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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
THE EARTH TECHNOLOGY CORPORATION (USA)
(Name of Subject Company)
--------------
TYCO INTERNATIONAL LTD.
T1 ACQUISITION CORP.
(Bidders)
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COMMON STOCK, PAR VALUE $.10 PER SHARE
(Title of class of securities)
270315-10-4
(CUSIP number of class of securities)
ROBERT F. SHARPE, Jr., VICE PRESIDENT
TYCO INTERNATIONAL LTD.
ONE TYCO PARK
EXETER, NEW HAMPSHIRE 03833
(603) 778-9700
(Name, address and telephone number of person authorized to
receive notices and communications on behalf of bidders)
WITH A COPY TO:
JOSHUA M. BERMAN, ESQ.
KRAMER, LEVIN, NAFTALIS,
NESSEN, KAMIN & FRANKEL
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 715-9100
CALCULATION OF FILING FEE
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TRANSACTION
VALUATION* AMOUNT OF FILING FEE**
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$81,041,168.00 $16,208.24
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* For purposes of calculating fee only. Assumes purchase of 10,130,146 shares
of Common Stock, $.10 par value per share, of The Earth Technology
Corporation (USA) at $8.00 per share, representing 8,751,636 shares
outstanding and 1,378,510 shares reserved for issuance pursuant to
outstanding options and warrants and pursuant to the company's 1994 Employee
Stock Purchase Plan.
** 1/50th of 1% of Transaction valuation.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previously paid: Not applicable
Form or registration no.: Not applicable.
Filing party: Not applicable.
Date filed: Not applicable.
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Page 1 of 9 Pages
Exhibit Index is located on Page 9
<PAGE>
CUSIP NO. 270315-10-4 14D-1 PAGE 2 OF 9 PAGES
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
TYCO INTERNATIONAL LTD. ( - )
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
/ / (a)
/ / (b)
3 SEC USE ONLY
4 SOURCES OF FUNDS
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) OR 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
MASSACHUSETTS
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
NONE
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES X
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
O
10 TYPE OF REPORTING PERSON
CO
<PAGE>
CUSIP NO. 270315-10-4 14D-1 PAGE 3 OF 9 PAGES
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
T1 ACQUISITION CORP.*
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
3 SEC USE ONLY
4 SOURCES OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
NONE
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES X
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
O
10 TYPE OF REPORTING PERSON
CO
* Has not yet received I.R.S. Identification No.
<PAGE>
This Statement relates to the offer by T1 Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Tyco
International Ltd., a Massachusetts corporation ("Tyco"), to purchase all
outstanding shares (the "Shares") of common stock, par value $.10 per share (the
"Common Stock"), of The Earth Technology Corporation (USA), a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated December 13, 1995 annexed hereto as
Exhibit (a)(1) (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer"), at a purchase price of $8.00 per Share, net to each
tendering stockholder in cash. The item numbers below and responses thereto are
in accordance with the requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is The Earth Technology Corporation
(USA), a Delaware corporation. The address of the Company's principal executive
offices is 100 West Broadway, Suite 5000, Long Beach, California 90802.
(b) The securities to which this statement relates are the Common Stock. The
information set forth in the Introduction of the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(g) This Statement is being filed by the Purchaser and Tyco
(collectively, the "Reporting Persons"). The Purchaser is a wholly owned
subsidiary of Tyco.
The information set forth in Section 9 ("Certain Information Concerning Tyco
and the Purchaser") and in Annex I of the Offer to Purchase is incorporated
herein by reference.
ITEM 3.PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning Tyco and the Purchaser"), Section 11 ("Contacts with the
Company; Background of the Offer") and Section 13 ("The Merger Agreement;
Certain Arrangements") of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in Section 10 ("Source and Amount of Funds")
of the Offer to Purchase is incorporated herein by reference.
(b)-(c) Not applicable.
ITEM 5.PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSAL OF THE BIDDER.
(a)-(g) The information set forth in the Introduction and Sections 7
("Effects of the Offer on the Market for Shares; Stock Quotations; Registration
Under the Exchange Act") and 12 ("Purpose of the Offer; Short Form Merger; Plans
for the Company; Dissenters' Rights; Going Private Transactions") of the Offer
to Purchase is incorporated herein by reference.
4 of 9 Pages
<PAGE>
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
The information set forth in Section 9 ("Certain Information Concerning Tyco
and the Purchaser") of the Offer to Purchase is incorporated herein by
reference.
ITEM 7.CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction and Sections 9 ("Certain
Information Concerning Tyco and the Purchaser"), 11 ("Contacts with the Company;
Background of the Offer") , 12 ("Purpose of the Offer; Short Form Merger; Plans
for the Company; Dissenters' Rights; Going Private Transactions") and 13 ("The
Merger Agreement; Certain Arrangements") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Sections 17 ("Fees and Expenses") and 18
("Miscellaneous") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning Tyco
and the Purchaser") of the Offer to Purchase is incorporated herein by
reference. The incorporation by reference herein of such financial information
does not constitute an admission that such information is material to a decision
by a stockholder of the Company whether to sell, tender or hold the Shares being
sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 11 ("Contacts with the Company;
Background of the Offer") and Section 13 ("The Merger Agreement; Certain
Arrangements") of the Offer to Purchase is incorporated herein by reference.
(b)-(c) The information set forth in Section 16 ("Certain Legal Matters") of
the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Sections 7 ("Effects of the Offer on the
Market for Shares; Stock Quotations; Registration Under the Exchange Act") and
16 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(e) None
(f) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, to the extent not otherwise set forth herein, is
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated December 13, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Nominees.
(a)(4) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(5) Notice of Guaranteed Delivery.
5 of 9 Pages
<PAGE>
(a)(6) Text of Joint Press Release issued December 11, 1995.
(a)(7) Form of Summary Advertisement, dated December 13, 1995.
(a)(8) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(b) Not applicable.
(c)(1) Confidentiality Agreement between Tyco and the Company, dated
August 29, 1995.
(c)(2) Agreement and Plan of Merger, dated December 8, 1995, among the
Purchaser, Tyco and the Company.
(d)-(f) Not applicable.
6 of 9 Pages
<PAGE>
SIGNATURE
After due inquiry and to the best of the undersigned's knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
TYCO INTERNATIONAL LTD.
Dated: December 13, 1995 By: /s/ Robert F. Sharpe, Jr.
.................................
Name: Robert F. Sharpe, Jr.
Title: Vice President
7 of 9 Pages
<PAGE>
SIGNATURE
After due inquiry and to the best of the undersigned's knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
T1 ACQUISITION CORP.
Dated: December 13, 1995 By: /s/ Robert F. Sharpe, Jr.
...............................
Name: Robert F. Sharpe, Jr.
Title: President
8 of 9 Pages
<PAGE>
EXHIBIT INDEX
<TABLE><CAPTION>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
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<S> <C> <C>
(a)(1) Offer to Purchase, dated December 13, 1995...........................
(a)(2) Letter of Transmittal................................................
(a)(3) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees...........................................................
(a)(4) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.......................................
(a)(5) Notice of Guaranteed Delivery........................................
(a)(6) Text of Joint Press Release issued December 11, 1995.................
(a)(7) Form of Summary Advertisement, dated December 13, 1995...............
(a)(8) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9................................................
(c)(1) Confidentiality Agreement between Tyco and the Company, dated August
29, 1995...........................................................
(c)(2) Agreement and Plan of Merger, dated December 8, 1995, among the
Purchaser, Tyco and the Company....................................
</TABLE>
9 of 9 Pages
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THE EARTH TECHNOLOGY CORPORATION (USA)
AT
$8.00 NET PER SHARE
BY
T1 ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, JANUARY 11, 1996, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES (AS HEREINAFTER DEFINED) REPRESENTING AT LEAST A MAJORITY OF THE TOTAL
NUMBER OF OUTSTANDING SHARES OF THE EARTH TECHNOLOGY CORPORATION (USA) (THE
"COMPANY") ON A FULLY DILUTED BASIS AS OF THE DATE THE SHARES ARE ACCEPTED FOR
PAYMENT PURSUANT TO THE OFFER. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS
AND CONDITIONS SET FORTH IN SECTION 15 OF THIS OFFER TO PURCHASE.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS
STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER, AND
RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
-------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, mail or deliver it and any other required documents to the
Depositary and either deliver the certificate(s) for such tendered Shares to the
Depositary along with the Letter of Transmittal or tender such Shares pursuant
to the procedures for book-entry transfer set forth in Section 2 of this Offer
to Purchase, or (2) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for the stockholder.
Stockholders having Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if they desire to tender
such Shares.
A stockholder who desires to tender Shares and whose certificate(s) for
Shares are not immediately available, or who cannot comply with the procedures
for book-entry transfer on a timely basis, may tender such Shares by following
the procedures for guaranteed delivery set forth in Section 2 of this Offer to
Purchase.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Requests for additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to
the Information Agent or to brokers, dealers, commercial banks or trust
companies.
-------------------
The Information Agent for the Offer is:
[LOGO]
December 13, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Introduction........................................................................... 1
The Tender Offer....................................................................... 3
1. Terms of the Offer; Extension of Tender Period; Termination; Amendments...... 3
2. Procedure for Tendering Shares............................................... 4
3. Withdrawal Rights............................................................ 7
4. Acceptance for Payment and Payment of Offer Price............................ 8
5. Certain Federal Income Tax Consequences...................................... 9
6. Price Range of Shares; Dividends............................................. 9
7. Effects of the Offer on the Market for Shares; Stock Quotations; Registration
Under the Exchange Act..................................................... 10
8. Certain Information Concerning the Company................................... 11
9. Certain Information Concerning Tyco and the Purchaser........................ 13
10. Source and Amount of Funds................................................... 14
11. Contacts with the Company; Background of the Offer........................... 14
12. Purpose of the Offer; Short Form Merger; Plans for the Company; Dissenters'
Rights; Going Private Transactions......................................... 16
13. The Merger Agreement; Certain Arrangements................................... 18
14. Dividends and Distributions.................................................. 25
15. Certain Conditions of the Offer.............................................. 26
16. Certain Legal Matters........................................................ 28
17. Fees and Expenses............................................................ 29
18. Miscellaneous................................................................ 30
Annex I Certain Information Concerning the Directors and Executive Officers of Tyco
International Ltd. and the Purchaser....................................... 31
</TABLE>
i
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF
THE EARTH TECHNOLOGY CORPORATION (USA):
INTRODUCTION
T1 Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of Tyco International Ltd., a Massachusetts corporation
("Tyco"), hereby offers to purchase all outstanding shares of common stock, par
value $.10 per share (the "Shares"), of The Earth Technology Corporation (USA),
a Delaware corporation (the "Company"), at $8.00 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which together constitute the
"Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer.
However, any tendering stockholder or other payee who fails to complete and sign
the Substitute Form W-9 that is included in the Letter of Transmittal may be
subject to a required backup federal income tax withholding of 31% of the gross
proceeds payable to such stockholder or other payee pursuant to the Offer. See
Section 2. The Purchaser will pay all charges and expenses of MacKenzie
Partners, Inc., as Information Agent (the "Information Agent"), and The First
Interstate Bank of California, as Depositary (the "Depositary"), incurred in
connection with the Offer. See Section 17.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES REPRESENTING AT LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING
SHARES OF THE COMPANY ON A FULLY DILUTED BASIS AS OF THE DATE THE SHARES ARE
ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER. THE OFFER IS ALSO SUBJECT TO CERTAIN
OTHER TERMS AND CONDITIONS SET FORTH IN SECTION 15.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of December 8, 1995 (the "Merger Agreement"), among Tyco, the Purchaser and
the Company. The Merger Agreement provides, among other things, that upon the
terms and subject to the conditions therein, as soon as practicable after the
consummation of the Offer, the Purchaser will be merged with and into the
Company (the "Merger"), with the Company being the corporation surviving the
Merger (the "Surviving Corporation"). At the effective time of the Merger (the
"Effective Time"), each outstanding Share (other than shares with respect to
which appraisal rights are properly exercised under the Delaware General
Corporation Law ("DGCL") ("Dissenting Shares")) not held in the treasury of the
Company or owned by any wholly owned subsidiary of the Company or Tyco, the
Purchaser or any other wholly owned subsidiary of Tyco will be converted into
and represent the right to receive $8.00 in cash or any higher price that may be
paid per Share in the Offer (the "Merger Consideration"), without interest. See
Section 13.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS
STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER, AND
RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
Alex. Brown, & Sons Incorporated ("Alex. Brown"), the Company's financial
advisor, has delivered to the Company's Board of Directors its written opinion
that the consideration to be received by the stockholders of the Company
pursuant to the Offer and the Merger is fair to such stockholders from a
financial point of view. A copy of such opinion is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 which is being
distributed to the Company's stockholders herewith.
1
<PAGE>
The Merger Agreement provides that, promptly upon the purchase of Shares
pursuant to the Offer, Tyco will be entitled to designate for election to the
Board of Directors of the Company a number of directors (rounded up to the next
whole number) equal to that number of directors which equals the product of (i)
the total number of directors on the Board of Directors and (ii) the percentage
that the aggregate number of Shares purchased by the Purchaser in the Offer
bears to the total number of Shares outstanding. The Company has agreed, upon
the request of Tyco, to increase the size of the Board of Directors of the
Company and/or use its reasonable best efforts to secure the resignations of
such number of directors as is necessary to enable Tyco's designees to be
elected to the Board of Directors and to cause Tyco's designees to be so
elected.
The Company has informed the Purchaser that as of December 1, 1995 there
were 8,751,636 Shares outstanding and 1,378,510 Shares reserved for issuance
pursuant to outstanding options and warrants and pursuant to the Company's 1994
Employee Stock Purchase Plan. As of the date hereof, neither the Purchaser, Tyco
nor any of their affiliates beneficially owns any Shares. Based on the
foreoging, if the Purchaser acquires at least 5,065,074 Shares in the Offer, it
will own a majority of the outstanding Shares on a fully diluted basis.
Accordingly, in such event the Purchaser would have sufficient voting power to
approve the Merger without the affirmative vote of any other stockholder. If the
Purchaser acquires 90% or more of the outstanding Shares in the Offer, the
Purchaser would be able to effect the Merger pursuant to the short form merger
provisions of the DGCL, without prior notice to, or any action of, any other
stockholder of the Company.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
2
<PAGE>
THE TENDER OFFER
1. TERMS OF THE OFFER; EXTENSION OF TENDER PERIOD; TERMINATION;
AMENDMENTS. Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of any
such extension or amendment), the Purchaser will accept for payment and pay for
all Shares which are validly tendered on or prior to the Expiration Date (as
hereinafter defined) and not theretofore withdrawn as permitted by Section 3.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Thursday, January 11, 1996, unless and until the Purchaser (subject to the terms
and conditions of the Merger Agreement) shall have extended the period of time
for which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition (as defined in Section 15). The Purchaser reserves the right
(but shall not be obligated) to waive or reduce the Minimum Condition or to
waive any or all of the other conditions of the Offer. If, by 12:00 Midnight,
New York City time, on Thursday, January 11, 1996, or any subsequent Expiration
Date, any or all of such conditions have not been satisfied or waived, subject
to the provisions of the Merger Agreement, the Purchaser may elect to (i)
terminate the Offer and return all tendered Shares to tendering stockholders,
(ii) waive all of the unsatisfied conditions and, subject to any required
extension, purchase all Shares validly tendered by the Expiration Date and not
withdrawn, (iii) extend the Offer and, subject to the right of stockholders to
withdraw Shares until the Expiration Date, retain the Shares that have been
tendered until the expiration of the Offer as extended, or (iv) delay acceptance
for payment of, or payment for, Shares, subject to complying with applicable
law, until the satisfaction or waiver of the conditions of the Offer. Under the
terms of the Merger Agreement, the Purchaser may not (except as described in the
next sentence), without the prior written consent of the Company, waive or amend
the Minimum Condition, reduce the number of Shares subject to the Offer, reduce
the price per Share to be paid pursuant to the Offer, extend the Offer if all of
the conditions to the Offer are satisfied or waived, change the form of
consideration payable in the Offer, or add, modify or amend any condition of the
Offer in any manner that would adversely affect the stockholders of the Company.
Notwithstanding the foregoing, the Purchaser may, without the consent of the
Company, extend the Offer (i) if, at the then scheduled Expiration Date of the
Offer, any of the conditions to the Purchaser's obligation to accept for payment
and pay for Shares shall not have been satisfied or waived until such time as
such conditions are satisfied or waived, (ii) for any period required by any
rule, regulation, interpretation or position of the Securities and Exchange
Commission (the "Commission") or the Commission staff applicable to the Offer or
(iii) for an aggregate period of not more than 10 business days (for all such
extensions) beyond the latest Expiration Date that would be permitted under
clause (i) or (ii) of this sentence if all of the conditions to the Offer are
satisfied or waived but the number of Shares tendered is less than 90% of the
then outstanding number of Shares.
Subject to the applicable regulations of the Commission, the Purchaser also
expressly reserves the right (subject to the provisions of the Merger
Agreement), in its sole discretion, at any time or from time to time, to (i)
delay acceptance for payment of or, regardless of whether such Shares were
theretofore accepted for payment, payment for any Shares, (ii) terminate the
Offer (whether or not any Shares have theretofore been accepted for payment) if
any of the conditions referred to in Section 15 have not been satisfied or upon
the occurrence of any of the events specified in Section 15, and (iii) waive any
condition or otherwise amend the Offer in any respect, in each case by giving
oral or written notice of such delay, termination, waiver or amendment to the
Depositary and by making a public announcement thereof. If the Purchaser accepts
for payment any Shares pursuant to the terms of the Offer, it will accept for
payment all Shares validly tendered prior to the Expiration Date and not
withdrawn and, subject to clause (i) above, will promptly pay for all Shares so
accepted for payment. The Purchaser acknowledges that its reservation of the
right to delay payment for Shares that it has accepted for payment is limited by
(a) Rule 14e-l(c) under the Securities Exchange Act of 1934, as
3
<PAGE>
amended (the "Exchange Act"), which requires the Purchaser to pay the
consideration offered or return the Shares tendered promptly after the
termination or withdrawal of the Offer, and (b) the requirement that the
Purchaser may not delay acceptance for payment of, or payment for, any Shares
upon the occurrence of any of the events specified in Section 15 without
extending the period of time during which the Offer is open.
The rights reserved by the Purchaser in the preceding paragraph are in
addition to the Purchaser's rights pursuant to Section 15. Any extension, delay,
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 no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date, in accordance with
the public announcement requirements of Rule 14e-1(d) under the Exchange Act.
Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, which require that any material change in the information
published, sent or given to stockholders in connection with the Offer be
promptly disseminated to stockholders in a manner reasonably designed to inform
stockholders of such change) and without limiting the manner in which the
Purchaser may choose to make any public announcement, the Purchaser shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service.
If the 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 (including the Minimum Condition), the Purchaser will disseminate
additional tender offer materials (including by public announcement as set forth
above) and extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act. The minimum period during which an offer must
remain open following material changes in the terms of the Offer, other than a
change in price, percentage of securities sought or inclusion of or change to a
dealer's soliciting fee, will depend upon the facts and circumstances, including
the materiality, of the changes. In the Commission's view, an offer should
remain open for a minimum of five business days from the date the material
change is first published, sent or given to stockholders, and, if material
changes are made with respect to information that approaches the significance of
price and share levels, a minimum of ten business days may be required to allow
for adequate dissemination and investor response. With respect to a change in
price or, subject to certain limitations, a change in the percentage of
securities sought or inclusion of or change to a dealer's soliciting fee, a
minimum ten business day period from the date of such change is generally
required to allow for adequate dissemination to stockholders. Accordingly, if,
prior to the Expiration Date, the Purchaser decreases the number of Shares being
sought or increases or decreases the consideration offered pursuant to the
Offer, and if the Offer is scheduled to expire at any time earlier than the
period ending on the tenth business day from the date that notice of such
increase or decrease is first published, sent or given to holders of Shares, the
Offer will be extended at least until the expiration of such ten business day
period. For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or a federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time.
The Company has provided or will provide the Purchaser with the Company's
stockholder list 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 registered holders of
Shares and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. PROCEDURE FOR TENDERING SHARES. Except as set forth below, in order for
Shares to be validly tendered pursuant to the Offer, the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed, together with
any required signature guarantees, or an Agent's Message (as
4
<PAGE>
hereinafter defined) in connection with a book-entry transfer of Shares, and any
other documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase on or prior to the Expiration Date, and either (i) certificates
representing tendered 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 confirmation of receipt of such delivery must be received by the
Depositary), in each case on or prior to the Expiration Date, or (ii) the
guaranteed delivery procedures set forth below must be complied with. No
alternative, conditional or contingent tenders will be accepted.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if such Letter of Transmittal is signed by the registered holder
of the Shares tendered therewith, unless such holder has completed either the
box entitled "Special Delivery Instructions" or the box entitled "Special
Payment Instructions" in the Letter of Transmittal, or (ii) if Shares are
tendered for the account of a firm that is a member in good standing of the
Security Transfer Agent's Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchange Medallion Program (each being
hereinafter referred to as an "Eligible Institution"). See Instruction 1 of the
Letter of Transmittal.
If a certificate representing Shares is registered in the name of a person
other than the signer of the Letter of Transmittal (or a facsimile thereof), or
if payment is to be made, or Shares not accepted for payment or not tendered are
to be returned to a person other than the registered holder, the certificate
must be endorsed or accompanied by an appropriate stock power, in either case
signed exactly as the name(s) of the registered holder(s) appears on the
certificate, with the signature(s) on the certificate or stock power guaranteed
by an Eligible Institution. If the Letter of Transmittal or stock powers are
signed or any certificate is endorsed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing and, unless waived by the Purchaser, proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted. See Instruction 5 of
the Letter of Transmittal.
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at The Depository Trust Company, the Midwest Securities Trust Company
and the Philadelphia Depository Trust Company (individually, a "Book-Entry
Transfer Facility" and, collectively, the "Book-Entry Transfer Facilities") for
purposes of the Offer within two business days after the date of this Offer to
Purchase, and any financial institution that is a participant in any of the
Book-Entry Transfer Facilities' systems may make book-entry delivery of the
Shares by causing any Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account in accordance with such Book-Entry Transfer Facility's
procedure for such transfer. However, although delivery of Shares may be
effected through book-entry transfer at any Book-Entry Transfer Facility, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message and any
other required documents, must, in any case, be transmitted to and received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, or the guaranteed delivery procedures
described below must be complied with. The term "Agent's Message" means a
message transmitted through electronic means by a Book-Entry Transfer Facility
to, and received by, the Depositary and forming a part of a book-entry
confirmation, which states that such Book-Entry Transfer Facility has received
an express acknowledgment from the participant in such Book-Entry Transfer
Facility tendering the Shares that such participant has received, and agrees to
be bound by, the terms of the Letter of Transmittal. DELIVERY OF DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates representing Shares are not
immediately available (or the procedures for book-entry transfer cannot be
completed on a timely basis) or time will not permit all required documents to
5
<PAGE>
reach the Depositary prior to the Expiration Date, such Shares may nevertheless
be tendered, provided that all of the following conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives, prior to the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in
the form provided by the Purchaser; and
(c) the certificates representing all tendered Shares in proper form for
transfer (or confirmation of a book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities), together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees (or, in connection
with a book-entry transfer, an Agent's Message) and any other documents
required by the Letter of Transmittal are received by the Depositary within
four Nasdaq Stock Market's National Market ("The Nasdaq National Market")
trading days after the date of such Notice of Guaranteed Delivery. A
"trading day" is any day on which The Nasdaq National Market is open for
business.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by telegram, telex, facsimile transmission or mail, to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates representing such Shares (or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility), (ii) properly completed and duly executed Letter(s) of Transmittal
(or facsimile(s) thereof), together with any required signature guarantees (or,
in connection with a book-entry transfer, an Agent's Message), and (iii) any
other documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when certificates
representing Shares or confirmations of book-entry transfers of such Shares are
actually received by the Depositary.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. 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.
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 tendered Shares will be determined by the Purchaser in its sole discretion,
and its determination shall be final and binding on all parties. The Purchaser
reserves the absolute right to reject any or all tenders of any Shares that it
determines are not in appropriate form or the acceptance for payment of or
payment for which may, in the opinion of the Purchaser's counsel, be unlawful.
The Purchaser also reserves the absolute right to waive any of the conditions of
the Offer or any defect or irregularity in any tender with respect to any
particular Shares or any particular stockholder, and the Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the Instructions thereto) will be final and binding on all
parties. No tender of Shares will be deemed to have been validly made until all
defects or irregularities relating thereto have been cured or expressly waived
to the satisfaction of the Purchaser. None of the Purchaser, Tyco, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders, nor shall any of
them incur any liability for failure to give any such notification.
Other Requirements. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser as such
stockholder's proxies, in the manner set forth in the Letter of Transmittal,
each with full power of substitution, to the full extent of such stockholder's
rights with respect to the Shares tendered by such stockholder and accepted for
payment by the Purchaser (and any
6
<PAGE>
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after December 1, 1995), effective if, when and to the
extent that the Purchaser accepts such Shares for payment pursuant to the Offer.
Upon such acceptance for payment, all prior proxies given by such stockholder
with respect to such Shares or other securities accepted for payment will,
without further action, be revoked, and no subsequent proxies may be given by
such stockholder nor any subsequent written consents executed (and, if given or
executed, will not be deemed effective). Such designees of the Purchaser will,
with respect to such Shares and other securities or rights issuable in respect
thereof, be empowered to exercise all voting and other rights of such
stockholder as they, in their sole discretion, may deem proper in respect of any
annual, special or adjourned meeting of the Company's stockholders, by written
consent in lieu of any such meeting or otherwise. The Purchaser reserves the
right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares the
Purchaser must be able to exercise full voting rights with respect to such
Shares.
The Purchaser's acceptance for payment of Shares tendered pursuant to any of
the procedures described above will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
TO PREVENT FEDERAL INCOME TAX BACKUP WITHHOLDING ON PAYMENTS MADE TO
STOCKHOLDERS WITH RESPECT TO SHARES PURCHASED PURSUANT TO THE OFFER, EACH
STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH HIS CORRECT TAXPAYER IDENTIFICATION
NUMBER AND CERTIFY THAT HE IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX
WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF
TRANSMITTAL. FOREIGN HOLDERS MUST SUBMIT A COMPLETED FORM W-8 TO AVOID BACKUP
WITHHOLDING. THIS FORM MAY BE OBTAINED FROM THE DEPOSITARY. SEE INSTRUCTIONS 10
AND 11 OF THE LETTER OF TRANSMITTAL.
3. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer will be
irrevocable, except that Shares tendered may be withdrawn at any time prior to
the Expiration Date, and, unless theretofore accepted for payment by the
Purchaser as provided herein, may also be withdrawn on or after February 12,
1996.
For a withdrawal of Shares tendered to be effective, a written, telegraphic,
telex 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 specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name(s) in which the certificate(s) representing such Shares are registered,
if different from that of the person who tendered such Shares. If certificates
for Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, the name of the registered holder and the serial numbers shown on
the particular certificates evidencing such Shares to be withdrawn must also be
furnished to the Depositary prior to the physical release of the Shares to be
withdrawn. The signature(s) on the notice of withdrawal must be guaranteed by an
Eligible Institution (except in the case of Shares tendered by an Eligible
Institution). If Shares have been tendered pursuant to the procedures for
book-entry transfer set forth in Section 2, any notice of withdrawal must
specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with such withdrawn Shares and must otherwise
comply with such Book-Entry Transfer Facility's procedures.
If the Purchaser extends the Offer, is delayed in its acceptance for payment
of any Shares tendered, or is unable to accept for payment or pay for Shares
tendered pursuant to the Offer, for any reason whatsoever, then, without
prejudice to the Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of the Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent that the tendering stockholder
is entitled to and duly exercises withdrawal rights as described in this Section
and as otherwise required by Rule 14e-1(c) under the Exchange Act. Any such
delay will be accompanied by an extension of the Offer to the extent required by
law.
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<PAGE>
Withdrawals of tenders of Shares may not be rescinded, and Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following the
procedures described in Section 2 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, and its determination will be final and binding on all parties. None
of the Purchaser, Tyco, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal, nor shall any of them incur any
liability for failure to give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT OF OFFER PRICE. 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), the Purchaser
will accept for payment and will pay for all Shares validly tendered prior to
the Expiration Date (and not properly withdrawn in accordance with Section 3
above) as soon as practicable after the latest to occur of (a) the expiration or
termination of the waiting period applicable to the acquisition of the Shares
pursuant to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (b) the Expiration Date, and (c) subject to
compliance with Rule 14e-1(c) under the Exchange Act, the satisfaction or waiver
of the conditions of the Offer set forth in Section 15. Any determination
concerning the satisfaction of such terms and conditions shall be within the
sole discretion of the Purchaser, and such determination shall be final and
binding on all tendering stockholders. See Section 15.
The Purchaser expressly reserves the right to delay acceptance for payment
of, or payment for, Shares in order to comply in whole or in part with any
applicable law. If the Purchaser desires to delay payment for Shares accepted
for payment pursuant to the Offer, and such delay would otherwise be in
contravention of Rule 14e-1(c) of the Exchange Act, the Purchaser will formally
extend the 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 representing such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities, as described in Section 2), (ii) a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees (or, in connection with a book-entry transfer, an Agent's
Message), and (iii) any other documents required by the Letter of Transmittal.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, tendered Shares when, as and if the Purchaser
gives oral or written notice to the Depositary, as agent for the tendering
stockholders, of the Purchaser's acceptance for payment of such Shares. Payment
for Shares so accepted for payment will be made by the deposit of the purchase
price therefor with the Depositary, which will act as agent for the tendering
stockholders for the purpose of receiving such payment from the 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 the Purchaser is unable to accept for payment Shares tendered
pursuant to the Offer, then, without prejudice to the Purchaser's rights under
Section 1, the Depositary may, nevertheless, on behalf of the 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 3 and as otherwise required by Rule 14e-1(c) under the Exchange Act.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE BY REASON OF
ANY DELAY IN MAKING SUCH PAYMENTS.
