<PAGE>
EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
WESLEY JESSEN VISIONCARE, INC.
AT
$38.50 NET PER SHARE
BY
WJ ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
NOVARTIS AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, JULY 3, 2000, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO THE TERMS OF AN AGREEMENT AND PLAN OF
MERGER, DATED AS OF MAY 30, 2000 (THE "MERGER AGREEMENT"), AMONG NOVARTIS AG
("PARENT"), WJ ACQUISITION CORP. ("PURCHASER") AND WESLEY JESSEN VISIONCARE,
INC. (THE "COMPANY"). THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I)
THERE HAVING BEEN VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION
OF THE OFFER AT LEAST THE NUMBER OF SHARES (AS DEFINED HEREIN) THAT SHALL
CONSTITUTE 51% OF THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS
(INCLUDING, WITHOUT LIMITATION, ALL SHARES ISSUABLE UPON THE CONVERSION OF ANY
CONVERTIBLE SECURITIES OR UPON THE EXERCISE OF ANY OPTIONS, WARRANTS, OR
RIGHTS) (THE "MINIMUM CONDITION") AND (II) ANY APPLICABLE WAITING PERIOD UNDER
THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR
ACT"), HAVING EXPIRED OR BEEN TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER
(THE "HSR CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS
CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTIONS 1 AND 14, WHICH SET FORTH IN
FULL THE CONDITIONS TO THE OFFER.
---------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF
THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN), ARE ADVISABLE AND FAIR TO,
AND IN THE BEST INTERESTS OF, THE COMPANY AND THE HOLDERS OF SHARES, HAS
APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER, AND HAS RECOMMENDED THAT
THE HOLDERS OF SHARES 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 (i) complete and sign the accompanying Letter of
Transmittal (or a manually signed facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together with
the certificate(s) evidencing tendered Shares, and any other required
documents, to the Depositary or tender such Shares pursuant to the procedure
for book-entry transfer set forth in Section 3 or (ii) request such
stockholder's broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for such stockholder. Any stockholder whose Shares
are registered in the name of a broker, dealer, commercial bank, trust company
or other nominee must contact such broker, dealer, commercial bank, trust
company or other nominee if such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, may tender such
Shares by following the procedure for guaranteed delivery set forth in Section
3.
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional
copies of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained from the Information Agent.
---------------
The Dealer Manager for the Offer is:
LEHMAN BROTHERS
June 6, 2000
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<C> <S> <C>
SUMMARY TERM SHEET....................................................... i
INTRODUCTION............................................................. 1
1. Terms of the Offer; Expiration Date................................. 4
2. Acceptance for Payment and Payment for Shares....................... 6
3. Procedures for Accepting the Offer and Tendering Shares............. 7
4. Withdrawal Rights................................................... 11
5. Certain Federal Income Tax Consequences............................. 12
6. Price Range of Shares; Dividends.................................... 13
7. Certain Information Concerning the Company.......................... 13
8. Certain Information Concerning Purchaser and Parent................. 15
9. Financing of the Offer and the Merger............................... 17
10. Background of the Offer; Contacts with the Company; the Merger
Agreement........................................................... 17
11. Purpose of the Offer; Plans for the Company After the Offer and the
Merger.............................................................. 31
12. Dividends and Distributions......................................... 34
13. Possible Effects of the Offer on the Market for Shares, Nasdaq
Listing, Margin Regulations and Exchange Act Registration........... 35
14. Certain Conditions of the Offer..................................... 36
15. Certain Legal Matters and Regulatory Approvals...................... 38
16. Fees and Expenses................................................... 40
17. Miscellaneous....................................................... 41
</TABLE>
SCHEDULES
Schedule I--Directors and Executive Officers of Parent and Purchaser
<PAGE>
SUMMARY TERM SHEET
This summary term sheet highlights selected information from this Offer to
Purchase, and may not contain all of the information that is important to you.
To better understand our offer to you and for a complete description of the
terms of the offer, you should read this entire Offer to Purchase and the
accompanying Letter of Transmittal carefully. Questions or requests for
assistance may be directed to the Information Agent or the Dealer Manager at
their addresses and telephone numbers on the back cover of this offer to
purchase.
WHO IS OFFERING TO BUY MY SECURITIES?
. We are WJ Acquisition Corp., a newly formed Delaware corporation and an
indirect wholly owned subsidiary of Novartis AG. We have been organized
in connection with this offer and have not carried on any activities
other than in connection with this offer.
. Novartis is a world leader, both in sales and in innovation, in its
continued core businesses: pharmaceuticals, generics, eyecare products
and medicines, consumer health and animal health. Novartis also is a
world leader in agribusiness, the operations of which will be spun off
to form Syngenta AG in 2000. The common stock of Novartis is listed on
the Swiss Stock Exchange under the symbol "SWX" and the American
Depositary Shares of Novartis are traded on the New York Stock Exchange
under the symbol "NVS".
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THIS OFFER?
. We are seeking to purchase all the issued and outstanding shares of
common stock, par value $0.01 per share, of Wesley Jessen VisionCare,
Inc., as well as the rights that are associated with the common stock.
See the "Introduction" and Section 1.
HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
. We are offering to pay $38.50 per share, net to each seller in cash and
without interest. See the "Introduction" and Section 1.
. If you tender your shares in the offer, you will not be obligated to pay
brokerage fees or commissions or, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with
respect to the sale of your shares. See the "Introduction".
WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER?
. We are not obligated to purchase any shares unless at least 51% of the
outstanding shares are validly tendered and not withdrawn prior to the
expiration of the offer. See Sections 1 and 14.
. We are not obligated to purchase any shares unless and until the
applicable waiting period under the HSR Act has expired or been
terminated. See Section 15.
These and other conditions to our obligation to purchase shares tendered in the
offer are described in greater detail in Sections 1 and 14.
DO YOU HAVE FINANCIAL RESOURCES TO MAKE PAYMENT?
. Novartis will provide us with the funds necessary to purchase the shares
in the offer. See Section 9.
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IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
. Because the form of payment consists solely of cash and all of the
funding which will be needed has already been arranged, and also because
of the lack of any relevant historical information concerning WJ
Acquisition Corp., we do not think our financial condition is relevant
to your decision to tender in the offer.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
. You will have at least until 12:00 midnight, New York City time, on
Monday, July 3, 2000, to tender your shares of Wesley Jessen common
stock in the offer. If you cannot deliver everything that is required in
order to make a valid tender by that time, you may be able to use a
guaranteed delivery procedure which is described in Section 3 of this
Offer to Purchase. See Section 3.
CAN THE OFFER BE EXTENDED, AND UNDER WHAT CIRCUMSTANCES?
. We expressly reserve the right, in our sole discretion, but subject to
the terms of the Merger Agreement and applicable law, to extend the
period of time during which the offer remains open. We have agreed in
the Merger Agreement that we may extend the offer if certain conditions
to the offer have not been satisfied. See Section 1.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
. If we decide to extend the offer, we will inform ChaseMellon Shareholder
Services, L.L.C., the Depositary, of that fact, and will issue a press
release giving the new expiration date no later than 9:00 a.m., New York
City time, on the day after the day on which the offer was previously
scheduled to expire. See Section 1.
HOW DO I TENDER MY SHARES?
To tender your shares in the offer, you must:
. complete and sign the accompanying Letter of Transmittal (or a manually
signed facsimile of the Letter of Transmittal) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it
together with your share certificates, and any other required documents,
to the Depositary;
. tender your shares pursuant to the procedure for book-entry transfer set
forth in Section 3; or
. if your share certificates are not immediately available or if you
cannot deliver your share certificates, and any other required
documents, to ChaseMellon, prior to the expiration of the offer, or you
cannot complete the procedure for delivery by book-entry transfer on a
timely basis, you may still tender your shares if you comply with the
guaranteed delivery procedures described in Section 3.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
. You may withdraw previously tendered shares any time prior to the
expiration of the offer, and, unless we have accepted the shares
pursuant to the offer, you may also withdraw any tendered shares at any
time after August 4, 2000. See Section 4.
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
. To withdraw previously tendered shares, you must deliver a written or
facsimile notice of withdrawal with the required information to
ChaseMellon while you still have the right to withdraw. If you tendered
shares by giving instructions to a broker or bank, you must instruct the
broker or bank to arrange for the withdrawal of your shares. See Section
4.
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WHAT DOES WESLEY JESSEN'S BOARD OF DIRECTORS THINK OF THE OFFER?
. The Board of Directors of Wesley Jessen has unanimously determined that
the Merger Agreement and the transactions contemplated thereby,
including each of the offer and the merger, are fair to, and in the best
interests of, the holders of shares, has approved, adopted and declared
advisable the Merger Agreement and the transactions contemplated
thereby, and has recommended that the holders of shares accept the offer
and tender shares pursuant to the offer.
WILL WESLEY JESSEN CONTINUE AS A PUBLIC COMPANY?
. No. If the merger occurs, Wesley Jessen will no longer be publicly
owned. Even if the merger does not occur, if we purchase all the
tendered shares, there may be so few remaining stockholders and publicly
held shares that the shares may no longer be eligible to be traded
through the Nasdaq National Market System or any other securities
market, there may not be a public trading market for the shares and
Wesley Jessen may cease making filings with the SEC or otherwise cease
being required to comply with SEC rules relating to publicly held
companies. See Section 13.
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT
TENDERED?
. If we accept for payment and pay for at least 51% of the outstanding
shares on a fully diluted basis, we will merge with and into Wesley
Jessen. If the merger occurs, Wesley Jessen will become an indirect
wholly owned subsidiary of Novartis, and each share that remains
outstanding (other than any shares held in the treasury of Wesley Jessen
VisionCare, Inc., or owned by Novartis, WJ Acquisition Corp. or any of
their subsidiaries, and any shares held by stockholders seeking
appraisal for their shares) will be canceled and converted automatically
into the right to receive $38.50 per share in cash (or any greater
amount per share paid pursuant to the offer).
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
. If you decide not to tender your shares in the offer and the merger
occurs, you will receive in the merger the same amount of cash per share
as if you would have tendered your shares in the offer.
. If you decide not to tender your shares in the offer and the merger does
not occur, if we purchase all the tendered shares, there may be so few
remaining stockholders and publicly held shares that the shares will no
longer be eligible to be traded through Nasdaq National Market or any
other securities market, there may not be a public trading market for
the shares and Wesley Jessen VisionCare, Inc. may cease making filings
with the SEC or otherwise cease being required to comply with SEC rules
relating to publicly held companies. See Section 13.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
. On May 26, 2000, the last full trading day before we announced our
offer, the last reported closing price per share reported on the Nasdaq
National Market was $33.19 per share. See Section 7.
WITH WHOM MAY I TALK IF I HAVE QUESTIONS ABOUT THE OFFER?
. You can call Innisfree M&A Incorporated, the Information Agent, at (212)
750-5833 or (888) 750-5834 or Lehman Brothers, the Dealer Manager, at
(212) 526-5044 or (212) 526-6105. See the back cover of this Offer to
Purchase.
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To All Holders of Common Stock of
Wesley Jessen VisionCare, Inc.:
INTRODUCTION
WJ Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect
wholly owned subsidiary of Novartis AG, a Swiss corporation ("Parent"), hereby
offers to purchase all the shares of common stock, par value $0.01 per share
("Common Stock"), of Wesley Jessen VisionCare, Inc., a Delaware corporation
(the "Company"), that are issued and outstanding, together with the associated
preferred share purchase rights (the "Rights" and, together with the Common
Stock, the "Shares") issued pursuant to the Rights Agreement, dated as of
November 16, 1999, as amended, between the Company and American Stock Transfer
and Trust Company, as Rights Agent (the "Rights Agreement"), for $38.50 per
Share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, together with this Offer to Purchase and any
amendments or supplements hereto or thereto, collectively constitute the
"Offer"). See Section 8 for additional information concerning Parent and
Purchaser.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
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 back-up U.S. federal
income tax withholding of 31% of the gross proceeds payable to such
stockholder or other payee pursuant to the Offer. See Section 5. Purchaser or
Parent will pay all charges and expenses of Lehman Brothers Inc. ("Lehman"),
which is acting as Dealer Manager for the Offer (the "Dealer Manager"),
ChaseMellon Shareholder Services, L.L.C. (the "Depositary") and Innisfree M&A
Incorporated (the "Information Agent") incurred in connection with the Offer.
See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") HAS UNANIMOUSLY
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN),
ARE ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND THE
HOLDERS OF SHARES, HAS APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER,
AND HAS RECOMMENDED THAT THE HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
Bear, Stearns & Co. Inc. ("Bear Stearns") has delivered to the Board its
written opinion dated May 29, 2000 to the effect that, based upon and subject
to various considerations and assumptions set forth in such opinion, the
consideration to be received by the stockholders pursuant to each of the Offer
and the Merger is fair to such stockholders from a financial point of view. A
copy of the written opinion of Bear Stearns is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-
9"), which has been filed with the Securities and Exchange Commission (the
"SEC") in connection with the Offer and which is being mailed to stockholders
concurrently herewith, and stockholders are urged to read such opinion
carefully in its entirety for a description of the assumptions made, matters
considered and limitations of the review undertaken by Bear Stearns.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT
LEAST THE NUMBER OF SHARES THAT SHALL CONSTITUTE 51% OF THE THEN OUTSTANDING
SHARES ON A FULLY DILUTED BASIS (INCLUDING, WITHOUT LIMITATION, ALL SHARES
ISSUABLE UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON THE
EXERCISE OF ANY OPTIONS, WARRANTS, OR RIGHTS) (THE "MINIMUM CONDITION"), AND
(II) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), HAVING EXPIRED OR BEEN
TERMINATED, PRIOR TO THE EXPIRATION OF THE OFFER
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(THE "HSR CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS
CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTIONS 1 AND 14, WHICH SET FORTH IN
FULL THE CONDITIONS TO THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of May 30, 2000 (the "Merger Agreement"), among Parent, Purchaser and the
Company. The Merger Agreement provides, among other things, that as promptly
as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of the General Corporation Law of the
State of Delaware ("Delaware Law"), Purchaser will be merged with and into the
Company (the "Merger"). As a result of the Merger, the Company will continue
as the surviving corporation (the "Surviving Corporation") and will become an
indirect wholly owned subsidiary of Parent. At the effective time of the
Merger (the "Effective Time"), each Share issued and outstanding immediately
prior to the Effective Time (other than Shares held in the treasury of the
Company or Shares owned by Purchaser, Parent or any direct or indirect wholly
owned subsidiary of Parent or of the Company, and other than Shares held by
stockholders who shall have demanded and perfected appraisal rights under
Delaware Law) shall be canceled and converted automatically into the right to
receive $38.50 in cash, or any higher price that may be paid per Share in the
Offer, without interest (the "Merger Consideration"). Stockholders who demand
and fully perfect appraisal rights under Delaware Law will be entitled to
receive, in connection with the Merger, cash for the fair value of their
Shares as determined pursuant to the procedures prescribed by Delaware Law.
See Section 11. The Merger Agreement is more fully described in Section 10.
Certain federal income tax consequences of the sale of Shares pursuant to the
Offer and the Merger, as the case may be, are described in Section 5.
The Merger Agreement provides that, promptly following the purchase of, and
payment for, a number of Shares that satisfies the Minimum Condition pursuant
to the Offer and from time to time thereafter, Purchaser shall be entitled to
designate the number of directors, rounded up to the next whole number, on the
Board that equals the product of the total number of directors on the Board
(giving effect to the election of any additional directors pursuant to this
paragraph) and the percentage that the number of Shares beneficially owned by
Parent or Purchaser following such purchase bears to the total number of
Shares then outstanding. In the Merger Agreement, the Company has agreed, at
such time, to promptly take all actions within its power to cause Purchaser's
designees to be elected or appointed to the Board, including increasing the
number of directors, and seeking and accepting resignations of incumbent
directors.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the consummation of the Offer, and, if
necessary, the approval and adoption of the Merger Agreement and the Merger by
the requisite vote of the stockholders of the Company. For a more detailed
description of the conditions to the Merger, see Section 10. Under the
Company's Certificate of Incorporation and Delaware Law, the affirmative vote
of the holders of a majority of the outstanding Shares is required to approve
and adopt the Merger Agreement and the Merger. Consequently, if Purchaser
acquires (pursuant to the Offer or otherwise) at least a majority of the
outstanding Shares, then Purchaser will have sufficient voting power to
approve and adopt the Merger Agreement and the Merger without the vote of any
other stockholder. See Sections 10 and 11.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, Purchaser will be able
to approve and adopt the Merger Agreement and the Merger without a vote of the
Company's stockholders. In such event, Parent, Purchaser and the Company have
agreed to take, at the request of Purchaser, all necessary and appropriate
action to cause the Merger to become effective in accordance with Delaware Law
as promptly as reasonably practicable after such acquisition, without a
meeting of the Company's stockholders. If, however, Purchaser does not acquire
at least 90% of the then outstanding Shares pursuant to the Offer or otherwise
and a vote of the Company's stockholders is required under Delaware Law, a
significantly longer period of time will be required to effect the Merger. See
Section 11.
