OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
of
SPECTRA-PHYSICS, INC.
at
$17.50 NET PER SHARE
by
SPECTRA-PHYSICS ACQUISITION, INC.
a wholly-owned subsidiary of
THERMO ELECTRON CORPORATION
----------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 14, 2001, UNLESS THE OFFER IS EXTENDED.
--------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES OF COMMON STOCK OF SPECTRA-PHYSICS, INC. (THE "COMPANY") WHICH, TOGETHER
WITH SHARES OWNED BY THERMO ELECTRON CORPORATION AND ITS SUBSIDIARIES,
CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE OUTSTANDING SHARES OF THE
COMPANY ON THE EXPIRATION DATE. AS OF NOVEMBER 12, 2001, THERMO ELECTRON
CORPORATION AND ITS SUBSIDIARIES OWNED AN AGGREGATE OF 13,333,000 SHARES OF THE
COMPANY'S OUTSTANDING COMMON STOCK, WHICH CONSTITUTED 78.5% OF THE OUTSTANDING
SHARES OF COMMON STOCK ON SUCH DATE. THE OFFER IS ALSO SUBJECT TO OTHER
IMPORTANT TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THIS OFFER, PASSED UPON THE FAIRNESS
OR MERITS OF THE OFFER OR DETERMINED WHETHER THIS OFFER TO PURCHASE IS ACCURATE
OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIME.
------------------------
THE DEALER MANAGER FOR THE OFFER IS:
[LOGO]
X.X. XXXXXX SECURITIES INC.
November 16, 2001
SUMMARY
BEFORE YOU MAKE ANY DECISION WITH RESPECT TO THE TENDER OFFER, YOU SHOULD
READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED INFORMATION INCLUDED
ELSEWHERE IN THIS OFFER TO PURCHASE. THIS SUMMARY AND THE REMAINDER OF THIS
OFFER TO PURCHASE INCLUDE INFORMATION REGARDING THE TENDER OFFER, THE PROPOSED
SUBSEQUENT SHORT-FORM MERGER, SPECTRA-PHYSICS, INC. AND THE POSITION OF THERMO
ELECTRON CORPORATION REGARDING THE FAIRNESS OF THE TERMS OF THE TENDER OFFER AND
THE MERGER. REFERENCES IN THIS OFFER TO PURCHASE TO THE BOARD OF DIRECTORS OF
THERMO ELECTRON INCLUDE BOTH THE FULL BOARD OF DIRECTORS AND/OR A DULY
AUTHORIZED COMMITTEE OF THE BOARD OF DIRECTORS.
- PRINCIPAL TERMS OF THE TENDER OFFER AND THE MERGER.
- TENDER OFFER FOR ALL OUTSTANDING SHARES (PAGE 7). Spectra-Physics
Acquisition, Inc. ("SPAI"), a wholly-owned subsidiary of Thermo Electron
Corporation, is offering to purchase in a tender offer all of the
outstanding shares of common stock of Spectra-Physics, Inc. that Thermo
Electron Corporation and its subsidiaries do not currently own.
- AFFILIATION OF SPECTRA-PHYSICS, SPAI AND THERMO ELECTRON (PAGES 38 AND
40). Spectra-Physics is an indirect majority-owned subsidiary of Thermo
Electron. SPAI is a newly-formed, wholly-owned subsidiary of Thermo
Electron, and was formed specifically in order to merge with and into
Spectra-Physics, as described below. An officer and director of Thermo
Electron is also a director of Spectra-Physics. See "Certain Information
Concerning The Company" and "Certain Information Concerning The Purchaser
And Thermo Electron."
- TENDER OFFER PRICE (PAGES 7 AND 37). The consideration being offered by
SPAI in the tender offer is $17.50 per share in cash, without interest, in
exchange for all of the outstanding shares of Spectra-Physics that Thermo
Electron and its subsidiaries do not currently own. On August 21, 2001,
Thermo Electron announced its intention to take Spectra-Physics private
through a tender offer at $20.00 per share in cash, to be followed by a
short-form merger. On August 20, 2001, the day prior to the announcement
of the proposed transaction, the last reported sale price of
Spectra-Physics common stock on NASDAQ was $13.69 per share. On
September 26, 2001, Thermo Electron announced that it was reevaluating the
offer price of $20.00 per share in order to analyze the impact on
Spectra-Physics of the worsening economic conditions associated with the
terrorist attacks on September 11, 2001. After the market closed on
November 6, 2001, Thermo Electron announced the revised offer price of
$17.50 per share in cash. On November 6, 2001, the last reported sale
price of Spectra-Physics common stock on NASDAQ was $17.80 per share. The
offer price of $17.50 per share is equal to a premium of approximately 28%
over the last reported sale price of Spectra-Physics common stock on
NASDAQ on the last trading date prior to the initial announcement, on
August 21, 2001, of our intention to take Spectra-Physics private. The
last reported sale price of Spectra-Physics common stock on NASDAQ on
November 14, 2001 was $17.50 per share. For more information regarding the
trading range of Spectra-Physics common stock, see "Price Range Of The
Shares; Dividends."
- CONDITIONS TO THE TENDER OFFER (PAGE 31). The tender offer is subject to a
number of conditions, including the condition that enough shares of
Spectra-Physics common stock are tendered and not withdrawn so that on the
expiration date of the tender offer Thermo Electron and its subsidiaries
will together own at least 90% of Spectra-Physics' outstanding shares.
Assuming that no outstanding Spectra-Physics stock options are exercised,
this 90% tender condition will be met if at least 1,945,080 shares of
Spectra-Physics common stock are validly tendered and not withdrawn prior
to the expiration date of the tender offer. See "The Tender Offer--Certain
Conditions Of The Offer."
2
- SPECTRA-PHYSICS SHARES OUTSTANDING; OWNERSHIP BY THERMO ELECTRON AND ITS
SUBSIDIARIES (PAGE 7). As of November 12, 2001, Spectra-Physics had
16,975,644 shares of common stock outstanding. In addition, options to
purchase 3,650,675 shares of Spectra-Physics common stock were outstanding
at such date. Thermo Electron and its subsidiaries owned in the aggregate
13,333,000 shares of Spectra-Physics common stock, or approximately 78.5%
of the outstanding shares of Spectra-Physics common stock, on
November 12, 2001.
- EXPIRATION OF THE TENDER OFFER (PAGE 25). The tender offer will expire at
12:00 midnight on Friday, December 14, 2001. We can elect at any time to
extend the tender offer. If we extend the tender offer, we will issue a
press release announcing the extension. See "The Tender Offer--Terms Of
The Offer; Expiration Date."
- PROCEDURES FOR ACCEPTING THE TENDER OFFER AND TENDERING SHARES
(PAGE 27). In order for your shares of Spectra-Physics common stock to be
purchased in the tender offer, you must follow the procedures described in
"The Tender Offer--Procedures For Accepting The Offer And Tendering
Shares" and in the accompanying Letter of Transmittal prior to the
expiration of the tender offer.
- PAYMENT FOR TENDERED SHARES (PAGE 26). If all of the conditions of the
tender offer are satisfied or waived and your shares of Spectra-Physics
common stock are accepted for payment, we will pay you for your shares
promptly after the expiration of the tender offer. See "The Tender Offer--
Acceptance For Payment And Payment For Shares."
- WITHDRAWAL RIGHTS (PAGE 30). You may withdraw shares that you have
tendered at any time on or prior to 12:00 midnight, New York City time, on
Friday, December 14, 2001, or, if the tender offer is extended, prior to
the expiration of the tender offer. Unless accepted for payment on or
prior to January 14, 2002, you may also withdraw shares you have tendered
at any time after that date. In order for a withdrawal to be effective,
EquiServe Trust Company, L.P., the depositary for the tender offer, must
receive your notice of withdrawal prior to the expiration of the tender
offer at one of the addresses on the back cover of this Offer to Purchase.
For more information on your withdrawal rights, see "The Tender
Offer--Withdrawal Rights."
- SUBSEQUENT MERGER (PAGE 42). The tender offer is the first step in Thermo
Electron's plan to take Spectra-Physics private. If the tender offer is
completed, Thermo Electron and its subsidiaries will together own at least
90% of Spectra-Physics' outstanding shares. Following the closing of the
tender offer, Thermo Electron plans to cause SPAI to merge with and into
Spectra-Physics in a so-called "short-form" merger. Spectra-Physics would
be the surviving corporation in the merger and would be wholly-owned by
Thermo Electron. SPAI does not intend to enter into a merger agreement
with Spectra-Physics or to seek the approval of the board of directors of
Spectra-Physics for such merger. If the merger occurs after February 22,
2002, stockholders of Spectra-Physics who do not tender their shares of
Spectra-Physics common stock in the tender offer will not be entitled to
vote their shares with respect to this merger, but will have a statutory
right to demand a judicial appraisal of the fair value of their shares of
Spectra-Physics common stock. See "The Merger; Appraisal Rights."
The consideration to be paid in the merger will be the same $17.50 per
share in cash as is payable in the tender offer. See "Special Factors--The
Merger." Thermo Electron is prohibited by the terms of Section 203 of the
Delaware General Corporation Law from causing Spectra-Physics to merge with
Thermo Electron or any of its subsidiaries until February 23, 2002, unless
the holders of at least two-thirds of the minority shares of
Spectra-Physics vote to approve the merger. It is Thermo Electron's current
intention to wait until as soon as practicable after February 22, 2002 to
complete the short-form merger. See "Special Factors--Background to the
Offer and the Merger--Acquisition of the Company."
3
- OTHER POSSIBLE PURCHASES OF SPECTRA-PHYSICS COMMON STOCK (PAGE 20). If,
after the tender offer is completed but prior to consummation of the
merger, the aggregate ownership by Thermo Electron and its subsidiaries of
the outstanding shares of Spectra-Physics common stock should fall below
90% due to the exercise of outstanding options or for any other reason,
Thermo Electron may acquire additional shares of Spectra-Physics common
stock on the open market or in privately negotiated transactions to the
extent required for the aggregate ownership of Spectra-Physics common
stock by Thermo Electron and its subsidiaries to equal or exceed 90%.
These purchases would be made at the market prices or privately negotiated
prices at the time of purchase, which may be higher or lower than the
price of $17.50 per share. See "Special Factors--Other Possible Purchases
of Shares."
- SOURCE OF FUNDS (PAGE 42). The total amount of funds required for SPAI to
purchase all of the outstanding shares of Spectra-Physics common stock
pursuant to the tender offer and merger, assuming no outstanding options
are exercised, and to pay related expenses is estimated to be
approximately $60 million. SPAI will obtain the funds to purchase the
Spectra-Physics common stock in the tender offer and the merger through a
capital contribution from Thermo Electron. Thermo Electron has committed
to provide any required financing to SPAI. Because the tender offer and
the merger are for cash and Thermo Electron has access to sufficient cash
to fund the tender offer and the merger, we do not believe that the
financial condition of Thermo Electron or SPAI is relevant to your
decision whether to tender your shares in the tender offer. See "Source
And Amount Of Funds."
- THERMO ELECTRON'S AND SPAI'S POSITION ON THE FAIRNESS OF THE OFFER AND THE
MERGER (PAGE 12).
- DETERMINATION OF THE BOARDS OF DIRECTORS OF THERMO ELECTRON AND SPAI. The
boards of directors of Thermo Electron and SPAI have determined that the
offer and the merger are fair to the unaffiliated stockholders of
Spectra-Physics. In considering the fairness of the offer and the merger
to Spectra-Physics' unaffiliated stockholders, the board of directors of
Thermo Electron reviewed and relied in part upon an analysis of the ranges
of potential values of the shares of Spectra-Physics common stock that
resulted from the application of several accepted valuation methodologies.
This analysis, including the selection of valuation methodologies, was
prepared by X.X. Xxxxxx Securities Inc. ("JPMorgan"). JPMorgan is the
financial advisor to Thermo Electron in connection with the tender offer
and the merger. In addition, the Board of Directors of SPAI reviewed and
adopted the fairness analysis of the Thermo Electron Board of Directors,
and has determined that the offer and the merger are fair to the
unaffiliated stockholders of Spectra-Physics. For a discussion of the
factors that the boards of directors of Thermo Electron and SPAI
considered in making their determinations as to the fairness of the offer
and the merger and a summary of the financial analysis prepared by
JPMorgan, see "Special Factors--Position Of Thermo Electron and the
Purchaser As To Fairness Of The Offer and the Merger" and "Special
Factors--Summary Of JPMorgan's Analysis and Opinion."
- SPECTRA-PHYSICS INDEPENDENT COMMITTEE. The board of directors of
Spectra-Physics has formed an independent committee of its board of
directors, comprised of Messrs. Xxxxxx Xxxx, Xxxxxxxx Xxxxxxx and Xxxxxxxx
Xxxxxxxxx, to prepare Spectra-Physics' recommendation on Schedule 14D-9 to
stockholders regarding the tender offer and the merger. The
Spectra-Physics independent committee has retained its own counsel and
financial advisor. See "Special Factors--Background To The Offer And The
Merger--Independent Committee of the Company's Board of Directors."
- POTENTIAL CONFLICTS OF INTEREST. One of the officers and directors of
Thermo Electron is also a director of Spectra-Physics and owns shares of
common stock of, or holds options to purchase shares of common stock of,
Thermo Electron and/or Spectra-Physics. As a result, there are
4
various potential or actual conflicts of interest in connection with the
tender offer and the merger. See "Special Factors--Conflicts Of Interest."
- CONSEQUENCES OF THE OFFER AND THE MERGER (PAGE 21).
Completion of the tender offer and the merger would have the following
consequences:
- Thermo Electron would have complete control over Spectra-Physics'
business.
- Thermo Electron would own 100% of the equity interest in Spectra-Physics'
business and would solely have the benefit or detriment of any change in
Spectra-Physics' value.
- The shares of Spectra-Physics would no longer be listed on NASDAQ.
- Spectra-Physics would no longer be subject to the requirements of the
Securities Exchange Act of 1934, including the requirements to file annual
and other periodic reports or to provide the type of going-private
disclosure contained in this offer to purchase.
If you do not tender your shares of Spectra-Physics common stock and the
tender offer is completed, your shares will remain outstanding until the
subsequent merger of SPAI and Spectra-Physics. After the merger, each of your
shares will, subject to statutory appraisal rights, be converted into the right
to receive $17.50 in cash, without interest.
- APPRAISAL RIGHTS (PAGE 42).
If you tender your shares of Spectra-Physics common stock in the tender
offer, you will not be entitled to exercise statutory appraisal rights under the
Delaware General Corporation Law. If you do not tender your shares in the tender
offer, upon the subsequent merger of SPAI and Spectra-Physics, you will have a
statutory right to dissent and demand payment of the judicially appraised fair
value of your Spectra-Physics shares plus a fair rate of interest, if any, from
the date of the merger. This value may be more or less than $17.50 per share.
See "The Merger; Appraisal Rights."
- PURPOSE OF THE TENDER OFFER (PAGE 10).
On January 31, 2000, Thermo Electron announced that its board of directors
had authorized its management to proceed with a major reorganization of the
operations of Thermo Electron and its subsidiaries. As part of this
reorganization, Thermo Electron has acquired the public minority interests in
each of its subsidiaries that have minority investors, with the exception of
Spectra-Physics, has spun off its separation technologies and fiber-based
products business and its medical products business, and has divested a variety
of non-core businesses. The purpose of this tender offer and the proposed
subsequent merger is to acquire the minority public interest in Spectra-Physics
as the last step in Thermo Electron's overall corporate reorganization.
Following the tender offer and the merger, Thermo Electron plans to retain
Spectra-Physics as part of Thermo Electron's core Optical Technologies business.
- FOR MORE INFORMATION (PAGES 38 AND 40).
More information regarding Spectra-Physics and Thermo Electron is available
from their respective public filings with the Securities and Exchange
Commission. See "Certain Information Concerning the Company" and "Certain
Information Concerning The Purchaser And Thermo Electron."
If you have any questions about the tender offer, please call the
information agent, X.X. Xxxx & Co., Inc. If you are a banker or broker, call
collect at (000) 000-0000. All others should call toll-free at (000) 000-0000.
5
IMPORTANT
ANY STOCKHOLDER OF THE COMPANY DESIRING TO TENDER ALL OR ANY PORTION OF SUCH
STOCKHOLDER'S SHARES (AS DEFINED HEREIN) SHOULD EITHER (1) COMPLETE AND SIGN THE
ACCOMPANYING 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 THE INSTRUCTIONS TO THE LETTER OF TRANSMITTAL,
MAIL OR DELIVER THE LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE) OR,
IN THE CASE OF A BOOK-ENTRY TRANSFER EFFECTED PURSUANT TO THE PROCEDURES SET
FORTH IN "THE TENDER OFFER--PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING
SHARES," AN AGENT'S MESSAGE (AS DEFINED HEREIN), AND ANY OTHER REQUIRED
DOCUMENTS TO THE DEPOSITARY (AS DEFINED HEREIN), AND EITHER DELIVER THE
CERTIFICATES REPRESENTING SUCH SHARES TO THE DEPOSITARY ALONG WITH THE LETTER OF
TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE) OR DELIVER SUCH SHARES PURSUANT TO
THE PROCEDURES FOR BOOK-ENTRY TRANSFER SET FORTH IN "THE TENDER
OFFER--PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES" OR (2) REQUEST
SUCH STOCKHOLDER'S BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO EFFECT THE TRANSACTION FOR SUCH STOCKHOLDER. ANY STOCKHOLDER HAVING
SHARES 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 IF SUCH STOCKHOLDER DESIRES TO TENDER SUCH
SHARES.
A STOCKHOLDER WHO DESIRES TO TENDER SHARES AND WHOSE CERTIFICATES
REPRESENTING SUCH SHARES ARE NOT IMMEDIATELY AVAILABLE, OR WHO CANNOT COMPLY IN
A TIMELY MANNER WITH THE PROCEDURES FOR BOOK-ENTRY TRANSFER, MAY TENDER SUCH
SHARES BY FOLLOWING THE PROCEDURES FOR GUARANTEED DELIVERY SET FORTH IN "THE
TENDER OFFER--PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES."
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THIS OFFER
TO PURCHASE, THE LETTER OF TRANSMITTAL OR OTHER TENDER OFFER MATERIALS MAY BE
DIRECTED TO THE INFORMATION AGENT OR THE DEALER MANAGER, AT THEIR RESPECTIVE
ADDRESSES AND TELEPHONE NUMBERS SET FORTH ON THE BACK COVER OF THIS OFFER TO
PURCHASE. STOCKHOLDERS MAY ALSO CONTACT THEIR BROKER, DEALER, COMMERCIAL BANK OR
TRUST COMPANY FOR ASSISTANCE CONCERNING THE OFFER.
