OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PARAVANT INC.
BY
PRINCE MERGER CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DRS TECHNOLOGIES, INC.
AT
$4.75 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 22, 2002, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED AS OF
OCTOBER 23, 2002 (THE "MERGER AGREEMENT"), BY AND AMONG DRS TECHNOLOGIES, INC.
("PARENT"), PRINCE MERGER CORPORATION (THE "PURCHASER") AND PARAVANT INC. (THE
"COMPANY").
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (I) HAS DETERMINED THAT THE
TERMS OF THE OFFER, THE MERGER AGREEMENT AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THE SHAREHOLDERS OF THE COMPANY, (II) HAS APPROVED AND ADOPTED
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE
OFFER AND THE MERGER, AND (III) RECOMMENDS THAT THE SHAREHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
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AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, THAT NUMBER OF SHARES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 REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS ON THE DATE OF PURCHASE, THE EXPIRATION OR TERMINATION OF ANY
APPLICABLE WAITING PERIOD UNDER THE XXXX-XXXXX-XXXXXX ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED, AND THE OTHER CONDITIONS SET FORTH IN THIS OFFER TO
PURCHASE. SEE SECTION 13 -- "CERTAIN CONDITIONS OF THE OFFER".
------------------------
IMPORTANT
Any shareholder who desires to tender all or any portion of such
shareholder's shares should either (i) complete and sign the Letter of
Transmittal (or facsimile thereof) in accordance with the instructions in the
Letter of Transmittal, mail or deliver it and any other required documents to
the Depositary (as defined herein) and either deliver the certificates for such
shares to the Depositary or tender such shares pursuant to the procedures for
book-entry transfer set forth in Section 3 -- "Procedure for Tendering Shares"
or (ii) request such shareholder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such shareholder. Any
shareholder whose shares are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such person to
tender their shares.
Any shareholder who desires to tender shares and whose certificates
representing such shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
shares by following the procedures for guaranteed delivery set forth in Section
3 -- "Procedure for Tendering Shares."
Questions and requests for assistance may be directed to X.X. Xxxx & Co.,
Inc. (the "Information Agent") or Bear, Xxxxxxx & Co. Inc. (the "Dealer
Manager") at their respective locations and telephone numbers set forth on the
back cover of this Offer to Purchase. Requests for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent or the Dealer Manager, or to
brokers, dealers, commercial banks or trust companies. A shareholder also may
contact brokers, dealers, commercial banks or trust companies for assistance
concerning the Offer.
------------------------
The Dealer Manager for the Offer is:
BEAR, XXXXXXX & CO. INC.
------------------------
October 28, 2002
TABLE OF CONTENTS
PAGE
----
SUMMARY TERM SHEET.......................................... 1
INTRODUCTION................................................ 5
THE OFFER................................................... 7
1. Terms of the Offer................................ 7
2. Acceptance for Payment and Payment for Shares..... 9
3. Procedure for Tendering Shares.................... 10
4. Withdrawal Rights................................. 12
5. Certain U.S. Federal Income Tax Consequences...... 13
6. Price Range of the Shares; Dividends on the
Shares................................................ 14
7. Effect of the Offer on the Market for the Shares;
Stock Listing; Exchange Act Registration; Margin
Regulations....................................... 14
8. Certain Information Concerning the Company........ 15
9. Certain Information Concerning Parent and
Purchaser............................................. 18
10. Source and Amount of Funds........................ 19
11. Background of the Offer; Purpose of the Offer and
the Merger; the Merger Agreement and Certain Other
Agreements........................................ 20
12. Plans For the Company............................. 34
13. Certain Conditions of the Offer................... 35
14. Certain Legal Matters............................. 37
15. Fees and Expenses................................. 40
16. Miscellaneous..................................... 40
SCHEDULE I -- Directors and Executive Officers of Parent and
Purchaser................................................. 41
i
SUMMARY TERM SHEET
Prince Merger Corporation is offering to purchase all of the outstanding
common stock of
Paravant Inc. for $4.75 per share in cash. The following are
some of the questions you, as a shareholder of
Paravant Inc. may have and
answers to those questions. We urge you to carefully read the remainder of this
Offer to Purchase because the information in this summary is not complete and
additional important information is contained in the remainder of this
Offer to
Purchase and the Letter of Transmittal.
WHO IS OFFERING TO BUY MY SHARES?
Our name is Prince Merger Corporation. We are a Florida corporation formed
for the purpose of making a tender offer for all of the common stock of
Paravant
Inc. We are a wholly owned subsidiary of DRS Technologies, Inc., a Delaware
corporation. See "Introduction" to this
Offer to Purchase and Section 9 --
"Certain Information Concerning Parent and Purchaser."
WHAT SHARES ARE BEING SOUGHT IN THE OFFER?
We are seeking to purchase all of the outstanding common stock of
Paravant
Inc. See "Introduction" to this
Offer to Purchase and Section 1 -- "Terms of the
Offer."
HOW MUCH ARE YOU OFFERING TO PAY? WHAT IS THE FORM OF PAYMENT? WILL I HAVE TO
PAY ANY FEES OR COMMISSIONS?
We are offering to pay $4.75 per share, net to you, in cash. If you are the
record owner of your shares and you tender your shares to us in the offer, you
will not have to pay brokerage fees or similar expenses. If you own your shares
through a broker or other nominee, and your broker tenders your shares on your
behalf, your broker or nominee may charge you a fee for doing so. You should
consult your broker or nominee to determine whether any charges will apply. See
"Introduction" to this
Offer to Purchase.
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
DRS Technologies, Inc., our parent company, will provide us with sufficient
funds to purchase all shares validly tendered and not withdrawn in the offer and
to provide funding for the merger which is expected to follow the successful
completion of the offer (as discussed below). All of these funds are expected to
be obtained from DRS's generally available corporate funds and an existing
credit facility of DRS. The existing credit facility does not permit the
consummation of the Offer and the Merger, however, DRS has entered into a
commitment letter with the administrative agent of the existing credit facility
which provides for a waiver of the provisions in the existing credit facility
that prohibit the Offer and the Merger or, alternatively DRS entering into a
replacement credit facility that will permit the consummation of the Offer and
the Merger. The offer is not conditioned upon any financing arrangement. See
Section 10 -- "Source and Amount of Funds."
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think that our financial condition is relevant to your decision
to tender in the offer because:
- the form of payment consists solely of cash and the Offer is to purchase
all outstanding Shares;
- we, through our parent company DRS Technologies, Inc., are arranging for
our funding from generally available corporate funds and an existing
credit facility as discussed above;
- the offer is not subject to any financing condition; and
- if we consummate the offer, we will acquire all remaining shares for the
same cash price in the merger as in the offer.
See Section 10 -- "Source and Amount of Funds."
1
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on Friday,
November 22, 2002, to decide whether to tender your shares in the offer.
Further, if you cannot deliver everything that is required in order to make a
valid tender by that time, you may be able to use a guaranteed delivery
procedure, which is described later in this
Offer to Purchase. See Section
1 -- "Terms of the Offer" and Section 3 -- "Procedure for Tendering Shares."
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Yes. The offer can be extended for varying lengths of time depending on the
circumstances. We have agreed in the merger agreement that:
- We may, at our discretion, extend the expiration date of the offer if any
of the conditions to our obligation to accept for payment and pay for
shares tendered into the offer have not been satisfied or waived by us.
- We may, at our discretion, extend the expiration date of the offer for up
to ten (10) business days if less than 80% of the outstanding shares are
tendered;
- We may, at our discretion, elect to provide a subsequent offering period
of three (3) to twenty (20) business days, beginning after we have
purchased shares during the offer, during which shareholders may tender,
but not withdraw, their shares and receive the offer consideration.
- We may extend the expiration date of the offer upon an increase in the
offer price for the shares as provided under federal securities laws.
See Section 1 -- "Terms of the Offer."
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will inform Mellon Investor Services LLC (which
is the depositary for the offer) of that fact and will make a public
announcement of the extension, not later than 9:00 a.m., New York City time, on
the business day after the day on which the offer was scheduled to expire. See
Section 1 -- "Terms of the Offer."
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
- We are not obligated to purchase any shares which are validly tendered
unless that number of shares represents at least a majority of the shares
of
Paravant Inc. outstanding on a fully diluted basis.
- We are not obligated to purchase shares which are validly tendered if,
among other things,
Paravant Inc. shall have not satisfied the conditions
set forth in the Merger Agreement (See Section 13 to this Offer to
Purchase -- "Certain Conditions of the Offer"), including if the Board of
Directors of
Paravant Inc. shall have withdrawn its recommendation of the
offer and merger.
- We are not obligated to purchase shares unless and until the expiration
or termination of applicable waiting periods or comparable provisions
under any applicable pre-merger notification laws or regulations under
United States antitrust law.
HOW DO I TENDER MY SHARES?
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal, to Mellon Investor
Services LLC, the depositary for the offer, not later than the time the tender
offer expires. If your shares are held in street name, the shares can be
tendered by your nominee through Mellon Investor Services LLC. If you cannot get
something that is required to the depositary by the expiration of the tender
offer, you may get a little extra time to do so by having a broker, a bank or
other fiduciary which is a member of the Securities Transfer Agents Medallion
Program or other eligible institution guarantee that the missing items will be
received by the depositary within three Nasdaq Stock Market trading
2
days. However, the depositary must receive the missing items within that three
trading day period or else your shares will not be validly tendered. See Section
3 -- "Procedure for Tendering Shares."
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired. If we have
not agreed to accept your shares for payment by December 26, 2002, you can
withdraw them at any time after such time until we accept them for payment. This
right to withdraw will not apply to any subsequent offering period discussed in
Section 1. See Section 1 -- "Terms of the Offer" and Section 4 -- "Withdrawal
Rights."
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Section 4 -- "Withdrawal
Rights."
WHAT DOES THE BOARD OF DIRECTORS OF
PARAVANT INC. THINK OF THE OFFER?
We are making the offer pursuant to the Agreement and Plan of Merger with
Paravant Inc., which has been approved by the board of directors of Paravant
Inc. The board of directors of Paravant Inc. has unanimously approved the Merger
Agreement, our tender offer and the proposed merger of us with and into Paravant
Inc. The board of directors of Paravant Inc. also has unanimously determined
that the Merger Agreement, the tender offer and the proposed merger are fair to
and in the best interests of shareholders and has recommended that shareholders
tender their shares. See "Introduction" to this Offer to Purchase and Section
11 -- "Background of the Offer; Purpose of the Offer and the Merger; the Merger
Agreement and Certain Other Agreements."
HAVE ANY PARAVANT INC. SHAREHOLDERS AGREED TO TENDER THEIR SHARES?
Yes. Certain shareholders owning approximately 22% of the Company's
outstanding shares who are all directors or executive officers of the Company or
its subsidiaries (or relatives of, or entities controlled by, such persons) have
agreed to tender their shares in the Offer pursuant to certain Shareholder
Tender and Voting Agreements which have been approved by the board of directors
of Paravant Inc. See "Introduction" to this Offer to Purchase and Section
11 -- "Background of the Offer; Purpose of the Offer and the Merger; the Merger
Agreement and Certain Other Agreements."
IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL PARAVANT
INC. CONTINUE AS A PUBLIC COMPANY?
No. If a majority of the outstanding shares of Paravant Inc. on a fully
diluted basis are tendered and accepted for payment, subject to the Merger
Agreement we will be merged with and into Paravant Inc. If the merger takes
place, Paravant Inc. no longer will be publicly owned. Even if the merger does
not take place, if we purchase all the tendered shares, there may be so few
remaining shareholders and publicly held shares that Paravant Inc. common stock
will no longer be eligible to be traded through a Nasdaq market or on a
securities exchange, there may not be a public trading market for Paravant Inc.,
and Paravant Inc. may cease making filings with the Securities and Exchange
Commission or otherwise being required to comply with the SEC rules relating to
publicly held companies. See Section 7 -- "Effect of the Offer on the Market for
the Shares; Stock Listing; Exchange Act Registration; Margin Regulations."
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE PARAVANT INC. SHARES
ARE NOT TENDERED IN THE OFFER?
If we accept for payment and pay for at least a majority of the outstanding
shares of Paravant Inc. on a fully diluted basis, subject to the Merger
Agreement we will be merged with and into Paravant Inc. If that merger takes
place, DRS Technologies, Inc. will own all of the shares of Paravant Inc. and
all remaining shareholders of Paravant Inc. (other than us and DRS Technologies,
Inc.) will receive $4.75 per share in cash. See "Introduction" to this Offer to
Purchase.
3
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the merger described above takes place, shareholders not tendering in
the offer will receive the same amount of cash per share which they would have
received had they tendered their shares in the offer. Therefore, if the merger
takes place, the only difference to you between tendering your shares and not
tendering your shares is that you will be paid earlier if you tender your
shares. If you decide not to tender your shares in the offer and we purchase the
shares tendered by other shareholders, but the merger does not occur, the number
of shareholders and of shares of Paravant Inc. which are still in the hands of
the public may be so small that there no longer may be an active public trading
market (or, possibly, any public trading market) for the Paravant Inc. common
stock. Also, as described above, Paravant Inc. may cease making filings with the
SEC or otherwise being required to comply with the SEC rules relating to
publicly held companies. You do not have the right to assert dissenters' rights
as a result of the offer or merger described above. See "Introduction" to this
Offer to Purchase and Section 7 -- "Effect of the Offer on the Market for the
Shares; Stock Listing; Exchange Act Registration; Margin Regulations."
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On October 23, 2002, the last trading day before we announced the tender
offer and the possible subsequent merger, the last sale price of Paravant Inc.
common stock reported on the Nasdaq National Market was $3.60 per share. On
October 25, 2002, the last full day prior to commencement of the offer, the last
reported sales price of the shares on the Nasdaq National Market was $4.69 per
share of common stock. We advise you to obtain a recent quotation for shares of
Paravant Inc. common stock in deciding whether to tender your shares. See
Section 6 -- "Price Range of the Shares; Dividends on the Shares."
WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF TENDERING SHARES
AND OF THE MERGER?
The sale or exchange of shares pursuant to the offer and the merger will be
a taxable transaction for United States federal income tax purposes and possibly
for state, local and foreign tax purposes as well. In general, a shareholder who
sells shares for cash pursuant to the offer or receives cash in exchange for
shares pursuant to the merger will recognize gain or loss for United States
federal income tax purposes equal to the difference, if any, between the amount
of cash received and the shareholder's adjusted tax basis in the shares sold or
exchanged. See Section 5 -- "Certain U.S. Federal Income Tax Consequences."
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You can call X.X. Xxxx & Co., Inc. at (000) 000-0000 (toll free). X.X. Xxxx
& Co., Inc. is acting as the information agent for our tender offer.
4
To the Holders of Common Stock of Paravant Inc.:
INTRODUCTION
Prince Merger Corporation, a Florida corporation (the "Purchaser") and a
wholly owned subsidiary of DRS Technologies, Inc., a Delaware corporation
("Parent"), hereby offers to purchase all issued and outstanding shares of
common stock ("Common Stock"), par value $0.015 per share (the "Shares"), of
Paravant Inc., a Florida corporation (the "Company"), at a price of $4.75 per
Share, net to the seller in cash, 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").
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the sale of Shares pursuant to the Offer.
Purchaser will pay all fees and expenses incurred in connection with the Offer
of Bear, Xxxxxxx & Co. Inc., which is acting as the Dealer Manager, X.X. Xxxx &
Co., Inc., which is acting as the Information Agent (the "Information Agent"),
and Mellon Investor Securities LLC which is acting as the Depositary (the
"Depositary"). See Section 15 -- "Fees and Expenses."
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 REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"). SEE SECTION
13 -- "CERTAIN CONDITIONS OF THE OFFER."
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
October 23, 2002 (the "Merger Agreement"), by and among Parent, Purchaser and
the Company pursuant to which, no later than the second business day after the
satisfaction or waiver, if permissible, of all conditions to the Merger (as
defined below), Purchaser will be merged with and into the Company, with the
Company surviving the Merger as a wholly owned subsidiary of Parent, and the
separate corporate existence of Purchaser will thereupon cease. The merger of
Purchaser with and into the Company as effected pursuant to the immediately
preceding sentence, is referred to herein as the "Merger," and the Company as
the Surviving Corporation of the Merger is sometimes herein referred to as the
"Surviving Corporation." At the effective time of the Merger (the "Effective
Time"), each Share (other than Shares held by Parent, Purchaser or any other
wholly owned subsidiary of Parent) will be cancelled and retired and converted
into the right to receive $4.75 per Share, net to the seller in cash (such
price, being referred to herein as the "Offer Price"), payable to the holder
thereof without interest (the "Merger Consideration"). The Merger Agreement is
more fully described in Section 11 -- "Background of the Offer; Purpose of the
Offer and the Merger; the Merger Agreement and Certain Other Agreements."
The Company has informed Purchaser that, as of October 23, 2002, there were
(i) 17,354,040 Shares issued and outstanding; (ii) outstanding options
(including shares to be issued pursuant to the Company's Employee Stock Purchase
Plan) to purchase an aggregate of 3,832,932 Shares under the Company's stock
plans; and (iii) outstanding warrants to purchase an aggregate of 165,000
Shares. The Merger Agreement provides, among other things, that the Company will
not, without the prior written consent of Parent, issue any additional Shares
(except on the exercise of outstanding options and other rights and securities).
Based on the foregoing, and after giving effect to the exercise of all
outstanding options and warrants, Purchaser believes that the Minimum Condition
would be satisfied if 10,697,338 Shares are validly tendered and not withdrawn
prior to the expiration of the Offer. If the Minimum Condition is satisfied and
Purchaser accepts for payment the Shares tendered pursuant to the offer,
Purchaser will be able to elect a majority of the members of the Company's Board
of Directors and to effect the Merger without the affirmative vote of any other
shareholder of the Company. See Section 11 -- "Background of the Offer; Purpose
of the Offer and the Merger; the Merger Agreement and Certain Other Agreements"
and Section 12 -- "Plans For the Company." As used in this Offer to Purchase,
"fully diluted basis" takes into account the conversion or exercise of all
outstanding options and other rights and securities exercisable or convertible
into Shares.