The Company has advised Purchaser that as of May 23, 2000, 18,175,585
shares of Common Stock were issued, consisting of 17,671,246 shares of Common
Stock outstanding and 504,339 shares of Common Stock held in the treasury of
the Company. In addition, the Company has advised Parent that as of May 23,
2000, 2,689,475 shares of Common Stock are reserved for issuance pursuant to
employee stock options. As a result, as of such date, the Minimum Condition
would be satisfied if Purchaser acquired 10,383,968 Shares. Also, as of such
date, Purchaser could cause the Merger to become
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effective in accordance with Delaware Law, without a meeting of the Company's
stockholders, if Purchaser acquired 18,324,649 Shares.
No appraisal rights are available in connection with the Offer; however,
stockholders may have appraisal rights in connection with the Merger
regardless of whether the Merger is consummated with or without a vote of the
Company's stockholders. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension
or amendment), Purchaser will accept for payment and pay for all Shares
validly tendered (and not withdrawn in accordance with the procedures set
forth in Section 4) on or prior to the Expiration Date. "Expiration Date"
means 12:00 midnight, New York City time, on Monday, July 3, 2000, unless and
until Purchaser (subject to the terms and conditions of the Merger Agreement)
shall have extended the period during which the Offer is open, in which case
Expiration Date shall mean the latest time and date at which the Offer, as it
may be extended by Purchaser, shall expire.
The Offer is subject to the conditions set forth under Section 14,
including the satisfaction of the Minimum Condition and the HSR Condition.
Subject to the applicable rules and regulations of the SEC and subject to the
terms and conditions of the Merger Agreement, Purchaser expressly reserves the
right to waive any such condition (other than the Minimum Condition) in whole
or in part, in its sole discretion. Subject to the applicable rules and
regulations of the SEC and subject to the terms and conditions of the Merger
Agreement, Purchaser expressly reserves the right to increase the price per
Share payable in the Offer and to make any other changes in the terms and
conditions of the Offer; provided, however, that Purchaser may not, without
the prior written consent of the Company, (i) decrease the price per Share
payable in the Offer, (ii) decrease the number of Shares sought in the Offer,
(iii) change the form of consideration payable in the Offer, (iv) impose
conditions to the Offer in addition to those set forth in Section 14 hereof,
(v) except as provided in the Merger Agreement or required by any rule,
regulation, interpretation or position of the SEC applicable to the Offer,
change the expiration date of the Offer, or (vi) otherwise amend or change any
term or condition of the Offer in a manner materially adverse to the holders
of Shares.
The Merger Agreement also provides that, without the consent of the
Company, Purchaser shall have the right to extend the Offer beyond the initial
expiration date, which shall be the twentieth business day from and after the
date the Offer is commenced, in the following events: (i) from time to time,
if, at the initial expiration date (or extended expiration date of the Offer,
if applicable), any of the conditions to the Offer (other than the Minimum
Condition) shall not have been satisfied or waived, until such conditions are
satisfied or waived; (ii) for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Offer or any period required by applicable law; (iii) if all conditions to the
Offer other than the Minimum Condition are satisfied or waived, but the
Minimum Condition has not been satisfied, for one or more periods not to
exceed ten (10) business days each (or an aggregate of thirty (30) business
days for all such extensions); or (iv) if all of the conditions to the Offer
are satisfied or waived but the number of Shares validly tendered and not
withdrawn is less than ninety percent (90%) of the then outstanding number of
Shares on a diluted basis, for an aggregate period not to exceed twenty (20)
business days (for all such extensions); provided that Purchaser shall accept
and promptly pay for all securities tendered prior to the date of such
extension, and shall otherwise meet the requirements of Rule 14d-11 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in
connection with each such extension. In addition, pursuant to the Merger
Agreement, Parent and Purchaser agreed that Purchaser shall, from time to
time, extend the Offer, if requested by the Company, if, at the initial
expiration date (or any extended date of the Offer, if applicable), all of the
conditions to the Offer other than the Minimum Condition and/or the HSR
Condition or the condition that no impeding governmental order exists shall
have been waived or satisfied and the Minimum Condition and/or the HSR
Condition or the condition that no impeding governmental order exists shall
not have been satisfied, until the earlier of ten (10) business days after
such expiration date (or extended expiration date of the Offer, if applicable)
or September 30, 2000, in the case of the Minimum Condition, or November 30,
2000, in the case of the HSR Condition or the condition that no impeding
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governmental order exists, or such earlier date upon which either such
condition shall not be reasonably capable of being satisfied prior to November
30, 2000. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer and subject to the right of a
tendering stockholder to withdraw such stockholder's Shares. See Section 4.
Under no circumstances will interest be paid on the purchase price for
tendered Shares, whether or not the Offer is extended. Any extension of the
Offer may be effected by Purchaser giving oral or written notice of such
extension to the Depositary.
Purchaser shall pay for all Shares validly tendered and not withdrawn
promptly following the acceptance of Shares for payment pursuant to the Offer.
Notwithstanding the immediately preceding sentence and subject to the
applicable rules of the SEC and the terms and conditions of the Offer and the
Merger Agreement, Purchaser also expressly reserves the right (i) to delay
payment for Shares in order to comply in whole or in part with applicable laws
(any such delay shall be effected in compliance with Rule 14e-1(c) under the
Exchange Act, which requires Purchaser to pay the consideration offered or to
return Shares deposited by or on behalf of stockholders promptly after the
termination or withdrawal of the Offer), (ii) to extend or terminate the Offer
and not to accept for payment or pay for any Shares not theretofore accepted
for payment or paid for, upon the occurrence of any of the conditions to the
Offer specified in Section 14, and (iii) to amend the Offer or to waive any
conditions to the Offer in any respect consistent with the provisions of the
Merger Agreement described above, in each case by giving oral or written
notice of such delay, termination, waiver or amendment to the Depositary and
by making public announcement thereof.
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act, which require that material changes be
promptly disseminated to stockholders in a manner reasonably designed to
inform them of such changes) and without limiting the manner in which
Purchaser may choose to make any public announcement, Purchaser will have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a press release to the Dow Jones News
Service or the Public Relations Newswire.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules l4d-
4(c), l4d-6(d) and 14e-1 under the Exchange Act. Subject to the terms of the
Merger Agreement, if, prior to the Expiration Date, Purchaser should decide to
increase the consideration being offered in the Offer, such increase in the
consideration being offered will be applicable to all stockholders whose
Shares are accepted for payment pursuant to the Offer and, if at the time
notice of any such increase in the consideration being offered is first
published, sent or given to holders of such Shares, the Offer is scheduled to
expire at any time earlier than the period ending on the tenth business day
from and including the date that such notice is first so published, sent or
given, 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 on which the
principal offices of the SEC in Washington, D.C. are open to accept filings,
or, in the case of determining a date when any payment is due, any day on
which banks are not required or authorized to close in The City of New York,
and consists of the time period from 12:01 a.m. through 12:00 midnight, New
York City time.
The Company has provided Purchaser with the Company's stockholder list and
security position listings, including the most recent list of names, addresses
and security positions of non-objecting beneficial owners in the possession of
the Company, for the purpose of disseminating the Offer to holders of Shares.
This Offer to Purchase and the related Letter of Transmittal will be mailed by
Purchaser to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished, for subsequent transmittal to
beneficial owners of Shares, to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
4
<PAGE>
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Purchaser will accept for payment all Shares validly
tendered (and not properly withdrawn in accordance with Section 4) prior to
the Expiration Date promptly after the occurrence of the Expiration Date.
Purchaser shall pay for all Shares validly tendered and not withdrawn promptly
following the acceptance of Shares for payment pursuant to the Offer.
Notwithstanding the immediately preceding sentence and subject to applicable
rules and regulations of the SEC and the terms of the Merger Agreement,
Purchaser expressly reserves the right to delay payment for Shares in order to
comply in whole or in part with applicable laws. See Sections 1 and 15.
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)
the certificates evidencing such Shares (the "Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in
Section 3, (ii) the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or an Agent's Message (as defined below), in connection with the
book-entry transfer and (iii) any other documents required under the Letter of
Transmittal. The term "Agent's Message" means a message, transmitted by the
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of the Book-Entry Confirmation which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in the
Book-Entry Transfer Facility tendering the Shares that are the subject of such
Book-Entry Confirmation, that such participant has received and agrees to be
bound by the Letter of Transmittal and that Purchaser may enforce such
agreement against such participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit
of the purchase price therefor with the Depositary, which will act as agent
for tendering stockholders for the purpose of receiving payments from
Purchaser and transmitting such payments to tendering stockholders whose
Shares have been accepted for payment.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are
submitted evidencing more Shares than are tendered, Share Certificates
evidencing unpurchased Shares will be returned, without expense to the
tendering stockholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility
pursuant to the procedure set forth in Section 3, such Shares will be credited
to an account maintained at such Book-Entry Transfer Facility), as promptly as
practicable following the expiration or termination of the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares. In order for a holder of Shares validly to tender
Shares pursuant to the Offer, the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message, and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase and either (i) the Share
Certificates evidencing tendered Shares must be received by the Depositary at
such address or such Shares must be tendered pursuant to the procedure for
book-entry transfer described below and a Book-Entry Confirmation must be
received by the Depositary (including an Agent's Message if the tendering
stockholder has not delivered a Letter of Transmittal), in each case prior to
the Expiration Date, or (ii) the tendering stockholder must comply with the
guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, 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.
5
<PAGE>
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the system of the Book-Entry
Transfer Facility may make a book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery
of Shares may be effected through book-entry transfer at the Book-Entry
Transfer Facility, the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees, or an Agent's Message, and any other required documents,
must, in any case, be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration
Date, or the tendering stockholder must comply with the guaranteed delivery
procedure described below.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY, IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES, DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Security Transfer Agent
Medallion Signature Program, or by any other "eligible guarantor institution",
as such term is defined in Rule 17Ad-15 under the Exchange Act (each of the
foregoing being referred to as an "Eligible Institution"), except in cases
where Shares are tendered (i) by a registered holder of Shares who has not
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal or (ii)
for the account of an Eligible Institution. If a Share Certificate is
registered in the name of a person other than the signer of the Letter of
Transmittal, or if payment is to be made, or a Share Certificate not accepted
for payment or not tendered is to be returned, to a person other than the
registered holder(s), then the Share Certificate 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 Share Certificate, with the
signature(s) on such Share Certificate or stock powers guaranteed by an
Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares are
not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such stockholder cannot complete the procedure for
delivery by book-entry transfer on a timely basis, such Shares may
nevertheless be tendered, provided that all the following conditions are
satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is
received prior to the Expiration Date by the Depositary as provided below;
and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message,
and any other documents required by the Letter of Transmittal are received
by the Depositary within three Nasdaq National Market ("Nasdaq") trading
days after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or by
facsimile transmission to the Depositary and must include a guarantee by an
Eligible Institution in the form set forth in the form of Notice of Guaranteed
Delivery made available by Purchaser.
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 the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message, and any other documents required by the Letter of Transmittal.
6
<PAGE>
Determination of Validity. ALL QUESTIONS AS TO THE FORM OF DOCUMENTS AND
THE VALIDITY, FORM, ELIGIBILITY (INCLUDING TIME OF RECEIPT) AND ACCEPTANCE FOR
PAYMENT OF ANY TENDER OF SHARES WILL BE DETERMINED BY PURCHASER, IN ITS SOLE
DISCRETION, WHICH DETERMINATION SHALL BE FINAL AND BINDING ON ALL PARTIES.
Purchaser reserves the absolute right to reject any and all tenders determined
by it not to be in proper form or the acceptance for payment of which may, in
the opinion of its counsel, be unlawful. Purchaser also reserves the absolute
right to waive any condition of the Offer to the extent permitted by
applicable law and the Merger Agreement or any defect or irregularity in the
tender of any Shares of any particular stockholder, whether or not similar
defects or irregularities are waived in the case of other stockholders. NO
TENDER OF SHARES WILL BE DEEMED TO HAVE BEEN VALIDLY MADE UNTIL ALL DEFECTS
AND IRREGULARITIES HAVE BEEN CURED OR WAIVED. NONE OF PURCHASER, PARENT OR ANY
OF THEIR RESPECTIVE AFFILIATES OR ASSIGNS, THE DEALER MANAGER, THE DEPOSITARY,
THE INFORMATION AGENT OR ANY OTHER PERSON WILL BE UNDER ANY DUTY TO GIVE
NOTIFICATION OF ANY DEFECTS OR IRREGULARITIES IN TENDERS OR INCUR ANY
LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTIFICATION. 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.
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering stockholder's acceptance of the terms and conditions
of the Offer, as well as the tendering stockholder's representation and
warranty to Purchaser that (i) such stockholder has the full power and
authority to tender, sell, assign and transfer the tendered Shares (and any
and all other Shares or other securities issued or issuable in respect of such
Shares), and (ii) when the same are accepted for payment by Purchaser,
Purchaser will acquire good and unencumbered title thereto, free and clear of
all liens, restrictions, charges and encumbrances and not subject to any
adverse claims.
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the
conditions of the Offer.
Appointment as Proxy. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's agents, attorneys-in-fact and proxies, each with full power
of substitution, in the manner set forth in the Letter of Transmittal, to the
full extent of such stockholder's rights with respect to the Shares tendered
by such stockholder and accepted for payment by Purchaser (and with respect to
any and all other Shares or other securities issued or issuable in respect of
such Shares on or after May 30, 2000). All such powers of attorney and proxies
shall be considered irrevocable and coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
Purchaser accepts such Shares for payment. Upon such acceptance for payment,
all prior powers of attorney and proxies given by such stockholder with
respect to such Shares (and such other Shares and securities) will be revoked,
without further action, and no subsequent powers of attorney or proxies may be
given nor any subsequent written consent executed by such stockholder (and, if
given or executed, will not be deemed to be effective) with respect thereto.
The designees of Purchaser will, with respect to the Shares for which the
appointment is effective, be empowered to exercise all voting and other rights
of such stockholder as they in their sole discretion may deem proper at any
annual or special meeting of the Company's stockholders or any adjournment or
postponement thereof, by written consent in lieu of any such meeting or
otherwise. Purchaser reserves the right to require that, in order for Shares
to be deemed validly tendered, immediately upon Purchaser's payment for such
Shares, Purchaser must be able to exercise full voting rights with respect to
such Shares (and such other Shares and securities).
UNDER THE "BACKUP WITHHOLDING" PROVISIONS OF U.S. FEDERAL INCOME TAX LAW,
THE DEPOSITARY MAY BE REQUIRED TO WITHHOLD 31% OF ANY PAYMENTS OF CASH
PURSUANT TO THE OFFER. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH
RESPECT TO PAYMENT TO CERTAIN STOCKHOLDERS OF THE PURCHASE PRICE OF SHARES
PURCHASED PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE
DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND
CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX
WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF
TRANSMITTAL. SEE INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL.
4. WITHDRAWAL RIGHTS.
Tender of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer,
may also be withdrawn at any time after August 4, 2000. If Purchaser extends
the Offer, is delayed in its acceptance for payment of Shares or is unable to
accept Shares for payment pursuant to the Offer for any reason, then, without
prejudice to Purchaser's
7
<PAGE>
rights under the Offer, the Depositary may, nevertheless, on behalf of
Purchaser, retain tendered Shares, and such Shares may not be withdrawn except
to the extent that tendering stockholders are entitled to withdrawal rights as
described in this Section 4, subject to Rule 14e-1(c) under the Exchange Act.
