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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X]Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ADT LIMITED
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WESTERN RESOURCES, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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PRELIMINARY COPY--SUBJECT TO COMPLETION
[LOGO] Western Resources(R)
February , 1997
Dear Fellow ADT Shareowner:
We are pleased to enclose for your consideration Western Resources' proxy
statement and GREEN proxy card relating to the special general meeting of ADT
Limited shareowners.
In the past, ADT has advised Western Resources that it is not interested in
discussing a business arrangement between ADT and Western Resources despite
the fact that Western Resources believes that such a combination could
maximize ADT's potential both in its existing security business and in the
emerging market of deregulated retail energy distribution. After careful study
and consideration, we believe that the potential benefits to ADT, Western
Resources and ADT's other shareowners can be best realized through a
combination of Western Resources and ADT. Therefore, Western Resources is
taking its proposal to combine with ADT directly to the true owners of ADT--
the ADT shareowners.
Western Resources is offering to exchange each ADT common share for $7.50 in
cash and $15.00 in Western Resources Common Stock (the "Offer"), on the terms
and subject to the conditions set forth in the enclosed Preliminary
Prospectus. ADT shareowners may receive less than $15.00 in Western Resources
Common Stock in certain circumstances if the price of Western Resources Common
Stock falls below $29.75. The Offer is subject to certain conditions including
Western Resources' receipt of tenders of a number of ADT common shares which,
together with shares presently owned by Western Resources and its
subsidiaries, constitute a majority of the total number of ADT common shares
outstanding. Following completion of the Offer, Western Resources plans to
acquire the remaining equity interest of ADT by effecting an amalgamation of a
Bermuda subsidiary of Western Resources with and into ADT (the
"Amalgamation").
The ADT board has recently taken certain actions that Western Resources
believes were designed to establish impediments to consummation of the Offer,
including the adoption of a "poison pill" shareowner rights plan pursuant to
which the associated preference share purchase rights were issued. Western
Resources believes that the ADT board of directors may be unwilling to amend
or redeem the "poison pill" and otherwise permit the Offer to be consummated.
Accordingly, Western Resources is soliciting your proxy as a shareowner of ADT
to remove the present members of the ADT board and to replace them with
nominees of Western Resources who presently intend to take all actions
necessary to expedite consummation of the Offer and the Amalgamation,
including amending or redeeming ADT's "poison pill," subject to their
fiduciary duties under Bermuda law.
Based upon the closing price of ADT common shares on December 17, 1996, the
last trading day prior to the public announcement of the Offer, the Offer
represents a 12% premium over ADT's market price. In addition, the Offer
provides ADT shareowners with
the opportunity to invest in a combined company with the potential to become a
market leader in the converging energy marketing and security industries.
TO RECEIVE THE BENEFITS OF THE OFFER, IT IS IMPORTANT THAT YOU VOTE THE
GREEN PROXY CARD IN FAVOR OF WESTERN RESOURCES' NOMINEES AND PROPOSALS. ONLY
YOUR LATEST-DATED PROXY WILL COUNT AT THE ADT SPECIAL MEETING.
If you have any questions concerning this Proxy Statement or the Offer or
need assistance in voting your shares, please contact our Information Agent,
MacKenzie Partners, Inc. at 1-800-322-2885.
YOUR VOTE IS ESSENTIAL
IF YOU WANT THE OFFER TO SUCCEED, VOTE FOR THE WESTERN RESOURCES PROPOSALS BY
SIGNING, DATING AND RETURNING THE ENCLOSED GREEN PROXY CARD TODAY.
Thank you for your attention and support.
Sincerely,
/s/ John Hayes
Chairman of the Board
and Chief Executive Officer
IMPORTANT VOTING INFORMATION
If your shares are held in your own name, please sign, date and return
the enclosed GREEN proxy card in the postage-paid envelope provided with
this letter. If your shares are held in the name of a brokerage firm, bank
or other institution, please sign, date and return the GREEN proxy card to
such brokerage firm, bank or other institution in the envelope provided by
that firm.
If you have any questions or require any assistance in voting your
shares, please call toll free:
MacKenzie
Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(800) 322-2885 (toll-free)
156 Fifth Avenue New York, New York 10010 (800) 322-2885 (toll-free)
A registration statement relating to the Western Resources securities
referred to in this letter and in the accompanying proxy statement has been
filed with the Securities and Exchange Commission but has not yet become
effective. Such securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This letter
and the accompanying proxy statement shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
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PRELIMINARY COPY--SUBJECT TO COMPLETION--DATED FEBRUARY 25, 1997
SPECIAL GENERAL MEETING OF SHAREHOLDERS
OF
ADT LIMITED
----------------
RELATING TO THE REMOVAL OF THE EXISTING BOARD OF DIRECTORS OF ADT LIMITED,
THE REDUCTION OF THE SIZE OF SUCH BOARD TO TWO DIRECTORS
AND THE ELECTION OF THE NOMINEES OF WESTERN RESOURCES, INC.
----------------
PROXY STATEMENT
OF
WESTERN RESOURCES, INC.
This Preliminary Proxy Statement (the "Proxy Statement") and the
accompanying GREEN proxy card are furnished by Western Resources, Inc., a
Kansas corporation ("Western Resources"), in connection with its solicitation
of proxies to be voted at the special general meeting of shareholders of ADT
Limited, a company incorporated under the laws of Bermuda ("ADT"), and at any
adjournments, postponements, continuations or reschedulings thereof (the "ADT
Special Meeting"). This Proxy Statement is first being mailed to ADT
shareholders on or about , 1997. Westar Capital, Inc., a Kansas
corporation and a wholly owned subsidiary of Western Resources ("Westar
Capital"), presently owns approximately 27% of the Shares (as defined below).
Westar Capital has requested, in accordance with the Bye-Laws of ADT (the "ADT
Bye-Laws") and Bermuda law, that the ADT Special Meeting be convened on
February 18, 1997; however, on January 7, 1997, ADT announced that it had
scheduled the ADT Special Meeting date for July 8, 1997. Westar Capital has
commenced litigation challenging the July 8, 1997 meeting date and is seeking
relief to compel the board of directors of ADT (the "ADT Board") to hold the
ADT Special Meeting on or before March 20, 1997. See "Litigation." Enclosed is
a copy of the Western Resources Preliminary Prospectus, as filed with the
Securities and Exchange Commission on February 25, 1997 (the "Preliminary
Prospectus"), which sets forth the terms and conditions of the Offer (as
hereinafter defined).
At the ADT Special Meeting, ADT shareholders will be asked to vote upon the
following proposals:
(1) The removal of all eight of the present members of the ADT Board and
any person or persons elected or designated by any of such directors to
fill any vacancy or newly created directorships;
(2) The reduction of the number of seats on the ADT Board to two; and
(3) The election of Steven L. Kitchen and Steven A. Millstein (the "Western
Resources Nominees") as the directors of ADT (or, if either Western
Resources Nominee is unable to serve as a director of ADT due to death,
disability or otherwise, any other person designated as a Western
Resources Nominee by Western Resources).
Each of the foregoing actions (collectively, the "Western Resources
Proposals") is designed to expedite consummation of Western Resources' offer
to acquire ADT for $7.50 net in cash and $15.00 in Western Resources Common
Stock (as defined below), subject to downward adjustment only in the
circumstances described below. Shareholders of ADT are being asked to vote FOR
each of the Western Resources Proposals on the accompanying GREEN proxy card.
Assuming the presence of a quorum at the ADT Special Meeting, adoption of each
of the Western Resources Proposals will require the affirmative vote of a
simple majority of Shares voted at the ADT Special Meeting. See "The Western
Resources Proposals--Voting at the ADT Special Meeting."
WESTERN RESOURCES RECOMMENDS THAT YOU VOTE FOR EACH OF THE WESTERN
RESOURCES PROPOSALS.
Western Resources has filed exchange offer materials with the Securities and
Exchange Commission (the "Commission"). As soon as Western Resources'
registration statement has been declared effective by the Commission, Western
Resources and Westar Capital intend to commence an offer to exchange shares of
common stock, par value $5.00 per share, of Western Resources ("Western
Resources Common Stock"), and cash, for
each outstanding common share, par value $ 0.10 per share (each a "Share" and
collectively, the "Shares"), of ADT, including the associated preference share
purchase rights (each, a "Right" and collectively, the "Rights") issued
pursuant to the Rights Agreement, dated as of November 6, 1996, between ADT
and Citibank, N.A., New York branch, as Rights Agent (the "Rights Agreement"),
upon the terms and subject to the conditions set forth in the Preliminary
Prospectus and in the related Letter of Transmittal (which, together with the
final Prospectus, as it may be amended or supplemented, shall constitute the
"Offer"). The term "Expiration Date" means 5:00 p.m., Eastern time, on
, 1997, unless and until Western Resources, in its sole discretion, shall
have extended the period of time during which the Offer is open, in which
event the term "Expiration Date" shall mean the latest time and date at which
the Offer, as so extended by Western Resources, will expire.
In the Offer, each Share will be entitled to receive $7.50 net in cash (the
"Cash Consideration") and that number of shares of Western Resources Common
Stock equal to the Exchange Ratio (as defined below) (the "Stock
Consideration" and, together with the Cash Consideration, the "Offer
Consideration"). The term "Exchange Ratio" means the quotient (rounded to the
nearest 1/100,000) determined by dividing $15.00 by the average of the high
and low sales prices of Western Resources Common Stock (as reported on the New
York Stock Exchange, Inc. (the "NYSE") Composite Transactions reporting system
as published in The Wall Street Journal or, if not published therein, in
another authoritative source) (the "Western Resources Average Price") on each
of the twenty consecutive trading days ending with the third trading day
immediately preceding the Expiration Date; provided that the Exchange Ratio
shall not be greater than 0.50420. Pursuant to the Exchange Ratio, each Share
will be exchanged for $7.50 net in cash and $15.00 of Western Resources Common
Stock as long as the Western Resources Average Price is $29.75 or higher. If
the Western Resources Average Price is less than $29.75, each Share will be
exchanged for $7.50 net in cash and less than $15.00 of Western Resources
Common Stock. See "The Offer--The Exchange Ratio." Western Resources Common
Stock is listed for trading under the symbol "WR" on the NYSE. On February 21,
1997, the closing price of Western Resources Common Stock on the NYSE was
$30.75. Based on such closing price, the Exchange Ratio would be .48780 and
each Share would be converted into $7.50 net in cash and $15.00 of Western
Resources Common Stock. The Exchange Ratio will change as the market price of
the Western Resources Common Stock changes. Holders of outstanding Shares
("ADT Shareholders") may call (800) any time on or after the date hereof
through the Expiration Date for the current Exchange Ratio calculated based on
the then-current Western Resources Average Price for the twenty consecutive
trading days ending with the third trading day immediately preceding the date
the call is placed. The actual Western Resources Average Price and Exchange
Ratio will be calculated as of the third trading day immediately prior to the
Expiration Date, as described above, and a press release will be issued
announcing the actual Exchange Ratio prior to the opening of the second
trading day prior to the Expiration Date (as it may be extended from time to
time).
Complete information regarding the Offer is contained in the enclosed
Preliminary Prospectus and in the Tender Offer Statement on Schedule 14D-1,
which will be filed with the Commission prior to the commencement of the
Offer. The Tender Offer Statement on Schedule 14D-1 and any amendments
thereto, including exhibits, should be available for inspection and copies
should be obtainable in the manner set forth under the caption "Certain
Information Concerning Western Resources and ADT" (except that such material
will not be available at the regional offices of the Commission or at the
offices of the NYSE).
The purpose of the Offer is to enable Western Resources to acquire control
of ADT. Western Resources presently intends, following consummation of the
Offer, to propose and seek to have ADT effect an amalgamation of a wholly
owned subsidiary of Western Resources, incorporated under the laws of Bermuda
("Bermuda Sub"), with and into ADT, pursuant to the provisions of Sections 104
through 109 of the Companies Act 1981 of Bermuda, as amended (the "Companies
Act"), with the amalgamated company operating under the name of ADT (the
"Amalgamation"). In the Amalgamation, each then outstanding Share (other than
Shares owned by Western Resources or any of its affiliates, Shares held in the
treasury of ADT (if ADT is so authorized) or by any subsidiary of ADT and
Shares owned by ADT Shareholders who perfect appraisal rights under Bermuda
law) would be cancelled in exchange for the right to receive the Offer
Consideration. ADT has not
2
agreed to provide Western Resources with information that might be relevant to
the structuring of the Amalgamation. Western Resources therefore reserves the
right to change the structure of the Amalgamation upon receipt of such
information. A separate vote of ADT Shareholders subsequent to the ADT Special
Meeting will be required in order to approve the Amalgamation. If the Minimum
Tender Condition is satisfied and the Offer is consummated, no separate proxy
solicitation of ADT Shareholders will be required and Western Resources does
not currently intend to make any such solicitation. ADT Shareholders should be
aware that a vote in favor of the Western Resources Proposals will essentially
constitute a vote in favor of the Amalgamation, subject to Western Resources'
ability to amend or terminate the Offer or its failure to proceed with the
Amalgamation.
THE ACCEPTANCE OF AND PAYMENT FOR SHARES BY WESTERN RESOURCES PURSUANT TO
THE OFFER IS CONDITIONED UPON ADOPTION OF THE WESTERN RESOURCES PROPOSALS.
ACCORDINGLY, APPROVAL OF THE WESTERN RESOURCES PROPOSALS AT THE ADT SPECIAL
MEETING WILL FACILITATE THE PROMPT CONSUMMATION OF THE OFFER.
WESTERN RESOURCES URGES ADT SHAREHOLDERS TO PRESERVE THEIR OPPORTUNITY TO
ACCEPT THE SIGNIFICANT BENEFITS OF THE OFFER BY PROMPTLY SIGNING, DATING AND
RETURNING THE ENCLOSED GREEN PROXY CARD. YOU MUST SEPARATELY TENDER YOUR
SHARES PURSUANT TO THE OFFER IF YOU WISH TO PARTICIPATE IN THE OFFER. VOTING
FOR THE WESTERN RESOURCES PROPOSALS DOES NOT OBLIGATE YOU TO TENDER YOUR
SHARES PURSUANT TO THE OFFER, AND YOUR FAILURE TO VOTE FOR THE WESTERN
RESOURCES PROPOSALS DOES NOT PREVENT YOU FROM TENDERING YOUR SHARES PURSUANT
TO THE OFFER.
If your Shares are held in your own name, please sign, date and return the
enclosed GREEN proxy card in the postage-paid envelope provided with this
Proxy Statement. If your Shares are held in the name of a brokerage firm, bank
or other institution, please sign, date and return the GREEN proxy card to
such brokerage firm, bank or other institution in the envelope provided by
that firm.
If you have any questions or require assistance in voting your Shares,
please call toll free:
MacKenzie
Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(800) 322-2885 (toll-free)
WESTERN RESOURCES HAS FILED EXCHANGE OFFER MATERIALS WITH THE SECURITIES AND
EXCHANGE COMMISSION AND INTENDS TO MAKE ITS OFFER DIRECTLY TO SHAREHOLDERS OF
ADT LIMITED AS SOON AS ITS REGISTRATION STATEMENT HAS BEEN DECLARED EFFECTIVE
BY THE SECURITIES AND EXCHANGE COMMISSION. THE OFFER MAY BE ACCEPTED ONLY
AFTER SUCH REGISTRATION STATEMENT IS DECLARED EFFECTIVE AND WILL BE MADE ONLY
BY MEANS OF THE FINAL PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL.
3
THE WESTERN RESOURCES PROPOSALS
THE REQUISITION
On December 18, 1996, Westar Capital deposited a requisition (the
"Requisition") with ADT, pursuant to Section 74 of the Companies Act and Bye-
Law 42 of the ADT Bye-Laws, requiring the ADT Board to convene the ADT Special
Meeting so that ADT Shareholders will have the opportunity to vote on the
Western Resources Proposals. Under the Companies Act and the ADT Bye-Laws, the
ADT Board is required to convene the ADT Special Meeting. In the event that
the ADT Board does not within twenty-one days from the date of the deposit of
the Requisition convene the ADT Special Meeting, Westar Capital may itself
convene the ADT Special Meeting. Westar Capital has requested that the date of
the ADT Special Meeting be February 18, 1997; however, on January 7, 1997, ADT
announced that it had scheduled the ADT Special Meeting for July 8, 1997.
Westar Capital has commenced litigation challenging the July 8, 1997 meeting
date and is seeking relief to compel the ADT Board to hold the ADT Special
Meeting on or before March 20, 1997. See "Litigation."
DESCRIPTION OF THE WESTERN RESOURCES PROPOSALS
Western Resources is soliciting proxies in connection with the ADT Special
Meeting for the approval of the Western Resources Proposals, which are
described below. At the ADT Special Meeting, ADT Shareholders will be asked to
adopt the resolutions attached as Annex 1 hereto in order to implement the
Western Resources Proposals.
(1) Removal of Directors. The Western Resources Proposals include the
removal of all eight of the present members of the ADT Board and any other
person who may be a director of ADT at the time of the ADT Special Meeting.
Pursuant to Section 93 of the Companies Act and Bye-Law 71 of the ADT Bye-
Laws, any director of ADT may be removed from office as a director by a
resolution of ADT Shareholders to that effect.
(2) Reduction of the Number of Seats on the ADT Board. The Western Resources
Proposals include a proposal to reduce the number of seats on the ADT Board to
two. Section 91(1) of the Companies Act provides that the affairs of a company
shall be managed by not less than two directors. Bye-Law 52 of the ADT Bye-
Laws provides that the number of directors shall be such number, not less than
two, as the shareholders in general meeting may from time to time determine.
The ADT Board is currently comprised of eight directors.
(3) Election of the Western Resources Nominees. The Western Resources
Proposals include the election as directors of ADT of the two Western
Resources Nominees named in the table below, each of whom has consented to
serve as a director, if elected, until the next annual general meeting of
shareholders of ADT and until his successor has been elected and qualified.
Westar Capital plans to nominate each of the Western Resources Nominees in
accordance with the ADT Bye-Laws which require that written notice be given of
Westar Capital's intention to propose the Western Resources Nominees for
election to the ADT Board, together with notice in writing signed by the
Western Resources Nominees of their willingness to be elected, to the
Corporate Secretary of ADT not less than 6 and not more than 28 days prior to
the day appointed for the shareholder meeting at which directors are to be
elected. In order to comply with the requirement of Bye-Law 53 of the ADT Bye-
Laws that a director of ADT own one Share, each of the Western Resources
Nominees will own at least one Share at the time of the ADT Special Meeting.
Western Resources' primary purpose in seeking to elect the Western Resources
Nominees to the ADT Board is to take all actions necessary to expedite
consummation of the Offer and the Amalgamation. The Western Resources Nominees
would also be responsible for managing the business and affairs of ADT and
intend to discharge fully their obligations under Bermuda law. Although
Western Resources has no reason to believe that any of the Western Resources
Nominees will be unable to serve as a director of ADT, if either of the
Western Resources Nominees is not available for election, the persons named as
proxies on the GREEN proxy card will vote for the election of such other
nominee or nominees as may be proposed by Western Resources.
4
EMPLOYMENT HISTORY OR PRESENT
NAME, AGE AND PRINCIPAL OCCUPATION AND
BUSINESS ADDRESS FIVE-YEAR EMPLOYMENT HISTORY
---------------- -----------------------------
Steven L. Kitchen (51).. Mr. Kitchen has been Executive Vice President and Chief Financial
Western Resources, Inc. Officer of Western Resources during the past five years.
818 S. Kansas Avenue
Topeka, Kansas 66612
Steven A. Millstein
(43)................... Mr. Millstein has been President of Westar Security, Inc. since 1995.
Westar Security, Inc.
4221 West John From 1992 through 1995, Mr. Millstein held the position of Vice President
Carpenter of Marketing and Sales with Acoustics Development Corporation. Prior to
Freeway such time, Mr. Millstein served as Division Manager for Production Manage-
Irving, Texas 75063 ment at Southwestern Bell Telephone Company.
Schedule B sets forth certain information relating to Shares owned by the
Western Resources Nominees and certain transactions between any of them and
ADT.
The Western Resources Nominees will receive no compensation for agreeing to
stand for election as directors of ADT. In addition, it is anticipated that
each Western Resources Nominee, upon election, will receive no director's fees
for services as a director of ADT. Western Resources has agreed to indemnify
each Western Resources Nominee, to the fullest extent permitted by applicable
law, from and against any and all expenses, liabilities or losses of any kind
arising out of any threatened or filed claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative, asserted against or
incurred by the Western Resources Nominee in his or her capacity as a nominee
for election as a director of ADT, and, if elected, as a director of ADT, or
arising out of his or her status in either such capacity. Western Resources
has also agreed to reimburse each Western Resources Nominee for his or her
reasonable out-of-pocket expenses, including reasonable fees and expenses of
counsel.
THE PURPOSE OF THE WESTERN RESOURCES PROPOSALS IS TO FACILITATE CONSUMMATION
OF THE OFFER WHICH WOULD ENABLE ADT SHAREHOLDERS TO RECEIVE $7.50 NET IN CASH
AND $15.00 OF WESTERN RESOURCES COMMON STOCK (SUBJECT TO ADJUSTMENT) FOR EACH
SHARE.
