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OFFER TO PURCHASE FOR CASH
UP TO 51% OF THE SHARES OF COMMON STOCK
OF
ZAPME! CORPORATION
AT
$2.32 NET PER SHARE
BY
GILAT SATELLITE NETWORKS LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, NOVEMBER 14, 2000, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE IN CONNECTION WITH THE TENDER OFFER AGREEMENT,
DATED AS OF OCTOBER 3, 2000, BY AND AMONG GILAT SATELLITE NETWORKS LTD.
("PURCHASER"), ZAPME! CORPORATION (THE "COMPANY") AND CERTAIN PRINCIPAL
STOCKHOLDERS OF THE COMPANY LISTED ON SCHEDULE A AND SCHEDULE B THERETO. THE
BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED BASED ON, AMONG OTHER THINGS,
THE RECOMMENDATION OF A SPECIAL COMMITTEE COMPRISED OF INDEPENDENT DIRECTORS
THAT THE TENDER OFFER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER, IS IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS, HAS APPROVED THE OFFER, HAS APPROVED AND ADOPTED THE TENDER OFFER
AGREEMENT, AND HAS RECOMMENDED THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE A NUMBER OF SHARES OF
COMMON STOCK PAR VALUE $0.01 PER SHARE (THE "SHARES") OF THE COMPANY WHICH,
TOGETHER WITH THE SHARES BENEFICIALLY OWNED BY PURCHASER, WOULD REPRESENT AT
LEAST 17% OF THE OUTSTANDING SHARES (AS DEFINED IN THIS OFFER TO PURCHASE), (II)
THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE
XXXX-XXXXX-XXXXXX ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED AND (III) THE
SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 14.
CERTAIN STOCKHOLDERS OF THE COMPANY HAVE AGREED TO TENDER ALL OF THEIR
SHARES IN THE OFFER, AND OTHER STOCKHOLDERS OF THE COMPANY HAVE GRANTED
PURCHASER THE OPTION TO PURCHASE THEIR SHARES, IN EACH CASE AT A PRICE OF $2.32
NET PER SHARE. THE OPTION WILL ONLY BE EXERCISED IF THE SHARES TENDERED IN THE
OFFER CONSTITUTE, TOGETHER WITH THE SHARES BENEFICIALLY OWNED BY PURCHASER, LESS
THAN 51% OF THE OUTSTANDING SHARES (AS DEFINED IN THIS OFFER TO PURCHASE).
THIS OFFER TO PURCHASE IS FOR UP TO THE NUMBER OF SHARES WHICH, TOGETHER
WITH THE SHARES BENEFICIALLY OWNED BY PURCHASER, CONSTITUTE 51% OF THE TOTAL
NUMBER OF OUTSTANDING SHARES (AS DEFINED IN THIS OFFER TO PURCHASE).
IMPORTANT
Any stockholder of the Company wishing to tender all or any portion of its
Shares in the Offer must either (i) complete and sign the Letter of Transmittal
in accordance with the instructions in the Letter of Transmittal and mail or
deliver the Letter of Transmittal together with certificates representing the
Shares tendered and all other required documents to EquiServe Trust Company,
N.A. (the "Depositary") or follow the procedure for book-entry transfer set
forth in Section 3 or (ii) request such stockholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for the
stockholder. A stockholder having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such person
if such stockholder wishes to tender such Shares. See Section 3.
Any stockholder of the Company who wishes to tender Shares and cannot
deliver certificates representing such Shares and all other required documents
to the Depositary on or prior to the expiration of the Offer or who cannot
comply with the procedures for book-entry transfer on a timely basis may tender
such Shares pursuant to the guaranteed delivery procedure set forth in Section
3.
Questions and requests for assistance may be directed to CIBC World Markets
Corp. (the "Dealer Manager") at its address and telephone number set forth on
the back cover of this Offer to Purchase. Additional copies of this Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other
related tender offer materials may be obtained from the Dealer Manager.
Stockholders may also contact their broker, dealer, commercial bank and trust
companies or other nominee.
The Dealer Manager for the Offer is:
CIBC WORLD MARKETS
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TABLE OF CONTENTS
PAGE
----
SUMMARY OF THE OFFER............................................... i
INTRODUCTION....................................................... 1
1. Terms of the Offer; Proration............................... 3
2. Acceptance for Payment and Payment for Shares............... 5
3. Procedure for Tendering Shares.............................. 6
4. Withdrawal Rights........................................... 9
5. Certain Federal Income Tax Consequences..................... 9
6. Price Range of Shares; Dividends............................ 10
7. Effect of the Offer on the Market for Shares, Nasdaq
Listing, Exchange Act, and Margin Regulation.............. 11
8. Certain Information Concerning the Company.................. 12
9. Certain Information Concerning Purchaser.................... 13
10. Source and Amount of Funds.................................. 15
11. Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company............................. 15
12. Purpose of the Offer; Plans for the Company................. 17
13. The Tender Offer Agreement.................................. 19
14. Certain Conditions of the Offer............................. 24
15. Certain Regulatory and Legal Matters........................ 25
16. Fees and Expenses........................................... 27
17. Miscellaneous............................................... 27
XXXXX X -- CERTAIN INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF PURCHASER.................................. I-1
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SUMMARY OF THE OFFER
THIS SUMMARY OF THE OFFER HIGHLIGHTS SELECTED INFORMATION FROM THIS OFFER
TO PURCHASE, AND MAY NOT CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO
YOU. TO BETTER UNDERSTAND OUR OFFER TO YOU AND FOR A COMPLETE DESCRIPTION OF THE
TERMS OF THE OFFER, YOU SHOULD READ THIS ENTIRE OFFER TO PURCHASE AND THE
ACCOMPANYING LETTER OF TRANSMITTAL CAREFULLY. QUESTIONS OR REQUESTS FOR
ASSISTANCE MAY BE DIRECTED TO THE DEALER MANAGER AT ITS ADDRESS AND TELEPHONE
NUMBER LISTED ON THE LAST PAGE OF THIS OFFER TO PURCHASE.
WHO IS OFFERING TO BUY MY SECURITIES?
- We are Gilat Satellite Networks Ltd., an Israeli corporation formed in
1987.
- With our global subsidiaries Spacenet Inc., Gilat Europe and Gilat
Florida Inc., we are a leading provider of telecommunications solutions
based on VSAT satellite network technology. We provide satellite-based,
end-to-end enterprise networking and rural telephony solutions to
customers across six continents, and markets interactive broadband data
services. We are a joint venture partner, with Microsoft Corp., EchoStar
Communications Corp. and ING Xxxxxx Xxxx Investments, in StarBand
Communications Inc., a consumer, always-on, nationwide, two-way,
high-speed satellite Internet service provider.
- Our shares are listed on the Nasdaq National Market under the symbol
"GILTF".
WHAT ARE THE SECURITIES AND AMOUNTS OF SECURITIES SOUGHT IN THIS OFFER?
- We are offering to purchase the outstanding and issued shares of common
stock of the Company up to a number of shares of common stock, which
together with the shares we currently own, shall constitute 51% of the
total shares of common stock of the Company outstanding as of the last
business day prior to the consummation of the offer. See Sections 1 and
13.
- We are not offering to purchase any other shares of capital stock of the
Company.
- In this Summary, references to "shares of common stock" or "shares" are
references to the common stock of the Company.
HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT? WILL I HAVE TO
PAY ANY FEES OR COMMISSIONS?
- We are offering to pay $2.32 per share, net to you, in cash, upon the
terms and subject to the conditions contained in this Offer to Purchase
and in the related letter of transmittal. 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 a fee for doing so. You should
consult your broker or nominee to determine whether any charges will
apply.
HAVE YOU ENTERED INTO ANY AGREEMENTS WITH THE COMPANY'S PRINCIPAL STOCKHOLDERS?
- We have entered into a tender offer agreement with the Company and its
principal stockholders pursuant to which certain principal stockholders
have agreed to tender their shares in the offer. The number of shares
held by these stockholders represent about 12.94% of the outstanding
shares.
- Certain other principal stockholders have granted us an option to
purchase their shares of common stock at a purchase price of $2.32 per
share. The number of shares held by these stockholders represent about
37.49% of the outstanding shares. We will exercise this option upon
consummation of the offer, but only to the extent necessary for us to
acquire 51% of the total number of shares of common stock outstanding as
of the last business day prior to the consummation of the offer, taking
into account the
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number of shares we beneficially own and the number of shares tendered
prior to the expiration of the offer. See Sections 1 and 13.
- If the offer is terminated because it fails to meet certain conditions,
we have agreed to purchase and each of the principal stockholders have
agreed in the tender offer agreement to sell all of their shares of
common stock to us at a purchase price of $2.32 per share. See Sections 1
and 13.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER?
There is no financing condition to the offer, however:
- we are not obligated to purchase any tendered shares unless the number of
shares validly tendered and not withdrawn before the expiration date of
the offer represents, together with the shares we currently own, at least
17% of the total number of shares of the Company outstanding as of the
last business day prior to the consummation of the offer. See Sections 1
and 13.
- We are not obligated to purchase any tendered shares if:
- There is a material adverse change in the Company or its business;
- There is any material litigation pending or threatened against the
Company;
- The applicable waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 has not expired or been terminated; or
- Other similar and necessary approvals have not been obtained or
waiting periods applicable to the offer have not expired or been
terminated. See Section 14.
DO YOU HAVE ENOUGH FINANCIAL RESOURCES TO MAKE PAYMENT?
- We have all of the necessary funds to acquire the tendered shares of
common stock. The offer is not conditioned upon any financing
arrangement. See Section 9.
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
- We do not think our financial condition is relevant to your decision to
tender your shares in the offer because:
- The form of payment in the offer consists solely of cash and
- Our offer is not subject to any financing condition. See Section 10.
HOW MUCH TIME DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
- You will have until at least 12:00 midnight, New York City time, on
November 14, 2000 to tender your shares of common stock. 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 that is
described later in this Offer to Purchase. See Sections 3.
CAN THE OFFER BE EXTENDED, AND UNDER WHAT CIRCUMSTANCES?
- We expressly reserve the right to extend the period of time during which
the offer remains open, if certain conditions to the offer have not been
satisfied. See Section 1 and 13.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
- If we decide to extend the offer beyond November 14, 2000, we will inform
EquiServe Trust Company, N.A., the depositary of 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 next business day after the day on which
the offer was scheduled to expire. See Section 1.
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HOW DO I TENDER MY SHARES?
To tender your shares in the offer, you must:
- Complete and sign the accompanying letter of transmittal in accordance
with the instructions in the letter of transmittal and mail or deliver it
together with your share certificates, and any other required documents,
to the depositary of the offer no later than the time the offer expires;
- Tender your shares pursuant to the procedure for book-entry transfer set
forth in Section 3; or
- If your share certificates are not immediately available or if you cannot
deliver your share certificates, and any other required documents, to
Equiserve Trust Company, N.A. prior to the expiration of the offer, or
you cannot complete the procedure for delivery by book-entry transfer on
a timely basis, tender your shares by complying with the guaranteed
delivery procedures described in Section 3.
UNTIL WHEN CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
- You may withdraw any previously tendered shares at any time prior to the
expiration of the offer, and, if we have not by December 17, 2000 agreed
to accept your shares for payment. See Section 4.
HOW DO I WITHDRAW MY 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 of the
Offer while you still have the right to withdraw the shares. See Section
4. If you tendered shares by giving instructions to a broker or bank, you
must instruct the broker or bank to arrange for the withdrawal of your
shares.
WHAT HAPPENS IF MORE THAN THE NUMBER OF SHARES, WHICH TOGETHER WITH THE NUMBER
OF SHARES WE BENEFICIALLY OWN, CONSTITUTE 51% OF THE TOTAL NUMBER OF SHARES
OUTSTANDING AS OF THE LAST BUSINESS DAY PRIOR TO THE CONSUMMATION OF THE OFFER
ARE TENDERED?
- We are offering to purchase a number of shares, which, together with the
number of shares we beneficially own, constitutes 51% of the total number
of shares outstanding on the last business day prior to the consummation
of the offer. If more than that number of shares is validly tendered and
not withdrawn at the expiration of the offer, we will purchase shares on
a pro rata basis. This means that we will purchase from each tendering
shareholder a number of shares equal to the number of shares validly
tendered and not withdrawn by such shareholder multiplied by a proration
factor. The proration factor is equal to the number of shares we are
offering to purchase divided by the total number of shares validly
tendered and not withdrawn by all shareholders. See Section 1.
WHEN WILL I KNOW HOW MANY OF MY SHARES WERE ACCEPTED FOR PAYMENT?
- Because of the difficulty of determining the number of shares validly
tendered and not withdrawn, we do not expect that we will be able to
announce the final proration factor or commence payment for any shares
purchased pursuant to the offer until approximately seven Nasdaq National
Market trading days after the expiration of the offer. The preliminary
results of any proration will be announced by press release as promptly
as practicable after the time we accept shares for payment pursuant to
the offer. Shareholders may obtain such preliminary information from the
Dealer Manager and may be able to obtain such information from their
brokers. See Section 1.
WHAT DOES THE COMPANY'S BOARD OF DIRECTORS THINK OF THE OFFER?
A special committee of the Company, consisting of independent directors,
evaluated the offer and the related tender offer agreement.
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The Board of Directors, based on, among other things, the recommendation of
the special committee, determined that the offer and the related tender offer
agreement is in the best interests of the Company and its stockholders, and
recommended that the stockholders of the Company accept the offer. See Section
1.
WILL THERE CONTINUE TO BE A PUBLIC MARKET FOR MY SHARES?
- We intend to preserve a public market for the shares and continue making
the required filings for the Company with the SEC.
- However, because we will own 51% of the total shares outstanding
following consummation of the offer, there is a risk that there may be so
few remaining holders of the shares of common stock and publicly held
shares that the shares may no longer be eligible to be traded through the
Nasdaq National Market or other securities markets, in which case there
may not be a public trading market for the shares and the Company may
cease making filings with the SEC with respect to the common stock.