Any such delay will be by an extension of the Offer to the extent required by
law.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover page of this Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of such Shares, if different from that of the person who
tendered such Shares. If Share Certificates evidencing Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such Share Certificates, the serial numbers shown on
such Share Certificates must be submitted to the Depositary and the
signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution, unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure
for book-entry transfer as set forth in Section 3, any notice of withdrawal
must specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares.
ALL QUESTIONS AS TO THE FORM AND VALIDITY (INCLUDING TIME OF RECEIPT) OF
ANY NOTICE OF WITHDRAWAL WILL BE DETERMINED BY PURCHASER, IN ITS SOLE
DISCRETION, WHOSE DETERMINATION WILL BE FINAL AND BINDING. NONE OF PURCHASER,
PARENT OR ANY OF THEIR RESPECTIVE AFFILIATES OR ASSIGNS, THE DEALER MANAGER,
THE DEPOSITARY, THE INFORMATION AGENT OR ANY OTHER PERSON WILL BE UNDER ANY
DUTY TO GIVE ANY NOTIFICATION OF ANY DEFECTS OR IRREGULARITIES IN ANY NOTICE
OF WITHDRAWAL OR INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH
NOTIFICATION.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of
the Offer. However, withdrawn Shares may be re-tendered at any time prior to
the Expiration Date by following one of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of certain U.S. federal income tax consequences
of the Offer and the Merger to holders whose Shares are purchased pursuant to
the Offer or whose Shares are converted into the right to receive cash in the
Merger (whether upon receipt of the Merger Consideration or pursuant to the
proper exercise of dissenter's rights). The discussion applies only to holders
of Shares in whose hands Shares are capital assets (generally assets held for
investment), and may not apply to Shares received pursuant to the exercise of
employee stock options or otherwise as compensation, or to holders of Shares
who are not citizens or residents of the United States of America.
THE TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL INFORMATION
PURPOSES ONLY AND IS BASED UPON PRESENT LAW (WHICH MAY BE SUBJECT TO CHANGE,
POSSIBLY ON A RETROACTIVE BASIS). BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER,
EACH HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER TO SUCH
HOLDER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER TAX
LAWS.
The receipt of the offer price and the receipt of cash pursuant to the
Merger (whether as Merger Consideration or pursuant to the proper exercise of
dissenter's rights) will be a taxable transaction for U.S. federal income tax
purposes (and also may be a taxable transaction under applicable state, local
and other income tax laws). In general, for U.S. federal income tax purposes,
a holder of Shares will recognize gain or loss equal to the difference between
such holder's adjusted tax basis in the Shares sold pursuant to the Offer or
converted to cash in the Merger and the amount of cash received therefor. Such
gain or loss generally will be capital gain or loss. Certain non-corporate
holders (including individuals) will be subject to tax on the net amount of
such capital gain at a maximum rate of 20%, provided that the Shares were held
for more than 12 months. The deduction of capital losses is subject to certain
limitations under U.S. federal income tax law. Holders of Shares should
consult their own tax advisors in this regard.
Payments in connection with the Offer or the Merger may be subject to
backup withholding at a 31% rate. Backup withholding generally applies if a
holder (i) fails to furnish such holder's social security number or taxpayer
identification number ("TIN"), (ii) furnishes an incorrect TIN, (iii) fails
properly to report interest or dividends or (iv) under certain
8
<PAGE>
circumstances, fails to provide a certified statement, signed under penalties
of perjury, that the TIN provided is such holder's correct number and that
such holder 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 U.S. federal income tax, provided that
certain information is furnished to the Internal Revenue Service. Certain
persons, including corporations and financial institutions, generally are
exempt from backup withholding. Certain penalties apply for failure to furnish
correct information and for failure to include the reportable payments in
income. Each holder of Shares should consult with such holder's own tax
advisor as to such holder's qualifications for exemption from withholding and
the procedure for obtaining such exemption.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are listed and principally traded on Nasdaq. The following table
sets forth, for the quarters indicated, the high and low closing sales prices
per Share on Nasdaq as reported by the Dow Jones News Service and the amount
of cash dividends paid or declared per Share according to published financial
sources.
SHARES MARKET DATA
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------ ------ ---------
<S> <C> <C> <C>
1998:
First Quarter................................... $40.25 $32.13 $ 0
Second Quarter.................................. 34.00 18.38 0
Third Quarter................................... 25.75 17.00 0
Fourth Quarter.................................. 27.75 16.88 0
1999:
First Quarter................................... $27.56 $20.50 $ 0
Second Quarter.................................. 34.88 26.75 0
Third Quarter................................... 32.75 27.13 0
Fourth Quarter.................................. 39.94 25.31 0
2000:
First Quarter................................... $40.00 $22.94 $ 0
Second Quarter (through June 5, 2000)........... 39.38 31.00 0
</TABLE>
On May 26, 2000, the last full trading day prior to the announcement of the
execution of the Merger Agreement and of Purchaser's intention to commence the
Offer, the closing price per Share as reported on Nasdaq was $33.19. On June
5, 2000, the last full trading day prior to the commencement of the Offer, the
closing price per Share as reported on Nasdaq was $36.98. As of June 5, 2000,
the approximate number of holders of record of the Shares was 180.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth in this Offer to Purchase, all of 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 SEC and other public sources. Neither Purchaser nor Parent assumes any
responsibility for the accuracy or completeness of the information concerning
the Company furnished by the Company or contained in such documents and
records or for any failure by the Company to disclose events which may have
occurred or may affect the significance or accuracy of any such information
but which are unknown to Purchaser or Parent.
General. The Company is a Delaware corporation with its principal executive
offices located at 333 East Howard Avenue, Des Plaines, Illinois 60018, and
its telephone number is (847) 294-3000. The Company is the leading worldwide
developer, manufacturer and marketer of specialty soft contact lenses, based
on its share of the specialty lens market, and
9
<PAGE>
ranks fourth in the contact lens market overall in terms of net revenues. The
Company was founded by Drs. Newton K. Wesley and George Jessen in 1946. From
1980 to 1995, the Company operated as a wholly owned subsidiary of Schering-
Plough Corporation. In June 1995, Bain Capital, Inc. and management acquired
the Company from Schering-Plough in a leveraged acquisition. In 1997, the
Company made its initial public offering of common stock, which trades in
Nasdaq under the symbol "WJCO".
Certain Projected Financial Data of the Company. Prior to entering into the
Merger Agreement, Parent conducted a due diligence review of the Company and
in connection with such review received certain projections of the Company's
future operating performance. The Company does not in the ordinary course
publicly disclose projections and these projections were not prepared with a
view to public disclosure. The Company has advised Parent and Purchaser that
these projections were prepared by the Company's management based on numerous
assumptions including, among others, projections of revenues, operating
income, benefits and other expenses, depreciation and amortization, capital
expenditure and working capital requirements. No assurances can be given with
respect to any such assumptions. These projections do not give effect to the
Offer or the potential combined operations of Parent and the Company or any
alterations Parent may make to the Company's operations or strategy after the
consummation of the Offer. The information set forth below is presented for
the limited purpose of giving the stockholders access to the material
financial projections prepared by the Company's management that were made
available to Parent and Purchaser in connection with the Merger Agreement and
the Offer.
WESLEY JESSEN VISIONCARE, INC.
PROJECTED FINANCIAL PERFORMANCE*
<TABLE>
<CAPTION>
DESCRIPTION FY 2000 FY 2001 FY 2002
----------- -------- -------- --------
<S> <C> <C> <C>
Net sales.................................... $341,500 $374,300 $411,356
Cost of Goods Sold........................... 107,051 113,600 124,846
Gross Profit................................. 234,449 260,700 286,510
Income from Operations (EBIT)................ 67,372 79,421 87,198
Net Income................................... 42,260 50,900 55,882
</TABLE>
-------
* All amounts in thousands.
CERTAIN MATTERS DISCUSSED HEREIN, INCLUDING, BUT NOT LIMITED TO, THESE
PROJECTIONS, ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. FORWARD-LOOKING STATEMENTS INCLUDE THE INFORMATION SET FORTH
ABOVE UNDER "CERTAIN PROJECTED FINANCIAL DATA OF THE COMPANY". WHILE PRESENTED
WITH NUMERICAL SPECIFICITY, THESE PROJECTIONS WERE NOT PREPARED BY THE COMPANY
IN THE ORDINARY COURSE AND ARE BASED UPON A VARIETY OF ESTIMATES AND
HYPOTHETICAL ASSUMPTIONS WHICH MAY NOT BE ACCURATE, MAY NOT BE REALIZED, AND
ARE ALSO INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, ALL OF WHICH ARE DIFFICULT TO PREDICT, AND
MOST OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. ACCORDINGLY, THERE CAN BE
NO ASSURANCE THAT ANY OF THE PROJECTIONS WILL BE REALIZED AND THE ACTUAL
RESULTS FOR THE YEARS ENDING DECEMBER 31, 2000, 2001 AND 2002 MAY VARY
MATERIALLY FROM THOSE SHOWN ABOVE.
In addition, these projections were not prepared in accordance with
generally accepted accounting principles, and neither the Company's nor
Parent's independent accountants have examined or compiled any of these
projections or expressed any conclusion or provided any other form of
assurance with respect to these projections and accordingly assume no
responsibility for these projections. These projections were prepared with a
limited degree of precision, and were not prepared with a view to public
disclosure or compliance with the published guidelines of the SEC or the
guidelines established by the American Institute of Certified Public
Accountants regarding projections, which would require a more complete
presentation of data than as shown above. The inclusion of these projections
herein should not be regarded as a representation by the Company, Parent and
Purchaser or any other person to whom these projections were provided that the
projected results will be achieved. These projections should be read in
conjunction with the historical financial information of the Company. None of
Parent, Purchaser, or any other person to whom these projections were provided
assumes any responsibility for the accuracy or validity of the foregoing
projections. Forward-looking statements also include those preceded by,
followed by or that include the words "believes," "expects," "anticipates" or
similar expressions.
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<PAGE>
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements and other information with the SEC
relating to its business, financial condition and other matters. Information
as of particular dates concerning the Company's directors and officers, their
remuneration, 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 proxy statements distributed
to the Company's stockholders and filed with the SEC. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities maintained by the SEC at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and also should be available for
inspection at the SEC's regional offices located at Seven World Trade Center,
13th Floor, New York, New York 10048 and the Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
materials may also be obtained by mail, upon payment of the SEC's customary
fees, by writing to its principal office at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549. The SEC also maintains a World Wide Website on
the Internet at http://www.sec.gov that contains reports and other information
regarding issuers that file electronically with the SEC.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT.
General. Purchaser is a newly incorporated Delaware corporation organized
in connection with the Offer and the Merger and has not carried on any
activities other than in connection with the Offer and the Merger. The
principal offices of Purchaser are located at 608 Fifth Avenue, New York, New
York 10020 and its telephone number is (212) 307-1122. Purchaser is an
indirect wholly owned subsidiary of Parent.
Until immediately prior to the time that Purchaser will purchase 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. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.
Parent is a corporation organized under the laws of Switzerland. Its
principal offices are located at Schwarzwaldallee 215, CH-4058 Basel,
Switzerland, and its telephone number is 011-41-61-324-8000. Parent is a world
leader, both in sales and in innovation, in its continued core businesses:
pharmaceuticals, generics, eyecare products and medicines, consumer health and
animal health. Parent also is a world leader in agribusiness, the operations
of which will be spun off to form Syngenta AG in 2000. The common stock of
Parent is listed on the Swiss Stock Exchange under the symbol "SWX" and the
American Depositary Shares of Parent are traded on the New York Stock Exchange
under the symbol "NVS".
The name, citizenship, business address, business telephone number,
principal occupation or employment, and five-year employment history for each
of the directors and executive officers of Purchaser and Parent and certain
other information are set forth in Schedule I hereto. Except as described in
this Offer to Purchase and in Schedule I hereto, none of Parent, Purchaser or,
to the best knowledge of such corporations, any of the persons listed on
Schedule I to the Offer of Purchase has during the last five years (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violation of such laws.
Except as described in this Offer to Purchase, (i) none of Purchaser,
Parent nor, to the best knowledge of Purchaser and Parent, any of the persons
listed in Schedule I to this Offer to Purchase or any associate or majority
owned subsidiary of Purchaser, Parent or any of the persons so listed,
beneficially owns or has any right to acquire any Shares and (ii) none of
Purchaser, Parent nor, to the best knowledge of Purchaser and Parent, any of
the persons or entities referred to above nor any director, executive officer
or subsidiary of any of the foregoing has effected any transaction in the
Shares during the past 60 days.
Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, none of Purchaser, Parent nor, to the best knowledge
of Purchaser and Parent, any of the persons listed in Schedule I to this Offer
to Purchase, has any agreement, arrangement, understanding, whether or not
legally enforceable, with any other person with respect to any securities of
the Company, including, but not limited to, the transfer or voting of such
securities, joint ventures, loan or
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option arrangements, puts or calls, guaranties of loans, guaranties against
loss or the giving or withholding of proxies, consents or authorizations.
Except as set forth in this Offer to Purchase, since January 1, 1998, neither
Purchaser nor Parent nor, to the best knowledge of Purchaser and Parent, any
of the persons listed on Schedule I hereto, has had any transaction with the
Company or any of its executive officers, directors or affiliates that is
required to be reported under the rules and regulations of the SEC applicable
to the Offer. Except as set forth in this Offer to Purchase, since January 1,
1998, there have been no negotiations, transactions or material contacts
between any of Purchaser, Parent, or any of their respective subsidiaries or,
to the best knowledge of Purchaser and Parent, any of the persons listed in
Schedule I to this Offer to Purchase, on the one hand, and the Company or its
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer for or other acquisition of any class of the
Company's securities, an election of the Company's directors or a sale or
other transfer of a material amount of assets of the Company.
9. FINANCING OF THE OFFER AND THE MERGER.
The total amount of funds required by Purchaser to consummate the Offer and
the Merger and to pay related fees and expenses is estimated to be
approximately $791 million. Purchaser will obtain all of such funds from
Parent or one of Parent's subsidiaries. Parent and its subsidiary will provide
such funds from existing resources.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT.
Over the past several years, CIBA Vision Corporation, an indirect wholly
owned subsidiary of Parent ("CIBA Vision"), and the Company have engaged in
various commercial transactions, including licensing arrangements, in the
ordinary course of their respective businesses.
During the first week of May 2000, a representative of Lehman Brothers,
financial advisor to Parent, telephoned a representative of Bear Stearns,
financial advisor to the Company, to discuss a potential transaction.
On May 10, 2000, Dr. Glen Bradley, Chief Executive Officer of CIBA Vision,
and representatives of Parent's financial advisor, met with Kevin Ryan, Chief
Executive Officer of the Company, Edward Kelley, Chief Financial Officer of
the Company, and a representative of the Company's financial advisor to
discuss a potential transaction. On the same day, CIBA Vision entered into a
confidentiality agreement with the Company.
During the period from May 10 through May 24, 2000, representatives of CIBA
Vision, the financial, legal and accounting advisers to Parent and CIBA Vision
conducted a due diligence review of the Company and attended presentations
made by the management of the Company. In addition, during this period
representatives of CIBA Vision also visited certain facilities of the Company.
On May 24, 2000, Parent's financial advisers telephoned the Company's
financial advisers to inform them that Parent was prepared to make a proposal
to acquire all of the outstanding Shares for a price of $38.00 per Share,
subject to satisfactory agreement between Parent and the Company on other
aspects of the proposed transaction, including the terms of a draft merger
agreement. The Company informed Parent that it was unwilling to commence
negotiations at that price. On May 24, 2000 and May 25, 2000, the financial
advisers continued discussions regarding the proposed acquisition of the
Company by Parent, including the proposed purchase price. On May 25, 2000,
Parent's financial advisers informed the Company's financial advisers that
Parent was prepared to make a proposal to acquire all of the outstanding
Shares for a price of $38.50 per Share. In the evening of May 25, 2000, the
Company's financial advisers informed Parent's financial advisers, on behalf
of the Board, that the Company would consider the proposed acquisition by
Parent at such price, subject to satisfactory negotiation of the terms of the
draft merger agreement. During the period from May 25, 2000 through May 29,
2000, representatives of Parent, CIBA Vision and the Company and their
respective legal and financial advisers negotiated the terms of the Merger
Agreement.
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The Merger Agreement was finalized and executed, and a joint press release
announcing the proposed Offer and the Merger was issued, on May 30, 2000.
On June 6, 2000, Parent and Purchaser commenced the Offer.