5
As a condition and inducement to Parent and Purchaser entering into the
Merger Agreement and incurring the liabilities therein, certain shareholders of
the Company (each, a "Tendering Shareholder"), who hold voting and dispositive
power with respect to 3,780,835 Shares (representing approximately 22% of the
outstanding Shares), concurrently with the execution and delivery of the Merger
Agreement entered into Shareholder Tender and Voting Agreements (the
"Shareholder Tender and Voting Agreements"), dated October 23, 2002, with Parent
and Purchaser. Pursuant to the Shareholder Tender and Voting Agreements, the
Tendering Shareholders have agreed, among other things, to tender the Shares
held by them in the Offer, and to grant Parent a proxy with respect to the
voting of such Shares in favor of the Merger with respect to such Shares upon
the terms and subject to the conditions set forth therein. The Board of
Directors of the Company has approved the Shareholder Tender and Voting
Agreements. See Section 11 -- "Background of the Offer; Purpose of the Offer and
the Merger; the Merger Agreement and Certain Other Agreements".
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (I) HAS DETERMINED THAT
THE TERMS OF THE OFFER, THE MERGER AGREEMENT AND THE MERGER ARE FAIR TO AND IN
THE BEST INTERESTS OF THE SHAREHOLDERS OF THE COMPANY, (II) HAS APPROVED AND
ADOPTED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, AND (III) RECOMMENDS THAT THE SHAREHOLDERS
OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Wachovia Securities, Inc. (previously First Union Securities, Inc.), the
Company's financial advisor ("Wachovia"), has delivered to the Company's Board
of Directors its written opinion (the "Fairness Opinion"), dated October 21,
2002, to the effect that, as of such date, the consideration to be received by
the holders of Shares pursuant to the Offer and under the terms of the Merger
Agreement, is fair from a financial point of view to such holders. Such opinion
is set forth in full as an exhibit to the Company's Solicitation/ Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), which is being mailed to
shareholders of the Company with this Offer to Purchase. Shareholders are urged
to read the Schedule 14D-9 and such opinion carefully in their entirety.
Consummation of the Merger is conditioned upon, among other things, the
approval and adoption by the requisite vote of shareholders of the Company of
the Merger Agreement, if required by applicable law in order to consummate the
Merger.
If Purchaser obtains eighty percent (80%) or more of the outstanding Shares
in the Offer, Purchaser will effect the Merger pursuant to the short-form merger
provisions of the Florida Business Corporation Act ("FBCA") without obtaining
the approval of any other shareholder of the Company. See Section 14 -- "Certain
Legal Matters." If the Minimum Condition is satisfied, Purchaser would have
sufficient voting power to approve the Merger without the affirmative vote of
any other shareholder of the Company. The Company has agreed, if required, to
cause a meeting of its shareholders to be held following consummation of the
Offer for the purposes of considering and taking action upon the approval and
adoption of the Merger Agreement. Parent and Purchaser have agreed to vote the
Shares purchased in the Offer in favor of the approval and adoption of the
Merger Agreement. Under the FBCA, holders of the Shares do not have the right to
assert dissenters' rights as a result of the Offer or Merger. See Section
11 -- "Background of the Offer; Purpose of the Offer and the Merger; the Merger
Agreement and Certain Other Agreements."
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
6
THE OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, Purchaser will
accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn in accordance with Section
4 -- "Withdrawal Rights." The term "Expiration Date" shall mean 12:00 Midnight,
New York City time, on Friday, November 22, 2002, unless and until Purchaser, in
accordance with the terms of the Merger Agreement, shall have extended the
period of time for which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended by
Purchaser, shall expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition, and the expiration or termination of all waiting periods
imposed by the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
and the regulations thereunder (the "HSR Act") and the other conditions set
forth in Section 13 -- "Certain Conditions of the Offer." If such conditions are
not satisfied prior to the Expiration Date, Purchaser reserves the right (but
shall not be obligated) to (i) decline to purchase any of the Shares tendered
and terminate the Offer, subject to the terms of the Merger Agreement, (ii)
waive any of the conditions to the Offer, to the extent permitted by applicable
law and the provisions of the Merger Agreement, and, subject to complying with
applicable rules and regulations of the Securities and Exchange Commission (the
"SEC"), purchase all Shares validly tendered, (iii) subject to the terms of the
Merger Agreement, extend the Offer or (iv) amend the Offer.
Subject to the terms of the Merger Agreement, Purchaser may, (i) extend the
period of time during which the Offer is open and thereby delay acceptance for
payment of, and the payment for, any Shares, by giving oral or written notice of
such extension to the Depositary and (ii) amend the Offer by giving oral or
written notice of such amendment to the Depositary. Any extension, amendment or
termination of the Offer will be followed as promptly as practicable by public
announcement thereof, the announcement in the case of an extension to be issued
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(d) under the Securities Exchange Act. Without
limiting the obligation of Purchaser under such Rule or the manner in which
Purchaser may choose to make any public announcement, Purchaser currently
intends to make announcements by issuing a press release to the Dow Xxxxx News
Service.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE TO BE PAID
BY PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.
The Merger Agreement provides that, except as described below, Purchaser
will not, without the prior written consent of the Company (i) decrease the
price per Share payable in the Offer, (ii) change the form of consideration
payable in the Offer, (iii) reduce the maximum number of Shares sought to be
purchased in the Offer, (iv) impose conditions to the Offer in addition to those
described in Section 13, (v) waive or change the Minimum Condition or make other
changes in the terms and conditions of the Offer that are in any manner adverse
to the holders of the Shares, or (vi) except as provided below, extend the Offer
beyond the date that is twenty (20) business days after the commencement of the
Offer (the "Initial Expiration Date"). Notwithstanding the foregoing, Purchaser
may, without the consent of the Company (a) extend the Offer beyond the
scheduled Expiration Date, which initially shall be the Initial Expiration Date
if, as of such expiration, any of the Offer Conditions (as defined in the Merger
Agreement) shall not be satisfied or waived, (b) extend the Offer for any period
required by any rule, regulation or interpretation of the SEC, the staff thereof
or the Nasdaq National Market applicable to the Offer, (c) extend the Offer for
up to ten (10) business days if, as of the scheduled Expiration Date, there
shall not have been tendered at least eighty percent (80%) of the outstanding
Shares on a fully diluted basis and (d) provide a "Subsequent Offering Period"
in accordance with Rule 14d-11 under the Exchange Act.
A Subsequent Offering Period would be an additional period of time from
three (3) to twenty (20) business days in length, following the expiration of
the Offer, during which shareholders may tender Shares for the Offer Price. Rule
14d-11 provides that Purchaser may include a Subsequent Offering Period so long
as, among other things, (i) the Offer remained open for a minimum of twenty (20)
business days and has
7
expired, (ii) Purchaser offers the same form and amount of consideration to
shareholders in both the initial and subsequent offering period, (iii) Purchaser
accepts and promptly pays for all Shares tendered during the Offer prior to the
Expiration Date, (iv) Purchaser announces the results of the Offer, including
the approximate number and percentage of Shares deposited in the Offer, no later
than 9:00 a.m. New York City time on the next business day after the Expiration
Date and immediately begins the Subsequent Offering Period, and (v) Purchaser
immediately accepts and promptly pays for Shares as they are tendered during the
Subsequent Offering Period.
In a public release, the SEC has expressed the view that the inclusion of a
Subsequent Offering Period would constitute a material change to the terms of
the Offer requiring Purchaser to disseminate new information to shareholders in
a manner reasonably calculated to inform them of such change sufficiently in
advance of the Expiration Date (generally five (5) business days). The SEC,
however, has recently stated that such advance notice may not be required under
certain circumstances. In the event Purchaser elects to include a Subsequent
Offering Period, it will notify shareholders of the Company consistent with the
requirements of the SEC. Purchaser does not currently intend to include a
Subsequent Offering Period in the Offer, although it reserves the right to do so
in its sole discretion. Pursuant to Rule 14d-7 under the Exchange Act, no
withdrawal rights apply to Shares tendered during a Subsequent Offering Period,
and no withdrawal rights apply during the Subsequent Offering Period with
respect to Shares tendered in the Offer and accepted for payment. During a
Subsequent Offering Period, Purchaser will promptly purchase and pay for all
Shares tendered at the same price paid in the Offer. In addition, Purchaser may
increase the Offer Price and extend the Offer to the extent required by law in
connection with such increase, in each case in its sole discretion and without
Company's consent. Notwithstanding the foregoing, Purchaser may, without the
consent of the Company, extend the Offer for any period required by any rule,
regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer.
If Purchaser extends the Offer, or if Purchaser (whether before or after
its acceptance for payment of Shares) is delayed in its purchase of or payment
for Shares or is unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may retain tendered Shares on behalf of Purchaser, and such Shares may not be
withdrawn except to the extent tendering shareholders are entitled to withdrawal
rights as described in Section 4 -- "Withdrawal Rights." However, the ability of
Purchaser to delay the payment for Shares which Purchaser has accepted for
payment is limited by Rule 14e-l(c) under the Exchange Act, which requires that
a bidder pay the consideration offered or return the securities deposited by or
on behalf of holders of securities promptly after the termination or withdrawal
of the Offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances then existing, including
the relative materiality of the changed terms or information. In the SEC's view,
an offer should remain open for a minimum of five (5) business days from the
date a material change is first published, sent or given to security holders and
that, if material changes are made with respect to information not materially
less significant than the offer price and the number of shares being sought, a
minimum of ten (10) business days may be required to allow adequate
dissemination and investor response. The requirement to extend the Offer will
not apply to the extent that the number of business days remaining between the
occurrence of the change and the then-scheduled Expiration Date equals or
exceeds the minimum extension period that would be required because of such
amendment. As used in this Offer to Purchase, "business day" has the meaning set
forth in Rule 14d-1 under the Exchange Act.
PURSUANT TO RULE 14D-7 UNDER THE EXCHANGE ACT, NO WITHDRAWAL RIGHTS APPLY
DURING THE SUBSEQUENT OFFERING PERIOD. FURTHERMORE, THE SAME CONSIDERATION, THE
OFFER PRICE, WILL BE PAID TO SHAREHOLDERS TENDERING SHARES IN THE OFFER OR IN A
SUBSEQUENT OFFERING PERIOD, IF ONE IS INCLUDED.
8
The Company has provided Purchaser with the Company's shareholder lists and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed by Purchaser to record holders of Shares and will be furnished by
Purchaser to brokers, dealers, banks and similar persons whose names, or the
names of whose nominees, appear on the shareholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT 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), Purchaser will accept for payment and will pay, promptly after
the Expiration Date, for all Shares validly tendered prior to the Expiration
Date and not properly withdrawn in accordance with Section 4 -- "Withdrawal
Rights". All determinations concerning the satisfaction of such terms and
conditions will be within Purchaser's discretion, which determinations will be
final and binding. See Sections 1 -- "Terms of the Offer" and 13 -- "Certain
Conditions of the Offer." Subject to the Merger Agreement and compliance with
Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay
the consideration offered or return the securities deposited by or on behalf of
holders of securities promptly after the termination or withdrawal of such
bidder's offer), Purchaser expressly reserves the right to delay acceptance for
payment for Shares in order to comply with any applicable law, including,
without limitation, the HSR Act. See Section 14 -- "Certain Legal Matters."
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares (or a timely Book-Entry Confirmation (as defined below) with respect
thereto), (ii) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message (as defined below), and (iii)
any other documents required by the Letter of Transmittal. The per Share
consideration paid to any holder of Common Stock pursuant to the Offer will be
the highest per Share consideration paid to any other holder of such Shares
pursuant to the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Purchaser and not
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of 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 accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from Purchaser and
transmitting payment to tendering shareholders.
If Purchaser is delayed in its acceptance for payment of, or payment for,
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to Purchaser's rights under the
Offer (including such rights as are set forth in Sections 1 -- "Terms of the
Offer" and 13 -- "Certain Conditions of the Offer") (but subject to compliance
with Rule 14e-1(c) under the Exchange Act), the Depositary may, nevertheless, on
behalf of Purchaser, retain tendered Shares, and such Shares may not be
withdrawn except to the extent tendering shareholders are entitled to exercise,
and duly exercise, withdrawal rights as described in Section 4 -- "Withdrawal
Rights."
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE TO BE PAID
BY PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned, without expense to
the tendering shareholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility (as defined below) pursuant to the procedures set forth in Section
3 -- "Procedures for Tendering Shares" such Shares will be credited to an
account maintained at the Book-Entry Transfer Facility), as promptly as
practicable after the expiration or termination of the Offer.
9
Purchaser reserves the right to transfer or assign, in whole or in part, to
Parent or to any affiliate of Parent, the right to purchase Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering shareholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES
Valid Tender. For a shareholder to validly tender Shares pursuant to the
Offer, either (i) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or in
the case of a book-entry transfer, an Agent's Message (as defined below), and
any other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, except with respect to any Subsequent Offering Period, and
either certificates for tendered Shares must be received by the Depositary at
one of such addresses or such Shares must be delivered pursuant to the
procedures for book-entry transfer set forth below (and a Book-Entry
Confirmation (as defined below) received by the Depositary), in each case, prior
to the Expiration Date or (ii) the tendering shareholder must comply with the
guaranteed delivery procedures set forth below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two (2) business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
the Book-Entry Transfer Facility's systems may make book-entry delivery of
Shares by causing the Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account in accordance with the Book-Entry Transfer Facility's
procedure for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message (as defined below), and any other required documents must, in
any case, be transmitted to, and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date (except with respect to any Subsequent Offering Period, if one
is provided), or the tendering shareholder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of Shares into the Depositary's account at the Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation."
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant. For Shares to be validly
tendered during any Subsequent Offering Period, the tendering shareholder must
comply with the foregoing procedures except that the required documents and
certificates must be received during the Subsequent Offering Period.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. 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. SHARES
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
10
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section 3, includes any participant
in the Book Entry Transfer Facility's systems whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (ii) if such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agent's Medallion Program, or by any other "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Exchange Act
(each, an "Eligible Institution" and, collectively, "Eligible Institutions"). In
all other cases, all signatures on Letters of Transmittal must be guaranteed by
an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal.
If the certificates for Shares are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or
certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the certificates
surrendered, then the tendered certificates for such Shares must be endorsed or
accompanied by appropriate stock powers, in either case, signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as aforesaid.
See Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser, is received by
the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect
to) such Shares, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the National Association of
Security Dealers Automated Quotation System, Inc. (the "Nasdaq") is open
for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary 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 such Notice of Guaranteed Delivery made available by Purchaser.
Other Requirements. Notwithstanding any other provision hereof, payment
for Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (i) certificates for (or a timely
Book-Entry Confirmation with respect to) such Shares, (ii) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and (iii) any other documents required by the Letter of
Transmittal. Accordingly, tendering shareholders may be paid at different times
depending upon when certificates for Shares or Book-Entry Confirmations with
respect to Shares are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE TO BE PAID BY PURCHASER
FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING
SUCH PAYMENT.
Appointment. By executing the Letter of Transmittal as set forth above,
the tendering shareholder will irrevocably appoint designees of Purchaser, and
each of them, as such shareholder's attorneys-in-fact and proxies in the manner
set forth in the Letter of Transmittal, each with full power of substitution, to
the full extent of such shareholder's rights with respect to the Shares tendered
by such shareholder and accepted for payment by Purchaser and with respect to
any and all other Shares or other securities or rights issued or
11
issuable in respect of such Shares. All such proxies will be considered coupled
with an interest in the tendered Shares. Such appointment will be effective
when, and only to the extent that, Purchaser accepts for payment Shares tendered
by such shareholder as provided herein. Upon such appointment, all prior powers
of attorney, proxies and consents given by such shareholder with respect to such
Shares or other securities or rights will, without further action, be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given by such shareholder (and, if given, will not be deemed effective). The
designees of Purchaser will thereby be empowered to exercise all voting and
other rights with respect to such Shares and other securities or rights,
including, without limitation, in respect of any annual, special or adjourned
meeting of the Company's shareholders, actions by written consent in lieu of any
such meeting or otherwise, as they in their sole discretion deem proper.
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon Purchaser's acceptance for payment of such
Shares, Purchaser must be able to exercise full voting, consent and other rights
with respect to such Shares and other related securities or rights, including
voting at any meeting of shareholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by Purchaser, in its sole discretion, which determination
will be final and binding. Purchaser reserves the absolute right to reject any
or all tenders of any Shares determined by it not to be in proper form or the
acceptance for payment of, or payment for, which may, in the opinion of
Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right, in
its sole discretion, subject to the provisions of the Merger Agreement, to waive
any of the conditions of the Offer or any defect or irregularity in the tender
of any Shares of any particular shareholder, whether or not similar defects or
irregularities are waived in the case of other shareholders. No tender of Shares
will be deemed to have been validly made until all defects or irregularities
relating thereto have been cured or waived. None of Purchaser, Parent, the
Depositary, the Information Agent, the Dealer Manager 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.
Subject to the terms of the Merger Agreement, Purchaser's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding.
Backup Withholding. To prevent backup withholding with respect to payment
of the purchase price of Shares purchased pursuant to the Offer, a tendering
registered holder, or his assignee (in either case, the "Payee"), must provide
the Depository with such shareholder's correct taxpayer identification number
("TIN") and certify that such shareholder is not subject to backup withholding
by completing and signing the Substitute Form W-9 provided in the Letter of
Transmittal. If backup withholding applies with respect to a shareholder, the
Depository is required to withhold and deposit with the Internal Revenue Service
30%, or other applicable withholding percentage, of any payments made to such
shareholder. Certain shareholders (including, among others, all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
In order for a foreign shareholder to qualify as an exempt recipient, the
shareholder must submit a Form W-8BEN, signed under penalties of perjury,
attesting to the shareholder's exempt status. See Instruction 9 of the Letter of
Transmittal
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Except as provided in this Offer to Purchase with
respect to a Subsequent Offering Period, Shares tendered pursuant to the Offer
may be withdrawn pursuant to the procedures set forth below at any time prior to
the Expiration Date and, unless theretofore accepted for payment and paid for by
Purchaser pursuant to the Offer, may also be withdrawn at any time after
December 26, 2002.
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 and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on
12
such certificates must be submitted to the Depositary and, unless such Shares
have been tendered by an Eligible Institution, the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
delivered pursuant to the procedures for book-entry transfer as set forth in
Section 3 -- "Procedure for Tendering Shares", any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by again following one of the procedures described in
Section 3 -- "Procedure for Tendering Shares" any time prior to the Expiration
Date or during any Subsequent Offering Period.
No withdrawal rights will apply to Shares tendered in a Subsequent Offering
Period under Rule 14d-11 of the Exchange Act, and no withdrawal rights apply
during a Subsequent Offering Period under Rule 14d-11 with respect to Shares
tendered in the Offer and accepted for payment. See Section 1 -- "Terms of the
Offer."