TABLE OF CONTENTS
PAGE
---------
SUMMARY..................................................... 2
INTRODUCTION................................................ 7
SPECIAL FACTORS............................................. 9
THE TENDER OFFER............................................ 25
MATERIAL FEDERAL INCOME TAX CONSEQUENCES.................... 36
PRICE RANGE OF THE SHARES; DIVIDENDS........................ 37
CERTAIN INFORMATION CONCERNING THE COMPANY.................. 38
CERTAIN INFORMATION CONCERNING THE PURCHASER AND THERMO
ELECTRON.................................................. 40
SOURCE AND AMOUNT OF FUNDS.................................. 42
THE MERGER; APPRAISAL RIGHTS................................ 42
FEES AND EXPENSES........................................... 44
MISCELLANEOUS............................................... 46
SCHEDULE I MEMBERS OF THE BOARDS OF DIRECTORS AND EXECUTIVE OFFICERS OF
THE PURCHASER AND THERMO ELECTRON
SCHEDULE II INFORMATION CONCERNING TRANSACTIONS IN THE COMMON STOCK OF
THE COMPANY
SCHEDULE III SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
6
TO THE HOLDERS OF COMMON STOCK OF SPECTRA-PHYSICS, INC.:
INTRODUCTION
Spectra-Physics Acquisition, Inc. (the "Purchaser"), a Delaware corporation,
hereby offers to purchase all outstanding shares of common stock, par value $.01
per share (the "Shares"), of Spectra-Physics, Inc., a Delaware corporation
("Spectra-Physics" or the "Company"), at a purchase price of $17.50 per Share
(the "Offer Price"), net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in this Offer to Purchase and
in the related Letter of Transmittal (which, together with any amendments or
supplements hereto or thereto, collectively constitute the "Offer"). The
Purchaser is a wholly-owned subsidiary of Thermo Electron Corporation, a
Delaware corporation ("Thermo Electron"). References in this Offer to Purchase
to the Board of Directors of Thermo Electron include both the full Board of
Directors and/or a duly authorized committee of the Board of Directors.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES WHICH, TOGETHER WITH THE SHARES OWNED BY THERMO ELECTRON AND ITS
SUBSIDIARIES, CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE OUTSTANDING
SHARES ON THE EXPIRATION DATE OF THE OFFER (THE "MINIMUM CONDITION"). THE OFFER
IS ALSO SUBJECT TO OTHER IMPORTANT TERMS AND CONDITIONS CONTAINED IN THIS OFFER
TO PURCHASE. SEE "THE TENDER OFFER--CERTAIN CONDITIONS OF THE OFFER."
As of November 12, 2001, there were 16,975,644 Shares outstanding and
3,650,675 Shares reserved for issuance pursuant to options (the "Options")
outstanding as of such date under the Company's option plans. As of such date,
Thermo Electron owned 13,333,000 Shares, or approximately 78.5% of the
outstanding Shares (64.6% assuming all outstanding options are exercised).
Thermo Electron owned 13,000,000 Shares indirectly through Spectra-Physics AB
("SPAB"), its wholly owned subsidiary, and 333,000 Shares directly.
Based upon the number of outstanding Shares as of November 12, 2001 and
assuming no Options are exercised, 1,945,080 Shares must be tendered in the
Offer in order to satisfy the Minimum Condition. Assuming all outstanding
Options are exercised, 5,230,688 Shares must be tendered in the Offer in order
to satisfy the Minimum Condition.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in the Letter of Transmittal, stock
transfer taxes with respect to the purchase by the Purchaser of Shares pursuant
to the Offer. The Purchaser will pay all fees and expenses of JPMorgan, which is
acting as the Dealer Manager (the "Dealer Manager"), EquiServe Trust Company,
L.P., which is acting as the Depositary (the "Depositary"), and X.X. Xxxx &
Co. Inc., which is acting as the Information Agent (the "Information Agent"), in
connection with the Offer. See "Fees And Expenses."
This Offer to Purchase and the documents incorporated by reference in this
Offer to Purchase include certain forward-looking statements. These statements
appear throughout this Offer to Purchase and include statements regarding the
intent, belief or current expectations of Thermo Electron and its Board of
Directors, including statements concerning Thermo Electron's strategies
following completion of the Offer and its plans with respect to the acquisition
of all of the equity interests in the Company. Such forward-looking statements
are not guarantees of future performance and involve risks and uncertainties.
Actual results may differ materially from those described in such
forward-looking statements as a result of various factors.
7
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT YOU SHOULD READ CAREFULLY BEFORE YOU MAKE ANY
DECISION WITH RESPECT TO THE OFFER.
If the Offer is completed, Thermo Electron and the Purchaser will together
own at least 90% of the Shares. Thermo Electron ultimately intends to cause the
Company to merge with and into the Purchaser in a so-called "short-form" merger
between the Company and the Purchaser (the "Merger"). Due to the requirements of
Section 203 of the Delaware General Corporation Law, Thermo Electron is
prohibited from completing the Merger until February 23, 2002, unless the Merger
is approved by the holders of at least two-thirds of the minority shares of the
Company. See "Special Factors--Background to the Offer and the
Merger--Acquisition of the Company." After the Merger, the Company would be
wholly owned by Thermo Electron. Stockholders of the Company who do not tender
their Shares in the Offer would not be entitled to vote on the Merger, unless it
occurs before February 23, 2002. The consideration per Share in the Merger will
be the same as the Offer Price. It is Thermo Electron's current intention that
the Merger be completed as soon as possible after February 22, 2002.
If, after the Offer is completed but prior to consummation of the Merger,
the aggregate ownership by Thermo Electron and its subsidiaries of the
outstanding Shares should fall below 90% due to the exercise of outstanding
Options or for any other reason, Thermo Electron may acquire additional Shares
on the open market or in privately negotiated transactions to the extent
required for such ownership to equal or exceed 90%. Any such purchases would be
made at market prices or privately negotiated prices at the time of purchase,
which may be higher or lower than the Offer Price. For a discussion of other
actions Thermo Electron may take if the Offer is not completed, see "Special
Factors--Conduct Of The Company's Business If the Offer Is Not Completed."
The Purchaser and Thermo Electron have filed with the Securities and
Exchange Commission (the "Commission") a Tender Offer Statement on Schedule TO
(including the information required by Schedule 13E-3) (the "Schedule TO") under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), relating
to the Offer, the Merger and other potential purchases of Shares.
8
SPECIAL FACTORS
BACKGROUND TO THE OFFER AND THE MERGER
THE THERMO ELECTRON REORGANIZATION. On January 31, 2000, Thermo Electron
announced that its Board of Directors had authorized its management to proceed
with a major reorganization of the operations of Thermo Electron and its
subsidiaries. As part of this reorganization, Thermo Electron has acquired the
public minority interest in all of its subsidiaries that have minority
investors, except for the Company, has spun off its separation technologies and
fiber-based products business and its medical products business, and has
divested a variety of non-core businesses. The purpose of the Offer and the
Merger is to acquire the minority public interest in the Company as the last
step in Thermo Electron's overall corporate reorganization and to permit the
shareholders of the Company to receive cash for their shares without the risks
of ongoing stock ownership in the Company. Following the Offer and the Merger,
Thermo Electron plans to retain the Company as part of Thermo Electron's core
Optical Technologies business.
ACQUISITION OF THE COMPANY. On January 7, 1999, Thermo Instrument Systems
Inc., then a majority-owned subsidiary of Thermo Electron ("Thermo
Instrument"), announced that it would commence a tender offer for all of the
outstanding shares of Spectra-Physics AB ("SPAB"), then a publicly traded
company with its shares listed on the Stockholm Stock Exchange, and the parent
company of the Company. On February 22, 1999, Thermo Instrument announced that
all of the conditions of its offer had been satisfied and that the offer was
then unconditional in all respects. As of February 22, 1999, Thermo Instrument
had purchased and received acceptances for approximately 17.3 million, or
approximately 98 percent, of all outstanding SPAB shares, at a price of 160
Swedish krona per share (approximately $20 per share). In March 2000, Thermo
Instrument acquired the remaining outstanding shares of SPAB under the
compulsory acquisition rules applicable to Swedish companies.
At the time of its acquisition by Thermo Instrument, SPAB owned
approximately 80% of the outstanding shares of the Company. By virtue of Thermo
Instrument's acquisition of SPAB, Thermo Electron thereby became the ultimate
beneficial owner of 80% of the Company. In June 2000, Thermo Instrument was
merged directly into Thermo Electron.
Section 203 of the Delaware General Corporation Law prohibits business
combination transactions involving a Delaware corporation (such as the Company)
and an "interested stockholder" (defined generally as any person that directly
or indirectly beneficially owns 15% or more of the outstanding voting stock of
the subject corporation) for three years following the time such person became
an interested stockholder, unless special requirements are met or certain
exceptions apply. At the time of Thermo Instrument's acquisition of SPAB, the
Company notified Thermo Instrument that it believed that Thermo Instrument and
Thermo Electron were "interested stockholders" as defined in Section 203 with
respect to the Company, and that Thermo Electron and its subsidiaries were
subject to the restrictions of Section 203. Accordingly, Thermo Electron and its
subsidiaries are prohibited from consummating the proposed Merger until at least
February 23, 2002, without the approval of the holders of at least two-thirds of
the minority shares of the Company.
THE COMPANY. Spectra-Physics designs, develops, manufactures, and
distributes semiconductor-based lasers and laser optics for a variety of end
markets, including passive and active components for the telecommunications
industry. Spectra-Physics is also a leader in developing laser products for a
variety of other commercial markets, including computer and microelectronics
manufacturing, industrial manufacturing, medical, image recording, and research
and development. The Company's manufacturing operations are based in Mountain
View and Oroville, California; Tucson, Arizona; and Stahnsdorf, Germany.
International operations consist of subsidiaries located in Japan and Germany,
and approximately 30 distributors worldwide. Spectra-Physics' website is located
at xxx.xxxxxxx-xxxxxxx.xxx.
9
INDEPENDENT COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS. On August 21,
2001, Thermo Electron issued a press release announcing that Thermo Electron
would take the Company private as a wholly-owned subsidiary of Thermo Electron,
as the last step in its corporate reorganization. Thermo Electron announced that
it would make a tender offer for all of the outstanding shares held by the
stockholders of the Company other than Thermo Electron and its subsidiaries (the
"Unaffiliated Stockholders") at $20.00 per Share in cash.
After the Thermo Electron announcement, the Board of Directors of the
Company formed an independent committee (the "Independent Committee"),
consisting of Messrs. Xxxxxx Xxxx, Xxxxxxxx Xxxxxxx and Xxxxxxxx Xxxxxxxxx, the
Directors of the Company who are not otherwise affiliated with Thermo Electron,
or any of its subsidiaries other than the Company, to prepare the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 to stockholders
regarding the Offer. Under Rule 14d-9 under the Exchange Act, the Company must
send to its stockholders on or prior to November 30, 2001 its recommendation
whether to accept or reject the Offer. The Company's Board of Directors also
authorized the Independent Committee to retain its own counsel and financial
advisor. After its formation, the Independent Committee retained Xxxxxx,
Sonsini, Xxxxxxxx & Xxxxxx, P.C., as its legal counsel and Xxxxxxx Xxxxx Xxxxxx
as its financial advisor.
On September 26, 2001, Thermo Electron announced that it was reevaluating
the offer price of $20.00 per Share in order to analyze the impact on the
Company of the worsening economic conditions associated with the terrorist
attacks on September 11, 2001.
On November 6, 2001, Thermo Electron's Board of Directors met and determined
that Thermo Electron would offer $17.50 per Share in cash in the Offer.
On November 16, 2001, the Purchaser commenced the Offer.
REASONS FOR THE OFFER AND THE MERGER
ACTIONS OF THERMO ELECTRON'S BOARD OF DIRECTORS. On August 20, 2001, the
Board of Directors of Thermo Electron held a special meeting at which Thermo
Electron's management presented the proposal for Thermo Electron to acquire all
of the Shares that Thermo Electron and its subsidiaries did not already own.
Xx. Xxxxxx X. Xxxxxxx, a director of Spectra-Physics and a member of Thermo
Electron's Board of Directors and Thermo Electron's Chief Operating Officer and
President, recused himself from taking action with respect to the Offer. The
Board of Directors of Thermo Electron considered all of the factors relating to
the Offer and the Merger referred to below. The Board of Directors of Thermo
Electron also discussed the fact that the acquisition by Thermo Electron of the
minority stockholder interest in the Company would complete Thermo Electron's
corporate reorganization. After consideration of these factors, the Board of
Directors of Thermo Electron determined to take the Company private through an
acquisition for cash through the Offer for all of the Shares held by the
Unaffiliated Stockholders at a purchase price of $20.00 per Share. On
September 26, 2001, Thermo Electron announced that it was reevaluating the offer
price of $20.00 per Share in order to analyze the impact on the Company of the
worsening economic conditions associated with the terrorist attacks on
September 11, 2001. On November 6, 2001, Thermo Electron announced the revised
Offer Price of $17.50 per Share in cash.
BENEFITS AND DETRIMENTS TO THE COMPANY OF THE OFFER AND THE MERGER. In
determining whether to make the Offer and thereafter effect the Merger, the
Board of Directors of Thermo Electron considered several factors, including the
financial performance and profitability of the Company and
10
the potential benefits to the Company's business if the Company were to become
part of a larger business unit. Thermo Electron's Board of Directors also
considered the following factors:
- the prospect of achieving greater marketing, operating and administrative
efficiencies and synergies as a result of the Company's operations being
conducted in a more coordinated manner with Thermo Electron's other
businesses;
- the reduction in the amount of public information available to competitors
about the Company's businesses that would result from the termination of
the Company's obligations under the reporting requirements of the
Commission;
- the elimination of additional burdens on management associated with public
reporting and other tasks resulting from the Company's public company
status, including, for example, the dedication of time by and resources of
the Company's management and Board of Directors to stockholder and analyst
inquiries and investor and public relations;
- the decrease in costs, particularly those associated with being a public
company (for example, as a privately-held entity, the Company would no
longer be required to file quarterly, annual or other periodic reports
with the Commission or publish and distribute to its stockholders annual
reports and proxy statements), that Thermo Electron anticipates could
result in savings of approximately $450,000 per year, including fees for
an audit by an independent accounting firm and legal fees;
- the greater flexibility that the Company's management would have to focus
on long-term business goals, as opposed to quarterly earnings, as a
non-reporting company, particularly in light of the volatility in the
Company's quarterly results; and
- public capital market trends affecting small-cap companies, including
perceived lack of interest by institutional investors in companies with a
limited public float.
The Board of Directors of Thermo Electron also considered the advantages and
disadvantages of certain alternatives to acquiring the minority stockholder
interest in the Company, including:
- a sale of Thermo Electron's equity interest in the Company; and
- leaving the Company as a majority-owned, public subsidiary.
The first alternative, selling Thermo Electron's equity interests in the
Company, was not an alternative that was pursued at length, given that Thermo
Electron did not want to sell its equity interest in the Company at prices that
it believed could be obtained at the current time, but rather intended to retain
the Company as a part of Thermo Electron's core Optical Technologies business.
In the view of the Board of Directors of Thermo Electron, the principal
advantage of leaving the Company as a majority-owned, public subsidiary was the
ability of Thermo Electron to invest the cash that would be required to buy the
minority stockholder interest in the Company for other purposes. The
disadvantages of leaving the Company as a majority-owned, public subsidiary
which were considered by the Board of Directors included the inability to
achieve many of the benefits of taking the Company private discussed above. The
Board of Directors of Thermo Electron concluded that the advantages of leaving
the Company as a majority-owned, public subsidiary were significantly outweighed
by the disadvantages of doing so, and accordingly that alternative was rejected.
CONSIDERATION OF LIQUIDITY AND SHARE PRICE; TIMING. The Board of Directors
of Thermo Electron considered the relatively low volume of trading in the Shares
and considered that the Offer and the Merger would result in immediate, enhanced
liquidity for the Unaffiliated Stockholders. The Board of Directors of Thermo
Electron also considered recent trends in the price of the Shares.
11
Thermo Electron has determined to make the Offer and effect the Merger at
this time as the last step in the reorganization of Thermo Electron and its
subsidiaries. Thermo Electron began the process of its corporate reorganization
in August 1998. Following the Merger, Thermo Electron will have no more publicly
traded, majority-owned subsidiaries, which has been a primary goal of Thermo
Electron's reorganization. This element of the reorganization cannot be
completed without the Offer and, ultimately, the Merger. Accordingly, Thermo
Electron has decided to undertake the Offer and the Merger at this time in order
to complete the process of its corporate reorganization. It also took into
account the expiration on February 23, 2002 of the restrictions under Delaware
corporate law on a merger with the Company. See "--Background To The Offer And
The Merger--Acquisition of the Company."
ALTERNATIVE STRUCTURE CONSIDERED. The Board of Directors of Thermo Electron
also considered an alternative to structuring the transaction as a tender offer
followed by a short-form merger. The alternative structure that was considered
was that of a long-form merger, for which the approval of the Company's Board of
Directors and stockholders would have been required. In determining to structure
the transaction as a tender offer followed by a short-form merger, instead of as
a long-form merger, the Board of Directors considered the following:
- Unless at least 90% of the outstanding Shares are owned by the Purchaser,
it could not effect a short-form merger. Unlike a long-form merger, the
approval of the Company's Board of Directors is not required to complete a
short-form merger.
- A tender offer followed by a later short-form merger would permit Thermo
Electron to acquire the minority interest in the Company on an expeditious
basis and provide the Unaffiliated Stockholders with a prompt opportunity
to receive cash in exchange for their Shares. Thermo Electron believed
that a long-form merger would take substantially longer to complete,
because of the length of time required to call and hold a special
stockholders' meeting and the time required to prepare, file and complete
Commission review of the necessary proxy statement relating to the
meeting.
- In the Offer, each Unaffiliated Stockholder would individually determine
whether to accept cash in exchange for their Shares. In the case of a
long-form merger, the vote of the holders of a majority of the shares
outstanding would be binding upon all stockholders, including those who
vote against the transaction.
- Unaffiliated Stockholders who do not tender their Shares in the Offer
could preserve their appraisal rights in the Merger under state law. This
factor would also have been present in a long-form merger.
After discussing the advantages and disadvantages of acquiring the minority
stockholder interest in the Company, including the alternative method of
acquiring such interests through a long-form merger, Thermo Electron's Board of
Directors authorized taking the Company private through a tender offer for all
of the Shares of the Company that Thermo Electron and its subsidiaries did not
already own, to be followed by a short-form merger.
POSITION OF THERMO ELECTRON AND THE PURCHASER AS TO FAIRNESS OF THE OFFER AND
THE MERGER
Because Thermo Electron currently owns a majority of the Shares, Thermo
Electron and the Purchaser are deemed "affiliates" of the Company under
Rule 12b-2 of the Exchange Act. Accordingly, in compliance with Rule 13e-3 under
the Exchange Act, the Board of Directors of Thermo Electron has considered the
fairness of the Offer and the Merger to the Unaffiliated Stockholders.
DETERMINATION OF THE BOARD OF DIRECTORS OF THERMO ELECTRON. In authorizing
the Offer and the Merger, the Board of Directors of Thermo Electron determined
that the Offer and the Merger are fair to the Unaffiliated Stockholders. In
reaching its determination, the Board of Directors of Thermo
12
Electron considered the factors set forth below in this section, which
constitute all of the material factors considered by the Board of Directors in
making its determination. The Board of Directors of Thermo Electron determined
that each of the following factors supported its belief that the Offer and the
Merger are fair to the Unaffiliated Stockholders:
- FINANCIAL ANALYSIS. In considering the fairness of the Offer and the
Merger from a financial point of view to the Company's stockholders,
including the Unaffiliated Stockholders, the Board of Directors of Thermo
Electron reviewed and relied in part upon an analysis of the ranges of
potential values of the Shares that result from the application of several
accepted valuation methodologies. This financial analysis, including the
selection of valuation methodologies, was prepared by JPMorgan to assist
the Board of Directors of Thermo Electron with its evaluation of the Offer
and the Merger, and has been adopted by the Thermo Electron Board of
Directors. Thermo Electron retained JPMorgan as its financial advisor for
the purpose of advising Thermo Electron in connection with strategic
alternatives, including advising Thermo Electron in connection with the
acquisition of the minority interest in the Company. The financial
analyses undertaken by JPMorgan included an analysis based upon public
trading multiples and discounted cash flows. The analysis of trading
multiples of companies engaged in businesses which JPMorgan deemed to be
relevant to the Company's business indicated an estimated range of equity
values for the Shares of approximately $13.00 to $18.00 per Share, with
the top end of such range reflecting the impact of the estimated amount
and timing of the cost savings and related expenses and synergies expected
to result from the Merger (the "Synergies"). The analysis based upon
discounted cash flows indicated an estimated range of equity values for
the Shares of between $11.75 and $14.75 per Share for the Company without
incorporating the impact of the Synergies, and $15.25 to $18.75 per Share
when the impact of the Synergies was incorporated. See "--Summary of
JPMorgan's Analysis and Opinion."
