AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 8, 1994
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the
Securities Exchange Act of 1934)
TREDEGAR INDUSTRIES, INC.
(Name of Issuer)
TREDEGAR INDUSTRIES, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, NO PAR VALUE PER SHARE
(Title of Class of Securities)
89465010
(CUSIP Number of Class of Securities)
NANCY M. TAYLOR, ESQ.
CORPORATE COUNSEL AND SECRETARY
TREDEGAR INDUSTRIES, INC.
1100 BOULDERS PARKWAY
RICHMOND, VIRGINIA 23225
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of the Person(s) Filing Statement)
COPIES TO:
C. PORTER VAUGHAN, III, ESQ.
HUNTON & WILLIAMS
RIVERFRONT PLAZA, EAST TOWER
951 EAST BYRD STREET
RICHMOND, VIRGINIA 23219
SEPTEMBER 8, 1994
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE
$19,000,000 $3,800
*Calculated solely for the purpose of determining the filing fee, based upon the
purchase of 1,000,000 shares at $19.00 per share.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
AMOUNT PREVIOUSLY PAID: N/A FILING PARTY: N/A
FORM OR REGISTRATION NO.: N/A DATE FILED: N/A
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Schedule 13E-4 relates is
Tredegar Industries, Inc., a Virginia corporation (the "Company"), and the
address of its principal executive office is 1100 Boulders Parkway, Richmond,
Virginia 23225.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase up
to 1,000,000 shares (or such lesser number of shares as are properly tendered)
of its common stock, no par value per share (the "Shares"), 10,589,390 of which
Shares were outstanding as of September 7, 1994, at prices not in excess of
$19.00 nor less than $17.00 net per Share in cash upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated September 8, 1994 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer"), copies of which are attached as Exhibits (a)(1) and
(a)(2), respectively, and incorporated herein by reference. Officers and
directors of the Company may participate in the Offer on the same basis as the
Company's other shareholders, although the Company has been advised that no
director or executive officer of the Company intends to tender any shares
pursuant to the Offer. The information set forth in "Introduction" and "The
Offer -- Section 1, Number of Shares; Proration" of the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in "Introduction" and "The Offer -- Section
8, Price Range of Shares; Dividends" of the Offer to Purchase is incorporated
herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b)The information set forth in "The Offer -- Section 9, Source and
Amount of Funds" of the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j)The information set forth in "Introduction" and "The
Offer -- Section 9, Source and Amount of Funds," "The Offer -- Section 2,
Purpose of the Offer; Certain Effects of the Offer," "The Offer -- Section 11,
Interest of Directors and Officers; Transactions and Arrangements Concerning
Shares" and "The Offer -- Section 12, Effects of the Offer on the Market for
Shares; Registration under the Exchange Act" of the Offer to Purchase is
incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "The Offer -- Section 11, Interest of
Directors and Officers; Transactions and Arrangements Concerning Shares" and
Schedule A, "Certain Transactions Involving Shares" of the Offer to Purchase is
incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENT, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
The information set forth in "Introduction" and "The Offer -- Section 9,
Source and Amount of Funds," "The Offer -- Section 2, Purpose of the Offer;
Certain Effects of the Offer," and "The Offer -- Section 11, Interest of
Directors and Officers; Transactions and Arrangements Concerning Shares" of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED, OR TO BE COMPENSATED.
The information set forth in "Introduction" and "The Offer -- Section 16,
Fees and Expenses" of the Offer to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b)The information set forth in "The Offer -- Section 10, Certain
Information Concerning the Company" of the Offer to Purchase is incorporated
herein by reference, the information set forth on pages 27 through 40 of the
Company's Annual Report to Shareholders for the year ended December 31, 1993,
filed as Exhibit (g)(1) hereto, is incorporated herein by reference, and the
information set forth on pages 2 through 7 of the Company's Quarterly Report on
Form 10-Q for the six months ended June 30, 1994, as amended, filed as Exhibit
(g)(2) is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
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(b) The information set forth in "The Offer -- Section 13, Certain Legal
Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein
by reference.
(c) The information set forth in "The Offer -- Section 12, Effect of the
Offer on the Market for Shares; Registration under the Exchange Act" of the
Offer to Purchase is incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and Letter of
Transmittal is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase, dated September 8, 1994.
(2) Form of Letter of Transmittal (including Certification of Taxpayer
Identification Number on Form W-9).
(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(5) Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(6) Form of Memorandum, dated September 8, 1994, to Participants in the
Tredegar Industries, Inc. Dividend Reinvestment and Stock Purchase
Plan.
(7) Form of Memorandum, dated September 8, 1994, to Participants in the
Savings Plan for the Employees of Tredegar Industries, Inc.
(8) Form of Memorandum, dated September 8, 1994, to Participants in the
Tredegar Industries, Inc. Employee Stock Purchase Plan.
(9) Text of Press Release issued by the Company, dated August 29, 1994.
(10) Form of Summary Advertisement, dated September 8, 1994.
(11) Form of Letter to Shareholders of the Company, dated September 8,
1994, from John D. Gottwald, President and Chief Executive Officer
of the Company.
(12) Form of letter to Participants in the Tredegar Industries, Inc.
Dividend Reinvestment and Stock Purchase Plan, dated September 8,
1994, from John D. Gottwald, President and Chief Executive Officer
of the Company.
(13) Form of Letter to Participants in the Savings Plan for the
Employees of Tredegar Industries, Inc., dated September 8, 1994,
from John D. Gottwald, President and Chief Executive Officer of the
Company.
(14) Form of Letter to Participants in the Tredegar Industries, Inc.
Employee Stock Purchase Plan, dated September 8, 1994, from John D.
Gottwald, President and Chief Executive Officer of the Company.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not Applicable.
(g)(1) Pages 27 through 40 of the Company's Annual Report to Shareholders
for the year ended December 31, 1993.
(2) Pages 2 through 7 of the Company's Quarterly Report on Form 10-Q for
the six months ended June 30, 1994, as amended.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule 13E-4 is true, complete and
correct.
September 8, 1994
TREDEGAR INDUSTRIES, INC.
By: /s/ NORMAN A. SCHER
Norman A. Scher
Executive Vice President
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EXHIBIT INDEX
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
(a)(1) Form of Offer to Purchase, dated September 8, 1994.
(2) Form of Letter of Transmittal (including Certification of Taxpayer
Identification Number on Form W-9).
(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(5) Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(6) Form of Memorandum, dated September 8, 1994, to Participants in the
Tredegar Industries, Inc. Dividend Reinvestment and Stock Purchase Plan.
(7) Form of Memorandum, dated September 8, 1994, to Participants in the
Savings Plan for the Employees of Tredegar Industries, Inc.
(8) Form of Memorandum, dated September 8, 1994, to Participants in the
Tredegar Industries, Inc. Employee Stock Purchase Plan.
(9) Text of Press Release issued by the Company, dated August 29, 1994.
(10) Form of Summary Advertisement, dated September 8, 1994.
(11) Form of Letter to Shareholders of the Company, dated September 8, 1994,
from John D. Gottwald, President and Chief Executive Officer of the
Company.
(12) Form of Letter to Participants in the Tredegar Industries, Inc. Dividend
Reinvestment and Stock Purchase Plan, dated September 8, 1994, from John
D. Gottwald, President and Chief Executive Officer of the Company.
(13) Form of Letter to Participants in the Savings Plan for the Employees of
Tredegar Industries, Inc., dated September 8, 1994, from John D.
Gottwald, President and Chief Executive Officer of the Company.
(14) Form of Letter to Participants in the Tredegar Industries, Inc. Employee
Stock Purchase Plan, dated September 8, 1994, from John D. Gottwald,
President and Chief Executive Officer of the Company.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
( f ) Not applicable.
(g)(1) Pages 27 through 40 of the Company's Annual Report to Shareholders for
the year ended December 31, 1993.
(2) Pages 2 through 7 of the Company's Quarterly Report on Form 10-Q for the
six months ended June 30, 1994, as amended.
4
EXHIBIT (A)(1)
TREDEGAR INDUSTRIES, INC.
OFFER TO PURCHASE FOR CASH UP TO
1,000,000 SHARES OF ITS COMMON STOCK (INCLUDING
THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $19.00
NOR LESS THAN $17.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, OCTOBER 6, 1994, UNLESS THE OFFER IS EXTENDED.
Tredegar Industries, Inc., a Virginia corporation (the "Company"), hereby
invites its shareholders to tender shares of its Common Stock, no par value per
share (the "Shares") (including the associated Preferred Stock Purchase Rights
(the "Rights") issued pursuant to the rights agreement, dated as of June 15,
1989, as amended, between the Company and the Rights Agent named therein), at
prices not in excess of $19.00 nor less than $17.00 per Share in cash, as
specified by shareholders tendering their Shares, upon the terms and subject to
the conditions set forth herein and in the related Letter of Transmittal (which
together constitute the "Offer"). Unless the Company redeems the Rights, a
tender of Shares will constitute a tender of the associated Rights. Unless the
context requires otherwise, all references herein to Shares shall include the
associated Rights. The Company will determine the single per Share price, not in
excess of $19.00 nor less than $17.00 per Share, net to the seller in cash (the
"Purchase Price"), that it will pay for Shares properly tendered pursuant to the
Offer, taking into account the number of Shares so tendered and the prices
specified by tendering shareholders. The Company will select the lowest Purchase
Price that will allow it to buy 1,000,000 Shares (or such lesser number of
Shares as are properly tendered at prices not in excess of $19.00 nor less than
$17.00 per Share). All Shares properly tendered at prices at or below the
Purchase Price and not withdrawn will be purchased at the Purchase Price,
subject to the terms and the conditions of the Offer, including the proration
and conditional tender provisions. All Shares acquired in the Offer will be
acquired at the Purchase Price. The Company reserves the right, in its sole
discretion, to purchase more than 1,000,000 Shares pursuant to the Offer. See
Section 15.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED, BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7.
The Shares are listed and traded on the New York Stock Exchange, Inc. (the
"NYSE"). On August 29, 1994, the last full trading day on the NYSE prior to the
announcement of the Offer, the closing per Share sales price as reported on the
NYSE Composite Tape was $16.375. On September 7, 1994, the last full trading day
on the NYSE prior to the commencement of the Offer, the closing per Share sales
price as reported on the NYSE Composite Tape was $18.375. SHAREHOLDERS ARE URGED
TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE SECTION 8.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED UNANIMOUSLY THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED. THE COMPANY
HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO
TENDER ANY SHARES PURSUANT TO THE OFFER.
IMPORTANT
Any shareholder wishing to tender all or any part of his or her Shares
should either (a) complete and sign a Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
either mail or deliver it with any required signature guarantee and any other
required documents to American Stock Transfer & Trust Company (the
"Depositary"), and either mail or deliver the stock certificates for such Shares
to the Depositary (with all such other documents) or tender such Shares pursuant
to the procedure for book-entry tender set forth in Section 3, or (b) request a
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such shareholder. Holders of Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee should contact
such person if they desire to tender their Shares. Any shareholder who desires
to tender Shares and whose certificates for such Shares cannot be delivered to
the Depositary or who cannot comply with the procedure for book-entry transfer
or whose other required documents cannot be delivered to the Depositary, in any
case, by the expiration of the Offer must tender such Shares pursuant to the
guaranteed delivery procedure set forth in Section 3.
TO PROPERLY TENDER SHARES, SHAREHOLDERS MUST COMPLETE THE SECTION OF THE
LETTER OF TRANSMITTAL RELATING TO THE PRICE AT WHICH THEY ARE TENDERING SHARES.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent or to the Dealer Managers at
their respective addresses and telephone numbers set forth on the back cover of
this Offer to Purchase.
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
THE DATE OF THIS OFFER TO PURCHASE IS SEPTEMBER 8, 1994
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY OR THE DEALER MANAGERS AS TO WHETHER SHAREHOLDERS SHOULD
TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS
NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE RELATED
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE DEALER MANAGERS.
TABLE OF CONTENTS
SECTION PAGE
SUMMARY................................................................................................................. S-1
INTRODUCTION............................................................................................................ 1
THE OFFER............................................................................................................... 2
1. Number of Shares; Proration.......................................................................... 2
2. Purpose of the Offer; Certain Effects of the Offer................................................... 4
3. Procedures for Tendering Shares...................................................................... 4
4. Withdrawal Rights.................................................................................... 7
5. Purchase of Shares and Payment of Purchase Price..................................................... 8
6. Conditional Tender of Shares......................................................................... 9
7. Certain Conditions of the Offer...................................................................... 9
8. Price Range of Shares; Dividends..................................................................... 11
9. Source and Amount of Funds........................................................................... 11
10. Certain Information Concerning the Company........................................................... 11
11. Interest of Directors and Officers; Transactions and Arrangements Concerning Shares.................. 20
12. Effects of the Offer on the Market for Shares; Registration under the Exchange Act................... 21
13. Certain Legal Matters; Regulatory Approvals.......................................................... 21
14. Certain Federal Income Tax Consequences.............................................................. 22
15. Extension of Offer; Termination; Amendment........................................................... 24
16. Fees and Expenses.................................................................................... 25
17. Miscellaneous........................................................................................ 25
SCHEDULE A Certain Transactions Involving Shares................................................................ A-1
SUMMARY
THIS GENERAL SUMMARY IS SOLELY FOR THE CONVENIENCE OF THE COMPANY'S
SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT AND
MORE SPECIFIC DETAILS IN THIS OFFER TO PURCHASE.
PURCHASE PRICE................ The Company will select a single Purchase Price which will be not more than $19.00 nor less
than $17.00 per Share. All Shares purchased by the Company will be purchased at the Purchase
Price even if tendered at or below the Purchase Price. Each shareholder desiring to tender
Shares must specify in the Letter of Transmittal the minimum price (not more than $19.00 nor
less than $17.00 per Share) at which such shareholder is willing to have his or her Shares
purchased by the Company.
NUMBER OF SHARES TO BE
PURCHASED................... 1,000,000 Shares (or such lesser number of Shares as are properly tendered).
HOW TO TENDER SHARES.......... See Section 3. Call the Information Agent, the Dealer Managers or consult your broker for
assistance.
BROKERAGE COMMISSIONS......... None.
STOCK TRANSFER TAX............ None, if payment is made to the registered holder.
EXPIRATION AND PRORATION
DATES....................... Thursday, October 6, 1994 at 5:00 P.M., New York City time, unless extended by the Company.
PAYMENT DATE.................. As soon as practicable after the termination of the Offer.
POSITION OF THE COMPANY AND
ITS DIRECTORS............... Neither the Company nor its Board of Directors makes any recommendation to any shareholder as
to whether to tender or refrain from tendering Shares.
WITHDRAWAL RIGHTS............. Tendered Shares may be withdrawn at any time until 5:00 P.M., New York City time, on Thursday,
October 6, 1994, unless the Offer is extended by the Company, and, unless previously purchased,
after 12:00 Midnight on Wednesday, November 2, 1994. See Section 3.
ODD LOTS...................... There will be no proration of Shares tendered by any shareholder owning beneficially less than
100 Shares as of September 7, 1994 who tenders all such Shares prior to the Proration Date and
who checks the "Odd Lots" box in the Letter of Transmittal.
FURTHER DEVELOPMENTS REGARDING
THE OFFER................... Call the Information Agent or the Dealer Managers or consult your broker.
S-1
TO THE HOLDERS OF COMMON STOCK OF TREDEGAR INDUSTRIES, INC.:
INTRODUCTION
Tredegar Industries, Inc., a Virginia corporation (the "Company"), invites
its shareholders to tender shares of its Common Stock, no par value per share
(the "Shares"), at prices not in excess of $19.00 nor less than $17.00 per
Share, as specified by shareholders tendering their Shares, upon the terms and
subject to the conditions set forth herein and in the related Letter of
Transmittal (which together constitute the "Offer"). The Company will determine
the single per Share price, not in excess of $19.00 nor less than $17.00 per
share, net to the seller in cash (the "Purchase Price"), that it will pay for
Shares properly tendered pursuant to the Offer, taking into account the number
of Shares so tendered and the prices specified by tendering shareholders. The
Company will select the lowest Purchase Price that will allow it to buy
1,000,000 shares (or such lesser number of Shares as are properly tendered). All
Shares acquired in the Offer will be acquired at the Purchase Price. All Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
will be purchased at the Purchase Price, upon the terms and subject to the
conditions of the Offer, including the proration and conditional tender
provisions. Shares tendered at prices in excess of the Purchase Price and shares
not purchased because of proration or conditional tender will be returned. The
Company reserves the right, in its sole discretion, to purchase more than
1,000,000 Shares pursuant to the Offer. See Section 15.
THIS OFFER IS NOT CONDITIONED UPON THE TENDER OF ANY MINIMUM NUMBER OF
SHARES BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7.
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer more than 1,000,000 Shares are properly tendered at or
below the Purchase Price and not withdrawn, the Company will buy Shares first
from all Odd Lot Holders (as defined in Section 1) who properly tender all their
Shares at or below the Purchase Price and then on a PRO RATA basis from all
other shareholders who properly tender at prices at or below the Purchase Price
(and did not withdraw them prior to the expiration of the Offer). See Section 1.
All stock certificates representing Shares not purchased pursuant to the Offer,
including Shares tendered at prices greater than the Purchase Price and not
withdrawn and Shares not purchased because of proration or conditional tenders,
will be returned at the Company's expense to the shareholders who tendered such
Shares.
The Purchase Price will be paid net to the tendering shareholder in cash
for all Shares purchased. Tendering shareholders will not be obligated to pay
brokerage commissions, solicitation fees or, subject to Instruction 7 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Company. HOWEVER, ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO
COMPLETE, SIGN AND RETURN TO THE DEPOSITARY THE FORM W-9 THAT IS INCLUDED IN THE
LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX
WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH SHAREHOLDER OR OTHER
PAYEE PURSUANT TO THE OFFER. SEE SECTION 3.The Company will pay all fees and
expenses of Goldman, Sachs & Co. (the "Dealer Managers"), American Stock
Transfer & Trust Company (the "Depositary") and Georgeson & Company Inc. (the
"Information Agent") incurred in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MAKING
OF THE OFFER. HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING
THEIR SHARES. EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE
TENDERED. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE
OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
Shareholders who are participants in the Tredegar Industries, Inc. Dividend
Reinvestment and Stock Purchase Plan (the "Dividend Reinvestment Plan") may
instruct American Stock Transfer & Trust Company, as administrator under the
Dividend Reinvestment Plan, to tender part or all of the Shares attributed to
such participant's account and in each case must specify the price or prices at
which such Shares are to be tendered. See Section 3.
The Savings Plan for the Employees of Tredegar Industries, Inc. (the
"Savings Plan") holds Shares (approximately 10.2% of the outstanding Shares) in
accounts for participants of the Savings Plan. NationsBank of Virginia, N.A.
(the "Savings Plan Trustee") serves as trustee for the Savings Plan. Under the
terms of the Savings Plan, a
1
participant may instruct the Savings Plan Trustee to tender all or part of
certain Shares allocated to one or more of the participant's accounts and in
such case must specify the price at which such Shares are to be tendered. See
Section 3. The special Odd Lot purchase rules described below do not apply to
any Shares held in a Savings Plan account. See Section 1.
The Tredegar Industries, Inc. Employee Stock Purchase Plan (the "Stock
Purchase Plan") holds Shares in accounts for participants of the Stock Purchase
Plan. American Stock Transfer & Trust Company (the "Stock Purchase Plan
Custodian") serves as custodian for the Stock Purchase Plan. Under the terms of
the Stock Purchase Plan, a participant may instruct the Stock Purchase Plan
Custodian to tender all or part of certain Shares allocated to one or more of
the participant's accounts and in such case must specify the price at which such
Shares are to be tendered. See Section 3.
As of September 7, 1994, the Company had issued and outstanding 10,589,390
Shares and had reserved 850,435 Shares for issuance upon exercise of outstanding
stock options. The 1,000,000 Shares that the Company is offering to purchase
pursuant to the Offer represent approximately 9.45% of the outstanding Shares.
The Shares are listed and traded on the New York Stock Exchange, Inc. (the
"NYSE") under the symbol "TG". On August 29, 1994, the last full trading day on
the NYSE prior to the announcement of the Offer, the closing per Share sales
price as reported on the NYSE Composite Tape was $16.375. On September 7, 1994,
the last full trading day on the NYSE prior to the commencement of the Offer,
the closing per Share sales price as reported on the NYSE Composite Tape was
$18.375. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
SHARES. See Section 8.
THE OFFER
1. NUMBER OF SHARES; PRORATION. Upon the terms and subject to the
conditions of the Offer, the Company will purchase up to 1,000,000 Shares or
such lesser number of Shares as are properly tendered (and not withdrawn in
accordance with Section 4) prior to the Expiration Date (as defined below) at
prices not in excess of $19.00 nor less than $17.00 net per Share in cash. The
term "Expiration Date" means 5:00 P.M., New York City time, on Thursday, October
6, 1994, unless and until the Company, in its sole discretion, shall have
extended the period of time during which the Offer will remain open, in which
event the term "Expiration Date" shall refer to the latest time and date at
which the Offer, as so extended by the Company, shall expire. See Section 15 for
a description of the Company's right to extend, delay, terminate or amend the
Offer. The Company reserves the right to purchase more than 1,000,000 Shares
pursuant to the Offer. In accordance with applicable regulations of the
Securities and Exchange Commission (the "Commission"), the Company may purchase
pursuant to the Offer an additional amount of Shares not to exceed 2% of the
outstanding Shares without amending or extending the Offer. See Section 15. In
the event of an over-subscription of the Offer as described below, Shares
tendered at or below the Purchase Price prior to the Expiration Date will be
subject to proration, except for Odd Lots as explained below. The proration
period also expires on the Expiration Date.
The Company will select the lowest Purchase Price that will allow it to buy
1,000,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $19.00 nor less than $17.00 per Share). All Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
will be purchased at the Purchase Price, subject to the terms and the conditions
of the Offer, including the proration and conditional tender provisions. All
Shares purchased in the Offer will be purchased at the Purchase Price.
THE OFFER IS NOT CONDITIONED UPON THE TENDER OF ANY MINIMUM NUMBER OF
SHARES, BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7.
In accordance with Instruction 5 of the Letter of Transmittal, shareholders
desiring to tender Shares must specify the price, not in excess of $19.00 nor
less than $17.00 per Share, at which they are willing to sell their Shares to
the Company. As promptly as practicable following the Expiration Date, the
Company will, in its sole discretion, determine the Purchase Price that it will
pay for Shares properly tendered pursuant to the Offer and not withdrawn, taking
into account the number of Shares tendered and the prices specified by tendering
shareholders. The Company intends to select the lowest Purchase Price, not in
excess of $19.00 nor less than $17.00 net per Share in cash, that will enable it
to purchase 1,000,000 Shares (or such lesser number of Shares as are properly
tendered) pursuant to the Offer. Shares properly tendered pursuant to the Offer
at or below the Purchase Price and not withdrawn will be purchased at the
Purchase Price, subject to the terms and conditions of the Offer, including
2
the proration and conditional tender provisions. All Shares tendered and not
purchased pursuant to the Offer, including Shares tendered at prices in excess
of the Purchase Price and Shares not purchased because of proration or
conditional tender, will be returned to the tendering shareholders at the
Company's expense as promptly as practicable following the Expiration Date.
PRIORITY OF PURCHASERS. Upon the terms and subject to the conditions of the
Offer, if more than 1,000,000 Shares have been properly tendered at prices at or
below the Purchase Price and not withdrawn prior to the Expiration Date, the
Company will purchase properly tendered Shares on the basis set forth below:
(a) FIRST, all Shares properly tendered and not withdrawn prior to the
Expiration Date by any Odd Lot Holder (as defined below) who:
(1) tenders all Shares beneficially owned by such Odd Lot Holder at
a price at or below the Purchase Price (tenders of less than
all Shares owned by such shareholder will not qualify for this
preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed
Delivery; and
(b) SECOND, after purchase of all of the foregoing Shares, all other
Shares tendered properly and unconditionally at prices at or below
the Purchase Price and not withdrawn prior to the Expiration Date,
on a PRO RATA basis (with appropriate adjustments to avoid
purchases of fractional Shares) as described below; and
(c) THIRD, if necessary, Shares conditionally tendered at or below the
Purchase Price and not withdrawn prior to the Expiration Date,
selected by random lot in accordance with Section 6.
ODD LOTS. For purposes of the Offer, the term "Odd Lots" shall mean all
Shares properly tendered prior to the Expiration Date at prices at or below the
Purchase Price and not withdrawn by any person (an "Odd Lot Holder") who owned,
beneficially or of record, as of the close of business on September 7, 1994, an
aggregate of fewer than 100 Shares (and so certified in the appropriate place on
the Letter of Transmittal and, if applicable, on the Notice of Guaranteed
Delivery). In order to qualify for this preference, an Odd Lot Holder must
tender all such Shares in accordance with the procedures described in Section 3.
As set forth above, Odd Lots will be accepted for payment before proration, if
any, of the purchase of other tendered Shares. This preference is not available
to partial tenders or to beneficial or record holders of an aggregate of 100 or
more Shares, even if such holders have separate accounts or certificates
representing fewer than 100 Shares. By accepting the Offer, an Odd Lot Holder
would not only avoid the payment of brokerage commissions but also would avoid
any applicable odd lot discounts in a sale of such holder's Shares. Any
shareholder wishing to tender all of such shareholder's Shares pursuant to this
Section should complete the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery.
The Company also reserves the right, but will not be obligated, to purchase
all Shares duly tendered by any shareholder who tendered all Shares owned,
beneficially or of record, at or below the Purchase Price and who, as a result
of proration, would then own, beneficially or of record, an aggregate of fewer
than 100 Shares. If the Company exercises this right, it will increase the
number of Shares that it is offering to purchase by the number of Shares
purchased through the exercise of the right.
The special Odd Lot purchase rules described above do not apply to any
Shares held in a Savings Plan account.
PRORATION. In the event that proration of tendered Shares is required, the
Company will determine the proration factor as soon as practicable following the
Expiration Date. Proration for each shareholder tendering Shares, other than Odd
Lot Holders, shall be based on the ratio of the number of Shares tendered by
such shareholder to the total number of Shares tendered by all shareholders,
other than Odd Lot Holders, at or below the Purchase Price, subject to the
conditional tender provisions described in Section 6. Because of the difficulty
in determining the number of Shares properly tendered (including Shares tendered
by guaranteed delivery procedures, as described in Section 3) and not withdrawn,
and because of the odd lot procedure, the Company does not expect that it will
be able to announce the final proration factor or to commence payment for any
Shares purchased pursuant to the Offer until approximately seven NYSE trading
days after the Expiration Date. The preliminary results of any proration will be
announced by press release as promptly as practicable after the Expiration Date.
Shareholders may
3
obtain such preliminary information from the Information Agent or the Dealer
Managers and may be able to obtain such information from their brokers.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares and will be furnished to brokers, banks and similar
persons whose names, or the names of whose nominees, appear on the Company's
shareholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The Company is making the Offer because the Board of Directors believes
that, given the Company's business, assets and prospects and the current market
price of the Shares, the purchase of the Shares is an attractive use of the
Company's funds. Projected future cash flows are expected to be adequate for
normal operations and debt service.
The Offer provides shareholders who are considering a sale of all or a
portion of their Shares with the opportunity to determine the price or prices
(not in excess of $19.00 nor less than $17.00 per Share) at which they are
willing to sell their Shares and, subject to the terms and conditions of the
Offer, to sell those Shares for cash without the usual transaction costs
associated with market sales. In addition, shareholders owning fewer than 100
Shares whose Shares are purchased pursuant to the Offer not only will avoid the
payment of brokerage commissions but also will avoid any applicable odd-lot
discounts payable on a sale of their Shares in a NYSE transaction. The Offer
also allows shareholders to sell a portion of their Shares while retaining a
continuing equity interest in the Company if they so desire. Shareholders who
determine not to accept the Offer will realize a proportionate increase in their
relative equity interest in the Company, and thus in the Company's future
earnings and assets, subject to increased risks arising from higher leverage
resulting from the purchase of Shares by the Company, and subject to the
Company's right to issue additional Shares and other equity securities in the
future.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF
SUCH SHAREHOLDER'S SHARES AND NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH
RECOMMENDATION. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN
THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE
PRICE OR PRICES AT WHICH TO TENDER.
The Company may in the future purchase additional Shares on the open
market, in private transactions, through tender offers or otherwise. Any such
purchase may be on the same terms or on terms which are more or less favorable
to shareholders than the terms of the Offer. However, Rule 13e-4 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), prohibits the
Company and its affiliates from purchasing any Shares, other than pursuant to
the Offer, until at least ten business days after the Expiration Date. Any
possible future purchases by the Company will depend on many factors, including
the market price of the Shares, the results of the Offer, the Company's business
and financial position and general economic and market conditions.
Shares the Company acquires pursuant to the Offer will be restored to the
status of authorized and unissued Shares and will be available for the Company
to issue without further shareholder action (except as required by applicable
law or the rules of the NYSE or any other securities exchange on which the
Shares are listed) for purposes including, but not limited to, the acquisition
of other businesses, the raising of additional capital for use in the Company's
business and the satisfaction of obligations under existing or future employee
benefit plans. The Company has no current plans for reissuance of the Shares
repurchased pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES.
PROPER TENDER OF SHARES. For Shares to be tendered properly pursuant to the
Offer, (a) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) including any required signature guarantees
and any other documents required by the Letter of Transmittal, must be received
prior to 5:00 P.M., New York City time, on the Expiration Date by the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase or
(b) the tendering shareholder must comply with the guaranteed delivery procedure
set forth below. IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER
4
OF TRANSMITTAL, SHAREHOLDERS DESIRING TO TENDER SHARES PURSUANT TO THE OFFER
MUST PROPERLY INDICATE IN THE SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT
WHICH SHARES ARE BEING TENDERED" ON THE LETTER OF TRANSMITTAL THE PRICE (IN
MULTIPLES OF $.125) AT WHICH THEIR SHARES ARE BEING TENDERED. Shareholders who
desire to tender Shares at more than one price must complete a separate Letter
of Transmittal for each price at which Shares are tendered, provided that the
same Shares cannot be tendered (unless properly withdrawn previously in
accordance with the terms of the Offer) at more than one price. IN ORDER TO
PROPERLY TENDER SHARES, ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN THE
APPROPRIATE SECTION ON EACH LETTER OF TRANSMITTAL.
In addition, Odd Lot Holders who tender all such Shares must complete the
box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Holders as set forth in Section 1.
SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee is
required (i) if the Letter of Transmittal is signed by the registered holder of
the Shares (which term, for purposes of this Section 3, shall include any
participant in The Depository Trust Company, Midwest Securities Trust Company or
Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities") whose name appears on a security position listing as the owner of
the Shares) tendered therewith and such holder has not completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal; or (ii) if Shares are tendered for
the account of a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company (not a savings bank or a savings and loan association)
having an office, branch or agency in the United States (each such entity being
hereinafter referred to as an "Eligible Institution"). See Instruction 1 of the
Letter of Transmittal. If a certificate for Shares is registered in the name of
a person other than the person executing a Letter of Transmittal, or if payment
is to be made, or Shares not purchased or tendered are to be issued, to a person
other than the registered holder, then the certificate must be endorsed or
accompanied by an appropriate stock power, in either case, signed exactly as the
name of the registered holder appears on the certificate, or stock power
guaranteed by an Eligible Institution.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at a Book-Entry Transfer Facility
as described above), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal. THE METHOD OF DELIVERY OF ALL DOCUMENTS,
INCLUDING CERTIFICATES FOR SHARES, THE LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. IF
DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED.
BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect
to the Shares for purposes of the Offer at each Book-Entry Transfer Facility
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry delivery of the Shares by causing such facility to
transfer Shares into the Depositary's account in accordance with the Book-Entry
Transfer Facility's procedures for transfer. Although delivery of Shares may be
effected through a book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility, either (i) a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) with any required
signature guarantees and any other required documents must, in any case, be
transmitted to and received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date, or
(ii) the guaranteed delivery procedure described below must be followed.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACKUP FEDERAL INCOME TAX
WITHHOLDING EQUAL TO 31% OF THE GROSS PAYMENTS MADE TO SHAREHOLDERS FOR SHARES
PURCHASED PURSUANT TO THE OFFER, EACH SHAREHOLDER WHO DOES NOT OTHERWISE
ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH
THE SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN
OTHER INFORMATION BY COMPLETING THE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL. Foreign shareholders may be required to submit Form W-8, certifying
non-United States status, to avoid backup withholding. See Instructions 14 and
15 of
5
the Letter of Transmittal. For a discussion of certain federal income tax
consequences to tendering shareholders, see Section 14.
WITHHOLDING FOR FOREIGN SHAREHOLDERS. Even if a foreign shareholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold federal income taxes equal to 30% of the gross payments payable to
a foreign shareholder or his agent unless the Depositary determines that an
exemption from or a reduced rate of withholding is available pursuant to a tax
treaty or an exemption from withholding is applicable because such gross
proceeds are effectively connected with the conduct of a trade or business in
the United States. In order to obtain an exemption from or a reduced rate of
withholding pursuant to a tax treaty, a foreign shareholder must deliver to the
Depositary a properly completed Form 1001. For this purpose, a foreign
shareholder is a shareholder that is not (i) a citizen or resident of United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States, any State or any political subdivision
thereof or (iii) any estate or trust the income of which is subject to United
States federal income taxation regardless of the source of such income. In order
to obtain an exemption from withholding on the grounds that the gross proceeds
paid pursuant to the Offer are effectively connected with the conduct of a trade
or business within the United States, a foreign shareholder must deliver to the
Depositary a properly completed Form 4224. The Depositary will determine a
shareholder's status as a foreign shareholder and eligibility for a reduced rate
of, or an exemption from, withholding by reference to any outstanding
certificates or statements concerning eligibility for a reduced rate of, or
exemption from, withholding (E.G., Form 1001 or Form 4224) unless facts and
circumstances indicate that such reliance is not warranted. A foreign
shareholder may be eligible to obtain a refund of all or a portion of any tax
withheld if such shareholder meets one of the three tests for sale treatment
described in Section 14 or is otherwise able to establish that no tax or a
reduced amount of tax is due. Backup withholding generally will not apply to
amounts subject to the 30% or treaty-reduced rate of withholding.
GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share certificates cannot be delivered to the
Depositary prior to the Expiration Date (or the procedures 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, such
Shares may nevertheless be tendered, provided that all of the following
conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives by hand, mail, telegram or facsimile
transmission, prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery substantially in the form
the Company has provided with this Offer to Purchase (specifying the
price at which the Shares are being tendered), including (where
required) a signature guarantee by an Eligible Institution; and
(c) the certificates for all tendered Shares, in proper form for transfer
(or confirmation of book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) and any required
signature guarantees or other documents required by the Letter of
Transmittal, are received by the Depositary within five NYSE trading
days after the date of receipt by the Depositary of such Notice of
Guaranteed Delivery.
If any tendered Shares are not purchased, or if less than all Shares
evidenced by a shareholder's certificates are tendered, certificates for
unpurchased Shares will be returned as promptly as practicable after the
expiration or termination of the Offer or, in the case of Shares tendered by
book-entry transfer at a Book-Entry Transfer Facility, such Shares will be
credited to the appropriate account maintained by the tendering shareholder at
the appropriate Book-Entry Transfer Facility, in each case without expense to
such shareholder.
DIVIDEND REINVESTMENT PLAN. A shareholder participating in the Dividend
Reinvestment Plan who wishes to have American Stock Transfer & Trust Company,
who administers the Dividend Reinvestment Plan, tender Shares held in such
participant's account in the Dividend Reinvestment Plan should so indicate by
completing the separate election form included with the memorandum furnished to
such participants. THE PARTICIPANTS IN THE DIVIDEND REINVESTMENT PLAN MAY NOT
USE THE LETTER OF TRANSMITTAL TO DIRECT THE TENDER OF DIVIDEND REINVESTMENT PLAN
SHARES, BUT MUST USE THE SEPARATE ELECTION FORM ENCLOSED WITH THE MEMORANDUM TO
PARTICIPANTS IN THE TREDEGAR INDUSTRIES, INC. DIVIDEND REINVESTMENT AND STOCK
PURCHASE PLAN. DIVIDEND REINVESTMENT
6
PLAN PARTICIPANTS ARE URGED TO READ THE SEPARATE INSTRUCTION FORM AND RELATED
MATERIALS CAREFULLY. ANY DIVIDEND REINVESTMENT PLAN SHARES TENDERED BUT NOT
PURCHASED WILL BE RETURNED TO THE PARTICIPANT'S DIVIDEND REINVESTMENT PLAN
ACCOUNT.
If a participant tenders all of his or her Dividend Reinvestment Plan
Shares and all such Shares are purchased by the Company pursuant to the Offer,
such tender will be deemed to be authorization and written notice to American
Stock Transfer & Trust Company of termination of such shareholder's
participation in the Dividend Reinvestment Plan.
SAVINGS PLAN. Participants in the Savings Plan who wish to have the Savings
Plan Trustee tender all or part of the Shares allocated to their accounts should
so indicate by completing, executing and returning to the Savings Plan Trustee
the election form included with the memorandum furnished to such participants.
THE PARTICIPANTS IN THE SAVINGS PLAN MAY NOT USE THE LETTER OF TRANSMITTAL TO
DIRECT THE TENDER OF THE SAVINGS PLAN SHARES, BUT MUST USE THE SEPARATE ELECTION
FORM ENCLOSED WITH THE MEMORANDUM TO PARTICIPANTS IN THE SAVINGS PLAN FOR THE
EMPLOYEES OF TREDEGAR INDUSTRIES, INC. SAVINGS PLAN PARTICIPANTS ARE URGED TO
READ THE SEPARATE INSTRUCTION FORM AND RELATED MATERIALS CAREFULLY. ANY SAVINGS
PLAN SHARES TENDERED BUT NOT PURCHASED WILL BE RETURNED TO THE PARTICIPANT'S
SAVINGS PLAN ACCOUNT.
STOCK PURCHASE PLAN. Participants in the Stock Purchase Plan who wish to
have the Stock Purchase Plan Custodian thereof tender all or part of the vested
Shares allocated to their accounts should so indicate by completing, executing
and returning to the Stock Purchase Plan Custodian the election form included
with the memorandum furnished to such participants. THE PARTICIPANTS IN THE
STOCK PURCHASE PLAN MAY NOT USE THE LETTER OF TRANSMITTAL TO DIRECT THE TENDER
OF THE STOCK PURCHASE PLAN SHARES, BUT MUST USE THE SEPARATE ELECTION FORM
ENCLOSED WITH THE MEMORANDUM TO PARTICIPANTS IN THE TREDEGAR INDUSTRIES, INC.
EMPLOYEE STOCK PURCHASE PLAN. STOCK PURCHASE PLAN PARTICIPANTS ARE URGED TO READ
THE SEPARATE INSTRUCTION FORM AND RELATED MATERIALS CAREFULLY. ANY STOCK
PURCHASE PLAN SHARES TENDERED BUT NOT PURCHASED WILL BE RETURNED TO THE
PARTICIPANT'S STOCK PURCHASE PLAN ACCOUNT.
DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of Shares
to be accepted, the price to be paid for Shares to be accepted and the validity,
form, eligibility (including time of receipt) and acceptance of any tender of
Shares will be determined by the Company, in its sole discretion, and its
determination shall be final and binding on all parties. The Company 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 be unlawful. The Company also reserves the absolute right to waive any
of the conditions of the Offer or any defect or irregularity in any tender with
respect to any particular Shares or any particular shareholder. No tender of
Shares will be deemed to have been properly made until all defects or
irregularities have been cured by the tendering shareholder or waived by the
Company. None of the Company, the Dealer Managers, the Depositary, the
Information Agent or any other person shall be obligated to give notice of any
defects or irregularities in tenders, nor shall any of them incur any liability
for failure to give any such notice.
TENDERING SHAREHOLDER'S REPRESENTATION AND WARRANTY; COMPANY'S ACCEPTANCE
CONSTITUTES AN AGREEMENT. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering shareholder's acceptance of the
terms and conditions of the Offer, as well as the tendering shareholder's
representation and warranty to the Company that (a) such shareholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated by the Commission under the Exchange Act and (b) the tender of such
Shares complies with Rule 14e-4. It is a violation of Rule 14e-4 for a person,
directly or indirectly, to tender Shares for such person's own account unless,
at the time of tender and at the end of the proration period or period during
which Shares are accepted by lot (including any extensions thereof), the person
so tendering (i) has a net long position equal to or greater than the amount of
(x) Shares tendered or (y) other securities convertible into or exchangeable or
exercisable for the Shares tendered and will acquire such Shares for tender by
conversion, exchange or exercise and (ii) will deliver or cause to be delivered
such Shares in accordance with the terms of the Offer. Rule 14e-4 provides a
similar restriction applicable to the tender or guarantee of a tender on behalf
of another person. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
shareholder and the Company upon the terms and conditions of the Offer.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time prior to the Expiration Date
and, unless theretofore accepted for payment by the Company pursuant to the
Offer, may also be withdrawn at any time after 12:00 Midnight, New York City
time, on Wednesday, November 2, 1994.
7
For a withdrawal to be effective, a notice of withdrawal must be in
written, telegraphic or facsimile transmission form and must be received in a
timely manner by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase. Any such notice of withdrawal must specify the
name of the tendering shareholder, the name of the registered holder, if
different from that of the person who tendered such Shares, the number of Shares
tendered and the number of Shares to be withdrawn. If the certificates for
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the release of such certificates, the tendering
shareholder must also submit the serial numbers shown on the particular
certificates for Shares to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution (except in the case of
Shares tendered by an Eligible Institution). If Shares have been tendered
pursuant to the procedure for book-entry tender set forth in Section 3, the
notice of withdrawal also must specify the name and the number of the account at
the applicable Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with the procedures of such facility. None of the
Company, the Dealer Managers, the Depositary, the Information Agent or any other
person shall be obligated to give notice of any defects or irregularities in any
notice of withdrawal nor shall any of them incur liability for failure to give
any such notice. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding.
Withdrawals may not be rescinded and any Shares withdrawn will thereafter
be deemed not properly tendered for purposes of the Offer unless such withdrawn
Shares are properly retendered prior to the Expiration Date by again following
one of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain tendered Shares on behalf of the Company, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE. Upon the terms and
subject to the conditions of the Offer, as promptly as practicable following the
Expiration Date, the Company (i) will determine the Purchase Price it will pay
for the Shares properly tendered and not withdrawn prior to the Expiration Date,
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders, and (ii) will accept for payment and pay for (and
thereby purchase) Shares properly tendered at prices at or below the Purchase
Price and not withdrawn prior to the Expiration Date. For purposes of the Offer,
the Company will be deemed to have accepted for payment (and therefore
purchased) Shares that are tendered at or below the Purchase Price and not
withdrawn (subject to the proration and conditional tender provisions of the
Offer) only when, as and if it gives oral or written notice to the Depositary of
its acceptance of such Shares for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date the Company will accept for payment and pay a
single per Share Purchase Price for 1,000,000 Shares (subject to increase or
decrease as provided in Section 15) or such lesser number of Shares as are
properly tendered at prices not in excess of $19.00 nor less than $17.00 per
Share and not withdrawn as permitted in Section 4.
The Company will pay for Shares purchased pursuant to the Offer by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering shareholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering shareholders.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any proration and commence payment for Shares
purchased until approximately seven NYSE trading days after the Expiration Date.
Certificates for all Shares tendered and not purchased, including all Shares
tendered at prices in excess of the Purchase Price and Shares not purchased due
to proration or conditional tender, will be returned (or, in the case of Shares
tendered by book-entry transfer, such Shares will be credited to the account
maintained with the Book-Entry Transfer Facility by the participant therein who
so delivered such Shares) to the tendering shareholder at the Company's expense
as promptly as practicable after the Expiration Date without expense to the
tendering shareholders. Under no circumstances will interest on the Purchase
Price be paid by the Company by reason of any delay in making payment. In
addition, if certain events occur, the Company may not be obligated to purchase
Shares pursuant to the Offer. See Section 7.
8
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
of the Purchase Price is to be made to, or (in the circumstances permitted by
the Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or such other person), payable on account of the transfer to
such person will be deducted from the Purchase Price unless satisfactory
evidence of the payment of the stock transfer taxes, or exemption therefrom, is
submitted. See Instruction 7 of the Letter of Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING OF
31% OF THE GROSS PROCEEDS PAID TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER. SEE SECTION 3. ALSO SEE SECTION 3 REGARDING FEDERAL INCOME TAX
CONSEQUENCES FOR FOREIGN SHAREHOLDERS.
6. CONDITIONAL TENDER OF SHARES. Under certain circumstances set forth in
Section 1 above, the Company may prorate the number of Shares purchased pursuant
to the Offer. As discussed in Section 14, the number of Shares to be purchased
from a particular shareholder might affect the tax consequences to such
shareholder of such purchase and such shareholder's decision whether to tender.
Accordingly, a shareholder may tender Shares subject to the condition that a
specified minimum number, if any, must be purchased, and any shareholder wishing
to make such a conditional tender should so indicate in the box captioned
"Conditional Tender" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery. It is the tendering shareholder's responsibility
to calculate such minimum number of Shares and each shareholder is urged to
consult his or her own tax advisor. If the effect of accepting tenders on a PRO
RATA basis is to reduce the number of Shares to be purchased from any
shareholder below the minimum number so specified, such tender will
automatically be deemed withdrawn, except as provided in the next paragraph, and
Shares tendered by such shareholder will be returned as soon as practicable
after the Expiration Date.
However, if so many conditional tenders would be deemed withdrawn that the
total number of Shares to be purchased falls below 1,000,000 Shares, then to the
extent feasible, the Company will select enough of such conditional tenders,
which would otherwise have been deemed withdrawn, to purchase such desired
number of Shares. In selecting among such conditional tenders, the Company will
select by random lot and will limit its purchase in each case to the designated
minimum number of Shares to be purchased.
7. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of
the Offer, the Company shall not be required to accept for payment, purchase or
pay for any Shares tendered, and may terminate or amend the Offer or may
postpone the acceptance for payment of, or the purchase of and the payment for
Shares tendered, subject to Rule 13e-4(f) under the Exchange Act, if at any time
on or after September 8, 1994 and prior to the time of payment for any such
Shares (whether any Shares have theretofore been accepted for payment, purchased
or paid for pursuant to the Offer) any of the following events shall have
occurred (or shall have been determined by the Company to have occurred) that,
in the Company's sole judgment in any such case and regardless of the
circumstances giving rise thereto (including any action or omission to act by
the Company), makes it inadvisable to proceed with the Offer or with such
acceptance for payment or payment:
(a) there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person,
domestic or foreign, before any court, authority, agency or tribunal
that directly or indirectly (i) challenges the making of the Offer, the
acquisition of some or all of the Shares pursuant to the Offer or
otherwise relates in any manner to the Offer, or (ii) in the Company's
sole judgment, could materially and adversely affect the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the business of
the Company or any of its subsidiaries or materially impair the
contemplated benefits of the Offer to the Company;
9
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the
Company or any of its subsidiaries, by any court or any authority,
agency or tribunal that, in the Company's sole judgment, would or might
directly or indirectly (i) make the acceptance for payment of, or
payment for, some or all of the Shares illegal or otherwise restrict or
prohibit consummation of the Offer; (ii) delay or restrict the ability
of the Company, or render the Company unable, to accept for payment or
pay for some or all of the Shares; (iii) materially impair the
contemplated benefits of the Offer to the Company; or (iv) materially
and adversely affect the business, condition (financial or other),
income, operations or prospects of the Company and its subsidiaries,
taken as a whole, or otherwise materially impair in any way the
contemplated future conduct of the business of the Company or any of
its subsidiaries;
(c) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities
exchange or in the over-the-counter market; (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in
the United States; (iii) the commencement of a war, armed hostilities
or other international or national calamity directly or indirectly
involving the United States; (iv) any limitation (whether or not
mandatory) by any governmental, regulatory or administrative agency or
authority on, or any event that, in the Company's sole judgment, might
affect, the extension of credit by banks or other lending institutions
in the United States; (v) any significant decrease in the market price
of the Shares or any change in the general political, market, economic
or financial conditions in the United States or abroad that could, in
the sole judgment of the Company, have a material adverse effect on the
Company's business, operations or prospects or the trading in the
Shares; (vi) in the case of any of the foregoing existing at the time
of the commencement of the Offer, a material acceleration or worsening
thereof; or (vii) any decline in either the Dow Jones Industrial
Average or the Standard and Poor's Index of 500 Industrial Companies by
an amount in excess of 10 percent measured from the close of business
on September 7, 1994;
(d) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger or acquisition proposal for the
Company, shall have been proposed, announced or made by another person
or shall have been publicly disclosed, or the Company shall have
learned that (i) any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act), other than the Savings Plan, Gabelli
Funds, Inc. and Mario J. Gabelli (and the other reporting entities
named in their Schedule 13D dated July 12, 1994), or members of the
Gottwald family (see Section 11), shall have acquired or proposed to
acquire beneficial ownership of more than five percent of the
outstanding Shares, or any new group shall have been formed that
beneficially owns more than five percent of the outstanding Shares; or
(e) any change or changes shall have occurred in the business, financial
condition, assets, income, operations, prospects or stock ownership of
the Company or its subsidiaries that, in the Company's sole judgment,
is or may be material to the Company or its subsidiaries.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and may be waived by
the Company, in whole or in part, at any time and from time to time in its sole
discretion. The Company's failure at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by the Company concerning the events described above
will be final and binding.
10
8. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and traded on
the NYSE. The following table sets forth, for the periods indicated, the high
and low closing per Share sales prices on the NYSE Composite Tape as compiled
from published financial sources and the cash dividends paid per Share in each
such fiscal quarter:
FISCAL YEAR HIGH LOW DIVIDENDS
1992:
1st Quarter............................................... $ 14 1/2 $ 10 $.06
2nd Quarter............................................... 18 1/4 13 3/8 .06
3rd Quarter............................................... 18 5/8 13 5/8 .06
4th Quarter............................................... 16 3/4 13 1/2 .06
1993:
1st Quarter............................................... 18 15 .06
2nd Quarter............................................... 16 3/8 13 .06
3rd Quarter............................................... 13 7/8 12 1/2 .06
4th Quarter............................................... 15 3/8 12 7/8 .06
1994:
1st Quarter............................................... 15 7/8 14 1/8 .06
2nd Quarter............................................... 15 3/8 14 .06
3rd Quarter (through September 7, 1994)................... 18 3/8 14 3/4 .06
On August 29, 1994, the last full trading day on the NYSE prior to the
announcement of the Offer, the closing per Share sales price on the NYSE
Composite Tape was $16.375. On September 7, 1994, the last full trading day on
the NYSE prior to the commencement of the Offer, the closing per Share sales
price on the NYSE Composite Tape was $18.375. SHAREHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.
On July 27, 1994, the Board of Directors declared the fourth quarter
regular dividend of $.06 per Share to be paid on October 1, 1994 to shareholders
of record on September 16, 1994. Shareholders of record on September 16, 1994
will receive such dividend notwithstanding any tender of Shares by them pursuant
to the Offer. All decisions with respect to the payment of future dividends will
be made by the Board of Directors based upon the Company's earnings, financial
condition, anticipated cash needs and such other considerations as the Board of
Directors deems relevant.
9. SOURCE AND AMOUNT OF FUNDS. Assuming that the Company purchases
1,000,000 Shares pursuant to the Offer at a price not in excess of $19.00 nor
less than $17.00 per Share, the cost to the Company (including all fees and
expenses relating to the Offer) is estimated to be between $17,330,000 and
$19,330,000. The Company will use part of the proceeds from the disposition of
its interest in its 97% owned coal subsidiary, The Elk Horn Coal Corporation
("Elk Horn"), on August 16, 1994 and the Company's other excess cash balances to
fund the purchase of the Shares tendered pursuant to the Offer. See Section 10,
"Certain Information Concerning the Company -- Recent Events."
10. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL
The Company was formed under the laws of the Commonwealth of Virginia as a
wholly owned subsidiary of Ethyl Corporation ("Ethyl") on June 1, 1988. On July
10, 1989, Ethyl distributed all of the outstanding common stock of the Company
to Ethyl's shareholders. Since July 10, 1989, the Company has been a publicly
held operating company. The Company is engaged directly or through subsidiaries
in plastics, metal products and technology businesses. Additional information
concerning the Company is contained in the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1994, the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1994, as amended, and the Company's
Current Report on Form 8-K filed on August 31, 1994, copies of which can be
obtained from the Company upon request. See " -- Additional Information".
RECENT EVENTS
On July 13, 1994, the Company announced its second-quarter and year-to-date
results from continuing operations. Second-quarter sales increased 14% to $122.9
million. Net income (excluding special items) was 29 cents per share, up from 2
cents in last year's second quarter. Year-to-date sales increased 11% to $243.9
million. Year-to-date net income (excluding special items) was 52 cents per
share, up from 9 cents in 1993. The favorable results were driven by strong
performances in the Company's core Plastics and Metal Products segments,
partially offset by continued losses in its Technology segment (formerly
referred to as the "Other segment").
11
In August, the Company established two new revolving credit facilities that
in the aggregate permit the Company to borrow up to $235 million. In connection
with the new facilities, the Company terminated a $180 million credit agreement
(from which no amounts had been borrowed) and repaid a $35 million variable-rate
term loan. See note (1f) to "Notes to Pro Forma Financial Information" below.
On August 26, 1994, the Company announced that, in the third quarter of
1994, it will record an after-tax charge of $1.3 million or 12 cents per share
for costs related to the shut down of Tredegar Molded Products Company's
("Molded Products") Alsip, Illinois plant. Also in the third quarter of 1994,
the Company will take an after-tax charge of $3.1 million or 29 cents per share
associated with the write-off of goodwill resulting from disappointing
performance in certain lines of Molded Products' business.
Based upon management's estimates, the Company's 1994 results should
continue to compare favorably with 1993 results. However, second-quarter and
year-to-date results are not necessarily indicative of future performance.
During 1994, the Company purchased a total of 309,608 Shares for $4.4
million. The Company has made no purchase of Shares since July 20, 1994.
On August 16, 1994, Elk Horn, the Company's 97% owned coal subsidiary, was
acquired by Pen Holdings, Inc., for an aggregate consideration of approximately
$71 million. The Company realized an after-tax gain of approximately $26 million
or $2.43 per share on the divestiture. After-tax proceeds from the sale totalled
approximately $50 million. Of this amount, $35 million was used to reduce the
Company's outstanding debt. The balance of approximately $15 million has been
invested in short-term securities and will be available to be used to make Share
repurchases related to the Offer. See "Selected Historical and Pro Forma
Financial Information" included in this Offer to Purchase.
CERTAIN FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
The following financial highlights is a summary of selected items from the
"Selected Historical and Pro Forma Financial Information" and should be read in
conjunction with, and not as a substitute for, the more detailed "Selected
Historical and Pro Forma Financial Information":
(IN THOUSANDS EXCEPT PER-SHARE AMOUNTS)
FOR THE
FOR THE SIX MONTHS FOR THE TWELVE YEAR
ENDED MONTHS ENDED ENDED
6/30/94 6/30/93 6/30/94 12/31/93
Net sales from continuing operations $243,907 $219,240 $473,875 $449,208
Income (loss) from continuing operations (a):
Historical (2,019) 2,384 (680) 3,723
Pro forma for disposition of interests in Energy
Businesses and Offer at $19.00 (1,658) 2,754 51 4,463
Earnings (loss) per share from continuing operations (a):
Historical (.19) .22 (.06) .34
Pro forma for disposition of interests in Energy
Businesses and Offer at $19.00 (.17) .28 .01 .45
(a) Income (loss) and earnings (loss) per share from continuing operations,
adjusted for special items affecting the comparability of operating results
among periods and pro forma interest income, are presented below (see notes
(1e) and (2a) of "Notes to Pro Forma Financial Information"):
(IN THOUSANDS EXCEPT PER-SHARE AMOUNTS)
FOR THE
FOR THE SIX MONTHS FOR THE TWELVE YEAR
ENDED MONTHS ENDED ENDED
6/30/94 6/30/93 6/30/94 12/31/93
Income (loss) from continuing operations adjusted for special
items:
Historical $ 5,623 $ 974 $ 8,966 $ 4,317
Pro forma for disposition of interests in Energy
Businesses, Offer at $19.00, and interest income 5,984 1,344 9,696 5,057
Earnings (loss) per share from continuing operations
adjusted for special items:
Historical .52 .09 .83 .40
Pro forma for disposition of interests in Energy
Businesses, Offer at $19.00, and interest income .61 .14 .98 .51
12
SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
Set forth below is certain selected historical and pro forma consolidated
financial information with respect to the Company. Historical financial
information was excerpted or derived from the audited financial statements
contained in the Company's 1993 Annual Report on Form 10-K and from the
unaudited financial statements contained in the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1994, as amended. The historical
information below is qualified in its entirety by reference to such reports
(which may be inspected or obtained at the offices of the Commission in the
manner set forth in " -- Additional Information" below) and the financial
information and related notes contained therein.
On February 4, 1994, the Company sold its remaining oil and gas properties
and on August 16, 1994, the Company disposed of its interest in Elk Horn
(collectively referred to hereinafter as the "Energy Businesses"). The Energy
Businesses have been previously reported in the Company's historical financial
statements as discontinued operations.
The pro forma information on the financial position of the Company as of
June 30, 1994 and December 31, 1993, and the pro forma information on the
results of continuing operations for the Company for the six months ended June
30, 1994 and 1993, the twelve months ended June 30, 1994, and the year ended
December 31, 1993, are presented for the divestiture of the Energy Businesses
and the Offer.
The pro forma information on the Company's financial position for the
divestiture of the Energy Businesses assumes that the Company on that date
disposed of its interests in the Energy Businesses, repaid certain borrowings,
obtained new revolving credit facilities, and invested remaining funds in cash
equivalents. The pro forma information on the Company's financial position for
the Offer assumes that the Company on that date disposed of its interests in the
Energy Businesses, repaid certain borrowings, obtained new revolving credit
facilities, and used remaining funds and, if necessary, borrowed funds under the
new revolving credit facilities, to purchase 1,000,000 Shares pursuant to the
Offer at prices of $17.00 and $19.00.
The pro forma information on the Company's results of continuing operations
for the divestiture of the Energy Businesses assumes that at the beginning of
each period shown, the Company disposed of its interests in the Energy
Businesses, repaid certain borrowings and obtained new revolving credit
facilities. The pro forma information on the Company's results of continuing
operations for the Offer assumes that at the beginning of each period shown, the
Company disposed of its interests in the Energy Businesses, repaid certain
borrowings, obtained new revolving credit facilities and used remaining funds
and, if necessary, borrowed funds under the new revolving credit facilities, to
purchase 1,000,000 Shares pursuant to the Offer at prices of $17.00 and $19.00.
In accordance with Commission rules and regulations, no pro forma interest
income is recognized in the pro forma results of continuing operations for any
funds assumed invested in cash equivalents or other marketable securities.
The pro forma financial information of the Company is unaudited and does
not purport to be indicative of the future results or the financial position of
the Company or the net income and financial position that would actually have
been attained had the pro forma transactions occurred on the dates or for the
periods indicated. See notes (1e) and (2a) of the "Notes to Pro Forma Financial
Information" for income and earnings per share from continuing operations
adjusted for special items affecting the comparability of operating results
among periods and pro forma interest income.
13
TREDEGAR INDUSTRIES, INC.
SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER-SHARE AMOUNTS AND RATIOS)
FOR THE SIX MONTHS
ENDED JUNE 30, 1993
PRO
FORMA
FOR THE SIX MONTHS ENDED JUNE 30, 1994 FOR
PRO FORMA DISPOSAL
PRO FORMA FOR FOR DISPOSAL OF
DISPOSAL OF OF ENERGY ENERGY
ENERGY BUSINESSES BUSINESSES
BUSINESSES (1A) AND OFFER (2A) (1A)
PRO $17.00/SH. $19.00/SH. PRO
FORMA PRO PURCHASE PURCHASE FORMA
HISTORICAL ADJUST. FORMA PRICE PRICE HISTORICAL ADJUST.
RESULTS OF CONTINUING
OPERATIONS:
Net sales $243,907 $243,907 $243,907 $243,907 $219,240
Other (expense)
income, net (71) $ (209)(1b) (280) (280) (280) (462) $ (209)(1b)
243,836 (209) 243,627 243,627 243,627 218,778 (209)
Cost of goods sold 204,934 204,934 204,934 204,934 185,482
Selling, general &
administrative
expenses 23,554 23,554 23,554 23,554 24,706
Research &
development expenses 3,766 3,766 3,766 3,766 4,175
Interest expense 2,343 (825)(1c) 1,518 1,518 1,542 2,555 (926)(1c)
Unusual items
(1e)(2a) 9,521 9,521 9,521 9,521 (2,263)
244,118 (825) 243,293 243,293 243,317 214,655 (926)
Income (loss) from
continuing
operations before
income taxes (282) 616 334 334 310 4,123 717
Income taxes (1e)(2a) 1,737 240(1d) 1,977 1,977 1,968 1,739 280(1d)
Income (loss) from
continuing
operations (1e)(2a) $ (2,019) $ 376 $ (1,643) $ (1,643) $ (1,658) $ 2,384 $ 437
Earnings (loss) per
share from
continuing
operations (1e)(2a) $ (.19) $ .04 $ (.15) $ (.17) $ (.17) $ .22 $ .04
Shares used to
compute earnings
(loss) per share 10,808 10,808 10,808 9,808 9,808 10,895 10,895
Ratio of earnings to
fixed charges (2c) .9x 1.2x 1.2x 1.2x 2.3x
PRO FORMA
FOR DISPOSAL
OF ENERGY
BUSINESSES
AND OFFER (2A)
$17.00/SH. $19.00/SH.
PRO PURCHASE PURCHASE
FORMA PRICE PRICE
RESULTS OF CONTINUING
OPERATIONS:
Net sales $219,240 $219,240 $219,240
Other (expense)
income, net (671) (671) (671)
218,569 218,569 218,569
Cost of goods sold 185,482 185,482 185,482
Selling, general &
administrative
expenses 24,706 24,706 24,706
Research &
development expenses 4,175 4,175 4,175
Interest expense 1,629 1,703 1,739
Unusual items
(1e)(2a) (2,263) (2,263) (2,263)
213,729 213,803 213,839
Income (loss) from
continuing
operations before
income taxes 4,840 4,766 4,730
Income taxes (1e)(2a) 2,019 1,990 1,976
Income (loss) from
continuing
operations (1e)(2a) $ 2,821 $ 2,776 $ 2,754
Earnings (loss) per
share from
continuing
operations (1e)(2a) $ .26 $ .28 $ .28
Shares used to
compute earnings
(loss) per share 10,895 9,895 9,895
Ratio of earnings to
fixed charges (2c) 3.1x 3.0x 3.0x
See accompanying notes to pro forma financial information.
14
TREDEGAR INDUSTRIES, INC.
SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER-SHARE AMOUNTS AND RATIOS)
AS OF AND FOR THE YEAR
ENDED DECEMBER 31, 1993
PRO
FORMA
AS OF AND FOR THE TWELVE MONTHS ENDED JUNE 30, 1994 FOR
PRO FORMA DISPOSAL
PRO FORMA FOR FOR DISPOSAL OF
DISPOSAL OF OF ENERGY ENERGY
ENERGY BUSINESSES BUSINESSES
BUSINESSES (1A) AND OFFER (2A)(2B) (1A)
PRO $17.00/SH. $19.00/SH. PRO
FORMA PRO PURCHASE PURCHASE FORMA
HISTORICAL ADJUST. FORMA PRICE PRICE HISTORICAL ADJUST.
RESULTS OF CONTINUING
OPERATIONS:
Net sales $473,875 $473,875 $473,875 $473,875 $449,208
Other (expense)
income, net 4 $ (418)(1b) (414) (414) (414) (387) $ (418)(1b)
473,879 (418) 473,461 473,461 473,461 448,821 (418)
Cost of goods sold 398,738 398,738 398,738 398,738 379,286
Selling, general &
administrative
expenses 46,821 46,821 46,821 46,821 47,973
Research &
development expenses 8,732 8,732 8,732 8,732 9,141
Interest expense 4,832 (1,816)(1c) 3,016 3,157 3,216 5,044 (1,917)(1c)
Unusual items
(1e)(2a) 12,236 12,236 12,236 12,236 452
471,359 (1,816) 469,543 469,684 469,743 441,896 (1,917)
Income from
continuing
operations before
income taxes 2,520 1,398 3,918 3,777 3,718 6,925 1,499
Income taxes (1e)(2a) 3,200 545(1d) 3,745 3,690 3,667 3,202 585(1d)
Income (loss) from
continuing
operations (1e)(2a) $ (680) $ 853 $ 173 $ 87 $ 51 $ 3,723 $ 914
Earnings (loss) per
share from
continuing
operations (1e)(2a) $ (.06) $ .08 $ .02 $ .01 $ .01 $ .34 $ .09
Shares used to
compute earnings
(loss) per share 10,852 10,852 10,852 9,852 9,852 10,895 10,895
Ratio of earnings to
fixed charges (2c) 1.5x 2.0x 1.9x 1.9x 2.1x
FINANCIAL POSITION:
Assets:
Cash and cash
equivalents $ 4,608 $ 17,550(1f) $ 22,158 $ 4,828 $ 2,828 $ -- $ 11,008(1f)
Other current assets 117,733 117,733 117,733 117,733 116,820
Property, plant &
equipment, net 129,468 129,468 129,468 129,468 135,402
Other assets &
deferred charges 26,162 150(1f) 26,312 26,312 26,312 24,456 150(1f)
Goodwill and other
intangibles 35,950 35,950 35,950 35,950 45,729
Net assets of
discontinued
operations 21,983 (21,983)(1g) 30,976 (30,976)(1g)
Total assets $335,904 $ (4,283) $331,621 $314,291 $312,291 $353,383 $(19,818)
Liabilities and
shareholders'
equity:
Total current
liabilities $ 64,332 $ 64,332 $ 64,332 $ 64,332 $ 54,756
Long-term debt 70,500 $(35,000)(1f) 35,500 35,500 35,500 97,000 $(61,000)(1f)
Deferred income
taxes 19,071 (2,230)(1b) 16,841 16,841 16,841 23,108 (2,230)(1b)
Other noncurrent
liabilities 9,692 6,194(1b) 15,886 15,886 15,886 9,431 6,194(1b)
Shareholders' equity 172,309 26,753(1h) 199,062 181,732 179,732 169,088 37,218(1h)
Total liabilities
and
shareholders'
equity $335,904 $ (4,283) $331,621 $314,291 $312,291 $353,383 $(19,818)
Ending shares
outstanding 10,594 10,594 9,594 9,594 10,895
Book value per share $ 16.26 $ 18.79 $ 18.94 $ 18.73 $ 15.52
Working capital
excluding cash and
cash equivalents $ 53,401 $ 53,401 $ 53,401 $ 53,401 $ 62,064
Net debt (debt less
cash and cash
equivalents) $ 65,892 $ 13,342 $ 30,672 $ 32,672 $ 97,000
Debt as a % of total
capitalization 29.0% 15.1% 16.3% 16.5% 36.5%
Net debt as a % of
net capitalization 27.7% 6.3% 14.4% 15.4% 36.5%
PRO FORMA
FOR DISPOSAL
OF ENERGY
BUSINESSES
AND OFFER (2A)(2B)
$17.00/SH. $19.00/SH.