WESTERN RESOURCES BELIEVES THAT IT IS IN THE BEST INTERESTS OF ADT
SHAREHOLDERS TO APPROVE THE WESTERN RESOURCES PROPOSALS, INCLUDING THE
ELECTION OF THE WESTERN RESOURCES NOMINEES, AT THE ADT SPECIAL MEETING. THE
WESTERN RESOURCES NOMINEES PRESENTLY INTEND, SUBJECT TO THE FULFILLMENT OF THE
FIDUCIARY DUTIES THEY WOULD HAVE AS DIRECTORS OF ADT, TO TAKE ALL ACTIONS
NECESSARY AND DESIRABLE TO FACILITATE THE CONSUMMATION OF THE OFFER.
WESTERN RESOURCES RECOMMENDS THAT YOU VOTE FOR EACH OF THE WESTERN RESOURCES
PROPOSALS.
The effect of the Western Resources Proposals will be to replace the current
directors of ADT, Michael A. Ashcroft, John E. Dannenberg, Alan B. Henderson,
James S. Pasman, Jr., Stephen J. Ruzika, W. Peter Slusser, William W. Stinson
and Raymond S. Troubh, with the Western Resources Nominees. If the ADT
Shareholders approve the Western Resources Proposals at the ADT Special
Meeting, the ADT Shareholders will have effectively approved the Offer and the
Amalgamation as the Western Resources Nominees are committed to taking,
subject to the fulfillment of the fiduciary duties they would have as
directors of ADT, all actions necessary and desirable to facilitate
consummation of the Offer and the Amalgamation including, among other things,
(i) either redeeming the Rights or amending the Rights Agreement to make the
Rights inapplicable to the Offer, if necessary, in order to satisfy the Rights
Plan Condition, (ii) not invoking the provisions of Bye-Law 104 or 46 of the
ADT Bye-Laws (as described below) in connection with the acquisition of Shares
by Western Resources pursuant to the Offer or otherwise, (iii) adopting and
approving an agreement and plan of amalgamation among ADT, Bermuda Sub and
Western Resources pursuant to which Bermuda Sub will amalgamate with and into
ADT, with the amalgamated company operating under the name of ADT, and ADT
5
Shareholders (other than Western Resources and ADT and their respective
affiliates, and ADT Shareholders who perfect appraisal rights under Bermuda
law) will receive the Offer Consideration in exchange for the cancellation of
each Share (the "Amalgamation Agreement") and (iv) proposing an amendment to
the ADT Bye-Laws providing that an amalgamation may be approved by the
affirmative vote of a simple majority of the votes cast at a general meeting
of ADT (the "Bye-Law Amendment"). Bye-Law 64 of the ADT Bye-Laws ("Bye-Law
64") restricts the ability of an ADT director to vote on, or be counted in a
quorum to consider, proposals concerning any other company in which the
director is the holder of or is beneficially interested in one percent or more
of the equity share capital or the voting rights. Bye-Law 64 will not restrict
the ability of the Western Resources Nominees to facilitate the consummation
of the Offer and the Amalgamation because any interest of the Western
Resources Nominees in the equity share capital or voting rights of either
Western Resources or Bermuda Sub will be less than one percent.
VOTING AT THE ADT SPECIAL MEETING
Adoption of each of the resolutions to be presented at the ADT Special
Meeting requires the affirmative vote of a simple majority of votes, assuming
the presence of a quorum of two holders of Shares present either in person or
by proxy. Such vote may be decided on a show of hands, with each ADT
Shareholder present in person or by proxy entitled to one vote, provided, that
if a poll is demanded, the required vote shall be determined by reference to
the number of Shares voted. A poll may be demanded at the ADT Special Meeting,
before or on the declaration of the result of a show of hands, by (a) the
chairman of the meeting, (b) at least three ADT Shareholders present in person
or represented by proxy, (c) any ADT Shareholder(s) present in person or
represented by proxy holding between them not less than one-tenth of the total
voting rights of the ADT Shareholders entitled to vote at the ADT Special
Meeting; (d) any ADT Shareholder(s) present in person or represented by proxy
holding Shares on which an aggregate sum has been paid up equal to not less
than one-tenth of the total sum paid up on all Shares entitled to vote at such
meeting. Western Resources and Westar Capital intend to vote Westar Capital's
Shares and those Shares for which Western Resources or its representatives
hold valid proxies at the ADT Special Meeting in favor of each of the Western
Resources Proposals.
The accompanying GREEN proxy card will be voted in accordance with your
instructions on such card at the ADT Special Meeting. You may vote FOR the
Western Resources Proposals or vote against, or abstain from voting on, the
Western Resources Proposals by marking the proper box on the GREEN proxy card
for the ADT Special Meeting. If no marking is made, you will be deemed to have
given a direction to vote the Shares represented by the GREEN proxy card FOR
the Western Resources Proposals, provided that you have signed the proxy card.
WESTERN RESOURCES RECOMMENDS A VOTE FOR THE WESTERN RESOURCES PROPOSALS.
It is not expected that any matter other than those referred to herein will
be brought before the ADT Special Meeting. If any other matter, including
consideration of a proposal for postponement or adjournment, is presented at
the ADT Special Meeting, the persons named in the enclosed form of proxy and
acting thereunder will vote on such matters in their discretion. However,
proxies voted against the Western Resources Proposals will be voted for any
proposal for postponement or adjournment to solicit additional proxies against
the Western Resources Proposals.
POTENTIAL RISKS RELATING TO THE ELECTION OF THE WESTERN RESOURCES NOMINEES
As stated above, the Western Resources Nominees are committed to taking,
subject to their fiduciary duties under Bermuda law, all actions necessary and
desirable to facilitate the consummation of the Offer on the terms, and
subject to the conditions, set forth in the Offer. While it is conceivable
that the Western Resources Nominees, once elected, could decide not to proceed
with the Offer, given the public commitment made by the Western Resources
Nominees stated above, Western Resources believes that such a possibility is
extremely remote. The Western Resources Nominees would have no ability to
change the terms or conditions of the Offer since it is made by Western
Resources.
6
The determination whether another proposed transaction would offer more
value to ADT Shareholders than the Offer and the Amalgamation would be made by
the ADT Board, which, if the Western Resources Proposals are approved, would
be comprised of the Western Resources Nominees. To the knowledge of Western
Resources and Westar Capital, the Western Resources Nominees have not made a
determination, if elected, whether to take affirmative steps to solicit third
party interest with respect to a sale of ADT or merely to evaluate unsolicited
third party bids, if any. If the Western Resources Nominees are elected it is
possible that their interests could conflict with those of the other ADT
Shareholders with respect to such matters due to their affiliations with
Western Resources. Western Resources believes that the possibility of such
conflicts is extremely remote because it believes that such scenarios are
highly unlikely to develop.
With respect to the determination of whether to solicit third party interest
in a sale of ADT, Western Resources believes that because ADT has been the
subject of an unsolicited takeover offer for over two months and has arguably
been "in play" since the announcement of its proposed merger with Republic
Industries, Inc. ("Republic") on July 1, 1996, without the public announcement
of any third party interest in acquiring ADT, the solicitation of third party
interest in a sale of ADT once the Western Resources Nominees were elected
would not likely be a meaningful exercise. For more information regarding the
proposed merger with Republic, see "Background of the Solicitation."
Furthermore, with respect to the evaluation of unsolicited third party bids,
Western Resources believes for the same reasons cited above that the
possibility of an unsolicited third party expression of interest between the
time the Western Resources Nominees are elected and the consummation of the
Offer is extremely remote.
While Western Resources believes that the scenarios pursuant to which
possible conflicts of interests could arise are extremely remote, it further
believes that if such conflicts arise, the Western Resources Nominees'
interests would be aligned with those of the ADT Shareholders due to the fact
that (i) by approving the Western Resources Proposals, the ADT Shareholders
will have effectively approved the Offer and the Amalgamation because, as
stated, the Western Resources Nominees, subject to their fiduciary duties
under Bermuda law, are committed to taking all actions necessary and desirable
to facilitate the consummation of the Offer and the Amalgamation on the terms,
and subject to the conditions, set forth in the Offer and (ii) the Western
Resources Nominees would be subject to their fiduciary duties as directors of
ADT under Bermuda law that would require that they act in the best interests
of ADT Shareholders.
7
REASONS FOR THE SOLICITATION
The purpose of this solicitation (the "Proxy Solicitation") is to remove all
of the present members of the ADT Board, to reduce the number of seats on the
ADT Board to two and to elect the Western Resources Nominees to the ADT Board
in order to expedite consummation of the Offer and the Amalgamation, which
Western Resources believes will be beneficial to both ADT and Western
Resources shareholders.
ENHANCED BUSINESS OPPORTUNITIES
The Western Resources Board believes the combination of ADT and Western
Resources will provide significant benefits to the shareholders of both
companies. The combination of ADT's leading national presence and unmatched
brand equity in the security business and Western Resources' strong core
utility business and customer service expertise should provide the combined
entity with opportunities not available to either company on its own.
Following the Amalgamation, Western Resources intends to capitalize on these
opportunities to become one of the leading providers of energy and energy-
related products and services, including security, to homes and businesses.
As deregulation continues for electric and natural gas utilities, individual
homes and businesses will have the opportunity to choose their energy
providers. As this process unfolds, companies with nationally recognized brand
names will have a significant advantage in marketing energy and energy-related
products and services. Consummation of the Offer and the Amalgamation will
position ADT to take advantage of this emerging market, as Western Resources
intends to leverage ADT's strong brand name by marketing energy and energy
related products and services to existing ADT customers and to new customers
who know and trust the ADT brand name. In the new era of deregulation,
formerly regulated utility companies that do not respond to the new realities
of the competitive energy marketplace may suffer erosion in market share,
revenues and profits as competitors enter their service territories. Although
Western Resources has been planning for the deregulation of the energy market,
increased competition for retail electricity sales may in the future reduce
Western Resources' earnings from its formerly regulated businesses. During
1995, however, Western Resources' average retail electric rates were over 9%
below the national average. In 1997, Western Resources further reduced its
retail rates and expects to be able to retain a substantial portion of its
current sales volume in a competitive environment. Finally, Western Resources
believes that the deregulation of the energy market will prove beneficial to
Western Resources, since any potential competitive pressure in its formerly
regulated business is expected to be more than offset by the nationwide
markets which Western Resources expects to enter by bundling energy and
security services into one package.
GROWTH OPPORTUNITIES IN THE SECURITY INDUSTRY
The U.S. security business is a growth industry with annual revenue of $13
billion that Western Resources believes is growing at approximately 10% per
year. Many opportunities for further growth exist, particularly in the
residential segment.
Currently, the security industry serves approximately 17.4 million
residential customers in the U.S. Western Resources believes that the number
of households purchasing security alarm services each year has grown at a 13%
rate in recent years with growth expected at an annual rate of 10% through the
year 2000. This sustained growth will be driven by a combination of increased
demand for security alarm services and the low current penetration rate.
Today, only 22% of single family households and 18% of total U.S. households
have the protection provided by an electronic security alarm system. With the
advent of more reliable, less costly, equipment, which is easier to install,
the price of the average alarm system has decreased dramatically, permitting a
significantly larger segment of the population to afford this service. The
average price of a residential alarm system was $1,500 in 1990, compared with
only $1,200 in 1995. This decrease has coincided with an increased awareness
and concern over the incidence of crime and a stronger general desire on the
part of consumers to protect their families and property. Industry estimates
project the penetration rate of the residential market segment to at least
double its current level to approximately 40% by the year 2005, which would
result in the creation of 17.6 million new residential customers.
8
Western Resources believes that the commercial market penetration rate is
currently 50-60%, with a continued opportunity for growth driven by the same
demand factors affecting the residential market. In addition, a large segment
of the existing customer base requires upgrading of older systems with newer
technology, and the integration of security enhancements such as access
control and closed circuit television equipment. The cost of these
technologies has decreased dramatically and now offers an economical and
reliable alternative to security guards and outdated methods of controlling
and documenting activities within the workplace.
In order to maximize these growth opportunities, successful industry
participants would ideally utilize sophisticated mass marketing techniques to
reach consumers, develop and leverage strong brand names and fully achieve the
available economies of scale. This maximization is unlikely within the current
industry structure due to its high fragmentation of providers. There are
presently approximately 9,000-11,000 alarm companies in the U.S. Although over
85% of such companies have less than $1,000,000 in annual revenue, companies
of this size currently have a 75% share of the market. Only 13% of the U.S.
market is controlled by larger companies with ADT having the largest share at
7%, which is more than three times the size of the next largest provider.
Western Resources believes that the security industry's characteristics of
rapid growth and provider fragmentation offer a unique opportunity for the
emergence of a dynamic, growth-oriented market leader. Western Resources
believes it is one of the first, and most successful, energy companies to
pursue the opportunities presented by the security business. Western
Resources' wholly owned security subsidiary, Westar Security, Inc. ("Westar
Security"), has grown through acquisitions and internal growth and, following
Western Resources' recent acquisition of Westinghouse Security, Inc.
("Westinghouse Security"), a national security system monitoring company and a
wholly owned subsidiary of Westinghouse Electric Corporation ("Westinghouse"),
Western Resources' subsidiary, Westar Security, now has over 400,000 accounts
in 44 states, making it the third largest security service provider in the
country. The combination of Westar Security and Westinghouse Security with ADT
will increase ADT's current U.S. customer base of 1.6 million accounts by 25%,
a highly significant increase in the competitive and highly fragmented
security business. Western Resources believes that a combination of ADT's
leading position in the security industry with Western Resources' financial
strength and energy businesses will expand and strengthen ADT's current
industry leadership in the security business. Western Resources intends to
take full advantage of the new technologies that are available to ADT, which
will not be limited as a result of the Offer and the Amalgamation. ADT has
indicated in its publicly filed documents that during the past few years it
has been offering energy management products and services to regulate the
temperature and lighting of customers' premises. Such services are a natural
fit with the energy and related services that Western Resources intends to
provide on a national basis through the ADT name.
EXPANSION OF BRANDED ENERGY MARKETING
The electric and natural gas utility industry in the United States is
rapidly evolving from a historically regulated monopolistic market to a
dynamic and competitive integrated marketplace. The 1992 Energy Policy Act
began the process of deregulation of the electricity industry by permitting
the FERC to order electric utilities to allow third parties to sell electric
power to wholesale customers over their transmission systems. Since that time
the wholesale electricity market has become increasingly competitive as
companies begin to engage in nationwide power brokerage. In addition, various
states including California and New York have taken active steps toward
allowing retail customers to purchase electric power from third party
providers. The natural gas industry has been substantially deregulated, with
FERC and many state regulators requiring local natural gas distribution
companies to allow wholesale and retail customers to purchase gas from third-
party providers. The successful providers of energy in a deregulated market
will not only provide electric or natural gas service but also a variety of
other services, including security. Western Resources believes that in the
newly deregulated environment, more sophisticated consumers will continue to
demand new and innovative options and insist on the development of more
efficient products and services to meet their energy-related needs. Western
Resources believes that its strong core utility business provides it with the
platform to offer the more efficient products and energy services that
customers will desire. Furthermore, Western Resources believes it is necessary
to continuously seek new ways to add value to its customers' lives and
businesses. Recognizing that its current
9
customer base must expand beyond its existing service area, Western Resources
views every person, whether in the United States or abroad, as a potential
customer. Western Resources also recognizes that its potential to emerge as a
leading national energy and energy-related services provider is enhanced by
having a strong brand name. Western Resources has been establishing its brand
identity through the Westar Security name. The combination of Western
Resources and ADT would immediately provide an ideal brand name to capitalize
on the emerging security and energy marketplaces.
In 1995, the U.S. electric industry had retail revenues of approximately
$200 billion, serving approximately 117 million homes and businesses, and the
U.S. natural gas retail industry had revenues of approximately $100 billion,
serving approximately 58 million homes and businesses. In Western Resources'
view, the deregulation of the energy business will result in a model similar
to that used by the long-distance telecommunications industry, with low-cost
providers serving customers throughout the country. However, unlike the long-
distance telecommunications market, which is dominated by large companies with
powerful brands, today's energy market is highly fragmented. No utility
company has a market share in the U.S. greater than 6%. It is Western
Resources' view that this market fragmentation presents a superior opportunity
for national industry leaders to emerge. Western Resources believes that a
combination with ADT will give it the brand name recognition and complementary
services to excel in the emerging deregulated electric and natural gas
markets.
The combination of Western Resources and ADT will allow the combined company
to integrate energy, energy-related products and services, and security, into
a packaged group of products and services to homes and businesses under the
internationally recognized ADT brand name. This strategy is based upon what
Western Resources believes to be the compelling structural and operational
similarities between the energy and security businesses. From an operational
perspective, both businesses require expertise in constructing and maintaining
a highly reliable network with central service facilities and the dispatch of
trained personnel to customer locations to respond quickly to disruptions in
service. Western Resources believes that from the customer's point of view,
energy and security are both critical service streams which may be viewed as
necessities by homes and businesses. Rather than choosing a different supplier
for each service, Western Resources believes that customers will appreciate
the convenience of purchasing energy and security services as a package and
paying for them on one convenient customer statement. Western Resources is
currently putting this concept into practice in its utility service area,
offering many of its utility customers the convenience of one-stop shopping
for their energy and security needs. Following the Offer and the Amalgamation,
Western Resources plans to expand this successful concept by selling security
and unregulated energy services to ADT's customers nationwide through a
unified sales and marketing effort under the ADT brand name.
To date, ADT's management has not recognized the opportunities presented by
the deregulation of the energy market. Western Resources believes that a
combination of the strong core utility business and customer service skills of
Western Resources and the brand name, customer base and support infrastructure
of ADT will provide both the Western Resources and ADT shareholders with an
invaluable opportunity to succeed in the security and energy markets. As the
retail electric and natural gas markets become fully open to competition,
substantial opportunities exist to increase market share and to sell a menu of
integrated services which enhance the comfort and security of energy
customers.
10
THE OFFER
Western Resources has filed exchange offer materials with the Commission. As
soon as Western Resources' registration statement is declared effective by the
Commission, Western Resources and Westar Capital intend to commence the Offer
in order to exchange the Offer Consideration for each outstanding Share, and
associated Right, upon the terms and subject to the conditions set forth in
the final Prospectus and in the related Letter of Transmittal.
The purpose of the Offer is to enable Western Resources to acquire control
of ADT. Western Resources presently intends, following consummation of the
Offer, to propose and to seek to have ADT effect the Amalgamation. In the
Amalgamation, each then outstanding Share (other than Shares owned by Western
Resources or any of its affiliates, Shares held in the treasury of ADT (if ADT
is so authorized) or by any subsidiary of ADT and Shares owned by ADT
Shareholders who perfect appraisal rights under Bermuda law) would be
cancelled in exchange for the right to receive the Offer Consideration.
OFFER PREMIUM
Western Resources believes that the Offer is in the best interests of ADT
Shareholders because, among other things, the Offer Consideration represents a
premium to the closing price per Share on the last trading day prior to the
public announcement of the Offer. The following table shows the premium of the
Offer Consideration over the closing per Share price on the NYSE on the last
trading day immediately prior to the public announcement of the Offer.
ADT PERCENT
OFFER PRICE* SHARE PRICE DIFFERENTIAL**
------------ ----------- --------------
December 17, 1996, the last trading
day before the public announcement
of the Offer...................... $22.50 $20.13 11.8%
- --------
* Assumes the Offer Consideration is $7.50 net in cash and $15.00 of
Western Resources Common Stock per Share. On February 24, 1997, the last
trading day before the date of this Preliminary Prospectus, the closing
price of Western Resources Common Stock was $31.25. If the Western
Resources Average Price is less than $29.75, each Share will be exchanged
for $7.50 net in cash and less than $15.00 in Western Resources Common
Stock as set forth more fully below under "--The Exchange Ratio."
** Based on the closing prices of Western Resources Common Stock and Shares
on the indicated date.
THE EXCHANGE RATIO
The per Share price premium which ADT Shareholders will receive in the
Offer, and the dividend which ADT Shareholders will receive as holders of
Western Resources Common Stock, will depend on the Exchange Ratio at the time
of consummation of the Offer. Such Exchange Ratio will be determined based on
the Western Resources Average Price; provided that the Exchange Ratio will not
be more than 0.50420 shares of Western Resources Common Stock per Share. The
amount of cash provided in the Offer will be $7.50 net per Share, regardless
of the level of the Exchange Ratio. Pursuant to the Offer, each Share will be
exchanged for $7.50 net in cash and $15.00 of Western Resources Common Stock
as long as the Western Resources Average Price is $29.75 or higher. If the
Western Resources Average Price is less than $29.75, then each Share will be
exchanged for $7.50 net in cash and less than $15.00 of Western Resources
Common Stock.
The following chart sets forth a range of possible Western Resources Average
Prices and the corresponding (i) Exchange Ratio, (ii) the dollar value of the
Stock Consideration to be received per Share, (iii) the dollar value of the
Cash Consideration to be received per Share, (iv) the total dollar value of
the Offer Consideration to be received per Share, and (v) Share price premium
over the closing Share price on the last trading day prior to the public
announcement of the Offer. The Western Resources Average Prices set forth
below are for illustrative purposes only and are not intended to be an
exhaustive list of Western Resources Average Prices. There can be no assurance
that the actual Western Resources Average Price will be in the range set forth
below.