THE MERGER AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE MERGER AGREEMENT.
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER
AGREEMENT, WHICH IS INCORPORATED HEREIN BY REFERENCE, AND A COPY OF WHICH HAS
BEEN FILED AS AN EXHIBIT TO THE TENDER OFFER STATEMENT ON SCHEDULE TO (THE
"SCHEDULE TO") FILED BY PURCHASER AND PARENT WITH THE SEC IN CONNECTION WITH
THE OFFER. THE MERGER AGREEMENT MAY BE EXAMINED AND COPIES MAY BE OBTAINED AT
THE PLACES SET FORTH IN SECTION 7. DEFINED TERMS USED HEREIN AND NOT DEFINED
HEREIN SHALL HAVE THE RESPECTIVE MEANINGS ASSIGNED TO THOSE TERMS IN THE
MERGER AGREEMENT.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as practicable, but in no event later than five business days
after the public announcement of the terms of the Merger Agreement. The
obligation of Purchaser to accept for payment Shares tendered pursuant to the
Offer is subject to the satisfaction of the Minimum Condition and certain
other conditions that are described in Section 14 hereof. Purchaser and Parent
have agreed that they shall not, without the prior written consent of the
Company, (i) decrease the price per Share payable in the Offer, (ii) decrease
the number of Shares sought in the Offer, (iii) change the form of
consideration payable in the Offer, (iv) impose conditions to the Offer in
addition to those set forth in Section 14 hereof, (v) except as provided in
the Merger Agreement or required by any rule, regulation, interpretation or
position of the SEC applicable to the Offer, change the expiration date of the
Offer, or (vi) otherwise amend or change any term or condition of the Offer in
a manner materially adverse to the holders of Shares.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law, Purchaser will
be merged with and into the Company. As a result of the Merger, the Company
will continue as the Surviving Corporation and will become an indirect wholly
owned subsidiary of Parent, and the separate corporate existence of Purchaser
will cease in accordance with Delaware Law. Upon consummation of the Merger,
each issued and outstanding Share (other than any Shares held in the treasury
of the Company, or owned by Parent, Purchaser or any subsidiary of Parent or
of the Company and any Shares which are held by stockholders who have not
voted in favor of the Merger or consented thereto in writing and who shall
have demanded properly in writing appraisal for such Shares in accordance with
Delaware Law) will convert into the right to receive the Merger Consideration.
Pursuant to the Merger Agreement, each share of common stock, par value
$0.01 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time will be converted into and become one fully paid and non-
assessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
The Merger Agreement provides that the directors of Purchaser at the
Effective Time will be the initial directors of the Surviving Corporation, and
that the officers of the Company as of the Effective Time will be the initial
officers of the Surviving Corporation. Subject to the Merger Agreement, the
Certificate of Incorporation and Bylaws of Purchaser in effect immediately
prior to the Effective Time will become the Certificate of Incorporation and
Bylaws of the Surviving Corporation.
Stockholders' Meeting. Pursuant to the Merger Agreement, the Company,
acting through the Board, shall, if required by applicable law to consummate
the Merger, duly call, give notice of, convene and hold a special meeting of
its stockholders as soon as practicable following the date on which Purchaser
completes the purchase of Shares pursuant to the Offer for the purpose of
considering and taking action upon the Merger Agreement (the "Stockholders'
Meeting"). If Purchaser acquires at least a majority of the outstanding
Shares, Purchaser will have sufficient voting power to approve the Merger,
even if no other stockholder votes in favor of the Merger.
Proxy Statement. The Merger Agreement provides that the Company, acting
through the Board, shall, if required by applicable law to consummate the
Merger, prepare and file with the SEC a preliminary proxy or information
statement (the "Proxy Statement") relating to the Merger Agreement and the
Merger and shall use its reasonable best efforts to cause a
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definitive Proxy Statement to be mailed to its stockholders at the earliest
practicable time following the expiration or termination of the Offer. The
Company, subject to its fiduciary duties under applicable law, has agreed to
include in the Proxy Statement, the recommendation of the Board that
stockholders of the Company vote in favor of the approval and adoption of the
Merger Agreement and the Merger. Parent and Purchaser and any of their
respective subsidiaries have agreed to vote, or cause to be voted, all Shares
owned by them in favor of the Merger Agreement and the Merger. The Merger
Agreement provides that, in the event Parent, Purchaser, or any other
subsidiary of Parent shall acquire at least 90% of the outstanding Shares,
Parent, Purchaser and the Company will take all necessary and appropriate
action to cause the Merger to be effective, as soon as practicable after such
acquisition, without the Stockholders' Meeting.
Conduct of Business by the Company Pending the Merger. Pursuant to the
Merger Agreement, the Company has covenanted and agreed that, between the date
of the Merger Agreement and the earlier of the termination of the Merger
Agreement or the completion date of the Offer, unless Parent shall otherwise
agree in writing (and except as set forth in Section 5.1 of the Company
Disclosure Letter or as contemplated in the Merger Agreement), the Company
shall conduct its business and shall cause the businesses of its subsidiaries
to be conducted only in, and the Company and its subsidiaries shall not take
any action except in, the ordinary course of business and in a manner
consistent with past practice; and the Company shall use reasonable commercial
efforts to preserve substantially intact the business organization of the
Company and its subsidiaries, to keep available the services of the present
officers, employees and consultants of the Company and its subsidiaries and to
preserve the present relationships of the Company and its subsidiaries with
customers, suppliers and other persons with which the Company or any of its
subsidiaries has significant business relations. The Merger Agreement provides
that, by way of amplification and not limitation, except as contemplated by
the Merger Agreement, or as required by applicable law or rule of any stock
exchange or over-the-counter market, neither the Company nor any of its
subsidiaries shall, during the period of the date of the Merger Agreement and
continuing until the earlier of the termination of the Merger Agreement or the
completion date of the Offer and except as set forth in Section 5.1 of the
Company Disclosure Letter, directly or indirectly do, or propose to do, any of
the following without the prior written consent of Parent: (a) amend or
otherwise change its certificate of incorporation or by-laws, or amend the
Rights Agreement or reduce the rights issued thereunder; (b) issue, sell,
pledge, dispose of or encumber, or authorize the issuance, sale, pledge,
disposition or encumbrance of, any shares of capital stock of any class, or
any options, warrants, convertible securities or other rights of any kind to
acquire any shares of capital stock, or any other ownership interest
(including, without limitation, any phantom interest) in the Company, any of
its subsidiaries or affiliates (except for the issuance of Shares issuable
pursuant to Company Stock Options under the Company Stock Option Plans, which
options are outstanding on the date of the Merger Agreement; provided that the
occurrence of a separation of the rights under the Rights Agreement, and the
related issuance of Shares to the Company's stockholders thereunder shall not
be deemed a breach of the Merger Agreement to the extent that (i) the
occurrence of such separation occurred as a result of an unsolicited
acquisition of Shares by a third party, and (ii) such acquisition did not
occur as a result of the Company breaching the non-solicitation covenant under
the Merger Agreement described below under the heading "No Solicitation of
Transactions"); (c) sell, pledge, dispose of or encumber any assets of the
Company or any of its subsidiaries (except for (i) sales of inventory in the
ordinary course of business and in a manner consistent with past practice, and
(ii) dispositions of obsolete or worthless assets); (d) (i) declare, set
aside, make or pay any dividend or other distribution (whether in cash, stock
or property or any combination thereof) in respect of any of its capital
stock, except that a wholly owned subsidiary of the Company may declare and
pay a dividend to its parent, (ii) split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, (iii) except as required by the terms of any security as in
effect on the date of the Merger Agreement or expressly permitted thereunder,
amend the terms or change the period of exercisability of, purchase,
repurchase, redeem or otherwise acquire, or permit any subsidiary to amend the
terms or change the period of exercisability of, purchase, repurchase, redeem
or otherwise acquire, any of its securities or any securities of its
subsidiaries, including, without limitation, Shares or any option, warrant or
right, directly or indirectly, to acquire any such securities, or propose to
do any of the foregoing, or (iv) commence any claim, suit or other action or
settle, pay or discharge any claim, suit or other action brought or threatened
against the Company, other than any claim, suit or action with respect to or
arising out of the ordinary course of business which is not material to the
Company considered as a whole; (e) (i) acquire (by merger, consolidation, or
acquisition of stock or assets) any corporation, partnership or other business
organization or division thereof; (ii) incur any indebtedness for borrowed
money, except in the ordinary course of business, or issue any debt securities
or assume, guarantee (other than guarantees of the Company's subsidiaries
entered into in the ordinary course of business) or endorse, or otherwise as
an accommodation become responsible for, the obligations of any person, or
make any
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loans or advances, except in the ordinary course of business consistent with
past practice; (iii) commit to make any capital expenditures or purchases of
fixed assets, except in the ordinary course of business consistent with past
practice; or (iv) enter into any lease agreement, other than in the ordinary
course of business consistent with past practice; (f) increase the
compensation or severance payable or to become payable to its directors,
officers or employees, except for increases in salary or wages of employees of
the Company or its subsidiaries (who are not directors or executive officers
of the Company) in accordance with past practices, or grant any severance or
termination pay (except payments required to be made under obligations
existing on the date of the Merger Agreement that are disclosed to Parent and
Purchaser in accordance with the terms of such obligations) to, or enter into
any employment or severance agreement with, any employee of the Company or any
of its subsidiaries, except for agreements with new employees entered into in
the ordinary course of business and providing for annual base and bonus
compensation not to exceed $150,000, or establish, adopt, enter into or amend
any collective bargaining agreement, any of the Company's benefit plans,
trust, fund, policy or arrangement for the benefit of any current or former
directors, officers or employees or any of their beneficiaries, except, in
each case, as may be required by law or as would not result in a material
increase in the cost of maintaining such collective bargaining agreement,
benefit plan, trust, fund, policy or arrangement; (g) take any action to
change material accounting policies or procedures (including, without
limitation, procedures with respect to revenue recognition, payments of
accounts payable and collection of accounts receivable), except as required by
a change in GAAP or the SEC's position occurring after the date of the Merger
Agreement; (h) except in the ordinary course of business, make any tax
election or settle or compromise any material United States federal, state,
local or non-United States tax liability; (i) 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 the financial statements
contained in the Company's reports or incurred in the ordinary course of
business and consistent with past practice; (j) enter into any contract or
agreement which is material to the Company, other than in the ordinary course
of business and consistent with past practices, or amend, modify or consent to
the termination of any material contract other than in the ordinary course of
business and consistent with past practices; or (k) 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 the
Merger Agreement untrue or incorrect or prevent the Company from performing or
cause the Company not to perform its covenants under the Merger Agreement.
Company Board Representation. The Merger Agreement provides that, promptly
following the purchase of, and payment for, a number of Shares that satisfies
the Minimum Condition, and from time to time thereafter, Purchaser shall be
entitled to designate the number of directors, rounded up to the next whole
number, on the Board that equals the product of the total number of directors
on the Board (giving effect to the election of any additional directors
pursuant to this sentence), and the percentage that the number of Shares
beneficially owned by Parent or Purchaser following such purchase bears to the
total number of Shares then outstanding, and the Company shall take all action
within its power to cause Purchaser's designees to be elected or appointed to
the Board, including, without limitation, increasing the number of directors,
and seeking and accepting resignations of incumbent directors. The Merger
Agreement also provides that, at such time, the Company shall use its best
efforts to cause individual directors designated by Purchaser to constitute
the number of members, rounded up to the next whole number, on (i) each
committee of the Board, other than any such committee of such Board
established to take action under the Merger Agreement, and (ii) each board of
directors of each subsidiary of the Company, and each committee thereof, that
represents the same percentage as such individuals represent on the Board.
Notwithstanding the foregoing, in the event that Purchaser's designees are to
be appointed or elected to the Board, until the Effective Time, such board of
directors shall have at least two directors who are directors on the date of
the Merger Agreement and who are not officers of the Company.
The Merger Agreement provides that, following the election or appointment
of Purchaser's designees, in accordance with the immediately preceding
paragraph and prior to the Effective Time, the approval of those directors of
the Company who were directors on the date of the Merger Agreement and who are
not officers of the Company shall be required to authorize any termination of
the Merger Agreement by the Company, any amendment thereto requiring action by
the Company's board of directors, any amendment of the Certificate of
Incorporation or Bylaws of the Company, any extension of time for performance
of any obligation or action thereunder by Parent or Purchaser, any waiver of
compliance with any of the agreements or conditions contained therein for the
benefit of the Company and any material transaction with Parent, Purchaser or
any of their affiliates.
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Access to Information. Pursuant to the Merger Agreement, the Company shall,
and shall cause its subsidiaries to, afford to the officers, employees,
accountants, counsel, financing sources and other representatives of Parent
reasonable access during normal business hours to its properties, books,
contracts, commitments and records; shall furnish to Parent all information
concerning its business, properties and personnel as Parent may reasonably
request or has reasonably requested; and make available during normal business
hours to the officers, employees, accountants, counsel, financing sources and
other representatives of Parent the appropriate individuals for discussion of
the Company's business, properties, prospects and personnel as Parent may
reasonably request and Parent has agreed to keep such information
confidential, in accordance with the terms of the Confidentiality Letter
described below.
No Solicitation of Transactions. The Company has agreed that it shall not,
directly or indirectly, or through any officer, director, employee,
representative or agent of the Company or any of its subsidiaries, and shall
not permit any such officer, director, employee, representative or agent to,
solicit or encourage the initiation of any inquiries or proposals regarding,
or participate in negotiations or discussions concerning, any merger, sale of
assets, sale of shares of capital stock or similar transactions involving the
Company or any subsidiaries of the Company that if consummated would
constitute an Alternative Transaction (any of the foregoing inquiries or
proposals being referred to as an "Acquisition Proposal"). The Company may
furnish information in response to unsolicited requests by, and participate in
discussions and negotiations with, third parties in connection with any such
transaction or Acquisition Proposal only if such person has submitted a bona
fide written proposal which the Board reasonably determines is likely to lead
to a Superior Proposal not solicited in violation of the Merger Agreement and
has executed a confidentiality agreement with the Company, provided that such
actions occur prior to the consummation of the Offer and the Board determines
in good faith (based on the advice of its financial advisor and counsel) that
the failure to take such actions would be inconsistent with its fiduciary
duties.
The Company has agreed to immediately cease any discussions or negotiations
with any person, entity or group concerning any such transaction or any
Acquisition Proposal that were continuing as of the date of the Merger
Agreement. The Company has also agreed to notify Parent promptly orally and in
writing upon receipt of any Acquisition Proposal, or any modification or
amendment thereto, or any request for non-public information relating to the
Company or any of its subsidiaries in connection with an Acquisition Proposal
or for access to the properties, books or records of the Company or any
subsidiary by any person or entity that informs the Board or such subsidiary
that it is considering making, or has made, an Acquisition Proposal.
The Company has also agreed that neither the Company nor the Board shall
withdraw or modify in a manner adverse to Parent or Purchaser, or propose to
withdraw or modify in a manner adverse to Parent or Purchaser, or fail at
Parent's request to reaffirm, the approval by the Board of the Merger
Agreement, the Offer or the Merger or the favorable recommendation of the
Board with respect thereto. Notwithstanding the foregoing, in the event that,
after the Company has received a bona fide written Acquisition Proposal not
solicited in violation of the Merger Agreement, the Board determines (based on
the advice of its counsel), prior to the consummation of the Offer, that the
failure to take such actions would be inconsistent with its fiduciary duties
to the Company's stockholders under applicable law, the Board may withdraw or
modify its approval or recommendation of the Merger Agreement, the Offer or
the Merger or approve or recommend such an Acquisition Proposal that is a
Superior Proposal, provided, however, that in no event may the Board take
either such action earlier than the second full business day following
Parent's receipt of written notice of the intention of the Board to do so.
The Company and the Board shall not (i) redeem the rights under the Rights
Agreement, or waive or amend any provision of the Rights Agreement, in any
such case to permit or facilitate the consummation of any Acquisition Proposal
or Alternative Transaction, or (ii) enter into any agreement with respect to,
or otherwise approve or recommend to stockholders, or publicly propose to
approve or recommend, any Acquisition Proposal or Alternative Transaction,
unless the Merger Agreement has been terminated in accordance with its terms.
