[PREMISYS LOGO]
October 27, 1999
To Our Stockholders:
I am pleased to inform you that on October 20, 1999, Premisys
Communications, Inc., a Delaware corporation (the "Company" or "Premisys"),
entered into an Agreement and Plan of Merger (the "Merger Agreement") with Zhone
Technologies, Inc., a Delaware corporation ("Parent" or "Zhone"), and Zhone
Acquisition Corp., a Texas corporation and wholly owned subsidiary of Parent
("Purchaser"). Pursuant to the Merger Agreement, Purchaser has commenced a cash
tender offer (the "Offer") to purchase all of the outstanding shares of the
Company's Common Stock, $0.01 par value (the "Shares"), for $10.00 per share,
net to the seller in cash without interest. Under the Merger Agreement, the
Offer will be followed by a merger (the "Merger") in which, among other things,
any and all remaining Shares of Premisys Common Stock, other than Shares
purchased by Purchaser, will be converted into the right to receive $10.00 per
share in cash, without interest.
YOUR BOARD OF DIRECTORS (I) HAS UNANIMOUSLY DECIDED TO RECOMMEND THAT THE
COMPANY ACCEPT THE TERMS AND CONDITIONS OF THE OFFER, AS SET FORTH IN THE MERGER
AGREEMENT AND RELATED DOCUMENTS, (II) HAS UNANIMOUSLY DECIDED TO RECOMMEND THE
OFFER AND THE MERGER, (III) HAS DETERMINED AS OF THE DATE OF THE MEETING AT
WHICH THE BOARD TOOK ACTION THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR
TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS, RECOMMENDING THAT
THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT TO THE
OFFER AND APPROVE THE MERGER AGREEMENT (IF REQUIRED) AND (IV) HAS UNANIMOULSY
APPROVED THE ACQUISITION OF SHARES BY PURCHASER PURSUANT TO THE OFFER AND THE
OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT.
In arriving at its decision, your Board of Directors gave careful
consideration to a number of factors, including, among other things, the opinion
of Broadview International LLC, the Company's financial advisor, that the offer
price for the Company's Common Stock in the Offer and the Merger (referred to in
the Merger Agreement as the "Merger Consideration") is fair to the Company's
stockholders from a financial point of view. A more complete description of the
factors considered by the Board of Directors is set forth in the attached
Solicitation/Recommendation Statement on Schedule 14D-9.
A more complete description of the Offer and the Merger are set forth in the
accompanying Offer to Purchase, dated October 27, 1999, together with related
materials, including a Letter of Transmittal to be used for tendering your
Shares. These documents set forth the terms and conditions of the Offer and the
Merger and provide instructions as to how to tender your Shares. I urge you to
read the enclosed material carefully before making a decision with respect to
tendering your Shares in the Offer.
Sincerely,
/s/ XXXXXXX X. XXX
Xxxxxxx X. Xxx
CHAIRMAN OF THE BOARD