PRO PURCHASE PURCHASE
FORMA PRICE PRICE
RESULTS OF CONTINUING
OPERATIONS:
Net sales $449,208 $449,208 $449,208
Other (expense)
income, net (805) (805) (805)
448,403 448,403 448,403
Cost of goods sold 379,286 379,286 379,286
Selling, general &
administrative
expenses 47,973 47,973 47,973
Research &
development expenses 9,141 9,141 9,141
Interest expense 3,127 3,342 3,413
Unusual items
(1e)(2a) 452 452 452
439,979 440,194 440,265
Income from
continuing
operations before
income taxes 8,424 8,209 8,138
Income taxes (1e)(2a) 3,787 3,703 3,675
Income (loss) from
continuing
operations (1e)(2a) $ 4,637 $ 4,506 $ 4,463
Earnings (loss) per
share from
continuing
operations (1e)(2a) $ .43 $ .46 $ .45
Shares used to
compute earnings
(loss) per share 10,895 9,895 9,895
Ratio of earnings to
fixed charges (2c) 2.9x 2.8x 2.8x
FINANCIAL POSITION:
Assets:
Cash and cash
equivalents $ 11,008 $ -- $ --
Other current assets 116,820 116,820 116,820
Property, plant &
equipment, net 135,402 135,402 135,402
Other assets &
deferred charges 24,606 24,606 24,606
Goodwill and other
intangibles 45,729 45,729 45,729
Net assets of
discontinued
operations
Total assets $333,565 $322,557 $322,557
Liabilities and
shareholders'
equity:
Total current
liabilities $ 54,756 $ 54,756 $ 54,756
Long-term debt 36,000 42,322 44,322
Deferred income
taxes 20,878 20,878 20,878
Other noncurrent
liabilities 15,625 15,625 15,625
Shareholders' equity 206,306 188,976 186,976
Total liabilities
and
shareholders'
equity $333,565 $322,557 $322,557
Ending shares
outstanding 10,895 9,895 9,895
Book value per share $ 18.94 $ 19.10 $ 18.90
Working capital
excluding cash and
cash equivalents $ 62,064 $ 62,064 $ 62,064
Net debt (debt less
cash and cash
equivalents) $ 24,992 $ 42,322 $ 44,322
Debt as a % of total
capitalization 14.9% 18.3% 19.2%
Net debt as a % of
net capitalization 10.8% 18.3% 19.2%
See accompanying notes to pro forma financial information.
15
NOTES TO PRO FORMA FINANCIAL INFORMATION
1. NOTES TO PRO FORMA FINANCIAL INFORMATION FOR THE DISPOSAL OF THE COMPANY'S
INTERESTS IN THE ENERGY BUSINESSES (SEE "CERTAIN FINANCIAL
INFORMATION -- SELECTED AND HISTORICAL PRO FORMA FINANCIAL INFORMATION"
ABOVE).
(a) In accordance with Commission rules and regulations, no pro forma
interest income is recognized in the pro forma results of continuing
operations for funds assumed invested in cash equivalents or other
marketable securities. Had such income been recognized assuming an
investment in AAA-rated tax-exempt securities with maturities of less
than 30 days, pro forma net income would have been increased by
approximately $.2 million, $.2 million, $.4 million and $.3 million for
the six months ended June 30, 1994 and 1993, the twelve months ended June
30, 1994 and the year ended December 31, 1993, respectively (see notes
(1c) and (1e)).
(b) In accordance with applicable accounting pronouncements, the pro forma
information on the financial position of the Company reflects a $6.2
million adjustment to other noncurrent liabilities for the recognition of
the estimated present value of the unfunded obligation under the Coal
Industry Retiree Health Benefit Act of 1992 (the "Act") assumed by the
Company under the provisions of the merger agreement relating to the
disposition of Elk Horn. Under the Act, assigned operators (former
employers) are responsible for a portion of the funding of medical and
death benefits of certain retired miners and dependents of the United
Mine Workers of America.
The pro forma information on the financial position of the Company also
reflects a $2.2 million related adjustment to deferred income taxes for
the estimated tax benefit the Company will receive on the present value
of the unfunded obligation.
The estimated annual interest cost at 7% on the present value of the
unfunded obligation is reflected as a pro forma adjustment to other
(expense) income, net.
(c) The adjustments to interest expense reflect the pro forma interest cost
savings comprised of the following:
(IN THOUSANDS)
FOR
THE
TWELVE FOR THE
FOR THE SIX MONTHS YEAR
MONTHS ENDED ENDED ENDED
6/30/94 6/30/93 6/30/94 12/31/93
Savings from assumed repayment of debt and new credit agreements (see note
(1f)) $1,113 $1,279 $2,442 $2,608
Reallocation of interest cost historically allocated to the Energy
Businesses for financial reporting purposes (269) (334) (588) (653)
Amortization of transaction costs (19) (19) (38) (38)
Pro forma interest cost savings $ 825 $ 926 $1,816 $1,917
Pro forma interest cost savings were computed using the following pro
forma average cash flows:
(IN THOUSANDS)
FOR THE
TWELVE FOR THE
FOR THE SIX MONTHS MONTHS YEAR
ENDED ENDED ENDED
6/30/94 6/30/93 6/30/94 12/31/93
Average net cash flow (cash flows from operating and investing
activities) realized from operations and the disposition of interests
in Energy Businesses from beginning of period to dates of disposal $62,166 $72,821 $66,091 $71,418
Average variable-rate debt outstanding assumed repaid during the period (44,232) (59,731) (52,457) (60,207)
Average cash flows assumed invested in cash equivalents during the
period (see note (1a)) $17,934 $13,090 $13,634 $11,211
16
(d) Pro forma income tax adjustments are recognized at an assumed combined
state and federal income tax rate of approximately 39%.
(e) Income (loss) and earnings (loss) per share from continuing operations,
adjusted for special items affecting the comparability of operating
results among periods and pro forma interest income, are presented below:
(IN THOUSANDS EXCEPT PER-SHARE AMOUNTS)
FOR THE
TWELVE FOR THE
FOR THE SIX MONTHS YEAR
MONTHS ENDED ENDED ENDED
6/30/94 6/30/93 6/30/94 12/31/93
Historical income (loss) from continuing operations as reported $(2,019) $ 2,384 $ (680) $ 3,723
Historical after-tax effects of special items:
Write-off of APPX Software, Inc. intangibles 7,642 7,642
Charges associated with the disposal of a Film Products plant in
Flemington, N.J. 1,107 1,107
Charges associated with reorganization of corporate functions 549 549
Impact on deferred taxes of 1% increase in the federal income tax rate 348 348
Gain on the sale of Emisphere Technologies, Inc. common stock (1,410) (1,410)
Historical income from continuing operations as adjusted for special
items 5,623 974 8,966 4,317
Pro forma and other adjustments (after-tax):
Reflected in the results of continuing operations 376 437 853 914
Interest income (see note (1a)) 240 165 358 284
Pro forma income from continuing operations as adjusted for special items
and interest income $ 6,239 $ 1,576 $10,177 $ 5,515
Earnings (loss) per share from continuing operations:
Historical:
As reported $ (.19) $ .22 $ (.06) $ .34
As adjusted for special items .52 .09 .83 .40
Pro forma:
As reflected in the results of continuing operations (.15) .26 .02 .43
As adjusted for special items and interest income .58 .14 .94 .51
(f) Pro forma adjustments at June 30, 1994 and December 31, 1993 to other
assets and deferred charges, long-term debt and cash and cash equivalents
are as follows:
(IN THOUSANDS)
6/30/94 12/31/93
Net cash flow (cash flows from operating and investing activities) realized from operations
and the disposition of interests in Energy Businesses from end of period to dates of
disposal $ 52,700 $ 72,158
Transaction costs capitalized in other assets and deferred charges related to two new
revolving credit agreements entered into on August 18 and 19, 1994 (150) (150)
Prepayment on August 19, 1994 of variable-rate term loan due June 7, 1997 (35,000) (35,000)
Assumed repayment of variable-rate, revolving credit borrowings (no amounts borrowed at June
30, 1994) (26,000)
Pro forma increase in cash and cash equivalents $ 17,550 $ 11,008
In accordance with the Company's policy, cash balances in excess of
operating needs are invested in marketable securities with maturities of
less than one year that have a quality rating of at least A-2/P-2 or
AA/Aa. Excess cash arising from the recent disposition of the Company's
interest in Elk Horn has been invested in marketable securities with
maturities of less than 30 days. These funds coupled with the Company's
other excess cash balances are expected to be used to fund the Company's
Offer with any remaining funds invested until opportunities, in existing
businesses or elsewhere, are identified.
17
The two new revolving credit agreements permit the Company to borrow up to
$235 million with $200 million maturing on August 18, 1998 and $35 million
maturing on August 19, 1999. In connection with these new agreements, the
Company terminated its $180 million facility that was due June 16, 1996
(no amounts borrowed). The new agreements provide for interest to be
charged at a base rate (generally the London Interbank Offered Rate) plus
a spread that is dependent on the Company's quarterly debt to total
capitalization ratio. Facility fees are also charged on the $235 million
commitment amount. The weighted average spreads and facility fees charged
under the new agreements at various debt to total capitalization levels
are as follows:
(BASIS POINTS)
DEBT TO TOTAL CAPITALIZATION RATIO SPREAD FACILITY FEE
Less than or equal to 35% 31.1 19.7
Greater than 35% and less than or equal to 50% 39.6 23.6
Greater than 50% 49.3 26.5
The Company's remaining debt outstanding of $35.5 million consists
primarily of a $35 million, 7.2% note due 2003 (six-year average
remaining maturity at June 30, 1994).
(g) The pro forma adjustment to net assets of discontinued operations at June
30, 1994 and December 31, 1993 reflects the divestiture of the Energy
Businesses' net assets.
(h) Pro forma adjustments to shareholders' equity at June 30, 1994 and
December 31, 1993 are as follows:
(IN THOUSANDS)
6/30/94 12/31/93
Net income recognized from operations of Energy Businesses from end of period to dates of
disposal $ 1,013 $ 4,220
After-tax gains recognized from the Company's disposition of its:
Interest in Elk Horn on August 16, 1994 25,740 25,740
Remaining oil & gas properties on February 4, 1994 3,938
Deferred tax benefit recognized in the first quarter of 1994 on the difference between the
financial reporting and income tax basis of Elk Horn 3,320
Total shareholders' equity pro forma adjustments $26,753 $37,218
2. NOTES TO PRO FORMA FINANCIAL INFORMATION FOR THE OFFER (SEE "CERTAIN
FINANCIAL INFORMATION -- SELECTED HISTORICAL AND PRO FORMA FINANCIAL
INFORMATION" ABOVE).
(a) PRO FORMA ADJUSTMENTS TO RESULTS OF CONTINUING OPERATIONS FOR THE OFFER.
Pro forma adjustments to results of continuing operations for the Offer
relate to interest expense on pro forma borrowings needed at the beginning
of the periods presented to complete the assumed purchase of 1,000,000
Shares at prices of $17.00 and $19.00. The Company believes that, based on
current balances of cash and cash equivalents, no borrowings will actually
be required to fund the Offer.
Shares used to compute earnings (loss) per share were decreased by the
assumed purchase of 1,000,000 Shares. Pro forma income tax adjustments
for interest expense were recognized at an assumed combined state and
federal income tax rate of approximately 39%.
18
Income (loss) and earnings (loss) per share from continuing operations,
adjusted for special items affecting the comparability of operating
results among periods and pro forma interest income, are presented below:
(IN THOUSANDS EXCEPT PER-SHARE AMOUNTS)
FOR THE
TWELVE FOR THE
FOR THE SIX MONTHS YEAR
MONTHS ENDED ENDED ENDED
6/30/94 6/30/93 6/30/94 12/31/93
Pro forma income from continuing operations for the disposition of
interests in Energy Businesses as adjusted for special items and
interest income (see note (1e)) $6,239 $1,576 $10,177 $5,515
Pro forma adjustments for the Offer at $17.00 reflected in the
results of continuing operations (45) (86) (131)
Interest income (see notes (1a) & (1e)) (231) (165) (350) (284)
Pro forma income from continuing operations as adjusted for special
items, the Offer at $17.00 and interest income 6,008 1,366 9,741 5,100
Incremental after-tax impact of the Offer at $19.00 (24) (22) (45) (43)
Pro forma income from continuing operations as adjusted for special
items, the Offer at $19.00 and interest income $5,984 $1,344 $ 9,696 $5,057
Pro forma earnings per share from continuing operations as adjusted
for special items and interest income for:
Disposition of interests in Energy Businesses (see note (1e)) $ .58 $ .14 $ .94 $ .51
Disposition of interests in Energy Businesses and Offer at:
$17.00 .61 .14 .99 .52
$19.00 .61 .14 .98 .51
(b) PRO FORMA ADJUSTMENTS TO FINANCIAL POSITION FOR THE OFFER.
Pro forma adjustments to shareholders' equity for the Offer at June 30,
1994 and December 31, 1993 are as follows:
(IN THOUSANDS EXCEPT
PER-SHARE AMOUNTS)
$17.00/SH. $19.00/SH.
PURCHASE PURCHASE
PRICE PRICE
1,000,000 Shares assumed purchased $ 17,000 $ 19,000
Estimated transaction costs 330 330
Assumed total cost of Offer $ 17,330 $ 19,330
The Offer was assumed to be funded on a pro forma basis by the sources
described below:
(IN THOUSANDS EXCEPT PER-SHARE AMOUNTS)
6/30/94 12/31/93
$17.00/SH. $19.00/SH. $17.00/SH. $19.00/SH.
PURCHASE PURCHASE PURCHASE PURCHASE
PRICE PRICE PRICE PRICE
Cash and cash equivalents $ 17,330 $ 19,330 $ 11,008 $ 11,008
Assumed borrowings under new revolving credit facilities 6,322 8,322
Total Offer funding $ 17,330 $ 19,330 $ 17,330 $ 19,330
(c) RATIO OF EARNINGS TO FIXED CHARGES.
The ratio of earnings to fixed charges has been affected by special items
(see note (1e)). The pro forma ratios of earnings to fixed charges at the
maximum Offer price of $19.00, as adjusted for the pretax effects of
special items, are 5.7, 2.1, 4.7 and 2.9 for the six months ended June 30,
1994 and 1993, the twelve months ended June 30, 1994 and the year ended
December 31, 1993, respectively.
19
ADDITIONAL INFORMATION
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is obligated to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, options granted to them,
the principal holders of the Company's securities and any material interest of
such persons in transactions with the Company is required to be disclosed in
proxy statements distributed to the Company's shareholders and filed with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 2120, Washington, D.C. 20549; at its
regional offices located at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and 7 World Trade Center, New York, New York 10048. Copies
of such material may also be obtained by mail, upon payment of the Commission's
customary charges, from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Such reports,
proxy statements and other information concerning the Company also can be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005,
on which the Shares are listed.
11. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING SHARES.
As of September 7, 1994, the Company had issued and outstanding 10,589,390
Shares and had reserved for issuance upon exercise of outstanding stock options
850,435 Shares. The 1,000,000 Shares that the Company is offering to purchase
represent approximately 9.45% of the Shares then outstanding. As of September 2,
1994, the Company's directors and executive officers as a group (16 persons)
beneficially owned an aggregate of 2,402,107 Shares representing approximately
22.2% of the outstanding Shares, assuming the exercise by such persons of their
currently exercisable options. As of September 2, 1994, Floyd D. Gottwald, Jr.
and Bruce C. Gottwald, together with members of their immediate families (the
"Gottwalds"), including John D. Gottwald, who is President and Chief Executive
Officer of the Company, as a group beneficially owned an aggregate of 2,678,328
Shares representing approximately 25.2% of the outstanding Shares, assuming the
exercise by such persons of their currently exercisable options. Each of the
Company's executive officers or directors (including Floyd D. Gottwald, Jr.,
Bruce C. Gottwald and John D. Gottwald) has advised the Company that he does not
intend to tender any Shares pursuant to the Offer. If the Company purchases
1,000,000 Shares pursuant to the Offer, then after the purchase of Shares
pursuant to the Offer, the Company's executive officers and directors as a group
would own beneficially approximately 24.5% and the Gottwalds as a group would
own beneficially approximately 27.8% of the outstanding Shares immediately after
the Offer, assuming the exercise by such persons of their currently exercisable
options.
Except as set forth in Schedule A, neither the Company, nor any subsidiary
of the Company nor, to the best of the Company's knowledge, any of the Company's
directors or executive officers, nor any affiliates of any of the foregoing, had
any transactions involving the Shares during the 40 business days prior to the
date hereof.
Except for outstanding options to purchase Shares granted from time to time
over recent years to certain employees (including executive officers) of the
Company pursuant to the Company's stock option plans and except as otherwise
described herein, neither the Company nor, to the best of the Company's
knowledge, any of its affiliates, directors or executive officers, is a party to
any contract, arrangement, understanding or relationship with any other person
relating, directly or indirectly, to the Offer with respect to any securities of
the Company including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations.
On June 30, 1989, the Board of Directors of the Company declared a dividend
distribution of one Right on each then outstanding share of the Company's common
stock. Rights also are issued with shares issued after the initial dividend
distribution and before the occurrence of certain specified events as set forth
in the Rights Agreement. This summary is qualified in its entirety by the Rights
Agreement which the Company has filed with the Commission.
Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Participating Cumulative Preferred Stock, Series A
(the "Preferred Stock") at an exercise price of $50.00, subject to adjustment
(the "Exercise Price"). Each one one-hundredth of a share of Preferred Stock is
structured to be the equivalent of one share of the Company's common stock.
20
The Rights presently are attached to certificates representing shares of
the Company's common stock, and no separate certificates evidencing the Rights
(the "Rights Certificates") have been distributed. The Rights will separate from
the shares of the Company's common stock and a distribution of the Rights
Certificates will occur (the "Rights Distribution Date") upon the earlier of (i)
10 days following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 10% or more of the outstanding shares (the
"Stock Acquisition Date"), or (ii) 10 business days following the commencement
of a tender offer or exchange offer that would result in a person or group
becoming an Acquiring Person. Until the Rights Distribution Date, the Rights
will be evidenced by the certificates representing shares of the Company's
common stock and are transferred with and only with such certificates.
While each Right initially provides for the acquisition of one
one-hundredth of a share of Preferred Stock at the Exercise Price, the Rights
Agreement provides that if (i) an Acquiring Person purchases 30% or more of the
outstanding shares, (ii) at any time following the Rights Distribution Date the
Company is the surviving corporation in a merger with an Acquiring Person and
its common stock is not changed or exchanged, or (iii) an Acquiring Person
effects a statutory share exchange with the Company after which the Company is
not a subsidiary of any Acquiring Person, proper provision shall be made so that
each holder of a Right will thereafter have the right to receive, upon exercise
and payment of the Exercise Price, Preferred Stock or shares of the Company's
common stock at the option of the Company (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to twice the
amount of the Exercise Price.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination in which the
Company is not the surviving corporation (other than a merger described in the
preceding paragraph), or (ii) 50% or more of the Company's assets or earning
power is sold or transferred, each holder of a Right shall thereafter have the
right to receive, upon exercise and payment of the Exercise Price, common stock
of the acquiring company having a value equal to twice the Exercise Price. The
events set forth in this paragraph and in the preceding paragraph are referred
to as the "Triggering Events".
Rights, or any shares of the Company's common stock to which such Rights
are then attached, may not be transferred (i) to any person who is or who upon
completion of the transfer would be, an Acquiring Person, or (ii) to any
affiliate or associate of any such Person. Any Right that is the subject of such
an attempted transfer shall be deemed to be held beneficially by the person who
attempted to make such attempted transfer and shall continue to be exercisable
by such person. Further, to the extent permitted by law, no Rights may be
exercised by an Acquiring Person.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right.
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT. The Company's purchase of Shares pursuant to the Offer will reduce
the number of Shares that might otherwise be traded publicly and may reduce the
number of shareholders. Nonetheless, the Company anticipates that there will be
a sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the NYSE, the Company does not believe that
its purchase of Shares pursuant to the Offer will cause the Company's remaining
Shares to be delisted from the NYSE.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit to their customers using such Shares as collateral. The Company
believes that, following the purchase of Shares pursuant to the Offer, the
Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's shareholders. The Company believes that its
purchase of Shares pursuant to the Offer will not result in the Shares becoming
eligible for deregistration under the Exchange Act.
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. The Company is not aware
of any license or regulatory permit that appears to be material to the Company's
business that might be adversely affected by the Company's acquisition of Shares
as contemplated herein or of any approval or other action by any government or
governmental, administrative or regulatory authority or agency, domestic or
foreign, that would be required for the acquisition
21
or ownership of Shares by the Company as contemplated herein. Should any such
approval or other action be required, the Company presently contemplates that
such approval or other action will be sought. The Company is unable to predict
whether it may determine that it is required to delay the acceptance for payment
of or payment for Shares tendered pursuant to the Offering pending the outcome
of any such matter. There can be no assurance that any such approval or other
action, if needed, would be obtained or would be obtained without substantial
conditions or that the failure to obtain any such approval or other action might
not result in adverse consequences to the Company's business. The Company's
obligations under the Offer to accept for payment and pay for Shares is subject
to certain conditions. See Section 7.
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
GENERAL. The federal income tax discussion set forth below summarizes the
principal federal income tax consequences to domestic shareholders of sales of
Shares pursuant to the Offer and is included for general information only. The
discussion does not address all aspects of federal income taxation that may be
relevant to a particular shareholder or any relevant foreign, state, local or
other tax laws. Certain shareholders (including insurance companies, tax-exempt
entities, foreign persons, financial institutions, broker dealers, employee
benefit plans, personal holding companies and persons who acquired their Shares
upon the exercise of employee stock options or as compensation) may be subject
to special rules not discussed below. The discussion is based on laws,
regulations, rulings and court decisions currently in effect, all of which are
subject to change. The Company has neither requested nor obtained a written
opinion of counsel or a ruling from the Internal Revenue Service (the "Service")
with respect to the tax matters discussed below. EACH SHAREHOLDER IS URGED TO
CONSULT AND RELY ON THE SHAREHOLDER'S OWN TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES TO THE SHAREHOLDER OF SELLING SHARES PURSUANT TO THE OFFER,
INCLUDING THE APPLICATION OF FOREIGN, STATE, LOCAL OR OTHER TAX LAWS.
A sale of Shares pursuant to the Offer will constitute a "redemption" under
the Internal Revenue Code of 1986 (the "Code") and will be a taxable transaction
for federal income tax purposes. If the redemption qualifies as a sale of Shares
by a shareholder under Section 302 of the Code, the shareholder will recognize
gain or loss equal to the difference between (i) the cash received pursuant to
the Offer and (ii) the shareholder's tax basis in the Shares surrendered
pursuant to the Offer. If the redemption does not qualify as a sale of Shares
under Section 302, the shareholder will not be treated as having sold Shares but
will be treated as having received a dividend taxable as ordinary income in an
amount equal to the cash received pursuant to the Offer. As described below,
whether a redemption qualifies for sale treatment will depend largely on the
total number of the shareholder's Shares (including any Shares constructively
owned by the Shareholder) that are purchased. A shareholder desiring to obtain
sale treatment therefore may want to make a conditional tender, as described in
Section 6, to make sure that a minimum number of his Shares (if any) are
purchased.
SALE TREATMENT. Under Section 302 of the Code, a redemption of Shares
pursuant to the Offer will be treated as a sale of such Shares for federal
income tax purposes if such redemption (i) results in a "complete redemption" of
all of the shareholder's stock in the Company, (ii) is "substantially
disproportionate" with respect to the shareholder, or (iii) is "not essentially
equivalent to a dividend" with respect to the shareholder. In determining
whether any of these three tests under Section 302 is satisfied, a shareholder
must take into account not only Shares that the shareholder actually owns, but
also any Shares that the shareholder is treated as owning pursuant to the
constructive ownership rules of Section 318 of the Code. Under these rules, a
shareholder generally is treated as owning (i) Shares owned by the shareholder's
spouse, children, grandchildren, and parents, (ii) Shares owned by certain
trusts of which the shareholder is a beneficiary, (iii) Shares owned by any
estate of which the shareholder is a beneficiary, (iv) Shares owned by any
partnership or "S corporation" in which the shareholder is a partner or
shareholder, (v) Shares owned by any non-S corporation of which the shareholder
owns at least 50% in value of the stock and (vi) Shares that the shareholder has
an option or similar right to acquire. A shareholder that is a partnership or S
corporation, estate, trust, or non-S corporation is treated as owning stock
owned (as the case may be) by partners or S corporation shareholders, by estate
beneficiaries, by certain trust beneficiaries, and by 50% shareholders of a
non-S corporation. Stock constructively owned by a person generally is treated
as being owned by that person for the purpose of attributing ownership to
another person.
A redemption of Shares from a shareholder pursuant to the Offer will result
in a "complete redemption" of all the shareholder's stock in the Company if,
either (i) the Company purchases all of the Shares actually and constructively
owned by the shareholder, or (ii) the shareholder actually owns no Shares after
all transfers of Shares pursuant to the Offer, constructively owns only Shares
owned by certain family members, and the shareholder
22
qualifies to and does waive (pursuant to Section 302(c)(2) of the Code)
constructive ownership of Shares owned by family members. Any shareholder
desiring to waive such constructive ownership of Shares should consult a tax
advisor about the applicability of Section 302(c)(2).
A redemption of Shares from a shareholder pursuant to the Offer will be
"substantially disproportionate" with respect to the shareholder if the
percentage of Shares actually and constructively owned by the shareholder
compared to all Shares outstanding immediately after all redemptions of Shares
pursuant to the Offer is less than 80% of the percentage of Shares actually and
constructively owned by the shareholder compared to all Shares outstanding
immediately before such redemptions. If exactly 1,000,000 Shares are redeemed
pursuant to the Offer, the number of Shares outstanding after consummation of
the Offer will be approximately 90.55% of the number of Shares currently
outstanding. Consequently, in that case a shareholder must dispose of more than
27.56% (I.E., 1 minus 80% of 90.55%) of the number of Shares the shareholder
actually and constructively owns in order possibly to qualify for a
substantially disproportionate redemption. If the Company were to exercise its
right to purchase an additional 2% of the outstanding Shares, a shareholder
would have to dispose of more than 29.16% (I.E., 1 minus 80% of 88.55% of the
number of Shares the shareholder actually and constructively owns in order
possibly to qualify for a substantially disproportionate redemption.
A redemption of Shares from a shareholder pursuant to the Offer will be
"not essentially equivalent to a dividend" if pursuant to the Offer, the
shareholder experiences a "meaningful reduction" in his proportionate interest
in the Company, including voting rights, participation in earnings, and
liquidation rights, arising from the actual and constructive ownership of
Shares. The Service has indicated in a published ruling that a very small
reduction in the proportionate interest of a small minority shareholder who does
not exercise any control over corporate affairs generally constitutes a
"meaningful reduction" in the shareholder's interest in the company. The fact
that the redemption fails to qualify as a sale pursuant to the other two tests
is not taken into account in determining whether the redemption is "not
essentially equivalent to a dividend." If exactly 1,000,000 Shares are redeemed
pursuant to the Offer, the number of Shares outstanding will be reduced by
approximately 9.45%. Consequently, in that case a shareholder must dispose of
more than 9.45% of the number of Shares the shareholder actually and
constructively owns in order to have any reduction in the shareholder's
proportionate stock interest in the Company. If the Company were to exercise its
right to purchase an additional 2% of the outstanding Shares, a shareholder
would have to dispose of more than 11.45% of the number of Shares the
shareholder actually and constructively owns in order to have any reduction in
the shareholder's proportionate interest.
Shareholders should be aware that their ability to satisfy any of the
foregoing tests also may be affected by proration pursuant to the Offer.
THEREFORE, UNLESS A SHAREHOLDER MAKES A CONDITIONAL TENDER (SEE SECTION 6), THE
SHAREHOLDER (OTHER THAN AN ODD LOT HOLDER WHO TENDERS ALL OF HIS SHARES AT OR
BELOW THE PURCHASE PRICE) CAN BE GIVEN NO ASSURANCE, EVEN IF HE TENDERS ALL OF
HIS SHARES, THAT THE COMPANY WILL PURCHASE A SUFFICIENT NUMBER OF SUCH SHARES TO
PERMIT HIM TO SATISFY ANY OF THE FOREGOING TESTS. Shareholders also should be
aware that an acquisition or disposition of Shares in the market or otherwise as
part of a plan that includes the shareholder's tender of Shares pursuant to the
Offer might be taken into account in determining whether any of the foregoing
tests is satisfied. Shareholders are urged to consult their own tax advisors
with regard to whether acquisitions from or sales to third parties, including
market sales, and a tender may be so integrated.
If any of the foregoing three tests is satisfied, the shareholder will
recognize gain or loss equal to the difference between the amount of cash
received pursuant to the Offer and the shareholder's tax basis in the Shares
sold. Such gain or loss must be determined separately for each block of Shares
sold (I.E., Shares that were acquired in a single transaction), and will be
capital gain or loss if the shareholder held the Shares as a capital asset.
Capital gain or loss generally will be long-term capital gain or loss if, when
the Company accepts the Shares for payment, the shareholder held the Shares for
more than one year. Long-term capital gains of individuals, estates and trusts
currently are subject to federal income tax at a maximum rate of 28%. Short-term
capital gains of individuals, estates and trusts generally are subject to a
maximum federal income tax rate of 39.6%. Capital gains of corporations
generally are taxed at the federal income tax rates applicable to corporate
ordinary income.
DIVIDEND TREATMENT. If none of the foregoing three tests under Section 302
of the Code is satisfied, the shareholder generally will be treated as having
received a dividend taxable as ordinary income in an amount equal to the amount
of cash received by the shareholder pursuant to the Offer, to the extent the
Company has sufficient accumulated or current earnings and profits. The Company
expects that its current and accumulated earnings and profits will be sufficient
to cover the amount of any payments pursuant to the Offer that are treated as
dividends.
23
Dividend income of individuals, estates and trusts generally is subject to
federal income tax at a maximum rate of 39.6%. Dividend income of corporations,
subject to the provisions discussed below, generally is subject to federal
income tax at a maximum rate of 35%. To the extent that the purchase of Shares
from any shareholder pursuant to the Offer is treated as a dividend, the
shareholder's tax basis in any Shares that the shareholder actually or
constructively owns after consummation of the Offer should be increased by the
shareholder's tax basis in the Shares surrendered pursuant to the Offer.
TREATMENT OF DIVIDEND INCOME FOR CORPORATE SHAREHOLDERS. In the case of a
corporate shareholder, if the cash received for Shares pursuant to the Offer is
treated as a dividend, the dividend income may be eligible for the 70%
dividends-received deduction under Section 243 of the Code. The
dividends-received deduction is subject to certain limitations; for example, the
deduction may not be available if the corporate shareholder does not satisfy
certain holding period requirements with respect to its tendered Shares or if
the Shares are "debt-financed portfolio stock." If a dividends-received
deduction is available, the dividend (having arisen in a non-PRO RATA
redemption) also likely will be treated as an "extraordinary dividend" under
Section 1059 of the Code. In that case the corporate shareholder's tax basis in
its remaining Shares (for purposes of determining gain or loss on a future
disposition) will be reduced (but not below zero) by the amount of any
"extraordinary dividend" not taxed because of the dividends-received deduction.
Any amount of the "extraordinary dividend" not taxed because of the dividends-
received deduction and in excess of the corporate shareholder's tax basis for
the remaining Shares generally will be subject to tax as gain on a subsequent
sale or disposition of those Shares. Corporate shareholders should consult their
tax advisors as to the availability of the dividends-received deduction and the
application of Section 1059 of the Code.
SEE SECTION 3 WITH RESPECT TO THE APPLICATION OF BACKUP FEDERAL INCOME TAX
WITHHOLDING.
15. EXTENSION OF OFFER; TERMINATION; AMENDMENT. The Company expressly
reserves the right, in its sole discretion, at any time and from time to time,
and regardless of whether or not any of the events set forth in Section 7 shall
have occurred or shall be deemed by the Company to have occurred, to extend the
period of time during which the Offer is open and thereby delay acceptance for
payment of, and payment for, any Shares by giving oral or written notice of such
extension to the Depositary and making a public announcement thereof. The
Company also expressly reserves the right, in its sole discretion, to terminate
the Offer and not accept for payment or pay for any Shares not theretofore
accepted for payment or paid for or, subject to applicable law, to postpone
payment for Shares upon the occurrence of any of the conditions specified in
Section 7 hereof by giving oral or written notice of such termination or
postponement to the Depositary and making a public announcement thereof. The
Company's reservation of the right to delay payment for Shares which it has
accepted for payment is limited by Rule 13e-4(f)(5) promulgated under the
Exchange Act, which requires that the Company must pay the consideration offered
or return the Shares tendered promptly after termination or withdrawal of a
tender offer. Subject to compliance with applicable law, the Company further
reserves the right, in its sole discretion, and regardless of whether any of the
events set forth in Section 7 shall have occurred or shall be deemed by the
Company to have occurred, to amend the Offer in any respect (including, without
limitation, by decreasing or increasing the consideration offered in the Offer
to holders of Shares or by decreasing or increasing the number of Shares being
sought in the Offer). Amendments to the Offer may be made at any time and from
time to time effected by public announcement thereof, such announcement, in the
case of an extension, to be issued no later than 9:00 a.m., New York City time,
on the next business day after the last previously scheduled or announced
Expiration Date. Any public announcement made pursuant to the Offer will be
disseminated promptly to shareholders in a manner reasonably designed to inform
shareholders of such change. Without limiting the manner in which the Company
may choose to make a public announcement, except as required by applicable law,
the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to the
Dow Jones News Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules require that the
minimum period during which an offer must remain open following material changes
in the terms of the offer or information concerning the offer (other than a
change in price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of such terms or
information. If (i) the Company increases or decreases the price to be paid for
Shares, the number of Shares being sought in the Offer or the Dealer Managers'
soliciting
24
fees and, in the event of an increase in the number of Shares being sought, such
increase exceeds two percent of the outstanding Shares and (ii) the Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from, and including, the date that such notice of an
increase or decrease is first published, sent or given in the manner specified
in this Section 15, the Offer will be extended until the expiration of such
period of ten business days.