"Alternative Transaction" means any of (i) a transaction pursuant to which
any person (or group of persons) other than Parent or its affiliates (a "Third
Party") acquires or would acquire more than 30% of the outstanding shares of
any class of equity securities of the Company, whether from the Company or
pursuant to a tender offer or exchange offer or otherwise, (ii) a merger or
other business combination involving the Company pursuant to which any Third
Party acquires more than 30% of the outstanding equity securities of the
Company or the entity surviving such merger or business combination, (iii) any
transaction pursuant to which any Third Party acquires or would acquire
control of assets of the Company or any of its Subsidiaries having a fair
market value equal to more than 30% of the fair market value of all the assets
of the Company
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and its Subsidiaries, taken as a whole, immediately prior to such transaction,
or (iv) any other consolidation, business combination, recapitalization or
similar transaction involving the Company or any of its Subsidiaries that are
"significant" under Regulation S-X at a level of 30% or more, other than the
Transactions; provided, however, that the term "Alternative Transaction" shall
not include any acquisition of securities by a broker dealer in connection
with a bona fide public offering of such securities.
"Superior Proposal" means any written proposal made by a third person to
acquire, directly or indirectly, for consideration consisting of cash and/or
securities, all of the equity securities of the Company entitled to vote
generally in the election of directors or all or substantially all the assets
of the Company, if, and only if, the Board reasonably determines (i) that the
proposed transaction would be more favorable from a financial point of view to
its stockholders than the Offer and the Merger and the Transactions, taking
into account, at the time of determination, any changes to the terms of the
Merger Agreement which, as of that time, had been proposed by Parent, and (ii)
that the person or entity making such Acquisition Proposal is capable of
consummating such Acquisition Proposal.
The Company has agreed not to release any Third Party from confidentiality
provisions of any agreement to which the Company is a party.
Employee Stock Options and Other Employee Benefits. The Merger Agreement
also provides that, prior to the Expiration Date, the Company will take all
actions necessary and appropriate to provide that, upon the Effective Time,
each outstanding Company Stock Option granted under any of the Company's 1995
Stock Purchase and Option Plan, 1996 Stock Option Plan, Stock Incentive Plan
and Non-Employee Director Stock Option Plan (collectively, the "Company Stock
Option Plans") or under any other plan or arrangement, each outstanding
warrant and option to purchase shares, whether or not then exercisable or
vested, and each right to purchase Shares under the Company's Employee Stock
Discount Purchase Plan and the International Employee Discount Purchase Plan
(collectively, the "Company Purchase Plans"), shall be cancelled and, in
exchange therefor, each holder of such Company Stock Option, warrant, option
or right to purchase shall receive an amount in cash in respect thereof, if
any, equal to the product of (i) the excess, if any, of the Merger
Consideration over the per share exercise price thereof and (ii) the number of
shares subject thereto (such payment to be net of applicable withholding
taxes).
The Company shall use its reasonable best efforts to obtain all necessary
waivers, consents or releases from holders of Company Stock Options, other
options, warrants and rights to purchase Shares and shall take any such action
as may be reasonably necessary to give effect to, and to accomplish the above
transactions involving Company Stock Options.
Effective as of the Effective Time and for a one-year period thereafter,
Parent agreed to provide, or cause the Surviving Corporation and its
subsidiaries to provide, those persons who, immediately prior to the Effective
Time, were employees of the Company and its subsidiaries and who continue in
such employment ("Continuing Employees") with benefits and compensation that
are substantially comparable, in the aggregate, to the compensation and
benefits provided to such employees as of the date of the Merger Agreement;
provided that Parent or the Surviving Corporation may terminate the employment
of any such Continuing Employees in accordance with applicable laws and
contractual rights, if any, of such Continuing Employees. Except with respect
to accruals under any defined benefit pension plan, Parent will, or will cause
the Surviving Corporation and its subsidiaries to, give Continuing Employees
full credit for purposes of eligibility, vesting and determination of the
level of benefits under any employee benefit plans or arrangements maintained
by Parent, the Surviving Corporation or any of their subsidiaries for such
Continuing Employees' service with the Company or any subsidiary of the
Company, to the same extent recognized by the Company for similar purposes
immediately prior to the Effective Time.
Directors' and Officers' Indemnification and Insurance. The Merger
Agreement further provides that the Certificate of Incorporation and Bylaws of
the Surviving Corporation shall contain provisions with respect to
indemnification substantially to the same effect as those set forth in the
Certificate of Incorporation and Bylaws of the Company on the date of the
Merger Agreement, which provisions shall not be amended, modified or otherwise
repealed for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who, at the
Effective Time, were directors, officers, employees, or agents of the Company,
unless such modification shall be required by law.
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The Merger Agreement provides that Parent shall cause the Surviving
Corporation, to the fullest extent permitted under applicable law or under the
Surviving Corporation's Certificate of Incorporation or Bylaws, to indemnify
and hold harmless each present and former director, officer or employee of the
Company or any of its subsidiaries against the costs or expenses (including
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
amounts paid in settlement in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, (x) arising out of or pertaining to the Transactions or (y)
otherwise with respect to any acts or omissions occurring at or prior to the
Effective Time, to the same extent as provided in the Company's Certificate of
Incorporation or Bylaws or any applicable contract or agreement as in effect
on the date of the Merger Agreement, in each case for a period of six years
after the date of the Merger Agreement.
The Merger Agreement also provides that 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 with 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 twice 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.
Consents; Approvals; Reasonable Best Efforts. The Merger Agreement provides
that, subject to its terms and conditions, Parent and the Company shall (i)
promptly make all filings necessary in connection with their respective
Necessary Consents (defined as consents, approvals, orders, authorizations,
registrations, declarations and filings required under or in relation to the
HSR Act, state securities or "blue sky" laws, the Securities Act of 1933, as
amended (the "Securities Act"), the Exchange Act, Delaware Law with respect to
the filing of the Certificate of Merger and the rules and regulations of the
Nasdaq, antitrust or other competition laws of other jurisdictions) and (ii)
use reasonable best efforts to cooperate with one another in (y) determining
whether any filings are required to be made with, or consents, permits,
authorizations or approvals are required to be obtained from, any third party
or other governmental entity in connection with the execution and delivery of
the Merger Agreement and the consummation of the Transactions and (z) timely
making all such filings and timely seeking all such consents, permits,
authorizations or approvals, including such party's Necessary Consents. The
parties shall cooperate with one another in connection with the making of all
such filings, including providing copies of all such documents to the non-
filing or non-submitting party and its advisors prior to filing or otherwise
submitting. Without limiting the generality of the foregoing, Parent and
Purchaser agree to (i) promptly effect all necessary registrations and
filings, including, but not limited to, filings and submissions of information
under the HSR Act, and applicable foreign laws that are designed or intended
to prohibit, restrict or regulate actions having the purpose or effect of
monopolization, restraint of trade or limitation of competition (collectively,
"Antitrust Laws"), and (ii) use reasonable best efforts to promptly take, or
cause their affiliates to take, if required by the Federal Trade Commission
(the "FTC") or its staff, the Assistant Attorney General in charge of the
Antitrust Division and his staff, or any state attorney general or its staff,
or any comparable person under applicable foreign Antitrust Laws, in each case
in order to consummate the Transactions, all commercially reasonable actions
and things to secure federal, state and applicable foreign antitrust
clearance. The existence of the conditions set forth in clause (b) under
"Conditions to the Merger" and in Section 14, clauses (a) and (b), will not
limit or diminish Parent's obligations pursuant to the foregoing sentence or
relieve Parent of any liability or damages that may result from its breach of
its obligations under such sentence. In connection with the foregoing, the
Company will cooperate with and assist Parent, and, with respect to matters
that are within its power or control will use its reasonable best efforts to
promptly (x) take, or cause to be taken, all actions and to do, or cause to be
done, all commercially reasonable things necessary, proper or advisable under
applicable Antitrust Laws to consummate the Transactions as soon as
practicable, including, without limitation, preparing and filing as promptly
as practicable all documentation to effect all necessary filings, notices,
petitions, statements, registrations, submissions of information, applications
and other documents and (y) obtain and maintain all approvals, consents,
registrations, permits, authorizations and other confirmations required to be
obtained from any third party that are necessary, proper or advisable to
consummate the Merger and the other Transactions. Subject to applicable laws
relating to the exchange of information, Parent and the Company shall have the
right to review in advance, and to the extent practicable each will consult
with the other on, all the information relating to their respective
subsidiaries that appears in any filing made with, or written materials
submitted to, any third party and/or any governmental entity in connection
with the Merger and the other Transactions.
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Other Cooperation and Further Assurances. Parent, Purchaser and the Company
have also agreed that if required by applicable law, as soon as practicable
following consummation of the Offer, Parent and the Company shall together, or
pursuant to any reasonable allocation of responsibility between them,
cooperate with one another in taking all commercially reasonable efforts in
order to lift any injunctions or remove any other impediment to the
consummation of the Transactions. In case at any time after the Effective Time
any further action is necessary or desirable to carry out the purposes of the
Merger Agreement, the proper officers and directors of each of the parties to
the Merger Agreement shall take all such necessary action.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company as to the absence of certain changes or events
concerning the Company's business, compliance with law, litigation, employee
benefit matters, labor matters, intellectual property, environmental matters,
taxes, amendments to the Rights Agreement, material contracts and brokers.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the fulfillment
or waiver at or prior to the Effective Time of the following conditions: (a)
the Offer Completion Date shall have occurred, which is the date on which
Purchaser completes the purchase of Shares pursuant to the Offer; (b) if
required by applicable law, the Merger Agreement shall have been adopted at or
prior to the Effective Time by the requisite vote of the stockholders of the
Company in accordance with Delaware Law; and (c) no order, statute, rule,
regulation, executive order, stay, decree, judgment or injunction shall have
been enacted, entered, promulgated or enforced by any court or other
governmental entity which prohibits or prevents the consummation of the Merger
which has not been vacated, dismissed or withdrawn prior to the Effective
Time. The Company and Parent shall use reasonable best efforts to have any of
the foregoing vacated, dismissed or withdrawn by the Effective Time.
Termination. The Merger Agreement provides that it may be terminated at any
time prior to the Effective Time, notwithstanding approval thereof by the
stockholders of the Company: (a) by mutual written consent duly authorized by
the Boards of Directors of Parent and the Company; or (b) by either Parent or
the Company if the initial consummation of the Offer shall not have occurred
on or prior to September 30, 2000, provided, however, that either party may,
by written notice to the other party delivered on or prior to September 30,
2000, extend such date until November 30, 2000, if the failure to consummate
the Offer on or prior to September 30, 2000 shall have resulted from the
failure of the conditions set forth in clause (a) of Section 14 and/or clause
(b) of Section 14 to be satisfied, and provided further that the right to
terminate the Merger Agreement pursuant to this clause (b) shall not be
available to any party whose failure to fulfill any obligation under the
Merger Agreement pursuant to this clause (b) has been the cause of, or
resulted in, the failure of the Offer to be consummated on or prior to such
date; or (c) by either Parent or the Company if, as the result of the failure
of the Minimum Condition or any of the other conditions set forth in Section
14, the Offer shall have terminated or expired in accordance with its terms
without Purchaser having purchased any Shares pursuant to the Offer; or (d) by
either Parent or the Company if a court of competent jurisdiction or
governmental, regulatory or administrative agency or commission shall have
issued a nonappealable final order, decree or ruling or taken any other
nonappealable final action having the effect of permanently restraining,
enjoining or otherwise prohibiting the Offer or the Merger; provided that the
party seeking to terminate the Merger Agreement shall have used its reasonable
best efforts to remove or lift such order decree or ruling; or (e) by Parent,
if, whether or not permitted to do so by the Merger Agreement, the Board or
the Company shall, prior to the Offer Completion Date, (x) (i) withdraw,
modify or change its approval or recommendation of the Offer, the Merger
Agreement or the Merger in a manner adverse to Parent; (ii) approve or
recommend to the stockholders of the Company an Acquisition Proposal or
Alternative Transaction; or (iii) approve or recommend that the stockholders
of the Company tender their shares in any tender or exchange offer that is an
Alternative Transaction or (y) take any public position or make any
disclosures to the Company's stockholders, whether or not permitterd by the
non-solicitation covenant, which has the effect of any of the foregoing; or
(f) by Parent or the Company, upon a material breach of any representation,
warranty, covenant or agreement on the part of the Company or Parent,
respectively, set forth in the Merger Agreement; provided that, except for any
breach of the Company's obligations under the non-solicitation covenant, if
such breach is curable prior to the initial expiration date of the Offer (or
any extension thereof) by the Company or Parent, as the case may be, through
the exercise of its reasonable best efforts and for so long as the Company or
Parent, as the case may be, continues to exercise such reasonable best
efforts, neither Parent nor the Company, respectively, may terminate the
Merger Agreement under this clause (f) until such date; or (g) by the Company,
in order to accept a Superior Proposal; provided that (A) the Offer shall not
theretofore have been
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consummated (or, if the Offer is consummated and extended, initially
consummated); (B) the Board determines (based on the advice of counsel) that
the failure to take such actions would be inconsistent with its fiduciary
duties to the Company's stockholders under applicable law; (C) the Company has
given Parent two full business days' advance notice of the Company's intention
to accept such Superior Proposal; (D) the Company shall have the paid the Fees
and the Expenses described below under the section entitled "Fees and
Expenses"; and (E) the Company shall have complied in all respects with the
non-solicitation covenant.
Notwithstanding the foregoing, the right to terminate the Merger Agreement
pursuant to clauses (e) and (f) above shall not be available to Parent if
Purchaser or any other affiliate of Parent shall have acquired the Shares
pursuant to the Offer.
Effect of Termination. In the event of the termination of the Merger
Agreement, written notice thereof shall forthwith be given to the other party
or parties specifying the provision thereof pursuant to which such termination
is made, and the Merger Agreement shall forthwith become void and there shall
be no liability on the part of any party thereto or any of its affiliates,
directors, officers or stockholders except for any obligation of the Company
or Parent set forth below under the section entitled "Fees and Expenses".
Notwithstanding the foregoing, nothing in the Merger Agreement shall relieve
the Company or Parent from liability for any wilful breach thereof.
Fees and Expenses. The Merger Agreement provides that all fees and expenses
incurred in connection with the Merger Agreement and the Transactions shall be
paid by the party incurring such expenses, whether or not the Merger is
consummated. The Company shall pay Parent a fee of $30,000,000 (the "Fee") and
shall also pay Parent up to $1,000,000 to reimburse Parent for its itemized
out-of-pocket expenses in connection with the Transactions (the "Expense
Reimbursement") upon the first to occur of any of the following events: (1)
the termination of the Merger Agreement by Parent pursuant to the provisions
described above in clause (e) or (f); or (2) the termination of the Merger
Agreement by the Company pursuant to the provisions described above in clause
(g). Parent shall reimburse the Company for the fee of $25,000,000 paid to
Ocular Sciences, Inc. in connection with the termination of the Ocular Merger
Agreement (the "Parent Expense Reimbursement") upon the termination of the
Merger Agreement (i) by either Parent or the Company pursuant to the
provisions described above in clause (b), (c) or (d), if the failure to
consummate the Offer is the result of the failure of the conditions set forth
in any of clause (a) or (b) of Section 14 herein to be satisfied, or (ii) by
the Company pursuant to the provision described above in clause (f); provided,
however, that if within twelve months of termination of the Merger Agreement
pursuant to clause (i) of this sentence, an Alternative Transaction is
consummated, the Company shall pay to Parent, not later than two days after
the date such Alternative Transaction is consummated, an amount equal to
$25,000,000, previously reimbursed to the Company by Parent pursuant to the
provisions of the Merger Agreement. The Fee and the Expense Reimbursement and
the Parent Expense Reimbursement shall be paid by wire transfer of same day
funds to an account designated by Parent or the Company, as applicable, within
two business days after a demand for payment following (i) in the case of the
Fee and the Expense Reimbursement, the first to occur of any of the events
described above in the second sentence of this paragraph; provided that, in
the event of a termination of the Merger Agreement pursuant to the provision
described above in clause (g), the Fee and the Expense Reimbursement shall be
paid as therein provided as a condition to the effectiveness of such
termination and (ii) in the case of the Parent Expense Reimbursement, the
first to occur of any of the events described above in the third sentence of
this paragraph. The agreements regarding the Fee and Expense Reimbursement are
an integral part of the Transaction and do not constitute a penalty.