11
PREMIUM
TO ADT
WESTERN SHAREHOLDERS
RESOURCES VALUE OF TOTAL VALUE (DECEMBER
AVERAGE EXCHANGE STOCK VALUE OF CASH OF OFFER 17, 1996
PRICE RATIO CONSIDERATION CONSIDERATION CONSIDERATION CLOSING PRICE)
--------- -------- ------------- ------------- ------------- --------------
$25.00 0.50420 $12.61 $7.50 $20.11 (0.1)%
25.50 0.50420 12.86 7.50 20.36 1.2%
26.00 0.50420 13.11 7.50 20.61 2.4%
26.50 0.50420 13.36 7.50 20.86 3.7%
27.00 0.50420 13.61 7.50 21.11 4.9%
27.50 0.50420 13.87 7.50 21.37 6.2%
28.00 0.50420 14.12 7.50 21.62 7.4%
28.50 0.50420 14.37 7.50 21.87 8.7%
29.00 0.50420 14.62 7.50 22.12 9.9%
Collar 29.50 0.50420 14.87 7.50 22.37 11.2%
------------------------------------------------------------------------------------
29.75 0.50420 15.00 7.50 22.50 11.8%
30.00 0.50000 15.00 7.50 22.50 11.8%
30.50 0.49180 15.00 7.50 22.50 11.8%
31.00 0.48387 15.00 7.50 22.50 11.8%
31.50 0.47619 15.00 7.50 22.50 11.8%
32.00 0.46875 15.00 7.50 22.50 11.8%
32.50 0.46154 15.00 7.50 22.50 11.8%
33.00 0.45455 15.00 7.50 22.50 11.8%
33.50 0.44776 15.00 7.50 22.50 11.8%
34.00 0.44118 15.00 7.50 22.50 11.8%
34.50 0.43478 15.00 7.50 22.50 11.8%
35.00 0.42857 15.00 7.50 22.50 11.8%
CERTAIN CONDITIONS OF THE OFFER
Western Resources' obligation to exchange the Offer Consideration for Shares
pursuant to the Offer will be conditioned upon, among other things, the
satisfaction or, where applicable, waiver of the following conditions: (i)
there being validly tendered and not withdrawn prior to the Expiration Date a
number of Shares which, together with Shares owned by Western Resources and
its affiliates, will constitute at least a majority of the total number of
outstanding Shares on a fully diluted basis (as though all options or other
securities convertible into or exercisable or exchangeable for Shares had been
so converted, exercised or exchanged) as of the date the Shares are accepted
for exchange by Western Resources pursuant to the Offer (the "Minimum Tender
Condition"), (ii) approval of the issuance of shares of Western Resources
Common Stock in connection with the Offer and the Amalgamation and approval of
an amendment to the Amended and Restated Articles of Incorporation of Western
Resources to increase the number of shares of Western Resources Common Stock
authorized for issuance, by the holders (voting as a single class) of a
majority of the shares of Western Resources Common Stock and Western Resources
preferred stock outstanding on the applicable record date (the "Western
Resources Shareholder Approval Condition"), (iii) the approval by a majority
of those Shares voted at the ADT Special Meeting of the Western Resources
Proposals (the "ADT Shareholder Approval Condition"), (iv) the ADT Board
having redeemed the Rights or amended the Rights Agreement so that the Rights
are inapplicable to the acquisition of Shares pursuant to the Offer, or
Western Resources being otherwise satisfied in its sole discretion that the
Rights are invalid or are not applicable to the acquisition of Shares pursuant
to the Offer (the "Rights Plan Condition"), (v) Western Resources and Westar
Capital being satisfied, in their sole discretion, that the provisions of Bye-
Law 104 and Bye-Law 46 of the ADT Bye-Laws do not and will not apply to
Western Resources, Westar Capital or the acquisition of Shares pursuant to the
Offer so as (A) to require Western Resources or Westar Capital to comply with
the provisions of Bye-Law 104 of the ADT Bye-Laws or (B) to prevent Western
Resources, Westar Capital or any of their affiliates from voting Shares owned
by any of them at any time (the "ADT Bye-Law Condition"), (vi) the receipt by
Westar Capital of a final judgment from a court of competent jurisdiction
declaring the Republic Warrant invalid or the expiration of the Republic
Warrant prior to the Expiration Date without having been exercised (the
"Republic Warrant Condition"), and (vii) all regulatory approvals required to
consummate the Offer having been obtained and remaining in full force and
12
effect, all statutory waiting periods in respect thereof having expired and no
such approval containing any conditions or restrictions which the Western
Resources Board of Directors (the "Western Resources Board") determines will
or could be expected to materially impair the strategic and financial benefits
expected to result from the Offer (the "Regulatory Approval Condition"). For a
complete discussion of the conditions of the Offer, see "The Offer--Conditions
of the Offer" in the Preliminary Prospectus.
TIMING OF THE OFFER
The Offer is currently scheduled to expire on , 1997; however, it is
Western Resources' current intention to extend the Offer from time to time as
necessary until all conditions to the Offer have been satisfied or waived.
Western Resources expects that the Western Resources Shareholder Approval
Condition will be satisfied by , 1997, the date on which it has called a
special meeting of its shareholders (the "Western Resources Special Meeting")
to approve the issuance of shares of Western Resources Common Stock in
connection with the Offer and the Amalgamation and to approve an amendment to
the Western Resources Articles to increase the number of shares of Western
Resources Common Stock authorized for issuance. ADT has notified ADT
Shareholders that it plans to convene the ADT Special Meeting on July 8, 1997.
Westar Capital is seeking to enjoin ADT's attempt to delay the ADT Special
Meeting beyond March 20, 1997 and Western Resources expects that it will be
successful in such efforts. Western Resources currently anticipates that all
of the conditions to the Offer (other than the ADT Shareholder Approval
Condition, the Rights Plan Condition and the ADT Bye-Law Condition) will be
satisfied by the date of the ADT Special Meeting. Western Resources currently
anticipates that the ADT Shareholder Approval Condition will be satisfied at
the ADT Special Meeting and that the Rights Plan Condition and the ADT Bye-Law
Condition will be satisfied as soon as practicable thereafter. See
"Litigation."
THE RIGHTS AGREEMENT
The Rights Plan Condition may be satisfied in a number of ways, including
the following: (i) the current ADT Board may redeem the Rights or amend the
Rights Agreement so that the Rights would not be triggered by the Offer and
the Amalgamation, (ii) following the satisfaction of the ADT Shareholder
Approval Condition, the newly elected ADT Board may, subject to its fiduciary
obligations, take such actions as may be necessary with respect to the Rights
so that they would not be triggered by the Offer and the Amalgamation, or
(iii) Western Resources may be successful in its litigation seeking, among
other things, the invalidation of the Rights or an injunction requiring the
ADT Board to redeem the Rights. See "Prospectus Summary--Litigation" and
"Litigation."
Set forth below is certain additional information concerning the Rights.
On November 4, 1996, the ADT Board declared a dividend of one Series A First
Preference Share Purchase Right for each Share in issue at the close of
business on November 15, 1996 and the issuance of one Right with respect to
each Share issued after such date but prior to the Distribution Date (as
defined below).
The terms of the Rights are set forth in the Rights Agreement. The following
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement which is further described
and filed as an exhibit to the ADT Form 8-A.
After the Distribution Date, each Right entitles the holder thereof to
purchase from ADT one hundredth of a Series A First Preference Share at a
price of $90 (the "Purchase Price"), subject to adjustment for dilution. The
Rights are not exercisable and will not separate from the Shares until the
distribution date (the "Distribution Date") which occurs on the earlier to
occur of (i) the close of business on the tenth day (or such later date as may
be designated by a majority of the Continuing Directors (as defined below))
following the date of the first public announcement that a person (other than
certain persons described below) has become the beneficial owner of 15% or
more of the Shares then issued and outstanding (an "Acquiring Person") (such
date of public announcement being a "Share Acquisition Date") or (ii) the
close of business on the tenth business day (or such later date as may be
designated by a majority of the Continuing Directors) following the
commencement of a
13
tender or exchange offer which would result in the person making the tender or
exchange offer becoming an Acquiring Person. None of ADT, a subsidiary of ADT,
an employee benefit plan of ADT or of any of its subsidiaries or any person
organized, appointed or established by ADT or any of its subsidiaries for or
pursuant to such a plan may be considered an Acquiring Person. In addition, a
person (together with its affiliates and associates) (a "Grandfathered
Person") owning 15% or more of the issued and outstanding Shares (such
person's share percentage being a "Grandfathered Percentage") is not an
Acquiring Person if such person acquired its Shares prior to 5:00 p.m.,
Eastern time, on November 4, 1996, provided that such Grandfathered Person
will become an Acquiring Person if its Grandfathered Percentage increases.
Under this formulation, each of Western Resources and Westar Capital is a
"Grandfathered Person."
A "Continuing Director" is defined under the Rights Agreement to be any
member of the ADT Board who, while such person is a member of the ADT Board,
is not an Acquiring Person (or an affiliate or associate thereof) or a
representative or nominee of an Acquiring Person or of any such affiliate or
associate and either (i) was a member of the ADT Board immediately prior to
the time any person becomes an Acquiring Person or (ii) subsequently becomes a
member of the ADT Board, if such person's nomination for election or election
to the ADT Board is recommended or approved by a majority of the Continuing
Directors.
After any person becomes an Acquiring Person, each Right (other than Rights
beneficially owned by an Acquiring Person and its affiliates and associates,
or transferees thereof) will entitle the holder thereof to purchase, for the
Purchase Price, Shares having a market value equal to twice the Purchase
Price.
In the event that, after a Share Acquisition Date, (i) ADT consolidates,
amalgamates, or otherwise combines with any other person and ADT is either not
the continuing or surviving corporation or the Shares are changed or exchanged
or (ii) ADT or one of its subsidiaries sell, or otherwise transfer, assets or
earning power aggregating more than 50% of the assets or earning power of ADT
and its subsidiaries taken as a whole, each Right will entitle the holder
thereof to purchase, for the Purchase Price, a number of shares of common
stock of the other party to such business combination or sale having a market
value equal to twice the Purchase Price.
The Rights may be redeemed at a redemption price of $.01 per Right at any
time prior to the earlier of (i) the close of business on the tenth day
following the Share Acquisition Date (or such later date as a majority of the
Continuing Directors may designate prior to such time as the Rights are no
longer redeemable) and (ii) November 14, 2005. If the Rights are to be
redeemed on or after the Share Acquisition Date after there has been a change
in the majority of the directors on the ADT Board as a result of a proxy or
consent solicitation and a participant in such solicitation has stated that
such person intends to take, or may consider taking, any action which would
result in such person becoming an Acquiring Person or would result in the
occurrence of any of the events specified in the immediately preceding
paragraph, a majority of the Continuing Directors will be required to
authorize such redemption.
The Rights Agreement may be amended in any respect prior to the Distribution
Date. After the Distribution Date, the Rights Agreement may be amended in
certain respects, if such amendments would not adversely affect the interest
of the holders of Rights (other than the Acquiring Person and any of its
affiliates or associates). After an Acquiring Person has become such, to be
effective, any amendment must be approved by a majority of the Continuing
Directors.
Unless previously redeemed in accordance with terms of its Agreement, the
Rights will expire on November 14, 2005.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group of persons that attempts to acquire
ADT in a manner which causes the Rights to become exercisable.
ADT BYE-LAWS AND THE UNITED KINGDOM CITY CODE PROVISIONS
Following their election, the Western Resources Nominees do not currently
intend to serve notice pursuant to Bye-Law 104 or 46 of the ADT Bye-Laws
("Bye-Law 104" and "Bye-Law 46," respectively) upon Western
14
Resources or any affiliate of Western Resources who, following consummation of
the Offer, owns 30% or more of the Shares. Thus, in the event the Western
Resources Nominees are elected at the ADT Special Meeting, Western Resources
believes that Bye-Law 104 and Bye-Law 46 of the ADT Bye-Laws should not apply
to Western Resources or its affiliates and that the ADT Bye-Law Condition
should, therefore, be satisfied.
ADT Bye-Law 104
Pursuant to Bye-Law 104(1)(A) of the ADT Bye-Laws, where any person is or
becomes "interested" in Shares, whether as a result of one transaction or a
series of transactions, in circumstances in which such person would be
obligated to make an offer to shareholders of ADT or to the holders of every
class of securities convertible into, or of rights to subscribe for, share
capital of ADT under the Rules of the City Code on Take-overs and Mergers of
the United Kingdom of Great Britain and Northern Ireland, as amended (the
"City Code"), the ADT Board may require such person to make an offer under the
City Code as if the City Code applied to ADT, but so references in the City
Code to the "Panel" will be construed as if they were references to the ADT
Board. Rule 9 of the City Code, as it is applied by the ADT Bye-Laws, provides
that, except with the consent of the ADT Board, when any person (and persons
acting "in concert" with such person) acquires shares which carry 30% or more
of the voting rights of a company, such person must make an offer for all
shares of that class (whether voting or non-voting). The offer must be for
cash or offer a cash alternative, in each case at not less than the highest
price paid (in cash or otherwise) for shares of the same class by the offeror,
or anyone acting in concert with the offeror, during the offer period and
within the 12 months prior to commencement of the offer.
Pursuant to Bye-Law 104(3) of the ADT Bye-Laws, where any person is
interested, whether as a result of a series of transactions over a period of
time or not, in 30% or more of the outstanding Shares, the ADT Board may
demand that a cash offer for all of the outstanding voting or nonvoting
securities of ADT be made if the ADT Board determines that an offer pursuant
to Bye-Law 104(1)(A) of the ADT Bye-Laws is not expedient or if a person
required to make such an offer fails to do so. Pursuant to Bye-Law 104(4) of
the ADT Bye-Laws, if the ADT Board serves a notice under Bye-Law 104(3) of the
ADT Bye-Laws, the ADT Board may also require that the offeror offer to
purchase securities of ADT convertible into voting or non-voting shares of ADT
on terms considered "fair and reasonable" by the ADT Board in its sole
discretion. Such offer must be made within 30 days of the demand.
Unless the ADT Board otherwise agrees, an offer for each class of ADT
capital stock under Bye-Laws 104(3) and 104(4) of the ADT Bye-Laws must be for
cash or must offer a cash alternative at not less than the highest price paid
by the offeror or any person acting in concert with it for shares of such
class within the preceding 12 months. Such offer must remain open for at least
14 days after the date on which it becomes unconditional as to acceptances,
and in the case of an offer under Bye-Law 104(3) of the ADT Bye-Laws, must
provide that all shares will be purchased within 21 days of the offer becoming
unconditional in all respects.
ADT Bye-Law 46
Subject to any rights or restrictions attached to any class of capital stock
of ADT, at any meeting of ADT, an ADT Shareholder present in person or by
proxy is entitled, on a poll, to one vote for each share held by such ADT
Shareholder. Pursuant to Bye-Law 46 of the ADT Bye-Laws, an ADT Shareholder is
not entitled (except as a proxy for another ADT Shareholder) to be present or
to vote at any meeting if such ADT Shareholder received a notice under Bye-Law
104 of the ADT Bye-Laws stating that upon failure to make an offer pursuant to
Bye-Law 104 of the ADT Bye-Laws before a period of not less than 28 days from
the date of service of such notice the ADT Shareholder would not be entitled
to vote and the ADT Shareholder upon whom such notice was served (i) fails to
make such an offer within the period so specified, or (ii) having made such an
offer or acquired shares of ADT in contravention of a notice served under Bye-
Law 104 of the ADT Bye-Laws, fails to remedy such noncompliance.
Neither Western Resources nor any of its subsidiaries are presently
"interested" in 30% or more of the outstanding Shares of ADT. Therefore, the
provisions of Bye-Law 104 do not presently apply to Western
15
Resources or its subsidiaries. If elected, the Western Resources Nominees
intend to take all actions necessary and desirable to facilitate consummation
of the Offer and the Amalgamation, including, among other things, not invoking
the provisions of Bye-Law 104 or Bye-Law 46 of the ADT Bye-Laws in connection
with the acquisition of Shares by Western Resources pursuant to the Offer or
otherwise.
The foregoing does not purport to be a complete description of Bye-Law 104
or Bye-Law 46 of the ADT Bye-Laws. ADT Shareholders are urged to, and should,
read Bye-Law 104 and Bye-Law 46 of the ADT Bye-Laws, copies of which are
included herein as Schedules E and F, respectively.
If the Offer is consummated, Western Resources and its affiliates will own a
majority of the outstanding Shares. Accordingly, Western Resources and its
affiliates will at such time have sufficient voting power in ADT to approve
the Bye-Law Amendment and the Amalgamation Agreement independently of the vote
of any other ADT Shareholders. Western Resources presently intends to vote any
and all Shares then owned by Western Resources and its affiliates to approve
such proposals.
The Amalgamation will be subject to certain conditions, including the
consent of the Minister of Finance of Bermuda (the "Minister of Finance"). The
Western Resources Nominees are committed, subject to the exercise of their
fiduciary duties, as soon as practicable following the exchange of Shares by
Western Resources pursuant to the Offer, to causing all necessary actions to
be taken to seek the consent of the Minister of Finance to the Amalgamation.
Western Resources has no reason to believe that the Minister of Finance will
not grant approval for the Amalgamation; however, there can be no assurance
that the Minister of Finance would grant his consent to the Amalgamation. An
adverse decision by the Minister of Finance may not be subject to appeal or
review in any court. Western Resources also presently intends to condition the
Amalgamation upon holders of not more than 5% of the outstanding Shares at the
effective time of the Amalgamation perfecting appraisal rights with respect to
the Amalgamation pursuant to Section 106(6) of the Companies Act. See "Absence
of Appraisal Rights."
16
VOTING SECURITIES OF ADT AND PRINCIPAL HOLDERS THEREOF
Each Share is entitled to one vote upon each matter presented at the ADT
Special Meeting. The ADT Proxy Statement (as defined herein) states that, as
of December 31, 1996, there were 141,382,697 Shares outstanding, including
3,182,787 which are owned by a subsidiary of ADT.
The following table and notes thereto, which, other than information
regarding Westar Capital and with respect to the Republic Warrant (as defined
below), are reproduced from the ADT Proxy Statement, set forth certain
information with respect to beneficial ownership of Shares (i) as of December
31, 1996 by any person known by ADT to own beneficially more than five percent
of the outstanding Shares, other than Westar Capital, and (ii) as of December
31, 1996 by (a) all directors of ADT, (b) the named directors and officers of
ADT, including three executive officers of subsidiaries of ADT and (c) all
directors and executive officers of ADT as a group. The following table also
sets forth certain information with respect to beneficial ownership of Shares
by Westar Capital as of the date of this Preliminary Proxy Statement. An
asterisk indicates ownership of less than one percent of outstanding Shares.
NUMBER OF
NAME OF BENEFICIAL OWNER SHARES BENEFICIALLY PERCENT OF
OR IDENTITY OF GROUP OWNED (1)(2) CLASS (3)
------------------------ ------------------- ----------
Westar Capital, Inc. (4)....................... 38,287,111 27.1%
818 S. Kansas Avenue
Topeka, Kansas 66612
M.A. Ashcroft (5).............................. 11,075,718 7.5%
J.E. Danneberg................................. 102 *
R.A. Gross..................................... 2,000 *
A.B. Henderson................................. 621 *
R.G. Lakey..................................... 15,000 *
J.S. Pasman, Jr................................ 2,000 *
M.J. Richardson................................ 282,837 *
S.J. Ruzika.................................... 1,157,405 *
W.P. Slusser................................... 2,800 *
W.W. Stinson................................... 3,010 *
R.S. Troubh.................................... 2,500 *
All directors and executive officers as a
group, 11 persons............................. 12,543,993 8.4%
(1) Includes Shares which may be acquired upon exercise of the following
number of options to purchase Shares from ADT exercisable on or within 60
days of December 31, 1996 held by the following persons: M.A. Ashcroft,
9,700,000; R.A. Gross, nil; R.G. Lakey, 15,000; M.J. Richardson, 270,000
and S.J. Ruzika, 1,141,663.
(2) For purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any Shares which such person has the right
to acquire on or within 60 days after December 31, 1996. For purposes of
computing the percentage of outstanding Shares held by each person or
group of persons named above, any security which such person or persons
has or have the right to acquire on or within 60 days after December 31,
1996 is deemed to be outstanding, but is not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person.
(3) Based upon Shares outstanding on December 31, 1996, but excluding
3,182,787 Shares owned by a subsidiary of ADT.
(4) Includes 500 LYONs, each of which is exchangeable for 28.23 Shares. In
connection with the Republic Transaction (as defined herein), ADT granted
to Republic a warrant to purchase 15 million Shares at a purchase price
of $20 per Share, subject to adjustment (the "Republic Warrant"). See
"Background of the Solicitation." Western Resources has commenced
litigation challenging the validity of the Republic Warrant. See
"Litigation." If the Shares issuable upon the exercise of the Republic
Warrant are included for purposes of calculating beneficial ownership,
the number of Shares beneficially owned by Westar Capital would
constitute approximately 24.5% of the outstanding Shares.