Accordingly, we cannot assure that there will be a public market for the
shares. See Section 7.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
- If fewer than the number of shares which, together with the shares we
beneficially own, constitute at least 17% of the total shares outstanding
on the last business day prior to the consummation of the offer, are
validly tendered and not withdrawn in the offer, then we are not
obligated to purchase shares pursuant to the offer and may terminate the
offer, in which case the shares will remain outstanding and continue to
be traded on the Nasdaq National Market. However, if the offer is
terminated or not consummated and we are not precluded by law or by
judicial or administrative action from purchasing shares of common stock
outside of the offer, we have agreed to purchase and each of the
principal stockholders of the Company have agreed to sell us their shares
of common stock in accordance with the tender offer agreement. We will
purchase the shares of common stock held by each of the principal
stockholders that are party to the tender offer agreement. See Sections 1
and 13. We will, therefore, own a majority of the Company's shares and
will have the right to control the Company. See Section 7.
- Our purchase of the shares will reduce the number of the shares that
might otherwise trade publicly and may reduce the number of holders of
the shares, which could adversely affect the liquidity and market value
of the remaining shares held by the public.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
- On October 16, 2000, the last reported closing price per share reported
on the Nasdaq National Market was $1.84 per share. On October 2, 2000,
the last full trading day before we announced our offer, the last
reported closing price per share reported on the Nasdaq National Market
was $1.81 per share. We advise you to obtain a recent quotation for the
Company's common stock in deciding whether to tender your shares. See
Section 6.
WITH WHOM MAY I TALK IF I HAVE QUESTIONS ABOUT THE OFFER?
- You can call CIBC World Markets Corp., the Dealer Manager, toll free at
0-000-000-0000. See the back cover of the Offer to Purchase.
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To The Holders of Common Stock
of ZapMe! Corporation
INTRODUCTION
Gilat Satellite Networks Ltd., an Israeli corporation ("Purchaser"), hereby
offers to purchase up to the number issued and outstanding shares of common
stock, par value $0.01 per share (the "Shares") of ZapMe! Corporation, a
Delaware corporation (the "Company"), which represents, together with the Shares
beneficially owned by Purchaser, approximately 51% of the Outstanding Shares
(the "Maximum Number of Shares") at a price of $2.32 per share net to the seller
in cash, without interest thereon, all upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, as they may be amended and supplemented from time to time,
together constitute the "Offer"). "Outstanding Shares" shall mean the total
number of Shares outstanding as of the last business day prior to the
consummation of the Offer.
Tendering stockholders whose Shares are registered in their own names and
who tender directly to the Depositary (as defined below) will not be obligated
to pay brokerage fees or commissions or, except as set forth in Instruction 6 of
the Letter of Transmittal, stock transfer taxes on the purchase of Shares by
Purchaser pursuant to the Offer. Stockholders who hold their Shares through
banks or brokers should check with such institutions as to whether they charge
any service fees. Purchaser will pay all fees and expenses of CIBC World Markets
Corp., which is acting as the Dealer Manager for the Offer (the "Dealer
Manager") and of EquiServe Trust Company, N.A. which is acting as the Depository
for the Offer (the "Depositary") incurred in connection with the Offer. See
Section 16.
The purpose of the Offer is for Purchaser to acquire a majority voting
interest in the Company.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION
1) A NUMBER OF SHARES WHICH, TOGETHER WITH ANY SHARES BENEFICIALLY OWNED BY
PURCHASER, SHALL CONSTITUTE AT LEAST 17% OF THE OUTSTANDING SHARES (THE "MINIMUM
CONDITION") AND (II) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING
PERIOD UNDER THE XXXX-XXXXX-XXXXXX ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED (THE "HSR ACT") (THE "HSR CONDITION"). SEE SECTION 14.
CERTAIN STOCKHOLDERS OF THE COMPANY HAVE AGREED TO TENDER ALL OF THEIR
SHARES IN THE OFFER, AND OTHER STOCKHOLDERS OF THE COMPANY HAVE GRANTED
PURCHASER THE OPTION TO PURCHASE THEIR SHARES, IN EACH CASE AT A PRICE OF $2.32
NET PER SHARE. THE OPTION WILL ONLY BE EXERCISED IF THE SHARES TENDERED IN THE
OFFER CONSTITUTE, TOGETHER WITH THE SHARES BENEFICIALLY OWNED BY PURCHASER, LESS
THAN 51% OF THE OUTSTANDING SHARES.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED BASED UPON, AMONG
OTHER THINGS, THE RECOMMENDATION OF A SPECIAL COMMITTEE COMPRISED OF INDEPENDENT
DIRECTORS THAT THE TENDER OFFER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING THE OFFER, IS IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS, HAS APPROVED THE OFFER, HAS APPROVED AND ADOPTED THE TENDER OFFER
AGREEMENT (AS DEFINED BELOW), AND HAS RECOMMENDED THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER.
XXXXXX XXXXXX PARTNERS, FINANCIAL ADVISOR TO THE COMPANY, HAS DELIVERED TO
THE COMPANY BOARD ITS WRITTEN OPINION, DATED OCTOBER 3, 2000 (THE "FINANCIAL
ADVISOR OPINION"), TO THE EFFECT THAT, AS OF SUCH DATE AND BASED UPON AND
SUBJECT TO CERTAIN LIMITATIONS AND ASSUMPTIONS, THE CONSIDERATION TO BE RECEIVED
BY THE HOLDERS OF SHARES (OTHER THAN PURCHASER AND
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THE PRINCIPAL STOCKHOLDERS) PURSUANT TO THE OFFER IS FAIR TO SUCH HOLDERS FROM A
FINANCIAL POINT OF VIEW. A COPY OF THE FINANCIAL ADVISOR OPINION, WHICH SETS
FORTH, AMONG OTHER THINGS, THE OPINIONS EXPRESSED, THE ASSUMPTIONS MADE,
PROCEDURES FOLLOWED, MATTERS CONSIDERED AND LIMITATIONS OF THE REVIEW UNDERTAKEN
IN CONNECTION WITH ITS OPINION, WILL BE ATTACHED AS AN EXHIBIT TO THE COMPANY'S
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE "SCHEDULE 14D-9"),
WHICH WILL BE FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION
(THE "COMMISSION") IN CONNECTION WITH THE OFFER AND WHICH WILL BE MAILED TO
HOLDERS OF SHARES. HOLDERS OF SHARES ARE ENCOURAGED TO, AND SHOULD, READ THE
FINANCIAL ADVISOR OPINION IN ITS ENTIRETY.
The Offer is being made pursuant to the Tender Offer Agreement dated as of
October 3, 2000 (the "Tender Offer Agreement"), among the Company, Purchaser and
certain principal stockholders of the Company listed on Schedule A thereto
(collectively, the "Schedule A Stockholders") and certain other principal
stockholders listed on Schedule B thereto (collectively, the "Schedule B
Stockholders," and together with the Schedule A Stockholders, the "Identified
Stockholders").
The Tender Offer Agreement is more fully described in Section 13.
The Company has represented to Purchaser that, as of August 31, 2000, there
were 45,215,695 Shares issued and outstanding. Based upon such information, and
assuming that no Shares are otherwise issued after August 31, 2000, if Shares
representing at least 7,186,668 Shares in the aggregate are validly tendered and
not timely withdrawn prior to the expiration of the Offer, the Minimum Condition
will be satisfied.
Purchaser will purchase up to the Maximum Number of Shares.
Under the Tender Offer Agreement, the Schedule B Stockholders have agreed
to validly tender in, and not withdraw from, the Offer all of their Shares
(which, based upon the information set forth on Schedule B to the Tender Offer
Agreement, equals in the aggregate 5,852,905 Shares, and which constitute
approximately 12.94% of the total number of Shares outstanding as of October 3,
2000). In addition, pursuant to the Tender Offer Agreement, the Schedule A
Stockholders have granted to Purchaser an option to purchase all of their Shares
(which based upon the information set forth on Schedule A to the Tender Offer
Agreement, equals in the aggregate 16,951,445 Shares, and which constitute
approximately 37.49% of the total number of Shares outstanding as of October 3,
2000), which Purchaser shall exercise upon the consummation of the Offer at a
price per Share equal to $2.32, but only to the extent necessary for Purchaser
to acquire the Maximum Number of Shares (taking into account the number of
Shares validly tendered and not withdrawn prior to the expiration of the Offer).
See Section 13.
Thus, if the Minimum Condition is satisfied and Purchaser accepts for
payment Shares tendered pursuant to the Offer and exercises the option (if and
to the extent necessary) to acquire a certain number of the Schedule A
Stockholders' Shares, the Purchaser will be the beneficial owner of a majority
of the Outstanding Shares. It is expected that at least a majority of the
directors on the Company's Board of Directors will resign upon consummation of
the Offer and the directors appointed by Xxxxxxxxx will replace such directors.
See Section 12.
Alternatively, under the Tender Offer Agreement, if the Offer is terminated
or is not consummated, and Purchaser is not precluded either directly or
indirectly by applicable law or by administrative or judicial action from
purchasing up to the Maximum Number of Shares outside of the Offer, each of the
Identified Stockholders shall sell to Purchaser, and Purchaser shall purchase
from each Identified Stockholder, the number of Shares set forth opposite from
such Identified Stockholder's name on Schedule A and Schedule B, as the case may
be, to the Tender Offer Agreement (collectively, the "Identified Stockholders
Shares"), at a price per Share equal to $2.32. See Section 13.
Tendering Shares pursuant to the Offer will not affect the right of
stockholders to receive dividends declared by the Company, if any, with a record
date prior to the date on which Purchaser purchases the Shares pursuant to the
Offer. See Section 6.
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Certain United States federal income tax consequences of the sale of Shares
pursuant to the Offer are described in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE CAREFULLY READ BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; PRORATION.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), Purchaser will accept for payment and pay for all Shares up to the
Maximum Number of Shares that are validly tendered prior to the Expiration Date
and not theretofore properly withdrawn in accordance with Section 4. If more
than the Maximum Number of Shares are validly tendered and not withdrawn at the
Expiration Date of the Offer, Purchaser will purchase Shares on a pro rata basis
from all tendering shareholders as explained herein. The term "Expiration Date"
means 12:00 midnight, New York City time, on Tuesday, November 14, 2000, unless
Purchaser shall have extended the period of time for which the Offer is open in
accordance with the terms of the Tender Offer Agreement, or as may be required
by applicable law, 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. See Section 13.
Purchaser may in its sole discretion, without the consent of the Company,
and expressly reserves the right (but shall not be obligated) to, extend the
Offer, and thereby delay acceptance for payment of, and the payment for, any
Shares, if at the then-scheduled Expiration Date any of the conditions to the
Purchaser's obligation to purchase Shares are not satisfied, until such time as
such conditions are satisfied or waived. However, under no circumstances shall
the extension of the Offer be less than the minimum number of days required by
the Exchange Act or by other applicable law. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES, REGARDLESS OF ANY
EXTENSION OF OR AMENDMENT TO THE OFFER OR ANY DELAY IN PAYING FOR SUCH SHARES.
Upon the terms and subject to the conditions of the Offer, if more than the
Maximum Number of Shares are validly tendered and not properly withdrawn prior
to the Expiration Date, Purchaser will accept for payment and pay for only the
Maximum Number of Shares, on a pro rata basis (with appropriate adjustments to
avoid the purchase of fractional Shares) from each stockholder who has validly
tendered Shares in the Offer based on the number of Shares properly tendered by
each stockholder prior to the Expiration Date and theretofore not properly
withdrawn. In the event that proration of tendered Shares is required, Purchaser
shall determine the proration factor as soon as practicable following the
Expiration Date. Because of the difficulty of determining the precise number of
Shares validly tendered and not properly withdrawn prior to the Expiration Date
(due in part to the guaranteed delivery procedures described in Section 3),
Purchaser does not expect that it will be able to announce the final results of
such proration or pay for any Shares until at least seven Nasdaq National Market
trading days after the Expiration Date. Stockholders may obtain such preliminary
information from the Dealer Manager and may be able to obtain such information
from their broker.
The Offer is conditioned upon the satisfaction of the Minimum Condition and
the expiration or termination prior to the Expiration Date of the applicable
waiting period under the HSR Act. The Offer is also subject to satisfaction or
waiver of other terms and conditions. See Section 14 . Purchaser reserves the
right (but shall not be obligated), in accordance with applicable rules and
regulations of the Commission, in its sole discretion, to waive any of the
conditions to the Offer, including without limitation, the Minimum Condition. If
the Minimum Condition or any of the other conditions set forth in Section 14
have not been satisfied by 12:00 midnight, New York City time, on November 14,
2000 (or any other time then set as the Expiration Date), Purchaser may, subject
to the terms of the Tender Offer Agreement as described below, elect to (i)
extend the Offer and, subject to applicable withdrawal rights, retain all
tendered Shares until the Expiration Date, as extended, (ii) not extend the
Offer and, subject to complying with applicable rules and regulations of the
Commission, accept for payment all Shares so tendered or (iii) terminate the
Offer and not accept for payment any Shares and return all tendered Shares to
the tendering stockholders. If all of the
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conditions to consummation of the Offer are satisfied, Purchaser shall
consummate the Offer as promptly as possible. Purchaser reserves the right (but
will not be obligated), at any time and from time to time in its sole
discretion, to extend the period during which the Offer is open by giving oral
or written notice of such extension to the Depositary and by making a public
announcement of such extension promptly thereafter. However, under no
circumstances shall any such extension be less than the number of days required
by the Exchange Act or by any other applicable law. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to the
Offer, subject to the rights of a tendering stockholder to withdraw its Shares.
There can be no assurance that Purchaser will exercise its right to extend the
Offer.
