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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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WANG LABORATORIES, INC.
(NAME OF SUBJECT COMPANY)
WANG LABORATORIES, INC.
(NAME OF PERSON(S) FILING STATEMENT)
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COMMON STOCK, PAR VALUE $.01 PER SHARE
(AND CERTAIN SECURITIES CONVERTIBLE INTO
OR EXERCISABLE FOR COMMON STOCK)
(TITLE OF CLASS OF SECURITIES)
93369N 10 9
(CUSIP NUMBER OF CLASS OF SECURITIES)
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ALBERT A. NOTINI, ESQ.
EXECUTIVE VICE PRESIDENT
WANG LABORATORIES, INC.
290 CONCORD ROAD
BILLERICA, MASSACHUSETTS 01821
(978) 625-5000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICE AND COMMUNICATIONS ON
BEHALF OF THE PERSON(S) FILING STATEMENT)
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WITH A COPY TO:
DAVID T. BREWSTER, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
(617) 573-4800
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Wang Laboratories, Inc., a Delaware
corporation (the "Company"), and the address of the principal executive offices
of the Company is 290 Concord Road, Billerica, Massachusetts 01821. The titles
of the classes of equity securities to which this Statement relates are (1) the
Common Stock, par value $0.01 per share, of the Company, including the Series C
Junior Participating Preferred Stock issued pursuant to the Rights Agreement
dated as of April 22, 1998, between the Company and American Stock Transfer and
Trust Company, as Rights Agent (together, the "Common Stock"); (2) the
depositary shares (the "Depositary Shares"), in each case representing 1/20th of
a share of Series B Cumulative Convertible Preferred Stock, par value $0.01 per
share, of the Company (the "Series B Preferred Stock"); (3) the Series B
Preferred Stock; (4) the warrants issued by the Company pursuant to the Common
Stock Purchase Warrant Agreement dated as of October 29, 1993, between the
Company and American Stock Transfer and Trust Company, as Warrant Agent (the
"Common Stock Purchase Warrants"); (5) the Series A Cumulative Convertible
Preferred Stock, par value $0.01 per share, of the Company (the "Series A
Preferred Stock"); and (6) the Warrant issued by the Company to Microsoft
Corporation pursuant to the common stock purchase warrant dated February 27,
1998 (the "Special Common Stock Warrant" and together with the Common Stock, the
Depositary Shares, the Series B Preferred Stock, the Common Stock Purchase
Warrants and the Series A Preferred Stock, the "Offer Securities").
ITEM 2. TENDER OFFER OF THE PURCHASER.
This Statement relates to the tender offer by a Delaware corporation,
Getronics Acquisition, Inc. (the "Purchaser") disclosed in a Tender Offer
Statement on Schedule 14D-1 dated May 10, 1999 (the "Schedule 14D-1"), to
purchase all of the outstanding Offer Securities at the amounts per share or
warrant set forth below, net to the seller in cash, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated May 10, 1999 (the
"Offer to Purchase"), and the related Letters of Transmittal (which together
constitute the "Offer").
<TABLE>
<CAPTION>
OFFER PRICE PER
OFFER SECURITIES OFFER SECURITY
---------------- ---------------
<S> <C>
- - Common Stock.............................................. $ 29.25
- - Depositary Shares......................................... $ 55.05
- - Series B Preferred Stock.................................. $ 1,101.17
- - Common Stock Purchase Warrants............................ $ 7.80
- - Series A Preferred Stock.................................. $ 1,271.73
- - Special Common Stock Warrant.............................. $6,250,000.00
</TABLE>
Purchaser was formed in connection with the Offer and is owned as to 100%
of its outstanding stock by Getronics NV, a corporation organized under the laws
of The Netherlands ("Parent").
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of May 3, 1999 (the "Merger Agreement"), among Parent, Purchaser and the
Company. The Merger Agreement provides, among other things, for the making of
the Offer by the Purchaser and further provides that, upon the terms and subject
to the conditions contained in the Merger Agreement, the Purchaser will merge
with and into the Company (the "Merger," and together with the Offer, the
"Transaction") as soon as practicable after the consummation of the Offer.
Following consummation of the Merger (the "Effective Time"), the Company will
continue as the surviving corporation (the "Surviving Corporation"). In the
Merger, the Offer Securities issued and outstanding immediately prior to the
Effective Time (other than Offer Securities owned by any subsidiary of the
Company or any subsidiary of Parent or held in the treasury of the Company, all
of which will be cancelled, and other than Offer Securities, where applicable,
held by stockholders who perfect appraisal rights under Delaware law) will be
treated as set forth below.
- Each share of Common Stock will be converted into the right to receive
$29.25 in cash ("the Common Stock Merger Consideration").
- Each share of Series B Preferred Stock will become convertible into the
right to receive cash equal to the Common Stock Merger Consideration
multiplied by 37.647, or $1,101.17.
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- Each Common Stock Purchase Warrant will be converted into the right to
receive an amount in cash equal to the amount by which the Common Stock
Merger Consideration exceeds $21.45, or $7.80.
- Each share of Series A Preferred Stock will be converted immediately
prior to the Merger into 43.478 shares of Common Stock.
- The Special Common Stock Warrant shall expire.
A copy of the Merger Agreement is attached hereto as Exhibit 7 and is
incorporated herein by reference.
The Offer to Purchase states that the principal executive offices of the
Purchaser is located at Donauweg 10, Postbox 652, 1000 AR Amsterdam, The
Netherlands. The telephone number of the Purchaser at such location is
31-20-586-1412.
ITEM 3. IDENTITY AND BACKGROUND.
(a) Name and Address of the Company. The name and business address of the
Company, which is the person filing this Statement, are set forth in Item 1
above.
(b)(1) Certain Contracts, Etc. Certain contracts, agreements, arrangements
and understandings between the Company or its affiliates and certain of its
executive officers, directors or affiliates are described under the headings
"Election of Directors -- Compensation of Directors," "Proposal to Approve the
Amendment and Restatement of the Director Stock Option Plan," "Executive
Compensation" and "Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year End Option Values" at pages 8 to 12 and 27 to 32 of the Company's Proxy
Statement dated April 26, 1999, for its 1999 Annual Meeting of Stockholders (the
"1999 Proxy Statement"). Copies of such pages are filed as Exhibit 12 hereto and
are incorporated herein by reference.
In conjunction with their hiring, two executive officers of the Company
entered into contingent severance compensation agreements on generally the same
terms as other executive officers as described under the heading "Employment
Contracts and Change-in-Control Arrangements" at pages 30 to 32 of the 1999
Proxy Statement. Copies of such pages are filed as Exhibit 12 hereto and are
incorporated herein by reference.
Effective as of April 1, 1999, Franklyn A. Caine resigned as Chief
Financial Officer of the Company. To ensure his availability to assist the
Company in finalizing and reporting its results for the quarter then ended, the
Company entered into an agreement with Mr. Caine which provides for Mr. Caine's
continued employment on a limited basis through May 15, 1999. A copy of the
agreement between the Company and Mr. Caine is attached hereto as Exhibit 8 and
is incorporated herein by reference.
(b)(2) The Merger Agreement. A summary of the Merger Agreement is
contained in the section entitled Section 11 -- "Purpose of the Offer; Plans for
the Company; Certain Agreements" in the Offer to Purchase and is incorporated
herein by reference. A copy of the Merger Agreement is attached hereto as
Exhibit 7 and is incorporated herein by reference.
(b)(3) Confidentiality Agreement. The following is a summary of certain
portions of the Confidentiality Agreement dated February 26, 1999, between
Parent and the Company (the "Confidentiality Agreement") and is qualified in its
entirety by reference to the Confidentiality Agreement, a copy of which has been
filed as Exhibit 11 hereto and is incorporated by reference herein.
As a condition to being furnished certain information concerning the
Company (the "Evaluation Material"), Parent has agreed, among other things, that
it will keep such Evaluation Material confidential and will use it solely for
evaluating the Offer and the Merger. "Evaluation Material" does not include
information which (i) is already in Parent's possession, (ii) was, is or becomes
generally available to the public other than as a result of a disclosure by
Parent or its directors, officers, employees, agents or advisors, (iii) was, is
or becomes available to Parent on a non-confidential basis from a source other
than the Company or its directors, officers, employees, agents or advisors,
provided that such source is not known by Parent to be bound by a
confidentiality agreement with or other obligation of secrecy to the Company or
another party or (iv) has been independently acquired or developed by Parent or
its advisors based on information other than Evaluation Material.
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ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) Recommendation of the Board of Directors
The Board of Directors has approved the Merger Agreement and the
transactions contemplated thereby, determined that each of the Offer and the
Merger is fair to, and in the best interests of, the holders of the Offer
Securities, and has declared that the Offer and Merger are advisable. The Board
of Directors recommends that all holders of Offer Securities accept the Offer
and tender their Offer Securities pursuant to the Offer.
(b) Background of the Transaction
On November 13, 1998, Frans Kleipool, Director of Corporate Planning of
Parent, contacted Credit Suisse First Boston Corporation ("CSFB") in order to
arrange a meeting between Parent and the Company. Shortly thereafter, CSFB
informed Parent that Joseph M. Tucci, the Chairman and Chief Executive Officer
of the Company, would be interested in exchanging views about a possible
business combination of the Company and Parent with A.H.J. Risseeuw, the then
Chief Executive Officer of Parent.
On December 18, 1998, Mr. Tucci was introduced by a representative of CSFB
to Mr. Risseeuw at a meeting of the three parties. Mr. Tucci and Mr. Risseeuw
generally discussed the business opportunities for both companies and agreed to
investigate further the possibilities of a business combination.
From late December 1998 to early February 1999, Jan Docter, the Chief
Financial Officer of Parent, and Franklyn A. Caine, then Chief Financial Officer
of the Company, separately had several telephone discussions with
representatives of CSFB relating to possible financial and financing structures
for the acquisition of the Company by Parent.
On February 17, 1999, Messrs. Kleipool and Docter and Peter van Voorst, a
member of the executive board of Parent, met with representatives of CSFB and
Mr. Tucci to discuss the preliminary scope and timing of limited due diligence
reviews of the Company by Parent and of Parent by the Company.
On March 1, 1999, Mr. Van Voorst met with Kevin Roche, Vice President of
Service Planning of the Company, to discuss operational issues. Messrs. Docter
and Van Voorst and Cees van Luijk, the new Chief Executive Officer of Parent,
also met with Messrs. Tucci and Caine, Albert A. Notini, Executive Vice
President of the Company, and Jeremiah J.J. van Vuuren, President and Chief
Operating Officer, International, of the Company, to discuss operational and
business issues in connection with a possible business combination. Also on
March 1, 1999, the parties signed the Confidentiality Agreement.
On March 2, 1999, further talks were held between the senior management
teams of Parent and the Company. Each of the Company and Parent made a
presentation to the other party regarding its respective operations, market
positioning and financial profile. Issues related to a possible business
combination were discussed.
On March 14, 1999, Messrs. Tucci and Risseeuw had a telephone conversation
in which they further discussed certain issues related to a possible business
combination.
From March 20, 1999 through May 3, 1999, Parent's legal and financial
advisors, together with representatives of Parent, conducted legal and financial
due diligence investigations of the Company.
On March 21, 1999, Messrs. Tucci, Docter and Kleipool met to discuss the
general market trends in the systems integration industry. On March 22, 1999,
Messrs. Caine, Docter and Kleipool met to discuss the integration of management
control processes, procurement and business development. They also agreed on a
more definitive procedure and structure for the due diligence process.
On March 31 and April 1, 1999, Mr. Tucci met with Mr. Van Luijk and
Hartgert Langman, the chairman of the supervisory board of Parent, to further
discuss issues regarding a possible business combination.
On April 9, 1999, Messrs. van Vuuren, Docter and Van Voorst met in
Amsterdam to discuss the Company's operations in Europe.
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On April 14, 1999, representatives of the Company and of Parent and their
legal advisors met to discuss the results of the due diligence findings. On
April 14 and 15, 1999, representatives of the Company and of Parent met to
review information regarding the Company's European operations.
On April 21 and 22, 1999, representatives of Parent and the Company met to
review information regarding the Company's United States operations.
On April 23, 1999, Messrs. Van Luijk and Tucci met to discuss the terms of
a possible business combination. Mr. Van Luijk made a proposal to Mr. Tucci to
purchase all of the Common Stock and other securities of the Company for a
purchase price based on $29.25 per share of Common Stock, subject to certain
terms and conditions, including the negotiation of a mutually satisfactory
merger agreement.
On April 26, 1999, the supervisory board of Parent approved Mr. Van Luijk's
proposal to Mr. Tucci to acquire the Company, subject to a number of conditions.
Subsequent to the approval by the supervisory board, Messrs. Van Luijk and Tucci
had a telephone conversation in which they discussed certain aspects of the
conditions imposed on Parent's proposal by Parent's supervisory board.
On April 27, 1999, Messrs. Van Luijk and Tucci had several telephone
conversations to further discuss the conditions imposed on Parent's proposal by
Parent's supervisory board.
On April 28, 1999, the Board of Directors of the Company met to discuss the
proposal of Parent, as communicated to Mr. Tucci by Mr. Van Luijk. After the
meeting, Mr. Tucci informed Mr. Van Luijk of the issues raised by the Board of
Directors of the Company with respect to Parent's proposal.
From April 22 to May 2, 1999, the parties and their legal counsel
negotiated the terms of the proposed merger.
On May 2, 1999, Parent was advised by Messrs. Tucci and Notini that the
Company's Board of Directors had on that day reviewed the terms of the proposed
Merger Agreement and had, subject to the satisfactory conclusion of the
negotiation of the proposed Merger Agreement, determined the proposed Offer and
Merger are in the best interests of the Company and the Company's holders of
Offer Securities, approved the Offer and the Merger and recommended acceptance
of the Offer by the Company's stockholders.
Following the Company's Board of Directors meeting, the Merger Agreement
was finalized and executed by the parties on May 3, 1999. The Company and Parent
each announced the execution of the Merger Agreement in press releases issued
before the Nasdaq Stock Market's National Market and Amsterdam Exchanges,
respectively, opened on May 4, 1999.
(c) Reasons for the Recommendation
In reaching its conclusions and recommendations described above, the
Company's Board of Directors considered a number of factors, including the
following:
- The terms and conditions of the Offer and the Merger Agreement.
- The financial condition, results of operations, business and
prospects of the Company.
- The trading price of the Common Stock, and the expected trading
prices for the foreseeable future.
- Conditions in the information technology services industry
generally.
- The opinion of CSFB dated May 2, 1999, to the effect that, as of the
date of the opinion, the consideration to be received by holders of Common
Stock pursuant to the Offer and the Merger is fair from a financial point
of view to such stockholders. The full text of CSFB's written opinion which
set forth the procedures followed, the factors considered and the
assumptions made by CSFB is attached hereto and filed as Exhibit 6 hereto
and incorporated herein by reference. STOCKHOLDERS ARE URGED TO READ THE
OPINION OF CSFB CAREFULLY AND IN ITS ENTIRETY.
- The representation of Parent and the Purchaser that they expect to
have available to them funds sufficient to satisfy all of their respective
obligations under the Merger Agreement and the fact that the Offer is not
subject to a financing condition.
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- The provisions of the Merger Agreement that prohibit the Company
from soliciting any competitive proposal, but that permit the Company to
respond to unsolicited Acquisition Proposals (as that term is defined in
the Merger Agreement) by furnishing information to, and entering into
discussions or negotiations with, any third party making an Acquisition
Proposal, provided that such third party is bound by a confidentiality
agreement with terms not more favorable to such third party than the terms
of the Confidentiality Agreement, the Company's Board of Directors
determines that such third party's Acquisition Proposal is reasonably
likely to result in a Superior Proposal (as that term is defined in the
Merger Agreement) within a reasonable period of time and the Company's
Board of Directors determines that the failure to so act would likely
breach the fiduciary duties of the Board of Directors. Additional
provisions of the Merger Agreement permit the Company to enter into an
agreement for an Acquisition Proposal if the Board of Directors determines
that such Acquisition Proposal is a Superior Proposal and that the failure
to take action with respect to such Superior Proposal would likely breach
the fiduciary duties of the Board of Directors, provided that the Company
gives Parent notice of such determination and negotiates with Parent during
the three business days following such notice to agree to a modification of
the terms and conditions of the Merger Agreement as would enable the
Company to proceed with the transactions contemplated thereby on such
adjusted terms.
- The provisions in the Merger Agreement that require the Company to
pay to Parent a termination fee of $65 million if the Merger Agreement is
terminated under certain circumstances, which the Company's Board of
Directors recognized would potentially foreclose competing offers at
approximately the same price level as, or at slightly higher levels than,
the Offer, but, based in part on the advice of the Company's financial
advisors, was well within the range of termination fees payable in
transactions of similar size and should not be a deterrent to competing
offers at price levels somewhat higher than the Offer.
- The fact that other potential purchasers with whom the Company had
been in contact did not submit proposals.
The Company's Board of Directors did not assign relative weights to the
foregoing factors or determine that any factor was of particular importance.
Rather, the Company's Board of Directors viewed their position and
recommendations as being based on the totality of the information presented to
and considered by them. In addition, individual members of the Board of
Directors may have given different weight to different factors.
The Company's Board of Directors recognized that, while the consummation of
the Offer gives the stockholders the opportunity to realize a premium over the
prices at which the Common Stock was traded prior to the public announcement of
the Merger and Offer, tendering in the Offer would eliminate the opportunity for
stockholders to participate in the future growth and profits of the Company.
It is expected that, if the Offer Securities were not to be purchased by
the Purchaser in accordance with the terms of the offer or if the Merger were
not to be consummated, the Company's current management, under the general
direction of the Company's Board of Directors would continue to manage the
Company as an ongoing business in accordance with the Company's current
long-term strategic plan.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
CSFB was retained, pursuant to the terms of a letter agreement dated March
17, 1999 (the "CSFB Letter Agreement"), as financial advisor to the Company in
connection with any proposed business combination of the Company (whether in one
or a series of transactions) with another party of all or a substantial amount
of the assets or the capital stock of the Company, as well as any
recapitalization, restructuring or liquidation of the Company, or any other form
of disposition which results in an effective business combination of the
principal business and operations of the Company with another party (a "CSFB
Transaction"). Pursuant to the terms of the CSFB Letter Agreement, the Company
agreed to pay CSFB a fee of $150,000, plus an additional fee equal to 0.55% of
the Aggregate Consideration (as defined in the CSFB Letter Agreement) in
connection with a CSFB transaction upon consummation thereof. The Company has
also agreed to pay CSFB additional fees in such amounts as will be customary
given the nature of the services provided, including reimbursement for CSFB's
out-of-pocket expenses (including fees and expenses of legal
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counsel to be retained by CSFB and of other consultants and advisors retained
with the Company's consent) as well as any sales or similar taxes.
CSFB provided to the Company an opinion to the effect that the
consideration proposed to be paid in the Transaction is fair to the holders of
Common Stock from a financial point of view. CSFB has, in the past, provided
financial advisory services to the Company and has received fees for the
rendering of such services. In the ordinary course of business, CSFB may
actively trade the securities of the Company for its account and for the
accounts of its customers and, accordingly, may at any time hold a long or short
position in such securities.
Except as disclosed herein, neither the Company nor any person acting on
its behalf currently intends to employ, retain or compensate any other person to
make solicitations or recommendations to security holders on its behalf
concerning the Offer or the Merger.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) Share Transactions Last 60 Days. Except as set forth below, no
transactions in the Offer Securities have been effected during the past 60 days
by the Company or, to the best of the Company's knowledge, by any executive
officer, director, affiliate or subsidiary of the Company.
