OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
CIRCON CORPORATION
AT
$15.00 NET PER SHARE
BY
MMI ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY
OF
MAXXIM MEDICAL, INC.
-------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON TUESDAY, JANUARY 5, 1999, UNLESS THE OFFER IS EXTENDED.
-------------------------------------------------------------------------------
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF NOVEMBER 21, 1998, BY AND AMONG MAXXIM MEDICAL, INC. ("PARENT"), MMI
ACQUISITION CORP. ("PURCHASER") AND CIRCON CORPORATION (THE "COMPANY"). THE
BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND THE
MERGER, AND DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY AND UNANIMOUSLY RECOMMENDS
THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED
HEREIN) SUCH NUMBER OF SHARES THAT WOULD CONSTITUTE AT LEAST A MAJORITY OF THE
OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE SHARES ARE ACCEPTED FOR
PAYMENT. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS SET FORTH IN
THIS OFFER TO PURCHASE. SEE SECTION 14.
--------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such
stockholder's Shares (as defined herein) should either (i) complete and sign
the enclosed Letter of Transmittal (or a facsimile thereof) in accordance with
the Instructions in the Letter of Transmittal, have such stockholder's
signature thereon guaranteed (if required by Instruction 1 to the Letter of
Transmittal), mail or deliver the Letter of Transmittal (or a facsimile
thereof) and any other required documents to the Depositary (as defined herein)
and either deliver the certificates for such Shares to the Depositary or tender
such Shares pursuant to the procedure for book-entry transfer set forth in
Section 3 of this Offer to Purchase or (ii) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder, in each case on or prior to the Expiration
Date. Any stockholder whose Shares are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee to tender such
Shares.
Any stockholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available, who cannot comply with
the procedures for book-entry transfer on a timely basis, or who cannot deliver
all required documents to the Depositary prior to the expiration of the Offer,
may tender such Shares by following the procedures for guaranteed delivery set
forth in Section 3 of this Offer to Purchase.
Questions and requests for assistance may be directed to the Information
Agent (as defined herein) at its address and telephone numbers set forth on the
back cover of this Offer to Purchase. Requests for additional copies of this
Offer to Purchase, the related Letter of Transmittal, the Notice of Guaranteed
Delivery and the other tender offer documents may be directed to the
Information Agent or brokers, dealers, commercial banks or trust companies.
--------------
The Information Agent for the Offer is:
MACKENZIE
PARTNERS, INC. LOGO
November 30, 1998
TABLE OF CONTENTS
INTRODUCTION ........................................................................... 1
THE OFFER .............................................................................. 3
1. Terms of the Offer .............................................................. 3
2. Acceptance for Payment and Payment .............................................. 5
3. Procedures for Tendering Shares ................................................. 6
4. Withdrawal Rights. .............................................................. 8
5. Certain U.S. Federal Income Tax Consequences. ................................... 9
6. Price Range of the Shares; Dividends. ........................................... 10
7. Effect of the Offer on the Market for the Shares; Stock Listing; Exchange Act
Registration; Margin Regulations ................................................ 10
8. Certain Information Concerning the Company ...................................... 11
9. Certain Information Concerning Maxxim, Parent and Purchaser ..................... 13
10. Sources and Amount of Funds. .................................................... 14
11. Background of the Offer; Purpose of the Offer and the Merger; the Merger
Agreement and Certain Other Agreements. ......................................... 16
12. Plans for the Company; Other Matters ............................................ 23
13. Dividends and Distributions. .................................................... 25
14. Conditions to The Offer ......................................................... 25
15. Certain Legal Matters ........................................................... 27
16. Fees and Expenses ............................................................... 29
17. Miscellaneous ................................................................... 29
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF
XXXXXX, PARENT AND PURCHASER .......................................................... I-1
i
To the Holders of Common Stock of
Circon Corporation:
INTRODUCTION
MMI Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly
owned subsidiary of Maxxim Medical, Inc., a Delaware corporation ("Parent"), a
wholly owned subsidiary of Maxxim Medical, Inc., a Texas corporation
("Maxxim"), hereby offers to purchase all outstanding shares of common stock,
par value $0.01 per share (the "Common Stock"), including the associated
preferred stock purchase rights issued pursuant to the Rights Agreement (as
defined below) (the "Rights" and, together with the Common Stock, the
"Shares"), of Circon Corporation, a Delaware corporation (the "Company"), at a
price of $15.00 per Share, net to the seller in cash, without interest thereon
(the "Offer Price"), upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which, as
amended or supplemented from time to time, collectively constitute the
"Offer").
Tendering stockholders of record who tender Shares directly 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 by Purchaser pursuant to the Offer. Stockholders who hold
their Shares through a bank or broker should check with such institution as to
whether they charge any service fees. The Purchaser will pay all fees and
expenses of Mackenzie Partners, Inc. ("Mackenzie"), which is acting as
Information Agent (in such capacity, the "Information Agent"), and Xxxxxx Trust
Company of New York ("Xxxxxx Trust"), which is acting as the Depositary (in
such capacity, the "Depositary"), incurred in connection with the Offer and in
accordance with the terms of the agreements entered into with each such person
in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") HAS
UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AND DETERMINED THAT THE OFFER AND
THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT
THE OFFER AND TENDER THEIR SHARES.
Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx"), financial advisor to the
Company, has delivered to the Company Board its opinion, dated as of November
20, 1998 (the "Financial Advisor Opinion"), to the effect that, as of such date
and based upon and subject to certain assumptions and matters stated therein,
the consideration to be received by the public shareholders of the Company in
the Offer and the Merger is fair, from a financial point of view, to such
holders. A copy of the Financial Advisor Opinion is attached as an exhibit to
the Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9"), which has been filed by the Company with the Securities and
Exchange Commission (the "Commission") in connection with the Offer and which
is being mailed to holders of Shares herewith. Holders of Shares are urged to,
and should, read the Schedule 14D-9 in its entirety.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN ON OR PRIOR TO THE EXPIRATION DATE SUCH NUMBER OF
SHARES THAT WOULD CONSTITUTE AT LEAST A MAJORITY OF THE OUTSTANDING SHARES ON A
FULLY DILUTED BASIS ON THE DATE SHARES ARE ACCEPTED FOR PAYMENT (THE "MINIMUM
CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS SET FORTH IN
THIS OFFER TO PURCHASE. SEE SECTION 14. As used in this Offer to Purchase,
"fully diluted basis" takes into account the exercise of all outstanding
options, warrants and other rights and securities exercisable into shares of
Common Stock. Xxxxxxxxx believes that, as of November 20, 1998, there were
13,440,490 Shares issued and outstanding, 985,906 Shares were issuable pursuant
to the exercise of outstanding stock options ("Options") and 226,767 Shares
were issuable pursuant to the exercise of outstanding warrants ("Warrants").
The Merger Agreement provides, among other things, that the Company will not,
without the prior written consent of Parent, issue any additional Shares
(except upon the exercise of outstanding Options and Warrants) or other
securities convertible into, or exercisable or exchangeable for, Shares. See
Section 11. Based on the foregoing and assuming the issuance of all Shares
issuable upon the exercise of outstanding Options and
Warrants, Xxxxxxxxx believes that the Minimum Condition will be satisfied if
7,326,582 Shares are validly tendered and not withdrawn prior to the Expiration
Date.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of November 21, 1998 (the "Merger Agreement"), by and among Parent,
Purchaser and the Company. Pursuant to the Merger Agreement and the Delaware
General Corporation Law, as amended (the "DGCL"), as soon as practicable after
the completion of the Offer and satisfaction or waiver, if permissible, of all
conditions, including the purchase of Shares pursuant to the Offer (sometimes
referred to herein as the "consummation" of the Offer) and the approval and
adoption of the Merger Agreement by the stockholders of the Company (if
required by applicable law), Purchaser shall be merged with and into the
Company (the "Merger") and the Company will be the surviving corporation in the
Merger (the "Surviving Corporation"). At the effective time of the Merger (the
"Effective Time"), each Share then outstanding, other than Shares held by (i)
the Company or any of its subsidiaries, (ii) Parent or any of its subsidiaries,
including Purchaser, and (iii) stockholders who properly perfect their
dissenters' rights under the DGCL, will be converted into the right to receive
from the surviving corporation $15.00 in cash per Share paid in the Offer (the
"Merger Consideration"), without interest. The Merger Agreement is more fully
described in Section 11.
The Merger Agreement provides that upon the acceptance for payment of, and
payment for, Shares by Purchaser pursuant to the Offer, Purchaser shall be
entitled to designate such number of directors on the Company Board, on the
board of directors of each subsidiary of the Company and on each committee
thereof as will give Purchaser a majority of such directors or committee
members, and the Company shall, at such time, take all actions as to cause
Purchaser designees to be so elected; provided, however, that in the event that
Purchaser's designees are elected to the Company Board, until the Effective
Time such Board of Directors shall have at least two directors who are
directors of the Company on the date of execution of the Merger Agreement and
who are not officers of the Company or any of its subsidiaries (the
"Independent Directors").
Consummation of the Merger is conditioned upon, among other things, the
approval and adoption by the requisite vote of stockholders of the Company of
the Merger Agreement and the Merger, if required by applicable law. See Section
11. In the Merger Agreement, the Company has represented to the Purchaser and
Parent that the affirmative vote of the holders of a majority of the
outstanding Shares is the only vote of any class or series of the Company's
capital stock necessary to approve the Merger Agreement and the Merger at a
meeting of the Company's stockholders. If the Minimum Condition is satisfied
and Purchaser purchases at least a majority of the outstanding Shares in the
Offer, Purchaser will be able to effect the Merger without the affirmative vote
of any other stockholder. Pursuant to the Merger Agreement, Parent has agreed
to vote and to cause any subsidiary of Parent to vote the Shares acquired by
them pursuant to the Offer in favor of the Merger. See Section 12.
Under Section 253 of the DGCL, if a corporation owns at least 90% of the
outstanding shares of each class of a subsidiary corporation, the corporation
holding such stock may merge such subsidiary into itself, or itself into such
subsidiary, without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a "short-form merger"). In the
event that Purchaser acquires in the aggregate at least 90% of the outstanding
Shares pursuant to the Offer or otherwise, then, at the election of Parent, a
short-form merger could be effected without any further approval of the Company
Board or the stockholders of the Company. In the Merger Agreement, Parent,
Purchaser and the Company have agreed that, notwithstanding that all conditions
to the Offer are satisfied or waived as of the scheduled Expiration Date,
Purchaser may extend the Offer for a period not to exceed ten business days,
subject to certain conditions, if the Shares tendered pursuant to the Offer
constitute less than 90% of the outstanding Shares. Even if Purchaser does not
own 90% of the outstanding Shares following consummation of the Offer, Parent
or Purchaser could seek to purchase additional shares in the open market or
otherwise in order to reach the 90% threshold and employ a short-form merger.
The per share consideration paid for any Shares so acquired in open market
purchases may be greater or less than the Offer Price. Parent presently intends
to effect a short-form merger, if permitted to do so under the DGCL, pursuant
to which Purchaser will be merged with and into the Company. See Section 12.
2
The Company has declared a dividend of one Right for each outstanding
Share pursuant to the Preferred Shares Rights Agreement, dated as of August 14,
1996, by and between the Company and ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent (the "Rights Agreement"). The Purchaser understands that
pursuant to the Merger Agreement the Rights Agreement has been amended (i) to
render the Rights Agreement inapplicable to the Offer, the Merger, the Merger
Agreement and the acquisition of Shares by Purchaser pursuant to the Offer,
(ii) to ensure that (y) none of Parent, Purchaser or any of their respective
affiliates shall constitute an Acquiring Person (as defined in the Rights
Agreement) pursuant to the Rights Agreement by virtue of the execution of the
Merger Agreement, commencement and consummation of the Offer, the acquisition
of Shares by Purchaser pursuant to the Offer and the consummation of the Merger
and (z) a Distribution Date or a Shares Acquisition Date (as such terms are
defined in the Rights Agreement) does not occur by reason of the Offer, the
Merger, the execution of the Merger Agreement, the acquisition of the Shares by
Purchaser pursuant to the Offer, or the consummation of the Merger and (iii) to
provide that the Final Expiration Date (as defined in the Rights Agreement)
shall occur immediately prior to the Effective Time. In the Merger Agreement,
the Company has agreed that such amendment will not be further amended by the
Company without the prior consent of Parent.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), Purchaser will accept for payment and pay for all Shares validly
tendered on or prior to the Expiration Date, and not withdrawn in accordance
with Section 4. The term "Expiration Date" shall mean January 5, 1999 at 5:00
P.M., New York City time, unless and until Purchaser, in accordance with the
terms of the Merger Agreement, shall have extended the period of time during
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by Purchaser
pursuant to the terms of the Merger Agreement, shall expire. In the Merger
Agreement, subject to certain limitations, Parent and Purchaser have agreed
that if all conditions to Purchaser's obligation to accept for payment and pay
for Shares pursuant to the Offer are not satisfied or waived on the scheduled
Expiration Date, Purchaser may extend the Offer for additional periods. See
Section 14.