- INFORMATION CONCERNING THE FINANCIAL PERFORMANCE, CONDITION, BUSINESS
OPERATIONS AND PROSPECTS OF THE COMPANY. The Board of Directors of Thermo
Electron believed the Offer Price to be attractive in light of the
Company's current financial performance, profitability and growth
prospects. In addition, the Offer and the Merger would shift the risk of
the future financial performance of the Company from the Unaffiliated
Stockholders, who do not have the power to control decisions made as to
the Company's business, entirely to Thermo Electron, who has the power to
control the Company's business and who has the resources to manage and
bear the risks inherent in the business over the long term. The Board of
Directors relied upon and adopted the analyses of JPMorgan with respect to
the public companies that were deemed comparable in measures of financial
performance, profitability and growth prospects, and with respect to the
discounted cash flow of the Company, as described under "--Summary of
JPMorgan's Analysis And Opinion", below. These analyses indicated an
estimated range of equity values for the Shares of approximately $13.00 to
$18.00 per Share for the public company analysis, and a range of $15.25 to
$18.75 for the discounted cash flow analysis (including synergies relating
to the proposed Merger). The Board concluded that, based on these
analyses, the Offer Price was at the high end of the ranges, which weighed
in favor of the fairness of the Offer Price.
- THE PREMIUM REFLECTED IN THE OFFER PRICE OF $17.50 PER SHARE. The Board of
Directors of Thermo Electron considered the current and historical trading
prices of the Shares. The Offer Price represented a premium of
approximately 28% over the closing price of $13.69 on August 20, 2001,
which was the trading day prior to the date of Thermo Electron's initial
announcement that it would take the Company private. As of December 6,
2001, the closing price of the Shares was $17.45. Over the 52-week period
preceding the date of JPMorgan's fairness opinion, the Company's Shares
reached a high closing price of $46.25 and a low closing price of $13.25.
See also "PRICE RANGE OF THE SHARES; DIVIDENDS" for further information on
the
13
historic price range of the Shares. The purchase by Thermo Electron would
eliminate the exposure of the Unaffiliated Stockholders to any future or
continued declines in the price of the Shares. See "--Certain Effects Of
The Offer And The Merger."
- TERMS OF THE OFFER. The Board of Directors of Thermo Electron considered
the terms of the Offer and the Merger, including (1) the amount and form
of the consideration, (2) the limited number of conditions to the
obligations of the Purchaser, including the absence of a financing
condition, (3) the tender offer structure, which would provide an
expeditious means for the Unaffiliated Stockholders to receive the Offer
Price and (4) the Minimum Condition.
- THE MARKET PRICE AND RELATIVE LACK OF LIQUIDITY FOR THE SHARES, AND THE
LIQUIDITY THAT WOULD BE REALIZED BY THE UNAFFILIATED STOCKHOLDERS FROM THE
ALL-CASH OFFER. The Board of Directors of Thermo Electron believed that
the liquidity that would result from the Offer and the Merger would be
beneficial to the Unaffiliated Stockholders because Thermo Electron's
ownership of Shares (1) results in a relatively small public float that
necessarily limits the amount of trading in the Shares and (2) decreases
the likelihood that a proposal to acquire the Shares would be made by an
independent entity without the consent of Thermo Electron.
- THE ABSENCE OF ANY THIRD PARTY BUYER FOR THE COMPANY WHO WAS WILLING AND
ABLE TO PROVIDE AN ALTERNATE SOURCE OF LIQUIDITY TO THE UNAFFILIATED
STOCKHOLDERS. Thermo Electron currently intends to retain its majority
holdings in the Company, which forecloses the opportunity to consider an
alternative transaction with a third party purchaser of the Company or
otherwise provide liquidity to the Unaffiliated Stockholders. Accordingly,
it is unlikely that finding a third party buyer for the Company was a
realistic option for the Unaffiliated Stockholders. During 2000, Thermo
Electron solicited, but did not receive any, offers for the Company from
third parties. Thermo Electron considered the absence of any third party
buyer for the Company at that time to support the fairness of the Offer
and the Merger to the Unaffiliated Stockholders, because the absence of a
third party buyer demonstrated that Thermo Electron's offer was the only
likely source of prompt liquidity for the Shares which was available to
all of the Unaffiliated Stockholders simultaneously.
PROCEDURAL FAIRNESS. The Board of Directors of Thermo Electron also
determined that the Offer and the Merger are procedurally fair to the
Unaffiliated Stockholders. In making such determination, the Board of Directors
considered the following factors:
- Each Unaffiliated Stockholder can individually determine whether to tender
Shares in the Offer.
- The Offer provides the opportunity for the Unaffiliated Stockholders to
sell their Shares without incurring brokerage and other costs typically
associated with market sales.
- Unaffiliated Stockholders who believe that the terms of the Offer and the
Merger are not fair can pursue appraisal rights in the Merger under state
law.
CERTAIN NEGATIVE CONSIDERATIONS. The Board of Directors of Thermo Electron
also considered the following factors, each of which they considered negative,
in their deliberations concerning the fairness of the terms of the Offer and the
Merger:
- TERMINATION OF PARTICIPATION IN FUTURE GROWTH OF THE COMPANY. Following
the successful completion of the Offer and the Merger, the Unaffiliated
Stockholders would cease to participate in the future earnings or growth,
if any, of the Company or benefit from increases, if any, in the value of
their holdings in the Company.
- CONFLICTS OF INTEREST. The financial interests of Thermo Electron are
adverse as to the Offer Price to the financial interests of the
Unaffiliated Stockholders. In addition, officers and directors of the
Company have actual or potential conflicts of interest in connection with
the Offer and the Merger. See "--Conflicts Of Interest."
14
- NO UNAFFILIATED STOCKHOLDER APPROVAL. The Offer and the Merger do not
provide the Unaffiliated Stockholders with an opportunity to vote on the
proposed transaction, unless the Merger occurs prior to February 23, 2002.
- NO UNAFFILIATED REPRESENTATIVE OR INDEPENDENT DIRECTOR APPROVAL. The
members of the Board of Directors of the Company who are not employees of
the Company or affiliated with Thermo Electron have not retained an
unaffiliated representative to act solely on behalf of the Unaffiliated
Stockholders for purposes of negotiating the terms of the Offer and the
Merger or preparing a report concerning the fairness of the Offer and the
Merger. The Board of Directors of the Company has delegated to the
Independent Committee the authority to make a recommendation to the
Unaffiliated Stockholders with respect to the Offer and to prepare a
Solicitation/Recommendation Statement on Schedule 14D-9, as required by
the rules of the Commission. The Independent Committee retained Xxxxxxx
Xxxxx Xxxxxx to assist it in reviewing the fairness of the Offer to the
Unaffiliated Stockholders. Thermo Electron is permitted by the terms of
Delaware law and the rules of the Commission to conduct the Offer and the
Merger without the approval of the Board of Directors of the Company, and
thus the Offer and the Merger have not been and will not be approved by
the members of the Board of Directors of the Company who are not employees
of the Company or affiliated with Thermo Electron.
OTHER FACTORS. The Board of Directors of Thermo Electron did not consider
the net book value of the Company as a relevant factor in assessing the
Company's value and, accordingly, did not evaluate the fairness of the Offer
Price in relation to the Company's net book value. The Company's net book value
at September 30, 2001 was approximately $115 million, which would have yielded a
per Share valuation for the Company of $6.79. The Board of Directors relied in
part upon valuation methodologies performed by JPMorgan for the purpose of its
financial analysis, and JPMorgan did not employ net book value in its financial
analysis. Moreover, Thermo Electron does not believe that an analysis based upon
net book value was appropriate for an instruments business. Thermo Electron
believes that net book value is a valuation methodology more typically used in
the banking, utilities, real estate and financial services industries.
In connection with the Offer, the Board of Directors of Thermo Electron also
did not consider "shopping" the Company to prospective purchasers. Shopping the
Company would not only entail substantial time delays and allocation of
management's time and energy, but would also disrupt and discourage the
Company's employees and create uncertainty among the Company's customers and
suppliers. Furthermore, Thermo Electron does not intend to sell the Company, but
rather intends to continue to operate the Company as part of its core Optical
Technologies business. See "--Conduct Of Thermo Electron After The Offer And The
Merger."
In connection with the Offer, the Board of Directors of Thermo Electron did
not consider the Offer Price as compared to any implied liquidation value
because it was not contemplated that the Company be liquidated, whether or not
the Offer and the Merger were completed. Thermo Electron also believed that the
piecemeal sale of the Company's assets suggested by a liquidation analysis of
the Company would not yield a higher price per Share because a liquidation would
result in greater tax liability and more expenses for the fees of legal and
financial advisors.
RECENT PURCHASES OF SHARES BY THERMO ELECTRON. See Schedule II to this
Offer to Purchase for information on purchases of Shares by Thermo Electron (as
well as by the Company) during the past two years. Thermo Electron believed that
its purchases of Shares during the past two years, at a purchase price of $17.67
per Share, weighed in favor of the fairness of the Offer and the Merger in that
the price it had paid was substantially similar to the Offer Price.
15
CONCLUSIONS OF THE BOARD OF DIRECTORS OF THERMO ELECTRON. Thermo Electron's
Board of Directors concluded that, given the recent performance of the Shares
prior to the announcement of Thermo Electron's intention to take the Company
private, the uncertainties surrounding the Company's future growth prospects and
the limited trading market for the Shares, the Offer and the Merger were fair to
the Unaffiliated Stockholders. In determining that the Offer and the Merger were
fair to the Unaffiliated Stockholders, the Board of Directors of Thermo Electron
considered the above factors as a whole and did not assign specific or relative
weights to them, other than that the Offer Price of $17.50 per Share in cash was
considered the most important factor.
CONCLUSIONS OF THE BOARD OF DIRECTORS OF THE PURCHASER. The Board of
Directors of the Purchaser reviewed the fairness analysis and conclusion of the
Board of Directors of Thermo Electron, and has adopted the Thermo Electron Board
of Directors' analysis and conclusion that the Offer and the Merger are fair to
the Unaffiliated Stockholders. Accordingly, the Board of Directors of the
Purchaser has also determined that the Offer and the Merger are fair to the
Unaffiliated Stockholders.
SUMMARY OF JPMORGAN'S ANALYSIS AND OPINION
Thermo Electron retained JPMorgan as its exclusive financial advisor for the
purpose of advising Thermo Electron in connection with its strategic
alternatives, including advising Thermo Electron in connection with the
acquisition of the minority interest in the Company. JPMorgan presented the
results of its analysis of the ranges of potential values of the Shares to the
Thermo Electron Board of Directors on August 20, 2001. Following Thermo
Electron's announcement, on September 26, 2001, that it was reevaluating the
Offer Price in light of the terrorist attacks on September 11, 2001, Thermo
Electron requested JPMorgan to update its valuation analysis with respect to the
Shares. JPMorgan's financial analysis, including the selection of valuation
methodologies, was prepared to assist the Board of Directors of Thermo Electron
with its evaluation of the Offer and the Merger.
At the November 6, 2001 meeting of the Board of Directors of Thermo
Electron, JPMorgan also orally delivered its opinion (the "Opinion"),
subsequently confirmed in a written opinion dated November 6, 2001, that, as of
such date and based upon and subject to the various factors, assumptions and
limitations set forth in its Opinion, the Offer Price of $17.50 net per Share in
cash was fair, from a financial point of view, to Thermo Electron. No limitation
was placed upon the scope of JPMorgan's investigation or valuation methodologies
by Thermo Electron.
At the November 6, 2001 meeting, representatives of JPMorgan were present.
Xxxxxxx X. Xxxxx, Chairman and Chief Executive Officer of Thermo Electron,
scheduled the meeting and requested that the representatives of JPMorgan come to
the meeting in order to make their presentation regarding the Opinion.
JPMORGAN'S FINANCIAL ANALYSIS AND RELATED OPINION WERE PROVIDED TO THE BOARD
OF DIRECTORS OF THERMO ELECTRON. THE OPINION IS DIRECTED ONLY TO THE FAIRNESS OF
THE CONSIDERATION FROM A FINANCIAL POINT OF VIEW TO THERMO ELECTRON (AND NOT TO
THE UNAFFILIATED STOCKHOLDERS) AND DOES NOT CONSTITUTE A RECOMMENDATION AS TO
WHETHER OR NOT THE UNAFFILIATED STOCKHOLDERS SHOULD TENDER THEIR SHARES IN THE
OFFER.
The full text of JPMorgan's written Opinion, which sets forth among other
things the assumptions made, procedures followed, matters considered and
limitations on the scope of the review undertaken by JPMorgan in conducting its
financial analysis and in rendering its Opinion, is attached as Exhibit 12(c) to
the Schedule TO. The written Opinion should be read carefully and in its
entirety. A copy of JPMorgan's written Opinion will be made available for
inspection and copying at the principal office of Thermo Electron during its
regular business hours upon request from any record holder of the Shares or a
representative of such person designated as such in writing or may be obtained
from the Schedule TO filed with the Commission. Requests to have the Opinion
made available should be directed to the Corporate Secretary of Thermo Electron
at the address set forth under "Certain
16
Information Concerning The Purchaser And Thermo Electron." The summary of
JPMorgan's Opinion set forth in this Offer to Purchase is qualified in its
entirety by reference to the full text of the written Opinion.
In conducting its financial analysis and rendering its Opinion, JPMorgan,
among other things:
- reviewed certain publicly available business and financial information
concerning the Company and the industries in which it operates;
- compared the financial and operating performance of the Company with
publicly available information concerning certain other companies JPMorgan
deemed relevant and reviewed the current and historical market prices of
the Shares and certain publicly traded securities of such other companies;
- reviewed certain internal financial analyses and forecasts prepared by the
management of Thermo Electron relating to the Company's businesses, as
well as the Synergies; and
- performed such other financial studies and analyses and considered such
other information as JPMorgan deemed appropriate for the purposes of the
Opinion.
JPMorgan also held discussions with certain members of the management of
Thermo Electron with respect to certain aspects of the Offer and the Merger. In
addition, JPMorgan held discussions with certain members of management of Thermo
Electron with respect to the past and current business operations of the
Company, the financial condition and future prospects and operations of the
Company, the effect of the Offer and the Merger on the financial condition and
future prospects of Thermo Electron and certain other matters believed necessary
or appropriate to JPMorgan's inquiry. In addition, JPMorgan reviewed such other
financial studies and analyses and considered such other information as JPMorgan
deemed appropriate for the purposes of its financial analysis and Opinion.
JPMorgan did not hold any discussions with management of the Company.
JPMorgan relied upon and assumed, without independent verification, the
accuracy and completeness of all information that was publicly available or that
was furnished to, or discussed with, JPMorgan by Thermo Electron or otherwise
reviewed by JPMorgan, and JPMorgan has not assumed any responsibility or
liability therefor. JPMorgan did not conduct any valuation, appraisal or
physical inspection of any assets or liabilities, nor were any valuations or
appraisals provided to JPMorgan. JPMorgan also assumed that there have been no
material changes in the Company's results of operations or financial condition
since the date of the most recent financial statements made available to
JPMorgan. In relying on the financial analyses and forecasts provided to, or
discussed with, JPMorgan, including the Synergies, JPMorgan has assumed that
they have been reasonably prepared based on assumptions reflecting the best
currently available estimates and judgments by management as to the expected
future results of operations and financial condition of the Company to which
such analyses or forecasts relate. JPMorgan also assumed that the Offer and the
Merger will have the tax consequences described in discussions with, and
materials furnished to us by, representatives of Thermo Electron. JPMorgan
relied as to all legal matters relevant to rendering its Opinion upon the advice
of counsel. JPMorgan further assumed that any material governmental, regulatory
or other consents and approvals necessary for the consummation of the
Transaction will be obtained without any adverse effect on the Company or Thermo
Electron or on the contemplated benefits of the Offer and the Merger.
JPMorgan's Opinion is necessarily based on economic, market and other
conditions as in effect on, and the information made available to JPMorgan as
of, the date of its Opinion. Subsequent developments may affect the Opinion, and
JPMorgan does not have any obligation to update, revise or reaffirm its Opinion.
JPMorgan's Opinion is limited to the fairness, from a financial point of view,
of
17
the consideration to be paid by XXXX in the proposed Offer and Xxxxxx and
JPMorgan has expressed no opinion as to the underlying decision by Thermo
Electron to engage in the Offer and the Merger. JPMorgan has also expressed no
opinion as to the price at which the Shares or the common stock of Thermo
Electron will trade at any future time, whether prior to or following
consummation of the Offer and the Merger.
In accordance with customary investment banking practice, JPMorgan employed
generally accepted valuation methods in conducting its financial analysis and
reaching its Opinion. The following is a summary of the material financial
analyses undertaken by JPMorgan with respect to the Company and presented to the
Board of Directors of Thermo Electron at its meeting on November 6, 2001:
PUBLIC TRADING MULTIPLES. Using publicly available information, JPMorgan
compared selected financial data of the Company with similar data for selected
publicly traded companies engaged in businesses which JPMorgan deemed to be
relevant to the Company's business. The companies selected by JPMorgan were
Coherent Inc., GSI Lumonics Inc., and Newport Corporation. These companies were
selected, among other reasons, because they compete in similar industries with
fairly similar competitive dynamics and growth potential. For each selected
company, publicly available financial performance through the most recent last
twelve months was measured. In addition, JPMorgan derived estimates of sales,
EBITDA and net income per share for the fiscal years 2001 and 2002 for each
selected company from company filings and the Institutional Brokers Estimates
System.
JPMorgan applied a range of multiples derived from such analysis to the
Company's estimated sales, EBITDA and net income per share for calendar years
2001 and 2002 both with and without the impact of the Synergies, and arrived at
an estimated range of equity values for the Shares of approximately $13.00 to
$18.00 per Share, with the top end of such range reflecting the Synergies.
DISCOUNTED CASH FLOW ANALYSIS. JPMorgan conducted a discounted cash flow
analysis for the purpose of determining the fully diluted equity value per
Share. JPMorgan calculated the unlevered free cash flows that the Company is
expected to generate during fiscal years 2002 through 2006 based upon financial
projections prepared by JPMorgan after discussions with the management of Thermo
Electron. JPMorgan also calculated a range of terminal asset values of the
Company at the end of the five-year period ending 2006 by applying a range of
terminal EBITDA multiples of 7.5 to 8.5 to the EBITDA of the Company during the
final year of the five-year period. The unlevered free cash flows and the range
of terminal asset values were then discounted to present values using a range of
discount rates from 10% to 12%, which were chosen by JPMorgan based upon an
analysis of the Company's weighted average cost of capital. The present value of
the unlevered free cash flows and the range of terminal asset values were then
adjusted for the Company's estimated 2001 fiscal year-end excess cash, option
exercise proceeds and total debt. Based on this analysis, JPMorgan calculated an
estimated range of equity values of between $11.75 and $14.75 per Share.