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding. None of Purchaser, Parent, the
Depositary, the Information Agent, the Dealer Manager or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of certain United States federal income
tax consequences of the Offer and the Merger relevant to a beneficial holder of
Shares whose Shares are sold for cash pursuant to the Offer or converted into
the right to receive cash in the Merger (a "Holder"). This discussion is for
general informational purposes only and does not address all aspects of United
States federal income taxation that may be relevant to particular Holders of
Shares in light of their specific investment or tax circumstances. The
discussion is based on current provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), Treasury regulations promulgated thereunder, and
administrative and judicial interpretations thereof, all as in effect as of the
date hereof and all of which are subject to change, possibly with retroactive
effect. This discussion applies only to Holders who hold Shares as "capital
assets" within the meaning of Section 1221 of the Code and may not apply to
Holders who acquired their Shares pursuant to the exercise of employee stock
options or otherwise as compensation. In addition, this discussion does not
apply to certain types of Holders subject to special tax rules including, but
not limited to, insurance companies, tax-exempt organizations, financial
institutions, broker dealers and persons who hold their Shares as a part of
"straddle," "hedge," "conversion transaction," "synthetic security" or other
integrated investment. The tax consequences of the Offer and the Merger to
Holders who hold their Shares through a partnership or other pass-through entity
generally will depend upon such Holder's status for United States federal income
tax purposes. This discussion does not address the United States federal income
tax consequences to a Holder that, for United States federal income tax
purposes, is: (i) an individual who is not a U.S. resident or citizen, (ii) a
foreign corporation, (iii) a foreign partnership, or (iv) a foreign estate or
trust, nor does it consider the effect of any state, local or foreign income tax
or other tax laws. EACH HOLDER IS URGED TO CONSULT SUCH HOLDER'S TAX ADVISOR
REGARDING THE SPECIFIC UNITED STATES FEDERAL, STATE, LOCAL AND FOREIGN INCOME
AND OTHER TAX CONSEQUENCES OF THE OFFER AND THE MERGER IN LIGHT OF SUCH HOLDER'S
SPECIFIC TAX SITUATION.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for United States federal income tax purposes and may also
be a taxable transaction under state, local, or foreign tax laws. In general, a
Holder who receives cash in exchange for Shares pursuant to the Offer or the
Merger will recognize gain or loss for United States federal income tax purposes
equal to the difference, if any, between the amount of cash received by the
Holders and the Holder's adjusted tax basis in the Shares sold pursuant to the
Offer or surrendered for cash pursuant to the Merger. Gain or loss will be
determined separately for each block of Shares (i.e., Xxxxxx acquired at the
same cost in a single transaction) sold for cash pursuant to the Offer or
surrendered for cash pursuant to the Merger. Such gain or loss will generally be
capital gain or loss
13
and will generally be long-term capital gain or loss if such Shares have been
held for more than one year at the time of the consummation of the Offer or the
Merger, as the case may be. Certain limitations may apply to the use of capital
losses.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are traded through the Nasdaq National Market under the symbol
"PVAT". The following table sets forth, for each of the calendar quarters
indicated, the high and low reported sales price per Share on the Nasdaq
National Market based on published financial sources.
HIGH LOW
----- -----
2000
Fourth Quarter............................................ $2.94 $1.50
2001
First Quarter............................................. $2.06 $1.58
Second Quarter............................................ $1.95 $1.51
Third Quarter............................................. $2.37 $1.12
Fourth Quarter............................................ $3.15 $1.84
2002
First Quarter............................................. $3.55 $2.28
Second Quarter............................................ $4.36 $2.92
Third Quarter............................................. $3.75 $2.20
Fourth Quarter (through October 23)....................... $3.62 $3.06
On October 23, 2002, the last full trading day prior to the public
announcement of the execution of the Merger Agreement, the last reported sales
price of the Shares on the Nasdaq National Market was $3.60 per Share. On
October 25, 2002, the last full trading day prior to the commencement of the
Offer, the last reported sales price of the Shares on the Nasdaq National Market
was $4.69 per Share. Shareholders are urged to obtain a current market quotation
for the Shares.
Dividends on the Shares. The Company did not declare or pay any cash
dividends during the past two years. In addition, under the terms of the Merger
Agreement, the Company is not permitted to declare or pay dividends with respect
to the Shares without the prior written consent of Parent.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK LISTING; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS
Market for the Shares. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
could adversely affect the liquidity and market value of the remaining Shares
held by the public. The purchase of Shares pursuant to the Offer can also be
expected to reduce the number of holders of Shares.
Stock Listing. The Shares are traded through the Nasdaq National Market.
Depending upon the number of Shares purchased pursuant to the Offer, the Shares
may no longer meet the requirements of the National Association of Securities
Dealers, Inc. (the "NASD") for continued inclusion on the Nasdaq National
Market, which requires that an issuer either (i) have at least 750,000 publicly
held shares, held by at least 400 round-lot shareholders, with a market value of
at least $5,000,000, stockholders equity of $10,000,000 calculated pursuant to
SEC Regulation S-X (which excludes from the calculation any preferred stock with
a redemption feature), have two market makers for the shares, and have a minimum
bid price of $1 or (ii) have at least 1,100,000 publicly held shares, held by at
least 400 round-lot shareholders, with a market value of at least $15,000,000,
have four market makers for the shares, and have a minimum bid price of $3 and
have either (A) a market capitalization of at least $50,000,000 or (B) total
assets and revenues each of at least $50,000,000.
14
If the Nasdaq National Market and the Nasdaq Smallcap Market were to cease
to publish quotations for the Shares, it is possible that the Shares would
continue to trade in the over-the-counter market and that price or other
quotations would be reported by other sources. The extent of the public market
for such Shares and the availability of such quotations would depend, however,
upon such factors as the number of shareholders and/or the aggregate market
value of such securities remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration under the Exchange Act as described below, and other factors.
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on the
market price for, or marketability of, the Shares or whether it would cause
future market prices to be greater or lesser than the Offer Price.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the SEC if the Shares are neither
listed on a national securities exchange nor held by 300 or more holders of
record. Termination of registration of the Shares under the Exchange Act,
assuming there are no other securities of the Company subject to registration,
would substantially reduce the information required to be furnished by the
Company to its shareholders and to the SEC 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 pursuant to Section 14(a)
in connection with shareholders' meetings and the related requirement of
furnishing an annual report to shareholders and the requirements of Rule 13e-3
under the Exchange Act with respect to "going private" transactions, no longer
applicable to the Company. Furthermore, the ability of "affiliates" of the
Company and persons holding "restricted securities" of the Company to dispose of
such securities pursuant to Rule 144 or Rule 144A promulgated under the
Securities Act of 1933, as amended, may be impaired or eliminated.
Purchaser may seek to cause the Company to apply for termination of
registration of the Shares under the Exchange Act as soon after the completion
of the Offer as the requirements for such termination are met. If the Nasdaq
National Market listing and the Exchange Act registration of the Shares are not
terminated prior to the Merger, then the Shares will be delisted from the Nasdaq
National Market and the registration of the Shares under the Exchange Act will
be terminated following the consummation of the Merger.
Margin Regulations. The Shares currently are "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin regulations
of the Federal Reserve Board and therefore could no longer be used as collateral
for loans made by brokers. If registration of the Shares under the Exchange Act
were terminated, the Shares would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The information concerning the Company contained in this Offer to Purchase,
including that set forth below under the caption "Selected Financial
Information," has been furnished by the Company or has been taken from or based
upon publicly available documents and records on file with the SEC and other
public sources. Neither Parent nor Purchaser assumes responsibility for the
accuracy or completeness of the information concerning the Company contained in
such documents and records or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information but which are unknown to Parent or Purchaser.
The Company is a Florida corporation with its principal executive offices
at 00 Xxxxxxxxxxxx Xxxxx Xxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxx Xxxxxx 00000. The
telephone number of the Company at such offices is (000) 000-0000. The Company
serves the defense and national security industry with a range of electronic
commercial off-the-shelf products engineered to meet applications within
aircraft support, command and control, communications, radar and signal
intelligence. The Company also offers software design, integration
15
services and customization services to modify its standard products to the
specific needs of end users. The Company operates its business through its five
wholly owned subsidiaries, Paravant Computer Systems, Inc., Engineering
Development Laboratories, Incorporated, STL of Ohio, Inc., Tri-Plex Systems
Corporation and Catalina Systems Research, Inc.
Selected Financial Information. Set forth below is certain selected
consolidated financial information with respect to the Company, excerpted or
derived from the Company's Annual Reports on Form 10-K for the fiscal years
ended September 30, 2001 and September 30, 2000, and the Company's Quarterly
Report on Form 10-Q for the nine-months ended June 30, 2002. More comprehensive
financial information is included in such reports and in other documents filed
by the Company with the SEC. The following summary is qualified in its entirety
by reference to such reports and other documents and all of the financial
information (including any related notes) contained therein. Such reports and
other documents may be inspected and copies may be obtained from the SEC in the
manner set forth below.
PARAVANT INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
NINE MONTHS
ENDED JUNE 30, FISCAL YEAR ENDED SEPTEMBER 30,
----------------- ---------------------------------
2002 2001 2000 1999
----------------- --------- --------- ---------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
OPERATING DATA:
Revenues..................................... $40,063 $51,839 $40,410 $42,279
Operating income............................. 4,350 3,374 3,387 10,237
Net earnings................................. 2,139 445 1,584 5,886
Basic net earnings per share................. .12 .03 .09 .42
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets................................. $59,740 $61,875 $67,520 $42,973
Total liabilities............................ 24,784 29,387 35,196 10,771
Shareholders' equity......................... 34,956 32,488 32,324 32,202
Based on the Company's preliminary results, the Company's revenues for the
fiscal year ended September 30, 2002 were approximately $62.1 million, its
income from operations was approximately $8.3 million, its net earnings was
approximately $4.4 million and its basic and fully diluted earnings per Share
were approximately $0.26 and $0.25, respectively. These preliminary results have
been prepared by the Company's management and are subject to audit.
Certain Company Projections. Prior to entering into the Merger Agreement,
representatives of Parent conducted a due diligence review of the Company, and
in connection with such review received certain projections of the Company's
future operating performance. Parent analyzed the information in the
projections, certain publicly available information and additional information
obtained in Parent's due diligence review of the Company, along with Parent's
own estimates of potential cost savings and benefits and its own estimates with
respect to certain of the Company's programs. The projections provided to Parent
by the Company in connection with a possible acquisition of the Company in May
2002 included, among other things, the following forecasts of the Company's
revenues and earnings before interest and taxes (adjusted for cost savings
expected to be realized from the elimination of corporate headquarters expenses)
(in millions): $58.7 and $8.8 in fiscal 2002; $72.1 and $11.3 in fiscal 2003;
$95.5 and $15.9 in fiscal 2004; and $122.7 and $21.4 in fiscal 2005. The
financial projections in the Company's recently prepared fiscal 2003 strategic
plans, provided to Parent by the Company in September 2002 in connection with
the discussions concerning the Offer and the Merger, included, among other
things, the following forecasts of the Company's revenues and unadjusted
earnings before interest and taxes (in millions): $70.0 and $8.0 in fiscal 2003;
$79.9 and $9.6 in fiscal 2004; and $94.4 and $12.0 in fiscal 2005. Both sets of
financial projections are based on numerous
16
assumptions including assumptions concerning anticipated expansion of existing
contracts, new product introductions, new contracts and other growth
opportunities.
THE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR
COMPLIANCE WITH PUBLISHED GUIDELINES OF THE SEC OR THE GUIDELINES ESTABLISHED BY
THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS OR
FORECASTS. THESE FORWARD-LOOKING STATEMENTS (AS THAT TERM IS DEFINED IN THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995) ARE SUBJECT TO CERTAIN RISKS
AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE
PROJECTIONS. THE COMPANY HAS ADVISED PURCHASER AND PARENT THAT ITS INTERNAL
FINANCIAL FORECASTS (UPON WHICH THE PROJECTIONS PROVIDED TO PARENT WERE BASED IN
PART) ARE, IN GENERAL, PREPARED SOLELY FOR INTERNAL USE AND CAPITAL BUDGETING
AND OTHER MANAGEMENT DECISIONS, AND ARE SUBJECTIVE IN MANY RESPECTS AND THUS
SUSCEPTIBLE TO INTERPRETATIONS AND PERIODIC REVISION BASED ON ACTUAL EXPERIENCE
AND BUSINESS DEVELOPMENTS. THE PROJECTIONS ALSO REFLECT NUMEROUS ASSUMPTIONS
(NOT ALL OF WHICH WERE PROVIDED TO PARENT), ALL MADE BY MANAGEMENT OF THE
COMPANY, WITH RESPECT TO INDUSTRY PERFORMANCE, GENERAL BUSINESS, ECONOMIC,
MARKET AND FINANCIAL CONDITIONS AND OTHER MATTERS, INCLUDING EFFECTIVE TAX RATES
CONSISTENT WITH HISTORICAL LEVELS FOR THE COMPANY, ALL OF WHICH ARE DIFFICULT TO
PREDICT, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL AND NONE OF WHICH WERE
SUBJECT TO APPROVAL BY PARENT OR PURCHASER. ACCORDINGLY, THERE CAN BE NO
ASSURANCE THAT THE ASSUMPTIONS MADE IN PREPARING THE PROJECTIONS WILL PROVE
ACCURATE, AND ACTUAL RESULTS MAY BE MATERIALLY GREATER OR LESS THAN THOSE
CONTAINED IN THE PROJECTIONS. THE INCLUSION OF THE PROJECTIONS HEREIN SHOULD NOT
BE REGARDED AS AN INDICATION THAT ANY OF PARENT, PURCHASER, THE COMPANY OR THEIR
RESPECTIVE AFFILIATES OR REPRESENTATIVES CONSIDERED OR CONSIDER THE PROJECTIONS
TO BE A RELIABLE PREDICTION OF FUTURE EVENTS, AND THE PROJECTIONS SHOULD NOT BE
RELIED UPON AS SUCH. NONE OF PARENT, PURCHASER, THE COMPANY OR ANY OF THEIR
RESPECTIVE AFFILIATES OR REPRESENTATIVES HAS MADE, OR MAKES ANY REPRESENTATION
TO ANY PERSON REGARDING THE INFORMATION CONTAINED IN THE PROJECTIONS AND NONE OF
THEM INTENDS TO UPDATE OR OTHERWISE REVISE THE PROJECTIONS TO REFLECT
CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF
FUTURE EVENTS EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING
THE PROJECTIONS ARE SHOWN TO BE IN ERROR. IT IS EXPECTED THAT THERE WILL BE
DIFFERENCES BETWEEN ACTUAL AND PROJECTED RESULTS, AND ACTUAL RESULTS MAY BE
MATERIALLY HIGHER OR LOWER THAN THOSE PROJECTED.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the SEC relating to
its business, financial condition and other matters. Information as of
particular dates concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interests of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Company's shareholders and filed with the SEC. Such reports, proxy statements
and other information should be available for inspection at the public reference
facilities of the SEC at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, and at
the regional offices of the SEC located at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and Citicorp Center, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000. Copies of such information should be obtainable by mail, upon
payment of the SEC's customary charges, by writing to the SEC's principal office
at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000. The SEC also maintains a
website at xxxx://xxx.xxx.xxx that contains reports, proxy statements and other
information relating to the Company that have been filed via
17
the XXXXX System. Such material should also be available for inspection at the
offices of the Nasdaq National Market, located at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
9. CERTAIN INFORMATION CONCERNING PARENT AND PURCHASER
Parent and Purchaser. Parent is a Delaware corporation with its principal
executive offices at 0 Xxxxxx Xxx, Xxxxxxxxxx, Xxx Xxxxxx 00000. The telephone
number of Parent at such offices is (000) 000-0000. Parent is a leading supplier
of defense electronics products and systems. Parent provides high-technology
services to all branches of the U.S. military, major aerospace and defense prime
contractors, government intelligence agencies, international military forces and
industrial markets. Parent is a leading provider of thermal imaging devices,
combat display workstations, electronic sensor systems, ruggedized computers,
mission recorders and deployable flight incident recorders.
Purchaser is a Florida corporation newly formed at the discretion of Parent
for the purpose of effecting the Offer and the Merger. Parent owns, directly,
all of the outstanding capital stock of Purchaser. It is not anticipated that,
prior to the consummation of the Offer, Purchaser will have any significant
assets or liabilities or will engage in any activities other than those incident
to the Offer and the Merger and the financing thereof. The offices of Purchaser
are located at 0 Xxxxxx Xxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of Purchaser and Parent are set forth in Schedule I hereto.
Except as set forth in this Offer to Purchase or Schedule I to this Offer
to Purchase, (a) none of Purchaser, Parent or, to the best knowledge of
Purchaser or Parent, any of the persons listed on Schedule I, or any associate
or majority-owned subsidiary of any of the foregoing, beneficially owns or has a
right to acquire any Shares or any other equity securities of the Company; and
(b) none of Purchaser, Parent, or, to the best knowledge of Purchaser or Parent,
any of the persons or entities referred to above, nor any of the respective
executive officers, directors or subsidiaries of any of the foregoing, has
effected any transaction in Shares or any other equity securities of the Company
during the past 60 days.
Except as provided by the Merger Agreement or as set forth in this Offer to
Purchase, none of Purchaser, Parent or, to the best knowledge of Purchaser and
Parent, any of the persons listed on Schedule I, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any securities of the Company, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss, or the giving or
withholding of proxies).
Except as set forth in this Offer to Purchase, none of Purchaser, Parent or
any of their respective affiliates, or, to the best knowledge of Purchaser and
Parent, any of the persons listed on Schedule I, has had, any business
relationships or transactions with the Company or any of its executive officers,
directors or affiliates that would require reporting under the rules and
regulations of the SEC applicable to the Offer. Except as set forth in this
Offer to Purchase, during the past two years there have been no contacts,
negotiations or transactions between Purchaser or Parent, any of their
respective affiliates or, to the best knowledge of Purchaser or Parent, any of
the persons listed on Schedule I, and the Company or its affiliates concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors or a sale or other transfer of a material
amount of assets. None of the persons listed on Schedule I has, during the past
five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors). None of the persons listed in Schedule I
has, during the past five years, been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining the
person from 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.
Available Information. Pursuant to Rule 14d-3 under the Exchange Act,
Parent and Purchaser filed with the SEC a Tender Offer Statement on Schedule TO
(together with any amendments, supplements,
18
schedules, annexes and exhibits thereto, the "Schedule TO"), of which this Offer
to Purchase forms a part. Additionally, Parent is subject to the information and
reporting requirements of the Exchange Act and is required to file periodic
reports, proxy statements and other information with the SEC relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning Parent's business, principal physical properties,
capital structure, material pending legal proceedings, operating results,
financial condition, directors and officers (including their remuneration and
stock options granted to them), the principal holders of Parent's securities,
any material interests of such persons in transactions with Parent and certain
other matters is required to be disclosed in proxy statements and annual reports
distributed to Parent's shareholders and filed with the SEC. The Schedule TO and
the exhibits thereto, as well as these other reports, proxy statements and other
information, may be inspected and copied at the SEC's public reference
facilities in the same manner as set forth above with respect to the Company in
Section 8 -- "Certain Information Concerning the Company."