16. FEES AND EXPENSES. The Company has retained Goldman, Sachs & Co.
("Goldman Sachs") to act as the Dealer Managers in connection with the Offer.
Goldman Sachs will receive a fee for their services as Dealer Managers of $.15
for each Share purchased by the Company pursuant to the Offer, with a minimum
aggregate fee of $75,000. The Company also has agreed to reimburse Goldman Sachs
for certain reasonable out-of-pocket expenses incurred in connection with the
Offer, including fees and expenses of counsel, and to indemnify Goldman Sachs
against certain liabilities in connection with the Offer, including liabilities
under the federal securities laws. Goldman Sachs has rendered various investment
banking and other advisory services to the Company in the past, for which they
have received customary compensation, and can be expected to render similar
services to the Company in the future.
The Company has retained Georgeson & Company Inc. to act as Information
Agent and American Stock Transfer & Trust Company to act as Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telegraph and personal interviews and may request brokers,
dealers and other nominee shareholders to forward materials relating to the
Offer to beneficial owners. The Information Agent and the Depositary will each
receive reasonable and customary compensation for their respective services,
will be reimbursed by the Company for certain reasonable out-of-pocket expenses
and will be indemnified against certain liabilities in connection with the
Offer, including certain liabilities under the federal securities laws.
No fees or commissions will be payable to brokers, dealers or other persons
(other than fees to the Dealer Managers, the Information Agent and the
Depositary as described above) for soliciting tenders of Shares pursuant to the
Offer. The Company, however, upon request, will reimburse brokers, dealers and
commercial banks for customary mailing and handling expenses incurred by such
persons in forwarding the Offer and related materials to the beneficial owners
of Shares held by any such person as a nominee or in a fiduciary capacity. No
broker, dealer, commercial bank or trust company has been authorized to act as
the agent of the Company, the Dealer Managers, the Information Agent or the
Depositary for purposes of the Offer. The Company will pay or cause to be paid
all stock transfer taxes, if any, on its purchase of Shares except as otherwise
provided in Instruction 7 in the Letter of Transmittal.
17. MISCELLANEOUS. The Company is not aware of any jurisdiction where the
making of the Offer is not in compliance with applicable law. If the Company
becomes aware of any jurisdiction where the making of the Offer is not in
compliance with any valid applicable law, the Company will make a good faith
effort to comply with such law. If, after such good faith effort, the Company
cannot comply with such law, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares residing in such
jurisdiction. In any jurisdiction the securities or blue sky laws of which
require the Offer to be made by a licensed broker or dealer, the Offer is being
made on the Company's behalf by the Dealer Managers or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, the Company has filed with the Commission an Issuer Tender Offer
Statement on Schedule 13E-4 which contains additional information with respect
to the Offer. Such Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and in
the same manner as is set forth in Section 10 with respect to information
concerning the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGERS IN CONNECTION
WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE
RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE DEALER MANAGERS.
TREDEGAR INDUSTRIES, INC.
September 8, 1994
25
SCHEDULE A
CERTAIN TRANSACTIONS INVOLVING SHARES
EXECUTIVE OFFICERS AND DIRECTORS
During the 40 business days prior to September 8, 1994, the only
transactions effected in the Shares by the Company's executive officers and
directors were the purchases of Shares through the Savings Plan by the executive
officers as follows:
(a) Savings Plan transactions during June 1994 and allocated at the end of
July 1994:
PERSONS WHO
EFFECTED NUMBER OF AVERAGE
TRANSACTION SHARES BUY PRICE
Michael W. Giancaspro 105 $ 14.95
Richard W. Goodrum 231 14.95
John D. Gottwald 114 14.95
Steven M. Johnson 135 14.95
Douglas R. Monk 39 14.95
Anthony J. Rinaldi 127 14.95
Norman A. Scher 230 14.95
Frederick P. Woods 101 14.95
(b) Savings Plan transactions during July 1994 and allocated at the end of
August 1994:
PERSONS WHO
EFFECTED NUMBER OF AVERAGE
TRANSACTION SHARES BUY PRICE
Michael W. Giancaspro 94 $ 15.52
Richard W. Goodrum 134 15.52
John D. Gottwald 125 15.52
Steven M. Johnson 116 15.52
Douglas R. Monk 49 15.52
Anthony J. Rinaldi 3,854 15.74
Norman A. Scher 45 15.52
Frederick P. Woods 100 15.52
A-1
Manually signed photocopies of the Letter of Transmittal will be accepted
from Eligible Institutions. The Letter of Transmittal and certificates for
Shares and any other required documents should be sent or delivered by each
shareholder or his broker, dealer, commercial bank, trust company or nominee to
the Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
AMERICAN STOCK TRANSFER & TRUST COMPANY
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/OVERNIGHT DELIVERY:
American Stock Transfer & Trust Co. (Eligible Institutions American Stock Transfer & Trust Co.
40 Wall Street, 46th Floor Only) 40 Wall Street, 46th Floor
New York, NY 10005 (718) 234-5001 New York, NY 10005
(Attention: Reorganization (Attention: Reorganization
Department) CONFIRM BY TELEPHONE: Department)
(718) 921-8200
FOR INFORMATION CALL:
(718) 921-8200
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent at the telephone numbers and locations
listed below. Shareholders may also contact their local broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call
(212) 440-9800
ALL OTHERS CALL TOLL FREE
(800) 223-2064
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
In New York State: (212) 902-1000 (collect)
Other Areas: (800) 323-5678 (toll free)
September 8, 1994
EXHIBIT (A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
TREDEGAR INDUSTRIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED SEPTEMBER 8, 1994
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON THURSDAY, OCTOBER 6, 1994, UNLESS THE OFFER IS EXTENDED.
TO: AMERICAN STOCK TRANSFER & TRUST COMPANY
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/OVERNIGHT DELIVERY:
American Stock Transfer & Trust Co. (Eligible Institutions American Stock Transfer & Trust Co.
Only)
40 Wall Street, 46th Floor (718) 234-5001 40 Wall Street, 46th Floor
New York, NY 10005 New York, NY 10005
(Attention: Reorganization CONFIRM BY TELEPHONE: (Attention: Reorganization
Department) (718) 921-8200 Department)
FOR INFORMATION CALL:
(718) 921-8200
Delivery of this instrument and all other documents to an address or
transmission of instructions to a facsimile number other than as set forth above
does not constitute a valid delivery.
PLEASE READ THE ENTIRE LETTER
OF TRANSMITTAL, INCLUDING THE ACCOMPANYING INSTRUCTIONS,
CAREFULLY BEFORE CHECKING ANY BOX BELOW.
This Letter of Transmittal is to be used only if (a) certificates for Shares
(as defined below) are to be forwarded herewith or (b) a tender of Shares is
being made concurrently by book-entry transfer to the account maintained by
American Stock Transfer & Trust Company (the "Depositary") at The Depository
Trust Company, Midwest Securities Trust Company or Philadelphia Depository Trust
Company (hereinafter, collectively referred to as the "Book-Entry Transfer
Facilities") pursuant to Section 3 of the Offer to Purchase. See Instruction 2.
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) TENDERED CERTIFICATES
(PLEASE USE PREADDRESSED LABEL OR FILL IN (ATTACH SIGNED ADDITIONAL LIST IF NECESSARY)
EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S)
CERTIFICATE NO. OF SHARES* NO. OF SHARES
NUMBER(S) TENDERED**
TOTAL SHARES
TENDERED
Indicate in this box order (by certificate number) which Shares are to be
purchased in event of proration. (Attach additional list if necessary.)
*** See Instruction 10.
1st: 2nd: 3rd: 4th: 5th: 6th:
* Need not be completed if Shares are tendered by book-entry transfer.
** If you desire to tender fewer than all Shares evidenced by any certificates
listed above, please indicate in this column the number of Shares you wish
to tender. Otherwise, all Shares evidenced by such certificates will be
deemed to have been tendered. See Instruction 4.
*** If you do not designate an order, in the event less than all Shares tendered
are purchased due to proration, Shares will be selected for purchase by the
Depositary .
1
NOTE: SIGNATURE MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
SHARES HELD IN THE TREDEGAR INDUSTRIES, INC. DIVIDEND REINVESTMENT AND STOCK
PURCHASE PLAN (THE "DIVIDEND REINVESTMENT PLAN"), THE SAVINGS PLAN FOR THE
EMPLOYEES OF TREDEGAR INDUSTRIES, INC. (THE "SAVINGS PLAN") OR THE TREDEGAR
INDUSTRIES, INC. EMPLOYEE STOCK PURCHASE PLAN (THE "STOCK PURCHASE PLAN") MAY BE
TENDERED ONLY BY SUBMITTING A SEPARATE INSTRUCTION FORM TO THE RESPECTIVE
ADMINISTRATORS AS PROVIDED HEREIN. IF YOU HOLD SHARES IN THE DIVIDEND
REINVESTMENT PLAN, THE SAVINGS PLAN OR THE STOCK PURCHASE PLAN AND OUTSIDE OF
SUCH PLANS, YOU MUST TENDER SUCH SHARES SEPARATELY. THIS LETTER OF TRANSMITTAL
MAY BE USED ONLY FOR TENDERING SHARES NOT HELD IN THE DIVIDEND REINVESTMENT
PLAN, THE SAVINGS PLAN OR THE STOCK PURCHASE PLAN.
SHAREHOLDERS WHO CANNOT DELIVER THE CERTIFICATES FOR THEIR SHARES TO THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE (AS
DEFINED BELOW)) OR WHO CANNOT COMPLETE THE PROCEDURE FOR BOOK-ENTRY TRANSFER ON
A TIMELY BASIS OR WHO CANNOT DELIVER A LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE DEPOSITARY PRIOR TO THE EXPIRATION DATE MUST, IN EACH
CASE, TENDER THEIR SHARES PURSUANT TO THE GUARANTEED DELIVERY PROCEDURE SET
FORTH IN SECTION 3 OF THE OFFER TO PURCHASE. SEE INSTRUCTION 2.
SHAREHOLDERS WHO DESIRE TO TENDER SHARES PURSUANT TO THE OFFER (AS DEFINED
BELOW) AND WHO CANNOT DELIVER THEIR CERTIFICATES FOR THEIR SHARES (OR WHO ARE
UNABLE TO COMPLY WITH THE PROCEDURES FOR BOOK-ENTRY TRANSFER ON A TIMELY BASIS)
AND ALL OTHER DOCUMENTS REQUIRED BY THIS LETTER OF TRANSMITTAL TO THE DEPOSITARY
AT OR BEFORE THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE) MAY
TENDER THEIR SHARES ACCORDING TO THE GUARANTEED DELIVERY PROCEDURES SET FORTH IN
SECTION 3 OF THE OFFER TO PURCHASE. SEE INSTRUCTION 2. DELIVERY OF DOCUMENTS TO
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF THE
BOOK ENTRY-TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Check Box of Applicable Book-Entry Facility:
[ ] The Depository Trust Company
[ ] The Midwest Securities Trust Company
[ ] The Philadelphia Depository Company
Account Number:
Transaction Code Number:
[ ] CHECK HERE IF CERTIFICATES FOR 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 Holder(s):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
Check Box of Applicable Book-Entry Transfer Facility and Give
Account Number if Delivered by Book-Entry
Transfer:
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Company
[ ] Account Number:
2
ODD LOTS
(SEE INSTRUCTION 8)
To be completed ONLY if the Shares are being tendered by or on behalf
of a person owning beneficially or of record, as of the close of
business on September 7, 1994, an aggregate of fewer than 100 Shares.
The undersigned either (check one box);
[ ] was the beneficial or record owner, as of the close of business on
September 7, 1994, of an aggregate of fewer than 100 Shares, all
of which are being tendered; or
[ ] is a broker, dealer, commercial bank, trust company, or other
nominee that (a) is tendering for the beneficial owner(s) thereof,
Shares with respect to which it is the record holder, and (b)
believes, based upon representations made to it by such beneficial
owner(s), that each such person was the beneficial owner, as of
the close of business on September 7, 1994, of an aggregate of
fewer than 100 Shares and is tendering all of such Shares.
In addition the undersigned is tendering Shares either (check one
box):
[ ] at the Purchase Price (defined below), as the same shall be
determined by the Company in accordance with the terms of the
Offer (persons checking this box need not indicate the price per
Share below); or
[ ] at the price per Share indicated below under "Price (in Dollars)
per Share at which Shares are being tendered in this Letter of
Transmittal."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED
CONDITIONAL TENDER
(SEE INSTRUCTION 9)
[ ] check here if tender of Shares is conditional on the Company
purchasing all or a minimum number of the tendered Shares and
complete the following:
Minimum number of Shares to be sold: 3
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
TO AMERICAN STOCK TRANSFER & TRUST COMPANY:
The undersigned hereby tenders to Tredegar Industries, Inc., a Virginia
corporation (the "Company"), the above described shares of the Company's common
stock, no par value per share (the "Shares") (including the associated Preferred
Stock Purchase Rights (the "Rights") issued pursuant to the rights agreement,
dated as of June 15, 1989, as amended, between the Company and the Rights Agent
named therein), at the price per Share indicated in this Letter of Transmittal,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Company's Offer to Purchase, dated September 8, 1994 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer"). Unless the Rights are
redeemed, shareholders must tender one Right for each Share tendered to effect a
valid tender of Shares. Unless separate certificates for the Rights are issued,
a tender of Shares also will constitute a tender of the associated Rights.
Unless the context requires otherwise, all references herein to Shares shall
include the associated Rights.
Subject to and effective upon acceptance for payment of the Shares tendered
hereby in accordance with the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of
such extension or amendment), the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to all the Shares that are being tendered hereby and orders the registration
of all such Shares if tendered by book-entry transfer and hereby irrevocably
constitutes and appoints the Depositary as the true and lawful agent and
attorney-in-fact of the undersigned (with full knowledge that said Depositary
also acts as the agent of the Company) with respect to such Shares with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(a) deliver certificate(s) for such Shares or transfer ownership of
such Shares on the account books maintained by any of the Book-Entry
Transfer Facilities, together in either such case with all accompanying
evidences of transfer and authenticity, to, or upon the order of, the
Company upon receipt by the Depositary, as the undersigned's agent, of the
aggregate Purchase Price (as defined below) with respect to such Shares;
(b) present certificates for such Shares for cancellation and transfer
on the Company's books; and
(c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, subject to the next paragraph, all in
accordance with the terms of the Offer.
The undersigned hereby represents and warrants to the Company that:
(a) the undersigned understands that tenders of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and
in the instructions hereto will constitute the undersigned's acceptance of
the terms and conditions of the Offer, including the undersigned's
representation and warranty that:
(i) the undersigned has a net long position in Shares or equivalent
securities at least equal to the Shares tendered within the meaning of
Rule 14e-4 under the Securities Exchange Act of 1934, as amended, and
(ii) such tender of Shares complies with Rule 14e-4;
(b) when and to the extent the Company accepts such Shares for
purchase, the Company will acquire good, marketable and unencumbered title
to them, free and clear of all security interests, liens, charges,
encumbrances, conditional sales agreements or other obligations relating to
their sale or transfer, and not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any
additional documents the Depositary or the Company deems necessary or
desirable to complete the assignment, transfer and purchase of the Shares
tendered hereby; and
(d) the undersigned has read and agrees to all of the terms of the
Offer.
All authorities conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, executors, administrators, successors, assigns,
trustees in bankruptcy, and legal representatives of the undersigned. Except as
stated in the Offer to Purchase, this tender is irrevocable.
4
The name(s) and address(es) of the registered holder(s) should be printed
above, if they are not already printed above, exactly as they appear on the
certificates representing Shares tendered hereby. The certificate numbers, the
number of Shares represented by such certificates and the number of Shares that
the undersigned wishes to tender, should be set forth in the appropriate boxes
above. The price at which such Shares are being tendered should be indicated in
the box below.
The undersigned understands that the Company will, upon the terms and
subject to the conditions of the Offer, determine a single per Share price (not
in excess of $19.00 nor less than $17.00 per Share) net to the seller in cash
(the "Purchase Price") that it will pay for Shares properly tendered and not
withdrawn prior to the Expiration Date pursuant to the Offer, taking into
account the number of Shares so tendered and the prices (in multiples of $.125)
specified by tendering shareholders. The undersigned understands that the
Company will select the lowest Purchase Price that will allow it to buy
1,000,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $19.00 nor less than $17.00 per Share) pursuant to the
Offer. The undersigned understands that all Shares properly tendered at prices
at or below the Purchase Price and not withdrawn prior to the Expiration Date
will be purchased at the Purchase Price, upon the terms and subject to the
conditions of the Offer, including its proration and conditional tender
provisions, and that the Company will return all other Shares not purchased
pursuant to the Offer, including Shares tendered at prices greater than the
Purchase Price and not withdrawn prior to the Expiration Date and Shares not
purchased because of proration or conditional tender.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may accept for payment fewer than all of the Shares tendered hereby. In any such
event, the undersigned understands that certificate(s) for any Shares delivered
herewith but not tendered or not purchased will be returned to the undersigned
at the address indicated above, unless otherwise indicated under the "Special
Payment Instructions" or "Special Delivery Instructions" below. The undersigned
recognizes that the Company has no obligation, pursuant to the Special Payment
Instructions, to transfer any certificate for Shares from the name of its
registered holder, or to order the registration or transfer of Shares tendered
by book-entry transfer, if the Company purchases none of the Shares represented
by such certificate or tendered by such book-entry transfer.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The check for the aggregate Purchase Price for such of the Shares tendered
hereby as are purchased will be issued to the order of the undersigned and
mailed to the address indicated above, unless otherwise indicated under the
Special Payment Instructions or the Special Delivery Instructions below.
5
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5)
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST
COMPLETE A SEPARATE LETTER OF TRANSMITTAL FOR EACH PRICE AT WHICH SHARES
ARE TENDERED.)
[ ] $17.000 [ ] $17.750 [ ] $18.500
[ ] $17.125 [ ] $17.875 [ ] $18.625
[ ] $17.250 [ ] $18.000 [ ] $18.750
[ ] $17.375 [ ] $18.125 [ ] $18.875
[ ] $17.500 [ ] $18.250 [ ] $19.000
[ ] $17.625 [ ] $18.375
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND 11)
To be completed ONLY if certificates for Shares not
tendered or not purchased and/or any check for the aggregate
Purchase Price of Shares purchased are to be issued in the
name of and sent to someone other than the undersigned.
Issue:
[ ] Check to:
[ ] Certificates to:
Name(s):
(Please Print)
Address:
(Zip Code)
(Taxpayer Identification or Social Security No.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND 11)
To be completed ONLY if certificates for Shares not tendered
or not purchased and/or any check for the Purchase Price of
Shares purchased, issued in the name of the undersigned, are
to be mailed to someone other than the undersigned, or to
the undersigned at an address other than that shown above.
Mail:
[ ] Check to:
[ ] Certificates to:
Name(s):
(Please Print)
Address:
(Zip Code)
6
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL SHAREHOLDERS)
(PLEASE COMPLETE AND RETURN THE ENCLOSED FORM W-9)
(Must be signed by the registered holder(s) exactly as name(s) appear(s)
on certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificate(s) and
documents transmitted with this Letter of Transmittal. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or another person acting in a fiduciary or
representative capacity, please set forth full title and see Instruction
6.)
Signature(s) of Owner(s)
Dated: , 1994
Name(s):
(Please Print)
Capacity (full title):
Address:
(Include Zip Code)
Area Code(s) and
Telephone Number(s):
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
NAME OF FIRM:
AUTHORIZED SIGNATURE:
NAME:
(Please Print)
Title:
Address:
(Include Zip Code)
Area Code and
Telephone Number:
Dated: , 1994
7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered holder of
the Shares (which term, for purposes of this document, shall include any
participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of such Shares) exactly as the name
of the registered holder appears on the certificate tendered with this
Letter of Transmittal and payment and delivery are to be made directly to
such owner unless such owner has completed either the box entitled "Special
Payment Instructions" or "Special Delivery Instructions" above; or
(b) such Shares are tendered for the account of a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust
company (not a savings bank or savings and loan association) having an
office, branch or agency in the United States (each such entity, an
"Eligible Institution").
In all other cases, an Eligible Institution must guarantee all signatures
on this Letter of Transmittal. See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be used only if certificates for
Shares are delivered with it to the Depositary (or such certificates will be
delivered pursuant to a Notice of Guaranteed Delivery previously sent to the
Depositary) or if a tender for Shares is being made concurrently pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Certificates for all physically tendered Shares or confirmation of
a book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility of Shares tendered electronically, together in each case with a
properly completed and duly executed Letter of Transmittal or duly executed and
manually signed facsimile of it, and any other documents required by this Letter
of Transmittal, should be mailed or delivered to the Depositary at the
appropriate address set forth herein and must be delivered to the Depositary on
or before the Expiration Date (as defined in the Offer to Purchase). DELIVERY OF
DOCUMENTS TO ONE OF THE BOOK-ENTRY TRANSFER FACILITIES DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
Shareholders whose certificates are not immediately available or who cannot
deliver certificates for their Shares and all other required documents to the
Depositary before the Expiration Date, or whose Shares cannot be delivered on a
timely basis pursuant to the procedures for book-entry transfer, must, in any
such case, tender their Shares by or through any Eligible Institution by
properly completing and duly executing and delivering a Notice of Guaranteed
Delivery (or facsimile of it) and by otherwise complying with the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to
such procedure, certificates for all physically tendered Shares or book-entry
confirmations, as the case may be, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile of it) and all other documents
required by this Letter of Transmittal, must be received by the Depositary
within five New York Stock Exchange trading days after receipt by the Depositary
of such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer
to Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
signature guarantee by an Eligible Institution in the form set forth in such
Notice. For Shares to be tendered validly pursuant to the guaranteed delivery
procedure, the Depositary must receive the Notice of Guaranteed Delivery on or
before the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
8
The Company will not accept any alternative, conditional or contingent
tenders, nor will it purchase any fractional Shares, except as expressly
provided in the Offer to Purchase. All tendering shareholders, by execution of
this Letter of Transmittal (or a facsimile of it), waive any right to receive
any notice of the acceptance of their tender.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Shares Tendered" is inadequate, the certificate numbers and/or
the number of Shares should be listed on a separate signed schedule and attached
to this Letter of Transmittal.
4. PARTIAL TENDERS AND UNPURCHASED SHARES. (Not applicable to shareholders
who tender by book-entry transfer.) If fewer than all of the Shares evidenced by
any certificate are to be tendered, fill in the number of Shares that are to be
tendered in the column entitled "Number of Shares Tendered," in the box
captioned "Description of Shares Tendered." In such case, if any tendered Shares
are purchased, a new certificate for the remainder of the Shares (including any
Shares not purchased) evidenced by the old certificate(s) will be issued and
sent to the registered holder(s), unless otherwise specified in either the
"Special Payment Instructions" or "Special Delivery Instructions" box on this
Letter of Transmittal, as soon as practicable after the Expiration Date. Unless
otherwise indicated, all Shares represented by the certificate(s) listed and
delivered to the Depositary will be deemed to have been tendered.
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to be
properly tendered, the shareholder MUST check the box indicating the price per
Share at which he or she is tendering Shares under "Price (In Dollars) Per Share
at Which Shares Are Being Tendered" on this Letter of Transmittal. ONLY ONE BOX
MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED, THERE
IS NO PROPER TENDER OF SHARES. A shareholder wishing to tender portions of his
or her Share holdings at different prices must complete a separate Letter of
Transmittal for each price at which he or she wishes to tender each such portion
of his or her Shares. The same Shares cannot be tendered (unless previously
properly withdrawn as provided in Section 4 of the Offer to Purchase) at more
than one price.
6. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS.
(a) If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the certificate(s)
without any change whatsoever.
(b) If the Shares are registered in the names of two or more joint
holders, each such holder must sign this Letter of Transmittal.
(c) If any tendered Shares are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles of it) as there are
different registrations of certificates.
(d) When this Letter of Transmittal is signed by the registered
holder(s) of the Shares listed and transmitted hereby, no endorsement(s) of
certificate(s) representing such Shares or separate stock power(s) are
required unless payment is to be made or the certificate(s) for Shares not
tendered or not purchased are to be issued to a person other than the
registered holder(s). SIGNATURE(S) ON SUCH CERTIFICATE(S) MUST BE
GUARANTEED BY AN ELIGIBLE INSTITUTION. If this Letter of Transmittal is
signed by a person other than the registered holder(s) of the
certificate(s) listed, or if payment is to be made or their certificate(s)
for Shares not tendered or not purchased are to be issued to a person other
than the registered holder(s), the certificate(s) must be endorsed or
accompanied by appropriate stock power(s), in either case signed exactly as
the name(s) of the registered holder(s) appears on the certificate(s), and
the signature(s) on such certificate(s) or stock power(s) must be
guaranteed by an Eligible Institution. See Instruction 1.
9
(e) If this Letter of Transmittal or any certificate(s) or stock
power(s) are signed 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 must submit proper evidence satisfactory to the Company of their
authority so to act.
7. STOCK TRANSFER TAXES. Except as provided in this Instruction 7, no stock
transfer tax stamps or funds to cover such stamps need accompany this Letter of
Transmittal. The Company will pay or cause to be paid any stock transfer taxes
payable on the transfer to it of Shares purchased pursuant to the Offer. If,
however:
(a) payment of the aggregate Purchase Price for Shares tendered hereby
and accepted for purchase is to be made to any person other than the
registered holder(s);
(b) Shares not tendered or not accepted for purchase are to be
registered in the name(s) of any person(s) other than the registered
holder(s); or
(c) tendered certificates are registered in the name(s) of any
person(s) other than the person(s) signing this Letter of Transmittal;
then the Depositary will deduct from such aggregate Purchase Price the amount of
any stock transfer taxes (whether imposed on the registered holder, such other
person or otherwise) payable on account of the transfer to such person, unless
satisfactory evidence of the payment of such taxes or any exemption from them is
submitted.
8. ODD LOTS. As described in Section 1 of the Offer to Purchase, if the
Company is to purchase fewer than all Shares tendered before the Expiration Date
and not withdrawn, the Shares purchased first will consist of all Shares
tendered by any shareholder who each owned of record or owned beneficially, as
of the close of business on September 7, 1994, an aggregate of fewer than 100
Shares, and who tenders all of his or her Shares at or below the Purchase Price
(an "Odd Lot Owner"). This preference will not be available unless the box
captioned "Odd Lots" is completed.
9. CONDITIONAL TENDERS. As described in Sections 1 and 6 of the Offer to
Purchase, shareholders may condition their tenders on all or a minimum number of
their tendered Shares being purchased ("Conditional Tenders"). If the Company is
to purchase less than all Shares tendered before the Expiration Date and not
withdrawn, the Depositary will perform a preliminary proration, and any Shares
tendered at or below the Purchase Price pursuant to a Conditional Tender for
which the condition was not satisfied shall be deemed withdrawn, subject to
reinstatement if such Conditionally Tendered Shares are subsequently selected by
random lot for purchase subject to Section 1 of the Offer to Purchase.
Conditional tenders will be selected by lot only from shareholders who tender
all of their Shares. All tendered Shares shall be deemed unconditionally
tendered unless the "Conditional Tender" box is completed. The Conditional
Tender alternative is made available so that a shareholder may assure that the
purchase of Shares from the shareholder pursuant to the Offer will be treated as
a sale of such Shares by the shareholder, rather than the payment of a dividend
to the shareholder, for federal income tax purposes. Odd Lot Shares, which will
not be subject to proration, cannot be conditionally tendered. It is the
tendering shareholder's responsibility to calculate the minimum number of Shares
that must be purchased from the shareholder in order for the shareholder to
qualify for sale (rather than dividend) treatment, and each shareholder is urged
to consult his or her own tax advisor.
10. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of
the Offer to Purchase, shareholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase may
have an effect on the federal income tax treatment of the Purchase Price for the
Shares purchased. See Sections 1 and 14 of the Offer to Purchase.
11. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificate(s) for Shares
not tendered or not purchased and/or check(s) are to be issued in the name of a
person other than the signer of the Letter of Transmittal or if such
certificates and/or checks are to be sent to someone other than the person
signing the Letter of Transmittal or to the signer at a different address, the
boxes captioned "Special Payment Instructions" and/or "Special Delivery
Instructions" on this Letter of Transmittal should be completed as applicable
and signatures must be guaranteed as described in Instruction 1.
10
12. IRREGULARITIES. All questions as to the number of Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Company in its sole discretion, which determinations
shall be final and binding on all parties. The Company reserves the absolute
right to reject any or all tenders of Shares it determines not to be in proper
form or the acceptance of which or payment for which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Offer and any defect or irregularity in the
tender of any particular Shares, and the Company's interpretation of the terms
of the Offer (including these instructions) will be final and binding on all
parties. No tender of Shares will be deemed to be properly made until all
defects and irregularities have been cured or waived. Unless waived, any defects
or irregularities in connection with tenders must be cured within such time as
the Company shall determine. None of the Company, the Dealer Managers (as
defined in the Offer to Purchase), the Depositary, the Information Agent (as
defined in the Offer to Purchase) or any other person is or will be obligated to
give notice of any defects or irregularities in tenders and none of them will
incur any liability for failure to give any such notice.
13. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to, or additional copies of the
Offer to Purchase, the Notice of Guaranteed Delivery and this Letter of
Transmittal may be obtained from, the Information Agent or the Dealer Managers
at their addresses and telephone numbers set forth at the end of this Letter of
Transmittal or from your broker, dealer, commercial bank or trust company.
14. FORM W-9 AND FORM W-8. Shareholders other than corporations and certain
foreign persons may be subject to backup federal income tax withholding. Each
tendering shareholder who does not otherwise establish to the satisfaction of
the Depositary an exemption from backup federal income tax withholding is
required to provide the Depositary with a correct taxpayer identification number
("TIN") on Form W-9, which is provided with this Letter of Transmittal. For an
individual, his or her TIN will generally be his or her social security number.
Failure to provide the information requested or to make the certification on the
Form W-9 may subject the tendering shareholder to 31% backup federal income tax
withholding on the payments made to or for the shareholder with respect to
Shares purchased pursuant to the Offer. Failing to furnish a correct TIN may
subject the shareholder to a $50.00 penalty imposed by the Internal Revenue
Service. Providing false information may result in additional penalties. Backup
withholding is not an additional tax. Rather, the tax liability of a person
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained.
Shareholders who are foreign persons should submit Form W-8 to certify that they
are exempt from backup withholding. Form W-8 may be obtained from the
Depositary.
15. WITHHOLDING ON FOREIGN SHAREHOLDERS. Even if a foreign shareholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold federal income taxes equal to 30% of the gross payments payable to
a foreign shareholder or his agent unless the Depositary determines that an
exemption from or a reduced rate of withholding is available pursuant to a tax
treaty or an exemption from withholding is applicable because such gross
proceeds are effectively connected with the conduct of a trade or business in
the United States. In order to obtain an exemption from or a reduced rate of
withholding pursuant to a tax treaty, a foreign shareholder must deliver to the
Depositary a properly completed Form 1001. For this purpose, a foreign
shareholder is a shareholder that is not (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States, any State or any political subdivision
thereof or (iii) any estate or trust the income of which is subject to United
States federal income taxation regardless of the source of such income. In order
to obtain an exemption from withholding on the grounds that the gross proceeds
paid pursuant to the Offer are effectively connected with the conduct of a trade
or business within the United States, a foreign shareholder must deliver to the
Depositary a properly completed Form 4224. The Depositary will determine a
shareholder's status as a foreign shareholder and eligibility for a reduced rate
of, or an exemption from, withholding by reference to outstanding certificates
or statements concerning eligibility for a reduced rate of, or exemption from,
withholding (E.G., Form 1001 or Form 4224) unless facts and circumstances
indicate that such reliance is not warranted. A foreign shareholder may be
eligible to obtain a refund of all or a portion of any tax withheld if such
shareholder meets one of the three tests for sale treatment described in Section
14 of the Offer to Purchase or is otherwise able to establish that no tax or a
reduced amount of tax is due. Backup withholding generally will not apply to
amounts subject to the 30% or treaty-reduced rate of withholding. Foreign
shareholders
11
are urged to consult their tax advisors regarding the application of federal
income tax withholding, including eligibility for a withholding tax reduction or
exemption and refund procedures.
16. DIVIDEND REINVESTMENT PLAN. A shareholder participating in the Dividend
Reinvestment Plan who wishes to have American Stock Transfer & Trust Company,
who administers the Dividend Reinvestment Plan, tender Shares held in such
participant's account in the Dividend Reinvestment Plan should so indicate by
completing the separate election form included with the memorandum furnished to
such participants.
