OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AND CLASS B COMMON STOCK
OF
ALYSIS TECHNOLOGIES, INC.
AT
$1.39 NET PER SHARE
BY
MAUI ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
PITNEY ▇▇▇▇▇ INC.
--------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, APRIL 25, 2001, UNLESS THE OFFER IS EXTENDED.
--------------------------------------------------------------------------------
THE OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER,
DATED MARCH 20, 2001 (THE "MERGER AGREEMENT"), BY AND AMONG PITNEY ▇▇▇▇▇ INC.
("PARENT"), MAUI ACQUISITION CORP. (THE "PURCHASER") AND ALYSIS
TECHNOLOGIES, INC. (THE "COMPANY"). THE BOARD OF DIRECTORS OF THE COMPANY HAS
APPROVED (BY A UNANIMOUS VOTE OF THOSE DIRECTORS PRESENT) THE MERGER AGREEMENT,
THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN), DETERMINED THAT THE OFFER AND
THE MERGER ARE ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS OF THE
STOCKHOLDERS OF THE COMPANY AND RECOMMENDS (BY A UNANIMOUS VOTE OF THOSE
DIRECTORS PRESENT) THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS BEING MADE FOR ALL OUTSTANDING SHARES OF COMMON STOCK, PAR
VALUE $0.01 PER SHARE (THE "COMMON SHARES"), AND CLASS B COMMON STOCK, PAR VALUE
$0.01 PER SHARE (THE "CLASS B SHARES" AND TOGETHER WITH THE COMMON SHARES, THE
"SHARES"), OF THE COMPANY AND IS CONDITIONED UPON, AMONG OTHER THINGS, THERE
BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER THAT NUMBER OF COMMON SHARES WHICH, WHEN ADDED TO ANY COMMON SHARES
BENEFICIALLY OWNED BY THE PURCHASER OR PARENT, REPRESENTS AT LEAST A MAJORITY OF
THE TOTAL NUMBER OF COMMON SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE
DATE OF PURCHASE. SEE SECTION 14 OF THIS OFFER TO PURCHASE.
--------------------------
IMPORTANT
If you wish to tender all or any portion of your Shares, you should either:
(1) complete and sign the Letter of Transmittal (or a facsimile thereof) in
accordance with the instructions in the Letter of Transmittal, have your
signature guaranteed if required by Instruction 1 to the Letter of Transmittal,
mail or deliver the Letter of Transmittal (or such facsimile) and any other
required documents to the Depositary (as defined herein) and either (i) deliver
the certificates for such Shares to the Depositary along with the Letter of
Transmittal (or facsimile) or (ii) deliver such Shares pursuant to the procedure
for book-entry transfer as set forth in Section 2, or
(2) request your broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for you.
If you have Shares registered in the name of a banker, dealer, broker, trust
company or other nominee, you must contact it if you desire to tender your
Shares.
If you wish to tender Shares and your certificates for Shares are not
immediately available or the procedure for book-entry transfer cannot be
completed on a timely basis, or time will not permit all required documents to
reach the Depositary prior to the Expiration Date (as defined herein), your
tender may be effected by following the procedure for guaranteed delivery set
forth in Section 2.
Questions and requests for assistance may be directed to MacKenzie Partners,
the Information Agent, at its address and telephone number set forth on the back
cover of this Offer to Purchase. Additional copies of this Offer to Purchase,
the Letter of Transmittal, the Notice of Guaranteed Delivery and other related
materials may be obtained from the Information Agent.
March 29, 2001
TABLE OF CONTENTS
PAGE
--------
SUMMARY TERM SHEET.......................................... i
SECTION 1. TERMS OF THE OFFER.......................................... 2
SECTION 2. PROCEDURES FOR TENDERING SHARES............................. 5
SECTION 3. WITHDRAWAL RIGHTS........................................... 8
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT.......................... 9
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................... 10
SECTION 6. PRICE RANGE OF COMMON SHARES; DIVIDENDS ON COMMON SHARES.... 11
SECTION 7. POSSIBLE EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES;
EXCHANGE ACT REGISTRATION................................. 12
SECTION 8. CERTAIN INFORMATION CONCERNING THE COMPANY.................. 12
SECTION 9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER..... 15
SECTION 10. SOURCE AND AMOUNT OF FUNDS.................................. 16
SECTION 11. BACKGROUND OF THE OFFER; MERGER AGREEMENT AND RELATED
AGREEMENTS................................................ 17
SECTION 12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY................. 30
SECTION 13. DIVIDENDS AND DISTRIBUTIONS................................. 35
SECTION 14. CERTAIN CONDITIONS OF THE OFFER............................. 35
SECTION 15. CERTAIN LEGAL MATTERS....................................... 37
SECTION 16. FEES AND EXPENSES........................................... 38
SECTION 17. MISCELLANEOUS............................................... 38
SCHEDULE I.......................................................................... 40
▇▇▇▇▇ A............................................................................. A-1
SUMMARY TERM SHEET
Maui Acquisition Corp., which is referred to in this offer to purchase as
the "Purchaser," "we" or "us" is offering to purchase all of the outstanding
shares of common stock and class B common stock of Alysis Technologies, Inc.,
which is referred to in this offer to purchase as the "Company" or "Alysis," for
$1.39 per share in cash. The following are some of the questions you, as a
stockholder of Alysis Technologies, Inc., may have and answers to those
questions. We urge you to read the remainder of this offer to purchase and the
letter of transmittal carefully because the information in this summary is not
complete and additional important information is contained in the remainder of
this offer to purchase and the letter of transmittal.
Q. WHO IS OFFERING TO BUY MY SHARES?
A. We are called Maui Acquisition Corp. We are a Delaware corporation formed for
the purpose of making this tender offer. We are a wholly owned subsidiary of
Pitney ▇▇▇▇▇ Inc., a Delaware corporation, which is referred to in this
offer to purchase as "Parent" or "Pitney ▇▇▇▇▇." See "Section 9--Certain
Information Concerning Parent and the Purchaser."
Q. WHAT SHARES ARE BEING SOUGHT IN THE OFFER?
A. We are offering to purchase all of the outstanding shares of common stock and
class B common stock of Alysis Technologies, Inc. See "Section 1--Terms of
the Offer."
Q. HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
A. We are offering to pay $1.39 per share of common stock or class B common
stock, net to you, in cash and without interest thereon. See
"Section 1--Terms of the Offer."
Q. DO I HAVE TO PAY ANY BROKERAGE OR SIMILAR FEES TO TENDER?
A. If you are a record owner of your shares and you tender shares in the offer,
you will not have to pay any brokerage or similar fees. However, if you own
your shares through a broker or other nominee and your broker tenders on
your behalf, your broker may charge you a fee for doing so. You should
consult your broker or nominee to determine whether any charges will apply.
Q. DO YOU HAVE THE FINANCIAL RESOURCES TO PAY FOR THE SHARES?
A. We will need approximately $19 million to purchase Alysis' shares of common
stock and class B common stock. Pitney ▇▇▇▇▇ will provide us with sufficient
funds to complete the offer from Pitney Bowes' own resources. The offer is
not conditioned upon any financing arrangements. See "Section 10--Source and
Amount of Funds" and "Section 14--Certain Conditions of the Offer."
Q. IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
A. We do not think our financial condition is relevant to your decision whether
to tender shares and accept the offer because:
- the offer is being made for all outstanding shares of common stock and all
outstanding shares of class B common stock, solely for cash,
- the offer is not subject to any financing condition, and
- if we consummate the offer, we will acquire all remaining shares for the
same cash price in the merger.
Q. HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
A. You will have at least until 12:00 midnight, New York City time, on
Wednesday, April 25, 2001, to decide whether to tender your shares in the
offer. See "Section 1--Terms of the Offer" and "Section 2--Procedures for
Tendering Shares."
i
Q. CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
A. Yes. We agreed with Alysis that we may extend the offer if at the time the
offer is scheduled to expire (including at the end of an earlier extension)
any of the offer conditions is not satisfied (or waived by us) or if we are
required to extend the offer by the rules of the Securities and Exchange
Commission. See "Section 1--Terms of the Offer."
We may also elect to provide a "subsequent offering period," which is an
additional period of time beginning after we have purchased shares tendered
during the offer, during which stockholders may tender their shares and
receive the offer consideration. See "Section 1--"Terms of the Offer."
Q. HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
A. If we extend the offer, we will inform Wilmington Trust Company (which is the
depositary for the offer) of that fact and will make a public announcement
of the extension, by not later than 9:00 a.m., New York City time, on the
date after the day on which the offer was scheduled to expire.
Q. WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
A. We are not obligated to purchase any tendered shares unless the number of
shares tendered and not properly withdrawn prior to the expiration of the
offer, when added to any shares then beneficially owned by Pitney Bowes or
us, equals at least a majority of the shares of common stock of Alysis
outstanding on a fully diluted basis (including options with an exercise
price lower than the offer price) at the time of expiration of the offer.
The offer is also subject to a number of other conditions. See
"Section 14--Certain Conditions of the Offer."
Q. HOW DO I TENDER MY SHARES?
A. To tender shares, you must deliver the certificates representing your shares,
together with a completed letter of transmittal and any other documents
required, to Wilmington Trust Company, the depositary for the offer, not
later than the time the offer expires.
If your shares are held in street name, the shares can only be tendered by
your nominee through Wilmington Trust Company.
If you cannot deliver something that is required to be delivered to the
depositary prior to the expiration of the offer, you may get a little extra
time to do so by having a broker, a bank or other fiduciary, which is a
member of Securities Transfer Agents Medallion Program or other eligible
institution, guarantee that the missing items will be received by the
depositary within three Nasdaq Stock Market trading days. However, the
depositary must receive the missing items within that three trading day
period. See "Section 2--Procedure for Tendering Shares."
Q. HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
A. To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. You can withdraw shares at any
time until the offer has expired and, if we have not agreed to accept your
shares for payment by May 28, 2001, you can withdraw them at any time after
such time until we accept shares for payment. If we decide to provide a
subsequent offering period, we will accept shares tendered during that
period immediately and thus you will not be able to withdraw shares tendered
in the offering during any subsequent offering period. See
"Section 1--Terms of the Offer" and "Section 3--Withdrawal Rights."
Q. WHAT DOES THE ALYSIS BOARD OF DIRECTORS THINK OF THE OFFER?
A. We are making the offer pursuant to a merger agreement with Alysis. The board
of directors of Alysis approved (by a
ii
unanimous vote of those directors present) the merger agreement, our tender
offer and the merger with us. The board of directors of Alysis has
determined that the offer and the merger are advisable and fair to, and in
the best interests of, the stockholders of Alysis and it (by a unanimous
vote of those directors present) recommends that the stockholders accept the
offer and tender their shares pursuant to the offer. See
"Section 11--Background of the Offer; Merger Agreement and Related
Agreements."
Alysis has prepared a statement containing additional information regarding
the determination and recommendation of its board of directors and such
statement is being sent to the stockholders contemporaneously with this
offer to purchase.
Q. WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT
TENDERED IN THE OFFER?
A. If, following completion of the offer, we own a majority of the shares of
common stock of Alysis outstanding on a fully diluted basis, we will be
merged with Alysis. If that merger takes place, Pitney ▇▇▇▇▇ and its
affiliates will own all of the shares of Alysis and all other holders of
shares of common stock and class B common stock of Alysis will receive the
same price paid in the offer, that is $1.39 per share in cash. See
"Introduction" and "Section 12--Purpose of the Offer; Plans for the
Company."
Q. ARE DISSENTERS' RIGHTS AVAILABLE IN EITHER THE OFFER OR THE PROPOSED
SECOND-STEP MERGER?
A. Dissenters' rights are not available in the offer. If you do not favor the
proposed second-step merger and you comply with applicable procedures in
Delaware law, you will be entitled to dissenters' rights in connection with
the second-step merger. See "Section 11--Background of the Offer; Merger
Agreement and Related Agreements" and "Section 12--Purpose of the Offer;
Plans for the Company--Appraisal Rights."
Q. FOLLOWING THE MERGER, WILL ALYSIS CONTINUE AS A PUBLIC COMPANY?
A. No. If and when the merger takes place, Alysis will no longer be publicly
owned. Even if the merger does not take place, there may be so few remaining
stockholders and publicly held shares that the shares will no longer be
eligible to be traded on the Over-The-Counter Bulletin Board or any other
securities exchange and there may not be an active public trading market
(or, possibly, any public trading market) for the shares. As a result of the
merger, the registration of the shares under the Exchange Act will be
terminated. Consequently, following the merger, Alysis will be relieved of
the duty to file proxy and information statements, and its officers,
directors and more than 10% stockholders will be relieved of the reporting
requirements under, and the "short swing" profit liability provisions of,
Section 16 of the Exchange Act. Alysis will no longer be a public company
and its common stock will no longer be traded on the Over-The-Counter
Bulletin Board.
Q. IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
A. If the proposed second-step merger takes place, stockholders who do not
tender in the offer will receive in the merger the same amount of cash per
share of common stock or shares of class B common stock which they would
have received had they tendered their shares in the offer. Therefore, if the
merger takes place, the only difference to you between tendering shares and
not tendering shares is that you will be paid earlier if you tender your
shares.
However, until the merger is consummated or if the merger were not to take
place for some reason, the number of stockholders of Alysis and the shares
of common stock of Alysis which are still in the hands of the public may be
so small that there will no
iii
longer be an active public trading market (or possibly, any public trading
market) for Alysis' shares of common stock.
Also, Alysis shares of common stock may no longer be eligible to be traded
on the Over-The-Counter Bulletin Board, as Alysis may cease making filings
with the Securities and Exchange Commission or otherwise cease being
required to comply with the Securities and Exchange Commission's rules
relating to publicly held companies. See "Section 7--Possible Effect of the
Offer on the Market for the Common Shares; Exchange Act Registration" and
"Section 12--Purpose of the Offer; Plans for the Company."
Q. WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
A. On March 19, 2001, the last trading day before Pitney Bowes, Alysis and we
announced that we had signed the merger agreement, the last sale price of
Alysis shares of common stock was $0.75 per share. On March 27, 2001, the
most recent practical date prior to the mailing of this offer to purchase,
the closing sale price for Alysis shares of common stock was $1.36 per
share. Please obtain a recent quotation for Alysis shares of common stock in
deciding whether to tender your shares. Alysis shares of class B common
stock are not publicly traded. See "Section 6--Price Range of Common Shares;
Dividends on Common Shares."
Q. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE PROPOSED TRANSACTIONS?
A. The receipt of the offer or the second-step merger in exchange for Alysis
shares of common stock and class B common stock will be a taxable
transaction for U.S. federal income tax purposes and may also be taxable
under applicable state, local or foreign income or other tax laws. You
should consult your tax advisor about the particular effect the proposed
transactions will have on your shares. See "Section 5--Certain Federal
Income Tax Consequences."
Q. WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
A. You can call ▇▇▇▇▇▇▇▇▇ Partners, which is acting as the information agent for
our offer.
MacKenzie Partners
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Call collect:
(▇▇▇) ▇▇▇-▇▇▇▇
Call Toll free:
(▇▇▇) ▇▇▇-▇▇▇▇
iv
To the Holders of Shares of Alysis Technologies, Inc.:
INTRODUCTION
Maui Acquisition Corp., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Pitney ▇▇▇▇▇ Inc., a Delaware corporation ("Parent"),
is offering to purchase all outstanding shares of (1) common stock, par value
$0.01 per share (the "Common Shares"), and (2) class B common stock, par value
$0.01 per share (the "Class B Shares" and together with Common Shares the
"Shares"), of Alysis Technologies, Inc., a Delaware corporation (the "Company"),
at a price of $1.39 per Share, net to the seller in cash, without interest
thereon (the "Offer Price"), on the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal (which,
as amended from time to time, together constitute the "Offer" or the "Offer to
Purchase"). Unless the context indicates otherwise, as used herein, references
to "you" or "Stockholders" shall mean holders of Shares and references to "we"
or "us" shall mean the Purchaser.
If your Shares are registered in your own name and you tender Shares
directly to the Depositary (as defined herein) you will not be obligated to pay
brokerage fees or commissions or, except as set forth in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares pursuant
to the Offer. If you hold Shares through a broker or bank, we urge you to check
with such institution as to whether you will be charged any service fee. If you
fail to complete and sign the Substitute Form W-9 that is included in the Letter
of Transmittal, you may be subject to a required backup federal income tax
withholding of 31% of the gross proceeds payable in the Offer. See Section 2. We
will pay all charges and expenses of Wilmington Trust Company as Depositary (the
"Depositary"), and MacKenzie Partners as Information Agent (the "Information
Agent"), incurred in connection with the Offer. See Section 16.
The Board of Directors of the Company (the "Board of Directors" or the
"Board") has approved (by a unanimous vote of those directors present) the
Merger Agreement (as defined herein), the Offer and the Merger (as defined
herein), determined that the Offer and the Merger are advisable and fair to, and
in the best interests of, the Stockholders and recommends (by a unanimous vote
of those directors present) that the Stockholders accept the Offer and tender
their Shares pursuant to it. The factors considered by the Board in arriving at
its decision to approve the Merger Agreement and to recommend (by a unanimous
vote of those directors present) that the Stockholders accept the Offer and
tender their Shares pursuant to the Offer will be described in a Solicitation/
Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") to be filed
with the Securities and Exchange Commission (the "Commission") by the Company.
First Union Securities, Inc. ("First Union"), has acted as the Company's
financial advisor. The opinion of First Union, dated as of March 20, 2001, that,
as of such date, and based on and subject to the matters described in such
opinion, the $1.39 per Share cash consideration to be received in the Offer and
the Merger by the Stockholders is fair, from a financial point of view, to such
Stockholders, will be set forth in full as an Exhibit to the Schedule 14D-9. You
are urged to, and should, read such opinion carefully in its entirety.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 20, 2001 (the "Merger Agreement"), by and among the Purchaser,
Parent and the Company. The purpose of the Offer is to acquire control of, and
the entire equity interest in, the Company. Following the consummation of the
Offer, upon the terms and subject to the conditions of the Merger Agreement and
the Delaware General Corporation Law (the "DGCL"), we expect to be merged with
and into the Company (the "Merger") with the Company surviving the Merger under
the name "Alysis Technologies, Inc." and continuing its existence as a wholly
owned subsidiary of Parent. As a result of the Merger, we will cease to exist as
a separate corporate entity. See Sections 11 and 12.
Pursuant to the Offer, we are not required to purchase Shares unless, among
other things, there is validly tendered and not properly withdrawn prior to the
expiration of the Offer that number of
1
Common Shares which, when added to the Common Shares beneficially owned by us or
Parent would represent at least a majority of the total number of outstanding
Common Shares on a fully diluted basis (assuming exercise of all options to
purchase Common Shares with an exercise price less than the offer price) on the
date of purchase (the "Minimum Tender Condition").
According to the Merger Agreement, as of March 19, 2001, there were
outstanding 13,589,003 Shares and options having an exercise price of less than
the Offer Price that are convertible into 825,239 Common Shares.