10. SOURCE AND AMOUNT OF FUNDS
The Offer is not conditioned upon any financing arrangements. The total
amount of funds required by Purchaser to consummate the Offer and the Merger,
and expected to be incurred by Parent, is estimated to be approximately $92
million plus any related transaction fees and expenses. Purchaser will acquire
all such funds from Parent, which intends to obtain funds from generally
available corporate funds, as well as in accordance with the terms of a Credit
Agreement, dated as of September 28, 2001 (the "Credit Agreement"), by and among
Parent as borrower, the lenders referred to therein, Wachovia Bank, N.A.
(formerly known as First Union National Bank) as administrative agent (the
"Administrative Agent"), TD Securities (USA) Inc. as syndication agent and
Mellon Bank, N.A. as documentation agent, as amended. Pursuant to the Credit
Agreement, the lenders therein have made available to Parent a $240,000,000
credit facility, consisting of a $100,000,000 revolving credit commitment and a
$140,000,000 term loan commitment. Under the terms of the Credit Agreement, the
consummation by Purchaser of the Offer and the Merger would not be permitted
unless, among other things, the approval of a majority of the lenders thereunder
is first obtained. On October 27, 2002, Parent entered into a Commitment Letter
(the "Commitment Letter") with the Administrative Agent and certain of its
affiliates, including Wachovia Securities, Inc., pursuant to which such parties
have agreed (i) to seek a waiver of, or an amendment to, the provisions in the
Credit Agreement that prohibit the consummation of the Offer and the Merger by
Purchaser or (ii) alternatively, to enter into a replacement credit facility
(the "Replacement Facility") which would permit the consummation of the Offer
and the Merger by Purchaser.
The Credit Agreement contains representations and warranties, conditions
precedent, covenants, events of default and other provisions generally found in
similar agreements. In particular, the revolving loan component of the credit
facility has a termination date of the earliest of (a) September 30, 2006, (b)
such date chosen by Parent in accordance with the provisions of the Credit
Agreement concerning permanent reduction of the revolving credit commitment or
(c) such date chosen by the Administrative Agent in accordance with its remedies
under the Credit Agreement. The term loan component of the credit facility has a
maturity date of the first to occur of (a) September 30, 2008 or (b) the date of
termination set by the Administrative Agent in accordance with its remedies
under the Credit Agreement. Parent has the ability to choose between (i) a base
rate consisting of Wachovia, N.A.'s prime rate or the Federal Funds Rate (as
defined in the Credit Agreement) plus 1/2 of 1%, or (ii) a standard LIBOR Rate
(as defined in the Credit Agreement), plus the respective applicable margin
provided for (i) and (ii) within the Credit Agreement. This credit facility is
secured by all of the personal property, books and records and proceeds of
Parent and certain of its subsidiaries.
The Replacement Facility, as contemplated by the Commitment Letter,
contains material terms substantially similar to the existing Credit Agreement;
provided, however, the Replacement Facility would permit the consummation of the
Offer and the Merger and would increase the term loan commitment up to
$213,600,000.
Parent intends to repay any amounts borrowed under the Credit Agreement or
the Replacement Facility through internally generated free cash flows or through
a refinancing.
19
In the event that Parent is unable to borrow sufficient funds to allow
Purchaser to consummate the Offer and the Merger pursuant to the Commitment
Letter, Parent intends to seek to refinance its indebtedness through an
alternative replacement credit facility.
Wachovia, the Company's financial advisor in connection with the Offer and
Xxxxxx, is the Lead Arranger and Book Manager under the Commitment Letter.
This summary is not a complete description of the terms and conditions of
the Credit Agreement and the Commitment Letter, and is qualified in its entirety
by reference to the full text of the Credit Agreement and the Commitment Letter,
respectively, which is incorporated herein by reference and a copy of which has
been filed with the SEC as an exhibit to the Schedule TO.
Because (i) the only consideration in the Offer and Merger is cash, (ii)
the Offer is to purchase all outstanding Shares, (iii) there is an absence of a
financing condition and (iv) the amount of consideration payable in relation to
the financial capacity of Parent and its affiliates is not considered excessive,
Purchaser believes the financial condition of Purchaser is not material to a
decision by a holder of Shares whether to sell, tender or hold Shares pursuant
to the Offer.
11. BACKGROUND OF THE OFFER; PURPOSE OF THE OFFER AND THE MERGER; THE MERGER
AGREEMENT AND CERTAIN OTHER AGREEMENTS
BACKGROUND OF THE OFFER
The following information was prepared by Parent and the Company.
Information about the Company was provided by the Company, and neither Purchaser
nor Parent takes any responsibility for the accuracy or completeness of any
information regarding meetings or discussions in which Parent or its
representatives did not participate.
Parent continually explores and conducts discussions with regard to
acquisitions and other strategic corporate transactions that are consistent with
its corporate strategies.
Xx. Xxxx X. Xxxxxx, Xxxxxx's Chairman of the Board, President and Chief
Executive Officer, and Xx. Xxxxxxx X. Xxxxxx, the Company's President and Chief
Executive Officer, are acquainted and have had periodic informal discussions
over several years about their respective businesses and operations and the
potential for strategic alliances.
On an ongoing basis, the Company's Board of Directors evaluates the
Company's financial performance against the Company's business plan and
strategic alternatives. In October 1999, the Company announced that it had
engaged Wachovia as its financial advisor to explore strategic alternatives to
enhance shareholder value.
In late 1999, following an indication of interest from a third party, the
Company's Board of Directors authorized management to initiate discussions with
the third party regarding a possible strategic transaction with the Company.
These discussions were terminated in early 2000 after the Company and the third
party were unable to negotiate a mutually acceptable transaction.
In the early 2001, a third party contacted the Company about the
possibility of a strategic transaction, but after preliminary discussions, the
Company determined that the valuation range did not meet the expectations of the
Company's Board of Directors and discussions were terminated in May 2001.
In January 2002, another third party contacted the Company about a possible
transaction, and after a preliminary meeting in February 2002 the Company's
management proposed to the Company's Board of Directors that it consider
launching a process for a strategic transaction.
On March 21, 2002, the Company's Board of Directors approved a process for
seeking and considering proposals for transactions involving the merger or sale
of the entire Company, which process was to be managed by Wachovia. In
connection with the sale process, Xxxxxxxx prepared a Confidential Information
Memorandum in April 2002 and contacted 15 companies which Wachovia and the
Company believed, based on a variety of factors, might be interested in
acquiring the Company. Wachovia delivered copies of the
20
Confidential Information Memorandum to eight of these companies, including
Parent, that expressed an interest in receiving it.
On April 17, 2002, Xxxxxx was contacted by Xxxxxxxx in connection with this
process and on April 24, 2002, Parent and the Company executed a confidentiality
agreement in order to facilitate the disclosure of confidential business
information for the purpose of evaluating the acquisition of the Company. For a
summary of certain provisions of the confidentiality agreement, see below in
this Section 11.
Of the parties contacted by Wachovia in connection with the process, three
companies, including Parent, expressed interest in submitting bids to acquire
the Company in May 2002. Prior to conducting due diligence, on May 20, 2002,
Parent submitted a non-binding, preliminary indication of interest to the
Company at a range between $4.00 and $5.00 per Share, subject to satisfactory
due diligence, Parent Board approval and other customary conditions. The three
prospective bidders were provided with access to the Company's senior management
during May and June 2002 for a detailed presentation regarding the Company's
business and operations. In late May 2002 the Company established a data room
containing certain business, operational and financial information in order to
make those materials available to any party interested in the Company. On May
28, 2002 representatives of Parent attended a presentation by the Company's
management with respect to its business and operations.
In June 2002, based on the expressed interest of several potential bidders
during the process, the Company's management requested that Xxxxxxxx explore the
possible separate sale of certain of the Company's business units. On June 27,
2002, the Company's Board of Directors authorized Xxxxxxxx to contact an
additional five potential strategic buyers regarding a sale of the entire
Company and to contact three potential buyers regarding a separate sale of
certain of the Company's business units. Wachovia contacted these potential
buyers, distributing one additional Confidential Information Memorandum
regarding the sale of the entire Company. None of the potential buyers of any of
the Company's business units expressed interest in a separate purchase of a
business unit. The Company also responded to a previously unidentified potential
buyer of a business unit in July 2002.
Parent did not ultimately submit a final bid to acquire the Company as it
was primarily engaged in exploring the possibility of another acquisition. In
August 2002, due to the lack of formal offers to acquire the entire Company, the
Company's Board of Directors decided to terminate the process of exploring a
sale for the Company.
Throughout the summer of 2002, Xxxxxx continued to explore the possibility
of another acquisition. On September 19, 2002, a representative of Bear Xxxxxxx
contacted Xx. Xxxxxx to inquire whether the Company was still interested in
exploring a negotiated transaction and expressed its view that Parent might be
interested in a possible acquisition of the Company. Xx. Xxxxxx offered to
provide certain additional financial information, including updated forecasts
with respect to certain programs, to Parent and its representatives. On
September 20, 2002, Xx. Xxxxxx and Xx. Xxxxxx discussed, by telephone, the
possibility of an acquisition of the Company by Parent. Xx. Xxxxxx noted his
expectation that Xxxxxx's valuation should be at the high end of the range
indicated in Parent's May 20, 2002 preliminary indication of interest. Xx.
Xxxxxx indicated that Parent might be willing to affirm its valuation of the
Company if it were able to confirm certain assumptions during due diligence.
Beginning on or about September 30, 2002, Parent conducted two weeks of due
diligence.
On September 24, 2002, Xx. Xxxxxx and Xx. Xxxxx X. Xxxxxxxx, Vice President
of Mergers and Acquisitions of the Company, met at Parent's facilities and
discussed Parent's valuation of the Company with Xx. Xxxxxx and other
representatives of Parent's management team. The parties discussed an
acquisition of the Company utilizing cash and stock alternatives within a range
of $4.00-$5.00 per Share. More specifically, Xx. Xxxxxx indicated that he would
be prepared to recommend an acquisition price of either $4.50 per Share in cash
or $5.00 per Share in Parent common stock subject to a so-called "collar"
arrangement with respect to the trading range of Parent's common stock.
Over the next two weeks, representatives of Parent and the Company's
management teams held several meetings to discuss the proposed acquisition and
certain operational issues.
21
On September 26, 2002, the Company's Board of Directors met with the
Company's management, Xxxxxxxx and a representative of its outside legal
counsel, Holland & Knight LLP ("Holland & Knight"), to discuss these proposals
from Parent. Wachovia reviewed with the Board the terms of the proposals and the
valuation methodologies it expected to use in evaluating the consideration to be
received under the proposals. Holland & Xxxxxx discussed with the Board its
fiduciary responsibilities in connection with the proposals. The Board engaged
in a detailed discussion regarding the proposals and authorized management and
its advisors to continue to negotiate with Parent with respect to the proposals,
and shortly thereafter, Xx. Xxxxxx indicated to Parent that a proposal involving
the use of Parent common stock would be preferable.
On October 2, 2002, Xxxxxx's counsel delivered drafts of the Merger
Agreement and Shareholder Tender and Voting Agreements to the Company's counsel.
Over the next several weeks, counsel engaged in discussions regarding the terms
of the Merger Agreement.
On October 3, 2002 and October 9, 2002, the Company's Board of Directors
met to discuss the status of the negotiations with Parent. At each meeting the
Board discussed with its legal advisors and Xxxxxxxx the terms and structure of
the proposed transaction and the importance of a price protection floor with
respect to Parent's common stock below which either the consideration received
by the Company's shareholders would be converted to cash or the Company would
have a right to terminate the Merger Agreement. After lengthy discussion at each
meeting, the Board authorized continued negotiations with Parent.
During October 2002, coincident with a decrease in the stock prices of
defense companies generally, Parent common stock began trading at a range that
was below the collar proposed to the Company. Accordingly, Xx. Xxxxxx and Xx.
Xxxxxx concluded that it would be preferable for both parties to proceed on the
basis of an all-cash deal. They concluded that each would recommend to their
respective Board of Directors the acquisition of the Company for cash at a price
of $4.75 per Share. In connection with agreeing to recommend the cash
alternative, Xx. Xxxxxx required that Xx. Xxxxxx use his best efforts to provide
for the rescission of certain severance payments which would otherwise have been
payable to Messrs. Xxxxxx, Xxxxxxx X. XxXxxxxx, President of Paravant Computer
Systems, Inc., a subsidiary of the Company, and Xxxxxxx X. Xxxxx, the Company's
Chairman.
On October 17, 2002, the Board of Directors of Parent held a meeting at
which they discussed a number of factors concerning the potential acquisition of
the Company and considered certain business, operational and financial
information concerning the Company. At the meeting, representatives of Bear
Xxxxxxx made a detailed presentation to the Board of Directors concerning the
preliminary financial analysis of the Company and certain synergies that could
result from an acquisition. Xxxx Xxxxxxx responded to inquiries from the Board
of Directors as to specific aspects of their review and the remaining analysis
that Bear Xxxxxxx was still undertaking.
On October 17, 2002, the Company's Board of Directors held a special
meeting at which representatives of Xxxxxxxx gave a detailed preliminary
presentation regarding valuation, valuation methodology, comparable
transactions, and the factors considered in connection with its rendering of a
fairness opinion. In addition, a representative of Holland & Knight, the
Company's legal counsel, reviewed with the Board in detail the main legal
principles, including the Board's fiduciary duties, applicable to the proposed
Merger Agreement, the Merger, and the Board's recommendation that the
shareholders of the Company accept the Offer. The Board authorized management to
negotiate a definitive agreement with Parent and present the same to the Board
as soon as it was available.
On October 22, 2002, the Company's Board of Directors held a special
meeting at which representatives of Wachovia and Holland & Knight reviewed in
detail the principal terms of the proposed Merger Agreement and related
agreements. Representatives of Xxxxxxxx then delivered its oral opinion to the
Board of Directors, confirmed in writing as of October 21, 2002, that, based
upon and subject to various considerations, as of October 21, 2002, the Offer
Price proposed to be paid in the Offer and the Merger is fair, from a financial
point of view, to the holders of Shares.
After further deliberation, the Company's Board of Directors unanimously
determined that each of the Offer, the Merger Agreement and the Merger are
advisable and fair to, and in the best interests of the
22
Company and its shareholders; approved the Offer, the Merger Agreement, the
transactions contemplated thereby, including the Merger and the Shareholder
Tender and Voting Agreements; and resolved to recommend that shareholders of the
Company accept the Offer and tender their Shares pursuant to the Offer, and vote
in favor of adoption and approval of the Merger Agreement and approval of the
Merger (if such approval would be required by applicable law).
On October 22, 2002, the Board of Directors of Parent held a special
meeting at which representatives of Bear Xxxxxxx delivered an oral opinion to
the Board of Directors, confirmed in writing as of October 22, 2002, that, based
upon and subject to the various considerations, assumptions and conditions
contained in its opinion, the purchase price paid in the Offer and Merger is
fair, from a financial point of view, to Parent. After further discussion and
deliberation, the Parent's Board of Directors unanimously determined that each
of the Offer, the Merger Agreement, the Shareholder Tender and Voting Agreements
and the Merger are advisable and fair to, and in the best interests of Parent;
and approved the Offer, the Merger Agreement, and the transactions contemplated
thereby, including the Merger.
Following final negotiations over the terms of the Merger Agreement, the
Merger Agreement was executed on October 23, 2002 and on October 24, 2002 the
execution of the Merger Agreement was announced in separate press releases by
the Company and Parent.
PURPOSE OF THE OFFER AND THE MERGER
The purpose of the Offer, the Merger and the Merger Agreement is to enable
Parent to acquire control of, and the entire equity interest in, the Company.
The Offer is being made pursuant to the Merger Agreement and is intended to
increase the likelihood that the Merger will be effected. The purpose of the
Merger is to acquire all outstanding Shares not purchased pursuant to the Offer.
The transaction is structured as a merger in order to ensure the acquisition by
Parent of all the outstanding Shares.
If the Merger is consummated, Parent will have acquired 100% of the common
equity interest in the Company and Parent would be entitled to all benefits
resulting from that interest. These benefits include complete management with
regard to the future conduct of the Company's business and any increase in its
value. Similarly, Parent will also bear the risk of any losses incurred in the
operation of the Company and any decrease in the value of the Company.
Shareholders of the Company who sell their Shares in the Offer will cease
to have any equity interest in the Company and to participate in its earnings
and any future growth. If the Merger is consummated, the shareholders will no
longer have an equity interest in the Company and instead will have only the
right to receive cash consideration pursuant to the Merger Agreement. See
Section 12 -- "Plans for the Company." Similarly, the shareholders of the
Company will not bear the risk of any decrease in the value of the Company after
selling their Shares in the Offer or the subsequent Merger.
The primary benefits of the Offer and the Merger to the shareholders of the
Company are that such shareholders are being afforded an opportunity to sell all
of their Shares for cash at a price which represents a premium of approximately
31.9% over the closing market price of the Common Stock on the last full trading
day prior to the public announcement that the Company, Parent and Purchaser
executed the Merger Agreement, and a more substantial premium over recent
historical trading prices.
Under the FBCA, holders of the Shares do not have the right to assert
dissenters' rights as a result of the Offer or the Merger.
MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement.
The summary is qualified in its entirety by reference to the Merger Agreement,
which is incorporated herein by reference. A copy of the Merger Agreement has
been filed by Parent and Purchaser, pursuant to Rule 14d-3 under the Exchange
Act, as exhibit (d)(1) to the Schedule TO. The Merger Agreement may be examined
and copies may be obtained at the places and in the manner set forth in Section
8 -- "Certain Information Concerning the Company."
23
Capitalized terms used herein and not otherwise defined have the meanings
ascribed to them in the Merger Agreement.