(5) The number of Shares beneficially owned by Mr. Ashcroft includes 718
Shares owned by Mr. Ashcroft's wife. If the Republic Warrant is not
declared invalid and the 15 million Shares are issued upon the exercise
of the Republic Warrant, Mr. Ashcroft may be deemed the beneficial owner
of the additional 15 million Shares as Mr. Ashcroft, as Chairman of the
ADT Board, would hold the proxy for such Shares for a period of two years
or until such time as the Shares were transferred by Republic to a third
party. In the event that Mr. Ashcroft is deemed to be the beneficial
owner of the additional 15 million Shares upon the exercise of the
Republic Warrant, the number of Shares beneficially owned by Mr. Ashcroft
would constitute approximately 16.7% of the outstanding Shares.
17
CERTAIN INFORMATION REGARDING WESTERN RESOURCES AND ADT
WESTERN RESOURCES
Western Resources and its divisions and wholly owned subsidiaries include
KPL, a rate-regulated electric and gas division of Western Resources ("KPL"),
Kansas Gas and Electric Company ("KGE"), a rate-regulated utility and wholly
owned subsidiary of Western Resources, Westar Capital, Westar Security, Westar
Energy, Inc., The Wing Group Ltd., non-utility subsidiaries, and Mid-Continent
Market Center, Inc., a regulated gas transmission service provider ("MCMC").
KGE owns 47% of Wolf Creek Nuclear Operating Corporation ("WCNOC"), the
operating company for the Wolf Creek Generating Station ("Wolf Creek").
Western Resources' non-utility subsidiaries market natural gas primarily to
large commercial and industrial customers, provide electronic security
services, engage in international large power project development and provide
other energy-related products and services.
Western Resources is engaged principally in the production, purchase,
transmission, distribution and sale of electricity and the delivery and sale
of natural gas. Western Resources serves approximately 606,000 electrical
customers in eastern and central Kansas and approximately 650,000 natural gas
customers in Kansas and northeastern Oklahoma. On December 12, 1996, Western
Resources and ONEOK, Inc. ("ONEOK") announced a proposed strategic alliance
pursuant to which Western Resources will contribute its regulated local
natural gas distribution operations, MCMC and Westar Gas Marketing, Inc.
("Westar Gas Marketing"), and will become the largest shareholder of ONEOK.
See "Recent Developments."
Westar Capital is a private investment company, wholly owned by Western
Resources, with investments in energy-related and technology-oriented
businesses. Westar Capital owns 38,287,111 Shares, or approximately 27% of the
outstanding Shares, including 14,115 Shares issuable upon exchange of 500
LYONs, which are exchangeable for Shares at a rate of 28.23 Shares per LYON.
Westar Security is a rapidly growing electronic security services business
with over 400,000 customer accounts. On December 31, 1996, Western Resources
acquired all of the assets of Westinghouse Security, a national security
system monitoring company and a subsidiary of Westinghouse. Westar Security is
now the third-largest monitored security company in the United States with
offices in many major U.S. markets and direct access to customers in 44
states. See "Recent Developments."
Kansas City Power & Light Company, a Missouri corporation ("KCPL") is a
public utility engaged in the generation, transmission, distribution and sale
of electricity to approximately 430,000 customers in western Missouri and
eastern Kansas. On July 8, 1996, Western Resources made an offer to the
shareholders of KCPL to exchange each outstanding share of common stock, no
par value per share, of KCPL ("KCPL Common Stock") for $31.00 of Western
Resources Common Stock, subject to adjustment. On February 7, 1997, Western
Resources terminated the KCPL Offer and announced that it had entered into a
merger agreement with KCPL (the "KCPL Merger Agreement") pursuant to which
KCPL will merge with and into Western Resources (the "KCPL Merger"). For
further details concerning, and recent developments with respect to, the KCPL
Merger, see "The KCPL Merger."
Western Resources was incorporated under the laws of the State of Kansas in
1924. Western Resources' corporate headquarters is located at 818 S. Kansas
Avenue, Topeka, Kansas 66612 and its telephone number is (913) 575-6300.
Westar Capital's corporate headquarters is located at 818 S. Kansas Avenue,
Topeka, Kansas 66612 and its telephone number is (913) 575-6300.
ADT
The following information concerning ADT is excerpted from ADT's Annual
Report on Form 10-K for the period ended December 31, 1995 and other publicly
available information:
18
ADT was incorporated in Bermuda on September 28, 1984 under the name Hawley
Group Limited and is an exempted company limited by shares with its registered
office at Cedar House, 41 Cedar Avenue, Hamilton HM12 Bermuda. The executive
office of the subsidiary which supervises ADT's North American activities is
located in the United States at 1750 Clint Moore Road, Boca Raton, Florida
33431, and its telephone number is (561) 988-3600.
ADT is currently engaged in two service businesses: electronic security
services in North America and Europe and vehicle auction and related services
in the United States. ADT is the largest provider of electronic security
services in North America and the largest provider in the United Kingdom,
providing continuous monitoring of commercial and residential security systems
for 1.6 million customers. ADT is also the second largest provider of vehicle
remarketing services in the United States, operating a network of 28 vehicle
auction centers.
ADT's principal activities in the electronic security services businesses
are the electronic monitoring of its installed base of security systems and
the installation of new, monitored security systems to add to its installed
base. Monitored systems may be sold or, as is most often the case, ADT may
retain ownership of installed systems. ADT receives contractual recurring fees
for monitoring security systems through its electronic monitoring centers and
for maintenance of security systems installed at customer premises and other
related services. ADT sells, installs and maintains monitored security
systems, integrated electronic security systems and other electronic security
products for additional fees. In 1995, approximately 60% of ADT's total
electronic security services revenues in North America and Europe were derived
from contractually recurring fees for electronic monitoring and maintenance of
security systems installed at customer premises and other related services.
The remainder of ADT's security revenues were derived from the outright sale
and installation of security systems, the installation of security systems in
accordance with a monitoring service agreement and the maintenance of security
systems on a non-contractual basis.
In September 1996, ADT acquired the entire equity interest in Automated
Security (Holdings) PLC, a United Kingdom company ("ASH"). ASH is engaged in
the provision of electronic security services in North America and Europe.
Under the terms of the transaction (the "ASH Transaction"), shareholders of
ASH received three Shares for every ninety-two ordinary shares of ASH and two
Shares for every thirty-one 5% convertible cumulative redeemable preference
shares and 6% convertible cumulative redeemable preference shares of ASH. The
total consideration paid by ADT in the ASH Transaction consisted of 7,034,940
Shares and ADT accounted for the ASH Transaction as a pooling of interest.
In a press release issued by ADT on November 6, 1996, ADT announced its
intention to sell its United States vehicle auction business. ADT's vehicle
auction business operates a network of large modern auction centers which
provide an organized wholesale marketplace for the sale and purchase of used
vehicles. Principal sellers, or consignors, include new and used vehicle
dealers, vehicle manufacturers, fleet operators, leasing companies, financial
institutions and government agencies. Principal purchasers include franchise
and non-franchise vehicle dealers and distributors who acquire vehicles to
sell in the retail market. Western Resources does not presently possess
adequate information to formulate a position with respect to ADT's intention
to sell its U.S. vehicle auction business. If the Offer is consummated,
Western Resources would at such time evaluate its position with respect to
such proposed disposition.
Western Resources and ADT are subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports, proxy statements and other information with
the Commission. Reports, proxy statements and other information filed by
Western Resources and ADT with the Commission may be inspected and copied at
the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the
public reference facilities in the Commission's Regional Offices at Seven
World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
information may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Western Resources Common Stock and the Shares are listed
19
and traded on the NYSE. The Shares are also listed and traded on the London
Stock Exchange, the Frankfurt Stock Exchange and the Bermuda Stock Exchange.
Reports, proxy statements and other information filed by Western Resources and
ADT with the Commission may be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005.
Pursuant to Rule 409 promulgated under the Securities Act of 1933, as
amended, and Rule 12b-21 promulgated under the Exchange Act, Western Resources
has requested that ADT and its independent public accountants, Coopers &
Lybrand, L.L.P., provide to Western Resources the information required for
complete disclosure concerning the business, operations, financial condition
and management of ADT. Neither ADT nor Coopers & Lybrand, L.L.P. has yet
provided any information in response to such request. Western Resources will
provide any and all information which it receives from ADT or Coopers &
Lybrand, L.L.P. prior to the ADT Special Meeting and which Western Resources
deems material, reliable and appropriate in a subsequently prepared supplement
hereto.
20
BACKGROUND OF THE SOLICITATION
In the past, ADT has advised Western Resources that it is not interested in
discussing a business arrangement between ADT and Western Resources despite
the fact that Western Resources believes that such a combination could
maximize ADT's potential both in its existing security business and in the
emerging market of deregulated retail energy distribution. After careful study
and consideration, Western Resources believes that the potential benefits to
ADT, Western Resources and the companies' respective shareholders can be best
realized through a combination of Western Resources and ADT, and has,
therefore, decided to proceed with the Offer.
On December 21, 1995, Western Resources entered into a stock purchase
agreement (the "Laidlaw Agreement") with Laidlaw Transportation, Inc.
("Laidlaw"), and Laidlaw, Inc., pursuant to which Westar Capital subsequently
purchased a total of 30,800,000 Shares, on or prior to March 18, 1996, at an
average price of $14.40 per Share. Since March 18, 1996, from time to time,
Westar Capital has purchased Shares in the open market at prevailing market
prices. Westar Capital owns 38,287,111 Shares, or approximately 27% of the
outstanding Shares, including 14,115 Shares issuable upon exchange of 500
LYONs, which are exchangeable for Shares at a rate of 28.23 Shares per LYON.
Also on December 21, 1995, Mr. John E. Hayes, Jr., Chairman of the Board and
Chief Executive Officer of Western Resources, delivered a letter to Mr.
Michael A. Ashcroft, Chairman of the Board, President and Chief Executive
Officer of ADT, informing Mr. Ashcroft of the Laidlaw Agreement.
During January and February, 1996, conversations took place between Mr.
Hayes and Mr. Ashcroft and various representatives of the respective
companies. Messrs. Hayes and Ashcroft scheduled a meeting in Topeka, Kansas
for March 13, 1996. On March 11, 1996, Mr. Hayes delivered a letter to Mr.
Ashcroft discussing Western Resources' proposed joint marketing efforts with
ADT. On March 13, 1996, Messrs. Hayes and Ashcroft held a meeting but failed
to reach any agreement concerning Western Resources' proposal. Later that
month, Mr. Ashcroft informed Mr. Hayes that ADT was not interested in pursuing
a joint marketing relationship with Western Resources.
On July 1, 1996, ADT entered into an Agreement and Plan of Amalgamation (the
"Republic Agreement") with Republic and Republic Sub Ltd., a newly created
wholly owned subsidiary of Republic ("Republic Sub"). Pursuant to the terms of
the Republic Agreement, Republic Sub was to be amalgamated with and into ADT
with the amalgamated company operating under the name of ADT (the "Republic
Transaction"). The terms of the Republic Agreement contemplated that ADT
Shareholders would receive .92857 shares of Republic common stock in exchange
for each Share. The Republic Transaction was conditioned upon, among other
things, receipt by ADT of a fairness opinion from its financial advisor at a
later date (which fairness opinion was never obtained). Based on the $26.75
closing price per share of Republic common stock on July 1, 1996, each Share
would have been exchangeable for approximately $24.84 worth of Republic common
stock, representing a premium of 31% to the closing price per Share of $19.000
on June 28, 1996, the last trading day prior to the public announcement of the
Republic Transaction. Following the public announcement of the Republic
Transaction, the closing price per share of Republic common stock fell as low
as $20.75 per share. Based on a closing price of $20.75, each Share would have
been exchangeable for approximately $19.27 worth of Republic common stock in
the Republic Transaction, representing a premium of just 1% to the closing
price per Share of $19.00 on June 28, 1996. On September 13, 1996, Westar
Capital disclosed that it had determined to oppose the Republic Transaction.
Based on the $28.81 closing price per share of Republic common stock on
September 12, 1996, each Share would have been exchangeable for approximately
$26.75 worth of Republic common stock, representing a premium of 41% to the
closing price per Share of $19.00 on June 28, 1996. Western Resources believes
that such significant fluctuations in the market price of Republic common
stock (i.e., from $28.81 to $20.75 in the course of a three month period)
demonstrated volatility in Republic common stock (the consideration being
offered in the Republic Transaction).
Pursuant to the terms of the Republic Agreement, ADT granted to Republic the
Republic Warrant to purchase 15 million Shares at a purchase price of $20 per
Share, subject to adjustment. The Republic Warrant
21
was to become exercisable for a period of six months following the termination
of the Republic Agreement. On September 30, 1996, ADT and Republic jointly
announced the termination of the Republic Agreement citing uncertainty
attributable to market conditions, and amended the Republic Warrant to include
certain restrictions on the issuance of Shares pursuant thereto and the
transfer of such Shares by Republic to persons with interests in 10% or more
of ADT. As described below, Western Resources has commenced litigation
challenging the validity of the Republic Warrant. See "Litigation."
On September 5, 1996, the waiting period expired with respect to Western
Resources' filing under the HSR Act to acquire ownership of in excess of 25%
(but less than 50%) of the outstanding Shares.
On November 4, 1996, ADT declared a distribution of one Right for each
outstanding Share, payable to holders of record as of the close of business on
November 15, 1996, pursuant to the Rights Agreement. The Rights Agreement
provides, among other things, that after certain persons acquire 15% or more
(or, in certain limited situations, a greater percentage) of the issued and
outstanding Shares, holders of Shares (other than such persons) will be
entitled to purchase Shares at half of the current market value and that if,
after such an acquisition, ADT is involved in an amalgamation, other business
combination or certain sale transactions, holders of Shares (other than such
persons) will be entitled to purchase either Shares or common stock of the
other party to such transaction, at half of the current market value of such
securities. See "The Offer--Conditions of the Offer--Rights Agreement" and "--
ADT Rights" in the Preliminary Prospectus.
On November 6, 1996, ADT announced its intention to sell its United States
vehicle auction business.
On December 17, 1996, the Western Resources Board met and determined to
proceed with the Offer. On December 18, 1996, in the letter set forth below to
Mr. Michael A. Ashcroft, Chairman of the Board, President and Chief Executive
Officer of ADT, Mr. John E. Hayes, Jr., Chairman of the Board and Chief
Executive Officer of Western Resources, informed Mr. Ashcroft and the ADT
Board of Western Resources' intention to pursue the Offer and the Amalgamation
and encouraged Mr. Ashcroft and the ADT Board to meet with Western Resources
to discuss the possibility of a mutually beneficial negotiated transaction.
December 18, 1996
Mr. Michael A. Ashcroft
ADT Limited
Cedar House
41 Cedar Avenue
Hamilton HM12
Bermuda
Dear Michael:
We have demonstrated our belief in ADT's future by investing $589
million to purchase 27% of ADT's outstanding common shares, making us
ADT's largest shareowner. In the past you and your board have advised us
that you are not interested in discussing a business arrangement between
our companies that could maximize ADT's potential, both in its existing
security business and in the emerging market of deregulated retail energy
distribution.
Now, after careful study and consideration, we have determined that the
potential benefits to ADT, Western Resources and ADT's other shareowners
from a combination of Western Resources and ADT are simply too compelling
to ignore. We firmly believe that this combination will provide
significant benefits to our respective shareowners, customers and
employees not available to either company on its own.
We believe ADT's full potential can only be realized in a strategic
business combination. In our proposed transaction, ADT shareowners will
become a part of one of the most innovative and dynamic companies in the
business of making people's lives safer and more comfortable. Our
subsidiary, Westar Security, is one of the fastest growing security
companies in the nation. Combined with ADT, the leading
22
brand name in the security industry, Western Resources will serve the
energy and security needs of customers across the country and around the
world.
Western Resources, therefore, will file with the Securities and Exchange
Commission a preliminary prospectus for an offer by Western Resources to
ADT shareowners. Under our proposed offer, ADT shareowners (other than
Western Resources and its affiliates) will receive $7.50 net in cash and
$15.00 of Western Resources common stock in exchange for each ADT common
share, up to a maximum of 0.50420 shares of Western Resources common
stock. Based upon the closing price of ADT common shares on December 17,
1996, our proposal represents a 12% premium above ADT's market price.
In order to ensure ADT's other shareowners receive the chance to
consider our proposal for themselves, we will also demand a special
general meeting of ADT shareowners for the purposes of (i) removing the
present members of the ADT board, (ii) reducing the number of seats on the
ADT board from eight to two, and (iii) electing Western Resources'
nominees to the ADT board. We will also file preliminary proxy materials
relating to such special meeting. Once the Western Resources nominees are
elected to the ADT board, Western Resources intends to consummate the
exchange offer and a subsequent amalgamation pursuant to which Western
Resources will acquire 100% of ADT's equity.
We trust that you and the other members of ADT's board will consider the
best interests of ADT's shareowners, customers and employees and agree to
meet with us to achieve a mutually beneficial transaction, that ensures
that ADT executives and employees will enjoy exciting opportunities for
career growth with the combined company. We are, however, committed to
achieving the strategic benefits of a business combination of ADT and
Western Resources and prepared to take all necessary steps to ensure that
we and ADT's other shareowners have the opportunity to decide the future
of our investment in ADT.
I look forward to hearing from you soon.
Sincerely,
/s/ John
On December 18, 1996, Western Resources also publicly announced its
intention to commence the Offer and filed this Preliminary Proxy Statement
with the Commission for use in soliciting proxies from ADT Shareholders to
approve the Western Resources Proposals at the ADT Special Meeting. On
December 18, 1996, Westar Capital deposited the Requisition with ADT requiring
the ADT Board to convene the ADT Special Meeting.
On January 7, 1997, ADT announced that it had tentatively scheduled the ADT
Special Meeting date for July 8, 1997. Westar Capital has commenced litigation
challenging the July 8, 1997 meeting date and is seeking relief to compel the
ADT Board to hold the ADT Special Meeting on or before March 20, 1997. ADT
also filed the ADT Proxy Statement with the Commission for use in soliciting
proxies from ADT Shareholders for the ADT Special Meeting against the Western
Resources Proposals.
On January 23, 1997, the waiting period expired with respect to Western
Resources' filing under the HSR Act to acquire ownership of up to 100% of the
outstanding Shares.
23
LITIGATION
On December 18, 1996, Western Resources announced that Westar Capital had
commenced litigation in the United States District Court for the Southern
District of Florida (the "Court") charging ADT and the ADT Board with breaches
of their fiduciary duties to ADT and the ADT Shareholders. The complaint
alleged, among other things, that the ADT Board breached its fiduciary duty to
ADT and the ADT Shareholders by (i) adopting and continuing to deploy the ADT
Rights Agreement, (ii) granting the Republic Warrant in connection with the
subsequently terminated Republic Transaction for the purpose of making an
unsolicited bid for ADT more expensive and placing a block of votes under Mr.
Ashcroft's control, and (iii) placing approximately 3,182,787 Shares in an ADT
subsidiary to interfere with the voting rights of ADT's other shareholders.
Westar Capital also alleged that by agreeing to the Republic Warrant and the
amendments thereto, Republic aided and abetted breaches of fiduciary duties by
the ADT Board.
On January 3, 1997, Westar Capital filed an amended complaint alleging that
certain letters sent by ADT to Western Resources and Westar Capital interfered
with Westar Capital's voting rights as an ADT Shareholder.
On January 21, 1997, the Court granted Westar Capital's motion for leave to
file a Second Amended Complaint in which Westar Capital additionally alleged
that (i) ADT's January 7, 1997 announcement that the ADT Special Meeting was
scheduled for July 8, 1997 violated the ADT Board's fiduciary and statutory
duties under Bermuda law and (ii) ADT's failure to file a Schedule 14D-9
Tender Offer Statement violated Section 14(d) of the Exchange Act.
On January 23, 1997, Westar Capital filed a motion seeking to enjoin the ADT
Board from holding the ADT Special Meeting on July 8, 1997 and to compel the
ADT Board to hold the meeting on or before March 20, 1997. That motion is
currently pending. On January 27, 1997, ADT and the ADT Board (collectively,
the "ADT Defendants") filed a motion to dismiss Westar Capital's complaint on
the grounds that, among other things, the Court lacks personal jurisdiction
over the ADT Defendants. On February 21, 1997, the Court denied the ADT
Defendants' motion without prejudice and found the jurisdictional allegations
in the Second Amended Complaint to be insufficient. The Court granted Westar
Capital's motion for leave to file an amended complaint and ordered that
Westar Capital could file a Third Amended Complaint by March 3, 1997.
On February 6, 1997, Republic filed a motion to dismiss Westar Capital's
complaint, arguing among other things, that if the Court grants the ADT's
motion to dismiss, the complaint must also be dismissed as against Republic
for failure to join an indispensable party.
On February 20, 1997, Westar Capital filed a motion requesting that the
Court schedule a trial on the merits of Westar Capital's claim that the
Republic Warrant is invalid and a breach of fiduciary duties, and that
Republic be required to give Westar Capital five (5) business days notice
prior to its exercise of the Republic Warrant and the sale of Shares purchased
pursuant to the Republic Warrant.