Concurrently with the execution of the Merger Agreement, the Purchaser,
Parent and Warburg, ▇▇▇▇▇▇ Investors L.P., a Delaware limited partnership (the
"Company Stockholder"), entered into a Voting and Tender Agreement (the "Voting
and Tender Agreement") pursuant to which, subject to the terms and conditions of
the Voting and Tender Agreement, such Company Stockholder has agreed to tender
in the Offer, in the aggregate 4,647,212 Common Shares constituting
approximately 41.6% of the issued and outstanding Common Shares and 2,417,112
Class B Shares constituting 100% of the issued and outstanding Class B Shares.
See Section 11. The Class B Shares are non-voting shares of the Company. They
are convertible into Common Shares, so long as their holder owns less than 49%
of the shares entitled to vote in the election of the members of the Board.
Based on the foregoing and assuming no additional Shares (or options,
warrants or rights exercisable for, or securities convertible into, Shares) have
been issued other than as set forth above, if we were to purchase approximately
5,585,946 Common Shares pursuant to the Offer, the Minimum Tender Condition
would be satisfied.
If the Minimum Tender Condition and other conditions to the Offer are
satisfied and the Offer is consummated, we will own a sufficient number of
Common Shares to ensure that the Merger will be approved. Under the DGCL if,
after consummation of the Offer, we own at least 90% of the Common Shares then
outstanding, we will be able to cause the Merger to occur without a vote of the
Stockholders. If, however, after consummation of the Offer, we own less than 90%
of the then outstanding Common Shares, a vote of the Stockholders will be
required under the DGCL to approve the Merger.
Certain other conditions to the Offer are described in Section 14. We
expressly reserve the right in our sole discretion, to waive any one or more of
the conditions to the Offer in accordance with the terms of the Merger
Agreement. See Sections 14 and 15.
We reserve the right, subject to applicable laws, to acquire additional
Shares after expiration or termination of the Offer, through open market
purchases, privately negotiated transactions, a tender offer or exchange offer
or otherwise, upon such terms and at such prices as we may determine, which may
be more or less than the price to be paid per Share in the Offer and could be
for cash or other consideration.
WE RESERVE THE RIGHT TO AMEND OR WAIVE ANY ONE OR MORE OF THE CONDITIONS TO
THIS OFFER, SUBJECT TO THE TERMS OF THE MERGER AGREEMENT AND THE APPLICABLE
RULES AND REGULATIONS OF THE COMMISSION.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
SECTION 1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), we will purchase all Shares validly tendered and not properly
withdrawn prior to the Expiration Date. The term "Expiration Date" means 12:00
midnight, New York City time, on April 25, 2001, unless we, in our sole
discretion and subject to
2
the terms of the Merger Agreement, extend the period of time during which the
Offer (not including any Subsequent Offering Period (as defined herein)) is
open, in which event the term "Expiration Date" will mean the latest time and
date at which the Offer (not including any Subsequent Offering Period), as so
extended, will expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM TENDER CONDITION AND THE SATISFACTION OR WAIVER OF THE OTHER CONDITIONS
SET FORTH IN SECTION 14.
If by the Expiration Date any or all of the conditions to the Offer have not
been satisfied or waived, we reserve the right (but we shall not be obligated),
subject to the applicable rules and regulations of the Commission and subject to
the terms of and the limitations set forth in the Merger Agreement, to
(a) terminate the Offer and not pay for any Shares and return all tendered
Shares to tendering Stockholders, (b) waive or reduce all the unsatisfied
conditions and, subject to any required extension, accept for payment and pay
for all Shares validly tendered prior to the Expiration Date, (c) extend the
Offer and, subject to your right to withdraw Shares until the Expiration Date,
retain the Shares that have been tendered during the period or periods for which
the Offer is extended or (d) amend the Offer.
AMENDMENT OF THE OFFER. In the Merger Agreement, we agreed that we will
not, without the prior written consent of the Company, (a) decrease the price
per Share or change the form of consideration payable in the Offer, (b) reduce
the number of Shares to be purchased in the Offer, (c) impose conditions to the
Offer in addition to those set forth in Section 14, (d) change the conditions of
the Offer or (e) make any other change in the terms or conditions of the Offer
which is adverse to the holders of Shares. However, the Merger Agreement
provides that, without the consent of the Company, we may (i) extend the Offer,
if at the scheduled expiration date of the Offer any of the conditions set forth
in Section 14 have not been satisfied or waived, (ii) extend the Offer for any
period required by any regulation, interpretation or position of the Commission
applicable to the Offer, or (iii) elect to provide one or more Subsequent
Offering Periods for an aggregate period of not more than 20 business days. In
addition, we have agreed that, without the consent of the Company, we may
increase the price per Share payable in the Offer and extend the Offer in
connection with such increase to the extent required by applicable laws.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR
TENDERED SHARES, WHETHER OR NOT WE EXERCISE OUR RIGHT TO EXTEND THE OFFER.
The rights we reserve in the three preceding paragraphs are in addition to
our rights pursuant to Section 14. There can be no assurance that we will
exercise our right to extend the Offer.
EXTENSION OF THE OFFER. Any extension, amendment, delay, waiver or
termination will be followed as promptly as practicable by public announcement.
In the case of an extension, Rule 14e-1(d) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), requires that the announcement be issued
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date, in accordance with the public announcement
requirements of Rule 14d-4(d) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(d) and 14d-6(c) under the Exchange Act, which require
that any material changes be promptly disseminated to holders of Shares), we
will have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow ▇▇▇▇▇ News
Service. As used in this Offer to Purchase, "business day" has the meaning set
forth in Rule 14d-1(g)(3) under the Exchange Act.
Parent and we further agreed that in the event of the failure of one or more
of the conditions to the Offer (other than the Minimum Offer Condition and the
approval by any governmental entity) to be satisfied or waived on any date upon
which the Offer would otherwise expire, we may extend the
3
Offer for up to an additional ten business days or such shorter time during
which such condition is or conditions may be satisfied or waived. However, we
shall not be required to extend the Offer mentioned in the previous sentence if
such condition or conditions could not reasonably be expected to be satisfied
within such ten business day period. Notwithstanding anything to the contrary in
this paragraph, we shall not be required to extend the Offer beyond June 30,
2001.
If we make a material change in the terms of the Offer, the information
concerning the Offer, or waive a material condition of the Offer, we will extend
it to the extent required by Rules 14d-6(c) and 14e-1 under the Exchange Act.
SUBSEQUENT OFFERING PERIOD. Pursuant to Rule 14d-11 under the Exchange Act
and the applicable rules and regulations of the Commission, we may, subject to
certain conditions, provide a subsequent offering period from 3 business days to
20 business days in length following the expiration of the Offer on the
Expiration Date (a "Subsequent Offering Period"). A Subsequent Offering Period
is an additional period of time, following the expiration of the Offer and the
purchase of Shares in the Offer, during which you may tender Shares not tendered
into the Offer. If, among other things, upon the Expiration Date (i) all of the
conditions to Purchaser's obligations to accept for payment, and to pay for, the
Shares are satisfied or waived and (ii) we immediately accept for payment, and
promptly pay for, all Shares validly tendered (and not withdrawn in accordance
with the procedures set forth in Section 3 prior to the Expiration Date), we may
provide a Subsequent Offering Period. Shares tendered during the Subsequent
Offering Period may not be withdrawn. See Section 3. Purchaser will immediately
accept for payment, and promptly pay for, all validly tendered Shares as they
are received during the Subsequent Offering Period. We may elect to provide a
Subsequent Offering Period by giving oral or written notice of such Subsequent
Offering Period to the Depositary. If we decide to provide a Subsequent Offering
Period, we will make an announcement to that effect by issuing a press release
to a national news service on the next business day after the previously
scheduled Expiration Date.
Rule 14d-11 provides that we may provide a Subsequent Offering Period so
long as, among other things, (i) the initial 20 business day period of the Offer
has expired, (ii) we offer the same form and amount of consideration for Shares
in the Subsequent Offering Period as in the initial Offer, (iii) we accept and
promptly pay for all Shares tendered during the initial 20 business day period
of the Offer prior to its expiration, (iv) we announce the results of the Offer,
including the approximate number and percentage of Shares deposited in the
Offer, no later than 9:00 a.m. Eastern time on the next business day after the
Expiration Date and immediately begin the Subsequent Offering Period, (v) the
Offer is for all outstanding Shares and (vi) we immediately purchase Shares as
they are tendered during the Subsequent Offering Period.
If we extend the Offer or if we are delayed in our acceptance for payment of
or payment (whether before or after our acceptance for payment of Shares) for
Shares or we are unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to our rights under the Offer, the Depositary may retain
tendered Shares on our behalf, and such Shares may not be withdrawn except to
the extent tendering Stockholders are entitled to withdrawal rights as described
in Section 3. However, our ability to delay the payment for Shares we have
accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
tendered by or on behalf of holders of securities promptly after the termination
or withdrawal of such bidder's offer.
CONSEQUENCES OF MATERIAL CHANGES IN THE OFFER. If we make a material change
in the terms of the Offer or the information concerning the Offer or if we waive
a material condition of the Offer, we will extend the Offer and disseminate
additional tender offer materials to the extent required by Rules 14d-4(d),
14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which the
Offer must remain open following material changes in the terms of the Offer or
information concerning the Offer, other than a change in price or a change in
the percentage of securities sought,
4
will depend upon the facts and circumstances then existing, including the
relative materiality of the changed terms or information. With respect to a
change in price or a change in the percentage of securities sought, a minimum
period of 10 business days is generally required to allow for adequate
dissemination to Stockholders and investors response.
MAILING OF THE OFFER. The Company has provided us with the Stockholder
lists and security position listings for the purpose of disseminating the Offer
to Stockholders. We will mail this Offer to Purchase, the related Letter of
Transmittal and other relevant materials to record holders of Shares, and will
furnish the same to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
Stockholder lists, or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares. The Schedule 14D-9 will also be included in the
package of materials.
SECTION 2. PROCEDURES FOR TENDERING SHARES
VALID TENDER. For you to validly tender Shares in the Offer, either
(a) you must deliver to the Depositary at one of its addresses set forth on the
back cover page of this Offer to Purchase prior to the Expiration Date, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees, or in the case of a
book-entry transfer, an Agent's Message (as defined below), and any other
required documents, and either (i) certificates for tendered Shares ("Share
Certificates") must be received by the Depositary at one of such addresses or
(ii) such Shares must be delivered pursuant to the procedures for book-entry
transfer set forth below (and a Book-Entry Confirmation (as defined below)
received by the Depositary), in each case prior to the Expiration Date, or
(b) you must comply with the guaranteed delivery procedures set forth below.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Depository Trust Company ("DTC" or the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
Book Entry Transfer Facility's systems may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents, must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering Stockholder must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at the Book-Entry Transfer Facility as described above is
referred to in this Offer to Purchase as a "Book-Entry Confirmation." DELIVERY
OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE
BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that we may
enforce such agreement against such participant.
Participants in DTC may tender their Shares in accordance with DTC's
Automated Tender Offer Program, to the extent it is available to such
participants for the Shares they wish to tender. A Stockholder tendering through
the Automated Tender Offer Program must expressly acknowledge that
5
she/he/it has received and agreed to be bound by the Letter of Transmittal and
that the Letter of Transmittal may be enforced against such Stockholder.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT YOUR ELECTION AND RISK, AND DELIVERY WILL BE CONSIDERED MADE
ONLY WHEN THE DEPOSITARY ACTUALLY RECEIVES THEM. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED IS RECOMMENDED.
IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal (a) if the Letter of Transmittal is signed by the registered holder
(which term, for purposes of this Section, includes any participant in the
Book-Entry Transfer Facility's systems whose name appears on a security position
listing as the owner of the Shares) of Shares tendered therewith and such
registered holder has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal or (b) if such Shares are tendered for the account of a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) that is a participant in the Securities Transfer Agents
Medallion Program, or a bank, broker, dealer, credit union, savings association
or other entity which is an "eligible guarantor institution" as such term is
used in Rule 17A under the Exchange Act (each such institution, an "Eligible
Institution"). In all other cases, all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal.
If Share Certificates are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made, or Share
Certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the Share Certificates
surrendered, the tendered Share Certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered holders appear on the Share Certificates, with the signatures on
the Share Certificates or stock powers guaranteed as described above. See
Instructions 1 and 5 of the Letter of Transmittal.
If Share Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) with all requisite signature guarantees must accompany each
such delivery.
If you hold Shares through brokers or banks, you are urged to consult with
the brokers or banks to determine whether transaction costs may apply if you
tender Shares through the brokers and banks and not directly to the Depositary.
GUARANTEED DELIVERY. If you want to tender Shares pursuant to the Offer and
your Share Certificates are not immediately available or the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, your Shares may still be tendered if all the following conditions are met:
(i) your tender is made by or through an Eligible Institution;
(ii) the Depositary receives, as described below, a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form made
available by us, prior to the Expiration Date; and
(iii) the Depositary receives the Share Certificates representing all
tendered Shares, in proper form for transfer (or a Book-Entry Confirmation with
respect to all such Shares), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and any other required documents within three trading days after the
date of execution of such Notice of Guaranteed Delivery. A "trading day" is any
day on which the Nasdaq Stock Market is open for business.
6
You may deliver the Notice of Guaranteed Delivery by hand to the Depositary
or by telegram, facsimile transmission or mail and you must include a guarantee
by an Eligible Institution in the form set forth in such Notice of Guaranteed
Delivery.
Notwithstanding any other provision of the Offer, we will pay for Shares
only after timely receipt by the Depositary of (a) Share Certificates for (or a
timely Book-Entry Confirmation with respect to) such Shares, (b) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and (c) any other documents required by the Letter of
Transmittal. Accordingly, tendering Stockholders may be paid at different times
depending upon when Share Certificates or Book-Entry Confirmations with respect
to Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
WE PAY INTEREST ON THE PURCHASE PRICE OF THE SHARES, REGARDLESS OF ANY EXTENSION
OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Our acceptance for payment of Shares validly tendered pursuant to the Offer
will constitute a binding agreement between the tendering Stockholder and us
upon the terms and subject to the conditions of the Offer.
APPOINTMENT AS PROXY. By executing a Letter of Transmittal as set forth
above, you are irrevocably appointing our designees as your attorneys-in-fact
and proxies in the manner set forth in the Letter of Transmittal, each with full
power of substitution, to the full extent of your rights with respect to the
Shares that you tender and that we accept for payment and with respect to any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after the date of this Offer to Purchase, March 29, 2001
(the "Applicable Date"). All such proxies will be irrevocable and considered
coupled with an interest in the tendered Shares. This appointment will be
effective when, and only to the extent that we accept such Shares for payment
pursuant to the Offer. Upon such acceptance for payment, all prior powers of
attorney, proxies and consents given by you with respect to such Shares or other
securities or rights will, without further action, be revoked and no subsequent
powers of attorney, proxies, consents or revocations may be given (and, if
given, will not be deemed effective). Our designees will be empowered to
exercise all voting and other rights with respect to the Shares and other
securities or rights in respect of any annual, special, adjourned or postponed
meeting of the Stockholders, actions by written consent in lieu of any such
meeting or otherwise, as they in their sole discretion deem proper. We reserve
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon our acceptance for payment of such Shares, we must be able to
exercise full voting, consent and other rights with respect to such Shares and
other securities or rights, including voting at any meeting of Stockholders.
The foregoing proxies are effective only upon acceptance for payment of
Shares pursuant to the Offer. The Offer does not constitute a solicitation of
proxies, absent a purchase of Shares, for any meeting of the Company's
Stockholders, which will be made only pursuant to separate proxy solicitation
materials complying with the Exchange Act.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by us, in our sole discretion, which determination
will be final and binding on all parties. We reserve the absolute right to
reject any or all tenders determined by us not to be in proper form or the
acceptance for payment of or payment for which may, in the opinion of our
counsel, be unlawful. We also reserve the absolute right to waive any condition
of the Offer or any defect or irregularity in the tender of any Shares of any
particular Stockholder whether or not similar defects or irregularities are
waived in the case of other Stockholders. No tender of Shares will be deemed to
have been validly made until all defects or irregularities relating thereto have
been cured or waived. None of the Purchaser, Parent, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification. Our
7
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and its instructions) will be final and binding on all parties.
BACKUP WITHHOLDING. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, you must, unless an
exemption applies, provide the Depositary with your correct taxpayer
identification number ("TIN") on a Substitute Form W-9 and certify under
penalties of perjury that such TIN is correct and that you are not subject to
backup withholding. If you do not provide your correct TIN or you fail to
provide the certifications described above, the Internal Revenue Service (the
"IRS") may impose a penalty on you and the payment of cash to you pursuant to
the Offer may be subject to backup withholding of 31% of the amount of such
payment. All Stockholders surrendering Shares pursuant to the Offer should
complete and sign the main signature form and the Substitute Form W-9 included
as part of the Letter of Transmittal to provide the information and
certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to us and the
Depositary).
Noncorporate foreign Stockholders should complete and sign the main
signature form and a Certificate of Foreign Status, Form W-8BEN, a copy of which
may be obtained from the Depositary, in order to avoid backup withholding. See
Instruction 10 to the Letter of Transmittal.
SECTION 3. WITHDRAWAL RIGHTS
Except as otherwise described in this Section 3, tenders of Shares made in
the Offer are irrevocable. You may withdraw Shares that you previously tendered
in the Offer at any time prior to the Expiration Date and, unless previously
accepted for payment pursuant to the Offer, such Shares may also be withdrawn at
any time after May 28, 2001.
For your withdrawal to be effective, you must timely deliver to the
Depositary at one of its addresses set forth on the back cover page of this
Offer to Purchase a written, telegraphic or facsimile transmission notice of
withdrawal. This notice must specify the name of the person having tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If Share Certificates have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and, unless such Shares have been tendered
by an Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been delivered pursuant to
the procedure for book-entry transfer as set forth in Section 2, any notice of
withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility, to be credited with the withdrawn Shares and
otherwise comply with the Book-Entry Transfer Facility's procedures.
You may not rescind a withdrawal of Shares, and any Shares that you properly
withdraw will be considered not validly tendered for purposes of the Offer.
However, you may retender withdrawn Shares by again following one of the
procedures described in Section 2 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by us, in our sole discretion, which
determination will be final and binding. None of the Purchaser, Parent, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
8
If we extend the Offer or if we are delayed in our acceptance for payment of
or payment (whether before or after our acceptance for payment of Shares) for
Shares or we are unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to our rights under the Offer, the Depositary may retain
tendered Shares on our behalf, and such Shares may not be withdrawn except to
the extent tendering Stockholders are entitled to withdrawal rights as described
in this Section 3. However, our ability to delay the payment for Shares that we
have accepted for payment is limited by Rule 14e-1(e) under the Exchange Act,
which requires that a bidder pay the consideration offered or return the
securities tendered by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer.
If we provide a Subsequent Offering Period following the Offer, no
withdrawal rights will apply to Shares tendered during such Subsequent Offering
Period or to Shares tendered in the Offer and accepted for payment.
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), we will purchase, by accepting for payment and paying for, all
Shares validly tendered and not withdrawn (as permitted by Section 3) promptly
after the Expiration Date. All questions as to the satisfaction of such terms
and conditions will be determined by us, in our sole discretion, and our
determination will be final and binding on all parties. See Sections 1 and 14.