Within the past 60 days, the Company has entered into arrangements with
respect to securities with John Cunningham and Michael Levinger, both executive
officers of the Company. Mr. Cunningham's stock option instrument specifies a
grant of 240,000 shares of Common Stock vesting as to 34%, 33% and 33% over a
three-year period and will be exercisable at the fair market value of the Common
Stock when approved by the Company's Organization, Compensation and Nominating
Committee. Mr. Levinger's stock option instrument specifies a grant of 160,000
shares of Common Stock vesting as to 25% per year for the next four years and
will be exercisable at the fair market value of the Common Stock when approved
by the Company's Organization, Compensation and Nominating Committee. In
addition, Mr. Levinger has been awarded a restricted stock grant for 25,000
shares.
(b) Intent to Tender. To the best of the Company's knowledge, to the
extent permitted by applicable securities laws, rules or regulations, each
executive officer and director of the Company currently intends to tender all
Offer Securities over which he or she has sole dispositive power to the
Purchaser. The Company does not currently know whether its affiliates intend to
tender all Offer Securities over which he or she has sole dispositive power to
the Purchaser.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY SUBJECT COMPANY.
(a) Certain Negotiations. Except as set forth in this Schedule 14D-9, the
Company is not engaged in any negotiation in response to the Offer which relates
to or would result in (i) an extraordinary transaction, such as a merger or
reorganization, involving the Company or any subsidiary of the Company; (ii) a
purchase, sale or transfer of a material amount of assets by the Company or any
subsidiary of the Company; (iii) a tender offer for or other acquisition of
securities by or of the Company; or (iv) any material change in the present
capitalization or dividend policy of the Company.
(b) Certain Transactions. There are presently no transactions, board
resolutions, agreements in principle or signed contracts in response to the
Offer, other than as described in or incorporated by reference into Item 3(b),
which relate to or would result in one or more of the matters referred to in
Item 7(a)(i), (ii), (iii) or (iv).
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
(a) DGCL 203
Section 203 of the Delaware General Corporation Law (the "DGCL") purports
to regulate certain business combinations of a corporation organized under
Delaware law, such as the Company, with a stockholder beneficially owning 15% or
more of the outstanding voting stock of such corporation (an
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"Interested Stockholder"). Section 203 provides, in relevant part, that the
corporation shall not engage in any business combination for a period of three
years following the date such stockholder first becomes an Interested
Stockholder unless (i) prior to the date the stockholder first becomes an
Interested Stockholder, the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an Interested Stockholder, (ii) upon becoming an Interested
Stockholder, the Interested Stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced, or (iii)
on or subsequent to the date the stockholder becomes an Interested Stockholder,
the business combination is approved by the board of directors and authorized at
an annual or special meeting of stockholders by the affirmative vote of at least
two-thirds of the outstanding voting stock which is not owned by the Interested
Stockholder. The Company's Board of Directors has approved the Merger Agreement
and the transactions contemplated thereby, including the Offer and the Merger,
and, therefore, Section 203 of the DGCL is inapplicable to the Offer and the
Merger.
(b) Information Statement
The Information Statement attached as Annex A hereto is being furnished in
connection with the possible designation by the Purchaser, pursuant to the
Merger Agreement, of certain persons to be appointed to the Board of Directors
of the Company other than at a meeting of the Company's stockholders.
(c) Appraisal Rights
No appraisal rights are available to holders of Offer Securities in
connection with the Offer. However, if the Merger is consummated, holders of
Common Stock, Series A Preferred Stock or Series B Preferred Stock may have
certain rights under Section 262 of the DGCL to dissent and demand appraisal of,
and payment in cash for the fair value of, their shares of Common Stock, Series
A Preferred Stock or Series B Preferred Stock. Such rights, if the statutory
procedures are complied with, could lead to a judicial determination of the fair
value (excluding any element of value arising from accomplishment or expectation
of the Merger) required to be paid in cash to such dissenting holders for their
shares of Common Stock, Series A Preferred Stock or Series B Preferred Stock.
Any such judicial determination of the fair value of shares of Common Stock,
Series A Preferred Stock or Series B Preferred Stock could be based upon
considerations in addition to the applicable offer price and the market value of
the Common Stock, Series A Preferred Stock or Series B Preferred Stock,
including asset values and the investment value of the Common Stock, Series A
Preferred Stock or Series B Preferred Stock. The value so determined could be
more or less than the applicable offer price per Offer Security.
If any holder of Common Stock, Series A Preferred Stock or Series B
Preferred Stock who demands appraisal under Section 262 of the DGCL fails to
perfect, or effectively withdraws or loses his or her right to appraisal, as
provided in the DGCL, the shares of Common Stock, Series A Preferred Stock or
Series B Preferred Stock of such holder will be converted into the applicable
offer price per Offer Security in accordance with the Merger Agreement. A
stockholder may withdraw his or her demand for appraisal by delivery to
Purchaser of a written withdrawal of his or her demand for appraisal and
acceptance of the Merger.
Failure to follow the steps required by Section 262 of the DGCL for
perfecting appraisal rights may result in the loss of such rights.
(d) Parent Financing
The following information regarding the financing of the Offer and Merger
has been provided by Parent and the Purchaser. Parent and the Purchaser expect
to have available to them funds sufficient to satisfy all of Parent's and the
Purchaser's respective obligations under the Merger Agreement pursuant to a
definitive commitment letter issued severally by ABN Amro Bank N.V. and ING Bank
N.V.
(e) Antitrust -- United States
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), and the rules that have been promulgated thereunder by the
Federal Trade Commission (the "FTC"), certain
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acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the United States Department of
Justice (the "Antitrust Division") and the FTC and certain waiting period
requirements have been satisfied. The acquisition of the Offer Securities by the
Purchaser pursuant to the Offer is subject to such requirements.
Pursuant to the requirements of the HSR Act, Parent filed the required
Notification and Report Forms (the "Form") with the Antitrust Division and the
FTC on May 4, 1999. The statutory waiting period applicable to the purchase of
Offer Securities pursuant to the Offer is to expire at 11:59 P.M., New York City
time, on May 19, 1999, unless prior to such date, the Antitrust Division or the
FTC extends the waiting periods by requesting additional information or
documentary material relevant to the acquisition. If such a request is made, the
waiting period will be extended until 11:59 P.M., New York City time, on the
tenth day after Parent has substantially complied with such request. Thereafter,
such waiting periods can be extended only by court order or consent. A request
was made pursuant to the HSR Act for early termination of the applicable waiting
period. There can be no assurance, however, that the waiting period will be
terminated early. Although the Company is required to file certain information
and documentary material with the Antitrust Division and the FTC in connection
with the Offer, neither the Company's failure to make such filings nor a request
to the Company from the Antitrust Division for additional information or
documentary material will extend the waiting period. However, if the Antitrust
Division or the FTC raises substantive issues in connection with a proposed
transaction, the parties frequently engage in negotiations with the relevant
governmental agency concerning possible means of addressing these issues and may
agree to delay consummation of the transaction while such negotiations continue.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions. At any time before or after the consummation
of any such transactions, the Antitrust Division or the FTC could,
notwithstanding termination of the waiting period, take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Offer Securities pursuant to the
Offer or seeking divestiture of the Offer Securities so acquired or divestiture
of substantial assets of Parent or the Company or any of their respective
subsidiaries. State attorneys general may also bring legal actions under the
antitrust laws, and private parties may bring such actions under certain
circumstances. Parent and the Purchaser believe that the acquisition of Offer
Securities by the Purchaser 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 will be.
(f) Antitrust -- European Union
Parent and the Company each conduct business in member states of the
European Union. European Union Council Regulation 4064/89, as amended, requires
notification to and approval by the European Commission of certain mergers or
acquisitions involving parties with aggregate worldwide sales and individual
European Union sales exceeding certain thresholds, before such mergers or
acquisitions are completed. Parent and the Company have sales that exceed these
thresholds. A single notification to the European Commission eliminates any need
to submit notifications of the Merger to national competition authorities in
member states within the European Economic Area. Parent will notify the European
Commission of the Merger on or about May 11, 1999.
The European Commission must review the Offer and Merger to determine
whether or not it is compatible with the common market and, accordingly, whether
or not to permit it to proceed. A merger or acquisition which does not create or
strengthen a dominant position as a result of which effective competition would
be significantly impeded in the common market or in a substantial part of the
common market is considered to be compatible with the common market, and must be
allowed to proceed. The European Commission has one month following submission
of a complete notification to examine whether the merger raises serious doubts
with regard to its compatibility with the common market. If within this
one-month period the European Commission decides that there are no serious
doubts, or if it fails to reach a decision, the merger is deemed approved. If,
instead, the European Commission decides that there are serious doubts, it must
open a more detailed investigation which can last up to an additional four
months. Parent and the Company believe
8
<PAGE> 10
that the Merger is compatible with the common market under European Union
Council Regulation 4064/89, although there can be no assurance that the European
Commission will agree.
(g) Antitrust -- General
It is possible that any of the governmental entities with which filings are
made may seek, as conditions for granting approval of the Merger, various
regulatory concessions. There can be no assurance that:
- Parent or the Company will be able to satisfy or comply with such
conditions;
- compliance or non-compliance will not have adverse consequences for
Parent after completion of the Merger; or
- the required regulatory approvals will be obtained within the time frame
contemplated by Parent and the Company and referred to herein or on terms
that will be satisfactory to Parent and the Company.
Additional filings may be necessary in countries outside the European
Economic Area and the U.S.
(h) Exon-Florio
As part of the Omnibus Trade and Competitiveness Act of 1988, a new section
(the "Exon-Florio Amendment") was added to Title VII of the Defense Production
Act of 1050, 50 U.S.C. App. 2158 et seq. (the "DPA Act"), to empower the
President or his designee to take certain actions in relation to mergers,
acquisitions and takeovers by foreign persons which could result in foreign
control of a person engaged in interstate commerce in the United States. In
particular, the Exon-Florio Amendment enables the President to suspend or
prohibit any acquisitions by foreign persons which threaten to impair the
national security of the United States, and to divest such transactions that
have been concluded.
Under the terms of the Exon-Florio Amendment, a foreign company or United
States subsidiary of a foreign company acquiring a United States company may
notify the Committee on Foreign Investment in the United States (the "CFIUS") of
the proposed transaction, whereupon the CFIUS or the President must decide
within 30 days whether to investigate the transaction. The Purchaser and the
Company have prepared a notification for endorsement by the Purchaser and the
Company and filed with CFIUS pursuant to Section 721 of the DPA Act. If an
investigation is undertaken of the proposed transaction and CFIUS determines
that United States security may be impaired by the proposed transaction, then
CFIUS may recommend to the President that he suspend or prohibit the
transaction, or direct the United States Attorney General to seek divestment
relief in United States district court. The Company does not believe that the
Offer threatens to impair the national security of the United States.
(i) FOCI Arrangement
Pursuant to the National Industrial Security Program ("NISP"), when a
United States facility which has security clearances for classified information
is acquired by a non-United States entity, the clearances of that United States
facility are invalidated by the Department of Defense unless and until the
parties have entered into a foreign ownership, control and influence ("FOCI")
arrangement suitable to the Department of Defense which sets up barriers to
foreign access to the classified information. Wang Government Services, Inc.
("WGSI") has received a facility security clearance from the Defense Security
Service, prohibiting access by foreign persons and permitting it to receive
classified data, and is involved in performance under classified contracts.
In order for WGSI to maintain its facility security clearance following the
Purchaser's purchase of the Offer Securities, the Purchaser will be required to
enter into a FOCI arrangement with the Department of Defense in the form of
either a proxy agreement, voting trust agreement or special security agreement,
each of which will limit the Purchaser's control over and access to WGSI. If the
Purchaser does not conclude a suitable FOCI arrangement with the Department of
Defense prior to the latest time and date at which the Offer shall expire, the
existing facility security clearances of WGSI will be invalidated by the
Department of Defense until such time as the FOCI arrangement has been
concluded. Until such time, WGSI will be able to continue performance under
classified contracts unless one or more agencies object to such continued
performance, but no new security clearance will be granted to WGSI.
9
<PAGE> 11
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<S> <C>
Exhibit 1. -- Offer to Purchase dated May 10, 1999.*
Exhibit 2. -- Letters of Transmittal dated May 10, 1999.*
Exhibit 3. -- Press Release issued by the Company dated May 4, 1999.
Exhibit 4. -- Summary Advertisement published in the Wall Street
Journal dated May 10, 1999.
Exhibit 5. -- Letter to Stockholders of the Company dated May 10,
1999.*
Exhibit 6. -- Opinion of CSFB dated May 2, 1999.*
Exhibit 7. -- Agreement and Plan of Merger dated as of May 3, 1999,
among Parent, the Purchaser and the Company.
Exhibit 8. -- Agreement with Franklyn A. Caine dated March 31, 1999,
between Mr. Caine and the Company.
Exhibit 9. -- Agreement with Michael Levinger dated March 12, 1999,
between Mr. Levinger and the Company.
Exhibit -- Agreement with John Cunningham dated April 21, 1999,
10. between Mr. Cunningham and the Company.
Exhibit -- Confidentiality Agreement between Parent and the Company
11. dated February 26, 1999.
Exhibit -- Pages 8 to 12 and 27 to 32 of the Proxy Statement dated
12. April 26, 1999, relating to the Company's 1998 Annual
Meeting of Stockholders.
</TABLE>
- ---------------
* Included with Schedule 14D-9 mailed to stockholders.
10
<PAGE> 12
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
WANG LABORATORIES, INC.
By: /s/ ALBERT A. NOTINI
----------------------------------
Name: Albert A. Notini
Title: Executive Vice President
Dated: May 10, 1999
11
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO.
-------
<S> <C>
Exhibit 1. -- Offer to Purchase dated May 10, 1999.*
Exhibit 2. -- Letters of Transmittal dated May 10, 1999.*
Exhibit 3. -- Press Release issued by the Company dated May 4, 1999.
Exhibit 4. -- Summary Advertisement published in the Wall Street
Journal dated May 10, 1999.
Exhibit 5. -- Letter to Stockholders of the Company dated May 10,
1999.*
Exhibit 6. -- Opinion of CSFB dated May 2, 1999.*
Exhibit 7. -- Agreement and Plan of Merger dated as of May 3, 1999,
among Parent, the Purchaser and the Company.
Exhibit 8. -- Agreement with Franklyn A. Caine dated March 31, 1999,
between Mr. Caine and the Company.
Exhibit 9. -- Agreement with Michael Levinger dated March 12, 1999,
between Mr. Levinger and the Company.
Exhibit -- Agreement with John Cunningham dated April 21, 1999,
10. between Mr. Cunningham and the Company.
Exhibit -- Confidentiality Agreement between Parent and the Company
11. dated February 26, 1999.
Exhibit -- Pages 8 to 12 and 27 to 32 of the Proxy Statement dated
12. April 26, 1999, relating to the Company's 1998 Annual
Meeting of Stockholders.
</TABLE>
- ---------------
* Included with Schedule 14D-9 mailed to stockholders.
12
<PAGE> 14
ANNEX A
WANG LABORATORIES, INC.
290 CONCORD ROAD
BILLERICA, MASSACHUSETTS 01821
(978) 625-5000
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER
This Information Statement is being mailed on or about May 10, 1999 as a
part of Wang Laboratories, Inc.'s (the "Company") Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") to the holders of record of
shares of (1) the Common Stock, par value $0.01 per share, of the Company,
including the Series C Junior Participating Preferred Stock (the "Rights")
issued pursuant to the Rights Agreement (the "Rights Agreement") dated as of
April 22, 1998, between the Company and American Stock Transfer and Trust
Company, as Rights Agent (together, the "Common Stock"); (2) the depositary
shares (the "Depositary Shares"), in each case representing 1/20th of a share of
Series B Cumulative Convertible Preferred Stock, par value $0.01 per share, of
the Company (the "Series B Preferred Stock"); (3) the Series B Preferred Stock;
(4) the warrants issued by the Company pursuant to the Common Stock Purchase
Warrant Agreement dated as of October 29, 1993, between the Company and American
Stock Transfer and Trust Company, as Warrant Agent (the "Common Stock Purchase
Warrants"); (5) the Series A Cumulative Convertible Preferred Stock, par value
$0.01 per share, of the Company (the "Series A Preferred Stock"); and (6) the
Warrant issued by the Company to Microsoft Corporation pursuant to the common
stock purchase warrant dated February 27, 1998 (the "Special Common Stock
Warrant" and together with the Common Stock, the Depositary Shares, the Series B
Preferred Stock, the Common Stock Purchase Warrants and the Series A Preferred
Stock, the "Offer Securities"), at the close of business on or about May 7,
1999. You are receiving this Information Statement in connection with the
possible election of persons designated by the Purchaser (as defined below) to a
majority of the seats on the Board of Directors of the Company.
On May 3, 1999, Getronics NV, a company organized under the laws of The
Netherlands ("Parent"), Getronics Acquisition, Inc., a Delaware corporation and
a wholly owned subsidiary of Parent (the "Purchaser") and the Company entered
into an Agreement and Plan of Merger (the "Merger Agreement") in accordance with
the terms and subject to the conditions of which (i) Purchaser will commence a
tender offer (the "Offer") for all outstanding Offer Securities at the amounts
per share or warrant set forth below, and (ii) the Purchaser will be merged with
and into the Company (the "Merger"). As a result of the Offer and the Merger,
the Company will continue as the surviving corporation (the "Surviving
Corporation").
<TABLE>
<CAPTION>
OFFER PRICE PER
OFFER SECURITIES OFFER SECURITY
---------------- ---------------
<S> <C>
- - Common Stock.............................................. $ 29.25
- - Depositary Shares......................................... $ 55.05
- - Series B Preferred Stock.................................. $ 1,101.17
- - Common Stock Purchase Warrants............................ $ 7.80
- - Series A Preferred Stock.................................. $ 1,271.73
- - Special Common Stock Warrant.............................. $6,250,000.00
</TABLE>
You are urged to read this Information Statement carefully. You are not,
however, required to take any action. Capitalized terms used herein and not
otherwise defined herein shall have the meaning set forth in the Schedule 14D-9.
The information contained in this Information Statement concerning the
Purchaser has been furnished to the Company by the Purchaser, and the Company
assumes no responsibility for the accuracy or completeness of such information.
A-1
<PAGE> 15
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
GENERAL
At the close of business on March 29, 1999, the record date for the
determination of stockholders entitled to notice of and to vote at the annual
meeting of the Company scheduled for May 26, 1999, there were outstanding and
entitled to vote an aggregate of 46,695,565 shares of Common Stock, 2,875,000
Depositary Shares and 90,000 shares of Series A Preferred Stock, constituting
all of the outstanding voting stock of the Company. This total excludes
approximately 13,220 shares of Common Stock held for distribution to creditors
by the distribution agent under the Company's reorganization plan dated
September 20, 1993 (the "Reorganization Plan") under Chapter 11 of the U.S.