The Offer is conditioned upon the satisfaction of the Minimum Condition,
the expiration or termination of all waiting periods imposed by the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the other conditions set forth in Section 14. If such conditions are
not satisfied prior to the Expiration Date, Purchaser reserves the right,
subject to the terms of the Merger Agreement and subject to the applicable
rules and regulations of the Commission, to (i) decline to purchase any Shares
tendered in the Offer and terminate the Offer and return all tendered Shares to
the tendering stockholders, (ii) waive any or all conditions to the Offer
(except the Minimum Condition) and, to the extent permitted by applicable law,
purchase all Shares validly tendered and not withdrawn, (iii) extend the Offer
and, subject to the right of stockholders to withdraw Shares until the
Expiration Date, retain all Shares which have been validly tendered and not
withdrawn during the period or periods for which the Offer is extended or (iv)
subject to the following sentence, modify the terms of the Offer. The Merger
Agreement provides that Purchaser will not, without the consent of the Company,
reduce the number of Shares subject to the Offer, reduce the Offer Price, add
to the Offer conditions, extend the Offer (except as contemplated by the Merger
Agreement), change the form of consideration to be paid in the Offer, waive the
Minimum Condition, or amend any other condition to the Offer in any manner
adverse to the holders of the Shares.
The Merger Agreement requires Purchaser to accept for payment and pay for
all Shares validly tendered and not withdrawn pursuant to the Offer if all
conditions to the Offer are satisfied or waived on
3
the Expiration Date. However, if, immediately prior to the scheduled Expiration
Date, the number of Shares tendered and not withdrawn pursuant to the Offer
constitutes less than 90% of the Shares outstanding, Purchaser may extend the
Offer on one or more occasions for an aggregate period of not more than ten
business days after the satisfaction or waiver of all of the conditions to the
Offer set forth in Section 14 or for any period required by any rule,
regulation, interpretation or position of the Commission applicable to the
Offer. As used in this Offer to Purchase, "business day" has the meaning set
forth in Rule 14d-1 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement thereof, the announcement in the
case of an extension to be issued no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date in
accordance with Rules 14d-4(c), 14d-6(d) and 14e-1(d) under the Exchange Act.
Without limiting the obligation of Purchaser under such Rules or the manner in
which Purchaser may choose to make any public announcement, Purchaser currently
intends to make announcements by issuing a press release to the Dow Xxxxx News
Service.
If Purchaser extends the Offer, or if Purchaser (whether before or after
its acceptance for payment of Shares) is lawfully delayed in its purchase of,
or payment for, Shares, the Depositary may retain tendered Shares on behalf of
Purchaser, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in Section 4.
However, the ability of Purchaser to delay the payment for Shares which
Purchaser has 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 deposited by, or on behalf of, holders of securities
promptly after the termination or withdrawal of the Offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) 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 percentage of securities
sought, will depend upon the facts and circumstances then existing, including
the relative materiality of the changed terms or information. In a public
release, the Commission has stated its view that an offer must remain open for
a minimum period of time following a material change in the terms of the Offer
and that waiver of a material condition, such as the Minimum Condition or the
Offer Price, is a material change in the terms of the Offer. The release states
that an offer should remain open for a minimum of five business days from the
date a material change is first published, or sent or given to security holders
and that, if material changes are made with respect to information not
materially less significant than the offer price and the number of shares being
sought, a minimum of ten business days may be required to allow adequate
dissemination and investor response. The requirement to extend the Offer will
not apply to the extent that the number of business days remaining between the
occurrence of the change and the then-scheduled Expiration Date equals or
exceeds the minimum extension period that would be required because of such
amendment. If, prior to the Expiration Date, Purchaser increases the
consideration offered to holders of Shares pursuant to the Offer, such
increased consideration will be paid to all holders whose Shares are purchased
in the Offer whether or not such Shares were tendered prior to such increase.
4
The Company has provided Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares and will be furnished to brokers,
dealers, banks and similar persons whose names, or the names of whose nominees,
appear on the 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.
2. 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), Purchaser will accept for payment and will pay for, as
soon as practicable after the Expiration Date, all Shares validly tendered
prior to the Expiration Date and not withdrawn in accordance with Section 4.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Purchaser and not
withdrawn, if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares. Payment for
Shares accepted for payment pursuant to the Offer will be made by deposit in
cash of the purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from
Purchaser and transmitting payment to tendering stockholders. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares (or
a timely Book-Entry Confirmation (as defined below) with respect thereto), (ii)
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 (as defined below) and (iii) any other
documents required by the Letter of Transmittal. Accordingly, payment may be
made to tendering stockholders at different times if delivery of the Shares and
other required documents occur at different times. The per Share consideration
paid to any holder of Shares pursuant to the Offer will be the highest per
Share consideration paid to any other holder of such Shares pursuant to the
Offer.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO BE
PAID BY PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
Purchaser expressly reserves the right, in its 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. If Purchaser is delayed in its acceptance
for payment of, or payment for, Shares, then, without prejudice to Purchaser's
rights under the Offer (including such rights as are set forth in Sections 1
and 14) (but subject to compliance with Rule 14e-1(c) under the Exchange Act),
the Depositary may, nevertheless, on behalf of Purchaser, 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 4.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted representing more Shares than are
being tendered by the holder thereof, certificates evidencing Shares not
tendered or not accepted for purchase will be returned to the tendering
stockholder, or such other person as the tendering stockholder shall specify in
the Letter of Transmittal (subject to the terms and conditions thereof), as
promptly as practicable following the expiration, termination or withdrawal of
the Offer. In the case of Shares delivered by book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility (as defined in Section
3) pursuant to the procedures set forth in Section 3, such Shares will be
credited to such account maintained at the Book-Entry Transfer Facility as the
tendering stockholder shall specify in the Letter of Transmittal (subject to
the terms and conditions thereof), as promptly as practicable following the
expiration, termination or withdrawal of the Offer. If no such instructions are
given with respect to Shares delivered by book-entry transfer, any such Shares
not tendered or not purchased will be returned by crediting the account at the
Book-Entry Transfer Facility designated in the Letter of Transmittal as the
account from which such Shares were delivered.
5
Purchaser reserves the right to transfer or assign, in whole or, from time
to time, in part, to one or more of its affiliates, the right to purchase
Shares tendered pursuant to the Offer, but any such transfer or assignment will
not relieve Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES.
Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) 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, and any other required
documents, must be received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase on or prior to the Expiration Date
and either certificates evidencing tendered Shares must be received by the
Depositary at one of such addresses or such Shares must be delivered to the
Depositary pursuant to the procedures for book-entry transfer set forth below
and a Book-Entry Confirmation (as defined below) must be received by the
Depositary, in each case on or prior to the Expiration Date, or (ii) the
tendering stockholder must comply with the guaranteed delivery procedures
described below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
Book-Entry Transfer Facility's system 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 such Book-Entry Transfer Facility's
procedures for such transfer. Even though delivery of Shares may be effected
through book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility, a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or an Agent's
Message, and any other required documents must, in any case, be transmitted to,
and received by, the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase on or 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 herein as a "Book-Entry Confirmation."
DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO
THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against such participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL
BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING,
IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY
IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
6
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) of Shares (which term, for purposes of this Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on
a security position listing as the owner of the 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 (ii) 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 Security
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each, an
"Eligible Institution" and, collectively, "Eligible Institutions"). In all
other cases, all signatures on Letters of Transmittal must be guaranteed by an
Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal. If
the certificates for Shares 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
certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the certificates
surrendered, then the tendered certificates for such Shares must be endorsed or
accompanied by appropriate stock powers, in either case, signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as
aforesaid. See Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all of the required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser, is received by
the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect to)
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, are received by the Depositary within three trading
days after the date of execution of such Notice of Guaranteed Delivery. A
"trading day" is any day on which the New York Stock Exchange is open for
business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mailed to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Upon the acceptance of Shares for payment pursuant to the Offer, the valid
tender of Shares pursuant to one of the procedures described above will
constitute a binding agreement between the tendering stockholder and Purchaser,
upon the terms and subject to the conditions of the Offer.
Appointment. By executing the Letter of Transmittal as set forth above
(including delivery through an Agent's Message), the tendering stockholder will
irrevocably appoint the designees of Parent set forth in the Letter of
Transmittal as such stockholder's 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 such stockholder's rights with respect to the Shares
tendered by such stockholder and accepted for payment by Purchaser and with
respect to any and all non-cash dividends, distributions, rights, other Shares
or other securities issued or issuable in respect of such Shares on or after
November 21, 1998 (collectively, "Distributions"). All such powers of attorney
and proxies will be considered coupled with an interest in the tendered Shares.
Such appointment will be effective if, as and when, and only to the extent
that, Purchaser accepts for payment the Shares tendered by such stockholder as
provided herein. All such powers of attorney and proxies will be irrevocable
and will be deemed granted in consideration of the acceptance for payment by
7
Purchaser of Shares tendered in accordance with the terms of the Offer. Upon
such appointment, all prior powers of attorney, proxies and consents given by
such stockholder with respect to such Shares (and any and all Distributions)
will, without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given by such stockholder (and, if
given, will not be deemed effective). The designees of Purchaser will thereby
be empowered to exercise all voting and other rights with respect to such
Shares (and any and all Distributions), including, without limitation, in
respect of any annual or special meeting of the Company's stockholders (and any
adjournment or postponement thereof), actions by written consent in lieu of any
such meeting or otherwise, as each such attorney-in-fact and proxy or his
substitute shall in his sole discretion deem proper. Purchaser reserves the
right to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser's acceptance for payment of such Shares, Purchaser
must be able to exercise full voting, consent and other rights with respect to
such Shares (and any and all Distributions), including voting at any meeting of
stockholders.
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 Purchaser, in its sole discretion, which
determination will be final and binding. Purchaser reserves the absolute right
to reject any or all tenders of any Shares determined by it not to be in proper
form or the acceptance for payment of which, or payment for which, may, in the
opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the
absolute right, in its sole discretion, to waive any defect or irregularity in
any tender of 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 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. Purchaser's
interpretation of the terms and conditions of the Offer in this regard
(including the Letter of Transmittal and the instructions thereto) will be
final and binding.
Backup Withholding. Under the "backup withholding" provisions of federal
income tax law, unless a tendering registered holder, or its assignee (in
either case, the "Payee"), satisfies the conditions described in Instruction 10
of the Letter of Transmittal or is otherwise exempt, the cash payable as a
result of the Offer may be subject to backup withholding tax at a rate of 31%
of the gross proceeds. To prevent backup withholding, each Payee should
complete and sign the Substitute Form W-9 provided in the Letter of
Transmittal. See Instruction 10 to the Letter of Transmittal.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4 or as provided by
applicable law, tenders of Shares are irrevocable. Shares tendered pursuant to
the Offer may be withdrawn pursuant to the procedures set forth below at any
time on or prior to the Expiration Date and, unless theretofore accepted for
payment and paid for by Purchaser pursuant to the Offer, may also be withdrawn
at any time after January 29, 1999.
To be effective, a written, telegraphic or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of the Shares to be withdrawn, if different from the name of the person
who tendered the Shares. If certificates evidencing Shares to be withdrawn have
been delivered or otherwise identified to the Depositary, then, prior to the
physical release of such certificates, the serial numbers shown on such
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 procedures for book-entry transfer as set forth in
Section 3, 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 such Book-Entry Transfer Facility's
procedures.
8
Withdrawals of tendered Shares may not be rescinded, and any Shares
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following one of
the procedures described in Section 3 at any time on or 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 Purchaser, in its sole discretion,
which determination will be final and binding. None of Purchaser, Parent, the
Paying Agent, 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.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES.
The following is a general summary of certain U.S. federal income tax
consequences of the Offer and the Merger relevant to a beneficial holder of
Shares whose Shares are tendered and accepted for payment pursuant to the Offer
or whose Shares are converted to cash in the Merger (a "Holder"). The
discussion is based on the Internal Revenue Code of 1986, as amended (the
"Code"), regulations issued thereunder, judicial decisions and administrative
rulings, all of which are subject to change, possibly with retroactive effect.
The following does not address the U.S. federal income tax consequences to all
categories of Holders that may be subject to special rules (e.g., holders who
acquired their Shares pursuant to the exercise of employee stock options or
other compensation arrangements with the Company, holders who perfect their
appraisal rights under the DGCL, foreign holders, insurance companies,
tax-exempt organizations, dealers in securities and persons who have acquired
the Shares as part of a straddle, hedge, conversion transaction or other
integrated investment), nor does it address the federal income tax consequences
to persons who do not hold the Shares as "capital assets" within the meaning of
Section 1221 of the Code (generally, property held for investment).
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for U.S. federal income tax purposes and may also be a
taxable transaction under applicable state, local and foreign income and other
tax laws. In general, a Holder who sells Shares pursuant to the Offer or
receives cash in exchange for Shares pursuant to the Merger will recognize gain
or loss for federal income tax purposes equal to the difference, if any,
between the amount of cash received and the Holder's adjusted tax basis in the
Shares sold pursuant to the Offer or surrendered for cash pursuant to the
Merger. Gain or loss will be determined separately for each block of Shares
(i.e., Shares acquired at the same cost in a single transaction) tendered
pursuant to the Offer or surrendered for cash pursuant to the Merger. Such gain
or loss will be long-term capital gain or loss if the Holder has held the
Shares for more than one year at the time of the consummation of the Offer or
the Merger. Under recently adopted amendments to the Code, capital gains
recognized by an individual investor (or an estate or certain trusts) upon a
disposition of a Share that has been held for more than one year generally will
be subject to a maximum tax rate of 20% or, in the case of a Share that has
been held for one year or less, will be subject to tax at ordinary income
rates. Certain limitations apply to the use of capital losses.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL,
STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE OFFER AND THE
MERGER.