If Purchaser has not accepted for payment any Shares pursuant to the Offer
prior to November 30, 2000, either Purchaser or the Company may terminate the
Tender Offer Agreement, unless at such date the waiting period applicable to the
consummation of the Offer under the HSR Act or any other necessary governmental
filing shall not have expired or been terminated (except for such waiting
periods (other than under the HSR Act) or approvals the failure of which to
expire or be obtained is not reasonably likely to have a Material Adverse Effect
(as defined in Section 13 below) on the Company or Purchaser), in which case
Purchaser shall begin accepting payment of Shares tendered in the Offer as soon
as possible after the appropriate governmental agencies have given approval to
the HSR Act and any other necessary governmental filings and shall not be
grounds for termination of the Tender Offer Agreement, unless Purchaser and the
Company mutually agree. However, the right to terminate the Tender Offer
Agreement pursuant to preceding sentence shall not be available to either
Purchaser or the Company, as the case may be, whose failure to perform any of
its obligations under the Tender Offer Agreement results in the failure of the
Offer to be consummated by November 30, 2000. See Section 13.
If the Offer is terminated or not consummated, in each case solely because
purchase by means of the Offer is precluded by applicable law or by judicial or
administrative action, and such law or judicial or administrative action does
not indirectly or directly preclude Purchaser for acquiring Shares outside of
the Offer, the Identified Stockholder shall sell to Purchaser, and Purchaser
shall purchase from the Identified Stockholders, the Identified Stockholders
Shares, at purchase price per share equal to $2.32. See Section 13.
Subject to the terms of the Tender Offer Agreement described above,
Purchaser also expressly reserves the right, in its sole discretion at any time
and from time to time, upon the occurrence of any of the Events set forth in
Section 14, to delay payment for any Shares regardless of whether such Shares
were theretofore accepted for payment, or to terminate the Offer and not to
accept for payment or pay for any Shares not theretofore accepted for payment or
paid for, by giving oral or written notice of such delay, termination or
amendment to the Depositary and by making a public announcement thereof.
Purchaser's right to delay payment for any Shares or not to pay for any Shares
theretofore accepted for payment is subject to the applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act,
relating to Purchaser's obligation to pay for or return tendered Shares promptly
after the termination or withdrawal of the Offer.
Any extension of the period during which the Offer is open beyond November
14, 2000, any delay in acceptance for payment of any tendered Shares or any
termination or amendment of the Offer will be followed, as promptly as
practicable, by public announcement thereof, such announcement in the case of an
extension to be issued not 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 Rules 14d-4(d) and 14-d(6)(c) under the
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 and making any appropriate filing with the
Commission.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will disseminate additional tender offer materials and extend
the Offer if and to the extent required by Rules 14d-4(d), 14d-6(c) and l4e-1
under the Exchange Act. The minimum period during which a tender offer must
remain open following material changes in the terms of the Offer or the
information concerning the Offer, other than a change in price or a change in
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percentage of securities sought, will depend upon the relevant facts and
circumstances, including the relative materiality of the changes to such terms
or information.
The Company has provided Purchaser with the Company's list of stockholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of the Shares whose
names appear on the Company's list of stockholders and will be furnished, for
subsequent transmittal to beneficial owners of Shares, to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the Company's list of stockholders 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, and the terms and conditions of any such
extension or amendment), Purchaser will accept for payment and will pay for up
to the Maximum Number of Shares validly tendered prior to the Expiration Date
and not theretofore properly withdrawn in accordance with Section 4 promptly
after the later to occur of (a) the Expiration Date and (b) subject to
compliance with Rule 14e-l(c) under the Exchange Act, the satisfaction or waiver
of the conditions set forth in Section 14. Purchaser, subject to the Tender
Offer Agreement, expressly reserves the right, in its sole discretion, to delay
acceptance for payment of or payment for Shares in order to comply in whole or
in part with any applicable law, including, without limitation, the HSR Act and
any applicable foreign antitrust laws. Any such delays will be effected in
compliance with Rule 14e-1(c) under the Exchange Act (relating to a bidder's
obligation to pay for or return tendered securities promptly after the
termination or withdrawal of such bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares or timely confirmation (a "Book-Entry Confirmation") of a book-entry
transfer of such Shares into the Depositary's account at The Depository Trust
Company, (the "Book-Entry Transfer Facility"), pursuant to the procedures set
forth in Section 3, (ii) a properly completed and duly executed Letter of
Transmittal with all required signature guarantees or, in the case of a
book-entry transfer, an Agent's Message (as defined below) and (iii) all other
documents required by the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered on or prior to the
Expiration Date and not properly withdrawn if, as and when Purchaser gives oral
or written notice to the Depositary of Purchaser's acceptance of such Shares for
payment whose Shares have been accepted for payment, giving effect to proration
in the event that the number of Shares validly tendered in, and not properly
withdrawn from, the Offer exceeds the Maximum Number of Shares. In all cases,
payment for Shares purchased pursuant to the Offer will be made by deposit of
the purchase price with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from Purchaser and
transmitting such payment to tendering stockholders. If, for any reason
whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer
is delayed, or Purchaser is unable to accept for payment Shares tendered
pursuant to the Offer, then, without prejudice to Purchaser's rights, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares and
such Shares may not be withdrawn, except to the extent that the tendering
stockholders are entitled to withdrawal rights as described in Section 4 and as
otherwise required by Rule 14e-1(c) under the Exchange Act. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID BY PURCHASER, REGARDLESS OF ANY EXTENSION OF
THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
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If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason (including, without limitation,
proration due to tenders of more than the Maximum Number of Shares), or if
certificates are submitted for more Shares than are tendered, certificates for
such unpurchased or untendered Shares will be returned without expense to the
tendering stockholder (or, in the case of Shares delivered by book-entry
transfer to the Book-Entry Transfer Facility, such Shares will be credited to an
account maintained within the Book-Entry Transfer Facility), as promptly as
practicable after the expiration, termination or withdrawal of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more indirect majority owned and controlled
subsidiaries of Purchaser the right to purchase all or any portion of the Shares
tendered pursuant to the Offer, but no such transfer or assignment shall relieve
Purchaser of its obligations under the Offer or prejudice any rights of
tendering stockholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES.
VALID TENDERS. For a stockholder to tender Shares validly pursuant to the
Offer, a properly completed and duly executed Letter of Transmittal, with all
required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and all other required documents, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase on or prior to the Expiration Date, and either (i) certificates
representing such Shares must be received by the Depositary or such Shares must
be tendered pursuant to the procedure for book-entry transfer set forth below,
and a Book-Entry Confirmation must be received by the Depositary, in each case
on or prior to the Expiration Date or (ii) the guaranteed delivery procedure set
forth below must be complied with. If certificates for Shares are forwarded to
the Depositary in multiple deliveries, a properly completed and duly executed
Letter of Transmittal must accompany each delivery. No alternative, conditional
or contingent tenders will be accepted. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DESCRIBED BELOW DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of Shares by causing the Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account at the Book-Entry
Transfer Facility in accordance with such Book-Entry Transfer Facility's
procedures for 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, properly completed and duly
executed, with all required signature guarantees, or an Agent's Message in
connection with a book-entry transfer, and all other required documents, must,
in any case, be transmitted to and received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase on or prior to
the Expiration Date for a valid tender of Shares by book-entry. 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 LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS MUST BE
FORWARDED TO AND RECEIVED BY THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH ON
THE BACK COVER OF THIS OFFER TO PURCHASE. DELIVERY OF THE LETTER OF TRANSMITTAL
AND ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY WILL NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
THE 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 RIGHT OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING IN THE CASE
OF A BOOK-ENTRY TRANSFER BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
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SIGNATURE GUARANTEE. No signature guarantee on the Letter of Transmittal
is required if (i) 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 system 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) such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (such
participant, an "Eligible Institution"). In all other cases, all signatures on
the Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instructions 1 and 5 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, the tendered
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered holders or
owners appear on the certificates with the signatures on the certificates or
stock powers guaranteed as aforesaid. See Instructions 1 and 5 to the Letter of
Transmittal.
GUARANTEED DELIVERY. If a stockholder wishes to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit certificates and all required documents to
reach the Depositary on or prior to the Expiration Date or the procedure for
book-entry transfer cannot be completed on a timely basis, such Shares may
nevertheless be tendered validly upon compliance with all of the following
guaranteed delivery procedures:
(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 herewith, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates for all physically tendered Shares in proper
form for transfer (and/or a Book-Entry Confirmation for all such Shares),
together with a properly completed and duly executed Letter of Transmittal,
and all required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message, and all other documents required by the
Letter of Transmittal are received by the Depositary within three Nasdaq
trading days after the date of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, mail or facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Notwithstanding any other provision 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 such Shares or a Book-Entry
Confirmation (ii) a properly completed and duly executed Letter of Transmittal,
with all required signature guarantees, (or, in the case of a book-entry
transfer, an Agent's Message in lieu of the Letter of Transmittal) and (iii) all
other documents required by the Letter of Transmittal. Accordingly, tendering
stockholders 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 BY THE PURCHASER
ON THE PURCHASE PRICE OF THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
DETERMINATION OF VALIDITY. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by Purchaser in its sole discretion,
and its determination will be final and binding on all parties. Purchaser
reserves the absolute right to reject any or all tenders of any Shares that are
determined by it not to be in proper form or the acceptance of or payment for
which may, in the opinion of Purchaser's counsel, be
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unlawful. Purchaser also reserves the absolute right to waive any of the
conditions of the Offer, subject to the limitations set forth in the Tender
Offer Agreement, or any defect or irregularity in the tender of any Shares. In
all cases, Xxxxxxxxx's interpretation of the Instructions to the Letter of
Transmittal will be final and binding on all parties. No tender of Shares will
be deemed to have been validly made until all defects and irregularities have
been cured or waived. None of Purchaser, the Company, the Dealer Manager, the
Depositary, or any other person will be under any duty to give notification of
any defects or irregularities in tenders or incur any liability to any tendering
stockholder for failure to give any such notification. Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto and any other related documents
thereto) will be final and binding.
APPOINTMENT AS PROXY. By executing a Letter of Transmittal or, in the case
of a book-entry transfer, by delivery of an Agent's Message, in lieu of a Letter
of Transmittal, a tendering stockholder will irrevocably appoint designees of
Purchaser as such stockholder's attorneys-in-fact and proxies, each with full
power of substitution, in the manner set forth in the Letter of Transmittal, to
the full extent of such stockholder's rights with respect to (i) the Shares
tendered by such stockholder and accepted for payment by Purchaser and (ii) all
dividends, distributions (including, without limitation, distributions of
additional Shares) and rights declared, issued, paid or distributed in respect
of any such Shares on or after November 14, 2000 and payable or distributable to
such stockholder on a date prior to the transfer to the name of Purchaser (or a
nominee or transferee of Purchaser) on the Company's stock transfer record of
such Shares (collectively, "Distributions"). All such powers of attorney and
proxies are irrevocable and shall be considered coupled with an interest in the
tendered Shares. This appointment is effective when, and only to the extent
that, Xxxxxxxxx accepts for payment the Shares deposited with the Depositary.
Upon acceptance for payment, all prior powers of attorney and proxies given by
the stockholder with respect to the Shares and all Distributions will, without
further action, be revoked and no subsequent powers of attorney and proxies may
be given or written consent executed (and, if given or executed, will not be
deemed effective). The designees of Purchaser will, with respect to the Shares
and all Distributions, be empowered to exercise all voting and other rights of
such stockholder as they in their sole discretion deem proper in respect of any
annual or special meeting of the Company's stockholders, or any adjournment or
postponement thereof or in connection with any action that may be taken by
consent in lieu of any meeting or otherwise. Purchaser reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon Purchaser's payment for such Shares, Purchaser must be able to exercise
full voting and other rights of record or beneficial holder with respect to such
Shares and all Distributions, including voting at any meeting of stockholders
(whether annual or special or whether or not adjourned) or acting by written
consent.
BACKUP WITHHOLDING. In order to avoid "backup withholding" of United
States ("U.S.") federal income tax on payments of cash pursuant to the Offer, a
stockholder surrendering Shares in the Offer must, unless an exemption applies,
provide the Depositary with such stockholder's correct taxpayer identification
number ("TIN") on a Substitute Form W-9 and certify under penalties of perjury
that such TIN is correct and that such stockholder is not subject to backup
withholding. If a stockholder does not provide such stockholder's correct TIN or
fails to provide the certifications described above, the Internal Revenue
Service (the "IRS") may impose a penalty on such stockholder and payment of cash
to such stockholder pursuant to the Offer may be subject to backup withholding
of 31%. All stockholders surrendering Shares pursuant to the Offer should
complete and sign the main signature form and the Substitute Form W-9 included
as part of the Letter of Transmittal to provide the information and
certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to the Purchaser and the
Depositary). Certain stockholders (including, among others, all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See
Instruction 9 to the Letter of Transmittal.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer. Purchaser's payment of Shares tendered pursuant to the
Offer will constitute Purchaser's acceptance of the tendered Shares.
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4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4 or by applicable law,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time prior to the Expiration Date
(other than the Shares of Schedule B Stockholders, which may not be withdrawn
pursuant to the Tender Offer Agreement) and, unless theretofore accepted for
payment pursuant to the Offer, may also be withdrawn at any time after December
17, 2000 (or such later date as may apply if the Offer is extended). If
Purchaser extends the Offer or if the purchase of or payment for Shares is
delayed for any reason or if Purchaser is unable to purchase or pay for Shares
for any reason, then, without prejudice to Purchaser's rights under the Offer,
the tendered Shares may be retained by the Depositary on behalf of Purchaser and
may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as set forth in this Section 4, subject to Rule
14e-l(c) under the Exchange Act, which provides that no person who makes a
tender offer shall fail to pay the consideration offered or return the
securities deposited by or on behalf of security holders promptly after the
termination or withdrawal of the tender offer. Any such delivery in an
acceptance for payment will be accompanied by an extension of the Offer to the
extent required by law.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
notice of withdrawal must, to be valid, specify (i) the name of the person who
tendered the Shares to be withdrawn, (ii) the class and number of Shares to be
withdrawn and (iii) the name in which the certificates representing such Shares
are registered, if different from that of the person who tendered the Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer set forth in Section 3, any notice of withdrawal must, to be
valid, also specify the name and number of the account at the applicable
Book-Entry Transfer Facility to be credited with the withdrawn Shares.