If any tendered Shares are not accepted for payment and paid for,
certificates representing such Shares will be returned (or, in the case of
Shares delivered by book-entry transfer with any Book-Entry Transfer Facility as
permitted by Section 2, such Shares will be credited to an account maintained
with such Book-Entry Transfer Facility) without expense to the tendering
stockholder as promptly as practicable following the expiration or termination
of the Offer.
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<PAGE>
If, prior to the Expiration Date, the Purchaser increases the consideration
to be paid for Shares pursuant to the Offer, the Purchaser will pay such
increased consideration for all Shares accepted for payment pursuant to the
Offer, whether or not such Shares have been tendered or accepted for payment
prior to such increase in the consideration.
The Purchaser reserves the right to transfer or assign in whole or in part
to one or more affiliates of the Purchaser or Tyco the right to purchase all or
any portion of the Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve the Purchaser of its obligations under the Offer
and will in no way prejudice the rights of tendering stockholders to receive
payment for Shares validly tendered and accepted for payment pursuant to the
Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash for Shares
pursuant to the Offer (or in the Merger) will be a taxable transaction for
federal income tax purposes (and may also be a taxable transaction under
applicable state, local or other tax laws). In general, a stockholder will
recognize gain or loss for such purposes equal to the difference between such
stockholder's adjusted tax basis for the Shares such stockholder sells in such
transaction and the amount of cash received therefor. Gain or loss must be
determined separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) sold pursuant to the Offer or converted to
cash in the Merger. Such gain or loss will be capital gain or loss and will be
long term gain or loss if the Shares were held for more than one year on the
date of sale (in the case of the Offer) or the Effective Time of the Merger (in
the case of the Merger). The receipt of cash for Shares pursuant to the exercise
of appraisal rights will generally be taxed in the same manner described above.
Long-term capital gains for individuals currently are taxed at a maximum rate of
28%. Legislative proposals are pending that would decrease the tax rate
applicable to an individual's long-term capital gains. It is not known whether
any such proposal will be enacted, and, if enacted, what the new rate (if
changed) will be and when any such new rate will become effective.
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a rate of 31%. Backup withholding generally applies if
the stockholder (a) fails to furnish his social security number or TIN, (b)
furnishes an incorrect TIN, or (c) under certain circumstances, fails to provide
a certified statement, signed under penalties of perjury, that the TIN provided
is his correct number and that he is not subject to backup withholding. Backup
withholding is not an additional tax but merely an advance payment, which may be
refunded to the extent it results in an overpayment of tax. Certain persons
generally are entitled to exemption from backup withholding, including
corporations and financial institutions. Certain penalties apply for failure to
furnish correct information and for failure to include reportable payments in
income. Each stockholder should consult with his own tax advisor as to his
qualification for exemption from backup withholding and the procedure for
obtaining such exemption. Tendering stockholders may be able to prevent backup
withholding by completing the Substitute Form W-9 included in the Letter of
Transmittal.
The foregoing discussion may not be applicable to a stockholder who acquired
Shares pursuant to the exercise of employee stock options or otherwise as
compensation, or to an individual stockholder who is not a citizen or resident
of the United States or who is otherwise subject to special tax treatment under
the Internal Revenue Code. In addition, the foregoing discussion does not
address the tax treatment of holders of Stock Options or Warrants (both as
defined in Section 13).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are traded on The Nasdaq
National Market under the symbol "ETCO." The following table sets forth, for the
periods indicated, the highest and lowest sale prices of the Shares as reported
by the Company in its Annual Report on Form 10-K for the fiscal year ended
August 25, 1995 (the "1995 Annual Report") with respect to the two most recent
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fiscal years, and as reported by published financial sources with respect to
periods after August 25, 1995. The quotations represent prices between dealers
and do not reflect retail mark-ups, mark-downs or commissions and may not
represent actual transactions. The Company has not declared or paid any cash
dividends with respect to the Shares for the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
------------- ------
<S> <C> <C>
Fiscal Year Ended August 26, 1994:
First Quarter............................................................. $ 10 3/4 $ 7 5/8
Second Quarter............................................................ 14 7 7/8
Third Quarter............................................................. 16 1/8 11 3/4
Fourth Quarter............................................................ 12 7/8 7 1/2
Fiscal Year Ended August 25, 1995:
First Quarter............................................................. $ 10 7/8 $ 8 3/8
Second Quarter............................................................ 9 1/2 6
Third Quarter............................................................. 6 1/2 4 5/8
Fourth Quarter............................................................ 6 1/2 4 3/4
Fiscal Year Ending August 30, 1996:
First Quarter............................................................. $ 5 7/8 $ 4 1/4
Second Quarter (through December 12, 1995)................................ 8 4 7/8
</TABLE>
On December 8, 1995, the last full trading day prior to the public
announcement of the terms of the Offer and the Merger, the last reported bid
price on The Nasdaq National Market was $5 7/8 per Share. On December 12, 1995,
the last full trading day prior to commencement of the Offer, the last reported
bid price on The Nasdaq National Market was $7 27/32 per Share. STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; STOCK QUOTATIONS;
REGISTRATION UNDER THE EXCHANGE ACT. According to the Company, as of December
11, 1995, there were approximately 1,116 holders of record of Shares. The
purchase of Shares pursuant to the Offer will reduce the number of holders of
Shares and the number of Shares that might otherwise trade publicly.
Consequently, depending upon the number of Shares purchased and the number of
remaining holders of Shares, the purchase of Shares pursuant to the Offer may
adversely affect the liquidity and market value of the remaining Shares held by
the public. The Purchaser cannot predict whether the reduction in the number of
Shares that might otherwise trade publicly would have an adverse or beneficial
effect on the market price for, or marketability of, the Shares or whether it
would cause future market prices to be greater or less than the Offer price.
Depending upon the aggregate market value and the number of Shares not
purchased pursuant to the Offer, the Shares may no longer meet the quantitative
maintenance criteria of the National Association of Securities Dealers, Inc.
(the "NASD") for continued inclusion on The Nasdaq National Market, which
require that an issuer have at least 200,000 publicly held shares, held either
by at least 400 stockholders or 300 stockholders of round lots, with a market
value of at least $1 million and must have net tangible assets of at least
either $1 million, $2 million or $4 million depending on profitability levels
during the issuer's four most recent fiscal years. If these standards are not
met, the Shares might nevertheless continue to be included in The Nasdaq Stock
Market with quotations published in The Nasdaq Stock Market's "additional list"
or in one of the "local lists", but if the number of holders of Shares were to
fall below 300, or if the number of publicly held Shares were to fall below
100,000 or there were not at least two registered and active market makers for
the Shares, the NASD's rules provide that the Shares would no longer be
"qualified" for reporting by The Nasdaq Stock Market and The Nasdaq Stock Market
would cease to provide any quotations. Shares held directly or indirectly by
officers, directors or beneficial owners of more than 10% of the Shares will not
be considered as being publicly held for this purpose. If, as a result of the
purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet
the requirements of the NASD for continued inclusion in The Nasdaq National
Market or in any other tier of The Nasdaq Stock Market, and the Shares are no
10
<PAGE>
longer included in The Nasdaq National Market or in any other tier of The Nasdaq
Stock Market, the market for Shares could be adversely affected.
In the event that the Shares no longer meet the requirements of the NASD for
continued inclusion in any tier of The Nasdaq Stock Market, it is possible that
Shares would continue to trade in the over-the-counter market and that price
quotations would be reported by 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 Shares remaining at such time, the interest in
maintaining a market in Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act, as described
below, and other factors.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application of the Company to the Commission
if such Shares are not listed on a national securities exchange and there are
fewer than 300 holders of record of the Shares. The termination of the
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to its stockholders and to
the Commission, and would make certain of the provisions of the Exchange Act,
such as the short-swing profit recovery provisions of Section 16(b) and the
requirement of furnishing a proxy statement in connection with stockholders'
meetings and the related requirement of an annual report to stockholders, and
the requirements of Rule 13e-3 with respect to going private transactions, no
longer applicable with respect to the Shares or to the Company. Furthermore, if
a substantial number of Shares are acquired by the Purchaser, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended, may be impaired or, with respect to certain
persons, eliminated.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on such Shares as collateral. Depending on factors similar to those described
above regarding listing and market quotations, it is possible the Shares would
no longer constitute "margin securities" for purposes of the Federal Reserve
Board's margin regulations 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 information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company or
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Although neither the
Purchaser nor Tyco has any knowledge that would indicate that the statements
contained herein based on such documents are untrue, neither the Purchaser nor
Tyco takes 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 the Purchaser or Tyco.
The Company is a Delaware corporation organized in 1987, and its principal
offices are located at 100 West Broadway, Suite 5000, Long Beach, California
90802. The following description of the Company's business has been taken from
the Company's 1995 Annual Report:
The Company provides a broad range of environmental, consulting, and
engineering services through a nationwide network of 38 offices in 18 states.
The principal services of the Company consist of: (i) full-spectrum
environmental and hazardous waste management services, encompassing remedial
investigation through turnkey remediation, environmental planning and analysis,
compliance assessment, pollution prevention, and air quality assessment and
pollution control; (ii) infrastructure design and construction services, which
rely on the firm's engineering and geotechnical capabilities for
11
<PAGE>
transportation, water/wastewater, solid waste, and other public works projects;
(iii) facilities engineering and construction management services for
institutional, civic, commercial, and industrial clients; and (iv) contract
operations and management services for water, wastewater, and remediation
treatment facilities for municipal and industrial clients.
Set forth below is a summary of certain consolidated financial information
with respect to the Company and its consolidated subsidiaries, excerpted or
derived from the information contained in the Company's 1995 Annual Report. More
comprehensive financial information is included in such report and other
documents filed by the Company with the Commission. The financial information
summary set forth below is qualified in its entirety by reference to such report
and other documents filed with the Commission and all of the financial
information and related notes contained therein. Such report and other documents
may be inspected and copies may be obtained from the offices of the Commission
in the manner set forth below.
SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------
AUGUST 25, AUGUST 26, AUGUST 27,
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
INCOME STATEMENT:
Gross revenues.................................. $ 179,492 $ 176,199 $ 187,467
Operating income (loss)......................... 6,157(1) 2,961(2) (4,964)(3)
Net income (loss) from continuing operations.... 1,081(1) (718)(2) (9,743)(3)
Income (loss) from discontinued operations and
disposition of laboratory business............ (1,417) (93) 764
Net income (loss) applicable to common shares... (521) (1,083) (10,079)
Net income (loss) per share from continuing
operations.................................... $ 0.10(1) $ (0.18)(2) $ (2.16)(3)
Net income (loss) per share from discontinued
operations.................................... (0.16) (0.02) 0.15
Net income (loss) per share..................... (0.06) (0.20) (2.01)
<CAPTION>
AUGUST 25, AUGUST 26,
1995 1994
---------- ----------
<S> <C> <C> <C>
BALANCE SHEET:
Working capital................................. $ 31,664 $ 25,638
Total assets.................................... 95,046 99,410
Long-term liabilities........................... 36,945 31,873
Stockholders' equity............................ 24,676 24,487
</TABLE>
- ------------
(1) After special charges of $4,315 ($3,647 after-tax, or $.41 per share).
(2) After special charges of $6,873 ($5,105 after-tax, or $.91 per share).
(3) After special charges of $15,000 ($13,461 after-tax, or $2.69 per share).
Other Information. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the informational filing requirements of
the Exchange Act and, in accordance therewith, is obligated to file periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company is required to be disclosed in such proxy statements and
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities at the Commission's principal
office at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and
at the regional
12
<PAGE>
offices of the Commission located at Seven World Trade Center, New York, New
York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may also be obtained by mail, upon payment of the
Commission's customary fees, from the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549.
9. CERTAIN INFORMATION CONCERNING TYCO AND THE PURCHASER. The Purchaser is a
newly formed Delaware corporation and a wholly owned subsidiary of Tyco. To
date, the Purchaser has not conducted any business other than incident to its
formation, the execution and delivery of the Merger Agreement and the
commencement of the Offer.
Tyco, a Massachusetts corporation, is a global manufacturer, installer and
distributor of products and systems for a broad spectrum of markets, including
disposable medical products, packaging, fire and life safety, industrial process
control and telecommunications. The principal executive offices of Tyco and the
Purchaser are located at One Tyco Park, Exeter, New Hampshire 03833.
Until immediately prior to the time that the Purchaser purchases Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Since the Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information is available.
Set forth below is certain selected historical consolidated financial
information with respect to Tyco excerpted or derived from financial information
contained in Tyco's Annual Report on Form 10-K for the year ended June 30, 1995,
and Tyco's Report on Form 10-Q for the quarter ended September 30, 1995 (which
reports are hereby incorporated by reference herein). More comprehensive
financial information is included in such reports and other documents filed by
Tyco with the Commission, and the following summary is qualified in its entirety
by reference to such reports and such other documents and of 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 in Section 8. Such reports and other
documents should also be available for inspection at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005, where the common
stock of Tyco is listed.
SELECTED CONSOLIDATED FINANCIAL DATA OF TYCO INTERNATIONAL LTD.
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30, FISCAL YEAR ENDED JUNE 30,
------------------------ ----------------------------------------
1995 1994 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT:
Sales................... $1,216,202 $1,054,192 $4,534,651 $4,076,383 $3,919,357
Net income.............. 65,664 53,385 213,993(1) 189,191 20,602(2)
Net income per share
(3).................... $ .43 $ .36 $ 1.42(1) $ 1.28 $ 0.14(2)
</TABLE>
- ------------
(1) After Merger and Transaction Related Costs of $31,170 ($.21 per share) and
an Extraordinary Item of $2,600 ($.02 per share).
(2) After Restructuring and Severance Charges of $27,325 ($.19 per share), a
Non-recurring Inventory Charge of $22,485 ($.16 per share), an Extraordinary
Item of $2,816 ($.02 per share) and the Cumulative Effect of Accounting
Changes of $71,040 ($.49 per share).
(3) Restated to give effect to Tyco's two-for-one stock split on November 14,
1995.
13
<PAGE>
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30, JUNE 30,
1995 1995 1994
------------- ---------- ----------
<S> <C> <C> <C>
BALANCE SHEET:
Working capital..................................... $ 405,766 367,186 329,918
Total assets........................................ 3,479,710 3,381,461 3,144,598
Long-term debt...................................... 507,312 506,417 588,491
Shareholders' equity................................ 1,690,620 1,634,681 1,367,026
</TABLE>
The name, citizenship, business address, present principal occupation or
employment and five year employment history of each of the directors and
executive officers of Tyco and the Purchaser are set forth in Annex I hereto.
None of Tyco or the Purchaser or, to the best of their knowledge, any of the
persons listed on Annex I hereto, or any associate or majority-owned subsidiary
of Tyco, the Purchaser or any of the persons so listed, owns or has the right to
acquire any Shares or has effected any transaction in the Shares during the past
60 days.
Except as set forth in this Offer to Purchase, none of Tyco or the Purchaser
or, to the best of their knowledge, any of the persons listed in Annex I hereto,
(a) has any contract, arrangement, understanding or relationship with any other
person with respect to any securities of the Company, including, but not limited
to, any contract, arrangement, understanding or relationship concerning the
transfer or the voting of any securities of the Company, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties against
loss, or the giving or withholding of proxies; (b) has engaged in contacts,
negotiations or transactions with the Company or its affiliates concerning a
merger, consolidation, acquisition, tender offer or other acquisition of
securities, election of directors or a sale or other transfer of a material
amount of assets; or (c) has had any other transaction with the Company or any
of its executive officers, directors or affiliates that would require disclosure
under the rules and regulations of the Commission applicable to the Offer.
10. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by Tyco
and the Purchaser to purchase all Shares that may be tendered pursuant to the
Offer and the Merger, and to pay related fees and expenses, is estimated to be
approximately $73 million.
The Purchaser will obtain all such funds from Tyco or its affiliates. Tyco
has sufficient existing resources to satisfy its and the Purchaser's obligations
under the Offer and the Merger Agreement. This Offer is not conditioned upon any
financing arrangements.
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER. On or about August
8, 1995, The Environmental Finance Consulting Group, Inc. ("EFCG"), which had
advised Tyco from time to time with respect to the environmental engineering and
consulting industry, approached Tyco concerning a possible acquisition of the
Company. In response, Tyco requested that EFCG contact the Company on behalf of
Tyco to present Tyco's potential interest in such a transaction. Following such
contact, on August 18, 1995, a conference call was arranged including J. Brad
McGee, Vice President of Tyco-- Specialty Products, Diane C. Creel, Chairwoman,
Chief Executive Officer and President of the Company and Creighton K. Early,
Chief Financial Officer of the Company, to discuss the Company and opportunities
for Tyco in the Company's industry and to exchange information about the Company
and Tyco. On August 29, 1995, Tyco and the Company executed a confidentiality
agreement.
On September 20, 1995, Mr. McGee met with Ms. Creel, Mr. Early and William
Cretens, President of the Company's Operations Services subsidiary, to exchange
further information. During October 1995, executive officers and other
representatives of Tyco and the Company conducted a series of telephone
conversations and visits to the respective headquarters of Tyco and the Company
to analyze a potential acquisition of the Company by Tyco and explore possible
cost savings and synergies that could be achieved through such a business
combination.
14
<PAGE>
On October 10, 1995, the Company engaged Alex. Brown & Sons Incorporated
("Alex. Brown") to provide financial advisory and investment banking services to
the Company. At that time, Ms. Creel informed representatives of Alex. Brown of
the Company's contacts with Tyco and requested that representatives of Alex.
Brown attend all future meetings with Tyco. On October 17, 1995, Mr. McGee met
with Ms. Creel, Mr. Early and representatives of Alex. Brown to discuss the
Company's business.
On November 9, 1995, Robert F. Sharpe, Jr., Vice President of Tyco, and Mr.
McGee met at the Company's headquarters with Ms. Creel, Mr. Early and
representatives of Alex. Brown to discuss Tyco's preliminary valuation model for
the Company. Ms. Creel indicated that she did not believe that this preliminary
model produced a valuation which fully reflected the value of the Company,
particularly in light of recent acquisitions in the environmental engineering
and consulting industry and potential synergies that Tyco could obtain in an
acquisition of the Company. Ms. Creel further indicated that she did not believe
that such a valuation would be favorably viewed by the Finance Committee of the
Company's Board of Directors. In order to further discussions, Messrs. Sharpe
and McGee agreed to examine additional information relating to these factors and
to do further analyses in order to reassess their preliminary valuation of the
Company.
On November 13, 1995, Mr. McGee informed Ms. Creel that Tyco had increased
its valuation of the Company based upon additional information and newly
identified synergies. He stated that Tyco might be willing to offer $7.50 per
Share, subject to approval of the Tyco Board of Directors on December 6, 1995
and prompt consummation of the transaction thereafter. Ms. Creel indicated that
she would present this information to the Finance Committee.
On November 15, 1995, the Finance Committee held a telephonic meeting during
which Ms. Creel summarized the discussions with Tyco. The Finance Committee
discussed the revised offer and indicated that $7.50 was an interesting
expression of interest, but that it was not prepared to recommend such an offer
at that time. The Finance Committee concluded that it would be supportive of an
offer in the range of $8.00 to $8.50 per Share.
On November 16, 1995 a representative of Alex. Brown informed Mr. Sharpe
that Tyco's interest in the Company had been discussed by the Finance Committee
with inconclusive results. The Alex. Brown representative invited Tyco to
furnish any additional information that it might wish to communicate for
consideration at a reconvened meeting of the Committee on November 20, 1995.
On November 20, 1995 Mr. Sharpe informed the Alex. Brown representative that
Tyco was prepared to make an offer of $7.75 per Share. The Finance Committee
reconvened later that day via telephonic meeting to discuss Tyco's revised
proposal. The Finance Committee expressed appreciation for the $7.75 expression
of interest, but concluded that support for the transaction would not be strong
at that level. The Finance Committee reaffirmed that it would be supportive of
an offer at $8.00 per Share or above. The Finance Committee then instructed
representatives of Alex. Brown to convey this information to Tyco and to obtain
further information concerning the non-price terms of any potential offer. On
the evening of November 20, 1995, Mr. Sharpe indicated to a representative of
Alex. Brown that Tyco would need to perform an in-depth investigation of the
Company with favorable results to be able to reach a higher valuation for the
Company. However, depending on the outcome of such investigation, Tyco's
management could be in a position to recommend a price of $8.00 per Share to the
Board of Directors of Tyco.
During the week of November 27, 1995, representatives of Tyco conducted a
due diligence review of the Company's businesses. At the conclusion of its
review, Dennis Kozlowski, Chief Executive Officer of Tyco, indicated to Ms.
Creel that he was prepared to recommend to Tyco's Board of Directors that an
offer of $8.00 per Share be made.
On December 1, 1995, Tyco furnished to the Company a draft merger agreement
for the acquisition of the Company by Tyco. On December 4, 1995, the Company's
Board of Directors held a
15
<PAGE>
telephonic meeting to discuss Tyco's contemplated offer of $8.00 per Share and
the terms of the draft merger agreement. Ms. Creel informed the Board of
Directors of the background of the negotiations to date and of the Finance
Committee's support for such an offer. The Board of Directors indicated its
interest in the offer and instructed Ms. Creel to continue negotiating the terms
of the offer.
On December 6, 1995, at its regularly scheduled meeting, the Board of
Directors of Tyco considered the proposal to acquire the Company and heard an
informational presentation delivered by Ms. Creel. Following such presentation
and presentations of Tyco's management, the Board voted to approve an offer to
acquire the Company at $8.00 per Share substantially on the terms set forth in
the Merger Agreement.
On December 7, 1995, the Board of Directors of the Company met to consider
the Tyco offer. The Company's Board of Directors reviewed the principal terms of
the Merger Agreement and received the oral opinion of Alex. Brown, which opinion
was later confirmed in writing, that the offer price of $8.00 per Share was fair
to the stockholders of the Company from a financial point of view. Thereafter,
the Board of Directors of the Company approved the Merger Agreement, the Offer
and the Merger. On December 7 and 8, 1995, representatives of Tyco and the
Company finalized the Merger Agreement, including completion of the schedules
thereto. On December 8, 1995, Tyco and the Company executed the Merger
Agreement. Public disclosure of the Merger Agreement was made on the morning of
the next business day, December 11, 1995, prior to the opening of trading of the
Shares on The Nasdaq National Market.
12. PURPOSE OF THE OFFER; SHORT FORM MERGER; PLANS FOR THE COMPANY;
DISSENTERS' RIGHTS; GOING PRIVATE TRANSACTIONS.
Purpose of the Offer. The purpose of the Offer is for the Purchaser to
acquire control of, and a majority equity interest in, the Company. The purpose
of the Merger is to acquire all outstanding Shares not tendered and purchased
pursuant to the Offer. The acquisition of the entire equity interest in the
Company has been structured as a cash tender offer followed by a cash merger in
order to provide a prompt and orderly transfer of ownership of the Company from
the public stockholders to Tyco and to provide stockholders with cash for all of
their Shares.
Under the DGCL and the Company's Certificate of Incorporation, the approval
of the Board of Directors of the Company and the affirmative vote of the
majority of the holders of outstanding Shares are required to approve and adopt
the Merger Agreement and the Merger. The Board of Directors of the Company has
approved the Offer, the Merger and the Merger Agreement and the transactions
contemplated thereby, and, unless the Merger is consummated pursuant to the
short-form merger provisions under the DGCL described below, the only remaining
required corporate action of the Company is the approval and adoption of the
Merger Agreement and the Merger by the affirmative vote of the holders of a
majority of the outstanding Shares. If the Minimum Condition is satisfied, the
Purchaser will have sufficient voting power to cause the approval and adoption
of the Merger Agreement and the Merger without the affirmative vote of any other
stockholder.
16
<PAGE>
The Merger Agreement provides that, if approval or action in respect of the
Merger by the stockholders of the Company is required by applicable law, the
Company will, (i) if appropriate, call a meeting of its stockholders (the
"Stockholder Meeting") for the purpose of voting upon the Merger and will use
its reasonable best efforts to obtain stockholder approval of the Merger, (ii)
hold the Stockholder Meeting as soon as practicable following the purchase of
Shares pursuant to the Offer, (iii) recommend to its stockholders the approval
of the Merger through its Board of Directors, and (iv) use its reasonable best
efforts to obtain the necessary approvals by its stockholders of the Merger, but
subject in each case to the fiduciary duties of its Board of Directors under
applicable law as determined by the Board of Directors in good faith after
consultation with its counsel. The record date for the Stockholder Meeting will
be a date subsequent to the date the Purchaser becomes a record holder of Shares
purchased pursuant to the Offer.
Short Form Merger. Under the DGCL, if the Purchaser acquires at least 90% of
the outstanding Shares, the Purchaser will be able to approve the Merger without
a vote of the Company's other stockholders. The Merger Agreement provides that
if the Purchaser, or any other direct or indirect subsidiary of Tyco, acquires
at least 90% of the outstanding Shares, Tyco, the Purchaser and the Company will
take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the expiration of the Offer without a
meeting of stockholders of the Company, in accordance with Section 253 of the
DGCL. In the event that all of the conditions to the Purchaser's obligation to
purchase Shares in the Offer are satisfied or waived and the number of Shares
tendered is less than 90% of the outstanding Shares, the Purchaser may, subject
to the limitations set forth in the Merger Agreement, extend the Offer for a
period of not more than 10 business days without the consent of the Company. See
Section 1. If the Purchaser does not acquire at least 90% of the outstanding
Shares, a significantly longer period of time may be required to effect the
Merger, because a vote of the Company's stockholders would be required under the
DGCL.
Plans for the Company. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business and
operations of the Company will be continued by the Surviving Corporation
substantially as they are currently being conducted. The directors of the
Purchaser will be the initial directors of the Surviving Corporation, and the
then officers of the Company and such other persons as are designated by Tyco
will be the initial officers of the Surviving Corporation. Upon completion of
the Offer, Tyco intends to conduct a detailed review of the Company and its
assets, corporate structure, capitalization, operations, policies, management
and personnel. After such review, Tyco will determine what actions or changes,
if any, would be desirable in light of the circumstances which then exist, and
reserves the right to effect such actions or changes.
Except as described in this Offer to Purchase, neither Tyco nor the
Purchaser has any present plans or proposals that would relate to or result in
(i) any extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries, (ii) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries, (iii) any change in the Company's Board of Directors or
management, (iv) any material change in the Company's capitalization or dividend
policy, (v) any other material change in the Company's corporate structure or
business, (vi) causing a class of securities of the Company to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association,
or (vii) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g) of the Exchange Act.
Dissenters' Rights. No dissenters' rights are available in connection with
the Offer. However, if the Merger is consummated, stockholders of the Company
may have certain rights under the DGCL to dissent, and demand appraisal of, and
to obtain payment for the fair value of their Shares. Such rights, if the
statutory procedures were complied with, could lead to a judicial determination
of the fair value of the Shares (excluding any element of value arising from the
accomplishment or expectation of the
17
<PAGE>
Merger) to be required to be paid in cash to such dissenting holders for their
Shares. In addition, such dissenting stockholders would be entitled to receive
payment of a fair rate of interest from the date of consummation of the Merger
on the amount determined to be the fair value of their Shares. In determining
the fair value of the Shares, a Delaware court would be required to take into
account all relevant factors. Accordingly, such determination could be based
upon considerations other than, or in addition to, the market value of the
Shares, including, among other things, asset values and earning capacity. In
Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other things,
that "proof of value by any techniques or methods which are generally considered
acceptable in the financial community and otherwise admissible in court" should
be considered in an appraisal proceeding. Therefore, the value so determined in
any appraisal proceeding could be different from the price being paid in the
Offer.
Going Private Transactions. The Merger would have to comply with any
applicable Federal law operative at the time. The Commission has adopted Rule
13e-3 under the Exchange Act which is applicable to certain "going private"
transactions and which may under certain circumstances be applicable to the
Merger or another business combination following the purchase of Shares pursuant
to the Offer in which the Purchaser or Tyco seeks to acquire the remaining
shares not held by it. The Purchaser believes, however, that Rule 13e-3 will not
be applicable to the Merger. If applicable, Rule 13e-3 requires, among other
things, that certain financial information concerning the Company and certain
information relating to the fairness of such transaction and the consideration
offered to minority stockholders in such transaction be filed with the
Commission and disclosed to stockholders prior to the consummation of such
transaction.
13. THE MERGER AGREEMENT; CERTAIN ARRANGEMENTS.
The Merger Agreement
The following summary of certain provisions of the Merger Agreement, a copy
of which is filed as an exhibit to the Schedule 14D-1, is qualified in its
entirety by reference to the text of the Merger Agreement.
The Offer. The Purchaser commenced the Offer in accordance with the terms of
the Merger Agreement.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the DGCL, the
Purchaser shall be merged with and into the Company. Following the Effective
Time, the separate corporate existence of the Purchaser will cease and the
Company will continue as the Surviving Corporation and will succeed to and
assume all the rights and obligations of the Purchaser in accordance with the
DGCL. The Certificate of Incorporation of the Company, as in effect immediately
prior to the Effective Time, will be the Certificate of Incorporation of the
Surviving Corporation, except that such Certificate of Incorporation will be
amended to provide that the number of directors will be not less than three or
more than nine and all such directors shall constitute a single class. The
bylaws of the Purchaser prior to the Effective Time will be the bylaws of the
Surviving Corporation.