We expressly reserve the right, in our sole discretion, to delay acceptance for
payment of or payment for Shares in order to comply in whole or in part with any
applicable law. See Section 15. Any such delays will be effected in compliance
with Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to
pay for or return tendered securities promptly after the termination or
withdrawal of such bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) Share
Certificates for (or a timely Book-Entry Confirmation with respect to) such
Shares, (b) a Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and (c) any other documents required by
the Letter of Transmittal.
For purposes of the Offer, we will be considered to have accepted for
payment, and thereby purchased, Shares validly tendered as, if and when we give
written notice to the Depositary of our acceptance for payment such validly
tendered Shares. Payment for Shares accepted for payment pursuant to the Offer
will be made by deposit of the purchase price with the Depositary, which will
act as agent for validly tendering Stockholders for the purpose of receiving
payment from us and transmitting payment to tendering Stockholders.
UNDER NO CIRCUMSTANCES WILL WE PAY INTEREST ON THE PURCHASE PRICE OF THE
SHARES REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
Upon the deposit of all required funds with the Depositary for the purpose
of making payments in full to tendering Stockholders, our obligation to make
such payment shall be satisfied and tendering Stockholders must thereafter look
solely to the Depositary for payment of amounts owed to them by reason of the
acceptance for payment of Shares pursuant to the Offer. We will pay any stock
transfer taxes with respect to the transfer and sale to us pursuant to the
Offer, except as otherwise provided in Instruction 6 to the Letter of
Transmittal, as well as any charges and expenses of the Depositary and the
Information Agent.
If we are delayed in our acceptance for payment of or payment for Shares or
we are unable to accept for payment or pay for Shares pursuant to the Offer for
any reason, then, without prejudice to
9
our rights under the Offer (but subject to compliance with Rule 14e-1(c) under
the Exchange Act), the Depositary may, nevertheless, on our behalf, retain
tendered Shares, and such Shares may not be withdrawn except to the extent
tendering Stockholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 3.
If we do not purchase any tendered Shares pursuant to the Offer for any
reason, we will return Share Certificates for any such unpurchased Shares,
without expense to you (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility pursuant to the procedure set forth in Section 2, such Shares will be
credited to an account maintained at the Book-Entry Transfer Facility), as
promptly as practicable after the expiration, termination or withdrawal of the
Offer.
IF PRIOR TO THE EXPIRATION DATE, WE INCREASE THE PRICE OFFERED TO HOLDERS OF
SHARES IN THE OFFER, WE WILL PAY THE INCREASED PRICE TO ALL HOLDERS OF SHARES
THAT ARE PURCHASED IN THE OFFER, WHETHER OR NOT SUCH SHARES WERE TENDERED PRIOR
TO THE INCREASE IN PRICE.
We reserve the right to transfer or assign, in whole or from time to time in
part, to one or more of Parent's wholly owned subsidiaries, the right to
purchase Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve us of our obligations under the Offer or prejudice
your rights to receive payment for Shares validly tendered and accepted for
payment in the Offer.
If we provide a Subsequent Offering Period following the Offer, we will
immediately accept and promptly pay for all Shares as they are tendered in the
Subsequent Offering Period.
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences of the sale of Shares pursuant to the Offer and the exchange of
Shares for cash pursuant to the Merger. This summary does not purport to be a
description of all tax consequences that may be relevant to you, and assumes an
understanding of tax rules of general application. It does not address special
rules, which may apply to you based on your tax status, individual circumstances
or other factors unrelated to the Offer or the Merger. You are encouraged to
consult your own tax advisors regarding the Offer and the Merger.
Your receipt of cash for Shares in the Offer or the Merger will be a taxable
transaction for federal income tax purposes, and may also be taxable under
applicable state, local, foreign and other tax laws. For federal income tax
purposes, if you sell or exchange your Shares in the Offer or the Merger you
would generally recognize gain or loss equal to the difference between the
amount of cash received and your tax basis for the Shares that you sold or
exchanged. The gain or loss will be a capital gain or loss if the Shares are
held as capital assets by you and will be a long-term capital gain or loss if
your holding period for federal income tax purposes is more than one year at the
time of the sale or exchange. Long-term capital gain of a non-corporate
Stockholder is generally subject to a maximum federal tax rate of 20%. A
Stockholder's ability to use capital losses to offset ordinary income is
limited.
BACKUP WITHHOLDING. Under the federal income tax backup withholding rules,
unless an exemption applies, we will be required to withhold 31% of all payments
to which you are entitled pursuant to the Offer, unless you provide a tax
identification number and certify under penalties of perjury, that the number is
correct. If you are an individual, the tax identification number is your social
security number. If you are not an individual, the tax identification number is
your employer identification number. You should complete and sign the substitute
Form W-9, which will be included with the Letter of Transmittal to be returned
to the Depositary, in order to provide the information and certification
necessary to avoid backup withholding, unless an applicable exception exists and
is
10
proved in a manner satisfactory to the Depositary. Certain Stockholders,
including corporations and some foreign individuals, are not subject to these
backup withholding and reporting requirements. In order for a foreign individual
to qualify as an exempt recipient, however, he or she must submit a Certificate
of Foreign Status on Form W-8BEN attesting to his or her exempt status. Any
amounts withheld will be allowed as a credit against the holder's federal income
tax liability for that year.
THE FOREGOING U.S. FEDERAL INCOME TAX DISCUSSION MAY NOT BE APPLICABLE WITH
RESPECT TO SHARES RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR
OTHERWISE AS COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT
TO SPECIAL TAX TREATMENT UNDER THE INTERNAL REVENUE CODE SUCH AS NON-U.S.
PERSONS, LIFE INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FINANCIAL
INSTITUTIONS, AND MAY NOT APPLY TO A HOLDER OF SHARES IN LIGHT OF INDIVIDUAL
CIRCUMSTANCES. THE DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND IS
BASED UPON LAWS, REGULATIONS, RULINGS AND DECISIONS NOW IN EFFECT ALL OF WHICH
ARE SUBJECT TO CHANGE, POSSIBLY RETROACTIVELY. YOU ARE URGED TO CONSULT YOUR OWN
TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF THE OFFER AND THE MERGER,
INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL, OR FOREIGN INCOME OR OTHER
TAX LAWS.
SECTION 6. PRICE RANGE OF COMMON SHARES; DIVIDENDS ON COMMON SHARES
The Common Shares are listed on the Over-The-Counter Bulletin Board
("OTCBB") under the symbol "ALYS". The following table sets forth the high and
low intra-day sales prices per Common Share as reported in publicly available
sources for the periods indicated. The Company has represented to us that it did
not pay any dividends on the Common Shares or on the Class B Shares during such
periods.
HIGH LOW
-------- --------
1999:
First quarter............................................ $ 1.688 $0.625
Second quarter........................................... $ 4.500 $0.938
Third quarter............................................ $ 2.125 $1.063
Fourth quarter........................................... $10.000 $0.750
2000:
First quarter............................................ $14.938 $4.750
Second quarter........................................... $ 8.875 $2.938
Third quarter............................................ $ 4.125 $2.125
Fourth quarter........................................... $ 2.750 $0.313
2001:
First quarter (through March 27)......................... $ 1.750 $0.500
On March 19, 2001, the last full trading day prior to the announcement of
the terms of the Offer, the closing price for the Common Shares was $0.75 per
Common Share. On March 27, 2001, the most recent practical date prior to the
mailing of this Offer to Purchase, the closing price for the Common Shares was
$1.36 per Common Share. As of March 27, 2001, the approximate number of holders
of record of Common Shares was 55. As of March 27, 2001, there was one holder of
record of Class B Shares. YOU ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR
THE SHARES.
11
SECTION 7. POSSIBLE EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE
ACT REGISTRATION
MARKET FOR THE SHARES. The purchase of Common Shares pursuant to the Offer
will reduce the number of holders of Common Shares and the number of Common
Shares that might otherwise trade publicly and could adversely affect the
liquidity and market value of the remaining Common Shares held by the public.
LISTING ON OTCBB. Depending upon the number of Common Shares purchased
pursuant to the Offer, the Common Shares may no longer meet the requirements for
continued inclusion in the OTCBB. If, as a result of the purchase of Common
Shares pursuant to the Offer, the Common Shares no longer meet the criteria for
continuing inclusion in the OTCBB, the market for the Common Shares could be
adversely affected. According to the OTCBB listing requirements, the Common
Shares would not be eligible for continued listing if the Company ceased to be
current in its filings with the Commission or ceased to be registered under the
Exchange Act.
EXCHANGE ACT REGISTRATION. The Common Shares are currently registered under
the Exchange Act. Registration of the Common Shares under the Exchange Act may
be terminated upon application of the Company to the Commission if the Common
Shares are neither listed on a national securities exchange nor held by 300 or
more holders of record. Termination of registration of the Common Shares under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to its Stockholders and to the Commission and would
make certain provisions of the Exchange Act no longer applicable to the Company,
such as the short-swing profit recovery provisions of Section 16(b) of the
Exchange Act, the requirement of furnishing a proxy statement pursuant to
Section 14(a) of the Exchange Act in connection with Stockholders' meetings and
the related requirement of furnishing an annual report to Stockholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions. Furthermore, the ability of "affiliates" of the Company
and persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act of
1933, as amended (the "Securities Act"), may be impaired or eliminated.
If registration of the Common Shares is not terminated prior to the Merger,
then the Common Shares will be delisted from the OTCBB and the registration of
the Common Shares under the Exchange Act will be terminated following the
consummation of the Merger.
SECTION 8. CERTAIN INFORMATION CONCERNING THE COMPANY
Except as otherwise described in this Offer to Purchase, all of the
information concerning the Company contained herein, including financial
information, has been furnished by the Company or has been taken from or based
upon publicly available information. None of Parent or Purchaser assumes any
responsibility for the accuracy or completeness of this information or for any
failure by the Company to disclose events which may have occurred or may affect
the significance or accuracy of any such information but which are unknown to
Parent or us.
GENERAL. The Company is a Delaware corporation, with its principal
executive offices located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇. The Company's telephone number is (▇▇▇) ▇▇▇-▇▇▇▇.
The Company was incorporated in Delaware on July 20, 1992, and completed its
initial public offering of Shares on November 8, 1996. The Company develops and
delivers WorkOut-Registered Trademark-, a software solution providing electronic
billing and statement presentation services to utilities, telecommunications
companies, financial services and service bureaus.
12
SELECTED FINANCIAL INFORMATION. Set forth below is certain selected
consolidated financial information relating to the Company and its subsidiaries
which has been excerpted or derived from the unaudited financial statements
contained in the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000 (the "Form 10-Q"), and the audited financial statements
contained in the Company's Annual Report on Form 10-K405 for the fiscal year
ended December 31, 1999 (the "Form 10-K"). Such Form 10-Q and Form 10-K are each
incorporated herein by reference. More comprehensive financial information is
included in the Form 10-Q, Form 10-K and other documents filed by the Company
with the Commission. The summary financial information that follows is qualified
in its entirety by reference to such reports and other documents, including the
financial statements and related notes contained therein. Such reports and other
documents may be examined and copies may be obtained from the offices of the
Commission in the manner set forth below under "Available Information."
The financial information for the nine month period ended September 30, 2000
has not been audited and, in the opinion of the management of the Company,
reflects all adjustments (consisting of normal recurring adjustments) which are
necessary for a fair presentation of such information. Results for the
nine-month period ended September 30, 2000, are not necessarily indicative of
results for the full year.
13
ALYSIS TECHNOLOGIES, INC.
SELECTED FINANCIAL INFORMATION
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------ -------------------
1999 1998 1997 2000 1999
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Statements of Operations:
Revenues:
License..................................................... $ 7,623 $ 3,141 $ 7,911 $ 2,434 $ 5,769
Service..................................................... 7,290 5,661 11,347 1,923 5,525
Maintenance................................................. 4,899 4,369 3,223 2,890 3,810
------- -------- ------- -------- -------
Total revenues.............................................. 19,812 13,171 22,481 7,247 15,104
------- -------- ------- -------- -------
Cost of revenues:
License..................................................... 77 231 362 23 47
Service..................................................... 4,334 5,171 4,862 782 3,238
Maintenance................................................. 2,129 2,500 837 1,240 1,710
------- -------- ------- -------- -------
Total cost of revenues...................................... 6,540 7,902 6,061 2,045 4,995
------- -------- ------- -------- -------
Operating Expenses:
Sales and marketing......................................... 4,476 5,234 4,757 4,408 3,297
General and administrative.................................. 7,582 7,850 7,101 8,356 5,845
Product development......................................... 1,874 4,861 4,480 3,057 1,070
------- -------- ------- -------- -------
Total operating expenses.................................... 13,932 17,945 16,338 15,821 10,212
------- -------- ------- -------- -------
Operating income (loss)..................................... (660) (12,676) 82 (10,619) (103)
Other Income (expense):
Interest Expense............................................ -- -- (4) -- --
Interest income and other................................... 349 395 506 3,931 224
------- -------- ------- -------- -------
Income (loss) before income taxes........................... (311) (12,281) 584 (6,688) 121
------- -------- ------- -------- -------
Income taxes................................................ -- -- 23
Net income (loss)........................................... $ (311) $(12,281) $ 561 $ (6,688) $ 121
Preferred stock dividends................................... $ 117 $ -- $ -- $ 210 $ 47
------- -------- ------- -------- -------
Net income (loss) applicable to common stockholders......... $ (428) $(12,281) $ 561 $ (6,898) $ 74
======= ======== ======= ======== =======
Basic net income (loss) per share applicable to common
stockholders.............................................. $ (0.03) $ (1.06) $ 0.05 $ (.52) $ .01
======= ======== ======= ======== =======
Diluted net income (loss) per share applicable to common
stockholders.............................................. $ (0.03) $ (1.06) $ 0.05 $ (.52) $ .01
======= ======== ======= ======== =======
Shares used in computing basic net income (loss) per share
applicable to common stockholders......................... 12,326 11,596 11,164 13,334 12,134
======= ======== ======= ======== =======
Shares used in computing diluted net income (loss) per share
applicable to common stockholders......................... 12,326 11,596 12,017 13,334 13,042
======= ======== ======= ======== =======
YEAR ENDED DECEMBER 31,
------------------------------ NINE MONTHS ENDED
1999 1998 1997 SEPTEMBER 30, 2000
-------- -------- -------- -------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Balance Sheet Data:
Working Capital................................. $ 5,873 $ 3,124 $15,008 $1,312
Total assets.................................... 14,601 10,010 19,288 6,660
Total debt...................................... -- -- -- --
Convertible preferred stock..................... 3,814 -- -- 3,814
Stockholders' equity (net capital deficiency)... 9,014 3,823 15,623 3,728
14
AVAILABLE INFORMATION. The Company is subject to the information and
reporting requirements of the Exchange Act and in accordance therewith is
obligated to file reports and other information with the Commission relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities, any material interests of such persons in transactions
with the Company and other matters is required to be disclosed in proxy
statements distributed to the Company's Stockholders and filed with the
Commission. Such reports, proxy statements and other information should be
available for inspection at the public reference room at the Commission's office
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇
and also should be available for inspection and copying at the following
regional offices of the Commission: ▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and Citicorp Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. Copies may be obtained by mail, upon payment of
the Commission's customary charges, by writing to its principal office at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. Room ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇. Further
information on the operation of the Commission's Public Reference Room in
Washington, D.C. can be obtained by calling the Commission at 1-800-SEC-0330.
The Commission also maintains an Internet worldwide web site that contains
reports, proxy statements and other information about issuers, such as the
Company, who file electronically with the Commission. The address of that site
is ▇▇▇▇://▇▇▇.▇▇▇.▇▇▇.
COMPANY INFORMATION. The information concerning the Company contained in
this Offer to Purchase has been taken from or based upon publicly available
documents on file with the Commission and other publicly available information.
Although none of Parent, the Information Agent or us have any knowledge that any
such information is untrue, none of Parent, the Information Agent or us assume
any responsibility for the accuracy or completeness of such information or for
any failure by the Company to disclose events that may have occurred and may
affect the significance or accuracy of any such information.
SECTION 9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER
Parent is a Delaware corporation which, along with its subsidiaries, is
engaged in (i) mailing and integrated logistics operations focused on the rental
of postage meters and the sale and financing of mailing equipment, (ii) office
solutions, operations including the sale, financing, rental and service of
reprographic and facsimile equipment and the provision of facilities management
services, and (iii) capital services providing lease financing for Parent's
products worldwide. On December 11, 2000, Parent announced that its board of
directors had approved a formal plan to spin off its office solutions business
to stockholders, as an independent, publicly traded company. The transaction is
expected to be completed by the end of the third fiscal quarter in 2001.
We are a newly incorporated Delaware corporation and a wholly owned
subsidiary of Parent. To date, we have not conducted any business other than in
connection with the Offer and the Merger.
Parent's and our principal executive offices are located at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-0700. Parent's and our telephone number is
(▇▇▇) ▇▇▇-▇▇▇▇.
The name, citizenship, business address, business telephone number,
principal occupation or employment, and five-year employment history for each of
the directors and executive officers of Parent and the Purchaser and certain
other information are described in Schedule I hereto. Except as described in
this Offer to Purchase and in Schedule I hereto, none of Parent, the Purchaser
or, to their knowledge, any of the persons listed on Schedule I hereto has
during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to
any judicial or administrative proceeding (except for matters that were
dismissed without sanction or settlement) that resulted in a judgment, decree or
final order enjoining the person from
15
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
AVAILABLE INFORMATION. Parent is subject to the informational requirements
of the Exchange Act and, in accordance therewith, files reports relating to its
business, financial condition and other matters. Information, as of particular
dates, concerning ▇▇▇▇▇▇'s directors and officers, their remuneration, stock
options and other matters, the principal holders of Parent's securities and any
material interest of such persons in transactions with Parent is required to be
disclosed in proxy statements distributed to Parent's stockholders and filed
with the Commission. Such reports, proxy statements and other information should
be available for inspection at the Commission and copies thereof should be
obtainable from the Commission in the same manner as is set forth with respect
to the Company in Section 8 under the heading "Available Information."
INTEREST IN SECURITIES OF THE COMPANY. Except as described in this Offer to
Purchase, none of Parent, us or any other affiliate of Parent nor, to the best
knowledge of Parent or us, any of the persons listed in Schedule I hereto (which
lists the name, citizenship, business address, principal occupation or
employment and five-year employment history for each of the directors and
executive officers of Parent and us), or any associate or majority-owned
subsidiary of such persons (each, a "Purchaser Entity" and collectively, the
"Purchaser Entities"), beneficially owns any equity security of the Company, and
no Purchaser Entity, or, to the best knowledge of Parent, us, or any other
affiliate of Parent, any of the other persons referred to above, or any of the
respective directors, executive officers or subsidiaries of any of the
foregoing, has effected any transaction in any equity security of the Company
during the past 60 days.
Except as set forth in this Offer to Purchase, no Purchaser Entity, or, to
the best knowledge of any Purchaser Entity, any of the persons listed in
Schedule I hereto has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
without limitation, any contract, arrangement, understanding or relationship
concerning, the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies. Except as set
forth in this Offer to Purchase, no Purchaser Entity, or, to the best knowledge
of any Purchaser Entity, any of the persons listed in Schedule I hereto has had
any transactions with the Company, or any of its executive officers, directors
or affiliates that would require reporting under the rules of the Commission.
Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between any Purchaser Entity, or their respective
subsidiaries, or, to the best knowledge of any Purchaser Entity, any of the
persons listed in Schedule I hereto, on the one hand, and the Company or its
executive officers, directors or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors, or a sale or other transfer of a material
amount of assets that would require reporting under the rules of the Commission.
SECTION 10. SOURCE AND AMOUNT OF FUNDS
The Offer is not conditioned upon any financing arrangements. The total
amount of funds we require to purchase all of the Shares pursuant to the Offer,
to consummate the Merger and to pay fees and expenses related to the Offer and
the Merger is estimated to be approximately $26 million. We will obtain all
funds needed for the Offer and the Merger through a capital contribution from
Parent. Parent currently anticipates funding such capital contribution out of
its own resources.
We expressly reserve our right to obtain financing for the transaction
through alternative sources. However, currently, no alternative financing
arrangements or alternative financing plans exist.
16
SECTION 11. BACKGROUND OF THE OFFER; MERGER AGREEMENT AND RELATED AGREEMENTS
BACKGROUND OF THE OFFER
On an ongoing basis, the Board evaluates the Company's strategic
alternatives, including potential business combinations and strategic
investments. In September 2000, the Board retained First Union to assist the
Company's management in this evaluation. The Company's management and First
Union identified and contacted eighty-eight (including Parent) prospective
strategic and financial partners for the Company based on strategic fit and
their determination of which entities would most likely be interested in
engaging in a strategic combination or arrangement with the Company.
Twenty-three of those parties expressed an interest in a potential transaction
and were provided with a limited amount of information concerning the Company
after executing appropriate confidentiality agreements.
On November 1, 2000, Parent and the Company entered into a customary
confidentiality agreement.
In November 2000, Parent provided a preliminary non-binding proposal,
subject to due diligence and several conditions, to acquire the Company. After a
follow-up discussion with First Union, Parent agreed to increase its initial
offer.
On December 20, 2000, First Union discussed the revised proposal from Parent
with the Board. First Union also made a presentation to the Board concerning the
status of discussions with certain other parties who had entered into
confidentiality agreements and received information concerning the Company.
On January 16, 2001, Parent, subsequent to a meeting with First Union and
management on January 4, 2001, increased their offer again.
On January 20, 2001, First Union made a presentation to the Board regarding
the two preliminary offers submitted, including ▇▇▇▇▇▇'s. After evaluation of
the two offers as to which proposal was in the best interests of the Company and
its stockholders, the Board agreed to pursue further discussions with Parent
based on several factors, including ▇▇▇▇▇▇'s knowledge of the Company, the
likelihood of completing the proposed transaction, and the proposed valuation
and consideration offered by Parent.
On January 29, 2001, the Company and ▇▇▇▇▇▇ executed a non-binding letter of
intent and entered into an exclusivity period providing Parent with the
opportunity to perform additional financial and technical due diligence and
negotiate a definitive merger agreement.
On February 2, 2001, First Union provided an update to the Board regarding
the status of Parent's due diligence efforts and the status of negotiations of a
definitive merger agreement.
On February 27, 2001, subsequent to the completion of additional financial
and technical due diligence, Parent submitted a revised cash offer. The Company
rejected the proposed offer.
On March 2, 2001, Parent representatives met with representatives from First
Union and the Company in Stamford, Connecticut, to discuss the terms and
assumptions of the most recently proposed offer.
On March 5, 2001, Parent agreed to increase its offer to $1.39 per Share,
after redemption of the Company's preferred stock.
On March 6, 2001, the Board met telephonically with representatives of the
Company's management, outside counsel, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
Professional Corporation ("WSGR") and First Union, and reviewed and discussed
the proposed transaction. At the meeting, WSGR gave a presentation to the Board
on the terms of the Merger Agreement and the Voting and Tender Agreement, the
structure of the Offer and the Merger and the Board's fiduciary duties. In
addition, representatives from First Union reviewed the financial aspects of the
proposed transaction. The Board directed ▇▇. ▇▇▇▇▇ to continue to work with WSGR
and First Union to resolve any open issues with
17
Parent and the Purchaser and, upon resolution of the open issues, to reconvene
the Board to review the proposed Merger Agreement and reconsider the Offer and
Merger.
During the period from January 29, 2001 through March 19, 2001, Parent, the
Purchaser and the Company Stockholder negotiated the terms of the Voting and
Tender Agreement to provide that the Company Stockholder would, among other
things, (1) tender its Shares in the Offer and (2) vote its Shares to approve
the Merger Agreement and the Merger and against other business combination
transactions involving the Company. The Company Stockholder owns approximately
42% of the Common Shares and 100% of the Class B Shares outstanding as of
March 20, 2001.
During the period between March 6, 2001 and March 19, 2001, the Company and
Parent continued to negotiate the terms of a definitive merger agreement, and
Parent continued its financial and technical due diligence review of the
Company.
On March 19, 2001, the Board met telephonically with representatives of the
Company's management, WSGR and First Union, to reconsider the proposed
transaction. At the meeting, WSGR updated the Board on the terms of the Merger
Agreement and the Voting and Tender Agreement, the structure of the Offer and
the Merger and the Board's fiduciary duties. At this time, the Board received an
opinion from First Union that, as of the date of the meeting, the $1.39 cash per
Share to be received by the holders thereof pursuant to the Offer and the Merger
as contemplated in the Merger Agreement was fair from a financial point of view
to the Company's stockholders. Following additional discussion of the terms of
the proposed acquisition, the Board resolved, among other things:
- that the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, are fair to and in the best interests
of the holders of the Shares;
- to approve and authorize the Merger Agreement and the transactions
contemplated thereby;
- to recommend that the stockholders of the Company accept the Offer and
approve and adopt the Merger Agreement and the Merger; and
- to exempt the Purchaser and Parent from Section 203 of the DGCL in
connection with the Offer, the Merger and the other transactions
contemplated by the Merger Agreement and the Voting and Tender Agreement.
On the morning of March 20, 2001, the Merger Agreement was executed by the
Company, the Purchaser and Parent, and the Voting and Tender Agreement was
executed by the Purchaser, Parent and the Company Stockholder.
In connection with the Merger, ▇▇▇▇▇▇ has reached an agreement in principle
on the terms of definitive employment agreements with certain key employees of
the Company, including ▇▇▇ ▇▇▇▇▇, Executive Vice President and Chief Operating
Officer of the Company, to ensure their continued services immediately after the
Effective Time.
Prior to entering into the Merger Agreement, Parent and the Company or its
affiliates have entered into the following agreements, which were negotiated at
arm's length:
SOFTWARE LICENSE AGREEMENT. At Work Corp., a company acquired by the Company
in September 1999 ("At Work"), and Parent entered into a Software License
Agreement, dated as of August 21, 1998, pursuant to which At Work licensed the
WorkOut software product to Parent and provided product installation services
for such product.
SOFTWARE DISTRIBUTION AGREEMENT. At Work and Parent entered into a Software
Distribution Agreement, dated as of May 11, 1999, pursuant to which Parent was
granted the right to remarket the WorkOut software product to end-users for a
two-year period.
LETTER OF INTENT. The Company and Parent entered into a letter of intent,
dated as of January 10, 2001, pursuant to which the Company agreed to compensate
Parent up to $85,000 for program management and engineering services in support
of the Company's initiative with The British Post.
18
MERGER AGREEMENT AND RELATED AGREEMENTS
The following is a summary of certain provisions of the Merger Agreement,
the Voting and Tender Agreement and the Confidentiality Agreement (as defined
below) entered into in connection with the Merger Agreement. This summary is
qualified in its entirety by reference to the Merger Agreement, the Voting and
Tender Agreement and the Confidentiality Agreement which are incorporated herein
by reference and copies or forms of which have been filed with the Commission as
exhibits to the Tender Offer Statement on Schedule TO to which this Offer to
Purchase is an exhibit (the "Schedule TO"). The Merger Agreement, the Voting and
Tender Agreement and the Confidentiality Agreement may be examined and copies
may be obtained in the manner set forth in Section 8.
THE MERGER AGREEMENT
THE OFFER. The Merger Agreement provides that we will commence the Offer
and that, upon the terms and subject to prior satisfaction or waiver of those
conditions set forth in the Offer as described in Section 14 (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment) (collectively, the "Offer Conditions"), we will accept for payment,
and pay for, all Shares validly tendered pursuant to the Offer and not withdrawn
on or prior to the Expiration Date.
DIRECTORS. Subject to applicable law and to the extent permitted by the
National Association of Securities Dealers, promptly upon the purchase by us
pursuant to the Offer of such number of Shares as represents at least a majority
of the outstanding Common Shares, and from time to time thereafter, we will have
the right to designate such number of directors, rounded up to the next whole
number, to serve on the Board of Directors of the Company (the "Board") as will
give us representation on the Board equal to the product of (i) the number of
directors on the Board (giving effect to the election of any additional
directors pursuant to this provision) and (ii) the percentage that such number
of Common Shares beneficially owned by Parent and/or the Purchaser (including
Shares accepted for payment) so purchased bears to the number of Common Shares
outstanding. However, prior to the completion of the Merger, the Board shall
always have at least two members who are neither officers of Parent, nor
designees, shareholders or affiliates of Parent or Parent's affiliates. The
Company shall also cause individuals designated by us to constitute the same
percentage as is on the entire Board to be on (i) each committee of the Board
and (ii) each board of directors and each committee thereof of each subsidiary
of the Company. The Merger Agreement provides that the Company will, upon our
request, promptly take all actions necessary to cause our designees to be
validly elected or appointed to the Board, including without limitation,
increasing the size of the Board or securing the resignations of such number of
directors as is necessary to provide us with such level of representation, or
both.
THE MERGER. The Merger Agreement provides that, after the completion of the
Offer and the satisfaction or waiver of certain conditions, we will be merged
with and into the Company and the Company will be the surviving corporation (the
"Surviving Corporation") continue its existence under the name of "Alysis
Technologies, Inc." and shall continue its existence as a wholly owned
subsidiary of Parent. As a result of the Merger, our separate corporate
existence will cease.
SPECIAL MEETING OF STOCKHOLDERS. Unless the Merger is consummated in
accordance with Section 253 of the DGCL, the Company acting through its Board
will in accordance with applicable law duly call, give notice of, convene and
hold a special meeting (the "Special Meeting") of its Stockholders as soon as
practicable following the consummation of the Offer for the purpose of approving
the plan of merger (the "Plan of Merger") set forth in the Merger Agreement and
include in the letter to Stockholders, notice of meeting, proxy statement and
form of proxy, or the information statement, as the case may be, that may be
provided to Stockholders of the Company in connection with the Merger, and in
any schedules required to be filed with the Commission in connection therewith
(collectively, the "Proxy Statement"), the recommendation of its Board that
Stockholders of the Company vote in favor of the adoption of such Plan of
Merger. Parent and the Purchaser each
19
agree that, at the Special Meeting, all of the Shares acquired pursuant to the
Offer or otherwise owned or acquired by Parent, the Purchaser or any of their
affiliates will be voted in favor of the Merger.
MERGER WITHOUT A MEETING OF STOCKHOLDERS. The Merger Agreement further
provides that, notwithstanding the foregoing, if the Purchaser or any other
direct or indirect subsidiary of Parent holds at least 90% of the outstanding
shares of each class of capital stock of the Company entitled to vote on the
Merger, they will take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the consummation of the Offer
without a meeting of the Stockholders, in accordance with Section 253 of the
DGCL.
CONVERSION OF SHARES. At the Effective Time, each outstanding Share (other
than (i) Shares owned by the Company, Parent, the Purchaser or by a subsidiary
or affiliate of Parent, the Purchaser or the Company, all of which will be
canceled without any exchange of consideration and (ii) Shares owned by
Stockholders who did not approve the merger and have demanded appraisal rights
in accordance with Section 262 of the DGCL) will, by virtue of the Merger and
without action by the holder thereof, be converted into the right to receive an
amount in cash (subject to withholding taxes) equal to the Offer Price, without
interest (the "Merger Consideration"), upon surrender of the certificate
representing such Share.
CONVERSION OF PREFERRED STOCK. Each share of the Company's series B
preferred stock, par value $0.01 per share (the "Preferred Stock"), issued and
outstanding immediately prior to the Effective Time shall, in accordance with
the Company's Certificate of Designation, Preference and Rights of Series B
Preferred Stock, and by virtue of the Merger, be converted at the Effective Time
into the right to receive $10,000 (plus all accrued, unpaid dividends when, as
and if declared by the Board) which is the liquidation preference, as calculated
as of the Effective Time, without interest, upon surrender of the certificate
representing such shares of Preferred Stock. The Company Stockholder owns all of
the shares of Preferred Stock.
CONVERSION OF EXISTING STOCK OPTIONS. Each option or right to acquire
Shares (the "Existing Stock Options") granted under any stock option or similar
plan of the Company or under any agreement to which the Company or any of its
subsidiaries is a party (other than stock purchase rights under the Company's
Employee Stock Purchase Plan) (the "Stock Option Plans") which is outstanding on
the date that the amendment to Schedule TO reporting the initial acceptance by
the Purchaser of the Shares tendered in the Offer is filed with the Commission
(the "Acceptance Date"), will be converted into and will represent only the
right to receive an amount in cash, without interest, with respect to each Share
subject thereto equal to the excess, if any, of the Merger Consideration over
the per Share exercise or purchase price of such Existing Stock Option. On the
Acceptance Date, each holder of an Existing Stock Option will be entitled to
receive, in full satisfaction of such Existing Stock Option, an amount in cash
without interest in respect thereof equal to the product of (i) the excess, if
any, of the Merger Consideration over the per Share exercise or purchase price
of such Existing Stock Option and (ii) the number of Shares subject to such
Existing Stock Option (such amount being hereinafter referred to as the "Option
Consideration") and each Existing Stock Option will be canceled on the
Acceptance Date. The payment will be reduced by any income or employment tax
withholding required under the Code or any provision of state, local or foreign
tax law. However, such withheld amounts will be treated for all purposes of this
Agreement as having been paid to the holder of such Existing Stock Option. The
Stock Option Plans will terminate as of the Acceptance Date. All administrative
and other rights and authorities granted under any Stock Option Plan and under
the Stock Purchase Plan to the Company, the Board or any Committee or designee
thereof, following the Acceptance Date, will reside with the Surviving
Corporation.
CONVERSION OF EXISTING WARRANTS. Each warrant to acquire Shares (the
"Existing Warrants") granted under any warrant or similar agreement to which the
Company or any of its subsidiaries is a party and which is outstanding on the
Acceptance Date, whether or not then exercisable or vested,
20
shall be converted into and shall represent only the right to receive an amount
in cash, without interest, with respect to each Share subject thereto equal to
the excess, if any, of the Merger Consideration over the per share exercise
price of such Existing Warrant. On the Acceptance Date, each holder of an
Existing Warrant shall be entitled to receive, in full satisfaction of such
Existing Warrant, an amount in cash without interest in respect thereof equal to
the product of (i) the excess, if any, of the Merger Consideration over the per
Share exercise or purchase price of such Existing Warrant and (ii) the number of
Shares subject to such Existing Warrant (such amount being hereinafter referred
to as the "Warrant Consideration") and each Existing Warrant shall be canceled
on the Acceptance Date. Such payment shall be reduced by any income or
employment tax withholding required under the Code or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of such Existing Warrant.
CHARTER AND BYLAWS. The certificate of incorporation and the bylaws of the
Purchaser in effect immediately prior to the Effective Time will be the
certificate of incorporation and bylaws of the Surviving Corporation until
amended in accordance with applicable law. However, all rights to
indemnification now existing in favor of directors and officers of the Company
and its Subsidiaries as provided in their respective charters or bylaws will
survive the Merger and continue in full force and effect for a period of not
less than the statute of limitations applicable to such matters.
DIRECTORS AND OFFICERS. Our directors and officers immediately prior to the
Effective Time will be the directors and officers of the Surviving Corporation
until their respective death, permanent disability, resignation or removal or
until their respective successors are duly elected and qualified all in
accordance with applicable law.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders who have not tendered
their Shares will have certain rights under the DGCL to dissent from the Merger
and demand appraisal of, and to receive payment in cash of the fair value of,
their Shares. Stockholders who perfect such rights by complying with the
procedures set forth in Section 262 of the DGCL ("Section 262") will have the
"fair value" of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) determined by the Delaware Court of
Chancery and will be entitled to receive a cash payment equal to such fair value
for the Surviving Corporation. In addition, such dissenting stockholders would
be entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court is required
to take into account all relevant factors. Accordingly, such determination could
be based upon considerations other than, or in addition to, the market value of
the Shares, including among other things, asset values and earning capacity. The
value of the Shares determined in any appraisal proceeding could be the same as,
or more or less than, the purchase price per Share offered pursuant to the Offer
or proposed to be paid in the Merger.
REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, the Company has
made representations and warranties to Parent and the Purchaser with respect to,
among other matters, its organization and qualification, capitalization,
authority to enter into the Merger Agreement and to consummate the transactions
contemplated therein, consents and approvals required to consummate the Offer
and the Merger, financial statements and public filings, absence of any change
expected to have material adverse effect on the Company, information to be
included in the Schedule 14D-9, the Schedule TO (together with the Letter of
Transmittal and other ancillary documents contained therein, the "Offer
Documents") and the Proxy Statement, brokers, employee benefit matters,
litigation, tax matters, compliance with law, environmental matters,
intellectual property, real property, material contracts, opinion of financial
advisor, vote required by the Company's stockholders to approve the Merger,
absence of anti-takeover plans and inapplicability of state takeover statutes,
insurance, trade relations, warranties and product claims and potential
conflicts of interest. Each of Parent and the
21
Purchaser has made representations and warranties to the Company with respect
to, among other matters, its organization and qualification, authority to enter
into the Merger Agreement and to consummate the transactions contemplated
therein, information to be included in the Offer Documents and Proxy Statement,
consents and approvals, operations of the Purchaser, brokers, litigation and the
availability of the funds necessary to consummate the Offer and the Merger.
COVENANTS. The Merger Agreement obligates the Company and its subsidiaries,
from the date of the Merger Agreement until the earlier of the Effective Time
and the date on which the majority of the Company's directors are designees of
Parent or the Purchaser, or the termination of the Merger Agreement, to conduct
their operations only in the ordinary and usual course of business and
consistent with past practice. The Merger Agreement also contains specific
restrictive covenants as to certain activities of the Company during the period
specified in the preceding sentence. These covenants require the Company to seek
the prior written consent of Parent before taking (or permitting any of its
subsidiaries to take) certain actions such as:
- issuing or selling, granting options or rights to purchase, pledging,
authorizing or proposing the issuance, sale, grant of options, rights to
purchase or pledge of any of its securities,
- redeeming or repurchasing its securities,
- changing its capital structure,
- setting aside, making or paying any dividend or distribution on shares of
its capital stock,
- proposing or adopting amendments to its certificate of incorporation or
bylaws,
- granting stock-related awards or bonuses,
- acquiring or agreeing to acquire any material asset, business, business
organization or division, leasing or managing any assets other than in the
ordinary course of business consistent with past practice,
- selling, leasing, mortgaging, encumbering, subjecting to any lien (other
than liens for taxes not yet due and mechanics liens) or disposing any of
its properties or assets,
- entering into or amending material contracts,
- incurring or guaranteeing indebtedness,
- establishing or amending any benefits plans or arrangements for the
benefit of any current or former director, officer or employee,
- changing any of its accounting policies (unless required by law, GAAP or
the Commission),
- changing its material existing insurance policies (or equivalents
thereto),
- making any material tax election and settling any tax liability,
- paying liabilities other than in the ordinary course of business or
professional fees, waiving or transferring rights of material value
pursuant to the Company's material contracts,
- adopting a plan of liquidation, dissolution or restructuring,
- compromising any material litigation,
- entering into any "related party agreement" as defined in Item 404 of
Regulation S-K,
- effectuating a "plant closing" or "mass layoff" as defined in the Worker
Adjustment and Retraining Notification Act of 1986, as amended,
- entering into or amending any existing agreements or granting compensation
or benefits increases relating to any director, officer, or employee,
- failing to take any action to register or maintain any of its intellectual
property rights, or
- otherwise to take any of the foregoing actions.