9
6. PRICE RANGE OF THE SHARES; DIVIDENDS.
The Shares are traded through the over-the-counter market and are quoted
on the National Association of Securities Dealers Automated Quotation System
("NASDAQ") under the NASDAQ symbol "CCON." The following table sets forth, for
each of the fiscal quarters indicated, the high and low reported sales price
per Share on the NASDAQ, as set forth in the Company 10-K (as hereafter
defined) for 1996 and 1997 and as set forth in published financial sources for
1998.
COMMON STOCK
---------------------------
HIGH LOW
------------- -----------
Fiscal Year Ended December 31, 1996
First Quarter ended March 31, 1996 ............... $20 1/4 $10 3/4
Second Quarter ended June 30, 1996 ............... 15 5/8 10 3/4
Third Quarter ended September 30, 1996 ........... 19 1/2 8 1/2
Fourth Quarter ended December 31, 1996 ........... 17 5/8 15 1/4
Fiscal Year Ended December 31, 1997
First Quarter ended March 31, 1997 ............... 15 3/4 13 3/8
Second Quarter ended June 30, 1997 ............... 14 5/8 12 5/8
Third Quarter ended September 30, 1997 ........... 16 1/8 14
Fourth Quarter ended December 31, 1997 ........... 16 1/2 14 3/4
Fiscal Year Ended December 31, 1998
First Quarter ended March 31, 1998 ............... 16 13/16 15 1/8
Second Quarter ended June 30, 1998 ............... 19 1/8 13 1/4
Third Quarter ended September 30, 1998 ........... 16 3/4 8 7/16
Fourth Quarter through November 27, 1998 ......... 14 21/32 7 27/33
On November 20, 1998, the last full trading day prior to the public
announcement of the execution of the Merger Agreement, the last reported sales
price of the Shares on the NASDAQ was $10 11/16 per Share. On November 27,
1998, the last full trading day prior to the commencement of the Offer, the
last reported sales price of the Shares on the NASDAQ was $14 21/32 per Share.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
The Company did not declare or pay any cash dividends during any of the
periods indicated in the above table. In addition, under the terms of the
Merger Agreement, the Company is not permitted to declare or pay dividends with
respect to the Shares without the prior written consent of Parent and Parent
does not intend to consent to any such declaration or payment.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK LISTING; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS.
The Offer will reduce the number of holders of Shares and the number of
Shares that might otherwise trade publicly and, depending upon the number of
Shares so purchased, could adversely affect the liquidity and market value of
the remaining Shares held by the public.
Stock Listing. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements of the National
Association of Securities Dealers for continued inclusion on the NASDAQ which
requires that an issuer either (i) have at least 750,000 publicly held shares,
held by at least 400 round lot shareholders, with a market value of at least $5
million, have at least two market makers, have net tangible assets of at least
$4 million, and have a minimum bid price of $1.00 or (ii) have at least 1.1
million publicly held shares, held by at least 400 round lot shareholders, with
a market value of at least $15 million, have a minimum bid price of $5.00, have
at least four market makers and have either (A) a market capitalization of at
least $50 million or (B) total assets and revenues each of at least $50
million. If the NASDAQ was to cease to publish quotations for the Shares, it is
possible that the Shares would continue to trade in the over-the-counter market
and that price or other quotations
10
would be reported by other sources. The extent of the public market for such
Shares and the availability of such quotations would depend, however, upon such
factors as the number of stockholders and/or the aggregate market value of such
securities remaining at such time, the interest in maintaining a market in the
Shares on the part of securities firms, the possible termination of
registration under the Exchange Act as described below, and other factors.
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on
the market price for, or marketability of, the Shares or whether it would cause
future market prices to be greater or lesser than the Offer Price.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more
holders of record. Termination of registration of the Shares under the Exchange
Act would substantially reduce the information required to be furnished by the
Company to its stockholders and to the Commission and would make certain
provisions of the Exchange Act no longer applicable to the Company, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement pursuant to Section 14(a) 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 Rule 144A
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), may be impaired or eliminated.
Margin Regulations. The Shares are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Shares. Depending
upon factors similar to those described above regarding listing and market
quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers. In addition, if registration of the
Shares under the Exchange Act were terminated, the Shares would no longer
constitute "margin securities."
Purchaser currently intends to seek delisting of the Shares from the
NASDAQ and the termination of the registration of the Shares under the Exchange
Act as soon after the completion of the Offer as the requirements for such
delisting and termination are met. If the NASDAQ listing and the Exchange Act
registration of the Shares are not terminated prior to the Merger, then the
Shares will be delisted from the NASDAQ and the registration of the Shares
under the Exchange Act will be terminated following the consummation of the
Merger.
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
General. The information concerning the Company contained in this Offer to
Purchase, including that set forth below under the caption "Selected Financial
Information," has been furnished by the Company or has been taken from or based
upon publicly available documents and records on file with the Commission and
other public sources. None of Maxxim, Parent, Purchaser or the Information
Agent assumes responsibility for the accuracy or completeness of the
information concerning the Company contained in such documents and records 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 Maxxim, Parent, Purchaser or the Information Agent.
The Company designs, manufactures, markets and services medical endoscopy
systems for diagnosis and minimally invasive surgery. The Company's systems are
used for a growing number of medical specialties, including urology,
arthroscopy, laparoscopy, gynecology, thoracoscopy and plastic surgery. The
Company also designs, assembles and markets miniature color video systems used
with endoscope systems.
11
On August 28, 1995, the Company merged with Cabot Medical Corporation
("Cabot Medical"), collectively referred to as "Circon" or "the Company",
creating a publicly-traded minimally invasive surgery company with the largest
United States endoscopy market share in the fields of urology and gynecology.
The Company operates its business through several divisions and subsidiaries
including Circon Video, Circon ACMI, Circon Cabot and Circon Surgitek.
In addition, the merger with Cabot Medical brought the capability to
design, manufacture and market medical devices and systems for use in
gynecological diagnosis and surgery, ureteral stents, urological diagnostic
equipment and various products and systems principally used in general surgery.
Selected Financial Information. Set forth below is certain consolidated
financial information with respect to the Company, excerpted or derived from
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997 (the "Company 10-K"), and the Company's report on Form 10-Q for the period
ending September 30, 1998, each as filed with the Commission pursuant to the
Exchange Act.
More comprehensive financial information is included in such reports and
in other documents filed by the Company with the Commission. The following
summary is qualified in its entirety by reference to such reports and other
documents and all of the financial information (including any related notes)
contained therein. Such reports, documents and financial information may be
inspected and copies may be obtained from the Commission in the manner set
forth below.
CIRCON CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
NINE MONTHS ENDED
SEPTEMBER 30,
(UNAUDITED) FISCAL YEARS ENDED DECEMBER 31,
----------------------------- -------------------------------------------
1998 1997 1997 1996 1995
------------- ------------- ------------- ------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Net Sales .......................... $ 111,930 $ 119,882 $ 159,954 $ 153,779 $160,447
Operating Income (Loss) ............ 10,522 6,422 10,209 6,709 3,820
Net Income (Loss) .................. 5,437 2,467 5,099 2,071 (5,393)
Basic Net Income (Loss)
per Share: ....................... 0.41 0.19 0.38 0.16 (0.44)
Diluted Net Income (Loss)
per Share ........................ 0.40 0.18 0.37 0.16 (0.44)
BALANCE SHEET DATA:
Total Assets ....................... $ 164,630 $ 175,465 $ 169,357 $ 169,118 $181,399
Total Liabilities .................. 54,365 74,383 65,398 70,217 94,227
Total Shareholders' Equity ......... 110,265 101,082 103,959 98,901 87,172
Other Financial Information. During the course of the discussions between
Parent and the Company that led to the execution of the Merger Agreement, the
Company provided Parent with certain information about the Company and its
financial performance which is not publicly available. The information provided
included financial projections for the Company as an independent company (i.e.,
without regard to the impact on the Company of a transaction with Parent). Such
information included projections of total sales, earnings before interest and
taxes and net income for the fiscal year ending December 31, 1999 of
approximately $162.9 million, $19.9 million and $11.6 million, respectively.
The foregoing information was prepared by the Company solely for internal
use and not for publication or with a view to complying with the published
guidelines of the Commission regarding projections or with the guidelines
established by the American Institute of Certified Public Accountants and are
included in this Offer to Purchase only because they were furnished to Parent.
The foregoing information is "forward-looking" and inherently subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Company, including industry performance, general business and
economic conditions, changing competition, adverse changes in applicable laws,
regulations or rules
12
governing tax or accounting matters and other matters. Although the Company
believes the assumptions used in preparing this information were reasonable
when made, such assumptions are inherently subject to significant uncertainties
and contingencies which are impossible to predict and beyond the Company's
control. One cannot predict whether the assumptions made in preparing the
foregoing information will be accurate, and accordingly, there can be no
assurance, and no representation or warranty is made, that actual results will
not vary materially from those described above. The inclusion of this
information should not be regarded as an indication that Maxxim, Parent,
Purchaser, the Company or anyone who received this information considered it a
reliable prediction of future events, and this information should not be relied
on as such. None of Maxxim, Parent, Purchaser, the Company, Bear, Xxxxxxx or
Xxxxxxxxx, Xxxxxx & Xxxxxxxx ("DLJ"), financial advisor to Parent, assumes any
responsibility for the validity, reasonableness, accuracy or completeness of
the projections, and the Company has made no representation to Maxxim, Parent
or Purchaser regarding this financial information. The projections have not
been adjusted to reflect the effects of the Merger and the Company does not
intend to update or otherwise revise these projections prior to the
consummation of the Merger.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the Commission
relating to its business, financial condition and other matters. Information as
of particular dates concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interests of such persons in transactions with the
Company 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 facilities of the Commission at 000 Xxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, and at the regional offices of the Commission located
at Seven World Trade Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000 and Citicorp
Center, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000. Copies of such
information should be obtainable by mail, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at 000 Xxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000. The Commission also maintains a website
on the internet at xxxx://xxx.xxx.xxx that contains reports, proxy statements
and other information relating to the Company which have been filed via the
Commission's XXXXX System.
9. CERTAIN INFORMATION CONCERNING MAXXIM, PARENT AND PURCHASER.
Parent and Purchaser. Maxxim is a Texas corporation and (with its
subsidiaries) is a major manufacturer and developer of a diversified range of
specialty medical products and a leading supplier to hospitals, clinics and
outpatient surgery centers of single-use custom procedure trays. Parent is a
Delaware corporation and a wholly owned subsidiary of Maxxim. Maxxim operates a
substantial portion of its business and holds a substantial portion of its
assets through Parent. Parent operates three divisions: Case Management, Argon
Medical and Maxxim Medical Europe. Parent's Case Management division
manufactures, assembles and sells custom procedure trays for a wide variety of
operating room and other medical procedures, complete lines of surgical gloves
and medical examination gloves, infection control apparel for operating room
personnel and patient draping systems. Parent believes that it currently
controls a 35% market share in custom procedure trays and a 61% market share in
non-latex medical examination gloves in the United States. The Argon Medical
division manufactures and markets guidewires, needles, introducers, catheters,
manifolds, transducers, high pressure syringes and certain other single-use
medical and surgical specialty products, which are used in Parent's procedure
trays or are sold separately. This division also assembles and markets
procedure trays for use primarily in cardiology and radiology procedures.
Parent's third division, Maxxim Medical Europe, serves as Parent's European
manufacturer and distributor of its products.
Purchaser is a newly incorporated Delaware corporation organized in
connection with the Offer and the Merger and has not carried on any significant
activities other than in connection with the Offer and the Merger. All of the
outstanding capital stock of Purchaser is owned directly by Parent. Until
immediately prior to the time Purchaser purchases Shares pursuant to the Offer,
it is not anticipated that Purchaser will have any significant assets or
liabilities or engage in any significant activities other than those incident
to its formation and capitalization and the transactions contemplated by the
Offer and the Merger.
13
The principal offices of Maxxim, Purchaser and Parent are located at 00000
00xx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000. The telephone number of Maxxim,
Parent and Purchaser at such location is (000) 000-0000.
For certain information concerning the executive officers and directors of
Maxxim, Parent and Purchaser, see Schedule I.
Except as set forth in this Offer to Purchase, none of Maxxim, Purchaser
or Parent, nor, to the best knowledge of Maxxim, Purchaser or Parent, any of
the persons listed on Schedule I, nor any associate or majority owned
subsidiary of any of the foregoing, beneficially owns or has a right to acquire
any Shares, and none of Maxxim, Purchaser or Parent nor, to the best of
knowledge of Maxxim, Purchaser or Parent, any of the persons or entities
referred to above, nor any of the respective executive officers, directors or
subsidiaries of any of the foregoing, has effected any transaction in the
Shares during the past sixty days.