The Offer. The Merger Agreement provides that Purchaser will commence the
Offer and as promptly as reasonably practicable after the date of the Merger
Agreement and that, upon the terms and subject to the prior satisfaction or
waiver of the conditions to the Offer described in Section 13 -- "Certain
Conditions of the Offer," Purchaser will purchase all Shares validly tendered
and not withdrawn pursuant to the Offer. The Merger Agreement provides that,
without the written consent of the Company, Purchaser will not (i) decrease the
price per Share payable in the Offer, (ii) reduce the maximum number of Shares
sought to be purchased in the Offer, (iii) change the form of consideration
payable in the Offer, (iv) impose conditions to the Offer in addition to those
described in Section 13, or (v) waive or change the Minimum Condition or make
other changes in the terms and conditions of the Offer that are in any manner
adverse to the holders of the Shares. Purchaser may, without the consent of the
Company (a) extend the Offer beyond the Initial Expiration Date if, as of such
expiration, any of the Offer Conditions shall not be satisfied or, to the extent
permitted, waived, (b) extend the Offer for any period required by any rule,
regulation or interpretation of the SEC, the staff thereof or Nasdaq National
Market applicable to the Offer, (c) extend the Offer for a period not to exceed
ten (10) business days if, as of the scheduled Expiration Date, there shall not
have been tendered at least eighty percent (80%) of the outstanding Shares, and
(d) provide a Subsequent Offering Period in accordance with Rule 14d-11 under
the Exchange Act.
The Merger. The Merger Agreement provides that, following the consummation
of the Offer, subject to the terms and conditions thereof (i) Purchaser shall be
merged with and into the Company and, as a result of the Merger, the separate
corporate existence of Purchaser shall cease, (ii) the Company shall be the
successor or surviving corporation (sometimes referred to as the "Surviving
Corporation") in the Merger, and (iii) the separate corporate existence of the
Company with all its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger.
The respective obligations of each party to the Merger Agreement to effect
the Merger are subject to the satisfaction on or prior to the Closing Date of
each of the following conditions: (i) the Company shareholders' approval shall
have been obtained; provided that Parent may not assert this condition if it
fails to vote all Shares held by it or Purchaser in favor of the Merger and the
Company may not assert this condition if it fails to comply with its obligation
under the Merger Agreement to, among other things, call and hold a meeting of
its shareholders and distribute proxy materials, if such actions are required
under applicable laws to consummate the Merger, (ii) no governmental entity of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent) which (a) is in effect
and (b) has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger (which illegality or prohibition would have a
material impact on Parent and its subsidiaries, on a combined basis with the
Company and its subsidiaries, if the Merger were consummated notwithstanding
such statute, rule, regulation, executive order, decree, injunction or other
order), (iii) Parent or Purchaser shall have purchased Shares pursuant to the
Offer, except that this condition shall not be a condition to Parent's and
Purchaser's obligation to effect the Merger if Parent or Purchaser shall have
failed to purchase Shares pursuant to the Offer in breach of their obligations
under the Merger Agreement, and (iv) the applicable waiting period under the HSR
Act shall have expired or been terminated.
At the Effective Time of the Merger (i) each issued and outstanding Share
will be converted into the right to receive the Offer Price, without interest,
paid pursuant to the Offer, (ii) each Share that is owned by the Company as
treasury stock and each Share owned by Parent, Purchaser or any wholly owned
subsidiary of Parent, Purchaser or the Company will be cancelled and retired and
will cease to exist, and no consideration will be delivered in exchange
therefor, and (iii) each issued and outstanding share of common stock of
Purchaser will be converted into and become one fully paid and nonassessable
share of common stock of the Surviving Corporation.
The Company's Board of Directors. The Merger Agreement provides that
promptly upon the purchase of and payment for any Shares by Parent or Purchaser
which satisfies the Minimum Condition pursuant to the
24
Offer, Parent shall be entitled to designate such number of directors, rounded
up to the next whole number, on the Company's Board of Directors as is equal to
the product of the total number of directors on the Company's Board of Directors
(after giving effect to the directors to be designated by Parent) multiplied by
the percentage that the aggregate number of Shares so purchased and paid for
bears to the total number of Shares then outstanding. The Company shall, upon
Xxxxxx's request, promptly increase the size of the Company's Board of Directors
or use its reasonable best efforts to secure the resignations of such number of
its incumbent directors, or both, as is necessary to enable Xxxxxx's designees
to be so designated to the Company's Board of Directors. If Xxxxxx's designees
are appointed or elected to the Company's Board of Directors as set forth above,
until the Effective Time the Company and Parent shall use reasonable efforts to
have at least two (2) members of the Company's Board of Directors who are
directors on the date of the Merger Agreement and who are neither officers of
the Company nor designees of Parent. Following the election or appointment of
Xxxxxx's designees and until the Effective Time, the approval of a majority of
the directors then in office who were neither designated by Parent nor employed
by the Company shall be required to authorize any amendment of the Merger
Agreement or the Company's articles of incorporation and bylaws, any termination
of the Merger Agreement by the Company, any extension by the Company of the time
for the performance of any of the obligations or other acts of Purchaser or
Parent, any waiver of any of the Company's rights under the Merger Agreement or
any action as to which consent or agreement of the Company is required under the
Merger Agreement. The Company's obligations with respect to this section of the
Merger Agreement are subject to Section 14(f) of the Exchange Act and Rule 14f-1
General Rules and Regulations under the Exchange Act.
Shareholders' Meeting. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger (i) duly call,
give notice of, convene and hold a special meeting of its shareholders and
submit the Merger Agreement to a vote of its shareholders, (ii) prepare and file
with the SEC a preliminary proxy or information statement (the "Proxy
Statement") relating to the Merger and the Merger Agreement which shall comply
as to form with all applicable legal requirements and which shall include all
information concerning the Company, Parent and Purchaser required to be set
forth therein pursuant to the Exchange Act, (iii) file a definitive form of the
Proxy Statement, which shall reflect compliance with or resolution of the
comments and requests in accordance with the Exchange Act from the SEC as the
Company and Parent shall deem appropriate and shall distribute the definitive
Proxy Statement to the Company's shareholders in accordance with applicable
legal requirements, and (iv) take all such other reasonable action necessary or
appropriate to obtain the lawful approval of the Merger Agreement by the
Company's shareholders, including soliciting from holders of Shares proxies in
favor of the adoption and approval of the Merger and the transactions
contemplated hereby.
The Merger Agreement provides that Parent will vote, or cause to be voted,
all of the Shares then owned by it, Purchaser or any of its other subsidiaries
in favor of the approval of the Merger and the Merger Agreement.
The Merger Agreement further provides that in the event that Parent,
Purchaser and any other subsidiaries of Parent shall acquire in the aggregate at
least 80% of the outstanding Shares pursuant to the Offer or otherwise, the
parties hereto shall, subject to the terms and conditions of the Merger
Agreement, take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after such acquisition, without a
meeting of the Company's shareholders, in accordance with the FBCA.
Company Option Plans. The Merger Agreement provides that as of the
Effective Time, each employee stock option, stock equivalent right or right to
acquire Shares granted under the Company's Incentive Stock Option Plan, as
amended June 4, 1999, the Company's Stock Incentive Plan or the Non-employee
Directors' Stock Plan, as amended August 30, 2001, that is outstanding
immediately prior to the Effective Time, whether or not then vested or
exercisable, shall, effective as of the Effective Time, be cancelled in exchange
for a single lump sum cash payment, to be paid by the Surviving Corporation as
soon as practicable following the Effective Time upon its receipt of a release
or other documentation by the holder of such Company option reasonably
satisfactory to the Parent and the Surviving Corporation, equal to the product
of (i) the number of Shares subject to such Company option and (ii) the excess,
if any, of the Offer Price per Share at the Effective Time over the exercise
price per share of such Company option.
25
Warrants. All warrants to purchase shares of Company common stock
outstanding as of the Effective Time shall be cancelled in exchange for a single
lump sum cash payment to be paid by the Surviving Company as soon as practicable
following the Closing to the holder of such warrant upon receipt by Parent of a
release or other documentation by the holder of such warrant reasonably
satisfactory to Parent relinquishing any right or benefit under the terms of the
warrant or any obligation on the part of Parent, Purchaser or Company after the
Effective Time equal to the product of (i) the number of Shares subject to such
warrant and (ii) the excess, if any, of the Merger Consideration for a Share at
the Effective Time over the exercise price per Share of such warrant.
Interim Operations; Covenants. Pursuant to the Merger Agreement, the
Company has agreed that, except (i) as expressly contemplated by the Merger
Agreement or (ii) as agreed to in writing by Parent, after the date of execution
of the Merger Agreement, and prior to the earlier of (x) the termination of the
Merger Agreement in accordance with its terms and (y) the time the designees of
Parent have been elected to and shall constitute a majority of the Company's
Board of Directors the Company shall, and shall cause each of its subsidiaries
to, carry on its business in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted, and use all reasonable
efforts consistent with past practices and policies to (x) preserve intact its
present business organization, (y) keep available the services of the Company's
key employees, and (z) preserve its relationships with customers, suppliers,
licensors, licensees, and others with which it has business dealings. In
addition, without limiting the generality of the foregoing, during the period
from the date of the Merger Agreement and continuing until the earlier of the
termination of the Merger Agreement pursuant to its terms or the Effective Time,
except as set forth on the Company's budget delivered to Parent prior to the
execution of the Merger Agreement, the Company shall not do, and shall not
permit its subsidiaries to do, any of the following:
(a) enter into any new line of business material to it and its
subsidiaries taken as a whole;
(b) declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock or split, combine or reclassify any capital
stock or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for any capital stock (other than
dividends or distributions paid by wholly owned subsidiaries of the Company
to the Company or to other wholly owned subsidiaries of the Company);
(c) purchase, redeem or otherwise acquire, directly or indirectly, any
shares of its capital stock or the capital stock of its subsidiaries,
except repurchases of unvested shares at cost in connection with the
termination of the employment relationship with any employee pursuant to
stock option or purchase agreements in effect on the date hereof;
(d) issue, deliver, sell, authorize, pledge or otherwise encumber any
shares of capital stock, Voting Debt or any securities convertible into
shares of capital stock or Voting Debt, or subscriptions, rights, warrants
or options to acquire any shares of capital stock or Voting Debt or any
securities convertible into shares of capital stock or Voting Debt, or
enter into other agreements or commitments of any character obligating it
to issue any such securities or rights, other than issuances of Company
common stock upon the exercise of Company Options existing on the date
hereof in accordance with their present terms (including cashless
exercises);
(e) cause, permit or propose any amendments to its Charter Documents
or any of the Subsidiary Charter Documents of its Subsidiaries;
(f) acquire or agree to acquire by merging or consolidating with, or
by purchasing any equity interest in or a portion of the assets of, or by
any other manner, any business or any person or division thereof, or
otherwise acquire or agree to acquire any assets which are material,
individually or in the aggregate, to its business, other than acquisitions
of inventory and other assets in the ordinary course of business consistent
with past practices;
(g) enter into any joint ventures, strategic partnerships or alliances
that are material to any of its divisions or business units if such entry
would (A) present a material risk of delaying the Merger or make
26
it more difficult to obtain any Necessary Consent required under the terms
of the Merger Agreement or (B) require a consent of the other party thereto
to consummate the Merger;
(h) sell, pledge, dispose of, transfer, lease, license, or encumber,
or authorize the sale, pledge, disposition, transfer, lease, license, or
encumbrance of, any material property or assets of the Company or any of
its Subsidiaries, except (A) sales, pledges, dispositions, transfers,
leases, licenses or encumbrances pursuant to existing Contracts which have
been made available to Parent prior to the date hereof, or (B) sales or
dispositions of inventory and other tangible current assets in the ordinary
course of business consistent with past practices;
(i) make any loans, advances or capital contributions to, or
investments in, any other person, other than loans or investments by the
Company or one of its subsidiaries to or in the Company or one of its
wholly owned subsidiaries;
(j) except as required by GAAP or the SEC as concurred in by its
independent auditors, make any material change in its methods or principles
of accounting;
(k) make or change any material Tax election;
(l) settle any material claim (including any Tax claim), action or
proceeding involving money damages, except (A) in the ordinary course of
business consistent with past practice or (B) to the extent subject to
reserves existing as of the date hereof in accordance with GAAP;
(m) except as required by Legal Requirements or Contracts currently
binding on the Company or its subsidiaries, (1) increase in any manner the
amount of compensation or fringe benefits of, pay any bonus to or xxxxx
xxxxxxxxx or termination pay to, any executive officer or director of the
Company or any of the Company's Key Employees or materially increase the
foregoing with respect to employees of the Company and its subsidiaries
generally, (2) make any increase in, or commitment to increase, any Company
benefit plan (including any severance plan), adopt or amend, or make any
commitment to adopt or amend, any Company benefit plan or make any
contribution, other than regularly scheduled contributions, to any Company
benefit plan, (3) waive any stock repurchase rights, accelerate, amend or
change the period of exercisability of Company Options or restricted stock,
or reprice any Company Options or authorize cash payments in exchange for
any Company Options, (4) enter into any employment, severance, termination
or indemnification agreement with any Company employee, (5) make any
material oral or written representation or commitment with respect to any
material aspect of any Company benefit plan that is not materially in
accordance with the existing written terms and provision of such Company
benefit plan, (6) grant any stock appreciation right, phantom stock award,
stock-related award or performance award (whether payable in cash, shares
or otherwise) to any person (including any Company employee), or (7) enter
into any agreement with any Company employee the benefits of which are (in
whole or in part) contingent or the terms of which are materially altered
upon the occurrence of a transaction involving the Company of the nature
contemplated hereby;
(n) subject Parent or the Surviving Corporation or any of their
respective subsidiaries to any non-compete or other material restriction on
any of their respective businesses following the Closing;
(o) enter into any agreement or commitment the effect of which would
be to grant to a third party following the Merger any actual or potential
right of license to any material Intellectual Property owned by Parent or
any of its subsidiaries;
(p) enter into, modify or amend in a manner adverse in any material
respect to such party, or terminate any Company Material Contract or waive,
release or assign any material rights or claims thereunder, in each case,
in a manner adverse in any material respect to such party, other than any
modification, amendment or termination of any such Company material
contract in the ordinary course of business consistent with past practice;
(q) (i) incur any Indebtedness, except for Indebtedness for borrowed
money under the Company's existing credit facilities or replacement credit
facilities in an aggregate amount not materially larger than
27
the Company's existing credit facilities, or (ii) make or authorize any
capital expenditure materially in excess of the Company's budget as
disclosed to Parent prior to the date of the Merger Agreement;
(r) write up, write down or write off the book value of any assets
other than in the ordinary course of business or otherwise not in excess of
two million dollars ($2,000,000);
(s) take any action to render inapplicable, or to exempt any third
party from any state takeover law or state law that purports to limit or
restrict business combinations or the ability to acquire or vote shares,
except to the extent that the Company would be permitted to change the
recommendation of the Company's Board of Directors that the shareholders of
the Company accept the Offer, tender their Shares to Purchaser thereunder
and, if required by Legal Requirement, approve and adopt the Merger
Agreement and the Merger; or
(t) agree in writing or otherwise to take any of the actions described
above.
No Solicitation. Pursuant to the Merger Agreement, the Company has agreed
to immediately terminate, and cause each of its subsidiaries and its and their
representatives to immediately terminate, all activities, discussions or
negotiations, if any, with any third party with respect to, or any that could
reasonably be expected to lead to or contemplate the possibility of, an
Acquisition Proposal. For purposes of the Merger Agreement an "Acquisition
Proposal", with respect to the Company, shall mean any offer or proposal,
relating to any transaction or series of related transactions involving: (A) any
purchase from the Company or acquisition by any person or "group" (as defined
under Section 13(d)(3) of the Exchange Act) of more than a ten percent (10%)
interest in the total outstanding voting securities of the Company or any of its
subsidiaries or any tender or exchange offer that if consummated would result in
any person or group beneficially owning ten percent (10%) or more of the total
outstanding voting securities of the Company or any of its subsidiaries or any
merger, consolidation, business combination or similar transaction involving the
Company or any of its subsidiaries, (B) any sale, lease (other than in the
ordinary course of business), exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of more than ten
percent (10%) of the assets of the Company (including its subsidiaries taken as
a whole), or (C) any liquidation or dissolution of the Company. Except as
provided below, from the date of the Merger Agreement until the earlier of
termination of the Merger Agreement or the Effective Time, the Company is not
permitted, and will not authorize or permit its officers, directors, employees,
investment bankers, attorneys, accountants or other agents, to directly or
indirectly: (i) solicit, initiate, encourage, knowingly facilitate or induce any
inquiry with respect to, or the making, submission or announcement of, any
Acquisition Proposal, (ii) participate in any discussions or negotiations
regarding, or furnish to any person any nonpublic information with respect to,
or take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal, (iii) engage in discussions with any person with respect
to any Acquisition Proposal, except as to the existence of the restrictions upon
the Company's activities in the Merger Agreement, (iv) approve, endorse or
recommend any Acquisition Proposal, or (v) enter into any letter of intent or
similar document or any contract, agreement or commitment contemplating or
otherwise relating to any Acquisition Proposal or any transaction contemplated
thereby.
Notwithstanding the foregoing, prior to the acceptance of a majority of the
then outstanding Shares pursuant to the Offer, the Company may furnish
information concerning its business, properties or assets to any person pursuant
to a confidentiality agreement with terms no less favorable to the Company than
those contained in the Confidentiality Agreement, dated as of April 24, 2002
entered into between Parent and the Company (the "Confidentiality Agreement"),
and may negotiate and participate in discussions and negotiations with such
person concerning an Acquisition Proposal if (x) the Company receives an
unsolicited, bona fide written Acquisition Proposal from a third party that its
Board of Directors has in good faith concluded (following consultation with its
outside legal counsel and its financial advisor), is, or is reasonably likely to
result in, a Superior Offer (as defined below), (y) the Company's Board of
Directors concludes in good faith, following consultation with its outside legal
counsel, that there is a reasonable possibility that the failure to take such
actions would result in a breach of its fiduciary obligations under applicable
legal requirements, and (z) the Company has given a written notice to Parent
with respect to the Superior Offer as required pursuant to the Merger Agreement.
The Merger Agreement further provides that for a period of not less than three
(3) business days after Xxxxxx's receipt from the Company
28
of each such notice with respect to a Superior Offer, the Company shall, if
requested by Xxxxxx, negotiate in good faith with Parent to revise the Merger
Agreement so that the Acquisition Proposal that constituted a Superior Offer no
longer constitutes a Superior Offer.