Bankruptcy Code, as the Reorganization Plan provides that these shares may not
be voted by any party and shall not be considered outstanding for voting
purposes until distributed pursuant to the Reorganization Plan. Holders of
Common Stock, the Series B Preferred Stock and the Series A Preferred Stock are
entitled to one vote per share. Each holder of Depositary Shares is entitled to
exercise the voting rights relating to the number of shares of Series B
Preferred Stock represented by such Depositary Shares. As set forth in the
Deposit Agreement dated February 27, 1996 (filed by the Registrant as an Exhibit
to Amendment No. 1 to Form S-3 on August 14, 1996) between Wang and the American
Stock Transfer and Trust Company (the "Depositary"), the Depositary is
authorized to exercise the voting rights pertaining to the number of shares of
Series B Preferred Stock represented by the Depositary Shares as instructed by
the holders thereof. After aggregating all voting Depositary Shares, the
Depositary will disregard for voting purposes any fractional shares of Series B
Preferred Stock remaining.
RIGHT TO DESIGNATE DIRECTORS; THE PURCHASER DESIGNEES
The Merger Agreement provides that promptly upon the purchase, pursuant to
the Offer, of Offer Securities representing at least a majority of the
outstanding Common Stock (and other equity instruments convertible or
exercisable into Common Stock (together with the Common Stock, the "Common Stock
Equivalents")), the Purchaser shall be entitled to designate such number of
directors (the "Purchaser Designees") on the Board of Directors of the Company,
rounded up to the next whole number, as will give the Purchaser representation
on the Board of Directors proportional to its ownership of Common Stock
Equivalents. At such time, the Company will also cause each committee of the
Board of Directors to include persons designated by the Purchaser constituting
at least the same percentage of each such committee as the designees are of the
Board of Directors. The Company will increase the size of the Board of Directors
or exercise its best efforts to cause the resignations of such number of
incumbent directors as is necessary to enable the Purchaser Designees to be
elected to the Board of Directors.
Notwithstanding the Company's obligations outlined above, the Company's
Board of Directors shall have at least one director who was a director as of May
3, 1999 and who (i) is not an affiliate or associate of Parent or Purchaser or
any other person who beneficially owns Offer Securities representing 5% or more
of the Common Stock Equivalents, or (ii) is designated by a majority of the
directors of the Company who are such directors (the "Independent Directors").
The Merger Agreement further provides that, after the acceptance of payment of
Offer Securities pursuant to the Offer and prior to the effective time of the
Merger, the affirmative vote of a majority of the Independent Directors is
required for any consent or action by the Board of Directors under the Merger
Agreement including (i) any amendment or termination of the Merger Agreement,
the Company's Certificate of Incorporation or the Company's By-Laws, (ii) any
termination of the Merger Agreement by the Company, and (iii) any extension by
the Company of the time for the performance of any of the obligations or other
acts of Parent and Purchaser or waiver of any of the Company's rights under the
Merger Agreement. In addition, the Merger Agreement provides that, in the event
that Parent's and the Purchaser's designees constitute a majority of the
directors on the Board of Directors of the Company, the Independent Directors
shall be entitled, on behalf and at the expense of the Company, to take any
action under or in connection with the Merger Agreement and the transactions
contemplated thereby, including taking legal action regarding the enforcement of
its terms.
The Purchaser has informed the Company that it will choose the Purchaser
Designees from the directors and executive officers listed on Schedule I to the
Offer to Purchase, a copy of which is being mailed to the
A-2
<PAGE> 16
Company's stockholders together with this Schedule 14D-9. The Purchaser has
informed the Company that each of the directors and executive officers listed on
Schedule I to the Offer to Purchase has consented to act as a director, if so
designated. The information on such Schedule I is incorporated herein by
reference. It is expected that no Purchaser Designee will receive any
compensation for services performed in his or her capacity as a director.
It is expected that the Purchaser Designees may assume office at any time
following the purchase by the Purchaser of a specified minimum number of Offer
Securities pursuant to the Offer, which purchase cannot be earlier than 12:00
midnight, New York City time, June 7, 1999, and that, upon assuming office, the
Purchaser Designees will thereafter constitute at least a majority of the Board
of Directors.
None of the Purchaser Designees (i) is currently a director of, or holds
any position with, the Company, (ii) has a familial relationship with any
directors or executive officers of the Company or (iii) to the best knowledge of
the Purchaser, beneficially owns any securities (or rights to acquire such
securities) of the Company. The Company has been advised by the Purchaser that,
to the best of Purchaser's knowledge, none of the Purchaser Designees has been
involved in any transactions with the Company or any of its directors, executive
officers or affiliates which are required to be disclosed pursuant to the rules
and regulations of the Commission, except as may be disclosed herein or in the
Schedule 14D-9.
BOARD OF DIRECTORS OF THE COMPANY
The Board of Directors currently consists of 11 persons divided into three
classes. Biographical information concerning each of the Company's current
directors and executive officers is set forth below.
Class I Directors (holding terms expiring at the 2001 Annual Meeting):
ROBERTO COLANINNO DIRECTOR SINCE MARCH 1998; AGE 55
Mr. Colaninno has been Chief Executive Officer of Olivetti since September
1996. Mr. Colaninno is also Vice Chairman of Omnitel Pronto Italia, a mobile
telephone service provider, Chairman of the Fingruppo financial holding company,
Chairman of Oliman, a joint venture between Olivetti and Mannesmann AG of
Germany, and Chairman and Chief Executive Officer of Tecnost SpA, an Italian
listed company. Mr. Colaninno also serves as a Director and member of the
Chairman's Committee of Banca Agricola Mantovana, a member of the governing body
of Confindustria, the Italian industrialists' association, and Vice Chairman of
Federlombarda, the federation of industrialists in Lombardy, Italy.
RAYMOND C. KURZWEIL DIRECTOR SINCE OCTOBER 1993; AGE 51
Mr. Kurzweil has founded and sold four computer technology companies,
including Kurzweil Applied Intelligence, Inc., a speech and language technology
company, and Kurzweil Educational Systems, Inc., an educational software
company. He was the principal developer of the first omnifont optical character
recognition technology, the first print-to-speech reading machine for the blind,
the first music synthesizer that could recreate acoustic instruments and the
first commercially-marketed large vocabulary speech recognition software. He is
a director of Medical Manager Corp., a medical software systems company.
JOSEPH M. TUCCI DIRECTOR SINCE OCTOBER 1993; AGE 51
Mr. Tucci joined the Company in August 1990 as Executive Vice President,
Operations, was elected President and Chief Executive Officer in January 1993,
Chairman of the Board in October 1993 and was reaffirmed as President in June
1998.
FREDERICK A. WANG DIRECTOR SINCE OCTOBER 1981; AGE 48
Mr. Wang has been President and Chief Executive Officer of The athink
Group, a company involved with internet web publishing since 1997 and was
President and Chief Executive Officer of Archive Technologies Corporation, Inc.,
the predecessor company of The athink Group since 1996. Mr. Wang was a private
business consultant from 1990 to 1996 and served as President of the Company
from 1986 to 1989 and Chief Operating Officer from 1987 to 1989. He had been
employed by the Company from 1972 to 1989 and had also served as Treasurer,
Chief Development Officer and Executive Vice President of Manufacturing.
A-3
<PAGE> 17
Class II Directors (nominated for terms expiring at the 2002 Annual Meeting):
MARCIA J. HOOPER DIRECTOR SINCE NOVEMBER 1995; AGE 44
Ms. Hooper has been a Partner of Advent International Corporation, a
private equity management company since 1996. From 1994 through April 1996 she
served as General Partner of Viking Capital Limited Partnership, a venture
capital firm. From January through July 1994 she served as President of
Claybrook Capital. From 1985 to 1993 Ms. Hooper served as a General Partner of
three venture capital funds of Ampersand Ventures. She is a director of
PolyMedica Industries, Inc., a provider of targeted medical products and
services, and Interleaf, Inc., a publication and document distribution software
company.
JOSEPH J. KROGER DIRECTOR SINCE JUNE 1995; AGE 64
Mr. Kroger, formerly Vice Chairman of the Board of Unisys Corporation, has
been a private business consultant since 1993. From 1990 until 1993 he served as
President and Chief Executive Officer of Decision Data Corporation, a computer
services company. He is currently a director of Astea International Corp. a
developer of custom management software.
JOHN P. WHITE DIRECTOR SINCE DECEMBER 1997; AGE 62
Dr. White has been a senior partner at Global Technology Partners, LLC, a
private investment company, and has served as a senior fellow at the Rand
Corporation, a research corporation, since 1997. From June 1995 through July
1997, he served as the U.S. Deputy Secretary of Defense. He was the Director of
the Center for Business and Government at the John F. Kennedy School of
Government, Harvard University, from January 1993 through June 1995. From 1988
to 1992 he was General Manager of the Integration and Systems Product Divisions
and Vice President of Eastman Kodak Company. From October 1993 until June 1995,
Dr. White served as a Director of the Company.
Class III Directors (holding terms expiring at the 2000 Annual Meeting):
DAVID A. BOUCHER DIRECTOR SINCE OCTOBER 1993; AGE 48
Mr. Boucher has been Managing Director and General Partner of Applied
Technology, a venture capital firm specializing in early-stage information
industry companies, since 1993. From September 1992 to June 1994 he was
President and Chief Executive Officer of Ticker Research, Inc., a development
stage medical technology company engaged in research in nuclear magnetic
resonance imaging. From 1981 to 1991 Mr. Boucher was President and Chief
Executive Officer of Interleaf, Inc., a software company. He is a director of
Interleaf, Inc., Pervasive Software, Inc., a provider of ultra light embedded
database software and several privately held companies.
MICHAEL W. BROWN DIRECTOR SINCE APRIL 1996; AGE 53
Mr. Brown, until his retirement in July 1997, served as Chief Financial
Officer of Microsoft Corporation. He joined Microsoft in 1989 as Treasurer and
was appointed Chief Financial Officer in 1994. Prior to joining Microsoft, Mr.
Brown was a managing partner of Deloitte & Touche LLP, a public accounting firm.
Mr. Brown is a director of The Nasdaq Stock Market, Inc., Citrix Systems, Inc.,
a supplier of thin client/server application server products and Administaff,
Inc., a personal employer organization.
SERGIO EREDE DIRECTOR SINCE MARCH 1998; AGE 58
Mr. Erede has been an attorney in private practice with the firm of Erede e
Associati of Milan, Italy since 1969 and is counsel to Olivetti. Before entering
private practice, Mr. Erede was manager of the legal department of IBM Italia
S.pA. for four years. Prior to that he worked for one year at each of the law
firms of Sullivan and Cromwell in New York, NY and Hale and Dorr LLP in Boston,
MA. He is a director of Marzotto S.p.A. and Hugo Boss AG, textile concerns,
Editoriale L'Espresso S.p.A., Manuli Rubber Industries S.p.A., Carraro S.p.A.,
and Interpump S.p.A., manufacturers, Gruppo GS S.p.A., a retailer, and food and
restaurant concerns Parmalat Finanzioria S.p.A., Autogrill S.p.A., and SEAT
Pagine Ciolle S.p.A., the publishers of the Italian yellow pages.
A-4
<PAGE> 18
AXEL J. LEBLOIS DIRECTOR SINCE JANUARY 1995; AGE 50
Mr. Leblois has been Chairman of World Times, Inc., a publishing firm,
since 1995 and Chief Executive Officer of Executrain Inc, a global computer
training company, since 1997. From 1991 to 1995 he was President and Chief
Executive Officer of Bull HN Information Systems, Inc., a worldwide information
technology company providing integrated computer services and solutions. From
1983 to 1991 Mr. Leblois held various positions with International Data Group, a
worldwide supplier of information technology, including Vice Chairman of the
Executive Committee, and Chairman and Chief Executive Officer of its affiliate,
International Data Corporation. He is a director of Peritus Software Services,
Inc., a company which provides solutions and technology for software
maintenance, and Boston Private Bank.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the names, ages as of March 15, 1999 and
positions of all executive officers of the Company:
<TABLE>
<CAPTION>
OFFICER
NAME POSITION(S) AGE SINCE
---- ----------- --- -------
<S> <C> <C> <C>
Joseph M. Tucci........................... Chairman of the Board, President and 51 1990
Chief Executive Officer
Paul F. Brauneis.......................... Vice President and Controller 54 1997
Richard L. Buckingham..................... Vice President and Treasurer 53 1990
Franklyn A. Caine......................... Executive Vice President and Chief 49 1994
Financial Officer
Donald P. Casey........................... Chief Technology Officer 53 1991
Lucy A. Flynn............................. Senior Vice President Corporate/Marketing 45 1996
Communications
David I. Goulden.......................... President, US Operations and Senior Vice 39 1994
President
James J. Hogan............................ President, Wang Government Services and 56 1990
Senior Vice President
Albert A. Notini.......................... Executive Vice President, Corporate 42 1994
Development and Administration, General
Counsel and Secretary
Jose Ofman................................ President and Chief Operating Officer, 55 1997
Americas International
Jeremiah J.J. van Vuuren.................. President and Chief Operating Officer, 55 1993
International
</TABLE>
Mr. Tucci joined the Company in August 1990 as Executive Vice President,
Operations, was elected President and Chief Executive Officer in January 1993,
and Chairman of the Board and was reaffirmed as President in 1998.
Mr. Brauneis joined the Company in August 1997 as Vice President and
Controller. He had served from 1995 to 1997 as Vice President and Corporate
Controller of BBN Corporation, an internet services and network management
company. From 1993 to 1995 he was Vice President and Chief Financial Officer at
Softkey International, a consumer software products company. Prior to that he
spent 12 years at M/A Com, Inc., an electronic equipment manufacturer, most
recently as Vice President, Finance.
Mr. Buckingham joined the Company as Vice President and Treasurer in 1990.
From 1988 to 1990, he served as Vice President-Treasurer of Prime Computer,
Inc., a computer company.
Mr. Caine joined the Company as Executive Vice President and Chief
Financial Officer in August 1994. Prior to joining the Company, Mr. Caine was
employed by United Technologies Corporation, a diversified
A-5
<PAGE> 19
manufacturing company, serving as Senior Vice President, Planning and Corporate
Development, from 1993 to July 1994, as Senior Vice President and Controller
from 1991 to 1993, as Senior Vice President, Human Resources, from 1989 to 1991
and as Vice President and Treasurer from 1987 to 1989.
Mr. Casey joined the Company as Executive Vice President and Chief
Development Officer in September 1991, and was elected President and Chief
Technology Officer in January 1993. He served as President of the Software
Business until December 1995 and since then as Chief Technology Officer. Mr.
Casey resigned from his position as Chief Technology Officer on February 12,
1999. He had served as Vice President, Networking and Communications at Apple
Computer Inc., a personal computer company, from 1988 to 1990, and as Vice
President, Spreadsheet Division at Lotus Development Corporation, a software
company, from 1990 to 1991.
Ms. Flynn joined the Company in June 1996 as Senior Vice President,
Corporate/Marketing Communications. From 1992 through 1996, she served as Senior
Vice President and Director of Corporate Affairs at Shawmut National
Corporation. Previously she served as Vice President of Public Affairs at
Shawmut Bank N.A. from 1989 to 1992.
Mr. Goulden joined the Company in 1990 as Director of Marketing Strategies.
From 1991 to 1992 he served as Vice President, Marketing and Development and
from 1992 to 1993 he served as Vice President, Marketing. Mr. Goulden served the
Company as Vice President, Marketing and Business Development from 1993 to June
1994, as Senior Vice President, Business Development from June 1994 to December
1995 and as Senior Vice President, Software Products Division from December 1995
until March 1997. From March 1997 to February 1999, he held the position of
Senior Vice President, Marketing and Business Development and in February 1999
he was appointed President, U.S. Operations. He previously served as Director of
Corporate Strategy and Business Development from 1989 to 1990 at Unisys
Corporation, a computer manufacturer.
Mr. Hogan joined the Company as Senior Vice President, Personal Computer
Systems in October 1990, and became Senior Vice President Human Resources and
Operations Support in June 1993. From July 1994 to March 1995 he served as
President, Federal Systems Division Business and from March 1995 to December
1996 as Senior Vice President of the Company at which time he was also elected
as President of Wang Government Services, Inc. He had served as Vice
President-Audio and Communications Division, Americas for Thomson Consumer
Electronics when that company acquired General Electric's consumer electronics
business in 1988. Previously he served as Product General Manger of Audio/Video
Systems for General Electric's consumer electronics business from 1985 through
1987.
Mr. Notini joined the Company in February 1994 as Senior Vice President,
General Counsel and Secretary and became Executive Vice President, Corporate
Development and Administration in March 1999. Mr. Notini is also responsible for
all of the Company's, acquisitions and divestitures, legal, human resources,
real estate and intellectual property matters. Previously, he had served as a
Senior Partner from 1992 to 1994 and a Junior Partner from 1989 to 1992 at the
Boston law firm of Hale and Dorr, LLP, which he joined in 1984.
Mr. Ofman Joined the Company in March, 1997 as President and Chief
Operating Officer, Americas. Prior to that, he held several senior positions at
Electronic Data Systems Co., an information technology services company, the
most recent of which was Corporate Vice President and Group Executive.
Mr. van Vuuren joined the Company in September 1993 as General Manager,
Europe, Africa and the Middle East and Senior Vice President of the Company. He
served as President of the Company's International Business from July 1994 until
March 1997 and has been President and Chief Operating Officer, International
since that time. Previously, he served as Vice President of marketing operations
for Europe, Africa and the Middle East from 1986 to 1989 for Unisys Corporation,
a computer manufacturer, and was appointed Vice President and Group Manager
Europe in 1990.
BOARD AND COMMITTEE MEETINGS
The Company has a standing Finance and Audit Committee of the Board of
Directors, which reviews the Company's financial condition and operating
results, cash position, financing arrangements and financing
A-6
<PAGE> 20
strategies, recommends the engagement of the Company's independent auditors and
reviews the arrangements for the scope of the annual audit. In addition, the
Finance and Audit Committee reviews the activities and recommendations of the
Company's audit group, reviews comments made by the independent auditors with
respect to internal controls and management's response, reviews internal
accounting procedures and controls with the Company's finance and accounting
staff and monitors the Company's compliance programs. The members of the Finance
and Audit Committee are David A. Boucher (Chairman), Michael W. Brown, Sergio
Erede, Marcia J. Hooper, Joseph J. Kroger, and John P. White. The Finance and
Audit Committee met six times during Fiscal 1998 and four times during the Stub
Period.
The Company has a standing Organization, Compensation and Nominating
Committee of the Board of Directors, which reviews and approves proposals by
management concerning compensation, bonuses, benefits, stock options and stock
grants under plans for directors, corporate officers and employees of the
Company. This Committee also oversees administration of the Company's
compensation plans as they affect officers, directors and certain key employees,
and advises the Board on management resources and organization, executive
selection and development and succession planning. This Committee also
recommends to the Board of Directors nominees to be acted upon at stockholder
meetings, and reviews the qualifications of, and makes recommendations to the
Board concerning, candidates to fill Board vacancies that may occur during the
year. The Committee considers suggestions from stockholders and other sources
regarding possible candidates for directors. Such suggestions, together with
appropriate biographical information, should be submitted to the Secretary of
the Company. The Committee is also responsible for overseeing Company policies
on issues of public significance, including charitable contributions and
community relations. The members of the Organization, Compensation and
Nominating Committee are Joseph J. Kroger (Chairman), Roberto Colaninno, Marcia
J. Hooper and Axel J. Leblois. The Organization, Compensation and Nominating
Committee met eight times during Fiscal 1998 and four times during the Stub
Period.
The Board of Directors met eleven times during Fiscal 1998 and four times
during the Stub Period. Except as set forth below, each current Director
attended at least 75% of the meetings of the Board and the Committees on which
he or she then served during Fiscal 1998 and the Stub Period. Dr. White attended
71.4% of the meetings of the Board and the Committees on which he served during
Fiscal 1998 (he was unable to attend two special teleconference meetings in
February and March 1998). Mr. White also attended by invitation of the Board two
Board meetings prior to his election as a director.