THE CONFIDENTIALITY AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE CONFIDENTIALITY
AGREEMENT, DATED MAY 10, 2000, BETWEEN THE COMPANY AND CIBA VISION (THE
"CONFIDENTIALITY AGREEMENT"). THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE CONFIDENTIALITY AGREEMENT, WHICH IS INCORPORATED HEREIN BY
REFERENCE, AND A COPY OF WHICH HAS BEEN FILED WITH THE SEC AS AN EXHIBIT TO
THE SCHEDULE TO. THE CONFIDENTIALITY AGREEMENT MAY BE EXAMINED AND COPIES MAY
BE OBTAINED AT THE PLACES SET FORTH IN SECTION 7.
On May 10, 2000, the Company and CIBA Vision executed the Confidentiality
Agreement. Pursuant to the terms of the Confidentiality Agreement, each party
agreed to provide to the other party certain non-public information concerning
such party (the "Confidential Information").
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As a condition for the disclosure of the Confidential Information to each
other, the Company and CIBA Vision each agreed, among other things: (1) to
treat confidentially the Confidential Information, (2) to use the Confidential
Information only for the purposes of evaluation of a possible business
transaction with each other, (3) to disclose Confidential Information to its
directors, officers, employees, affiliates, prospective capital or financing
sources, advisors or other representatives (collectively, a party's
"Representatives") on a need-to-know basis only; provided that the
Representatives have agreed to be bound by that party's obligations under the
Confidentiality Agreement, (4) not to disclose to any third party other than a
party's Representatives, without the prior written consent of the other party,
any of the Confidential Information, the fact that discussions or negotiations
are taking place concerning a possible transaction, or any terms, conditions
or the status thereof, unless in the unqualified opinion of that party's
counsel, disclosure is required to be made under the Securities Act or the
Exchange Act, or other applicable law, (5) to immediately notify the other
party of the receipt of any demand or request by subpoena, civil investigative
demand, interrogatories, requests for information or other similar process to
disclose any portion of the Confidential Information and the terms of such
demand or request, and, if disclosure of the Confidential Information is
required, to exercise its best efforts to obtain an order or other reliable
assurance that confidential treatment will be accorded to the Confidential
Information, and (6) to promptly destroy or return to the other party, upon
request, all Confidential Information, without retaining any copy thereof. The
Confidentiality Agreement shall remain in effect for five years commencing on
May 10, 2000.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE
MERGER.
Purpose of the Offer. The Offer is being made pursuant to the Merger
Agreement. The purpose of the Offer and the Merger is for Parent to acquire
control of, and the entire equity interest in, the Company. The purpose of the
Merger is for Parent to acquire all Shares not purchased pursuant to the
Offer. Upon consummation of the Merger, the Company will become an indirect
wholly owned subsidiary of Parent.
Under Delaware Law, the approval of the Board and the affirmative vote of
the holders of a majority of the outstanding Shares is required to approve and
adopt the Merger Agreement and the transactions contemplated thereby,
including the Merger. The Board of Directors of the Company has unanimously
determined that each of the Offer and the Merger is fair to, and in the best
interests of, the Stockholders of the Company, has approved, adopted and
declared advisable the Merger Agreement and the Merger (such approval and
adoption having been made in accordance with Delaware Law, including, without
limitation, Section 203 thereof) and has resolved to recommend that the
Stockholders accept the Offer and tender their Shares pursuant to the Offer.
Unless the Merger is consummated pursuant to the short-form merger provisions
under Delaware Law 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 Shares.
Accordingly, if the Minimum Condition is satisfied, 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.
In the Merger Agreement, the Company has agreed to duly call, give notice
of, convene and hold a special meeting of its stockholders as promptly as
practicable following consummation of the Offer for the purpose of considering
and taking action on the Merger Agreement and the Merger, if such action is
required by Delaware Law. Parent and Purchaser have agreed that all Shares
owned by them and their subsidiaries will be voted in favor of the approval
and adoption of the Merger Agreement and the Merger.
The Merger Agreement provides that, promptly following the purchase by
Purchaser of a number of Shares that satisfies the Minimum Condition,
Purchaser will be entitled to designate representatives to serve on the Board
in proportion to Purchaser's ownership of Shares following such purchase. See
Section 10. Purchaser expects that such representation would permit Purchaser
to exert substantial influence over the Company's conduct of its business and
operations.
Short-Form Merger. Under Delaware Law, if Purchaser acquires, pursuant to
the Offer or otherwise, at least 90% of the then outstanding Shares, Purchaser
will be able to approve the Merger without a vote of the Company's
stockholders. In such event, Parent, Purchaser and the Company have agreed to
take, at the request of Purchaser, all necessary and appropriate action to
cause the Merger to become effective as promptly as reasonably practicable
after such acquisition, without a meeting of the Company's stockholders. If,
however, Purchaser does not acquire at least 90% of the outstanding Shares
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pursuant to the Offer or otherwise and a vote of the Company's stockholders is
required under Delaware Law, a significantly longer period of time would be
required to effect the Merger.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders who have not
tendered their Shares will have certain rights under Delaware Law to dissent
from the Merger and demand appraisal of, and to receive payment in cash of the
fair value of, their Shares. Stockholders who perfect such rights by complying
with the procedures set forth in Section 262 of the Delaware Law ("Section
262") will have the "fair value" of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) determined
by the Delaware Court of Chancery and will be entitled to receive a cash
payment equal to such fair value for the Surviving Corporation. 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, the court is 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. The Weinberger court also noted that
under Section 262, fair value is to be determined "exclusive of any element of
value arising from the accomplishment or expectation of the merger". In Cede &
Co. v. Technicolor, Inc., however, the Delaware Supreme Court stated that, in
the context of a two-step cash merger, "to the extent that value has been
added following a change in majority control before cash-out, it is still
value attributable to the going concern", to be included in the appraisal
process. As a consequence, the value so determined in any appraisal proceeding
could be the same, more or less than the purchase price per Share in the Offer
or the Merger Consideration.
In addition, several decisions by Delaware courts have held that, in
certain circumstances, a controlling stockholder of a company involved in a
merger has a fiduciary duty to other stockholders which requires that the
merger be fair to such other stockholders. In determining whether a merger is
fair to minority stockholders, Delaware courts have considered, among other
things, the type and amount of consideration to be received by the
stockholders and whether there was fair dealing among the parties. The
Delaware Supreme Court stated in Weinberger and Rabkin v. Philip A. Hunt
Chemical Corp. that the remedy ordinarily available to minority stockholders
in a cash-out merger is the right to appraisal described above. However, a
damages remedy or injunctive relief may be available if a merger is found to
be the product of procedural unfairness, including fraud, misrepresentation or
other misconduct.
Parent does not intend to object, assuming the proper procedures are
followed, to the exercise of appraisal rights by any stockholder and the
demand for appraisal of, and payment in cash for the fair value of, the
Shares. Parent intends, however, to cause the Surviving Corporation to argue
in an appraisal proceeding that, for purposes of such proceeding, the fair
value of each Share is less than or equal to the Merger Consideration. In this
regard, stockholders should be aware that opinions of investment banking firms
as to the fairness from a financial point of view (including Bear Stearns) are
not necessarily opinions as to "fair value" under Section 262.
The foregoing summary of the rights of dissenting stockholders under
Delaware Law does not purport to be a complete statement of the procedures to
be followed by stockholders desiring to exercise any dissenters' rights under
Delaware Law. The preservation and exercise of dissenters' rights require
strict adherence to the applicable provisions of Delaware Law.
Going Private Transactions. The SEC 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 Purchaser seeks to acquire the remaining Shares not held by it.
Purchaser believes that Rule 13e-3 will not be applicable to the Merger. Rule
13e-3 requires, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction be filed with the SEC and disclosed to stockholders prior to
consummation of the transaction.
Plans for the Company. It is expected that, initially following the Merger,
the business and operations of the Company will, except as set forth in this
Offer to Purchase, be continued by the Company substantially as they are
currently being
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conducted. Parent will continue to evaluate the business and operations of the
Company during the pendency of the Offer and after the consummation of the
Offer and the Merger, and will take such actions as it deems appropriate under
the circumstances then existing. Parent intends to seek additional information
about the Company during this period. Thereafter, Parent intends to review
such information as part of a comprehensive review of the Company's business,
operations, capitalization and management with a view to optimizing
exploitation of the Company's potential in conjunction with Parent's
businesses. It is expected that the business and operations of the Company
would form an important part of Parent's future business plans.
Except as indicated in this Offer to Purchase, Parent does not have any
present plans or proposals which relate to or would result in (i) any
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, relocation of any operations of the Company or any of its
subsidiaries, (ii) any purchase, sale or transfer of a material amount of
assets, involving the Company or any of its subsidiaries, (iii) any material
change in the Company's present indebtedness, capitalization or dividend
policy, (iv) any change in the present board of directors or management of the
Company, (v) any other material change in the Company's corporate structure or
business, (vi) any class of equity securities of the Company being delisted
from a national stock exchange or ceasing to be authorized to be quoted in an
automated quotation system operated by a national securities association,
(vii) any class of equity securities of the Company becoming eligible for
termination of registration under Section 12(g)(4) of the Exchange Act, (viii)
the suspension of the Company's obligation to file reports under Section 15(d)
of the Exchange Act, (ix) the acquisition by any person of additional
securities of the Company, or the disposition of securities of the Company, or
(x) any changes in the Company's charter, bylaws or other governing
instruments or other actions that could impede the acquisition of control of
the Company.
12. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that the Company shall not, between the date
of the Merger Agreement and the Effective Time, without the prior written
consent of Parent, (a) issue, sell, pledge, dispose of or encumber, or
authorize the issuance, sale, pledge, disposition or encumbrance of any shares
of any class of capital stock, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest (including, without limitation, any
phantom interest), of the Company or any of its subsidiaries or affiliates
(except for the issuance of Shares issuable pursuant to options granted under
the Company's 1995 Stock Purchase and Option Plan, 1996 Stock Option Plan,
Stock Incentive Plan and Non-Employee Director Stock Option Plan outstanding
on the date hereof); provided that the occurrence of a separation of the
rights under the Rights Agreement and the related issuance of Common Stock to
the Company's stockholders thereunder shall not be deemed a breach of the
Merger Agreement to the extent that (A) the occurrence of such separation
occurred as a result of an unsolicited acquisition of Common Stock by a third
party, and (B) such acquisition did not occur as a result of the Company
breaching the "No Solicitation" covenant under the Merger Agreement; (b) sell,
pledge, dispose of or encumber any assets of the Company or any of its
subsidiaries, except for (i) sales of inventory in the ordinary course of
business consistent with past practices and (ii) dispositions of obsolete or
worthless assets; or (c) (i) declare, set aside, make or pay any dividend or
other distribution, payable in cash, stock, property or any combination
thereof, with respect to any of its capital stock, except for dividends by any
wholly owned subsidiary to the Company, (ii) split, combine or reclassify any
of its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
its capital stock, or (iii) except as required by the terms of any security as
in effect on the date of the Merger Agreement or expressly permitted under the
Merger Agreement, amend the terms or change the period of exercisability of,
purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary of
the Company to amend the terms or change the period of exercisability of,
purchase, repurchase, redeem or otherwise acquire, any of its securities or
any securities of its subsidiaries, including, without limitation, Common
Stock, or any option, warrant or right, directly or indirectly, to acquire any
such securities, or propose to do any of the foregoing. See Section 10. If,
however, the Company should, during the pendency of the Offer, (i) split,
combine or otherwise change the Common Stock or its capitalization, (ii)
acquire or otherwise cause a reduction in the number of outstanding Common
Stock or (iii) issue or sell any additional Common Stock, shares of any other
class or series of capital stock, other voting securities or any securities
convertible into, or options, rights, or warrants, conditional or otherwise,
to acquire, any of the foregoing, then, without prejudice to Purchaser's
rights under Section 14, Purchaser may (subject to the provisions of the
Merger Agreement) make such adjustments to the purchase price and other terms
of the Offer (including the number and type of securities to be purchased) as
it deems appropriate to reflect such split, combination or other change.
23
<PAGE>
If, on or after May 30, 2000, the Company should declare, set aside, make
or pay any dividend on the Common Stock or make any other distribution
(including the issuance of additional shares of capital stock pursuant to a
stock dividend or stock split, the issuance of other securities or the
issuance of rights for the purchase of any securities) with respect to the
Common Stock that is payable or distributable to stockholders of record on a
date prior to the transfer to the name of Purchaser or its nominee or
transferee on the Company's stock transfer records of the Common Stock
purchased pursuant to the Offer, then, without prejudice to Purchaser's rights
under Section 14, (i) the purchase price per Common Share payable by Purchaser
pursuant to the Offer will be reduced (subject to the provisions of the Merger
Agreement) to the extent that any such dividend or distribution is payable in
cash and (ii) any non-cash dividend, distribution or right shall be received
and held by the tendering stockholder for the account of Purchaser and will be
required to be promptly remitted and transferred by each tendering stockholder
to the Depositary for the account of Purchaser, accompanied by appropriate
documentation of transfer. Pending such remittance and subject to applicable
law, Purchaser will be entitled to all of the rights and privileges as owner
of any such non-cash dividend, distribution or right and may withhold the
entire purchase price or deduct from the purchase price the amount or value
thereof, as determined by Purchaser in its sole discretion.
13. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR SHARES, NASDAQ LISTING,
MARGIN REGULATIONS AND EXCHANGE ACT REGISTRATION.
Possible Effects of the Offer on the Market for the Shares. The purchase of
Shares by Purchaser pursuant to the Offer will reduce the number of Shares
that might otherwise trade publicly and will reduce the number of holders of
Shares, which could adversely affect the liquidity and market value of the
remaining Shares held by the public.
Parent intends to cause the delisting of the Shares by Nasdaq following
consummation of the Offer.
Nasdaq Listing. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued listing
on Nasdaq. According to Nasdaq's published guidelines, the Shares would not be
eligible to be included for listing if, among other things, the number of
Shares publicly held falls below 100,000, the number of holders of Shares
falls below 300 or the market value of such publicly held Shares is not at
least $200,000. If, as a result of the purchase of Shares pursuant to the
Offer, the Merger or otherwise, the Shares no longer meet the requirements of
Nasdaq for continued listing, the listing of the Shares will be discontinued.
In such event, the market for the Shares would be adversely affected. In the
event that the Shares were no longer eligible for listing on Nasdaq,
quotations might still be available from other sources. The extent of the
public market for the Shares and the availability of such quotations would,
however, depend upon the number of holders of such Shares remaining at such
time, the interest in maintaining a market in such Shares on the part of
securities firms, the possible termination of registration of such Shares
under the Exchange Act as described below and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the SEC if the Shares are not listed on a "national securities
exchange" and there are fewer than 300 record holders. The termination of the
registration of the Shares under the Exchange Act would substantially reduce
the information required to be furnished by the Company to holders of Shares
and to the SEC and would make certain provisions of the Exchange Act, such as
the short-swing profit recovery provisions of Section 16(b), the requirement
of furnishing a proxy statement in connection with stockholders' meetings
pursuant to Section 14(a) or 14(c) of the Exchange Act and the related
requirements of an annual report, and the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions, no longer
applicable to the Shares. In addition, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the ability
to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"). If registration of
the Shares under the Exchange Act were terminated, the Shares would no longer
be eligible for Nasdaq reporting. Purchaser currently intends to seek to cause
the Company to terminate the registration of the Shares under the Exchange Act
as soon after consummation of the Offer as the requirements for termination of
registration are met.
Margin Regulations. The Shares are currently "margin securities", as such
term is defined under the rules of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), which has the effect, among
other things, of allowing brokers to extend credit on the collateral of such
securities. Depending upon factors similar to those described above regarding
listing and market quotations, following the Offer, it is possible that the
Shares might no longer constitute "margin
24
<PAGE>
securities" for purposes of the margin regulations of the Federal Reserve
Board, in which event such Shares could no longer be used as collateral for
loans made by brokers. In addition, if registration of the Shares under the
Exchange Act were terminated, the Shares would no longer constitute "margin
securities".