For purposes of the Merger Agreement, a "Superior Offer" shall mean an
unsolicited, bona fide written offer made by a third party to acquire, directly
or indirectly, pursuant to a tender or exchange offer, merger, consolidation or
other business combination, all or substantially all of the assets of the
Company or a majority of the total outstanding voting securities of the Company
and as a result of which the shareholders of the Company immediately preceding
such transaction would hold less than fifty percent (50%) of the equity
interests in the surviving or resulting entity of such transaction or any direct
or indirect parent or subsidiary thereof, on terms that the Board of Directors
of the Company has in good faith concluded (following consultation with its
outside legal counsel and its financial advisor), taking into account, among
other things, all legal, financial, regulatory and other aspects of the offer
and the person making the offer, to be more favorable, from a financial point of
view, to the Company's shareholders (in their capacities as shareholders) than
the terms of the Offer and the Merger and is reasonably capable of being
consummated
Neither the Company's Board of Directors nor any committee thereof shall
withdraw, modify or change, or propose publicly to withdraw, modify or change,
in a manner adverse to Parent, the Company's Board of Director's recommendation
that the shareholders of the Company accept the Offer, tender their Shares to
Purchaser thereunder and, if required by Legal Requirements, approve and adopt
the Merger Agreement and the Merger. Notwithstanding the foregoing, the
Company's Board of Directors may (A) withhold or withdraw its recommendation
that the shareholders of the Company accept the Offer, tender their Shares to
Purchaser thereunder and, if required by Legal Requirements, approve and adopt
the Merger Agreement and the Merger in response to the receipt of a Superior
Offer, and (B) recommend that its shareholders accept a tender or exchange offer
in the case of a Superior Offer that is a tender or exchange offer made directly
to its shareholders, if in the case of (A) or (B) all of the following
conditions are met:
(i) Purchaser shall not yet have accepted a majority of the then
outstanding Shares in the Offer;
(ii) the Company shall have (A) provided to Parent written notice
which shall state expressly (1) that it has received a Superior Offer, (2)
the material terms and conditions of the Superior Offer and the identity of
the Person or group making the Superior Offer, and (3) that it intends to
change the recommendation of the Company's Board of Directors that the
shareholders of the Company accept the Offer, tender their Shares to
Purchaser thereunder and, if required by Legal Requirement, approve and
adopt the Merger Agreement and the Merger; and the manner in which it
intends to do so, and (B) provided to Parent a copy of all written
materials delivered to the Person or group making the Superior Offer;
(iii) the Company's Board of Directors has concluded in good faith,
after consultation with its outside legal counsel, that, in light of such
Superior Offer, there is a reasonable possibility that failure to change
the recommendation of the Company's Board of Directors that the
shareholders of the Company accept the Offer, tender their Shares to
Purchaser thereunder and, if required by Legal Requirement, approve and
adopt the Merger Agreement and the Merger would result in a breach of
fiduciary obligations of the Company's Board of Directors to its
shareholders under applicable Legal Requirements; and
(iv) the Company shall not have breached in any material respect
certain provisions as set forth in the Merger Agreement with respect to
Acquisition Proposals.
Indemnification and Insurance. The Merger Agreement provides that for a
period of six (6) years after the Effective Time, Parent shall indemnify and
hold harmless the Company's directors and officers immediately prior to the
Effective Time to the fullest extent permitted under applicable Legal
Requirements, with respect to all actions or omissions by them prior to the
Effective Time in their capacities as officers or directors of the Company or
any of its subsidiaries (including with respect to all acts or omissions by them
in their capacities as officers or directors of the Company or any of its
subsidiaries in connection with the adoption and approval of the Merger
Agreement and the transactions contemplated thereby).
29
The Merger Agreement also provides that from and after the Effective Time,
Parent will, and will cause the Surviving Corporation to, fulfill and honor in
all respects the obligations of the Company pursuant to any indemnification
agreements between the Company and its directors and officers immediately prior
to the Effective Time, subject to applicable Legal Requirements. The articles of
incorporation and bylaws of the Surviving Corporation are required to contain
provisions with respect to exculpation and indemnification that are at least as
favorable to such indemnified parties as those contained in the articles of
incorporation and bylaws of the Company as in effect on the date of the Merger
Agreement, which provisions will not be amended, repealed or otherwise modified
for a period of six (6) years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who, immediately prior to
the Effective Time, were directors, officers, employees or agents of the
Company, unless such modification is required by applicable Legal Requirements.
Parent or the Surviving Corporation will maintain in effect for the benefit
of the Company's current directors and officers liability insurance covering
those persons who are covered by the Company's directors' and officers'
liability insurance policy as of the date of the Merger Agreement on terms no
less favorable to those applicable to the current directors and officers of the
Company for a period of six (6) years; provided, however, that in no event will
the Surviving Corporation be required to expend in excess of two hundred percent
(200%) of the annual premium paid by the Company as of the date of the Merger
Agreement for such coverage (and to the extent the annual premium would exceed
two hundred percent (200%) of the annual premium currently paid by the Company
for such coverage, the Surviving Corporation shall use all reasonable efforts to
cause to be maintained the maximum amount of coverage as is available for such
two hundred percent (200%) of such annual premium).
Representations and Warranties. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Parent and
Purchaser with respect to, among other things, its organization, subsidiaries,
capital structure, authority to enter into the Merger Agreement and consummate
the transactions contemplated by the Merger Agreement (the "Transactions"), the
vote of its shareholders required to approve the Transactions, consents and
approvals necessary to consummate the Transactions, public filings, financial
statements, conduct of the Company's business, taxes, intellectual property,
compliance with applicable laws, permits, litigation involving the Company,
brokers that may be entitled to any fees from the Company, potential conflicts
of interest among the Company, the Company subsidiaries, and any of their
affiliates, employee benefit plans, environmental matters, the Company's
contracts, the information to be made in the Company's public disclosure with
respect to the Transactions, approvals by its Board of Directors, the opinion of
the Company's financial advisor, and actions taken with respect to takeover
statutes.
Pursuant to the Merger Agreement, each of Parent and Purchaser has made
customary representations and warranties to the Company with respect to, among
other things, its organization, authority to enter into the Merger Agreement and
consummate the Transactions, consents and approvals necessary to consummate the
Transactions, brokers that may be entitled to any fees from Parent or Purchaser,
the information in Parent's and Purchaser's public disclosure to be made with
respect to the Transactions, and funding for the Offer.
Company and Parent representations are generally qualified as to "Material
Adverse Effect." For purposes of the Merger Agreement, the term "Material
Adverse Effect" means any fact, change, event, violation, inaccuracy,
circumstance or effect (any such item, an "Effect"), individually or when taken
together with all other Effects that have occurred prior to the date of
determination of the occurrence of the Material Adverse Effect, that is or could
be reasonably expected to (i) be materially adverse to the business, assets
(including intangible assets), capitalization, financial condition or results of
operations of such entity taken as a whole with its subsidiaries or (ii)
materially impede the consummation of the transactions contemplated by the
Merger Agreement, including the Offer, in accordance with the terms thereof and
applicable Legal Requirements excluding with respect to clauses (i) and (ii)
Effects (A) generally affecting the industry in which such entity and its
subsidiaries operate or arising from changes in general business or economics
conditions, or (B) affecting the securities markets generally.
30
Termination Fees. The Merger Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval of the shareholders of
the Company:
a. by mutual written consent of Parent and the Company; or
b. by either the Company or Parent, if as a result of any of the
Offer Conditions being incapable of being satisfied the Offer shall have
expired without any Shares being purchased pursuant thereto; provided,
however, that the right to terminate the Merger Agreement shall not be
available to any party whose failure to fulfill any obligation under the
Merger Agreement or the Offer has been the cause of, or resulted in, the
failure of the Shares to have been purchased pursuant to the Offer; or
c. by either the Company or Parent, if the Offer has not been
consummated on or before April 30, 2003; provided, however, that the right
to terminate the Merger Agreement shall not be available to any party whose
failure to fulfill any obligation under the Merger Agreement or the Offer
has been the cause of, or resulted in, the failure of the Offer to have
been consummated by such date; or
d. by either the Company or Parent, if a Governmental Entity shall
have issued an order, decree or ruling or taken any other action (including
the failure to have taken an action), in any case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Offer or
the Merger, which order, decree, ruling or other action is final and
nonappealable; or
e. by Parent, if a Company Triggering Event shall have occurred. For
the purposes of the Merger Agreement, a "Company Triggering Event" shall be
deemed to have occurred if: (i) the Company's Board of Directors shall have
for any reason changed its recommendation that the shareholders of the
Company accept the Offer, tender their Shares to Purchaser thereunder and,
if required by Legal Requirements, approve and adopt the Merger Agreement
and the Merger, (ii) the Company shall have failed to include in the Proxy
Statement or the Schedule 14D-9 the Company's Board of Directors'
recommendation that the shareholders of the Company accept the Offer,
tender their Shares to Purchaser thereunder and, if required by Legal
Requirement, approve and adopt the Merger Agreement and the Merger, (iii)
the Company's Board of Directors fails to reaffirm (publicly, if so
requested) its recommendation within three (3) calendar days after Parent
requests in writing that such recommendation be reaffirmed, (iv) the
Company's Board of Directors or any committee thereof shall have approved
or recommended any Acquisition Proposal, (v) a tender or exchange offer
relating to the Company's securities shall have been commenced by a Person
unaffiliated with Parent, and (A) the Company shall not have sent to its
securityholders pursuant to Rule 14e-2 promulgated under the Exchange Act,
within ten (10) business days after such tender or exchange offer is first
published, sent or given, a statement disclosing that the Company's Board
of Directors recommends rejection of such tender or exchange offer or (B)
such tender or exchange offer shall result in such Person beneficially
owning fifty percent (50%) or greater of the Company's outstanding equity
securities, or (vi) any person unaffiliated with Parent shall beneficially
own twenty-five percent (25%) or more of the Company's outstanding equity
securities; or
f. by the Company, (i) if Purchaser or Parent shall have materially
breached any of their respective covenants, obligations or other agreements
under the Merger Agreement, or (ii) if the representations and warranties
of Parent and Purchaser set forth in the Merger Agreement shall not be true
and correct (without giving effect to any limitation as to "materiality" or
"Material Adverse Effect" set forth therein) at and as of the date of the
Merger Agreement and as of the expiration of the date of termination of the
Merger Agreement (except to the extent expressly made as of an earlier
date, in which case as of such date), except where the failure to be so
true and correct, individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect on Parent; provided, further
that the breach of the covenant, obligation, agreement, representation or
warranty is incapable of being or has not been cured by Parent or Purchaser
prior to or on the date which is thirty (30) calendar days immediately
following written notice by the Company to Parent of such breach or failure
to perform; or
g. by Parent, (i) if the Company shall have materially breached any
of its respective covenants, obligations or other agreements under the
Merger Agreement, or (ii) if the representations and
31
warranties of the Company set forth in Merger Agreement shall not be true
and correct (without giving effect to any limitation as to "materiality" or
"Material Adverse Effect" set forth therein) at and as of the date of
Merger Agreement and as of the expiration of the date of termination of
Merger Agreement (except to the extent expressly made as of an earlier
date, in which case as of such date), except where the failure to be so
true and correct, individually or in the aggregate would not reasonably be
expected to have, a Material Adverse Effect on the Company; provided,
further that the breach of the covenant, obligation, agreement,
representation or warranty is incapable of being or has not been cured by
the Company prior to or on the date which is thirty (30) calendar days
immediately following written notice by Parent to the Company of such
breach or failure to perform.
If Parent shall have terminated the Merger Agreement pursuant to clause b.
above or clause c. above, the Company shall pay Parent a fee equal to four
million dollars ($4,000,000) in immediately available funds (the "Company
Termination Fee"); provided, that (A) such payment shall be made only if
following the date of the Merger Agreement and prior to the termination of the
Merger Agreement, there has been public disclosure of an Acquisition Proposal
with respect to the Company and (1) within nine (9) months following the
termination of the Merger Agreement an Acquisition is consummated or (2) within
nine (9) months following the termination of the Merger Agreement the Company
enters into an agreement providing for an Acquisition of the Company and an
Acquisition is consummated within eighteen (18) months of the termination of the
Merger Agreement and (B) such payment shall be made promptly, but in no event
later than two (2) business days after the consummation of such Acquisition.
For purposes of the Merger Agreement, "Acquisition" means any of the
following transactions (other than the transactions contemplated by the Merger
Agreement): (i) a merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company pursuant
to which the shareholders of the Company immediately preceding such transaction
hold less than sixty percent (60%) of the aggregate equity interests in the
surviving or resulting entity of such transaction or any direct or indirect
parent thereof, (ii) a sale or other disposition by the Company of assets
representing in excess of forty percent (40%) of the aggregate fair market value
of the Company's business immediately prior to such sale, or (iii) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or issuance by the Company or such person or group), directly or
indirectly, of beneficial ownership or a right to acquire beneficial ownership
of shares representing in excess of forty percent (40%) of the voting power of
then outstanding shares of capital stock of the Company.
If Parent shall have terminated the Merger Agreement pursuant to clause e.
above, the Company shall promptly, but in no event later than two (2) business
days after the date of such termination, pay Parent the Company Termination Fee.
If (A) the Merger Agreement is terminated by Parent or the Company, as
applicable, pursuant to clause b. above or clause c. above and following the
date hereof and prior to the termination of the Merger Agreement there has been
public disclosure of an Acquisition Proposal with respect to the Company, or (B)
the Merger Agreement is terminated by Parent pursuant to clause e. above, then
the Company shall pay Parent promptly and from time to time (as applicable), an
amount equal to Parent's documented or documentable out-of-pocket expenses
(including attorneys', accountants' and financial advisors' fees and any fees
incurred by Parent in connection with the filing of the Schedule TO or the proxy
statement with the SEC and the filing of the Notification and Report Forms with
the FTC and DOJ under the HSR Act and any premerger notification and reports
forms under similar applicable legal requirements of other jurisdictions, in
each case pursuant to the Merger Agreement), but which amount shall in no event
exceed one million dollars ($1,000,000).
SHAREHOLDER TENDER AND VOTING AGREEMENTS
The following is a summary of certain provisions of the Shareholder Tender
and Voting Agreements dated as of October 23, 2002 by and among Parent,
Purchaser and each of Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxx and UES Inc., Xxxxxxx X.
Xxxxxx, Xxxxxxx X. XxXxxxxx, Xxxxx X. Xxxxxxxx and X. Xxxxxx Xxxxxxxx (each
referred to as a "Tendering Shareholder" and collectively as the "Tendering
Shareholders"). The Tendering
32
Shareholders include directors and executive officers of the Company or its
subsidiaries (or relatives of, or entities controlled by, such persons) and have
voting and dispositive power with respect to an aggregate of 3,780,835 Shares
(the "Subject Shares") representing approximately 22% of the Shares outstanding
on the date of the Merger Agreement. The summary is qualified in its entirety by
reference to the Shareholder Tender and Voting Agreements, which are
incorporated herein by reference and copies of which have been filed with the
SEC as exhibits to the Schedule TO. Capitalized terms used herein and not
otherwise defined have the meanings ascribed to them in the Shareholder Tender
and Voting Agreements.
As a condition to the willingness of Parent to enter into the Merger
Agreement, and as inducement and in consideration therefor, each Tendering
Shareholder has entered into a Shareholder Tender and Voting Agreement. The
Tendering Shareholders include certain directors and officers of the Company.
Each Tendering Shareholder has also agreed that unless the Shareholder
Tender and Voting Agreement is terminated as stated below, (i) each Tendering
Shareholder shall tender the Subject Shares to Purchaser in the Offer no later
than the tenth Business Day following the commencement of the Offer, and (ii)
each Tendering Shareholder shall not withdraw any Subject Shares tendered unless
the Offer is terminated or has expired without Parent purchasing all Shares
tendered in the Offer. Each Tendering Shareholder has agreed that, prior to the
termination of the Shareholder Tender and Voting Agreement pursuant to its
terms, they will not (i) transfer, assign, sell, tender, gift-over, pledge,
encumber or otherwise dispose of ("Transfer"), any or all of the Subject Shares
or any right or interest therein, (ii) enter into any contract, option or other
agreement, arrangement or understanding with respect to any Transfer, (iii)
grant any proxy, power-of-attorney or other authorization or consent with
respect to any of the Subject Shares, (iv) deposit any of the Subject Shares
into a voting trust, or enter into a voting agreement or arrangement with
respect to any of the Subject Shares or (v) take any other action that would in
any way restrict, limit or interfere with the performance of such Tendering
Shareholder's obligations under the Shareholder Tender and Voting Agreements.
(a) Each Tendering Shareholder has agreed that it shall not, nor shall it
permit any of its affiliates to, nor shall such Tendering Shareholder act in
concert with or permit any of its affiliates to act in concert with any person
to make, or in any manner participate in, directly or indirectly, a
"solicitation" of "proxies" (as such terms are used in the rules of the SEC) or
powers of attorney or similar rights to vote, or seek to advise or influence any
person with respect to the voting of, any Shares in connection with any vote or
other action on any matter, other than to recommend that shareholders of the
Company accept the Offer, tender their Shares in the Offer, vote in favor of the
Merger and the Merger Agreement and otherwise as expressly provided by the
Shareholder Tender and Voting Agreements. Each Tendering Shareholder has agreed
that it shall not, nor shall it permit any of its affiliates to, nor shall such
Tendering Shareholder act in concert with or permit any of its affiliates to act
in concert with any person to, deposit any Shares in a voting trust or subject
any Shares to any arrangement or agreement with any person with respect to the
voting of such Shares. Each Shareholder has also agreed that it shall not, and
shall direct its representatives not to, directly or indirectly, enter into,
solicit, initiate, conduct or continue any discussions or negotiations with, or
knowingly encourage or respond to any inquiries or proposals by, or provide any
information to, any person, other than Parent, relating to any Acquisition
Proposal.
Each Tendering Shareholder has granted Parent an irrevocable proxy with
respect to the voting of such Subject Shares in favor of the Merger and other
transactions contemplated by the Merger Agreement (and any actions required in
furtherance thereof).
Each Tendering Shareholder has made certain representations and warranties
in the Shareholder Tender and Voting Agreements, including with respect to (i)
being the lawful owner of the Subject Shares, (ii) the authority to enter into
and perform the obligations under the Shareholder Tender and Voting Agreements
and the absence of required consents (except for filings under the HSR Act and
the Exchange Act) and statutory or contractual conflicts or violations, and
(iii) the absence of liens or any other encumbrances with regard to the Subject
Shares.
The Shareholder Tender and Voting Agreements, and all rights and
obligations of the parties thereto, shall terminate upon the earliest to occur
of (i) the mutual consent of Parent and each individual Tendering
33
Shareholder, (ii) the Effective Time, and (iii) the date of termination of the
Merger Agreement in accordance with its terms. Termination of the Shareholder
Tender and Voting Agreements shall not prevent any party thereunder from seeking
any remedies (at law or in equity) against any other party hereto for such
party's breach of any of the terms of the Shareholder Tender and Voting
Agreements.