22
NO SOLICITATION. In the Merger Agreement, the Company has agreed not to,
and to cause its subsidiaries and the officers, directors, key employees,
representatives (including, without limitation, investment bankers, attorneys
and accountants), agents or affiliates of the Company and its subsidiaries
(collectively, the "Representatives") not to, directly or indirectly:
- solicit, initiate or knowingly encourage or facilitate any inquiries or
the making of the proposal or offer with respect to any offer or proposal,
or any indication of interest in making an offer or proposal, made by a
person or group at any time which is structured to permit such person or
group to acquire beneficial ownership of at least 10% of the assets of the
Company and its subsidiaries taken as a whole, or at least 10% of the
outstanding shares of capital stock of the Company pursuant to a merger,
consolidation or other business combination, sale of shares of capital
stock, sale of assets, tender offer or exchange offer or similar
transaction, including any single or multi-step transaction or series of
related transactions, in each case other than the Offer and the Merger and
any offer or proposal made in the context of a proxy contest with respect
to any of the foregoing (each, an "Acquisition Proposal"); or
- participate in any discussions or negotiations with, or provide any
non-public information to, or afford any access to the properties, books
or records of the Company or any of its subsidiaries, or otherwise take
any other action to assist or facilitate (including granting any waiver or
release under any standstill or similar agreement with respect to any
securities of the Company), any "person" or "group" (as such terms are
used for purposes of Section 13(d)(3) of the Exchange Act) (other than
Parent or Purchaser or any affiliate or associate of Parent or Purchaser)
(each, a "Potential Acquiror") concerning any Acquisition Proposal.
In the event the Company receives any Acquisition Proposal, the Company
shall as promptly as practicable (and in any event no later than one business
day thereafter) notify Parent of such receipt and provide Parent with the
identity of the Potential Acquiror and a copy of such Acquisition Proposal.
Notwithstanding the foregoing, the Company may take any of the actions
referred to in the last bullet point above only with respect to a Potential
Acquiror that has made an unsolicited written bona fide Acquisition Proposal
provided that all of the following conditions are satisfied:
- the Board determines in good faith, (A) after consultation with its
independent financial advisor, that such Acquisition Proposal is
reasonably likely to result in the making of a Superior Proposal (as
defined below) and (B) after consultation with its outside legal counsel,
that such action is consistent with its fiduciary duties pursuant to
applicable law;
- as promptly as reasonably practicable (and in any event no later than one
business day following receipt) the Company notifies Parent of the receipt
of such Acquisition Proposal and/or any request for nonpublic information
relating to the Company or any of its subsidiaries or for access to the
properties, books or records of the Company or any of its subsidiaries by
the Potential Acquiror that has made such Acquisition Proposal and that
the Company intends to engage in negotiations with, or to provide
information to such Potential Acquiror;
- the Company receives from such Potential Acquiror an executed
confidentiality or standstill agreement that is no more favorable to such
person than the Confidentiality Agreement, dated November 1, 2000, between
Parent and the Company (the "Confidentiality Agreement"); and
- the Company furnishes or makes available to Parent the same information
provided to such person (to the extent not previously furnished or made
available).
If the Company or any of its subsidiaries or any of their Representatives
participate in discussions or negotiations with, or provides information to a
Potential Acquiror, the Company will notify Parent within one business day after
any material amendment to the Acquisition Proposal made by such Potential
Acquiror.
23
In this Offer, a "Superior Proposal" shall mean any unsolicited, bona fide
written Acquisition Proposal which the Board determines in its good faith
judgment (after consultation with its outside financial advisors and outside
legal counsel) taking into account applicable legal, financial, regulatory and
other relevant aspects of the Acquisition Proposal, the identity of the person
making the proposal and other relevant considerations, that (i) such Acquisition
Proposal is more favorable from a financial point of view to the Company's
stockholders than the Merger Agreement, (ii) the conditions to the consummation
of such Acquisition Proposal are reasonably capable of being satisfied promptly
or (iii) financing for such transaction, to the extent required, is then
committed or for which the Board after consultation with its outside financial
advisors concludes in good faith is likely to be available.
The Company shall, and shall cause its subsidiaries and their respective
Representatives to, immediately cease and cause to be terminated any existing
solicitation, activity, discussions or negotiations with any person (other than
Parent, Purchaser or any of their respective affiliates or associates) conducted
prior to the date hereof with respect to any Acquisition Proposal.
Unless the Company terminates the Merger Agreement in accordance with its
provisions, the Company shall not (i) withdraw or modify, or propose publicly to
withdraw or modify, in a manner adverse to Parent or Purchaser, the approval or
recommendation of the Offer or the Merger as set forth in the Merger Agreement,
(ii) approve or recommend, or propose publicly to approve or recommend, any
Acquisition Proposal, including, without limitation, for purposes of
Section 203 of the DGCL, or (iii) enter into any letter of intent, agreement in
principle or acquisition agreement related to any Acquisition Proposal.
Nothing contained in the Merger Agreement shall prohibit the Company or its
Board of Directors from taking and disclosing to the Company's stockholders a
position with respect to an Acquisition Proposal by a third party pursuant to
Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or otherwise
communicating with the Company's stockholders to the extent required by law.
DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE. In the Merger
Agreement, Parent and the Purchaser have agreed that all rights to
indemnification existing in favor of the present or former directors, officers
and employees of the Company or any of its subsidiaries as provided in the
Company's certificate of incorporation or bylaws, or the articles of
organization, bylaws or similar documents of any of its subsidiaries as in
effect at the date of the Merger Agreement with respect to matters occurring
prior to the Effective Time will survive the Merger and continue in full force
and effect for a period of not less than the statutes of limitations applicable
to such matters. Parent agreed to maintain in effect for a period of six years
after the Effective Time, in respect of acts or omissions occurring prior to the
Effective Time, policies of directors' and officers' liability insurance and
fiduciary liability insurance and fiduciary insurance. Such policies shall
provide coverage no less favorable than that provided for the individuals who
are covered by the Company's existing policies. However, Parent shall not be
required in order to maintain such policies to pay an annual premium in excess
of 200% of the aggregate annual amounts currently paid by the Company to
maintain its existing policies.
Pursuant to the Merger Agreement, the indemnification and directors' and
officers' insurance covenants described above will survive the consummation of
the Merger and are intended to benefit, and will be enforceable by, any person
or entity entitled to be indemnified hereunder (whether or not parties to the
Merger Agreement).
EMPLOYEE BENEFIT ARRANGEMENTS. The Merger Agreement provides that for a
period of one year following the Effective Time, Parent will cause the Company
to continue to provide the employees of the Surviving Corporation with
compensation and employee benefit plans (other than stock option or other plans
involving the potential issuance of securities of the Company or of the Parent
or any of its affiliates) which in the aggregate are substantially comparable to
those currently provided by the Company to such employees immediately prior to
the Effective Time; provided, however, that (i) employees covered by collective
bargaining agreements need not be provided such benefits and
24
(ii) the Merger Agreement shall not preclude Parent or any of its affiliates
from having the right to terminate the employment of any employee, with or
without cause, or to amend or to terminate in accordance with its terms and
applicable laws any employee benefit plan of Parent established, maintained or
contributed to by Parent or any of its affiliates after the Effective Time.
The Merger Agreement provides that employees of the Company and its
subsidiaries as of the Effective Time shall receive credit for service with the
Company, its subsidiaries and its predecessor companies (including, without
limitation, Tera, Teknekron Controls, Inc., Integrated Automation, Inc. and
▇▇▇▇▇▇ Industrial Systems, Inc.'s Integrated Automation Division) under the
employee benefit plans, programs and policies of Parent, the Surviving
Corporation or their respective subsidiaries in which such employees become
participants. Such past service credit shall be given only for purposes of
eligibility to participate, vesting, vacation entitlement and severance benefits
and only to the same extent that the employee had service credit under a
comparable Employee Benefit Plan of the Company and provided that nothing herein
shall result in the duplication of any benefits. In no event shall service prior
to the Effective Time be credited for purposes of benefit accrual under any
defined benefit pension plan or eligibility for post-retirement medical
benefits.
SEVERANCE ARRANGEMENTS. Pursuant to the Merger Agreement, employees of the
Company who on or for a certain period after the Effective Time incur a
termination of employment will be eligible for a severance payment. Each of
▇▇▇▇▇ ▇. ▇▇▇▇▇, the Company's President, Chief Executive Officer and Chairman of
the Board, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, the Company's Vice President and Chief Financial
Officer, and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Company's Vice President and General
Counsel, will be eligible for a severance payment of one-year base salary in the
event that their employment with the Company is terminated within one year after
the Effective Time. Parent does not currently contemplate continuing the
employment of Messrs. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ or of ▇▇. ▇▇▇▇▇▇▇. All other employees,
including the remaining executive officers of the Company, are eligible,
pursuant to the Merger Agreement, for a severance payment of six-months base
salary in the event their employment is terminated by the Company or Parent
within six months after the Effective Time. For all of the above individuals,
the termination must be involuntary and other than on account of disability,
death, retirement or cause. Any severance payments made pursuant to the Merger
Agreement by Parent will be offset against any severance payments payable or
made by the Company to all employees under any of the Company's existing
severance plans, policies, arrangements or practices. In addition, Parent will
provide such employees, including Messrs. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇,
with outplacement services and will reimburse such employees for the employer's
portion of the annual premium cost for continued coverage under a group medical
plan. Parent's commitment to make the severance payments and to provide the
other benefits described in this paragraph is limited to $2.3 million.
▇▇. ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇, the Company's Executive
Vice President and Chief Operating Officer, also have the following existing
arrangements with the Company with regard to severance and change of control:
▇▇. ▇▇▇▇▇ has entered into an employment agreement with the Company that,
under certain circumstances, allows for a severance payment of up to 12 months'
salary and acceleration of unvested options in the event of a change of control
of the Company.
▇▇. ▇▇▇▇▇▇▇▇ has entered into an employment agreement with the Company that,
under certain circumstances, allows for acceleration of unvested options in the
event of a change in control of the Company.
▇▇. ▇▇▇▇▇▇▇ has entered into option agreements that contain provisions for
acceleration of unvested options in the event of a change of control of the
Company.
▇▇. ▇▇▇▇▇ has entered into an employment agreement with the Company that,
under certain circumstances, allows for a severance payment of up to 12 months'
salary and acceleration of unvested options in the event of a change of control
of the Company.
25
EMPLOYEE RETENTION POOL. The Board has approved the establishment of a pool
of $700,000 in cash for making payments to certain executive officers and
employees either prior to or after the effectiveness of the Merger in connection
with employee retention bonuses. The retention bonuses shall be allocated as
follows: $400,000 to ▇▇. ▇▇▇▇▇, $150,000 to ▇▇. ▇▇▇▇▇▇▇▇ and $150,000 to
▇▇. ▇▇▇▇▇▇▇.
CONDITIONS TO THE CONSUMMATION OF THE MERGER. Pursuant to the Merger
Agreement, the parties' obligations to consummate the Merger are subject to the
satisfaction or waiver, where permissible, before the Effective Time of the
following conditions:
- unless the Merger is consummated as contemplated by Section 253 of the
DGCL, the Plan of Merger contained in the Merger Agreement will have been
approved by the affirmative vote of the Stockholders of the Company as
required by and in accordance with applicable laws and regulations,
- the consummation of the Merger will not be prohibited, restricted or made
illegal by any statute, rule, regulation, executive order, judgment,
decree or injunction of a court or a governmental entity,
- all consents, authorizations, orders and approvals of (or filings or
registrations with) any governmental entity required in connection with
the execution, delivery and performance of the Merger Agreement shall have
been obtained or made, except for filings in connection with the Merger
and any other documents required to be filed after the Effective Time and
except where the failure to have obtained or made any such consent,
authorization, order, approval, filing or registration would not make the
Merger illegal or have had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect (as defined
below); and
- the Purchaser will have accepted for purchase and paid, or cause to be
paid, for the Shares tendered pursuant to the Offer.
TERMINATION. The Merger Agreement provides that it may be terminated and
the Merger may be abandoned at any time prior to the Effective Time,
notwithstanding approval thereof by the Stockholders (with any termination by
Parent also being an effective termination by the Purchaser):
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent, if the Offer has not been
consummated on or before June 30, 2001 (unless the party claiming the right
to terminate the Merger Agreement is the party whose failure to fulfill its
obligations has resulted in or has materially contributed to the failure to
consummate the Merger by such date);
(c) by either the Company or Parent if any law, rule or regulation makes
consummation of the Offer or the Merger illegal or prohibited or if any
final and nonappealable judgment, injunction, order or decree of a court or
governmental entity shall restrain or prohibit the consummation of the Offer
or the Merger;
(d) by either the Company or Parent prior to acceptance for payment of
the Shares, if (i) there has been a breach by the other party of any
representation or warranty contained in the Merger Agreement which has had
or could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company or (ii) there has been a material
breach of any of the covenants or agreements set forth in the Merger
Agreement on the part of the other party, which breach is, in either case,
not curable or, if curable, is not cured within 30 days after written notice
of such breach is given by the terminating party to the other party;
(e) by Parent, if, prior to acceptance for payment of the Shares under
the Offer (i) the Board shall have failed to recommend, or shall have
withdrawn or modified in a manner adverse to Parent, its approval or
recommendation of the Merger Agreement, the Offer or the Merger or
26
shall have recommended, or entered into, or publicly announced its intention
to enter into, an agreement or an agreement in principle with respect to a
Superior Proposal (or shall have resolved to do any of the foregoing),
(ii) the Company shall have breached any of its obligations arising upon
reception of a Superior Proposal, or (iii) the Board shall exempt any other
person from the provisions of Section 203 of the DGCL;
(f) by Parent, if, prior to the acceptance for payment of the Shares
under the Offer, any "person" or "group" (as such terms are defined in
Section 13(d)(3) of the Exchange Act), other than Parent or any of its
affiliates shall have acquired beneficial ownership of more than 45% of the
Shares or more than 45% of the book value or fair market value of the assets
of the Company and its subsidiaries taken as a whole, or the right to
acquire ownership of such Shares or assets;
(g) by the Company, if the Board shall approve and the Company shall
enter into, a definitive agreement providing for the implementation of a
Superior Proposal; provided, however, that (i) the Company is not and has
not been in breach of its obligations arising in connection with a Superior
Proposal except for any such immaterial and inadvertent breach, (ii) the
Board authorizes the Company, subject to complying with the terms of the
Merger Agreement, to enter into a binding written agreement concerning a
transaction that constitutes a Superior Proposal and the Company notifies
the Parent in writing that it intends to enter into such an agreement,
attaching the most current version of such agreement to such notice
(including any subsequent amendments or modifications), (iii) during the
three business day period after the Company's notice, (x) the Company shall
have offered to negotiate with (and, if accepted, negotiate with), and shall
have caused its respective financial and legal advisors to have offered to
negotiate with (and if accepted, negotiate with), Parent to attempt to make
such commercially reasonable adjustments in the terms and conditions of the
Merger Agreement as will enable the Company to proceed with the Merger
Agreement and (y) the Board shall have concluded, after considering the
results of such negotiations and the revised proposal made by Parent, if
any, that any Superior Proposal giving rise to the Company's notice
continues to be a Superior Proposal, (iv) such termination is within three
business days following the three business day period referred to above and
(v) no termination pursuant to the circumstances as described in this
paragraph (g) shall be effective unless the Company simultaneously pays the
Termination Fee (as defined below); or
(h) by Parent or the Company, if as the result of the failure of any of
the Offer Conditions and otherwise pursuant to the terms hereof, the Offer
shall have terminated or expired in accordance with its terms without us
having purchased any Shares pursuant to the Offer; provided, however, that
the right to terminate the Merger Agreement pursuant to the circumstances
described in this paragraph (h) shall not be available to any party whose
failure to fulfill any of its obligations under the Merger Agreement results
in or materially contributes to the failure of any such condition.
EFFECT OF TERMINATION. In the event that the Merger Agreement is terminated
in accordance with its terms and the Merger is abandoned, the Merger Agreement
will become void and have no effect, without any liability on the part of any
party or its directors, officers or Stockholders, other than provisions relating
to confidentiality obligations, the payment of certain fees and expenses (as
described below), the effect of the termination of the Merger Agreement, the
survival of certain representations and warranties, the applicable law and
jurisdiction, the waiver of jury trial, which will survive any such termination;
provided that no party will be relieved from liability for any willful breach of
the Merger Agreement.
FEES AND EXPENSES. Except as provided below, whether or not the Merger is
consummated, all costs and expenses incurred in connection with the Offer, the
Merger Agreement and the transactions contemplated by the Merger Agreement will
be paid by the party incurring such expenses.
27
TERMINATION FEE. The Merger Agreement provides that, following a
termination thereof in accordance with the circumstances described in paragraphs
(e) or (g) above under "Termination," the Company will pay Parent a termination
fee of $1,000,000, which includes the reimbursement of all of the fees and
expenses related to the Offer, the Merger Agreement and the transactions
contemplated hereby (including, without limitation, legal, accounting and
investment banking fees and expenses) actually incurred by Parent and the
Purchaser (the "Termination Fee") in immediately available funds by wire
transfer to an account designated by Parent. The Merger Agreement also provides
that the Company will pay Parent the Termination Fee following a termination of
such Agreement after the initial expiration of the Offer pursuant to the
circumstances described in paragraph (d) above (as a result of a willful breach
of the Company), or pursuant to the circumstances described in paragraph (h)
above, if (A) at the time of such termination, the Minimum Tender Condition has
not been satisfied or the condition set forth in paragraph (g) under Section 14
below has not been satisfied, and (B) either at the time of such termination, an
Acquisition Proposal (replacing "10%" by "50%" in the definition of such term
for purposes of this paragraph) has been announced and not withdrawn or, within
12 months thereafter, an Acquisition Proposal shall have been consummated.
The Merger Agreement provides that any such Termination Fee will be payable
as promptly as practicable following termination of the Merger Agreement and, if
the Company is the party seeking to terminate the Merger Agreement, as a
condition thereto. If the Company fails to pay promptly all or any portion of
the Termination Fee, and, in order to obtain such payment, Parent commences a
suit which results in a judgment against the Company for such Termination Fee,
the Company shall pay to Parent its costs and expenses (including attorneys'
fees and expenses) in connection with such suit, together with interest from the
date of termination of the Merger Agreement on the amounts so owed at the prime
rate of Chase Manhattan Bank in effect from time to time during such period. The
prevailing party in any legal action undertaken to enforce the Merger Agreement
or any provision thereof will be entitled to recover from the other party the
costs and expenses (including attorneys' and expert witness fees) incurred in
connection with such action.