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange
Act (relating to the obligation of Purchaser to pay for or return tendered
Shares promptly after termination or withdrawal of the Offer), pay for, and
(subject to any such rules or regulations) may delay the acceptance for
payment of or the payment for any tendered Shares and (except as provided in
the Merger Agreement) amend or terminate the Offer if (i) the Minimum
Condition has not been satisfied or (ii) at any time on or after the date of
the Merger Agreement and before the Expiration Date, any of the following
conditions exists:
(a) there shall be in effect an injunction or other order, decree,
judgment or ruling by a governmental entity of competent jurisdiction or a
law, rule or regulation shall have been promulgated, or enacted by a
governmental entity of competent jurisdiction which in any such case (i)
restrains or prohibits the making or consummation of the Offer or the
consummation of the Merger, or (ii) prohibits or restricts the ownership by
Parent (or any of its affiliates or subsidiaries) of any material portion
of the Company's business or assets or which would substantially deprive
Parent and/or its affiliates or subsidiaries of the benefit of ownership of
the Company's business or assets, or (iii) imposes material limitations on
the ability of Purchaser or Parent effectively to acquire the Shares; or
(b) any applicable waiting period under all necessary registration and
filings, including, but not limited to, filings and submissions of
information, under the HSR Act and applicable foreign laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization, restraint of trade or limitation of
competition, shall not have expired or been terminated; or
(c) the Merger Agreement shall have been terminated by the Company or
Parent in accordance with its terms; or
(d) Parent and the Company shall have agreed in writing that Purchaser
shall amend the Offer to terminate the Offer or postpone the payment for
Shares pursuant thereto; or
(e) the representations and warranties of the Company set forth in the
Merger Agreement shall not have been true and accurate as of the date made
(except for those representations and warranties that address matters only
as of a particular date or only with respect to a specific period of time
which need only be true and accurate as of such date or with respect to
such period) (in each case without, for this purpose, giving effect to
qualifications or limitations as to materiality or the absence of a
Material Adverse Effect on the Company contained in such representations
and warranties), except for such failures to be true and correct as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company, or the Company shall have breached
or failed to perform or comply in any material respect with any material
obligation, agreement or covenant required by the Merger Agreement to be
performed or complied with by it; provided, however, that such breach or
failure to perform is incapable of being cured or has not been cured prior
to the initial expiration date of the Offer (or such later date upon which
the Offer shall expire); or
(f) the Board 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;
which, in the reasonable judgment of Parent or Purchaser, in any such case,
and regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
or payments.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent and Purchaser regardless of the circumstances
giving rise to any such condition, and, except for the Minimum Condition and
otherwise subject to the terms of the Merger Agreement, may be waived by
Parent and Purchaser, in whole or in part, any time and from time to time, in
the sole discretion of Parent and Purchaser.
25
<PAGE>
The determination as to whether any condition has been satisfied shall be
deemed a continuing right which may be asserted by Parent and Purchaser at any
time and from time to time. Notwithstanding the fact that Parent and Purchaser
reserve the right to assert the failure of a condition following acceptance
for payment but prior to payment in order to delay payment or cancel their
obligation to pay for properly tendered Shares, Parent and Purchaser will
either promptly pay for such Shares or promptly return such Shares.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment pursuant thereto shall
forthwith be returned to the tendering stockholders.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to Parent and discussions between representatives of Parent with
representatives of the Company during Parent's investigation of the Company
(see Section 10), neither Purchaser nor Parent is aware (i) of any license or
other regulatory permit that appears to be material to the business of the
Company or any of its subsidiaries, taken as a whole, which might be adversely
affected by the acquisition of Shares by Purchaser pursuant to the Offer or
(ii) except as set forth below, of any approval or other action by any
domestic (federal or state) or foreign governmental entity which would be
required prior to the acquisition of Shares by Purchaser pursuant to the
Offer. Should any such approval or other action be required, it is Purchaser's
present intention to seek such approval or action. Purchaser does not
currently intend, however, to delay the purchase of Shares tendered pursuant
to the Offer, pending the outcome of any such action or the receipt of any
such approval (subject to Purchaser's right to decline to purchase Shares if
any of the conditions in Section 14 shall have occurred). There can be no
assurance that any such approval or other action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result
to the business of the Company, Purchaser or Parent or that certain parts of
the businesses of the Company, Purchaser or Parent might not have to be
disposed of or held separate or other substantial conditions complied with in
order to obtain such approval or other action or in the event that such
approval was not obtained or such other action was not taken. Purchaser's
obligation under the Offer to accept for payment and pay for Shares is subject
to certain conditions, including conditions relating to the legal matters
discussed in this Section 15. See Section 14 for certain conditions of the
Offer.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of Delaware Law prevents an
"interested stockholder" (generally a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock, or an
affiliate or associate thereof) from engaging in a "business combination"
(defined to include mergers and certain other transactions) with a Delaware
corporation for a period of three years following the date such person became
an interested stockholder unless, among other things, prior to such date the
board of directors of the corporation approved either the business combination
or the transaction in which the interested stockholder became an interested
stockholder. On May 29, 2000, prior to the execution of the Merger Agreement,
the Board, by unanimous vote of all directors present at a meeting held on
such date, approved the Merger Agreement, determined that each of the Offer
and the Merger is advisable and fair to, and in the best interest of, the
stockholders of the Company. Accordingly, Section 203 is inapplicable to the
Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers
of corporations meeting certain requirements more difficult. However, in 1987,
in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the
State of Indiana may, as a matter of corporate law and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of
a target corporation without the prior approval of the remaining stockholders.
The state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and
were incorporated there.
The Company, directly or through its subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by
their terms, apply
26
<PAGE>
to the Offer or the Merger and has not complied with any such laws. Should any
person seek to apply any state takeover law, Purchaser will take such action
as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the
event it is asserted that one or more state takeover laws is applicable to the
Offer or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required
to file certain information with, or receive approvals from, the relevant
state authorities. In addition, if enjoined, Purchaser might be unable to
accept for payment any Shares tendered pursuant to the Offer, or be delayed in
continuing or consummating the Offer, and the Merger. In such case, Purchaser
may not be obligated to accept for payment any Shares tendered. See Section
14.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and to
the FTC and certain waiting period requirements have been satisfied. The
acquisition of Shares by Purchaser pursuant to the Offer is subject to such
requirements. See Section 2.
Pursuant to the HSR Act, Parent expects to file a Premerger Notification
and Report Form in connection with the purchase of Shares pursuant to the
Offer with the Antitrust Division and the FTC on or about June 9, 2000. Under
the provisions of the HSR Act applicable to the Offer, the purchase of Shares
pursuant to the Offer may not be consummated until the expiration of a 15-
calendar day waiting period following the filing by Parent, unless such
waiting period is earlier terminated by the FTC and the Antitrust Division.
Such waiting period may be extended by a request from the FTC or the Antitrust
Division for additional information or documentary material prior to the
expiration of the waiting period. Pursuant to the HSR Act, Parent has
requested early termination of the waiting period applicable to the Offer.
There can be no assurance, however, that the 15-day HSR Act waiting period
will be terminated early. If either the FTC or the Antitrust Division were to
request additional information or documentary material from Parent with
respect to the Offer, the waiting period with respect to the Offer would
expire at 11:59 p.m., New York City time, on the tenth calendar day after the
date of substantial compliance with such request. Thereafter, the waiting
period could be extended only by court order. If the acquisition of Shares is
delayed pursuant to a request by the FTC or the Antitrust Division for
additional information or documentary material pursuant to the HSR Act, the
Offer may, but need not, be extended and, in any event, the purchase of and
payment for Shares will be deferred until ten days after the request is
substantially complied with, unless the waiting period is sooner terminated by
the FTC and the Antitrust Division. Only one extension of such waiting period
pursuant to a request for additional information is authorized by the HSR Act
and the rules promulgated thereunder, except by court order. Any such
extension of the waiting period will not give rise to any withdrawal rights
not otherwise provided for by applicable law. See Section 4. It is a condition
to the Offer that the waiting period applicable under the HSR Act to the Offer
expire or be terminated. See Sections 1 and 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares
by Purchaser pursuant to the Offer. At any time before or after the purchase
of Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust
Division could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking to enjoin the purchase
of Shares pursuant to the Offer or seeking the divestiture of Shares purchased
by Purchaser or the divestiture of substantial assets of Parent, the Company
or their respective subsidiaries. Private parties and state attorneys general
may also bring legal action under federal or state antitrust laws under
certain circumstances. Based upon an examination of information available to
Parent relating to the businesses in which Parent, the Company and their
respective subsidiaries are engaged, Parent and Purchaser believe that the
Offer will not violate the antitrust laws. Nevertheless, 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 would be. See Section 14 for
certain conditions to the Offer, including conditions with respect to
litigation.
16. FEES AND EXPENSES.
Except as set forth below, Purchaser will not pay any fees or commissions
to any broker, dealer or other person for soliciting tenders of Shares
pursuant to the Offer.
27
<PAGE>
Lehman Brothers is acting as Dealer Manager in connection with the Offer
and has provided certain financial advisory services to Parent in connection
with the acquisition of the Company. Parent has agreed to pay Lehman Brothers
reasonable and customary compensation for such services. Parent has also
agreed to reimburse Lehman Brothers for all reasonable out-of-pocket expenses
incurred by Lehman Brothers, including the reasonable fees and expenses of
legal counsel, and to indemnify Lehman Brothers against certain liabilities
and expenses in connection with its engagement, including certain liabilities
under the federal securities laws.
Purchaser and Parent have retained Innisfree M&A Incorporated, as the
Information Agent, and ChaseMellon Shareholder Services, L.L.C., as the
Depositary, in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telecopy, telegraph and personal
interview and may request banks, brokers, dealers and other nominee
stockholders to forward materials relating to the Offer to beneficial owners.
As compensation for acting as Information Agent in connection with the Offer,
Innisfree will be paid a fee of $15,000 and will also be reimbursed for
certain out-of-pocket expenses and may be indemnified against certain
liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws.
Purchaser will pay the Depositary reasonable and customary compensation for
its services in connection with the Offer, plus reimbursement for out-of-
pocket expenses, and will indemnify the Depositary against certain liabilities
and expenses in connection therewith, including under federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser for customary handling and mailing expenses incurred by them in
forwarding material to their customers.
17. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to holders of Shares. Purchaser is not
aware of any jurisdiction where the making of the Offer is prohibited by any
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of
the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a
good faith effort to comply with any such state statute. If, after such good
faith effort, 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 shall be deemed to be made on behalf of Purchaser by the
Dealer Manager or 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 PURCHASER OR THE COMPANY NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Parent and Purchaser have filed with the SEC the Schedule TO,
together with exhibits, furnishing certain additional information with respect
to the Offer. The Schedule TO and any amendments thereto, including exhibits,
may be inspected at, and copies may be obtained from, the same places and in
the same manner as set forth in Section 7 (except that they will not be
available at the regional offices of the SEC).
WJ Acquisition Corp.
Dated: June 6, 2000
28
<PAGE>
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT.
The following table sets forth the name, current business address,
citizenship and current principal occupation or employment, and material
occupations, positions, offices or employments and business addresses thereof
for the past five years of each director and executive officer of Parent.
Unless otherwise indicated, the current business address of each person is
Novartis AG, Schwarzwaldallee 215, CH-4058 Basel, Switzerland.
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND HELD DURING THE PAST FIVE YEARS
CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP
------------------------ ---------------------------------------------------- -----------
<C> <S> <C>
Dr. Daniel Vasella.......... Chairman of the Board of Directors, Chief Executive Switzerland
Officer of Parent and Head of the Executive
Committee. Dr. Vasella assumed the position of
Chairman in April 1999, having served as President,
Chief Executive Officer and Head of the Executive
Committee since December 1996. From April 1995 until
December 1996, Dr. Vasella was a member of the
Sandoz Group Executive Committee and served as Chief
Executive Officer of Sandoz Pharma Ltd. Prior to his
appointment as Chief Executive Officer of Sandoz
Pharma Ltd., Dr. Vasella was Chief Operating Officer
of Sandoz Pharma Ltd. Dr. Vasella currently is a
member of the Board of Directors of Credit Suisse
Group, the Supervisory Board of Siemens AG in
Munich, Germany and the International Board of
Governors of the Press Center of Peace in Tel Aviv,
Israel. In addition, Dr. Vasella is a member of
several industry associations, including the
International Business Leaders Advisory Council for
the Mayor of Shanghai, a member of the Board of
INSEAD (Institute Europeen d'Administration des
Affaires, i.e., the European Institute for Business
Administration), IMD (International Institute of
Management Development) and a member of the Global
Leaders for Tomorrow Group of the World Economic
Forum in Davos, Switzerland.
The business address of Sandoz Pharma Ltd. was
Lichtstrasse 35, CH-4002 Basel, Switzerland.
Hans-Jorg Rudloff........... Vice Chairman of the Board of Directors of Parent Switzerland
since December 1996. From 1995 to December 1996, Mr.
Rudloff was Vice Chairman of the Board of Directors
of Sandoz AG. He was elected a Director of Sandoz AG
in 1994. Mr. Rudloff has been the Head of Investment
Banking of the Barclays Group since 1998. From 1995
to 1998, he served as Chairman of Marcuard Cook &
Cie S.A. and Chairman of MC-BBL Securities Ltd. Mr.
Rudloff also is a member of the boards of various
companies, including Pargesa S.A. in Geneva,
Switzerland and TBG (Thyssen-Bornemisza Group). He
also serves on the Advisory Board of the
Landeskreditbank in Baden-Wurttemberg.
The business address of Sandoz AG was Lichtstrasse
35,
CH-4002 Basel, Switzerland. The business address of
Barclays Group is 54 Lombard Street, London EC3P
3AH, United Kingdom. The business address of
Marcuard Cook & Cie S.A. is P.O. Box, CH-1211
Geneva, Switzerland. The business address of MC-BBL
Securities Ltd. is London, United Kingdom.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND HELD DURING THE PAST FIVE YEARS
CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP
------------------------ ---------------------------------------------------- -----------
<C> <S> <C>
Prof. Dr. Helmut Sihler..... Vice Chairman of the Board of Parent and a member of Austria
the Chairman's Committee since December 1996. From
1983 until December 1996, Prof. Sihler was a member
of the Board of Directors and the Chairman's
Committee of CIBA-Geigy AG, and Vice Chairman of the
Board since 1993. Prof. Sihler also is Chairman of
the Supervisory Boards of Deutsche Telekom AG, Bonn,
Germany and Dr. Ing. H.c. F. Porsche AG in
Stuttgart, Germany. Prof. Sihler serves as honorary
professor for economics in Munster, Germany.
The business address of CIBA-Geigy AG was
Klybeckstrasse 141, CH-4002 Basel, Switzerland.
Heini Lippuner.............. Director of Parent and a member of the Chairman's Switzerland
Committee. Mr. Lippuner has served as Director of
Parent since December 1996 and as a member of the
Chairman's Committee since April 1999. From 1986 to
December 1996, Mr. Lippuner was a member of the
Executive Committee as well as Chief Operating
Officer of the CIBA-Geigy Group. Mr. Lippuner is a
member of the Boards of Directors of Credit Suisse
Group, Buhler AG in Uzwil, Switzerland and
Winterthur Insurance Ltd. in Winterthur,
Switzerland.
The business address of CIBA-Geigy AG was
Klybeckstrasse 141, CH-4002 Basel, Switzerland.
Birgit Breuel............... Director of Parent. Mrs. Breuel has served as a Germany
Director since December 1996 and prior to that, she
was a Director of CIBA-Geigy AG since 1994. Since
1995, Mrs. Breuel has been acting as the General
Commissioner and since 1997, she has been a member
of the Executive Board of Expo 2000 Hannover GmbH,
the company organizing the World Exposition EXPO
2000 in Hannover, Germany. Mrs. Breuel also serves
as a member of the Board of Gruner+Jahr AG in
Hamburg, Germany and as a member of the Advisory
Board of J.P. Morgan GmbH in Frankfurt, Germany.
The business address of CIBA-Geigy AG was
Klybeckstrasse 141, CH-4002 Basel, Switzerland. The
business address of Expo 2000 Hannover GmbH is 30510
Hannover, Germany.
Prof. Dr. Peter Burckhardt.. Director of Parent since December 1996. Prof. Switzerland
Burckhardt has been Professor of Internal Medicine
and Chairman of the Department of Internal Medicine
at the University of Lausanne since 1982. Prof.
Burckhardt also serves as the Head of Medical
Service at the University Hospital of Lausanne since
1992. Prof. Burckhardt also serves as Chairman of
the Board of National Osteoporosis Societies,
trustee of the International Foundation of
Osteoporosis and member of the Committee of Appeal
of the Swiss Inter-Cantonal Office for the Control
of Drugs. Until 1995, Prof. Burckhardt was President
of the Swiss Society of Internal Medicine and the
Swiss Osteoporosis Association.