Except as set forth in this Offer to Purchase, none of Maxxim, Purchaser
or Parent has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any securities of the Company, joint ventures,
loan or option arrangements, puts or calls, guarantees of loans, guarantees
against loss or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, none of Maxxim, Purchaser,
Parent, any of their respective affiliates, nor, to the best knowledge of
Maxxim, Purchaser or Parent, any of the persons listed on Schedule I, has had,
since January 1, 1995, any business relationships or transactions with the
Company or any of its executive officers, directors or affiliates that would be
required to be reported under the rules of the Commission. Except as set forth
in this Offer to Purchase, since January 1, 1995 there have been no contacts,
negotiations or transactions between Maxxim, Purchaser, Parent, any of their
respective affiliates or, to the best knowledge of Maxxim, Purchaser or Parent,
any of the persons listed on Schedule I, and the Company or its affiliates
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.
Available Information. Maxxim is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the Commission
relating to its business, financial condition and other matters. Information as
of particular dates concerning Xxxxxx's directors and officers, their
remuneration, options granted to them, the principal holders of Xxxxxx's
securities and any material interests of such persons in transactions with
Xxxxxx is required to be disclosed in proxy statements distributed to Xxxxxx's
stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000,
and at the regional offices of the Commission located at Seven World Trade
Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000 and Citicorp Center, 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000. Copies of such information should be
obtainable by mail, upon payment of the Commission's customary charges, by
writing to the Commission's principal office at 000 Xxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000. The Commission also maintains a website at
xxxx://xxx.xxx.xxx that contains reports, proxy statements and other
information relating to Maxxim which have been filed via the XXXXX System.
10. SOURCES AND AMOUNT OF FUNDS.
The total amount of funds required by Purchaser to consummate the Offer
and the Merger, including the fees and expenses incurred in connection with the
Offer and the Merger and the refinancing of certain debt of the Company, is
estimated to be approximately $257 million. Purchaser will obtain all such
funds from Maxxim and/or Parent in the form of capital contributions and/or
loans.
Xxxxxx has entered into a commitment letter (the "Commitment Letter") with
NationsBank, N.A. ("NationsBank") and NationsBanc Xxxxxxxxxx Securities, Inc.
("NMSI") pursuant to which NationsBank and NMSI will provide Maxxim or any of
its subsidiaries (the "Borrower") financing in an aggregate amount up to $325
million (the "Facilities"). NationsBank has committed to provide the Facilities
upon the terms and subject to the conditions set forth in the Commitment
Letter, and NMSI has committed to
14
form a syndicate of financial institutions reasonably acceptable to Maxxim (the
"Lenders"), upon the terms and subject to the conditions set forth in the
Commitment Letter.
Pursuant to the Commitment Letter, the Facilities are expected to consist
of: (i) a $200 million term loan facility (the "Term Loan Facility") which may
be advanced in up to two tranches and (ii) a $125 million revolving credit
facility (the "Revolving Credit Facility").
The following is a summary of the principal terms of the Facilities based
upon the Commitment Letter. This summary is qualified in its entirety by
reference to the Commitment Letter, a copy of which has been filed as an
exhibit to the Schedule 14D-1 filed with the Commission in connection with the
Offer.
The Commitment Letter provides that the commitments of NationsBank and
NMSI will terminate unless the Facilities are closed on or prior to February 1,
1999.
The Facilities will mature six years from the closing thereof and the Term
Loan Facility will be subject to quarterly amortization over such period. In
addition, the Facilities will be subject to certain mandatory prepayments and
commitment reductions tied to the sale of assets, the issuance of permitted
debt and the issuance of equity.
The amounts borrowed pursuant to the Revolving Credit Facility and the
Term Loan Facility will bear interest at a rate equal to, at Borrower's option,
(i) LIBOR plus the Applicable Margin or (ii) the Base Rate (to be defined as
the higher of (a) the NationsBank prime rate and (b) the federal funds rate
plus 0.50%) plus the Applicable Margin. The "Applicable Margin" will be set
forth in a schedule to the Facilities and will be determined by reference to a
ratio of Xxxxxxxx's total debt to EBITDA (as defined in the Facilities).
The Facilities will contain certain representations and warranties,
certain negative and affirmative covenants, certain conditions and events of
default which are customarily required for similar financings. Such covenants
will include, among others, restrictions and limitations on dividends, stock
redemptions, redemption and/or prepayment of other debt, capital expenditures,
incurrence of debt, liens, negative pledges, investments, acquisitions,
mergers, consolidations and asset sales. The Borrower will also be required to
comply with certain financial covenants such as minimum net worth, maximum
leverage ratio, maximum senior leverage ratio and minimum fixed charge coverage
ratio.
The Facilities will require the Borrower to grant a first priority
perfected security interest in (i) all of the capital stock of the Borrower and
each of its domestic subsidiaries and 65% of the capital stock of each material
foreign subsidiary of the Borrower and (ii) present and future accounts
receivable and inventory of the Borrower and its subsidiaries.
The funding of the Facilities will be subject to customary closing
conditions, including, among others, the execution of satisfactory
documentation, the receipt of all necessary governmental approvals and no
material adverse change in the business or financial condition of the Borrower
or the Company. Although Maxxim expects that the Facilities will be available
to provide funds for the consummation of the Offer and the Merger in accordance
with their respective terms, there can be no assurance that the Facilities will
be consummated. The Offer is not conditioned upon any financing arrangements.
In connection with the Facilities, Xxxxxx has agreed to pay NationsBank
and NMSI certain commitment, underwriting, administrative and termination fees,
to reimburse NationsBank and NMSI for reasonable out-of-pocket fees and
expenses, whether or not the Facilities close, and to provide certain
indemnities, as is customary for commitments such as the Facilities.
Xxxxxx anticipates that indebtedness incurred through borrowings under the
Facilities in connection with the Offer and Merger will be repaid from a
variety of sources, which may include funds generated internally by Maxxim and
its subsidiaries, including Parent and, following the Merger, funds generated
by the Company, bank financing, and the public or private sale of debt or
equity securities. No decision has been made concerning the method Xxxxxx will
employ to repay such indebtedness. Such decision will be made based on Xxxxxx's
review from time to time of the advisability of particular actions, as well as
on prevailing interest rates and financial and other economic conditions and
such other factors as Maxxim may deem appropriate. Maxxim expressly reserves
its right to obtain financing for the transaction through alternative sources.
15
11. BACKGROUND OF THE OFFER; PURPOSE OF THE OFFER AND THE MERGER; THE MERGER
AGREEMENT AND CERTAIN OTHER AGREEMENTS.
Contacts with the Company; Background of the Offer.
Representatives of Parent were contacted in early May 1998 by Xxxx Xxxxxxx
and in late May 1998 by DLJ regarding the possibility of a business combination
between Parent and the Company.
In late October 1998, after meeting with representatives of Parent, DLJ
contacted Bear Xxxxxxx to determine whether the Company would consider a
business combination with Parent. Shortly after such meeting, Xxxxxxx X.
Xxxxxxxx, President of Parent, sent a letter to the Company's Board of
Directors expressing interest in pursuing a cash acquisition of the Company in
the range of $13.00 to $15.00 per Share.
Following meetings between Parent and the Company and their respective
representatives, and the review by Xxxxxx and its representatives of certain
information with respect to the Company, on November 13, 1998, Xxxxxx advised
the Company that Parent was prepared to acquire all outstanding Shares for $15
per Share in cash, subject to satisfactory negotiation of a definitive
agreement. Xxxxxx also stated that in order to proceed with the negotiation of
a definitive agreement with respect to such transaction, it would require the
Company to enter into an exclusivity agreement pursuant to which neither it nor
its Representatives (as therein defined) would solicit, initiate or encourage
any Acquisition Proposal (as therein defined), engage in negotiations, or
discussions with respect to an Acquisition Proposal, or disclose any non-public
information relating to the Company, from the date of execution of such
agreement, until November 23, 1998. On Monday, November 16, the Company's Board
of Directors met to discuss Xxxxxx's proposal. The Company executed and
delivered the Exclusivity Agreement on November 17, 1998. Following further
negotiations, on November 21, 1998, following the approval by the respective
boards of directors, the Merger Agreement was executed. On November 30, 1998,
Parent and Purchaser commenced the Offer.
Purpose of the Offer and the Merger. The purpose of the Offer and the
Merger is to enable Parent to acquire control of, and the entire equity
interest in, the Company. The Offer is being made pursuant to the Merger
Agreement and is intended to increase the likelihood that the Merger will be
effected. The purpose of the Merger is to acquire all of the outstanding Shares
not purchased pursuant to the Offer.
Stockholders of the Company who sell their Shares in the Offer will cease
to have any equity interest in the Company and any right to participate in its
earnings and future growth. If the Merger is consummated, non-tendering
stockholders will no longer have an equity interest in the Company and instead
will have only the right to receive cash consideration pursuant to the Merger
Agreement or to exercise statutory appraisal rights under Section 262 of the
DGCL. See Section 12. Similarly, after selling their Shares in the Offer or the
subsequent Merger, stockholders of the Company will not bear the risk of any
decrease in the value of the Company.
The primary benefits of the Offer and the Merger to the stockholders of
the Company are that such stockholders are being afforded an opportunity to
sell all of their Shares for cash at a price which represents a premium of
approximately 40% over the last reported sales price of the Shares on November
20, 1998, the last full trading day prior to the initial public announcement
that the Company, Purchaser and Parent had executed the Merger Agreement.
MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement.
This summary is not a complete description of the terms and conditions of the
Merger Agreement and is qualified in its entirety by reference to the full text
of the Merger Agreement filed with the Commission as an exhibit to the Schedule
14D-1 and is incorporated herein by reference. Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Merger
Agreement. The Merger Agreement may be examined, and copies obtained, as set
forth in Section 9 of this Offer to Purchase.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and Purchaser with
respect to, among other things, corporate
16
organization, subsidiaries, capital structure, options or other rights to
acquire Shares, authority to enter into the Merger Agreement, no conflicts
between the Merger Agreement and applicable laws and certain agreements to
which the Company or its assets may be subject, financial statements, filings
with the Commission, disclosures to be made in the Proxy Statement (as defined
below) and tender offer documents, absence of certain changes or events,
litigation and investigations, absence of changes in benefit plans, labor
relations, ERISA compliance, tax matters, compliance with applicable laws,
intellectual property, material contracts, applicability of state takeover
statutes, absence of excess parachute payments, brokers' and finders' fees,
receipt of the Financial Advisor Opinion, Company Rights Agreement, products
liability and insurance matters.
In the Merger Agreement, each of Parent and Purchaser has made customary
representations and warranties to the Company with respect to, among other
things, corporate organization, authority to enter into the Merger Agreement,
no conflicts between the Merger Agreement and the certificate of incorporation
and by-laws of Parent and Purchaser or laws applicable to Parent or Purchaser
disclosures to be made in the Proxy Statement and tender offer documents,
brokers' and finders' fees and financing.
Conditions to the Merger. The respective obligations of Parent and
Purchaser, on the one hand, and the Company, on the other hand, to effect the
Merger are subject to the satisfaction or waiver of each of the following
conditions: (i) the Merger Agreement shall have been approved and adopted by
the requisite vote of the holders of Shares, if required by applicable law, in
order to consummate the Merger; (ii) no statute, rule, regulation, order,
decree, temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other governmental
entity or other legal restraint or prohibition preventing consummation of the
Merger shall be in effect; provided, however, that each of the parties shall
have used reasonable efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any injunction or other order
that may be entered; and (iii) Purchaser shall have previously accepted for
payment and paid for Shares pursuant to the Offer.
The Company Board. The Merger Agreement provides that promptly upon the
acceptance for payment of, and payment for, Shares by Purchaser pursuant to the
Offer, Purchaser shall be entitled to designate such number of directors on the
Company Board as will give Purchaser, subject to compliance with Section 14(f)
of the Exchange Act, a majority of such directors and the Company shall, at
such time, cause Purchaser's designees to be so elected; provided, however,
that in the event that Purchaser's designees are elected to the Company Board,
until the Effective Time such Board of Directors shall have at least two
directors who are directors of the Company on the date of the Merger Agreement
and who are not officers of the Company or any of its subsidiaries (the
"Independent Directors").
The Merger Agreement further provides that, notwithstanding the foregoing,
if the number of Independent Directors shall be reduced below two for any
reason whatsoever, the remaining Independent Director shall designate a person
to fill such vacancy who shall be deemed to be an Independent Director for
purposes of the Merger Agreement or, if no Independent Directors then remain,
the other directors of the Company on the date of the Merger Agreement shall
designate two persons to fill such vacancies who shall not be officers or
affiliates of the Company or any of its subsidiaries, or officers or affiliates
of Parent or any of its subsidiaries, and such persons shall be deemed to be
Independent Directors. The Company shall, if requested by the Parent, also
cause directors designated by the Parent to constitute at least a majority of
(i) each committee of the Company's Board, (ii) each board of directors (or
similar body) of each subsidiary of the Company, and (iii) each committee (or
similar body) of each such board. Subject to applicable law, the Company shall
take all action requested by Parent necessary to effect any such election. In
connection with the foregoing, the Company will promptly, at the option of
Parent, either increase the size of the Company's Board, any subsidiary or any
committee thereof and/or obtain the resignation of such number of current
directors or committee members as is necessary to enable Purchaser's designees
to be elected or appointed to, and to constitute a majority of such boards and
committees and as provided above.