COMPENSATION OF DIRECTORS
The director who is employed by the Company or is employed by a stockholder
of the Company is not paid director fees. Directors who are not employed by the
Company or employed by a stockholder of the Company receive an annual fee of
$20,000 plus a fee of $1,000 for each meeting attended. The members of each
Committee receive an annual fee of $1,500, plus a fee of $1,000 for each
Committee meeting attended.
On each of September 30, 1997 and September 30, 1998, under the Company's
1995 Director Stock Option Plan, each of the then current directors of the
Company, other than Mr. Tucci, received an option to purchase 6,500 shares of
Common Stock. These options have an exercise price of $20.367 and $22.48,
respectively, per share. The 1997 grants became exercisable as to 34% of the
shares covered thereby on September 30, 1998, and will become exercisable as to
33% and 33% of the shares covered thereby on September 30, 1999 and September
30, 2000, respectively, provided the optionee continues to serve as a director
of the Company. The 1998 grants will become exercisable as to 34%, 33% and 33%
of the shares covered thereby on September 30, 1999, September 30, 2000 and
September 30, 2001, respectively, provided the optionee continues to serve as a
director of the Company.
In December 1997, under the Company's 1995 Director Stock Option Plan, Dr.
White received an option to purchase 6,500 shares of Common Stock. This option
has an exercise price of $22.77 per share and became exercisable as to 34% of
the shares covered thereby on December 23, 1998 and will become exercisable as
to 33% and 33% of the shares covered thereby on December 23, 1999 and December
23, 2000, respectively, provided the optionee continues to serve as a director
of the Company.
A-7
<PAGE> 21
In March 1998, under the Company's 1995 Director Stock Option Plan, Mr.
Erede received an option to purchase 6,500 shares of Common Stock. This option
has an exercise price of $25.18 per share and became exercisable as to 34% of
the shares covered thereby on March 25, 1999 and will become exercisable as to
33% and 33% of the shares covered thereby on March 25, 2000 and March 25, 2001,
respectively, provided the optionee continues to serve as a director of the
Company.
Raymond C. Kurzweil had been retained as a technical advisor by the
Official Committee of Unsecured Creditors in the Company's Chapter 11 proceeding
and, in that capacity, had reviewed the technology and intellectual property of
the Company. Through this review the Company's patent portfolio was identified
as one of the Company's important assets. After joining the Company's Board of
Directors in October 1993, Mr. Kurzweil agreed to continue his work with the
Company's patent portfolio and entered into a technical consulting agreement
with the Company effective October 1993. This agreement provided for
compensation at the rate of $375.00 per hour, not to exceed an average of
$15,000 per month, plus the reimbursement of expenses. The agreement was
approved by the Board of Directors and is subject to the Board's periodic
review. The agreement is terminable upon 30 days' notice by either party. The
agreement was terminated effective June 30, 1998 and the Company's final payment
to Mr. Kurzweil under this agreement was made in July 1998.
In July 1994, the Board of Directors adopted a policy prohibiting
non-employee directors from receiving compensation from the Company other than
in their capacity as directors, absent extraordinary circumstances.
A-8
<PAGE> 22
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
BENEFICIAL OWNERSHIP OF VOTING STOCK
The following table sets forth the beneficial ownership of the Company's
Common Stock, 6 1/2% Preferred Stock and 4 1/2% Preferred Stock on March 29,
1999 (i) by each person who is known by the Company to beneficially own more
than 5% of the outstanding shares of either the common or any preferred class of
the Company's stock, (ii) by each Director and nominee for Director, (iii) by
each of the executive officers named in the Summary Compensation Table set forth
under the caption "Executive Compensation" below (the "Named Executives"), and
(iv) by all current Directors and executive officers as a group.
<TABLE>
<CAPTION>
COMMON STOCK 6 1/2% PREFERRED STOCK 4 1/2% PREFERRED STOCK
---------------------------- ------------------------------- -------------------------------
NUMBER OF PERCENTAGE OF NUMBER OF PERCENTAGE OF NUMBER OF PERCENTAGE OF
SHARES OUTSTANDING SHARES OUTSTANDING SHARES OUTSTANDING
BENEFICIALLY COMMON BENEFICIALLY 6 1/2% PREFERRED BENEFICIALLY 4 1/2% PREFERRED
BENEFICIAL OWNER OWNED(1) STOCK(2) OWNED(1)(3) STOCK(3) OWNED(1) STOCK
---------------- ------------ ------------- ------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
5% STOCKHOLDERS
Ing. C. Olivetti & Co.
S.p.A.(4)
Via Jervis 77
Ivrea 10015 Italy............. 7,250,000 15.5% -- -- -- --
FMR Corp.(5)
82 Devonshire Street
Boston, Massachusetts 02109... 5,297,000 11.3% -- -- -- --
Franklin Resources, Inc.(6)
777 Mariners Island Blvd.
San Mateo, California 94403... 5,062,788 10.8% -- -- -- --
Boston Partners Asset
Management L.P.(7)
One Financial Center
43rd Floor
Boston, Massachusetts 02111... 4,206,030 9.0% -- -- -- --
Mellon Bank Corp.(8)
One Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15258.......... 2,889,530 6.2% -- -- -- --
Lipper & Company, Inc.(9)
101 Park Avenue, 6th Floor
New York, New York 10178...... -- -- 542,690 18.8% -- --
Microsoft Corporation(10)
Microsoft Way
Redmond, Washington 98052..... -- -- -- -- 90,000 100%
DIRECTORS/NOMINEES
David A. Boucher(11).......... 29,565 * -- -- -- --
Michael W. Brown(12).......... 2,210 * -- -- -- --
Roberto Colaninno(13)......... 7,250,000 15.5%
Sergio Erede(12).............. 2,210 *
Marcia J. Hooper(14).......... 13,065 * -- -- -- --
Joseph J. Kroger(15).......... 14,565 * -- -- -- --
Raymond C. Kurzweil(16)....... 15,210 * -- -- -- --
Axel J. Leblois(19)........... 13,065 * -- -- -- --
Joseph M. Tucci(17)........... 1,123,521 2.4% -- -- -- --
Frederick A. Wang(18)......... 32,028 * -- -- -- --
John P. White(12)............. 2,210 * -- -- -- --
</TABLE>
A-9
<PAGE> 23
<TABLE>
<CAPTION>
COMMON STOCK 6 1/2% PREFERRED STOCK 4 1/2% PREFERRED STOCK
---------------------------- ------------------------------- -------------------------------
NUMBER OF PERCENTAGE OF NUMBER OF PERCENTAGE OF NUMBER OF PERCENTAGE OF
SHARES OUTSTANDING SHARES OUTSTANDING SHARES OUTSTANDING
BENEFICIALLY COMMON BENEFICIALLY 6 1/2% PREFERRED BENEFICIALLY 4 1/2% PREFERRED
BENEFICIAL OWNER OWNED(1) STOCK(2) OWNED(1)(3) STOCK(3) OWNED(1) STOCK
---------------- ------------ ------------- ------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
OTHER NAMED EXECUTIVES
Jeremiah J.J. van
Vuuren(19).................. 334,574 * -- -- -- --
Jose Ofman(20)................ 203,233 * -- -- -- --
Franklyn A. Caine(21)......... 493,525 * -- -- -- --
Donald P. Casey(22)........... 30,989 *
All Directors, nominees for
Director and executive
officers as a group (21
persons)(23)................ 10,382,504 21.1% -- -- -- --
</TABLE>
- ---------------
* Less than 1%
(1) Each person has sole investment and voting power with respect to the shares
indicated as beneficially owned, except as otherwise noted. The inclusion
herein of any shares as beneficially owned does not constitute an admission
of beneficial ownership. The reported beneficial ownership of Common Stock
or preferred stock by each 5% stockholder is based on a Schedule 13G filed
by such holder or on the records of the Company's transfer agent. In
accordance with Securities and Exchange Commission rules, each person
listed is deemed to beneficially own any shares issuable upon the exercise
of stock options or warrants held by him or her that are currently
exercisable or exercisable within 60 days after January 29, 1999; and any
reference in these footnotes to options or warrants refers only to such
options or warrants.
(2) Number of shares deemed outstanding includes 46,696,565 shares outstanding
as of March 29, 1999, plus any shares subject to outstanding stock options
or warrants held by the person or entity in question.
(3) Represents the number of shares of 6 1/2% Preferred Stock deemed
beneficially owned and outstanding as represented by Depositary Shares as
of March 29, 1999.
(4) The corporate entity of Ing. C. Olivetti & S.p.A. has sole voting and
dispositive power over the Wang securities.
(5) Fidelity Management & Research Company ("Fidelity"), a wholly-owned
subsidiary of FMR Corp., FMR Corp. (through its control of Fidelity),
Edward C. Johnson 3(rd) (Chairman of FMR Corp.), and the various Fidelity
funds in whose name the shares are held each has power to dispose of
4,546,560 of the shares. Neither FMR Corp. nor Edward C. Johnson 3(rd), has
the power to vote or direct the voting of the shares owned directly by the
Fidelity funds, which power resides with the funds' Boards of Trustees.
Fidelity carries out the voting of the shares under written guidelines
established by the funds' Boards of Trustees. Fidelity Management Trust
Company, a wholly-owned subsidiary of FMR Corp., Edward C. Johnson 3(rd)
and FMR Corp., through its control of Fidelity Management Trust Company,
each has dispositive power over 750,439 of the shares, and power to vote or
to direct the voting of 669,795 shares, and no power to vote or to direct
the voting of 80,644 of shares.
(6) The Wang shares are beneficially owned by one or more open or closed-end
investment companies or other managed accounts which are advised by direct
and indirect investment advisory subsidiaries (the "Advisory Subsidiaries")
of Franklin Resources, Inc. ("FRI"). Pursuant to advisory contracts, the
Advisory Subsidiaries have all investment and voting power with respect to
such shares.
(7) Boston Partners Asset Management, L.P. ("BPAM") and Boston Partners, Inc.
as well as Desmond John Heathwood are joint Reporting Persons. Each of the
Reporting Persons may be deemed to own beneficially 4,206,030 shares of
Common Stock at December 31, 1998. BPAM owns of record 4,206,030 shares of
Common Stock. As sole general partner of BPAM, Boston Partners may be
deemed to own beneficially all of the shares of Common Stock that BPAM may
be deemed to own beneficially. As principal stockholder of Boston Partners,
Mr. Heathwood may be deemed to own beneficially all of the Common Stock
that Boston Partners may be deemed to own beneficially.
(8) Mellon Bank Corporation has sole voting power over 2,409,994 shares and
shared voting power over 4 shares, and sole dispositive power over
2,693,026 shares and shared dispositive power over 196,504 shares. Mellon
Bank Corporation holds shares in conjunction with its subsidiaries.
A-10
<PAGE> 24
(9) Lipper Convertibles, L.P. ("Lipper Convertibles") is the owner of record of
542,690 shares of Wang Series B Preferred Stock. As sole general partner of
Lipper Convertibles, Lipper Holdings, LLP ("Lipper Holdings") may be deemed
to beneficially own the Series B Preferred Stock that Lipper Convertibles
directly beneficially owns. As manager of Lipper Holdings, Lipper & Company
Inc. ("Lipper Inc.") may be deemed to beneficially own the Series B
Preferred Stock directly beneficially owned by Lipper Convertibles. As
controlling shareholder of Lipper Inc., Kenneth Lipper ("Lipper") may be
deemed to beneficially own the Series B Preferred Stock directly
beneficially owned by Lipper Convertibles.
(10) The Company has not received any information concerning the ownership of
Company securities held by Microsoft Corporation. Wang believes that the
voting and dispositive rights associated with Microsoft's holdings are
controlled by the management of Microsoft.
(11) Consists of 29,565 shares subject to outstanding stock options.
(12) Consists of 2,210 shares subject to outstanding stock options.
(13) Consists of 7,250,000 shares of Common Stock held by Olivetti of which Mr.
Colaninno is Chief Executive Officer and as to which shares Mr. Colaninno
disclaims beneficial ownership.
(14) Consists of 13,065 shares subject to outstanding stock options.
(15) Consists of 13,065 shares subject to outstanding stock options and 1,500
shares held outright.
(16) Consists of 15,210 shares subject to outstanding stock options.
(17) Consists of 897,500 shares subject to outstanding stock options, 223,506
shares held outright, 15 shares held pursuant to the Company's 401(k) Plan
and 2,500 shares subject to outstanding stock warrants.
(18) Consists of 29,565 shares subject to outstanding stock options, 2,463
shares held outright and 36,366 shares subject to outstanding stock
warrants.
(19) Includes 275,450 shares subject to outstanding stock options and 59,124
shares held outright.
(20) Consists of 150,000 shares subject to outstanding stock options and 53,233
shares held outright.
(21) Includes 447,000 shares subject to outstanding stock options, 46,514 shares
held outright, and 11 shares held pursuant to the Company's 401(k) Plan.
(22) Includes 24,142 shares held outright, 14 shares held pursuant to the
Company's 401(k) Plan and 6,833 shares subject to outstanding stock
warrants.
(23) Includes 2,537,279 shares subject to outstanding stock options, 7,799,526
shares held outright 86 shares held pursuant to the Company's 401(k) Plan
and 45,699 shares subject to outstanding stock warrants.
A-11
<PAGE> 25
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following Summary Compensation Table sets forth certain information
concerning the compensation for each of the last three fiscal years and the Stub
Period of the Company's Chief Executive Officer and the Company's four other
most highly compensated executive officers during Fiscal 1998 and during the
Stub Period (the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM COMPENSATION
COMPENSATION(1) AWARDS
--------------------- ----------------------------
RESTRICTED SECURITIES
FISCAL STOCK AWARDS UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (#)(2) OPTIONS(#)(3) COMPENSATION($)
--------------------------- ------ --------- -------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Joseph M. Tucci................. 1998s(4) 375,000 787,500(5) -- -- 32,082(6)
Chairman of the Board, President 1998 750,000 356,250(7) -- -- 70,100
and Chief Executive Officer 1997 652,030 4,693,750 230,000 465,000 443,783
1996 551,250 400,000 -- 148,500 49,773
Jeremiah J.J. van Vuuren(8)..... 1998s(4) 240,146 356,792(9) 29,000 -- 42,530(10)
President and Chief Operating 1998 396,988 106,875(7) -- 40,000 76,770
Officer, International 1997 371,963 196,247 25,000 120,000 41,261
1996 263,075 210,000 -- 87,750 34,265
Jose Ofman...................... 1998s(4) 187,500 180,000(11) -- -- 109,541(12)
President and Chief Operating 1998 375,000 106,875(7) -- -- 138,016
Officer, Americas International 1997 102,403(13) -- 50,000 300,000 17,607
Franklyn A. Caine............... 1998s(4) 192,500 245,000(14) 29,000 -- 8,280(15)
Executive Vice President and 1998 350,000 83,125(7) -- 50,000 21,560
Chief Financial Officer 1997 331,618 565,000 15,000 75,000 96,797
1996 325,000 198,000 -- 81,000 30,885
Donald P. Casey................. 1998s(4) 175,000 180,000(16) 14,000 -- 12,543(17)
Chief Technology Officer 1998 350,000 99,750(7) -- 45,000 30,128
1997 350,000 178,834 -- 45,000 25,665
1996 350,000 178,834 -- 87,750 35,476
</TABLE>
- ---------------
(1) Other compensation in the form of perquisites and other personal benefits
has been omitted, in accordance with the rules of the SEC, as the aggregate
amount of such perquisites and other personal benefits constituted less
than the lesser of $50,000 or 10% of the total annual salary and bonus for
each executive officer in each period covered.
(2) During the Stub Period, restricted stock awards of 29,000, 29,000 and
14,000 shares were granted to Messrs. van Vuuren, Caine and Casey,
respectively. The restricted stock vests according to the following: if the
average of the closing prices of the Company's Common Stock for a period of
forty (40) consecutive trading days ending on or prior to July 1, 2001 (the
"First Period") is $33.00 or more, then 34% of the shares vest on the later
of July 1, 2000 or the last trading date of the First Period; and 66% of
the shares vest on July 1, 2001. All restrictions terminate in any event on
July 1, 2005. Based on the closing price of the Common Stock on December
31, 1998 ($27.75), the restricted stock award to Mr. van Vuuren had a value
of $804,750, the restricted stock award to Mr. Caine had a value of
$804,750, and the restricted stock award to Mr. Casey had a value of
$388,500. In 1997, Restricted stock awards of 230,000, 25,000, 50,000 and
15,000 shares were granted to Messrs. Tucci, van Vuuren, Ofman and Caine,
respectively. The restricted stock issued to Mr. Tucci vested 50% on March
26, 1998 and 50% on March 26, 1999. The restricted stock issued to Mr.
Ofman vested 34% on March 26, 1999, and will vest 33% on each of March 26,
2000 and 2001. The restricted stock issued to each of Messrs. Caine and van
Vuuren vested 100% on March 26, 1999. Based on the closing price of the
Common Stock on June 30, 1998, the restricted stock award to Mr. Tucci had
a value of $5,850,625, the restricted stock award to Mr. Ofman had a value
of $1,271,875, the restricted stock award to Mr. van Vuuren had a value of
$635,937.50 and the restricted stock award to Mr. Caine, had a value of
$381,562.50.
(3) Consists of long-term incentive options granted under the Company's
Employees' Stock Incentive Plan or an individual stock incentive plan in
the case of Mr. Ofman.
(4) All compensation, except Bonuses, is for the six-month Stub Period and has
not been annualized.
A-12
<PAGE> 26
(5) Calendar 1998 bonus consists of $787,500 paid under the Company's executive
bonus plan. Fiscal 1998 bonus consists of $356,250 in Common Stock issued
under the Interim STIP. Fiscal 1997 bonus includes a $4,000,000 special
retention bonus and $693,750 paid under the Company's executive bonus
program. Fiscal 1996 bonus consists of $400,000 paid under the Company's
executive bonus program.
(6) All other compensation for the Stub Period consists of (i) $26,800 in
contributions by the Company under its retirement savings plans and (ii)
$5,282 in premiums paid by the Company on a group term life insurance
policy for the benefit of Mr. Tucci. All other compensation for Fiscal 1998
consists of (i) $60,000 in contributions by the Company under its
retirement savings plans and (ii) $10,100 in premiums paid by the Company
on a group term life insurance policy for the benefit of Mr. Tucci. All
other compensation for Fiscal 1997 consists of (i) $47,014 in contributions
by the Company under its retirement savings plans, (ii) $9,256 in premiums
paid by the Company on a group term life insurance policy for the benefit
of Mr. Tucci and (iii) $387,513 relating to the waiver by the Company of
both the principal and accrued interest under Mr. Tucci's 3% promissory
note. All other compensation for Fiscal 1996 consists of (i) $33,900 in
contributions by the Company under its retirement savings plans, (ii)
$8,402 in premiums paid by the Company on a group term life insurance
policy for the benefit of Mr. Tucci, and (iii) $7,471 consisting of imputed
income as a result of the 3% promissory note from Mr. Tucci.
(7) A six month short-term incentive bonus plan for executive covering the
period July 1, 1997 through December 31, 1997 (the "Interim STIP") was
approved by the Company's Organization, Compensation and Nominating
Committee. The Interim STIP required that all senior executives of the
Company receive and accept bonus earned by them for the period July 1997
through December 1997 to be paid in shares of Common Stock valued at the
closing price of the Common Stock on The Nasdaq Stock Market as of June 30,
1997 which was $21.3125. See "Report of Organization, Compensation and
Nominating Committee on Executive Compensation."