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,
and its determination will be final and binding on all parties. None of
Purchaser, its affiliates or assigns, the Dealer Manager, the Depositary, nor
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 to any
tendering stockholder for failure to give any such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the principal U.S. federal income tax
consequences relating to the sale of Shares pursuant to the Offer. The
discussion applies only to holders of Shares in whose hands Shares are capital
assets, and may not apply to Shares received pursuant to the exercise of
employee stock-options or otherwise as compensation, or to holders of Shares who
are subject to special provisions of the tax law (such as insurance companies,
tax-exempt organizations, dealers in stocks and securities, and non-U.S.
persons).
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR
GENERAL INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE
INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH
STOCKHOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES
DISCUSSED BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS OF THE OFFER
AND THE MERGER TO SUCH STOCKHOLDER, INCLUDING THE APPLICATION AND EFFECT OF
FEDERAL, STATE, LOCAL AND OTHER INCOME TAX LAWS.
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The receipt of cash for Shares pursuant to the Offer will be a taxable
transaction for U.S. federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign income or other tax laws.
In general, for U.S. federal income tax purposes, a holder of Shares will
recognize gain or loss equal to the difference between the amount of cash
received by the stockholder pursuant to the Offer and the aggregate adjusted tax
basis in the Shares tendered by the stockholder and purchased pursuant to the
Offer.
If tendered Shares are held by a tendering stockholder as capital assets,
gain or loss recognized by such stockholder will be capital gain or loss, which
will be long-term capital gain or loss if such stockholder's holding period for
the Shares exceeds one year. In the case of a tendering noncorporate
stockholder, long-term capital gains will be eligible for a maximum U.S. federal
income tax rate of 20%. In addition, there are limits on the deductibility of
capital losses.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals) that tenders Shares
may be subject to 31% backup withholding unless the stockholder provides its TIN
and certifies that such number is correct (or properly certifies that it is
awaiting a TIN) and certifies as to no loss of exemption from backup withholding
and otherwise complies with the applicable requirements of the backup
withholding rules. A stockholder that does not furnish a required TIN or that
does not otherwise establish a basis for an exemption from backup withholding
may be subject to a penalty imposed by the IRS. See "Backup Withholding" under
Section 3. Each stockholder should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide the information
and certification necessary to avoid backup withholding.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the U.S. federal income tax liability of the person subject to the
backup withholding, provided that the required information is given to the IRS.
If the backup withholding results in an overpayment of tax, a refund can be
obtained by the stockholder by filing a U.S. federal income tax return.
THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF THE U.S. FEDERAL
INCOME TAXATION THAT MAY BE RELEVANT TO PARTICULAR STOCKHOLDERS IN LIGHT OF
THEIR PARTICULAR CIRCUMSTANCES AND INCOME TAX SITUATIONS. STOCKHOLDERS SHOULD
CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE
CHANGE OF CONTROL OFFER, INCLUDING THE EFFECT OF ANY FEDERAL, STATE, LOCAL
FOREIGN OR OTHER TAX LAWS.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares have traded publicly on the Nasdaq National Market under the
trading symbol "IZAP" since October 20, 1999, the date of the Company's initial
public offering. Prior to the Company's initial public offering there was no
established public trading market for the Shares. The Company's initial public
offering price was $11.00 per share. The following table sets forth for each of
the periods indicated the high and low sales prices per Share. Share prices for
Fiscal Year Ended 1999 are as reported in the Company's Annual Report on Form
10-K for the year ended December 31, 1999 (the "Company Form 10-K") and, in the
case of 2000, as reported on the Nasdaq National Market System based on
published financial sources.
HIGH LOW
------ -----
FISCAL YEAR ENDED DECEMBER 31, 1999
October 20, 1999 to December 31, 1999..................... $12.94 $6.13
------ -----
FISCAL YEAR ENDED DECEMBER 31, 2000
First Quarter............................................. $11.63 $5.88
------ -----
Second Quarter............................................ $ 8.00 $1.81
------ -----
Third Quarter............................................. $ 4.19 $1.56
------ -----
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On October 2, 2000, the last full day of trading prior to the date of the
public announcement of the execution of the Tender Offer Agreement and the
announcement that Purchaser had submitted to the Company a proposal to acquire
up to the Maximum Number of Shares for $2.32 cash per share, the closing price
per share for the Shares as reported on the Nasdaq National Market was $1.81.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
Tendering Shares pursuant to the Offer will not affect the right of
stockholders to receive any dividends with respect to Shares declared by the
Company, if any, with a record date prior to the date on which Purchaser
purchases the Shares pursuant to the Offer. The Offer will expire at 12:00
midnight, New York City time, on November 14, 2000 unless extended as described
elsewhere in this Offer to Purchase.
According to the Company Form 10K, the Company has never declared or paid
any cash dividends on the Shares and does not anticipate declaring and paying
cash dividends on the Shares at any time in the foreseeable future.
7. EFFECT OF THE OFFER ON THE MARKET FOR SHARES, NASDAQ LISTING, EXCHANGE ACT,
AND MARGIN REGULATION.
MARKET FOR THE SHARES. The purchase of the Shares by Purchaser pursuant to
the Offer will reduce the number of Shares that might otherwise trade publicly
and will reduce the number of holders of Shares, which could adversely affect
the liquidity and market value of the remaining Shares held by the public.
NASDAQ LISTING. Purchaser currently does not intend to seek delisting of
the Shares from the Nasdaq or the termination of the registration of the Shares
under the Exchange Act following consummation of the Offer, although such Shares
may nonetheless be delisted on the Nasdaq as described below.
Because Purchaser will beneficially own 51% of the Outstanding Shares,
there is a risk that the Shares may no longer meet the standards for continued
listing on Nasdaq. According to NASDAQ's published guidelines, the Shares would
not be eligible to be included for listing if, among other things, the number of
Shares publicly held falls below 100,000, the number of holders of Shares falls
below 300 or the market value of such publicly held Shares is not at least
$200,000. If, as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of Nasdaq for continued
listing, the listing of the Shares will be discontinued. In such event, the
market for the Shares would be adversely affected. In the event the Shares were
no longer eligible for listing on Nasdaq, quotations might still be available
from other sources. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of
holders of such Shares remaining at such time, the interest in maintaining a
market in such Shares on the part of securities firms, the possible termination
of registration of such Shares under the Exchange Act as described below and
other factors. Purchaser cannot predict whether the reduction in number of
Shares that might otherwise trade publicly would have an adverse or beneficial
effect on the market price for or marketability of the Shares or whether it
would cause future market prices to be greater or less than the Offer Price.
EXCHANGE ACT REGISTRATION. The Shares currently are registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the Commission if the Shares are not listed on a "National Securities
Exchange" and, in connection with stockholders' meetings, there are fewer than
300 record holders of Shares. The termination of registration of the Shares
under the Exchange Act would make certain provisions of the Exchange Act no
longer applicable to the Company, such as the short-swing profit recovery
provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a
proxy statement pursuant to Section 14(a) or 14(c) of the Exchange Act and the
related requirement of furnishing an annual report to stockholders and the
requirements of Rule l3e-3 under the Exchange Act with respect to "going
private" transactions. Furthermore, the ability of "affiliates" of the Company
and persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act of
1933, as amended (the "Securities Act"), may be impaired or eliminated. If
registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be eligible for Nasdaq reporting.
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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 the Shares. Depending
upon factors similar to those described above regarding listing and market
quotations, it is possible that, following the Offer, the Shares would no longer
constitute "margin securities" for the purposes of the margin regulations of the
Federal Reserve Board and therefore could no longer be used as collateral for
loans made by brokers. If registration of Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth herein, the summary information concerning
the Company in this Section 8 and elsewhere in this Offer to Purchase is derived
from the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999 (the "Company 10-K"), the Company's Prospectus related to its initial
public offering filed with the SEC on October 20, 1999 (the "Company's
Prospectus") and the Company's Quarterly Reports on Form 10-Q for the three
months ended March 31, 2000 and June 30, 2000 (together, the "Company 10-Q"), as
filed with the Commission pursuant to the Exchange Act, and other publicly
available information. Although Purchaser does not have any knowledge that would
indicate that statements contained herein based upon such documents are untrue,
none of Purchaser, any of its affiliates, or the Dealer Manager assumes any
responsibility for the accuracy or completeness of the information concerning
the Company, furnished by the Company, or 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 Purchaser.
The Company is a Delaware corporation with its principal executive offices
located at 0000 Xxxxxxxxx Xxxxxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000.
The Company currently provides an advertising-supported, free broadband
Internet access network for schools nationwide, using a satellite-based network.
r)Star Broadband Networks, Inc., a subsidiary of the Company ("r)Star"),
develops, provides and manages satellite-based networks for large-scale
deployment across corporate enterprises, educational systems, and user
communities of interest. r)Star's core products include remote high-speed
Internet access, data delivery, high-quality video and networking services
distributed though its satellite broadband Internet gateway and bi-directional
solutions.
SELECTED FINANCIAL INFORMATION. Set forth below is certain selected
financial information with respect to the Company and its subsidiaries excerpted
from the information contained in the Company's Prospectus, the Company 10-K and
the Company 10-Q. More comprehensive financial information is included in such
reports and other documents filed by the Company with the Commission, and the
following summary is qualified in its entirety by reference to such reports,
other documents and all the financial information (including any related notes)
contained therein. Such reports and other documents should be available for
inspection and copies thereof should be obtainable in the manner set forth below
under "Available Information".
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ZAPME! CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE THREE MONTHS FOR THE YEAR ENDED
ENDED (UNAUDITED) DECEMBER 31,(1)
--------------------- ----------------------------
JUNE 30, JUNE 30,
2000 1999 1999 1998 1997
--------- --------- --------- ------- ------
Revenue..................................... $ 7,256 $ 141 $ 2,542 $ 0 $ 0
Net income (loss) after taxes............... (14,366) (5,780) (27,127) (5,031) 581
Net earnings (loss) per Share (fully
diluted).................................. (0.34) (0.67) (2.30) (0.48) (0.05)
---------------
(1) There were no cash dividends paid or declared on common stock during any of
these three periods.
AS OF JUNE 30, AS OF DECEMBER 31,
-------------- --------------------------
2000 1999 1998 1997
-------------- -------- ------- -----
BALANCE SHEET DATA
Cash and Cash Equivalents............................ $ 81,848 $112,714 $ 815 $ 275
Total Assets......................................... 151,902 151,192 3,603 349
Long-term Debt(1).................................... 21,783 13,292 269 462
Shareholders' Equity................................. 96,920 114,313 (2,123) (512)
---------------
(1) Net of current portion of long-term debt.
AVAILABLE INFORMATION. The Company is subject to the information and
reporting requirements of the Exchange Act and in accordance therewith files
periodic reports, proxy statements and other information with the Commission
relating to its business, financial condition and other matters. The Company is
required to disclose in such proxy statements certain information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interests of such persons in transactions
with the Company. Such reports, proxy statements and other information should be
available for public inspection at the public reference facilities maintained by
the Commission at Room 0000, 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, and
at the regional offices of the Commission located at Seven World Trade Center,
13th Floor, New York, New York 10048 and Citicorp Center, 000 Xxxx Xxxxxxx
Xxxxxx (Xxxxx 0000), Xxxxxxx, Xxxxxxxx 00000. Copies of this material may also
be obtained by mail, upon payment of the Commission's customary fees, from the
Commission's principal office at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000.
The Commission also maintains a web site on the Internet at xxxx://xxx.xxx.xxx
that contains reports, proxy statements and other information relating to the
Company which have been filed via the Commission's XXXXX System.
9. CERTAIN INFORMATION CONCERNING PURCHASER.
GENERAL. Purchaser, a corporation formed under the laws of Israel, was
incorporated in 1987. The name, business address, citizenship, present principal
occupation or employment and five-year employment history of each of the
executive officers and directors of Purchaser and certain other persons are set
forth on Xxxxx X.
The principal executive office of Purchaser is located at 00/X Xxxxx
Xxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxx.
Purchaser with its global subsidiaries Spacenet Inc., Gilat Europe and
Gilat Florida Inc., is a leading provider of telecommunications solutions based
on VSAT satellite network technology. Purchaser provides satellite-based,
end-to-end enterprise networking and rural telephony solutions to customers
across six continents, and markets interactive broadband data services.
Purchaser is also a joint venture partner, with Microsoft Corp., EchoStar
Communications Corp. and ING Xxxxxx Xxxx Investments, in StarBand Communications
Inc., a consumer, always-on, nationwide, two-way, high-speed satellite Internet
service provider.
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FINANCIAL INFORMATION. Set forth below is certain consolidated summary
information with respect to Purchaser which is excerpted or derived from
Purchaser's (i) Report of Foreign Issuer on Form 6-K for the month of August,
filed with the Commission on August 10, 2000 (ii) Annual Report on Form 20-F for
the fiscal year ended December 31, 1999, filed with the Commission on June 30,
2000 and (iii) Annual Report on Form 20-F for fiscal year ended December 31,
1998, filed with the Commission on June 30, 1999. More comprehensive financial
information is included in such report and other documents filed by Purchaser
with the Commission, and the following summary is qualified in its entirety by
reference to such reports and such other documents and all the financial
information (including any related notes) contained therein. Such reports and
other documents should be available for inspection and copies thereof should be
obtainable from the Commission in the manner set forth in Section 8 although
certain information may not be available on-line through XXXXX.