On December 26, 1996, a shareholder of ADT filed a purported class action
complaint against ADT, the ADT Board, Western Resources and Westar Capital in
the Civil Division of the Circuit Court of the Fifteenth Judicial Circuit in
Palm Beach County, Florida. The complaint alleges, among other things, that
Western Resources and Westar Capital are breaching their fiduciary duties to
ADT Shareholders by failing to offer "an appropriate premium for the
controlling interest" in ADT and by holding "an effective blocking position"
that prevents independent parties from bidding for ADT. The complaint seeks
preliminary and permanent relief enjoining Western Resources from acquiring
outstanding Shares of ADT and unspecified damages. Western Resources believes
it has good and valid defenses to the claims asserted and does not anticipate
any material adverse effect on its assets or financial results arising
therefrom.
On February 10, 1997, ADT Operations commenced litigation against The Chase
Manhattan Bank ("Chase Manhattan Bank") in the Supreme Court of the State of
New York, New York County, alleging that Chase Manhattan Bank breached
contractual obligations and fiduciary duties owed to ADT Operations by, among
other things, furnishing a "highly confident" letter to Western Resources
stating that Chase Manhattan Bank "expected to be able to arrange credit
facilities to fund" the Cash Consideration portion of the Offer. ADT
Operations seeks, among other things, damages and an order permanently
enjoining Chase Manhattan Bank from advising, funding, or otherwise
participating in the Offer. Neither Westar Capital nor Western Resources are
named as defendants in the action.
24
THE KCPL MERGER
On July 8, 1996, Western Resources commenced the KCPL Offer to exchange
shares of Western Resources Common Stock for each outstanding share of KCPL
Common Stock. It was Western Resources' intent, as soon as practicable after
consummation of the KCPL Offer, to seek to merge KCPL with and into Western
Resources. Pursuant to the exchange ratio in the KCPL Offer, KCPL shareholders
would have received $31.00 of Western Resources Common Stock in exchange for
each share of KCPL Common Stock, subject to a maximum of 1.100 and a minimum
of 0.933 shares of Western Resources Common Stock for each share of KCPL
Common Stock.
Beginning in November of 1996, members of the respective boards of directors
and managements of KCPL and Western Resources began discussions regarding a
negotiated transaction between the two companies. Negotiations continued for a
period of several weeks. On February 7, 1997, KCPL and Western Resources
announced that their respective boards of directors had approved the KCPL
Merger Agreement pursuant to which KCPL will be merged with and into Western
Resources and KCPL shareholders will receive $32.00 of Western Resources
Common Stock per share of KCPL Common Stock, subject to a maximum of 1.100 and
a minimum of 0.917 shares of Western Resources Common Stock per share of KCPL
Common Stock (subject to upward adjustment as specified in the KCPL Merger
Agreement). As required by the KCPL Merger Agreement, Western Resources
terminated the KCPL Offer on February 7, 1997.
The KCPL Merger, which will be tax-free to KCPL shareholders and is intended
to be accounted for as a pooling of interests transaction, will create a
combined company with more than 2,000,000 security and energy customers, $9.5
billion in assets, $3 billion in annual revenues and more than 8,000 megawatts
of electric generation resources. The KCPL Merger is conditioned upon, among
other things, the approvals of each company's shareholders and the necessary
review and approvals of various regulatory agencies, principally the KCC, the
Missouri Public Service Commission (the "MPSC"), the Nuclear Regulatory
Commission (the "NRC") and the Federal Energy Regulatory Commission (the
"FERC"). Western Resources intends to seek the approval of its shareholders at
its annual meeting of shareholders, presently scheduled for May 6, 1997.
Subject to the receipt of necessary regulatory and other approvals, Western
Resources presently anticipates that the KCPL Merger will be completed in the
first half of 1998.
According to a representation of KCPL contained in the Merger Agreement,
there were 61,908,726 shares of KCPL Common Stock outstanding on January 28,
1997. Upon consummation of the KCPL Merger, based on the closing share price
of Western Resources Common Stock on February 24, 1997, KCPL shareholders will
receive approximately 64,425,341 shares of Western Resources Common Stock in
the KCPL Merger. This number of shares would represent approximately 32.2% of
the total number of outstanding shares of Western Resources Common Stock,
assuming that the Offer and the Amalgamation had previously been completed at
an Exchange ratio of .48780, based on the closing share price of Western
Resources Common Stock on February 21, 1997.
RECENT DEVELOPMENTS
On December 12, 1996, Western Resources and ONEOK announced that they had
entered into a proposed strategic alliance in which Western Resources will
contribute its regulated local natural gas distribution operations, MCMC, and
Westar Gas Marketing, and will become the largest shareholder of ONEOK. A
division of ONEOK, the Oklahoma Natural Gas Company, provides local natural
gas service to 75% of the state of Oklahoma. ONEOK also has interests in
natural gas marketing, processing and production.
In the transaction, which is expected to close in mid-1997, Western
Resources will receive 2,996,702 shares of ONEOK common stock ("ONEOK Common
Stock") and 19,317,584 shares of a new series of convertible
25
preferred stock of ONEOK ("ONEOK Preferred Stock"), representing 45% of the
total equity of ONEOK. The ONEOK Preferred Stock will pay an annual dividend
of up to 1.5 times the ONEOK Common Stock dividend, with a minimum dividend of
$1.80 per share. The transaction is expected to be accretive to Western
Resources in the first full year.
As a result of its alliance with Western Resources, ONEOK will become the
ninth largest gas distribution company in the United States, serving 1.4
million customers. The strategic alliance will also include a marketing
agreement under which Western Resources will provide electric energy products,
security products and other unregulated services to ONEOK's existing 735,000
customers. The transaction requires the approval of ONEOK's shareholders, the
Oklahoma Corporation Commission (the "OCC"), the KCC and the Commission.
Pursuant to the HSR Act, the transaction may not be consummated unless certain
information has been furnished to the Antitrust Division and the FTC and
certain waiting period requirements have been satisfied. Western Resources
shareholders will not vote on the transaction.
On December 31, 1996, Western Resources paid approximately $358 million,
subject to certain adjustments and assumed certain liabilities and
obligations, for all of the assets used in, related to or necessary for the
operation of the security installation, monitoring and service business
currently operated by Westinghouse Security, a subsidiary of Westinghouse. As
a result of the acquisition, Westar Security is now the third-largest
monitored security company in the United States with over 400,000 customers,
offices in many major U.S. markets and direct access to customers in 44
states.
VOTING AND PROXY PROCEDURES
GENERAL
Only persons entered in the register of members of ADT as holders of Shares
at the time of the ADT Special Meeting will be entitled to vote at such
meeting unless the ADT Board sets a record date for the ADT Special Meeting.
In the event the ADT Board sets a record date for the ADT Special Meeting,
only holders of Shares at the close of business on such record date will be
entitled to vote at the ADT Special Meeting. Each Share is entitled to one
vote upon each matter presented at the ADT Special Meeting. Holders of ADT
preferred stock, if any, are not entitled to vote on any of the Western
Resources Proposals. Pursuant to Bye-Law 43 of the ADT Bye-Laws, at any
general meeting of ADT not less than two holders of Shares present either in
person or by proxy constitutes a quorum for the transaction of business. Each
of the Western Resources Proposals may be approved by the affirmative vote of
a majority of those Shares voted at the ADT Special Meeting. ADT Shareholders
do not have cumulative voting for directors.
Pursuant to Bermuda law, only votes cast for a matter constitute affirmative
votes. Votes withheld or abstaining from voting are counted for quorum
purposes only.
Any ADT Shareholder owning Shares held in the name of a brokerage firm, bank
or other institution should sign, date and return the GREEN proxy card to such
brokerage firm, bank or other institution in the envelope provided by that
firm. The accompanying GREEN proxy card will be voted in accordance with the
ADT Shareholder's instructions on such GREEN proxy card. In order to comply
with Bye-Law 48(1) of the ADT Bye-Laws, which requires that any person acting
as a proxy must be a shareholder of ADT, each of the representatives of
Western Resources named as a proxy on the accompanying proxy card will own at
least one Share at the time of the ADT Special Meeting.
OTHER PROPOSALS
EXCEPT FOR THE WESTERN RESOURCES PROPOSALS AS SET FORTH ABOVE, WESTERN
RESOURCES IS NOT AWARE OF ANY PROPOSALS TO BE BROUGHT BEFORE THE ADT SPECIAL
MEETING. SHOULD OTHER PROPOSALS BE BROUGHT BEFORE THE ADT SPECIAL MEETING, THE
PERSONS NAMED ON THE GREEN PROXY CARD WILL ABSTAIN FROM VOTING ON SUCH
26
PROPOSALS UNLESS SUCH PROPOSALS ADVERSELY AFFECT THE INTERESTS OF WESTERN
RESOURCES AS DETERMINED BY WESTERN RESOURCES, IN ITS SOLE DISCRETION, IN WHICH
EVENT SUCH PERSONS WILL VOTE ON SUCH PROPOSALS AT THEIR DISCRETION.
REVOCATION OF PROXIES
An executed proxy may be revoked at any time prior to its exercise by
submitting another proxy with a later date, by voting in person at the ADT
Special Meeting or by sending a written, signed, dated revocation which
clearly identifies the proxy being revoked to the Chairman of the ADT Special
Meeting prior to the ADT Special Meeting or to the Secretary of ADT at the
registered office of ADT at Cedar House, 41 Cedar Avenue, Hamilton HM12,
Bermuda, so as to arrive before the ADT Special Meeting. Proxies may be
revoked prior to the ADT Special Meeting by facsimile transmission addressed
to the Chairman of the ADT Special Meeting at ( ) - , or to the Secretary
of ADT at ( ) - . A revocation may be in any written form validly signed by
the registered holder as long as it clearly states that the proxy previously
given is no longer effective.
PROXY SOLICITATION
Proxies for the ADT Special Meeting will be solicited by mail, telephone,
telegraph, telex, telecopier, facsimile and advertisement, and in person.
Certain information about the directors and executive officers of Western
Resources and certain employees and other representatives of Western Resources
who may also assist MacKenzie Partners, Inc. ("MacKenzie") in soliciting
proxies is set forth in the attached Schedule A. Schedule B sets forth certain
information relating to Shares owned by Western Resources and its affiliates
and Western Resources' directors, executive officers, employees and other
representatives and certain transactions between any of them and ADT.
The entire expense of the Proxy Solicitation is being borne by Western
Resources. Western Resources may seek reimbursement for such expenses from
ADT, but does not expect that the question of such reimbursement will be
submitted to a vote of ADT Shareholders. Costs related to the Proxy
Solicitation include expenditures for attorneys, accountants, financial
advisors, proxy solicitors, public relations advisors, printing, advertising,
postage, litigation and related expenses and filing fees and are expected to
aggregate approximately $ million. Election of the Western Resources
Nominees and consummation of the Offer may, among other things, (i) result in
acceleration of credit facilities currently available to ADT Operations, Inc.,
a subsidiary of ADT ("ADT Operations"), (ii) enable the holders of certain
debt instruments of ADT Operations to require the repurchase of their
securities, and (iii) accelerate the date on which certain options outstanding
under ADT's stock option plans become exercisable. Although Western Resources
and Westar Capital do not believe that these events would materially and
adversely impact the financial condition of ADT, the actual impact of such
events cannot be presently ascertained and will depend, among other things, on
interest rates and the future conditions in the credit markets.
Western Resources has retained MacKenzie to act as Information Agent in
connection with the Proxy Solicitation. The Information Agent may contact
holders of Shares by mail, telephone, telex, telegraph, facsimile and personal
interviews and may request brokers, dealers and other nominee shareholders to
forward Proxy Solicitation materials to beneficial owners of Shares. The
Information Agent will be paid a customary fee of [$ ] for such services,
plus reimbursement of out-of-pocket expenses, and Western Resources will
indemnify the Information Agent against certain liabilities and expenses in
connection with the Proxy Solicitation, including liabilities under federal
securities laws.
Salomon Brothers Inc ("Salomon"), Bear, Stearns & Co. Inc. ("Bear Stearns")
and Chase Securities Inc. ("Chase") are acting as Dealer Managers (the "Dealer
Managers") in connection with the Offer.
Salomon is acting as financial advisor to Western Resources in connection
with its effort to acquire ADT, for which services, and for assistance
rendered by Salomon in connection with prior purchases of Shares by
27
Westar Capital, Western Resources has agreed to pay Salomon aggregate fees up
to a maximum of $5 million (a substantial portion of which is contingent upon
the consummation of an acquisition of 50% or more of the Shares of ADT or upon
consummation of the Amalgamation).
Bear Stearns is acting as financial advisor to Western Resources in
connection with is effort to acquire ADT, for which services, and for
assistance rendered by Bear Stearns in connection with prior purchases of
Shares by Westar Capital, Western Resources has agreed to pay Bear Stearns
aggregate fees up to a maximum of $4.3 million (a substantial portion of which
is contingent upon the consummation of an acquisition of 50% or more of the
Shares of ADT or upon consummation of the Amalgamation).
Chase is acting as financial advisor to Western Resources in connection with
its effort to acquire ADT, for which services Western Resources has agreed to
pay Chase aggregate fees up to a maximum of $1.5 million (a substantial
portion of which is contingent upon the consummation of an acquisition of 50%
or more of the Shares of ADT or upon consummation of the Amalgamation).
In addition to the compensation set forth above, Western Resources has
agreed to reimburse the Dealer Managers for their reasonable travel and other
out-of-pocket expenses. Western Resources has also agreed to reimburse each of
the Financial Advisors for necessary and reasonable attorneys' fees incurred
in connection with their engagement, and has agreed to indemnify each of the
Dealer Managers and certain related persons and entities against certain
liabilities and expenses in connection with the Dealer Managers' engagement,
including certain liabilities under the federal securities laws. In connection
with each of Salomon's, Bear Stearns' and Chase's engagement as Dealer
Manager, Western Resources anticipates that certain employees of Salomon, Bear
Stearns and Chase may communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who are ADT
Shareholders for the purpose of assisting in the Proxy Solicitation. Neither
Salomon, Bear Stearns nor Chase will receive any fee for or in connection with
such solicitation activities by its employees apart from the fees it is
otherwise entitled to receive as described above.
In addition to the fees to be received by each of Salomon, Bear Stearns and
Chase in connection with their engagement as Dealer Managers for the Offer,
Salomon, Bear Stearns and Chase have in the past rendered various investment
banking and financial advisory services for Western Resources for which they
have received customary compensation. In particular, pursuant to a letter
agreement dated September 5, 1995, as amended (the "Salomon KCPL Letter
Agreement"), Salomon is providing certain financial advisory services to
Western Resources in connection with the KCPL Offer. Under the terms of the
Salomon KCPL Letter Agreement, Western Resources has agreed to pay Salomon for
its financial advisory services (including services as Dealer Manager) in
connection with the KCPL Offer, a financial advisory fee of (i) $400,000 upon
execution of the Salomon KCPL Letter Agreement, (ii) $500,000 upon public
announcement of the KCPL Offer, and (iii) up to an additional $6,000,000 (less
amounts paid or payable described in (i) and (ii) above) upon Western
Resources' acquisition of more than 20% of the outstanding KCPL Shares or upon
the consummation of the KCPL Merger.
Western Resources will not pay any fees or commissions to any broker or
dealer or other person (other than the Information Agent and the Dealer
Managers) for soliciting proxies for the ADT Special Meeting. Brokers,
dealers, commercial banks and trust companies will be reimbursed by Western
Resources for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
ABSENCE OF APPRAISAL RIGHTS
ADT Shareholders do not have appraisal rights with respect to the Offer.
However, pursuant to Section 106(6) of the Companies Act, a registered
holder of Shares who does not vote in favor of the Amalgamation, if it is
proposed and submitted to a vote of ADT Shareholders, and who is not satisfied
that he or she has been offered fair value for his or her Shares, may, within
one month of the giving of the notice of the general meeting of ADT
Shareholders, apply to the Supreme Court of Bermuda (the "Bermuda Supreme
Court") to have the fair value of such dissenting ADT Shareholder's Shares
appraised by
28
the Bermuda Supreme Court. Within one month of the Bermuda Supreme Court
appraising the fair value of any Shares, Western Resources shall be entitled
either to pay to the dissenting ADT Shareholder an amount equal to the value
of his or her Shares as appraised by the Bermuda Supreme Court or to terminate
the Amalgamation if the agreement with respect thereto so provides. The
Bermuda Supreme Court has wide discretion to assess the value of shares in
appraisal proceedings. The Bermuda Supreme Court would likely call on expert
evidence and may assess the fair value based on (a) the market value (i.e.,
the quoted stock market price) of the Shares; (b) a valuation of the net
assets of ADT; (c) the earnings or investment value method which would involve
the capitalization of maintainable earnings; and/or (d) a combination of these
methods.
A beneficial owner of Shares who is not the registered holder may not assert
appraisal rights. If the stock is owned in a fiduciary capacity, such as by a
trustee, guardian or custodian, or by a nominee, the notice asserting
appraisal rights must be executed by the fiduciary or nominee as the
registered holder of the Shares. If the Shares are owned of record by more
than one person, as in a joint tenancy or tenancy in common, the notice must
be executed by all joint owners. An authorized agent, including an agent for
two or more joint owners, may execute the notice for a registered shareholder;
however, the agent must identify the registered holder, disclose the fact
that, in executing the notice, he is acting as agent for the registered holder
and provide evidence of his authority.
The right of a dissenting shareholder to be paid the fair value of his or
her Shares shall cease if the shareholder fails to comply with the procedures
set forth in Section 106(6) of the Companies Act, or if the Amalgamation is
abandoned for any reason.
Western Resources presently intends to condition the Amalgamation upon,
among other things, holders of not more than 5% of the outstanding Shares
having perfected appraisal rights with respect to the Amalgamation.
The foregoing does not purport to be a complete statement of the procedures
to be followed by ADT Shareholders desiring to exercise appraisal rights and,
in view of the fact that exercise of such rights requires adherence to the
relevant provisions of the Companies Act and Bermuda law, shareholders who
desire to exercise appraisal rights are advised to review with care all
applicable provisions of law and to obtain legal counsel in Bermuda concerning
proper compliance with applicable provisions of the Companies Act and Bermuda
law. ADT Shareholders are urged to, and should, read Section 106 of the
Companies Act, a copy of which is included herein as Schedule G.
SHAREHOLDER PROPOSALS
Proposals of ADT Shareholders intended to be presented at the 1997 Annual
Meeting of ADT Shareholders must have been received at ADT's Corporate
Secretary's Office on or before November 13, 1996 for consideration for
inclusion in the proxy statement and form of proxy relating to such meeting.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PRELIMINARY PROXY STATEMENT INCORPORATES BY REFERENCE DOCUMENTS NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (NOT INCLUDING
EXHIBITS TO SUCH DOCUMENTS THAT ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH DOCUMENTS) ARE AVAILABLE WITHOUT CHARGE UPON REQUEST TO CORPORATE
SECRETARY, WESTERN RESOURCES, INC., 818 S. KANSAS AVENUE, TOPEKA, KANSAS
66612. TELEPHONE REQUESTS MAY BE DIRECTED TO THE CORPORATE SECRETARY'S
DEPARTMENT AT (913) 575-1950. IN ORDER TO ENSURE TIMELY DELIVERY OF SUCH
DOCUMENTS, ANY REQUEST FOR DOCUMENTS SHOULD BE SUBMITTED NOT LATER THAN FIVE
BUSINESS DAYS PRIOR TO THE DATE OF THE ADT SPECIAL MEETING.
The following documents filed with the Commission by Western Resources (File
No. 1-3523) are incorporated herein by reference: (a) Western Resources'
Annual Report on Form 10-K for the year ended December 31, 1995 (the "Western
Resources 1995 Form 10-K"); (b) the portions of Western Resources' Proxy
Statement for the 1996 Annual Meeting of Shareholders, dated March 27, 1996,
that have been incorporated by reference in the Western Resources 1995 Form
10-K; (c) Western Resources' Quarterly Reports on Form 10-Q for the periods
ended March 31, 1996, June 30, 1996 and September 30, 1996; (d) Western
Resources' Registration Statement on Form S-4, dated February 25, 1997
(Registration No. 333-10897) and Western Resources' Preliminary Prospectus,
dated February 25, 1997, included therein relating to the Offer; (e) Western
29
Resources' Registration Statement on Form S-4, dated July 3, 1996
(Registration No. 333-02711), and Western Resources' Prospectus, dated July 3,
1996, included therein relating to the KCPL Offer; (f) Western Resources'
Current Reports on Form 8-K, dated April 15, 1996, April 23, 1996, April 25,
1996, April 26, 1996, April 29, 1996, May 3, 1996, May 6, 1996, May 7, 1996,
May 13, 1996, May 24, 1996, June 17, 1996, July 23, 1996, July 26, 1996,
October 24, 1996, December 18, 1996 and February 7, 1997; and (g) soliciting
materials of Western Resources filed pursuant to Rule 14a-12 and Rule 14a-6 of
the Exchange Act from December 18, 1996 through the date hereof.