(8) All compensation paid to Mr. van Vuuren is reported in US Dollars although
it is paid in UKL. The currency conversion rate used was $1.6595 per UKL,
$1.666 per UKL, $1.665 per UKL, and $1.5475 per UKL, for the Stub Period,
Fiscal 1998, 1997 and 1996, respectively. The conversion rates used were
those rates published by Reuters News Service on the last day of June of
each year and, for the Stub Period, on the last day of December 1998.
(9) Calendar 1998 bonus consists of $356,792 paid under the Company's executive
bonus plan. Fiscal 1998 bonus consists of $106,875 in Common Stock issued
under the Interim STIP. Fiscal 1997 bonus consists of $196,247 paid under
the Company's executive bonus program. Fiscal 1996 bonus consists of
$210,000 paid under the Company's executive bonus program.
(10) All other compensation for the Stub Period consists of (i) $26,907 in
contributions by the Company under its retirement savings plans and (ii)
$15,623 in a car allowance. All other compensation for Fiscal 1998 consists
of (i) $26,907 in contributions by the Company under its retirement savings
plans, (ii) $18,076 in premiums paid by the Company on a group term life
insurance policy for the benefit of Mr. van Vuuren and (iii) $31,787 in a
car allowance. All other compensation for Fiscal 1997 consists of (i)
$23,351 in contributions by the Company under its retirement savings plans
and (ii) $17,910 in premiums paid by the Company on a group term life
insurance policy for the benefit of Mr. van Vuuren. All other compensation
for Fiscal 1996 consists of (i) $19,474 in contributions by the Company
under its retirement savings plans and (ii) $14,791 in premiums paid by the
Company on a group term life insurance life insurance policy for the
benefit of Mr. van Vuuren.
(11) Calendar 1998 bonus consists of $180,000 paid under the Company's executive
bonus plan. Fiscal 1998 bonus consists of $106,875 in Common Stock issued
under the Interim STIP.
(12) All other compensation for the Stub Period consists of (i) $4,520 in
contributions by the Company under its retirement savings plans, (ii)
$7,473 in premiums paid by the Company on a group term life insurance
policy for the benefit of Mr. Ofman and (iii) $97,548 in relocation costs.
All other compensation for Fiscal 1998 consists of (i) $12,000 in
contributions by the Company under its retirement savings plans, (ii)
$14,946 in premiums paid by the Company on a group term life insurance
policy for the benefit of Mr. Ofman and (iii) $111,070 in relocation costs.
All other compensation for Fiscal 1997 consists of (i) $3,736 in premiums
paid by the Company on a group term life insurance policy for the benefit
of Mr. Ofman and (iii) $13,871 in relocation costs.
(13) Mr. Ofman joined the Company on March 26, 1997, and therefore, did not
receive compensation for all of Fiscal 1997.
A-13
<PAGE> 27
(14) Calendar 1998 bonus consists of $245,000 paid under the Company's executive
bonus plan. Fiscal 1998 bonus consists of $83,125 in Common Stock issued
under the Interim STIP. Fiscal 1997 bonus consists of a special retention
bonus of $400,000 and $165,000 paid under the Company's executive bonus
program. Fiscal 1996 bonus consists of $198,000 paid under the Company's
executive bonus program.
(15) All other compensation for the Stub Period consists of $8,280 in
contributions by the Company under its retirement savings plans. All other
compensation for Fiscal 1998 consists of $21,560 in contributions by the
Company under its retirement savings plans. All other compensation for
Fiscal 1997 consists of (i) $20,271 in contributions by the Company under
its retirement savings plans and (ii) $76,526 in relocation costs. All
other compensation for Fiscal 1996 consists of (i) $18,225 in contributions
by the Company under its retirement savings plans, (ii) $6,367 in premiums
paid by the Company to Mr. Caine in lieu of payments on a group term life
insurance policy for the benefit of Mr. Caine and (iii) $6,293 in
relocation costs.
(16) Calendar 1998 bonus consists of $180,000 paid under the Company's executive
bonus plan. Fiscal 1998 bonus consists of $99,750 in Common Stock issued
under Interim STIP. Fiscal 1997 bonus consists of $178,834 paid under the
Company's executive bonus program. Fiscal 1996 bonus consists of $178,834
paid under the Company's executive bonus program.
(17) All other compensation for the Stub Period consists of (i) $8,420 in
contributions by the Company under its retirement savings plans and (ii)
$4,123 in premiums paid by the Company on a group term life insurance
policy for the benefit of Mr. Casey. All other compensation for Fiscal 1998
consists of (i) $22,400 in contributions by the Company under its
retirement savings plans and (ii) $7,728 in premiums paid by the Company on
a group term life insurance policy for the benefit of Mr. Casey. All other
compensation for Fiscal 1997 consists of (i) $16,996 in contributions by
the Company under its retirement savings plans and (ii) $8,669 in premiums
paid by the Company on a group term life insurance policy for the benefit
of Mr. Casey. All other compensation for Fiscal 1996 consists of (i)
$21,612 in contributions by the Company under its retirement savings plans,
(ii) $6,586 in premiums paid by the Company on a group term life insurance
life insurance policy for the benefit of Mr. Casey and (iii) $7,278
consisting of imputed income as a result of the 3% promissory note from Mr.
Casey.
OPTION GRANTS
The following table sets forth certain information concerning grants of
stock options during Fiscal 1998 to each of the Named Executives. No options
were granted to the Named Executives during the Stub Period.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------------- VALUE AT ASSUMED
PERCENT OF TOTAL ANNUAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION FOR
SECURITIES GRANTED EXERCISE OPTION TERM(2)
UNDERLYING TO EMPLOYEES PRICE EXPIRATION ----------------------
NAME OPTIONS GRANTED(#) IN FISCAL YEAR ($)(1) DATE 5%($) 10%($)
---- ------------------ ---------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph M. Tucci............. 1998 -- -- -- -- -- --
Jeremiah J.J. van Vuuren.... 1998 40,000(3) 1.8 21.875 11/30/04 297,584 675,116
Jose Ofman.................. 1998 -- -- -- -- -- --
Franklyn A. Caine........... 1998 50,000(3) 2.3 21.875 11/30/04 371,980 843,895
Donald P. Casey............. 1998 45,000(3) 2.1 21.875 11/30/04 334,782 759,505
</TABLE>
- ---------------
(1) The exercise price per share of each option is equal to the fair market
value (the closing price of the Company's common stock on the day before the
day of grant) per share of Common Stock on the date of grant.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date. The gains shown are net of the option exercise price,
but do not include deductions for taxes or other expenses associated with
the exercise of the option or the sale of the underlying shares. The actual
gains, if any, on the stock option exercises will depend on the future
performance of the Common Stock, the op-
A-14
<PAGE> 28
tionholder's continued employment through the option period, and the date on
which the options are exercised and the underlying shares are sold.
(3) Each option (i) became exercisable as to 25% of the underlying shares on
December 1, 1998, and 25% of the underlying shares will become exercisable
on December 1, 1999, December 1, 2000 and December 30, 2001 and (ii)
generally terminates 30 days after the termination of the optionee's
employment with the Company (but in no event after the expiration date).
OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information concerning option
exercises during the Stub Period (1998s) and Fiscal 1998 by each of the Named
Executives and the number and value of unexercised options held by each of the
Named Executives on December 31, 1998 and June 30, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR END(#) AT FISCAL YEAR END($)(2)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(#) REALIZED(1)($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
Joseph M. Tucci............ 1998s -- -- 897,500/106,000 12,306,395/984,230
1998 -- -- 831,829/171,671 9,675,505/1,294,526
Jeremiah J. J. van
Vuuren................... 1998s -- -- 275,450/61,800 3,503,150/464,688
1998 -- -- 265,450/71,800 2,500,390/687,557
Jose Ofman................. 1998s -- -- 75,000/225,000 712,500/2,137,500
1998 -- -- 75,000/225,000 539,063/1,617,188
Franklyn A. Caine.......... 1998s -- -- 447,000/59,000 7,138,323/413,178
1998 -- -- 400,180/105,820 5,766,888/614,487
Donald P. Casey............ 1998s -- -- 244,150/48,600 3,247,403/329,110
1998 110,000 2,047,625 232,900/59,850 2,344,734/554,795
</TABLE>
- ---------------
(1) Based on the fair market value of the Common Stock on the date of exercise
less the option exercise price.
(2) Based on the fair market value (the closing price of the Company's Common
Stock) of the Common Stock on June 30, 1998 ($25.4375) and December 31, 1998
($27.75), respectively, less the option exercise price.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
In February 1997, the Company entered into an amended and restated
employment agreement ("Restated Agreement") with Mr. Tucci. The Restated
Agreement provides for an annual base salary of $750,000 and an annual
performance bonus targeted at 100% of the base salary, and provide for a minimum
bonus payment of $500,000 for Fiscal 1997. The Restated Agreement also provided
for a special retention payment of $4,000,000 on or about March 24, 1997. The
Restated Agreement provided for Mr. Tucci to be granted a restricted stock award
of 230,000 shares of Common Stock and an LTI Option grant of 365,000 shares of
Common Stock in 1997. The Restated Agreement forgives all amounts due to the
Company under that certain Non-Negotiable Secured Promissory Note dated as of
June 21, 1994 delivered by Mr. Tucci to the Company as amended, in the original
principal amount of $355,071 and releases to Mr. Tucci all shares of the
Company's Common Stock held as collateral for such loan. Finally, the Restated
Agreement provides for the payment of a severance benefit of $4,500,000, payable
in a lump sum equal to $1,500,000 and the balance over a 12-month period,
payable under certain enumerated circumstances (including employment termination
by the Company, an adverse change in job responsibilities, an adverse change in
compensation or the resignation of the executive following a significant
relocation).
A-15
<PAGE> 29
The Company entered into an employment agreement with Mr. van Vuuren in May
1993 pursuant to which the Company agreed to employ him as a Senior Vice
President of the Company and General Manager of the Company's European
Operations. The agreement, as amended in March 1997 and July 1998, specifies Mr.
van Vuuren's position as President and Chief Operating Officer, International
Operations. Under the terms of the agreement, as amended, Mr. van Vuuren's base
salary for Fiscal 1997 was $325,000 plus a supplemental amount of $50,000
subject to deferral at the option of Mr. van Vuuren. Mr. van Vuuren is also
eligible to participate in a yearly bonus plan targeted at 60% of his base
salary based on his performance against goals specified in the bonus plan. He
will also receive payments in the amount of $400,000 each, if and when the
market price of the Company's Common Stock averages $34.00, $39.00 and $44.00
per share respectively over twenty consecutive trading days. The agreement
provides that, if he is dismissed for any reason, other than for gross
misconduct or violation of the Company's Employee Code of Conduct, Mr. van
Vuuren will receive severance compensation equal to 18 months of base and
supplemental salary to be paid over an 18-month period. Severance payments would
be offset by compensation received from a new employer during such 18-month
period. In March 1997, Mr. van Vuuren received a restricted stock grant for
25,000 shares of Common Stock and an LTI Option grant in the amount of 60,000
shares of Common Stock in 1997. In July 1998 he received a restricted stock
grant for 29,000 shares of Common Stock.
In March 1997, the Company entered into an employment agreement with Mr.
Ofman pursuant to which the Company agreed to employ him as President and Chief
Operating Officer, Americas of the Company, as amended in July 1998. Mr. Ofman's
agreement extends through March 2000. Under the agreement, the Company agreed to
pay Mr. Ofman an annual base salary of $375,000. The agreement also provided for
annual performance-based bonuses to be determined by the Board of Directors
targeted at 60% of annual base salary for achieving 100% of his performance
goals and an over-achievement opportunity of an additional 40% of his annual
base salary for exceeding such performance targets, at the discretion of the
Board of Directors. He will also receive payments in the amount of $400,000
each, if and when the market price of the Company's Common Stock averages
$34.00, $39.00 and $44.00 per share, respectively, over twenty consecutive
trading days. Under the agreement, Mr. Ofman received a restricted stock award
of 50,000 shares of Common Stock and an option grant of 300,000 shares of Common
Stock in 1997. Under his employment agreement Mr. Ofman will receive severance
compensation equal to a lump sum payment equal to six (6) months of his salary
and target bonus plus commencing one month after termination or resignation and
ending eighteen (18) months thereafter, thirty-six (36) semi-monthly payments
equal to one-twenty-fourth ( 1/24) of his annual salary plus target bonus at
100% performance if Mr. Ofman's employment is involuntarily terminated other
than for cause or if Mr. Ofman experiences an adverse change in job
responsibilities. Severance payments would be offset by the compensation Mr.
Ofman received from a new employer during such 18-month period.
In June 1994, the Company entered into an employment agreement with Mr.
Caine pursuant to which the Company agreed to employ him as Executive Vice
President and Chief Financial Officer of the Company. Mr. Caine's agreement, as
amended in November 1995, May 1996, March 1997 and July 1998, extends through
June 30, 2001. Under the agreement, the Company agreed to pay Mr. Caine an
annual base salary and bonus as authorized from time to time by Wang's Chief
Executive Officer and the Organization, Compensation and Nominating Committee of
the Board of Directors. Under his employment agreement Mr. Caine will receive
severance compensation in an amount equal to six months salary and target bonus
payable in a lump sum and eighteen (18) monthly payments equal to one-twelfth
( 1/12) of his annual salary plus target bonus at 100% performance, if Mr.
Caine's employment is involuntarily terminated other than for cause or if Mr.
Caine experiences an adverse change in job responsibilities. Severance payments
would be offset by the compensation Mr. Caine received from a new employer
during such 18-month period. In March 1997, Mr. Caine received a restricted
stock award of 15,000 shares of Common Stock, an LTI Option grant of 25,000
shares of Common Stock and a special retention bonus payment from the Company in
the amount of $400,000 in 1997. In July 1998 he received a restricted stock
grant for 29,000 shares of Common Stock. Effective as of April 1, 1999, Mr.
Caine resigned as Chief Financial Officer of the Company.
In March 1993, the Company entered into an employment agreement with Mr.
Casey. The agreement, as amended in April 1995, July 1996, and July 1998 extends
through June 30, 2001 and provided for an annual base salary and bonus as
authorized from time to time by Wang's Chief Executive Officer and the
A-16
<PAGE> 30
Organization, Compensation and Nominating Committee of the Board of Directors.
Under his employment agreement Mr. Casey will receive severance compensation in
an amount equal to six (6) months salary and target bonus payable in a lump sum
and twenty-four (24) semi-monthly payments equal to one twenty-fourth ( 1/24) of
his annual salary plus target bonus at 100% performance, if Mr. Casey's
employment is involuntarily terminated other than for cause or if Mr. Casey
experiences an adverse change in job responsibilities. Severance payments would
be offset by the compensation Mr. Casey received from a new employer during such
18-month period. In July 1998, Mr. Casey received a restricted stock grant for
14,000 shares of Common Stock.
The Company is a party to contingent severance compensation agreements
("Severance Agreements") with nine executive officers (including Messrs. Tucci,
van Vuuren, Ofman, Caine and Casey) which would become operative following a
"change in control" of the Company, as defined in the Severance Agreements. The
Company believes that these agreements will better ensure the retention of those
officers and enable them to devote their full attention and energies to the
Company's business without the distractions that might arise in the
circumstances addressed in the agreements. The Severance Agreements continue in
effect while the executive is employed by the Company for a period of three
years, automatically renew for additional one year terms and remain in effect
for 36 months after the month in which a change in control occurs. If the
executive's employment is terminated following a change in control, the
executive would become entitled to various benefits under the Severance
Agreement, including (in lieu of a payment under any other severance plan or
agreement) a lump sum severance payment equal to 2.99 times the average annual
compensation received by the executive for the two previous years, unless the
executive's employment was terminated (i) because of death or disability, (ii)
by the Company for cause, or (iii) by the executive without "good reason," as
defined in the Severance Agreements.
The Severance Agreements for each of Messrs. Tucci, Caine and Casey provide
that in the event the total payments to the executive under the agreement are
subject in whole or in part to the excise tax (the "Excise Tax") imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), the
Company will pay the executive an additional amount in the form of a gross-up
payment such that the net amount retained by the executive after payment of the
Excise Tax on the total payments and any federal, state and local income taxes
on the gross-up payment equals the total payments the executive would have
received absent the Excise Tax. The Severance Agreement for Mr. van Vuuren
provides that the lump sum payment would be subject to reduction to the extent
that any payment (whether under the Severance Agreement or otherwise) to Mr. van
Vuuren was subject to the Excise Tax imposed under Section 4999 of the Code if
such reduction would result in a greater after-tax payment to Mr. van Vuuren.
CERTAIN TRANSACTIONS
Since April 1995, the Company and Microsoft Corporation ("Microsoft") have
maintained a worldwide technical, service and marketing alliance pursuant to
which the Company acts as an authorized provider of end-user support services
for Microsoft products. On March 23, 1998, the Company and Microsoft announced
an expansion of their strategic alliance. The Company will significantly extend
its services capacity by training and certifying 2,500 professionals as
Microsoft Certified Systems Engineers and Microsoft Certified Solution
Developers. In addition, the Company will open two Centers of Excellence, one in
Billerica and one in Italy. Under the terms of the agreement, Microsoft will
fund the costs associated with the program. These costs are expected to
approximate $25 million over the next three years. The funding will be repaid in
equal installments over five years, with the first payment due in 2001. Since
April 1996, Michael W. Brown, the Chief Financial Officer of Microsoft until
July 1997, has been a director of the Company.
In connection with the Company's acquisition of Olsy (see "Agreements Among
Stockholders -- Olivetti Agreements"), Wang assumed obligations and liabilities
associated with the going concern. These obligations included employee
liabilities as well as contract commitments and other business relationships. A
complete discussion of the terms and conditions of the Acquisition is more fully
set forth in the Stock Purchase Agreement filed as an Appendix to the Company's
Form 8-K filed on March 17, 1998.
A-17
<PAGE> 31
As part of the Reorganization Plan, the previous obligations of the Company
to indemnify its former directors, officers and employees pursuant to its
corporate charter, by-laws and policy of providing employee indemnification, and
applicable state law and agreements in respect of claims based on acts or
omissions related to such persons' service with, for or on behalf of the Company
have been retained and remain unaffected by the Chapter 11 case. Consequently,
the Company is obliged to indemnify each current or former director or executive
officer in the various legal proceedings relating to the Company's predecessor
Massachusetts corporation. On May 12, 1998, the Court issued an order (1)
authorizing the final distribution of the remaining shares to holders; and (2)
closing the Chapter 11 case.
AGREEMENTS AMONG STOCKHOLDERS - OLIVETTI AGREEMENTS
On March 17, 1998, the Company completed the purchase of Olsy, the
wholly-owned information technology solutions and service subsidiary of Olivetti
(the "Acquisition"). In connection with the Acquisition, the Company entered
into a Stock Purchase Agreement by and among Olivetti, the Company, Wang
Nederland BV, Olivetti Sistemas E Servicios Limitada and Olivetti do Brasil S.A.