GILAT SATELLITE NETWORKS LTD.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE SIX MONTHS
ENDED JUNE 30, FOR THE YEAR ENDED
(UNAUDITED) DECEMBER 31,
------------------- ------------------------------
2000 1999 1999 1998 1997
-------- -------- -------- -------- --------
Revenues.................................. $194,547 $140,498 $337,873 $155,335 $103,690
Operating income (loss)................... 15,997 19,525 20,251 (74,609) 16,506
Net income (loss)......................... 15,638 20,102 19,611 (79,383) 16,944
Earnings (loss) per share-diluted......... 0.65 0.97 0.92 (7.18) 1.51
AS OF JUNE 30, AS OF DECEMBER 31,
-------------- ------------------------------
2000 1999 1998 1997
-------------- -------- -------- --------
BALANCE SHEET DATA
Cash and Cash Equivalents......................... $ 67,418 $ 33,381 $ 7,564 $ 15,704
Total Current Assets.............................. 651,544 359,380 191,389 112,840
Total Current Liabilities......................... 104,320 94,073 102,162 27,759
Other Long-term Liabilities....................... 23,337 8,089 284 --
Convertible Subordinated Notes.................... 75,000 75,000 75,000 75,000
Shareholders' Equity.............................. 603,801 499,823 222,620 108,338
Except as set forth in this Offer to Purchase, including Section 11, none
of Purchaser and, to the best knowledge of Purchaser, any of the persons listed
on Annex I or any associate or majority owned subsidiary of Purchaser, or any of
the persons so listed, beneficially owns or has a right to acquire directly or
indirectly any Shares.
Except as set forth in this Offer to Purchase, including Section 11, none
of Purchaser and, to the best knowledge of Purchaser, any of the persons listed
on Annex I, owns any Shares and none of them has effected any transaction in the
Shares during the past 60 days.
Except as set forth in this Offer to Purchase, including Section 11, none
of Purchaser and, to the best knowledge of Purchaser, any of the persons listed
on Annex I, has any contract, arrangement, understanding or relationship with
any other person with respect to any securities of the Company, including,
without limitation, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies. None of
Purchaser and, to the best knowledge of Purchaser, any of the persons listed on
Annex I has had any transactions with the Company, or any of its executive
officers, directors or affiliates that would require reporting under the rules
of the Commission applicable to the Offer.
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Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between Purchaser, its subsidiaries, or, to the
best knowledge of Purchaser, any of the persons listed on Annex I, on the one
hand, and the Company or its executive officers, directors or affiliates, on the
other hand, concerning a merger, consolidation or acquisition, tender offer or
other acquisition of securities, election of directors, or a sale or other
transfer of a material amount of assets that would require reporting under the
rules of the Commission applicable to the Offer.
10. SOURCE AND AMOUNT OF FUNDS.
If the Maximum Number of Shares are validly tendered in the Offer and
acquired by Purchaser, the aggregate purchase price for such Shares and all
estimated commissions, fees and expenses relating to the Offer will be
approximately U.S. $54,000,000 million. Purchaser has sufficient funds to
consummate the Offer and does not anticipate borrowing or otherwise obtaining
funds from any third parties. The Offer is not subject to any financing
contingency.
If the Offer is consummated by any of Purchaser's direct or indirect
majority-owned and controlled subsidiaries, such subsidiary will receive all
necessary funds to consummate the Offer through capital contributions from
Purchaser and its affiliates.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
PAST CONTACTS AND TRANSACTIONS WITH THE COMPANY. Purchaser currently holds
500,000 Shares, of which 300,000 Shares were acquired in December 1998 and
200,000 in February 1999. These Shares were acquired in privately negotiated
transactions at $5.00 per share. In addition, certain officers and directors of
Purchaser hold an aggregate of 382,273 Shares, including Shares held in various
trusts.
Neither Purchaser nor its officers or directors are eligible to participate
in this Offer, and there are no arrangements or agreements between such officers
and directors and the Company or between Purchaser and the Company with respect
to the Shares they hold.
In 1998, the Company began to purchase VSAT data communications equipment
(including satellite uplink equipment and satellite receiver cards) from
Purchaser. In 1999, the parties expanded their business relationship to cover
purchase of services and equipment from Purchaser's wholly-owned subsidiary,
Spacenet Inc. ("Spacenet").
On June 11, 1999, the Company and Spacenet entered into a service agreement
(the "Service Agreement") whereby Spacenet was to provide the Company with
equipment, installation, maintenance and space segment for a fixed fee per
school installment. The Service Agreement provided for a minimum of 500 school
sites to be installed within 3-months of the effective date, a minimum 3-year
service term per site, and a fixed monthly fee per site. Commencing in July
1999, Spacenet began installing and leasing satellite equipment, as well as
providing the space segment and operation and maintenance services under the
Service Agreement. The Service Agreement was amended on July 19, 1999 to adjust
pricing, and amended and restated on September 30, 1999, to expand Spacenet's
responsibilities to provide a complete end-to-end, two-way broadband solution
and to increase the minimum number of sites to 2,000.
Sales to the Company of Purchaser and its affiliates amounted to $447,000
in 1998, $35,812,192 in 1999 and $22,287,150 in the first nine months of the
year 2000. Purchaser provided financing terms for a portion of these sales. Such
financing obligations are included in the Company's financial statements as
capital lease obligations.
In 1999, the Company provided advertisement services to Purchaser's
subsidiary Spacenet. On December 30, 1999, Purchaser and the Company entered
into an Agreement for advertising and consulting services for Purchaser and its
affiliates (the "ZapMe Agreement"). The services under the ZapMe Agreement were
substantially geared to provide information to assist Purchaser in the launch of
new satellite-to-home services to be offered by Gilat-to-Home, now StarBand
Communications, Inc., a joint venture among the Purchaser, Microsoft, Echostar
and ING Xxxxxx Xxxx Investments. The Company provided a beta test network for
new product features and development concepts, and StarBand paid for the costs
of these services.
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Xxxx Xxx, a co-founder of Purchaser, its Chairman and CEO, was a director
of the Company from June 1999 through October 1999. On October 15, 1999, Mr. Xxx
resigned from the Company's Board of Directors, but the Purchaser retained
observer rights on the Board, which give the Purchaser's designee the
opportunity to participate in most Board discussions. The Purchaser's designee
did not participate in any discussions of the Company's Board of Directors
relating to the Offer.
NEGOTIATIONS WITH THE COMPANY. Since 1998, Purchaser and Spacenet have
been important suppliers of equipment and services to the Company. Purchaser has
also been a shareholder of the Company.
In February 2000, Purchaser, through its Spacenet subsidiary, began
discussions with the Company, through its r)Star subsidiary, regarding technical
support of key vertical enterprise markets of interest to Purchaser. Purchaser
informed the Company of its intent to build web-based networks for vertical
market segments, combining Purchaser's satellite technology with a customized
browser to enable e-commerce transactions between small to medium-sized
businesses and their suppliers.
Purchaser provided the Company with specifications for the development of a
demonstration system for presentation to potential supplier partners and users.
Beginning on April 3, 2000, the Company attended a series of business
development meetings sponsored by Purchaser. In the course of these meetings,
Purchaser presented its service concept to key suppliers in the food service,
automotive repair and pharmacy market segments, and collected market research
regarding applications and other technical requirements necessary for these
vertical markets.
In June 2000, Purchaser delivered to the Company a specification for a
customized browser for technical support of the Purchaser's vertical
initiatives. The parties agreed that the Company would be compensated for its
technology, based on a revenue share model, to be negotiated prior to conclusion
of the first vertical initiative transaction, which has not yet occurred.
As a consequence of and during the above activities, Purchaser developed a
strong interest to acquire the Company's infrastructure in order to accelerate
its vertical market initiatives.
In June 2000, the Company began discussing with Purchaser potential changes
in its traditional education business and the ability to reposition the Company
with a focus on the vertical opportunities in an effort to improve its financial
performance. On July 11, 2000, Xxxx Xxx met with Xxxxx Xxxxxxxxx and Xxxx
Xxxxxxx, at that time the Company's Chairman and CEO, respectively, to discuss
the potential acquisition of all or part of the Company by Purchaser.
On July 20, 2000, July 23, 2000 and July 24, 2000, officers of Purchaser
and the Company met and held conference calls to further discuss the possibility
of an acquisition and to review the Company's financial condition.
On August 8, 2000, representatives of Purchaser and of the Company met to
discuss a potential cooperative agreement between the Company and one of
Purchaser's subsidiaries, as well as to review the technical characteristics of
the Company's browser.
On August 21, 2000, Messrs. Xxx and Xxxxxxxxx held a telephone conversation
to discuss a potential investment of Purchaser in the Company's r)Star
subsidiary, instead of an acquisition of the Company. On August 24, 2000,
Xxxxxxxxx submitted to the Company a draft term sheet outlining the proposed
r)Star investment. Between August 28 and August 30, 2000, Mr. Xxx and other
representatives of Purchaser negotiated the term sheet with Messrs. Xxxxxxxxx
and Inatome, and developed and reviewed business model assumptions for r)Star.
However, in early September the parties discontinued their discussions regarding
the proposed r)Star investment plan.
On September 11, 2000, Messrs. Xxx and Xxxxxxxxxx, Purchaser's CFO, held a
conference call with Messrs. Xxxxxxxxx and Inatome to discuss various options
for investment in, or acquisition of, the Company. It was decided that the
parties would continue to explore the possibility of an acquisition of all or a
substantial interest in the Company by Purchaser.
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On September 17, 2000, counsel to Purchaser provided counsel to the Company
with a proposed draft acquisition agreement.
At a special meeting held on September 17, 2000, the Board of Directors of
the Company formed a special committee comprised of independent officers (the
"Special Committee") to consider a definitive agreement from Purchaser.
On September 18, 2000, Purchaser and the Company entered into a
confidentiality agreement and on September 19, 2000, Purchaser began conducting
financial and legal due diligence.
On September 20, 2000, respective counsel to Purchaser and the Company
began discussions on the draft acquisition agreement.
On September 27, 2000, Messrs. Xxxxxxxxxx and Xxxxxxxxx decided to effect
the transaction by way of a tender offer to acquire 51% of the capital stock of
the Company, subject to (i) final agreement on pricing and other terms, (ii)
approval of the contemplated transaction by the Boards of Directors of the
Company and Purchaser, and (iii) receipt by the Company of a fairness opinion
from its financial advisor.
On September 30, 2000, Xxxxxxxxx's Board of Directors approved the
contemplated Offer and, thereafter, on October 1, 2000, after discussions with
the Special Committee, the Company's Board of Directors approved the proposed
Offer subject to the receipt of the fairness opinion.
On October 3, 2000, Purchaser, the Company and certain Company stockholders
agreed on the final offer price and executed a definitive Tender Offer
Agreement. Thereafter, the Company received a fairness opinion from Xxxxxx
Xxxxxx Partners, financial advisor to the Company and a joint press release
announcing the transaction was issued.
12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY.
PURPOSE OF THE OFFER. The purpose of the Offer is to enable Purchaser to
acquire a majority of the Outstanding Shares and, as a result, the Company will
be a direct majority-owned subsidiary of Purchaser.
RULE 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to business combination following the
purchase of Shares pursuant to the Offer or otherwise in which Purchaser seeks
to acquire the remaining Shares not held by it. If applicable, Rule 13e-3
requires, among other things, that certain financial information concerning the
Company and certain information relating to the fairness of the proposed
transaction and the consideration offered to minority stockholders in such
transaction, be filed with the Commission and disclosed to stockholders prior to
consummation of the transaction. Although, the purchase of a substantial number
of Shares pursuant to the Offer may result in the Company being able to
terminate its Exchange Act registration, Purchaser has no current intention to
do so. See Section 7. If such registration were terminated, Rule 13e-3 would be
inapplicable to any such future business combination with Purchaser.
PLANS FOR THE COMPANY. The Service. The Company intends to aggregate
horizontal business applications, such as merchant payment services, in-store
audio and video, and employee benefits administration, and bundle these services
with dedicated connections, via a satellite-based network, to vendors and other
Application Service Providers specific to targeted industries. The Company's
managed browser technology enables an industry-specific Internet access user
interface, a managed environment for conducting business transactions or viewing
web-based content and training.
For instance, an offering to the automotive repair vertical market could
include an always-on link from privately-owned body shops to many key suppliers
for the market. The user would have access to buying services, payment
processing services, electronic filing of insurance collision damage estimates,
and other back office services such as payroll processing. Users will have an
always-on high-speed Internet connection and on the same antenna, can receive
DISH Network television services, if desired.
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Vendors would be able to multicast their most current pricing, inventory,
and product information to each location in the vertical network, with the data
cached locally at the user location. The vendor would effectively have a
continuous connection to its customer.
The Company plans to generate revenues for this service from both the end
users, who will be charged for Internet access and other horizontal services,
and from the suppliers, who will be charged for the dedicated connection and
e-commerce, and advertising access to their customers.
The Strategy. Purchaser plans to reposition the Company to become a
leading provider of satellite-based e-business services to vertical markets,
defining a new business services market for small and medium enterprises.
Purchaser has significant experience in operating enterprise retail
networks and consumer-based networks, and complements the Company's experience
in building browser technology for vertical markets and marketing and managing
relationships with small entities. The Company intends to leverage these
strengths and pursue a number of strategies to obtain its goal as follows:
- Rapidly build a base of paying subscribers in several vertical markets,
using the marketing power of the key suppliers to identify, enroll and
retain subscribers
- Build value-added revenues in addition to access fees, through delivery
of additional horizontal services such as payment and insurance
processing, employee benefits administration, and other e-commerce
services
- Quickly build additional vertical markets by serving as an incubator,
which provides other Vertical Service Providers with an easier path for
providing connectivity to their customers
- Retain technical leadership by further research and development on the
integration of the browser and satellite technology
- Achieve a more efficient financial structure through divestiture of the
fixed assets associated with the former advertising-supported school
network, and instead re-focus on fee-based customers and assets.
In addition, the Company and Purchaser may enter into several transactions,
which may include the following:
- The Company will acquire Purchaser's existing vertical market businesses,
at their book value
- Purchaser will license certain technologies of the Company for use in
international markets, and will pay royalties for such use
- Purchaser will use the Company as a reseller for equipment, along with
Purchaser's Spacenet subsidiary.
Schools currently served by the Company will continue to receive Internet
service, although going forward the Company will discontinue the installation of
free computer labs for schools. In conjunction with its decision to transition
to a vertical business market focus, the Company will explore other strategic
partnerships or alternatives, including the divestiture of its educational
network.
In addition, it is expected that at least a majority of the current Board
of Directors of the Company will resign and that directors designated by
Xxxxxxxxx will be elected to fill the vacancies. In order to reflect its new
ownership and business focus, Purchaser may also consider causing the Company to
change its name and its Nasdaq trading symbol.