The address of the Medical Faculty at the University
of Lausanne is CHUV, CH-1011 Lausanne, Switzerland.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND HELD DURING THE PAST FIVE YEARS
CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP
------------------------ ---------------------------------------------------- -------------
<C> <S> <C>
Dr. Hans-Ulrich Doerig...... Director of Parent since December 1996. Since 1998, Switzerland
Dr. Doerig has served as Vice Chairman of the
Executive Board and Chief Risk Officer of Credit
Suisse Group. With the merger of the former Credit
Suisse International and the former CS First Boston
in 1997, he became Chief Executive Officer of Credit
Suisse First Boston in Zurich. In 1996, he was
appointed President of the General Management of
Credit Suisse in Zurich, in view of the Credit
Suisse Group restructuring. From 1993 to 1996, Dr.
Doerig served as full-time Vice Chairman of the
Board of Credit Suisse, heading the Credit and
Finance Committee as well as the Audit Committee of
the Board. Dr. Doerig is also Vice Chairman of the
Board of the University of Zurich.
The business address of Credit Suisse Group is
Paradeplatz 8, P.O. Box, CH-8070 Zurich,
Switzerland.
Walter G. Frehner........... Director of Parent. Mr. Frehner has served as a Switzerland
Director since December 1996, and prior to that, as
Director of CIBA-Geigy AG since 1994. From 1993
until his retirement in May 1996, Mr. Frehner served
as Chairman of the Board of Directors of Swiss Bank
Corporation, which merged with Union Bank of
Switzerland in June 1998. Mr. Frehner is also a
Director of Schindler Holding AG and Vice Chairman
of the insurance company Baloise Holding AG, in
Basel, Switzerland.
The business address of Swiss Bank Corporation was
Aeschenvorstadt 1, P.O. Box, CH-4002 Basel,
Switzerland.
William W. George........... Director of Parent since May 1999. Mr. George has United States
been Chairman (since 1996) and Chief Executive
Officer (since 1991) of Medtronic, Inc. in
Minneapolis, Minnesota, where he also served as
President and Chief Operating Officer from 1989 to
1991. Mr. George is also a member of the Boards of
Directors of Dayton Hudson, Imitation, and Allina
Health Systems.
The business address of Medtronic, Inc. is 7000
Central Avenue, Minneapolis, Minnesota 55303.
Alexandre F. Jetzer......... Director of Parent since December 1996. From Switzerland
December 1996 until July 1999, Mr. Jetzer was a
member of the Executive Committee and Head of
International Coordination, Legal & Taxes of Parent.
From May 1995 to December 1996, Mr. Jetzer was Vice
Chairman and Chief Executive Officer of Sandoz
Corporation in New York, New York and Chief
Executive Officer of Sandoz Pharmaceuticals
Corporation in East Hanover, New Jersey. From 1981
to 1995, he was a member of the Sandoz Group
Executive Committee.
The business address of Sandoz Corporation was 608
Fifth Avenue, New York, New York 10020. The business
address of Sandoz Pharmaceuticals Corporation was 59
State Route 10, East Hanover, New Jersey 07936-1005.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND HELD DURING THE PAST FIVE YEARS
CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP
------------------------ ---------------------------------------------------- -----------
<C> <S> <C>
Pierre Landolt.............. Director of Parent. Mr. Landolt has held this Switzerland
position since December 1996, and prior to that, was
a Director of Sandoz AG since 1986. He has been the
President of the Sandoz family foundation since
1994. Mr. Landolt is a member of various boards,
including Emasan AG, Basel, Switzerland; Curacao
International Trust Company, Curacao; and Parmigiani
Mesure et Art du Temps, Fleurier, Switzerland.
The business address of the Sandoz family foundation
is Sandoz Family Offices, 85 Avenue General Guisan,
CH-1009 Pully, Switzerland.
Prof. Dr. Rolf M. Director of Parent since May 1999. Prof. Zinkernagel Switzerland
Zinkernagel................ has been Professor and Director of the Institute of
Experimental Immunology at the University of Zurich
since 1992. Prof. Zinkernagel won the Nobel Prize
for Medicine (Immunology) in 1996. He is a member of
the Swiss Society of Allergy and Immunology
(President, 1993 to 1994), the American Associations
of Immunologists and of Pathologists, the ENI
European Network of Immunological Institutions, the
International Society for Antiviral Research, the
Scientific Advisory Board of Cytos in Zurich, CTL
Toronto/Delaware and Lombard & Odier Bank in Zurich.
The address of the Institute of Experimental
Immunology at the University of Zurich is
Universitatsspital/Dept. Path., Institut fur Exp.
Immunologie, Schmelzbergstr. 12, CH-8091 Zurich,
Switzerland.
Dr. Raymund Breu............ Chief Financial Officer and a member of the Switzerland
Executive Committee since December 1996. Dr. Breu
was Head of Group Finance and a member of the Sandoz
Group Executive Committee from 1993 until December
1996.
The business address of Sandoz AG was Lichtstrasse
35,
CH-4002 Basel, Switzerland.
Dr. Hans Kindler............ Head of Novartis Switzerland and of Group Technology Switzerland
Novartis AG and a member of the Executive Committee since
Lichtstrasse 35 December 1996. From 1990 until 1996, Dr. Kindler
CH-4058, Basel served as a member of the Executive Committee of the
Switzerland former CIBA-Geigy AG, where he was responsible for
personnel, production and technology, as well as for
safety and environmental protection.
The business address of CIBA-Geigy AG was
Klybeckstrasse 141, CH-4002 Basel, Switzerland.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND HELD DURING THE PAST FIVE YEARS
CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP
------------------------ ---------------------------------------------------- -------------
<C> <S> <C>
Dr. A. N. "Jerry" Head of Novartis' Healthcare Division and Chief United States
Karabelas.................. Executive Officer of its pharmaceutical operations,
as well as a member of the Executive Committee since
January 1998. Until January 1997, Dr. Karabelas held
various positions of increasing responsibility with
SmithKline Beecham Pharmaceuticals: in 1997, he was
Executive Vice President; from 1995 until January
1997, he was a member of the Executive Management
Team; and from 1994 to 1996, he was Head of
Diversified Pharmaceutical Services and President of
U.S. Pharmaceuticals. In addition to his
responsibilities at Parent, Dr. Karabelas serves on
the Boards of Directors of the Philadelphia College
of Pharmacy and Science and the Fox Chase Cancer
Center. He is also a member of the Scientific
Advisory Committee of the Massachusetts General
Hospital.
The business address of SmithKline Beecham
Pharmaceuticals is P.O. Box 7929, 1 Franklin Plaza,
Philadelphia, Pennsylvania 19101.
Thomas Ebeling.............. Chief Operating Officer of Novartis Pharmaceuticals Germany
Novartis AG (since December 1999) and member of the Executive
Lichtstrasse 35 Committee (since September 1998). From September
CH-4002, Basel 1998 to December 1999, Mr. Ebeling was Chief
Switzerland Executive Officer of Novartis' Consumer Health
Division. Prior to that, he was Chief Executive
Officer of Novartis' global nutrition operations, a
position he assumed in December 1997. Mr. Ebeling
joined Parent in May 1997 as General Manager of
Novartis Nutrition for Germany and Austria. Before
joining Parent, Mr. Ebeling worked for Pepsi-Cola
Germany for six years, during which time he served
in various capacities: from 1996 to 1997, he was
General Manager of Pepsi-Cola in Germany; and from
1994 to 1996, he served as National Sales and
Franchise Director.
The business address of Pepsi-Cola GmbH in Germany
is Martin Behaimstrasse 12, 63263 Neu Isenburg,
Germany.
Al Piergallini.............. Chief Executive Officer of Novartis' Consumer Health United States
Novartis Consumer Health Division and member of the Executive Committee since
Inc. December 1999. Prior to that, Mr. Piergallini was
560 Morris Ave. President and Chief Executive Officer of Novartis
Summit, New Jersey Consumer Health North America starting in January
1999. Before that, he was Chairman, President and
Chief Executive Officer of Gerber Products Company.
He joined Gerber in 1989 as President and Chief
Operating Officer.
The business address of Gerber Products Company is
445 State Street, Freemont, Michigan.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND HELD DURING THE PAST FIVE YEARS
CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP
------------------------ ---------------------------------------------------- --------------
<C> <S> <C>
Heinz Imhof................. Head of Novartis' Agribusiness Division and a member Switzerland
of the Executive Committee since June 1999. Since
December 1996, Mr. Imhof has been Head of Parent
Seeds. From 1995 until December 1996, he served as a
member of the Sandoz Group Executive Committee. From
1993 to 1995, he was Chairman and Chief Executive
Officer of Sandoz Corporation, New York, New York.
Additionally, he was Chairman and Chief Executive
Officer of Sandoz Pharmaceuticals Corporation in
East Hanover, New Jersey.
The business address of Sandoz AG was Lichtstrasse
35, CH-4002 Basel, Switzerland.
Dr. Urs Barlocher........... Head of International Coordination, Legal and Taxes Switzerland
and Corporate Security, as well as a member of the
Executive Committee, since June 1999. From December
1996 until May 1999, Dr. Barlocher was Head of
Corporate Legal, Taxes and Insurance. From May 1995
until December 1996, Dr. Barlocher served as
Chairman of the Board of Sandoz Deutschland GmbH
(Germany) and Biochemie GmbH (Austria). Prior to
that, he was Chief Executive Officer of Sandoz
Pharma Ltd. for three years.
The business address of Sandoz Deutschland GmbH was
Wiesentalstrasse 27, 79540 Loerrach, Germany. The
business address of Biochemie GmbH is
Biochemiestrasse 10, A-6250 Kundl, Austria. The
business address of Sandoz Pharma Ltd. was
Lichtstrasse 35, CH-4002 Basel, Switzerland.
Norman C. Walker............ Head of Human Resources since May 1998 and a member United Kingdom
of the Executive Committee since June 1999. Before
joining Parent, Mr. Walker worked for Kraft Jacobs
Suchard in Zurich for seven years, serving as Head
of Human Resources.
The business address of Kraft Jacobs Suchard is
Klausstrasse 6, Zurich, Switzerland.
Dr. John Atkin.............. Chief Executive Officer of Novartis Crop Protection United Kingdom
since June 1999. From January to May 1999, Dr. Atkin
served as Chief Operating Officer of Novartis Crop
Protection. From February 1997 to July 1998, Dr.
Atkin was Head of Insecticides and Patron for Asia
(area responsibility), and thereafter until December
1998, he was Head of Product Portfolio Management of
Novartis Crop Protection. Dr. Atkin was General
Manager of Sandoz Agro France from May 1995 to
January 1997 and before that, since July 1993, Head
of Sandoz Agro Northern Europe. Earlier appointments
were in crop protection with FMC Europe in Brussels
(marketing and sales manager), Rhone-Poulenc
(product development) and the British Ministry for
Agriculture.
The business address of Sandoz AG and Sandoz Agro
Northern Europe was Lichtstrasse 35, CH-4002 Basel,
Switzerland. The business address of Sandoz Agro
France was St.-Germain-En-Laye, France.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND HELD DURING THE PAST FIVE YEARS
CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP
------------------------ ---------------------------------------------------- --------------
<C> <S> <C>
Dr. Glen Bradley............ Chief Executive Officer of CIBA Vision since 1990. United States
CIBA Vision Corporation Dr. Bradley is a director of Summit Technology,
11460 Johns Creek Pkwy. E-Doctor Network, CIBA Vision AG, CIBA Vision
Duluth, Georgia Corporation, CIBA Vision Puerto Rico, Inc., CIBA
Vision Surgical Products, Inc. and Biocure, Inc.
Hans-Beat Gurtler........... Head of Novartis Animal Health since December 1996. Switzerland
From 1990 to 1996, Mr. Gurtler was the Head of the
Animal Health Sector of the former CIBA-Geigy Group.
The business address of the CIBA-Geigy AG was
Klybeckstrasse 141, CH-4002 Basel, Switzerland.
Dr. Oswald Sellemond........ Chief Executive Officer of Novartis Generics since Austria
Biochemie GmbH December 1996. Since 1990, Dr. Sellemond has been
Biochemiestrasse 10 Chief Executive Officer of Biochemie GmbH in Kundl,
A-6250 Kundl Austria, formerly a division of the Sandoz Group,
Austria and in 1999, he became Chairman of Biochemie GmbH.
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER.
The following table sets forth the name, current business address,
citizenship and current principal occupation or employment, and material
occupations, positions, offices or employments and business addresses thereof
for the past five years of each director and executive officer of Purchaser.
Unless otherwise indicated, the current business address of each person is
Novartis Corporation, 608 Fifth Avenue, New York, New York 10020.
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND HELD DURING THE PAST FIVE YEARS
CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP
------------------------ ---------------------------------------------------- --------------
<C> <S> <C>
Robert L. Thompson, Jr...... Director of Purchaser and Chief Executive Officer United States
and President of Purchaser. Executive Vice President
and General Counsel of Novartis Corporation since
January 1997. From January 1990 to December 1996,
Mr. Thompson served as Vice President, General
Counsel and Secretary of Sandoz Corporation.
The business address of Sandoz Corporation was 608
Fifth Avenue, New York, New York.
Terence A. Barnett.......... Chief Financial Officer of Purchaser. President and United Kingdom
Chief Executive Officer of Novartis Corporation
since June 1999. From September 1996 to June 1999,
Mr. Barnett served as President and Chief Executive
Officer of Novartis China in Beijing, China. Mr.
Barnett is a Director of Novartis Corporation and
several of its subsidiaries.
The business address of Novartis China is No. 1 Jian
Guo Men Wai Avenue, Beijing 100004, P.R. China.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
NAME AND HELD DURING THE PAST FIVE YEARS
CURRENT BUSINESS ADDRESS AND BUSINESS ADDRESSES THEREOF CITIZENSHIP
------------------------ ---------------------------------------------------- -------------
<C> <S> <C>
Mr. Tim Barabe.............. Chief Operating Officer of Purchaser. Chief United States
CIBA Vision Corporation Financial Officer of CIBA Vision Corporation since
11460 Johns Creek Pkwy. 1993. Mr. Barabe is a director of CIBA Vision Puerto
Duluth, Georgia Rico, Inc., CIBA Vision Surgical Products, Inc.,
Biocure, Inc. and Fernbank Natural History Museum.
Jeff Benjamin............... Vice President and Secretary of Purchaser. Vice United States
President and Associate General Counsel of Novartis
Corporation since January 1997. From January 1995 to
December 1996, Mr. Benjamin was at Ciba-Geigy
Corporation, serving as Vice President and Associate
General Counsel in 1995 and Vice President and
General Counsel in 1996.
The business address of Ciba-Geigy Corporation was
520 White Plains Road, Tarrytown, New York.
Wayne P. Merkelson.......... Treasurer and Assistant Secretary of Purchaser. Vice United States
President and Associate General Counsel of Novartis
Corporation since January 1997. From April 1989 to
December 1996, Mr. Merkelson served as Associate
General Counsel to Sandoz Corporation, becoming a
Vice President of that company in 1996.
The business address of Sandoz Corporation was 608
</TABLE> Fifth Avenue, New York, New York.
8
<PAGE>
Manually signed facsimiles of the Letter of Transmittal, properly
completed, will be accepted. The Letter of Transmittal and certificates
evidencing Shares and any other required documents should be sent or delivered
by each stockholder or his broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Facsimile Transmission
(for Eligible Institutions only):
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
By Overnight Courier: By Mail: By Hand:
Reorganization Department Reorganization Department Reorganization Department
85 Challenger Road P.O. Box 3301 120 Broadway
Mail Stop--Reorg. South Hackensack, NJ 07606 13th Floor
Ridgefield Park, NJ 07660 New York, NY 10271
OTHER INFORMATION:
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers listed below. Additional copies of this Offer to Purchase, the Letter
of Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent. A stockholder may also contact brokers, dealers, commercial
banks or trust companies for assistance concerning the Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
Bankers and Brokers Call Collect: (212) 750-5833
All Others Call Toll Free: (888) 750-5834
The Dealer Manager for the Offer is:
LEHMAN BROTHERS
Three World Financial Center
200 Vesey Street
New York, New York 10285
Call Collect: (212) 526-5044 or (212) 526-6105