Each Tendering Shareholder has entered into a Shareholder Tender and Voting
Agreement solely in his, her or its capacity as a record and beneficial owner of
the Subject Shares, and, if applicable, nothing therein shall limit or affect
any actions taken in his, her or its capacity as an officer or director of the
Company.
CONFIDENTIALITY AGREEMENT
The following is a summary of certain provisions of the Confidentiality
Agreement, dated as of April 24, 2002 (the "Confidentiality Agreement"), between
the Company and Parent. The following summary of the Confidentiality Agreement
does not purport to be complete and is qualified by reference to the text of the
Confidentiality Agreement, a copy of which is filed as an exhibit hereto and
incorporated herein by reference.
Under the Confidentiality Agreement, the Company agreed to furnish certain
confidential information (the "Confidential Evaluation Material") concerning its
business, operational and financial condition to Parent and its representatives
in connection with Parent's evaluation of a possible transaction with the
Company. Parent agreed that it would use the Confidential Evaluation Material
solely for the purpose of evaluating a possible transaction between itself and
the Company, and that Parent, its representatives, and anyone to whom Parent
disclosed the Confidential Evaluation Material as permitted under the
Confidentiality Agreement would keep such information confidential, unless such
information was publicly available, already known to Parent or becomes available
to Parent on a non-confidential basis from another source. Parent agrees to be
held responsible for any breach of the Confidentiality Agreement by its
officers, directors, advisors, employees, and/or affiliates or any of its
representatives. If Parent becomes legally compelled by deposition, subpoena, or
other governmental action to disclose any of the confidential information
covered by the Confidentiality Agreement, Parent will give Company prompt prior
written notice and will cooperate with the Company if it seeks to obtain a
protective order concerning such confidential information.
The Company and Parent agreed that for a period of two (2) years from the
date of the Confidentiality Agreement, neither Parent nor any of its affiliates
would, without obtaining the Company's prior written consent, solicit for
employment any officer or management employee of the Company.
Until the expiration of two (2) years from the date of the Confidentiality
Agreement, Parent agreed not to, without the prior written approval of the
Company's Board of Directors, (i) acquire or agree to acquire or make any
proposal to acquire directly or indirectly any of the Company's securities or
property; (ii) make, or in any way participate in any "solicitation" of
"proxies" (as such terms are used in the proxy rules of the SEC) to vote or to
influence any other person's voting of the Company's securities; (iii) form,
join or participate in a "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) with regard to the Company's voting securities; or (iv) otherwise
act alone or in concert with others, directly or indirectly, to control, advise,
or influence the management, Board of Directors, or policies of the Company.
Parent agreed to take all precautions with regard to protecting any
Confidential Evaluation Material. Upon the Company's request, Xxxxxx agreed to
return all written information provided by the Company and to destroy all
materials prepared by Parent based on the Confidential Evaluation Material.
12. PLANS FOR THE COMPANY
Plans for the Company. Parent intends to conduct a detailed review of the
Company and its assets, corporate structure, capitalization, operations,
properties, policies, management and personnel and will consider, subject to the
terms of the Merger Agreement, what, if any, changes would be desirable in light
of the circumstances which exist upon completion of the Offer. Such changes
could include changes in the Company's business, corporate structure, articles
of incorporation, by-laws, capitalization, Board of Directors, management or
dividend policy, although, except as disclosed in this Offer to Purchase, Parent
has no current plans with respect to any of such matters. The Merger Agreement
provides that promptly upon the purchase of
34
and payment for any Shares by Parent or Purchaser which satisfies the Minimum
Condition pursuant to the Offer, Parent shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Company's Board
of Directors as is equal to the product of the total number of directors on the
Company's Board of Directors (after giving effect to the directors to be
designated by Parent) multiplied by the percentage that the aggregate number of
Shares so purchased and paid for bears to the total number of Shares then
outstanding. The Company shall, upon Xxxxxx's request, promptly increase the
size of the Company's Board of Directors or use its best efforts to secure the
resignations of such number of its incumbent directors, or both, as is necessary
to enable Parent's designees to be so designated to the Company's Board of
Directors. If Xxxxxx's designees are appointed or elected to the Company's Board
of Directors as set forth above, until the Effective Time the Company and Parent
shall use reasonable efforts to have at least two (2) members of the Company's
Board of Directors who were directors on the date of the execution of the Merger
Agreement and who are neither officers of the Company nor designees of Parent.
Following the election or appointment of Xxxxxx's designees and until the
Effective Time, the approval of a majority of the directors then in office who
were neither designated by Parent nor employed by the Company shall be required
to authorize any amendment of the Merger Agreement or the Company's articles of
incorporation and bylaws, any termination of the Merger Agreement by the
Company, any extension by the Company of the time for the performance of any of
the obligations or other acts of Purchaser or Parent, any waiver of any of the
Company's rights under the Merger Agreement or any action as to which consent or
agreement of the Company is required under the Merger Agreement. See Section
11 -- "Background of the Offer; Purpose of the Offer and the Merger; the Merger
Agreement and Certain Other Agreements." The Merger Agreement provides that the
directors of Purchaser and the officers of the Company at the Effective Time of
the Merger will, from and after the Effective Time, be the initial directors and
officers, respectively, of the Surviving Corporation.
Except as disclosed in this Offer to Purchase, neither Parent nor Purchaser
has any present plans or proposals that would result in an extraordinary
corporate transaction, such as a merger, reorganization, liquidation, relocation
of operations, or sale or transfer of assets, involving the Company or any of
its subsidiaries, or any material changes in the Company's corporate structure,
business or composition of its management or personnel.
13. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its sole discretion (subject to the provisions of the Merger Agreement),
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-l(c) under the
Exchange Act (relating to 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 validly tendered Shares unless the Minimum Condition
shall have been satisfied. Furthermore, notwithstanding any other provisions of
the Offer, Purchaser shall not be required to accept for payment or pay for any
validly tendered Shares if, at the scheduled Expiration Date (i) any applicable
waiting periods under the HSR Act and any comparable provisions under any
applicable pre-merger notification laws or regulations of foreign jurisdictions
have not expired or terminated prior to termination of the Offer, or (ii)
immediately prior to the expiration of the Offer, any of the following
conditions shall exist (capitalized terms used herein and not otherwise defined
have the meanings ascribed to them in the Merger Agreement):
(a) there shall have been instituted or be pending, by any
Governmental Entity or any other Person or threatened by a Governmental
Entity, any suit, action or proceeding against Parent, Purchaser or the
Company challenging or seeking (i) to make illegal, restrain or prohibit or
make materially more costly the making of the Offer, the acceptance for
payment of, or payment for, any Shares by Parent or Purchaser, or the
consummation of the Merger, (ii) to prohibit or limit materially the
ownership or operation by the Company, Parent, Purchaser or any of their
affiliates of all or any material portion of the business or assets of the
Company, Parent or any of their affiliates, or compel the Company, Parent
or any of their affiliates to effect an Action of Divestiture, (iii) to
impose or confirm limitations on the ability of Parent, Purchaser or any
other affiliate of Parent to exercise full rights of ownership of any
Shares,
35
including, without limitation, the right to vote any Shares acquired by
Purchaser pursuant to the Offer or otherwise on all matters properly
presented to the Company's shareholders, including, without limitation, the
approval and adoption of the Merger Agreement and the transactions
contemplated by the Merger Agreement, (iv) to require divestiture by Parent
or Purchaser of any Shares; or (v) which otherwise seeks damages or relief
which could reasonably be expected to have a Material Adverse Effect on
Parent or the Company;
(b) there shall have been entered, enforced, enacted or deemed
applicable to (A) Parent, Purchaser or the Company or (B) the Merger
Agreement, the Offer or the Merger, in any case, any statute, rule,
regulation, legislation, judgment, order, injunction or decree by any
Governmental Entity or any other Person that is reasonably likely to,
directly or indirectly, result in any of the consequences referred to in
clauses (i) through (v) of paragraph (a) above;
(c) a Company Triggering Event shall have occurred;
(d) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and correct (without giving effect to
any limitation as to "materiality" or "Material Adverse Effect" set forth
therein) at and as of the date of the Merger Agreement and the expiration
of the Offer (except to the extent that such representations and warranties
speak as of a specific date, in which case as of such specific date),
except where the failure to be so true and correct, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Company;
(e) the Company shall have materially breached any covenant,
obligation or other agreement to be performed or complied by it under the
Merger Agreement;
(f) the Merger Agreement shall have been terminated in accordance with
its terms;
(g) any of the following shall have occurred: (1) any general
suspension of trading in, or limitation on prices for, securities on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq for a
period in excess of 24 hours (excluding suspensions or limitations
resulting solely from physical damage or interference with such exchanges
not related to market conditions), (2) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (3) a commencement or material worsening
of a war, armed hostilities or other national or international calamity
directly or indirectly involving the United States or any terrorist
activities which materially and adversely affects Parent, Purchaser or the
Company or the ability of financial institutions in the United States to
extend credit or syndicate loans, (4) any limitation (whether or not
mandatory) by any Governmental Entity on the extension of credit generally
by banks or other financial institutions, or (5) a change in general
financial, bank or capital market conditions which materially and adversely
affects the ability of financial institutions in the United States to
extend credit or syndicate loans;
(h) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment
for Shares thereunder; or
(i) any party to the Shareholder Tender and Voting Agreements other
than Purchaser and Parent shall have breached or failed to perform any of
its covenants or agreements under such agreements or breached any of its
representations and warranties in any of such agreements, or any of such
agreements shall not be valid, binding and enforceable, except for such
breaches or failures to be valid, binding and enforceable that do not
materially and adversely affect the benefits expected to be received by
Parent and Purchaser under the Merger Agreement or the Shareholder Tender
and Voting Agreements.
The foregoing conditions are for the benefit of Purchaser and Parent and
may be asserted by Purchaser or Parent regardless of the circumstances giving
rise to any such condition or may be waived by Purchaser or Parent in whole or
in part at any time and from time to time in their sole and absolute discretion.
The failure by Parent or Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right; the waiver of
any such right with respect to particular facts and other circumstances
36
shall not be deemed a waiver with respect to any other facts and circumstances;
and each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
14. CERTAIN LEGAL MATTERS
Except as described in this Section 14, based on information provided by
the Company, none of the Company, Purchaser or Parent is aware of any license or
regulatory permit that appears to be material to the business of the Company
that might be adversely affected by Purchaser's acquisition of Shares as
contemplated herein or of any approval or other action by a domestic or foreign
governmental, administrative or regulatory agency or authority that would be
required for the acquisition and ownership of the Shares by Purchaser as
contemplated herein. Should any such approval or other action be required,
Purchaser and Parent presently contemplate that such approval or other action
will be sought, except as described below under "State Takeover Laws." While,
except as otherwise described in this Offer to Purchase, Purchaser does not
presently intend to delay the acceptance for payment of or payment for Shares
tendered pursuant to the Offer pending the outcome of any such matter, there can
be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions or that failure to
obtain any such approval or other action might not result in consequences
adverse to the Company's business or that certain parts of the Company's
business might not have to be disposed of or other substantial conditions
complied with in the event that such approvals were not obtained or such other
actions were not taken or in order to obtain any such approval or other action.
If certain types of adverse action are taken with respect to the matters
discussed below, Purchaser could decline to accept for payment or pay for any
Shares tendered. See Section 13 -- "Certain Conditions of the Offer" for certain
conditions to the Offer, including conditions with respect to governmental
actions.
Affiliated Transaction Statute. Because the Company is incorporated under
the laws of the State of Florida, it is subject to Section 607.0901 (the
"Affiliated Transactions Statute") of the FBCA. The Affiliated Transactions
Statute generally prohibits a Florida corporation from engaging in an
"affiliated transaction" with an "interested shareholder," unless (i) the
affiliated transaction is approved by a majority of the disinterested directors
or by the affirmative vote of the holders of two-thirds of the voting shares
other than the shares beneficially owned by the interested shareholder, (ii) the
corporation has not had more than 300 shareholders of record at any time for
three years prior to the public announcement relating to the affiliated
transaction, or (iii) the corporation complies with certain statutory fair price
provisions.
Subject to certain exceptions, under the FBCA an "interested shareholder"
is a person who beneficially owns more than 10% of the corporation's outstanding
voting shares. In general terms, an "affiliated transaction" includes: (i) any
merger or consolidation with an interested shareholder; (ii) the transfer to any
interested shareholder of corporate assets with a fair market value equal to 5%
or more of the corporation's consolidated assets or outstanding shares or
representing 5% or more of the corporation's earning power or net income; (iii)
the issuance to any interested shareholder of shares with a fair market value
equal to 5% or more of the aggregate fair market value of all outstanding shares
of the corporation; (iv) any reclassification of securities or corporate
reorganization that will have the effect of increasing by more than 5% the
percentage of the corporation's outstanding voting shares beneficially owned by
any interested shareholder; (v) the liquidation or dissolution of the
corporation if proposed by any interested shareholder; and (vi) any receipt by
the interested shareholder of the benefit of any loans, advances, guaranties,
pledges or other financial assistance or any tax credits or other tax advantages
provided by or through the corporation.
At the October 22, 2002 meeting of the Company's Board of Directors, by
unanimous vote of all directors, including a majority of disinterested
directors, the Company's Board of Directors have approved the Merger Agreement
and the Shareholder Tender and Voting Agreements and the transactions
contemplated by those agreements. As a result, the provisions of the Affiliated
Transactions Statute are not applicable to the Offer and the Merger and the
transactions contemplated by such agreements.
Control Share Acquisition Statute. The Company also may be subject to
Section 607.0902 of the FBCA (the "Control Share Acquisition Statute"). The
Control Share Acquisition Statute provides that shares of publicly held Florida
corporations that are acquired in a "control share acquisition" generally will
have no
37
voting rights unless such rights are conferred on those shares by the vote of
the holders of a majority of all the outstanding shares other than interested
shares. A control share acquisition is defined, with certain exceptions, as the
acquisition of the ownership of voting shares which would cause the acquirer to
have voting power within the following ranges or to move upward from one range
into another: (i) 20%, but less than 33 1/3%; (ii) 33 1/3%, but less than 50%;
or (iii) 50% or more of such votes.
The Control Share Acquisition Statute does not apply to an acquisition of
shares of a publicly held Florida corporation (i) pursuant to a merger or share
exchange effected in compliance with the FBCA if the publicly held Florida
corporation is a party to the merger or share exchange agreement, or (ii) if
such acquisition has been approved by the board of directors of that corporation
before the acquisition.
Because the Control Share Acquisition Statute specifically exempts (i) an
acquisition of shares of a publicly held Florida corporation which has been
approved by the board of directors of the such corporation before the
acquisition, and (ii) a merger effected in compliance with the FBCA if the
publicly held Florida corporation is a party to the merger agreement, the
provisions of the Control Share Acquisition Statute are not applicable to the
Offer or to the Merger. At the October 22, 2002 meeting of the Company's Board
of Directors, by unanimous vote of all directors, the Company's Board of
Directors approved the acquisition of the Subject Shares (as defined in the
Shareholder Tender and Voting Agreements) pursuant to the Shareholder Tender and
Voting Agreements, the acquisition of Shares pursuant to the Offer, and the
Merger Agreement.
Short-Form Merger. Section 607.1104 of the FBCA provides that, if a parent
corporation owns at least 80% of the outstanding shares of each class of a
subsidiary corporation, the merger of the subsidiary corporation into another
80% owned subsidiary of the parent corporation may be effected by a plan of
merger adopted by the board of directors of the parent corporation and the
appropriate filings with the Florida Department of State, without the approval
of the shareholders of the subsidiary corporation (a "short-form merger"). In
accordance with the FBCA, if Purchaser acquires at least 80% of the outstanding
Shares, Purchaser will be able to effect the Merger without a vote of the other
shareholders of the Company. In such event, the Company has agreed in the Merger
Agreement to take, at the request of Purchaser, all necessary and appropriate
action to cause the Merger to become effective after such acquisition without a
meeting of the Company's shareholders.
State Takeover Statutes. A number of states have adopted laws which
purport, to varying degrees, to apply to attempts to acquire corporations that
are incorporated in, or which have substantial assets, shareholders, principal
executive offices or principal places of business or whose business operations
otherwise have substantial economic effects in, such states. The Company,
directly or through subsidiaries, conducts business in a number of states
throughout the United States, some of which have enacted such laws. Except as
described herein, we do not know whether any of these laws will, by their terms,
apply to the Offer or the Merger and have not complied with any such laws. To
the extent that certain provisions of these laws purport to apply to the Offer
or the Merger we believe that there are reasonable bases for contesting such
laws.
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
could, as a matter of corporate law, constitutionally disqualify a potential
acquiror from voting shares of a target corporation without the prior approval
of the remaining stockholders where, among other things, the corporation is
incorporated, and has a substantial number of stockholders, in the state.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal District Court
in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as
they apply to corporations incorporated outside Oklahoma in that they would
subject such corporations to inconsistent regulations. Similarly, in Tyson
Foods, Inc. x. XxXxxxxxxx, a Federal District Court in Tennessee ruled that four
Tennessee takeover statutes were unconstitutional as applied to corporations
incorporated outside Tennessee. This decision was affirmed by the United States
Court of Appeals for the Sixth Circuit. In December 1988, a Federal District
Court in Florida held in Grand Metropolitan PLC x. Xxxxxxxxxxx, that the
38
provisions of the Florida Affiliated Transactions Act and the Florida Control
Share Acquisition Act were unconstitutional as applied to corporations
incorporated outside of Florida.
Based on information supplied by the Company and the approval by the Board
of Directors of the Company of the Merger Agreement, the Shareholder Tender and
Voting Agreements, the Merger and the Offer, Purchaser does not believe that any
state takeover statutes or similar laws purport to apply to the Offer or the
Merger. Neither Purchaser nor Parent has currently complied with any state
takeover statute or regulation other than as set forth in this Offer to
Purchase. If any government official or third party should seek to apply any
state takeover law to the Offer or the Merger or other business combination
between Purchaser or any of its affiliates and the Company, Purchaser will take
such action as then appears desirable, which action may include challenging the
applicability or validity of such statute in appropriate court proceedings. In
the event that it is asserted that one or more state takeover statutes 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, Purchaser might be required to file certain information with, or to
receive approvals from, the relevant state authorities or holders of Shares, and
Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer, or be delayed in continuing or consummating the Offer or
the Merger. In such case, Purchaser may not be obligated to accept for payment
or pay for any tendered Shares pursuant to the Offer.
Antitrust. Under the HSR Act, and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied.