Conversion of Shares. At the Effective Time, each Share issued and
outstanding immediately prior thereto (other than Shares held by the Company as
treasury Shares, Shares owned by any wholly owned subsidiary of the Company,
Shares owned by Tyco, the Purchaser or any wholly owned subsidiary of Tyco and
Dissenting Shares) will be canceled and extinguished, and each Share, including
any "restricted" stock issued pursuant to the Company's 1987 Stock Plan (the
"1987 Stock Plan"), all of the vesting requirements of which have been waived,
will be converted into the right to receive the Merger Consideration upon the
surrender of the certificate formerly representing such Share.
18
<PAGE>
Stock Options and Warrants. Each option outstanding at the Effective Time to
purchase shares of Common Stock (a "Stock Option") granted under (i) the 1987
Stock Plan, (ii) the Company's Director Stock Option Plan (the "Director Option
Plan") and (iii) any other stock plan or agreement of the Company, whether
vested or unvested, shall be converted into an option (a "Parent Option") to
purchase that number of shares of common stock of Tyco, par value $.50 per share
("Tyco Common Stock"), equal to the product of (A) the quotient of (i) the fair
market value of a Share as of the Effective Time divided by (ii) the fair market
value of a share of Tyco Common Stock as of the Effective Time (the "Stock
Ratio") and (B) the number of Shares subject to such Stock Option (rounded to
the nearest whole Share) at an exercise price equal to the per Share exercise
price of such Stock Option divided by the Stock Ratio (rounded to the nearest
cent), which Parent Option shall be subject to the same vesting schedule as the
Stock Option. As soon as practicable after the Effective Time, Tyco shall
deliver to each holder of a Stock Option outstanding immediately prior to the
Effective Time an appropriate notice setting forth such holder's rights pursuant
hereto.
Each stock purchase warrant outstanding at the Effective Time to purchase
shares of Common Stock, issued by Summit Environmental Group, Inc. as of August
29, 1990 and assumed by the Company (a "Warrant"), shall represent the right to
receive, upon payment of the exercise price therefor in accordance with its
terms, cash in an amount equal to the product of (x) the number of Shares
issuable upon exercise of such Warrant immediately prior to the Effective Time
and (y) the Merger Consideration. Tyco understands that the Merger Consideration
(based on the price per Share offered hereby) does not exceed the exercise price
per Share of the Warrants.
Dissenting Shares. The Merger Agreement provides that, if required by the
DGCL, Dissenting Shares will not be exchangeable for the right to receive the
Merger Consideration, and holders of such Dissenting Shares will be entitled to
receive payment of the appraised value of such Dissenting Shares in accordance
with the provisions of Section 262 of the DGCL unless and until such holders
fail to perfect or effectively withdraw or lose their rights to appraisal and
payment under the DGCL. If, after the Effective Time, any holder fails to
perfect or effectively withdraws or loses such right, such Dissenting Shares
will thereupon be treated as if they had been converted into and have become
exchangeable for, at the Effective Time, the right to receive the Merger
Consideration. See Section 12 "--Dissenters' Rights."
Representations and Warranties. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Tyco and the
Purchaser relating to the Company and its subsidiaries, including, among other
things, organization and qualification, certificate of incorporation and bylaws,
capitalization, authority relative to the Merger Agreement, contracts, required
filings and consents, compliance with law, filings with the Commission,
financial statements, absence of certain changes or events, undisclosed
liabilities, litigation, employee benefit matters, labor matters, limitation on
business conduct, title to property, real property, taxes, environmental
matters, intellectual property, insurance, accounts receivable, customers,
interested party transactions and the absence of certain payments.
Tyco and the Purchaser have also made customary representations and
warranties to the Company relating to Tyco and the Purchaser, including, without
limitation, organization and qualification, authority relative to the Merger
Agreement, required filings and consents, and the availability of sufficient
funds to consummate the Offer and the Merger.
Covenants Relating to the Conduct of Business. Pursuant to the Merger
Agreement, the Company has agreed that, except as otherwise contemplated by the
Merger Agreement or consented to in advance by Tyco (which consent is
subsequently confirmed in writing), which consent shall not be unreasonably
withheld, it will, and will cause its subsidiaries to, in all material respects,
carry on their respective businesses in, and not enter into any material
transaction other than in accordance with, the
19
<PAGE>
regular and ordinary course and, to the extent consistent therewith, use their
reasonable best efforts to preserve intact their current business organizations,
keep available the services of their current officers and employees and preserve
their relationships with customers, suppliers and others having business
dealings with them.
The Company has agreed that except as contemplated by the Merger Agreement
it will not, and will not permit any of its subsidiaries to, without the prior
consent of Tyco (which consent is subsequently confirmed in writing), which
consent shall not be unreasonably withheld: (a) issue, deliver, sell, pledge,
dispose of or otherwise encumber any shares of its capital stock, any other
voting securities or equity equivalent or any securities convertible into, or
any rights, warrants or options to acquire, any such shares, securities or
equity equivalent (other than, in the case of the Company, the issuance of
Shares during the period from the date of the Merger Agreement through the
Effective Time upon the exercise of options to purchase Shares outstanding on
the date of the Merger Agreement in accordance with their current terms); (b)
amend or change its charter or bylaws; (c) acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial portion of the
assets of or equity in, or by any other manner, any business or division thereof
or otherwise acquire or agree to acquire any assets, in each case that are
material, individually or in the aggregate, to the Company and its subsidiaries
taken as a whole; (d) sell, lease or otherwise dispose of, or agree to sell,
lease or otherwise dispose of, any of its assets that are material, individually
or in the aggregate, to the Company and its subsidiaries taken as a whole; (e)
make any commitment or enter into any contract or agreement except (x) in the
ordinary course of business consistent with past practice or (y) for capital
expenditures to be made in fiscal 1996 as identified in a capital expenditure
budget previously delivered to Tyco; (f) incur any indebtedness for borrowed
money or guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others, except in the ordinary course of
business consistent with past practice, or make any loans, advances or capital
contributions to, or investments in, any other person, other than to the Company
or any wholly owned subsidiary of the Company and other than in the ordinary
course of business consistent with past practice; (g) alter through merger,
liquidation, reorganization, restructuring or in any other fashion the corporate
structure or ownership of any subsidiary of the Company; (h) except as may be
required as a result of a change in law or in generally accepted accounting
principles, change any of the accounting principles or practices used by the
Company; (i) make any tax election or settle or compromise any material income
tax liability; (j) pay, discharge or satisfy any liabilities, other than
payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities reflected or reserved against in,
or contemplated by, the financial statements (or the notes thereto) of the
Company or incurred in the ordinary course of business consistent with past
practice; (k) increase in any manner the compensation or fringe benefits of any
directors, officers or other key employees of the Company or pay any pension or
retirement allowance not required by any existing plan or agreement to any such
employees, or become a party to, amend or commit itself to any pension,
retirement, profit-sharing or welfare benefit plan or agreement or employment
agreement with or for the benefit of any employee, other than increases in the
compensation of employees who are not officers or directors of the Company made
in the ordinary course of business consistent with past practice, or (except
pursuant to the terms of preexisting plans or agreements) accelerate the vesting
of any compensation or benefit; (l) except in connection with the exercise of
its fiduciary duties by the Board of Directors of the Company, waive, amend or
allow to lapse any term or condition of any confidentiality or "standstill"
agreement to which the Company or any subsidiary is a party; or (m) take, or
agree to take, any of the foregoing actions or any action which would make any
of the representations or warranties of the Company contained in the Merger
Agreement untrue or incorrect at or prior to the Effective Time of the Merger.
Acquisition Proposals. The Company has agreed in the Merger Agreement, from
the date of the Merger Agreement and prior to the Effective Time, (a) that
neither the Company nor its subsidiaries will, and the Company will direct and
use its reasonable best efforts to cause its officers, directors,
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employees and authorized agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained by it or any
of its subsidiaries) not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to its stockholders)
with respect to a merger, acquisition, consolidation or similar transaction
involving, or any purchase of, any equity securities or all or any significant
portion of the assets of, the Company or its subsidiaries (any such proposal or
offer being referred to as an "Acquisition Proposal" except that, for purposes
of the provisions set forth below under "Fees and Expenses," the term
"Acquisition Proposal" shall not include a proposal to acquire equity securities
of the Company in an amount which, when added to all other equity securities of
the Company then held by the person or group of persons making such Acquisition
Proposal, shall constitute less than 20% of the equity securities of the Company
then outstanding) or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person or
entity relating to an Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal; (b) that it will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any person or entity conducted previously with
respect to any of the foregoing and will take the necessary steps to inform the
person or entity referred to above of the obligations undertaken pursuant to
this provision; and (c) that it will notify Tyco immediately if any such
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated or continued
with, the Company (but the Company shall not be required to disclose the
identity of the other party or the terms of its proposals); provided, however,
that the foregoing provisions will not prohibit the Board of Directors of the
Company from (i) furnishing information to, or entering into discussions or
negotiations with, any person or entity that makes an unsolicited bona fide
proposal in writing to engage in an Acquisition Proposal transaction which the
Board of Directors of the Company in good faith determines represents a
financially superior transaction for the stockholders of the Company as compared
to the Offer and the Merger if, and only to the extent that, (A) the Board of
Directors determines, after consultation with Skadden, Arps, Slate, Meagher &
Flom or such other outside counsel of national reputation in corporate and
securities matters as the Company shall select ("Company Counsel"), that failure
to take such action would be inconsistent with the compliance by the Board of
Directors with its fiduciary duties to stockholders imposed by law, (B) prior to
or concurrently with furnishing such information to, or entering into
discussions or negotiations with, such a person or entity, the Company provides
written notice to Tyco to the effect that it is furnishing information to, or
entering into discussions or negotiations with, such a person or entity, and (C)
the Company keeps Tyco informed of the status (excluding, however, the identity
of such person or entity and the terms of any proposal) of any such discussions
or negotiations; and (ii) to the extent applicable, complying with Rule 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal.
Nothing contained in the foregoing provisions will (x) permit the Company to
terminate the Merger Agreement (except as provided below under "Termination"),
(y) permit the Company to enter into any agreement with respect to an
Acquisition Proposal during the term of the Merger Agreement, or (z) affect any
other obligation of any party under the Merger Agreement.
Annual Meeting. The Company has agreed pursuant to the Merger Agreement that
it will defer and/or postpone the holding of its annual meeting of stockholders
indefinitely pending the consummation of the Merger, unless the Company is
required to hold such meeting by an order from a court of competent
jurisdiction.
Stock Plans and Warrants. The Company has agreed pursuant to the Merger
Agreement that, prior to the Effective Time, it will adopt any amendments to its
plans under which any Stock Options have been granted, will use its reasonable
efforts to obtain any such consents of the holders of such Stock Options and
will cause the committees of the Board of Directors that are responsible for the
administration of such plans to take such action as shall be necessary to
effectuate the provisions of the Merger
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Agreement with respect to the treatment of Stock Options. The Company shall
terminate the 1987 Stock Plan, the Director Option Plan and the Company's 1994
Employee Stock Purchase Plan, with respect to any further grants, as of the
Effective Time. The Company also agreed to give written notice of the Merger to
each registered holder of the Warrants at least 20 days prior to the Effective
Time.
Reasonable Best Efforts. Upon the terms and subject to the conditions set
forth in the Merger Agreement, each of the parties thereto has agreed to use its
reasonable best efforts to take, or cause to be taken, all actions (including
entering into transactions), and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger, and the other transactions contemplated by the Merger
Agreement, including, without limitation, obtaining certain consents, approvals
and waivers from Governmental Entities (as defined in the Merger Agreement) and
third parties and defending any lawsuit or other legal proceedings, whether
judicial or administrative, challenging the Merger Agreement or the consummation
of the transactions contemplated thereby, including seeking to have any stay or
temporary restraining order vacated or reversed. Neither Tyco, the Purchaser nor
the Company, however, will be required to take any action described above that
would in any event have a Material Adverse Effect (as defined in the Merger
Agreement) on the Company or any similar effect on Tyco. In addition, neither
Tyco, the Purchaser nor any of their affiliates will be required to enter into
any transaction or take any other action that would require a waiver of, or that
is inconsistent with satisfaction of, the conditions of the Offer set forth in
clauses (a)(iii), (iv) or (v) of Section 15-- "Certain Conditions of the Offer."
Public Announcements. The Merger Agreement provides that Tyco and the
Company will consult with each other before issuing any press release or
otherwise making any public statements with respect to the transactions
contemplated by the Merger Agreement, and shall not issue any such press release
or make any such public statement prior to such consultation, except as may be
required by applicable law or by obligations pursuant to any listing agreement
with any national securities exchange.
Indemnification. The Merger Agreement provides that, from and after the
Effective Time, the Surviving Corporation will indemnify and hold harmless all
past and present officers and directors (the "Indemnified Parties") of the
Company and of its subsidiaries to the full extent such persons may be
indemnified by the Company pursuant to Delaware law, the Company's Certificate
of Incorporation and Bylaws as in effect from time to time for acts and
omissions occurring at or prior to the Effective Time and has agreed to advance
reasonable litigation expenses incurred by such persons in connection with
defending any action arising out of such acts or omissions, provided that such
persons provide the requisite affirmations and undertaking, as set forth in
Section 145(e) of the DGCL. Tyco has agreed to provide, or cause the Surviving
Corporation to provide, for a period of not less than six years after the
Effective Time, the Company's current directors and officers an insurance and
indemnification policy that provides coverage for events occurring at or prior
to the Effective Time (the "D&O Insurance") that is no less favorable than the
Company's existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that Tyco and the
Surviving Corporation will not be required to pay an annual premium for the D&O
Insurance in excess of 200% of the annual premium currently paid by the Company
for such insurance, but in such case will purchase as much coverage as possible
for such amount. Tyco has agreed to unconditionally guarantee the performance of
the Surviving Corporation under these provisions.
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Board Representation. The Merger Agreement provides that, promptly upon the
purchase of Shares pursuant to the Offer, Tyco will be entitled to designate
such number of directors, rounded up to the next whole number, on the Board of
Directors of the Company as will give Tyco, subject to compliance with Section
14(f) of the Exchange Act, representation on the Board of Directors equal to the
product of (a) the total number of directors on the Board of Directors and (b)
the percentage that the number of Shares purchased by the Purchaser bears to the
number of Shares outstanding. The Company has agreed that, upon request by Tyco,
it will promptly increase the size of the Board of Directors and/or exercise its
reasonable best efforts to secure the resignations of such number of directors
as is necessary to enable Tyco's designees to be elected to the Board of
Directors and will cause Tyco's designees to be so elected. The Company has
agreed to take, at its expense, all actions required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder to effect any such election,
including the mailing to its stockholders of the information required to be
disclosed pursuant thereto. Tyco will supply to the Company in writing and be
solely responsible for any information with respect to itself and its nominees,
officers, directors and affiliates required by Section 14(f) and Rule 14f-1.
Pursuant to the Merger Agreement, following the election of designees of the
Purchaser, prior to the Effective Time, any amendment of the Merger Agreement or
the Certificate of Incorporation or bylaws of the Company, any termination of
the Merger Agreement by the Company, any extension by the Company of the time
for the performance of any of the obligations or other acts of Tyco or the
Purchaser or waiver of any of the Company's rights under the Merger Agreement
will require the concurrence of a majority of the directors of the Company then
in office who were directors as of the date of the Merger Agreement or persons
designated by such directors and neither were designated by the Purchaser nor
are employees of the Company ("Continuing Directors"). In addition, prior to the
Effective Time, the Company and the Purchaser will use all reasonable efforts to
ensure that the Company's Board of Directors at all times includes at least
three Continuing Directors.
Employment and Benefit Arrangements. Tyco has agreed pursuant to the Merger
Agreement that, from and after the Effective Time, it shall cause the Surviving
Corporation to honor all employment, severance, termination and retirement
agreements to which the Company is a party, as such agreements are in effect on
the date of the Merger Agreement. Tyco has also agreed that, for a one-year
period following the Effective Time, it shall cause the Surviving Corporation to
provide those employees who are employees of the Surviving Corporation at the
Effective Time with benefits that are, in the aggregate, no less favorable to
such employees as are the benefits of the Company available to such employees
immediately prior to the Effective Time. These provisions are not intended,
however, to create rights of third party beneficiaries.
Conditions Precedent to Merger. The respective obligations of Tyco, the
Purchaser and the Company to effect the Merger are subject to the fulfillment at
or prior to the Effective Time of the following conditions: (a) if required by
applicable law, the Merger Agreement shall have been approved by the requisite
vote of the stockholders of the Company; and (b) no court or other Governmental
Entity shall have enacted, issued, promulgated, enforced or entered any law,
rule, regulation, executive order, decree or injunction which prohibits or has
the effect of prohibiting the consummation of the Merger; provided, however, the
Company, Tyco and the Purchaser have agreed that, prior to invoking this
provision, they shall use their reasonable best efforts (subject to the other
terms and conditions of the Merger Agreement) to have any such order, decree or
injunction vacated.
Termination. The Merger Agreement may be terminated at any time prior to the
Effective Time, whether prior to or after approval by the stockholders of the
Company:
(a) by mutual written consent of Tyco and the Company;
(b) by the Company if: (i) the Offer has not been timely commenced
(except as a result of actions or omissions by the Company); or (ii) there
is an Acquisition Proposal which the Board of
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Directors of the Company in good faith determines represents a financially
superior transaction for the stockholders of the Company as compared to the
Offer and the Merger, and the Board of Directors of the Company determines,
after consultation with Company Counsel, that failure to terminate the
Merger Agreement would be inconsistent with the compliance by the Board of
Directors with its fiduciary duties to stockholders imposed by law;
provided, however, that such right to terminate the Merger Agreement shall
not be available (1) if the Company has breached in any material respect its
obligations concerning Acquisition Proposals or (2) if, prior to or
concurrently with any purported termination pursuant to this clause, the
Company shall not have paid the fees and expenses contemplated under the
provisions set forth below under "Fees and Expenses"; or (iii) any
representation or warranty of Tyco or the Purchaser shall not have been true
and correct in all material respects when made or shall have ceased at any
later date to be true and correct in all material respects as if made at
such later date; or (iv) Tyco or the Purchaser fails to comply in any
material respect with any of its material obligations or covenants contained
in the Merger Agreement, including the obligation of the Purchaser to
purchase Shares pursuant to the Offer;
(c) by Tyco if (i) the Board of Directors of the Company shall have
failed to recommend, or shall have withdrawn, modified or amended in any
material respect its approval or recommendations of the Offer or the Merger
or shall have resolved to do any of the foregoing; or (ii) any
representation or warranty of the Company shall not have been true and
correct in all material respects when made or shall have ceased at any later
date to be true and correct in all material respects as if made at such
later date except that the right to terminate the Merger Agreement pursuant
to this clause shall not be available to Tyco if the Purchaser or any
affiliate of the Purchaser shall acquire Shares pursuant to the Offer; or
(iii) the Company shall have failed to comply in any material respect with
any of its material obligations or covenants contained in the Merger
Agreement, except that the right to terminate the Merger Agreement pursuant
to this clause shall not be available to Tyco if the Purchaser or any
affiliate of the Purchaser shall acquire Shares pursuant to the Offer; or
(d) by either Tyco or the Company if: (i) the Merger has not been
effected on or prior to the close of business on April 30, 1996; provided,
however, that the right to terminate the Merger Agreement pursuant to this
clause will not be available (x) to Tyco if the Purchaser or any affiliate
of the Purchaser acquires Shares pursuant to the Offer, or (y) to any party
whose failure to fulfill any obligation of the Merger Agreement has been the
cause of, or resulted in, the failure of the Merger to have occurred on or
prior to the aforesaid date; or (ii) any court of competent jurisdiction or
any governmental, administrative or regulatory authority, agency or body
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the transactions
contemplated by the Merger Agreement and such order, decree, ruling or other
action shall have become final and nonappealable; or (iii) upon a vote at a
duly held meeting or upon any adjournment thereof, the stockholders of the
Company shall have failed to give any approval required by applicable law;
or (iv) either (x) as the result of the failure of the Minimum Condition or
any of the other conditions described in Section 15, the Offer shall have
terminated or expired in accordance with its terms without the Purchaser
having purchased any Shares pursuant to the Offer, or (y) the Offer shall
not have been consummated on or before February 15, 1996; provided, however,
that the right to terminate the Merger Agreement pursuant to this clause
will not be available to any party whose failure to fulfill any of its
obligations under the Merger Agreement results in the failure of any such
condition.
Fees and Expenses. Except as described in the following sentence, whether or
not the Merger is consummated, all costs and expenses incurred in connection
with the Merger Agreement and the transactions contemplated thereby shall be
paid by the party incurring such costs and expenses. The Company has agreed in
the Merger Agreement that, if the Merger Agreement is terminated pursuant to:
(i) clause (d)(iv) set forth above under "Termination" and at the time of such
termination (x) the
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Offer has remained open for a minimum of 20 business days, (y) the Minimum
Condition has not been satisfied and (z) an Acquisition Proposal existed; (ii)
clause (b)(ii) set forth above under "Termination"; (iii) clause (c)(i) set
forth above under "Termination"; (iv) clause (c)(iii) set forth above under
"Termination" and at the time of such termination an Acquisition Proposal
existed; or (v) clause (d)(i) or (iv) set forth above under "Termination" and at
the time of such termination any person, entity or group (as defined in Section
13(d)(3) of the Exchange Act) (other than Tyco or any of its affiliates) shall
have become the beneficial owner of more than 20% of the outstanding Shares and
such person, entity or group (or any affiliate of such person, entity or group)
thereafter (x) shall make an Acquisition Proposal and, in the case of a
consensual transaction with the Company, shall substantially have negotiated the
terms thereof at any time on or prior to the date which is six months after such
termination of the Merger Agreement, and (y) shall consummate such Acquisition
Proposal at any time on or prior to the date which is one year after termination
of the Merger Agreement, in the case of a consensual transaction, or six months
after termination of the Merger Agreement, in the case of a non-consensual
transaction, in each case with a value per Share of at least $8.00 (with
appropriate adjustments for reclassifications of capital stock, stock dividends,
stock splits, reverse stock splits and similar events), the Company will pay to
Tyco (the "Termination Fee") the sum of (a) $2.4 million, plus (b) the amount of
all documented costs and expenses incurred by Tyco, the Purchaser or their
affiliates in connection with the Merger Agreement or the transactions
contemplated thereby in an aggregate amount not to exceed $200,000. Such payment
will be made as promptly as practicable but in no event later than two business
days following termination of the Merger Agreement pursuant to the immediately
preceding sentence, or, in the case of clause (v) of the immediately preceding
sentence, upon consummation of such Acquisition Proposal.
Certain Arrangements
In addition to the substitute stock options, Tyco intends to provide key
executives at the Company with incentive arrangements that may under certain
circumstances provide higher compensation than that previously provided by the
Company and would also provide additional new stock options for selected Company
executives. Consistent with plans generally provided for Tyco executives, the
value of these incentives would be based primarily on the future earnings and
cash flow of the Company. Tyco also anticipates authorizing increased salaries
for selected Company executives to reflect their continued importance to the
organization. It is expected that Diane C. Creel and Creighton K. Early, each of
whom is an executive officer and a director of the Company, and Charles S.
Alpert, who is an executive officer of the Company, would receive the benefit of
the foregoing arrangements. Tyco also anticipates providing Ms. Creel with an
incentive should she remain as Chief Executive Officer of the Company for the
three year period after the Effective Date.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will (x) declare, set aside or pay any dividends on, or make any
other actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to stockholders of the Company in
their capacity as such, other than dividends payable to the Company declared by
any of the Company's subsidiaries, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
(z) purchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities.
If on or after the date of the Merger Agreement and notwithstanding the
provisions thereof, the Company should (i) split, combine or otherwise change
the Shares or its capitalization, (ii) acquire presently outstanding Shares or
otherwise cause a reduction in the number of outstanding Shares, or (iii) issue
or sell any shares of any class or any securities convertible into any such
shares, or any rights,
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warrants or options to acquire any such shares or convertible securities (other
than Shares issued pursuant to, and in accordance with the terms in effect on
the date of the Merger Agreement of, stock options issued prior to such date)
then, without prejudice to the Purchaser's rights under the Merger Agreement,
the Purchaser (subject to the Merger Agreement), in its sole discretion, may
make such adjustments in the Offer price and other terms of the Offer as it
deems appropriate to reflect such action.
If, on or after the date of the Merger Agreement and notwithstanding the
provisions thereof, the Company should declare or pay any cash, non-cash or
stock dividend or other distribution on, or issue any rights with respect to,
the Shares, payable or distributable to stockholders of record on a date prior
to the transfer to the name of the Purchaser or its nominees or transferees on
the Company's stock transfer records of the Shares purchased pursuant to the
Offer, then, without prejudice to the Purchaser's rights under the Merger
Agreement, (i) the price per Share payable by the Purchaser pursuant to the
Offer may (subject to the Merger Agreement), in the sole discretion of the
Purchaser, be reduced by the amount of any such cash dividend or distribution,
and (ii) any non-cash dividend, distribution or right to be received by the
tendering stockholders will (a) be received and held by the tendering
stockholders for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (b) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance,
the Purchaser will be, subject to applicable law, entitled to all rights and
privileges as owner of any such non-cash dividend, distribution or right or such
proceeds and may withhold the entire purchase price or deduct from the purchase
price the amount or value thereof, as determined by the Purchaser in its sole
discretion.
15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other term of the
Offer or the Merger Agreement, the Purchaser shall not be required to accept for
payment or pay for, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) of the Exchange Act, any Shares not
theretofore accepted for payment or paid for and may terminate or amend the
Offer as to such Shares, unless (i) there shall have been validly tendered and
not withdrawn prior to the expiration of the Offer that number of Shares which
would represent at least a majority of the outstanding Shares on a fully diluted
basis (the "Minimum Condition"), and (ii) any waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer shall have expired or
been terminated. Furthermore, notwithstanding any other term of the Offer or the
Merger Agreement, the Purchaser shall not be required to accept for payment or,
subject as aforesaid, to pay for any Shares not theretofore accepted for payment
or paid for, and may terminate or amend the Offer, if at any time on or after
the date of the Merger Agreement and before the acceptance of such Shares for
payment or the payment therefor, any of the following conditions exist or shall
occur and remain in effect:
(a) there shall have been instituted, pending or threatened any action
or proceeding by any court or other Governmental Entity, which (i) seeks to
challenge the acquisition by Tyco or the Purchaser (or any of its
affiliates) of Shares pursuant to the Offer, restrain, prohibit or delay the
making or consummation of the Offer or the Merger, or obtain damages in
connection therewith in an amount which would reasonably be expected to have
a Material Adverse Effect on the Company, (ii) seeks to make the purchase of
or payment for some or all of the Shares pursuant to the Offer or the Merger
illegal, (iii) seeks to impose limitations on the ability of Tyco (or any of
its affiliates) effectively to acquire or hold, or to require Tyco or the
Company or any of their respective affiliates or subsidiaries to dispose of
or hold separate, any portion of the assets or the business of Tyco and its
affiliates or any material portion of the assets or the business of the
Company and its subsidiaries taken as a whole, (iv) seeks to impose material
limitations on the ability of Tyco (or its affiliates) to exercise full
rights of ownership of the Shares purchased by it, including, without
limitation, the right to vote the Shares purchased by it on all matters
properly presented to the stockholders of the Company, or (v) seeks to
restrict any future business activity
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by Tyco (or any of its affiliates), including, without limitation, requiring
the prior consent of any person or entity (including any Governmental
Entity) to future transactions by Tyco (or any of its affiliates); or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any statute, rule,
regulation, judgment, decree, order or injunction, that is reasonably likely
to directly or indirectly result in any of the consequences referred to in
clauses (i) through (v) of subsection (a) above; or
(c) the Merger Agreement shall have been terminated in accordance with
its terms; or
(d) any of the representations and warranties made by the Company in the
Merger Agreement shall not have been true and correct in all material
respects when made, or shall thereafter have ceased to be true and correct
in all material respects as if made as of such later date (other than
representations and warranties made as of a specified date), or the Company
shall not in all material respects have performed each obligation and
agreement and complied in a timely manner with each covenant to be performed
and complied with by it under the Merger Agreement; or
(e) the Company's Board of Directors shall have modified or amended its
recommendation of the Offer in any manner adverse to Tyco or shall have
withdrawn its recommendation of the Offer, or shall have recommended
acceptance of any Acquisition Proposal or shall have resolved to do any of
the foregoing; or
(f) (i) any corporation, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) (a "person"), other than Tyco and the
Purchaser, shall have acquired beneficial ownership of more than 20% of the
outstanding Shares, or shall have been granted any options or rights,
conditional or otherwise, to acquire a total of more than 20% of the
outstanding Shares; (ii) any new group shall have been formed which
beneficially owns more than 20% of the outstanding Shares; or (iii) any
person (other than Tyco or one or more of its affiliates) shall have entered
into an agreement in principle or definitive agreement with the Company with
respect to a tender or exchange offer for any Shares or a merger,
consolidation or other business combination with or involving the Company;
or
(g) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange, the American Stock Exchange or The Nasdaq Stock Market, (ii) a
declaration of a banking moratorium or any suspension of payments in respect
of banks in the United States (whether or not mandatory), (iii) a
commencement or escalation of a war, armed hostility or other international
or national calamity directly involving the United States, (iv) any material
limitation (whether or not mandatory) by any Governmental Entity on, or any
other event that is reasonably likely materially and adversely to affect the
extension of credit by banks or other lending institutions in the United
States, (v) any decline in either the Dow Jones Industrial Average or the
Standard and Poor's 500 Index by an amount in excess of 15% measured from
the close of business on the date of the Merger Agreement, or (vi) in the
case of any of the foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof; or
(h) any change, development, effect or circumstance shall have occurred
or be threatened that would reasonably be expected to have a Material
Adverse Effect; or
(i) the Company shall commence a case under any chapter of Title XI of
the United States Code or any similar law or regulation; or a petition under
any chapter of Title XI of the United States Code or any similar law or
regulation is filed against the Company which is not dismissed within 2
business days.
