights, conditional or otherwise, to acquire a total of more than 20% of the outstanding shares of Company Common Stock and which, in each case, does not tender the shares of Company Common Stock beneficially owned by it in the Offer. (h) The Rights have not been exercised. ANNEX I - Page 2 -----END PRIVACY-ENHANCED MESSAGE-----