(the "Stock Purchase Agreement"), pursuant to which the Company paid Olivetti
$68.6 million in cash; issued 7,250,000 shares of unregistered Common Stock (and
agreed to issue an additional 1,500,000 shares of unregistered Common Stock if
approved by the stockholders of the Company (the "Additional Issuance")) with a
value of $197.2 million at the time of closing; issued 5,000,000 stock
appreciation rights ("SARs") which give Olivetti value for the increase in the
market price of the Company's Common Stock above $30.00 per share at any time
from March 2001 to March 2005 and are redeemable in cash or Common Stock at the
Company's election; and agreed to pay an additional amount (an "earnout") of up
to $56.0 million payable in the year 2000, subject to meeting mutually-agreed
performance targets for the calendar years 1998 and 1999 (see "Proposal To Issue
Additional Shares of Common Stock to Olivetti"). The purchase price for Olsy is
subject to certain purchase price adjustments to be determined by the parties.
Pursuant to the Stock Purchase Agreement, the Company entered into a
Stockholders Agreement with Olivetti (the "Stockholders Agreement"). The
Stockholders Agreement sets forth agreements among the parties relating to the
ownership of and the voting and transferability of the Common Stock and other
matters. In the Stockholders Agreement, the Company agreed to increase its Board
of Directors by two (2) members and to nominate Mr. Colaninno and Mr. Erede as
Class I and Class III directors, respectively (the "Olivetti Directors"), and to
appoint one such Olivetti Director to each of the Company's standing Committees
(including the Finance and Audit Committee and the Organization, Compensation
and Nominating Committee). The Company also agreed to recommend future Olivetti
nominees for one or two director positions, depending on the ownership interest
of Olivetti in the Company, for as long as Olivetti holds at least 33% of the
original number of shares of Common Stock held by it as a result of the
Acquisition.
In addition, the Stockholders Agreement prohibits Olivetti from directly or
indirectly transferring its shares of Common Stock, except to majority-owned
Olivetti affiliates that agree to be bound by the terms of the agreement, until
the later of three (3) years or an Early Termination Event. "Early Termination
Event" is defined to mean (i) failure of the Company to cause an Olivetti
nominee to be appointed to the Board or a Committee; (ii) a breach of the
Stockholders Agreement by the Company; or (iii) the sale, lease, transfer or
other disposition of all or substantially all of the assets of the Company. The
Stockholders Agreement also provides that Olivetti is entitled to certain demand
and participation ("piggyback") registration rights with respect to the shares
of Common Stock issued to Olivetti as part of the purchase price of Olsy.
Pursuant to the Agreement, after the earlier of (i) an Early Termination Event
or (ii) the third anniversary following the Acquisition, Olivetti or its
transferee is entitled to one demand registration with respect to its shares of
the Company's Common Stock, subject to certain registration priorities and
postponement rights of the Company. In addition, Olivetti would be entitled to
piggyback registration in connection with any registration of securities by the
Company (whether or not for its own account) on a form which may be used for
registration of the Common Stock held by Olivetti. Olivetti's priority rights,
however, would not extend to a primary registration on behalf of the Company
relating to mergers, acquisitions, exchange offers, subscription offers, stock
option plans or similar benefit plans.
A-18
<PAGE> 32
REPORT OF ORGANIZATION, COMPENSATION AND NOMINATING COMMITTEE ON EXECUTIVE
COMPENSATION
The Company's executive compensation program is administered by the
Organization, Compensation and Nominating Committee of the Board of Directors
(the "Committee"), which was established in October 1993. The Committee is
comprised entirely of non-employee directors.
The Committee seeks to achieve two broad goals in determining executive
compensation and establishing executive compensation programs. First, the
Committee seeks to implement compensation programs which are designed to align
the interest of the Company's executive officers with those of the Company's
stockholders by providing incentives for, and rewarding, the attainment of
Company financial and operational objectives. Second, the Committee seeks to
compensate its executives in a manner that enables the Company to attract and
retain executives whose services are critical to the success of the Company. The
Committee implements its goals through a combination of base salary, variable
short-term compensation, stock options, long-term incentive plans and health and
welfare benefit plans.
In establishing total compensation for executive officers, the Committee
considers the compensation profiles of executives at other companies that have a
business and/or financial situation similar to that of the Company, the cost to
replace the executive, the particular executive's level of achievement and
responsibility with the Company, the importance of the executive to the
Company's success, unique characteristics of the Company and its business and
the executive's historic compensation levels. Many of the executive officers
(including each of the Named Executives) of the Company are parties to
employment agreements that establish a minimum annual base salary and target
annual bonus during the term of the agreement. The Committee believes that such
employment agreements are necessary to retain and motivate those key executives
whose continued services are critical to the Company's future success and are
consistent with similar agreements in the industry generally. The Committee
believes that the compensation levels established for the executives are
appropriate, based on the factors described above.
For the six-month period from July 1, 1997 through December 31, 1997 (the
"Interim Period"), the Committee adopted a pro-rata six-month short term
incentive bonus plan for executives, in lieu of the annual plan which would have
applied in part to the Interim Period (the "Interim STIP"). The Interim STIP was
established in anticipation of the Company changing its fiscal year end from
June 30 to December 31, a change which was announced on August 5, 1998. The
Committee determined that it was in the best interest of the Company for all
executive compensation plans to be measured on a twelve month calendar basis
beginning January 1, 1998. In designing the Interim STIP, the Committee tied
individual payouts to achievement of specific financial measures. The targets
included Company revenue, earnings before income taxes, depreciation and
amortization, selling, general and administrative costs and percentage gross
margin. In addition, in order to further align the interests of the Company's
executive officers with the interests of the Company's stockholders, the
Committee required that the CEO and all executives directly reporting to the CEO
(including each of the Named Executives), accept their bonuses under the Interim
STIP in the form of shares of the Company's Common Stock. Thus, the cash bonus
to which each of such executives were entitled was exchanged for shares of
Common Stock calculated by dividing the amount of the bonus by the closing price
of the Common Stock on June 30, 1997 ($21.3125). The Committee considered this
exchange to be critical to its goal of tying the variable short-term
compensation of executive officers to the risks and opportunities inherent in
the performance of the Company measured by the value of its Common Stock in the
market.
For the calendar year 1998, the Committee's philosophy was to base between
twenty-five percent (25%) and fifty percent (50%) of the cash compensation paid
to the executive officers on the attainment of financial and individual goals,
thus aligning the objectives and rewards of Company executives with those of the
stockholders of the Company. Under the Company's 1998 Management Incentive Plan,
ninety percent (90%) of this incentive compensation was based on financial
measures and ten percent (10%) was based on individual objectives. The financial
targets varied among executives based upon their respective areas of operational
responsibility. Each executive was paid a percentage of his or her target bonus
based upon the degree to which established objectives were attained. The
financial objectives included revenue, cashflow from operations, and EBITDA
targets. The actual bonuses paid to the executive officers ranged from 60% to
105% of their target bonus. The $787,500 bonus paid to Mr. Tucci represented
105% of his target bonus.
A-19
<PAGE> 33
The Committee uses stock options as an important element of the
compensation package of the executive officers, including the Named Executives,
because they are designed to align the interest of the Company's executives with
those of the Company's stockholders. Those options granted during Fiscal 1998
vest over four years, and therefore, mature fully only after the executive has
remained with the Company for a significant period of time. The size of the
stock option grants to executive officers depend upon a number of factors,
including new hires of executives, the executive's contribution to the Company,
the executive's current stock and stock option holdings and such other factors
as the Committee deems relevant. In Fiscal 1998, three out of the five Named
Executives received grants of stock options under the Company's stock option
plan. Messrs. van Vuuren, Casey and Caine received an option for 40,000, 45,000
and 50,000 shares of Common Stock, respectively. These grants represented 1.8%,
2.1% and 2.3% of the total options granted to employees during the fiscal year.
The Committee uses grants of restricted Common Stock to more closely align
the interests of the executive officers with the interests of the Company and
the Company's stockholders. The restricted stock granted during the Stub Period
is designed to vest based on the performance of the Company's Common Stock in
the market as measured over a prolonged period. The increase in the Company's
Common Stock price and the condition that the executives continue with the
Company are requirements for the vesting of the restricted stock. In the Stub
Period, three out of five of the Named Executives received grants of restricted
stock. Messrs. van Vuuren, Caine and Casey received grants in the amounts of
29,000, 29,000 and 14,000 shares, respectively.
Under Section 162(m) of the Code, certain executive compensation in excess
of $1 million paid to the five most highly-paid executives of the Company is not
deductible by the Company for federal income tax purposes unless the
compensation is awarded under a performance-based plan approved by the
stockholders of the Company. The Committee intends to continue to structure the
award of stock options to executive officers so that they comply with the
performance-based requirements of Section 162(m), and may in the future decide
to submit other executive compensation plans for stockholder approval.
Organization, Compensation and
Nominating Committee
Joseph J. Kroger, Chairman
Roberto Colaninno
Marcia J. Hooper
Axel J. Leblois
A-20
<PAGE> 34
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Common Stock of the Company from December 16, 1993 (the date the Common Stock of
the reorganized Company commenced public trading) through December 31, 1998 with
the cumulative total return during this period of (i) Standard & Poor's 500
Composite Index and (ii) the High Technology Composite Index. This graph assumes
the investment of $100 on December 16, 1993 in the Company's Common Stock, the
Standard & Poor's 500 Composite Index and the High Technology Composite Index
and assumes dividends are reinvested.
WANG LABORATORIES, INC.
Stock Performance Graph
<TABLE>
<CAPTION>
WANG LABORATORIES, INC. S&P 500 COMPOSITE INDEX HITECH COMPOSITE INDEX
----------------------- ----------------------- ----------------------
<S> <C> <C> <C>
12/16/93 100.00 100.00 100.00
6/30/94 75.83 95.88 100.47
6/30/95 108.26 117.57 158.11
6/30/96 124.79 144.74 185.02
6/30/97 140.91 191.03 286.48
6/30/98 168.18 244.71 383.45
12/31/98 183.47 265.30 506.19
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who are beneficial owners of more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors and greater than 10% beneficial owners are required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms that they file. To
the Company's knowledge, based solely on the review of the copies of reports
furnished to Company, and written representations that no other reports were
required during the Fiscal 1998 or the Stub Period, all Section 16(a) filing
requirements applicable to such persons were satisfied during such periods.
A-21
<PAGE> 1
Exhibit 99(a)(1)
OFFER TO PURCHASE FOR CASH
All of the Outstanding Shares of Common Stock
(Including the Associated Rights),
All of the Outstanding Shares of 4 1/2% Series A Cumulative
Convertible Preferred Stock,
All of the Outstanding Shares of 6 1/2% Series B Cumulative
Convertible Preferred Stock,
All of the Outstanding Depositary Shares (each representing a 1/20th interest
in a Share of 6 1/2% Series B Cumulative Convertible Preferred Stock),
All of the Outstanding Common Stock Purchase Warrants
and
The Outstanding Special Common Stock Warrant
of
Wang Laboratories, Inc.
at
$29.25 Net Per Share of Common Stock,
$1,271.73 Net Per Share of 4 1/2% Series A Cumulative Convertible Preferred
Stock,
$1,101.17 Net Per Share of 6 1/2% Series B Cumulative Convertible Preferred
Stock,
$55.05 Net Per Depositary Share,
$7.80 Net Per Common Stock Purchase Warrant
and
$6,250,000.00 Net for the Special Common Stock Warrant, respectively,
by
Getronics Acquisition, Inc.
A Wholly-Owned Subsidiary of
Getronics NV
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, JUNE 7, 1999 UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF SHARES OF COMMON STOCK, INCLUDING THE ASSOCIATED RIGHTS (THE "COMMON
STOCK"), SHARES OF 4 1/2% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK (THE
"SERIES A PREFERRED STOCK"), SHARES OF 6 1/2% SERIES B CUMULATIVE CONVERTIBLE
PREFERRED STOCK (THE "SERIES B PREFERRED STOCK"), DEPOSITARY SHARES, EACH
REPRESENTING A 1/20TH INTEREST IN A SHARE OF SERIES B PREFERRED STOCK (THE
"DEPOSITARY SHARES"), WARRANTS TO PURCHASE SHARES OF COMMON STOCK (THE "COMMON
STOCK PURCHASE WARRANTS") AND THE SPECIAL COMMON STOCK WARRANT (THE "SPECIAL
COMMON STOCK WARRANT" AND, COLLECTIVELY WITH THE COMMON STOCK, THE SERIES A
PREFERRED STOCK, THE SERIES B PREFERRED STOCK, THE DEPOSITARY SHARES AND THE
COMMON STOCK PURCHASE WARRANTS, THE "OFFER SECURITIES") OF WANG LABORATORIES,
INC. (THE "COMPANY") WHICH REPRESENT AT LEAST A MAJORITY OF THE COMMON STOCK
EQUIVALENTS (AS SUCH TERM IS DEFINED IN THE OFFER) ON THE DATE OF PURCHASE
(THE "MINIMUM CONDITION"), (II) THE RECEIPT OF CERTAIN GOVERNMENTAL APPROVALS
AND (III) THE SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS DESCRIBED IN
SECTION 14--"CONDITIONS OF THE OFFER".
THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER (THE
"MERGER AGREEMENT"), DATED MAY 3, 1999, BY AND AMONG PARENT, THE PURCHASER AND
THE COMPANY. SEE SECTION 11--"PURPOSE OF THE OFFER; PLANS FOR THE COMPANY;
CERTAIN AGREEMENTS".
THE BOARD OF DIRECTORS OF THE COMPANY (I) HAS DETERMINED THAT EACH OF THE
OFFER AND THE MERGER OF THE PURCHASER WITH AND INTO THE COMPANY (THE "MERGER")
IS FAIR TO, AND IN THE BEST INTERESTS OF, THE HOLDERS OF THE OFFER SECURITIES
AND HAS DECLARED THAT THE OFFER AND THE MERGER ARE ADVISABLE, (II) HAS
APPROVED THE OFFER AND THE MERGER AND (III) HAS RECOMMENDED THAT THE HOLDERS
OF THE OFFER SECURITIES ACCEPT THE OFFER AND TENDER THEIR OFFER SECURITIES
PURSUANT TO THE OFFER AND THAT THE HOLDERS OF COMMON STOCK, SERIES A PREFERRED
STOCK, SERIES B PREFERRED STOCK AND DEPOSITARY SHARES APPROVE AND ADOPT THE
MERGER AGREEMENT.
---------------
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
May 10, 1999
<PAGE> 2
IMPORTANT
Any holder of Offer Securities desiring to tender all or any portion of the
Offer Securities owned by such holder should either (i) complete and sign the
applicable Letter of Transmittal or a copy thereof in accordance with the
instructions in such Letter of Transmittal and mail or deliver it together
with the certificate(s) evidencing tendered Offer Securities, and any other
required documents, to the Depositary, (ii) where applicable, cause such
holder's broker, dealer, commercial bank, trust company or custodian to tender
such Offer Securities pursuant to the procedures for book-entry transfer of
Offer Securities or (iii) comply with the guaranteed delivery procedure, in
each case, upon the terms set forth in Section 3--"Procedures for Tendering
Offer Securities". Any holder whose Offer Securities are registered in the
name of a broker, dealer, commercial bank, trust company or custodian must
contact such broker, dealer, commercial bank, trust company or custodian if
such holder desires to tender such Offer Securities. See Section 2--
"Acceptance for Payment and Payment for Offer Securities".
References to shares of Common Stock include references to the associated
rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
April 22, 1998, by and between the Company and the American Stock Transfer and
Trust Company, as Rights Agent, unless the context indicates otherwise. In
order to validly tender shares of Common Stock, a holder must tender the
associated Rights. The tender of a share of Common Stock will constitute the
tender of the associated Rights. See Section 2--"Acceptance for Payment and
Payment for Offer Securities".
Any holder who desires to tender Offer Securities and whose certificate(s)
evidencing such Offer Securities are not immediately available, or who cannot
comply with the procedures for book-entry transfer described in this Offer to
Purchase on a timely basis, may tender such Offer Securities by following the
procedures for guaranteed delivery set forth in Section 3--"Procedures for
Tendering Offer Securities".
Copies of this Offer to Purchase, the related Letters of Transmittal or of
any related documents must not be mailed to or otherwise distributed or sent
in, into or from any country where such distribution or offering would require
any additional measures to be taken or would be in conflict with any law or
regulation of such a country or any political subdivision thereof. Persons
into whose possession this document comes are required to inform themselves
about and to observe any such laws or regulations. This Offer to Purchase may
not be used for, or in connection with, any offer to, or solicitation by,
anyone in any jurisdiction or under any circumstances in which such offer or
solicitation is not authorized or is unlawful. This Offer to Purchase, the
related Letters of Transmittal or any related documents may not be issued or
passed on to any person in the United Kingdom unless such person is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996, as amended, or is a person to whom
this document may otherwise be lawfully issued or passed on.
Questions and 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 applicable Letter of Transmittal or
other related tender offer materials may be obtained from the Information
Agent or from brokers, dealers, commercial banks, trust companies or
custodians.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION.............................................................. 1
THE TENDER OFFER.......................................................... 3
1. Terms of the Offer.................................................. 3
2. Acceptance for Payment and Payment for Offer Securities............. 5
3. Procedures for Tendering Offer Securities........................... 6
4. Withdrawal Rights................................................... 9
5. Certain United States Federal Income Tax Consequences............... 10
6. Price Range; Dividends.............................................. 11
7. Certain Information Concerning the Company.......................... 13
8. Certain Information Concerning the Purchaser and Parent............. 20
9. Source and Amount of Funds.......................................... 24
10. Background of the Offer............................................. 25
11. Purpose of the Offer; Plans for the Company; Certain Agreements..... 26
12. Dividends and Distributions......................................... 37
13. Effect of the Offer on the Market for the Offer Securities; Exchange
Act Registration....................................................... 38
14. Conditions of the Offer............................................. 39
15. Certain Legal Matters; Regulatory Approvals......................... 41
16. Fees and Expenses................................................... 46
17. Miscellaneous....................................................... 46
</TABLE>
<TABLE>
<C> <S>
SCHEDULE I Information Concerning the Directors and Executive Officers of
Getronics NV and Getronics Acquisition, Inc.