JPMorgan also performed a discounted cash flow analysis that added the Synergies
to the unlevered free cash flows of the Company. Based on this analysis,
JPMorgan calculated an estimated range of equity values of between $15.25 and
$18.75 per Share.
HISTORICAL COMMON STOCK PERFORMANCE. JPMorgan conducted a historical
analysis of the closing price of the Shares over the 52-week period prior to the
date of its Opinion. During the 52-week period, based on trading prices on
Nasdaq, the Company's Shares achieved a high closing price of $46.25 on
January 16, 2001 and a low closing price of $13.25 on April 4, 2001.
The summary set forth above does not purport to be, and is not, a complete
description of the financial analyses or data presented by JPMorgan. The
preparation of a fairness opinion is a complex process and is not necessarily
susceptible to partial analysis or summary description. In arriving at its
Opinion, JPMorgan considered the results of all of its analyses as a whole and
did not attribute any
18
particular weight to any analysis or factor considered by it. JPMorgan believes
that the summary set forth above and its analyses must be considered as a whole
and that selecting portions thereof, without considering all of its analyses,
could create an incomplete view of the processes underlying its analyses and
Opinion. In addition, JPMorgan may have given various analyses and factors more
or less weight than other analyses and factors, and may have deemed various
assumptions more or less probable than other assumptions so that the ranges of
valuation resulting from any particular financial analysis described should not
be taken as JPMorgan's view of the actual value of the Company. JPMorgan based
its analyses on assumptions that it deemed reasonable, including assumptions
concerning general business and economic conditions and industry-specific
factors. The other principal assumptions upon which JPMorgan based its analyses
are set forth above under the description of each such analysis. JPMorgan's
analyses are not necessarily indicative of actual values or actual future
results that might be achieved, which values may be higher or lower than those
indicated. Moreover, JPMorgan's analyses are not and do not purport to be
appraisals or otherwise reflective of the prices at which businesses actually
could be bought or sold. JPMorgan has consented to the reference to and
discussion of its Opinion in this document.
At the August 20 meeting of the Thermo Electron Board of Directors, JPMorgan
described the procedures and analyses it had undertaken with respect to the
ranges of potential values of the Shares, which were substantially similar to
those undertaken in preparation for the November 6 meeting, as described above.
The results of those analyses are summarized below. The November 6 analysis
resulted in lower valuations for the Shares because of a projected deterioration
in the Company's prospects after the events of September 11.
PUBLIC TRADING MULTIPLES. Using substantially the same methodologies as
described above under "Public Trading Multiples" for the November 6, 2001
meeting, JPMorgan applied a range of multiples to the Company's estimated sales,
EBITDA and net income per share for fiscal years 2001 and 2002, and arrived at
an estimated range of equity values for the Shares of approximately $15.00 to
$21.00 per Share, with the top end of such range reflecting the Synergies.
DISCOUNTED CASH FLOW ANALYSIS. Using substantially the same methodologies
as described above under "Discounted Cash Flow Analysis" for the November 6,
2001 meeting, JPMorgan calculated an estimated range of equity values for the
Shares of between $13.00 and $16.25 per Share. JPMorgan also performed a
discounted cash flow analysis that added the Synergies to the unlevered free
cash flows of the Company. Based on this analysis, JPMorgan calculated an
estimated range of equity values of between $17.00 and $20.75 per Share.
HISTORICAL COMMON STOCK PERFORMANCE. Using substantially the same
methodologies as described above under "Historical Common Stock Performance" for
the November 6, 2001 meeting, JPMorgan noted that the Company's Shares had
achieved a high closing price of $72.25 on August 21, 2000 and a low closing
price of $13.25 on April 4, 2001.
As described above, JPMorgan's Opinion was only one of many factors
considered by the Board of Directors of Thermo Electron in its determination
that the terms of the Offer and the Merger are fair to the Unaffiliated
Stockholders and should not be viewed as determinative of the views of the Board
of Directors of Thermo Electron with respect to the value of the Company.
JPMorgan advised the Board of Directors of Thermo Electron in connection
with the Offer and the Merger in part because JPMorgan had been retained to
advise Thermo Electron in connection with the overall reorganization of Thermo
Electron and its subsidiaries. The Board of Directors of Thermo Electron also
considered JPMorgan's experience and expertise. As part of its investment
banking businesses, JPMorgan and its affiliates are continually engaged in the
valuation of businesses and securities in connection with mergers and
acquisitions, investments for passive and control purposes,
19
negotiated underwritings, competitive biddings, secondary distributions of
listed and unlisted securities, private placements and valuations for estate,
corporate and other purposes.
JPMorgan has advised Thermo Electron that, in the ordinary course of its
business, it and its affiliates may actively trade the debt and equity
securities of the Company, Thermo Electron and their affiliates for their own
account and for the accounts of customers and, accordingly, may at any time hold
a long or short term position in such securities.
Pursuant to a letter agreement among Thermo Electron and JPMorgan, dated
January 17, 2000 (as amended), Thermo Electron has agreed to pay JPMorgan a fee
of $750,000 for its services in connection with the Offer and the Merger. In
addition, JPMorgan will be reimbursed for expenses incurred in connection with
these transactions. Since January 2000, JPMorgan has also been acting as
financial advisor to Thermo Electron in connection with the overall
reorganization of Thermo Electron's businesses, which has been effected in a
series of transactions since January 2000 and for which JPMorgan has received
customary compensation. In addition, JPMorgan was engaged by the Company in May
2000 to act as its financial advisor in connection with the Company's
consideration of its strategic alternatives, which assignment was completed by
November 2000. Thermo Electron has agreed to indemnify JPMorgan and its
affiliates against certain liabilities, including liabilities under the federal
securities laws, in connection with its engagement.
CONFLICTS OF INTEREST
THERMO ELECTRON. The financial interests of Thermo Electron are adverse as
to the Offer Price to the financial interests of the Unaffiliated Stockholders.
DIRECTORS OF THERMO ELECTRON. Xx. Xxxxxx Xxxxxxx, a member of the Board of
Directors of Thermo Electron and its Chief Operating Officer and President, is
also a member of the Board of Directors of the Company. Xx. Xxxxxxx holds equity
interests in the Company. These positions and equity interests present this
director with actual or potential conflicts of interest in determining the
fairness of the Offer and the Merger to the Unaffiliated Stockholders. However,
Xx. Xxxxxxx abstained from voting with respect to the Offer and the Merger. See
Schedule I to this Offer to Purchase for a listing of the positions that the
members of the Board of Directors of Thermo Electron hold with Thermo Electron
and the Company and ownership of the common stock of the Company.
EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY. In considering any
position that the Board of Directors of the Company may take with respect to the
Offer, the Unaffiliated Stockholders should be aware that the executive officers
and certain directors of the Company have interests in connection with the Offer
and the Merger that present them with actual or potential conflicts of interest,
which will be described in the Company's Solicitation/Recommendation Statement
on Schedule 14D-9.
Following consummation of the Offer and the Merger, Thermo Electron
anticipates that the board of directors of the Company, as the corporation
surviving the Merger (the "Surviving Corporation"), will be comprised solely of
members of the Company and Thermo Electron. Officers and directors of the
Company who own Shares will receive the Offer Price in the Offer or the Merger
on the same terms as the Unaffiliated Stockholders.
OTHER POSSIBLE PURCHASES OF SHARES
If the Offer is successfully completed, Thermo Electron and its subsidiaries
will collectively own at least 90% of the outstanding Shares. If, after the
Offer is completed but prior to the effective date of the Merger (the "Effective
Date of the Merger"), as a result of the exercise of Options or for any other
reason, Thermo Electron and its subsidiaries collectively own less than 90% of
the outstanding Shares, Thermo Electron may acquire additional Shares in the
open market or in privately negotiated transactions to the extent required for
Thermo Electron and its subsidiaries' collective ownership of
20
Shares to equal or exceed 90%. If the Offer is not completed, Thermo Electron
may make open market or privately negotiated purchases of Shares to the extent
necessary in order for Thermo Electron and its subsidiaries collectively to own
at least 90% of the outstanding Shares. Such open market or privately negotiated
purchases would be made at market prices or privately negotiated prices at the
time of purchase, which may be higher or lower than the Offer Price.
THE MERGER
If the Offer is successfully completed, Thermo Electron plans to cause the
Purchaser to merge into the Company in a short-form merger, which would occur as
soon as possible after February 22, 2002. After the short-form merger, the
Company would be wholly owned by Thermo Electron. Under the Delaware General
Corporation Law (the "DGCL"), if the Purchaser owns at least 90% of the
outstanding Shares, the Purchaser would have the power to approve, adopt and
consummate the Merger without a vote of the Company's Board of Directors or
stockholders, unless the Merger occurs before February 23, 2002, in which case
the Merger would require the approval of the holders of at least two-thirds of
the minority shares of the Company. It is Thermo Electron's current intention to
wait until as soon as practicable after February 22, 2002 to complete the
Merger.
On the Effective Date of the Merger, each outstanding Share (other than
Shares held by stockholders, if any, who are entitled to and perfect their
appraisal rights under Section 262 of the DGCL) would be cancelled and converted
into the right to receive the Offer Price in cash, without interest. After the
Merger, Thermo Electron will, directly or indirectly, own 100% of the equity
interest in the Surviving Corporation.
CERTAIN EFFECTS OF THE OFFER AND THE MERGER
GENERAL. Upon completion of the Offer and the Merger, Thermo Electron would
have complete control over the conduct of the Company's business and would have
a 100% interest in the net book value and net earnings of the Company. In
addition, Thermo Electron would receive the benefit of complete control over any
future increases in the value of the Company and would bear the complete risk of
any losses incurred in the operation of the Company and any decrease in the
value of the Company. Thermo Electron's and its subsidiaries' aggregate
ownership of the Company prior to the transactions contemplated by the Offer and
the Merger was approximately 78.5%. Upon completion of the Offer and the Merger,
Thermo Electron's and its subsidiaries' aggregate interest in the Company's net
book value of approximately $115 million on September 30, 2001 and net income of
$1,447,000 for the year ended December 31, 2000 would increase from
approximately 78.5% of such amounts to 100% of such amounts. Because the
Purchaser currently owns less than 80% of the Company's outstanding Shares, any
existing operating loss carryforwards of the Company may be used only to offset
future income of the Company, and not of Thermo Electron.
BENEFITS AND DETRIMENTS TO THE UNAFFILIATED STOCKHOLDERS. Upon completion
of the Offer and the Merger, the Unaffiliated Stockholders would no longer have
any interest in, and would not be stockholders of, the Company and therefore
would not participate in the Company's future earnings and potential growth and
would no longer bear the risk of any decreases in the value of the Company. In
addition, the Unaffiliated Stockholders would not share in any distribution of
proceeds after any sales of businesses of the Company, whether contemplated at
the time of the Offer or thereafter. See "--Conduct Of Thermo Electron After The
Offer And The Merger." All of the Unaffiliated Stockholders' other incidents of
stock ownership, such as the rights to vote on certain corporate decisions, to
elect directors, to receive distributions upon the liquidation of the Company
and to receive appraisal rights upon certain mergers or consolidations of the
Company (unless such appraisal rights are perfected in connection with the
Merger), as well as the benefit of potential increases in the value of their
holdings in the Company based on any improvements in the Company's future
performance,
21
would be extinguished upon acceptance of Shares tendered in the Offer or, if not
tendered, upon completion of the Merger.
Upon completion of the Offer and the Merger, the Unaffiliated Stockholders
would also not bear the risks of potential decreases in the value of their
holdings in the Company based on any downturns in the Company's future
performance. Instead, the Unaffiliated Stockholders would have immediate
liquidity in the form of the Offer Price in place of an ongoing equity interest
in the Company in the form of the Shares. In summary, if the Offer and the
Merger are completed, the Unaffiliated Stockholders would have no ongoing rights
as stockholders of the Company (other than statutory appraisal rights in the
case of Unaffiliated Stockholders who are entitled to and perfect such rights
under Delaware law).
POSSIBLE EFFECT OF THE OFFER AND OPEN MARKET PURCHASES ON THE MARKET FOR
SHARES. Following the completion of the Offer and prior to the Effective Date
of the Merger, the purchase of Shares by the Purchaser pursuant to the Offer or
any subsequent open market or privately negotiated purchases would reduce the
number of Shares that might otherwise trade publicly and may reduce the number
of holders of Shares. This could adversely affect the liquidity and market value
of the remaining Shares held by the public.
NASDAQ. If the Offer and Merger are consummated, the Shares would not meet
the requirements for continued listing on The Nasdaq National Market and would
be delisted.
Following the closing of the Offer and prior to the Effective Date of the
Merger, depending upon the aggregate market value and the number of Shares not
purchased pursuant to the Offer or any subsequent open market or privately
negotiated purchases, as well as the number of Unaffiliated Stockholders who are
not affiliated with Thermo Electron, the Shares may no longer meet the
quantitative requirements for continued listing on The Nasdaq National Market.
In the event that the Shares no longer meet the requirements for trading on
The Nasdaq National Market, it is possible that the Shares would continue to
trade in the over-the-counter market prior to the Effective Date of the Merger
and that price or other quotations might still be available from other sources.
The extent of the public market for the Shares and the availability of such
quotations would, however, depend upon such factors as the number of holders
and/or the aggregate market value of such Shares remaining at such time, the
interest in maintaining a market in such Shares on the part of securities firms,
the possible termination of registration of such Shares under the Exchange Act,
as described below, and other factors. The Purchaser cannot predict whether a
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 less than
the price paid in the Offer and the Merger.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. If the Offer and the Merger are completed, however, the Company's
reporting obligations under the Exchange Act would terminate.
Prior to the Effective Date of the Merger, the purchase of Shares pursuant
to the Offer or open market or privately negotiated purchases following
consummation of the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application by the Company to the Commission if the Shares are
not listed on a national securities exchange and there are fewer than 300 record
holders of the Shares. Thermo Electron presently intends to seek to cause the
Company to terminate the registration of the Shares under the Exchange Act as
soon after the consummation of the Offer or the Merger as the requirements for
termination of registration are met.
22
The termination of the registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to holders of the Shares and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b), the requirement of furnishing a proxy statement in connection
with stockholders' meetings pursuant to Section 14(a) and the requirements of
Rule 13e-3 under the Exchange Act with respect to "going private" transactions,
no longer applicable to the Shares. Furthermore, "affiliates" of the Company and
persons holding "restricted securities" of the Company may be deprived of the
ability to dispose of the securities pursuant to Rule 144 under the Securities
Act. If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be "margin securities" or eligible for listing on The
Nasdaq National Market.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other things, of allowing brokers
to extend credit on the collateral of such Shares for the purpose of buying,
carrying or trading in securities ("purpose loans"). If the Offer and the Merger
are completed, the Shares would no longer be "margin securities." Following the
purchase of Shares pursuant to the Offer or any subsequent open market or
privately negotiated purchases and prior to the Effective Date of the Merger,
depending upon factors such as the number of record holders of the Shares and
the number and market value of publicly held Shares, the Shares might no longer
constitute "margin securities" for purposes of the Federal Reserve Board's
margin regulations and therefore no longer be used as collateral for purpose
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."
TREATMENT OF SPECTRA-PHYSICS OPTIONS.
At the time of the Merger, all options to purchase Shares (the "Options")
will become options to purchase Thermo Electron Common Stock with the same terms
and vesting as existed prior to the Merger, except as described below.
At the time of the Merger, all Options that are exercisable will become
exercisable options to purchase Thermo Electron Common Stock.
Any Options that are not exercisable at the time of the Merger (the
"Accelerated Options") will become immediately exercisable to purchase Thermo
Electron Common Stock if the options are "in-the-money" on the date of the
Merger. However, if the holder exercises the Accelerated Options before the date
or dates on which the options would have vested, the shares that he or she
receives will not be saleable until the date or dates in the future when the
options would have vested.
Any Options that are not exercisable at the time of the Merger and that are
"out-of-the-money" on the date of the Merger, will not become immediately
exercisable to purchase Thermo Electron Common Stock. These Options will retain
the same vesting terms as the original Options.
The number of shares of Thermo Electron Common Stock underlying each assumed
option will equal the number of Shares underlying the option before the Merger,
multiplied by the "cash exchange ratio" described below, rounded down to the
nearest whole number of shares of Thermo Electron Common Stock. The exercise
price for each assumed option (the "Adjusted Exercise Price") will be calculated
by dividing the exercise price of the stock option before the Merger by the
"cash exchange ratio" described below, rounded up to the nearest whole cent.
The "cash exchange ratio" for the Merger will be a fraction, the numerator
of which is the price per Share payable in the Merger and the denominator of
which is the closing price of Thermo Electron Common Stock on the day preceding
the effective date of the Merger.
ACCOUNTING TREATMENT. The Offer and the Merger would be accounted for as
the acquisition of a minority interest by Thermo Electron, using the purchase
method of accounting.
23
TAX CONSEQUENCES. For federal income tax purposes, the receipt of the cash
consideration by holders of the Shares pursuant to the Offer or the Merger will
be a taxable sale of the holder's Shares. See "Certain Federal Income Tax
Consequences."
CONDUCT OF THERMO ELECTRON AFTER THE OFFER AND THE MERGER
If the Offer and the Merger are completed, Thermo Electron intends to run
the business of the Company in substantially the same manner as it has been run
prior to the Offer and the Merger, except that Thermo Electron intends to
conduct a review of whether and/or to what extent the Company should continue
its telecommunications business. In addition, if the Offer and the Merger are
completed, Thermo Electron intends to cause the Company's Board of Directors to
consist solely of Thermo Electron employees, and further intends to undertake a
review of the composition of the Company's management. Further, Thermo Electron
intends to explore how best to integrate the Company's operations with those of
Thermo Electron, with a view to eliminating inefficiencies that result from
duplicative facilities or other aspects of the Company's business.
Except as otherwise described in this Offer to Purchase, the Purchaser and
Thermo Electron do not have, as of the date of this Offer to Purchase, any plans
or proposals for:
- any extraordinary corporate transaction, such as a merger, reorganization
or liquidation, involving the Company after the completion of the Offer
and the Merger;
- any purchase, sale or transfer of a material amount of assets of the
Company after the completion of the Offer and the Merger;
- any change in the present Board of Directors or management of the Company,
including, but not limited to, any plans or proposals to change the number
or the term of directors or to fill any existing vacancies on the board or
to change any material term of the employment contract of any executive
officer;
- any material change in the Company's present dividend rate or policy,
indebtedness or capitalization;
- any other material change in the Company's corporate structure or
business;
- the acquisition by any person of additional securities of the Company, or
the disposition of securities of the Company; or
- any changes in the Company's charter, bylaws or other governing
instruments or other actions that could impede the acquisition of control
of the Company.
CONDUCT OF THERMO ELECTRON IF THE OFFER IS NOT COMPLETED
If the Offer is not completed because the Minimum Condition or another
condition is not satisfied or waived, Thermo Electron expects to evaluate
whether it would continue to pursue the acquisition of the remaining equity
interest in the Company that Thermo Electron does not currently own. In
particular, Thermo Electron may consider:
- engaging in open market or privately negotiated purchases of Shares to
increase Thermo Electron's and its subsidiaries' aggregate ownership of
Shares to at least 90% of the outstanding Shares and then effecting a
short-form merger (subject to Thermo Electron's compliance with
Section 203 of the Delaware General Corporation Law);
- proposing that the Purchaser and the Company enter into a long-form merger
agreement, which would require the approval of the Company's Board of
Directors and, if such Merger were to take place before February 23, 2002,
the approval of the holders of at least two-thirds of the Company's
minority shares;
24
- keeping outstanding the public minority interest in the Company, in which
case the Unaffiliated Stockholders would receive no cash for their Shares
and would bear the risk that the trading price per Share could decline to
a price that is less than the Offer Price; or
- selling their interests in the Company or pursuing a sale of the entire
Company to a third party.