Purchaser also intends to continue to review the condition of the Company
and its assets, corporate structure, dividend policy, capitalization,
operations, properties, policies, management and personnel, and to take such
actions or effect such changes as it deems desirable. Such changes could include
changes in the Company's corporate structure, operational headquarters,
capitalization, management or dividend policy as well as integration of the
Company or parts thereof with other related business of Purchaser.
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13. THE TENDER OFFER AGREEMENT
THE FOLLOWING SUMMARY OF CERTAIN MATERIAL PROVISIONS OF THE TENDER OFFER
AGREEMENT, A COPY OF WHICH IS FILED AS AN EXHIBIT TO THE SCHEDULE TO, IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE TENDER OFFER
AGREEMENT, WHICH IS INCORPORATED HEREIN BY REFERENCE.
THE OFFER. The Tender Offer Agreement provides for the commencement of the
Offer by Purchaser. The obligation of Purchaser to accept for payment Shares
tendered pursuant to the Offer is subject only to the satisfaction or waiver by
Purchaser of the conditions set forth in Section 14 hereof. If all the
conditions to consummation of the Offer are satisfied, Purchaser shall
consummate the Offer as promptly as possible. Pursuant to the Tender Offer
Agreement, Purchaser may (but is under no obligation to) extend the Offer from
time to time in its sole discretion in the event that, at a then-scheduled
Expiration Date, all of the conditions to the Offer have not been satisfied.
Each such extension, however, shall not be less than the number of days required
by the Exchange Act or by other applicable law. Purchaser may extend the period
during which the Offer is open by giving oral or written notice of such
extension to the Depositary and by making a public announcement of such
extension promptly thereafter. During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer, subject to the
rights of a tendering stockholder to withdraw its Shares.
Under the Tender Offer Agreement, each of the Schedule B Stockholders has
agreed to irrevocably tender in the Offer the number of Shares held by such
Schedule B Stockholder as set forth opposite such Schedule B Stockholder's name
on Schedule B to the Tender Offer Agreement. In addition, each of the Schedule A
Stockholders, pursuant to the Tender Offer Agreement, have granted to Purchaser
the right and option to purchase the number of Shares held by such Schedule A
Stockholder as set forth opposite such Schedule A Stockholder's name on Schedule
A to the Tender Offer Agreement, at a per share price equal to $2.32. Purchaser
shall exercise the option granted by the Schedule A Stockholders upon
consummation of the Offer, but only to the extent necessary for Purchaser to
acquire the Maximum Number of Shares (taking into account the number of Shares
validly tendered and not withdrawn prior to the expiration of the Offer).
If Purchaser has not accepted for payment any Shares pursuant to the Offer
prior to November 30, 2000, either Purchaser or the Company may terminate the
Tender Offer Agreement, unless at such date the waiting period applicable to the
consummation of the Offer under the HSR Act or any other necessary governmental
filing shall not have expired or been terminated (except for such waiting
periods (other than under the HSR Act) or approvals the failure of which to
expire or be obtained is not reasonably likely to have a Material Adverse Effect
(as defined below) on the Company or Purchaser), in which case Purchaser shall
begin accepting payment of Shares tendered in the Offer as soon as possible
after the appropriate governmental agencies have given approval to the HSR Act
and any other necessary governmental filings and shall not be grounds for
termination of the Tender Offer Agreement, unless Purchaser and the Company
mutually agree. However, the right to terminate the Tender Offer Agreement
pursuant to preceding sentence shall not be available to either Purchaser or the
Company, as the case may be, whose failure to perform any of its obligations
under the Tender Offer Agreement results in the failure of the Offer to be
consummated by November 30, 2000. See the section entitled "Termination" set
forth below.
In the event that the Tender Offer Agreement is terminated, Purchaser has
agreed to terminate the Offer promptly without accepting any Shares for payment.
If the Offer is terminated or not consummated solely because acquisition by
Purchaser of the Shares is precluded by law, administrative or judicial action,
and such law, administrative or judicial action does not directly or indirectly
preclude Purchaser's acquisition of the Maximum Number of Shares outside of the
Offer, the Identified Stockholders shall sell to Purchaser, and Purchaser shall
purchase from the Identified Stockholders, the Identified Stockholders' Shares
at a purchase price per share equal to $2.32. The aggregate number of Shares of
the Identified Stockholders, as set forth on Schedule A and Schedule B to the
Tender Offer Agreement, equals 22,804,350 Shares, which constitutes, together
with the Shares beneficially owned by Purchaser, 51.54% of the total number of
Shares outstanding as of October 3, 2000.
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The Company's employee stock options will be unaffected by the consummation
of the Offer, and such plans will remain in full force and effect and shall be
administered in accordance with their terms and conditions.
REPRESENTATIONS AND WARRANTIES. Pursuant to the Tender Offer Agreement,
the Company has made customary representations and warranties to Purchaser,
including, but not limited to, representations and warranties relating to the
Company's organization and qualification, its subsidiaries, capitalization,
authority to enter into the Tender Offer Agreement and carry out the
transactions contemplated thereby, filings made by the Company with the
Commission under the Securities Act and the Exchange Act, litigation, employee
relations and benefits, taxes, Board of Directors approval, properties,
environmental matters, undisclosed liabilities, absence of questionable
payments, intellectual property, and insurance.
Purchaser has also made customary representations and warranties to the
Company, including, but not limited to, representations and warranties relating
to Purchaser's organization and qualification, its authority to enter into the
Tender Offer Agreement and carry out the transactions contemplated thereby, the
number of Shares Purchaser beneficially owns, litigation, and that Purchaser
will have sufficient funds available to it to purchase the Shares.
In addition, each of the Identified Stockholders has made certain
representations and warranties to Purchaser and Company, relating to the
Identified Stockholders' power and authority to enter into the Tender Offer
Agreement and to consummate all of its obligations contemplated thereby, that
such Identified Stockholder has valid title to its Shares, free and clear of all
liens and encumbrances, and that the number of Shares set forth across such
Identified Stockholder's name on Schedule A or Schedule B to the Tender Offer
Agreement, as the case may be, is a true and accurate number of the number of
Shares held by such Identified Stockholder as of October 3, 2000.
COVENANTS RELATING TO THE CONDUCT OF BUSINESS
THE COMPANY. Pursuant to the Tender Offer Agreement, the Company may take
certain action, prior to the expiration of the Offer, to significantly contract
its business operations in accordance with the business plans previously
discussed with Purchaser or as otherwise agreed to by Purchaser. Subject to the
foregoing, the Company has agreed that until the date the Offer expires, each of
the Company and its subsidiaries will conduct their respective operations
according to its ordinary course of business consistent with past practice, and
will use all commercially reasonable efforts to preserve intact its business
organization, to keep available the services of its officers and employees and
to maintain satisfactory relationships with suppliers, distributors, customers
and others having business relationships with it and will take no action which
would materially adversely affect the ability of the parties to consummate the
transactions contemplated by Tender Offer Agreement. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in the
Tender Offer Agreement, prior to the consummation of the Offer, the Company will
not nor will it permit any of its subsidiaries to, without the prior written
consent of Purchaser, which consent shall not be unreasonably withheld:
(i) amend its Certificate of Incorporation or Bylaws or other
organizational documents;
(ii) authorize for issuance, issue, sell, deliver, grant any options
for, or otherwise agree or commit to issue, sell or deliver any shares of
any class of its capital stock or any securities convertible into shares of
any class of its capital stock, except pursuant to and in accordance with
the terms of currently outstanding options;
(iii) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock or purchase, redeem or otherwise acquire any shares of its
own capital stock or of any of its subsidiaries, except as otherwise
expressly provided in Tender Offer Agreement;
(iv) (A) create, incur, assume, maintain or permit to exist any debt
for borrowed money other than under existing lines of credit in the
ordinary course of business consistent with past practice; (B) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or
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otherwise) for the obligations of any other person except for its wholly
owned subsidiaries, in the ordinary course of business and consistent with
past practices; or (C) make any loans, advances or capital contributions
to, or investments in, any other person in an aggregate amount exceeding
$50,000;
(v) (A) increase in any manner the compensation of any employee,
director or officer except in the ordinary course of business consistent
with past practice; (B) pay or agree to pay any pension, retirement
allowance or other employee benefit not required, or enter into or agree to
enter into any agreement or arrangement with such director or officer or
employee, whether past or present, relating to any such pension, retirement
allowance or other employee benefit, except as required under currently
existing agreements, plans or arrangements; (C) grant any severance or
termination pay to, or enter into any employment or severance agreement
with any employee, officer or director except consistent with commercially
acceptable standards; or (D) except as may be required to comply with
applicable law, become obligated (other than pursuant to any new or renewed
collective bargaining agreement) under any new pension plan, welfare plan,
multiemployer plan, employee benefit plan, benefit arrangement, or similar
plan or arrangement, which was not in existence on the date of the Tender
Offer Agreement, including any bonus, incentive, deferred compensation,
stock purchase, stock option, stock appreciation right, group insurance,
severance pay, retirement or other benefit plan, agreement or arrangement,
or employment or consulting agreement with or for the benefit of any
person, or amend any of such plans or any of such agreements in existence
on the date of the Tender Offer Agreement; provided, however, that this
clause (D) shall not prohibit the Company from renewing any such plan,
agreement or arrangement already in existence on terms no more favorable to
the parties to such plan, agreement or arrangement;
(vi) except as otherwise expressly contemplated by the Tender Offer
Agreement, enter into any other agreements, commitments or contracts,
except for (A) agreements, commitments or contracts for the purchase, sale
or lease of goods or services involving payments or receipts by the Company
or its subsidiaries not in excess of $50,000, or (B) leases for rental
space in an amount not to exceed $50,000 for any lease;
(vii) authorize, recommend, propose or announce an intention to
authorize, recommend or propose, or enter into any agreement in principle
or an agreement with respect to, any plan of liquidation or dissolution,
any acquisition of a material amount of assets or securities, any sale,
transfer, lease, license, pledge, mortgage, or other disposition or
encumbrance of a material amount of assets or securities or any material
change in its capitalization, or any entry into a material contract or any
amendment or modification of any material contract or any release or
relinquishment of any material contract rights;
(viii) authorize or commit to make capital expenditures in excess of
$50,000;
(ix) make any change in the accounting methods or accounting practices
followed by the Company;
(x) settle any action, suit, claim, investigation or proceeding
(legal, administrative or arbitrative) in excess of $50,000 without the
consent of Purchaser;
(xi) make any election under the Internal Revenue Code that would have
a Material Adverse Effect (as defined below); or
(xii) agree to do any of the foregoing.
A "Material Adverse Effect" with respect to Purchaser or the Company, as
the case may be, means any event, change or effect that is materially adverse to
the financial condition, properties, assets (including intangible assets),
liabilities (including contingent liabilities), business, operations or results
of operations of Purchaser or the Company, as the case may be, and its
subsidiaries, taken as a whole; provided, that changes or effects which are
primarily and directly caused by the execution and delivery of the Tender Offer
Agreement or the announcement of the transactions contemplated hereby shall not
constitute a Material Adverse Effect (it being understood that in any
controversy concerning the applicability of this proviso, the party claiming the
benefit of this proviso shall have the burden of proof with respect to the
elements of such proviso).
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ADDITIONAL EFFORTS. Upon the terms and subject to the conditions set forth
in the Tender Offer Agreement, each of the Company and Purchaser has agreed to
use its best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by the
Tender Offer Agreement, and to cooperate with each other in connection with the
foregoing, including using its best efforts (i) to obtain all necessary waivers,
consents and approvals from other parties to loan agreements, material leases
and other material contracts, (ii) to obtain all necessary consents, approvals
and authorizations as are required to be obtained under any federal, state or
foreign law or regulations, (iii) to defend all lawsuits or other legal
proceedings challenging the Tender Offer Agreement or the consummation of the
transactions contemplated thereby, (iv) to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated thereby, (v) to effect all necessary
registrations and filings, including, but not limited to, filings under the HSR
Act and submissions of information requested by governmental authorities, and
(vi) to fulfill all conditions to the Tender Offer Agreement.
ACQUISITION PROPOSALS. The Tender Offer Agreement provides that the
Company and all of its affiliates will not, directly or indirectly (through any
directors, officers, employees, agents, representatives or otherwise) (i)
solicit, initiate, facilitate or encourage (including by way of furnishing or
disclosing non-public information) any inquiries or the making of any proposal
with respect to any merger, consolidation or other business combination
involving the Company or its subsidiaries or the acquisition of all or any
significant assets or capital stock of the Company and its subsidiaries taken as
a whole (an "Acquisition Proposal"), (ii) negotiate, explore or otherwise engage
in discussions with any person (other than Purchaser and its representatives)
with respect to any Acquisition Proposal or (iii) enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the transactions contemplated by the Tender Offer Agreement.
Notwithstanding the foregoing, in the event that prior to the consummation of
the Offer, the Board of Directors of the Company determines in good faith, after
consultation with outside counsel, that it is necessary to respond to an
Unsolicited Superior Proposal (as defined below) in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the Board
of Directors of the Company may (subject to this and the following sentences)
(x) withdraw or modify its approval or recommendation of the Offer and the
Tender Offer Agreement or (y) approve or recommend an Unsolicited Superior
Proposal or terminate the Tender Offer Agreement (and concurrently with or after
such termination, if it so chooses, cause the Company to enter into any
agreement with respect to any Unsolicited Superior Proposal), but in each of the
cases set forth in this clause (y), no action shall be taken by the Company
pursuant to clause (y) until a time that is after the fifth (5th) business day
following Purchaser's receipt of written notice advising Purchaser that the
Board of Directors of the Company has received an Unsolicited Superior Proposal,
specifying the material terms and conditions of such Unsolicited Superior
Proposal and identifying the person making such Unsolicited Superior Proposal,
to the extent such identification of the person making such proposal does not
breach the fiduciary duties of the Board of Directors as advised by outside
legal counsel. If the Board of Directors takes any action pursuant to the
foregoing clauses (x) and (y), the Company shall within two business days of
such action pay Purchaser an amount equal to 3% of the consideration payable by
Purchaser under the Tender Offer Agreement for the Maximum Number of Shares that
may be tendered in the Offer and reimburse Purchaser for any of Purchaser's out
of pocket expenses (including without limitation fees and expenses of outside
professionals) (the "Termination Fee") by wire transfer of immediately available
funds to an account specified by Purchaser.