THE PARTICIPANTS IN THE DIVIDEND REINVESTMENT PLAN MAY NOT USE THE LETTER
OF TRANSMITTAL TO DIRECT THE TENDER OF DIVIDEND REINVESTMENT PLAN SHARES, BUT
MUST USE THE SEPARATE ELECTION FORM ENCLOSED WITH THE MEMORANDUM TO PARTICIPANTS
IN THE TREDEGAR INDUSTRIES, INC. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN.
DIVIDEND REINVESTMENT PLAN PARTICIPANTS ARE URGED TO READ THE SEPARATE
INSTRUCTION FORM AND RELATED MATERIALS CAREFULLY. ANY DIVIDEND REINVESTMENT PLAN
SHARES TENDERED BUT NOT PURCHASED WILL BE RETURNED TO THE PARTICIPANT'S DIVIDEND
REINVESTMENT PLAN ACCOUNT.
If a participant tenders all of his or her Dividend Reinvestment Plan
Shares and all such Shares are purchased by the Company pursuant to the Offer,
such tender will be deemed to be authorization and written notice to American
Stock Transfer & Trust Company of termination of such shareholder's
participation in the Dividend Reinvestment Plan.
SAVINGS PLAN. Participants in the Savings Plan who wish to have NationsBank
of Virginia, N.A., as trustee thereof (the "Savings Plan Trustee"), tender all
or part of the Shares allocated to their accounts should so indicate by
completing, executing and returning to the Savings Plan Trustee the election
form included with the memorandum furnished to such participants.
THE PARTICIPANTS IN THE SAVINGS PLAN MAY NOT USE THE LETTER OF TRANSMITTAL
TO DIRECT THE TENDER OF THE SAVINGS PLAN SHARES, BUT MUST USE THE SEPARATE
ELECTION FORM ENCLOSED WITH THE MEMORANDUM TO PARTICIPANTS IN THE SAVINGS PLAN
FOR THE EMPLOYEES OF TREDEGAR INDUSTRIES, INC. SAVINGS PLAN PARTICIPANTS ARE
URGED TO READ THE SEPARATE INSTRUCTION FORM AND RELATED MATERIALS CAREFULLY. ANY
SAVINGS PLAN SHARES TENDERED BUT NOT PURCHASED WILL BE RETURNED TO THE
PARTICIPANT'S SAVINGS PLAN ACCOUNT.
STOCK PURCHASE PLAN. Participants in the Stock Purchase Plan who wish to
have American Stock Transfer & Trust Company, as custodian thereof (the "Stock
Purchase Plan Custodian"), tender all or part of the Shares in such
participant's account should so indicate by completing, executing and returning
to the Stock Purchase Plan Custodian the election form included with the
memorandum furnished to such participants.
THE PARTICIPANTS IN THE STOCK PURCHASE PLAN MAY NOT USE THE LETTER OF
TRANSMITTAL TO DIRECT THE TENDER OF THE STOCK PURCHASE PLAN SHARES, BUT MUST USE
THE SEPARATE ELECTION FORM ENCLOSED WITH THE MEMORANDUM TO PARTICIPANTS IN THE
TREDEGAR INDUSTRIES, INC. EMPLOYEE STOCK PURCHASE PLAN. STOCK PURCHASE PLAN
PARTICIPANTS ARE URGED TO READ THE SEPARATE INSTRUCTION FORM AND RELATED
MATERIALS CAREFULLY. ANY STOCK PURCHASE PLAN SHARES TENDERED BUT NOT PURCHASED
WILL BE RETURNED TO THE PARTICIPANT'S STOCK PURCHASE PLAN ACCOUNT.
12
THE INFORMATION AGENT FOR THE OFFER IS:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call
(212) 440-9800
ALL OTHERS CALL TOLL FREE
(800) 223-2064
THE DEPOSITARY FOR THE OFFER IS:
AMERICAN STOCK TRANSFER & TRUST COMPANY
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/OVERNIGHT DELIVERY:
American Stock Transfer & Trust Co. (Eligible Institutions American Stock Transfer & Trust Co.
40 Wall Street, 46th Floor Only) 40 Wall Street, 46th Floor
New York, NY 10005 (718) 234-5001 New York, NY 10005
(Attention: Reorganization (Attention: Reorganization
Department) CONFIRM BY TELEPHONE: Department)
(718) 921-8200
FOR INFORMATION CALL:
(718) 921-8200
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
In New York State: (212) 902-1000 (collect)
Other Areas: (800) 323-5678 (toll free)
IMPORTANT: This Letter of Transmittal or a facsimile hereof (together with
certificates for the Shares being tendered and all other required documents), or
a Notice of Guaranteed Delivery must be received prior to 5:00 p.m., New York
City time, on the Expiration Date. SHAREHOLDERS ARE ENCOURAGED TO RETURN A
COMPLETED FORM W-9 WITH THEIR LETTER OF TRANSMITTAL.
13
Form W-9
(Rev. January 1993)
Department of the Treasury Give this form to
Internal Revenue Service the requester. Do
NOT sent to IRS.
Request for Taxpayer
Identification Number and Certification
Name (if joint names, list first and circle the name of the person or
entity whose number you enter in Part I below. See instructions on
page 2 if your name has changed.)
Business name (Sole proprietors see instructions on page 2.) (If you
are exempt from backup withholding, complete this form and enter
"EXEMPT" in Part II below.)
Address (number and Street) List account number(s) here
(optional)
City, state, and ZIP code
Part I Taxpayer Identification Number Part II For Payees Exempt From Backup
(TIN) Withholding (See exempt Payees
and Payments on Page 2)
Enter your TIN in the appropriate box.
For individuals, this is your social
security number (SSN). For sole Requester's name and address
proprietors, see the instructions (optional)
on page 2. For other entities, it is your
employer identification number (EIN).
If you do not have a number, see How To
Obtain a TIN below.
Note: If the account is in more that one
name, see the chart on page 2 for guidelines on
whose number to enter.
Social security number:
OR
Employer identification
number
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), and
2. I am not subject to backup withholding because: (a) I am exempt
from backup withholding, or (b) I have not been notified by the
Internal Revenue Service that I am subject to backup withholding
as a result of a failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup
withholding.
Certification Instructions.-You must cross out item 2 above if you
have been notified by the IRS that you are currently subject to backup
withholding because of underreporting interest or dividends on your
tax return. For real estate transactions, item 2 does not apply. For
mortgage interest paid, the acquisition or abandonment of secured
property, contributions to an individual retirement arrangement (IRA),
and generally payments other than interest and dividends, you are not
required to sign the Certification, but you must provide your correct
TIN. (Also see Signing the Certification on page 2.)
Sign
Here Signature Date
Section references are
to the Internal Revenue
Code.
Purpose of Form.-A person who is required to file an information return
with the IRS must obtain your correct TIN to report income paid to you,
real estate transactions, mortgage interest you paid, the acquisition or
abandonment of secured property, or contributions you made to an IRA.
Use Form W- 9 to furnish your correct TIN to the requester (the person
asking you to furnish your TIN) and, when applicable, (1) to certify
that the TIN you are furnishing is correct (or that you are waiting for
a number to be issued, (2) to certify that you are not subject to backup
withholding, and (3) to claim exemption from backup withholding if you
are an exempt payee. Furnishing your correct TIN and making the
appropriate certifications will prevent certain payments from being
subject to backup withholding.
Note: If a requester gives you a form other than a W-9 to request your
TIN, you must use the requester's form.
How To Obtain a TIN.-If you do not have a TIN, apply for one
immediately. To apply, get Form SS-5, Application for a Social Security
Card (for individuals), from your local office of the Social Security
Administration, or Form SS-4, Application for Employer Identification
Number (for businesses and all other entities), from your local IRS
office.
To complete Form W-9 if you do not have a TIN, write "Applied for" in
the space for the TIN in Part I, sign and date the form, and give it to
the requester. Generally, you will then have 60 days to obtain a TIN
and furnish it to the requester. If the requester does not receive your
TIN within 60 days, backup withholding, if applicable, will begin and
continue until you furnish your TIN to the requester. For reportable
interest or dividend payments, the payer must exercise one of the
following options concerning backup withholding during this 60-day
period. Under option (1), a payer must backup withhold on any
withdrawals you make from your account after 7 business days after the
requester receives this form back from you. Under option (2), the payer
must backup withhold on any reportable interest or dividend payments
made to your account, regardless of whether you make any withdrawals.
The backup withholding under option (2) must begin no later than 7
business days after the requester receives this form back. Under option
(2), the payer is required to refund the amounts withheld if your
certified TIN is received within the 60- day period and you were not
subject to backup withholding during that period.
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.
As soon as you receive your TIN, complete another Form W-9, include
your TIN, sign and date the form, and give it to the requester.
What Is Backup Withholding?-Persons making certain payments to you after
1992 are required to withhold and pay to the IRS 31% of such payments
under certain conditions. This is called "backup withholding." Payments
that could be subject to backup withholding include interest, dividends,
broker and barter exchange transactions, rents, royalties, nonemployee
compensation, and certain payments from fishing boat operators, but do
not include real estate transactions.
If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends on
your tax return, your payments will not be subject to backup
withholding. Payments you receive will be subject to backup withholding
if:
1. You do not furnish your TIN to the requester, or
2. The IRS notifies the requester that you furnished an incorrect
TIN, or
3. You are notified by the IRS that you are subject to backup
withholding because you failed to report all your interest and dividends
on your tax return (for reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to
backup withholding under 3 above (for reportable interest and dividend
accounts opened after 1983 only), or
5. You do not certify your TIN. This applies only to reportable
interest, dividend, broker, or barter exchange accounts opened after
1983, or broker accounts considered inactive in 1983.
Except as explained in 5 above, other reportable payments are subject
to backup withholding only if 1 or 2 above applies. Certain payees and
payments are exempt from backup withholding and information reporting.
See Payees and Payments Exempt From Backup Withholding, below, and
Exempt Payees and Payments under Specific Instructions, below, if you
are an exempt payee.
Payees and Payments Exempt From Backup Withholding.-The following is a
list of payees exempt from backup withholding and for which no
information reporting is required. For interest and dividends, all
listed payees are exempt except item (9). For broker transactions,
payees listed in (1) through (13) and a person registered under the
Investment Advisers Act of 1940 who regularly acts as a broker are
exempt. Payments subject to reporting under sections 6041 and 6041A are
generally exempt from backup withholding only if made to payees
described in items (1) through (7), except a corporation that provides
medical and health care services or bills and collects payments for such
services is not exempt from backup withholding or information reporting.
Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions, patronage dividends, and
payments by certain fishing boat operators.
(1) A corporation. (2) An organization exempt from tax under section
501(a), or an IRA, or a custodial account under section 403(b)(7). (3)
The United States or any of its agencies or instrumentalities. (4) A
state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities. (5) A foreign
government or any of its political subdivisions, agencies, or
instrumentalities. (6) An international organization or any of its
agencies or instrumentalities. (7) A foreign central bank of issue. (8)
A dealer in securities or commodities required to register in the United
States or a possession of the United States. (9) A futures commission
merchant registered with the Commodity Futures Trading Commission. (10)
A real estate investment trust. (11) An entity registered at all times
during the tax year under the Investment Company Act of 1940. (12) A
common trust fund operated by a bank under section 584(a). (13) A
financial institution. (14) A middleman known in the investment
community as a nominee or listed in the most recent publication of the
American Society of Corporate Secretaries, Inc., Nominee List. (15) A
trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends generally not subject to
backup withholding include the following:
(bullet) Payments to nonresidents aliens subject to withholding under
section 1441.
(bullet) Payments to partnerships not engaged in a trade or business in
the United States and that have at least one nonresident partner.
(bullet) Payments of patronage dividends not paid in money.
(bullet) Payments made by certain foreign organizations.
Payments of interest generally not subject to backup withholding
include the following:
(bullet) 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 TIN to the payer.
(bullet) Payments of tax- exempt interest (including exempt- interest
dividends under section 852).
(bullet) Payments described in section 6049(b)(5) to nonresident
aliens.
(bullet) Payments on tax-free covenant bonds under section 1451.
(bullet) Payments made by certain foreign organizations.
(bullet) Mortgage interest paid by you.
Payments that are not subject to information reporting are also not
subject to backup withholding. For details, see sections 6041,
6041A(a), 6042, 6044, 6045, 6049, 6050A, and 6050N, and their
regulations.
Penalties
Failure to Furnish TIN.- If you fail to furnish your correct TIN to a
requester, 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.
Civil Penalty for False Information With Respect to Withholding.-If you
make a false statement with no reasonable basis that results in no
backup withholding, you are subject to a $500 penalty.
Criminal Penalty for Falsifying Information.-Willfully falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
Misuse of TINs.-If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal
penalties.
Specific Instructions
Name.-If you are an individual, you must generally provide the name
shown on your social security card. However, if you have changed your
last name, for instance, due to marriage, without informing the Social
Security Administration of the name change, please enter your first
name, the last name shown on your social security card, and your new
last name.
If you are a sole proprietor, you must furnish your individual name
and either your SSN or EIN. You may also enter your business name or
"doing business as" name on the business name line. Enter your name(s)
as shown on your social security card and/or as it was used to apply for
EIN on Form SS-4.
Signing the Certification.-
1. Interest, Dividend, and Barter Exchange Accounts Opened Before 1984
and Broker Accounts Considered Active During 1983. You are required to
furnish your correct TIN, but you are not required to sign the
certification.
2. Interest, Dividend, Broker, and Barter Exchange Accounts Opened
After 1983 and Broker Accounts Considered Inactive During 1983. You must
sign the certification or backup withholding will apply. If you are
subject to backup withholding and you are merely providing your correct
TIN to the requester, you must cross out item 2 in the certification
before signing the form.
3. Real Estate Transactions. You must sign the certification. You may
cross item 2 of the certification.
4. Other Payments. You are required to furnish your correct TIN, but
you are not required to sign the certification unless you have been
notified of an incorrect TIN. Other payments include payments made in
the course of the requester's trade or business for rents, royalties,
goods (other than bills for merchandise), medical and health care
services, payments to a nonemployee for services (including attorney and
accounting fees), and payments to certain fishing boat crew members.
5. Mortgage Interest Paid by You, Acquisition or Abandonment of
Secured Property, or IRA Contributions. You are required to furnish
your correct TIN, but you are not required to sign the certification.
6. Exempt Payees and Payments. If you are exempt from backup
withholding, you should complete this form to avoid possible erroneous
backup withholding. Enter your correct TIN in Part I, write "EXEMPT" in
the block in Part II, and sign and date the form. If you are a
nonresident alien or foreign entity not subject to backup withholding,
give the requester a completed Form W-8, Certificate of Foreign Status.
7. TIN "Applied for." Follow the instructions under How To Obtain a
TIN, on page 1, and sign and date this form.
Signature.-For a joint account, only the person whose TIN is shown in
Part I should sign.
Privacy Act Notice.-Section 6109 requires you to furnish your correct
TIN to persons who must file information returns with the IRS to report
interest, dividends, and certain other income paid to you, mortgage
interest you paid, the acquisition or abandonment of secured property,
or contributions you made to an IRA. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax
return. You must provide your TIN whether or not you are required to
file a tax return. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not
furnish a TIN to a payer. Certain penalties may also apply.
What Name and Number To
Give The Requester
For this type of
account: Give name and SSN of
1. Individual The individual
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, the first individual
on the account1
3. Custodian account of The minor2
a minor (Uniform Gift
to Minors Act)
4. a. The usual The grantor-trustee1
revocable
savings
trust (grantor
is also trustee)
b. So-called trust The actual owner1
account that
is not a legal or
valid trust
under state law
5. Sole proprietorship The owner3
6. Sole proprietorship The owner3
7. A valid trust, estate, Legal entity4
or pension trust
8. Corporate The corporation
9. Association, club, The organization
religious, charitable,
educational, or other
tax-exempt organization
10. Partnership The partnership
11. A broker or registered The broker or nominee
nominee
12. Account with the The public entity
Department of
Agriculture in the
name of a public entity
(such as a state or
local government, school
district, or prison) that
receives agricultural
program payments
1 List first and circle the name of the person whose number you furnish.
2 Circle the minor's name and furnish the minor's SSN.
3 Show your individual name. You may also enter your business name.
You may use your SSN or EIN.
4 List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the TIN of the personal representative or
trustee unless the legal entity itself is not designated in the account
title.)
Note: If no name is circled when there is more than one name, the
number will be considered to be that of the first name listed.
EXHIBIT (A)(3)
TREDEGAR INDUSTRIES, INC.
NOTICE OF GUARANTEED DELIVERY OF SHARES OF COMMON STOCK
This form or a facsimile hereof must be used to accept the Offer (as
defined below) if:
(a) certificates for shares of common stock, no par value per share
(the "Shares"), of Tredegar Industries, Inc., a Virginia corporation (the
"Company"), cannot be delivered to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Company's Offer to Purchase dated
September 8, 1994 (the "Offer to Purchase")); or
(b) the procedure for book-entry transfer (set forth in Section 3 of
the Offer to Purchase) cannot be completed on a timely basis; or
(c) the Letter of Transmittal (or a facsimile thereof) and all other
required documents cannot be delivered to the Depositary prior to the
Expiration Date.
This form, properly completed and duly executed, may be delivered by hand,
mail or facsimile transmission to the Depositary. See Section 3 of the Offer to
Purchase.
TO: AMERICAN STOCK TRANSFER & TRUST COMPANY
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/OVERNIGHT DELIVERY:
American Stock Transfer & Trust Co. (Eligible Institutions American Stock Transfer & Trust Co.
40 Wall Street, 46th Floor Only) 40 Wall Street, 46th Floor
New York, NY 10005 (718) 234-5001 New York, NY 10005
(Attention: Reorganization (Attention: Reorganization
Department) CONFIRM BY TELEPHONE: Department)
(718) 921-8200
FOR INFORMATION CALL:
(718) 921-8200
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE 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.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company at the price per Share
indicated in this Notice of Guaranteed Delivery, upon the terms and subject to
the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal (which together constitute the "Offer"), receipt of both of which is
hereby acknowledged, Shares pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase.
ODD LOTS
To be completed ONLY if the Shares are being tendered by or on
behalf of a person owning beneficially or of record, as of the close of
business on September 7, 1994, an aggregate of fewer than 100 Shares.
The undersigned either (check one box);
[ ] was the beneficial or record owner, as of the close of business on
September 7, 1994, of an aggregate of fewer than 100 Shares, all of
which are being tendered; or
[ ] is a broker, dealer, commercial bank, trust company, or other
nominee that (a) is tendering for the beneficial owner(s) thereof,
Shares with respect to which it is the record holder, and (b)
believes, based upon representations made to it by such beneficial
owner(s), that each such person was the beneficial owner, as of the
close of business on September 7, 1994, of an aggregate of fewer
than 100 Shares and is tendering all of such Shares.
In addition the undersigned is tendering Shares either (check one box):
[ ] at the Purchase Price, as the same shall be determined by the
Company in accordance with the terms of the Offer (persons checking
this box need not indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (in Dollars) per
Share at which Shares are being tendered."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED
CONDITIONAL TENDER (SEE INSTRUCTION 9)
[ ] check here if tender of Shares is conditional on the Company purchasing
all or a minimum number of the tendered Shares and complete the
following:
Minimum number of Shares to be sold:
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST
COMPLETE A SEPARATE NOTICE OF GUARANTEE FOR EACH PRICE AT WHICH SHARES
ARE TENDERED.)
[ ] $17.000 [ ] $17.750 [ ] $18.500
[ ] $17.125 [ ] $17.875 [ ] $18.625
[ ] $17.250 [ ] $18.000 [ ] $18.750
[ ] $17.375 [ ] $18.125 [ ] $18.875
[ ] $17.500 [ ] $18.250 [ ] $19.000
[ ] $17.625 [ ] $18.375
(Please type or print)
Certificate Nos. (if available):
Name(s)
Address(es)
Area Code(s) and Telephone Number(s)
SIGN HERE
Signature(s)
Dated:
If Shares will be tendered by book-entry transfer, check one box:
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] The Philadelphia Depository Company
Account Number:
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned is a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office, branch, or agency in the United States
and represents that: (a) 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, and (b) such tender of Shares complies with
such Rule 14e-4, and guarantees that the Depositary will receive (i)
certificates of the Shares tendered hereby in proper form for transfer, or (ii)
confirmation that the Shares tendered hereby have been delivered pursuant to the
procedure for book-entry transfer (set forth in Section 3 of the Offer to
Purchase) into the Depositary's account at The Depository Trust Company, the
Midwest Securities Trust Company or The Philadelphia Depository Company, as the
case may be, together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other documents required by the
Letter of Transmittal, all within five New York Stock Exchange trading days
after the date the Depositary receives this Notice of Guaranteed Delivery.
Authorized Signature:
Name:
(Please Print)
Title:
Name of Firm:
Address:
(Including Zip Code)
Area Code and Telephone Number:
Date: , 1994
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL.
EXHIBIT (A)(4)
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
TREDEGAR INDUSTRIES, INC.
Offer To Purchase For Cash Up To
1,000,000 Shares Of Its Common Stock (Including
The Associated Preferred Stock Purchase Rights)
At A Purchase Price Not In Excess Of $19.00
Nor Less Than $17.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, OCTOBER 6, 1994, UNLESS THE OFFER IS
EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Tredegar Industries, Inc., a Virginia corporation (the "Company"), has
appointed us to act as Dealer Managers in connection with its offer to purchase
for cash up to 1,000,000 shares of its Common Stock, no par value per share (the
"Shares") (including the associated Preferred Stock Purchase Rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of June 15, 1989, as
amended, between the Company and the Rights Agent named therein), at prices not
in excess of $19.00 nor less than $17.00 per Share, specified by its
shareholders, upon the terms and subject to the conditions set forth in its
Offer to Purchase, dated September 8, 1994, and in the related Letter of
Transmittal (which together constitute the "Offer"). Unless the Rights are
redeemed by the Company, a tender of Shares will also constitute a tender of the
associated Rights. Unless the context requires otherwise, all references herein
to Shares include the associated Rights.
The Company will determine the single per Share price, not in excess of
$19.00 nor less than $17.00 per share, net to the seller in cash (the "Purchase
Price"), that it will pay for Shares properly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the lowest Purchase Price that
will allow it to buy 1,000,000 shares (or such lesser number of Shares as are
properly tendered). All Shares acquired in the Offer will be acquired at the
Purchase Price. All Shares properly tendered at prices at or below the Purchase
Price and not withdrawn will be purchased at the Purchase Price, upon the terms
and subject to the conditions of the Offer, including the proration and
conditional tender provisions. Shares tendered at prices in excess of the
Purchase Price and shares not purchased because of proration will be returned.
The Company reserves the right, in its sole discretion, to purchase more than
1,000,000 Shares pursuant to the Offer. See Sections 1 and 15 of the Offer to
Purchase.
If, prior to the Expiration Date (as defined in the Offer to Purchase),
more than 1,000,000 Shares (or such greater number of Shares as the Company may
elect to purchase) are properly tendered and not withdrawn, the Company will,
upon the terms and subject to the conditions of the Offer, accept Shares for
purchase first from Odd Lot Owners (as defined in the Offer to Purchase) who
properly tender their Shares at or below the Purchase Price and then on a PRO
RATA basis from all other shareholders whose Shares are properly tendered at or
below the Purchase Price and not withdrawn. If any shareholder tenders Shares
and does not wish to have such Shares purchased subject to proration, such
shareholder may tender Shares subject to the condition that a specified minimum
number of Shares (which may be represented by designated stock certificates) or
none of such Shares be purchased. See Sections 1, 3 and 6 of the Offer to
Purchase.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 7 OF THE OFFER TO PURCHASE.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase, dated September 8, 1994;
2. Letter to Clients which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer;
3. Letter, dated September 8, 1994, from John D. Gottwald, President
and Chief Executive Officer of the Company, to shareholders of the Company;
4. Letter of Transmittal for your use and for the information of your
clients (together with accompanying Form W-9 and guidelines); and
5. Notice of Guaranteed Delivery to be used to accept the Offer if the
Share certificates and all other required documents cannot be delivered to
the Depositary by the Expiration Date or if the procedure for book-entry
transfer cannot be completed on a timely basis.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THURSDAY, OCTOBER 6, 1994, UNLESS THE OFFER IS EXTENDED.
No fees or commissions will be payable to brokers, dealers or any person
for soliciting tenders of Shares pursuant to the Offer other than fees paid to
the Dealer Managers, the Information Agent or the Depositary as described in the
Offer to Purchase. The Company will, however, upon request, reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to the beneficial owners of Shares held by you as a nominee
or in a fiduciary capacity. The Company will pay or cause to be paid any stock
transfer taxes applicable to its purchase of Shares, except as otherwise
provided in Instruction 7 of the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary with either certificate(s) representing the tendered Shares or
confirmation of their book-entry transfer all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in Section 3, "The Offer -- Procedure for Tendering Shares,"
of the Offer to Purchase, tenders may be made without the concurrent deposit of
stock certificates or concurrent compliance with the procedure for book-entry
transfer, if such tenders are made by or through a broker or dealer which is a
member firm of a registered national securities exchange, or a member of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office, branch or agency in the United States. Certificates
for Shares so tendered (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the "Book-Entry Transfer
Facilities" described in the Offer to Purchase), together with a properly
completed and duly executed Letter of Transmittal and any other documents
required by the Letter of Transmittal, must be received by the Depositary within
five New York Stock Exchange trading days after timely receipt by the Depositary
of a properly completed and duly executed Notice of Guaranteed Delivery.
Any inquiries you may have with respect to the Offer should be addressed to
Goldman, Sachs & Co. or to the Information Agent at their respective addresses
and telephone numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
undersigned, telephone in New York State: (212) 902-1000 (collect) and in other
areas: (800) 323-5678 (toll free), or from the Information Agent, Georgeson &
Company Inc., telephone: (800) 223-2064 (toll free).
Very truly yours,
GOLDMAN, SACHS & CO.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR ANY OF ITS AFFILIATES, THE DEALER
MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED THEREIN.
EXHIBIT (A)(5)
TREDEGAR INDUSTRIES, INC.
Offer To Purchase For Cash Up To
1,000,000 Shares Of Its Common Stock (Including
The Associated Preferred Stock Purchase Rights)
At A Purchase Price Not In Excess Of $19.00
Nor Less Than $17.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, OCTOBER 6, 1994, UNLESS THE OFFER IS
EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated September
8, 1994, and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the Offer by Tredegar Industries, Inc., a Virginia
corporation (the "Company"), to purchase up to 1,000,000 shares of its Common
Stock, no par value per share (the "Shares") (including the associated Preferred
Stock Purchase Rights (the "Rights") issued pursuant to the rights agreement,
dated as of June 15, 1989, as amended, between the Company and the Rights Agent
named therein), at prices not in excess of $19.00 nor less than $17.00 per
Share, specified by tendering shareholders, upon the terms and subject to the
conditions set forth in the Offer. Unless the Rights are redeemed by the
Company, a tender of Shares will also constitute a tender of the associated
Rights. Unless the context requires otherwise, all references herein to Shares
include the associated Rights.
The Company will determine the single per Share price, not in excess of
$19.00 nor less than $17.00 per share, net to the seller in cash (the "Purchase
Price"), that it will pay for Shares properly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering shareholders. The Company will select the lowest Purchase Price that
will allow it to buy 1,000,000 shares (or such lesser number of Shares as are
properly tendered). All Shares acquired in the Offer will be acquired at the
Purchase Price. All Shares properly tendered at prices at or below the Purchase
Price and not withdrawn will be purchased at the Purchase Price, upon the terms
and subject to the conditions of the Offer, including the proration and
conditional tender provisions. Shares tendered at prices in excess of the
Purchase Price and shares not purchased because of proration will be returned.
The Company reserves the right, in its sole discretion, to purchase more than
1,000,000 Shares pursuant to the Offer. See Sections 1 and 15 of the Offer to
Purchase.
If, prior to the Expiration Date (as defined in the Offer to Purchase),
more than 1,000,000 Shares (or such greater number of Shares as the Company may
elect to purchase) are properly tendered and not withdrawn, the Company will,
upon the terms and subject to the conditions of the Offer, accept Shares for
purchase first from Odd Lot Owners (as defined in the Offer to Purchase) who
properly tender their Shares at or below the Purchase Price and then on a PRO
RATA basis from all other shareholders whose Shares are properly tendered at or
below the Purchase Price and not withdrawn. If any shareholder tenders Shares
and does not wish to have such Shares purchased subject to proration, such
shareholder may tender Shares subject to the condition that a specified minimum
number of Shares (which may be represented by designated stock certificates) or
none of such Shares be purchased. See Sections 1, 3 and 6 of the Offer to
Purchase.
We are the owner of record of Shares held for your account. As such, we are
the only ones who can tender your Shares, and then only pursuant to your
instructions. WE ARE SENDING YOU THE LETTER OF TRANSMITTAL FOR YOUR INFORMATION
ONLY; YOU CANNOT USE IT TO TENDER SHARES WE HOLD FOR YOUR ACCOUNT.
1
Please instruct us as to whether you wish us to tender any or all of the
Shares we hold for your account on the terms and subject to the conditions of
the Offer.
We call your attention to the following:
1. You may tender Shares at prices not in excess of $19.00 nor less
than $17.00 per Share as indicated in the attached Instruction Form, net to
you in cash.
2. You may condition your tender of Shares on the Company purchasing
all or a minimum number of your Shares.
3. You may designate the priority in which your Shares shall be
purchased in the event of proration.
4. The Offer is not conditioned upon any minimum number of Shares
being tendered.
5. The Offer, proration period and withdrawal rights will expire at
5:00 P.M., New York City time, on Thursday, October 6, 1994, unless the
Company extends the Offer.
6. The Offer is for 1,000,000 Shares, constituting approximately 9.45%
of the Shares outstanding as of September 7, 1994.
7. Tendering shareholders will not be obligated to pay any brokerage
commissions, solicitation fees, or, subject to Instruction 7 of the Letter
of Transmittal, stock transfer taxes on the Company's purchase of Shares
pursuant to the Offer.
8. If you beneficially held, as of the close of business on September
7, 1994, an aggregate of fewer than 100 Shares, and you instruct us to
tender on your behalf all such Shares at or below the Purchase Price before
the Expiration Date (as defined in the Offer to Purchase) and check the box
captioned "Odd Lots " in the attached Instruction Form, the Company, upon
the terms and subject to the conditions of the Offer, will accept all such
Shares for purchase before proration, if any, of the purchase of other
Shares properly tendered at or below the Purchase Price.
9. If you wish to tender portions of your Shares at different prices,
you must complete a separate Instruction Form for each price at which you
wish to tender each such portion of your Shares. We must submit separate
Letters of Transmittal on your behalf for each price you will accept.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your Instruction Form to us is enclosed.
If you authorize us to tender your Shares, we will tender all such Shares unless
you specify otherwise on the attached Instruction Form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION DATE OF THE OFFER.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON THURSDAY, OCTOBER 6, 1994, UNLESS THE COMPANY EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if more than 1,000,000
Shares have been properly tendered at prices at or below the Purchase Price and
not withdrawn prior to the Expiration Date (as defined in the Offer to
Purchase), the Company will purchase properly tendered Shares on the basis set
forth below:
(a) FIRST, all Shares properly tendered and not withdrawn prior to the
Expiration Date by any Odd Lot Holder (as defined below) who:
2
(1) tenders all Shares beneficially owned by such Odd Lot Holder at
a price at or below the Purchase Price (tenders of less than all Shares
owned by such shareholder will not qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) SECOND, after purchase of all of the foregoing Shares, all other
Shares tendered properly and unconditionally at prices at or below the
Purchase Price and not withdrawn prior to the Expiration Date, on a pro
rata basis (with appropriate adjustments to avoid purchases of fractional
Shares) as described in the Section 1 of the Offer to Purchase; and
(c) THIRD, if necessary, Shares conditionally tendered at or below the
Purchase Price and not withdrawn prior to the Expiration Date, selected by
random lot in accordance with Section 6 of the Offer to Purchase.
You may condition your tender on the Company purchasing a minimum number of
your tendered Shares. In such case, if as a result of the preliminary proration
provisions in the Offer to Purchase the Company would purchase less than such
minimum number of your Shares, then the Company will not purchase any of your
Shares, except as provided in the next sentence. In such case, if as a result of
conditionally tendered Shares not being purchased the total number of Shares
that would have been purchased is less than 1,000,000, the Company will select,
by random lot, for purchase from shareholders who tender all their Shares,
conditionally tendered Shares for which the condition, based on a preliminary
proration, has not been satisfied. See Section 1 of the Offer to Purchase.
The Offer is being made to all holders of Shares. The Company is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If the Company becomes aware
of any valid state statute prohibiting the making of the Offer, the Company will
make a good faith effort to comply with such statute. If, after such good faith
effort, the Company cannot comply with such statute, the Offer will not be made
to, nor will tenders be accepted from or on behalf of, holders of Shares in such
state. In those jurisdictions whose securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be deemed
to be made on behalf of the Company by the Dealer Managers or one or more
registered brokers or dealers licensed under the laws of such jurisdictions.
INSTRUCTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF TREDEGAR INDUSTRIES, INC.
Please tender to Tredegar Industries, Inc. (the "Company"), on (our) (my)
behalf, the number of Shares indicated below, which are beneficially owned by
(us) (me) and registered in your name, upon terms and subject to the conditions
contained in the Offer to Purchase of the Company dated September 8, 1994, and
the related Letter of Transmittal, the receipt of both of which is acknowledged.
Number of Shares to be tendered: Shares
3
ODD LOTS
(SEE INSTRUCTION 8)
[ ] By checking this box the undersigned represents that the undersigned
owned, beneficially or of record, as of the close of business on
September 7, 1994, an aggregate of fewer than 100 Shares and is
tendering all of such Shares.