27
<PAGE>
The foregoing conditions are for the sole benefit of Tyco and the Purchaser
and may be asserted by Tyco or the Purchaser regardless of the circumstances
giving rise to any such condition and may be waived by Tyco or the Purchaser, in
whole or in part, at any time and from time to time, in the sole discretion of
Tyco. The failure by Tyco or the Purchaser at any time to exercise any of the
foregoing rights will not be deemed a waiver of any right, the waiver of such
right with respect to any particular facts or circumstances shall not be deemed
a waiver with respect to any other facts or circumstances, and each right will
be deemed an ongoing right which may be asserted at any time and from time to
time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Depositary to the tendering stockholders.
16. CERTAIN LEGAL MATTERS.
General. Except as described in this Section 16, based on a review of
publicly available filings by the Company with the Commission and other publicly
available information concerning the Company, neither Tyco nor the Purchaser is
aware of any license or regulatory permit that appears to be material to the
business of the Company and that might be adversely affected by the Purchaser's
acquisition of Shares pursuant to the Offer, or of any approval or other action
by any governmental, administrative or regulatory agency or authority, domestic
or foreign, that would be required for the acquisition or ownership of Shares by
the Purchaser pursuant to the Offer. Should any such approval or other action be
required, it is presently contemplated that such approval or action would be
sought, except as described below under "State Takeover Statutes." While the
Purchaser does not currently intend to delay acceptance for payment of Shares
tendered pursuant to the Offer pending the outcome of any such matter, there can
be no assurance that any such approval or other action, if required, would be
obtained without substantial conditions or that adverse consequences would not
result to the Company's business or that certain parts of the Company's business
would not have to be disposed of in the event that such approvals were not
obtained or such other actions were not taken or in order to obtain any such
approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, the Purchaser may decline to accept for
payment or pay for any Shares tendered. See Section 15.
State Takeover Laws. The Company and certain of its subsidiaries conduct
business in a number of states throughout the United States, some of which have
adopted laws and regulations applicable to offers to acquire shares of
corporations that are incorporated or have substantial assets, stockholders
and/or a principal place of business in such states. In Edgar v. MITE Corp., the
Supreme Court of the United States held that the Illinois Business Takeover
Statute, which involved state securities laws that made the takeover of certain
corporations more difficult, imposed a substantial burden on interstate commerce
and was therefore unconstitutional. In CTS Corp. v. Dynamics Corp. of America,
however, the Supreme Court of the United States held that a state may, as a
matter of corporate law and, in particular, those laws concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without prior approval of the remaining
stockholders, provided that such laws were applicable only under certain
conditions, in particular, that the corporation has a substantial number of
stockholders in and is incorporated under the laws of such state.
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 the corporation's outstanding voting stock) from engaging in a "business
combination" (defined to include mergers and certain other actions) with a
Delaware corporation for a period of three years following the date such person
became an interested stockholder. The Board of Directors of the Company has
taken all appropriate action so that neither Tyco nor the Purchaser is an
"interested stockholder" pursuant to Section 203.
28
<PAGE>
Neither Tyco nor the Purchaser has determined whether any other state
takeover laws and regulations will by their terms apply to the Offer, and,
except as set forth above, neither Tyco nor the Purchaser has presently sought
to comply with any state takeover statute or regulation. Tyco and the Purchaser
reserve the right to challenge the applicability or validity of any state law or
regulation purporting to apply to the Offer or the Merger and neither anything
in this Offer nor any action taken in connection herewith is intended as a
waiver of such right. In the event it is asserted that one or more state
takeover statutes is applicable to the Offer or the Merger and an appropriate
court does not determine that such statute is inapplicable or invalid as applied
to the Offer or the Merger, Tyco or the Purchaser might be required to file
certain information with, or to receive approval from, the relevant state
authorities, and the Purchaser might be unable to accept for payment or pay for
Shares tendered pursuant to the Offer, or be delayed in consummating the Offer.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the U.S. Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. The acquisition of Shares by the Purchaser pursuant to the Offer
is subject to such requirements. See Section 15.
Under the provisions of the HSR Act applicable to the purchase of Shares
pursuant to the Offer, purchases may not be consummated until the expiration of
a 15-calendar day waiting period after the filing of certain required
information and documentary material with the Antitrust Division and the FTC
with respect to the Offer (unless earlier terminated pursuant to a request
therefor, which Tyco or the Purchaser will make). If, within such 15-day waiting
period, either the Antitrust Division or the FTC requests additional information
or documentary material relevant to the Offer from Tyco, the waiting period will
be extended for an additional period of 10 calendar days following the date of
substantial compliance with such request. Only one extension of the waiting
period pursuant to a request for additional information is authorized by the
rules promulgated under the HSR Act. Thereafter, such waiting period may be
extended only by court order or by agreement of Tyco. A request for additional
information issued to the Company cannot extend the waiting period. Tyco expects
to file, or cause to be filed, a Notification and Report Form with respect to
the Offer under the HSR Act on December 15, 1995, and, in such event, the
required waiting period with respect to the Offer will expire at 11:59 p.m., New
York City time, on December 30, 1995, unless Tyco receives a request for
additional information or documentary material or the Antitrust Division or the
FTC terminate the waiting period prior thereto.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed purchase of the Shares
by the Purchaser pursuant to the Offer. At any time before or after such
purchase, the Antitrust Division or the FTC could take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the transaction or seeking divestiture of the Shares
so acquired or divestiture of substantial assets of Tyco or its subsidiaries.
Litigation seeking similar relief could also be brought by private parties and
the state attorneys general.
Based upon an examination of publicly available information relating to the
businesses in which Tyco and the Company are engaged, Tyco and the Purchaser do
not believe that consummation of the Offer will result in violation of any
applicable antitrust laws. However, 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, what the result will be. See Section 15 for certain conditions to the
Offer, including conditions with respect to litigation and certain governmental
actions.
17. FEES AND EXPENSES. The Purchaser has retained MacKenzie Partners, Inc.
to act as the Information Agent and The First Interstate Bank of California to
act as the Depositary in connection
29
<PAGE>
with the Offer. The Information Agent may contact holders of Shares by mail,
telephone, telex, telegraph and personal interview and may request brokers,
dealers and other nominee stockholders to forward the Offer materials to
beneficial owners. The Information Agent and the Depositary will receive
reasonable and customary compensation for services relating to the Offer and
will be reimbursed for certain out-of-pocket expenses. The Purchaser and Tyco
have also agreed to indemnify the Information Agent and the Depositary against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws.
Neither Tyco nor the Purchaser will pay any fees or commissions to any
broker or dealer or any other person (other than to the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial
banks and trust companies will, upon request, be reimbursed by the Purchaser for
customary mailing and handling expenses incurred by them in forwarding offering
materials to their customers.
18. MISCELLANEOUS. The Offer is being made to all holders of Shares. The
Purchaser is not aware of any jurisdiction where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute or
seek to have such statute declared inapplicable to the Offer. If, after such
good faith effort, the Purchaser cannot comply with any such state statute, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
the holders of Shares in such state. 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 will be deemed to be made on behalf of the Purchaser by one or
more registered brokers or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF TYCO, THE PURCHASER OR THE COMPANY NOT CONTAINED IN
THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Tyco and the Purchaser have filed with the Commission a Tender Offer
Statement on Schedule 14D-1, together with all exhibits thereto, pursuant to
Rule 14d-3 of the General Rules and Regulations under the Exchange Act,
furnishing certain additional information with respect to the Offer. Such Tender
Offer Statement and any amendments thereto, including exhibits, may be inspected
and copies may be obtained from the offices of the Commission in the manner set
forth in Section 8 (except that they will not be available at the regional
offices of the Commission).
T1 ACQUISITION CORP.
DECEMBER 13, 1995
30
<PAGE>
ANNEX I
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF TYCO INTERNATIONAL LTD.
AND THE PURCHASER
I. DIRECTORS AND EXECUTIVE OFFICERS OF TYCO. The following table sets forth
the name, current business address, present principal occupation or employment,
and material occupations, positions, offices or employment for the past five
years of each director and executive officer of Tyco. Each such person is a
citizen of the United States of America. None of the listed persons, during the
past five years, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
such person was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
AND FIVE-YEAR
NAME AND POSITION HELD CURRENT BUSINESS ADDRESS EMPLOYMENT HISTORY
- ----------------------------- --------------------------- -------------------------------
<S> <C> <C>
L. Dennis Kozlowski,
Director, Chairman,
President and Chief
Executive Officer............ One Tyco Park Mr. Kozlowski has been Chief
Exeter, NH 03833 Executive Officer of Tyco
since 1992 and Chairman since
1993. He has been President
of Tyco since 1989.
Joshua M. Berman, Director,
Secretary.................... 919 Third Avenue Mr. Berman has been of counsel
New York, NY 10022 to Kramer, Levin, Naftalis,
Nessen, Kamin & Frankel since
1985.
Richard S. Bodman,
Director..................... 295 N. Maple Avenue Mr. Bodman has been Senior Vice
Rm 444513 President of AT&T Corporation
Basking Ridge, NJ 07920 since 1990.
John F. Fort, Director....... 2003 Milford Street Mr. Fort served as Chairman and
Houston, TX 77098 Chief Executive Officer of
Tyco from 1982 until he
retired in 1992.
Stephen W. Foss, Director.... 380 Lafayette Road Mr. Foss has been President of
Hampton, NH 03842 Foss Manufacturing Company,
Inc. since 1969.
Richard A. Gilleland,
Director..................... Two Chatham Center, Mr. Gilleland has been
Ste 1100 President and Chief Executive
112 Washington Place Officer of Amsco
Pittsburgh, PA 15219 International, Inc. since
July 1995. He previously
served as Senior Vice
President of Tyco from 1994.
From 1990 to 1994, he was
President and Chief Executive
Officer of Kendall
International, Inc., which
was acquired by Tyco in 1994.
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
AND FIVE-YEAR
NAME AND POSITION HELD CURRENT BUSINESS ADDRESS EMPLOYMENT HISTORY
- ----------------------------- --------------------------- -------------------------------
<S> <C> <C>
Philip M. Hampton,
Director..................... 399 Park Avenue Mr. Hampton has been Chairman
32nd Floor of Metzler Corporation since
New York, NY 10022 1989.
Frank E. Walsh, Jr.,
Director..................... 330 South Street Mr. Walsh has been Chairman of
Morristown, NJ 07962-1975 Wesray Capital Corporation
since 1982.
David P. Brownell, Vice
President.................... One Tyco Park Mr. Brownell has been Vice
Exeter, NH 03833 President of Tyco since 1993.
He served as Executive Vice
President of the Flow Control
Division of Tyco's Grinnell
Corporation ("Grinnell")
subsidiary from 1991 to 1993
and as Vice President of
Grinnell Supply Sales from
1989 to 1991.
John J. Guarnieri, Vice
President-Corporate
Controller................... One Tyco Park Mr. Guarnieri has been Vice
Exeter, NH 03833 President-Corporate
Controller of Tyco since 1993
and served as Corporate
Controller from 1991 to 1993.
He served as Vice
President-Corporate
Controller of Grinnell from
1989 to 1991.
Robert P. Mead, Vice
President.................... One Tyco Park Mr. Mead has been Vice
Exeter, NH 03833 President of Tyco and
President of Grinnell's Flow
Control Division since 1993.
He served as Managing
Director of Tyco's Australian
operations from 1991 to 1992.
He served as Vice President
of Grinnell from 1989 to
1991.
Barbara S. Miller,
Treasurer.................... One Tyco Park Ms. Miller has been Treasurer
Exeter, NH 03833 of Tyco since 1993 and served
as Assistant Corporate
Controller from 1989 to 1993.
Robert F. Sharpe, Jr., Vice
President.................... One Tyco Park Mr. Sharpe has been Vice
Exeter, NH 03833 President of Tyco since 1994.
He served as Vice President
and Assistant General Counsel
of RJR Nabisco Holdings Corp.
from 1989 to 1994.
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
AND FIVE-YEAR
NAME AND POSITION HELD CURRENT BUSINESS ADDRESS EMPLOYMENT HISTORY
- ----------------------------- --------------------------- -------------------------------
<S> <C> <C>
Mark H. Swartz, Vice
President-Chief Financial
Officer...................... One Tyco Park Mr. Swartz has been Vice
Exeter, NH 03833 President-Chief Financial
Officer of Tyco since
February 1995 and Director of
Mergers and Acquisitions
since 1991. He served as a
Senior Auditor at Deloitte &
Touche from 1987 to 1991.
</TABLE>
II. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The following table
sets forth the name, current business address and present principal occupation
or employment, and material occupations, positions, offices or employment for
the past five years of each director and executive officer of the Purchaser.
Each such person is a citizen of the United States of America. None of the
listed persons, during the last five years, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
CURRENT BUSINESS AND FIVE-YEAR
NAME AND POSITION HELD ADDRESS EMPLOYMENT HISTORY
- ----------------------------- ------------------ ----------------------------------------
<S> <C> <C>
Robert F. Sharpe, Jr.,
Director, President.......... One Tyco Park See Directors and Executive Officers of
Exeter, NH 03833 Tyco.
Mark. H. Swartz, Director,
Vice President and
Treasurer.................... One Tyco Park See Directors and Executive Officers of
Exeter, NH 03833 Tyco.
M. Brian Moroze, Director,
Vice President and
Secretary.................... One Tyco Park Mr. Moroze has been General Counsel of
Exeter, NH 03833 Tyco since 1994, and served as
Associate General Counsel from 1986 to
1994.
</TABLE>
33
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. Letters of Transmittal and certificates for Shares should be sent or
delivered by each stockholder of the Company or his broker, dealer, commercial
bank or trust company to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
<TABLE><CAPTION>
FIRST INTERSTATE BANK OF CALIFORNIA
<S> <C> <C>
By Mail: By Hand or By Overnight Courier: By Facsimilie:
First Interstate Bank of California First Interstate Bank of (201) 296-4062
c/o Chemical/Mellon California (For Eligible Institutions Only)
Shareholder Services c/o Chemical/Mellon Confirm by Telephone:
P.O. Box 845 Shareholder Services (800) 522-6645
Midtown Station 85 Challenger Road
New York, NY 10018 Ridgefield Park, NJ 07660
or
First Interstate Bank of
California
120 Broadway, 13th Floor
New York, NY 10271
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth below. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may be
directed to the Information Agent or the Depositary. Stockholders may also
contact their brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
The Information Agent for the Offer is:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
THE EARTH TECHNOLOGY CORPORATION (USA)
PURSUANT TO THE OFFER TO PURCHASE DATED DECEMBER 13, 1995
OF
T1 ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, JANUARY 11, 1996, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
FIRST INTERSTATE BANK OF CALIFORNIA
<TABLE>
<S> <C> <C>
By Mail: By Hand or By Overnight Courier: By Facsimile:
First Interstate Bank of First Interstate Bank of (201) 296-4062
California California (For Eligible Institutions Only)
c/o Chemical/Mellon c/o Chemical/Mellon Confirm by Telephone:
Shareholder Services Shareholder Services (800) 522-6645
P.O. Box 845 85 Challenger Road
Midtown Station Ridgefield Park, NJ 07660
New York, NY 10018 or
First Interstate Bank of
California
120 Broadway, 13th Floor
New York, NY 10271
</TABLE>
------------------------------------------------
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE
APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates representing Shares (as defined below) are to be forwarded herewith
or, unless an Agent's Message (as defined in Instruction 2) is utilized, if
delivery is to be made by book-entry transfer to the account maintained by the
Depositary at The Depository Trust Company, the Midwest Securities Trust Company
or the Philadelphia Depository Trust Company (individually, a "Book-Entry
Transfer Facility" and, collectively, the "Book-Entry Transfer Facilities")
pursuant to the procedures set forth in Section 2 of the Offer to Purchase.
Stockholders whose certificates are not immediately available, or who cannot
deliver their certificates or confirmation of the book-entry transfer of their
Shares into the Depositary's account at a Book-Entry Transfer Facility
("Book-Entry Confirmation") and all other documents required hereby to the
Depositary on or prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase), must tender their Shares according to the guaranteed
delivery procedures set forth in Section 2 of the Offer to Purchase. See
Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery: ______________________________
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer
Facility:
Name of Tendering Institution _____________________________________________
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) CERTIFICATE(S) TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LISTS IF NECESSARY)
TOTAL NUMBER OF NUMBER OF
CERTIFICATE SHARES REPRESENTED SHARES
NUMBER(S)* BY CERTIFICATE(S) TENDERED**
<S> <C> <C> <C>
TOTAL SHARES
* NEED NOT BE COMPLETED BY STOCKHOLDERS TENDERING BY BOOK-ENTRY TRANSFER.
** UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL SHARES REPRESENTED BY ANY CERTIFICATES DELIVERED TO
THE DEPOSITARY ARE BEING TENDERED HEREBY. SEE INSTRUCTION 4.
</TABLE>
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the certificates representing
Shares tendered hereby. The certificates and number of Shares that the
undersigned wishes to tender should be indicated in the appropriate boxes.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to T1 Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Tyco
International Ltd., a Massachusetts corporation ("Tyco"), the above-described
shares of common stock, par value $.10 per share (the "Shares"), of The Earth
Technology Corporation (USA), a Delaware corporation (the "Company"), pursuant
to the Purchaser's offer to purchase all of the outstanding Shares at a price of
$8.00 per Share, net to the tendering stockholder in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated December 13,
1995 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which together constitute the "Offer"). The
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to Tyco or to one or more affiliates of Tyco, the right to
purchase Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and transfers
to, or upon the order of, the Purchaser all right, title and interest in and to
all of the Shares that are being tendered hereby (and any and all other Shares
or other securities or rights issued or issuable in respect thereof on or after
December 1, 1995) and irrevocably appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares (and
any such other Shares or securities or rights), with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates representing such Shares (and any such
other Shares or securities or rights), or transfer ownership of such Shares (and
any such other Shares or securities or rights) on the account books maintained
by a Book-Entry Transfer Facility, together in either such case with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser upon receipt by the Depositary, as the undersigned's agent, of the
purchase price (adjusted, if appropriate, as provided in the Offer to Purchase),
(b) present such Shares (and any such other Shares or securities or rights) for
registration and transfer on the books of the Company, and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any such other Shares or securities or rights), all in accordance
with the terms of the Offer.
<PAGE>
The undersigned hereby irrevocably appoints Robert F. Sharpe, Jr. and Mark
H. Swartz and each of them or any other designee of the Purchaser, the attorneys
and proxies of the undersigned, each with full power of substitution, to vote in
such manner as each such attorney and proxy or his substitute shall, in his sole
discretion, deem proper, and otherwise act (including pursuant to written
consent) with respect to all the Shares tendered hereby which have been accepted
for payment by the Purchaser prior to the time of such vote or action (and any
and all other Shares or securities or rights issued or issuable in respect
thereof on or after December 1, 1995), which the undersigned is entitled to vote
at any meeting of stockholders (whether annual or special and whether or not an
adjourned meeting) of the Company, or consent in lieu of any such meeting, or
otherwise. This proxy and power of attorney is coupled with an interest in the
Shares tendered hereby and is irrevocable and is granted in consideration of,
and is effective upon, the acceptance for payment of such Shares (and any such
other Shares or securities or rights) by the Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke all prior proxies
granted by the undersigned at any time with respect to such Shares (and any such
other Shares or securities or rights) and no subsequent proxies will be given
(and if given will be deemed not to be effective) with respect thereto by the
undersigned. The undersigned acknowledges that in order for Shares to be deemed
validly tendered, immediately upon the acceptance for payment of such Shares,
the Purchaser or the Purchaser's designee must be able to exercise full voting
and other rights of a record and beneficial holder with respect to such Shares.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any and all other Shares or securities or rights issued or issuable
in respect thereof on or after December 1, 1995) and that, when the same are
accepted for payment by the Purchaser, the Purchaser will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby (and
any such other Shares or securities or rights).
No authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall be affected by, and all such authority shall survive, the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned. Except as stated in
the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Purchaser may not be required to accept for payment
any of the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates
representing Shares not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any certificates
representing Shares not tendered or accepted for payment (and accompanying
documents, as appropriate) to the registered holder(s) appearing under
"Description of Shares Tendered" at the address shown below such registered
holder(s) name(s). In the event that either or both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the purchase price and/or return any certificates representing
Shares not tendered or accepted for payment in the name(s) of, and deliver such
check and/or return such certificates to, the person or persons so indicated.
Stockholders tendering Shares by book entry transfer may request that any Shares
not accepted for payment be returned by crediting such account maintained at a
Book-Entry Transfer Facility as such stockholder may designate by making an
appropriate entry under "Special Payment Instructions." The undersigned
recognizes that the Purchaser has no obligation pursuant to the Special Payment
Instructions to transfer any Shares from the name of the registered holder(s)
thereof if the Purchaser does not accept for payment any of the Shares so
tendered hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates representing Shares not tendered or not
purchased and/or the check for the purchase the name of someone other than the
undersigned, or if Shares tendered by book-entry transfer which are not
purchased are to be returned by credit to an account maintained at a Book-Entry
Transfer Facility other than that account designated above.
Issue check and/or certificate(s) to:
Name: ........................................................................
(Please Print)
Address: .....................................................................
..............................................................................
(Include Zip Code)
..............................................................................
(Tax Identification or Social Security Number)
/ / Credit unpurchased Shares tendered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below.
Check appropriate box:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
..............................................................................
(Account Number)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates representing Shares not tendered or
not purchased and/or the check for the purchase price of Shares purchased
are to be sent to someone other than the undersigned, or to the
undersigned at an address other than that shown under "Description of
Shares Tendered."
Issue check and/or certificate(s) to:
Name: ........................................................................
(Please Print)
Address: .....................................................................
..............................................................................
(Include Zip Code)
<PAGE>
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
....................................................................
....................................................................
SIGNATURE(S) OF HOLDER(S) OF SHARES
Dated:.......................... , 199
(Must be signed by registered holder(s) exactly as name(s) appear(s)
on stock certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates
and documents transmitted herewith. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact, agents,
officers of corporations or others acting in a fiduciary or
representative capacity, please set forth the full title and see
Instruction 5.)
Name(s).............................................................
(PLEASE PRINT)
Capacity (full title)...............................................
Address.............................................................
....................................................................
(INCLUDE ZIP CODE)
Area Code and Telephone Number......................................
Tax Identification or
Social Security No..................................................
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE IN SPACE BELOW.
Authorized Signature(s).............................................
Name................................................................
(PLEASE PRINT)
Title...............................................................
Name of Firm........................................................
Address.............................................................
....................................................................
(INCLUDE ZIP CODE)
Area Code and Telephone Number......................................
Dated:........................ , 199
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in a Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered
herewith, unless such holder has completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on
this Letter of Transmittal, or (ii) if such Shares are tendered for the account
of a firm that is a member in good standing of the Security Transfer Agent's
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchange Medallion Program (each being hereinafter referred to as an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed by stockholders either if certificates
representing Shares are to be forwarded herewith to the Depositary or, unless an
Agent's Message (as defined below) is utilized, if tenders of Shares are to be
made pursuant to the procedures for delivery by book-entry transfer set forth in
Section 2 of the Offer to Purchase. Certificates representing all physically
tendered Shares, or any book-entry confirmation of Shares, as the case may be,
together with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or, in connection
with a book-entry transfer, an Agent's Message, and any other documents required
by this Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth herein on or prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase). If a stockholder's certificate(s)
representing Shares are not immediately available (or the procedure for the
book-entry transfer cannot be completed on a timely basis) or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date, such stockholder's Shares may nevertheless be tendered if the
procedures for guaranteed delivery set forth in Section 2 of the Offer to
Purchase are followed. Pursuant to such procedure, (i) such tender must be made
by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Purchaser, must be received by the Depositary on or prior to the Expiration
Date, and (iii) the certificates representing all tendered Shares, in proper
form for transfer, or Book-Entry Confirmation of Shares, as the case may be, in
each case together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees (or,
in connection with a book-entry transfer, an Agent's Message) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within four Nasdaq Stock Market's National Market trading days after
the date of execution of such Notice of Guaranteed Delivery, all as provided in
Section 2 of the Offer to Purchase. The term "Agent's Message" means a message
transmitted through electronic means by a Book-Entry Transfer Facility to, and
received by, the Depositary and forming a party of a book-entry confirmation,
which states that such Book-Entry Transfer Facility has received an express
acknowledgment from the participant in such Book-Entry Transfer Facility
tendering the Shares that such participant has received, and agrees to be bound
by, this Letter of Transmittal.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATE(S)
REPRESENTING SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH
A BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER. THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF SUCH DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO INSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER SHARES BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any
certificate submitted are to be tendered, fill in the number of Shares that are
to be tendered in the box entitled "Number of Shares Tendered." In such case,
new certificate(s) representing the remainder of the Shares that were
represented by the old certificate(s) will be sent to the registered holder(s),
unless otherwise provided in the appropriate box on this Letter of Transmittal,
as soon as practicable after the Expiration Date. All Shares represented by
certificate(s) delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face(s) of the certificate(s) without alteration, enlargement or
any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), TOGETHER
WITH CERTIFICATES REPRESENTING SHARES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS, OR THE NOTICE OF GUARANTEED DELIVERY, MUST BE
RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE.
<PAGE>
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and tendered hereby, no endorsements of certificates or separate
stock powers are required, unless payment or certificates for Shares not
tendered or accepted for payment are to be issued to a person other than the
registered holder(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificates or stock powers are signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Purchaser of such person's authority so to act must be submitted.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution, unless the signature is that of an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates representing Shares not tendered or accepted for payment are to be
registered in the name of, any person other than the registered holder, or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder or such other person) payable on
account of the transfer to such person will be deducted from the purchase price,
unless satisfactory evidence of the payment of such taxes or exemption therefrom
is submitted.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check and/or certificates
representing Shares not tendered or accepted for payment are to be issued in the
name of a person other than the signer of this Letter of Transmittal or if a
check is to be sent and/or such certificates are to be returned to someone other
than the signer of this Letter of Transmittal or to an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer may request that
Shares not accepted for payment be credited to such account maintained at a
Book-Entry Transfer Facility as such stockholder may designate hereon. If no
such instructions are given, such Shares not accepted for payment will be
returned by crediting the account at the Book-Entry Transfer Facility designated
above.
8. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed.
9. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by the
Purchaser, in whole or in part, at any time and from time to time in the
Purchaser's sole discretion, in the case of any Shares tendered hereby.
10. SUBSTITUTE FORM W-9. The tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN"), generally
the stockholder's social security or federal employer's identification number,
on Substitute Form W-9, which is provided below, and to certify whether the
stockholder is subject to backup withholding of Federal income tax. If a
tendering stockholder is subject to backup withholding, the stockholder must
cross out item (2) of the Certification box of the Substitute Form W-9. Failure
to provide the information on the Substitute Form W-9 may subject the tendering
stockholder to 31% Federal income tax withholding on the payment of the purchase
price. If the tendering stockholder has not been issued a TIN and has applied
for a number or intends to apply for a number in the near future, he or she
should write "Applied For" in the space provided for the TIN in Part I, and sign
and date the Substitute Form W-9. If "Applied For" is written in Part I and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% on all payments of the purchase price until a TIN is provided to
the Depositary.
11. FOREIGN HOLDERS. Foreign holders must submit a completed IRS Form W-8 to
avoid backup withholding. IRS Form W-8 may be obtained by contacting the
Depositary at one of the addresses on the face of this Letter of Transmittal.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at the address set forth below.
Additional copies of the Offer to Purchase, this Letter of Transmittal, the
Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be obtained from the
Information Agent at the address set forth below or from your broker, dealer,
commercial bank or trust company.
<PAGE>
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is his social security number. If a tendering stockholder
is subject to backup withholding, he must cross out item (2) of the
Certification box on the Substitute Form W-9. If the Depositary is not provided
with the correct TIN, the stockholder may be subject to a $50 penalty imposed by
the Internal Revenue Service. In addition, payments that are made to such
stockholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit to the Depositary a properly completed
Internal Revenue Service Form W-8, signed under penalties of perjury, attesting
to that individual's exempt status. Such statements may be obtained from the
Depositary. Exempt stockholders, other than foreign individuals, should furnish
their TIN, write "Exempt" on the face of the Substitute Form W-9 below, and
sign, date and return the Substitute Form W-9 to the Depositary. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service (the
"IRS").
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to stockholder with
respect to Shares purchased pursuant to the Offer, the stockholder is required
to notify the Depositary of his correct TIN by completing the Substitute Form
W-9 below certifying that the TIN provided on such form is correct (or that such
stockholder is awaiting a TIN) and that (i) such holder is exempt from backup
withholding, (ii) such holder has not been notified by the IRS that he is
subject to backup withholding as a result of a failure to report all interest or
dividends, or (iii) the IRS has notified such holder that he is no longer
subject to backup withholding (see Part II of Substitute Form W-9).
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidelines on which number to
report. If the tendering stockholder has not been issued a TIN and has applied
for a number or intends to apply for a number in the near future, he should
write "Applied For" in the space provided for in the TIN in Part I, and sign and
date the Substitute Form W-9. If "Applied For" is written in Part I and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% on all payments of the purchase price until a TIN is provided to
the Depositary.
<PAGE>
<TABLE><CAPTION>
PAYER'S NAME: FIRST INTERSTATE BANK OF CALIFORNIA
<C> <S> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
OR
EMPLOYER IDENTIFICATION NUMBER
(IF AWAITING TIN WRITE "APPLIED FOR")
DEPARTMENT OF THE PART 2--For Payees exempt from backup withholding, see the enclosed Identification Number
TREASURY (TIN) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9
INTERNAL REVENUE and complete as instructed therein.