An "Unsolicited Superior Proposal" means any bona fide, unsolicited,
written proposal made by a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, more than 50% of the voting
power of the shares of the Company's common stock then outstanding or all or
substantially all the assets of the Company and otherwise on terms that the
Board of Directors of the Company determines in its good faith judgment (based
on the advice of a financial advisor of nationally recognized reputation) to be
more favorable to the Company's stockholders than the Offer.
The Tender Offer Agreement provides that the foregoing provisions will not
prohibit the Company from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act, or from making
any disclosure to the Company's stockholders if, in the good faith judgment of
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the Board of Directors of the Company, after consultation with outside counsel,
failure to disclose would be inconsistent with its fiduciary duties to the
Company's stockholders under applicable law; provided, however, that except as
set forth above, neither the Company nor its Board of Directors nor any
committee thereof shall, withdraw or modify, or propose publicly to withdraw or
modify, its position with respect to the Tender Offer Agreement or the Offer or
approve or recommend, or propose publicly to approve or recommend, an
Acquisition Proposal.
INDEMNIFICATION. The Tender Offer Agreement provides that Xxxxxxxxx has
agreed to indemnify the Company's officers and directors to the same extent that
it indemnifies its own officers and directors. To that end, Purchaser shall
cause to be maintained in effect for not less than two years from the date the
Offer expires the current policies of the directors' and officers' liability
insurance maintained by the Company (provided that Purchaser may substitute
therefor policies of at least the same coverage containing terms and conditions
which are no less advantageous) with respect to matters occurring on or prior to
the date the Offer expires; provided, that in no event shall Purchaser or the
Company be required to expend annually more than 200% of the amount that the
Company spent in the last fiscal year to maintain or procure such insurance
coverage.
Also, under the Tender Offer Agreement, each of the Identified Stockholders
has agreed individually, not jointly and severally, to indemnify Purchaser for
any liability or loss incurred by Purchaser as a result of (i) the inaccuracy of
any representation or warranty made by such Identified Stockholder in the Tender
Offer Agreement or (ii) any breach by such Identified Stockholder to perform all
of its obligations under the Tender Offer Agreement.
TERMINATION. The Tender Offer Agreement may be terminated at any time
prior to the time Purchaser purchases the Shares pursuant to the Offer by either
the Company's stockholders or Purchaser's stockholders:
By either Purchaser or the Company:
(i) if Purchaser shall not have accepted for payment any Shares
pursuant to the Offer prior to November 30, 2000, unless at such date the
waiting period applicable to the consummation of the Offer under the HSR
Act or any other necessary governmental filing shall not have expired or
been terminated (except for such waiting periods (other than under the HSR
Act) or approvals the failure of which to expire or be obtained is not
reasonably likely to have a Material Adverse Effect on the Company or
Purchaser), in which case Purchaser shall begin accepting payment of Shares
tendered in the Offer as soon as possible after the appropriate
governmental agencies have given approval to the HSR Act and any other
necessary governmental filings and shall not be grounds for termination of
this Agreement, unless the parties hereto mutually agree; provided,
further, however, that the right to terminate the Tender Offer Agreement
pursuant to this paragraph (i) shall not be available to any party whose
failure to perform any of its obligations under the Tender Offer Agreement
results in the failure of the Offer to be consummated by such time; or
(ii) if any Restraint having any of the effects set forth in the
preceding paragraph shall be in effect and shall have become nonappealable.
A "Restraint" shall mean any judgment, order, decree, statute, law,
ordinance, rule or regulation entered, enacted, promulgated, enforced or
issued by any court or other governmental entity of competent jurisdiction
or other legal restraint or prohibition preventing Purchaser from acquiring
the Identified Stockholders Shares.
By Purchaser:
(i) if the Company or any Identified Stockholder shall have breached
or failed to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Tender Offer
Agreement (including each of the Company's obligations described in
"Acquisition Proposals");
(ii) if (A) any of the provisions summarized in the section entitled
"Acquisition Proposals" set forth above (collectively, the "Acquisition
Proposal Provisions"), shall be breached by the Company or any of its
officers, directors or employees or any investment banker, financial
advisor, attorney, accountant
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or other representative of the Company, in any material respect and the
Company shall have failed promptly to terminate the activity giving rise to
such breach and used best efforts to cure such breach, or (B) the Company
shall breach the Acquisition Proposal Provisions by failing to promptly
notify Purchaser as required thereunder; provided, in the case of (A), the
Company shall comply with applicable requirements relating to the payment
(including the timing of any payment) of Purchaser's expenses and the
required Termination Fee described in the section entitled "Acquisition
Proposals" set forth above;
(iii) if (A) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Purchaser
its approval or recommendation of the Offer or the Tender Offer Agreement,
or failed to reconfirm its recommendation within five business days after a
written request to do so, or approved or recommended any Acquisition
Proposal or (B) the Board of Directors of the Company or any committee
thereof shall have resolved to take any of the foregoing actions; provided,
that in the case of clauses (A) or (B), the Company shall comply with
applicable requirements relating to the payment (including the timing of
any payment) of Purchaser's expenses and the required Termination Fee
described in the section entitled "Acquisition Proposals" set forth above;
or
(iv) upon the commencement or written threat of material litigation by
any third party, which litigation could (A) have a Material Adverse Effect
on the Company or Purchaser, (B) affect either party's ability to
consummate the transactions contemplated in the Tender Offer Agreement, or
(C) challenge the validity of the Tender Offer Agreement.
By the Company:
(i) if Purchaser shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in the Tender Offer Agreement; or
(ii) if it elects to terminate the Tender Offer Agreement in
accordance with the provisions described in "Acquisition Proposals" set
forth above; provided that the Company has complied with such provisions,
agreement providing for an Superior Unsolicited Proposal; provided that the
Company has complied with all of it obligations described under the
"Acquisition Proposals" section of this Offer to Purchaser.
FEES AND EXPENSES. Pursuant to the Tender Offer Agreement, each party to
the Tender Offer Agreement agreed to pay its own respective costs and expenses
incurred in connection with the Tender Offer Agreement and the transactions
contemplated thereby. As discussed in "Acquisition Proposals", the Company has
also agreed in the Tender Offer Agreement that if the Board of Directors of the
Company (i) withdraws or modifies its approval or recommendation of the Offer
and the Tender Offer Agreement or (ii) approves or recommends an Unsolicited
Superior Proposal or terminates the Tender Offer Agreement (and concurrently
with or after such termination, chooses, and causes the Company, to enter into
any agreement with respect to any Unsolicited Superior Proposal) it shall pay to
Purchaser the Termination Fee as described in the section entitled "Acquisition
Proposals" set forth above.
14. CERTAIN CONDITIONS OF THE OFFER.
Subject to any applicable rules or regulations of the Commission, Purchaser
will not be required to accept for payment or pay for any Shares tendered
pursuant to the Offer, and may postpone the acceptance for payment, or, payment
for, Shares tendered pursuant to the Offer, and may terminate the Offer (whether
or not any Shares have theretofore been purchased or paid for) to the extent
permitted by the Tender Offer Agreement if (i) at the expiration of the Offer,
the Minimum Condition shall not have been satisfied or (ii) at any time prior to
acceptance for payment for any such Shares any of following conditions (each
referred to as an "Event") occurs or has occurred and continues to exist (each
of paragraphs (a) through (i) providing a separate and independent condition to
Purchaser's obligations pursuant to the Offer):
(a) any waiting periods under the HSR Act applicable to the purchase
of Shares pursuant to the Offer shall not have expired or been terminated;
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(b) there shall be in effect any judgment, order, decree, statute,
law, ordinance, rule or regulation entered, enacted, promulgated, enforced
or issued by any court or other governmental entity of competent
jurisdiction or other legal restraint or prohibition preventing Purchaser
from acquiring the Identified Stockholders Shares;
(c) there shall be in effect any action or proceeding instituted by,
any governmental authority seeking to prevent Purchaser from acquiring the
Identified Stockholders Shares or seeking material damages in connection
with the transactions contemplated by the Tender Offer Agreement which
continues to be outstanding;
(d) there shall have been instituted against the Company or Purchaser
any action or proceeding (judicial or otherwise) that seeks to enjoin or
delay the Purchaser from acquiring the Identified Stockholders Shares;
(e) any representation or warranty of the Company or any of the
Identified Stockholders set forth in the Tender Offer Agreement shall not
be true and correct in any material respect in each case as if such
representation or warranty were made at the time of such determination
(except for any representations or warranties which by their terms are
given as of a specified date);
(f) the Company or any Identified Stockholder shall fail to perform or
comply in any material respect with any covenant or agreement to be
performed or complied with by it or identified to be performed or complied
with by it prior to the consummation of the Offer;
(g) any necessary consents and approvals of any federal, state or
local governmental authority or any other third party required for the
consummation by Purchaser, Company or any Identified Stockholder of the
transactions contemplated by the Tender Offer Agreement shall not have been
obtained;
(h) except as described in "Covenants Relating to the Conduct of
Business", there shall have occurred any Material Adverse Effect, in the
general affairs, business, management, operations, assets and liabilities
or prospects of the Company and its subsidiaries taken as a whole or in the
condition (financial or otherwise) of the Company or any of its
subsidiaries; or
(i) the Tender Offer Agreement shall have been terminated in
accordance with its terms
which, in the reasonable judgment of Purchaser with respect to each and every
matter referred to above and regardless of the circumstances giving rise to any
such condition, makes it inadvisable to proceed with the Offer or with such
acceptance for payment of or payment for Shares.
The foregoing conditions are for the sole benefit of Purchaser and (i) may
be asserted by Purchaser regardless of the circumstances giving rise to such
condition (except for any action or inaction by Purchaser or any of its
affiliates constituting a breach of the Tender Offer Agreement) or (ii) may be
waived by Purchaser in whole at any time or in part from time to time in its
reasonable discretion. The failure by Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right and may be asserted at any time and
from time to time.
15. CERTAIN REGULATORY AND LEGAL MATTERS.
GENERAL. Except as set forth in this Section 15, Purchaser is not aware of
(i) any licenses or other regulatory permits that appear to be material to the
business of the Company and its subsidiaries, taken as a whole, that might be
adversely affected by Purchaser's acquisition of Shares or otherwise, or (ii)
any approval or other action by any domestic (federal or state), foreign or
supranational governmental authority, administrative agency or regulatory agency
which would be required for the acquisition or ownership of Shares by Purchaser
as contemplated herein. Should any such approval or other action be required, it
will be sought, but Purchaser has no current intention to delay the purchase of
Shares tendered pursuant to the Offer pending the outcome of any such matter,
subject, however, to Purchaser's right to decline to purchase Shares if the
Minimum Condition has not been satisfied or if any of the Events specified in
Section 14 shall have occurred.
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There can be no assurance that any such approval or other action, if needed,
would be obtained or would be obtained without conditions that Purchaser is not
required to accept.
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 FTC and the Antitrust Division of the Department of Justice
(the "Antitrust Division") and certain waiting period requirements have been
satisfied. The acquisition of Shares pursuant to the Offer is subject to such
requirements. See Sections 2 and 14.
UNITED STATES ANTITRUST LAW. Under the provisions of the HSR Act
applicable to the Offer, the acquisition of Shares under the Offer may be
consummated after the expiration of a 15-calendar day waiting period commenced
by the filing by Purchaser of a Notification and Report Form with respect to the
Offer, unless Purchaser receives a request for additional information or
documentary material from the Antitrust Division of the Department of Justice
(the "Antitrust Division") or the Federal Trade Commission ("FTC") or unless
early termination of the waiting period is granted. Purchaser is in the process
of preparing such filing. If, within the 15 calendar-day waiting period, either
the Antitrust Division or the FTC issues a request for additional information or
documentary materials (a "Second Request"), the waiting period will be extended
for an additional period of 10 calendar days following the date of substantial
compliance by the parties with such Second Request.
If the consummation of the Offer is delayed by the issuance of a Second
Request, the Offer may be extended in Purchaser's sole discretion. In any event,
the consummation of the Offer must be deferred until 10 days after the parties
substantially comply with such Second Request or until the additional waiting
period is earlier terminated by the FTC and the Antitrust Division. Only one
extension of the waiting period pursuant to a Second Request is authorized by
the HSR Act and, thereafter, the waiting period can be extended only by court
order. Under the terms of the HSR Act, the Offer may not be consummated unless
and until the filing and waiting period requirements of the HSR Act applicable
to the Offer has been satisfied.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as Purchaser's proposed acquisition of a
majority of the Shares. At any time before or after Purchaser's acquisition of
Shares pursuant to the Offer, the Antitrust Division or the FTC could take such
action under the antitrust laws as it either deems necessary or desirable in the
public interest, including seeking to enjoin the purchase of Shares pursuant to
the Offer or seeking the divestiture of Shares acquired by Purchaser or the
divestiture of substantial assets of the Company or its subsidiaries or
Purchaser or its subsidiaries. Private parties and the Attorney Generals of the
several States may also bring legal action under the antitrust laws. There can
be no assurance that a challenge to the Offer on antitrust grounds will not be
made, or, if such a challenge is made, of the result thereof.
STATE TAKEOVER LAWS. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of the DGCL ("Section 203") prevents
an "interested stockholder" (including a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) from engaging
in a "business combination" with a Delaware corporation for a period of three
years following the date such person became an interested stockholder. The
Company has represented to Purchaser in the Tender Offer Agreement that it has
taken all appropriate action so that the Purchaser is not considered an
"interested stockholder" for purposes of the restrictions contained in Section
203.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects in such states. Based on information supplied by the Company,
Purchaser does not believe that any other state takeover statutes apply to the
Offer and, therefore, Purchaser currently has not complied with any other such
state takeover statute or regulation. Purchaser reserves the right to challenge
the applicability or validity of any state law purportedly applicable to the
Offer and nothing in this Offer to Purchase or any action taken in connection
with the Offer is intended as a waiver of such right. If it is asserted that any
state takeover statute is applicable to the Offer and an appropriate court does
not determine that it is inapplicable or invalid as applied to the Offer,
Purchaser might be required to file certain information with, or to receive
approvals from, the
26
33
relevant state authorities, and Purchaser might not be able to accept for
payment or pay for Shares tendered in the Offer, or be delayed in consummating
the Offer. In such case, Purchaser may not be obligated to accept for payment or
pay for any Shares tendered pursuant to the Offer.