If Thermo Electron were to pursue any of these alternatives, it may take
considerably longer for the Unaffiliated Stockholders to receive any
consideration for their Shares (other than through sales in the open market)
than if they had tendered their Shares in the Offer. Any such transaction may
result in proceeds per Share to the Unaffiliated Stockholders that are more or
less than the Offer Price.
In addition, if the Offer is not completed, Thermo Electron expects to
undertake the review of the Company's business and composition of its management
as described above under "--Conduct of Thermo Electron After The Offer And The
Merger."
25
THE TENDER OFFER
TERMS OF THE OFFER; EXPIRATION DATE
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), the Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date (as defined below) and not properly
withdrawn as provided in "--Withdrawal Rights." The term "Expiration Date" means
12:00 midnight, New York City time, on Friday, December 14, 2001, unless and
until the Purchaser, in its sole discretion, shall have extended the period
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 the
Purchaser, shall expire.
Subject to the applicable rules and regulations of the Commission, the
Purchaser expressly reserves the right, in its sole discretion, at any time and
from time to time, to extend the period during which the Offer is open for any
reason, including the failure to satisfy any of the conditions specified in
"--Certain Conditions Of The Offer," and thereby delay acceptance for payment
of, and payment for, any Shares, by giving oral or written notice of such
extension to the Depositary. There can be no assurance that the Purchaser will
exercise its right to extend the Offer. During any such extension, all Shares
previously tendered and not properly withdrawn will remain subject to the Offer,
subject to the rights of a tendering stockholder to withdraw such stockholder's
Shares. See "--Withdrawal Rights."
Subject to the applicable rules and regulations of the Commission, the
Purchaser also expressly reserves the right, in its sole discretion, at any time
and from time to time, to (1) terminate the Offer and not accept for payment (or
pay for) any Shares if any of the conditions referred to in "--Certain
Conditions Of The Offer" has not been satisfied or upon the occurrence and
during the continuance of any of the events specified in "--Certain Conditions
Of The Offer," and (2) waive any condition or amend the Offer in any respect, in
each case by giving oral or written notice of termination, waiver or amendment
to the Depositary and by making a public announcement thereof. The Purchaser
acknowledges (a) that Rule 14e-1(c) under the Exchange Act requires the
Purchaser to pay the consideration offered or return the Shares tendered
promptly after the termination or withdrawal of the Offer and (b) that the
Purchaser may not delay acceptance for payment of, or payment for, any Shares
upon the occurrence of any of the conditions specified in "--Certain Conditions
Of The Offer" without extending the period during which the Offer is open.
If the Minimum Condition or any other condition specified in "--Certain
Conditions Of The Offer" is not fulfilled by the Expiration Date, the Purchaser
reserves the right (but shall not be obligated) to (1) decline to purchase any
of the Shares tendered, return all tendered Shares to tendering stockholders and
terminate the Offer, (2) extend the Offer and retain all tendered Shares until
the expiration of the Offer, as extended, subject to the terms and conditions of
the Offer (including any rights of stockholders to withdraw their Shares), or
(3) waive or reduce the condition and, subject to complying with applicable
rules and regulations of the Commission, accept for payment and purchase all
Shares validly tendered.
Any extension, termination or amendment will be followed as promptly as
practicable by a public announcement thereof, such announcement, in the case of
an extension, to be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Purchaser may choose to make any public
announcement, except as provided by applicable law (including Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act, which require that material changes
be promptly disseminated to holders of Shares), the Purchaser will have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Xxxxx News Service. The
Purchaser does not intend to provide a subsequent offering period in the Offer.
25
If the 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,
the Purchaser will disseminate additional tender offer materials (including by
public announcement as set forth above) and extend the Offer to the extent
required by Rules 14d-4(d), 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, a change in percentage of securities sought or a change
in any dealer's soliciting fee, will depend upon the facts and circumstances,
including the relative materiality of the changes. With respect to a change in
price or, subject to certain limitations, a change in the percentage of
securities sought or a change in any dealer's soliciting fee, a minimum ten
business day period from the date of such change is generally required to allow
for adequate dissemination of such change to stockholders. Accordingly, if,
prior to the Expiration Date, the Purchaser decreases the number of Shares being
sought, increases the consideration offered pursuant to the Offer or adds a
dealer's soliciting fee, and if the Offer is scheduled to expire at any time
earlier than the period ending on the tenth business day from the date that
notice of such increase, decrease or addition is first published, sent or given
to stockholders, the Offer will be extended at least until the expiration of
such ten business day period. For purposes of the Offer, a "business day" means
any day other than a Saturday, Sunday or a federal holiday and consists of the
time period from 12:01 a.m. through 12:00 midnight, New York City time.
This Offer to Purchase and the related Letter of Transmittal and, if
required, other relevant material will be mailed to record holders of Shares and
will be furnished to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
Company's stockholder list or, if applicable, who are listed as participants in
a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
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), the Purchaser will purchase by accepting for payment, and will pay
for, all Shares validly tendered prior to the Expiration Date and not properly
withdrawn (including Shares validly tendered and not withdrawn during any
extension of the Offer, if the Offer is extended, subject to the terms and
conditions of such extension), promptly after the Expiration Date. In addition,
subject to complying with Rule 14e-1 under the Exchange Act, the Purchaser
expressly reserves the right, in its sole discretion, to delay the acceptance
for payment of, or payment for, Shares in order to comply, in whole or in part,
with any applicable law.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of:
- certificates evidencing Shares ("Share Certificates") or timely
confirmation of a book-entry transfer of such Shares ("Book-Entry
Confirmation") into the Depositary's account at The Depository Trust
Company (the "Book-Entry Transfer Facility") pursuant to the procedures
set forth in "--Procedures For Accepting The Offer And Tendering Shares";
- the Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's
Message (as defined below) in connection with a book-entry transfer; and
- 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 occurs at different
times.
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
26
the Book-Entry Transfer Facility has received an express acknowledgment from the
participant in the Book-Entry Transfer Facility tendering the Shares which are
the subject of such Book-Entry Confirmation, that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn if, as and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares so accepted for payment pursuant to the Offer will be made by deposit
of the aggregate purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from the
Purchaser and transmitting such payment to stockholders whose Shares have been
accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE
FOR SHARES BE PAID, REGARDLESS OF ANY EXTENSION OF THE OFFER OR DELAY IN MAKING
SUCH PAYMENT. Upon the deposit of funds with the Depositary for the purpose of
making payment to validly tendering stockholders, the Purchaser's obligation to
make such payment shall be satisfied and such tendering stockholders must
thereafter look solely to the Depositary for payment of the amounts owed to them
by reason of the acceptance for payment of Shares pursuant to the Offer.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if Share Certificates are
submitted for more Shares than are tendered, Share Certificates representing
Shares not purchased or not tendered will be returned, without expense, to the
tendering stockholder (or, in the case of Shares tendered by book-entry transfer
of such Shares into the Depositary's account at the Book-Entry Transfer Facility
pursuant to the procedures for book-entry transfer set forth in "--Procedures
For Accepting The Offer And Tendering Shares," such Shares will be credited to
an account maintained at the Book-Entry Transfer Facility), as soon as
practicable following expiration or termination of the Offer.
If, prior to the Expiration Date, the Purchaser increases the consideration
to be paid per Share, the Purchaser will pay such increased consideration for
all Shares purchased pursuant to the Offer, whether or not such Shares have been
tendered or purchased prior to such increase in consideration.
The Purchaser reserves the right to transfer or assign, in whole or in part
from time to time, to one or more of its affiliates, the right to purchase the
Shares tendered pursuant to the Offer, but any such transfer or assignment will
not relieve the Purchaser of its obligations under the Offer, nor will any such
transfer or assignment in any way prejudice the rights of tendering stockholders
to receive payment for Shares validly tendered and accepted for payment pursuant
to the Offer.
PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES
GENERAL. Except as set forth below, in order for Shares to be validly
tendered pursuant to the Offer, the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees, or an Agent's Message in connection with a book-entry
delivery of Shares, and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
and either (l) Share Certificates evidencing tendered Shares must be received by
the Depositary at such address or such Shares must be tendered pursuant to the
procedures for book-entry transfer set forth below (and a Book-Entry
Confirmation must be received by the Depositary), in each case prior to the
Expiration Date, or (2) the guaranteed delivery procedures set forth below must
be complied with.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
the Letter of Transmittal (or a facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
27
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE SOLE OPTION AND RISK OF EACH TENDERING STOCKHOLDER AND,
EXCEPT AS OTHERWISE PROVIDED UNDER THIS HEADING "--PROCEDURES FOR ACCEPTING THE
OFFER AND TENDERING SHARES," THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED BY THE DEPOSITARY. IF DELIVERY IS MADE BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will make a request to establish
accounts with respect to the Shares at 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 system of the
Book-Entry Transfer Facility may make book-entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. Although delivery of Shares
may be effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees, or an Agent's Message, and any other documents required by
the Letter of Transmittal, must, in any case, be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase prior
to the Expiration Date in order for such Shares to be validly tendered pursuant
to the Offer, or the tendering stockholder must comply with the guaranteed
delivery procedures described below.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
SIGNATURE GUARANTEES. Signatures on all Letters of Transmittal must be
guaranteed by a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program, the Stock Exchanges' Medallion Program or the
New York Stock Exchange, Inc. Medallion Signature Program (an "Eligible
Institution"), unless Shares tendered thereby are tendered (1) by a registered
holder of Shares who has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal or (2) for the account of an Eligible Institution.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or Share
Certificates for unpurchased Shares are to be returned, to a person other than
the registered holder(s), then the tendered Share Certificates must be endorsed
or accompanied by appropriate stock powers signed exactly as the name(s) of the
registered holder(s) appear(s) on the Share Certificates with the signature(s)
on such Share Certificates or stock powers guaranteed by an Eligible Institution
as provided above and in the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available or time will not permit all of the required documents to reach the
Depositary prior to the Expiration Date, or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares may nevertheless be
tendered, provided that all of the following conditions are satisfied:
- such tender is made by or through an Eligible Institution;
- a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Purchaser with the Letter of
Transmittal, is received by the Depositary, in accordance with the
procedure set forth as provided below, prior to the Expiration Date; and
28
- the Share Certificates (or a Book-Entry Confirmation) for all tendered
Shares, in proper form for transfer, in each case together with the Letter
of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees or, in the case of a
book-entry transfer, an Agent's Message, and any other documents required
by the Letter of Transmittal, are received by the Depositary within three
Nasdaq trading days after the date of execution of such Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Notwithstanding any other provision of this Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of Share Certificates therefor (or Book-Entry
Confirmation of the transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility), a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), together with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message, and any
other documents required by the Letter of Transmittal. Accordingly, payment may
not be made to all tendering stockholders at the same time and will depend upon
when Share Certificates or Book-Entry Confirmations of such Shares are received
by the Depositary.
BACKUP FEDERAL INCOME TAX WITHHOLDING. Under the U.S. federal income tax
laws, the Depositary may, under certain circumstances, be required to withhold
30.5% of the amount of any payments made to certain stockholders pursuant to the
Offer. To prevent such backup federal income tax withholding with respect to
payments made to certain stockholders of the purchase price of Shares purchased
pursuant to the Offer, each such stockholder must provide the Depositary with
such stockholder's correct taxpayer identification number and certify that such
stockholder is not subject to backup federal income tax withholding by
completing the Substitute Form W-9 included in the Letter of Transmittal.
APPOINTMENT AS PROXY. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser 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 with respect to any
Shares tendered thereby (and with respect to any and all other Shares or other
securities issued or issuable in respect of such Shares on or after
November 16, 2001). All such powers of attorney and proxies shall be considered
irrevocable and coupled with an interest in the tendered Shares. Such
appointment will be effective when, and only to the extent that, the Purchaser
accepts the tendered Shares for payment and deposits the purchase price therefor
with the Depositary. Upon such deposit, all prior powers of attorney and proxies
given by such stockholder at any time with respect to such Shares (and other
Shares and securities issued or issuable in respect of the tendered Shares on or
after November 16, 2001) will, without further action, be revoked, and no
subsequent powers of attorney or proxies may be given nor any subsequent written
consents be executed by such stockholder (and, if given or executed, will not be
deemed effective). Upon such deposit by the Purchaser, the designees of the
Purchaser will, with respect to such Shares and other securities, be empowered
to exercise all voting and other rights of such stockholder as they in their
sole discretion may deem proper at any annual or special meeting of the
Company's stockholders, or any adjournment or postponement thereof, or by
written consent in lieu of any such meeting or otherwise. The Purchaser reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Purchaser's payment for such Shares, the Purchaser must be
able to exercise full voting and other rights of a record and beneficial holder,
including, without limitation, voting at any meeting of stockholders or by
written consent in lieu of any such meeting.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including the time of receipt) and acceptance for payment of any
tendered Shares pursuant to any of the procedures
29
described above will be determined by the Purchaser, in its sole discretion,
which determination will be final and binding on all parties. The Purchaser
reserves the absolute right to reject any and all tenders of any particular
Shares determined by it not to be in appropriate form or for which the
acceptance of or payment may, in the opinion of its counsel, be unlawful. The
Purchaser also reserves the absolute right to waive any of the conditions of the
Offer or any defect or irregularities in the tender of any particular Shares,
whether or not similar defects or irregularities are waived in the case of any
other Shares. The Purchaser's interpretations of the terms and conditions of the
Offer (including the Letter of Transmittal and Instructions thereto) will be
final and binding. No tender of Shares will be deemed to have been validly made
until all defects and irregularities have been cured or waived. None of the
Purchaser, any of its affiliates or assigns, the Dealer Manager, the Information
Agent, the Depositary 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.
THE PURCHASER'S ACCEPTANCE FOR PAYMENT OF SHARES TENDERED PURSUANT TO THE
OFFER WILL CONSTITUTE A BINDING AGREEMENT BETWEEN THE TENDERING STOCKHOLDER AND
THE PURCHASER UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER.
WITHDRAWAL RIGHTS
Except as otherwise provided in this Section, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the time at which the Offer expires on the
Expiration Date and, unless previously accepted for payment as provided herein,
may also be withdrawn at any time after January 14, 2002.
If the Purchaser extends the Offer, is delayed in, or delays, its acceptance
for payment or payment for Shares or is unable to accept for payment or pay for
Shares for any reason, then, without prejudice to the Purchaser's other rights
under the Offer, tendered Shares may nevertheless be retained by the Depositary,
on behalf of the Purchaser, and may not be withdrawn except to the extent
tendering stockholders are entitled to and duly exercise withdrawal rights as
described in this Section. Any such extension or delay will be accompanied by an
extension of the Offer to the extent required by law.
In order for a withdrawal 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 that of the person who tendered such Shares. If Share Certificates to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such Share Certificates, the tendering
stockholder must also submit the serial numbers shown on such Share Certificates
to the Depositary, and the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution, unless such Shares have been tendered for
the account of an Eligible Institution. If Shares have been tendered pursuant to
the procedures for book-entry transfer, as set forth in "--Procedures For
Accepting The Offer And Tendering Shares," any notice of withdrawal must specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares and must otherwise comply with the procedures
of the Book-Entry Transfer Facility.
Withdrawals may not be revoked and any Shares properly withdrawn will
thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by following the procedures described in "--Procedures For
Accepting The Offer And Tendering Shares."
All questions as to the form and validity (including the time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding on all parties. None
of the Purchaser, its affiliates or assigns, the Dealer Manager, the
30
Information Agent, the Depositary 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.
CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion, the Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) under the Exchange Act (relating to the
Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares, and may amend or terminate the Offer if (1) the
Minimum Condition has not been satisfied or (2) at any time on or after
November 16, 2001 and before the time of acceptance of the Shares for payment
pursuant to the Offer, any of the following events shall occur:
(a) any change shall have occurred in the business, properties, assets,
liabilities, capitalization, stockholders' equity, financial condition,
cash flows, operations, licenses, franchises or results of operations of
the Company or its subsidiaries which has a material adverse effect on
the Company and its subsidiaries taken as a whole; or
(b) any government or governmental authority or agency, whether domestic,
foreign or supranational (a "Governmental Entity"), shall have instituted
or threatened any action, proceeding, application, claim or counterclaim,
sought or obtained any judgment, order or injunction, or taken any other
action, which (i) challenges the acquisition by Thermo Electron or the
Purchaser (or any other affiliate of Thermo Electron) of any Shares
pursuant to the Offer or the Merger, restrains, prohibits or materially
delays the making or consummation of the Offer or the Merger, prohibits
the performance of any of the contracts or other arrangements entered
into by Thermo Electron or the Purchaser (or any other affiliate of
Thermo Electron) in connection with the acquisition of the Shares or the
Company, seeks to obtain any material amount of damages, or otherwise
directly or indirectly adversely affects the Offer or the Merger,
(ii) seeks to prohibit or limit materially the ownership or operation by
the Company, Thermo Electron or the Purchaser (or any other affiliate of
Thermo Electron) of all or any material portion of the business or assets
of the Company or of Thermo Electron and its affiliates, or to compel the
Company, Thermo Electron or the Purchaser (or any other affiliate of
Thermo Electron) to dispose of or to hold separate all or any material
portion of the business or assets of Thermo Electron or any of its
affiliates or of the Company or any of its subsidiaries as a result of
the transactions contemplated by the Offer or the Merger, (iii) seeks to
impose any material limitation on the ability of the Company, Thermo
Electron or the Purchaser (or any other affiliate of Thermo Electron) to
conduct the Company's or any subsidiary's business or own such assets,
(iv) seeks to impose or confirm any material limitation on the ability of
Thermo Electron or the Purchaser (or any other affiliate of Thermo
Electron) to acquire or hold, or to exercise full rights of ownership of,
any Shares, including the right to vote such Shares on all matters
properly presented to the stockholders of the Company, (v) seeks to
require divestiture by Thermo Electron or the Purchaser or any of their
affiliates of all or any of the Shares or (vi) otherwise has resulted in
or has a reasonable likelihood of resulting in, a material adverse effect
on the business, financial condition, results of operation or prospects
of the Company or Thermo Electron (a "Material Adverse Effect"); or
(c) there shall have been entered or issued any preliminary or permanent
judgment, order, decree, ruling or injunction or any other action taken
by any Governmental Entity or court, whether on its own initiative or the
initiative of any other person, which (i) restrains, prohibits
31
or materially delays the making or consummation of the Offer or the
Merger, prohibits the performance of any of the contracts or other
arrangements entered into by Thermo Electron or the Purchaser (or any
other affiliate of Thermo Electron) in connection with the acquisition of
the Shares or the Company or otherwise directly or indirectly materially
adversely affects the Offer or the Merger, (ii) prohibits or limits
materially the ownership or operation by the Company, Thermo Electron or
the Purchaser (or any other affiliate of Thermo Electron) of all or any
material portion of the business or assets of the Company and its
subsidiaries taken as a whole or of Thermo Electron or the Purchaser (or
any other affiliate of Thermo Electron), or compels the Company, Thermo
Electron or the Purchaser (or any other affiliate of Thermo Electron) to
dispose of or to hold separate all or any material portion of the
business or assets of Thermo Electron or any of its affiliates or of the
Company or any of its subsidiaries as a result of the transactions
contemplated by the Offer or the Merger, (iii) imposes any material
limitation on the ability of the Company, Thermo Electron or the
Purchaser (or any other affiliate of Thermo Electron) to conduct the
Company's or any subsidiary's business or own such assets, (iv) imposes
or confirms any material limitation on the ability of Thermo Electron or
the Purchaser (or any other affiliate of Thermo Electron) to acquire or
hold, or to exercise full rights of ownership of, any Shares, including
the right to vote such Shares on all matters properly presented to the
stockholders of the Company, (v) requires divestiture by Thermo Electron
or the Purchaser or any of their affiliates of all or any of the Shares
or (vi) otherwise has resulted in, or has a reasonable likelihood of
resulting in, a Material Adverse Effect; or
(d) there shall have been instituted or be pending before any Governmental
Entity or court any action, proceeding, application, claim or
counterclaim or any judgment, order or injunction sought or any other
action taken by any person or entity (other than a Governmental Entity)
which (i) challenges the acquisition by Thermo Electron or the Purchaser
(or any other affiliate of Thermo Electron) of any Shares pursuant to the
Offer or the Merger, restrains, prohibits or materially delays the making
or consummation of the Offer or the Merger, prohibits the performance of
any of the contracts or other arrangements entered into by Thermo
Electron or the Purchaser (or any other affiliate of Thermo Electron) in
connection with the acquisition of the Shares or the Company, seeks to
obtain any material amount of damages, or otherwise directly or
indirectly adversely affects the Offer or the Merger, (ii) seeks to
prohibit or limit materially the ownership or operation by the Company,
Thermo Electron or the Purchaser (or any other affiliate of Thermo
Electron) of all or any material portion of the business or assets of the
Company or of Thermo Electron and its affiliates, or to compel the
Company, Thermo Electron or the Purchaser (or any other affiliate of
Thermo Electron) to dispose of or to hold separate all or any material
portion of the business or assets of Thermo Electron or any of its
affiliates or of the Company or any of its subsidiaries as a result of
the transactions contemplated by the Offer or the Merger, (iii) seeks to
impose any material limitation on the ability of the Company, Thermo
Electron or the Purchaser (or any other affiliate of Thermo Electron) to
conduct the Company's or any subsidiary's business or own such assets,
(iv) seeks to impose or confirm any material limitation on the ability of
Thermo Electron or the Purchaser (or any other affiliate of Thermo
Electron) to acquire or hold, or to exercise full rights of ownership of,
any Shares, including the right to vote such Shares on all matters
properly presented to the stockholders of the Company, (v) seeks to
require divestiture by Thermo Electron or the Purchaser (or any other
affiliate of Thermo Electron) of all or any of the Shares or
(vi) otherwise has resulted in or, in the Purchaser's reasonable
discretion, has a reasonable likelihood of resulting in a Material
Adverse Effect; and which in the case of clause (i), (ii), (iii),
(iv) or (v) is successful or the Purchaser determines, in its reasonable
discretion, has a reasonable likelihood of being successful; or
32
(e) there shall be any statute, rule or regulation enacted, promulgated,
entered, enforced or deemed applicable to the Offer or the Merger, or any
other action shall have been taken by any Governmental Entity or court
that results in, directly or indirectly, any of the consequences referred
to in clauses (i) through (vi) of paragraph (b) above; or
(f) there shall have occurred any general suspension of trading in, or
limitation on prices for, securities on NASDAQ or in the over-the-counter
market (other than any temporary suspension pursuant to a circuit breaker
procedure then in effect and lasting for not more than three trading
hours), any declaration of a banking moratorium by federal or New York
authorities or general suspension of payments in respect of lenders that
regularly participate in the United States market in loans, any material
limitation by any federal, state or local government or any court,
administrative or regulatory agency or commission or other governmental
authority or agency in the United States that materially affects the
extension of credit generally by lenders that regularly participate in
the U.S. market in loans, any commencement of a war involving the United
States or any commencement of armed hostilities or other national or
international circumstance involving the United States that has a
material adverse effect on bank syndication or financial markets in the
United States or, in the case of any of the foregoing occurrences
existing on or at the time of the commencement of the Offer, a material
acceleration or worsening thereof; which in the reasonable judgment of
the Purchaser, in any such case, and regardless of the circumstances
giving rise to such condition, makes it inadvisable to proceed with the
Offer, the Merger and/or with such acceptance for payment or payments.
The foregoing conditions are for the sole benefit of the Purchaser and its
affiliates and may be asserted by the Purchaser regardless of any circumstances
giving rise to any condition and may be waived by the Purchaser, in whole or in
part, at any time and from time to time, prior to the time at which the Offer
expires on the Expiration Date. The failure by the Purchaser (or any affiliate
of the Purchaser) at any time to exercise any of the foregoing rights will not
be deemed a waiver of any right, and each right will be deemed an ongoing right
which may be asserted at any time and from time to time, prior to the time at
which the Offer expires on the Expiration Date. All conditions to the Offer,
other than those dependent upon the receipt of necessary government approvals,
must be satisfied or waived before the Offer expires.
CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
GENERAL. Except as described below, neither Thermo Electron nor the
Purchaser is aware of any license or regulatory permit that appears to be
material to the business of the Company and its subsidiaries that might be
adversely affected by the Purchaser's acquisition of Shares as contemplated
herein.
Except as described in this section, neither Thermo Electron nor the
Purchaser is aware of any other material filing, approval or other action by any
federal or state governmental or administrative authority that would be required
for the acquisition of Shares by the Purchaser as contemplated herein. Should
any such other approval or action be required, it is currently contemplated that
such approval or other action would be sought. There is, however, no present
intention to delay the purchase of Shares tendered pursuant to the Offer or the
Merger pending the outcome of any such other approval or action. There can be no
assurance that any such other approval or action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result to
the Purchaser's, Thermo Electron's or the Company's business in the event that
such other approvals were not obtained or such other actions were not taken. The
Purchaser's obligation under the Offer to accept for payment and pay for Shares
is subject to certain conditions, including conditions relating to the legal
matters discussed in this section. See "--Certain Conditions Of The Offer."
33
ANTITRUST. The Purchaser believes that the Offer and the Merger are exempt
from the reporting requirements contained in the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976. Nevertheless, there can be no assurance that a
challenge to the Offer and the Merger on antitrust grounds will not be made, or,
if such challenge is made, what the result will be.
FOREIGN APPROVALS. The Company conducts business in a number of foreign
countries and jurisdictions. In connection with the acquisition of the Shares
pursuant to the Offer or the Merger, the laws of certain of those foreign
countries and jurisdictions may require the filing of information with, or the
obtaining of the approval or consent of, governmental authorities in such
countries and jurisdictions. The governments in such countries and jurisdictions
might attempt to impose additional conditions on the Company's operations
conducted in such countries and jurisdictions as a result of the acquisition of
the Shares pursuant to the Offer or the Merger. If such approvals or consents
are found to be required, the Purchaser intends to make the appropriate filings
and applications. In the event such a filing or application is made for the
requisite foreign approvals or consents, there can be no assurance that such
approvals or consents will be granted and, if such approvals or consents are
received, there can be no assurance as to the date of such approvals or
consents. In addition, there can be no assurance that the Purchaser will be able
to cause the Company or its subsidiaries to satisfy or comply with such laws or
that compliance or noncompliance will not have adverse consequences for the
Company or any subsidiary after purchase of the Shares pursuant to the Offer or
the Merger.
STATE ANTI-TAKEOVER STATUTES. Section 203 of the DGCL prohibits business
combination transactions involving a Delaware corporation (such as the Company)
and an "interested stockholder" (defined generally as any person that directly
or indirectly beneficially owns 15% or more of the outstanding voting stock of
the subject corporation) for three years following the time such person became
an interested stockholder, unless special requirements are met or certain
exceptions apply, including that prior to such time the board of directors of
the subject corporation approved either the business combination or the
transaction which resulted in such person being an interested stockholder. The
Purchaser believes the Offer is not prohibited by Section 203 of the DGCL. As
described above under "Special Factors--Background To The Offer And The Merger",
the Merger will not be permissible under Section 203 of the DGCL before
February 23, 2002, unless Thermo Electron receives the approval of the holders
of at least two-thirds of the minority shares of the Company. Thermo Electron
currently intends to wait until as soon as practicable after February 22, 2002
to complete the Merger, and accordingly does not intend to seek such approval
from the minority stockholders.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In 1982, in XXXXX x. MITE CORP., the Supreme
Court of the United States invalidated on constitutional grounds the Illinois
Business Takeover Statute, which, as a matter of state securities law, made
takeovers of corporations meeting certain requirements more difficult. However,
in 1987 in CTS CORP. v. DYNAMICS CORP. OF AMERICA, the Supreme Court held that
the 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 that state and
were incorporated there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. Neither Thermo Electron nor the Purchaser knows whether any of these laws
will, by their terms, apply to the Offer or the Merger, and the Purchaser has
not necessarily complied with any such laws. Should any person seek to apply any
state takeover law, the Purchaser will take such action as then appears
desirable, which may include challenging the validity or applicability of any
such statute in appropriate court proceedings. In the
34
event it is asserted that one or more state takeover laws is applicable to the
Offer or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer or the Merger, the Purchaser
might be required to file certain information with, or receive approvals from,
the relevant state authorities. In addition, if enjoined, the Purchaser might be
unable to accept for payment any Shares tendered pursuant to the Offer or be
delayed in continuing or consummating the Offer. In such case, the Purchaser may
not be obligated to accept for payment any Shares tendered. See "--Certain
Conditions Of The Offer."
DIVIDENDS AND DISTRIBUTIONS
If, on or after November 16, 2001, the Company should declare or pay any
dividend or other distribution (including, without limitation, the issuance of
additional Shares pursuant to a stock dividend or stock split or the issuance of
rights for the purchase of any securities) with respect to the Shares that is
payable or distributable to stockholders of record on a date occurring prior to
the transfer to the name of the Purchaser or its nominees or transferees on the
Company's stock transfer records of the Shares purchased pursuant to the Offer,
then, without prejudice to the Purchaser's rights described in "--Certain
Conditions Of The Offer," (1) the purchase price per Share payable by the
Purchaser pursuant to the Offer will be reduced in the amount of any such cash
dividend or distribution, and (2) the whole of any non-cash dividend or
distribution (including, without limitation, additional Shares or rights as
aforesaid) will be required to be remitted promptly and transferred by each
tendering stockholder to the Depositary for the account of the Purchaser
accompanied by appropriate documentation of transfer. Pending such remittance or
appropriate assurance thereof, the Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend, distribution or right, and
may withhold the entire purchase price or deduct from the purchase price the
amount of value of such non-cash dividend, distribution or right, as determined
by the Purchaser in its sole discretion.
If, on or after November 16, 2001, the Company should split the Shares or
combine or otherwise change the Shares or its capitalization, then, without
prejudice to the Purchaser's rights described under the heading "--Certain
Conditions Of The Offer," appropriate adjustments to reflect such split,
combination or change may be made by the Purchaser in the purchase price and
other terms of the Offer, including, without limitation, the number or type of
securities offered to be purchased.
35
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the material U.S. federal income tax
consequences of the Offer and the Merger to the beneficial owners of Shares.
This summary is based upon the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), applicable treasury regulations thereunder, judicial
decisions and current administrative rulings as in effect on the date of this
Offer to Purchase. The discussion does not address all aspects of U.S. federal
income taxation that may be relevant to particular taxpayers in light of their
personal circumstances or to taxpayers subject to special treatment under the
Code (for example, life insurance companies, foreign corporations, foreign
partnerships, foreign estates or trusts, or individuals who are not citizens or
residents of the United States and beneficial owners whose Shares were acquired
pursuant to the exercise of warrants, employee stock options or otherwise as
compensation) and does not address any aspect of state, local, foreign or other
taxation.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for federal income tax purposes under the Code, and may also
be a taxable transaction under applicable state, local or foreign income or
other tax laws. Generally, for federal income tax purposes, a beneficial owner
of Shares that tenders Shares pursuant to the Offer or surrenders Shares
pursuant to the Merger will recognize gain or loss equal to the difference
between the amount of cash received by the beneficial owner and the aggregate
tax basis in the Shares sold pursuant to the Offer or canceled and converted to
cash pursuant to the Merger. Gain or loss will be calculated separately for each
block of Shares purchased pursuant to the Offer or canceled and converted to
cash pursuant to the Merger.
Gain or loss on the disposition of Shares will be capital gain or loss,
assuming that the Shares are held as capital assets. Capital gains of
individuals, estates and trusts generally are subject to a maximum federal
income tax rate of (i) 20% if, at the time the tendered Shares are accepted for
payment (in the case of the Offer) or the Effective Time of the Merger (in the
case of the Merger), the beneficial owner held the Shares for more than one year
or (ii) 39.1% if, at the time the tendered Shares are accepted for payment (in
the case of the Offer) or the Effective Time of the Merger (in the case of the
Merger), the beneficial owner held the Shares for not more than one year.
Capital gains of corporations generally are taxed at the federal income tax
rates applicable to corporate ordinary income. In addition, the ability of both
corporate and non-corporate beneficial owners to use capital losses to offset
ordinary income is limited.
In general, cash received by Unaffiliated Stockholders who exercise
statutory appraisal rights ("Dissenting Stockholders") in respect of such
appraisal rights will result in the recognition of gain or loss to the
Dissenting Stockholders. Any such Dissenting Stockholder should consult with its
tax advisor for a full understanding of the tax consequences of the receipt of
cash in respect of appraisal rights pursuant to the Merger.
A beneficial owner may be subject to backup federal income tax withholding
at a rate of 30.5% with respect to the amount of cash received pursuant to the
Offer or the Merger unless the owner provides its tax identification number
("TIN") and certifies that such number is correct or properly certifies that it
is awaiting a TIN, or unless an exemption applies. A beneficial owner that does
not furnish its TIN may be subject to a penalty imposed by the Internal Revenue
Service. See "The Tender Offer--Procedures For Accepting The Offer And Tendering
Shares--Backup Federal Income Tax Withholding."
If backup withholding applies to a beneficial owner, the Depositary is
required to withhold 30.5% from payments to such owner. Backup withholding is
not an additional tax. Rather, the amount of the backup withholding can be
credited against the federal income tax liability of the person subject to the
backup withholding, provided that the required information is given to the
Internal Revenue Service. If
36
backup withholding results in an overpayment of tax, a refund can be obtained by
the beneficial owner upon filing an income tax return.
EACH BENEFICIAL OWNER OF SHARES IS URGED TO CONSULT SUCH BENEFICIAL OWNER'S
TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH BENEFICIAL OWNER OF THE
OFFER AND THE MERGER, INCLUDING THE APPLICATION OF STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS.
PRICE RANGE OF THE SHARES; DIVIDENDS
PRICE RANGE OF SHARES. The Shares are listed on The Nasdaq National Market
under the symbol "SPLI". The following table sets forth the high and low sales
prices per Share on The Nasdaq National Market, as reported in publicly
available sources for each of the periods indicated.
HIGH LOW
-------- --------
Fiscal Year Ended December 31, 1999:
First Quarter............................................. $ 14.50 $ 6.00
Second Quarter............................................ 11.375 6.375
Third Quarter............................................. 13.125 7.375
Fourth Quarter............................................ 29.75 8.00
Fiscal Year Ended December 31, 2000:
First Quarter............................................. 98.50 24.625
Second Quarter............................................ 75.00 32.25
Third Quarter............................................. 104.375 46.00
Fourth Quarter............................................ 60.00 19.75
Fiscal Year Ending December 31, 2001:
First Quarter............................................. 46.25 15.00
Second Quarter............................................ 24.88 13.25
Third Quarter............................................. 25.99 12.93
Fourth Quarter (through December 6, 2001)................. 18.15 16.85
As of December 6, 2001, there were 28 holders of record of the Shares and in
excess of 2,500 beneficial owners of the Shares.
On August 20, 2001, the last full trading day prior to the public
announcement of the Purchaser's intention to commence the Offer at a price of
$20.00 per Share, the closing sale price per Share, as reported on The Nasdaq
National Market, was $13.69. On November 6, 2001, the last reported sale price
of the Company's common stock on The Nasdaq National Market prior to Thermo
Electron's announcement of the revised Offer Price of $17.50 per Share was
$17.80. On December 6, 2001, the closing sale price per Share, as reported on
The Nasdaq National Market, was $17.45.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
DIVIDENDS. The Company has never declared or paid any cash dividends in
respect of the Shares.
37
CERTAIN INFORMATION CONCERNING THE COMPANY
Stockholders are urged to review the publicly available information
concerning the Company before acting on the Offer.
GENERAL.
The Company is subject to the disclosure requirements of the Exchange Act
and in accordance therewith is required to file reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. In addition, the Company is required to file within
10 business days of the commencement of this Offer, and to distribute to the
Company's Stockholders, a statement on Schedule 14D-9 regarding its
recommendation to the Company's stockholders with respect to the Offer. Such
reports, proxy statements, Schedule 14D-9 and other information are or will be
available for inspection at the Commission's public reference facilities at 000
Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 and should also be available for
inspection at the regional offices of the Commission located at 0 Xxxxx Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 and Citicorp Center, 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000. Copies may be obtained at
prescribed rates from the Commission's principal office at 000 Xxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000. The Commission also maintains a web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission at
xxxx://xxx.xxx.xxx. In addition, certain material filed by the Company may also
be available for inspection at the offices of the NASDAQ Stock Market, Inc.,
0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000.
Neither Thermo Electron nor the Purchaser intends to grant unaffiliated
stockholders special access to the Company's records in connection with the
Offer. Neither Thermo Electron nor the Purchaser intends to obtain counsel to or
appraisal services for unaffiliated stockholders of the Company.
FINANCIAL INFORMATION. Set forth below is certain selected consolidated
financial information with respect to the Company and its subsidiaries excerpted
or derived from the audited consolidated financial statements contained in the
Company's Consolidated Financial Statements included in the Company's Annual
Reports on Form 10-K for its fiscal years ended December 31, 2000, December 31,
1999, December 31, 1998 and December 31, 1997 and the unaudited financial
statements contained in the Company's Quarterly Report on Form 10-Q for the nine
months ended September 30, 2001 (collectively, the "Company Reports"). More
comprehensive financial information is included in the Company Reports and in
other documents filed by the Company with the Commission (which may be inspected
or obtained in the manner set forth above), and the following financial
information is qualified in its entirety by reference to the Company Reports and
other documents and all of the financial information (including any related
notes) contained therein or incorporated therein by reference.
38
The results of operations for the nine months ended September 30, 2001 are
not necessarily indicative of results for the entire year.