SERVICE
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
PAYER'S REQUEST FOR (1) The number shown on this form is my correct Taxpayer Identification Number (or a Taxpayer
TAXPAYER IDENTIFICATION Identification Number has not been issued to me) and either (a) I have mailed or delivered
NUMBER (TIN) an application to receive a Taxpayer Identification Number to the appropriate Internal
Revenue Service ("IRS") or Social Security Administration office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not provide a
Taxpayer Identification Number within sixty (60) days, 31% of all reportable payments made
to me thereafter will be withheld until I provide a number; and
(2) I am not subject to backup withholding either because (a) I am exempt from backup
withholding, (b) I have not been notified by the IRS that I am subject to backup
withholding as a result of a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the
IRS that you are subject to backup withholding because of underreporting interest or dividends
on your tax return. However, if after being notified by the IRS that you were subject to
backup withholding, you received another notification from the IRS that you are no longer
subject to backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines).
SIGNATURE DATE , 199
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
<PAGE>
The Information Agent for the Offer is:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
Exhibit (a)(3)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THE EARTH TECHNOLOGY CORPORATION (USA)
AT
$8.00 NET PER SHARE
BY
T1 ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, JANUARY 11, 1996, UNLESS THE OFFER IS EXTENDED.
December 13, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies And Other Nominees:
We have been appointed by T1 Acquisition Corp. (the "Purchaser"), a Delaware
corporation and a wholly owned subsidiary of Tyco International Ltd. ("Tyco"), a
Massachusetts corporation, to act as Information Agent in connection with the
Purchaser's offer to purchase all of the outstanding shares of common stock, par
value $.10 per share (the "Shares"), of The Earth Technology Corporation (USA),
a Delaware corporation (the "Company"), at a price of $8.00 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated December 13, 1995 (the "Offer to Purchase") and the
related Letter of Transmittal (which together constitute the "Offer"), copies of
which are enclosed herewith. The Offer is being made in connection with the
Agreement and Plan of Merger, dated as of December 8, 1995, among Tyco, the
Purchaser and the Company.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES REPRESENTING AT LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING
SHARES OF THE COMPANY ON A FULLY DILUTED BASIS AS OF THE DATE THE SHARES ARE
ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal to be used by stockholders of the Company
in accepting the Offer. Facsimile copies of the Letter of Transmittal (with
manual signatures) may be used to tender Shares.
3. A letter to stockholders of the Company from Diane C. Creel,
Chairwoman, Chief Executive Officer and President of the Company, together
with a Solicitation/Recommendation Statement on Schedule 14D-9 filed by the
Company with the Securities and Exchange Commission and mailed to the
stockholders of the Company.
4. A printed form of letter which may be sent to your clients for whose
account you hold Shares in your name or in the name of your nominee with
space provided for obtaining such clients' instructions with regard to the
Offer.
5. The Notice of Guaranteed Delivery to be used to accept the Offer if
certificates representing Shares are not immediately available or if time
will not permit all required documents to reach the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) or if the
procedures for book-entry transfer cannot be completed on a timely basis.
<PAGE>
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to First Interstate Bank of California, as
Depositary.
Your attention is directed to the following:
1. The tender price is $8.00 per Share, net to the seller in cash.
2. THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER
AND THE MERGER (AS DEFINED IN THE OFFER TO PURCHASE) ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
3. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Thursday, January 11, 1996, unless the Offer is extended.
4. The Offer is being made for all of the outstanding Shares. The Offer
is conditioned upon, among other things, there being validly tendered and
not withdrawn prior to the expiration of the Offer a number of Shares
representing at least a majority of the total number of outstanding Shares
of the Company on a fully diluted basis as of the date the Shares are
accepted for payment pursuant to the Offer.
5. Stockholders who tender Shares will not be obligated to pay brokerage
fees, commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and pay for all Shares which
are validly tendered on or prior to the Expiration Date and not theretofore
withdrawn pursuant to the Offer to Purchase. 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 representing such Shares (or a
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company, the Midwest Securities
Trust Company or the Philadelphia Depository Trust Company, pursuant to the
procedures described in Section 2 of the Offer to Purchase), (ii) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) with
any required signature guarantees (or, in connection with a book-entry transfer,
an Agent's Message (as defined in Section 2 of the Offer to Purchase)), and
(iii) all other documents required by the Letter of Transmittal.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents prior to the expiration
of the Offer, a tender may be effected by following the guaranteed delivery
procedures specified under Section 2, "Procedure for Tendering Shares," in the
Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker or dealer
or to any other person (other than the Information Agent) in connection with the
solicitation of tenders of Shares pursuant to the Offer. The Purchaser will,
however, upon request, reimburse you for customary mailing and handling expenses
incurred by you in forwarding the enclosed materials to your clients. The
Purchaser will pay or cause to be paid any transfer taxes payable on the
transfer of Shares to it, except as otherwise provided in Instruction 6 of the
enclosed Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JANUARY 11, 1996,
UNLESS THE OFFER IS EXTENDED.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials may be obtained by contacting,
the Information Agent at its addresses and telephone numbers set forth on the
back cover page of the Offer to Purchase.
Very truly yours,
MACKENZIE PARTNERS, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY PERSON AS AN AGENT OF THE PURCHASER, TYCO, THE DEPOSITARY OR THE
INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
Exhibit (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THE EARTH TECHNOLOGY CORPORATION (USA)
AT
$8.00 NET PER SHARE
BY
T1 ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, JANUARY 11, 1996, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated December 13,
1995 (the "Offer to Purchase") and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by T1 Acquisition Corp.,
a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Tyco
International Ltd., a Massachusetts corporation ("Tyco"), to purchase all of the
outstanding shares of common stock, par value $.10 per share (the "Shares"), of
The Earth Technology Corporation (USA), a Delaware corporation (the "Company"),
at a price of $8.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer. The Offer is being made in
connection with the Agreement and Plan of Merger, dated as of December 8, 1995,
among Tyco, the Purchaser and the Company.
WE ARE THE HOLDER OF RECORD OF SHARES FOR YOUR ACCOUNT. A TENDER OF SUCH
SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR
INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, pursuant to the
terms and conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $8.00 per Share, net to you in cash.
2. THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER
AND THE MERGER (AS DEFINED IN THE OFFER TO PURCHASE) ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
3. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Thursday, January 11, 1996, unless the Offer is extended.
4. The Offer is being made for all of the outstanding Shares. The Offer
is conditioned upon, among other things, there being validly tendered and
not withdrawn prior to the expiration of the Offer a number of shares
representing at least a majority of the total number of outstanding shares
of the Company on a fully diluted basis as of the date the Shares are
accepted for payment pursuant to the Offer.
5. Stockholders who tender Shares will not be obligated to pay brokerage
fees, commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant
to the Offer.
If you wish to have us tender any or all of your Shares, please complete,
sign and return the instruction form set forth below. An envelope to return your
instructions to us is enclosed. If you authorize the tender of your Shares, all
such Shares will be tendered unless otherwise specified on the instruction form
set forth below. PLEASE FORWARD YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO
ALLOW US AMPLE TIME TO TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION
OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements and amendments thereto. The Purchaser is not
aware of any state where the making of the Offer is prohibited by administrative
or judicial action pursuant to any valid state statute. If the Purchaser becomes
aware of any valid state statute prohibiting the making of the Offer or the
acceptance of Shares pursuant thereto, the Purchaser will make a good faith
effort to comply with any such state statute or seek to have such statute
declared inapplicable to the Offer. If, after such good faith effort, the
Purchaser cannot comply with any such state statute, the Offer will not be made
to (nor will tenders be accepted from or on behalf of) the holders of Shares in
such state. 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 will be
deemed to be made on behalf of the Purchaser by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
-------------------
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THE EARTH TECHNOLOGY CORPORATION (USA)
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated December 13, 1995 and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by T1 Acquisition Corp.
(the "Purchaser"), a Delaware corporation and a wholly owned subsidiary of Tyco
International Ltd., a Massachusetts corporation, to purchase all of the
outstanding shares of common stock, par value $.10 per share (the "Shares"), of
The Earth Technology Corporation (USA), a Delaware corporation, at a price of
$8.00 per Share, net to the seller in cash.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) held by you for
the account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
SIGN HERE
Number of Shares to be Tendered:*
Shares
-------------- ------------------------------
------------------------------
Signature(s)
Account Number:
---------------- ------------------------------
------------------------------
Please print name(s) and
address(es) here
------------------------------
Dated: , 199 Area Code and
------------------- - Telephone Number(s)
------------------------------
Tax Identification or
Social Security Number
- ------------
* Unless otherwise indicated, it will be assumed that all of your Shares held by
us for your account are to be tendered.
2
Exhibit (a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
THE EARTH TECHNOLOGY CORPORATION (USA)
TO
T1 ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates representing shares of common
stock, par value $.10 per share (the "Shares"), of The Earth Technology
Corporation (USA), a Delaware corporation, are not immediately available (or if
the procedure for book-entry transfer cannot be completed on a timely basis), or
if time will not permit all required documents to reach the Depositary prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase). Such
form may be delivered by hand or transmitted by facsimile transmission or mail
to the Depositary. See Section 2 of the Offer to Purchase.
The Depositary for the Offer is:
FIRST INTERSTATE BANK OF CALIFORNIA
<TABLE>
<S> <C> <C>
By Hand or
By Mail: By Overnight Courier: By Facsimile:
First Interstate Bank of c/o Chemical/Mellon (201) 296-4062
California Shareholder Services (For Eligible Institutions
c/o Chemical/Mellon 85 Challenger Road Only)
Shareholder Services Ridgefield Park, NJ 07660 Confirm by Telephone:
P.O. Box 845 or (800) 522-6645
Midtown Station First Interstate Bank of
New York, NY 10018 California
120 Broadway, 13th Floor
New York, NY 10271
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message (as defined in Section 2 of the Offer to Purchase) and
certificates representing the Shares to the Depositary within the time period
specified herein. Failure to do so could result in a financial loss to the
Eligible Institution.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to T1 Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Tyco International Ltd., a
Massachusetts corporation, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated December 13, 1995 (the "Offer to Purchase")
and the related Letter of Transmittal (which together constitute the "Offer"),
receipt of which is hereby acknowledged, the number of Shares specified below
pursuant to the guaranteed delivery procedures set forth in Section 2 of the
Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares ______________________ Name(s) of Record Holder(s)
Certificate No(s). (if available) ________________ ___________________________________________
__________________________________________________ ___________________________________________
(Please Type or Print)
Address(es)
CHECK ONE BOX IF SHARES WILL BE TENDERED BY BOOK-
ENTRY TRANSFER:
___________________________________________
/ / The Depository Trust Company
___________________________________________
(Zip Code)
/ / Midwest Securities Trust Company Area Code and Tel. No.(s)
/ / Philadelphia Depository Trust Company ___________________________________________
Signature(s)
Name of Tendering Institution:
___________________________________________
__________________________________________________
___________________________________________
Account Number ___________________________________
Dated ______________________________________, 199
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member in good standing of the Security Transfer Agent's
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchange Medallion Program (each, an "Eligible Institution") (a)
represents that the above named person(s) own(s) the Shares tendered hereby
within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), (b) represents that such tender of
Shares complies with Rule 14e-4 under the Exchange Act, and (c) guarantees
delivery to the Depositary, at one of its addresses set forth above, of
certificates representing the Shares tendered hereby in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's accounts at The Depository Trust Company, the Midwest Securities
Trust Company or the Philadelphia Depository Trust Company, in each case with
delivery of a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees, or an Agent's Message
in the case of a book-entry transfer, and any other required documents, within
four Nasdaq Stock Markets National Market trading days after the date hereof.
<TABLE>
<S> <C>
___________________________________________ ___________________________________________
(Name of Firm) (Authorized Signature)
___________________________________________ ___________________________________________
(Address) (Title)
___________________________________________ Name ______________________________________
(Zip Code) (Please Type or Print)
___________________________________________ Date ________________________________, 199
Area Code and Tel. No.
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES REPRESENTING SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
[TYCO INTERNATIONAL LTD. LETTERHEAD]
[LOGO]
Exhibit (a)(6)
Contact: Contact:
Diane C. Creel David Brownell
CEO, Chairwoman & President Vice President
The Earth Technology Corporation (USA) Tyco International Ltd.
(310) 495-4449 (603) 778-9700
FOR IMMEDIATE RELEASE
TYCO INTERNATIONAL TO ACQUIRE
THE EARTH TECHNOLOGY CORPORATION (USA)
Exeter, New Hampshire and Long Beach, California, December 11, 1995--
Tyco International Ltd. (NYSE-TYC) and The Earth Technology Corporation
(USA) (OTC-ETCO) ("Earth Tech") jointly announced today that they have
entered into a definitive Merger Agreement under which Tyco would purchase,
for cash, all of the outstanding common stock of Earth Tech at a price of
$8 per share.
Under the Agreement, a subsidiary of Tyco will shortly commence a
tender offer to purchase all of Earth Tech's 8,752,000 shares of common
stock for $8 per share in cash, for a total of approximately $70 million.
The tender offer will be followed by a merger in which each of the remaining
shares of Earth Tech will be exchanged for $8 in cash.
The offer will be made pursuant to definite offering documents to be
filed with the Securities and Exchange Commission. The offer is
conditioned on the tender of a majority of the outstanding shares of common
stock on a fully diluted basis, as well as certain other conditions.
"Earth Tech is an excellent fit with Tyco's Flow Control segment,
particularly in our water works and waste water treatment businesses.
Their expertise in the engineering and design of water/wastewater treatment
facilities, and environmental solutions will help expand our market
penetration in these areas," said L. Dennis Kozlowski, Tyco's Chairman and
Chief Executive Officer. Mr. Kozlowski also noted that the acquisition
would provide a positive contribution to Tyco's earnings from the onset.
<PAGE>
Diane C. Creel, CEO, Chairwoman and President of Earth Tech stated,
"we are delighted to become part of the Tyco family. We believe that this
offer represents superior value for our shareholders and a tremendous
opportunity for continued growth of our company."
Earth Tech, headquartered in Long Beach, California, has 40 offices
throughout North America. Earth Tech reported sales of $178 million for the
last fiscal year ended August 25, 1995 with a long term backlog in excess
of $800 million.
Tyco is a worldwide manufacturer with strong leadership positions in
disposable medical products, packaging materials, flow control products,
electrical and electronic components and is the world's largest
manufacturer and installer of fire protection systems. The Company
operates in more than 50 countries around the world and has revenues in
excess of $4.5 billion.
xxx
Exhibit (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase
dated December 13, 1995, and the related Letter of Transmittal and is not
being made to (nor will tenders be accepted from or on behalf of) holders
of Shares in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction the securities laws of which require the
Offer to be made by a licensed broker or dealer the Offer shall be deemed
made on behalf of the Purchaser by one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
THE EARTH TECHNOLOGY
CORPORATION (USA)
at
$8.00 Net Per Share
by
T1 Acquisition Corp.
a wholly owned subsidiary of
TYCO INTERNATIONAL LTD.
T1 Acquisition Corp., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Tyco International Ltd., a Massachusetts
corporation ("Tyco"), is offering to purchase all outstanding shares of
common stock, par value $.10 per share (the "Shares"), of The Earth
Technology Corporation (USA), a Delaware corporation (the "Company"), at
$8.00 per Share, net to the seller in cash (the "Offer Price"), upon the
terms and subject to the conditions set forth in the Offer to Purchase
dated December 13, 1995 and in the related Letter of Transmittal (which
together constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, JANUARY 11, 1996, UNLESS
EXTENDED.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer at least
that number of Shares which would constitute a majority of the outstanding
Shares on a fully diluted basis (the "Minimum Condition").
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of December 8, 1995 (the "Merger Agreement"), among Tyco, the
Purchaser and the Company pursuant to which, following the consummation of
the Offer and the satisfaction or waiver of certain conditions, the
Purchaser will be merged with and into the Company (the "Merger"). At the
effective time of the Merger, each outstanding Share (other than Shares
held in the Company's treasury or by any wholly owned subsidiary of the
Company, or owned by Tyco, the Purchaser or any other wholly owned
subsidiary of Tyco or held by stockholders, if any, who are entitled to and
who properly exercise dissenters' rights under Delaware law) will be
converted into the right to receive the Offer Price, without interest.
The Board of Directors of the Company has determined that the Offer
and the Merger are fair to, and in the best interests of, the Company and
its stockholders, has approved the Merger Agreement, the Offer and the
Merger, and recommends that the Company's stockholders accept the Offer and
tender their Shares pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares properly tendered to
the Purchaser and not withdrawn as, if and when the Purchaser gives oral or
written notice to First Interstate Bank of California (the "Depositary") of
the Purchaser's acceptance for payment of such Shares. Upon the terms and
subject to the conditions of the Offer, payment for Shares purchased
pursuant to the offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting payment to tendering stockholders. In all cases, payment for
Shares purchased pursuant to the Offer will be made only after timely
receipt by the Depositary of (a) certificates for such Shares or timely
confirmation of book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility (as defined in the Offer to
<PAGE>
Purchase) pursuant to the procedures set forth in Section 2 of the Offer to
Purchase, (b) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) with any required signature guarantees and (c) any
other documents required by the Letter of Transmittal. Under no
circumstances will interest be paid by the Purchaser on the purchase price
of the Shares, regardless of any delay in making such payment.
The term "Expiration Date" means 12:00 Midnight, New York City time,
on Thursday, January 11, 1996, unless and until the Purchaser, in its sole
discretion (but subject to the terms of the Merger Agreement), shall have
extended the period of time during which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by the Purchaser, shall expire. The Purchaser
expressly reserves the right, in its sole discretion (but subject to the
terms of the Merger Agreement), at any time or from time to time, and
regardless of whether or not any of the events set forth in Section 15 of
the Offer to Purchase shall have occurred or shall have been determined by
the Purchaser to have occurred, to extend the period of time during which
the Offer is open and thereby delay acceptance for payment of, and the
payment for, any Shares, by giving oral or written notice of such extension
to the Depositary. The Purchaser shall not have any obligation to pay
interest on the purchase price for tendered Shares in the event the
Purchaser exercises its right to extend the period of time during which the
Offer is open. There can be no assurance that the Purchaser will exercise
its right to extend the Offer. Any such extension will be followed by a
public announcement thereof no later than 9:00 A.M., New York City time, on
the next business day after the previously scheduled Expiration Date.
During any such extension, all Shares previously tendered and not withdrawn
will remain subject to the Offer, subject to the right of a tendering
stockholder to withdraw such stockholder's Shares.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
12:00 Midnight, New York City time, on Thursday, January 11, 1996 (or, if
the Purchaser shall have extended the period of time during which the Offer
is open, the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire) and, unless theretofore accepted for payment and
paid for by the Purchaser pursuant to the Offer, may also be withdrawn at
any time on or after February 12, 1996. 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 the Offer to Purchase and must specify the name of the person
having tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered holder of the Shares to be
withdrawn, if different from the name of the person who tendered the
Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered by
an Eligible Institution (as defined in Section 2 of the Offer to Purchase),
the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the
procedures for book-entry transfer as set forth in Section 2 of the Offer
to Purchase, any notice of withdrawal must also specify the name and number
of the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with such
Book-Entry Transfer Facility's procedures. Withdrawals of tenders of Shares
may not be rescinded, and any Shares properly withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by again following one of the procedures described
in Section 2 of the Offer to Purchase at any time prior to the Expiration
Date.
The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and furnished
to brokers, dealers, banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder lists or,
if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners
of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii)
under the Securities Exchange Act of 1934, as amended, is contained in the
Offer to Purchase and is incorporated herein by reference.
The Offer to Purchase and the related Letter of Transmittal contain
important information and should be read in their entirety before any
decision is made with respect to the Offer.
<PAGE>
Requests for copies of the Offer to Purchase and the Letter of
Transmittal may be directed to the Information Agent as set forth below,
and copies will be furnished promptly at the Purchaser s expense.
The Information Agent for the Offer is:
[MACKENZIE PARTNERS,INC LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
December 13, 1995
Exhibit (a)(8)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE><CAPTION>
- ---------------------------------------------------- ----------------------------------------------------
GIVE THE GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF-- NUMBER OF--
- ---------------------------------------------------- ----------------------------------------------------
<S> <C> <C> <C>
1. An individual's The individual 9. A valid trust, The legal entity (Do
account estate, or pension not furnish the
trust identifying number of
2. Two or more The actual owner of the personal
individuals (joint the account or, if representative or
account) combined funds, any trustee unless the
one of the legal entity itself is
individuals(1) not designated in the
account title.)(5)
3. Husband and wife The actual owner of
(joint account) the account or, if 10. Corporate account The corporation
joint funds, either
person(1) 11. Religious, The organization
charitable, or
4. Custodian account of The minor(2) educational
a minor (Uniform Gift organization account
to Minors Act)
12. Partnership account The partnership
5. Adult and minor The adult or, if the held in the name of
(joint account) minor is the only the business
contributor, the
minor(1) 13. Association, club, or The organization
other tax-exempt
6. Account in the name The ward, minor, or organization
of guardian or incompetent person(3)
committee for a 14. A broker or The broker or
designated ward, registered nominee nominee
minor, or incompetent
person 15. Account with the The public entity
Department of
7. a. The usual The grantor-trustee(1) Agriculture in the
revocable savings name of a public
trust account entity (such as a
(grantor is also State or local
trustee) government, school
district, or prison)
b. So-called trust The actual owner(1) that receives
account that is agricultural program
not a legal or payments
valid trust under
State law
8. Sole proprietorship The owner(4)
account
- ---------------------------------------------------- ----------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for an Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply for
a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
. An international organization or any agency or instru mentality thereof.
. A registered dealer in securities or commodities regis tered in the U.S. or a
possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a) (1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresi dent partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt- interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresi dent aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding.
FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER,
WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE
PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE
FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION
CONTACT YOUR TAX CONSULTANT OR
THE INTERNAL REVENUE SERVICE
Exhibit (c)(1)
tyco international ltd.
August 15, 1995
Earth Tech
100 West Broadway
Suite 5000
Long Beach, California 90802
Attn: Diane Creel
President and Chief Executive Officer
Dear Sirs:
In connection with our possible interest in a transaction involving
the acquisition of Earth Tech (the "Company"), you are furnishing us or our
representatives with certain information which is either non-public,
confidential or proprietary in nature. All information furnished to us or
our representatives by the Company or any of its employees,
representatives, agents or advisors (including attorneys, accountants,
financial and technical advisors) shall be considered confidential and
proprietary and, together with analyses, compilations, forecasts, studies
or other documents prepared by us, our agents, advisors (including
attorneys, accountants, financial and technical advisors), representatives
or employees which contain such information, is hereinafter referred to as
the "Information". In consideration of the Company furnishing us with the
information, we agree that:
1. The Information will be kept confidential and shall not, without
the prior written consent of the Company, be disclosed by us, or by our
agents, representatives, advisors or employees, in any manner whatsoever,
in whole or in part, and shall not be used by us, our agents,
representatives, advisors or employees, other than to determine whether we
wish to enter into, or other than in connection with, the transaction
described above. Moreover, we agree to reveal the Information only to our
agents, representatives, advisors and employees who need to know the
Information for the purpose of evaluating, or otherwise in connection with,
the transaction described above who shall agree to act in accordance with
the terms and conditions of this Agreement.
2. Without the prior written consent of the Company, except pursuant
to paragraph 5 hereof, we and our agents, representatives, advisors and
employees will not disclose to any person the fact that the Information has
been made available, that discussions or negotiations are taking place or
have taken place concerning a possible transaction involving the
acquisition of the Company by us or any of the terms, conditions, or other
<PAGE>
Earth Tech
August 15, 1995
Page 2
facts with respect to any such possible transaction, including the status
thereof.
3. All copies of the Information, except for that portion of the
Information which consists of analyses, compilations, forecasts, studies or
other documents prepared by us, our agents, representatives, advisors or
employees, will be returned to the Company promptly upon its request.
4. The term Information shall not include such portions of the
Information which (i) are or become generally available to the public other
than as a result of a disclosure by us, our agents, representatives,
advisors or employees, or (ii) become available to us or to our agents,
representatives, advisors or employees on a non-confidential basis from a
source which was not then prohibited from disclosing such Information to us
by a legal, contractual or fiduciary obligation to the Company, or (iii)
which was in our possession, or in the possession of our agents,
representatives, advisors or employees, or otherwise available to us, or
our agents, representatives, advisors or employees, on a non-confidential
basis prior to its disclosure to us or one or more of our agents,
representatives, advisors or employees.
5. In the event that we or anyone to whom we transmit the
Information pursuant to this Agreement are requested or become legally
compelled to disclose any of the Information (whether by oral questions,
interrogatories, requests for Information or documents, subpoena, Civil
Investigatives Demand or similar process or otherwise), we will provide the
Company with prompt notice, to the extent practicable, so that the Company
may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, the Company agrees that
such disclosure may be made without liability hereunder. We will furnish
only that portion of the Information which we are, in the opinion of our
counsel or the counsel of our representative, legally required to disclose
and will use our best efforts to obtain reliable assurance that
confidential treatment will be accorded the Information.
6. Without our prior written consent, except pursuant to paragraph 5
hereof, you agree that the Company will not disclose to any person the fact
that discussions or negotiations are taking place or have taken place
concerning a possible transaction involving the acquisition of the Company
by us or any of the terms, conditions or other facts with respect to any
such possible transaction, including the status thereof.
<PAGE>
Earth Tech
August 15, 1995
Page 3
7. The confidentiality obligations created by this Agreement shall
terminate three years from the date hereof.
8. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
9. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts without regard to
principles of conflicts of law.
Very truly yours,
TYCO INTERNATIONAL LTD.
/s/ J. Brad McGee
By: ---------------------
J. Brad McGee
Title: Vice President
Specialty Products
Accepted and agreed
to as of the 29 day
of August, 1995.
EARTH TECH
/s/ Diane Creel
By:
-------------------------
Diane Creel
President and
Chief Executive Officer
Exhibit (c)(2)
__________________
AGREEMENT AND PLAN OF MERGER
AMONG
TYCO INTERNATIONAL LTD.,
T1 ACQUISITION CORP.