In addition the undersigned is tendering Shares either (check one box):
[ ] at the Purchase Price, as the same shall be determined by the
Company in accordance with the terms of the Offer (persons checking
this box need not indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (in Dollars) per
Share at which Shares are being tendered."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED
CONDITIONAL TENDER
[ ] check here if tender of Shares is conditional on the Company
purchasing all or a minimum number of the tendered Shares and
complete the following:
Minimum number of Shares to be sold:
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST
COMPLETE A SEPARATE INSTRUCTION FORM FOR EACH PRICE AT WHICH SHARES ARE
TENDERED.)
[ ] $17.000 [ ] $17.750 [ ] $18.500
[ ] $17.125 [ ] $17.875 [ ] $18.625
[ ] $17.250 [ ] $18.000 [ ] $18.750
[ ] $17.375 [ ] $18.125 [ ] $18.875
[ ] $17.500 [ ] $18.250 [ ] $19.000
[ ] $17.625 [ ] $18.375
4
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED UNANIMOUSLY THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED.
Signature(s):
Name(s):
(Please Print)
(Taxpayer Identification or
Social Security Number)
Address:
(Including Zip Code)
Area Code and Telephone Number:
Date: , 1994
IMPORTANT: SHAREHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED FORM W-9
WITH THEIR INSTRUCTION FORM.
5
EXHIBIT (A)(6)
TREDEGAR INDUSTRIES, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
To: Participants in the Tredegar Industries, Inc. Dividend Reinvestment and
Stock Purchase Plan
Re: Tredegar Industries, Inc.'s Offer to Purchase for Cash Up to 1,000,000
Shares of its Common Stock
Date: September 8, 1994
This memorandum is being sent to you because you are a participant in the
Tredegar Industries, Inc. Dividend Reinvestment and Stock Purchase Plan (the
"Dividend Reinvestment Plan").
The Dividend Reinvestment Plan is described in the Plan Prospectus
("Prospectus"). Please refer to the relevant Prospectus for more information
regarding the Dividend Reinvestment Plan.
TREDEGAR INDUSTRIES, INC. IS OFFERING TO PURCHASE SHARES OF ITS COMMON STOCK
Tredegar Industries, Inc. (the "Company") is inviting its shareholders to
tender shares of the Company's common stock, no par value per share (the
"Shares"), for sale directly to the Company. Shareholders are being invited to
tender their shares at prices not in excess of $19.00 nor less than $17.00 per
share. The details of the invitation are described in the Company's Offer to
Purchase, dated September 8, 1994 (the "Offer to Purchase") and this memorandum
(which together constitute the "Offer" for purposes of tendering Shares held in
your Dividend Reinvestment Plan account). Copies of the Offer to Purchase and
certain related materials (excluding the Letter of Transmittal), which are being
sent to the Company's shareholders generally, are enclosed for your review.
The Letter of Transmittal referred to above and in the Offer to Purchase
cannot be used to tender the Shares held in your Dividend Reinvestment Plan
account: the enclosed Election Form for the Dividend Reinvestment Plan is a
substitute for the Letter of Transmittal and must be used to tender shares in
your Dividend Reinvestment Plan account.
YOUR DECISION WHETHER TO TENDER
As a participant in the Dividend Reinvestment Plan you may direct American
Stock Transfer and Trust Company, the administrator of the Dividend Reinvestment
Plan (the "Administrator") to tender Shares allocated to your Dividend
Reinvestment Plan account pursuant to the Offer.
HOW TO TENDER SHARES; COMPLETION OF ELECTION FORM
If you wish to direct the Administrator to tender all or part of the Shares
in your Dividend Reinvestment Plan account, you must complete and return the
enclosed Election Form in accordance with the instructions specified on the
Election Form. Before deciding whether or not to tender your Shares, please
carefully read the enclosed materials.
YOUR ELECTION WILL BE EFFECTIVE ONLY IF YOUR PROPERLY COMPLETED ELECTION
FORM IS RECEIVED BY THE ADMINISTRATOR AT ITS ADDRESS SET FORTH ON THE ENCLOSED
RETURN ENVELOPE NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, OCTOBER
4, 1994. Election Forms that are received after this deadline, and Election
Forms which are not properly completed, will not be accepted. Examples of
improperly completed Election Forms include Forms which are not signed and Forms
which contain incorrect or incomplete information.
Dividend Reinvestment Plan Participants who desire to tender Shares at more
than one price must complete a separate Election Form for each price at which
Shares are tendered, provided that the same Shares cannot be tendered (unless
properly withdrawn in accordance with the terms of the Offer) at more than one
price. IN ORDER
1
TO PROPERLY TENDER SHARES, ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN THE
APPROPRIATE SECTION ON EACH ELECTION FORM.
CHANGING YOUR INSTRUCTION TO ADMINISTRATOR
As more fully described in Section 4 of the Offer to Purchase, tenders will
be deemed irrevocable unless withdrawn by the dates specified therein. If you
instruct the Administrator to tender Shares, and you subsequently decide to
change your instructions, you may do so by sending a notice of withdrawal to the
Administrator. The notice of withdrawal will be effective only if it is in
writing and is received by the Administrator at or before 5:00 P.M., New York
City Time, on Tuesday, October 4, 1994, at the address set forth on the enclosed
return envelope. Any notice of change of instruction to the Administrator must
specify your name, your social security number, the number of Shares tendered,
and the number of Shares to be withdrawn. Upon receipt of a timely written
notice of change of instruction to the Administrator, previous instructions to
tender with respect to such Shares will be deemed cancelled. If you later wish
to retender Shares, you may call American Stock Transfer & Trust Company, Plan
Administrator at (212) 936-5100 to obtain a new Election Form. Any new Election
Form must be received by the Administrator at or before 5:00 P.M. New York City
Time, on Tuesday, October 4, 1994.
IF YOU HAVE QUESTIONS
If you have any questions about the Offer or any of the other matters
discussed above, please call Georgeson & Company Inc., the Information Agent, at
(800) 223-2064. If you have questions about the Dividend Reinvestment Plan,
please refer to the Prospectus. Additional copies of the Prospectus for the
Dividend Reinvestment Plan may be obtained from the Administrator by contacting
the Shareholder Services Department at (800) 937-5449.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
PARTICIPANT AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
PARTICIPANT MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE OR PRICES.
ELECTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF TREDEGAR INDUSTRIES, INC.
Please tender to Tredegar Industries, Inc. (the "Company"), on (our) (my)
behalf, the number of Shares indicated below held in the Tredegar Industries,
Inc. Dividend Reinvestment and Stock Purchase Plan (the "Dividend Reinvestment
Plan"), which are beneficially owned by (us) (me) and held by you under the
Dividend Reinvestment Plan, upon terms and subject to the conditions contained
in the Offer to Purchase of the Company dated September 8, 1994, the receipt of
which is acknowledged.
2
Number of Shares to be tendered: Shares
ODD LOTS
(SEE INSTRUCTION 8)
[ ] By checking this box the undersigned represents that the undersigned
owned, beneficially or of record, as of the close of business on
September 7, 1994, an aggregate of fewer than 100 Shares and is
tendering all of such Shares.
In addition the undersigned is tendering Shares either (check one box):
[ ] at the Purchase Price, as the same shall be determined by the
Company in accordance with the terms of the Offer (persons
[ ] checking this box need not indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (in Dollars) per
Share at which Shares are being tendered."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED
CONDITIONAL TENDER
[ ] check here if tender of Shares is conditional on the Company
purchasing all or a minimum number of the tendered Shares and
complete the following:
Minimum number of Shares to be sold:
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST
COMPLETE A SEPARATE ELECTION FORM FOR EACH PRICE AT WHICH SHARES ARE
TENDERED.)
[ ] $17.000 [ ] $17.750 [ ] $18.500
[ ] $17.125 [ ] $17.875 [ ] $18.625
[ ] $17.250 [ ] $18.000 [ ] $18.750
[ ] $17.375 [ ] $18.125 [ ] $18.875
[ ] $17.500 [ ] $18.250 [ ] $19.000
[ ] $17.625 [ ] $18.375
3
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED UNANIMOUSLY THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED.
Signature(s):
Name(s):
(Please Print)
(Taxpayer Identification or
Social Security Number)
Address:
(Including Zip Code)
Area Code and Telephone Number:
Date: , 1994
IMPORTANT: THIS DIVIDEND REINVESTMENT PLAN PARTICIPANT'S ELECTION FORM
(OR A MANUALLY SIGNED FACSIMILE THEREOF) MUST BE RECEIVED BY
THE ADMINISTRATOR PRIOR TO 5:00 P.M. ON TUESDAY, OCTOBER 4,
1994. PARTICIPANTS ARE ENCOURAGED TO RETURN A COMPLETED FORM
W-9 WITH THEIR ELECTION FORM.
4
EXHIBIT (A)(7)
SAVINGS PLAN FOR THE EMPLOYEES OF
TREDEGAR INDUSTRIES, INC.
To: Participants in the Savings Plan for the Employees of Tredegar
Industries, Inc.
Re: Tredegar Industries, Inc.'s Offer to Purchase for Cash Up to
1,000,000 Shares of its Common Stock
Date: September 8, 1994
This memorandum is being sent to you because you are a participant in the
Savings Plan for the Employees of Tredegar Industries, Inc. (the "Savings
Plan").
The Savings Plan is described in the Summary Plan Description ("SPD").
Please refer to the relevant SPD for more information regarding the Savings
Plan.
TREDEGAR INDUSTRIES, INC. IS OFFERING TO PURCHASE SHARES OF ITS COMMON STOCK
Tredegar Industries, Inc. (the "Company") is inviting its shareholders to
tender shares of the Company's common stock, no par value per share (the
"Shares"), for sale directly to the Company. Shareholders are being invited to
tender their shares at prices not in excess of $19.00 nor less than $17.00 per
share. The details of the invitation are described in the Company's Offer to
Purchase, dated September 8, 1994 (the "Offer to Purchase") and this memorandum
(which together constitute the "Offer" for purposes of tendering Shares
allocated to your Savings Plan account). Copies of the Offer to Purchase and
certain related materials (excluding the Letter of Transmittal), which are being
sent to the Company's shareholders generally, are enclosed for your review.
The Letter of Transmittal referred to above and in the Offer to Purchase
cannot be used to tender the Shares held in your Savings Plan account: the
enclosed Election Form for the Savings Plan is a substitute for the Letter of
Transmittal and must be used to tender Shares in your Savings Plan account.
Also, please note that if you hold an "odd lot," as described in Section 1 of
the Offer to Purchase, in your Savings Plan account, the special odd lot
purchase rule will not apply to your Shares in the Savings Plan. That is, the
proration provisions that will apply if more than 1,000,000 Shares are properly
tendered (as described in Section 1 of the Offer to Purchase) will apply to any
Shares tendered from the Savings Plan, even if you are an odd lot holder. You
are permitted, however, to make a conditional tender of the Shares allocated to
your Savings Plan account. See Section 6 of the Offer to Purchase for the
provisions governing conditional tenders.
YOUR DECISION WHETHER TO TENDER
As a participant in the Savings Plan you may direct NationsBank of
Virginia, N.A., the trustee of the Savings Plan (the "Trustee") to tender Shares
allocated to your Savings Plan account pursuant to the Offer. PARTICIPANTS
CONSIDERING TENDERING SHARES FROM THEIR SAVINGS PLAN ACCOUNT SHOULD REVIEW
CAREFULLY THE TAX CONSEQUENCES OF DOING SO. (SEE "POTENTIAL TAX CONSEQUENCES OF
TENDERING SHARES" BELOW.) ALSO, THE PROCEEDS FROM ANY SALE OF SHARES FROM YOUR
SAVINGS PLAN ACCOUNT WILL NOT BE DISTRIBUTED TO YOU. INSTEAD, ANY PROCEEDS WILL
CONTINUE TO BE HELD IN THE SAVINGS PLAN AND WILL BE REINVESTED IN THE GOVERNMENT
OBLIGATIONS FUND. (SEE "REINVESTMENT OF SALE PROCEEDS" BELOW).
HOW TO TENDER SHARES; COMPLETION OF ELECTION FORM
If you wish to direct the Trustee to tender all or part of the eligible
Shares in your Savings Plan account, you must complete and return the enclosed
Election Form in accordance with the instructions specified on the Election
Form. Before deciding whether or not to tender your Shares, please carefully
read the enclosed materials.
YOUR ELECTION WILL BE EFFECTIVE ONLY IF YOUR PROPERLY COMPLETED ELECTION
FORM IS RECEIVED BY THE TRUSTEE AT ITS ADDRESS SET FORTH ON THE ENCLOSED RETURN
ENVELOPE NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, OCTOBER 4,
1994. Election Forms that are received after this deadline, and Election Forms
which are not properly completed, will not be accepted. Examples of improperly
completed Election Forms include Forms which are not signed and Forms which
contain incorrect or incomplete information. Your decision to tender (or not to
tender) and your reinvestment election are personal decisions you should make
based upon your own personal circumstances and desires.
1
Savings Plan participants who desire to tender Shares at more than one
price must complete a separate Election Form for each price at which Shares are
tendered, provided that the same Shares cannot be tendered (unless properly
withdrawn in accordance with the terms of the offer) at more than one price. IN
ORDER TO PROPERLY TENDER SHARES, ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN
THE APPROPRIATE SECTION ON EACH ELECTION FORM.
SAVINGS PLAN ACCOUNTS. Under the Savings Plan, you may direct the Trustee
to tender all or part of the Shares that are allocated to your account including
Shares that were purchased with Company matching contributions. The label
attached below identifies the number of Shares that were allocated to your
account as of July 31, 1994. Unallocated Shares (for example, Shares that were
recently purchased by the Trustee) are not subject to your tender direction. The
Trustee will decide whether and, if so, upon what terms, unallocated Shares will
be tendered.
REINVESTMENT OF SALE PROCEEDS
If you direct the Trustee to tender Shares allocated to your account in the
Savings Plan, proceeds from the sale of the Shares will be invested in the
Government Obligations Fund. Proceeds from the sale of unallocated Shares will
be invested in the Government Obligations Fund, as well. In accordance with the
Savings Plan's investment transfer provisions, you will be able to transfer
amounts from the Government Obligations Fund to the Tredegar Common Stock Fund.
The first opportunity that you will have to transfer sale proceeds from the
Government Obligations Fund to the Tredegar Common Stock Fund will be effective
as of November 30, 1994.
SALE PROCEEDS THAT ARE TRANSFERRED FROM THE GOVERNMENT OBLIGATIONS FUND TO
THE TREDEGAR COMMON STOCK FUND WILL BE USED TO PURCHASE COMMON STOCK AT THE
MARKET PRICE AT THAT TIME. ACCORDINGLY, THE REINVESTMENT PURCHASE PRICE MAY BE
HIGHER THAN THE SALE PRICE. THIS WOULD RESULT IN A DECREASE IN THE NUMBER OF
SHARES CREDITED TO YOUR SAVINGS PLAN ACCOUNT. IT IS ALSO POSSIBLE THAT THE
REINVESTMENT PRICE WILL BE LOWER THAN THE TENDER OFFER SALE PRICE, WHICH WOULD
RESULT IN AN INCREASED NUMBER OF SHARES BEING CREDITED TO YOUR ACCOUNT. THE KEY
POINT IS THAT NO ONE CAN ASSURE YOU WHAT THE REINVESTMENT PRICE WILL BE, SINCE
IT IS DEPENDENT ON MARKET CONDITIONS AT THE TIME. ALSO, BE SURE TO READ THE NEXT
SECTION REGARDING THE POSSIBLE LOSS OF FAVORABLE TAX TREATMENT UNDER THE SAVINGS
PLAN AS A RESULT OF TENDERING SHARES FROM YOUR ACCOUNT.
POTENTIAL TAX CONSEQUENCES OF TENDERING SHARES
TENDERING AND SELLING SHARES FROM YOUR SAVINGS ACCOUNT NOW COULD RESULT IN
THE LOSS OF A FAVORABLE TAX TREATMENT AVAILABLE WITH RESPECT TO ANY SHARES THAT
SUBSEQUENTLY ARE DISTRIBUTED TO YOU FROM THE SAVINGS PLAN. Shares that you
receive in a distribution from the Savings Plan generally are eligible for
favorable tax treatment. Specifically, depending upon the type of distribution,
all or a portion of any "net unrealized appreciation" on the Shares is not
taxable to you until you sell the Shares. If you tender and sell Shares from
your Savings Plan account, any net unrealized appreciation in the Shares that
are sold will be lost. In addition, if the proceeds are transferred from the
Government Obligation Fund to the Tredegar Common Stock Fund, the cost of the
Shares in your account will be recalculated to reflect current market prices of
the newly acquired Shares. If your net unrealized appreciation is lost, the
amount of tax that you owe immediately upon receipt of a Savings Plan
distribution may be greater than if you had not tendered and sold your Shares in
the Offer.
CHANGING YOUR INSTRUCTION TO TRUSTEE
As more fully described in Section 4 of the Offer to Purchase, tenders will
be deemed irrevocable unless withdrawn by the dates specified therein. If you
instruct the Trustee to tender Shares, and you subsequently decide to change
your instructions, you may do so by sending a notice of withdrawal to the
Trustee. The notice of withdrawal will be effective only if it is in writing and
is received by the Trustee at or before 5:00 P.M., New York City Time, on
Tuesday, October 4, 1994, at the address set forth on the enclosed return
envelope. Any notice of change of instruction to the Trustee must specify your
name, your social security number, the number of Shares tendered, and the number
of Shares to be withdrawn. Upon receipt of a timely written notice of change of
instruction to the Trustee, previous instructions to tender with respect to such
Shares will be deemed cancelled. If you later wish to retender Shares, you may
call Lynn Firebaugh, Manager, Employee Benefits, at (804) 330-1288 to obtain a
new Election Form. Any new Election Form must be received by the Trustee at or
before 5:00 P.M. New York City Time, on Tuesday, October 4, 1994.
2
IF YOU HAVE QUESTIONS
If you have any questions about the Offer or any of the other matters
discussed above, please call Georgeson & Company Inc., the Information Agent at
(800) 223-2064. If you wish, your inquiry may be made on a confidential basis.
If you have questions about the Savings Plan, please refer to the Savings Plan's
SPD. Additional copies of the SPD for the Savings Plan may be obtained from Lynn
Firebaugh, at (804) 330-1288.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
PARTICIPANT AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
PARTICIPANT MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE OR PRICES.
ELECTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF TREDEGAR INDUSTRIES, INC.
Please tender to Tredegar Industries, Inc. (the "Company"), on (our) (my)
behalf, the number of Shares indicated below held in the Savings Plan for the
Employees of Tredegar Industries, Inc. (the "Savings Plan"), which are
beneficially owned by (us) (me) and held by you under the Savings Plan, upon
terms and subject to the conditions contained in the Offer to Purchase of the
Company dated September 8, 1994, the receipt of which is acknowledged. I
understand that the label that follows sets forth the number of Shares allocated
to me in the various Savings Plan accounts.
Number of Shares to be tendered from my Pre-Tax shares account: Shares
Number of Shares to be tendered from my After-Tax shares account: Shares
Number of Shares to be tendered from my Employer Matching account: Shares
CONDITIONAL TENDER
[ ] check here if tender of Shares is conditional on the Company
purchasing all or a minimum number of the tendered Shares and
complete the following:
Minimum number of Shares to be sold:
3
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST
COMPLETE A SEPARATE ELECTION FORM FOR EACH PRICE AT WHICH SHARES ARE
TENDERED.)
[ ] $17.000 [ ] $17.750 [ ] $18.500
[ ] $17.125 [ ] $17.875 [ ] $18.625
[ ] $17.250 [ ] $18.000 [ ] $18.750
[ ] $17.375 [ ] $18.125 [ ] $18.875
[ ] $17.500 [ ] $18.250 [ ] $19.000
[ ] $17.625 [ ] $18.375
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED UNANIMOUSLY THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED.
Signature:
Name:
(Please Print)
(Taxpayer Identification or
Social Security Number)
Address:
(Including Zip Code)
Area Code and Telephone Number:
Date: , 1994
IMPORTANT: THIS SAVINGS PLAN PARTICIPANT'S ELECTION FORM (OR A MANUALLY
SIGNED FACSIMILE THEREOF) MUST BE RECEIVED BY THE TRUSTEE
PRIOR TO 5:00 P.M. ON TUESDAY, OCTOBER 4, 1994.
4
EXHIBIT (A)(8)
TREDEGAR INDUSTRIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
To: Participants in the Tredegar Industries, Inc. Employee Stock
Purchase Plan
Re: Tredegar Industries, Inc.'s Offer to Purchase for Cash Up to
1,000,000 Shares of its Common Stock
Date: September 8, 1994
This memorandum is being sent to you because you are a participant in the
Tredegar Industries, Inc. Employee Stock Purchase Plan (the "Stock Purchase
Plan").
The Stock Purchase Plan is described in the Summary Plan Description
("SPD"). Please refer to the relevant SPD for more information regarding the
Stock Purchase Plan.
TREDEGAR INDUSTRIES, INC. IS OFFERING TO PURCHASE SHARES OF ITS COMMON STOCK
Tredegar Industries, Inc. (the "Company") is inviting its shareholders to
tender shares of the Company's common stock, no par value per share (the
"Shares"), for sale directly to the Company. Shareholders are being invited to
tender their shares at prices not in excess of $19.00 nor less than $17.00 per
share. The details of the invitation are described in the Company's Offer to
Purchase, dated September 8, 1994 (the "Offer to Purchase") and this memorandum
(which together constitute the "Offer" for purposes of tendering Shares held in
your Stock Purchase Plan account). Copies of the Offer to Purchase and certain
related materials (excluding the Letter of Transmittal), which are being sent to
the Company's shareholders generally, are enclosed for your review.
The Letter of Transmittal referred to above and in the Offer to Purchase
cannot be used to tender the Shares held in your Stock Purchase Plan account:
the enclosed Election Form for the Stock Purchase Plan is a substitute for the
Letter of Transmittal and must be used to tender Shares in your Stock Purchase
Plan account.
YOUR DECISION WHETHER TO TENDER
As a participant in the Stock Purchase Plan you may direct American Stock
Transfer and Trust Company, the custodian of the Stock Purchase Plan (the
"Custodian") to tender Shares allocated to your Stock Purchase Plan account
pursuant to the Offer.
HOW TO TENDER SHARES; COMPLETION OF ELECTION FORM
If you wish to direct the Custodian to tender all or part of the Shares in
your Stock Purchase Plan account, you must complete and return the enclosed
Election Form in accordance with the instructions specified on the Election
Form. Before deciding whether or not to tender your Shares, please carefully
read the enclosed materials.
YOUR ELECTION WILL BE EFFECTIVE ONLY IF YOUR PROPERLY COMPLETED ELECTION
FORM IS RECEIVED BY THE CUSTODIAN AT ITS ADDRESS SET FORTH ON THE ENCLOSED
RETURN ENVELOPE NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, OCTOBER
4, 1994. Election Forms that are received after this deadline, and Election
Forms which are not properly completed, will not be accepted. Examples of
improperly completed Election Forms include Forms which are not signed and Forms
which contain incorrect or incomplete information. Your decision to tender (or
not to tender) is a personal decision you should make based upon your own
personal circumstances and desires.
Stock Purchase Plan participants who desire to tender Shares at more than
one price must complete a separate Election Form for each price at which Shares
are tendered, provided that the same Shares cannot be tendered (unless properly
withdrawn in accordance with the terms of the Offer) at more than one price. IN
ORDER TO
1
PREPAY TENDER SHARES, ONE AND ONLY ONE BOX MUST BE CHECKED IN THE APPROPRIATE
SECTION ON EACH ELECTION FORM.
CHANGING YOUR INSTRUCTION TO CUSTODIAN
As more fully described in Section 4 of the Offer to Purchase, tenders will
be deemed irrevocable unless withdrawn by the dates specified therein. If you
instruct the Custodian to tender Shares, and you subsequently decide to change
your instructions, you may do so by sending a notice of withdrawal to the
Custodian. The notice of withdrawal will be effective only if it is in writing
and is received by the Custodian at or before 5:00 P.M., New York City Time, on
Tuesday, October 4, 1994, at the address set forth on the enclosed return
envelope. Any notice of change of instruction to the Custodian must specify your
name, your social security number, the number of Shares tendered, and the number
of Shares to be withdrawn. Upon receipt of a timely written notice of change of
instruction to the Custodian, previous instructions to tender with respect to
such Shares will be deemed cancelled. If you later wish to retender Shares, you
may call American Stock Transfer & Trust Company, Plan Custodian at (212)
936-5100 to obtain a new Election Form. Any new Election Form must be received
by the Custodian at or before 5:00 P.M. New York City Time, on Tuesday, October
4, 1994.
IF YOU HAVE QUESTIONS
If you have any questions about the Offer or any of the other matters
discussed above, please call Georgeson & Company Inc., the Information Agent, at
(800) 223-2064. If you have questions about the Stock Purchase Plan, please
refer to the Company's SPD. Additional copies of the SPD for the Stock Purchase
Plan may be obtained from Lynn Firebaugh, Manager, Employee Benefits at (804)
330-1288.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
PARTICIPANT AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
PARTICIPANT MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER AND AT WHAT PRICE OR PRICES.
ELECTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF TREDEGAR INDUSTRIES, INC.
Please tender to Tredegar Industries, Inc. (the "Company"), on (our) (my)
behalf, the number of Shares indicated below held in the Tredegar Industries,
Inc. Employee Stock Purchase Plan (the "Stock Purchase Plan"), which are
beneficially owned by (us) (me) and held by you under the Stock Purchase Plan,
upon terms and subject to the conditions contained in the Offer to Purchase of
the Company dated September 8, 1994, the receipt of which is acknowledged.
2
Number of Shares to be tendered: Shares
ODD LOTS
(SEE INSTRUCTION 8)
[ ] By checking this box the undersigned represents that the undersigned
owned, beneficially or of record, as of the close of business on
September 7, 1994, an aggregate of fewer than 100 Shares and is
tendering all of such Shares.
In addition the undersigned is tendering Shares either (check one box):
[ ] at the Purchase Price, as the same shall be determined by the
Company in accordance with the terms of the Offer (persons
[ ] checking this box need not indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (in Dollars) per
Share at which Shares are being tendered."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED
CONDITIONAL TENDER
[ ] check here if tender of Shares is conditional on the Company
purchasing all or a minimum number of the tendered Shares and
complete the following:
Minimum number of Shares to be sold:
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE, MUST
COMPLETE A SEPARATE ELECTION FORM FOR EACH PRICE AT WHICH SHARES ARE
TENDERED.)
[ ] $17.000 [ ] $17.750 [ ] $18.500
[ ] $17.125 [ ] $17.875 [ ] $18.625
[ ] $17.250 [ ] $18.000 [ ] $18.750
[ ] $17.375 [ ] $18.125 [ ] $18.875
[ ] $17.500 [ ] $18.250 [ ] $19.000
[ ] $17.625 [ ] $18.375
3
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED UNANIMOUSLY THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED.
Signature(s):
Name(s):
(Please Print)
(Taxpayer Identification or
Social Security Number)
Address:
(Including Zip Code)
Area Code and Telephone Number:
Date: , 1994
IMPORTANT: THIS STOCK PURCHASE PLAN PARTICIPANT'S ELECTION FORM (OR A
MANUALLY SIGNED FACSIMILE THEREOF) MUST BE RECEIVED BY THE
CUSTODIAN PRIOR TO 5:00 P.M. ON TUESDAY, OCTOBER 4, 1994.
PARTICIPANTS ARE ENCOURAGED TO RETURN A COMPLETED FORM W-9 WITH
THEIR ELECTION FORM.
4
EXHIBIT (A)(9)
FOR IMMEDIATE RELEASE
TREDEGAR ANNOUNCES SELF-TENDER OFFER
RICHMOND, Va., Aug. 29, 1994 -- The board of directors of Tredegar
Industries (NYSE:TG) today authorized a "Dutch auction" self-tender offer for up
to one million shares of the company's common stock. The tender price range will
be $17 to $19 per share. The offer will commence next week with the distribution
of the offering materials. The offer will be subject to the terms and conditions
that will be described in the offering materials.
As of Aug. 29, Tredegar had 10,587,625 shares of common stock outstanding.
The closing price for Tredegar common stock today was $16 3/8.
Under terms of a Dutch auction offer, shareholders are given an opportunity
to specify prices, within a stated price range, at which they are willing to
tender their shares. Upon receipt of the tenders, the offering company will
select a final price that enables it to purchase up to the stated amount of
shares from those shareholders who agreed to sell at or below the
company-selected price.
Tredegar said the offer will give shareholders who are considering the sale
of all or a portion of their shares an opportunity to determine the price,
within a range, at which they are willing to sell. If Tredegar agrees to
purchase their shares, sellers will avoid the normal transaction costs
associated with market sales. The company is not making any recommendation to
its shareholders regarding the tendering of shares.
The dealer manager for the offer will be Goldman, Sachs & Co. and the
information agent will be Georgeson & Co.
Tredegar Industries is a diversified manufacturer of plastics and metal
products.
EXHIBIT (A)(10)
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION
OF AN OFFER TO SELL SHARES. THE OFFER IS MADE SOLELY BY THE OFFER TO
PURCHASE AND THE RELATED LETTER OF TRANSMITTAL WHICH ARE BEING
MAILED TO SHAREHOLDERS OF TREDEGAR INDUSTRIES, INC. ON OR ABOUT
SEPTEMBER 8, 1994. WHILE THE OFFER IS BEING MADE TO ALL
SHAREHOLDERS OF THE COMPANY, TENDERS WILL NOT BE ACCEPTED FROM OR
ON BEHALF OF THE SHAREHOLDERS IN ANY JURISDICTION IN WHICH THE
ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS
OF SUCH JURISDICTION. IN THOSE JURISDICTIONS WHOSE LAWS
REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR
DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON BEHALF
OF THE COMPANY BY GOLDMAN, SACHS & CO. OR ONE OR MORE
REGISTERED BROKERS OR DEALERS LICENSED UNDER THE
LAWS OF SUCH JURISDICTION.
Notice of Offer to Purchase for Cash
by
TREDEGAR INDUSTRIES, INC.
Up To 1,000,000 Shares Of Its Common Stock
(Including the Associated Preferred Stock Purchase Rights)
at a purchase price not in excess of
$19.00 nor less than $17.00 per share
Tredegar Industries, Inc., a Virginia corporation (the "Company"), invites
shareholders to tender up to 1,000,000 shares of its Common Stock, no par value
per share (the "Shares") (including the associated Preferred Stock Purchase
Rights (the "Rights") issued pursuant to the rights agreement, dated as of June
15, 1989, as amended, between the Company and the Rights Agent named therein),
at prices not in excess of $19.00 nor less than $17.00 per Share in cash, as
specified by such shareholders, upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer").
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON THURSDAY,
OCTOBER 6, 1994, UNLESS THE OFFER IS EXTENDED
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED, BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED UNANIMOUSLY THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED. THE COMPANY
HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO
TENDER ANY SHARES PURSUANT TO THE OFFER.
As promptly as practicable following the Expiration Date (as defined
below), the Company will purchase up to 1,000,000 Shares or such lesser number
of Shares as are properly tendered (and not withdrawn in accordance with Section
4 of the Offer to Purchase) prior to the Expiration Date at prices not in excess
of $19.00 nor less than $17.00 net per Share in cash. The term "Expiration Date"
means 5:00 P.M., New York City time, on Thursday, October 6, 1994, unless and
until the Company, in its sole discretion, shall have extended the period of
time during which the Offer will remain open, in which event the term
"Expiration Date" shall refer to the latest time and date at which the Offer, as
so extended by the Company, shall expire.
The Company will select the lowest Purchase Price that will allow it to buy
1,000,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $19.00 nor less than $17.00 per Share). All Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
will be purchased at the Purchase Price, subject to the terms and the conditions
of the Offer, including the proration and conditional tender provisions. All
Shares purchased in the Offer will be purchased at the Purchase Price. The
Company is making the
Offer because the Board of Directors believes that, given the Company's
business, assets and prospects and the current market price of the Shares, the
purchase of the Shares is an attractive use of the Company's funds.
Upon the terms and subject to the conditions of the Offer, if more than
1,000,000 Shares have been properly tendered at prices at or below the Purchase
Price and not withdrawn prior to the Expiration Date, the Company will purchase
properly tendered Shares on the following basis: (a) FIRST, all Shares properly
tendered and not withdrawn prior to the Expiration Date by any Odd Lot Holder
(as defined in the Offer to Purchase) who: (1) tenders all Shares beneficially
owned by such Odd Lot Holder at a price at or below the Purchase Price (partial
tenders will not qualify for this preference); and (2) completes the box
captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery; and (b) SECOND, after purchase of all of the
foregoing Shares, all other Shares tendered properly and unconditionally at
prices at or below the Purchase Price and not withdrawn prior to the Expiration
Date, on a PRO RATA basis (with appropriate adjustments to avoid purchases of
fractional Shares) as described below; and (c) THIRD, if necessary, Shares
conditionally tendered at or below the Purchase Price and not withdrawn prior to
the Expiration Date, selected by random lot. The Company also reserves the
right, but will not be obligated, to purchase all Shares duly tendered by any
shareholder who tendered all Shares owned, beneficially or of record, at or
below the Purchase Price and who, as a result of proration, would then own,
beneficially or of record, an aggregate of fewer than 100 Shares. If the Company
exercises this right, it will increase the number of Shares that it is offering
to purchase by the number of Shares purchased through the exercise of the right.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time to extend the period of time during which the Offer
is open and thereby delay acceptance for payment of, and payment for, any Shares
by giving oral or written notice of such extension to the American Stock
Transfer & Trust Company (the "Depositary") and making a public announcement
thereof.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless theretofore accepted for payment by the Company
pursuant to the Offer, may also be withdrawn at any time after 12:00 Midnight,
New York City time, on Wednesday, November 2, 1994. For a withdrawal to be
effective, a notice of withdrawal must be in written, telegraphic or facsimile
transmission form and must be received in a timely manner by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase. Any
such notice of withdrawal must specify the name of the tendering shareholder,
the name of the registered holder, if different from that of the person who
tendered such Shares, the number of Shares tendered and the number of Shares to
be withdrawn. If the certificates for Shares to be withdrawn have been delivered
or otherwise identified to the Depositary, then, prior to the release of such
certificates, the tendering shareholder must also submit the serial numbers
shown on the particular certificates for Shares to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution).