The following documents filed with the Commission by ADT (File No. 0-16979)
are incorporated herein by reference: (a) ADT's Annual Report on Form 10-K for
the year ended December 31, 1995 (the "ADT 1995 Form 10-K"); (b) ADT's Proxy
Statement for the 1996 Annual Meeting of ADT Shareholders, dated March 12,
1996; (c) ADT's Quarterly Reports on Form 10-Q for the periods ended March 31,
1996, June 30, 1996 and September 30, 1996; (d) ADT's Preliminary Proxy
Statement on Schedule 14A, dated January 8, 1997; (e) ADT's Current Reports on
Form 8-K, dated June 28, 1996, July 11, 1996, July 16, 1996, September 19,
1996, October 1, 1996, October 23, 1996 and November 12, 1996; (f) ADT's
Registration Statement on Form 8-A, dated November 12, 1996; and (g)
soliciting materials of ADT filed pursuant to Rule 14a-12 and Rule 14a-6 of
the Exchange Act from December 18, 1996 through the date hereof.
The following documents filed with the Commission by KCPL (File No. 1-707)
are incorporated herein by reference: (a) KCPL's Annual Report on Form 10-K
for the year ended December 31, 1995 (the "KCPL 1995 Form 10-K"); and (b)
KCPL's Quarterly Reports on Form 10-Q for the periods ending March 31, 1996,
June 30, 1996 and September 30, 1996.
All documents filed by either Western Resources or ADT pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof
and prior to the date of the ADT Special Meeting shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of such
filing. Any statement contained herein or in a document incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
or in any other subsequently filed document which also is, or is deemed to be,
incorporated herein by reference modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
ADT AND KCPL INFORMATION
While Western Resources has included information concerning ADT and KCPL
insofar as it is known or reasonably available to Western Resources, neither
ADT nor KCPL is affiliated with Western Resources and ADT has not to date
permitted access by Western Resources to ADT's books and records for the
purpose of preparing this Proxy Statement. Therefore, information concerning
ADT which has not been made public was not available to Western Resources for
the purpose of preparing this Proxy Statement. Although Western Resources has
no knowledge that would indicate that statements relating to ADT or KCPL
contained or incorporated by reference in this Proxy Statement in reliance
upon publicly available information are inaccurate or incomplete, Western
Resources was not involved in the preparation of such information and
statements and, for the foregoing reasons, is not in a position to verify any
such information or statements.
WESTERN RESOURCES, INC.
February 25, 1997
MacKenzie
Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(800) 322-2885 (toll-free)
30
ANNEX 1
RESOLUTIONS TO BE CONSIDERED AT THE ADT SPECIAL MEETING
1. RESOLVED, that subject to Resolutions 2 and 3 below being passed, all
of the present members of the Board of Directors of ADT Limited (the
"ADT Board") and any other person who may be a director of ADT
Limited at the time of the ADT Special Meeting, be and are hereby
removed from the office of director;
2. RESOLVED, FURTHER, that the number of seats on the ADT Board from and
after the date of this resolution shall be two (2); and
3. RESOLVED, FINALLY, that the directors of ADT Limited from and after
the date of this resolution until the next annual general meeting of
ADT Limited or until their successors have been duly elected shall be
Steven L. Kitchen and Steven A. Millstein or, if either is unable to
serve as a director of ADT Limited due to death, disability or
otherwise, any other person designated by Western Resources.
SCHEDULE A
INFORMATION CONCERNING THE DIRECTORS, EXECUTIVE
OFFICERS AND CERTAIN REPRESENTATIVES OF WESTERN RESOURCES, INCLUDING THE
WESTERN RESOURCES NOMINEES, WHO MAY SOLICIT PROXIES
The following table sets forth the name, business address and the present
principal occupation or employment, and the name, principal business and
address of any corporation or other organization in which such employment is
carried on, of the directors and executive officers of Western Resources, the
Western Resources Nominees and other representatives of Western Resources who
may solicit proxies from ADT Shareholders.
DIRECTORS AND EXECUTIVE OFFICERS OF WESTERN RESOURCES AND WESTERN RESOURCES
NOMINEES
PRESENT POSITION WITH WESTERN RESOURCES
NAME AND BUSINESS ADDRESS OR OTHER PRINCIPAL OCCUPATION OR EMPLOYMENT
------------------------- -------------------------------------------
John E. Hayes, Jr. ................. Director, Chairman of the Board and Chief Executive
Western Resources, Inc. Officer, Western Resources.
818 S. Kansas Avenue
Topeka, KS 66612
David C. Wittig..................... Director and President, Western Resources.
Western Resources, Inc.
818 S. Kansas Avenue
Topeka, KS 66612
Norman E. Jackson................... Executive Vice President, Electric Operations,
Western Resources, Inc. Western Resources.
818 S. Kansas Avenue
Topeka, KS 66612
Steven L. Kitchen................... Executive Vice President and Chief Financial
Western Resources, Inc. Officer, Western Resources.
818 S. Kansas Avenue
Topeka, KS 66612
Carl M. Koupal, Jr. ................ Executive Vice President and Chief Administrative
Western Resources, Inc. Officer, Western Resources.
818 S. Kansas Avenue
Topeka, KS 66612
Steven A. Millstein................. President, Westar Security, Inc.
Westar Security, Inc.
818 S. Kansas Avenue
Topeka, KS 66612
John K. Rosenberg................... Executive Vice President and General Counsel,
Western Resources, Inc. Western Resources.
818 S. Kansas Avenue
Topeka, KS 66612
Jerry D. Courington................. Controller, Western Resources.
Western Resources, Inc.
818 S. Kansas Avenue
Topeka, KS 66612
A-1
OTHER REPRESENTATIVES OF WESTERN RESOURCES WHO MAY SOLICIT PROXIES
NAME AND BUSINESS ADDRESS
(UNLESS OTHERWISE INDICATED, THE BUSINESS
ADDRESS IS WESTERN PRESENT POSITION WITH WESTERN
RESOURCES, INC., 818 S. KANSAS AVENUE, RESOURCES OR OTHER
TOPEKA, KS 66612) PRINCIPAL OCCUPATION OR EMPLOYMENT
- ----------------------------------------- ----------------------------------
Bruce A. Akin..................... Director, Corporate Development.
Bruce R. Burns.................... Manager, Shareholder Services.
Lori A. Finney.................... Executive Director, Corporate Strategy.
James A. Martin................... Vice President, Finance.
Michel' J. Philipp................ Director, Corporate Communications.
Carolyn A. Starkey................ Financial Analyst.
Richard D. Terrill................ Corporate Secretary.
Craig A. Weingartner.............. Corporate Development, Associate.
Salomon Brothers Inc
Gregg S. Polle.................... Managing Director, Salomon Brothers Inc
Salomon Brothers Inc
7 World Trade Center
New York, NY 10048
Arthur H. Tildesley, Jr........... Director, Salomon Brothers Inc
Salomon Brothers Inc
7 World Trade Center
New York, NY 10048
William A. Murphy................. Vice President, Salomon Brothers Inc
Salomon Brothers Inc
7 World Trade Center
New York, NY 10048
Chad Rucker....................... Associate, Salomon Brothers Inc
Salomon Brothers Inc
7 World Trade Center
New York, NY 10048
Bear, Stearns & Co. Inc.
Douglas T. Lake................... Senior Managing Director, Bear, Stearns &
Co. Inc.
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Richard M. Osler.................. Managing Director, Bear, Stearns & Co. Inc.
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
David F. Huff..................... Vice President, Bear, Stearns & Co. Inc.
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
A-2
NAME AND BUSINESS ADDRESS
(UNLESS OTHERWISE INDICATED, THE BUSINESS
ADDRESS IS WESTERN PRESENT POSITION WITH WESTERN
RESOURCES, INC., 818 S. KANSAS AVENUE, RESOURCES OR OTHER
TOPEKA, KS 66612) PRINCIPAL OCCUPATION OR EMPLOYMENT
- ----------------------------------------- ----------------------------------
Chase Securities Inc.
Mark Davis........................... Managing Director, Chase Securities Inc.
Chase Securities Inc.
270 Park Avenue
New York, New York 10017
John Bass............................ Vice President, Chase Securities Inc.
Chase Securities Inc.
270 Park Avenue
New York, New York 10017
Craig Decker......................... Associate, Chase Securities, Inc.
Chase Securities Inc.
270 Park Avenue
New York, New York 10017
Andrew Quigley....................... Associate, Chase Securities Inc.
Chase Securities Inc.
270 Park Avenue
New York, New York 10017
A-3
SCHEDULE B
SHARES HELD BY WESTAR CAPITAL
Westar Capital is the beneficial and record holder of Shares purchased (i)
from Laidlaw on or prior to March 18, 1996, as described in this Preliminary
Proxy Statement and (ii) as purchased in open market transactions in the
amount and on the dates set forth below:
NUMBER OF
SHARES
DATE OF TRANSACTION PURCHASED
------------------- ----------
1/26/96.............................................................. 15,400,000
3/18/96.............................................................. 15,400,000
7/15/96.............................................................. 100,000
7/15/96.............................................................. 50,000
7/15/96.............................................................. 60,000
7/15/96.............................................................. 161,800
7/15/96.............................................................. 116,700
7/15/96.............................................................. 41,500
7/15/96.............................................................. 26,000
7/16/96.............................................................. 20,000
7/16/96.............................................................. 20,000
7/16/96.............................................................. 21,000
7/16/96.............................................................. 28,500
7/16/96.............................................................. 80,000
7/16/96.............................................................. 25,000
7/16/96.............................................................. 59,000
7/16/96.............................................................. 10,000
7/16/96.............................................................. 65,000
7/16/96.............................................................. 44,000
7/16/96.............................................................. 22,500
7/16/96.............................................................. 25,000
7/16/96.............................................................. 30,000
7/16/96.............................................................. 20,000
7/16/96.............................................................. 25,000
7/16/96.............................................................. 20,000
7/16/96.............................................................. 10,000
7/16/96.............................................................. 100,000
7/17/96.............................................................. 10,000
7/17/96.............................................................. 49,000
7/17/96.............................................................. 25,000
7/17/96.............................................................. 10,000
7/17/96.............................................................. 25,000
8/22/96.............................................................. 40,000
8/22/96.............................................................. 80,000
8/22/96.............................................................. 95,000
8/22/96.............................................................. 135,000
9/5/96............................................................... 29,600
9/5/96............................................................... 165,000
NUMBER OF
SHARES
DATE OF TRANSACTION PURCHASED
------------------- ---------
9/5/96............................................................... 16,696
9/6/96............................................................... 10,000
9/30/96.............................................................. 128,500
9/30/96.............................................................. 152,000
9/30/96.............................................................. 170,000
9/30/96.............................................................. 749,500
9/30/96.............................................................. 2,000
9/30/96.............................................................. 98,000
10/8/96.............................................................. 14,115*
10/16/96............................................................. 160,000
10/16/96............................................................. 50,000
10/17/96............................................................. 2,900
10/18/96............................................................. 50,000
10/18/96............................................................. 50,000
10/18/96............................................................. 2,500
10/21/96............................................................. 247,700
10/21/96............................................................. 58,300
10/22/96............................................................. 50,000
10/22/96............................................................. 120,000
10/23/96............................................................. 155,000
10/23/96............................................................. 116,700
10/23/96............................................................. 18,400
10/24/96............................................................. 25,000
10/24/96............................................................. 25,000
10/24/96............................................................. 44,700
10/25/96............................................................. 15,000
10/25/96............................................................. 125,000
10/28/96............................................................. 66,700
10/28/96............................................................. 75,500
10/28/96............................................................. 202,800
10/28/96............................................................. 27,500
10/28/96............................................................. 204,700
10/28/96............................................................. 15,000
10/28/96............................................................. 129,000
10/28/96............................................................. 2,034,800
10/28/96............................................................. 20,000
10/29/96............................................................. 144,500
10/29/96............................................................. 65,000
- --------
* Issuable upon exchange of 500 LYONs beneficially owned by Westar Capital.
B-1
SHARES HELD BY DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN REPRESENTATIVES OF
WESTERN RESOURCES, INCLUDING THE WESTERN RESOURCES NOMINEES, AND CERTAIN
TRANSACTIONS BETWEEN ANY OF THEM AND ADT
John K. Rosenberg, Richard D. Terrill and Neil T. Anderson have agreed to
serve as the proxies on Western Resources' GREEN proxy card for the ADT
Special Meeting. In order to comply with Bye-Law 48(1) of the ADT Bye-Laws,
which requires that any person acting as a proxy must be a shareholder of ADT,
each of the representatives of Western Resources named as a proxy on the
accompanying proxy card will own at least one Share at the time of the ADT
Special Meeting.
Except as disclosed in this Schedule or in the Preliminary Proxy Statement,
none of Western Resources, or any of its directors, executive officers or the
employees named in Schedule A, including the Western Resources Nominees, owns
any securities of ADT or any subsidiary of ADT, beneficially or of record, or
has purchased or sold any of such securities within the past two years. Except
as disclosed in this Schedule or in the Preliminary Proxy Statement, to the
best knowledge of Western Resources, none of its directors, executive officers
or the employees of Western Resources named in Schedule A, including the
Western Resources Nominees, or their associates, beneficially owns, directly
or indirectly, any securities of ADT. Michael S. Barnes has advised Western
Resources that he owns 700 Shares.
Other than as disclosed in this Schedule and in the Preliminary Proxy
Statement, to the knowledge of Western Resources, none of Western Resources,
or any of its directors, executive officers or the employees of Western
Resources named in Schedule A, including the Western Resources Nominees, has
any substantial interest, direct or indirect, by security holdings or
otherwise, in any matter to be acted upon at the ADT Special Meeting.
Other than as disclosed in this Schedule and in the Preliminary Proxy
Statement, to the knowledge of Western Resources, none of Western Resources,
or any of its directors, executive officers or the employees of Western
Resources named in Schedule A, including the Western Resources Nominees, is,
or has been within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of ADT,
including, but not limited to, joint ventures, loan or option arrangements,
puts or calls, guarantees against loss or guarantees of profit, division of
losses or profits, or the giving or withholding of proxies.
Other than as set forth in this Schedule or in the Preliminary Proxy
Statement, to the knowledge of Western Resources, none of Western Resources,
or any of its directors, executive officers or the employees of Western
Resources named in Schedule A, including the Western Resources Nominees, or
any of their associates, has had or will have a direct or indirect material
interest in any transaction or series of similar transactions since the
beginning of ADT's last fiscal year or any currently proposed transactions, or
series of similar transactions, to which ADT or any of its subsidiaries was or
is to be a party in which the amount involved exceeds $60,000.
Other than as set forth in this Schedule and in the Preliminary Proxy
Statement, to the knowledge of Western Resources, none of Western Resources,
or any of its directors, executive officers or the employees of Western
Resources named in Schedule A, including the Western Resources Nominees, or
any of their associates, has any arrangements or understandings with any
person with respect to any future employment by ADT or its affiliates or with
respect to any future transactions to which ADT or any of its affiliates will
or may be a party.
B-2
SCHEDULE C
INFORMATION CONCERNING SALOMON, BEAR STEARNS AND CHASE
INFORMATION CONCERNING SALOMON
Western Resources has retained Salomon to act as its financial advisor in
connection with the transactions described in the Preliminary Proxy Statement.
Salomon from time to time also executes routine brokerage transactions for the
account of Western Resources' Profit Sharing and Retirement Trust.
Salomon is an internationally recognized investment banking firm that
provides financial services in connection with a wide range of business
transactions. Salomon does not admit that it or any of its directors, officers
or employees is a "participant," as defined in Schedule 14A promulgated under
the Exchange Act by the Commission ("Schedule 14A"), in the solicitation to
which the Preliminary Proxy Statement relates or that such Schedule 14A
requires the disclosure in the Preliminary Proxy Statement or this Schedule of
certain information concerning Salomon.
The following employees (the "Salomon Individuals") of Salomon may engage in
solicitation activities in connection with the solicitation to which the
Preliminary Proxy Statement relates (and to the extent that any such Salomon
Individual does, in fact, engage in such solicitation activities, any such
Salomon Individual would thereby become a "participant," as defined in
Schedule 14A):
NAME POSITION
---- --------
Gregg S. Polle.......................... Managing Director, Salomon Brothers Inc
Arthur H. Tildesley, Jr................. Director, Salomon Brothers Inc
William A. Murphy....................... Vice President, Salomon Brothers Inc
Chad Rucker............................. Associate, Salomon Brothers Inc
Each of the Salomon Individuals is engaged in the investment banking business
at Salomon Brothers Inc at Seven World Trade Center, New York, New York 10048,
and is employed by Salomon in the capacity listed beside his or her name.
As of December 13, 1996, Salomon beneficially held a net "short" position of
10,800 Shares, and beneficially owned LYONs of an affiliate of ADT
exchangeable for 14,595 Shares. As of December 13, 1996, Salomon did not own
of record any Shares for customer accounts. In the normal course of its
business, Salomon regularly buys and sells securities, including Shares, for
its own account and for the accounts of its customers, which transactions may
result from time to time in Salomon having a net "long" or net "short"
position in ADT's securities or option contracts in ADT's securities. A list
of all securities of ADT bought and sold by Salomon for its own account over
the last two years is set forth on Schedule D. It is impracticable, however,
owing to the volume of such transactions, to list each transaction for the
accounts of customers involving ADT's securities for the past two years for
the purpose of the Preliminary Proxy Statement.
None of the Salomon Individuals or their associates owned of record or
beneficially any of ADT's securities as of December 17, 1996. None of the
Salomon Individuals or their associates purchased or sold for their own
account securities of any class of ADT within the past two years.
None of the Salomon Individuals or their associates own of record any
securities of ADT which are not also beneficially owned by them nor do they or
their associates beneficially own, directly or indirectly, any securities of
any parent or subsidiary of ADT.
C-1
In the normal course of its business, Salomon finances the securities
positions of Salomon by bank and other borrowings and repurchase and
securities borrowing transactions. None of such borrowings were intended
specifically for the purpose of purchasing securities of ADT.
Except as set forth below or as disclosed elsewhere in this Schedule or the
Preliminary Proxy Statement, and except for customary arrangements with
respect to securities of ADT held by Salomon for the accounts of its
customers, none of the Salomon Individuals, Salomon or any associate of such
persons is or has been, within the past year, a party to any contract,
arrangement or understanding with any person with respect to any securities of
ADT, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies. Except
as set forth below or as disclosed elsewhere in this Schedule or the
Preliminary Proxy Statement, none of the Salomon Individuals, Salomon or any
associate of such persons has any arrangement or understanding with any person
with respect to any future employment by ADT or its affiliates or any future
transactions to which ADT or any of its affiliates will or may be a party, nor
any material interest, direct or indirect, in any transaction which has
occurred since December 17, 1994 or any currently proposed transaction, or
series of similar transactions, to which ADT or any of its affiliates was or
is to be a party and in which the amount involved exceeds $60,000.
INFORMATION CONCERNING BEAR STEARNS
Western Resources has retained Bear Stearns to act as its financial advisor
in connection with the transactions described in the Preliminary Proxy
Statement. Bear Stearns from time to time also executes routine brokerage
transactions for the account of Western Resources' Profit Sharing and
Retirement Trust.
Bear Stearns is an internationally recognized investment banking firm that
provides financial services in connection with a wide range of business
transactions. Bear Stearns does not admit that it or any of its directors,
officers or employees is a "participant," as defined in Schedule 14A in the
solicitation to which the Preliminary Proxy Statement relates or that such
Schedule 14A requires the disclosure in the Preliminary Proxy Statement or
this Schedule of certain information concerning Bear Stearns.
The following employees (the "Bear Stearns Individuals") of Bear Stearns may
engage in solicitation activities in connection with the solicitation to which
the Preliminary Proxy Statement relates (and to the extent that any such Bear
Stearns Individual does, in fact, engage in such solicitation activities, any
such Bear Stearns Individual would thereby become a "participant," as defined
in Schedule 14A):
NAME POSITION
---- --------
Senior Managing Director, Bear,
Douglas T. Lake........................ Stearns & Co. Inc.
Managing Director, Bear, Stearns &
Richard M. Osler....................... Co. Inc.
Vice President, Bear, Stearns & Co.
David F. Huff.......................... Inc.
Each of the Bear Stearns Individuals is engaged in the investment banking
business at Bear Stearns at 245 Park Avenue, New York, New York 10167, and is
employed by Bear Stearns in the capacity listed beside his name.
As of December 17, 1996, Bear Stearns did not beneficially own any Shares
and did not own of record any Shares for customer accounts. In the normal
course of its business, Bear Stearns regularly buys and sells securities,
including Shares, for its own account and for the accounts of its customers,
which transactions may result from time to time in Bear Stearns having a net
"long" or net "short" position in ADT's securities or option contracts in
ADT's securities. A list of all securities of ADT bought and sold by Bear
Stearns for its own account over the last two years is set forth on Schedule
D. It is impracticable, however, owing to the volume of such transactions, to
list each transaction for the accounts of customers involving ADT's securities
for the past two years for the purpose of the Preliminary Proxy Statement.
C-2
None of the Bear Stearns Individuals or their associates owned of record or
beneficially any of ADT's securities as of December 17, 1996. None of the Bear
Stearns Individuals or their associates purchased or sold for their own
account securities of any class of ADT within the past two years.
None of the Bear Stearns Individuals or their associates own of record any
securities of ADT which are not also beneficially owned by them nor do they
beneficially own, directly or indirectly, any securities of any parent or
subsidiary of ADT.