AND
THE EARTH TECHNOLOGY CORPORATION (USA),
DATED AS OF December 8, 1995
__________________
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I THE OFFER
Section 1.1 The Offer . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Company Actions . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II THE MERGER
Section 2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.2 Effective Time . . . . . . . . . . . . . . . . . . . . . 4
Section 2.3 Effects of the Merger . . . . . . . . . . . . . . . . . . 4
Section 2.4 Certificate of Incorporation and Bylaws; Directors and
Officers . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.5 Conversion of Securities . . . . . . . . . . . . . . . . 5
Section 2.6 Payment of Certificates . . . . . . . . . . . . . . . . . 6
Section 2.7 Dissenting Shares . . . . . . . . . . . . . . . . . . . . 7
Section 2.8 Merger Without Meeting of Stockholders . . . . . . . . . 7
Section 2.9 No Further Ownership Rights in Common Stock . . . . . . . 8
Section 2.10 Closing of Company Transfer Books . . . . . . . . . . . 8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Section 3.1 Organization and Qualification . . . . . . . . . . . . . 8
Section 3.2 Authority Relative to this Agreement . . . . . . . . . . 8
Section 3.3 No Conflict; Required Filings and Consents . . . . . . . 8
Section 3.4 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.5 Ownership of Sub; No Prior Activities . . . . . . . . . . 9
Section 3.6 Financing . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.7 Full Disclosure . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization and Qualification; Subsidiaries . . . . . . 10
Section 4.2 Certificate of Incorporation and Bylaws . . . . . . . . . 11
Section 4.3 Capitalization . . . . . . . . . . . . . . . . . . . . . 11
Section 4.4 Authority Relative to this Agreement . . . . . . . . . . 12
Section 4.5 Contracts; No Conflict; Required Filings and Consents . . 12
Section 4.6 Compliance; Permits . . . . . . . . . . . . . . . . . . . 13
Section 4.7 SEC Filings; Financial Statements . . . . . . . . . . . . 13
Section 4.8 Absence of Certain Changes or Events . . . . . . . . . . 14
Section 4.9 No Undisclosed Liabilities . . . . . . . . . . . . . . . 14
Section 4.10 Absence of Litigation . . . . . . . . . . . . . . . . . 15
Section 4.11 Employee Benefit Plans; Employment Agreements . . . . . 15
Section 4.12 Labor Matters . . . . . . . . . . . . . . . . . . . . . 17
Section 4.13 Limitation on Business Conduct . . . . . . . . . . . . . 17
Section 4.14 Title to Property . . . . . . . . . . . . . . . . . . . 17
Section 4.15 Real Property; Leased Premises. . . . . . . . . . . . . 18
Section 4.16 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 18
- i -
<PAGE>
Section 4.17 Environmental Matters . . . . . . . . . . . . . . . . . 19
Section 4.18 Intellectual Property . . . . . . . . . . . . . . . . . 20
Section 4.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.20 Accounts Receivable. . . . . . . . . . . . . . . . . . . 21
Section 4.21 Customers. . . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.22 Interested Party Transactions . . . . . . . . . . . . . 22
Section 4.23 Absence of Certain Payments. . . . . . . . . . . . . . . 22
Section 4.24 Takeover Statute. . . . . . . . . . . . . . . . . . . . 22
Section 4.25 Opinion of Financial Advisor . . . . . . . . . . . . . . 22
Section 4.26 Brokers . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.27 Full Disclosure . . . . . . . . . . . . . . . . . . . . 23
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.1 Conduct of Business by the Company Pending the Merger . . 23
Section 5.2 Acquisition Proposals . . . . . . . . . . . . . . . . . . 25
Section 5.3 Annual Meeting of Stockholders . . . . . . . . . . . . . 26
Section 5.4 Conduct of Business of Sub Pending the Merger . . . . . . 26
ARTICLE VI ADDITIONAL AGREEMENTS
Section 6.1 Company Stockholder Approval; Proxy Statement . . . . . . 26
Section 6.2 Access to Information; Confidentiality . . . . . . . . . 28
Section 6.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . 28
Section 6.4 Stock Plans and Warrants . . . . . . . . . . . . . . . . 29
Section 6.5 Reasonable Best Efforts . . . . . . . . . . . . . . . . . 29
Section 6.6 Public Announcements . . . . . . . . . . . . . . . . . . 30
Section 6.7 Indemnification; Directors and Officers Insurance . . . . 30
Section 6.8 Board Representation . . . . . . . . . . . . . . . . . . 30
Section 6.9 Notification of Certain Matters . . . . . . . . . . . . . 31
Section 6.10 Employment and Benefit Arrangements . . . . . . . . . . . 31
ARTICLE VII CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . 32
Section 8.2 Effect of Termination . . . . . . . . . . . . . . . . . . 34
Section 8.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE IX GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties . . . . . 34
Section 9.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 9.3 Interpretation . . . . . . . . . . . . . . . . . . . . . 36
Section 9.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . 36
- ii -
<PAGE>
Section 9.5 Entire Agreement; No Third-Party Beneficiaries . . . . . 36
Section 9.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.7 Assignment. . . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.8 Severability . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.9 Enforcement of this Agreement; Attorneys Fees . . . . . . 36
EXHIBIT A Conditions of the Offer
- iii -
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 8, 1995 (this
"Agreement"), among Tyco International Ltd., a Massachusetts corporation
("Parent"), T1 Acquisition Corp., a Delaware corporation ("Sub") and a wholly
owned subsidiary of Parent, and The Earth Technology Corporation (USA), a
Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
each have approved the acquisition of the Company by Parent pursuant to a tender
offer (the "Offer") by Sub for all of the outstanding shares of Common Stock,
par value $.10 per share ("Common Stock"), of the Company at a price of $8.00
per share, net to the seller in cash, without interest, followed by a merger
(the "Merger") of Sub with and into the Company, all upon the terms and subject
to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving the Offer and the Merger and recommending that the Company's
stockholders accept the Offer; and
WHEREAS, pursuant to the Merger, each issued and outstanding share of
Common Stock not owned directly or indirectly by Parent or the Company, except
shares of Common Stock held by holders who comply with the provisions of
Delaware law regarding the right of stockholders to dissent from the Merger and
require appraisal of their shares of Common Stock, will be converted into the
right to receive the per share consideration paid pursuant to the Offer.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, Parent, Sub and the
Company hereby agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer. (a) Subject to the provisions of this Agreement,
---------
within five business days after the first public announcement of this Agreement,
Sub shall, and Parent shall cause Sub to, commence, within the meaning of Rule
14d-2 under the Securities Exchange Act of 1934, as amended (including the rules
and regulations promulgated thereunder, the "Exchange Act"), the Offer. The
obligation of Sub to, and of Parent to cause Sub to, commence the Offer and
accept for payment, and pay for, any shares of Common Stock tendered pursuant to
the Offer shall be subject to the conditions set forth in Exhibit A (the "Offer
Conditions"). The Offer shall initially expire twenty (20) business days after
the date of its commencement, unless this Agreement is terminated in accordance
with Article VIII, in which case the Offer (whether or not previously extended
in accordance
<PAGE>
with the terms hereof) shall expire on such date of termination. Without the
prior written consent of the Company, Sub shall not (i) impose conditions to the
Offer in addition to the Offer Conditions, (ii) modify or amend the Offer
Conditions or any other term of the Offer in a manner adverse to the holders of
shares of Common Stock, (iii) waive or amend the Minimum Condition (as defined
in Exhibit A), (iv) reduce the number of shares of Common Stock subject to the
Offer, (v) reduce the price per share of Common Stock to be paid pursuant to the
Offer, (vi) except as provided in the following sentence, extend the Offer, if
all of the Offer Conditions are satisfied or waived, or (vii) change the form of
consideration payable in the Offer. Notwithstanding the foregoing, Sub may,
without the consent of the Company, extend the Offer at any time, and from time
to time, (i) if at the then scheduled expiration date of the Offer any of the
conditions to Sub's obligation to accept for payment and pay for shares of
Common Stock shall not have been satisfied or waived, until such time as such
conditions are satisfied or waived; (ii) for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or its staff applicable to the Offer; or (iii) if all Offer
Conditions are satisfied or waived but the number of shares of Common Stock
tendered is less than 90% of the then outstanding number of shares of Common
Stock, for an aggregate period of not more than 10 business days (for all such
extensions) beyond the latest expiration date that would be permitted under
clause (i) or (ii) of this sentence. So long as this Agreement is in effect and
the Offer Conditions have not been satisfied or waived, Sub shall, and Parent
shall cause Sub to, cause the Offer not to expire. Subject to the terms and
conditions of the Offer (but subject to the right of termination in accordance
with Article VIII), Sub shall, and Parent shall cause Sub to, pay for all shares
of Common Stock validly tendered and not withdrawn pursuant to the Offer as soon
as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect to the
Offer, which shall contain an offer to purchase and a related letter of
transmittal (such Schedule 14D-1 and the documents therein pursuant to which the
Offer will be made, together with any supplements or amendments thereto, the
"Offer Documents"). The Company and its counsel shall be given an opportunity
to review and comment upon the Offer Documents prior to the filing thereof with
the SEC. The Offer Documents shall comply as to form in all material respects
with the requirements of the Exchange Act, and, on the date filed with the SEC
and on the date first published, sent or given to the Company's stockholders,
the Offer Documents shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that no representation is made by Parent
or Sub with respect to information supplied by the Company in writing for
inclusion in the Offer Documents. Each of Parent, Sub and the Company agrees
promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that such information shall have become false or
misleading in any material respect, and each of Parent and Sub further agrees to
take all steps necessary to cause the Offer Documents as so corrected to be
filed with the SEC and to be disseminated to holders of shares of Common Stock,
in each case as and to the extent required by applicable federal securities
laws. Parent and Sub agree to provide the Company and its counsel in writing
with any comments Parent, Sub or their counsel may receive from
- 2 -
<PAGE>
the SEC or its staff with respect to the Offer Documents promptly upon receipt
of such comments.
Section 1.2 Company Actions. (a) The Company hereby approves of and
---------------
consents to the Offer and represents that the Board of Directors of the Company
at a meeting duly called and held has duly adopted resolutions (i) approving
this Agreement, the Offer and the Merger, (ii) determining that the terms of the
Offer and Merger are fair to, and in the best interests of, the Company and its
stockholders, and (iii) recommending that the Company's stockholders accept the
Offer and tender their shares of Common Stock and approve the Merger and this
Agreement. The Company hereby consents to the inclusion in the Offer Documents
of such recommendation of the Board of Directors of the Company. The Company
represents that its Board of Directors has received the written opinion (the
"Fairness Opinion") of Alex. Brown & Sons Incorporated (the "Financial Advisor")
that the proposed consideration to be received by the holders of shares of
Common Stock pursuant to the Offer and the Merger is fair to such holders from a
financial point of view. The Company has been authorized by the Financial
Advisor to permit, subject to the prior review and consent by the Financial
Advisor (such consent not to be unreasonably withheld), the inclusion of the
Fairness Opinion (or a reference thereto) in the Offer Documents, the Schedule
14D-9 (as hereinafter defined) and the Proxy Statement (as hereinafter defined).
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, including the exhibits thereto, the "Schedule 14D-9") containing
the recommendations described in paragraph (a) of Section 1.2 above and shall
mail the Schedule 14D-9 to the stockholders of the Company as required by Rule
14D-9 promulgated under the Exchange Act. Parent and its counsel shall be given
an opportunity to review and comment upon the Schedule 14D-9 prior to the filing
thereof with the SEC. The Schedule 14D-9 shall comply as to form in all material
respects with the requirements of the Exchange Act and, on the date filed with
the SEC and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the Company
with respect to information supplied by Parent or Sub in writing for inclusion
in the Schedule 14D-9. Each of the Company, Parent and Sub agrees promptly to
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to the holders of shares of Common Stock, in each case as and to
the extent required by applicable federal securities laws. The Company agrees to
provide Parent and Sub and their counsel in writing with any comments the
Company or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to promptly furnish Sub with a list, as of a recent date, of the
holders of Common Stock and
- 3 -
<PAGE>
mailing labels containing the names and addresses of the record holders of
Common Stock and of those persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings (including shares of Common Stock held by depositories) and computer
files and all other information in the Company's possession or control regarding
the beneficial owners of Common Stock, and shall furnish to Sub such information
and assistance (including updated lists of stockholders, security position
listings and computer files) as Sub may reasonably request in communicating the
Offer to the Company's stockholders.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions
----------
hereof, and in accordance with the General Corporation Law of the State of
Delaware, as amended (the "DGCL"), Sub shall be merged with and into the Company
at the Effective Time (as hereinafter defined). Following the Merger, the
separate corporate existence of Sub shall cease and the Company shall continue
as the surviving corporation (the "Surviving Corporation") and shall succeed to
and assume all the rights and obligations of Sub in accordance with the DGCL.
Section 2.2 Effective Time. The Merger shall become effective when the
--------------
Certificate of Merger or, if applicable, the Certificate of Ownership and Merger
(each, the "Certificate of Merger"), executed in accordance with the relevant
provisions of the DGCL, are accepted for record by the Secretary of State of the
State of Delaware. When used in this Agreement, the term "Effective Time" shall
mean the later of the date and time at which the Certificate of Merger is
accepted for record or such later time established by the Certificate of Merger.
The filing of the Certificate of Merger shall be made as soon as reasonably
practicable (but not later than the third business day) after the satisfaction
or waiver of the conditions to the Merger set forth herein.
Section 2.3 Effects of the Merger. The Merger shall have the effects set
---------------------
forth in the DGCL.
Section 2.4 Certificate of Incorporation and Bylaws; Directors and
------------------------------------------------------
Officers.
- --------
(a) The Certificate of Incorporation of the Company, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law, except that ARTICLE Sixth of such Certificate of
Incorporation shall be amended and restated to provide that the number of
directors of the Surviving Corporation shall be not less than three (3) or more
than nine (9), and all such directors shall constitute a single class. The
Bylaws of Sub, as in effect immediately prior to the Effective Time, shall be
the Bylaws of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
(b) The directors of Sub at the Effective Time shall, from and after
the Effective Time, be the directors of the Surviving Corporation until their
successors have been
- 4 -
<PAGE>
duly elected or appointed and qualified or until their earlier death,
resignation or removal, in accordance with the Surviving Corporation's
Certificate of Incorporation and Bylaws.
(c) The officers of the Company at the Effective Time and such other
persons as designated by Parent shall, from and after the Effective Time, be the
officers of the Surviving Corporation until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal, in accordance with the Surviving Corporation's Certificate of
Incorporation and Bylaws.
Section 2.5 Conversion of Securities. As of the Effective Time, by virtue
------------------------
of the Merger and without any action on the part of any stockholder of the
Company:
(a) All shares of Common Stock that are held in the treasury of the
Company or by any wholly owned subsidiary of the Company and any shares of
Common Stock owned by Parent, Sub or any other wholly owned subsidiary of
Parent shall be canceled and no consideration shall be delivered in
exchange therefor.
(b) Each share of Common Stock issued and outstanding immediately
prior to the Effective Time, including any "restricted" stock issued
pursuant to the 1987 Stock Option and Restricted Stock Plan (as defined
below), all of the vesting requirements of which are hereby waived without
the need for any action on the part of any person (other than shares to be
canceled in accordance with Section 2.5(a) and other than Dissenting Shares
(as defined in Section 2.7)) shall be converted into the right to receive
from Parent in cash, without interest, the per share consideration in the
Offer (the "Merger Consideration"). All such shares of Common Stock, when
so converted, shall no longer be outstanding and shall automatically be
canceled and retired and each holder of a certificate or certificates (the
"Certificates") representing any such shares shall cease to have any rights
with respect thereto, except the right to receive the Merger Consideration
for such shares upon surrender of such Certificates.
(c) Each issued and outstanding share of the capital stock of Sub
shall be converted into and become one fully paid and nonassessable share
of Common Stock of the Surviving Corporation.
(d) Each option outstanding at the Effective Time to purchase shares
of Common Stock (a "Stock Option") granted under (i) The Earth Technology
Corporation (USA) 1987 Stock Plan (the "1987 Stock Plan"), (ii) The Earth
Technology Corporation (USA) Director Option Plan (the "Director Option
Plan") and (iii) any other stock plan or agreement of the Company, whether
vested or unvested, shall be converted into an option (a "Parent Option")
to purchase that number of shares of Parent common stock, par value $.50
per share ("Parent Common Stock"), equal to the product of (A) the quotient
of (i) the fair market value of a share of Common Stock as of the Effective
Time divided by (ii) the fair market value of a share of Parent Common
Stock as of the Effective Time (the "Stock Ratio") and (B) the number of
shares of Common Stock subject to such Stock Option (rounded to the nearest
whole share) at an exercise price equal to the per share
- 5 -
<PAGE>
exercise price of such Stock Option divided by the Stock Ratio (rounded
to the nearest cent), which Parent Option shall be subject to the same
terms and conditions (including vesting schedule) as the Stock Option.
As soon as practicable after the Effective Time, Parent shall deliver to
each holder of a Stock Option outstanding immediately prior to the
Effective Time an appropriate notice setting forth such holder's rights
pursuant hereto.
(e) Each stock purchase warrant outstanding at the Effective Time to
purchase shares of Common Stock, issued by Summit Environmental Group, Inc.
as of August 29, 1990 and assumed by the Company (a "Warrant"), shall
represent the right to receive, upon payment of the exercise price therefor
in accordance with its terms, cash in an amount equal to the product of (x)
the number of shares issuable upon exercise of such Warrant immediately
prior to the Effective Time and (y) the Merger Consideration.
Section 2.6 Payment of Certificates. (a) Paying Agent. Prior to the
----------------------- ------------
Effective Time, Parent shall appoint First Interstate Bank of California or such
other commercial bank or trust company designated by Parent and reasonably
acceptable to the Company to act as paying agent hereunder (the "Paying Agent")
for the payment of the Merger Consideration upon surrender of Certificates. All
of the fees and expenses of the Paying Agent shall be borne by Parent.
(b) Surviving Corporation to Provide Funds. Parent shall take all
--------------------------------------
steps necessary to enable and cause the Surviving Corporation to provide the
Paying Agent with cash in amounts necessary to pay for all of the shares of
Common Stock pursuant to Section 2.5 (determined as though there are no
Dissenting Shares (as hereinafter defined)), when and as such amounts are needed
by the Paying Agent.
(c) Payment Procedures. As soon as practicable after the Effective
------------------
Time, the Paying Agent shall mail to each holder of record of a Certificate,
other than Parent, the Company and any wholly owned subsidiary of Parent or the
Company, (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
actual delivery of the Certificates to the Paying Agent and shall be in a form
and have such other provisions as Parent may reasonably specify) and
(ii) instructions for the use thereof in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by the Surviving Corporation, together with such
letter of transmittal, duly executed and completed in accordance with the
instructions thereto, and such other documents as may reasonably be required by
the Paying Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor the amount of cash into which the shares of Common Stock
theretofore represented by such Certificate shall have been converted pursuant
to Section 2.5, and the Certificates so surrendered shall forthwith be canceled.
No interest will be paid or will accrue on the cash payable upon the surrender
of any Certificate. If payment is to be made to a person other than the person
in whose name the Certificate so surrendered is registered, it shall be a
condition of payment that such Certificate shall be properly endorsed or
otherwise in proper
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<PAGE>
form for transfer and that the person requesting such payment shall pay any
transfer or other taxes required by reason of the transfer of such Certificate
or establish to the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. Until surrendered as contemplated by this
Section 2.6, each Certificate (other than Certificates representing Dissenting
Shares and Certificates representing any shares of Common Stock owned by Parent
or any wholly owned subsidiary of Parent or held in the treasury of the Company
or by any wholly owned subsidiary of the Company) shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the amount of cash, without interest, into which the shares of Common
Stock theretofore represented by such Certificate shall have been converted
pursuant to Section 2.5. Notwithstanding the foregoing, none of the Paying
Agent, the Surviving Corporation or any party hereto shall be liable to a former
stockholder of the Company for any cash or interest delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws. In
the event any Certificate shall have been lost, stolen or destroyed, Parent may,
in its discretion and as a condition precedent to the payment of the Merger
Consideration in respect of the shares represented by such Certificate, require
the owner of such lost, stolen or destroyed Certificate to deliver a bond in
such sum as it may reasonably direct as indemnity against any claim that may be
made against Parent or the Paying Agent.
Section 2.7 Dissenting Shares. Notwithstanding any provision of this
-----------------
Agreement to the contrary, if required by the DGCL (but only to the extent
required thereby), shares of Common Stock which are issued and outstanding
immediately prior to the Effective Time and which are held by holders of such
shares of Common Stock who have properly exercised appraisal rights with respect
thereto in accordance with Section 262 of the DGCL (the "Dissenting Shares")
will not be exchangeable for the right to receive the Merger Consideration, and
holders of such shares of Common Stock will be entitled to receive payment of
the appraised value of such shares of Common Stock in accordance with the
provisions of such Section 262 unless and until such holders fail to perfect or
effectively withdraw or lose their rights to appraisal and payment under the
DGCL. If, after the Effective Time, any such holder fails to perfect or
effectively withdraws or loses such right, such shares of Common Stock will
thereupon be treated as if they had been converted into and have become
exchangeable for, at the Effective Time, the right to receive the Merger
Consideration, without any interest thereon. The Company will give Parent
prompt notice of any demands received by the Company for appraisals of shares of
Common Stock, and Parent shall have the right to participate in all negotiations
and proceedings with respect to any such demands. Neither the Company nor the
Surviving Corporation shall, except with the prior written consent of Parent,
make any payment with respect to any demands for appraisal or offer to settle or
settle any such demands.
Section 2.8 Merger Without Meeting of Stockholders. Notwithstanding the
--------------------------------------
foregoing in this Article II, in the event that Sub, or any other direct or
indirect subsidiary of Parent, shall acquire at least 90 percent of the
outstanding shares of Common Stock, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
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<PAGE>
Section 2.9 No Further Ownership Rights in Common Stock. From and after
-------------------------------------------
the Effective Time, the holders of shares of Common Stock which were outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares of Common Stock except as otherwise provided in this
Agreement or by applicable law. All cash paid upon the surrender of Certificates
in accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of Common Stock.
Section 2.10 Closing of Company Transfer Books. At the Effective Time,
---------------------------------
the stock transfer books of the Company shall be closed and no transfer of
shares of Common Stock shall thereafter be made. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be canceled
and exchanged as provided in this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub hereby represent and warrant to the Company as follows:
Section 3.1 Organization and Qualification. Each of Parent and Sub is a
------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority necessary to own, lease and operate the properties it purports to
own, operate or lease and to carry on its business as it is now being conducted,
except as would not reasonably be expected to prevent or delay consummation of
the Merger, or otherwise materially and adversely affect the ability of Parent
or Sub to perform their respective obligations under this Agreement.
Section 3.2 Authority Relative to this Agreement. Each of Parent and Sub
------------------------------------
has all necessary corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent and Sub and the consummation by Parent and Sub of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of Parent and Sub, and no other corporate
proceedings on the part of Parent or Sub are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. The Board of
Directors of Parent has determined that it is advisable and in the best interest
of Parent's stockholders for Parent to enter into this Agreement and to
consummate, upon the terms and subject to the conditions of this Agreement, the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Parent and Sub and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Parent and Sub.
Section 3.3 No Conflict; Required Filings and Consents. The execution and
------------------------------------------
delivery of this Agreement by Parent and Sub do not, and the performance of this
Agreement by Parent and Sub will not, (i) conflict with or violate the Articles
of Organization (or Certificate of Incorporation) or Bylaws of Parent or Sub,
(ii) conflict with or violate any law,
- 8 -
<PAGE>
rule, regulation, order, judgment or decree applicable to Parent or any of its
subsidiaries or by which its or their respective properties are bound or
affected, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
impair Parent's or any of its subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Parent
or any of its subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or any of its subsidiaries is a party or by which
Parent or any of its subsidiaries or its or any of their respective properties
are bound or affected, except in any such case for any such conflicts,
violations, breaches, defaults or other occurrences that would not reasonably be
expected to prevent or delay consummation of the Merger, or otherwise materially
and adversely affect the ability of Parent or Sub to perform their respective
obligations under this Agreement.
(b) The execution and delivery of this Agreement by Parent and Sub
does not, and the performance of this Agreement by Parent and Sub will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for applicable requirements, if any, of the Exchange Act, the pre-
merger notification requirements of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder (the "HSR
Act"), and the filing and recordation of appropriate merger or other documents
as required by the DGCL, and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not reasonably be expected to prevent or delay consummation of the Merger,
or otherwise materially and adversely affect the ability of Parent or Sub to
perform their respective obligations under this Agreement.
Section 3.4 Brokers. No broker, finder or investment banker (other than
-------
The Environmental Financial Consulting Group, Inc., the fees and expenses of
which will be paid by Parent) is entitled to any brokerage, finder's or other
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent or Sub.
Section 3.5 Ownership of Sub; No Prior Activities. (a) Sub is a direct,
-------------------------------------
wholly-owned subsidiary of Parent and was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement.
(b) As of the date hereof and the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation or
organization and the transactions contemplated by this Agreement and except for
this Agreement and any other agreements or arrangements contemplated by this
Agreement, Sub has not and will not have incurred, directly or indirectly,
through any subsidiary or affiliate, any obligations or liabilities or engaged
in any business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person.
- 9 -
<PAGE>
Section 3.6 Financing. Parent or Sub have sufficient funds available to
---------
enable Sub to purchase all outstanding shares, on a fully diluted basis, of
Common Stock and to pay all fees and expenses related to the transactions
contemplated by this Agreement.
Section 3.7 Full Disclosure. No statement contained in any certificate or
---------------
schedule furnished or to be furnished by Parent or Sub to the Company in, or
pursuant to the provisions of, this Agreement contains or shall contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary, in the light of the circumstances under which it was made, in
order to make the statements herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Sub as follows:
Section 4.1 Organization and Qualification; Subsidiaries. Each of the
--------------------------------------------
Company and each of its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority necessary to
own, lease and operate the properties it purports to own, operate or lease and
to carry on its business as it is now being conducted, except where the failure
to be so organized, existing and in good standing or to have such power and
authority would not reasonably be expected to have a material adverse effect on
the business, assets (including intangible assets), financial condition,
prospects or results of operations of the Company and its subsidiaries taken as
a whole or on the ability of the Company to perform its obligations under this
Agreement (a "Material Adverse Effect"). Each of the Company and each of its
subsidiaries is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned, leased or operated by it or the nature of its activities
makes such qualification or licensing necessary, except for such failures to be
so duly qualified or licensed and in good standing that would not reasonably be
expected to have a Material Adverse Effect. A true and complete list of all of
the Company's subsidiaries, together with the jurisdiction of incorporation of
each subsidiary and the percentage of each subsidiary's outstanding capital
stock owned by the Company or another subsidiary, is set forth in Section 4.1 of
the written disclosure schedule previously delivered by the Company to Parent
(the "Disclosure Schedule"). Except as set forth in Section 4.1 of the
Disclosure Schedule or the SEC Reports (as defined below), the Company does not
directly or indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity, with respect to which interest the Company has invested
or is required to invest $100,000 or more, excluding securities in any publicly
traded company held for investment by the Company and comprising less than five
percent of the outstanding stock of such company.
- 10 -
<PAGE>
Section 4.2 Certificate of Incorporation and Bylaws. The Company has
---------------------------------------
heretofore furnished to Parent a complete and correct copy of its Certificate of
Incorporation and Bylaws as most recently restated and subsequently amended to
date, and has furnished or made available to Parent the Certificate of
Incorporation and Bylaws (or equivalent organizational documents) of each of its
subsidiaries (the "Subsidiary Documents"). Such Certificate of Incorporation,
Bylaws and Subsidiary Documents are in full force and effect. Neither the
Company nor any of its subsidiaries is in violation of any of the provisions of
its Certificate of Incorporation or Bylaws or Subsidiary Documents, except for
immaterial violations of the Subsidiary Documents which may exist.
Section 4.3 Capitalization. The authorized capital stock of the Company
--------------
consists of 20,000,000 shares of Common Stock and 5,000,000 shares of Preferred
Stock, par value $.10 per share (the "Preferred Stock"). As of December 1,
1995, (i) 8,751,636 shares of Common Stock were issued and outstanding, all of
which are validly issued, fully paid and nonassessable (except that 60,707 of
such shares were restricted shares issued pursuant to the 1987 Stock Plan), and
78,989 shares were held in treasury, (ii) no shares of Preferred Stock were
outstanding or held in treasury, (iii) no shares of Common Stock or Preferred
Stock were held by subsidiaries of the Company, (iv) 880,908 shares of Common
Stock were reserved for future issuance pursuant to outstanding stock options
granted under the 1987 Stock Plan and 328,955 shares were reserved for future
grants under such plan, (v) 79,624 shares of Common Stock were reserved for
future issuance upon exercise of options granted under the Director Option Plan
and 110,762 shares were reserved for future grants under such Plan, (vi) 30,572
shares of Common Stock were reserved for future issuance under The Earth
Technology Corporation (USA) 1994 Employee Stock Purchase Plan (the "Employee
Stock Purchase Plan"), (vii) 166,500 shares of Common Stock were reserved for
issuance upon exercise of the Warrants, (viii) 146,843 shares of Common Stock
were reserved for issuance pursuant to options issued by Summit Environmental
Group, Inc. and assumed by the Company, and (ix) 74,063 shares of Common Stock
were reserved for issuance pursuant to options issued by HazWaste Industries
Incorporated and assumed by the Company. No material change in such
capitalization has occurred between December 1, 1995 and the date hereof.
Except as set forth in Section 4.1, this Section 4.3 or Section 4.11 or in
Section 4.3 or Section 4.11 of the Disclosure Schedule or the SEC Reports, there
are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock of
the Company or any of its subsidiaries or obligating the Company or any of its
subsidiaries to issue or sell any shares of capital stock of, or other equity
interests in, the Company or any of its subsidiaries. All shares of Common
Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
shall be duly authorized, validly issued, fully paid and nonassessable. Except
as disclosed in Section 4.3 of the Disclosure Schedule or the SEC Reports, there
are no obligations, contingent or otherwise, of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any shares of Common
Stock or the capital stock of any subsidiary or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
such subsidiary or any other entity other than guarantees of bank obligations of
subsidiaries entered into in the ordinary course of business. Except as set
forth in Sections 4.1 and 4.3 of the Disclosure Schedule, all of the outstanding
shares of capital stock (other than directors' qualifying shares) of each
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<PAGE>
of the Company's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and all such shares (other than directors' qualifying shares and
a de minimis number of shares owned by employees of such subsidiaries) are owned
by the Company or another subsidiary free and clear of all security interests,
liens, claims, pledges, agreements, limitations in the Company's voting rights,
charges or other encumbrances of any nature whatsoever.
Section 4.4 Authority Relative to this Agreement. The Company has all
------------------------------------
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action,
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than the adoption of this Agreement by the holders of at least a majority
of the outstanding shares of Common Stock entitled to vote in accordance with
the DGCL and the Company's Certificate of Incorporation and Bylaws). The Board
of Directors of the Company has determined that it is advisable and in the best
interest of the Company's stockholders for the Company to enter into this
Agreement and to consummate, upon the terms and subject to the conditions of
this Agreement, the transaction contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by Parent and Sub, as applicable,
constitutes a legal, valid and binding obligation of the Company.
Section 4.5 Contracts; No Conflict; Required Filings and Consents. (a)
-----------------------------------------------------
Section 4.5(a) of the Disclosure Schedule includes a list of (i) all loan
agreements, indentures, mortgages, pledges, conditional sale or title retention
agreements, security agreements, equipment obligations, guaranties, standby
letters of credit, equipment leases or lease purchase agreements, each in an
amount equal to or exceeding $200,000, to which the Company or any of its
subsidiaries is a party or by which any of them is bound; and (ii) all
agreements which, as of the date hereof, are required to be filed as "material
contracts" pursuant to the requirements of the Exchange Act, as amended, and the
SEC's rules thereunder (each of the foregoing and any contract or agreement of
the Company or any of its subsidiaries with any customer listed on Schedule 4.21
of the Disclosure Schedule, being referred to as a "Material Contract"). Except
as set forth in Section 4.5(a) of the Disclosure Schedule, neither the Company
nor any of its subsidiaries is in default or violation (and no event has
occurred which with notice or lapse of time or both would constitute a default
or violation) of any Material Contract, nor, to the knowledge of the Company, is
any other party to any Material Contract in default or violation thereof (and no
event has occurred which with notice or lapse of time or both would constitute
such a default or violation), except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth in Section 4.5(b) of the Disclosure Schedule,
the execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Certificate of
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<PAGE>
Incorporation or Bylaws of the Company, (ii) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to the Company or any of
its subsidiaries or by which its or any of their respective properties is bound
or affected, or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default), or
impair the Company's or any of its subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of the
Company or any of its subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or its or any of their
respective properties is bound or affected, except for any such conflicts,
violations, breaches, defaults or other occurrences that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(c) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except (i)
for applicable requirements, if any, of the Exchange Act, the pre-merger
notification requirements of the HSR, and the filing and recordation of
appropriate merger or other documents as required by the DGCL, and (ii) where
the failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not reasonably be expected to prevent
or delay consummation of the Merger, or otherwise prevent or delay the Company
from performing its obligations under this Agreement, or would not otherwise
reasonably be expected to have a Material Adverse Effect.