AMENDMENT. To the extent permitted by applicable laws and regulations, the
Merger Agreement may be amended by action taken by or on behalf of Parent, the
Purchaser and the Board (with the concurrence of the Company's directors
independent from Parent), at any time before or after approval of the Merger
Agreement by the Stockholders. After any such Stockholder approval, no amendment
may be made which decreases the Merger Consideration or which adversely affects
the rights of the Company's Stockholders under the Merger Agreement without the
approval of the Stockholders of the Company. Any amendment to the Merger
Agreement must be made by an instrument in writing signed on behalf of all of
the parties.
VOTING AND TENDER AGREEMENT
TENDER OF SHARES. In connection with the execution of the Merger Agreement,
Parent and the Purchaser have entered into the Voting and Tender Agreement with
the Company Stockholder who owns, in the aggregate, 4,647,212 Common Shares,
representing approximately 41.6% of the issued and outstanding Common Shares,
and 2,417,112 Class B Shares, representing 100% of the issued and outstanding
Class B Shares. Pursuant to the Voting and Tender Agreement, upon the terms and
conditions set forth therein, the Company Stockholder has agreed that it will
tender within ten business days of the commencement of the Offer, pursuant to
and in accordance with the terms of the Offer, all Shares it owns and not
withdraw or permit to be withdrawn any Shares it owns therefrom.
VOTING OF SHARES. The Company Stockholder has agreed, during the period
commencing on the date of the Voting and Tender Agreement and continuing, until
the earlier of the consummation of the Offer and the termination of the Voting
and Tender Agreement to appear, or cause the holder of record on any applicable
record date with respect to any Shares it owns to appear, for the purpose of
obtaining a quorum at any annual or special meeting of Stockholders of the
Company (or any
28
adjournment thereof), or in connection with any written consent of the
Stockholders, at which or in which, matters relating to the Merger, Merger
Agreement or any transaction contemplated thereby are considered. The Company
Stockholder has also agreed, during the period mentioned in the preceding
sentence, at any meeting or action by consent of the Stockholders, to vote, or
cause to be voted by the record holder thereof, the Shares it owns: (i) in favor
of the Merger, the Merger Agreement (as amended from time to time) and the
transactions contemplated by the Merger Agreement and (ii) against any proposal
for any extraordinary corporate transaction, such as a recapitalization,
dissolution, liquidation, or sale of assets of the Company or any merger,
consolidation or other business combination (other than the Merger) between the
Company and any person (other than Parent or a subsidiary of Parent) or any
other action or agreement that is intended or which reasonably could be expected
to (A) result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement,
(B) result in any of the conditions to the Company's obligations under the
Merger Agreement not being fulfilled or (C) impede, interfere with, delay,
postpone or materially adversely affect the Merger and the transactions
contemplated by the Merger Agreement.
RESTRICTIONS ON TRANSFER. Until the termination of the Voting Tender
Agreement and except as otherwise provided under such Agreement, the Company
Stockholder has agreed that, it will not, directly or indirectly transfer to any
person any or all the Shares it owns or cause any security interests, liens,
claims, pledges, charges, encumbrances, options, rights of first refusals,
agreements, or limitations on its voting rights, to attach to the Shares it owns
and that it has agreed to tender to us pursuant to the Voting and Tender
Agreement or to any options with respect to Shares or any Shares issuable
thereunder. The Company Stockholder has also agreed that it will not, directly
or indirectly, grant any proxies or powers of attorney, deposit any Shares it
owns into a voting trust or enter into a voting agreement, understanding or
arrangement with respect to such Shares. The Company Stockholder may, however,
transfer any or all shares it owns to one or more of its affiliates so long as
prior to effecting such transfer, any such affiliate shall agree to be bound by
the Voting and Tender Agreement.
NO SOLICITATION. The Company Stockholder (i) is required to immediately
terminate any discussions with any third party concerning an Acquisition
Proposal and (ii) has agreed not to, and will not permit any of its
Representatives, directly or indirectly, (A) to encourage, solicit, initiate or
knowingly facilitate any inquiries or the making of any proposals or offers with
respect to any Acquisition Proposal, (B) participate in negotiations with, or
provide any information to, or otherwise take any other action to assist or
facilitate any person or group (other than Parent or us or any affiliate or
associate of Parent or us) concerning any Acquisition Proposal, (C) enter into
an agreement with any person, other than Parent or the Purchaser, providing for
a possible Acquisition Proposal, or (D) make or authorize any statement,
recommendation or solicitation in support of any possible Acquisition Proposal
by any person, other than by Parent or us. Notwithstanding the above, the
Company Stockholder may take any actions in its capacity as a director, officer
or employee of the Company permitted under the Merger Agreement.
REPRESENTATIONS AND WARRANTIES. The Voting and Tender Agreement contains
certain customary representations and warranties of the parties thereto,
including, without limitation, representations and warranties by the Company
Stockholder as to ownership of Shares and power and authority to enter into the
Voting and Tender Agreement. In addition, the Voting and Tender Agreement
contains a representation and warranty by the Company Stockholder as to
certification by an internationally recognized firm of independent public
accountants that, since July 20, 1992, no change in ownership as defined in
Section 382 of the Code, which would have resulted in the limitation of the
Company's ability to utilize tax net operating losses, net capital loss carry
forward, or any tax credits, has occurred.
TERMINATION. Generally, with respect to the Company Stockholder, the Voting
and Tender Agreement terminates upon the earlier of (a) the date upon which
Parent shall have purchased and paid for all of the Shares it owned in
accordance with the Offer and (b) the date upon which the
29
Merger Agreement is terminated in accordance with its terms; provided, however,
that if at the date of such termination, the Termination Fee is or may become
payable, the Voting and Tender Agreement will only terminate on the date which
is six months after such date.
CONFIDENTIALITY AGREEMENT
On November 1, 2000, Parent and First Union, acting as agent for the
Company, signed a Confidentiality Agreement (the "Confidentiality Agreement")
providing, among other things, that, subject to the terms of the Confidentiality
Agreement, Parent and its affiliates will keep confidential certain non-public,
confidential or proprietary information provided by the Company or the Company's
agents or representatives (including attorneys and financial advisors).
LETTER OF INTENT
On January 29, 2001, Parent and the Company executed a non-binding letter of
intent and entered into an exclusivity period providing Parent with the
opportunity to perform additional financial and technical due diligence and to
negotiate a definitive merger agreement.
SECTION 12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY
PURPOSE. The Offer is being made pursuant to the Merger Agreement. The
purpose of the Offer and the Merger is to acquire control of, and ultimately the
entire equity interest in, the Company. The Offer, as the first step in the
acquisition of the Company, is intended to facilitate the acquisition of all the
Shares. The purpose of the Merger is to acquire all Shares not purchased in the
Offer or otherwise. Pursuant to the Merger, each then outstanding Share (other
than Shares owned by us, our subsidiaries, affiliates or the Company) will be
converted into the right to receive an amount in cash equal to the price per
Share paid in the Offer. Upon consummation of the Merger, the Company will
become a wholly owned subsidiary of Parent.
APPROVAL OF MERGER AGREEMENT. Under Delaware law, the approval of the Board
and the affirmative vote of the holders of a majority of the outstanding Common
Shares is required to approve and adopt the Merger Agreement and the
transactions contemplated, including the Offer and the Merger. The Board has
determined (by a unanimous vote of those present) that the Merger Agreement and
the related transactions, including the Offer and the Merger, are fair to, and
in the best interests of, the Stockholders, has approved, adopted and declared
advisable the Merger Agreement and the related transactions, including the Offer
and the Merger (such approval and adoption having been made in accordance with
the DGCL), and has resolved to recommend that the Stockholders accept the Offer
and tender their Shares pursuant to the Offer, and approve and adopt the Merger
Agreement and the related transactions, including the Offer and the Merger.
Unless the Merger is consummated pursuant to the short-form merger provisions
under Section 253 of the DGCL described in "Short-Form Merger" below, the only
remaining required corporate action of the Company is the approval and adoption
of the Merger Agreement and the Merger by the affirmative vote of the holders of
a majority of the Common Shares. Accordingly, if the Minimum Tender Condition is
satisfied, Purchaser will have sufficient voting power to cause the approval and
adoption of the Merger Agreement and the Merger without the affirmative vote of
any other stockholder.
In the Merger Agreement, the Company has agreed to duly call, give notice
of, convene and hold an annual or special meeting of its stockholders as
promptly as practicable following consummation of the Offer for the purpose of
considering and taking action on the Merger Agreement and the transactions
contemplated hereby, including the Offer and the Merger, if such action is
required by the DGCL in order to consummate the Merger. The Purchaser and Parent
have agreed that all Common Shares owned by them and their subsidiaries will be
voted in favor of the approval and adoption of the Merger Agreement and the
Merger.
30
ELECTION OF DIRECTORS. The Merger Agreement provides that, promptly upon
the purchase by Purchaser of Shares pursuant to the Offer, Purchaser will be
entitled to designate representatives to serve on the Board in proportion to
Purchaser's ownership of Shares following such purchase. See Section 11.
Purchaser expects that such representation would permit Purchaser to exert
substantial influence over the Company's conduct of its business and operations.
LISTING ON OTCBB. Depending upon the number of Common Shares purchased
pursuant to the Offer, the Common Shares may no longer meet the standards for
continued listing on the OTCBB. See Section 7. If, as a result of the purchase
of Shares pursuant to the Offer, the Merger or otherwise, the Common Shares no
longer meet the listing requirements of the OTCBB for continued listing, the
listing of the Common Shares will be discontinued. In any event, we intend to
cause the delisting of the Common Shares by OTCBB following consummation of the
Offer.
EXCHANGE ACT REGISTRATION. The Common Shares are currently registered under
the Exchange Act. Such registration may be terminated upon application by the
Company to the Commission if the Common Shares are not listed on a "national
securities exchange" and there are fewer than 300 record holders. See
Section 7. If registration of the Common Shares under the Exchange Act were
terminated, the Shares would no longer be eligible for listing on the OTCBB. We
currently intend to seek to cause the Company to terminate the registration of
the Common Shares under the Exchange Act as soon after consummation of the Offer
as the requirements for termination of registration are met.
SHORT-FORM MERGER. Under Delaware law, if we acquire, pursuant to the Offer
or otherwise, at least 90% of the then outstanding Common Shares, we will be
able to approve the Merger without a vote of the Company's stockholders (a
"Short-Form Merger"). In such event, Parent, the Company and us have agreed in
the Merger Agreement to take all necessary and appropriate action to cause the
Merger to become effective as promptly as reasonably practicable after such
acquisition, without a meeting of the Company's stockholders. If, however, we do
not acquire at least 90% of the outstanding Common Shares pursuant to the Offer
or otherwise and a vote of the Company's stockholders is required under the
DGCL, a significantly longer period of time would be required to effect the
Merger.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, any holder of Shares at the
Effective Time (a "Remaining Stockholder") will have certain rights under the
DGCL to dissent and demand appraisal of its Shares. Under Section 262 of the
DGCL, a Remaining Stockholder who does not wish to accept the Merger
Consideration for its Shares pursuant to the Merger has the right to seek an
appraisal and be paid the "fair value" of its Shares at the Effective Time
(exclusive of any element of value arising from the accomplishment or
expectation of the Merger) judicially determined and paid to it in cash,
provided that such holder complies with the provisions of Section 262 of the
DGCL.
The following is a brief summary of the statutory procedures to be followed
by a Remaining Stockholder in order to dissent from the Merger and perfect
appraisal rights under Delaware law. This summary is not intended to be complete
and is qualified in its entirety by reference to Section 262 of the DGCL, the
text of which is set forth in Annex A hereto. Any Remaining Stockholder
considering demanding appraisal is advised to consult legal counsel. Dissenters'
rights will not be available unless and until the Merger (or a similar business
combination) is consummated.
Remaining Stockholders of record who desire to exercise their appraisal
rights must fully satisfy all of the following conditions. A written demand for
appraisal of Shares must be delivered to the Secretary of the Company
(1) before the taking of the vote on the approval and adoption of the Merger
Agreement if the Merger is not being effected as a Short-Form Merger but rather
is being consummated following approval thereof at a meeting of the Company's
stockholders (a "Long-Form Merger") or (2) within 20 days after the date that
the Surviving Corporation mails to the Remaining Stockholders a notice (the
"Notice of Merger") to the effect that the Merger is effective and that
31
appraisal rights are available (and includes in such notice a copy of
Section 262 of the DGCL and any other information required thereby) if the
Merger is being effected as a Short-Form Merger without a vote or meeting of the
Company's stockholders. If the Merger is effected as a Long-Form Merger, this
written demand for appraisal of Shares must be in addition to, and separate
from, any proxy or vote abstaining from or against the approval of the Merger,
and neither voting against, abstaining from voting, nor failing to vote on the
Merger will constitute a demand for appraisal within the meaning of Section 262
of the DGCL. In the case of a Long-Form Merger, any stockholder seeking
appraisal rights must hold the Shares for which appraisal is sought on the date
of the making of the demand, continuously hold such Shares through the Effective
Time, and otherwise comply with the provisions of Section 262 of the DGCL.
In the case of both a Short-Form Merger and a Long-Form Merger, a demand for
appraisal must be executed by or for the stockholder of record, fully and
correctly, as such stockholder's name appears on the stock certificates. If the
Shares are owned of record in a fiduciary capacity, such as by a trustee,
guardian or custodian, such demand must be executed by the fiduciary. If Shares
are owned of record by more than one person, as in a joint tenancy or tenancy in
common, such demand must be executed by all joint owners. An authorized agent,
including an agent for two or more joint owners, may execute the demand for
appraisal for a stockholder of record; however, the agent must identify the
record owner and expressly disclose the fact that, in exercising the demand, he
is acting as agent for the record owner.
A record owner, such as a broker, who holds Shares as a nominee for others,
may exercise appraisal rights with respect to the Shares held for all or less
than all beneficial owners of Shares as to which the holder is the record owner.
In such case, the written demand must set forth the number of Shares covered by
such demand. Where the number of Shares is not expressly stated, the demand will
be presumed to cover all Shares outstanding in the name of such record owner.
Beneficial owners who are not record owners and who intend to exercise appraisal
rights should instruct the record owner to comply strictly with the statutory
requirements governing the exercise of appraisal rights before the date of any
meeting of stockholders of the Company called to approve the Merger in the case
of a Long-Form Merger and within 20 days following the mailing of the Notice of
Merger in the case of a Short-Form Merger.
The Remaining Stockholders who elect to exercise appraisal rights must mail
or deliver their written demands to: Secretary, Alysis Technologies, Inc., ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇. The written demand for
appraisal should specify the stockholder's name and mailing address, the number
of Shares covered by the demand and that the stockholder intends to thereby
demand appraisal of such Shares. In the case of a Long-Form Merger, the Company
must, within ten days after the Effective Time, provide notice of the Effective
Time to all stockholders who have complied with Section 262 of the DGCL and have
not voted for approval and adoption of the Merger Agreement.
In the case of a Long-Form Merger, the Remaining Stockholders electing to
exercise their appraisal rights under Section 262 must not vote for the approval
of the Merger or consent thereto in writing. Voting in favor of the approval of
the Merger, or delivering a proxy in connection with the stockholders meeting
called to approve the Merger (unless the proxy votes against, or expressly
abstains from the vote on, the approval and adoption of the Merger), will
constitute a waiver of the Remaining Stockholder's right of appraisal and will
nullify any written demand for appraisal submitted by the Remaining Stockholder.
Regardless of whether the Merger is effected as a Long-Form Merger or a
Short-Form Merger, within 120 days after the Effective Time, either the Company
or any stockholder who has complied with the required conditions of Section 262
and who is otherwise entitled to appraisal rights may file a petition in the
Delaware Court of Chancery demanding a determination of the fair value of the
Shares of the dissenting stockholders. If a petition for an appraisal is timely
filed, after a hearing on such
32
petition, the Delaware Court of Chancery will determine which stockholders are
entitled to appraisal rights and thereafter will appraise the Shares owned by
such stockholders, determining the fair value of such Shares, exclusive of any
element of value arising from the accomplishment or expectation of the Merger,
together with a fair rate of interest to be paid, if any, upon the amount
determined to be the fair value.
In determining fair value, the Delaware Court of Chancery is to take into
account all relevant factors. In ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇, INC., et al., the Delaware
Supreme Court discussed the factors that could be considered in determining fair
value in an appraisal proceeding, stating that "proof of value by any techniques
or methods which are generally considered acceptable in the financial community
and otherwise admissible in court" should be considered and that "[f]air price
obviously requires consideration of all relevant factors involving the value of
a company." The Delaware Supreme Court stated that in making this determination
of fair value the court must consider "market value, asset value, dividends,
earnings prospects, the nature of the enterprise and any other facts which were
known or which could be ascertained as of the date of merger which throw any
light on future prospects of the merged corporation...." The Delaware Supreme
Court has construed Section 262 of the DGCL to mean that "elements of future
value, including the nature of the enterprise, which are known or susceptible of
proof as of the date of the merger and not the product of speculation, may be
considered." However, the Court noted that Section 262 provides that fair value
is to be determined "exclusive of any element of value arising from the
accomplishment or expectation of the merger."
Remaining Stockholders who in the future consider seeking appraisal should
have in mind that the fair value of their Shares determined under Section 262
could be more than, the same as, or less than the Merger Consideration if they
do seek appraisal of their Shares, and that opinions of investment banking firms
as to fairness from a financial point of view are not necessarily opinions as to
fair value under Section 262 of the DGCL. Moreover, the Company, as the
Surviving Corporation in the Merger, intends to argue in any appraisal
proceeding that, for purposes thereof, the "fair value" of the Shares is less
than that paid in the Offer. The cost of the appraisal proceeding may be
determined by the Delaware Court of Chancery and taxed upon the parties as the
Delaware Court of Chancery deems equitable in the circumstances. Upon
application of a dissenting stockholder, the Delaware Court of Chancery may
order that all or a portion of the expenses incurred by any dissenting
stockholder in connection with the appraisal proceeding, including, without
limitation, reasonable attorneys' fees and the fees and expenses of experts, be
charged pro rata against the value of all Shares entitled to appraisal. In the
absence of such a determination or assessment, each party bears its own
expenses.
Any Remaining Stockholder who has duly demanded appraisal in compliance with
Section 262 of the DGCL will not, after the Effective Time, be entitled to vote
for any purpose the Shares subject to such demand or to receive payment of
dividends or other distributions on such Shares, except for dividends or other
distributions payable to stockholders of record at a date prior to the Effective
Time.
At any time within 60 days after the Effective Time, any former holder of
Shares shall have the right to withdraw his or her demand for appraisal and to
accept the Merger Consideration paid in the Merger. After this period, such
holder may withdraw his or her demand for appraisal only with the consent of the
Company, as the Surviving Corporation in the Merger. If no petition for
appraisal is filed with the Delaware Court of Chancery within 120 days after the
Effective Time, stockholders' rights to appraisal shall cease and all
stockholders shall be entitled to receive the Merger Consideration for their
Shares. Inasmuch as the Company has no obligation to file such a petition, and
Parent has no present intention to cause or permit the Surviving Corporation in
the Merger to do so, any stockholder who desires such a petition to be filed is
advised to file it on a timely basis. However, no petition timely filed in the
Delaware Court of Chancery demanding appraisal shall be dismissed as to any
stockholder without the approval of the Delaware Court of Chancery, and such
approval may be conditioned upon such terms as the Delaware Court of Chancery
deems just.