Stockholders' Meeting. If required by applicable law in order to
consummate the Merger, the Company, acting through the Company Board, shall, in
accordance with applicable law, its Certificate of
17
Incorporation and by-laws: (i) as promptly as practicable following the
expiration of the Offer, duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Stockholders Meeting") for the purposes of
obtaining approval of the Merger by an affirmative vote of the holders of a
majority of the Shares outstanding ("Company Stockholder Approval") and the
approval and adoption of the Merger Agreement; (ii) prepare and file with the
Commission a preliminary proxy or information statement relating to the Merger
and the Merger Agreement and (x) obtain and furnish the information required to
be included in the Proxy Statement and, after consultation with Parent, respond
promptly to any comments made by the Commission with respect to the preliminary
proxy or information statement and cause a definitive proxy or information
statement, including any amendment or supplement thereto (the "Proxy
Statement") to be mailed to its stockholders at the earliest practicable date
and (y) use its reasonable best efforts to obtain the necessary approvals of
the Merger and the Merger Agreement by its stockholders; and (iii) unless the
Merger Agreement has been terminated in accordance with the provisions
summarized under the heading "Termination" below, subject to its rights
pursuant to the section summarized under "No Solicitation" below, include in
the Proxy Statement the recommendation of the Company Board that stockholders
of the Company vote in favor of the approval of the Merger and the approval and
adoption of the Merger Agreement. Parent has agreed to vote, or cause to be
voted, all of the Shares then owned by it, Purchaser or any of its other
subsidiaries in favor of the approval of the Merger and the approval and
adoption of the Merger Agreement.
Options. The Merger Agreement provides that immediately prior to the
Effective Time, each then outstanding Option, whether or not then vested or
exercisable, shall, effective as of the commencement of the Offer, become fully
exercisable. Upon the commencement of the Offer, the Company Board or an
appropriate committee thereof shall provide notice to each employee of the
Company or its subsidiaries or a member of the Company Board (each, an
"Optionee"), that any Company Stock Option (as defined in the Merger Agreement)
not exercised within 15 days (10 days in the case of Company Stock Options
granted under the Company 1995 Directors Stock Option Plan) from the date of
such notice shall thereupon be cancelled. The notice may provide each Optionee
with an opportunity to avoid the tendering of the exercise price and receiving
in lieu thereof an amount per option share equal to the excess, if any, of the
Offer Price over the exercise price of the Option. Nothwithstanding anything to
the contrary set forth in this paragraph, any such acceleration, exercise or
cancellation shall be conditioned upon the effectiveness of the Merger. The
Merger Agreement further provides that prior to the commencement of the Offer,
the Company shall (i) obtain any consents from holders of Company Stock Options
and (ii) amend the terms of its equity incentive plans or arrangements, in each
case as is necessary to give effect to the provisions described herein and to
ensure that at the Effective Time, no holder of any Company Stock Option shall
have the right to purchase or receive any Shares.
Conduct of Business by the Company. The Merger Agreement provides that the
Company shall, and shall cause its subsidiaries to, carry on their respective
businesses in the ordinary course consistent with the manner as currently
conducted and use commercially reasonable efforts to (a) preserve intact their
current business organization, (b) keep available the services of their current
officers and employees and (c) preserve their relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them. Without limiting the generality of the foregoing, the
Company shall not, and shall not permit any of its subsidiaries to, without
Parent's prior written consent:
(i) other than dividends and distributions by a direct or indirect wholly
owned subsidiary of the Company to its parent or pursuant to the Rights
Agreement, (x) declare, set aside or pay any dividends on, or make any
other distributions (whether in cash, stock or property), in respect of,
any of its capital stock, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock
(other than the issuance of Shares upon the exercise of Options or Warrants
outstanding on the date of the Merger Agreement and in accordance with
their terms in effect on the date of execution of the Merger Agreement) or
(z) purchase, redeem or otherwise acquire any shares of capital stock of
the Company or any of its subsidiaries or any other securities thereof or
any rights, warrants or options to acquire any such shares or other
securities;
18
(ii) issue, deliver, sell, pledge or otherwise encumber any shares of its
capital stock or any shares of capital stock of its subsidiaries, any other
voting securities or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting securities or
convertible securities (other than (y) pursuant to the Rights Agreement or
(z) the issuance of Shares upon the exercise of Options or Warrants
outstanding on the date of the Merger Agreement and in accordance with
their terms in effect on the date of execution of the Merger Agreement);
(iii) amend its Certificate of Incorporation, by-laws or other comparable
charter or organizational documents or those of any of its subsidiaries;
(iv) acquire or agree to acquire (including, without limitation, by
merger, consolidation or acquisition of stock or assets) any business,
including through the acquisition of any interest in any corporation,
partnership, joint venture, association or other business organization or
division thereof;
(v) sell, lease, license, mortgage or otherwise encumber or otherwise
dispose of any of its material properties or assets, other than in the
ordinary course of business consistent with past practice;
(vi) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its subsidiaries, or guarantee any debt securities of another
person, other than short-term bank financing in the ordinary course of
business consistent with past practice; or make any loans, advances or
capital contributions to, or investments in, any other person, other than
in the ordinary course of business consistent with past practice and in any
event not in excess, individually or in the aggregate, of $100,000;
(vii) make or agree to make any material capital expenditure,
individually or in the aggregate, in excess of $25,000;
(viii) except as required to comply with applicable law (in which case
the Company will notify Parent) (A) adopt, enter into, terminate or amend
in any material respect any employment, severance or similar contract,
collective bargaining agreement or Benefit Plan, (B) increase in any manner
the compensation or fringe benefits of, or pay any bonus to, any director,
officer or employee, (C) pay any benefit not provided for under any Benefit
Plan or any other benefit plan or arrangement of the Company or its
subsidiaries, (D) increase in any manner the severance or termination pay
of any officer or employee, (E) grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or Benefit
Plan (including the grant of stock options, stock appreciation rights,
stock based or stock related awards, performance units or restricted stock
or the removal of existing restrictions in any Benefit Plans or agreements
or awards made thereunder), (F) take any action to fund or in any other way
secure the payment of compensation or benefits under any employee plan,
agreement, contract or arrangement or Benefit Plan or (G) take any action
to accelerate the vesting of, or cash out rights associated with, any
Options or other benefits;
(ix) enter into any agreement of a nature that would be required to be
filed as an exhibit to Form 10-K under the Exchange Act;
(x) except as required by generally accepted accounting principles, make
any material change in accounting methods, principles or practices;
(xi) make any tax election, make a claim for any tax refund or enter into
any settlement or compromise with respect to any material tax liability;
(xii) amend or terminate any material contract, or waive, release, assign
or settle any material rights or claims;
(xiii) hire or fire or agree to hire any officers;
(xiv) take any action that may reasonably be expected to result in (i)
any of the representations and warranties by the Company becoming untrue,
(ii) any breach of the Company's covenants under the Merger Agreement or
(iii) any of the conditions of the Offer not being satisfied; or
19
(xv) authorize any of, or commit or agree to take any of, the foregoing
actions.
No Solicitation. Pursuant to the Merger Agreement, the Company has agreed
that it shall not, nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any of its officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other
representative or agent retained by it or any subsidiary to, directly or
indirectly, (i) solicit, initiate or encourage the submission of any Takeover
Proposal (as defined below), (ii) participate in any discussions or
negotiations regarding, or furnish to any person any nonpublic information with
respect to, or take any other action designed or reasonably likely to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, a Takeover Proposal, or (iii) except as
specifically provided in the applicable provisions of the Merger Agreement and
provided that the Company shall have first complied with all its obligations
under the provisions relating to no solicitation, termination fees and
expenses, enter into any agreement with respect to any Takeover Proposal or
approve or resolve to approve any Takeover Proposal. Upon execution of the
Merger Agreement, the Company agreed to cease any then existing activities,
discussions or negotiations with any parties conducted with respect to any of
the foregoing. Notwithstanding the foregoing, the Merger Agreement provides
that if, at any time prior to the acceptance for payment of Shares pursuant to
the Offer, the Company Board determines in good faith after consultation with
outside counsel, that such action may reasonably be required to discharge the
Company Board's fiduciary duties to the Company's stockholders under applicable
law, the Company may, in response to an unsolicited Takeover Proposal which
constitutes a Superior Proposal (as defined below) made subsequent to the date
of the Merger Agreement, and subject to compliance with the applicable
provisions of the Merger Agreement, (x) furnish information with respect to the
Company to any person that has submitted a Takeover Proposal that constitutes a
Superior Proposal pursuant to a customary confidentiality agreement in form and
substance reasonably satisfactory to Parent and (y) participate in discussions
and negotiations regarding such Takeover Proposal which constitutes a Superior
Proposal. Pursuant to the Merger Agreement, any violation of the restrictions
set forth in the preceding sentence by any director or officer of the Company
or any subsidiary or any investment banker, financial advisor, attorney,
accountant or other representative or agent of the Company or any subsidiary
will be deemed to be a breach of the Merger Agreement by the Company. The term
"Takeover Proposal" means any proposal or offer from any person, in each case,
in writing, relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company and its subsidiaries, taken as a
whole (other than the purchase of the Company's products in the ordinary course
of business), or more than a 30% interest in the total voting securities of the
Company or any tender offer or exchange offer that if consummated would result
in any person beneficially owning 30% or more of any class of equity securities
of the Company or any merger, consolidation, business combination, sale of
substantially all assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company other than the transactions contemplated by
the Merger Agreement.
Pursuant to the Merger Agreement, except as set forth in this paragraph,
neither the Company Board nor any committee thereof shall (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Parent the
approval or recommendation by such Board of Directors or such committee of the
Offer, the Merger or the Merger Agreement, (ii) approve or recommend, or
propose publicly to approve or recommend, any Takeover Proposal, (iii) cause
the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, an "Acquisition
Agreement") related to any Takeover Proposal or (iv) resolve to take any of the
foregoing actions. Notwithstanding the foregoing, in the event that, prior to
the acceptance for payment of Shares pursuant to the Offer, the Company Board
determines in good faith, after consultation with outside counsel, that such
action may reasonably be required to discharge the Company Board's fiduciary
duties to the Company's stockholders under applicable law, the Company Board
may, in response to an unsolicited Superior Proposal (subject to the following
proviso), (x) withdraw or modify its approval or recommendation of the Offer,
the Merger or the Merger Agreement or (y) approve or recommend any such
Superior Proposal; provided, that in the case of clause (y), such approval or
recommendation shall occur only at a time that is after the later of (i) the
fifth business day following Parent's receipt of written notice advising Parent
that the Company Board has received a Superior Proposal, specifying the
material terms of such Superior Proposal and identifying the person making such
Superior Proposal and (ii) in the event
20
of any amendment to the price or any material term of a Superior Proposal,
three business days following Xxxxxx's receipt of written notice containing the
material terms of such amendment, including any change in price (it being
understood that each further amendment to the price or any material terms of a
Superior Proposal shall necessitate an additional written notice to Parent and
additional three business day period prior to which the Company can take the
actions set forth in clause (y) above). All notices referred to in the prior
sentence shall include a copy of any such Superior Proposal. The term "Superior
Proposal" means any bona fide Takeover Proposal made by a third party (i) that
is on terms which the Company Board determines in its good faith judgment
(based on the written opinion of the Company's financial advisors as to the
financial terms of such Superior Proposal and after consultation with the
Company's legal advisors) to be more favorable to the Company's stockholders
than the Offer and the Merger and (ii) for which financing, to the extent
required, is available pursuant to definitive agreements with respect thereto.
The Merger Agreement further provides that in addition to the obligations
of the Company set forth in the preceding two paragraphs, the Company will
promptly advise Parent orally and in writing of any request for nonpublic
information (except requests not of a transactional or financial nature by
companies with established commercial relationships with the Company, made in
the ordinary course of business and not in connection with a possible Takeover
Proposal) or of any Takeover Proposal, the material terms and conditions of
such request or Takeover Proposal and the identity of the person making such
request or Takeover Proposal. The Company will promptly inform Parent of any
material change in the details (including amendments or proposed amendments) of
any such request or Takeover Proposal.
Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of the terms of the Merger
Agreement by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if (x) Purchaser shall not have accepted for payment any Shares
pursuant to the Offer prior to February 26, 1999 (the "Deadline Condition")
as a result of the failure, occurrence or existence of any of the
Conditions to Offer set forth in Section 14 or (y) the Offer shall have
terminated or expired in accordance with its terms without Purchaser having
accepted for payment any Shares pursuant to the Offer; provided, however,
that the right to terminate the Merger Agreement pursuant to this paragraph
is not available to any party whose failure to perform any of its
obligations under the Merger Agreement results in the failure of the
satisfaction of any such conditions; provided, that if the Offer is
extended, as provided for in the Merger Agreement, to a date later than the
date of the Deadline Condition, the date of the Deadline Condition shall
automatically be extended to the first business day following the extended
expiration date of the Offer;
(ii) if any Governmental Entity (as defined in the Merger Agreement)
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the acceptance
for payment of, or payment for, Shares pursuant to the Offer or the Merger
on the terms contemplated in the Merger Agreement, and such order, decree
or ruling or other action shall have become final and nonappealable;
(c) by Parent or Purchaser if, prior to the purchase of Shares pursuant to
the Offer, any of the material representations and warranties of the Company
set forth in the Merger Agreement shall not be true and correct in any material
respect, as of the date of the Merger Agreement, or if the Company shall have
failed to perform in any material respect any obligation or to comply in any
material respect with any agreement or covenant of the Company to be performed
or complied with by it under the Merger Agreement;
(d) by Parent or Purchaser if either Parent or Purchaser is entitled to
terminate the Offer as a result of the occurrence of any event set forth in
Section 14, paragraphs (d), (e), (f) or (g);
(e) by the Company in connection with entering into a definitive agreement
with respect to a Superior Proposal, in accordance with the provisions
summarized under the heading "No Solicitation"
21
above, provided that the Company has complied with all provisions thereof,
including the notice provisions therein and that the Company has made the
payments summarized under the heading "Termination Fee" below;
(f) by the Company if, prior to the purchase of Shares pursuant to the
Offer, any of the material representations and warranties of the Parent or
Purchaser set forth in the Merger Agreement shall not be true and correct in
any material respect, at the date of the Merger Agreement, or if the Parent or
Purchaser shall have failed to perform in any material respect any obligation
or to comply with in any material respect any agreement or covenant of Parent
or Purchaser to be performed or complied with by them under the Merger
Agreement; or
(g) by Parent or Purchaser if (i) a tender offer for any securities of the
Company shall have been commenced or publicly proposed to be made by another
person (including the Company or its subsidiaries or affiliates), (ii) any
person or group (as defined in Section 13(d)(3) of the Exchange Act), other
than Parent and Purchaser and other than any person or group which prior to the
date hereof has publicly disclosed beneficial ownership of 10% or more of the
outstanding voting securities of the Company (a "Significant Shareholder")
shall have acquired directly or indirectly beneficial ownership of 10% or more
of the outstanding voting securities of the Company or any of its subsidiaries,
whether through the acquisition of securities, the exercise of rights under
options, warrants or similar instruments, the formation of a group, or
otherwise, or (iii) any Significant Shareholder or group that together would
constitute a Significant Shareholder shall have beneficially acquired
additional voting securities of the Company, whether through the acquisition of
securities, the exercise of rights under options, warrants or similar
instruments, the formation of a group or otherwise, representing 2% or more of
the outstanding voting securities of the Company; provided that in Parent's
reasonable judgment any such event described in clause (ii) or (iii) makes the
successful completion of the Offer unlikely or materially more burdensome to
Parent or Purchaser.
Termination Fee. Pursuant to the Merger Agreement the Company shall pay,
or cause to be paid, in same day funds to Parent the sum of (x) all of Parent's
reasonabe out-of-pocket expenses incurred or to be incurred in connection with
the Offer, the Merger or the Merger Agreement or the preparation therefor, such
amount not to exceed $3,000,000 (the "Expenses"), and (y) $8,800,000 (the
"Termination Fee") if (i) the Company terminates the Merger Agreement pursuant
to clause (e) under the heading "Termination" above, or (ii) prior to
termination of the Merger Agreement, a Takeover Proposal (whether or not such
Takeover Proposal constitutes a Superior Proposal) shall have been received and
within twelve months of such termination such proposal is consummated or the
Company enters into an agreement to consummate or approves or recommends to its
stockholders such proposal. The payment shall be made in the case of a
termination described in clause (i) immediately prior to termination and in the
case of a termination described in clause (ii) concurrently with the earlier of
any such recommendation or the consummation of any such transaction by the
Company. The Company shall pay, or cause to be paid, in same day funds to
Parent all of Parent's Expenses if Parent or Purchaser shall terminate the
Merger Agreement pursuant to clause (c) under the heading "Termination" above,
such payment to be made promptly upon such termination.
Indemnification. The Merger Agreement provides that from and after the
consummation of the Offer, Parent will, and will cause the Surviving
Corporation to, fulfill and honor in all respects the obligations of the
Company pursuant to (i) each indemnification agreement in effect at such time
between the Company and each person who is or was a director or officer of the
Company at or prior to the Effective Time and (ii) any indemnification
provisions under the Company's Certificate of Incorporation or by-laws as each
is in effect on the date of the Merger Agreement (the persons to be indemnified
pursuant to the agreements or provisions referred to in clauses (i) and (ii) of
this sentence shall be referred to as, collectively, the "Indemnified
Parties"). In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) any
counsel retained by the Indemnified Parties for any period after the Effective
Time must be reasonably satisfactory to the Surviving Corporation, (ii) after
the Effective Time, the Surviving Corporation shall pay the reasonable fees and
expenses of such counsel; provided, however, that the Surviving Corporation
shall not be liable for any settlement effected without its written consent
(which consent shall not be unreasonably withheld)
22
and; provided, further, that the Indemnified Parties as a group may retain only
one law firm to represent them with respect to any single action unless there
is, under applicable standards of professional conduct, a conflict on any
significant issue between the positions of any two or more Indemnified Parties.
The Certificate of Incorporation and by-laws of the Surviving Corporation shall
contain the provisions with respect to indemnification and exculpation from
liability set forth in the Company's Certificate of Incorporation and by-laws
on the date of the Merger Agreement, which provisions shall not be amended,
repealed or otherwise modified for a period of six years after the Effective
Time in any manner that would adversely affect the rights thereunder of any
Indemnified Party.
The Merger Agreement further provides that the foregoing indemnification
provisions shall survive the consummation of the Merger at the Effective Time,
is intended to be for the benefit of, and enforceable by, the Company, Parent,
the Surviving Corporation and each Indemnified Party and such Indemnified
Party's heirs and representatives, and shall be binding on all successors and
assigns of Parent and the Surviving Corporation. In addition, the Merger
Agreement provides that prior to the consummation of the Merger, the Company
may purchase additional directors and officers liability insurance in an
aggregate amount not to exceed $300,000.
EXCLUSIVITY AGREEMENT
The following is a summary of certain provisions of the Exclusivity
Agreement entered into on November 17, 1998 by Parent and the Company (the
"Exclusivity Agreement"). This summary is not a complete description of the
terms and conditions of the Exclusivity Agreement and is qualified in its
entirety by reference to the full text of the Exclusivity Agreement filed with
the Commission as an exhibit to the Schedule 14D-1 and is incorporated herein
by reference. Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Exclusivity Agreement. The Exclusivity
Agreement may be examined, and copies obtained, as set forth in Section 9 of
this Offer to Purchase.
Pursuant to the terms of the Exclusivity Agreement that Parent and the
Company entered into on November 17, 1998, the Company agreed that from the
date of the execution of the Exclusivity Agreement until 5:00 p.m., Pacific
time, on November 23, 1998, it would not permit any of its Representatives (as
defined therein) to, directly or indirectly, (a) solicit, initiate or encourage
any Acquisition Proposal (as defined therein), engage in discussions,
negotiations or carry-on a dialogue with any person or Group (as such term is
defined under Section 13d-3 of the Securities Exchange Act of 1934) with
respect to an Acquisition Proposal, or (b) disclose any non-public information
relating to the Company or afford access to the properties, books or records
(financial or otherwise) of the Company to, any person or Group. The Company
further agreed that it would cease any existing activities, discussions or
negotiations with any persons conducted with respect to an Acquisition
Proposal.
12. PLANS FOR THE COMPANY; OTHER MATTERS.
Parent and Purchaser intend following completion of the Offer to conduct a
detailed review of the Company and its assets, corporate structure,
capitalization, business and operations, properties, policies, management and
personnel, including determining how to optimally realize any potential
synergies which may exist between the operations of the Company and those of
Parent and its affiliates, and to consider and determine what, if any, changes
would be desireable in light of the circumstances which then exist. Such review
is not expected to be completed until after the consummation of the Merger,
and, following such review, Parent will consider what, if any, changes would be
desirable in light of the circumstances then existing. Such changes could
include, among other things, changes in the Company's business, corporate
structure, certificate of incorporation, by-laws, capitalization, management or
dividend policy.
Assuming the Minimum Condition is satisfied and Purchaser purchases Shares
pursuant to the Offer, Parent intends to promptly exercise its rights under the
Merger Agreement to obtain majority representation on the Company Board. See
"Merger Agreement--The Company Board" in Section 11. Parent intends to exercise
such rights by causing the Company to elect to the Company Board Messrs.
Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Xxxx X. Xxxxxx and Xxxxx
X. XxXxxx. Information with respect to such directors is contained in Schedule
I hereto and in the Schedule 14D-9.
23
The Merger Agreement provides that the directors of Purchaser and the officers
of the Company at the Effective Time of the Merger will, from and after the
Effective Time, be the initial directors and officers, respectively, of the
Surviving Corporation.
Purchaser or an affiliate of Purchaser 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 it shall determine, which
may be more or less than the price to be paid pursuant to the Offer. Purchaser
and its affiliates also reserve the right to dispose of any or all Shares
acquired by them, subject to the terms of the Merger Agreement.
Except as disclosed in this Offer to Purchase, none of Maxxim, Parent or
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, 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 capitalization, corporate structure, business or
composition of its management or the Company Board.
Stockholder Approval. Under the DGCL, the affirmative vote of the holders
of a majority of the outstanding Shares is required to adopt and approve the
Merger Agreement and transactions contemplated thereby unless the Merger is
consummated pursuant to the short-form merger provisions under the DGCL
described below (in which case no further corporate action by the stockholders
of the Company will be required to complete the Merger). The Merger Agreement
provides that Parent will vote, or cause to be voted, all of the Shares then
owned by Parent, Purchaser or any of Parent's other subsidiaries and affiliates
in favor of the approval of the Merger and the adoption of the Merger
Agreement. In the event that Parent, Purchaser and Xxxxxx's other subsidiaries
acquire in the aggregate at least a majority of the Shares entitled to vote on
the approval of the Merger and the Merger Agreement, they would have the
ability to effect the Merger without the affirmative votes of any other
stockholders.
Short-Form Merger. Section 253 of the DGCL provides that, if a corporation
owns at least 90% of the outstanding shares of each class of another
corporation, the corporation holding such stock may merge itself into such
corporation without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a "short-form merger"). In the
event that Parent, Purchaser and any other subsidiaries of Parent acquire in
the aggregate at least 90% of the outstanding Shares, pursuant to the Offer or
otherwise, then, at the election of Parent, a short-form merger could be
effected without any approval of the Company Board or the stockholders of the
Company, subject to compliance with the provisions of Section 253 of the DGCL.
In the Merger Agreement, Parent, Purchaser and the Company have agreed that,
notwithstanding that all conditions to the Offer are satisfied or waived as of
the scheduled Expiration Date, Purchaser may extend the Offer on one or more
occasions for an aggregate period of not more than ten business days beyond the
latest expiration date that would otherwise be permitted under the Merger
Agreement, if the Shares tendered pursuant to the Offer constitute less than
90% of the outstanding Shares. Even if Parent and Purchaser do not own 90% of
the outstanding Shares following consummation of the Offer, Parent and
Purchaser could seek to purchase additional shares in the open market or
otherwise in order to reach the 90% threshold and employ a short-form merger.
The per share consideration paid for any Shares so acquired may be greater or
less than that paid in the Offer. Parent presently intends to effect a
short-form merger if permitted to do so under the DGCL.
Appraisal Rights. Holders of the Shares do not have appraisal rights in
connection with the Offer. However, if the Merger is consummated, holders of
the Shares at the Effective Time will have certain rights pursuant to the
provisions of Section 262 of the DGCL including the right to dissent and demand
appraisal of, and to receive payment in cash of the fair value of, their
Shares. Under Section 262 of the DGCL, dissenting stockholders of the Company
who comply with the applicable statutory procedures will be entitled to receive
a judicial determination of the fair value of their Shares (exclusive of any
element of value arising from the accomplishment or expectation of the Merger)
and to receive payment of such fair value in cash, together with a fair rate of
interest thereon, if any. Any such judicial determination of the fair value of
the Shares could be based upon factors other than, or in addition to, the price
per Share to be paid in the Merger or the market value of the Shares. The value
so determined could be more or less than the price per Share to be paid in the
Merger.
24
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE
DGCL DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE
FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE ANY APPRAISAL RIGHTS AVAILABLE
UNDER THE DGCL. THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE
STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL.
Rule 13e-3. 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. Xxxxxxxxx
believes, however, that Rule 13e-3 will not be applicable to the Merger because
it is anticipated that the Merger would be effected within one (1) year
following consummation of the Offer and in the Merger stockholders would
receive the same price per Share as paid in the Offer. If Rule 13e-3 were
applicable to the Merger, it would require, 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 a transaction, be filed with the Commission and
disclosed to minority stockholders prior to consummation of the transaction.
13. DIVIDENDS AND DISTRIBUTIONS.
As described above, the Merger Agreement provides that from the date of
the Merger Agreement, without the prior written consent of Parent, neither the
Company nor any of its subsidiaries shall: (A) declare, set aside or pay any
dividends on, or make any other distributions (whether in cash, stock or
property), in respect of, any of its capital stock, (B) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock (other than the issuance of Shares upon the exercise of Options
or Warrants outstanding on the date of the Merger Agreement and in accordance
with their terms in effect on the date of the Merger Agreement) or (C)
purchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any shares of its
capital stock or any shares of capital stock of its subsidiaries, any other
voting securities or any securities convertible into, or any rights, warrants
or options to acquire, any such shares, voting securities or convertible
securities (other than (x) pursuant to the Rights Agreement or (y) the issuance
of Shares upon the exercise of Options or Warrants outstanding on the date of
the Merger Agreement and in accordance with their terms in effect on the date
of the Merger Agreement).