If Shares have been tendered pursuant to the procedure for book-entry tender set
forth in the Offer to Purchase, the notice of withdrawal also must specify the
name and the number of the account at the applicable Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with the
procedures of such facility.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY TENDERS ARE MADE. The
information required to be disclosed by Rule 13e-4(d)(1) under the Securities
Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference. The Offer to Purchase and the related Letter
of Transmittal are being mailed to record holders of Shares and are being
furnished to brokers, banks and similar persons whose names, or the names of
whose nominees, appear on the Company's shareholder 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.
Additional copies of the Offer to Purchase and the Letter of Transmittal
may be obtained from the Depositary, the Information Agent or the Dealer
Managers and will be furnished promptly at the Company's expense.
THE INFORMATION AGENT FOR THE OFFER IS:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, New York 10005
Call Toll Free (800) 223-2064
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
In New York State: (212) 902-1000 (collect)
Other Areas: (800) 323-5678 (toll free)
September 8, 1994
EXHIBIT (A)(11)
[Tredegar Industries, Inc. Letterhead]
September 8, 1994
TO OUR SHAREHOLDERS:
Tredegar Industries, Inc. is offering to purchase up to 1,000,000 shares,
or approximately 9.45% of the currently outstanding shares, of its common stock
(the "Shares") from existing shareholders. The price will not be in excess of
$19.00 nor less than $17.00 per Share. Tredegar is conducting the tender offer
through a procedure commonly referred to as a "Dutch auction." This allows you
to select the lowest price within the specified price range at which you are
willing to sell your Shares to Tredegar.
The offer gives shareholders the opportunity to sell their Shares at a
price greater than market prices prevailing prior to announcement of the offer.
On August 29, 1994, the last trading day prior to the announcement of the offer,
the closing price per share for Tredegar's common stock on the New York Stock
Exchange (the "NYSE") was $16.375. On September 7, 1994, the last trading day
prior to the commencement of the offer, the closing price per share for
Tredegar's common stock on the NYSE was $18.375. In addition, any shareholder
whose Shares are purchased in the offering will receive the total purchase price
in cash and will not incur the usual transaction costs associated with
open-market sales. Any shareholders owning an aggregate of less than 100 Shares
whose Shares are purchased pursuant to the offer will avoid the applicable odd
lot discounts payable on sales of odd lots on the NYSE.
Tredegar will pay the same per Share price (the "Purchase Price") for all
Shares it purchases in the offering. If the number of Shares properly tendered
is equal to or less than the number of Shares Tredegar seeks to purchase through
the offer, the Purchase Price will be the highest price of those specified by
tendering shareholders.
If tendering shareholders properly tender more than the number of Shares
Tredegar seeks to purchase through the offer, Tredegar will take into account
the number of Shares so tendered and certain other factors described in the
Offer to Purchase and select the Purchase Price that will allow Tredegar to buy
the number of Shares that it seeks to purchase through the offer. In such
circumstances, Tredegar would not purchase the Shares of any tendering
shareholder who specified a price per Share above the Purchase Price.
All Shares properly tendered at prices at or below the Purchase Price and
not withdrawn on or prior to the Expiration Date (as defined in the Offer to
Purchase) will be purchased at the Purchase Price, net to the seller in cash,
subject to the terms and conditions described in the Offer to Purchase and the
related Letter of Transmittal. Those terms and conditions include, among other
things, provisions relating to possible proration, conditional tenders and the
tender of odd lots. All stock certificates representing Shares that are tendered
and not purchased will be returned promptly to the shareholder.
The offer is explained in detail in the Offer to Purchase and Letter of
Transmittal. I encourage you to read these materials carefully before making any
decision with respect to the offer. If you want to tender your Shares, the
instructions on how to tender Shares are also explained in detail in the
accompanying materials.
Neither Tredegar nor its Board of Directors makes any recommendation to any
shareholder whether to tender all or any Shares.
Sincerely,
John D. Gottwald
President and Chief Executive Officer
EXHIBIT (A)(12)
[Tredegar Industries, Inc. Letterhead]
September 8, 1994
TO PARTICIPANTS IN THE TREDEGAR INDUSTRIES, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Tredegar Industries, Inc. is offering to purchase up to 1,000,000 shares,
or approximately 9.45% of the currently outstanding shares, of its common stock
(the "Shares") from existing shareholders. The price will not be in excess of
$19.00 nor less than $17.00 per share. As a participant in Tredegar's Dividend
Reinvestment and Stock Purchase Plan, you will be able to tender Shares in your
plan account.
The enclosed memorandum to Dividend Reinvestment Plan participants contains
information regarding the tender offer that is relevant to Dividend Reinvestment
Plan participants. Also enclosed with this letter is the election form that all
Dividend Reinvestment Plan participants must complete and return to the plan
administrator by October 4, 1994, if they wish to tender their Dividend
Reinvestment Plan Shares.
I encourage you to read carefully the memorandum, the election form and the
other enclosed materials, including the Offer to Purchase. Neither Tredegar nor
our Board of Directors makes any recommendation to any Dividend Reinvestment
Plan participant whether to tender all or any Shares in the Dividend
Reinvestment Plan.
As a Dividend Reinvestment Plan participant, you will have the opportunity
to sell your plan Shares at a price greater than market prices prevailing prior
to announcement of the offer. On August 29, 1994, the last trading day prior to
the announcement of the offer, the closing price per share for Tredegar's common
stock on the New York Stock Exchange ("NYSE") was $16.375. On September 7, 1994,
the last trading day prior to the commencement of the offer, the closing price
per share for Tredegar's common stock on the NYSE was $18.375. Tredegar is
conducting the offer through a procedure commonly referred to as a "Dutch
auction." This procedure allows you to select the lowest price within the
specified price range at which you are willing to sell your Shares to Tredegar.
Tredegar will pay the same per Share price (the "Purchase Price") for all Shares
it purchases in the offering. If the number of Shares properly tendered is equal
to or less than the number of Shares Tredegar seeks to purchase through the
offer, the Purchase Price will be the highest price of those specified by
tendering shareholders.
If tendering shareholders properly tender more than the number of Shares
Tredegar seeks to purchase through the offer, Tredegar will take into account
the number of Shares so tendered and certain other factors described in the
Offer to Purchase and select the Purchase Price that will allow Tredegar to buy
the number of Shares that it seeks to purchase through the offer. In such
circumstances, Tredegar would not purchase the Shares of any tendering
shareholder who specified a price per Share above the Purchase Price.
Sincerely,
John D. Gottwald
President and Chief Executive Officer
EXHIBIT (A)(13)
[Tredegar Industries, Inc. Letterhead]
September 8, 1994
TO PARTICIPANTS IN THE SAVINGS PLAN FOR
THE EMPLOYEES OF TREDEGAR INDUSTRIES, INC.
Tredegar Industries, Inc. is offering to purchase up to 1,000,000 shares,
or approximately 9.45% of the currently outstanding shares, of its common stock
(the "Shares") from existing shareholders. The price will not be in excess of
$19.00 nor less than $17.00 per Share. As a participant in Tredegar's Employee
Savings Plan, you will be able to tender Shares allocated to your Savings Plan
account.
The enclosed memorandum to Savings Plan participants contains information
regarding the tender offer that is relevant to Savings Plan participants. Also
enclosed with this letter is the election form that Savings Plan participants
must complete and return to the plan trustee by October 4, 1994, if they wish to
tender their Savings Plan Shares.
I encourage you to read carefully the memorandum, the election form and the
other enclosed materials, including the Offer to Purchase. Neither Tredegar nor
our Board of Directors makes any recommendation to any Savings Plan participant
whether to tender all or any eligible Shares in the Savings Plan. Each Savings
Plan participant should independently decide whether to tender Shares, taking
into account his or her personal circumstances. Your decision will not affect in
any way the terms of your employment by Tredegar.
As a Savings Plan participant, you will have the opportunity to sell your
eligible plan Shares at a price greater than market prices prevailing prior to
announcement of the offer. On August 29, 1994, the last trading day prior to the
announcement of the offer, the closing price per share for Tredegar's common
stock on the New York Stock Exchange ("NYSE") was $16.375. On September 7, 1994,
the last trading day prior to the commencement of the offer, the closing price
per share for Tredegar's common stock on the NYSE was $18.375. Tredegar is
conducting the offer through a procedure commonly referred to as a "Dutch
auction." This procedure allows you to select the lowest price within the
specified price range at which you are willing to sell your Shares to Tredegar.
Tredegar will pay the same per Share price (the "Purchase Price") for all Shares
it purchases in the offering. If the number of Shares properly tendered is equal
to or less than the number of Shares Tredegar seeks to purchase through the
offer, the Purchase Price will be the highest price of those specified by
tendering shareholders.
If tendering shareholders properly tender more than the number of Shares
Tredegar seeks to purchase through the offer, Tredegar will take into account
the number of Shares so tendered and certain other factors described in the
Offer to Purchase and select the Purchase Price that will allow Tredegar to buy
the number of Shares that it seeks to purchase through the offer. In such
circumstances, Tredegar would not purchase the Shares of any tendering
shareholder who specified a price per Share above the Purchase Price.
The enclosed Offer to Purchase and accompanying materials contain a
substantial amount of information and may seem complicated. Tredegar has
retained Georgeson & Company as the information agent to provide assistance with
any questions you may have concerning these materials. Please feel free to call
Georgeson at (800) 223-2064.
Sincerely,
John D. Gottwald
President and Chief Executive Officer
EXHIBIT (A)(14)
[Tredegar Industries, Inc. Letterhead]
September 8, 1994
TO PARTICIPANTS IN THE TREDEGAR INDUSTRIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
Tredegar Industries, Inc. is offering to purchase up to 1,000,000 shares,
or approximately 9.45% of the currently outstanding shares, of its common stock
(the "Shares") from existing shareholders. The price will not be in excess of
$19.00 nor less than $17.00 per share. As a participant in Tredegar's Employee
Stock Purchase Plan, you will be able to tender Shares in your plan account.
The enclosed memorandum to Employee Stock Purchase Plan participants
contains information regarding the tender offer that is relevant to Employee
Stock Purchase Plan participants. Also enclosed with this letter is the election
form that all Employee Stock Purchase Plan participants must complete and return
to the plan custodian by October 4, 1994, if they wish to tender their Employee
Stock Purchase Plan Shares.
I encourage you to read carefully the memorandum, the election form and the
other enclosed materials, including the Offer to Purchase. Neither Tredegar nor
our Board of Directors makes any recommendation to any Employee Stock Purchase
Plan participant whether to tender all or any Shares in the Employee Stock
Purchase Plan. Each Employee Stock Purchase Plan participant should
independently decide whether to tender Shares, taking into account his or her
personal circumstances. Your decision will not affect in any way the terms of
your employment by Tredegar.
As an Employee Stock Purchase Plan participant, you will have the
opportunity to sell your plan Shares at a price greater than market prices
prevailing prior to announcement of the offer. On August 29, 1994, the last
trading day prior to the announcement of the offer, the closing price per share
for Tredegar's common stock on the New York Stock Exchange ("NYSE") was $16.375.
On September 7, 1994, the last trading day prior to the commencement of the
offer, the closing price per share for Tredegar's common stock on the NYSE was
$18.375. Tredegar is conducting the offer through a procedure commonly referred
to as a "Dutch auction." This procedure allows you to select the lowest price
within the specified price range at which you are willing to sell your Shares to
Tredegar. Tredegar will pay the same per Share price (the "Purchase Price") for
all Shares it purchases in the offering. If the number of Shares properly
tendered is equal to or less than the number of Shares the Company seeks to
purchase through the offer, the Purchase Price will be the highest price of
those specified by tendering shareholders.
If tendering shareholders properly tender more than the number of Shares
Tredegar seeks to purchase through the offer, Tredegar will take into account
the number of Shares so tendered and certain other factors described in the
Offer to Purchase and select the Purchase Price that will allow Tredegar to buy
the number of Shares that it seeks to purchase through the offer. In such
circumstances, Tredegar would not purchase the Shares of any tendering
shareholder who specified a price per Share above the Purchase Price.
The enclosed Offer to Purchase and accompanying materials contain a
substantial amount of information and may seem complicated. Tredegar has
retained Georgeson & Company as the information agent to provide assistance with
any questions you may have concerning these materials. Please feel free to call
Georgeson at (800) 223-2064.
Sincerely,
John D. Gottwald
President and Chief Executive Officer
EXHIBIT (G)(1)
Report of Independent Accountants
To the Board of Directors and Shareholders of Tredegar Industries, Inc.:
We have audited the accompanying consolidated balance sheets of Tredegar
Industries, Inc., and Subsidiaries ("Tredegar") as of December 31, 1993 and
1992, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1993. These financial statements are the responsibility of Tredegar's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Tredegar as of
December 31, 1993 and 1992, and the consolidated results of their operations
and their cash flows for each of the three years in the period ended December
31, 1993, in conformity with generally accepted accounting principles.
As discussed in Notes 14 and 16 to the consolidated financial statements,
effective as of the beginning of 1993, Tredegar changed its method of accounting
for postretirement benefits other than pensions to conform with Statement of
Financial Accounting Standards No. 106 and its method of accounting for income
taxes to conform with Statement of Financial Accounting Standards No. 109.
COOPERS & LYBRAND
Richmond, Virginia
January 17, 1994, except for the information presented in Note 2,
for which the date is February 4, 1994.
Management's Report on the Financial Statements
Tredegar's management has prepared the financial statements and related notes
appearing on pages 28 through 39 in conformity with generally accepted
accounting principles. In so doing, management makes informed judgments and
estimates of the expected effects of events and transactions. Financial data
appearing elsewhere in this annual report are consistent with these financial
statements.
Tredegar maintains a system of internal controls to provide reasonable, but not
absolute, assurance of the reliability of the financial records and the
protection of assets. The internal control system is supported by written
policies and procedures, careful selection and training of qualified
personnel and an extensive internal audit program.
These financial statements have been audited by Coopers & Lybrand, independent
certified public accountants. Their audit was made in accordance with
generally accepted auditing standards and included a review of Tredegar's
internal accounting controls to the extent considered necessary to determine
audit procedures.
The Audit Committee of the Board of Directors, composed of outside directors
only, meets with management, internal auditors and the independent
accountants to review accounting, auditing and financial reporting matters. The
independent accountants are appointed by the Board on recommendation of the
Audit Committee, subject to shareholder approval.
(table page 28)
CONSOLIDATED STATEMENTS OF INCOME
Tredegar Industries, Inc., and Subsidiaries
Years Ended December 31 1993 1992 1991
(In thousands, except
per-share amounts)
Revenues:
Net sales $449,208 $445,229 $439,186
Other (expense) income, net (387) 226 745
Total 448,821 445,455 439,931
Costs and expenses:
Cost of goods sold 379,286 370,652 373,429
Selling, general and
administrative 47,973 48,130 49,764
Research and development 9,141 5,026 4,541
Interest 5,044 5,615 7,489
Unusual items 452 90 721
Total 441,896 429,513 435,944
Income from continuing
operations before
income taxes 6,925 15,942 3,987
Income taxes 3,202 6,425 1,468
Income from continuing
operations 3,723 9,517 2,519
Income from discontinued
operations 6,784 5,795 3,104
Net income before extraordinary
item and cumulative effect of
changes in accounting
principles 10,507 15,312 5,623
Extraordinary item-prepayment
premium on extinguishment of
debt (net of income tax benefit
of $685) (1,115) - -
Cumulative effect of changes in
accounting for:
Postretirement benefits other
than pensions (net of income
tax benefit of $2,545) (4,150) - -
Income taxes 4,300 - -
Net income $9,542 $15,312 $5,623
Earnings per share:
Continuing operations $ .34 $ .88 $ .24
Discontinued operations .63 .53 .28
Before extraordinary item
and cumulative effect
of changes in accounting
principles .97 1.41 .52
Extraordinary item (.10) - -
Cumulative effect of changes
in accounting principles .01 - -
Net income $ .88 $ 1.41 $ .52
See accompanying notes to financial statements.
(table page 29)
CONSOLIDATED BALANCE SHEETS
Tredegar Industries, Inc., and Subsidiaries
December 31 1993 1992
(In thousands, except share amounts)
Assets
Current assets:
Accounts and notes receivable $ 70,173 $ 62,137
Inventories 34,211 31,358
Deferred income taxes 11,555 14,515
Prepaid expenses and other 881 4,207
Net assets held for sale - 1,721
Total current assets 116,820 113,938
Property, plant and equipment, at cost:
Land and land improvements 7,194 5,368
Buildings 46,608 46,839
Machinery and equipment 270,131 259,151
Total property, plant and equipment 323,933 311,358
Less accumulated depreciation and amortization 188,531 171,595
Net property, plant and equipment 135,402 139,763
Other assets and deferred charges 24,456 26,828
Goodwill and other intangibles 45,729 44,577
Net assets of discontinued operations 30,976 29,804
Total assets $353,383 $354,910
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 19,376 $ 16,977
Accrued expenses 35,380 40,596
Total current liabilities 54,756 57,573
Long-term debt 97,000 101,500
Deferred income taxes 23,108 32,646
Other noncurrent liabilities 9,431 794
Total liabilities 184,295 192,513
Commitments and contingencies
Shareholders' equity:
Common stock (no par value):
Authorized-50,000,000 shares;
Issued and outstanding-10,894,904 shares 170,140 170,131
Foreign currency translation adjustment (283) (39)
Retained earnings (deficit) (769) (7,695)
Total shareholders' equity 169,088 162,397
Total liabilities and shareholders' equity $353,383 $354,910
See accompanying notes to financial statements.
(table page 30)
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Tredegar Industries, Inc., and Subsidiaries
Retained Foreign Total
Common Stock Earnings Currency Shareholders'
Years ended December 31, 1993, 1992 and 1991 Shares Amount (Deficit) Translation Equity
(In thousands, except share and per-share data)
Balance December 31, 1990 10,894,357 $170,131 ($23,399) $529 $147,261
Net income - - 5,623 - 5,623
Cash dividends declared ($.24 per share) - - (2,615) - (2,615)
Foreign currency translation adjustment - - - (46) (46)
Balance December 31, 1991 10,894,357 170,131 (20,391) 483 150,223
Net income - - 15,312 - 15,312
Cash dividends declared ($.24 per share) - - (2,616) - (2,616)
Issued upon exercise of SARs 44 - - - -
Foreign currency translation adjustment - - - (522) (522)
Balance December 31, 1992 10,894,401 170,131 (7,695) (39) 162,397
Net income - - 9,542 - 9,542
Cash dividends declared ($.24 per share) - - (2,616) - (2,616)
Issued upon exercise of SARs 503 9 - - 9
Foreign currency translation adjustment - - - (244) (244)
Balance December 31, 1993 10,894,904 $170,140 ($769) ($283) $169,088
See accompanying notes to financial statements.
(table page 31)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Tredegar Industries, Inc., and Subsidiaries
Years Ended December 31 1993 1992 1991
(In thousands)
Cash flows from operating activities:
Continuing operations:
Income from continuing operations $ 3,723 $ 9,517 $ 2,519
Adjustments for noncash items:
Depreciation 23,117 21,963 24,089
Amortization of intangibles 2,706 914 1,113
Write-off of goodwill and
intangibles - 1,576 -
Deferred income taxes (1,418) (98) 1,099
Accrued pension income and
postretirement benefits (621) (1,086) (1,447)
Loss (gain) on divestitures and
sale of businesses 1,815 - (2,820)
Gain on sale of investments (2,263) (1,092) -
Changes in assets and liabilities,
net of effects from acquisitions:
Accounts and notes receivable (7,194) 723 10,337
Inventories (2,480) 113 6,424
Prepaid expenses 3,347 (1,609) 3,556
Accounts payable and accrued
expenses (1,701) 1,602 (7,273)
Other, net (1,435) (1,595) (2,671)
Net cash provided by continuing
operating activities 17,596 30,928 34,926
Net cash used for extraordinary item (1,115) - -
Net cash provided by discontinued
operating activities 4,318 536 6,579
Net cash provided by
operating activities 20,799 31,464 41,505
Cash flows from investing activities:
Continuing operations:
Capital expenditures (16,480) (20,705) (21,360)
Acquisitions (net of $398, $294 and
$1,898 cash acquired in 1993,
1992 and 1991, respectively) (5,099) (15,922) (23,254)
Investments (600) (1,700) (2,400)
Proceeds from sales of investments 5,263 1,992 -
Property disposals 3,373 4,025 2,220
Proceeds from sales of businesses - 3,167 9,123
Other, net (613) (661) (68)
Net cash used in investing
activities
of continuing operations (14,156) (29,804) (35,739)
Discontinued operations:
Capital expenditures (417) (341) (5,233)
Property disposals 1,711 152 248
Net cash provided by (used
in) investing activities of
discontinued operations 1,294 (189) (4,985)
Net cash used in investing
activities (12,862) (29,993) (40,724)
Cash flows from financing activities:
Dividends paid (3,270) (2,616) (2,615)
Net (decrease) increase in borrowings (4,500) 1,500 -
Other, net (167) (855) 44
Net cash used in financing
activities (7,937) (1,971) (2,571)
Decrease in cash and cash equivalents - (500) (1,790)
Cash and cash equivalents at
beginning of year - 500 2,290
Cash and cash equivalents at
end of year $ - $ - $ 500
Supplemental cash flow information:
Interest payments (net of amount
capitalized) $ 8,332 $ 6,331 $8,333
Income tax payments (refunds), net $ 6,673 $ 8,051 ($2,489)
See accompanying notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
Tredegar Industries, Inc., and Subsidiaries
(Dollars in thousands, except per-share amounts)
1. Summary of Significant Accounting Policies
Organization and Operations. Tredegar Industries, Inc., and subsidiaries
("Tredegar") became an independent company on July 10, 1989, when Ethyl
Corporation ("Ethyl") spun off its plastics, aluminum and energy businesses.
During 1993, Tredegar acquired Polestar Plastics, Inc., a custom molder of
precision plastic parts for the medical and electronics markets. During 1992,
Tredegar acquired APPX Software, Inc. (formerly Kennedy & Company) (software),
Folium Plasticos Especiais (plastic film) and Fielden Engineers, Ltd.
(materials handling). These acquisitions were accounted for using the purchase
method; accordingly, the assets and liabilities of the acquired entities have
been recorded at their estimated fair value at the date of acquisition. The
excess of the purchase price over the estimated fair value of the identifiable
net assets acquired is being amortized on a straight-line basis over
periods from 7 to 15 years. The operating results of entities acquired have
been included in the Consolidated Statements of Income since the
date of acquisition.
Basis of Presentation and Principles of Consolidation. The consolidated
financial statements include accounts and operations of Tredegar and all of its
subsidiaries. Intercompany accounts and transactions within Tredegar have been
eliminated. Certain previously reported amounts have been reclassified to
conform to the 1993 presentation.
Cash Equivalents. Cash equivalents consist of cash in excess of daily operating
requirements invested in marketable securities with maturities of three months
or less.
Inventories. Inventories are stated at the lower of cost or market, with cost
principally determined on the last-in, first-out ("LIFO") basis. Other
inventories are stated on either the weighted average cost or the first-in,
first-out basis. Cost elements included in work-in-process and finished goods
inventories are raw materials, direct labor and manufacturing overhead.
Property, Plant and Equipment. Accounts include costs of
assets constructed or purchased, related delivery and installation costs and
interest incurred on significant capital projects during their construction
periods. Expenditures for renewals and betterments also are capitalized, but
expenditures for repairs and maintenance are expensed as incurred. The cost and
accumulated depreciation applicable to assets retired or sold are removed from
the respective accounts, and gains or losses thereon are included in
income.
Property, plant and equipment includes capitalization of interest incurred on
capital projects of $320, $607 and $813 in 1993, 1992 and 1991, respectively.
Depreciation is computed primarily by the straight-line method based on the
estimated useful lives of the assets. Depletion of coal mineral rights and
development costs are computed by the unit-of-production method based on
estimated proven recoverable reserves.
Tredegar follows the successful efforts method of accounting for its oil and gas
exploration and production activities whereby (i) geological and geophysical
costs are expensed as incurred, and (ii) exploratory drilling
costs that result in the discovery of proved reserves and development costs,
including development of dry holes, are capitalized. Depletion of producing oil
and gas properties is computed by the unit-of-production method based on an
estimate of proved recoverable oil and gas reserves. Leasehold costs of
unproved properties are capitalized and amortized on a composite basis at rates
based on past experience and average lease life.
Goodwill and Other Intangibles. Goodwill acquired prior to November 1, 1970
($19,879), is not being amortized. Goodwill acquired subsequently ($19,764,
$19,946 and $18,043 at December 31, 1993, 1992 and 1991, respectively, net of
accumulated amortization), is amortized on a straight-line basis over periods
from 7 to 40 years. Other intangibles ($6,086, $4,752 and $519 at December 31,
1993, 1992 and 1991, respectively, net of accumulated amortization), consisting
primarily of proprietary software technology acquired and the cost of certain
non-competition agreements, are being amortized on a straight-line basis over
periods from 5 to 7 years.
Pension Plans. Annual costs of pension plans are determined
actuarially in compliance with Statement of Financial Accounting
Standards ("SFAS") No. 87, "Employers Accounting for Pensions."
Tredegar's policy is to fund its pension plans at amounts not less than the
minimum requirements of the Employee Retirement Income
Security Act of 1974.
Postretirement Benefits Other Than Pensions. Effective January 1, 1993,
Tredegar adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." SFAS No. 106 requires recognition of the cost of
postretirement benefits during the employees' service periods. Previously, such
expenses were accounted for on a cash basis. Tredegar elected to immediately
recognize the liability for prior years' service as the cumulative effect
of a change in accounting principle. Accordingly, in the first quarter of 1993
Tredegar recorded an unfunded, accumulated postretirement benefit obligation of
$6,695 and a noncurrent, deferred income tax benefit of $2,545, resulting in an
after-tax charge of $4,150. Tredegar's current policy is to fund related
benefits when claims are incurred.
Postemployment Benefits. Tredegar periodically provides certain postemployment
benefits purely on a discretionary basis. Accordingly, under SFAS No.
112, "Employers Accounting for Postemployment Benefits," related costs for these
programs are accrued when it is probable that such benefits will be paid. All
other postemployment benefits are either accrued under current benefit plans or
are not material to Tredegar's financial position or results of operations.
Income Taxes. Effective January 1, 1993, Tredegar adopted SFAS No. 109,
"Accounting for Income Taxes." SFAS No. 109 requires the asset and liability
method of accounting for deferred income taxes, whereby enacted statutory tax
rates are applied to the differences between the financial reporting and tax
bases of assets and liabilities. The cumulative effect of this change in
accounting principle was a reduction in deferred income taxes and a
corresponding increase in net income of $4,300 in the first quarter of 1993.
Deferred income taxes were determined under Accounting Principles Board Opinion
No. 11 prior to 1993.
Deferred income taxes arise from temporary differences between financial and
income tax reporting of various items, principally depreciation and accruals for
employee benefits, divestitures, plant shutdowns and environmental remediation.
Software Development Costs. Tredegar, through APPX
Software, a wholly owned subsidiary, is involved in the development and sale of
computer software. Software development costs are accounted for in accordance
with SFAS No. 86, "Accounting for the Costs of Computer Software to be Sold,
Leased, or Otherwise Marketed." This statement requires that all costs incurred
to establish the technological feasibility of a computer software product to be
sold, leased or otherwise marketed be considered research and development
costs. Such costs are expensed as incurred. Once technological feasibility is
established, all software development and production costs are capitalized and
subsequently reported at the lower of unamortized cost or net realizable value.
Capitalization is discontinued once software is available for sale or lease.
Capitalized costs are amortized based on current and anticipated future revenues
for each product over periods not exceeding 5 years, with an annual minimum
equal to the straight-line amortization over the estimated remaining life of
the product.
Capitalized software costs are included in "Other assets and deferred charges"
and totaled $433 and $561 at December 31, 1993 and 1992, respectively.
Earnings Per Share. Earnings per share is computed using the weighted average
number of shares of common stock outstanding during the period. For the periods
presented, stock options have an immaterial dilutive effect. The number of
shares used in computing earnings per share were 10,894,802, 10,894,370 and
10,894,357 in 1993, 1992 and 1991, respectively.
2. Discontinued Operations
In November 1993, Tredegar announced that it is pursuing the sale of its coal
subsidiary, The Elk Horn Coal Corporation ("Elk Horn"). Assuming Elk Horn
can be sold on terms agreeable to Tredegar, the sale is expected to be
completed by mid-1994, and a gain is expected to be recognized. In addition, on
February 4, 1994, Tredegar sold its remaining oil and gas properties for
approximately $8,000. This transaction resulted in a gain of approximately
$6,100 ($3,900 after income taxes), which will be recognized in 1994. As a
result of the potential sale of Elk Horn and the sale of Tredegar's remaining
oil and gas properties, the Energy segment is being reported as discontinued
operations. Accordingly, information about results of operations, financial
condition, cash flows and industry segments has been reclassified
where appropriate.
Results from continuing operations are not indicative of future performance
because they exclude income that would be generated from reinvestment of
divestiture proceeds. Tredegar expects to use these proceeds to repay
outstanding borrowings under its revolving credit agreement, with remaining
proceeds invested until opportunities, in existing businesses or elsewhere,
are identified.
The combined statements of income and net assets of the
discontinued Energy segment are presented below:
Combined Statements of Income
Discontinued Energy Segment (Unaudited)
Years Ended December 31 1993 1992 1991
Revenues:
Net sales $33,431 $32,859 $34,283
Other expenses, net (13) (2) (8)
Total 33,418 32,857 34,275
Costs and expenses:
Cost of goods sold 20,381 19,355 25,276
Selling, general &
administrative 3,424 3,253 3,333
Interest allocated 653 661 785
Unusual items (1,424) - -
Total 23,034 23,269 29,394
Income from discontinued operations
before income taxes 10,384 9,588 4,881
Income taxes 3,600 3,793 1,777
Income from
discontinued operations $ 6,784 $ 5,795 $ 3,104
Combined Statement of Net Assets
Discontinued Energy Segment (Unaudited)
December 31 1993 1992
Current assets:
Accounts and notes receivable $ 6,173 $ 6,910
Inventories 6,695 3,763
Total current assets 12,868 10,673
Property, plant and equipment:
Land and land improvements 2,477 2,428
Buildings 471 470
Machinery and equipment 930 982
Coal lands 29,502 22,846
Oil and gas properties 8,782 9,152
Total property, plant & equipment 42,162 35,878
Less accumulated depreciation and
depletion 12,958 12,750
Net property, plant and equipment 29,204 23,128
Deferred income taxes - 1,499
Other assets and deferred charges 184 158
Total assets 42,256 35,458
Current liabilities:
Accounts payable 1,653 2,259
Accrued expenses 3,308 2,640
Total current liabilities 4,961 4,899
Deferred income taxes 5,434 -
Other noncurrent liabilities 885 755
Total liabilities 11,280 5,654
Net assets of discontinued operations $30,976 $29,804
Transactions between Tredegar and the Energy segment are reflected in the
combined financial statements as though they are settled immediately and there
are no amounts due to or from Tredegar at the end of any period. All of the
Energy segment's full-time employees participate in Tredegar's noncontributory
defined benefit plan for salaried employees. These employees also participate
in Tredegar's welfare (medical, life and disability) and savings plans.
Accordingly, related costs have been allocated to discontinued operations.
Interest expense was allocated to discontinued operations based upon the ratio
of the Energy segment's capital employed (net assets) to Tredegar's consolidated
capital employed.
For federal income tax purposes, results of the Energy segment's operations have
been included in Tredegar's consolidated tax return. The Energy segment's
provision for income taxes represents its allocated share of Tredegar's income
tax expense. The allocated share approximates income tax expense that would have
been incurred had the Energy segment (i) filed a separate consolidated tax
return, and (ii) separately computed income taxes in accordance with SFAS No.
109 in 1993 and Accounting Principles Board Opinion No. 11 prior to 1993.
Unusual items totaling $1,424 in 1993 include gains on the sale of certain oil
and gas properties. The significant changes in coal lands and deferred income
taxes from December 31, 1992 to December 31, 1993, were due to the write-up of
coal lands to their pretax amount in accordance with SFAS No. 109.
Under a new law (the Coal Industry Retiree Health Benefit Act of 1992) (the
"Act"), assigned operators (former employers) are responsible for a portion of
the funding of medical and death benefits of certain retired miners and
dependents of the United Mine Workers of America. Elk Horn was notified in
October 1993 that it is responsible for 57 retirees and 143 dependents
under the Act. In accordance with applicable pronouncements, premiums of $371
have been charged to Elk Horn's operating results in 1993. Based upon an
actuarial valuation, Tredegar estimates that the present value of the
unfunded obligation amounts to approximately $6,000 ($3,720 after income taxes).