NINE MONTHS
YEAR ENDED ENDED
---------------------------------------------------- ---------------------
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, SEPT. 30, SEPT. 30,
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- -------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
STATEMENT OF OPERATIONS DATA:
Net sales.......................................... $135,434 $159,174 $169,016 $141,310 $186,190 $129,061 $158,315
Cost of products sold.............................. 88,320 98,772 103,724 94,622 117,610 81,310 113,572
-------- -------- -------- -------- -------- -------- --------
Gross margin..................................... 47,114 60,402 65,292 46,688 68,580 47,751 44,743
-------- -------- -------- -------- -------- -------- --------
Operating expenses:
Research and development......................... 12,005 14,365 16,728 17,044 22,629 17,288 17,140
Selling, general and administrative.............. 28,966 32,539 34,903 34,255 39,120 27,237 34,719
Restructuring and other costs (income), net...... 6,915 15,757 -- 2,540 1,385 1,385 2,247
-------- -------- -------- -------- -------- -------- --------
Total operating expenses....................... 47,886 62,661 51,631 53,839 63,134 45,910 54,106
-------- -------- -------- -------- -------- -------- --------
Operating income (loss)........................ (772) (2,259) 13,661 (7,151) 5,446 1,841 (9,363)
-------- -------- -------- -------- -------- -------- --------
Other income (expense):
Interest income (expense)........................ (5,374) (4,005) 1,335 857 515 551 (851)
Foreign currency gain (loss)..................... 2,532 2,067 -- 89 559 260 (139)
Legal settlement................................. -- 17,010 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total other income (expense)................... (2,842) 15,072 1,335 946 1,074 811 (990)
-------- -------- -------- -------- -------- -------- --------
Income (loss) before income taxes and cumulative
effect of change in accounting method............ (3,614) 12,813 14,996 (6,205) 6,520 2,652 (10,353)
(Provision for) benefit of income taxes............ (634) 21,048 (5,349) 2,357 (3,051) (1,241) 4,141
-------- -------- -------- -------- -------- -------- --------
Income before cumulative effect of change in
accounting method................................ (4,248) 33,861 9,647 (3,848) 3,469 1,411 (6,212)
Cumulative effect of change in accounting method
(net of tax of $1,778)........................... -- -- -- -- (2,022) (2,022) --
-------- -------- -------- -------- -------- -------- --------
Net income (loss).................................. $ (4,248) $ 33,861 $ 9,647 $ (3,848) $ 1,447 $ (611) $ (6,212)
======== ======== ======== ======== ======== ======== ========
Income (loss) per share before cumulative effect of
change in accounting principle:
Basic.......................................... $ (.33) $ 2.57 $ .60 $ (.24) $ .21 $ .09 $ (.37)
======== ======== ======== ======== ======== ======== ========
Diluted........................................ $ (.33) $ 2.57 $ .59 $ (.24) $ .20 $ .08 $ (.37)
======== ======== ======== ======== ======== ======== ========
Net income (loss) per share:
Basic.......................................... $ (.33) $ 2.57 $ .60 $ (.24) $ .09 $ (.04) $ (.37)
======== ======== ======== ======== ======== ======== ========
Diluted........................................ $ (.33) $ 2.57 $ .59 $ (.24) $ .08 $ (.04) $ (.37)
======== ======== ======== ======== ======== ======== ========
Basic weighted average shares...................... 13,000 13,162 16,168 16,169 16,576 16,554 16,751
======== ======== ======== ======== ======== ======== ========
Diluted weighted average shares.................... 13,000 13,191 16,473 16,169 17,416 17,448 16,751
======== ======== ======== ======== ======== ======== ========
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, SEPT. 30,
1996 1997 1998 1999 2000 2001
-------- -------- -------- -------- -------- ---------
BALANCE SHEET DATA (AT END OF PERIOD):
Cash and cash equivalents........................... $ 2,531 $ 33,487 $ 34,620 $ 23,278 $ 22,639 $ 7,336
Working capital..................................... 27,531 68,941 72,277 57,947 55,032 37,057
Total assets........................................ 86,848 140,524 157,028 152,277 190,831 191,863
Short-term obligations.............................. -- 7,321 11,756 13,655 22,311 39,686
Long-term obligations............................... -- -- -- -- 7,500 --
Long-term obligation to parent company.............. 69,698 -- -- -- -- --
Shareholders' equity (deficit) (1).................. (21,223) 96,324 110,068 105,462 112,816 115,206
Other Financial Data:
Book value (deficit) per share...................... $ (1.63) $ 6.09 $ 6.81 $ 6.52 $ 6.78 $ 6.88
Cash dividends...................................... -- -- -- -- -- --
------------------------------
(1) Represents parent deficit at December 31, 1996.
39
CERTAIN INFORMATION CONCERNING THE PURCHASER AND THERMO ELECTRON
THE PURCHASER
The Purchaser is a wholly-owned subsidiary of Thermo Electron that does not
currently conduct any active business. The Purchaser is organized under the laws
of the State of Delaware. The Purchaser's principal executive offices are
located at 00 Xxxxx Xxxxxx, X.X. Box 9046, Waltham, Massachusetts 00000-0000,
and its telephone number is (000) 000-0000.
The name, business address, principal occupation, employment history and
citizenship of each of the executive officers and directors of the Purchaser are
set forth on Schedule I hereto.
During the past five years, the Purchaser has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to any judicial or administrative proceeding (except for any
matters that were dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining the Purchaser from future violations
of, or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws.
THERMO ELECTRON
Thermo Electron, a Delaware corporation, is a global leader in providing
technology-based instruments, components, and systems that offer total solutions
for markets ranging from life sciences to telecommunications to food, drug, and
beverage production. Thermo Electron's technologies help researchers sift
through data to make discoveries that will fight disease or prolong life, allow
manufacturers to fabricate ever-smaller components required to increase the
speed and quality of communications, and automatically monitor and control
online production to ensure that critical quality standards are met safely and
efficiently.
On January 31, 2000, Thermo Electron announced that its Board of Directors
had authorized its management to proceed with a major reorganization of the
operations of Thermo Electron and its subsidiaries. As part of this
reorganization, Thermo Electron has acquired the public minority interest in
each of its subsidiaries that have minority investors, except for
Spectra-Physics, has spun off its separation technologies and fiber-based
products business and its medical products business, and has divested a variety
of non-core businesses. The purpose of the Offer and the Merger is to acquire
the minority public interest in the Company as the last step in Thermo
Electron's overall corporate reorganization and to permit the Unaffiliated
Stockholders to receive cash for their shares without the risks of ongoing stock
ownership in the Company. Following the Offer and the Merger, Thermo Electron
plans to retain the Company as part of Thermo Electron's core Optical
Technologies business.
Thermo Electron's common stock is listed on the New York Stock Exchange
under the symbol "TMO". The principal executive offices of Thermo Electron are
located at 00 Xxxxx Xxxxxx, X.X. Box 9046, Waltham, Massachusetts 00000-0000,
and its telephone number is (000) 000-0000.
Thermo Electron is subject to the disclosure requirements of the Exchange
Act and in accordance therewith is required to file reports, proxy statements
and other information with the Commission relating to its business, financial
condition and other matters. Such reports, proxy statements and other
information are available for inspection and copying at prescribed rates at the
offices of the Commission as set forth under "Certain Information Concerning The
Company." In addition, certain material filed by Thermo Electron may also be
available for inspection at the offices of the New York Stock Exchange, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The name, business address, principal occupation, five-year employment
history and citizenship of each of the directors and executive officers of
Thermo Electron are set forth in Schedule I hereto.
40
During the past five years, Thermo Electron has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to any judicial or administrative proceeding (except for any
matters that were dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining Thermo Electron from future violations
of, or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws.
CERTAIN TRANSACTIONS
Except as otherwise set forth in this Offer to Purchase, neither the
Purchaser nor Thermo Electron or, to the best knowledge of the Purchaser and
Thermo Electron, any of the persons listed on Schedule I hereto, has any
contract, arrangement, understanding or relationship with any other person with
respect to any Shares or other securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or voting of any such Shares or other securities, joint ventures,
loan or option arrangements, puts or calls, guaranties of loans, guaranties
against loss or the giving or withholding of proxies.
PRIOR CONTACTS. Except as set forth in this Offer to Purchase (particularly
the section entitled "Special Factors--Background To The Offer And The Merger"),
since November 16, 1999, there have been no contacts, negotiations or
transactions between the Purchaser, Thermo Electron, any subsidiary of the
Purchaser or Thermo Electron or, to the best knowledge of the Purchaser and
Thermo Electron, any of the persons listed on Schedule I hereto, on the one
hand, and the Company or any of its officers, directors or affiliates, on the
other hand, concerning a merger, consolidation or acquisition, a tender offer or
other acquisition of securities, an election of directors, or a sale or other
transfer of a material amount of assets, other than votes cast by Thermo
Electron for the election of directors of the Company in the normal course.
PRIOR BUSINESS RELATIONSHIPS. Except as set forth in this Offer to
Purchase, neither the Purchaser nor Thermo Electron or, to the best knowledge of
the Purchaser or Thermo Electron, any of the persons listed on Schedule I hereto
has, since November 16, 1999, had any business relationships or transactions
with the Company or any of its executive officers, directors or affiliates that
would require disclosure herein under the rules and regulations of the
Commission applicable to the Offer or the Merger.
In March 2001, the Company entered into a credit agreement with Thermo
Electron, under which Thermo Electron made a one year, $20.0 million revolving
credit facility available to the Company. The facility bears interest at a per
annum rate of 2.75% above the prevailing LIBOR rate. In November 2001, this
facility was amended to increase the maximum available amount from $20 million
to $35 million. As of November 14, 2001, approximately $29.4 million was
outstanding under the credit facility.
FINANCIAL INFORMATION. Because the Offer Price will be paid in cash, the
Purchaser and Thermo Electron do not believe that financial information with
respect to the Purchaser, Thermo Electron and their subsidiaries would be
material to a stockholder's evaluation of the Offer and the Merger. Financial
information concerning Thermo Electron and its subsidiaries is filed by Thermo
Electron with the Commission (which may be inspected and copies thereof obtained
at the offices of the Commission as set forth in "Certain Information Concerning
The Company").
41
SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase all of the
outstanding Shares pursuant to the Offer and the Merger, and to pay related fees
and expenses, is estimated to be approximately $60 million. The Purchaser will
obtain the funds to purchase the Shares in the Offer and the Merger from Thermo
Electron as a loan or capital contribution. Thermo Electron has committed to
provide any required financing to the Purchaser.
THE MERGER; APPRAISAL RIGHTS
THE MERGER
Following the consummation of the Offer, subject to the conditions described
in this Offer to Purchase and in accordance with the DGCL, Thermo Electron plans
to cause the Purchaser to merge with and into the Company. Upon the Effective
Date of the Merger:
--each Share issued and outstanding immediately prior to the Effective Date
of the Merger (other than Shares held by Unaffiliated Stockholders, if any, who
are entitled to and who properly exercise their dissenters' rights (see
"--Appraisal Rights" below) under the DGCL) will be cancelled and extinguished
and be converted into and become a right to receive the Offer Price per Share;
and
--each outstanding share of the Purchaser's capital stock issued and
outstanding immediately prior to the Effective Date of the Merger will be
converted into one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation. As a result of the Merger, Thermo Electron
will own all of the outstanding equity interests in the Company.
APPRAISAL RIGHTS
Stockholders who tender their Shares in the Offer are not entitled to
appraisal rights under the DGCL. If the Purchaser effects the Merger, then
Company stockholders who do not tender their Shares to the Purchaser pursuant to
the Offer would have the right to demand an appraisal of the fair value of their
Shares in accordance with the provisions of Section 262 of the DGCL
("Section 262"), which sets forth the rights and obligations of Company
stockholders demanding an appraisal and the procedures to be followed.
Under the DGCL, record holders of the Shares who follow the procedures set
forth in Section 262 will be entitled to have their Shares appraised by the
Court of Chancery of the State of Delaware and to receive payment of the fair
value of such shares together with a fair rate of interest, if any, as
determined by such court. The fair value as determined by the Delaware court is
exclusive of any element of value arising from the accomplishment or expectation
of the Merger. The following is a summary of certain of the provisions of
Section 262 of the DGCL and is qualified in its entirety by reference to the
full text of Section 262, a copy of which is attached to this Offer to Purchase
as Schedule III.
The Surviving Corporation would notify the Unaffiliated Stockholders of
record as of the Effective Date of the Merger, and of the approval and
consummation of the Merger and the availability of appraisal rights under
Section 262 within ten days after the Effective Date of the Merger (the "Merger
Notice"). Any Unaffiliated Stockholder entitled to appraisal rights would have
the right, within 20 days after the date of mailing of the Merger Notice, to
demand in writing from the Surviving Corporation an appraisal of his Shares.
Such demand will be sufficient if it reasonably informs the Surviving
Corporation of the identity of the stockholder and that the stockholder intends
to demand an appraisal of the fair value of his Shares. Failure to make such a
timely demand would foreclose an Unaffiliated Stockholder's right to appraisal.
42
Only a holder of record of Shares as of the Effective Date of the Merger is
entitled to assert appraisal rights for the Shares registered in that holder's
name. A demand for appraisal should be executed by or on behalf of the holder of
record fully and correctly, as the holder's name appears on the holder's Share
Certificates. Holders of Shares who hold their shares in brokerage accounts or
other nominee forms and wish to exercise appraisal rights should consult with
their brokers to determine the appropriate procedures for the making of a demand
for appraisal by such nominee. All written demands for appraisal of the Shares
should be sent or delivered to the Corporate Secretary, Thermo Electron
Corporation, 00 Xxxxx Xxxxxx, X.X. Box 9046, Waltham, Massachusetts 02454-9046,
so as to be received within the 20 days after the mailing of the Merger Notice.
If the Shares are owned of record in a fiduciary capacity, such as by a
trustee, guardian or custodian, execution of the demand should be made in that
capacity, and if the Shares are owned of record by more than one person, as in a
joint tenancy or tenancy in common, the demand should be executed by or on
behalf of all joint owners. An authorized agent, including one or more joint
owners, may execute a demand for appraisal on behalf of a holder of record;
however, the agent must identify the record owner or owners and expressly
disclose the fact that in executing the demand, the agent is agent for such
owner or owners.
A record holder such as a broker holding Shares as nominee for several
beneficial owners may exercise appraisal rights with respect to the Shares held
for one or more beneficial owners while not exercising such rights with respect
to the Shares held for other beneficial owners; in such case, the written demand
should set forth the number of shares as to which appraisal is sought and where
no number of shares is expressly mentioned the demand will be presumed to cover
all Shares held in the name of the record holder.
Within 10 calendar days after the Effective Date of the Merger, the
Surviving Corporation must send a notice as to the effectiveness of the Merger.
Within 120 calendar days after the Effective Date of the Merger, the Surviving
Corporation, or any stockholder entitled to appraisal rights under Section 262
who has complied with the foregoing procedures, may file a petition in the
Delaware Court of Chancery demanding a determination of the fair value of the
Shares of all such stockholders. The Surviving Corporation is not under any
obligation, and has no present intention, to file a petition with respect to the
appraisal of the fair value of the Shares. Accordingly, it is the obligation of
the stockholders to initiate all necessary action to perfect their appraisal
rights within the time prescribed in Section 262.
Within 120 calendar days after the Effective Date of the Merger, any
stockholder of record who has complied with the requirements for exercise of
appraisal rights will be entitled, upon written request, to receive from the
Surviving Corporation a statement setting forth the aggregate number of Shares
with respect to which demands for appraisal have been received and the aggregate
number of holders of such Shares. Such statement must be mailed within 10
calendar days after a written request therefor has been received by the
Surviving Corporation or within 10 calendar days after the expiration of the
period for the delivery of demands for appraisal, whichever is later.
If a petition for an appraisal is timely filed, after a hearing on such
petition, the Delaware Court of Chancery will determine the stockholders
entitled to appraisal rights and will appraise the fair value of the Shares,
exclusive of any element of value arising from the accomplishment or expectation
of the Merger, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. Holders considering seeking
appraisal should be aware that the fair value of their Shares as determined
under Section 262 could be more than, the same as or less than the amount per
Share that they would otherwise receive if they did not seek appraisal of their
Shares. The Delaware Supreme Court has stated that "proof of value by any
techniques or methods that are generally considered acceptable in the financial
community and otherwise admissible in court" should be considered in the
appraisal proceedings. In addition, Delaware courts have decided that the
statutory appraisal remedy,
43
depending on factual circumstances, may or may not be a dissenter's exclusive
remedy. The Court will also determine the amount of interest, if any, to be paid
upon the amounts to be received by persons whose Shares have been appraised. The
costs of the action may be determined by the Court and taxed upon the parties as
the Court deems equitable. The Court may also order that all or a portion of the
expenses incurred by any holder of Shares in connection with an appraisal,
including, without limitation, reasonable attorneys' fees and the fees and
expenses of experts used in the appraisal proceeding, be charged pro rata
against the value of all the Shares entitled to appraisal.
The Court may require stockholders who have demanded an appraisal and who
hold Shares represented by certificates to submit their certificates for Shares
to the Court for notation thereon of the pendency of the appraisal proceedings.
If any stockholder fails to comply with such direction, the Court may dismiss
the proceedings as to such stockholder.
Any stockholder who has duly demanded an appraisal in compliance with
Section 262 will not, after the Effective Date of the Merger, be entitled to
vote the Shares subject to such demand for any purpose or be entitled to the
payment of dividends or other distributions on those Shares (except dividends or
other distributions payable to holders of record of Shares as of a date prior to
the Effective Date of the Merger).
If any stockholder who demands appraisal of shares under Section 262 fails
to perfect, or effectively withdraws or loses, the right to appraisal, as
provided in the DGCL, the Shares of such holder will be converted into the right
to receive the Offer Price, without interest. A stockholder will fail to
perfect, or effectively lose, the right to appraisal if no petition is filed
within 120 calendar days after the Effective Date of the Merger. A stockholder
may withdraw a demand for appraisal by delivering to the Surviving Corporation a
written withdrawal of the demand for appraisal and acceptance of the Merger,
except that any such attempt to withdraw made more than 60 calendar days after
the Effective Date of the Merger will require the written approval of the
Surviving Corporation. Once a petition for appraisal has been filed, such
appraisal proceeding may not be dismissed as to any stockholder without the
approval of the Court.
For U.S. federal income tax purposes, stockholders who receive cash for
their Shares upon exercise of their appraisal rights will realize taxable gain
or loss. See "Material Federal Income Tax Consequences."
THE FOREGOING SUMMARY DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE
PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE THEIR APPRAISAL
RIGHTS AND IS QUALIFIED IN ITS ENTIRETY BY EXPRESS REFERENCE TO THE DELAWARE
APPRAISAL STATUTE, THE FULL TEXT OF WHICH IS ATTACHED HERETO AS SCHEDULE III.
STOCKHOLDERS ARE URGED TO READ SCHEDULE III IN ITS ENTIRETY SINCE FAILURE TO
COMPLY WITH THE PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF
APPRAISAL RIGHTS.
FEES AND EXPENSES
JPMorgan is acting as financial advisor to Thermo Electron in connection
with the Offer and the Merger. JPMorgan is also acting as Dealer Manager in
connection with the Offer. For a discussion of the fees to be paid to JPMorgan
in connection with Offer and the Merger, see "Special Factors--Summary Of
JPMorgan's Analysis and Opinion."
The Purchaser has retained X.X. Xxxx & Co., Inc. to act as the Information
Agent and EquiServe Trust Company, L.P. to act as the Depositary in connection
with the Offer. The Information Agent may contact holders of Shares by mail,
telephone, telex, telecopy, telegraph and personal interview and may request
brokers, dealers, commercial banks, trust companies and other nominees to
forward the Offer material to beneficial owners. Each of the Information Agent
and the Depositary will receive
44
reasonable and customary compensation for its services and will be reimbursed
for certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under U.S. federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person for soliciting tenders of Shares pursuant to the Offer
(other than to the Dealer Manager and the Information Agent). Brokers, dealers,
commercial banks and trust companies will, upon request, be reimbursed by the
Purchaser for customary mailing and handling expenses incurred by them in
forwarding materials to their customers.