14. CONDITIONS TO THE OFFER.
The Offer is subject to the Minimum Condition being satisfied by the
Expiration Date or such later date as the Offer may be extended in accordance
with the terms of the Merger Agreement. Pursuant to the Merger Agreement, if
all of the conditions to the Offer have not been satisfied or waived on any
scheduled Expiration Date then, Purchaser may extend the Offer from time to
time until such conditions are satisfied or waived. Notwithstanding any other
provision of the Offer, subject to the terms of the Merger Agreement, Purchaser
shall not be required to accept for payment or pay for any Shares if (i) any
waiting period under the HSR Act applicable to the purchase of Shares pursuant
to the Offer shall not have expired or been terminated, (ii) the Minimum
Condition shall not have been satisfied or (iii) upon the scheduled Expiration
Date and before the acceptance of such Shares for payment and payment
therefore, any of the following conditions exist:
(a) there shall be instituted or pending by any Governmental Entity any
suit, action or proceeding (i) challenging the acquisition by Parent or
Purchaser of any Shares under the Offer, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger, (ii) seeking to prohibit or
materially limit the ownership or operation by the Company, Parent or any of
Parent's subsidiaries of a material portion of the business or assets of the
Company or Parent and its subsidiaries, taken as a whole, or to compel the
Company or Parent to dispose of or hold separate any material portion of the
business or
25
assets of the Company or Parent and its subsidiaries, taken as a whole, in each
case as a result of the Offer or the Merger or (iii) seeking to impose material
limitations on the ability of Parent or Purchaser to acquire or hold, or
exercise full rights of ownership of, any Shares to be accepted for payment
pursuant to the Offer including, without limitation, the right to vote such
Shares on all matters properly presented to the stockholders of the Company or
(iv) seeking to prohibit Parent or any of its subsidiaries from effectively
controlling in any material respect any material portion of the business or
operations of the Company or (v) seeking to obtain from the Company any damages
that could reasonably be expected to have a material adverse effect on the
Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to the
Offer or the Merger, by any Governmental Entity or court, other than the
application to the Offer or the Merger of applicable waiting periods under the
HSR Act, that would result in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above;
(c) the Merger Agreement shall have been terminated in accordance with its
terms;
(d) (i) the Company Board or any committee thereof shall have withdrawn or
modified its approval or recommendation of the Offer or the Merger or its
adoption of the Merger Agreement, or approved or recommended any Takeover
Proposal, (ii) the Company shall have entered into any agreement with respect
to any Takeover Proposal in accordance with the provisions of the Merger
Agreement summarized under the heading "No Solicitation" or (iii) the Company
Board or any committee thereof shall have resolved to take any of the foregoing
actions;
(e) in the event any of the representations and warranties of the Company
set forth in the Merger Agreement shall not be true and correct in any material
respect, at the date of the Merger Agreement or at the scheduled expiration of
the Offer, or if the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any agreement
or covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(f) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange for a
period in excess of three hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not related to
market conditions), (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States (whether or not
mandatory) by any Governmental Entity, (iii) any limitation or proposed
limitation (whether or not mandatory) by any United States governmental
authority or agency that has a material adverse effect generally on the
extension of credit by banks or other financial institutions, (iv) any change
in general financial bank or capital market conditions such that banks are
unwilling to extend credit to borrowers similar to Parent generally, or (v) any
decline in either the Dow Xxxxx Industrial Average or the Standard & Poor's
Index of 500 Industrial Companies by an amount in excess of 20% from the close
of business on the date of the Merger Agreement;
(g) there shall have occurred any events or changes which constitute or
which are reasonably likely to constitute, individually or in the aggregate, a
material adverse change in the condition of the Company (financial or
otherwise); or
(h) (i) a tender offer for any securities of the Company shall have been
commenced or publicly proposed to be made by another person (including the
Company or its subsidiaries or affiliates), (ii) any person or group (as
defined in Section 13(d)(3) of the Exchange Act), other than Parent and
Purchaser and other than Significant Shareholder, shall have acquired directly
or indirectly beneficial ownership of 10% or more of the outstanding voting
securities of the Company or any of its subsidiaries, whether through the
acquisition of securities, the exercise of rights under options, warrants or
similar instruments, the formation of a group, or otherwise, or (iii) any
Significant Shareholder of group that together would constitute a Significant
Shareholder shall have beneficially acquired additional voting securities of
the Company, whether through the acquisition of securities, the exercise of
rights under options, warrants or similar instruments, the formation of a group
or otherwise, representing 2% or more of the outstanding voting securities of
the Company; provided that in Parent's reasonable judgment any such event
described in clause (ii) or (iii) makes the successful completion of the Offer
unlikely or materially more burdensome to Parent or Purchaser;
26
which, in the reasonable judgement of Parent or Sub, in its sole discretion,
make it inadvisable to proceed with such acceptance of Shares for payment or
the payment therefor.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and (except for the Minimum Condition) may, subject to the terms of the Merger
Agreement, be waived by Parent and Purchaser in whole or in part at any time
and from time to time in their sole discretion. The failure by Parent or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any right and all such rights may be asserted at any time or
from time to time.
15. CERTAIN LEGAL MATTERS.
General. Except as described in this Section 15, based on information
provided by the Company, none of the Company, Purchaser or Parent is 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 by Parent or Purchaser pursuant
to the Offer, the Merger or otherwise, or (ii) any approval or other action by
any governmental, administrative or regulatory agency or authority, domestic or
foreign, that would be required prior to the acquisition of Shares by Purchaser
pursuant to the Offer, the Merger or otherwise. Should any such approval or
other action be required, Purchaser and Parent presently contemplate that such
approval or other action will be sought, except as otherwise described below
under "State Antitakeover Statutes." While, except as otherwise described in
this Offer to Purchase, Purchaser does not presently intend to delay the
acceptance for payment of, or payment for, Shares tendered pursuant to the
Offer pending the outcome of any such matter, there can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that failure to obtain any such
approval or other action might not result in consequences adverse to the
Company's business or that certain parts of the Company's business might not
have to be disposed of, or other substantial conditions complied with, in the
event that such approvals were not obtained or such other actions were not
taken or in order to obtain any such approval or other action. If certain types
of adverse action are taken with respect to the matters discussed below,
Purchaser could decline to accept for payment, or pay for, any Shares tendered.
See Section 14 for certain conditions to the Offer, including conditions with
respect to governmental actions.
State Antitakeover Statutes. Section 203 of the DGCL, in general,
prohibits a Delaware corporation, such as the Company, from engaging in a
"Business Combination" (defined as a variety of transactions, including
mergers) with an "Interested Stockholder" (defined generally as a person that
is the beneficial owner of 15% or more of the outstanding voting stock of the
subject corporation) for a period of three years following the date that such
person became an Interested Stockholder unless, prior to the date such person
became an Interested Stockholder, the board of directors of the corporation
approved either the Business Combination or the transaction that resulted in
the stockholder becoming an Interested Stockholder. The provisions of Section
203 of the DGCL are not applicable to any of the transactions contemplated by
the Merger Agreement, since the Merger Agreement and the transactions
contemplated thereby were approved by the Company Board prior to the execution
thereof.
A number of states have adopted laws and regulations that purport to apply
to attempts to acquire corporations that are incorporated in such states, or
whose business operations have substantial economic effects in such states, or
which have substantial assets, security holders, employees, principal executive
offices or principal places of business in such states. In Xxxxx x. MITE Corp.,
the Supreme Court of the United States (the "Supreme Court") invalidated on
constitutional grounds the Illinois Business Takeover statute, which, as a
matter of state securities law, made certain corporate acquisitions more
difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the State of Indiana may, as a matter of corporate law
and, in particular, with respect to those aspects of corporate law concerning
corporate governance, constitutionally disqualify a potential acquiror from
voting on the affairs of a target corporation without the prior approval of the
remaining stockholders. The state law before the Supreme Court was by its terms
applicable only to corporations that had a substantial number of stockholders
in the state and were incorporated there.
27
The Company has represented to Parent and Purchaser that the Company
Stockholder Approval (as defined in the Merger Agreement) is the only vote of
the holders of any class or series of the Company's capital stock which is
necessary to approve the Merger Agreement and the transactions contemplated
thereby.
Parent and Purchaser do not believe that the antitakeover laws and
regulations of any state other than the State of Delaware will by their terms
apply to the Offer, and, except as set forth above with respect to Section 203
of the DGCL, neither Parent nor Purchaser has attempted to comply with any
state antitakeover statute or regulation. Purchaser reserves the right to
challenge the applicability or validity of any state law purportedly applicable
to the Offer and nothing in this Offer to Purchase or any action taken in
connection with the Offer is intended as a waiver of such right. If it is
asserted that any state antitakeover statute is applicable to the Offer and an
appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer, Purchaser might be required to file certain information
with, or to receive approvals from, the relevant state authorities, and
Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer or may be delayed in consummating the Offer in order to
comply with applicable law. In such case, Purchaser may not be obligated to
accept for payment, or pay for, any Shares tendered pursuant to the Offer. See
Section 14.
Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the "DOJ") and the Federal Trade Commission (the "FTC")
and certain waiting period requirements have been satisfied.
Parent has filed its Notification and Report Form with respect to the
Offer under the HSR Act on November 24, 1998. The waiting period under the HSR
Act with respect to the Offer will expire at 11:59 p.m., New York City time, on
the fifteenth day after the date of such filing unless early termination of the
waiting period is granted. However, the DOJ or the FTC may extend the waiting
period by requesting additional information or documentary material from Parent
or the Company. If such a request is made, such waiting period will expire at
11:59 p.m., New York City time, on the tenth day after substantial compliance
by Parent with such request. Only one extension of the waiting period pursuant
to a request for additional information is authorized by the HSR Act.
Thereafter, such waiting period may be extended only by court order or with the
consent of Parent. In practice, complying with a request for additional
information or material can take a significant amount of time. In addition, if
the DOJ or the FTC raises substantive issues in connection with a proposed
transaction, the parties frequently engage in negotiations with the relevant
governmental agency concerning possible means of addressing those issues and
may agree to delay consummation of the transaction while such negotiations
continue. The Purchaser will not accept for payment Shares tendered pursuant to
the Offer unless and until the waiting period requirements imposed by the HSR
Act with respect to the Offer have been satisfied. See Section 14.
The FTC and the DOJ frequently scrutinize the legality under the Antitrust
Laws (as defined below) of transactions such as Purchaser's acquisition of
Shares pursuant to the Offer and the Merger. At any time before or after
Purchaser's acquisition of Shares, the DOJ or the FTC could take such action
under the Antitrust Laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the acquisition of Shares pursuant to the
Offer or otherwise seeking divestiture of Shares acquired by Purchaser or
divestiture of substantial assets of Parent or its subsidiaries. Private
parties, as well as state governments, may also bring legal action under the
Antitrust Laws under certain circumstances. Based upon an examination of
information provided by the Company relating to the businesses in which Parent
and the Company are engaged, Parent and Purchaser believe that the acquisition
of Shares by Purchaser will not violate the Antitrust Laws. Nevertheless, there
can be no assurance that a challenge to the Offer or other acquisition of
Shares by Purchaser on antitrust grounds will not be made or, if such a
challenge is made, of the result. See Section 14 for certain conditions to the
Offer, including conditions with respect to litigation and certain government
actions.
As used in this Offer to Purchase, "Antitrust Laws" shall mean and include
the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended,
28
and all other Federal and state statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines, and other laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade.
Federal Reserve Board Regulations. Regulations U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or
maintenance of credit for the purpose of buying or carrying margin stock,
including the Shares, if the credit is secured directly or indirectly by margin
stock. Such secured credit may not be extended or maintained in an amount that
exceeds the maximum loan value of all the direct and indirect collateral
securing the credit, including margin stock and other collateral. The financing
of the Offer will be structured such that such financing will be in full
compliance with the Margin Regulations.
16. FEES AND EXPENSES.
Purchaser and Parent have retained MacKenzie Partners, Inc. to serve as
the Information Agent and Xxxxxx Trust Company of New York to serve as the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by personal interview, mail, telephone, telex, telegraph and
other methods of electronic communication and may request brokers, dealers,
commercial banks, trust companies and other nominees to forward the Offer
materials to beneficial holders. The Information Agent and the Paying Agent
will each receive reasonable and customary compensation for their services, be
reimbursed for certain reasonable out-of-pocket expenses and be indemnified
against certain liabilities in connection with their services, including
certain liabilities and expenses under the federal securities laws.
Except as set forth above, none of Maxxim, Parent or Purchaser will pay
any fees or commissions to any broker or dealer or other person or entity in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, banks and trust companies will be reimbursed by Purchaser for
customary mailing and handling expenses incurred by them in forwarding the
Offer materials to their customers.
17. MISCELLANEOUS.
Purchaser is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of the Shares pursuant thereto, Purchaser
shall make a good faith effort to comply with such statute or seek to have such
statute declared inapplicable to the Offer. If, after such good faith effort,
Purchaser cannot comply with such state statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) holders of Shares in such
state.
No person has been authorized to give any information or to make any
representation on behalf of Maxxim, Parent or Purchaser 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.