33
Failure to take any required step in connection with the exercise of
appraisal rights may result in the termination or waiver of such rights.
APPRAISAL RIGHTS CANNOT BE EXERCISED AT THIS TIME. THE INFORMATION SET FORTH
ABOVE IS FOR INFORMATIONAL PURPOSES ONLY WITH RESPECT TO ALTERNATIVES AVAILABLE
TO STOCKHOLDERS IF THE MERGER IS CONSUMMATED. STOCKHOLDERS WHO WILL BE ENTITLED
TO APPRAISAL RIGHTS IN CONNECTION WITH THE MERGER WILL RECEIVE ADDITIONAL
INFORMATION CONCERNING APPRAISAL RIGHTS AND THE PROCEDURES TO BE FOLLOWED IN
CONNECTION THEREWITH BEFORE SUCH STOCKHOLDERS HAVE TO TAKE ANY ACTION RELATING
THERETO.
STOCKHOLDERS WHO SELL SHARES IN THE OFFER WILL NOT BE ENTITLED TO EXERCISE
APPRAISAL RIGHTS WITH RESPECT THERETO BUT, RATHER, WILL RECEIVE THE PURCHASE
PRICE PAID IN THE OFFER THEREFOR.
GOING PRIVATE TRANSACTIONS. The Commission has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares not held by it or its
affiliates. We believe that Rule 13e-3 will not be applicable to the Merger.
Rule 13e-3 requires, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction be filed with the Commission and disclosed to stockholders
prior to consummation of the transaction.
PURCHASE OF SHARES AFTER THE EXPIRATION DATE. Parent, Purchaser or an
affiliate of Parent may, following the consummation or termination of the Offer,
seek to acquire additional Shares through open market purchases, privately
negotiated transactions, a tender offer or exchange offer or otherwise, upon
such terms and at such prices as they shall determine, which may be more or less
than the price paid in the Offer.
PLANS FOR THE COMPANY'S BUSINESS. In connection with the Offer, we have
reviewed, and will continue to review, on the basis of publicly available
information, various possible business strategies that the Company may pursue in
the event that we acquire control of the Company pursuant to this Offer or the
Merger. If and to the extent that we acquire control of the Company or otherwise
obtain access to the books and records of the Company, we intend to conduct a
detailed review of the Company and its assets, corporate structure, dividend
policy, capitalization, operations, properties, policies, management and
personnel and consider and determine what, if any, changes would be desirable in
light of the circumstances which then exist. Such strategies could include,
among other things, changes in the Company's business strategy, corporate
structure, certificate of incorporation, bylaws, capitalization, management or
dividend policy.
Except as described in this Offer to Purchase, we have no present plans or
proposals that would result in an extraordinary corporate transaction, such as a
merger, consolidation, reorganization, liquidation or sale or transfer of a
material amount of assets, involving the Company or any of its subsidiaries, or
any material changes in the Company's present capitalization, dividend policy,
employee benefit plans, corporate structure or business or any material changes
or reductions in the composition of its management or personnel.
34
SECTION 13. DIVIDENDS AND DISTRIBUTIONS
If, on or after the date of the Merger Agreement, the Company should
(a) split, combine or otherwise change the Shares or its capitalization,
(b) acquire or otherwise cause a reduction in the number of outstanding Shares
or other securities or (c) issue or sell additional Shares (other than the
issuance of Shares under option prior to the date of the Merger Agreement, in
accordance with the terms of such options as publicly disclosed prior to the
date of the Merger Agreement), shares of any other class of capital stock, other
voting securities or any securities convertible into, or exchangeable or
exercisable for any of the foregoing, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, then, subject to the
provisions of Section 14, we, in our sole discretion, may make such adjustments
as we deem appropriate to the Offer Price and the other terms of the Offer,
including, without limitation, the number or type of securities offered to be
purchased.
SECTION 14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, Parent and the Purchaser
will not be required to accept for payment, purchase or pay for any Shares
tendered in connection with the Offer and may terminate or, subject to the terms
of the Merger Agreement, amend the Offer, if (i) the Minimum Tender Condition
has not been satisfied as of the Expiration Date or been terminated, or (ii) at
any time on or after the date of the Merger Agreement and prior to the time of
payment for any Shares, any of the following conditions exists and is continuing
at the Expiration Date:
(a) there is instituted or pending any action or proceeding by any
governmental entity (i) challenging or seeking to make illegal, to delay
materially or otherwise directly or indirectly to restrain or prohibit the
making of the Offer, the acceptance for payment of or payment for the Shares
by Parent or the Purchaser or the consummation of the Merger, (ii) seeking
to obtain material damages or otherwise directly or indirectly relating to
the transactions contemplated by the Offer or the Merger, (iii) seeking to
restrain or prohibit Parent's ownership or operation (or that of its
respective subsidiaries or affiliates) of all or any material portion of the
business or assets of the Company and its subsidiaries, taken as a whole, or
of Parent and its subsidiaries, taken as a whole, or to compel Parent or any
of its subsidiaries or affiliates to dispose of or hold separate all or any
material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or of Parent and its subsidiaries, taken as
a whole, (iv) seeking to impose or confirm material limitations on the
ability of Parent, the Purchaser or any of Parent's other subsidiaries or
affiliates effectively to exercise full rights of ownership of the Shares,
including without limitation, the right to vote any Shares acquired or owned
by Parent, or any of Parent's other subsidiaries or affiliates on all
matters properly presented to the Stockholders, (v) seeking to require
divestiture by Parent, or any of Parent's other subsidiaries or affiliates
of any Shares or (vi) that otherwise, in the good faith judgment of Parent,
has had or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect;
(b) there has been any action taken, or any statute, rule, regulation,
injunction, order, decree, enacted, enforced, promulgated, issued or deemed
applicable to the Offer or the Merger, by any court or governmental entity,
that result in any of the consequences referred to in clauses (i) through
(vi) of paragraph (a) above;
(c) there has been any event, occurrence or development or state of
circumstances or facts which, individually or in the aggregate, has had or
could reasonably be expected to have a Material Adverse Effect;
(d) there has occurred (1) any general suspension of, or limitation on
prices for, trading in securities on any national securities exchange or in
the over-the-counter market in the United States (other than any suspension
or limitation on trading in any particular security as a result of a
computerized trading limit or any intraday suspension due to "circuit
breakers"), (2) any
35
declaration of any banking moratorium or any suspension of payments in
respect of banks or any limitation (whether or not mandatory) on the
extension of credit by lending institutions in the United States or (3) any
commencement of armed hostilities or other national or international
calamity involving the United States that has a material adverse effect on
bank syndication for financial markets in the United States or, in the case
of any of the foregoing occurrences existing on or at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(e) any "person" or "group" (as such terms are used in Section 13(d)(3)
of the Exchange Act)--other than Parent, us or another person (who on the
date hereof alone or as part of a "group" (as such term is used in
Section 13(d)(3) of the Exchange Act) is the beneficial owner of more than
5% of the outstanding Shares) or any of their respective affiliates--has
become the "beneficial owner" of more than 45% of the outstanding Shares;
(f) (i) the Board shall have failed to recommend, or shall have
withdrawn or modified in a manner adverse to Parent, its approval or
recommendation of the Merger Agreement, the Offer or the Merger, or shall
have recommended, or entered into, or publicly announced its intention to
enter into, an agreement or an agreement in principle with respect to a
Superior Proposal (or shall have resolved to do any of the foregoing) or
(ii) the Company shall have breached any of its obligations under the Merger
Agreement with respect to "Merger Agreement--No Solicitation" as described
in Section 11;
(g) the Company has breached or failed to comply in any material respect
with any of its material obligations, covenants, or agreements under the
Merger Agreement; or (i) any representation or warranty of the Company
contained in the Merger Agreement that is qualified by reference to a
Material Adverse Effect or (ii) any representation or warranty contained in
the Merger Agreement that is qualified by reference to "materiality" is not
true and correct, in either case without giving effect to such materiality
standard (including Material Adverse Effect); or any other such
representation or warranty is not true and correct in any respect that (when
taken together with all such other representations and warranties not true
and correct) has had or could reasonably be expected to have a Material
Adverse Effect, in each case either as of when made or at and as of any time
thereafter (except in the case of any representation or warranty that by its
terms is made as of a date specified therein which need be accurate only as
of such date);
(h) the Merger Agreement has been terminated pursuant to its terms or
has been amended pursuant to its terms to provide for such termination or
amendment of the Offer; or
(i) the Company Stockholder has breached or caused a default to occur
under the Voting and Tender Agreement or the Company Stockholder has
asserted that the Voting and Tender Agreement is unenforceable against it;
which, in the good faith judgment of ▇▇▇▇▇▇, and regardless of the circumstances
giving rise to such conditions, makes it inadvisable to proceed with the Offer
or with acceptance for payment or payment for Shares.
The Merger Agreement also conditions the completion of the Offer on the
expiration or termination of all waiting periods under the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended, under any other applicable law,
or imposed by any foreign or domestic governmental entity, which could
reasonably be expected to have a Material Adverse Effect. However, as of the
date of this Offer, this condition has been satisfied.
The term "Material Adverse Effect" means any material and adverse effect on
the financial condition, business, properties, assets, liabilities or results of
operations of the Company and its subsidiaries taken as a whole or the ability
of the Company to consummate the transactions contemplated by the Merger
Agreement in any material respect (excluding any such effect to the extent that
it results from (i) the announcement of the Merger Agreement or the transactions
contemplated
36
by it, or (ii) changes in global economic conditions, financial markets
generally or conditions in the electronic bill presentment and payment industry
generally).
The foregoing conditions are for the sole benefit of Parent and us and may
be asserted or, other than the Minimum Tender Condition, waived by Parent or the
Purchaser in whole or in part at any time or from time to time in their
discretion subject to the terms of the Merger Agreement. The failure of Parent
or the Purchaser at any time to exercise any of the foregoing rights shall not
be deemed a waiver of any such right, the waiver of any such right with respect
to particular facts and circumstances shall not be deemed a waiver with respect
to any other facts and circumstances and each such right shall be deemed an
ongoing right, which may be asserted at any time and from time to time.
A public announcement will be made of a material change in, or waiver of,
such conditions to the extent required by Rules 14d-4(d) and 14d-6(c) under the
Exchange Act, and the Offer will be extended in connection with any such change
or waiver to the extent required by such rules.
SECTION 15. CERTAIN LEGAL MATTERS
GENERAL. Except as otherwise disclosed herein, based on our review of
publicly available information filed by the Company with the Commission, we are
not aware of (i) any license or regulatory permit that appears to be material to
the business of the Company and its subsidiaries, taken as a whole, that might
be adversely affected by the acquisition of Shares pursuant to the Offer or the
Merger or (ii) any approval or other action by any governmental entity that
would be required for the acquisition or ownership of Shares as contemplated
herein. Should any such approval or other action be required, we currently
contemplate that such approval or action would be sought. While we do not
currently intend to delay the acceptance for payment of Shares tendered pursuant
to the Offer pending the outcome of any such matter, there can be no assurance
that any such approval or action, if needed, would be obtained or would be
obtained without substantial conditions or that adverse consequences might not
result to the business of the Company, the Purchaser or Parent or that certain
parts of the businesses of the Company, the Purchaser or Parent might not have
to be disposed of in the event that such approvals were not obtained or any
other actions were not taken. Our obligation under the Offer to accept for
payment and pay for Shares is subject to certain conditions. See Section 14.
BUSINESS COMBINATION TRANSACTIONS. The Company is incorporated under the
laws of the State of Delaware. In general, Section 203 of the DGCL prevents an
"interested stockholder" (generally, a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock, or an affiliate
or associate thereof) from engaging in a "business combination" (defined to
include mergers and certain other transactions) with a Delaware corporation for
a period of five years following the date such person becomes an interested
stockholder unless prior to such date the board of directors of the corporation
approved the business combination. Neither Parent nor us is an interested
stockholder and the Board has approved (by a unanimous vote of those directors
present) both the Offer and the Merger. Accordingly, Section 203 is inapplicable
to the Merger Agreement and the transactions contemplated thereby, including the
Offer and the Merger.
OTHER STATE LAWS. A number of other states have adopted laws and
regulations applicable to attempts to acquire securities of corporations which
are incorporated, or have substantial assets, stockholders, principal executive
offices or principal places of business, or whose business operations otherwise
have substantial economic effects, in such states. In 1982, in ▇▇▇▇▇ ▇. MITE
CORP., the Supreme Court of the United States invalidated on constitutional
grounds the Illinois Business Takeover Statute, which, as a matter of state
securities law, made takeovers of corporations meeting certain requirements more
difficult. However, in 1987 in CTS CORP. v. DYNAMICS CORP. OF AMERICA, the
Supreme Court held that the Indiana Control Share Acquisition Act was
constitutional. Such Act, by its terms, is applicable only to corporations that
have a substantial number of Stockholders in Indiana and
37
are incorporated there. Subsequently, a number of federal courts ruled that
various state takeover statutes were unconstitutional insofar as they apply to
corporations incorporated outside the state of enactment.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. We do not believe that, other than Section 203 of the DGCL, any state
takeover statutes or similar laws purport to apply to the Offer or the Merger.
We have not currently complied with any other state takeover statute or
regulation. Should any person seek to apply any state takeover law, we will take
such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court proceedings.
In the event it is asserted that one or more state takeover laws is applicable
to the Offer and the Merger, and an appropriate court does not determine that it
is inapplicable or invalid as applied to the Offer, we might be required to file
certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, we might be unable to accept for payment
any Shares tendered pursuant to the Offer, or be delayed in continuing or
consummating the Offer. In such case, we may not be obligated to accept for
payment any Shares tendered. See Section 14.
FOREIGN APPROVALS. According to the Company 10-K, the Company conducts
business in a number of other foreign countries and jurisdictions. In connection
with the acquisition of the Shares pursuant to the Offer, the laws of certain of
those foreign countries and jurisdictions may require the filing of information
with, or the obtaining of the approval of, governmental authorities in such
countries and jurisdictions. The governments in such countries and jurisdictions
might attempt to impose additional conditions on the Company's operations
conducted in such countries and jurisdictions as a result of the acquisition of
the Shares pursuant to the Offer or the Merger. There can be no assurance that
we will be able to cause the Company or its subsidiaries to satisfy or comply
with such laws or that compliance or non-compliance will not have adverse
consequences for the Company or any subsidiary after purchase of the Shares
pursuant to the Offer or the Merger.
SECTION 16. FEES AND EXPENSES
MacKenzie Partners has been retained by us as Information Agent in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee Stockholders to forward material relating to
the Offer to beneficial owners of Shares. We will pay the Information Agent
reasonable and customary compensation for all such services in addition to
reimbursing the Information Agent for reasonable out-of-pocket expenses in
connection therewith. We have agreed to indemnify the Information Agent against
certain liabilities and expenses in connection with the Offer, including,
without limitation, certain liabilities under the federal securities laws.
Wilmington Trust Company has been retained as the Depositary. We will pay
the Depositary reasonable and customary compensation for its services in
connection with the Offer, will reimburse the Depositary for its reasonable
out-of-pocket expenses in connection therewith and will indemnify the Depositary
against certain liabilities and expenses in connection therewith, including,
without limitation, certain liabilities under the federal securities laws.
Except as set forth above, we will not pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks and trust companies and other nominees
will, upon request, be reimbursed by us for customary clerical and mailing
expenses incurred by them in forwarding offering materials to their customers.
SECTION 17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in
38
compliance with the securities, blue sky or other laws of such jurisdiction. We
are not aware of any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. To the extent we become aware of any state law that would limit
the class of offerees in the Offer, we will amend the Offer and, depending on
the timing of such amendment, if any, will extend the Offer to provide adequate
dissemination of such information to such holders of Shares prior to the
expiration of the Offer. In any jurisdiction where the securities, blue sky or
other laws of which require the Offer to be made by a licensed broker or dealer,
the Offer is being made on our behalf by one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON OUR BEHALF NOT CONTAINED HEREIN OR IN THE LETTER OF
TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED.
We have filed with the Commission a Tender Offer Statement on Schedule TO
pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer, and may
file amendments. Such Schedule TO and any amendments thereto, including
exhibits, may be inspected and copies may be obtained in the manner set forth in
Section 8 with respect to the Company (except that such material will not be
available at the regional offices of the Commission).
Maui Acquisition Corp.
March 29, 2001
39
SCHEDULE I
(1) The name of each director and each executive officer of Parent is set
forth below. The business address of each person listed below is ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-0700. Unless otherwise indicated, each person is a
citizen of the United States of America. Directors of Parent are indicated by an
asterisk.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS;
NAME AND CITIZENSHIP (IF NOT A CITIZEN OF THE UNITED STATES OF AMERICA)
---- ------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇*................. ▇▇. ▇▇▇▇▇▇▇▇ has been Chairman of the Board of Directors and Chief
Executive Officer since 1997 and Director since 1994. He was Vice
Chairman and Chief Executive Officer in 1996, and Vice Chairman
from 1994 to 1996.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇*................... ▇▇. ▇▇▇▇▇▇▇▇ has been Director since 1992. She is also President
of ▇▇▇▇▇▇▇▇ Construction, Inc., a Denver-based commercial and
industrial general contractor.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇................... ▇▇. ▇▇▇▇▇▇▇▇▇ has been Executive Vice President and President,
Pitney Bowes Document Messaging Technologies since 2000. He was
President of Production Mail and Document Factory Solutions
(formerly Production Mail and Software Systems, formerly
Production Mail Division) from 1996 to 2000. ▇▇. ▇▇▇▇▇▇▇▇▇ is a
citizen of the United Kingdom.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇*.................. ▇▇. ▇▇▇▇▇▇▇▇▇▇ has been President and Chief Operating Officer
since 1996 and Director since 1994. He was Vice Chairman from 1994
to 1996.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇................ ▇▇. ▇▇▇▇▇▇▇▇▇▇ has been Vice President and Chief Information
Officer since 2000. ▇▇. ▇▇▇▇▇▇▇▇▇▇ was formerly the Vice
President, Information Technology and Chief Information Officer of
Novartis Pharmaceuticals Corp. (formed by the merger of Sandoz and
Ciba Geigy). Prior to the merger, he also served as the Vice
President, Information Systems and Chief Information Officer for
Sandoz Pharmaceuticals Company. ▇▇. ▇▇▇▇▇▇▇▇▇▇ also served as Vice
President, Information Management Services and Chief Information
Officer of Asea Brown Boveri, Inc.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇*................... ▇▇. ▇▇▇▇▇▇ has been Director since 1991. He is also the retired
Chairman of the Board of Directors and Chief Executive Officer of
▇▇▇▇▇ Corporation, a manufacturer of engineered products serving
the automotive, industrial, commercial and military markets.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇*................... ▇▇. ▇▇▇▇▇▇▇▇ has been Director since 1977. He is also Chairman and
President of The Colonial Williamsburg Foundation. ▇▇. ▇▇▇▇▇▇▇▇
was President of Rockefeller Brothers Fund, a philantropic
organization from 1988 to 2000.