FOREIGN APPROVALS. Based on information supplied by the Company, Purchaser
does not believe that any foreign takeover statutes or similar regulatory
provisions apply to the Offer and, therefore, Purchaser currently has not
complied with any such foreign takeover statute or regulation. Purchaser
reserves the right to challenge the applicability or validity of any foreign law
or regulation purportedly applicable to the Offer and nothing in this Offer to
Purchase or any action taken in connection with the Offer is intended as a
waiver of such right. If it is asserted that any foreign takeover statute or
regulation is applicable to the Offer and an appropriate court or other body
does not determine that it is inapplicable or invalid as applied to the Offer,
Purchaser might be required to file certain information with, or to receive
approvals from, the relevant foreign authorities, and Purchaser might not be
able to accept for payment or pay for Shares tendered in the Offer, or be
delayed in consummating the Offer. In such case, Purchaser may not be obligated
to accept for payment or pay for any Shares tendered pursuant to the Offer.
16. FEES AND EXPENSES.
CIBC World Markets Corp. is acting as the Dealer Manager in connection with
the Offer for which services it will receive customary compensation. Purchaser
also has agreed to reimburse CIBC World Markets Corp. for its out-of-pocket
expenses, including the fees and expenses of legal counsel and other advisors,
incurred in connection with their engagement, and to indemnify CIBC World
Markets Corp. and certain related persons against certain liabilities and
expenses in connection with their engagement, including certain liabilities
under the federal securities laws. In the ordinary course of business, CIBC
World Markets Corp. and its affiliates may actively trade the debt and equity
securities of the Company for its own account and for the accounts of customers
and, accordingly, may at any time hold a long or short position in such
securities.
Purchaser has retained EquiServe Trust Company, N.A. as the Depositary in
connection with the Offer. The Depositary will receive reasonable and customary
compensation for their services hereunder and reimbursement for its reasonable
out-of-pocket expenses. The Depository may contact holders of Shares by mail,
telephone, facsimile, telegraph and personal interviews and may request brokers,
dealers, commercial banks, trust companies and other nominees to forward
materials relating to the Offer to beneficial owners of Shares. The Depositary
will also be indemnified by Purchaser against certain liabilities in connection
with the Offer, including certain liabilities under the federal securities laws.
The Depositary has not been retained to make solicitations or recommendations in
connection with the Offer.
Except as described herein, neither Purchaser nor any officer, director,
stockholder, agent or other representative of Purchaser will pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks, trust
companies and other nominees will, upon request, be reimbursed by Purchaser for
customary mailing and handling expenses incurred by them in forwarding offering
materials to their customers.
17. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. Purchaser is
not aware of any jurisdiction in which the making of the Offer does not comply
with applicable law. If Xxxxxxxxx becomes aware of any jurisdiction in which the
making of the Offer would not comply with applicable law, Purchaser will make a
good faith effort to comply with such law. If, after such good faith effort,
Purchaser cannot comply with such law, the Offer will not be made to, nor will
tenders be accepted from or on behalf of, holders of Shares residing in any 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 the Dealer Manager or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
27
34
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OTHER THAN AS CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF ANY SUCH INFORMATION OR
REPRESENTATION IS GIVEN OR MADE, IT SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Purchaser has filed with the Commission a Statement on Schedule TO pursuant
to Section 14(d)(1) of the Exchange Act and Rule 14d-3 promulgated thereunder,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. In addition, the Company anticipates filing with the
Commission a Solicitation/Recommendation Statement on Schedule 14D-9 pursuant to
Rule l4d-9 together with exhibits under the Exchange Act, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto, setting forth the recommendation of the Board with respect to the Offer
and the reasons for such recommendation and furnishing certain additional
related information. The Schedule TO and Schedule 14D-9 and any amendments
thereto, including exhibits, may be examined and copies may be obtained at the
same places and in the same manner as set forth with respect to the Company in
Section 8 (except that they will not be available at the regional offices of the
Commission).
GILAT SATELLITE NETWORKS LTD.
October 17, 2000
28
35
ANNEX I
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
A. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The following table sets forth the name, citizenship, present principal
occupation or employment, and material occupations, positions, offices or
employment for the past five years of each director and executive officer of
Purchaser, as well as a description, if applicable, of any criminal, judicial or
administrative proceedings involving such director or executive officer of
Purchaser. Unless otherwise indicated, the current business address of each such
person is c/o Gilat Satellite Networks Ltd., 00/X Xxxxx Xxxxxxx Xxxxxx, Xxxxx
Xxxx, Xxxxxx Xxxx, Xxxxx Xxxxx 00000, Xxxxxx.
DIRECTORS
---------------------------------------------------------------------------------------------------------------
POSITIONS FOR THE PAST FIVE YEARS
PRESENT PRINCIPAL AND ANY CRIMINAL, JUDICIAL OR
NAME CITIZENSHIP OCCUPATION/BUSINESS ADDRESS ADMINISTRATIVE PROCEEDINGS
---------------------------------------------------------------------------------------------------------------
XXXX XXX Xxxxxx Chief Executive Officer and Chief Executive Officer and
Chairman of the Board of Di- Director of Purchaser (from 1987
rectors of Purchaser until present).
Chairman of the Board of Direc-
tors of Purchaser (from July 1995
until present).
---------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXXXXX Israel President, Chief Operating Of- Director and Chief Operating Of-
ficer and Director of Purchaser ficer of Purchaser (from 1987
until present).
President of Purchaser (from July
1995 until present).
---------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXX Israel Director of Purchaser Director of Purchaser (from 1987
until present).
Address:
Gilat Communications Ltd. Chairman of Board of Directors of
00/X Xxxxx Xxxxxxx Xxxxxx Purchaser (from 1987 until July
P.O. Box 7144 1995).
Petah Tikva 49130, Israel
Chairman of the Board, Chief Ex-
ecutive Officer and President of
Gilat Communications Ltd. (from
July 1990 to present).
---------------------------------------------------------------------------------------------------------------
I-1
36
---------------------------------------------------------------------------------------------------------------
POSITIONS FOR THE PAST FIVE YEARS
PRESENT PRINCIPAL AND ANY CRIMINAL, JUDICIAL OR
NAME CITIZENSHIP OCCUPATION/BUSINESS ADDRESS ADMINISTRATIVE PROCEEDINGS
---------------------------------------------------------------------------------------------------------------
XXX XXXXXX Israel Director of Purchaser Director of Purchaser (from July
1994 until present).
Address:
Saridar Investments Ltd. Managing Director of Discount In-
00 Xxxxx Xxxxxxxx Xxxx. vestment Corporation Ltd. ("DIC")
Tel-Aviv and Discount Investment
Israel Corporation Financial Manage-
ment Ltd. ("DICFM") (from 1985
until March 1999).
In August 1999, an indictment was
filed by the Tel Aviv District
Attorney's Office in the Tel Aviv
Magistrate's Court alleging
certain violations of the Israeli
Securities Law by DIC and certain
of its officers, including Xx.
Xxx Xxxxxx, in his capacity as
the former CEO of DIC. The
indictment alleges that DIC's
annual and quarterly financial
statements for the period
1990-1995 were misleading in
connection with the failure to
attach to DIC's financial
statements sent to the Tel Aviv
Stock Exchange and the Israel
Registrar of Companies the xxxxx-
cial statements of three private
Israeli companies of which DIC
was a shareholder. In December
1999, Xx. Xxxxxx and the other
defendants pleaded not guilty to
the charges, although one of the
defendants subsequently entered
into a plea agreement with the
prosecution. The court commenced
evidentiary proceedings in May
2000.
---------------------------------------------------------------------------------------------------------------
XXXX XXXXXXXX United States Director of Purchaser. Chair- Director of Purchaser (from Janu-
man and Chief Executive Of- ary 1999 until present).
ficer of GE American
Communications, Inc. Chairman and Chief Executive Of-
ficer of GE American Communi-
Address: cations, Inc. (from 1992 until
GE American Communications, present).
Inc.
Four Research Way
Princeton, NJ 08540-6684
---------------------------------------------------------------------------------------------------------------
I-2
37
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
---------------------------------------------------------------------------------------------------------------
POSITIONS FOR THE PAST FIVE YEARS
PRESENT PRINCIPAL AND ANY CRIMINAL, JUDICIAL OR
NAME CITIZENSHIP OCCUPATION/BUSINESS ADDRESS ADMINISTRATIVE PROCEEDINGS
---------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXX Xxxxxx Vice President, Technology of Vice President, Technology of
Xxxxxxxxx Xxxxxxxxx (from 1989 until
present).
---------------------------------------------------------------------------------------------------------------
XXXX XXXXXXXXXX Israel Vice President, Finance and Vice President, Finance and Ad-
Administration and Chief Fi- ministration and Chief Financial
nancial Officer of Purchaser Officer of Purchaser (from 1991
until present).
---------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXXXXX Israel Senior Vice President, Busi- Senior Vice President for
ness Development of Purchaser Business Development of Purchaser
(from June 1999 until present;
1994 until April 1998).
Chief Executive Officer of Global
Village Telecom (Antilles) N.V.
(from April 1998 until June
1999).
---------------------------------------------------------------------------------------------------------------
XXXXX X. XXXXXXXX Israel and United Vice President and General Vice President and General
States Counsel of Purchaser Counsel of Purchaser (from August
1995 until present).
---------------------------------------------------------------------------------------------------------------
XXXX XXXXXX Xxxxxx and Canada Vice President, General Man- Vice President, General Manager
ager of Purchaser for Asia, of Purchaser for Asia, Africa and
Africa and Pacific Rim Pacific Rim (from March 1999
until present).
Vice President, Business Develop-
ment of Purchaser from January
1998 to January 1999
Vice President and General Man-
ager of Gilat Inc. (from August
1994 until December 1997).
---------------------------------------------------------------------------------------------------------------
XXXX XXXXXX United States Chief Executive Officer and Chief Executive Officer Gilat-to-
President of Gilat Florida, Home Latin America, Inc. (from
Inc. May 2000 until present)
Chief Executive Officer Xxxxx- President of Gilat Florida, Inc.
to-Home Latin America, Inc. (from July 1997 until present).
Address: Chief Executive Officer of Gilat
0000 Xxxxxxxx Xxxxxxxxx Xxxxxxx, Inc. (from January 1998
Parkway, Suite 200 until present).
Sunrise, Florida 33323
Vice President of Marketing and
Business Development at Spacenet
Inc. (from 1995 to 1997).
---------------------------------------------------------------------------------------------------------------
I-3
38
---------------------------------------------------------------------------------------------------------------
POSITIONS FOR THE PAST FIVE YEARS
PRESENT PRINCIPAL AND ANY CRIMINAL, JUDICIAL OR
NAME CITIZENSHIP OCCUPATION/BUSINESS ADDRESS ADMINISTRATIVE PROCEEDINGS
---------------------------------------------------------------------------------------------------------------
XXXXXXX XXXXXX United States President and Chief Operating President and Chief Operating Of-
Officer of Spacenet Inc. ficer of Spacenet Inc. (from
Address: January 1999 until present).
Spacenet Inc.
0000 Xxx Xxxxxx Xx. Senior Vice President and General
McLean, Va. 22102 Manager of the Wireless Networks
Division of Xxxxxx Network Sys-
tems, Inc. ("HNS") and various
other executive-level marketing,
sales and operations positions
within HNS (from May 1978 until
January 1999).
---------------------------------------------------------------------------------------------------------------
XXXXX X. XXXXX United States Vice President, Sales and Mar- Vice President of Sales and
keting of Spacenet Inc. Marketing of Spacenet Inc. (from
Address: December 1998 until present).
Spacenet Inc.
0000 Xxx Xxxxxx Xx. Vice President of Sales, Xxxxxx
McLean, Va. 22102 Network Systems, a division of
Xxxxxx Electronics (from 1994
until 1998).
---------------------------------------------------------------------------------------------------------------
XXXXXX X. XXXXXX United States and President of Gilat Satellite President of Gilat Satellite Net-
France Networks (Europe) Inc. works (Europe) Inc. (from Spring
Address: 2000 until present).
000 Xxxx. Pereire
75017 Paris Chief Financial Officer;
France Executive Vice President and
General Manager for Europe and
Eastern Europe of Global One
Communications S.A. (from 1996
until 2000).
Founded and operated Profit De-
velopment, a transition manage-
ment company, providing temporary
management for European and
American companies undergoing
corporate change (from 1982 until
1996).
---------------------------------------------------------------------------------------------------------------
I-4
39
The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each stockholder of the Company or such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
the Depositary at one of the addresses set forth below:
The Depositary for the Offer is:
EQUISERVE
(For Information (000) 000-0000)
By Mail: By Overnight Courier: By Hand:
EquiServe, N.A. EquiServe, N.A. Securities Transfer &
P.O. Box 9573 00 Xxxxxxxxxx Xxxxx Xxxxxxxxx Xxxxxxxx
Xxxxxx, XX 00000-0000 Xxxxxxxxx, XX 00000 c/o EquiServe
000 Xxxxxxxx Xxxxxx, Xxxxxxxx
Xxx Xxxx, XX 00000
Questions or requests for assistance may be directed to the Dealer Manager
at the address and telephone numbers set forth below. Additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and related materials may be obtained from the Dealer Manager as set forth below
and will be furnished promptly at Purchaser's expense. Stockholders may also
contact their broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Offer.
The Dealer Manager for the Offer is:
CIBC WORLD MARKETS CORP.
One World Financial Center
New York, New York 10281
(000) 000-0000 (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