Purchaser, Parent and Maxxim have filed with the Commission the Schedule
14D-1 pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer. In
addition, the Company has filed with the Commission the Schedule 14D-9 pursuant
to Rule 14d-9 under the Exchange Act, setting forth its recommendation with
respect to the Offer and the reasons for its recommendation and furnishing
certain additional related information. Such Schedules and any amendments
thereto, including exhibits, should be available for inspection and copies
should be obtainable in the same manner set forth in Section 9 of this Offer to
Purchase (except that such material will not be available at the regional
offices of the Commission).
MMI ACQUISITION CORP., a Delaware Corporation
MAXXIM MEDICAL, INC., a Delaware Corporation
MAXXIM MEDICAL, INC., a Texas Corporation
November 30, 1998
29
[THIS PAGE INTENTIONALLY LEFT BLANK]
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
OF XXXXXX, PARENT AND PURCHASER
(a) DIRECTORS AND EXECUTIVE OFFICERS OF MAXXIM. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Maxxim. Unless otherwise indicated, each such
person is a citizen of the United States of America and the business address of
each such person is c/o Maxxim Medical, Inc., 00000 00xx Xxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000. Unless otherwise indicated, each occupation set
forth opposite an individual's name refers to employment with Xxxxxx. Unless
otherwise indicated, each such person has held his or her present occupation as
set forth below, or has been an executive officer at Maxxim for the past five
years.
Xxxxxxx X. Xxxxxxxx ......... Xxxxxxx X. Xxxxxxxx has served as a Director of
Maxxim since 1982, and as Chairman of the Board
of Directors, Chief Executive Officer and President
of Maxxim since November 1986. Xx. Xxxxxxxx is
also a director of Henley Healthcare, Inc., a manu-
facturer of products used in physical therapy, En-
core Orthopedics, Inc., a designer and manufac-
turer of implantable orthopedic devices and Bovie
Medical Corp., a supplier of electrosurgery genera-
tors and accessories. Xx. Xxxxxxxx is a citizen of
Canada.
Xxxxx X. Xxxxxx ............. Xxxxx X. Xxxxxx has served as Executive Vice
President and Chief Operating Officer since Janu-
ary 1986, and was elected Secretary in July 1997.
Xx. Xxxxxx also served as Treasurer from
April 1986 through June 1997. Xx. Xxxxxx is a
citizen of Canada.
Xxxx X. Xxxxxx .............. Xxxx X. Xxxxxx has served as Vice President and
Controller since December 1990. In July 1997, Xx.
Xxxxxx was elected Treasurer.
Xxxxx X. Xxxxxx ............. Xxxxx X. Xxxxxx has served as Vice President since
March 1988 and Group Vice President since
July 1993. From January 1992 to July 1993, Xx.
Xxxxxx was President of Argon Medical, a division
of Maxxim. Xx. Xxxxxx is a citizen of Canada.
Xxxxx X. XxXxxx ............. Xxxxx X. XxXxxx has served as Vice President since
November 1993. Since June 1995, he has served as
Executive Vice President of Operations of Case
Management, a division of Maxxim. From Decem-
ber 1992 through July 1995, he served as President
of Boundary Healthcare Products Corp. ("Bound-
ary").
I-1
Xxxx X. Xxxxxx ............. Xxxx X. Xxxxxx has served as Vice President since
May 1995. Since June 1995, he has served as
Executive Vice President Sales and Marketing of
Case Management, a division of Maxxim. From
May 1994 through June 1995, he served as Presi-
dent of Sterile Design, a division of Xxxxxxx &
Xxxxxxx Medical, Inc. ("Xxxxxxx & Xxxxxxx").
From July 1993 to May 1994, he served as Execu-
tive Vice President of Sterile Design. For over five
years prior to July 1993, he worked for Xxxxxxx &
Xxxxxxx serving in various capacities, the latest of
which being Business Director.
Xxxxxx X. Xxxxxx ........... Xxxxxx X. Xxxxxx has served as Vice President,
Information Services since August 1994. Previ-
ously, he had served as Director of Information
Services since January 1991.
Xxxxxxx X. Xxxxx ........... Xxxxxxx X. Xxxxx has served as Vice President
since January 1997. Previously, she had served as
Vice President Human Resources of Case Manage-
ment, a division of Maxxim since August 1995.
From July 1993 to August 1995, Xx. Xxxxx served
as Manager of Human Resources of Sterile Design,
a division of Xxxxxxx & Xxxxxxx. From April 1980
to July 1993, Xx. Xxxxx provided human resource
management to Xxxxxxx & Xxxxxxx.
Xxx X. Xxxx ................ Xxx X. Xxxx has served as Vice President,
Managing Director of Maxxim Medical Europe, a
division of Maxxim since January 1997. Prior to
that time, he was Managing Director of Medica
B.V., a Netherlands corporation acquired by
Xxxxxx in January 1995, for more than five years.
Xx. Xxxx is a citizen of The Netherlands.
Xxxxxx X. XxXxxxxx ......... Xxxxxx X. XxXxxxxx was elected as a Director of
Maxxim, effective December 1992, pursuant to the
terms of an agreement with Boundary under which
Xxxxxx acquired Boundary. Since July 1987, Xx.
XxXxxxxx has been the President of MedCom De-
velopment Corporation, the General Partner of
MCT Investors, L.P., a limited partnership engaged
in the business of venture capital investing. Xx.
XxXxxxxx was the principal shareholder and Presi-
dent of Boundary from July 1987 until its acquisi-
tion. Xx. XxXxxxxx is also Chairman of the Board of
American Telecasting, Inc.
I-2
Xxxxx X. Xxxxxxxxxx ............. Xxxxx X. Xxxxxxxxxx has served as a Director of
Maxxim since 1986 and as Secretary from 1992 to
1997. From June 1990 until October 1996, Xx.
Xxxxxxxxxx served as Group Vice President and
General Counsel of Sulzer Medica USA, Inc., a
subsidiary of Sulzer Medica Ltd., a Swiss medical
device manufacturer. From January 1997 through
January 1998, Xx. Xxxxxxxxxx was Vice President
and General Counsel of Advanced Medical Instru-
ments, Inc., a manufacturer of medical monitoring
equipment. From September 1997 to January 1998,
Xx. Xxxxxxxxxx also served as President of GlasTech,
Inc., a manufacturer of dental products. Since
January 24, 1998, Xx. Xxxxxxxxxx has been Presi-
dent and Chief Operating Officer of Physicians
Resource Group, Inc., a physicians practice man-
agement company. Xx. Xxxxxxxxxx is also a director
of Benchmark Electronics, Inc.
Xxxxxx Xxxxxxx, M.D. ............ Xxxxxx Xxxxxxx, M.D. has served as a Director of
Maxxim since February 1991. Xx. Xxxxxxx has been
a Professor and Chairman of the Department of
Physical Medicine and Rehabilitation at Baylor
College of Medicine in Houston, Texas since 1978.
Since 1978, he has also served as the Senior At-
tending and Medical Director in the Department of
Physical Medicine at the Methodist Hospital, Hous-
ton, Texas, Consultant Physiatrist to the Texas
Institute for Rehabilitation and Research, Hous-
ton, Texas, and the Physician-in-Chief for the Physi-
cal Medicine and Rehabilitation Services of Xxxxxx
County Hospital District, Houston, Texas. In 1994,
Xx. Xxxxxxx was elected President of the Academy
of Physical Rehabilitation.
Xxxxxx X. Xxxxxx, Ph.D. ......... Xxxxxxx X. Xxxxxx, Ph.D. has served as a Director of
Maxxim since 1976, and served as a consultant to
Maxxim from that date until May 1996. Xx. Xxxxxx
has been as a Professor of Chemical Engineering at
the University of Houston for more than five years.
Xx. Xxxxxx is also a consultant and director of
Henley Healthcare, Inc.
I-3
Xxxxxxx X. Xxxxxx, Ph.D. ......... Xxxxxxx X. Xxxxxx, Ph.D. has served as a Director
of Maxxim since November 1989. Xx. Xxxxxx served
from April 1991 until February 1997, as President
and Chief Executive Officer, and since Febru-
ary 1997, as Chairman and Chief Executive Officer,
of Physio-Control International Corp., a manufac-
turer of cardiac defibrillators and monitoring equip-
ment. Xx. Xxxxxx also serves as a director of
SeaMED Corporation, which engages in contract
engineering and manufacturing for medical and
other industries, CardioDynamics International
Corporation, a manufacturer of noninvasive digital
heart monitoring devices and related products and
Encore Orthopedics, Inc. Xx. Xxxxxx also serves as
Chairman of the Board of Directors for the Medi-
cal Device Manufacturers Association.
Xxxx X. Xxxxxxxx, Ing. ........... Xxxx X. Xxxxxxxx, Ing. has served as a Director of
Maxxim since 1987. Since 1990, Xx. Xxxxxxxx has
been the executive chairman of the Dutch Society
of Enterprises in Medical Technology, a Nether-
lands based technology society, and holds the posi-
tion of Chairman of an advisory committee for the
standardization of medical aids. For more than five
years prior to that time, Xx. Xxxxxxxx was the
President of X.X. Xxxxx Xxxxxx Xxxxx Xxxxxxx, a
major Dutch instrument company and a leading
manufacturer of physical therapy products. Xx.
Xxxxxxxx is a citizen of The Netherlands.
I-4
(b) DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Parent. Unless otherwise indicated, the
business address of such person is c/o Maxxim Medical, Inc., 00000 00xx Xxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000. Unless otherwise indicated, each occupation
set forth opposite an individual's name refers to employment with Parent.
Unless otherwise indicated each such person has held his or her present
occupation as set forth below, or has been an executive officer at Parent, or
the entity indicated, for the past five years.
Xxxxxxx X. Xxxxxxxx ......... Xxxxxxx X. Xxxxxxxx has served as a Director of
Maxxim since 1982, and as Chairman of the Board
of Directors, Chief Executive Officer and President
of Maxxim since November 1986 and as sole Xx-
xxxxxx and President of Parent for more than five
years. Xx. Xxxxxxxx is also a director of Henley
Healthcare, Inc., a manufacturer of products used
in physical therapy, Encore Orthopedics, Inc., a
designer and manufacturer of implantable orthope-
dic devices and Bovie Medical Corp., a supplier of
electrosurgery generators and accessories. Xx.
Xxxxxxxx is a citizen of Canada.
Xxxxx X. Xxxxxx ............. Xxxxx X. Xxxxxx has served as Executive Vice
President and Chief Operating Officer of Maxxim
since January 1986, and was elected Secretary in
July 1997. Xx. Xxxxxx also served as Treasurer of
Maxxim from April 1986 through June 1997. Xx.
Xxxxxx has been the Secretary of Parent for more
than five years. Xx. Xxxxxx is a citizen of Canada.
I-5
(c) DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table
sets forth the name and present principal occupation or employment, and
material occupations, positions, offices or employments for the past five
years, of each director and executive officer of Purchaser. Unless otherwise
indicated, the business address of each such person is c/o Maxxim Medical,
Inc., 00000 00xx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with Purchaser. Unless otherwise indicated, each such person has
held his or her present occupation as set forth below, or has been an executive
officer at Purchaser, or the entity indicated, for the past five years.
Xxxxxxx X. Xxxxxxxx ......... Xxxxxxx X. Xxxxxxxx has served as a Director of
Maxxim since 1982, and as Chairman of the Board
of Directors, Chief Executive Officer and President
of Maxxim since November, 1986. Xx. Xxxxxxxx is
also a director of Henley Healthcare, Inc., a manu-
facturer of products used in physical therapy, En-
core Orthopedics, Inc., a designer and manufac-
turer of implantable orthopedic devices and Bovie
Medical Corp., a supplier of electrosurgery genera-
tors and accessories. Xx. Xxxxxxxx has been the
sole Director and President of Purchaser since
November 18, 1998. Xx. Xxxxxxxx is a citizen of
Canada.
Xxxxx X. Xxxxxx ............. Xxxxx X. Xxxxxx has served as Executive Vice
President and Chief Operating Officer of Maxxim
since January 1986, and was elected Secretary in
July 1997. Xx. Xxxxxx also served as Treasurer of
Maxxim from April 1986 through June 1997. Xx.
Xxxxxx has been the Secretary of Purchaser since
November 18, 1998. Xx. Xxxxxx is a citizen of
Canada.
I-6
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, 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 his broker, dealer, commercial bank, trust
company or other nominee to the Depositary, at the applicable address set forth
below:
The Depositary for the Offer is:
XXXXXX TRUST COMPANY OF NEW YORK
By Mail: By Hand and Overnight Courier:
Xxxxxx Trust Company of New York Xxxxxx Trust Company of New York
Wall Street Station 00 Xxxx Xxxxxx
P.O. Box 1023 19th Floor
New York, New York 10268-1023 New York, New York 10005
By Facsimile Transmission: (000) 000-0000 or (000) 000-0000
(For Eligible Institutions Only)
Confirm Facsimile by Telephone: (000) 000-0000
For Information Call: (000) 000-0000
Any questions or requests for assistance or additional copies of this
Offer to Purchase, the related Letter of Transmittal, the Notice of Guaranteed
Delivery and the other tender offer documents may be directed to the
Information Agent at the address and telephone numbers set forth below.
Stockholders may also contact their broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MACKENZIE
PARTNERS, INC. LOGO
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (Collect)
or
Call Toll Free: (000) 000-0000