</TABLE>
I
<PAGE> 4
To the Holders of Common Stock, 4 1/2% Series A Cumulative
Convertible Preferred Stock, 6 1/2% Series B Cumulative
Convertible Preferred Stock, Depositary Shares (each
representing a 1/20th interest in a Share of 6 1/2% Series B Cumulative
Convertible Preferred Stock), Common Stock Purchase
Warrants and the Special Common Stock Warrant:
INTRODUCTION
Getronics Acquisition, Inc., a Delaware corporation (the "Purchaser"), and a
wholly-owned subsidiary of Getronics NV, a public company with limited
liability incorporated under the laws of The Netherlands with its corporate
seat in Amsterdam, The Netherlands ("Parent"), hereby offers to purchase (i)
all of the issued and outstanding shares of common stock, par value $0.01 per
share, including the associated rights (the "Common Stock"), of Wang
Laboratories, Inc., a company organized under the laws of Delaware (the
"Company"), at a price of $29.25 per share of Common Stock, net to the seller
in cash, without interest thereon (the "Common Stock Offer Price"), (ii) all
of the issued and outstanding shares of 4 1/2% Series A Cumulative Convertible
Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"),
of the Company at a price of $1,271.73 per share of Series A Preferred Stock,
net to the seller in cash, without interest thereon (the "Series A Preferred
Stock Offer Price"), (iii) all of the issued and outstanding shares of 6 1/2%
Series B Cumulative Convertible Preferred Stock, par value $0.01 per share
(the "Series B Preferred Stock"), of the Company at a price of $1,101.17 per
share of Series B Preferred Stock, net to the seller in cash, without interest
thereon (the "Series B Preferred Stock Offer Price"), (iv) all of the issued
and outstanding depositary shares, each representing a 1/20th interest in a
share of Series B Preferred Stock (the "Depositary Shares"), at a price of
$55.05 per Depositary Share, net to the seller in cash, without interest
thereon (the "Depositary Shares Offer Price"), (v) all of the issued and
outstanding warrants (other than the Special Common Stock Warrant) of the
Company to purchase shares of Common Stock (the "Common Stock Purchase
Warrants") at a price of $7.80 per Common Stock Purchase Warrant, net to the
seller in cash, without interest thereon (the "Common Stock Purchase Warrants
Offer Price") and (vi) the issued and outstanding warrant of the Company (the
"Special Common Stock Warrant") giving the holder the right to receive a
certain number of shares of Common Stock upon exercise thereof, at a price of
$6,250,000.00, net to the seller in cash, without interest thereon (the
"Special Common Stock Warrant Offer Price" and, together with the Common Stock
Offer Price, the Series A Preferred Stock Offer Price, the Series B Preferred
Stock Offer Price, the Depositary Shares Offer Price and the Common Stock
Purchase Warrants Offer Price, collectively, the "Offer Price"), upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Letters of Transmittal (which, as they may be amended and
supplemented from time to time, together constitute the "Offer"). Unless the
context indicates otherwise, as used herein, "Offer Securities" shall mean the
shares of Common Stock, the shares of Series A Preferred Stock, the shares of
Series B Preferred Stock, the Depositary Shares, the Common Stock Purchase
Warrants and the Special Common Stock Warrant. Unless the context indicates
otherwise, all references to shares of Common Stock shall include the
associated rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of April 22, 1998 (the "Rights Agreement"), by and between the
Company and the American Stock Transfer and Trust Company ("ASTT"), as Rights
Agent.
Tendering holders whose Offer Securities are registered in their own name
and who tender directly to Citibank, N.A., as Depositary (the "Depositary")
will not be obligated to pay brokerage fees or commissions or, except as set
forth in Instruction 6 of the applicable Letter of Transmittal, stock transfer
taxes on the purchase of Offer Securities pursuant to the Offer. The Purchaser
will pay all charges and expenses of Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as Dealer Manager (the "Dealer Manager" or "Merrill Lynch"), the
Depositary, and Morrow & Co., Inc., as Information Agent (the "Information
Agent"), in each case incurred in connection with the Offer. See Section 16--
"Fees and Expenses".
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not properly withdrawn prior to the expiration of the Offer a
number of Offer Securities which represent at least a
1
<PAGE> 5
majority of the Common Stock Equivalents (as such term is defined herein) on
the date of purchase (the "Minimum Condition"), (ii) the receipt of certain
Governmental Approvals (as such term is defined herein) and (iii) the
satisfaction of certain other terms and conditions described in Section 14--
"Conditions of the Offer".
"Common Stock Equivalents" shall mean such number of shares of Common Stock
represented by Offer Securities or stock options and other rights to purchase
Common Stock (the "Options") which, in the case of (i) one (1) share of Common
Stock, is 1, (ii) one (1) share of Series A Preferred Stock, is 43.478, (iii)
one (1) share of Series B Preferred Stock, is 37.647, (iv) one (1) Depositary
Share, is 1.882, (v) one (1) Common Stock Purchase Warrant, is 1, (vi) the
Special Common Stock Warrant, is 213,675, and (vii) each Option, is equal to
the number of shares of Common Stock issuable upon exercise of such Option.
The Company has informed the Purchaser that, as of May 3, 1999, there were
issued and outstanding (i) 47,045,593 shares of Common Stock, (ii) 90,000
shares of Series A Preferred Stock, (iii) 2,875,000 Depositary Shares
(representing 143,750 shares of Series B Preferred Stock), (iv) 7,208,935
Common Stock Purchase Warrants, (v) the Special Common Stock Warrant and (vi)
Options exercisable into 8,941,077 shares of Common Stock. As a result, as of
such date, the Minimum Condition would be satisfied if, in the aggregate, a
combination of Common Stock, Series A Preferred Stock, Series B Preferred
Stock, Depositary Shares, Common Stock Purchase Warrants and the Special
Common Stock Warrant representing 36,367,045 Common Stock Equivalents would be
tendered and not properly withdrawn prior to the expiration of the Offer.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of May 3, 1999 (the "Merger Agreement"), by and among Parent, the Purchaser
and the Company. The Merger Agreement provides that, promptly upon
consummation of the Offer, Parent will cause the Purchaser to be merged with
and into the Company (the "Merger"). At the effective time of the Merger (the
"Effective Time"), except for the Offer Securities which are held by any
subsidiary of the Company or in the treasury of the Company, or which are
held, directly or indirectly, by Parent or any direct or indirect subsidiary
of Parent (including the Purchaser), all of which shall cease to be
outstanding and be canceled and retired and none of which shall receive any
payment with respect thereto and Offer Securities held by holders exercising
their rights to dissent in accordance with the Delaware General Corporation
Law (the "DGCL"), (i) each share of Common Stock (including all associated
Rights) issued and outstanding immediately prior to the Effective Time and all
rights in respect thereof shall, by virtue of the Merger and without any
action on the part of the holder thereof, forthwith cease to exist and be
converted into and represent the right to receive an amount in cash equal to
$29.25, without interest, (ii) each share of Series A Preferred Stock issued
and outstanding immediately prior to the Effective Time and all rights in
respect thereof shall, immediately prior to the Merger and without any action
on the part of the holders thereof, be converted into 43.478 fully paid and
nonassessable shares of Common Stock, such shares of Common Stock thereafter
to be treated in accordance with clause (i) above, (iii) each share of Series
B Preferred Stock issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of the
holders thereof, no longer be convertible into shares of Common Stock but
shall thereafter be convertible, in accordance with Section 7(E) of the
Certificate of Designation of the Series B Preferred Stock, into the right to
receive an amount in cash equal to $1,101.17, without interest, (iv) each
Common Stock Purchase Warrant issued and outstanding immediately prior to the
Effective Time and all rights in respect thereof shall, by virtue of the
Merger and without any action on the part of the holders thereof, no longer be
exercisable into the right to receive Common Stock but shall become
exercisable, in accordance with Section 11.5 of the Warrant Agreement, dated
as of October 29, 1993, by and between the Company and ASTT, into the right to
receive an amount in cash equal to $7.80, without interest and (v) the Special
Common Stock Warrant issued and outstanding immediately prior to the Effective
Time and all rights in respect thereof shall, by virtue of the Merger and
without any action on the part of the holder thereof, expire. The Merger
Agreement is more fully described in Section 11--"Purpose of the Offer; Plans
for the Company; Certain Agreements". Under the DGCL, if the Purchaser
2
<PAGE> 6
acquires, pursuant to the Offer or otherwise, at least 90% of the issued and
outstanding shares of each of the Common Stock, the Series A Preferred Stock
and the Series B Preferred Stock, the Purchaser will be able to approve and
effect the Merger without a vote of the Company's stockholders. If, however,
the Purchaser does not acquire at least 90% of the issued and outstanding
shares of each of the Common Stock, the Series A Preferred Stock and the
Series B Preferred Stock, pursuant to the Offer or otherwise, a vote of the
Company's stockholders to effect the Merger is required under the DGCL and a
longer period of time will be required to effect the Merger. See Section 11--
"Purpose of the Offer; Plans for the Company; Certain Agreements".
The board of directors of the Company (the "Board of Directors") (i) has
determined that each of the Offer and the Merger is fair to, and in the best
interest of, the holders of the Offer Securities and has declared that the
Offer and the Merger are advisable, (ii) has approved the Offer and the Merger
and (iii) has recommended that the holders of the Offer Securities accept the
Offer and tender their Offer Securities pursuant to the Offer and that the
holders of Common Stock, Series A Preferred Stock, Series B Preferred Stock
and Depositary Shares approve and adopt the Merger Agreement.
"Governmental Approvals" means (i) the expiration or termination of any
applicable waiting period (and any extension thereof) under (A) the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder (the "HSR Act"), (B) the voluntary notification under
Section 721 of the Defense Production Act of 1950, as amended ("Exon-Florio"),
(ii) a decision of the Commission of the European Community that the purchase
of the Offer Securities contemplated by the Offer is compatible with the
common market and (iii) the receipt of approvals and consents from certain
other governmental agencies and authorities. See Section 14--"Conditions of
the Offer" for a complete description of the conditions to the Offer.
This Offer to Purchase and the Letters of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
THE TENDER OFFER
1. Terms of the Offer. Upon the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and
conditions of any extension or amendment), the Purchaser will accept for
payment and pay for all Offer Securities validly tendered prior to the
Expiration Date (as hereinafter defined) and not withdrawn in accordance with
Section 4--"Withdrawal Rights". The term "Expiration Date" means 12:00
Midnight, New York City time, on Monday, June 7, 1999, unless and until the
Purchaser, in its sole discretion (but subject to the terms of the Merger
Agreement), shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by the Purchaser, shall expire.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition and the receipt of the Governmental Approvals. The Offer is
also subject to certain other conditions set forth in Section 14--"Conditions
of the Offer". If these or any of the other conditions referred to in Section
14--"Conditions of the Offer" are not satisfied or any of the events specified
in Section 14--"Conditions of the Offer" have occurred or are determined by
the Purchaser to have occurred prior to the Expiration Date, the Purchaser,
subject to the terms of the Merger Agreement, reserves the right (but is not
obligated) to (i) decline to purchase any of the Offer Securities tendered in
the Offer and terminate the Offer, and return all tendered Offer Securities to
the tendering holders of the Offer Securities, (ii) waive or amend any or all
conditions to the Offer and, to the extent permitted by applicable law and
applicable rules and regulations of the Securities and Exchange Commission
(the "Commission"), purchase all Offer Securities validly tendered or (iii)
subject to the limitations described below, extend the Offer and, subject to
the right of a tendering holder to withdraw its Offer Securities until the
Expiration Date, retain the Offer Securities which have been tendered during
the period or periods for which the Offer is extended, provided, however,
that, subject to the terms of the Merger Agreement, the Minimum Condition may
not be waived by the Purchaser in its sole discretion.
3
<PAGE> 7
Subject to the terms of the Merger Agreement and the applicable rules and
regulations of the Commission and to applicable law, the Purchaser expressly
reserves the right, in its sole discretion, at any time and from time to time,
to extend for any reason the period of time during which the Offer is open,
including upon the occurrence of any of the events specified in Section 14--
"Conditions of the Offer", by giving notice of such extension to the
Depositary and by making a public announcement thereof. During any such
extension, all Offer Securities previously tendered and not withdrawn will
remain subject to the Offer, subject to the rights of a tendering holder to
withdraw its Offer Securities. See Section 4--"Withdrawal Rights".
Subject to the applicable rules and regulations of the Commission and to
applicable law, the Purchaser also expressly reserves the right, in its sole
discretion (subject to the terms of the Merger Agreement), at any time and
from time to time (i) to delay acceptance for payment of, or, regardless of
whether such Offer Securities were theretofore accepted for payment, payment
for, any Offer Securities (a) if any applicable waiting period (or extension
thereof) under the HSR Act has not expired or been terminated, (b) if a
decision of the Commission of the European Community that the purchase of the
Offer Securities pursuant to the Offer is compatible with the common market
has not been received, (c) if any applicable waiting period under Exon-Florio
has not expired or been terminated or (d) in order to comply in whole or in
part with any other applicable law, (ii) to terminate the Offer and not accept
for payment any Offer Securities if any of the conditions referred to in
Section 14--"Conditions of the Offer" are not satisfied or any of the events
specified in Section 14--"Conditions of the Offer" have occurred and (iii)
subject to the terms of the Merger Agreement, to waive any condition, or
otherwise amend the Offer in any respect by giving oral or written notice of
such delay, termination, waiver or amendment to the Depositary and by making a
public announcement thereof.
The Purchaser reserves the right to modify the terms of the Offer including,
without limitation, except as provided below, to extend the Offer beyond any
scheduled expiration date, except that, without the written consent of the
Company, the Purchaser will not reduce the number of Offer Securities sought
in the Offer, reduce the Offer Price, or modify, waive or add to the
conditions of the Offer referred to in Section 14--"Conditions of the Offer".
The Purchaser reserves the right (but, subject to the terms of the Merger
Agreement, will not be obligated) to extend the offer from time to time if and
to the extent (i) the applicable waiting period under each of the HSR Act or
Exon-Florio described in Section 15--"Certain Legal Matters; Regulatory
Approvals" has not expired or been terminated on the Expiration Date or (ii) a
decision of the Commission of the European Community that the purchase of the
Offer Securities pursuant to the Offer is compatible with the common market
has not been received.
The Purchaser acknowledges that (i) Rule 14e-1(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), requires the Purchaser
to pay the consideration offered or return the Offer Securities tendered
promptly after the termination or withdrawal of the Offer and (ii) the
Purchaser may not delay acceptance for payment of, or payment for (except as
provided in clause (i) of the second preceding paragraph), any Offer
Securities upon the occurrence of any of the conditions specified in Section
14--"Conditions of the Offer" without extending the period of time during
which the Offer is open.
During any such extension, all Offer Securities previously tendered and not
properly withdrawn will remain subject to the Offer, subject to the right of a
tendering holder to withdraw its Offer Securities. Any such extension, delay,
termination, waiver or amendment will be followed, as promptly as practicable,
by public announcement thereof, with 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
4
<PAGE> 8
applicable law (including Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act), which require that material changes be promptly disseminated to
holders in a manner reasonably designed to inform them of such changes and
without limiting the manner in which the Purchaser may choose to make any
public announcement, the 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 as otherwise may be
required by applicable law.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Purchaser will extend the Offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act.
The Company has provided the Purchaser with the Company's list of holders of
the Offer Securities and security position listings in respect of the Offer
Securities for the purpose of disseminating the Offer to Purchase, the
applicable Letter of Transmittal, and other relevant materials to holders of
Offer Securities. This Offer to Purchase, the related Letters of Transmittal
and other relevant materials will be mailed to record holders of Offer
Securities whose names appear on the Company's list of holders of the Offer
Securities and will be furnished, for subsequent transmittal to beneficial
owners of Offer Securities, to brokers, dealers, commercial banks, trust
companies, custodians and similar persons whose names, or the names of whose
nominees, appear on the list of holders of the Offer Securities or, where
applicable, who are listed as participants in the security position listing of
The Depository Trust Company ("DTC").
2. Acceptance for Payment and Payment for Offer Securities. Upon the terms
and subject to the conditions of the Offer (including, if the Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will purchase, by accepting for payment, and will
pay for, all Offer Securities validly tendered prior to the Expiration Date
(and not properly withdrawn in accordance with Section 4--"Withdrawal Rights")
promptly after the later to occur of (i) the Expiration Date and (ii) the
receipt of certain Governmental Approvals specified in Section 15--"Certain
Legal Matters; Regulatory Approvals". Subject to applicable rules of the
Commission and the terms of the Merger Agreement, the Purchaser expressly
reserves the right, in its discretion, to delay acceptance for payment of, or
payment for, Offer Securities pending receipt of certain Governmental
Approvals specified in Section 15--"Certain Legal Matters; Regulatory
Approvals". If, following acceptance for payment of Offer Securities, the
Purchaser asserts such Governmental Approvals as a condition and does not
promptly pay for Offer Securities tendered, the Purchaser will promptly return
such Offer Securities.
In all cases, payment for Offer Securities purchased pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Offer Securities (the "Offer Security
Certificates") or timely confirmation of a book-entry transfer (a "Book-Entry
Confirmation") of such Offer Securities into the Depositary's account at DTC
(the "Book-Entry Transfer Facility"), pursuant to the procedures set forth in
Section 3--"Procedures for Tendering Offer Securities", (ii) the applicable
Letter of Transmittal (or a copy thereof), properly completed and duly
executed with any required signature guarantees, or an Agent's Message (as
defined below) in connection with a book-entry transfer and (iii) any other
documents required by such Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary forming a part of a
Book-Entry Confirmation system, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from a participant (the
"Participant") in the Book-Entry Transfer Facility tendering the Offer
Securities that such Participant has received a copy of the Offer to Purchase
and agrees to be bound by the terms of the Offer and that the Purchaser may
enforce such agreement against such Participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) Offer Securities validly tendered and not
properly withdrawn if, as and when the Purchaser gives notice to the
Depositary of the Purchaser's acceptance for payment of such Offer Securities.
Payment for Offer
5
<PAGE> 9
Securities accepted pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering holders for the purpose of receiving payments from the Purchaser and
transmitting payments to such tendering holders whose Offer Securities have
been accepted for payment. Under no circumstances will interest on the
purchase price for Offer Securities be paid by the Purchaser, regardless of
any delay in making such payment or extension of the Expiration Date. Upon the
deposit of funds with the Depositary for the purpose of making payments to
tendering holders, the Purchaser's obligation to make such payment shall be
satisfied, and tendering holders must thereafter look solely to the Depositary
for payment of amounts owed to them by reason of the acceptance for payment of
Offer Securities pursuant to the Offer.
If any tendered Offer Securities are not accepted for payment for any reason
pursuant to the terms and conditions of the Offer, or if Offer Security
Certificates are submitted evidencing more Offer Securities than are tendered,
Offer Security Certificates evidencing Offer Securities not purchased will be
returned, without expense to the tendering holder (or, in the case of Offer
Securities tendered by book-entry transfer into the Depositary's account at
the Book-Entry Transfer Facility pursuant to the procedure set forth in
Section 3--"Procedures for Tendering Offer Securities", such Offer Securities
will be credited to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable following the expiration, termination or
withdrawal of the Offer.
If, prior to the Expiration Date, the Purchaser increases the consideration
to be paid per Offer Security pursuant to the Offer, the Purchaser will pay
such increased consideration for all such Offer Securities purchased pursuant
to the Offer, whether or not such Offer Securities were tendered prior to such
increase in consideration.
The Purchaser reserves the right to assign to Parent, or to any other direct
or indirect wholly-owned subsidiary of Parent, the right to purchase all or
any portion of the Offer Securities tendered pursuant to the Offer, but any
such assignment will not relieve the Purchaser of its obligations under the
Offer and will in no way prejudice the rights of tendering holders to receive
payment for Offer Securities validly tendered and accepted for payment
pursuant to the Offer.
3. Procedures for Tendering Offer Securities.
Valid Tender of Offer Securities. In order for Offer Securities to be
validly tendered pursuant to the Offer, a holder of Offer Securities must,
prior to the Expiration Date, either (i) deliver to the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase (a) a
properly completed and duly executed Letter of Transmittal (or a copy thereof)
with any required signature guarantees, (b) the applicable Offer Security
Certificates and (c) any other documents required to be included with the
applicable Letter of Transmittal upon the terms and subject to the conditions
thereof and of this Offer to Purchase, (ii) cause such holder's broker,
dealer, commercial bank, trust company or custodian to tender applicable Offer
Securities pursuant to the procedures for book-entry transfer described below
or (iii) comply with the guaranteed delivery procedures described below.
If Rights Certificates (as defined herein) have been distributed to holders
of Common Stock, such holders are required to tender, or (if such procedure is
available) make book-entry transfer of, Rights Certificates representing a
number of Rights equal to the number of shares of Common Stock being tendered
in order to effect a valid tender of such Common Stock.
Series A Preferred Stock, Series B Preferred Stock and the Special Common
Stock Warrant may be tendered only upon physical delivery to the Depositary of
the applicable Letter of Transmittal and the certificate representing such
securities (as such securities have been issued only in certificated form).