The following is an estimate of fees and expenses to be incurred by the
Purchaser in connection with the Offer:
Financial Advisor........................................... $ 750,000
Legal....................................................... 250,000
Printing.................................................... 100,000
Advertising................................................. 25,000
Filing...................................................... 25,527
Depositary.................................................. 12,500
Information Agent (including mailing)....................... 12,000
Miscellaneous............................................... 24,973
----------
$1,200,000
==========
The Company will not pay any of the fees and expenses to be incurred by the
Purchaser in connection with the Offer.
45
MISCELLANEOUS
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Offer is
not being made to (nor will tenders be accepted from or on behalf of) holders of
Shares in any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by the Dealer Manager or one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
Thermo Electron and the Purchaser have filed with the Commission a Schedule
TO together with exhibits, pursuant to Rule 14d-3 and Rule 13e-3 promulgated by
the Commission under the Exchange Act, furnishing certain additional information
with respect to the Offer. Such statement and any amendments thereto, including
exhibits, may be examined and copies may be obtained at the same places and in
the same manner as set forth with respect to information about the Company in
"Certain Information Concerning The Company" (except that such statement and
amendments may not be available in the regional offices of the Commission).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED HEREIN OR IN THE LETTER
OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED ON AS HAVING BEEN AUTHORIZED.
November 16, 2001
46
SCHEDULE I
MEMBERS OF THE BOARDS OF DIRECTORS AND
EXECUTIVE OFFICERS OF THE PURCHASER AND
THERMO ELECTRON
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
The name, business address, position with the Purchaser, present principal
occupation or employment and five-year employment history of each of the
directors and executive officers of the Purchaser, together with the names,
principal businesses and addresses of any corporations or other organizations in
which such principal occupations are conducted, are set forth below. Unless
otherwise indicated, each occupation set forth refers to the Purchaser, each
individual is a United States citizen and each individual's business address is
00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000. Unless otherwise indicated, to
the knowledge of the Purchaser and Thermo Electron, no director or executive
officer of the Purchaser beneficially owns any Shares (or rights to acquire
Shares). Unless otherwise indicated, to the knowledge of the Purchaser and
Thermo Electron, no director or executive officer of the Purchaser has been
convicted in a criminal proceeding during the last five years (excluding traffic
violations or similar misdemeanors) and no director or executive officer of the
Purchaser was a party to any judicial or administrative proceeding during the
last five years (except for any matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to, federal
or state securities laws, or a finding of any violation of federal or state
securities laws.
XXXX XXXXX-XXXXXXX................... See biography below under "Directors and Executive Officers
of Thermo Electron."
DIRECTORS AND EXECUTIVE OFFICERS OF THERMO ELECTRON
The name, business address, position with Thermo Electron, present principal
occupation or employment and five-year employment history of each of the
directors and executive officers of Thermo Electron, together with the names,
principal businesses and addresses of any corporations or other organizations in
which such principal occupations are conducted, are set forth below. Unless
otherwise indicated, each occupation set forth refers to Thermo Electron, each
individual is a United States citizen and each individual's business address is
00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000. Unless otherwise indicated, to
the knowledge of the Purchaser and Thermo Electron, no director or executive
officer of Thermo Electron beneficially owns any Shares (or rights to acquire
Shares). Unless otherwise indicated, to the knowledge of the Purchaser and
Thermo Electron, no director or executive officer of Thermo Electron has been
convicted in a criminal proceeding during the last five years (excluding traffic
violations or similar misdemeanors) and no director or executive officer of
Thermo Electron was a party to any judicial or administrative proceeding during
the last five years (except for any matters that were dismissed without sanction
or settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to, federal
or state securities laws, or a finding of any violation of federal or state
securities laws.
I-1
XXXXX X. XXXXX....................... Xx. Xxxxx, 68, has been a director of Thermo Electron since
1974. Xx. Xxxxx was a general partner of Venrock Associates,
a venture capital investment firm located at 00 Xxxxxxxxxxx
Xxxxx, Xxx Xxxx, XX 00000, for more than five years until
his retirement in September 1997. He has been the vice
chairman of Rockefeller Financial Services, Inc. since
December 1997. Xx. Xxxxx is also a director of American
Superconductor Corporation, Xxxxx & Xxxxxxxxxx Computer
Corporation, Lexent Inc., United States Trust Corporation,
and Western Multiplex Corp.
XXXXX XXXXXXX........................ Xx. Xxxxxxx, 74, has been a director of Thermo Electron
since 1978. Xx. Xxxxxxx has been a consultant on business
and energy matters since 1977. His business address is 000
X.X. Murray Boulevard, Xxxxx 000, Xxxxxxxx, XX 00000.
Xx. Xxxxxxx is also a director of The AES Corporation and
Statia Terminals Group N.V.
XXX X. XXXXX......................... Xx. Xxxxx, 48, has been a director of Thermo Electron since
May 2000. He is the managing director of Stonegate Capital,
a firm he formed to manage his personal investment
activities in technology startup ventures, primarily related
to the Internet. From 1984 until 1995, he was the chairman,
president and chief executive officer of Lotus Development
Corporation, a software manufacturer that was acquired by
IBM Corporation in 1995.
XXXXXX X. XXXXXX..................... Xx. XxXxxx, 66, has been a director of Thermo Electron since
1962. He has been the chairman of Pilot Capital Corporation,
located at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX
00000, which is engaged in private investments, since 1998.
Xx. XxXxxx was the president of Pilot Capital Corporation
from 1987 to 1998. Xx. XxXxxx is also a director of
Church & Xxxxxx Co., Inc.
XXXXXX X. X'XXXXX.................... Xx. X'Xxxxx, 57, has been a director of Thermo Electron
since June 1998. He has been the chairman and chief
executive officer of The Sagamore Group, a firm specializing
in change management situations with a focus on the service
sector, since March 2001. He was the president and chief
executive officer of PacificCare Health Systems Inc., a
managed health services company, from July 2000 to
October 2000. From 1995 until July 2000, he was the chairman
and chief executive officer of Premier Inc., a strategic
alliance of not-for-profit health care and hospital systems.
Xx. X'Xxxxx is also a director of Xxxxx Group PLC and Viasys
Healthcare Inc.
XXXXXX X. XXXXXX..................... Xx. Xxxxxx, 47, has been a director of Thermo Electron since
1987. She has served since 1995 as president and a director
of Olayan America Corporation, a member of the Olayan Group,
and as president and a director of Competrol Real Estate
Limited, another member of the Olayan Group, from 1985 until
its merger into Olayan America Corporation in 1997. The
surviving company, which is located at 000 Xxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000, is engaged in private
investments, including real estate, and advisory services.
Xx. Xxxxxx is a citizen of Saudi Arabia.
I-2
XXXXXXX X. XXXXXX.................... Xx. Xxxxxx, 54, has been a director of Thermo Electron since
July 2001. Xx. Xxxxxx is the Xxxxxx Xxxxxxx Xxxxxxxx
University Professor at the Harvard Business School, and a
leading authority on competitive strategy and international
competitiveness. His business address is Harvard Business
School, Soldiers Field Road, Boston, MA 02163.
XXXXXXX X. XXXXX..................... Xx. Xxxxx, 57, has been a director of Thermo Electron since
September 1997, its chief executive officer since June 1999
and chairman of the board since January 2000. He also served
as president of Thermo Electron from June 1999 to
July 2000. From April 1994 until May 1999, Xx. Xxxxx was the
chairman and chief executive officer of the American Stock
Exchange Inc. located at 00 Xxxxxxx Xxxxx, Xxx Xxxx, XX
00000-0000. Xx. Xxxxx is also a director of The American
Stock Exchange Inc., Dreyfus Corporation, and Xxxx Xxxxxxx
Financial Services, Inc.
XXXXXX X. XXXXXX..................... Xx. Xxxxxx, 53, has been a director of Thermo Electron since
July 2001. Xx. Xxxxxx has been president and chief executive
officer of Boston Medical Center, a 550-bed academic medical
center affiliated with Boston University, since July 1996.
Xx. Xxxxxx is also a director of Hologic, Inc. and Vertex
Pharmaceuticals, Inc. Her business address is Boston Medical
Center, Talbot 0, Xxx Xxxxxx Xxxxxxx Xxxxxx Xxxxx, Xxxxxx,
XX 00000-0000.
XXXX X. XXXXXX....................... Xx. Xxxxxx, 33, was appointed Vice President of Thermo
Electron and President of its Life Sciences sector in
November 2001. From 2000 to 2001, Xx. Xxxxxx was president
and chief executive officer of Xxxxxx Laboratory Products,
L.P., a provider of life science sample preparation and
processing equipment, and from 1997 to 2000, he worked at
Dade Behring Inc., a clinical diagnostics company, first as
executive vice president for Europe, Asia, and
Intercontinental, and then as president-Americas. From 1995
to 1996, Xx. Xxxxxx served as member of a portfolio
management group at Xxxx Capital, Inc.
XXXXXX X. XXXXXXX.................... Xx. Xxxxxxx, 43, has been a director of the Company since
July 2000. He has been the chief operating officer and
president of the Company since July 2000. From June 1999 to
July 2000, he served as the president of Honeywell
International's (formerly AlliedSignal Corporation)
electronic materials division; from August 1997 to
May 1999, he served as vice president and general manager of
its fluorine products division; and from July 1995 to
July 1997, he served as vice president and general manager
of its specialty films division.
I-3
XXX XXXXXXXXX........................ Xx. Xxxxxxxxx, 37, was appointed Vice President of Thermo
Electron in January 2001 and President, Optical Technologies
in October 2000. From May 2000 to October 2000,
Xx. Xxxxxxxxx was vice president and general manager of the
amorphous metals division of Honeywell International and
from November 1998 to April 2000 he was business director
for Honeywell International's specialty fluorine division.
From June 1996 to October 1998, he was the marketing manager
of new business development of the plastics division of
General Electric Company. He also served as product manager
of this division from December 1994 to May 1996.
XXXXX X. XXXX........................ Xx. Xxxx, 45, was appointed Vice President of Thermo
Electron in January 2001 and President, Measurement and
Control in October 2000. Since 1995, Xx. Xxxx has held
various operating positions at Thermo Electron. These
included President, Optical Technologies from February 2000
to October 2000; President and Chief Executive Officer of
its Thermo Optek Corporation subsidiary from March 1999 to
February 2000; President and Chief Executive Officer of its
ThermoSpectra Corporation subsidiary from March 1998 to
March 1999; and President and Chief Executive Officer of its
Thermo BioAnalysis Corporation subsidiary from
February 1995 to March 1998.
XXXX XXXXX-XXXXXXX................... Xx. Xxxxx-Xxxxxxx, 42, has been a vice president of Thermo
Electron since March 1998 and its chief financial officer
since January 1999. Prior to his appointment as a vice
president of Thermo Electron, Xx. Xxxxx-Xxxxxxx served as
president and chief executive officer of ThermoSpectra
Corporation from its inception in August 1994 until
March 1998. Xx. Xxxxx-Xxxxxxx is also the sole Director and
the President of the Purchaser. Xx. Xxxxx-Xxxxxxx is a
citizen of Greece.
XXXX X. XXXXXXXXX.................... Xx. Xxxxxxxxx, 47, was appointed General Counsel of Thermo
Electron in 1992 and Vice President in 1996.
XXXXX X. XXXXXXXX.................... Xx. Xxxxxxxx, 42, was appointed Chief Accounting Officer of
Thermo Electron in January 2001 and Corporate Controller in
1996. From 1995 until 1996 Xx. Xxxxxxxx was Assistant
Corporate Controller of Thermo Electron.
STOCK OWNERSHIP. The following table sets forth the beneficial ownership of
common stock of the Company, as of October 31, 2001, with respect to each
director and executive officer of Thermo Electron. No director or executive
officer of Thermo Electron beneficially owns any shares of capital
I-4
stock of the Purchaser. The directors and executive officers of Thermo Electron
disclaim beneficial ownership of the shares of common stock beneficially owned
by Thermo Electron.
NAME NUMBER OF SHARES (1)
---- --------------------
Xxx Xxxxxxxxx............................................. 0
Xxxx X. Xxxxxx............................................ 0
Xxxxx X. Xxxxx............................................ 0
Xxxxxx X. Xxxxxxx......................................... 5,000
Xxxx X. Xxxxxxxxx......................................... 0
Xxxxx X. Xxxxxxxx......................................... 0
Xxxxx X. Xxxx............................................. 0
Xxxxx Xxxxxxx............................................. 0
Xxx X. Xxxxx.............................................. 0
Xxxxxx X. XxXxxx.......................................... 0
Xxxx Xxxxx-Xxxxxxx........................................ 0
Xxxxxx X. Xxxxxx.......................................... 0
Xxxxxx X. X'Xxxxx......................................... 0
Xxxxxxx X. Xxxxxx......................................... 0
Xxxxxxx X. Xxxxx.......................................... 0
Xxxxxx X. Xxxxxx.......................................... 0
All directors and current executive officers as a group
(17 persons)............................................ 5,000
------------------------
(1) Shares of the common stock of Spectra-Physics beneficially owned by
Xx. Xxxxxxx and by all directors and current executive officers as a group
include 5,000 shares that Xx. Xxxxxxx has the right to acquire within
60 days of October 31, 2001 through the exercise of stock options. No
director or current executive officer beneficially owned more than 1% of the
Spectra-Physics common stock outstanding as of October 31, 2001; all
directors and current executive officers as a group beneficially owned less
than 1% of the Company's common stock outstanding as of October 31, 2001.
I-5
SCHEDULE II
INFORMATION CONCERNING TRANSACTIONS
IN THE COMMON STOCK OF THE COMPANY
The following table sets forth information with respect to purchases of the
Company's common stock by the Purchaser and Thermo Electron since January 1,
1999 (the commencement of the Company's second full fiscal year preceding the
date of this Offer to Purchase).
NUMBER OF
SHARES PRICE
DATE PURCHASER PURCHASED PAID PER SHARE
---- ---------------- --------- --------------
June 20, 2001...................... Thermo Electron 333,000 $17.67
This Schedule does not include 13,000,000 shares of the Company's common
stock acquired by Thermo Electron in February 1999 by virtue of Thermo
Electron's acquisition of SPAB. See "Special Factors--Background to the Offer
and the Merger--Acquisition of the Company."
II-1
SCHEDULE III
SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
262. APPRAISAL RIGHTS.
(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this section
with respect to such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise complied with
subsection (d) of this section and who has neither voted in favor of the merger
or consolidation nor consented thereto in writing pursuant to Section 228 of
this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of the stockholder's shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the word "stockholder" means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and the
words "depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to Section 251 (other than a merger effected pursuant to
Section 251 (g) of this title), Section 252, Section 254, Section 257, Section
258, Section 263 or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock, or
depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no appraisal
rights shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for its
approval the vote of the stockholders of the surviving corporation as
provided in subsection (f) of Section251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required by
the terms of an agreement of merger or consolidation pursuant to Sections
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
a. Shares of stock of the corporation surviving or resulting from such
merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts in
respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national
securities exchange or designated as a national market system
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or held of record by more
than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a. and b. of this paragraph;
or
d. Any combination of the shares of stock, depository receipts and cash
in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
III-1
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under Section253 of this title is not owned by
the parent corporation immediately prior to the merger, appraisal rights
shall be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections
(d) and (e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are available
pursuant to subsections (b) or (c) hereof that appraisal rights are
available for any or all of the shares of the constituent corporations, and
shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholder's shares shall deliver
to the corporation, before the taking of the vote on the merger or
consolidation, a written demand for appraisal of such stockholder's shares.
Such demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of such stockholder's shares. A proxy or vote against
the merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the effective date of such
merger or consolidation, the surviving or resulting corporation shall notify
each stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to Section228
or Section253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days thereafter,
shall notify each of the holders of any class or series of stock of such
constituent corporation who are entitled to appraisal rights of the approval
of the merger or consolidation and that appraisal rights are available for
any or all shares of such class or series of stock of such constituent
corporation, and shall include in such notice a copy of this section;
provided that, if the notice is given on or after the effective date of the
merger or consolidation, such notice shall be given by the surviving or
resulting corporation to all such holders of any class or series of stock of
a constituent corporation that are entitled to appraisal rights. Such notice
may, and, if given on or after the effective date of the merger or
consolidation, shall, also notify such stockholders of the effective date of
the merger or consolidation. Any stockholder entitled to appraisal rights
may, within 20 days after the date of mailing of such notice, demand in
writing from the surviving or resulting corporation the appraisal of such
holder's shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder
intends thereby to demand the appraisal of such holder's shares. If such
notice did not notify stockholders of the effective date of the merger or
consolidation, either (i) each such constituent corporation shall send a
second notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of such
constituent corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the surviving or
resulting corporation shall send such a second notice to all such holders on
or within 10 days after such effective date; provided, however, that if such
second notice is sent more than 20 days following the sending of the first
notice, such second notice need only be sent
III-2
to each stockholder who is entitled to appraisal rights and who has demanded
appraisal of such holder's shares in accordance with this subsection. An
affidavit of the secretary or assistant secretary or of the transfer agent
of the corporation that is required to give either notice that such notice
has been given shall, in the absence of fraud, be prima facie evidence of
the facts stated therein. For purposes of determining the stockholders
entitled to receive either notice, each constituent corporation may fix, in
advance, a record date that shall be not more than 10 days prior to the date
the notice is given, provided, that if the notice is given on or after the
effective date of the merger or consolidation, the record date shall be such
effective date. If no record date is fixed and the notice is given prior to
the effective date, the record date shall be the close of business on the
day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in Chancery
in which the petition was filed a duly verified list containing the names and
addresses of all stockholders who have demanded payment for their shares and
with whom agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be filed, by the
surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and to
the stockholders shown on the list at the addresses therein stated. Such notice
shall also be given by 1 or more publications at least 1 week before the day of
the hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The forms
of the notices by mail and by publication shall be approved by the Court, and
the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all
III-3
relevant factors, including the rate of interest which the surviving or
resulting corporation would have had to pay to borrow money during the pendency
of the proceeding. Upon application by the surviving or resulting corporation or
by any stockholder entitled to participate in the appraisal proceeding, the
Court may, in its discretion, permit discovery or other pretrial proceedings and
may proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on the
list filed by the surviving or resulting corporation pursuant to subsection
(f) of this section and who has submitted such stockholder's certificates of
stock to the Register in Chancery, if such is required, may participate fully in
all proceedings until it is finally determined that such stockholder is not
entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.
(1) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation. (Last amended by Ch. 339, L.
'98, eff. 7-1-98.)
III-4
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal and certificates evidencing Shares and any
other required documents should be sent or delivered by each stockholder or his
broker, dealer, commercial bank, trust company or other nominee to the
Depositary at one of its addresses set forth below:
THE DEPOSITARY FOR THE OFFER IS:
EQUISERVE TRUST COMPANY, L.P.
BY FIRST CLASS MAIL: BY OVERNIGHT DELIVERY:
EquiServe Trust Corporate Actions EquiServe Trust
P.O. Box 43025 Attn: Corporate Actions
Prividence, RI 02940-3025 00 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
BY HAND DELIVERY:
Securities Transfer & Reporting
c/o EquiServe Trust
000 Xxxxxxx'x Xxxxxx, Xxxxxxxx
Xxx Xxxx, XX 00000
TELEPHONE ASSISTANCE: 000-000-0000 OR 000-000-0000
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal or other tender offer materials may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth below. Stockholders may also contact
their broker, dealer, bank or trust company for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
X.X. XXXX & CO., INC.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Bankers and Brokers Call Collect (000) 000-0000
All Others Call Toll-Free (000) 000-0000
THE DEALER MANAGER FOR THE OFFER IS:
[LOGO]
X.X. XXXXXX SECURITIES INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