In the normal course of its business, Bear Stearns finances the securities
positions of Bear Stearns by bank and other borrowings and repurchase and
securities borrowing transactions. None of such borrowings were intended
specifically for the purpose of purchasing securities of ADT.
Except as set forth below or as disclosed elsewhere in this Schedule or the
Preliminary Proxy Statement, and except for customary arrangements with
respect to securities of ADT held by Bear Stearns for the accounts of its
customers, none of the Bear Stearns Individuals, Bear Stearns or any associate
of such persons is or has been, within the past year, a party to any contract,
arrangement or understanding with any person with respect to any securities of
ADT, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies.
Except as set forth below or as disclosed elsewhere in this Schedule or the
Preliminary Proxy Statement, none of the Bear Stearns Individuals, Bear
Stearns or any associate of such persons has any arrangement or understanding
with any person with respect to any future employment by ADT or its affiliates
or any future transactions to which ADT or any of its affiliates will or may
be a party, nor any material interest, direct or indirect, in any transaction
which has occurred since December 17, 1994 or any currently proposed
transaction, or series of similar transactions, to which ADT or any of its
affiliates was or is to be a party and in which the amount involved exceeds
$60,000.
INFORMATION CONCERNING CHASE
Western Resources has retained Chase to act as its financial advisor in
connection with the transactions described in the Preliminary Proxy Statement.
Chase may from time to time also execute routine brokerage transactions for
the account of Western Resources' Profit Sharing and Retirement Trust.
Chase is an internationally recognized investment banking firm that provides
financial services in connection with a wide range of business transactions.
Chase does not admit that it or any of its directors, officers or employees is
a "participant," as defined in Schedule 14A, in the solicitation to which the
Preliminary Proxy Statement relates or that such Schedule 14A requires the
disclosure in the Preliminary Proxy Statement or this Schedule of certain
information concerning Chase.
The following employees (the "Chase Individuals") of Chase may engage in
solicitation activities in connection with the solicitation to which the
Preliminary Proxy Statement relates (and to the extent that any such Chase
Individual does, in fact, engage in such solicitation activities, any such
Chase Individual would thereby become a "participant," as defined in Schedule
14A):
NAME POSITION
---- --------
Mark Davis............................. Managing Director, Chase Securities Inc.
John Bass.............................. Vice President, Chase Securities Inc.
Craig Decker........................... Associate, Chase Securities Inc.
Andrew Quigley......................... Associate, Chase Securities Inc.
Each of the Chase Individuals is engaged in the investment banking business at
Chase Securities Inc., 270 Park Avenue, New York, New York 10017, and is
employed by Chase in the capacity listed beside his name.
C-3
As of December 17, 1996, Chase did not beneficially own any Shares and did
not own of record any Shares for customer accounts. In the normal course of
its business, Chase regularly buys and sells securities, including Shares, for
its own account and for the accounts of its customers, which transactions may
result from time to time in Chase having a net "long" or net "short" position
in ADT's securities or option contracts in ADT's securities. A list of all
securities of ADT bought and sold by Chase for its own account over the last
two years is set forth on Schedule D. It is impracticable, however, owing to
the volume of such transactions, to list each transaction for the accounts of
customers involving ADT's securities for the past two years for the purpose of
the Preliminary Proxy Statement.
None of the Chase Individuals or their associates owned of record or
beneficially any of ADT's securities as of December 17, 1996. None of the
Chase Individuals or their associates purchased or sold for their own account
securities of any class of ADT within the past two years.
None of the Chase Individuals or their associates own of record any
securities of ADT which are not also beneficially owned by them nor do they or
their associates beneficially own, directly or indirectly, any securities of
any parent or subsidiary of ADT.
In the normal course of its business, Chase finances the securities
positions of Chase by bank and other borrowings and repurchase and securities
borrowing transactions. None of such borrowings were intended specifically for
the purpose of purchasing securities of ADT.
Except as set forth below or as disclosed elsewhere in this Schedule or the
Preliminary Proxy Statement, and except for customary arrangements with
respect to securities of ADT held by Chase for the accounts of its customers,
none of the Chase Individuals, Chase or any associate of such persons is or
has been, within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of ADT,
including, but not limited to, joint ventures, loan or option arrangements,
puts or calls, guarantees against loss or guarantees of profit, division of
losses or profits, or the giving or withholding of proxies. Except as set
forth below or as disclosed elsewhere in this Schedule or the Preliminary
Proxy Statement, none of the Chase Individuals, Chase or any associate of such
persons has any arrangement or understanding with any person with respect to
any future employment by ADT or its affiliates or any future transactions to
which ADT or any of its affiliates will or may be a party, nor any material
interest, direct or indirect, in any transaction which has occurred since
December 17, 1994 or any currently proposed transaction, or series of similar
transactions, to which ADT or any of its affiliates was or is to be a party
and in which the amount involved exceeds $60,000.
Chase Manhattan Bank, an affiliate of Chase, acts as Agent on a $300,000,000
credit facility for ADT Operations, Inc., a subsidiary of ADT. Chase Manhattan
Bank's commitment under the facility is $25,000,000, of which $10,121,696.04
is presently outstanding.
C-4
SCHEDULE D
TRADING HISTORY OF SALOMON, BEAR STEARNS AND CHASE (FOR THEIR OWN ACCOUNTS)
TRADING HISTORY OF SALOMON (AND ONE OF ITS AFFILIATES)
ADT ORDINARY SHARES
Shares Purchased (Trade Date)
1996: None
1995: None
1994: None
Shares Sold (Trade Date)
1996: 714,747(9/19)
1995: None
1994: None
ADT COMMON SHARES
Shares Purchased (Trade Date)
1996: 3,320(1/3); 1,300(1/9); 4(1/9); 400(1/26); 62(1/26); 400(1/26);
35,800(3/6); 5,000(3/8); 3,500(3/12); 8,400(3/18); 4,100(4/3); 9,000(5/10);
5,000(5/10); 2,000(5/10); 14,000(5/10); 1,900(5/21); 2,200(5/21); 24,500(7/2);
5,000(7/2); 71,500(7/2); 40,300(7/2); 5,600(7/2); 5,500(7/2); 7,000(7/2);
21,400(7/2); 76,200(7/2); 76,300(7/2); 27,500(7/2); 3,400(7/2); 19,500(7/2);
3,300(7/2); 13,000(7/2); 49,400(7/11); 31,000(7/11); 1,000(7/11); 14(7/18);
300(7/18); 5,000(8/6); 4,500(8/23); 20,000(8/27); 20,000(8/27); 20,000(8/27);
20,000(8/27); 11,000(9/3); 1,600(9/3); 2,000(9/3); 13,000(9/3); 11,000(9/3);
10,000(9/3); 8,100(9/13); 2,500(9/16); 35,900(9/20); 62(9/30); 100(9/30)
1995: 600(1/4); 1,600(3/15); 63(3/15); 20,600(4/6); 36(4/11); 1,700(4/11);
100,000(5/31); 50,000(5/31); 27,500(5/31); 27,500(5/31); 200(6/12);
20,600(6/12); 2,100(6/12); 2,100(6/12); 13,500(6/20); 60(6/20); 20,500(6/23);
14,800)6/23); 200(6/23); 24,500(6/23); 15,500(6/26); 31,000(6/26);
25,000(6/30); 10,000(7/11); 54,100(8/9); 39,500(8/15); 3,000(8/16);
5,000(8/16); 2,100(8/16); 43(8/16); 1,600(8/28); 10,000(8/30); 20,000(9/15);
7,600(9/15); 26,300(9/15); 1,618(9/19);
1994: 250,000(12/21)
Shares Sold (Trade Date)
1996: 3,300(1/4); 20(1/4); 1,304(1/9); 862(1/26); 57,600(3/15); 2,000)4/3);
400(4/3); 1,700(4/3); 10,00(5/10); 20,000(5/10); 4,100(5/21); 9,600(7/2);
2,200(7/2); 400(7/2); 1,600(7/2); 1,200(7/2); 258,100(7/2); 4,100(7/2);
2,300(7/2); 4,200(7/2); 8,200(7/2); 27,600(7/2); 23,600(7/2); 58,900(7/2);
81,400(7/11); 314(7/18); 49,500(8/8); 500(8/27); 6,000(8/27); 7,500(8/27);
23,500(8/27); 14,500(8/27); 11,500(8/27); 13,500(8/27); 3,000(8/27);
1,600(9/3); 45,600(9/3); 1,400(9/3); 85(9/20); 4,500(9/24); 162(9/30);
1995: 600(1/5); 544(3/15); 1,119(3/15); 8,400(4/6); 12,200(4/6); 1,736(4/11);
27,500(5/31); 50,000(5/31); 50,000(5/31); 77,500(5/31); 24,600(6/12);
400(6/12); 1,260(6/20); 2,000(6/23); 15,000(6/23); 14,800(6/23); 13,200(6/23);
15,000(6/23); 16,500(6/26); 20,000(6/26); 10,000(6/26); 25,000(7/7);
10,000(7/10); 20,000(7/17); 10,000(7/17); 10,000(7/17); 10,000(7/19);
15,000(7/19); 25,000(7/19); 10,000(7/31); 5,000(8/4); 5,000(8/7); 15,000(8/9);
10,000(8/9); 500(8/9); 15,000(8/9); 100(8/9); 2,600(8/10); 17,000(8/14);
2,000(8/14); 15,000(8/14); 5,000(8/15); 12,700(8/15); 7,700(8/15)l 2,143(8/16);
1,600(8/28); 18(9/19); 1,600(9/19); 4,900(9/22); 5,000(9/25)
1994: 40,000(12/21); 210,000(12/21)
D-1
OPTIONS
Options Purchased (Trade Date)
1996: None
1995: None
1994: None
Options Sold (Trade Date)
1996: None
1995: None
1994: None
ADT 8.25% GUARANTEED SENIOR NOTES
Notes Purchased (Trade Date)
1996: None
1995: 500,000(3/2); 10,000(3/7); 400,000(3/8); 100,000(5/25); 100,000(6/6);
50,000(6/20)
1994: 500,000(11/9)
Notes Sold (Trade Date)
1996: None
1995: 350,000(2/15); 150,000(3/2); 125,000(3/2); 500,000(3/2); 100,000(3/2);
125,000(3/2); 250,000(5/3)
1994: 100,000(11/14); 50,000(12/7)
ADT 9.25% GUARANTEED SENIOR SUBORDINATED NOTES
Notes Purchased (Trade Date)
1996: 1,000,000(5/2)
1995: 4,000,000(1/10)
1994: None
Notes Sold (Trade Date)
1996: 1,000,000(5/2)
1995: 2,000,000(1/10); 1,000,000(1/10); 1,000,000(1/10)
1994: None
LYONS
LYONs Purchased (Trade Date)
1996: 100,000(3/6); 500,000(3/6); 3,000,000(3/15); 500,000(3/15)
1995: 1,500,000(6/30); 7,000,000(7/6); 3,000,000(7/7); 500,000(7/14);
400,000(7/14); 200,000(7/14); 1,100,000(7/14); 950,000(8/9); 105,000(8/9);
525,000(8/9); 105,000(8/9); 420,000(8/9); 420,000(8/9); 475,000(8/9);
25,000(8/14); 25,000(8/14)
1994: None
LYONs Sold (Trade Date)
1996: 300,000(3/6); 250,000(3/6); 1,902,000(3/6); 1,200,000(3/12)
1995: 2,500,000(6/30); 2,000,000(6/30); 1,015,000(6/30); 888,000(7/6);
950,000(7/6); 1,000,000(7/11); 1,150,000(8/9); 1,150,000(8/9); 1,500,000(8/9);
1,500,000(8/9); 62,000(8/14); 2,000,000(8/15); 2,000,000(9/15)
1994: None
9 1/2% AUTOMATED SECURITY CAPITAL FINANCE (JERSEY) CONVERTIBLE CAPITAL BONDS
Convertibles Purchased (Trade Date)
1996: 2,000,000(3/7); 2,000,000(3/7); 5,259,000(3/8); 5,259,000(3/8)
1995: 510,000(9/21); 510,000(10/24)
1994: None
Convertibles Sold (Trade Date)
1996: 2,000,000(3/7); 5,259,000(3/8); 395,500(4/25)
1995: 360,000(9/28); 150,000(9/28)
1994: None
D-2
TRADING HISTORY OF BEAR STEARNS
ADT ORDINARY SHARES
Shares Purchased (Trade Date)
1996: None
1995: None
1994: None
Shares Sold (Trade Date)
1996: None
1995: None
1994: None
ADT COMMON SHARES
Shares Purchased (Trade Date)
1996: 6,000(3/12); 5,800(5/17); 1,100(5/20); 7,900(6/6); 100(7/1); 10,000(7/1);
10,000(7/1); 10,100(7/1); 21,800(7/1); 50,800(7/1); 18,000(7/2); 5,000(7/2);
3,000(7/5); 1,800(7/8); 6,300(7/10); 4,000(7/17); 10,000(7/17); 2,000(7/30);
23,500(8/21); 25,000(8/22); 1,000(8/27); 22,600(9/10); 5,000(9/10);
8,000(9/18); 300(11/12); 130(11/13);
1995: 1,000(5/8)
1994: None
Shares Sold (Trade Date)
1996: 6,000(3/6); 900(5/10); 6,000(5/13); 7,900(6/7); 4,800(7/1); 6,300(7/1);
18,100(7/1); 24,000(7/1); 24,000(7/1); 44,600(7/1); 100(7/2); 18,000(7/2);
5,000(7/2); 14,000(7/17); 2,000(7/30); 23,500(8/21); 5,000(8/22); 20,000(8/22);
1,000(8/27); 22,600(9/10); 5,000(9/10); 8,000(9/19); 300(10/23); 130(11/14)
1995: 1,000(5/5)
1994: None
ADT OPTIONS
Options Purchased (Trade Date)
1996: None
1995: None
1994: None
Options Sold (Trade Date)
1996: None
1995: None
1994: None
ADT 8.25% GUARANTEED SENIOR NOTES
Notes Purchased (Trade Date)
1996: 50,000(2/2); 350,000(12/13)
1995: 150,000(1/3); 20,000(2/14); 2,000,000(3/23); 50,000(7/27); 152,000(9/15);
3,000,000(11/16); 2,000,000(11/29); 2,500,000(12/1)
1994: 30,000(3/16); 25,000(6/10); 120,000(10/31); 30,000(12/16)
D-3
Notes Sold (Trade Date)
1996: 50,000 (2/5)
1995: 30,000 (1/26); 20,000 (2/14); 2,000,000 (3/23); 50,000 (7/31); 135,000
(9/15); 17,000 (9/19); 3,000,000 (11/16); 2,000,000 (11/29); 2,500,000
(12/1)
1994: 30,000 (3/16); 25,000 (6/10); 120,000 (10/31); 30,000 (12/16)
ADT 9.25% GUARANTEED SENIOR SUBORDINATED NOTES
Notes Purchased (Trade Date)
LYONs Purchased (Trade Date)
1996: None
1995: None
1994: None
Notes Sold (Trade Date)
1996: None
1995: None
1994: None
LYONS
1996: 150,000(2/13); 50,000(2/15); 30,000(2/12); 232,000(2/21); 200,000(6/6);
154,000(7/1); 240,000(7/1); 2,000,000(7/1); 2,000,000(7/1); 38,000(8/22);
14,000(8/23); 1,000,000(9/10); 20,000(9/12); 428,000(9/12); 55,000(9/26);
31,000(10/7); 500,000(10/75); 45,000(11/11); 455,000(11/11); 145,000 (11/15)
1995: 100,000(6/300; 200,000(6/30); 300,000(6/30); 450,000(6/30);
575,000(6/30); 650,000(6/30); 690,000(6/30); 750,000(6/30); 900,000(6/30);
900,000(6/30); 1,250,000(6/30); 1,500,000(6/30); 2,300,000(6/30);
5,100,000(6/30); 7,000,000(6/30); 175,000(7/5); 325,000(7/5); 400,000(7/5);
425,000(7/5); 425,000(7/5); 680,000(7/5); 400,000(7/6); 2,000,000(7/6);
3,050,000(7/10); 2,404,000(7/11); 50,000(7/26); 2,065,000(8/15); 50,000(8/22);
40,000(9/19); 250,000(9/25); 100,000(11/27); 282,000(11/30); 7,000(12/8);
79,000(12/12)
1994: None
LYONs Sold (Trade Date)
1996: 150,000(2/13); 50,000(2/15); 23,000(2/21); 239,000(2/23);
1,866,000(6/28); 728,000(7/1); 2,000,000(7/1); 1,000,000(9/10); 500,000(9/12);
500,000(10/7); 86,000(10/25); 500,000(11/11); 145,000 (11/15)
1995: 500,000(6/30); 950,000(6/30); 1,000,000(6/30); 1,000,000(6/30);
1,500,000(6/30); 2,000,000(6/30); 2,000,000(6/30); 2,500,000(6/30);
5,000,000(6/30); 1,200,000(7/3); 30,000(7/5); 5,200(7/5); 85,000(7/5);
6,895,000(7/5); 2,683,000(7/6); 5,042,000(7/10); 160,000(7/11); 252,000(7/11);
100,000(7/19); 190,000(7/25); 850,000(7/25); 200,000(8/2); 35,000(8/9);
50,000(8/9); 110,000(8/9); 110,000(8/9); 570,000(8/9); 50,000(8/21);
40,000(9/20); 250,000(9/25); 100,000(11/27); 282,000(11/30); 86,000(12/8)
1994: None
9 1/2% AUTOMATED SECURITY CAPITAL FINANCE (JERSEY) CONVERTIBLE CAPITAL BONDS
Convertibles Purchased (Trade Date)
1996: None
1995: None
1994: None
Convertibles Sold (Trade Date)
1996: None
1995: None
1994: None
D-4
TRADING HISTORY OF CHASE
ADT ORDINARY SHARES
Shares Purchased (Trade Date)
1996: None
1995: None
1994: None
Shares Sold (Trade Date)
1996: None
1995: None
1994: None
ADT COMMON SHARES
Shares Purchased (Trade Date)
1996: None
1995: None
1994: None
Shares Sold (Trade Date)
1996: None
1995: None
1994: None
ADT OPTIONS
Options Purchased (Trade Date)
1996: None
1995: None
1994: None
Options Sold (Trade Date)
1996: None
1995: None
1994: None
ADT 8.25% GUARANTEED SENIOR NOTES
Notes Purchased (Trade Date)--Par Amount
1996: None
1995: None
1994: 1,150,000(4/20); 2,500,000(4/21); 1,500,000(6/8)
D-5
Notes Sold (Trade Date)
1996: None
1995: None
1994: 2,000,000(3/29); 1,000,000(4/7); 1,000,000(4/8); 1,150,000(4/13)
ADT 9.25% GUARANTEED SENIOR SUBORDINATED NOTES
Notes Purchased (Trade Date)--Par Amount
1996: None
1995: None
1994: 2,000,000(4/13); 463,000(5/19); 92,000(5/19); 125,000(5/19);
265,000(5/19); 567,000(5/19); 93,000(5/19); 395,000(5/19); 650,000(6/21)
Notes Sold (Trade Date)
1996: None
1995: None
1994: 1,000,000(4/13); 150,000(4/14); 500,000(5/16); 1,000,000(5/16);
2,000,000(5/19)
LYONS
LYONS Purchased (Trade Date)
1996: None
1995: None
1994: None
LYONs Sold (Trade Date)
1996: None
1995: None
1994: None
9 1/2% AUTOMATED SECURITY CAPITAL FINANCE (JERSEY) CONVERTIBLE CAPITAL BONDS
Convertibles Purchased (Trade Date)
1996: None
1995: None
1994: None
Convertibles Sold (Trade Date)
1996: None
1995: None
1994: None
D-6
SCHEDULE E
ADT BYE-LAWS
BYE-LAW 104. TAKE-OVER OFFERS FOR THE COMPANY.
(1) (A) Where any person is or becomes interested, whether as a result of
transactions over a period of time or not, in shares in the capital
of the Company in circumstances in which he would be obliged to make
or extend an offer or offers to shareholders or holders of other
securities or rights referred to in paragraph (4) below of the
Company under the Rules for the time being of the City Code on Take-
overs and Mergers of the United Kingdom of Great Britain and
Northern Ireland (the "City Code", which expression shall include
any revision or modification thereof) issued by the Panel on Take-
overs and Mergers ("the Panel", which expression shall include any
body which succeeds to the functions of the said Panel) if the
Company was a company incorporated in the United Kingdom of Great
Britain and Northern Ireland to which the City Code applied, the
Directors may serve upon that person a notice requiring him to make
or extend an offer or offers in writing in accordance with the
requirements of the City Code in all respects as if the City Code
did apply to the Company but so that references in the City Code to
the Panel shall be construed, for the purposes of this Bye-Law, as
if they were references to the Board of Directors of the Company.