Section 4.6 Compliance; Permits. (a) Except as disclosed in Section
-------------------
4.6 of the Disclosure Schedule, neither the Company nor any of its subsidiaries
is in conflict with, or in default or violation of, any law, rule, regulation,
order, judgment or decree applicable to the Company or any of its subsidiaries
or by which its or any of their respective properties is bound or affected,
except for any such conflicts, defaults or violations which would not reasonably
be expected to have a Material Adverse Effect.
(b) Except as disclosed in Section 4.6 of the Disclosure Schedule or
the SEC Reports, the Company and its subsidiaries hold all franchises, grants,
authorization, permits, licenses, easements, variances, exemptions, consents,
certificates, orders and approvals which are material to the operation of the
business of the Company and its subsidiaries taken as a whole as it is now being
conducted ("Permits"). The Company and its subsidiaries are in compliance with
the terms of the Permits, except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect.
Section 4.7 SEC Filings; Financial Statements. (a) The Company has filed
---------------------------------
all forms, reports and documents required to be filed with the SEC since August
27, 1993 and has made available to Parent (i) its Annual Reports on Form 10-K
for the fiscal years ended August 27, 1993, August 26, 1994 and August 25, 1995,
(ii) all proxy statements relating to
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<PAGE>
the Company's meetings of stockholders (whether annual or special) held since
August 27, 1993, (iv) all other reports or registration statements filed by the
Company with the SEC since August 27, 1993, and (v) all amendments and
supplements to all such reports and registration statements filed by the Company
with the SEC (collectively, the "SEC Reports"). Except as disclosed in Section
4.7 of the Disclosure Schedule or the SEC Reports, the SEC Reports (i) were
prepared in all material respects in accordance with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder, or the Exchange Act, as the case may be, and (ii) did not at the
time they were filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. None of the
Company's subsidiaries is required to file any forms, reports or other documents
with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the SEC Reports and the Company's
1995 Annual Report on Form 10-K was prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto), and each
fairly in all material respects presents the consolidated financial position of
the Company and its subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be material in amount.
Section 4.8 Absence of Certain Changes or Events. Except as set forth in
------------------------------------
Section 4.8 of the Disclosure Schedule or the SEC Reports, since August 25, 1995
the Company has conducted its business in the ordinary course and there has not
occurred: (i) any Material Adverse Effect; (ii) any amendments or changes in
the Certificate of Incorporation or Bylaws of the Company; (iii) any damage to,
destruction or loss of any asset of the Company (whether or not covered by
insurance) that would reasonably be expected to have a Material Adverse Effect;
(iv) any material change by the Company in its accounting methods, principles or
practices; (v) any material revaluation by the Company of any of its assets,
including writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business; (vi) any other action
or event that would have required the consent of Parent pursuant to Section 5.1
had such action or event occurred after the date of this Agreement; or (vii) any
sale of a material amount of property of the Company, except in the ordinary
course of business.
Section 4.9 No Undisclosed Liabilities. Except as set forth in Section
--------------------------
4.9 of the Disclosure Schedule or the SEC Reports, neither the Company nor any
of its subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise), except liabilities (a) in the aggregate adequately provided for in
the Company's audited balance sheet (including any related notes thereto) for
the fiscal year ended August 25, 1995 included in the Company's 1995 Annual
Report on Form 10-K (the "1995 Balance Sheet"), (b) incurred in the ordinary
course of business and not required under GAAP to be reflected on the 1995
Balance Sheet, (c) incurred since August 25, 1995 in the ordinary course of
business consistent with past
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<PAGE>
practice, (d) incurred in connection with this Agreement, or (e) which would not
reasonably be expected to have a Material Adverse Effect.
Section 4.10 Absence of Litigation. Except as set forth in Section 4.10
---------------------
of the Disclosure Schedule or the SEC Reports, there are no claims, actions,
suits, proceedings or investigations pending or, to the knowledge of the
Company, overtly threatened against the Company or any of its subsidiaries, or
any properties or rights of the Company or any of its subsidiaries, before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, that would reasonably be expected to have a Material
Adverse Effect. Except as set forth in Section 4.10 of the Disclosure Schedule
or the SEC Reports, since August 27, 1993, there have been no actions, suits or
proceedings made or pending against the Company or any of its subsidiaries
alleging (x) any Environmental Claims (as defined in Section 4.17) or (y) any
breach by the Company or any of its subsidiaries of applicable standards of
conduct in rendering any engineering, construction, design, operation,
maintenance, management, assessment, cleanup or remediation services, except for
such actions, suits or proceedings which, in the case of either clause (x) or
(y) above, would not reasonably be expected to result in liability to the
Company or any of its subsidiaries of $50,000, in any individual case, or
$500,000 in the aggregate.
Section 4.11 Employee Benefit Plans; Employment Agreements. (a) Section
---------------------------------------------
4.11(a) of the Disclosure Schedule lists all employee pension plans (as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), all material employee welfare plans (as defined in Section
3(1) of ERISA), and all other material bonus, stock option, stock purchase,
incentive, deferred compensation, supplemental retirement, severance and other
similar fringe or employee benefit plans, programs or arrangements, and any
employment, executive compensation or severance agreements, written or
otherwise, as amended, modified or supplemented, for the benefit of, or relating
to, any former or current employee, officer or consultant (or any of their
beneficiaries) of the Company or any other entity (whether or not incorporated)
which is a member of a controlled group including the Company or which is under
common control with the Company (an "ERISA Affiliate") within the meaning of
Section 414 of the Code or Section 4001 of ERISA, or any subsidiary of the
Company (together, the "Employee Plans"). None of the Employee Plans is subject
to Title IV of ERISA, and neither the Company nor any ERISA affiliate has any
liability (whether actual or contingent) with respect to any employee pension
plan under Section 4069 or 4212(c) of ERISA or Section 412 of the Code. There
have been made available to Parent copies of (i) each such written Employee Plan
and all related trust agreements, insurance and other contracts (including
policies), summary plan descriptions, summaries of material modifications and
communications distributed to plan participants, (ii) the three most recent
annual reports on Form 5500 series, with accompanying schedules and attachments,
filed with respect to each Employee Plan required to make such a filing, (iii)
the latest reports which have been filed with the Department of Labor with
respect to each Employee Plan required to make such filing and (iv) favorable
determination letters issued for each Employee Plan and related trust that are
intended to satisfy the qualification requirements of Section 401(a) and Section
501(a) of the Code (or, if pending, a copy of the application for such
determination). For purposes of this Section 4.11, the term "material," when
used with respect to (i) any Employee Plan, shall mean that the Company or an
ERISA Affiliate has incurred or may incur obligations in an amount exceeding
$100,000 with respect to such Employee Plan, and (ii) any liability, obligation,
breach or non-compliance, shall mean that the Company or an ERISA Affiliate has
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incurred or may incur obligations in an amount exceeding $50,000, with respect
to any one such or series of related liabilities, obligations, breaches,
defaults, violations or instances of non-compliance.
(b) (i) Except as set forth in Section 4.11(b) of the Disclosure
Schedule, none of the Employee Plans promises or provides retiree medical or
other retiree welfare benefits to any person, and none of the Employee Plans is
a "multiemployer plan" as such term is defined in Section 3(37) of ERISA; (ii)
no party in interest or disqualified person (as defined in Section 3(14) of
ERISA and Section 4975 of the Code) has at any time engaged in a transaction
with respect to any Employee Plan which would reasonably be expected to subject
the Company or any ERISA Affiliate, directly or indirectly, to a material tax,
penalty or other material liability for prohibited transactions under ERISA or
Section 4975 of the Code; (iii) no fiduciary of any Employee Plan has breached
any of the responsibilities or obligations imposed upon fiduciaries under Title
I of ERISA, which breach would reasonably be expected to result in any material
liability to the Company or any ERISA Affiliate; (iv) all Employee Plans have
been established and maintained substantially in accordance with their terms and
have operated in compliance in all material respects with the requirements
prescribed by any and all statutes (including ERISA and the Code), orders, or
governmental rules and regulations currently in effect with respect thereto
(including all applicable requirements for notification to participants or the
Department of Labor, Internal Revenue Service (the "IRS") or Secretary of the
Treasury), and the Company and each of its subsidiaries have performed all
material obligations required to be performed by them under, are not in any
material respect in default under or violation of, and have no knowledge of any
default or violation by any other party to, any of the Employee Plans; (v) each
Employee Plan intended to qualify under Section 401(a) of the Code and each
trust intended to qualify under Section 501(a) of the Code is the subject of a
favorable determination letter from the IRS, and nothing has occurred which
would reasonably be expected to impair such determination; (vi) all
contributions required to be made with respect to any Employee Plan pursuant to
the terms of the Employee Plan or any collective bargaining agreement, have been
made on or before their due dates; and (vii) neither the Company nor any ERISA
Affiliate has incurred, nor reasonably expects to incur, any liability under
Title IV of ERISA (other than liability for premium payments to the Pension
Benefit Guaranty Corporation arising in the ordinary course).
(c) Section 4.11(c) of the Disclosure Schedule sets forth a true and
complete list of each current or former employee, officer or director of the
Company or any of its subsidiaries who holds (i) any option to purchase Common
Stock as of the date hereof, together with the number of shares of Common Stock
subject to such option, the option price of such option (to the extent
determined as of the date hereof), whether such option is intended to qualify as
an incentive stock option within the meaning of Section 422(b) of the Code (an
"ISO"), and the expiration date of such option; (ii) any other right, directly
or indirectly, to acquire Common Stock, together with the number of shares of
Common Stock subject to such right; and (iii) any restricted shares of Common
Stock, as to which the restrictions relevant thereto have not lapsed. Section
4.11(c) of the Disclosure Schedule also
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sets forth the total number of such ISOs, such nonqualified options and
such restricted shares.
(d) Section 4.11(d) of the Disclosure Schedule sets forth a true and
complete list of (i) all employment agreements with officers of the Company or
any of its subsidiaries; (ii) all agreements with consultants who are
individuals obligating the Company or any of its subsidiaries to make annual
cash payments in an amount exceeding $50,000; (iii) all officers of the Company
or any of its subsidiaries who have executed a non-competition agreement with
the Company or any of its subsidiaries; (iv) all severance agreements, programs
and policies of the Company or any of its subsidiaries with or relating to its
employees, in each case with outstanding commitments exceeding $100,000,
excluding programs and policies required to be maintained by law; and (v) all
Employee Plans which contain change in control provisions.
(e) The Company has fiduciary liability insurance of at least
$1,000,000 in effect covering the fiduciaries of the Employee Plans (including
the Company) with respect to whom the Company may have liability.
Section 4.12 Labor Matters. Except as set forth in Section 4.12 of the
-------------
Disclosure Schedule or the SEC Reports, (i) there are no controversies pending
or, to the knowledge of the Company or any of its subsidiaries, threatened,
between the Company or any of its subsidiaries and any of their respective
employees, which controversies would reasonably be expected to have a Material
Adverse Effect; (ii) neither the Company nor any of its subsidiaries is a party
to any material collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or its subsidiaries, nor does the
Company or any of its subsidiaries know of any activities or proceedings of any
labor union to organize any such employees; and (iii) neither the Company nor
any of its subsidiaries has any knowledge of any strikes, slowdowns, work
stoppages, lockouts, or threats thereof, by or with respect to any employees of
the Company or any of its subsidiaries which would reasonably be expected to
have a Material Adverse Effect.
Section 4.13 Limitation on Business Conduct. Except as set forth in
------------------------------
Section 4.13 of the Disclosure Schedule or the SEC Reports, neither the Company
nor its subsidiaries is a party to, or has any obligation under, any contract or
agreement, written or oral, which contains any covenants currently or
prospectively limiting in any material respect the freedom of the Company or any
of its subsidiaries to engage in any line of business or to compete with any
entity.
Section 4.14 Title to Property. Except as set forth in Section 4.14 of
-----------------
the Disclosure Schedule or the SEC Reports, each of the Company and each of its
subsidiaries owns the properties and assets that it purports to own free and
clear of all liens, charges, mortgages, security interests or encumbrances of
any kind ("Liens"), except for Liens which arise in the ordinary course of
business and do not materially impair the Company's or its subsidiaries'
ownership or use of such properties or assets or Liens for taxes not yet due.
With respect to the property and assets it leases, the Company, its
subsidiaries, and to the best of the Company's knowledge each of the other
parties thereto, is in material compliance with such
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<PAGE>
leases and the Company or its subsidiaries, as the case may be, hold a valid
leasehold interest free of any Liens. The rights, properties and assets
presently owned, leased or licensed by the Company and its subsidiaries include
all rights, properties and assets necessary to permit the Company and its
subsidiaries to conduct their business in all material respects in the same
manner as their businesses have been conducted prior to the date hereof.
Section 4.15 Real Property; Leased Premises. (a) Each of the buildings,
------------------------------
improvements and structures located upon any real property and land owned by the
Company or any of its subsidiaries (collectively, the "Real Property"), and each
of the buildings, structures and premises leased by the Company or any of its
subsidiaries (the "Leased Premises"), is in reasonably good repair and operating
condition, except as would not reasonably be expected to have a Material Adverse
Effect.
(b) Except as set forth in Section 4.15 of the Disclosure Schedule,
the Company has not received any notice of or writing referring to any
requirements by any insurance company that has issued a policy covering any part
of any Real Property or Leased Premises or by any board of fire underwriters or
other body exercising similar functions, requiring any repairs or work to be
done on any part of any Real Property or Leased Premises, except as would not
reasonably be expected to have a Material Adverse Effect.
(c) Except as set forth in Section 4.15 of the Disclosure Schedule,
all public utilities used in the operation of each Real Property or Leased
Premises in the manner currently operated are installed and operating, and all
installation and connection charges have been paid in full or provided for; and
the plumbing, electrical, heating, air conditioning, ventilating, septic and all
other structural or material mechanical systems in the buildings upon the Real
Property and Leased Properties are in good working order and working condition,
so as to be adequate for the operation of the business of the Company and its
subsidiaries as heretofore conducted, except as would not reasonably be expected
to have a Material Adverse Effect.
Section 4.16 Taxes. (a) For purposes of this Agreement, "Tax" or "Taxes"
-----
shall mean taxes, fees, levies, duties, tariffs, imposts, and governmental
impositions or charges of any kind in the nature of (or similar to) taxes,
payable to any federal, state, local or foreign taxing authority, including (i)
income, franchise, profits, gross receipts, ad valorem, net worth, value added,
----------
sales, use, service, real or personal property, special assessments, capital
stock, license, payroll, withholding, employment, social security, workers'
compensation, unemployment compensation, utility, severance, production, excise,
stamp, occupation, premiums, windfall profits, transfer and gains taxes, and
(ii) interest, penalties, additional taxes and additions to tax imposed with
respect thereto; and "Tax Returns" shall mean returns, reports, and information
statements with respect to Taxes required to be filed with the IRS or any other
taxing authority, domestic or foreign, including consolidated, combined and
unitary tax returns (and including returns required in connection with any
Employee Plan).
(b) Other than as disclosed in Section 4.16(b) of the Disclosure
Schedule or the SEC Reports: The Company and its subsidiaries have filed all
United States federal
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income Tax Returns and all other material Tax Returns required to be filed by
them, and the Company and its subsidiaries have paid and discharged all material
Taxes due in connection with or with respect to the periods or transactions
covered by such Tax Returns and have paid all other material Taxes as are due,
except such as are being contested in good faith by appropriate proceedings (to
the extent that any such proceedings are required) and with respect to which the
Company is maintaining reserves to the extent currently required, unless the
failure to do so would not reasonably be expected to have a Material Adverse
Effect. Except as does not involve or would not result in liability to the
Company or any of its subsidiaries that would reasonably be expected to have a
Material Adverse Effect, (i) there are no Tax liens on any assets of the Company
or any subsidiary thereof except in respect of Taxes not yet due; and
(ii) neither the Company nor any of its subsidiaries has granted any waiver of
any statute of limitations with respect to, or any extension of a period for the
assessment of, any Tax. To the best knowledge of the Company, there are no
pending or threatened audits, investigations or claims for or relating to any
liability of or in respect of material Taxes of the Company or any of its
subsidiaries. The accruals and reserves for Taxes (including deferred taxes)
reflected in the 1995 Balance Sheet are in all material respects adequate to
cover all Taxes accruable through the date thereof (including interest and
penalties, if any, thereon and Taxes being contested) in accordance with GAAP.
Section 4.17 Environmental Matters. (a) Except as set forth in Section
---------------------
4.17(a) of the Disclosure Schedule or the SEC Reports, the Company and its
subsidiaries are in material compliance with the Environmental Laws (as
hereinafter defined), which compliance includes the possession by the Company
and its subsidiaries of all permits and governmental authorizations required
under applicable Environmental Laws, and compliance in all respects with the
terms and conditions thereof, except in each case where such non-compliance
would not reasonably be expected to have a Material Adverse Effect. Except as
set forth in Section 4.17(a) of the Disclosure Schedule, neither the Company nor
any of its subsidiaries has received any communication (written or oral),
whether from a governmental authority, citizens group, employee or otherwise,
that alleges that the Company or any of its subsidiaries is not in such material
compliance, and there are no circumstances that may prevent or interfere with
such compliance in the future, except where such non-compliance would not
reasonably be expected to have a Material Adverse Effect. Except as set forth
in Section 4.17(a) of the Disclosure Schedule, there are no permits or other
governmental authorizations currently held by the Company or any of its
subsidiaries pursuant to the Environmental Laws.
(b) There are no Environmental Claims (as hereinafter defined),
including claims based on "arranger liability," pending or, to the best
knowledge of the Company, threatened against the Company or any of its
subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law, except for such
Environmental Claims that would not reasonably be expected to have a Material
Adverse Effect.
(c) To the best knowledge of the Company, except as set forth in
Section 4.17(c) of the Disclosure Schedule, there are no past or present
actions, inactions, activities,
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<PAGE>
circumstances, conditions, events or incidents, including the release, emission,
discharge, presence or disposal of any Material of Environmental Concern (as
hereinafter defined), that would form the basis of any Environmental Claim
against the Company or any of its subsidiaries or against any person or entity
whose liability for any Environmental Claim the Company or any of its
subsidiaries have retained or assumed either contractually or by operation of
law, except for such Environmental Claims that would not reasonably be expected
to have a Material Adverse Effect.
(d) Without in any way limiting the generality of the foregoing,
Section 4.17(d) of the Disclosure Schedule sets forth (i) all on-site and off-
site locations where the Company or any of its subsidiaries has stored, disposed
or arranged for the disposal of Materials of Environmental Concern for itself
(but not on behalf of others) and (ii) any underground storage tanks, and the
capacity and contents of such tanks, located on property owned or leased by the
Company or any of its subsidiaries. Except as set forth in Section 4.17(d) of
the Disclosure Schedule, there is no asbestos contained in or forming part of
any building, building component, structure or office space owned or leased by
the Company or any of its subsidiaries. Except as set forth in Section 4.17(d)
of the Disclosure Schedule, no polychlorinated biphenyls (PCB's) or PCB-
containing items are used or stored at any property owned or leased by the
Company or any of its subsidiaries.
(e) For purposes of this Agreement:
(i) "Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral) by any person or entity alleging
potential liability (including potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based on
or resulting from (x) the presence, or release into the environment, of any
Material of Environmental Concern at any location, whether or not owned or
operated by the Company or any of its subsidiaries, or (y) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law.
(ii) "Environmental Laws" means all Federal, state, local and foreign
laws or regulations relating to pollution or protection of human health and
the environment (including ambient air, surface water, ground water, land
surface or sub-surface strata), including laws and regulations relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern.
(iii) "Materials of Environmental Concern" means chemicals,
pollutants, contaminants, hazardous materials, hazardous substances and
hazardous wastes, toxic substances, petroleum and petroleum products.
Section 4.18 Intellectual Property. (a) The Company and/or each of its
---------------------
subsidiaries owns, or is licensed or otherwise possesses legally enforceable
rights to use all patents,
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trademarks, trade names, service marks, copyrights, and any applications
therefor, technology, know-how, computer software programs or applications, and
tangible or intangible proprietary information or material that are used in the
business of the Company and its subsidiaries as currently conducted, except as
would not reasonably be expected to have a Material Adverse Effect.
(b) To the best knowledge of the Company, there are no valid grounds
for any bona fide claims (i) to the effect that the business of the Company or
any of its subsidiaries infringes on any copyright, patent, trademark, service
mark or trade secret; (ii) against the use by the Company or any of its
subsidiaries, of any trademarks, trade names, trade secrets, copyrights,
patents, technology, know-how or computer software programs and applications
used in the business of the Company or any of its subsidiaries as currently
conducted or as proposed to be conducted; (iii) challenging the ownership,
validity or effectiveness of any of the patents, registered and material
unregistered trademarks and service marks, registered copyrights, trade names
and any applications therefor owned by the Company or any of its subsidiaries
(the "Company Intellectual Property Rights") or other trade secret material to
the Company; or (iv) challenging the license or legally enforceable right to use
of any third-party patents, trademarks, service marks and copyrights by the
Company or any of its subsidiaries, except, in each case, for claims that, if
determined adversely to the Company, would not reasonably be expected to have a
Material Adverse Effect.
(c) To the best knowledge of the Company, all material patents,
registered trademarks, service marks and copyrights held by the Company are
valid and subsisting. Except as set forth in Section 4.18(c) of the Disclosure
Schedule or the SEC Reports, to the Company's knowledge, there is no material
unauthorized use, infringement or misappropriation of any of the Company
Intellectual Property by any third party, including any employee or former
employee of the Company or any of its subsidiaries.
Section 4.19 Insurance. All material fire and casualty, general
---------
liability, professional liability, business interruption, product liability and
sprinkler and water damage insurance policies maintained by the Company or any
of its subsidiaries are with reputable insurance carriers, are in full force and
effect with no premium delinquencies, provide full and adequate coverage for all
normal risks incident to the business of the Company and its subsidiaries and
their respective properties and assets and are in character and amount at least
equivalent to that carried by persons engaged in similar businesses and subject
to the same or similar perils or hazards, except as would not reasonably be
expected to have a Material Adverse Effect.
Section 4.20 Accounts Receivable. The accounts receivable of the Company
-------------------
and its subsidiaries as reflected in the most recent financial statements
contained in the SEC Reports, to the extent uncollected on the date hereof, and
the accounts receivable reflected on the books of the Company and its
subsidiaries are valid and existing and represent monies due, and the Company
has made reserves reasonably considered adequate for receivables not collectible
in the ordinary course of business, and (subject to the aforesaid reserves) are
subject to no refunds or other adjustments and to no defenses, rights of setoff,
assignments,
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<PAGE>
restrictions, encumbrances or conditions enforceable by third parties on or
affecting any thereof, except for such refunds, adjustments, defenses, rights of
setoff, assignments, restrictions, encumbrances or conditions as would not
reasonably be expected to have a Material Adverse Effect.
Section 4.21 Customers. Section 4.21 of the Disclosure Schedule sets
---------
forth a list of the Company's twenty five (25) largest customers (detailed, in
the case of government agencies, by separate government agency) in terms of
gross sales for the fiscal year ended August 25, 1995. Except as set forth in
Section 4.21 of the Disclosure Schedule, since August 25, 1995 there have not
been any changes in the business relationships of the Company with any of the
customers named therein that would constitute a Material Adverse Effect.
Section 4.22 Interested Party Transactions. Except as set forth in
-----------------------------
Section 4.22 of the Disclosure Schedule or the SEC Reports, since the date of
the Company's proxy statement dated January 19, 1995, no event has occurred that
would be required to be reported as a Certain Relationship or Related
Transaction, pursuant to Item 404 of Regulation S-K promulgated by the SEC,
except for contracts entered into in the ordinary course of business of the
Company, on an arms-length basis, with terms no less favorable to the Company
than would reasonably be expected in a similar transaction with an unaffiliated
third party.
Section 4.23 Absence of Certain Payments. None of the Company, any of
---------------------------
its subsidiaries, or any of their affiliates or any of their respective
officers, directors, employees or agents or other people acting on behalf of any
of them have (i) engaged in any activity prohibited by the United States Foreign
Corrupt Practices Act of 1977 or any other similar law, regulation, decree,
directive or order of any other country and (ii) without limiting the generality
of the preceding clause (i), used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others.
None of the Company, any of its subsidiaries or any of their affiliates or any
of their respective directors, officers, employees or agents of other persons
acting on behalf of any of them, has accepted or received any unlawful
contributions, payments, gifts or expenditures.
Section 4.24 Takeover Statute. The Board of Directors of the Company has
----------------
taken all appropriate action so that neither Parent nor Sub will be an
"interested stockholder" within the meaning of Section 203 of the DGCL.
Section 4.25 Opinion of Financial Advisor. The Company has been advised
----------------------------
by its financial advisor, Alex. Brown & Sons Incorporated that in its opinion,
as of the date hereof, the Merger Consideration is fair to the holders of the
Common Stock.
Section 4.26 Brokers. No broker, finder or investment banker (other than
-------
Alex. Brown & Sons Incorporated, the fees and expenses of whom will be paid by
the Company) is entitled to any brokerage, finder's or other fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has heretofore
furnished to Parent a complete and correct
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<PAGE>
copy of all agreements between the Company and Alex. Brown & Sons Incorporated
pursuant to which such firm would be entitled to any payment relating to the
transactions contemplated hereunder.
Section 4.27 Full Disclosure. (i) No statement contained in any
---------------
certificate or schedule furnished or to be furnished by the Company or its
subsidiaries to Parent or Sub in, or pursuant to the provisions of, this
Agreement and (ii) none of the monthly consolidated financial statements for
September 1995 and October 1995 furnished by the Company to Parent, including
the accompanying commentary, contains or shall contain any untrue statement of a
material fact or omits or will omit to state any material fact necessary, in the
light of the circumstances under which it was made, in order to make the
statements herein or therein not misleading.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.1 Conduct of Business by the Company Pending the Merger. Except
-----------------------------------------------------
as otherwise expressly contemplated by this Agreement or consented to in advance
by Parent (which consent is subsequently confirmed in writing), which consent
shall not be unreasonably withheld, during the period from the date of this
Agreement through the earlier of the time that the change in composition of the
Board of Directors of the Company contemplated by Section 6.8 has occurred and
the Effective Time, the Company shall, and shall cause its subsidiaries to, in
all material respects carry on their respective businesses in, and not enter
into any material transaction other than in accordance with, the regular and
ordinary course and, to the extent consistent therewith, use its reasonable best
efforts to preserve intact their current business organizations, keep available
the services of their current officers and employees and preserve their
relationships with customers, suppliers and others having business dealings with
them. Without limiting the generality of the foregoing, and except as otherwise
expressly contemplated by this Agreement (including the time period specified
above), the Company shall not, and shall not permit any of its subsidiaries to,
without the prior consent of Parent (which consent is subsequently confirmed in
writing), which consent shall not be unreasonably withheld:
(a) (i) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to stockholders of the
Company in their capacity as such, other than dividends payable to the
Company declared by any of the Company's subsidiaries, (ii) split, combine
or reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock or (iii) purchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its subsidiaries or
any other securities thereof or any rights, warrants or options to acquire
any such shares or other securities;
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<PAGE>
(b) issue, deliver, sell, pledge, dispose of or otherwise encumber
any shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities or equity equivalent (other than, in the case of the Company,
the issuance of Common Stock during the period from the date of this
Agreement through the Effective Time upon the exercise of Stock Options or
Warrants outstanding on the date of this Agreement in accordance with their
current terms);
(c) amend or change its Certificate of Incorporation or Bylaws;
(d) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of or equity in, or by
any other manner, any business or any corporation, partnership, association
or other business organization or division thereof or otherwise acquire or
agree to acquire any assets, in each case that are material, individually
or in the aggregate, to the Company and its subsidiaries taken as a whole;
(e) sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets that are material, individually or
in the aggregate, to the Company and its subsidiaries taken as a whole;
(f) make any commitment or enter into any contract or agreement
except (i) in the ordinary course of business consistent with past practice
or (ii) for capital expenditures to be made in fiscal 1996 as identified in
a capital expenditure budget previously delivered to Parent;
(g) incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any debt
securities of others, except for borrowings or guarantees incurred in the
ordinary course of business consistent with past practice under financing
arrangements in existence on the date hereof, or make any loans, advances
or capital contributions to, or investments in, any other person, other
than to the Company or any wholly owned subsidiary of the Company and other
than in the ordinary course of business consistent with past practice;
(h) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any
subsidiary of the Company;
(i) except as may be required as a result of a change in law or
pursuant to GAAP, change any of the accounting principles or practices used
by it;
(j) make any tax election or settle or compromise any material income
tax liability;
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<PAGE>
(k) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business and consistent with past practice of liabilities reflected or
reserved against in, or contemplated by, the financial statements (or the
notes thereto) of the Company or incurred in the ordinary course of
business consistent with past practice;
(l) increase in any manner the compensation or fringe benefits of any
of its directors, officers and other key employees or pay any pension or
retirement allowance not required by any existing plan or agreement to any
such employees, or become a party to, amend or commit itself to any
pension, retirement, profit-sharing or welfare benefit plan or agreement or
employment agreement with or for the benefit of any employee, other than
increases in the compensation of employees who are not officers or
directors of the Company made in the ordinary course of business consistent
with past practice, or (except pursuant to the terms of preexisting plans
or agreements) accelerate the vesting of any compensation or benefit;
(m) except in connection with the exercise of its fiduciary duties by
the Board of Directors of the Company as set forth in Section 5.2, waive,
amend or allow to lapse any term or condition of any confidentiality or
"standstill" agreement to which the Company or any subsidiary is a party;
or
(n) take, or agree in writing or otherwise to take, any of the
foregoing actions or any action which would make any of the representations
or warranties of the Company contained in this Agreement untrue or
incorrect at or prior to the Effective Time.