Should Tredegar sell Elk Horn and retain the obligations under the Act, the
expected gain will be reduced accordingly.
3. Industry Segments
See pages 19 to 24 for net sales, operating profit, identifiable assets
and related information about Tredegar's industry segments that are presented
for the years 1989-1993. The discussion of segment information is unaudited.
4. Accounts and Notes Receivable
Accounts and notes receivable consist of:
December 31 1993 1992
Trade, less allowance for doubtful accounts
and sales returns of $3,216 and $3,291
in 1993 and 1992 $69,051 $61,213
Other 1,122 924
Total $70,173 $62,137
5. Inventories
Inventories consist of the following:
December 31 1993 1992
Finished goods $ 5,735 $ 4,699
Work-in-process 5,298 4,380
Raw materials 15,497 15,132
Stores, supplies and other 7,681 7,147
Total $34,211 $31,358
Inventories stated on the LIFO basis amounted to $15,044 and $15,748 at December
31, 1993 and1992, respectively, which are below replacement costs by
approximately $10,590 and $10,564, respectively.
6. Net Assets Held For Sale
Included in "Other assets and deferred charges" are net assets held for sale,
primarily land and buildings related to closed facilities, totaling $3,605 and
$2,609 as of December 31, 1993 and 1992, respectively. Such assets are stated at
estimated net realizable value and are expected to be sold over the next 1 to 2
years. At December 31, 1992, current assets included net assets held for sale
totaling $1,721, which were sold during 1993.
7. Investments
On February 15, 1991, Tredegar, through a subsidiary, entered into a Stock and
Warrant Purchase Agreement (the "Agreement") with Emisphere Technologies,
Inc. ("Emisphere"), a pharmaceutical research and development organization that
is developing an oral delivery system for drugs currently administered by
injection. Pursuant to the Agreement, during 1991 and 1992, Tredegar purchased
428,571 unregistered shares of Emisphere common stock for $7 per share.
Tredegar also purchased 112,500 registered shares of Emisphere common stock for
$8 per share in 1991. In total, Tredegar acquired 541,071 shares of Emisphere's
common stock for $3,900.
In 1992, Tredegar sold its 112,500 registered shares for $1,992 and recognized a
pretax gain of $1,092 ($680 after income taxes). In 1993, Tredegar sold its
remaining 428,571 shares for $5,263 and recognized a pretax gain of $2,263
($1,410 after income taxes). In total, Tredegar received $7,255 for its $3,900
investment in Emisphere common stock, resulting in a pretax gain of $3,355
($2,090 after income taxes).
As of December 31, 1993, Tredegar, through a subsidiary, owned 5% of a venture
capital limited partnership. Tredegar's total capital commitment is $2,000, with
$800 invested as of December 31, 1993. Additional contributions of $1,200 are
expected to be made over the next two years but will not exceed $667 in any 12-
month period.
8. Goodwill and Other Intangibles
Goodwill and other intangibles, and the related accumulated amortization, are as
follows:
December 31 1993 1992
Goodwill and other intangibles $60,185 $53,135
Additions 3,858 8,626
Write-offs & disposals - (1,576)
Subtotal 64,043 60,185
Accumulated amortization (18,314) (15,608)
Net $45,729 $44,577
9. Accrued Expenses
Accrued expenses consist of the following:
December 31 1993 1992
Workmen's compensation and disabilities $ 6,094 $ 5,597
Payrolls, related taxes and medical and
other benefits 6,036 7,098
Vacation 5,298 5,332
Environmental 4,293 5,909
Divestitures 2,709 5,812
Other 10,950 10,848
Total $35,380 $40,596
10. Debt and Credit Agreements
Long-term debt consists of:
December 31 1993 1992
Borrowings under short-term variable-
rate credit arrangements $ 6,000 $ 6,500
Variable-rate revolving loan due in 1996 20,000 24,000
Variable-rate term loan due in 1997 35,000 35,000
7.2% note to institutional lender due
in 2003 35,000 -
8.6% note to institutional lender - 35,000
Other 1,000 1,000
Total $97,000 $101,500
At December 31, 1993 and 1992, $6,000 and $6,500, respectively, were borrowed
under short-term credit arrangements at average interest rates of 3.8% and
5.1%, respectively. The balances outstanding in each year were classified as
long-term debt in accordance with Tredegar's intention and ability to refinance
such obligations on a long-term basis.
On June 16, 1993, Tredegar paid a $1,800 ($1,115 after income taxes) prepayment
premium to an institutional lender to refinance its $35,000, 8.6% fixed-rate
debt that was due in September 1994. The new note carries a fixed rate of 7.2%
and matures in June 2003. Annual principal payments of $5,000 will begin in
1997. Tredegar estimates that the carrying value of its fixed-rate note
approximated its fair value at December 31, 1993.
During the third quarter of 1993, Tredegar's variable-rate revolving credit
agreement was amended to increase the maximum debt allowed under such agreement
from $150,000 to $180,000. The maturity date under the agreement was extended by
one year to June 16, 1996. The agreement provides for a commitment fee of .375%
on the unused amount. The agreement also provides for extensions of the
maturity date in one-year increments. The interest rate on the revolving loan
was 4% and 4.4% at December 31, 1993 and 1992, respectively.
During 1992, Tredegar borrowed $35,000 under a variable-rate term loan due on
June 7, 1997. The interest rate on the term loan was 4.4% and 4.9% at December
31, 1993 and 1992, respectively.
The weighted average interest rate on all variable-rate loans outstanding
during the year was 4.2% in 1993, compared with 4.9% in 1992.
Tredegar's loan agreements contain restrictions, among others, on the payment
of cash dividends. At December 31, 1993, $37,415 was available for cash
dividend payments.
11. Shareholder Rights Agreement
Pursuant to a Rights Agreement dated as of June 15, 1989 (as amended), between
Tredegar and American Stock Transfer and Trust Company as Rights Agent (the
"Rights Agreement"), one Right is attendant to each share of Tredegar common
stock. Each Right entitles the registered holder to purchase from Tredegar
one one-hundredth of a share of Participating Cumulative Preferred Stock,
Series A (the "Preferred Stock"), at an exercise price of $50 (the "Purchase
Price"). The Rights will become exercisable, if not earlier redeemed, only if
a person or group acquires 10% or more of the outstanding shares of Tredegar
common stock or announces a tender offer, the consummation of which would
result in ownership by a person or group of 10% or more of Tredegar common
stock. Any action by a person who, together with his associates and affiliates,
owned 10% or more of the outstanding shares of Tredegar common stock on
July 10, 1989, cannot cause the Rights to become exercisable.
Each holder of a Right, upon the occurrence of certain events, will become
entitled to receive, upon exercise and payment of the Purchase Price, Preferred
Stock (or in certain circumstances, cash, property or other securities of
Tredegar or a potential acquirer) having a value equal to twice the amount of
the Purchase Price.
The Rights will expire on June 30, 1999.
12. Stock Option Plans
Tredegar has two stock option plans whereby stock options may be granted to
purchase a specified number of shares of Tredegar common stock at a price not
less than the fair market value on the date of grant and for a term not to
exceed 10 years. In addition to the stock options, recipients may also be
granted stock appreciation rights ("SARs") and restricted stock.
Activity for 1991-1993 is shown at the bottom of this page.
At December 31, 1993 and 1992, options to purchase 452,352 and 247,473 shares,
respectively, were exercisable and 752,900 and 761,900 shares, respectively,
were available for grant.
Stock Option Plan Information Number of Shares Option Price
Options SARs Per Share Aggregate
Outstanding at December 31, 1990 351,100 351,100 $16.7045 $5,865
Lapsed in 1991 (47,600) (47,600) $16.7045 (795)
Outstanding at December 31, 1991 303,500 303,500 $16.7045 5,070
Granted in 1992 210,000 192,000 $12.125 to $17.00 2,627
Lapsed in 1992 (25,400) (25,400) $16.7045 (424)
SARs exercised in 1992 (1,500) (1,500) $16.7045 (25)
Outstanding at December 31, 1992 486,600 468,600 $12.125 to $17.00 7,248
Granted in 1993 20,000 - $12.875 258
Lapsed in 1993 (11,000) (11,000) $16.7045 (184)
SARs exercised in 1993 (6,000) (6,000) $12.125 to $16.7045 (89)
Outstanding at December 31, 1993 489,600 451,600 $12.125 to $17.00 $7,233
13. Rental Expense and Contractual Commitments
Rental expense was $2,936, $2,026 and $1,539 for 1993, 1992 and 1991,
respectively. Rental commitments under all noncancelable operating leases
as of December 31, 1993, are as follows:
1994 $ 2,883
1995 2,535
1996 1,930
1997 1,112
1998 974
Remainder 2,475
Total $11,909
Contractual obligations for plant construction and purchases of real property
and equipment amounted to approximately $2,029 and $2,062 at December 31, 1993
and 1992, respectively.
14. Retirement Plans & Other Postretirement Benefits
Tredegar has noncontributory defined benefit plans covering most employees. The
plans for salaried and hourly employees currently in effect are based on a
formula using the participant's years of service and compensation or using the
participant's years of service and a dollar amount. Plan assets consist
principally of common stock and U.S. government and corporate obligations.
The components of net pension income for Tredegar's plans for 1993, 1992 and
1991 are as follows:
1993 1992 1991
Return on plan assets:
Actual return $18,557 $7,509 $18,000
Expected return greater
(lower) than actual (8,097) 2,327 (8,191)
Expected return 10,460 9,836 9,809
Amortization of transition asset 1,231 1,231 1,235
Service cost (benefits earned
during the year) (3,072) (3,139) (2,953)
Interest cost on projected
benefit obligation (6,515) (6,104) (5,685)
Amortization of prior service costs (805) (738) (729)
Curtailment loss recognized - - (230)
Net pension income $ 1,299 $ 1,086 $ 1,447
The following table presents a reconciliation of the funded status of Tredegar's
pension plans at December 31, 1993, 1992 and 1991, to prepaid pension expense:
1993 1992 1991
Plan assets at fair value $130,603 $116,587 $111,714
Actuarial present value
of benefit obligations:
Accumulated benefit obligation
(including vested benefits of
$85,828, $65,400 and
$60,437, respectively) (89,221) (68,469) (63,868)
Projected compensation
increase (11,225) (15,209) (15,470)
Projected benefit obligation (100,446) (83,678) (79,338)
Plan assets in excess of projected
benefit obligation 30,157 32,909 32,376
Unrecognized net gain (11,736) (14,475) (15,508)
Unrecognized transition asset
being amortized principally
over 16 years (6,687) (7,918) (9,149)
Unrecognized prior service costs
being amortized 5,464 5,631 6,273
Prepaid pension expense $17,198 $16,147 $13,992
Prepaid pension expense of $17,198 and $16,147 is included in "Other assets and
deferred charges" in the consolidated balance sheets at December 31, 1993 and
1992, respectively.
Net pension income and plan obligations are calculated using assumptions of
discount rates on projected benefit obligations, rates of projected increases in
compensation, and expected rates of return on plan assets. The discount rate on
projected benefit obligations was assumed to be 7% at December 31, 1993, and 8%
at December 31, 1992 and 1991. The rate of projected compensation increase was
assumed to be 5% at December 31, 1993, and 5.5% at December 31, 1992 and 1991.
The expected long-term rate of return on plan assets was assumed to be 9% each
year. Net pension income is determined using assumptions as of the beginning of
each year. Funded status is determined using assumptions as of the end of each
year.
In December 1993, Tredegar established a non-qualified supplemental pension plan
covering certain employees. The plan is designed to restore all or a part of the
pension benefits that would have been payable to designated participants from
Tredegar's principal pension plans if it were not for limitations imposed by
income tax regulations. The projected benefit obligation relating to this
unfunded plan ($612 at December 31, 1993) is being amortized over the average
remaining working life of participants in the plan (approximately $100
annually).
In addition to providing pension benefits, Tredegar provides postretirement life
insurance and health care benefits for certain groups of employees. Tredegar and
retirees share in the cost of postretirement health care benefits, with
employees retiring after July 1, 1993, receiving a fixed subsidy from Tredegar
to cover a portion of their health care premiums. Effective January 1, 1993,
Tredegar adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (see Note 1 on page 32). In accordance with the
new standard, prior years' financial statements have not been restated.
Previously, such expenses were accounted for on a cash basis.
The components of net periodic postretirement benefit cost are
as follows:
1993
Service cost (benefits earned during the year) $186
Interest cost on accumulated postretirement
benefit obligation 492
Net postretirement benefit cost $678
The following table presents a reconciliation of the funded status of Tredegar's
postretirement life insurance and health care benefit plans at December 31, 1993
and January 1, 1993, to accrued postretirement benefit cost:
December 31, January 1,
1993 1993
Plan assets at fair value $ - $ -
Accumulated postretirement benefit
obligation (APBO):
Retirees (3,001) (3,411)
Other fully eligible participants (2,408) (1,749)
Other active participants (1,755) (1,535)
Total APBO (7,164) (6,695)
APBO in excess of plan assets (7,164) (6,695)
Unrecognized gain (52) -
Accrued postretirement benefit cost ($7,216) ($6,695)
Accrued postretirement benefit cost of $7,216 is included in "Other noncurrent
liabilities" in the consolidated balance sheet at December 31, 1993.
The discount rate used in determining the accumulated postretirement benefit
obligation was 7% at December 31, 1993, and 8% at January 1, 1993. The rate of
annual pay increase for life insurance benefits was assumed to be 5% at December
31, 1993, and 5.5% at January 1, 1993. A 14% and 11.2% annual rate of increase
in the per-capita cost of covered health care benefits was assumed at December
31, 1993, for the indemnity and managed care plans, respectively. A 15% and 12%
annual rate of increase in the per-capita cost of covered health care benefits
was assumed at January 1, 1993, for the indemnity and managed care plans,
respectively. The rates were assumed to decrease gradually to 6% and 5%,
respectively, in year 2002 and remain at that level thereafter. Net
postretirement benefit cost is determined using assumptions as of the beginning
of each year. Funded status is determined using assumptions as of the end of
each year.
If the health care cost trend rate assumptions were changed by 1%, the
accumulated postretirement benefit obligation as of December 31, 1993,
would be changed by approximately $25. The effect of this change on the sum of
the service cost and interest cost components of net periodic postretirement
benefit cost for 1993 would be immaterial.
15. Savings Plan
Tredegar has a savings plan whereby eligible employees may voluntarily
contribute a percentage of their compensation. Under the provisions of the plan,
Tredegar matches a portion of the employee's contribution to the plan with
shares of Tredegar common stock. Contributions accrued by Tredegar in 1993,
1992 and 1991, amounted to $2,146, $1,818 and $2,121, respectively.
16. Income Taxes
Effective January 1, 1993, Tredegar adopted SFAS No. 109, "Accounting for Income
Taxes," which requires use of the asset and liability method of accounting for
deferred income taxes (see Note 1 on page 32). As permitted under the new
standard, prior years' financial statements have not been restated. Deferred
income taxes were determined under Accounting Principles Board Opinion No. 11
for years prior to 1993.
Income from continuing operations before income taxes and
income taxes are as follows:
1993 1992 1991
Income from continuing operations
before income taxes:
Domestic $4,460 $13,307 $3,252
Foreign 2,465 2,635 735
Total $6,925 $15,942 $3,987
Current income taxes:
Federal $2,190 $ 5,423 ($621)
State 759 919 849
Foreign 1,671 181 141
Total 4,620 6,523 369
Deferred income taxes:
Federal (848) (378) 1,520
State (197) (222) (537)
Foreign (721) 502 116
Adjustment for 1% increase in
federal statutory rate 348 - -
Total (1,418) (98) 1,099
Total income taxes $3,202 $ 6,425 $1,468
The significant differences between the U.S. federal statutory rate and the
effective income tax rate for continuing operations are as follows:
Percent of Income from Continuing
Operations Before Income Taxes
Years Ended December 31 1993 1992 1991
Income tax expense at federal
statutory rate 35.0 34.0 34.0
State taxes, net of federal
income tax benefit 5.3 2.9 5.2
Foreign Sales Corporation (3.1) (3.6) (13.6)
Adjustment of deferred income
taxes for 1% increase in
federal statutory rate 5.0 - -
Research and development tax
credit (5.8) - -
Goodwill amortization 5.1 1.0 3.8
Accelerated write-off of
certain goodwill - 2.5 -
Other items, net 4.7 3.5 7.4
Effective income tax rate 46.2 40.3 36.8
Deferred income taxes result from temporary differences between financial and
income tax reporting of various items. The source of these differences and the
tax effects for continuing operations were as follows:
1993 1992 1991
Depreciation ($2,002) $1,176 ($1,461)
Divestitures, plant shutdowns
and environmental accruals 1,229 (846) 2,992
Employee benefits 309 (132) (310)
Other items, net (954) (296) (122)
Total ($1,418) ($98) $1,099
Deferred tax liabilities and deferred tax assets as of December 31, 1993 and
January 1, 1993, reflecting the adoption of SFAS No. 106 and 109, are as
follows:
December 31, January 1,
1993 1993
Deferred tax liabilities:
Depreciation $16,982 $18,984
Pensions 6,642 5,854
Other 2,442 3,776
Total deferred tax liabilities 26,066 28,614
Deferred tax assets:
Employee benefits 7,899 7,420
Environmental accruals 1,697 2,174
Divestitures 1,279 2,031
Inventory 1,441 1,332
Allowance for doubtful accounts and
sales returns 1,169 1,201
Alternative minimum tax credit
carryforward 524 732
Other 504 601
Total deferred tax assets 14,513 15,491
Net deferred tax liability $11,553 $13,123
Included in the balance sheet at December 31,1993:
Noncurrent deferred tax liabilities
in excess of assets $23,108
Current deferred tax assets in excess
of liabilities 11,555
Net deferred tax liability $11,553
17. Unusual Items
In 1993, unusual items totaling $452 include estimated costs related to the
planned disposal of a Film Products plant in Flemington, New Jersey ($1,815),
and the reorganization of corporate functions ($900), partially offset by a gain
on the sale of Tredegar's remaining investment in Emisphere ($2,263) (see Note 7
on page 35).
In 1992, unusual items totaling $90 include the accelerated write-off of certain
goodwill associated with the restructuring of Molded Products ($1,182) partially
offset by the gain on the sale of a portion of Tredegar's investment in
Emisphere ($1,092) (see Note 7 on page 35).
In 1991, the decisions to close the Pomona, California, and LaGrange, Kentucky,
Molded Products plants and to sell the Pittsfield, Massachusetts, tooling plant
resulted in unusual charges to earnings totaling $4,412. Management's decision
in 1991 to continue to operate Fiberlux resulted in a $2,797 reversal of the
unusual charge accrued in 1990. In addition, a gain on the sale of the
Molded Products beverage closure business of $894 is reflected in unusual items
in 1991.
18. Contingencies
Tredegar is involved in various stages of investigation and clean up relating
to environmental matters at certain of its plant locations. Where management
has determined the nature and scope of any required environmental cleanup
activity, estimates of cleanup costs have been obtained and accrued. As
management continues its efforts to assure compliance with environmental laws
and regulations, additional contingencies may be identified. If additional
contingencies are identified, it is management's practice to determine the
nature and scope of such contingencies, obtain and accrue the estimated cost of
remediation, and begin remediation. While it is not possible to predict the
course of ongoing environmental compliance activities, management does not
currently believe that additional costs that could arise from such activities
will have a material adverse effect on Tredegar's financial position; however,
such costs could have a material adverse effect on quarterly or annual
operating results when resolved in a future period.
Tredegar is involved in various other legal actions arising in the normal
course of business. After taking into consideration legal counsels' evaluation
of such actions, management believes that Tredegar has sufficiently accrued for
possible losses and that these actions will not have a material adverse effect
on Tredegar's financial position; however, the resolution of such actions in a
future period could have a material adverse effect on quarterly or annual
operating results at that time.
Tredegar Industries, Inc., is a diversified manufacturer of plastics and metal
products. Tredegar also has interests in energy, computer software and rational
drug design research.
Annual Meeting
The annual meeting of shareholders of Tredegar Industries, Inc., will be held on
Thursday, May 26, 1994, beginning at 9:00 a.m. E.D.T. at the Atlanta Airport
Hilton and Towers in Atlanta, Georgia. Formal notices of the annual meeting,
proxies and proxy statements will be mailed to shareholders on or before March
31.
Corporate Headquarters
1100 Boulders Parkway
Richmond, Virginia 23225
804-330-1000
Number of Employees
Approximately 3,500
Counsel
Hunton & Williams
Richmond, Virginia
Independent Accountants
Coopers & Lybrand
Richmond, Virginia
Stock Listing
New York Stock Exchange
Ticker Symbol: TG
Transfer Agent and Registrar
American Stock Transfer & Trust Company
New York, New York
Inquiries
Inquiries concerning stock transfers, dividend reinvestment, consolidating
accounts, changes of address, or lost or stolen stock certificates should be
directed to:
American Stock Transfer & Trust Company
Shareholder Services Department
40 Wall Street - 46th Floor
New York, New York 10005
Telephone: 212-936-5100
All other inquiries should be directed to:
Tredegar Industries, Inc.
Corporate Communications Department
1100 Boulders Parkway
Richmond, Virginia 23225
Telephone: 804-330-1044
Dividend Information
During 1993 and 1992, the Board of Directors declared quarterly dividends of
$.06 per share, or $.24 per share on an annual basis. All decisions with
respect to payment of dividends will be made by the Tredegar Board of Directors
based upon Tredegar's earnings, financial condition, anticipated cash needs and
such other considerations as the Board deems relevant. See Note 10 of Notes to
The Financial Statements on page 35 for details of restrictions on dividends.
Market Prices of Common Stock and Shareholder Data
The following table shows the reported high and low closing prices of
Tredegar's common stock by quarter for the past two years.
1993 1992
High Low High Low
First Quarter 18 15 14 1/2 10
Second Quarter 16 3/8 13 18 1/4 13 3/8
Third Quarter 13 7/8 12 1/2 18 5/8 13 5/8
Fourth Quarter 15 3/8 12 7/8 16 3/4 13 1/2
Tredegar has no preferred stock outstanding.
There were 10,895,611 shares of common stock held by 8,165 shareholders of
record on January 31, 1994.
Plants, Facilities and Offices
Corporate Headquarters:
Richmond, Virginia
Tredegar Film Products:
Carbondale, Pennsylvania
Flemington, New Jersey
Fremont, California
LaGrange, Georgia
Manchester, Iowa
New Bern, North Carolina
Tacoma, Washington
Terre Haute, Indiana (2)
(plant and technical center)
Kerkrade, the Netherlands
Sao Paulo, Brazil
Molded Products:
Alsip, Illinois
Excelsior Springs, Missouri
South Grafton, Massachusetts
St. Petersburg, Florida (3)
(2 plants and technical center)
Phillipsburg, Pennsylvania
State College, Pennsylvania
Fiberlux:
Pawling, New York
Purchase, New York (headquarters)
South Bend, Indiana
Aluminum Extrusions:
Carthage, Tennessee
Kentland, Indiana
Newnan, Georgia
Brudi:
Ridgefield, Washington
Kelso, Washington
Adelaide, Australia
Halifax, United Kingdom
Elk Horn Coal:
Prestonsburg, Kentucky
APPX Software, Inc.:
Richmond, Virginia
Molecumetics, Ltd.:
Bellevue, Washington
EXHIBIT (G)(2)
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TREDEGAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30 December 31
ASSETS 1994 1993
Cash and cash equivalents $ 4,608 $ -
Accounts and notes receivable 74,210 70,173
Inventories 31,308 34,211
Deferred income taxes 11,111 11,555
Prepaid expenses and other 1,104 881
Total current assets 122,341 116,820
Property, plant and equipment, at cost 324,265 323,933
Less accumulated depreciation
and amortization 194,797 188,531
Net property, plant and equipment 129,468 135,402
Other assets and deferred charges 26,162 24,456
Goodwill and other intangibles 35,950 45,729
Net assets of discontinued operations 21,983 30,976
Total assets $ 335,904 $ 353,383
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 25,078 $ 19,376
Accrued expenses 36,581 35,380
Income taxes payable 2,673 -
Total current liabilities 64,332 54,756
Long-term debt 70,500 97,000
Deferred income taxes 19,071 23,108
Other noncurrent liabilities 9,692 9,431
Total liabilities 163,595 184,295
Shareholders' equity:
Common stock, no par value 165,839 170,140
Foreign currency translation
adjustment 84 (283)
Retained earnings (deficit) 6,386 (769)
Total shareholders' equity 172,309 169,088
Total liabilities and
shareholders' equity $ 335,904 $ 353,383
See accompanying notes to financial statements.
TREDEGAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per-share amounts)
(Unaudited)
Second Quarter Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
Net sales $122,913 $108,042 $243,907 $219,240
Other income (expense), net 160 (192) (71) (462)
123,073 107,850 243,836 218,778
Cost of goods sold 102,684 91,468 204,934 185,482
Selling, general & administrative
expenses 12,259 12,278 23,554 24,706
Research & development expenses 1,927 2,246 3,766 4,175
Interest expense 1,166 1,232 2,343 2,555
Unusual items - (736) 9,521 (2,263)
118,036 106,488 244,118 214,655
Income (loss) from continuing
operations before income taxes 5,037 1,362 (282) 4,123
Income taxes 1,963 688 1,737 1,739
Income (loss) from continuing
operations 3,074 674 (2,019) 2,384
Discontinued operations:
Income from energy segment operations 1,772 2,154 3,207 3,995
Gain on sale of remaining oil & gas
properties (net of income tax of
$2,121) - - 3,938 -
Deferred tax benefit on the difference
between the financial reporting and
income tax basis of The Elk Horn
Coal Corporation - - 3,320 -
Net income before extraordinary item
and cumulative effect of changes
in accounting principles 4,846 2,828 8,446 6,379
Extraordinary item - prepayment
premium on extinguishment of
debt (net of income tax benefits
of $685) - (1,115) - (1,115)
Cumulative effect of changes in
accounting for postretirement benefits
other than pensions (net of tax) and
income taxes - - - 150
Net income $ 4,846 $ 1,713 $ 8,446 $ 5,414
Earnings (loss) per share:
Continuing operations $ .29 $ .06 $ (.19) $ .22
Discontinued operations .16 .20 .97 .37
Before extraordinary item and
cumulative effect of changes
in accounting principles .45 .26 .78 .59
Extraordinary item - (.10) - (.10)
Cumulative effect of changes
in accounting principles - - - .01
Net income $ .45 $ .16 $ .78 $ .50
Shares used to compute earnings per share 10,722 10,895 10,808 10,895
See accompanying notes to financial statements.
TREDEGAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months
Ended June 30
1994 1993
Cash flows from operating activities:
Continuing operations:
Income (loss) from continuing operations $(2,019) $ 2,384
Adjustments for noncash items:
Depreciation 11,789 11,380
Amortization of intangibles 1,010 1,281
Write-off of intangibles 9,521 -
Deferred income taxes (3,593) 363
Accrued pension income and postretirement benefits 177 115
Gain on sale of investments - (2,263)
Changes in assets and liabilities:
Accounts and notes receivable (4,037) (4,441)
Inventories 2,903 (3,066)
Prepaid expenses and other (230) (654)
Accounts payable 5,702 946
Accrued expenses and income taxes payable 3,625 (4,373)
Other,net (883) (1,429)
Net cash provided by continuing operating activities 23,965 243
Net cash used for extraordinary item - (1,115)
Net cash provided by discontinued operating activities 11,621 8,000
Net cash provided by operating activities 35,586 7,128
Cash flows from investing activities:
Continuing operations:
Capital expenditures (7,885) (5,905)
Investments (1,200) (200)
Proceeds from sales of investments - 5,263
Property disposals 2,569 2,208
Other, net (128) (334)
Net cash (used in) provided by investing
activities of continuing operations (6,644) 1,032
Discontinued operations:
Capital expenditures (16) (313)
Property disposals 7,853 1,685
Net cash provided by investing activities of
discontinued operations 7,837 1,372
Net cash provided by investing activities 1,193 2,404
Cash flows from financing activities:
Dividends paid (1,291) (1,308)
Net decrease in borrowings (26,500) (8,100)
Repurchase of Tredegar common stock (4,333) -
Other, net (47) (124)
Net cash used in financing activities (32,171) (9,532)
Increase in cash and cash equivalents 4,608 -
Cash and cash equivalents at beginning of period - -
Cash and cash equivalents at end of period $ 4,608 $ -
Supplemental cash flow information:
Interest payments (net of amount capitalized) $ 2,619 $ 5,249
Income tax payments, net $ 5,237 $ 3,935
See accompanying notes to financial statements.
TREDEGAR INDUSTRIES, INC.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying consolidated financial
statements of Tredegar Industries, Inc. and Subsidiaries ("Tredegar")
contain all adjustments necessary to present fairly, in all material
respects, Tredegar's consolidated financial position as of June 30, 1994,
and the consolidated results of their operations and their cash flows for
the six months ended June 30, 1994 and 1993. All such adjustments are
deemed to be of a normal recurring nature. These financial statements
should be read in conjunction with the consolidated financial statements
and notes thereto included in the 1993 Annual Report. The results of
operations for the six months ended June 30, 1994 are not necessarily
indicative of the results to be expected for the full year.
2. Certain prior-period amounts have been reclassified to conform to the
current presentation.
3. The components of inventories are as follows:
(In thousands)
June 30 December 31
1994 1993
Finished goods $ 5,905 $ 5,735
Work-in-process 3,824 5,298
Raw materials 14,670 15,497
Stores, supplies and other 6,909 7,681
Total $ 31,308 $ 34,211
4. Unusual items in 1994 include the write-off of goodwill and other
intangibles in APPX Software, Inc. ($7.6 million after income taxes or 70
cents per share). The write-off is the result of management's
determination that income generated by the acquired products, which
historically had been marketed to small and medium-sized companies, will
not be sufficient to recover the unamortized costs associated with the
intangible software assets purchased by Tredegar in December 1992. The
goodwill and other intangibles in APPX Software were being amortized over 5
to 7 years at an annual rate of approximately $1.5 million after income
taxes, or 14 cents per share. Unusual items in 1993 include gains on sales
of Emisphere Technologies, Inc. ("Emisphere") common stock ($460,000 after
income taxes, or 4 cents per share for the second quarter and $1.4 million
after income taxes, or 13 cents per share, for the six months).
5. Tredegar is reporting its energy segment as discontinued operations. In
February 1994, Tredegar sold its remaining oil and gas properties for
approximately $8 million. In June 1994, Tredegar announced an agreement to
sell its 97%- owned subsidiary, The Elk Horn Coal Corporation ("Elk Horn"),
to Pen Holdings, Inc. for $71 million. Assuming completion of the
transaction during the third quarter, Tredegar expects to realize an
after-tax gain of approximately $26 million or $2.43 per share. After-tax
proceeds from the sale should be approximately $50 million. Of this amount,
it is expected that $35 million will be used to repay certain outstanding
debt. Remaining proceeds will be invested in marketable securities.
Results of energy segment operations are summarized below:
(In thousands)
Second Quarter Six Months
Ended June 30 Ended June 30
1994 1993 1994 1993
Revenues $ 8,443 $7,933 $16,154 $15,931
Costs and expenses:
Operating costs and
expenses 5,530 5,539 10,883 11,019
Interest allocated 133 161 269 334
Unusual items - (1,010) - (1,424)
Total 5,663 4,690 11,152 9,929
Income before income taxes 2,780 3,243 5,002 6,002
Income taxes 1,008 1,089 1,795 2,007
Income from energy segment
operations $ 1,772 $2,154 $ 3,207 $3,995
Unusual items for energy segment operations in 1993 include gains of $1
million ($663,000 after income taxes or 6 cents per share) for the second
quarter and $1.4 million ($938,000 after income taxes or 9 cents per share)
for the six months related to sales of certain oil and gas properties.
Discontinued operations in 1994 include a gain of $6.1 million ($3.9
million after income taxes or 36 cents per share) related to the sale of
Tredegar's remaining oil and gas properties, and a deferred tax benefit of
$3.3 million (31 cents per share) recognized on the difference between the
financial reporting basis and income tax basis of Elk Horn in connection
with its anticipated sale.
6. Net income and earnings per share, adjusted for nonrecurring items
affecting the comparability of operating results, are presented below:
(In thousands, except per-share amounts)
Second Quarter Six Months
1994 1993 1994 1993
Net income as reported $4,846 $1,713 $8,446 $5,414
After-tax effects of
nonrecurring items:
Write-off of APPX
Software intangibles - - 7,642 -
Gain on sale of oil & gas
properties - (663) (3,938) (938)
Deferred tax benefit
associated with the
expected sale of Elk
Horn Coal - - (3,320) -
Gain on sale of Emisphere - (460) - (1,410)
Extraordinary charge - 1,115 - 1,115
Cumulative effect of
accounting changes - - - (150)
Net income as adjusted for
nonrecurring items 4,846 1,705 8,830 4,031
Income from discontinued
operations as adjusted
for nonrecurring items (1,772) (1,491) (3,207) (3,057)
Net income from continuing
operations as adjusted
for nonrecurring items $3,074 $ 214 $5,623 $ 974
Earnings per share:
As reported $ .45 $ .16 $ .78 $ .50
As adjusted for
nonrecurring items .45 .16 .81 .37
From continuing
operations as adjusted
for nonrecurring items .29 .02 .52 .09
7. During the second quarter of 1994, Tredegar purchased 303,000 shares of
Tredegar common stock for $4.3 million. In the first quarter of 1994,
Tredegar granted stock options to purchase 381,000 shares of Tredegar
common stock at prices not less than the fair market value on the date of
grant ($15.125) and for a term not to exceed 10 years.