A Notification and Report Form with respect to the Offer is expected to be
filed under the HSR Act on or about October 28, 2002, and the waiting period
with respect to the Offer under the HSR Act will expire at 11:59 P.M., New York
City time, on the fifteenth day after such Notification and Report Form is
filed. Before such time, however, either the FTC or the Antitrust Division may
extend the waiting period by requesting additional information or material from
Purchaser. If such request is made, the waiting period will expire at 11:59
P.M., New York City time, on the tenth calendar day after Purchaser has
substantially complied with such request. Thereafter, the waiting period may be
extended only by court order or with Purchaser's consent.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after Purchaser's
acquisition of Shares, the Antitrust Division or the FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the acquisition of Shares pursuant to the
Offer or otherwise or seeking divestiture of Shares acquired by Purchaser or
divestiture of substantial assets of Parent or its subsidiaries. Private
parties, as well as state governments, may also bring legal action under the
antitrust laws under certain circumstances. Based upon an examination of
publicly available information relating to the businesses in which Parent and
the Company are engaged, Parent and Purchaser believe that the acquisition of
Shares by Purchaser will not violate the antitrust laws. Nevertheless, there can
be no assurance that a challenge to the Offer or other acquisition of Shares by
Purchaser on antitrust grounds will not be made or, if such a challenge is made,
of the result. See Section 13 -- "Certain Conditions of the Offer," including
conditions with respect to litigation and certain governmental actions.
In addition to the United States, the antitrust and competition laws of
other countries may apply to the Offer and the Merger and additional filings and
notifications may be required. Parent and the Company are reviewing whether any
such filings are required and intend to make such filings promptly to the extent
required.
Federal Reserve Board Regulations. Regulations G, U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock, including the
Shares, if the credit is secured directly or indirectly by margin stock. Such
secured credit may not be extended or maintained in an amount that exceeds the
maximum loan value of all the direct
39
and indirect collateral securing the credit, including margin stock and other
collateral. All financing for the Offer will be structured so as to be in full
compliance with the Margin Regulations.
15. FEES AND EXPENSES
Except as set forth below, neither Purchaser nor Parent will pay any fees
or commissions to any broker, dealer or other person for soliciting tenders of
Shares pursuant to the Offer.
Parent and Purchaser have retained X.X. Xxxx & Co., Inc. to act as the
Information Agent, Mellon Investor Services LLC to act as Depositary and Bear,
Xxxxxxx & Co. Inc. to act as the Dealer Manager in connection with the Offer.
Such firms will each receive reasonable and customary compensation for their
services. Parent and Purchaser have also agreed to reimburse such firms for
certain reasonable out-of-pocket expenses and to indemnify each such firm
against certain liabilities in connection with their services, including certain
liabilities under federal securities laws.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Information Agent, Depository and the Dealer
Manager) for making solicitations or recommendations in connection with the
Offer. Brokers, dealers, banks and trust companies will be reimbursed by
Purchaser for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
16. MISCELLANEOUS
The Offer is being made to all holders of Shares other than the Company.
Purchaser is not aware of any jurisdiction in which the making of the Offer or
the tender of Shares in connection therewith would not be in compliance with the
laws of such jurisdiction. If Purchaser becomes aware of any jurisdiction in
which the making of the Offer would not be in compliance with applicable law,
Purchaser will make a good faith effort to comply with any such law. If, after
such good faith effort, Purchaser cannot comply with any such law, the Offer
will not be made to (nor will tenders be accepted from or on behalf of) the
holders of Shares residing in 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 Purchaser by
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR PURCHASER NOT CONTAINED HEREIN OR IN THE
LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
We have filed with the SEC the Schedule TO pursuant to Rule 14d-3 under the
Exchange Act furnishing certain additional information with respect to the
Offer. The Schedule TO and any amendments thereto, including exhibits, may be
examined and copies may be obtained from the offices of the SEC and the Nasdaq
National Market in the manner set forth in Section 8 -- "Certain Information
Concerning the Company" of this Offer to Purchase (except that they will not be
available at the regional offices of the SEC).
Prince Merger Corporation
October 28, 2002
40
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF
PRINCE MERGER CORPORATION
AND
DRS TECHNOLOGIES, INC.
1. PRINCE MERGER CORPORATION
Set forth below is the name, business address and present principal
occupation or employment, and material occupations, positions, offices or
employments for the past five years, of each director and executive officer of
the Prince Merger Corporation. Unless otherwise indicated, (a) each such person
is a citizen of the U.S., and (b) the business address of each such person is
c/o DRS Technologies, Inc. 0 Xxxxxx Xxx, Xxxxxxxxxx, XX 00000.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---------------- --------------------------------------------------
Xxxx X. Xxxxxx................... Xx. Xxxxxx has been a Director and the President of
Prince Merger Corporation since its formation on October
17, 2002. Xx. Xxxxxx has been Chairman of the Board since
August 1995 and President and Chief Executive Officer of
DRS Technologies, Inc. since May 1994. Xx. Xxxxxx joined
DRS Technologies, Inc. in 1973 and has been a director
since 1988. Xx. Xxxxxx serves as Vice Chairman on the
board of directors of the American Electronics
Association, and is a director on the boards of the New
Jersey Technology Council, SSG Precision Optronics, Inc.,
Opticare Health Systems, Inc. and Congoleum Corporation,
where he chairs the Audit Committee. Xx. Xxxxxx also
serves on the Board of Governors of the Aerospace
Industries Association of America.
Xxxxxxx X. Xxxxxxxxx............. Xx. Xxxxxxxxx has been the Vice President and Treasurer
of Prince Merger Corporation since its formation on
October 17, 2002. Xx. Xxxxxxxxx has been Executive Vice
President, Chief Financial Officer and Treasurer of DRS
Technologies, Inc. since 1999. He held similar positions
at NAI Technologies, Inc. (NAI) from November 1988 until
February 1999 and was a member of its board of directors
from 1996 until February 1999, when it was acquired by
DRS Technologies. Xx. Xxxxxxxxx has over 25 years of
experience in corporate financial management, including
ten years with NAI.
Xxxx Xxxxxxxx Xxxx............... Xx. Xxxx has been a Director, and the Vice President and
Secretary of Prince Merger Corporation since its
formation on October 17, 2002. Xx. Xxxx has been
Executive Vice President, General Counsel and Secretary
of DRS Technologies, Inc. since July 1997. From July 1993
until June 1997, Xx. Xxxx was a Director in the corporate
law department of Xxxxxxx Xxxxxxx, a Professional
Corporation, where she served as DRS Technologies, Inc.'s
outside legal counsel. Xx. Xxxx is admitted to practice
law in New York and New Jersey and is a member of the
American, New York State and New Jersey State Bar
Associations.
41
2. DRS TECHNOLOGIES, INC.
Set forth below is the name, business address and present principal
occupation or employment, and material occupations, positions, offices or
employments for the past five years, of the directors and executive officers of
DRS Technologies, Inc. Unless otherwise indicated, (a) each such person is a
citizen of the U.S., and (b) the business address of each such person is c/o DRS
Technologies, Inc. 0 Xxxxxx Xxx, Xxxxxxxxxx, XX 00000.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---------------- --------------------------------------------------
EXECUTIVE OFFICERS
Xxxx X. Xxxxxx................... See Part 1 of this Schedule I
Xxxxxxx X. Xxxxxxxxx............. See Part 1 of this Schedule I
Xxxx X. Xxxxxx, Xx. ............. Xx. Xxxxxx has been Executive Vice President and Chief
Operating Officer of DRS Technologies, Inc. since May
2000. Xx. Xxxxxx joined DRS Technologies, Inc. in 1993 as
President of Technology Applications and Service Company,
now DRS Electronic Systems, Inc. From 1994 until 1998,
Xx. Xxxxxx was one of DRS Technologies, Inc.'s Vice
Presidents and President of the DRS Electronic Systems
Group. Thereafter, Xx. Xxxxxx was Executive Vice
President, Operations from 1998 until 2000. Xx. Xxxxxx
has over 30 years of experience in the defense
electronics industry and has held positions in
engineering, marketing and general management. Xx. Xxxxxx
is a director of ACE-COMM Corporation and Mikros Systems
Corporation.
Xxxx Xxxxxxxx Xxxx............... See Part 1 of this Schedule I
Xxxxxx X. Xxxxxx................. Xx. Xxxxxx has been Executive Vice President, Business
Operations and Strategy since January 2001. Before
joining DRS Technologies, Inc., he was Director,
Corporate Development, at Jabil Circuit, Inc. from July
2000 until December 2000. Prior to that, he was Vice
President, Planning, at L-3 Communications Corporation
from its inception in April 1997 until June 2000.
Earlier, Xx. Xxxxxx held various positions in divisional
and corporate financial management with Lockheed Xxxxxx
Corporation from April 1996 until April 1997, with Loral
Corporation from September 1984 until March 1996 and with
Xxxx Xxxxxxx, Inc. from June 1982 until August 1994.
DIRECTORS
Xxxx X. Xxxxxx................... See Part 1 of this Schedule I
Xxx Xxxxx........................ Xx. Xxxxx has been a director of DRS Technologies, Inc.
000 X. Xxxxxxxxxx Xxxx, Xxx. 450 since February 1997. Additionally, Xx. Xxxxx has been
Plymouth Meeting, PA 19462 employed since 1977 by Teleflex, Inc., a defense and
aerospace company, and has been Senior Vice President at
Teleflex since 1987. Xx. Xxxxx has over forty years of
operations and management experience in the defense and
aerospace industry. Since 1987, he has been actively
involved in leading diligence teams and negotiating terms
of mergers and acquisitions, as well as negotiating major
contracts for Teleflex's Defense/Aerospace Group. Xx.
Xxxxx also serves as a director of Xxxxx Industries, Inc.
42
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---------------- --------------------------------------------------
Xxxxxx X. Xxxxxx................. Xx. Xxxxxx has been a director of DRS Technologies, Inc.
0 Xx Xxxx'x Xxxxxx since 1993. He currently serves as Director of the Boston
Boston, MA 02215 University Photonics Center since November 1993 and as
Professor of Engineering and Physics at that university
since November 1993. From 1991 until 1993, Xx. Xxxxxx was
the Principal Deputy Under Secretary of Defense,
Acquisition, with primary responsibility for managing the
Department of Defense acquisition process, including
setting policy and executing programs. He also served as
Deputy Director of Operational Test and Evaluation for
Command, Control, Communication and Intelligence from
1990 to 1991, a position which included top level
management and oversight of the operational test and
evaluation of all major Department of Defense
communication, command and control, intelligence,
electronic warfare, space and information management
system programs. From 1981 to 1988, Xx. Xxxxxx was
employed as Vice President, Technical Operations at
Xxxxxxx Xxxxx Xxxxxx Laboratory and, from 1988 to 1990,
as its Executive Vice President.
Xxxxxxx X. Xxxxxxxx.............. Xx. Xxxxxxxx has been a director of DRS Technologies,
0000 Xxxxxx xx xxx Xxxxxxxx Inc. since February 1997. Xx. Xxxxxxxx is currently
New York, NY 10036 Senior Vice President and Treasurer of Verizon
Communications, Inc. since July 2000. He has been
employed by Verizon Communications, Inc. since its
formation in June 2000 through the merger of Bell
Atlantic Corp. and GTE Corp. He was employed by Bell
Atlantic Corp. and its predecessors since 1971, serving
as a Vice President from 1996 until July 2000 and as
Treasurer from June 1999 until July 2000. Previously, he
was Chief Investment Officer of NYNEX Asset Management
Company from March 1991 until September 1995 and of Bell
Atlantic Asset Management Company from June 1996 until
July 2000. Xx. Xxxxxxxx has also served as Chairman of
Bell Atlantic Credit Company (BACC) from September 1997
until December 1998 and as Chairman and Chief Executive
Officer from December 1998 until July 2000. Xx. Xxxxxxxx
currently serves as Chairman of Verizon Capital Corp.
since July 2000. He also serves as Director of Exchange
Indemnity Corp since October 1996 and of GTE Reinsurance
since November 2000. Xx. Xxxxxxxx is a member of the Real
Estate Advisory Board of the New York Common Fund and The
Financial Executives Institute and a Director of its New
York City chapter.
43
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---------------- --------------------------------------------------
Xxxxxx X. Xxxxxxxx............... Xx. Xxxxxxxx has been a director of DRS Technologies,
00 Xxxx 00xx Xxxxxx Inc. since 1998. Xx. Xxxxxxxx has been a partner of the
New York, NY 10019 law firm of Xxxxxx Xxxx & Priest LLP since August 1998.
Previously, he served as General Counsel to the
Department of the Navy from 1993 until 1998. As chief
legal officer of the Department of the Navy and the
principal legal advisor to the Secretary of the Navy, Xx.
Xxxxxxxx was recognized as a leader in acquisition
reform, procurement related litigation and the
accomplishment of national security objectives in the
context of environmental compliance. He also exercised
Secretariat oversight of the Naval Criminal Investigative
Service and served as the Department's Designated Agency
Ethics Officer and Contractor Suspension and Department
Official from 1993 until 1998. For his service, Xx.
Xxxxxxxx received the Department of the Navy
Distinguished Public Service Award. Prior to that, he was
a partner of the law firm of Xxxxxx, Singer, Raives &
Xxxxxxx from 1982 until 1993. Xx. Xxxxxxxx also serves as
a director of The Wornick Company, a producer of combat
rations for the Department of Defense.
X. Xxxxxxx Xxxxx................. Xx. Xxxxx has been a director of DRS Technologies, Inc
000 Xxxx Xxxxx Xxxx Xx. since February 1999. Xx. Xxxxx is currently President of
Boca Raton, FL 33432 X.X. Xxxxx Associates, business advisors, and has served
in that position since May 2000. From December 2001 until
July 2002 Xx. Xxxxx was Chief Executive Officer of
Technisource, Inc., a provider of information technology
staffing, outsourced solutions and computer systems.
Until June 1999, he served as President of Fundamental
Management Corporation, an investment management company.
Additionally, from May 1992 until February 2000, Xx.
Xxxxx was Chairman of the Board of Elcotel, Inc., a
public communications company. He serves as a director of
Concurrent Computer Systems, Inc., SK Technologies, CSPI,
Inc. and Technisource, Inc.
Xxxx X. Xxxxxx................... Xx. Xxxxxx has been a director of DRS Technologies, Inc.
Four Times Square since 1986. Xx. Xxxxxx was a member of the law firm of
New York, NY 10036 Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP from 1979 to
1998 and is now of counsel to the firm. Xx. Xxxxxx also
serves as a director of American Biltrite Inc., Autobytel
Inc., Grey Advertising Inc., REFAC Technology Inc.,
Congoleum Corporation and Volt Information Sciences, Inc.
Xxxxxx X. Xxxxx.................. Xx. Xxxxx has been a director of DRS Technologies, Inc
00000 Xxxxxxxxx Xxxx XX since 1991. From May 1994 until 1999, he served as a Vice
Bainbridge Island, WA 98110 President and also as the President of our Data Systems
Group. Admiral Platt also served as President of our
wholly owned subsidiary, DRS Precision Echo, Inc. from
July 1992 to August 1998. Xx. Xxxxx has been Chairman of
The Wornick Company, a producer of combat rations for the
Department of Defense, since 2000 and Chairman of CDCOM,
a Washington State based data storage company, since
1999. Admiral Platt held various high level positions as
a military officer in the Department of the Navy,
retiring as Competition Advocate General of the Navy in
1987. He has also served as Chairman of The Historic
Battleship Society since 1996 and Chairman of Hydro Wing
Hawaii since 2000.
44
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
---------------- --------------------------------------------------
Xxxxxx X. Xxxxxx................. Xx. Xxxxxx has been a director of DRS Technologies, Inc.
P.O. Box 889 since 2000. He has served as Director of the National
000 Xxxxx Xxxxxxxx, Suite 1404 Memorial Institute for the Prevention of Terrorism,
Oklahoma City, OK 73101 located in Oklahoma City, OK, since April 2000. General
Xxxxxx served as the 33rd Chief of Staff, U.S. Army, from
June 20, 1995 until June 21, 1999. Prior to that, he was
Commanding General of United States Army Forces Command,
Fort XxXxxxxxx, Georgia, from August 1, 1999 until March
31, 2000. Additionally, General Xxxxxx has served as
Distinguished Fellow of the Association of the U.S. Army
since 1999. He is a member of the Editorial Board of the
Armed Forces Journal and the Advisory Committee for Media
and Security of the Fund for Peace Project. General
Xxxxxx also serves as a director of Microvision, Inc.,
Mutual of America and Plato Learning, Inc.
Xxxx X. Xxxxx.................... Xx. Xxxxx has been a director of DRS Technologies, Inc.
000 0xx Xxx XX 00 since August 1998. He is a Managing Director of Onex
New York, NY 10019-4108 Investment Corp. since 1992 and has been with Onex
Investment Corp. since 1989. Previously, he worked at
Xxxxxx, Xxxxxxx & Co. in both the Mergers and
Acquisitions group from 1983 until 1985 and the Merchant
Banking group from 1987 until 1989. Xx. Xxxxx also serves
as a director of Dura Automotive Systems. Xx. Xxxxx and
Xxxx X. Xxxxxx, our Chairman of the Board, President and
Chief Executive Officer, are first cousins.
45
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for Shares and
any other required documents should be sent or delivered by each shareholder of
the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary, at one of the addresses set forth below:
Depositary for the Offer is:
MELLON INVESTOR SERVICES LLC
BY MAIL BY HAND BY OVERNIGHT DELIVERY
Mellon Investor Services Mellon Investor Services LLC Mellon Investor Services LLC
LLC 000 Xxxxxxxx, 00xx Xxxxx 00 Xxxxxxxxxx Xxxx
P.O. Box 3301 New York, NY 10271 Mail Stop-Reorg
South Hackensack, NJ 00000 Xxxxxxxxxx Xxxx, XX 00000
Attn: Reorganization Department
BY FACSIMILE TRANSMISSION: CONFIRM RECEIPT OF FACSIMILE
(FOR ELIGIBLE INSTITUTIONS ONLY) BY TELEPHONE:
(000) 000-0000 (000) 000-0000
Questions and requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and the
Guidelines for Certification of Taxpayer Identification on Substitute Form W-9
may be directed to the Information Agent at the locations and telephone numbers
set forth below. Shareholders may also contact Bear, Xxxxxxx & Co. Inc., Dealer
Manager for the Offer, or their broker, dealer, commercial bank or trust company
for assistance concerning the Offer.
The Information Agent for the Offer is:
X.X. XXXX & CO., INC.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Banks and Brokers (Call Collect): (000) 000-0000
All Others Call Toll-Free: (000) 000-0000
The Dealer Manager for the Offer is:
BEAR, XXXXXXX & CO. INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Call Toll-Free (000) 000-0000