Section 5.2 Acquisition Proposals. From and after the date of this
---------------------
Agreement and prior to the Effective Time, except as provided below, the Company
agrees (i) that neither the Company nor its subsidiaries shall, and the Company
shall direct and use its reasonable best efforts to cause its officers,
directors, employees and authorized agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
subsidiaries) not to, initiate, solicit or encourage, directly or indirectly,
any inquiries or the making or implementation of any proposal or offer
(including any proposal or offer to its stockholders) with respect to a merger,
acquisition, consolidation or similar transaction involving, or any purchase of,
any equity securities or all or any significant portion of the assets of, the
Company or its subsidiaries (any such proposal or offer being hereinafter
referred to as an "Acquisition Proposal"; provided, however, that for purposes
-------- -------
of Section 6.3 only, the term "Acquisition Proposal" shall not include a
proposal to acquire equity securities of the Company in an amount, when added to
all other equity securities of the Company then held by the person or group of
persons making such Acquisition Proposal, less than 20% of the equity securities
of the Company then outstanding) or engage in any negotiations concerning, or
provide any confidential information or data to, or have any discussions with,
any person or entity relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal;
(ii) that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any person or
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<PAGE>
entity conducted heretofore with respect to any of the foregoing and will take
the necessary steps to inform the person or entity referred to above of the
obligations undertaken in this Section 5.2; and (iii) that it will notify Parent
immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, it (but the Company shall not be
required to disclose the names of any party making or the terms of any such
proposal); provided, however, that nothing contained in this Section 5.2 shall
-------- -------
prohibit the Board of Directors of the Company from (x) furnishing information
to, or entering into discussions or negotiations with, any person or entity that
makes an unsolicited bona fide proposal in writing to engage in an Acquisition
Proposal transaction which the Board of Directors of the Company in good faith
determines represents a financially superior transaction for the stockholders of
the Company as compared to the Offer and the Merger if, and only to the extent
that, (A) the Board of Directors determines, after consultation with Skadden,
Arps, Slate, Meagher & Flom, or such other outside counsel of national
reputation for its expertise in corporate and securities law matters as the
Company shall select ("Company Counsel"), that failure to take such action would
be inconsistent with the compliance by the Board of Directors with its fiduciary
duties to stockholders imposed by law, (B) prior to or concurrently with
furnishing such information to, or entering into discussions or negotiations
with, such a person or entity, the Company provides written notice to Parent to
the effect that it is furnishing information to, or entering into discussions or
negotiations with, such a person or entity, and (C) the Company keeps Parent
informed of the status (excluding, however, the identity of such person or
entity and the terms of any proposal) of any such discussions or negotiations;
and (y) to the extent applicable, complying with Rule 14e-2 promulgated under
the Exchange Act with regard to an Acquisition Proposal. Nothing in this
Section 5.2 shall (t) permit the Company to terminate this Agreement (except as
contemplated by Section 8.1(b)(ii)), (u) permit the Company to enter into any
agreement with respect to an Acquisition Proposal during the term of this
Agreement, or (v) affect any other obligation of any party under this Agreement.
Section 5.3 Annual Meeting of Stockholders. The Company shall defer
------------------------------
and/or postpone the holding of its Annual Meeting of Stockholders (the "Annual
Meeting") indefinitely pending consummation of the Merger unless the Company is
otherwise required to hold the Annual Meeting by an order from a court of
competent jurisdiction.
Section 5.4 Conduct of Business of Sub Pending the Merger. During the
---------------------------------------------
period from the date of this Agreement through the Effective Time, Sub shall not
engage in any activities of any nature except as provided in or contemplated by
this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Company Stockholder Approval; Proxy Statement. (a) If
---------------------------------------------
approval or action in respect of the Merger by the stockholders of the Company
is required by applicable law, the Company shall (i) if appropriate, call a
meeting of its stockholders (the "Stockholder
- 26 -
<PAGE>
Meeting") for the purpose of voting upon the Merger and shall use its reasonable
best efforts to obtain stockholder approval of the Merger, (ii) hold the
Stockholder Meeting as soon as practicable following the purchase of shares of
Common Stock pursuant to the Offer, (iii) recommend to its stockholders the
approval of the Merger through its Board of Directors, and (iv) use its
reasonable best efforts to obtain the necessary approvals by its stockholders of
the Merger, this Agreement and the transactions contemplated hereby, but subject
in each case to the fiduciary duties of its Board of Directors under applicable
law as determined by the Board of Directors in good faith after consultation
with Company Counsel. The record date for the Stockholder Meeting shall be a
date subsequent to the date Parent or Sub becomes a record holder of Common
Stock purchased pursuant to the Offer.
(b) If required by applicable law, the Company will, as soon as
practicable following the expiration of the Offer, prepare and file a
preliminary version of the proxy statement to be sent to the stockholders of the
Company in connection with the Stockholders Meeting (the "Proxy Statement"), or,
if applicable, an information statement in lieu of a proxy statement pursuant to
Rule 14C under the Exchange Act (with all references herein to the Proxy
Statement being deemed to refer to such information statement, to the extent
applicable) with the SEC with respect to the Stockholders Meeting and will use
its reasonable best efforts to respond to any comments of the SEC or its staff
and to cause the Proxy Statement to be cleared by the SEC. The Company will
notify Parent of the receipt of any comments from the SEC or its staff and of
any request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply Parent with copies of
all correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. The Company shall give Parent and its counsel the
opportunity to review the Proxy Statement prior to its being filed with the SEC
and shall give Parent and its counsel the opportunity to review all amendments
and supplements to the Proxy Statement and all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC. Each of the Company and Parent agrees to use its reasonable
best efforts, after consultation with the other parties hereto, to respond
promptly to all such comments of and requests by the SEC. As promptly as
practicable after the Proxy Statement has been cleared by the SEC, the Company
shall mail the Proxy Statement to the stockholders of the Company. If at any
time prior to the approval of this Agreement by the Company's stockholders there
shall occur any event that should be set forth in an amendment or supplement to
the Proxy Statement, the Company will prepare and mail to its stockholders such
an amendment or supplement. The Company represents and warrants to Parent and
Sub that the Proxy Statement (x) will not, on the date the Proxy Statement (or
any amendment or supplement thereto) is first mailed to stockholders, at the
time of the Stockholders Meeting, or at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading; and (y)
will comply in all material respects with the requirements of the Exchange Act.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information supplied by Parent or Sub in writing for
inclusion in the Proxy Statement.
- 27 -
<PAGE>
(c) Parent agrees to cause all shares of Common Stock purchased
pursuant to the Offer and all other shares of Common Stock owned by Sub or any
other subsidiary or affiliate of Parent to be voted in favor of the approval of
the Merger.
(d) Parent and Sub represent and warrant to the Company that the
information supplied by Parent or Sub in writing for inclusion in the Proxy
Statement (or any amendment or supplement thereto) will not, on the date the
Proxy Statement is first mailed to stockholders, at the time of the Stockholders
Meeting or at the Effective Time contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
Section 6.2 Access to Information; Confidentiality. The Company shall,
--------------------------------------
and shall cause each of its subsidiaries to, afford to Parent, and to Parent's
accountants, counsel, financial advisers and other representatives, reasonable
access and permit them to make such inspections as they may reasonably require
during normal business hours during the period from the date of this Agreement
through the Effective Time to all their respective properties, books, contracts,
commitments and records and, during such period, the Company shall, and shall
cause each of its subsidiaries to, furnish promptly to Parent (i) a copy of each
report, schedule, registration statement and other document filed by it during
such period pursuant to the requirements of federal or state securities laws and
(ii) all other information concerning its business, properties and personnel as
Parent may reasonably request.
Section 6.3 Fees and Expenses. (a) Except as provided in subsection (b)
-----------------
below, whether or not the Merger is consummated, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs and expenses.
(b) The Company agrees that if this Agreement is terminated pursuant
to (i) Section 8.1(d) (iv) and (x) the Offer has remained open for a minimum of
-
twenty (20) business days, (y) the Minimum Condition has not been satisfied and
(z) an Acquisition Proposal existed; (ii) Section 8.1(b)(ii); (iii) Section
-- ---
8.1(c)(i); (iv) Section 8.1(c)(iii); or (v) Section 8.1(d)(i) or (iv) and, with
-- -
respect to this clause (v), at the time of such termination any person, entity
-
or group (as defined in Section 13(d)(3) of the Exchange Act) (other than Parent
or any of its affiliates) shall have become the beneficial owner of more than
20% of the outstanding shares of Common Stock and such person, entity or group
(or any affiliate of such person, entity or group) thereafter (x) shall make an
Acquisition Proposal, and, in the case of a consensual transaction with the
Company, shall substantially have negotiated the terms thereof, at any time on
or prior to the date which is six months after such termination of this
Agreement, and (y) shall consummate such Acquisition Proposal at any time on or
prior to the date which is one year after termination of this Agreement, in the
case of a consensual transaction, or six months after termination of this
Agreement, in the case of a non-consensual transaction, in each case with a
value per share of Common Stock of at least $8.00 (with appropriate adjustments
for reclassifications of capital stock, stock dividends, stock splits, reverse
stock splits and similar events), then the Company shall pay to Parent the sum
of (a) $2.4 million, plus (b) the amount of all documented out-of-pocket costs
and
- 28 -
<PAGE>
expenses incurred by Parent, Sub or their affiliates in an aggregate amount not
to exceed $200,000 in connection with this Agreement or the transactions
contemplated hereby. Such payment shall be made as promptly as practicable but
in no event later than two business days following termination of this Agreement
pursuant to the immediately preceding sentence, or, in the case of clause (v) of
-
the immediately preceding sentence, upon consummation of such Acquisition
Proposal, and shall be made by wire transfer of immediately available funds to
an account designated by Parent.
Section 6.4 Stock Plans and Warrants. Prior to the Effective Time, the
------------------------
Company shall adopt any such amendments to its plans under which any Stock
Options have been granted, shall use its reasonable best efforts to obtain any
such consents of the holders of such Stock Options and shall cause the
committees of the Board of Directors that are responsible for the administration
of such plans to take such action as shall be necessary to effectuate the
provisions of Section 2.5(d). The Company shall terminate the 1987 Stock Plan,
the Director Option Plan and the Employee Stock Purchase Plan, with respect to
any further grants, as of the Effective Time. The Company shall give written
notice of the Merger to each registered holder of the Warrants at least twenty
(20) days prior to the Effective Time.
Section 6.5 Reasonable Best Efforts. Upon the terms and subject to the
-----------------------
conditions set forth in this Agreement, each of the parties agrees to use its
reasonable best efforts to take, or cause to be taken, all actions (including
entering into transactions), and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger, and the other transactions contemplated by this
Agreement, including (a) the prompt making of their respective filings
(including under the HSR Act) and thereafter the making of any other required
submission with respect to the Offer and the Merger, (b) the obtaining of all
additional necessary actions or non-actions, waivers, consents and approvals
from any applicable federal, state, foreign or supranational court, commission,
governmental body, regulatory or administrative agency, authority or tribunal
of competent jurisdiction (a "Governmental Entity") and the making of all
necessary registrations and filings (including filings with Governmental
Entities) and the taking of all reasonable steps as may be necessary to obtain
an approval or waiver from any Governmental Entity, (c) the obtaining of all
necessary consents, approvals or waivers from third parties, (d) the defending
of any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (e)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by this Agreement; provided, however, that neither
-------- -------
Parent, Sub nor the Company shall be required to take any action pursuant to
clauses (b), (c), (d) or (e) above that would in any event have a Material
Adverse Effect, in the case of the Company, or any similar effect on Parent
and/or its subsidiaries; and provided further that neither Parent, Sub nor any
-------- -------
of their affiliates shall be required to enter into any transaction or take any
other action that would require a waiver of, or that is inconsistent with
satisfaction of, the conditions of the Offer set forth in clauses (a)(iii), (iv)
or (v) in Exhibit A hereto.
- 29 -
<PAGE>
Section 6.6 Public Announcements. Parent and Sub, on the one hand, and
--------------------
the Company, on the other hand, will consult with each other before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange.
Section 6.7 Indemnification; Directors and Officers Insurance. (a) From
-------------------------------------------------
and after the Effective Time, the Surviving Corporation shall indemnify and hold
harmless all past and present officers and directors (the "Indemnified Parties")
of the Company and of its subsidiaries to the full extent such persons may be
indemnified by the Company pursuant to Delaware law, the Company's Certificate
of Incorporation and Bylaws as in effect from time to time for acts and
omissions occurring at or prior to the Effective Time and shall advance
reasonable litigation expenses incurred by such persons in connection with
defending any action arising out of such acts or omissions, provided that such
persons provide the requisite affirmations and undertaking, as set forth in
Section 145(e) of the DGCL.
(b) In addition, Parent will provide, or cause the Surviving
Corporation to provide, for a period of not less than six years after the
Effective Time, the Company's current directors and officers an insurance and
indemnification policy that provides coverage for events occurring at or prior
to the Effective Time (the "D&O Insurance") that is no less favorable than the
existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that Parent and the
-------- -------
Surviving Corporation shall not be required to pay an annual premium for the D&O
Insurance in excess of 200% of the annual premium currently paid by the Company
for such insurance, but in such case shall purchase as much such coverage as
possible for such amount.
(c) This Section 6.7 is intended to benefit the Indemnified Parties
and shall be binding on all successors and assigns of Parent, Sub, the Company
and the Surviving Corporation. Parent hereby guarantees the performance by the
Surviving Corporation of the indemnified obligations pursuant to this Section
6.7, which guaranty is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the bankruptcy or insolvency of the
Surviving Corporation or any other person. The Indemnified Parties shall be
intended third-party beneficiaries of this Section 6.7.
Section 6.8 Board Representation. (a) Promptly upon the purchase of
--------------------
shares of Common Stock pursuant to the Offer, Parent shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors of the Company as will give Parent, subject to compliance
with Section 14(f) of the Exchange Act, representation on the Board of Directors
equal to the product of (a) the total number of directors on the Board of
Directors and (b) the percentage that the number of shares of Common Stock
purchased by Sub bears to the number of shares of Common Stock outstanding, and
the Company shall, upon request by Parent, promptly increase the size of the
Board of Directors and/or exercise its reasonable best efforts to secure the
resignations of such number of directors as is necessary to enable Parent's
designees to be elected to the Board of Directors and shall cause Parent's
designees to be so elected. The Company shall
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<PAGE>
take, at its expense, all action required pursuant to Section 14(f) and Rule
14f-1 in order to fulfill its obligations under this Section 6.8 and shall
include in the Schedule 14D-9 or otherwise timely mail to its stockholders such
information with respect to the Company and its officers and directors as is
required by Section 14(f) and Rule 14f-1 in order to fulfill its obligations
under this Section 6.8. Parent will supply to the Company in writing and be
solely responsible for any information with respect to itself and its nominees,
officers, directors and affiliates required by Section 14(f) and Rule 14f-1.
(b) Following the election of designees of Parent pursuant to this
Section 6.8, prior to the Effective Time, any amendment of this Agreement or the
Certificate of Incorporation or Bylaws of the Company, any termination of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Sub or waiver
of any of the Company's rights or obligations hereunder shall require the
concurrence of a majority of the directors of the Company then in office who are
directors as of the date hereof or persons designated by such directors and
neither were designated by Parent nor are employees of the Company ("Continuing
Directors"). Prior to the Effective Time, the Company and Parent shall use all
reasonable efforts to ensure that the Company's Board of Directors at all times
includes at least three Continuing Directors.
Section 6.9 Notification of Certain Matters. The Company shall give
-------------------------------
prompt notice to Parent and Sub, and Parent and Sub shall give prompt notice to
the Company, of (i) the occurrence or nonoccurrence of any event the occurrence
or nonoccurrence of which would be likely to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at or prior to the Effective Time, or (ii) any material failure of the
Company, Parent or Sub, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
-------- -------
Section 6.9 shall not cure such breach or non-compliance or limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
Section 6.10 Employment and Benefit Arrangements. (a) From and after the
-----------------------------------
Effective Time, Parent shall cause the Surviving Corporation to honor all
employment, severance, termination and retirement agreements to which the
Company is a party, as such agreements are in effect on the date hereof.
(b) For a one-year period following the Effective Time, Parent shall
cause the Surviving Corporation to provide those employees who are employees of
the Surviving Corporation at the Effective Time with benefits that are, in the
aggregate, no less favorable to such employees as are the benefits of the
Company available to such employees immediately prior to the Effective Time.
(c) The provisions of this Section 6.10 are not intended to create
rights of third party beneficiaries.
- 31 -
<PAGE>
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger.
----------------------------------------------------------
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. If approval of the Merger by the holders
--------------------
of the Common Stock is required by applicable law, the Merger shall have
been approved by the requisite vote of such holders.
(b) No Order. No court or other Governmental Entity shall have
--------
enacted, issued, promulgated, enforced or entered any law, rule,
regulation, executive order, decree or injunction which prohibits or has
the effect of prohibiting the consummation of the Merger; provided,
--------
however, that, prior to invoking this provision, the Company, Parent and
-------
Sub shall use their reasonable best efforts (subject to the other terms and
conditions of this Agreement) to have any such order, decree or injunction
vacated.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at any time
-----------
prior to the Effective Time, whether before or after any approval by the
stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by the Company if:
(i) the Offer has not been timely commenced (except as a result
of actions or omissions by the Company) in accordance with Section
1.1(a); or
(ii) there is an Acquisition Proposal which the Board of
Directors of the Company in good faith determines represents a
financially superior transaction for the stockholders of the Company
as compared to the Offer and the Merger, and the Board of Directors of
the Company determines, after consultation with Company Counsel, that
failure to terminate this Agreement would be inconsistent with the
compliance by the Board of Directors with its fiduciary duties to
stockholders imposed by law; provided, however, that the right to
-------- -------
terminate this Agreement pursuant to this clause shall not be
available (x) if the Company has breached in any material respect its
obligations under Section 5.2, or (y) if, prior to or concurrently
with any purported termination pursuant to this clause, the Company
shall not have paid the fees and expenses contemplated by Section
6.3(b); or
- 32 -
<PAGE>
(iii) any representation or warranty of Parent or Sub shall not
have been true and correct in all material respects when made or shall
have ceased at any later date to be true and correct in all material
respects as if made at such later date; or
(iv) Parent or Sub fails to comply in any material respect with
any of its material obligations or covenants contained herein,
including the obligation of Sub to purchase shares of Common Stock
pursuant to the Offer;
(c) by Parent if:
(i) the Board of Directors of the Company shall have failed to
recommend, or shall have withdrawn, modified or amended in any
material respect its approval or recommendations of the Offer or the
Merger or shall have resolved to do any of the foregoing; or
(ii) any representation or warranty of the Company shall not have
been true and correct in all material respects when made or shall have
ceased at any later date to be true and correct in all material
respects as if made at such later date; provided, however, that the
-------- -------
right to terminate this Agreement pursuant to this clause shall not be
available to Parent if Sub or any affiliate of Sub shall acquire
shares of Common Stock pursuant to the Offer; or
(iii) the Company shall have failed to comply in any material
respect with any of its material obligations or covenants contained
herein; provided, however, that the right to terminate this Agreement
-------- -------
pursuant to this clause shall not be available to Parent if Sub or any
affiliate of Sub shall acquire shares of Common Stock pursuant to the
Offer;
(d) by either Parent or the Company if:
(i) the Merger has not been effected on or prior to the close of
business on April 30, 1996; provided, however, that the right to
-------- -------
terminate this Agreement pursuant to this clause shall not be
available (x) to Parent, if Sub or any affiliate of Sub acquires
Shares pursuant to the Offer, or (y) to any party whose failure to
fulfill any obligation of this Agreement has been the cause of, or
resulted in, the failure of the Merger to have occurred on or prior to
the aforesaid date; or
(ii) any court of competent jurisdiction or any governmental,
administrative or regulatory authority, agency or body shall have
issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree,
ruling or other action shall have become final and nonappealable; or
- 33 -
<PAGE>
(iii) upon a vote at a duly held meeting or upon any adjournment
thereof, the stockholders of the Company shall have failed to give any
approval required by applicable law; or
(iv) either (x) as the result of the failure of the Minimum
Condition or any of the other conditions set forth in Exhibit A
hereto, the Offer shall have terminated or expired in accordance with
its terms without Sub having purchased any shares of Common Stock
pursuant to the Offer, or (y) the Offer shall not have been
consummated on or before February 15, 1996; provided, however, that
-------- -------
the right to terminate this Agreement pursuant to this clause shall
not be available to any party whose failure to fulfill any of its
obligations under this Agreement results in the failure of any such
condition.
Section 8.2 Effect of Termination. In the event of termination of this
---------------------
Agreement by either Parent or the Company, as provided in Section 8.1, this
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of the Company, Parent or Sub or their respective officers or
directors (except for Section 6.3, which shall survive the termination);
provided, however, that nothing contained in this Section 8.2 shall relieve any
- -------- -------
party hereto from any liability for any willful and material breach of this
Agreement.
Section 8.3 Amendment. This Agreement may be amended by the parties
---------
hereto, by or pursuant to action taken by their respective Boards of Directors,
at any time before or after any approval of the Merger by the stockholders of
the Company but, after the purchase of shares of Common Stock pursuant to the
Offer, no amendment shall be made which decreases the Merger Consideration or
which in any way materially adversely affects the rights of such stockholders,
without the further approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
Section 8.4 Waiver. At any time prior to the Effective Time, the parties
------
hereto may (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, or (iii) waive compliance with any of the agreements or
conditions contained herein which may legally be waived. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties. None of the
----------------------------------------------
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the termination of this Agreement in
accordance with Article VIII or the Effective Time; provided, however, that
-------- -------
termination of this Agreement shall not
- 34 -
<PAGE>
relieve any party hereto from any liability for any willful and material breach
by such party of any such representations or warranties.
Section 9.2 Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed given if delivered personally, sent by
overnight courier or telecopied (with a confirmatory copy sent by overnight
courier) to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to Parent or Sub, to:
Tyco International Ltd.
One Tyco Park
Exeter, New Hampshire 03833
Attn: General Counsel
Fax: (603) 778-7700
Conf: (603) 778-9700
with a copy to:
Kramer, Levin, Naftalis, Nessen,
Kamin & Frankel
919 Third Avenue
New York, New York 10022
Attn: Joshua M. Berman, Esq.
Fax: (212) 715-8000
Conf: (212) 715-9100
(b) if to the Company to:
The Earth Technology Corporation (USA)
100 West Broadway
Long Beach, California 90802
Attn: General Counsel
Fax: (310) 495-2825
Conf: (310) 495-4449
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Los Angeles, California 90071
Attn: Joseph J. Giunta, Esq.
Fax: (213) 687-5600
Conf: (213) 687-5000
- 35 -
<PAGE>
Section 9.3 Interpretation. When a reference is made in this Agreement to
--------------
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." As used in this Agreement, (i)
"business day" shall have the meaning ascribed thereto in Rule 14d-1(c)(6) under
the Exchange Act, and (ii) "subsidiary" shall have the meaning ascribed thereto
in Rule 12b-2 under the Exchange Act.
Section 9.4 Counterparts. This Agreement may be executed in counterparts,
------------
each such counterpart being deemed to be an original instrument and all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties.
Section 9.5 Entire Agreement; No Third-Party Beneficiaries. This
----------------------------------------------
Agreement, including the documents and instruments referred to herein, (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except for the provisions of Section 6.7 is not
intended to confer upon any person other than the parties any rights or remedies
hereunder.
Section 9.6 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.7 Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Sub of any of
its obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
Section 9.8 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party.
Section 9.9 Enforcement of this Agreement; Attorneys Fees. (a) The
---------------------------------------------
parties agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and
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provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
(b) The prevailing party in any judicial action shall be entitled to
receive from the other party reimbursement for the prevailing party's reasonable
attorneys' fees and disbursements, and court costs. The provisions of this
Section 9.9(b) shall survive the termination of this Agreement in accordance
with Article VIII.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized all as of
the date first written above.
TYCO INTERNATIONAL LTD.
By:______________________________
Name:
Title:
T1 ACQUISITION CORP.
By:______________________________
Name:
Title:
THE RHEA CORPORATION
By:______________________________
Name:
Title:
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EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement, Sub shall
not be required to accept for payment or pay for, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) of the Exchange Act,
any shares of Common Stock not theretofore accepted for payment or paid for and
may terminate or amend the Offer as to such shares of Common Stock, unless (i)
there shall have been validly tendered and not withdrawn prior to the expiration
of the Offer that number of shares of Common Stock which would represent at
least a majority of the outstanding shares of Common Stock on a fully diluted
basis (the "Minimum Condition"), and (ii) any waiting period under the HSR Act
applicable to the purchase of shares of Common Stock pursuant to the Offer shall
have expired or been terminated. Furthermore, notwithstanding any other term of
the Offer or this Agreement, Sub shall not be required to accept for payment or,
subject as aforesaid, to pay for any shares of Common Stock not theretofore
accepted for payment or paid for, and may terminate or amend the Offer if at any
time on or after the date of this Agreement and before the acceptance of such
shares of Common Stock for payment or the payment therefor, any of the following
conditions exist or shall occur and remain in effect:
(a) there shall have been instituted, pending or threatened any
action or proceeding by any court or other Governmental Entity, which (i)
seeks to challenge the acquisition by Parent or Sub (or any of its
affiliates) of shares of Common Stock pursuant to the Offer, restrain,
prohibit or delay the making or consummation of the Offer or the Merger, or
obtain damages in connection therewith in an amount which would reasonably
be expected to have a Material Adverse Effect, (ii) seeks to make the
purchase of or payment for some or all of the shares of Common Stock
pursuant to the Offer or the Merger illegal, (iii) seeks to impose
limitations on the ability of Parent (or any of its affiliates) effectively
to acquire or hold, or to require Parent or the Company or any of their
respective affiliates or subsidiaries to dispose of or hold separate, any
portion of the assets or the business of Parent and its affiliates or any
material portion of the assets or the business of the Company and its
subsidiaries taken as a whole, (iv) seeks to impose material limitations on
the ability of Parent (or its affiliates) to exercise full rights of
ownership of the shares of Common Stock purchased by it, including, without
limitation, the right to vote the shares purchased by it on all matters
properly presented to the stockholders of the Company, or (v) seeks to
restrict any future business activity by Parent (or any of its affiliates),
including, without limitation, requiring the prior consent of any person or
entity (including any Governmental Entity) to future transactions by Parent
(or any of its affiliates); or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any statute, rule,
regulation, judgment, decree, order or injunction, that is reasonably
likely to directly or indirectly result in any of the consequences referred
to in clauses (i) through (v) of subsection (a) above; or
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(c) the Merger Agreement shall have been terminated in accordance
with its terms; or
(d) any of the representations and warranties made by the Company in
the Merger Agreement shall not have been true and correct in all material
respects when made, or shall thereafter have ceased to be true and correct
in all material respects as if made as of such later date (other than
representations and warranties made as of a specified date), or the Company
shall not in all material respects have performed in a timely manner each
obligation and agreement and complied in a timely manner with each covenant
to be performed and complied with by it under the Merger Agreement; or
(e) the Company's Board of Directors shall have modified or amended
its recommendation of the Offer in any manner adverse to Parent or shall
have withdrawn its recommendation of the Offer, or shall have recommended
acceptance of any Acquisition Proposal or shall have resolved to do any
of the foregoing; or
(f) (i) any corporation, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) ("person"), other than Parent and Sub, shall
have acquired beneficial ownership of more than 20% of the outstanding
shares of Common Stock, or shall have been granted any options or rights,
conditional or otherwise, to acquire a total of more than 20% of the
outstanding shares of Common Stock; (ii) any new group shall have been
formed which beneficially owns more than 20% of the outstanding shares of
Common Stock; or (iii) any person (other than Parent or one or more of its
affiliates) shall have entered into an agreement in principle or definitive
agreement with the Company with respect to a tender or exchange offer for
any shares of Common Stock or a merger, consolidation or other business
combination with or involving the Company; or
(g) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange, the American Stock Exchange or The Nasdaq Stock Market, (ii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States (whether or not mandatory), (iii) a
commencement or escalation of a war, armed hostilities or other inter-
national or national calamity directly involving the United States, (iv)
any material limitation (whether or not mandatory) by any Governmental
Entity on, or any other event that is reasonably likely materially and
adversely to affect the extension of credit by banks or other lending
institutions in the United States, (v) any decline in either the Dow Jones
Industrial Average or the Standard and Poor's 500 Index by an amount in
excess of 15% measured from the close of business on the date of this
Agreement, or (vi) in the case of any of the foregoing existing at the time
of the commencement of the Offer, a material acceleration or worsening
thereof; or
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(h) any change, development, effect or circumstance shall have
occurred or be threatened that would reasonably be expected to have a
Material Adverse Effect; or
(i) the Company shall commence a case under any chapter of Title XI
of the United States Code or any similar law or regulation; or a petition
under any chapter of Title XI of the United States Code or any similar law
or regulation is filed against the Company which is not dismissed within 2
business days.
The foregoing conditions are for the sole benefit of Parent and Sub and may
be asserted by Parent or Sub regardless of the circumstances giving rise to any
such condition and may be waived by Parent or Sub, in whole or in part, at any
time and from time to time, in the sole discretion of Parent. The failure by
Parent or Sub at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any right, the waiver of such right with respect to any
particular facts or circumstances shall not be deemed a waiver with respect to
any other facts or circumstances, and each right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered shares of Common Stock not theretofore accepted for payment shall
forthwith be returned by the Paying Agent to the tendering stockholders.
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