(B) Where any person has acquired, is in the process of acquiring, or
appears to the Directors likely to acquire an interest in shares in
the capital of the Company in circumstances in which he would be
subject to the Rules Governing Substantial Acquisitions of Shares
(the "SARs", which expression shall include any revision or
modification thereof issued by the Panel, if the Company was a
company incorporated in the United Kingdom of Great Britain and
Northern Ireland to which the SARs applied, the Directors may serve
upon that person a notice requiring him to comply with the provisions
of the SARs in relation to any acquisition made (after the date of
adoption of this paragraph (1)(B)) or proposed to be made by him and
if that person has made (after the date of adoption of this paragraph
(1)(B)) or subsequently makes any acquisition in contravention of the
provisions of the SARs such a notice or a further notice issued by
the Directors may require that person to dispose or to procure the
disposal by any person with whom he has acted in concert of any
interest in shares so acquired within twenty-eight days of the date
of such notice.
(C) If a notice served under paragraph (1)(B) requiring a disposal of
shares is not complied with in accordance with its terms and has not
been withdrawn, the Directors may, so far as they are able, dispose
of the shares to which such notice relates at the best price
reasonably obtainable in all the circumstances in which case they
shall give written notice of such disposal to the person or persons
on whom such notice was served. Except as hereinafter provided such a
disposal shall be completed as soon as reasonably practicable after
the giving of a notice under this paragraph (1)(C) as may in the
opinion of the Directors be consistent with obtaining the best price
reasonably obtainable and in any event within thirty days of expiry
of such notice provided that a disposal under this paragraph (1)(C)
shall be suspended during the period when dealings by the Directors
in the Company's shares are not permitted either by law or by the
regulations of any stock exchange upon which those shares of the
Company which are to be disposed of are listed, but any disposal
under this paragraph which is suspended as aforesaid shall be
completed within thirty days after expiry of the period of such
suspension and provided further that neither the Company nor the
Directors shall be liable to any holder or any person having an
interest in any share or other person for failing to obtain the best
price so long as the Directors act in good faith within the period
specified above.
(D) For the purpose of effecting any disposal under paragraph (1)(C)
above, the Directors may authorise in writing any officer or employee
of the Company to execute any necessary transfer on behalf of any
holder and may issue a new certificate to the purchaser. The net
proceeds of such disposal shall be received by the Company, whose
receipt shall be a good discharge for the purchase money, and shall
be paid (without any interest being payable thereon) to the former
holder upon surrender by him of the certificate in respect of the
shares sold and formerly held by him.
E-1
(E) The provisions of these Bye-Laws relating to the protection of
purchasers of shares sold under a lien or upon forfeiture shall apply
mutatis mutandis to disposals under this Bye-Law.
(2) Any notice served under paragraph (1) above may also require the person
on whom it is served to execute an undertaking under seal in favour of
the Directors (as trustees for all the holders of shares in the capital
of the Company) and in a form satisfactory to the Directors to observe
and perform the rules and requirements of the City Code or the SARs as
the case may be as if the same were applicable to the Company and in the
manner prescribed in paragraph (1) above.
(3) Where any person is interested, whether as a result of a series of
transactions over a period of time or not, in Common Shares which (taken
together with shares held or acquired by persons acting in concert with
him) represent 30 per cent. or more of all the Common Shares for the
time being in issue and the Directors determine that it is not expedient
to serve a notice under paragraph (1)(A) above or if any person upon
whom such a notice is served fails within thirty days to comply with the
same, the Directors may serve upon that person a notice requiring him to
make an offer in writing (the "Offer"), within 30 days of the date of
such notice on the basis set out in the following paragraphs, to the
holders of every class of share capital of the Company (whether voting
or non-voting) to purchase all such shares for cash on terms that
payment in full therefor will be made within 21 days of the Offer
becoming or being declared unconditional in all respects.
(4) Where the Directors serve a notice upon any person in accordance with
paragraph (3) above, they may also include in that notice a requirement
that such person shall make an appropriate offer or proposal in writing
to the holders of every class of securities convertible into, or of
rights to subscribe for, share capital of the Company (whether such share
capital is voting or non-voting). Such appropriate offer or proposal is
referred to in this Bye-Law as a "Convertible Offer". The Convertible
Offer shall be made at the same time as the Offer. The terms of the
Convertible Offer shall be such terms as the Directors, in their absolute
discretion, consider to be fair and reasonable having regard to the terms
of the Offer and the Directors shall notify such terms to the person
specified in paragraph (3) above (the "Offeror"). The Convertible Offer
shall be conditional only upon the Offer becoming or being declared
unconditional in all respects.
(5) In addition to the Offeror, the Directors may require, in their
absolute discretion, each of the principal members of a group of persons
acting in concert with him and who appear to be interested in any shares
in, or convertible securities of, the Company to make the Offer and/or
the Convertible Offer. For the purposes of this Bye-Law, persons shall be
deemed to be acting in concert if, pursuant to an agreement or
understanding (whether formal or informal) they actively co-operate in
acquiring or seeking to acquire shares in, or convertible securities of,
the Company.
(6) Unless the Directors otherwise agree, an offer made under paragraphs
(3), (4) or (5) of this Bye-Law must, in respect of each class of share
capital or convertible securities involved, be in cash or be accompanied
by a cash alternative offer at not less than the highest price paid by
the Offeror or any person acting in concert with it for shares or
convertible securities of that class within the preceding 12 months. If
such price cannot be ascertained by the Directors or if such shares or
convertible securities have been acquired other than for cash pursuant to
a bargain made on any recognised stock exchange or if the Directors
consider that such highest price is, for any reason, inappropriate,
unfair or unreasonable having regard to the size and timing of the
relevant purchases, the relationship (if any) between the seller and
purchaser of such shares or convertible securities or the number of
shares or convertible securities purchased in the preceding 12 months,
the Directors may, in any such case, fix the price at which the Offer,
the Convertible Offer or the cash alternative offer is to be made. The
cash Offer, the cash Convertible Offer or the cash alternative offer
must, in each case, remain open for not less than 14 days after the date
on which the Offer or the Convertible Offer, as the case may be, has
become or is declared to be unconditional as to acceptances.
E-2
(7) Any person who makes or is about to make or who is or can be required
to make an offer under this Bye-Law or who has made such an offer which
has lapsed, shall observe and shall procure that any persons acting in
concert with him shall observe the rules and requirements of the City
Code both in letter and in spirit prior to, during the pursuit of and, if
applicable, after the failure of such an offer.
(8) For the purposes of this Bye-Law, any questions or disputes arising out
of the grant of consent by the Directors, the comparability of offers,
the terms of offers, any question as to whether any person shall be
regarded as acting in concert with another, any question regarding the
interpretation or application of the City Code and the meaning of any
terms or phrases used in this Bye-Law or the City Code shall be
determined by the Directors in their absolute discretion.
E-3
SCHEDULE F
ADT BYE-LAWS
BYE-LAW 46. VOTING RIGHTS.
(1) Subject to any rights or restrictions attached to any class of shares,
at any meeting of the Company, each Member present in person shall be
entitled to one vote on any question to be decided on a show of hands
and each Member present in person or by proxy shall be entitled on a
poll to one vote for each share held by him.
PROVIDED THAT no Member shall be entitled (save as proxy for another
Member) to be present or vote at any meeting, either personally or by
proxy, or to exercise any privilege in relation to meetings of the
Company conferred by membership, or be reckoned in a quorum:--
(A) in respect of any share held by him (whether alone or jointly with
any other person) on which there shall not have been paid all calls
for the time being due and payable, together with interest and
expenses (if any); or
(B) in respect of any shares held by him in relation to which he or any
person appearing to be interested in such shares has been duly served
with a notice under paragraph (2) of this Bye-Law which:
(i) requires him or such other person to give information to the
Company in accordance with such paragraph; and
(ii) contains a statement to the effect that upon failure to supply
such information before the expiry of a period specified in
such notice (being such reasonable period as the Directors
shall determine from the date of service of such notice) the
registered holder of such shares shall not be entitled to vote
or otherwise exercise the rights referred to in this Bye-Law
and the person on whom such notice was served fails to supply
such information within the period so specified.
Provided that:--
(a) the Company shall be entitled to serve a notice under paragraph
(2) of this Bye-Law which fulfills sub-sub-paragraphs (i) and
(ii) above on a person who is not the registered holder of
shares in the Company only if the registered holder of the
shares in question has previously been, or is simultaneously
with the service of such a notice, served by the Company with a
notice under paragraph (2) of this Bye-Law; and
(b) the disqualification provisions of this sub-paragraph (B) shall
take effect only upon the service on the registered holder of
the shares in question of a notice to the effect that he has
thereby become subject to the said disqualification for so long
as the information requested pursuant to this sub-paragraph (B)
has not been supplied to the Company and for a period of ninety
days thereafter; and
(c) for the purpose of this sub-paragraph (B) a person shall be
treated as appearing to be interested in any shares if (after
taking into account any information supplied in response to any
notice under paragraph (2) of this Bye-Law and any other
information) the Company knows or has reasonable cause to
believe that the person in question is or may be interested in
the shares.
(C) in respect of any shares held by him in relation to which he or any
person appearing to be interested in such shares has been duly served
with a notice under Bye-Law 104 which:--
(i) requires him or such other person to make an offer in
accordance with, or otherwise comply with the terms of, such
Bye-Law; and
F-1
(ii) contains a statement to the effect that upon failure to make
such an offer before the expiry of a period specified in such
notice (being not less than twenty-eight days from the date of
service of such notice) or, having made such an offer or
acquired such shares in contravention of a notice served under
that Bye-Law, otherwise fails to comply with the provisions of
Bye-Law 104 the registered holder of such shares shall not be
entitled to vote or otherwise exercise the rights referred to
in this Bye-Law and the person on whom such notice was served
fails to make such an offer within the period so specified or
fails to remedy such non-compliance.
Provided that:--
(a) the Company shall be entitled to serve a notice under paragraph
(2) of this Bye-Law which fulfils sub-sub-paragraphs (i) and
(ii) above on a person who is not the registered holder of
shares in the Company only if the registered holder of the
shares in question has previously been, or is, simultaneously
with the service of such a notice, served by the Company with a
notice under Bye-Law 104; and
(b) the disqualification provisions of this sub-paragraph (C) shall
take effect only upon the service on the registered holder of
the shares in question of a notice to the effect that he has
thereby become subject to the said disqualification and shall
subsist until an offer is made in accordance with Bye-Law 104
and such offer becomes or is declared unconditional in all
respects in accordance with its terms.
(D) in respect of any shares in relation to which he and any person
specified in paragraph (3) of this Bye-Law has been duly served with
a notice under paragraph (3) which remains in effect.
(2) (A) The Company may by notice in writing require any person whom the
Company knows or has reasonable cause to believe to be interested in
shares in the Company to indicate whether or not it is the case and,
where that person holds any interest in any such shares, to give such
further information as may be required in accordance with sub-
paragraph (B) below.
(B) Any such notice may require the person to whom it is addressed to
give particulars of his own present interests in shares in the
Company.
(C)
The particulars referred to above include particulars of the identity
of persons interested in the shares in question and of whether
persons interested in the same shares are parties to any agreement or
arrangement relating to the exercise of any of the rights conferred
by the holding of the shares.
(D)
A notice under this Bye-Law shall require any information given in
response to the notice to be given in writing within such reasonable
time as the Directors may determine and is specified in the notice.
(E)
For the purposes of this Bye-Law, a person who is interested in a
right to subscribe for or convert into shares in the Company shall be
deemed to be interested in shares in the Company and references to
interests in shares shall include any interest whatsoever in such
shares including, without limitation, a right to control directly or
indirectly the exercise of any right conferred by the holding of
shares alone or in conjunction with a person deemed to be acting in
concert for the purposes of Bye-Law 104 and the interest of any
person shall be deemed to include the interest of any other person
deemed to be acting in concert as aforesaid.
(F)
A notice which has taken effect under this Bye-Law shall remain in
effect in accordance with its terms following a transfer of the
shares to which it relates unless and until the Directors determine
otherwise and notify the registered holder accordingly.
(G)
The right to receive payments of income or capital which become due
or payable in respect of any share during a period of
disqualification applicable to such share under this Bye-Law shall be
suspended during such period of disqualification without any
liability of the Company to the
F-2
Member for late payment or non-payment and the Company may retain
such sums for its own use and benefit during such period of
suspension and the holders of such shares may, in the discretion of
the Directors, be excluded from participation in any further issue of
shares by reference to an existing holding of shares at a point in
time during such period of suspension. No trust shall be created in
respect of any such debt, no interest shall be payable in respect of
the same and the Company shall not be required to account for any
money earned on such amount, which may be employed in the business of
the Company or invested in such investments as the Directors may from
time to time think fit.
(3) (A) Where any person whether alone or in circumstances where for the
purposes of Bye-Law 104 he is acting in concert with other persons
acquires or has acquired interests in shares which (including the
interests of persons with whom he is acting in concert as aforesaid)
amount to three per cent. or more of the issued share capital of any
class of the Company he shall within two days following the date on
which he became aware (or ought reasonably to have become aware) of
the acquisition of such an interest notify the Company of the
existence of such interest and shall in making such notification to
the Company also supply the particulars referred to in sub-paragraphs
(2)(B) and (2)(C) above and so long as his interest as aforesaid
amounts to three per cent. or more of the issued share capital of any
class of the Company he shall notify the Company of any change in his
interests (including the interests of persons with whom he is acting
in concert as aforesaid) amounting to one per cent. or more of the
issued share capital of any class of the Company within two days
following the date on which he became aware (or ought reasonably to
have become aware) of such change.
(B)
If any person has failed to make a notification in accordance with
sub-paragraph (3)(A) above (notwithstanding that such notification
has been made after the said period of two days) the Directors may
serve a notice on such person stating that the registered holder of
the shares in which that person is interested shall not be entitled
to vote or otherwise exercise the rights referred to in this Bye-Law
in respect of any shares or a number of shares specified in the
notice held by that registered holder during the one hundred and
eighty days following the service of such notice provided that the
registered holder of such shares has previously been, or is
simultaneously with the service of such a notice, served with a
notice under this sub-paragraph.
(C)
If the Directors resolve that they have reasonable cause to believe
that a person is or may be interested in shares of the Company or
that any such shares are or may be shares in which any person is
interested and that they have made reasonable enquiries to establish
whether a person is so interested, or whether they are such shares,
as the case may be, such person shall for the purposes of this Bye-
Law be deemed to be interested in shares or, as the case may be, such
shares shall be deemed to be shares in which such person is
interested, from the date of such resolution until any such time as
the Directors resolve otherwise.
(D)
Any belief, resolution or decision of the Directors which is held or
made in pursuance or purported pursuance of any of the provisions of
this Bye-Law shall be conclusive, final and binding on all persons
concerned, and the validity of any act or thing which is done or
caused to be done by the Directors in pursuance or purported
pursuance of any of such provisions shall not be capable of being
impeached by anyone on the ground that there was not any basis or
reasonable basis on which the Directors could have arrived at any
such belief or made any such resolution or decision, or on the ground
that any conclusion of fact on which the Directors relied or might
have relied for the purposes of arriving at any such belief or making
any such resolution or decision was incorrect, or on any other ground
whatsoever.
(E)
In calculating the number of days allowed for any notification to be
made under this Bye-Law 46(3), any day which is a Saturday or Sunday
shall be disregarded.
F-3
SCHEDULE G
THE COMPANIES ACT
SECTION 106. SHAREHOLDER APPROVAL
SHAREHOLDER APPROVAL
(1) The directors of each amalgamating company shall submit the amalgamation
for approval to a meeting of the holders of shares of the amalgamating company
of which they are directors and, subject to subsection (4), to the holders of
each class of such shares.
(2) A notice of a meeting of shareholders complying with section 75 shall be
sent in accordance with that section to each shareholder of each amalgamating
company, and shall--
(a) include or be accompanied by a copy or summary of the amalgamation
agreement; and
(b) subject to subsection 2A, state--
(i) the fair value of the shares as determined by each amalgamating
company; and
(ii) that a dissenting shareholder is entitled to be paid the fair
value of his shares.
(2A) Notwithstanding subsection 2(b)(ii), failure to state the matter
referred to in that subsection does not invalidate an amalgamation.
(3) Each share of an amalgamating company carries the right to vote in
respect of an amalgamation whether or not it otherwise carries the right to
vote.
(4) The holders of shares of a class of shares of an amalgamating company
are entitled to vote separately as a class in respect of an amalgamation if
the amalgamation agreement contains a provision which would constitute a
variation of the rights attaching to any such class of shares for the purposes
of section 47.
(4A) The provisions of the bye-laws of the company relating to the holding
of general meetings shall apply to general meetings and class meetings
required by this section provided that, unless the bye-laws otherwise provide,
the resolution of the shareholders or class must be approved by a majority
vote of three-fourths of those voting at such meeting and the quorum necessary
for such meeting shall be two persons at least holding or representing by
proxy more than one-third of the issued shares of the company or the class, as
the case may be, and that any holder of shares present in person or by proxy
may demand a poll.
(5) An amalgamation agreement shall be deemed to have been adopted when it
has been approved by the shareholders as provided in this section.
(6) Any shareholder who did not vote in favour of the amalgamation and who
is not satisfied that he has been offered fair value for his shares may within
one month of the giving of the notice referred to in subsection (2) apply to
the Court to appraise the fair value of his shares.
(6A) Subject to subsection (6B), within one month of the Court appraising
the fair value of any shares under subsection (6) the company shall be
entitled either--
(a) to pay to the dissenting shareholder an amount equal to the value of
his shares as appraised by the Court; or
(b) to terminate the amalgamation in accordance with subsection (7).
(6B) Where the Court has appraised any shares under subsection (6) and the
amalgamation has proceeded prior to the appraisal then, within one month of
the Court appraising the value of the shares, if the amount paid to the
dissenting shareholder for his shares is less than that appraised by the Court
the amalgamated company shall pay to such shareholder the difference between
the amount paid to him and the value appraised by the Court.
(6C) No appeal shall lie from an appraisal by the Court under this section.
(6D) The costs of any application to the Court under this section shall be
in the discretion of the Court.
(7) An amalgamation agreement may provide that at any time before the issue
of a certificate of amalgamation the agreement may be terminated by the
directors of an amalgamating company, notwithstanding approval of the
agreement by the shareholders of all or any of the amalgamating companies.
G-1
[Front of Proxy Card]
PROXY SOLICITED BY WESTERN RESOURCES, INC.
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
ADT LIMITED
The undersigned, a holder of record of common shares, par value $0.10 per
share (the "Shares"), of ADT Limited, a company incorporated under the laws of
Bermuda ("ADT"), hereby appoints John K. Rosenberg, Richard D. Terrill and Neil
T. Anderson, or any of them, the proxy or proxies of the undersigned, each with
full power of substitution, to attend the Special Meeting of ADT shareholders
(and any adjournments, postponements, continuations or reschedulings thereof),
at which holders of Shares will be voting on, among other things, approval and
adoption of the Western Resources Proposals to: (i) remove all of the present
members of the Board of Directors of ADT (the "ADT Board") and any person or
persons elected or designated by any of such directors to fill any vacancy or
newly created directorship, (ii) reduce the number of seats on the ADT Board to
two, and (iii) elect Steven L. Kitchen and Steven A. Millstein (the "Western
Resources Nominees") as the directors of ADT (or, if either Western Resources
Nominee is unable to serve as a director of ADT due to death, disability or
otherwise, any other person designated as a Western Resources Nominee by Western
Resources), and to vote as specified in this proxy all the Shares which the
undersigned would otherwise be entitled to vote if personally present. The
undersigned hereby revokes any previous proxies with respect to the matters
covered in this Proxy.
THE BOARD OF DIRECTORS OF WESTERN RESOURCES, INC. RECOMMENDS A VOTE FOR
EACH OF THE WESTERN RESOURCES PROPOSALS. IF RETURNED CARDS ARE SIGNED BUT NOT
- ----
MARKED, THE UNDERSIGNED WILL BE DEEMED TO HAVE VOTED FOR EACH OF THE WESTERN
---
RESOURCES PROPOSALS AND TO HAVE ABSTAINED ON ALL OTHER MATTERS.
[Reverse of Proxy Card]
THE BOARD OF DIRECTORS OF WESTERN RESOURCES, INC. RECOMMENDS A VOTE FOR EACH
OF THE WESTERN RESOURCES PROPOSALS.
1. APPROVAL OF PROPOSAL TO REMOVE
PRESENT MEMBERS OF ADT BOARD. [_] FOR [_] AGAINST [_] ABSTAIN
2. APPROVAL OF PROPOSAL TO REDUCE
NUMBER OF SEATS ON ADT BOARD TO TWO. [_] FOR [_] AGAINST [_] ABSTAIN
3. ELECTION OF DIRECTORS: STEVEN L.
KITCHEN AND STEVEN A. MILLSTEIN.
[_] FOR all Western Resources [_] WITHHOLD [_] ABSTAIN
Nominees (except as marked AUTHORITY to vote
to the contrary below) for all nominees
WITHHELD for the following nominee(s) only: write name(s):
-------------------------------------------------
4. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENTS,
POSTPONEMENTS, CONTINUATIONS OR
RESCHEDULINGS HEREOF.
Date: , 1997
..............................
----------------------------------------
Signature (Title, if any)
----------------------------------------
Signature if held jointly
Please sign your name below exactly as
it appears hereon. When Shares are held
of record by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such. If a corporation, please sign in
full corporate name by president or
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE, PLEASE CONTACT [MACKENZIE
PARTNERS, INC.] AT 1-800-[322-2885].