▇▇▇ ▇. ▇▇▇▇.......................... ▇▇. ▇▇▇▇ has been Vice President and Corporate Secretary since
2000. She was Corporate Secretary and Senior Associate General
Counsel from 1996 to 2000.
40
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS;
NAME AND CITIZENSHIP (IF NOT A CITIZEN OF THE UNITED STATES OF AMERICA)
---- ------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇*.................. ▇▇. ▇▇▇▇▇▇▇ has been Director since 1999. She is also a consultant
with ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, a firm specializing in strategic
communication and public affairs consulting. ▇▇. ▇▇▇▇▇▇▇ was a
Visiting Fellow at the International Monetary Fund from 1998 to
1999. ▇▇. ▇▇▇▇▇▇▇ was also Managing Director for Finance and
Resource Mobilization of The World Bank from 1996 to 1998.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.................. ▇▇. ▇▇▇▇▇▇▇ has been Vice President, Corporate Marketing and Chief
Communications Officer since 1997. She was Vice
President-Communications, Marketing and Future Strategy from 1996
to 1997.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.................... ▇▇. ▇▇▇▇▇▇▇▇ has been Executive Vice President and President,
Pitney Bowes Business Services since 2000. She was President,
Pitney Bowes Business Services from 1999 to 2000. ▇▇. ▇▇▇▇▇▇▇▇
was Vice President-Operations, Pitney Bowes Management Services
from 1997 to 1999 and Executive Director, Administrative Services
in 1997. She was Vice President-Customer Support Operations with
Dictaphone Corporation from 1995 to 1996.
▇▇▇▇▇ ▇▇▇▇▇*......................... ▇▇. ▇▇▇▇▇ has been a Director since 1997. He is also President and
Chief Executive Officer of ▇▇▇▇▇ ▇▇▇▇▇ Industries, Inc., a
manufacturer of automotive components.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇...................... ▇▇. ▇▇▇▇ has been Vice President, Strategy Planning and New
Business Development since 1999. She was Vice President, Corporate
Planning and Strategy from 1997 to 1999 and Group Vice President,
Strategy, Operations Planning from 1994 to 1997.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇*................... ▇▇. ▇▇▇▇▇▇ has been Director since 1999. He is also Chairman,
President and Chief Executive Officer of ▇▇▇▇▇▇▇▇▇-▇▇▇▇ Company, a
manufacturer of industrial products and components. ▇▇. ▇▇▇▇▇▇
was President and Chief Operating Officer of ▇▇▇▇▇▇▇▇▇-▇▇▇▇
Company in 1999, President and Chief Operating Officer of Textron
Inc. in 1999, Executive Vice President and Chief Operating Officer
of Textron Inc. from 1998 to 1999 and President of Textron
Industrial Products from 1995 to 1998.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇...................... ▇▇. ▇▇▇▇▇▇ has been Vice President-Finance since 2001. He was Vice
President-Controller and Chief Tax Counsel from 1996 to 2001.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇...................... ▇▇. ▇▇▇▇▇▇▇ has been Vice President and Chief Strategy Officer
since 2001. He was Vice President, Global Growth and Futures
Strategy from 1999 to 2001. ▇▇. ▇▇▇▇▇▇▇ joined the company from
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an international management consulting company.
▇▇. ▇▇▇▇▇▇▇ was appointed worldwide practice leader for postal
organizations in 1990, Corporate Vice President in 1991, and
served most recently on the firm's global board for
telecommunications and media and as Manager of the Latin American
practice.
41
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS;
NAME AND CITIZENSHIP (IF NOT A CITIZEN OF THE UNITED STATES OF AMERICA)
---- ------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇*...................... ▇▇. ▇▇▇▇▇ has been Director since 1998. He is also Chairman and
Chief Executive Officer of ▇▇▇▇▇▇▇ Controls, Inc., a supplier of
automotive seating interiors and batteries, non residential
building control systems and energy and facility management.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇................... ▇▇. ▇▇▇▇▇▇▇ has been Executive Vice President, Group President and
Chief Venture Development Officer since 2001. He was Executive
Vice President and Group President, Pitney Bowes Small Business
and Financial Services from 2000 to 2001. ▇▇. ▇▇▇▇▇▇▇ was
President, Pitney Bowes Offices Direct and Financial Solutions
from 1999 to 2000, and President, Pitney Bowes Financial Services
from 1997 to 1999. He was President, Pitney Bowes Credit
Corporation from 1995 to 1997.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇..................... ▇▇. ▇▇▇▇▇▇ has been Executive Vice President and Group President,
Global Mailing Systems since 2001. He was Executive Vice President
and Group President, Pitney Bowes International from 2000 to 2001,
President, Pitney Bowes International from 1998 to 2000 and
President, Pitney Bowes Copier Systems from 1990 to 1997.
▇▇. ▇▇▇▇▇▇ is a citizen of Canada.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇*................... ▇▇. ▇▇▇▇▇▇▇▇▇ has been Director since 2000. He has also been
President and Chief Executive Officer of Nexsi Systems
Corporation, a provider of high performance network infrastructure
solutions, since 2001. He was President of the Network Service
Provider Division of Sun Microsystems, Inc. ("Sun") from 1999 to
2001 and President of Sun's Solaris Software Division from 1998 to
1999. ▇▇. ▇▇▇▇▇▇▇▇▇ was Vice President of Sun's Solaris and
Network Software Division in 1997. He was Vice President of the
Broadband Networks Division of Nortel Networks from 1990 to 1997.
▇▇. ▇▇▇▇▇▇▇▇▇ is a citizen of Canada.
▇▇▇▇ ▇. ▇. ▇▇▇▇▇..................... ▇▇. ▇▇▇▇▇ has been Executive Vice President-Office of the Chairman
since 2001. He was Executive Vice President and Group President,
U.S. Mailing Systems from 2000 to 2001 and President, U.S. Mailing
Systems from 1994 to 2000. ▇▇. ▇▇▇▇▇ is a citizen of the United
Kingdom.
▇▇▇▇ ▇. ▇▇▇▇......................... ▇▇. ▇▇▇▇ has been Vice President and General Counsel since 1996.
▇▇. ▇▇▇▇ joined the company from the New York law firm of ▇▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇, where she had been a Senior Partner from 1985 to
1996.
▇▇▇▇▇ ▇. ▇▇▇▇▇....................... ▇▇. ▇▇▇▇▇ has been Executive Vice President and Chief Financial
Officer since June 2000. He was Vice President and Chief Financial
Officer from January to May 2000. ▇▇. ▇▇▇▇▇ joined the company
from ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., an investment bank and one of
Parent's financial advisors, where he had served as managing
director from 1993 to 2000.
▇▇▇▇ ▇. ▇▇▇▇▇▇....................... ▇▇. ▇▇▇▇▇▇ has been Vice President and General Manager, Business
Reengineering since 1999 and Vice President, Products Supply from
1994 to 1999.
42
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS;
NAME AND CITIZENSHIP (IF NOT A CITIZEN OF THE UNITED STATES OF AMERICA)
---- ------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇............... ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ has been Vice President, E-Business since 2001.
He was Vice President, E-Business and Chief Development Officer
from 2000 to 2001. ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ was Vice President and Chief
Financial Officer from 1996 to 2000. He joined the company after
spending 31 years with Ford Motor Company.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇*..................... ▇▇. ▇▇▇▇ has been Director since 1995. He is also Chairman and
Chief Executive Officer of The MONY Group Inc. (formerly Mutual of
New York).
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇*.............. ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ has been Director since 1987. She is also a
retired Senior Vice President of Federated Department Stores, Inc.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.................. ▇▇. ▇▇▇▇▇▇▇ has been Vice President and General Manager, Customer
Relationship Management since 1999. She was Vice President,
Worldwide Postal Market Development from 1998 to 1999, Vice
President, Postal Carrier Relations Worldwide from 1997 to 1998.
▇▇. ▇▇▇▇▇▇▇ was Vice President, Stategy Alliance and Marketing
from 1995 to 1997.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.................... ▇▇. ▇▇▇▇▇▇▇ has been Vice President and Chief Human Resources
Officer since 2000. She was Vice President and Chief Personnel
Officer from 1997 to 2000, and Vice President Personnel from 1993
to 1997.
▇▇▇▇▇▇ ▇. ▇▇▇▇....................... ▇▇. ▇▇▇▇ has been Vice President-Engineering and Chief Technology
Officer since 2001. He was Vice President and Chief Technology
Officer from 1996 to 2001. Before that time, ▇▇. ▇▇▇▇ was Vice
President-Technology of ▇▇▇▇▇▇▇ Electric, which he joined in 1986
as Director of Research and Development for its since-divested
Rosemount Aerospace Division.
(2) The name of each director and each executive officer of the Purchaser is
set forth below. The business address of each person listed below is ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-0700. Unless otherwise indicated, each person
is a citizen of the United States of America.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS;
NAME AND CITIZENSHIP (IF NOT A CITIZEN OF THE UNITED STATES OF AMERICA)
---- ------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇................... ▇▇. ▇▇▇▇▇▇▇▇▇ has been Chief Executive Officer, President and
Director since the Purchaser's date of incorporation. He has also
been Executive Vice-President and President, Document Messaging
Technologies of Parent since 2000. He was President of Production
Mail and Document Factory Solutions (formerly Production Mail and
Software Systems, formerly Production Mail Division) from 1996 to
2000. ▇▇. ▇▇▇▇▇▇▇▇▇ is a citizen of the United Kingdom.
43
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS;
NAME AND CITIZENSHIP (IF NOT A CITIZEN OF THE UNITED STATES OF AMERICA)
---- ------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇....................... ▇▇. ▇▇▇▇▇ has been Executive Vice President, Chief Financial
Officer and Director since the Purchaser's date of incorporation.
He has also been Executive Vice President and Chief Financial
Officer of Parent since June 2000. He was Vice President and Chief
Financial Officer from January to May 2000. ▇▇. ▇▇▇▇▇ joined the
company from ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., an investment bank and one
of Parent's financial advisors, where he had served as managing
director from 1993 to 2000.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇................... ▇▇. ▇▇▇▇▇▇▇▇▇▇ has been Executive Vice President, Operations and
Director since the Purchaser's date of incorporation. He has also
been President, docSense, a division of Parent since 2000. He was
Vice President and General Manager of Pitney Bowes, Production
Mail and Document Factory Solutions from 1998 to 2000, and Vice
President of Pitney Bowes, Systems Integration from 1996 to 1998.
▇▇. ▇▇▇▇▇▇▇▇▇▇ was Vice President of Pitney Bowes, Product Line
Management from 1995 to 1996.
44
ANNEX A
DELAWARE CODE
TITLE 8. CORPORATIONS
CHAPTER 1. GENERAL CORPORATION LAW
SUBCHAPTER IX. MERGER, CONSOLIDATION OR CONVERSION
Section 262 Appraisal Rights.
(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who has
otherwise complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor consented
thereto in writing pursuant to Section 228 of this title shall be
entitled to an appraisal by the Court of Chancery of the fair value of
the stockholder's shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the
word "stockholder" means a holder of record of stock in a stock
corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by
those words and also membership or membership interest of a member of a
nonstock corporation; and the words "depository receipt" mean a receipt
or other instrument issued by a depository representing an interest in
one or more shares, or fractions thereof, solely of stock of a
corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation
to be effected pursuant to Section 251 (other than a merger effected
pursuant to Section 251(g) of this title), Section 252, Section 254,
Section 257, Section 258, Section 263 or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date
fixed to determine the stockholders entitled to receive notice of and
to vote at the meeting of stockholders to act upon the agreement of
merger or consolidation, were either (i) listed on a national
securities exchange or designated as a national market system
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or (ii) held of record by
more than 2,000 holders; and further provided that no appraisal
rights shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for its
approval the vote of the stockholders of the surviving corporation as
provided in subsection (f) of Section 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or
series of stock of a constituent corporation if the holders thereof
are required by the terms of an agreement of merger or consolidation
pursuant to Sections 251, 252, 254, 257, 258, 263 and 264 of this
title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts
in respect thereof) or depository receipts at the effective date
of the merger or consolidation will be either listed on a
national securities exchange or designated as a national market
system security on an
A-1
interdealer quotation system by the National Association of
Securities Dealers, Inc. or held of record by more than 2,000
holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of
this paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a., b. and c.
of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under Section 253 of this title is not
owned by the parent corporation immediately prior to the merger,
appraisal rights shall be available for the shares of the subsidiary
Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of
any class or series of its stock as a result of an amendment to its
certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or
substantially all of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this section,
including those set forth in subsections (d) and (e) of this section,
shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior
to the meeting, shall notify each of its stockholders who was such on
the record date for such meeting with respect to shares for which
appraisal rights are available pursuant to subsections (b) or
(c) hereof that appraisal rights are available for any or all of the
shares of the constituent corporations, and shall include in such
notice a copy of this section. Each stockholder electing to demand
the appraisal of such stockholder's shares shall deliver to the
corporation, before the taking of the vote on the merger or
consolidation, a written demand for appraisal of such stockholder's
shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such
stockholder's shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder
electing to take such action must do so by a separate written demand
as herein provided. Within 10 days after the effective date of such
merger or consolidation, the surviving or resulting corporation shall
notify each stockholder of each constituent corporation who has
complied with this subsection and has not voted in favor of or
consented to the merger or consolidation of the date that the merger
or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to Section 228
or Section 253 of this title, each constituent corporation, either
before the effective date of the merger or consolidation or within
ten days thereafter, shall notify each of the holders of any class or
series of stock of such constituent corporation who are entitled to
appraisal rights of the approval of the merger or consolidation and
that appraisal rights are available for any or all shares of such
class or series of stock of such constituent corporation, and shall
include in such notice a copy of this section; provided that, if the
notice is given on or after the effective date of the merger or
consolidation, such notice shall be given by the surviving or
resulting corporation to all such holders of any class or series of
stock of a constituent corporation that are entitled to appraisal
rights. Such notice may, and, if given
A-2
on or after the effective date of the merger or consolidation, shall,
also notify such stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights may,
within 20 days after the date of mailing of such notice, demand in
writing from the surviving or resulting corporation the appraisal of
such holder's shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that
the stockholder intends thereby to demand the appraisal of such
holder's shares. If such notice did not notify stockholders of the
effective date of the merger or consolidation, either (i) each such
constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the
holders of any class or series of stock of such constituent
corporation that are entitled to appraisal rights of the effective
date of the merger or consolidation or (ii) the surviving or
resulting corporation shall send such a second notice to all such
holders on or within 10 days after such effective date; provided,
however, that if such second notice is sent more than 20 days
following the sending of the first notice, such second notice need
only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance
with this subsection. An affidavit of the secretary or assistant
secretary or of the transfer agent of the corporation that is
required to give either notice that such notice has been given shall,
in the absence of fraud, be prima facie evidence of the facts stated
therein. For purposes of determining the stockholders entitled to
receive either notice, each constituent corporation may fix, in
advance, a record date that shall be not more than 10 days prior to
the date the notice is given, provided, that if the notice is given
on or after the effective date of the merger or consolidation, the
record date shall be such effective date. If no record date is fixed
and the notice is given prior to the effective date, the record date
shall be the close of business on the day next preceding the day on
which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise
entitled to appraisal rights, may file a petition in the Court of
Chancery demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within 60 days
after the effective date of the merger or consolidation, any stockholder
shall have the right to withdraw such stockholder's demand for appraisal
and to accept the terms offered upon the merger or consolidation. Within
120 days after the effective date of the merger or consolidation, any
stockholder who has complied with the requirements of subsections
(a) and (d) hereof, upon written request, shall be entitled to receive
from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares
not voted in favor of the merger or consolidation and with respect to
which demands for appraisal have been received and the aggregate number
of holders of such shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholder's written request for
such a statement is received by the surviving or resulting corporation or
within 10 days after expiration of the period for delivery of demands for
appraisal under subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of
their shares have not been reached by the surviving or resulting
corporation. If the petition shall be filed by the surviving or resulting
corporation, the petition shall be accompanied by such a duly verified
list. The Register in Chancery, if so ordered by the Court, shall give
notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation
A-3
and to the stockholders shown on the list at the addresses ▇▇▇▇▇▇▇
stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by
mail and by publication shall be approved by the Court, and the costs
thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become
entitled to appraisal rights. The Court may require the stockholders who
have demanded an appraisal for their shares and who hold stock
represented by certificates to submit their certificates of stock to the
Register in Chancery for notation thereon of the pendency of the
appraisal proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the
merger or consolidation, together with a fair rate of interest, if any,
to be paid upon the amount determined to be the fair value. In
determining such fair value, the Court shall take into account all
relevant factors. In determining the fair rate of interest, the Court may
consider all relevant factors, including the rate of interest which the
surviving or resulting corporation would have had to pay to borrow money
during the pendency of the proceeding. Upon application by the surviving
or resulting corporation or by any stockholder entitled to participate in
the appraisal proceeding, the Court may, in its discretion, permit
discovery or other pretrial proceedings and may proceed to trial upon the
appraisal prior to the final determination of the stockholder entitled to
an appraisal. Any stockholder whose name appears on the list filed by the
surviving or resulting corporation pursuant to subsection (f) of this
section and who has submitted such stockholder's certificates of stock to
the Register in Chancery, if such is required, may participate fully in
all proceedings until it is finally determined that such stockholder is
not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation
to the stockholders entitled thereto. Interest may be simple or compound,
as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith,
and the case of holders of shares represented by certificates upon the
surrender to the corporation of the certificates representing such stock.
The Court's decree may be enforced as other decrees in the Court of
Chancery may be enforced, whether such surviving or resulting corporation
be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and
the fees and expenses of experts, to be charged pro rata against the
value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection
(d) of this section shall be entitled to vote such stock for any purpose
or to receive payment of dividends or other distributions on the stock
(except dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the merger or
consolidation); provided, however, that if no petition for an appraisal
shall be filed within the time provided in subsection (e) of this
A-4
section, or if such stockholder shall deliver to the surviving or
resulting corporation a written withdrawal of such stockholder's demand
for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an
appraisal shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval may be
conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of
authorized and unissued shares of the surviving or resulting corporation.
A-5
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each Stockholder of the
Company or such Stockholder's broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer
is:
WILMINGTON TRUST COMPANY
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/OVERNIGHT COURIER:
Corporate Trust Reorg. Svcs. ▇▇▇-▇▇▇-▇▇▇▇ Wilmington Trust Company
Wilmington Trust Company ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇ ▇▇▇ ▇▇▇▇ Confirm by Telephone: 1st Floor
Wilmington, DE 19899-8861 302-651-8869 Wilmington, DE 19801
Attn.: Corporate Trust Reorg
Svcs.
Questions and requests for assistance may be directed to the Information
Agent at its address or telephone number set forth below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and all other tender offer
materials may be obtained from the Information Agent as set forth below, and
will be furnished promptly at the Purchaser's expense. You may also contact your
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
[MACKENZIE PARTNERS LOGO]
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
New York, New York 10010
Call Collect:
(▇▇▇) ▇▇▇-▇▇▇▇
Call Toll Free:
800-322-2885