The Common Stock, including the associated Rights, and the Common Stock
Purchase Warrants may be tendered by means of book-entry transfer (described
below) or upon physical delivery to the Depositary of the applicable Letter of
Transmittal and the certificate representing such securities (as such
securities have been issued in book-entry and certificated form).
6
<PAGE> 10
The Depositary Shares may be tendered only by means of Book-Entry Transfer
(as such securities have been issued only in book-entry form).
The method of delivery of Offer Security Certificates, the applicable Letter
of Transmittal and all other required documents, including delivery through
the Book-Entry Transfer Facility, is at the option and risk of the tendering
holder, 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.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Common Stock, including the associated Rights, the Common Stock
Purchase Warrants and the Depositary 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 may
tender shares of Common Stock, Common Stock Purchase Warrants or Depository
Shares in the Offer by (i) causing such securities to be transferred in
accordance with the Book-Entry Transfer Facility's procedures into the
applicable account maintained by the Depositary at the Book-Entry Transfer
Facility and (ii) causing the applicable Letter of Transmittal to be delivered
to the Depositary by means of an Agent's Message. In order to effect a valid
tender through the Book-Entry Transfer Facility, the shares of Common Stock,
including the associated Rights, the Common Stock Purchase Warrants or the
Depository Shares along with an Agent's Message and any other required
documents, must, in any case, be transmitted to, and received by, the
Depositary prior to the Expiration Date, or the tendering holder must comply
with the guaranteed delivery procedures described below. Delivery of documents
or instructions to the Book-Entry Transfer Facility in accordance with the
Book-Entry Transfer Facility's procedures does not constitute delivery to the
Depositary.
Signature Guarantee. Signatures on all Letters of Transmittal must be
guaranteed by a financial institution (including most banks, savings and loan
associations and brokerage houses) which is a participant in the Security
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (an
"Eligible Institution"), unless the Offer Securities tendered thereby are
tendered (i) by the registered holder of Offer Securities who has not
completed the box entitled "Special Payment Instructions" on the applicable
Letter of Transmittal or (ii) for the account of an Eligible Institution. See
Instruction 1 to the applicable Letter of Transmittal.
If an Offer Security Certificate is registered in the name of a person other
than the signer of the applicable Letter of Transmittal, if payment is to be
made, or if an Offer Security Certificate not accepted for payment or not
tendered is to be returned, to a person other than the registered holder(s),
then the Offer Security 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(s) on the Offer Security Certificate, with the
signature(s) on such Offer Security Certificate or stock powers guaranteed as
described above. See Instructions 1, 5 and 7 to the applicable Letter of
Transmittal.
Guaranteed Delivery. If a holder desires to tender Offer Securities pursuant
to the Offer and such holder's Offer Security Certificates are not immediately
available or time will not permit all required documents to reach the
Depositary prior to the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, such Offer Securities may
nevertheless be tendered if all the following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary as provided below prior to the Expiration Date;
and
(iii) the Offer Security Certificates (and certificates in respect of
Rights ("Rights Certificates"), if such Rights Certificates have been
issued) for all tendered Offer Securities, in proper form for transfer,
together with a properly completed and duly executed Letter of Transmittal
(or a copy thereof) with any required
7
<PAGE> 11
signature guarantee (or, in the case of a book-entry transfer, a Book-Entry
Confirmation along with an Agent's Message) and any other documents
required by such Letter of Transmittal, are received by the Depositary
within three New York Stock Exchange trading days after the date of
execution of the Notice of Guaranteed Delivery, or in the case Rights
Certificates have been issued, three business days after the date Rights
Certificates are distributed to holders of Common Stock.
Any Notice of Guaranteed Delivery may be delivered by hand or transmitted by
mail to the Depositary and must include a guarantee by an Eligible Institution
in the form set forth in the Notice of Guaranteed Delivery. In the case of
Offer Securities held through the Book-Entry Transfer Facility, the Notice of
Guaranteed Delivery must be delivered to the Depositary by a Participant by
means of the confirmation system of the Book-Entry Transfer Facility.
Notwithstanding any other provision hereof, payment for Offer Securities
purchased pursuant to the Offer will, in all cases, be made only after timely
receipt by the Depositary of (i) the Offer Security Certificates evidencing
such Offer Securities or a Book-Entry Confirmation of the delivery of such
Offer Securities and, if Rights Certificates have been issued in respect of
Common Stock, such Rights Certificates or a Book-Entry Confirmation, if
available, with respect to such Rights Certificates (unless the Purchaser
elects, in its sole discretion, to make payment for the Offer Securities
pending receipt of the Rights Certificates or a Book-Entry Confirmation, if
available, with respect to such Rights Certificates), (ii) a properly
completed and duly executed Letter of Transmittal or a copy thereof (or, in
the case of a book-entry transfer, an Agent's Message) and (iii) any other
documents required by such Letter of Transmittal. Accordingly, tendering
holders may be paid at different times depending upon when Offer Security
Certificates (or Rights Certificates) or Book-Entry Confirmations with respect
to Offer Securities (or Rights Certificates, if available) are actually
received by the Depositary. Under no circumstances will interest be paid on
the purchase price of the Offer Securities to be paid by the Purchaser,
regardless of any extension of the Offer or any delay in making such payment.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Offer Securities pursuant to any of the procedures described above
will be determined by the Purchaser, in its sole discretion, whose
determination will be final and binding on all parties. The Purchaser reserves
the absolute right to reject any or all tenders of any Offer Securities
determined by it not to be in proper form or if the acceptance for payment of,
or payment for, such Offer Securities may, in the opinion of the Purchaser's
counsel, be unlawful. The Purchaser also reserves the absolute right, in its
sole discretion, to waive any of the conditions of the Offer (subject to the
terms of the Merger Agreement) or any defect or irregularity in any tender
with respect to Offer Securities of any particular holder, whether or not
similar defects or irregularities are waived in the case of other holders. No
tender of Offer Securities will be deemed to have been validly made until all
defects and irregularities have been cured or waived.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the applicable Letter of Transmittal and the instructions thereto)
will be final and binding.
Appointment as Proxy. By executing the applicable Letter of Transmittal (or
delivering an Agent's Message) as set forth above, a tendering holder
irrevocably appoints each designee of the Purchaser as such holder's attorney-
in-fact and proxy, with full power of substitution, to vote in such manner as
such attorney-in-fact and proxy (or any substitute thereof) shall deem proper
in its sole discretion, and to otherwise act (including pursuant to written
consent) to the full extent of such holder's rights with respect to the Offer
Securities tendered by such holder and accepted for payment by the Purchaser
(and any and all dividends, distributions, rights or other securities issued
or issuable in respect of such Offer Securities on or after May 3, 1999). All
such proxies shall be considered coupled with an interest in the tendered
Offer Securities and shall be irrevocable. This appointment will be effective
if, when, and only to the extent that, the Purchaser accepts such Offer
Securities for payment pursuant to the Offer. Upon such acceptance for
payment, all prior proxies given by such holder with respect to such Offer
Securities, rights or other securities will, without further action, be
revoked, and no subsequent proxies may be given (and, if given, will not be
deemed effective). The designees of the Purchaser will, with respect to the
Offer Securities, rights or other securities for which the appointment is
effective,
8
<PAGE> 12
be empowered to exercise all voting and other rights of such holder as they in
their sole discretion may deem proper at any annual, special, adjourned or
postponed meeting of the Company's stockholders, by written consent or
otherwise, and the Purchaser reserves the right to require that, in order for
the Offer Securities, rights or other securities to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Offer Securities, the Purchaser must be able to exercise all rights
(including, without limitation, all voting rights and rights of conversion)
with respect to such Offer Securities rights or other securities and receive
all dividends and distributions.
Backup Withholding. Under United States federal income tax law, the amount
of any payments made by the Depositary to holders (other than corporate and
certain other exempt holders) pursuant to the Offer may be subject to backup
withholding tax at a rate of 31%. To avoid such backup withholding tax with
respect to payments made pursuant to the Offer, a non-exempt tendering holder
must provide the Depositary with such holder's correct taxpayer identification
number and certify that such holder is not subject to backup withholding tax
by completing the Substitute Form W-9 included as part of the applicable
Letter of Transmittal. If backup withholding applies with respect to a holder
or if a holder fails to deliver a completed Substitute Form W-9 to the
Depositary or otherwise establish an exemption, the Depositary is required to
withhold 31% of any payments made to such holder. See Section 5--"Certain
United States Federal Income Tax Consequences" of this Offer to Purchase and
Instruction 9 to the applicable Letter of Transmittal.
The Purchaser's acceptance for payment of Offer Securities tendered pursuant
to the Offer will constitute a binding agreement between the tendering holder
and the Purchaser upon the terms and subject to the conditions of the Offer.
4. Withdrawal Rights. Tenders of Offer Securities made pursuant to the Offer
are irrevocable except that such Offer Securities may be withdrawn at any time
prior to the Expiration Date and, unless theretofore accepted for payment by
the Purchaser pursuant to the Offer, may also be withdrawn at any time after
July 8, 1999, or at such later time as may apply if the Offer is extended.
If the Purchaser extends the Offer, is delayed in its acceptance for payment
of Offer Securities or is unable to accept Offer Securities for payment
pursuant to the Offer for any reason, then, without prejudice to the
Purchaser's rights under the Offer, the Depositary may, nevertheless, on
behalf of the Purchaser, retain tendered Offer Securities, and such Offer
Securities may not be withdrawn except to the extent that tendering holders
are entitled to withdrawal rights as described in this Section 4--"Withdrawal
Rights". Any such delay will be an extension of the Offer to the extent
required by law.
For a withdrawal to be effective, a written notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase. Any such notice of withdrawal must
specify the name of the person who tendered the Offer Securities to be
withdrawn, the class of Offer Securities to be withdrawn, the number of Offer
Securities to be withdrawn and the name of the registered holder of the Offer
Securities, if different from that of the person who tendered such Offer
Securities. If Offer Security Certificates evidencing Offer Securities to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such Offer Security Certificates, the serial
numbers shown on such Offer Security 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 Offer Securities have been tendered
for the account of an Eligible Institution. Offer Securities tendered pursuant
to the procedure for book-entry transfer as set forth in Section 3--
"Procedures for Tendering Offer Securities", may be withdrawn only by means of
the withdrawal procedures made available by the Book-Entry Transfer Facility
to the Participants, must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Offer
Securities and must otherwise comply with the Book-Entry Transfer Facility's
procedures.
Withdrawals of tendered Offer Securities may not be rescinded without the
Purchaser's consent and any Offer Securities properly withdrawn will
thereafter be deemed not validly tendered for purposes of the Offer. All
questions as to the form and validity (including time of receipt) of notices
of withdrawal will be determined by
9
<PAGE> 13
the Purchaser, in its sole discretion, which determination will be final and
binding. None of Parent, the Purchaser, the Depositary, the Information Agent,
the Dealer Manager or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
Any Offer Securities properly withdrawn may be re-tendered at any time prior
to the Expiration Date by following any of the procedures described in Section
3--"Procedures for Tendering Offer Securities".
5. Certain United States Federal Income Tax Consequences. The receipt of
cash for Offer Securities pursuant to the Offer or the Merger by a U.S. Holder
(defined below) will be a taxable transaction for United States federal income
tax purposes and may also be a taxable transaction under applicable state,
local or foreign tax laws. For purposes of this discussion, a "U.S. Holder" is
a beneficial owner of Offer Securities who for United States federal income
tax purposes is (i) a citizen or resident of the United States, (ii) a
corporation or partnership organized in or under the laws of the United States
or any State thereof (including the District of Columbia), (iii) an estate the
income of which is subject to United States federal income taxation regardless
of its source or (iv) a trust (a) the administration over which a United
States court can exercise primary supervision and (b) all of the substantial
decisions of which one or more United States persons have the authority to
control. Notwithstanding the preceding sentence, to the extent provided in the
Treasury Regulations, certain trusts in existence on August 20, 1996, and
treated as United States persons prior to such date, that maintain a valid
election to continue to be treated as United States persons also will be U.S.
Holders. In general, a U.S. Holder will recognize gain or loss for United
States federal income tax purposes equal to the difference, if any, between
the amount realized from the sale of Offer Securities and such U.S. Holder's
adjusted tax basis, if any, in such Offer Securities. Assuming that the Offer
Securities constitute a capital asset in the hands of the U.S. Holder, such
gain or loss will be capital gain or loss and, in the case of a noncorporate
U.S. Holder, the maximum marginal United States federal income tax rate
applicable to such gain will be lower than the maximum marginal United States
federal income tax rate applicable to ordinary income if such U.S. Holder's
holding period for such Offer Securities exceeds one year.
The foregoing discussion may not be applicable to certain types of holders,
including holders who acquired Offer Securities pursuant to the exercise of
stock options or otherwise as compensation, holders that are not U.S. Holders
and holders that are otherwise subject to special tax rules, such as financial
institutions, insurance companies, dealers or traders in securities or
currencies, tax-exempt entities, persons that hold Offer Securities as a
position in a "straddle" or as part of a "hedging" or "conversion" transaction
for tax purposes and persons that have a "functional currency" other than the
United States dollar.
Backup Withholding Tax. As noted in Section 3--"Procedures for Tendering
Offer Securities", a holder (other than an "exempt recipient", including a
corporation and a non-U.S. Holder that provides appropriate certification (if
the payor does not have actual knowledge that such certificate is false)) that
receives cash in exchange for Offer Securities may be subject to United States
federal backup withholding tax at a rate equal to 31%, unless such holder
provides its taxpayer identification number and certifies that such holder is
not subject to backup withholding tax by submitting a completed Substitute
Form W-9 to the Depositary. Accordingly, each holder should complete, sign and
submit the Substitute Form W-9 included as part of the applicable Letter of
Transmittal in order to avoid the imposition of such backup withholding tax.
The United States federal income tax discussion set forth above is included
for general information and is based upon laws, regulations, rulings and
decisions now in effect, all of which are subject to change (possibly
retroactively). Holders are urged to consult their tax advisors with respect
to the specific tax consequences of the Offer to them, including the
application and effect of the alternative minimum tax and state, local and
foreign tax laws.
10
<PAGE> 14
6. Price Range; Dividends.
Common Stock. The shares of Common Stock are listed and traded on the Nasdaq
Stock Market's National Market ("Nasdaq National Market") under the symbol
"WANG". The following table sets forth, for the periods indicated, the high
and low sales prices per share of Common Stock as reported by the Dow Jones
News Service:
<TABLE>
<CAPTION>
High Low
----- -----
<S> <C> <C>
1997:
Quarter ended 6/30/97......................................... 21.50 16.00
Quarter ended 9/30/97......................................... 23.13 18.63
Quarter ended 12/31/97........................................ 25.00 19.13
1998:
Quarter ended 3/31/98......................................... 31.63 21.38
Quarter ended 6/30/98......................................... 32.25 21.00
Quarter ended 9/30/98......................................... 26.13 17.75
Quarter ended 12/31/98........................................ 28.25 14.13
1999:
Quarter ended 3/31/99......................................... 28.13 18.81
Period 4/1/99 through 5/7/99.................................. 28.94 19.13
----- -----
</TABLE>
On May 3, 1998, the last full trading day prior to the public announcement
of the Offer, the last reported sales price of the Common Stock on the Nasdaq
National Market was $25.50 per share of Common Stock. On May 7, 1999, the last
full trading day prior to the date of this Offer to Purchase, the last
reported sales price of the Common Stock on the Nasdaq National Market was
$28.94 per share of Common Stock. Holders of Common Stock are urged to obtain
current market quotations for the Common Stock.
As of May 10, 1999, no dividends had ever been paid on the shares of Common
Stock.
Series A Preferred Stock. The Series A Preferred Stock is held by a single
holder. No price quotations are available for the Series A Preferred Stock.
The Series A Preferred Stock is entitled to cash dividends in the amount of
$45.00 per annum per share, payable quarterly in arrears. The Company has
advised the Purchaser that all dividend payments have been made on a timely
basis.
Series B Preferred Stock and the Depositary Shares. The Series B Preferred
Stock are not listed on any exchange or traded on the Nasdaq National Market.
No price quotations are available for the Series B Preferred Stock. One series
of the Depositary Shares were initially authorized to be part of the National
Association of Securities Dealers, Inc.'s (the "NASD") PORTAL System.
Currently, PORTAL System transactions are not reported to the NASD.
The Series B Preferred Stock is entitled to cash dividends in the amount of
$65.00 per annum per share, payable quarterly in arrears. The Company has
advised the Purchaser that all dividend payments have been made on a timely
basis.
Parent and the Purchaser have been advised that a second series of the
Depositary Shares are traded on the over-the-counter market on a limited and
sporadic basis. The following table sets forth, for the periods indicated, the
high and low bid quotations per Depositary Share as reported by Factset. Such
quotations represent inter-
11
<PAGE> 15
dealer quotations, without adjustment for retail markets, markdowns or
commissions, and do not necessarily represent actual transactions.
<TABLE>
<CAPTION>
High Low
----- -----
<S> <C> <C>
1997:
Quarter ended 6/30/97(/1/).................................... 51.25 47.75
Quarter ended 9/30/97......................................... 53.50 46.63
Quarter ended 12/31/97........................................ 54.50 47.13
1998:
Quarter ended 3/31/98......................................... 63.63 49.63
Quarter ended 6/30/98......................................... 62.88 49.63
Quarter ended 9/30/98......................................... 56.13 45.25
Quarter ended 12/31/98........................................ 59.63 38.88
1999:
Quarter ended 3/31/99......................................... 59.63 46.00
Period 4/1/99 through 5/7/99.................................. 60.38 46.00
----- -----
</TABLE>
- --------
(1) Period 5/9/97 through 6/30/97.
On May 3, 1999, the last day on which the Depositary Shares were traded prior
to the public announcement of the Offer, the reported closing bid quotation of
the Depositary Shares on the over-the-counter market was $53.63 per Depositary
Share. On May 7, 1999, the last day on which the Depositary Shares were traded
prior to the date of this Offer to Purchase, the reported closing bid quotation
of the Depositary Shares on the over-the-counter market was $60.38 per
Depositary Share. Holders are urged to obtain a current market quotation for
the Depositary Shares.
12
<PAGE> 16
Common Stock Purchase Warrants. The Common Stock Purchase Warrants are
listed and traded on the Nasdaq National Market under the symbol "WANG W". The
following table sets forth, for the periods indicated, the high and low sales
prices per Common Stock Purchase Warrant as reported by the Dow Jones News
Services:
<TABLE>
<CAPTION>
High Low
----- ----
<S> <C> <C>
1997:
Quarter ended 6/30/97.......................................... 6.63 4.25
Quarter ended 9/30/97.......................................... 7.94 5.31
Quarter ended 12/31/97......................................... 8.75 4.63
1998:
Quarter ended 3/31/98.......................................... 13.94 5.44
Quarter ended 6/30/98.......................................... 14.50 6.09
Quarter ended 9/30/98.......................................... 9.13 4.50
Quarter ended 12/31/98......................................... 10.56 2.88
1999:
Quarter ended 3/31/99.......................................... 10.50 4.47
Period 4/1/99 through 5/7/1999................................. 8.75 4.88
----- ----
</TABLE>
On May 3, 1999, the last full trading day prior to the public announcement
of the Offer, the last reported sales price of the Common Stock Purchase
Warrants on the Nasdaq National Market was $8.63 per Common Stock Purchase
Warrant. On May 7, 1999, the last day full trading prior to the date of this
Offer to Purchase, the last reported sales price of the Common Stock Purchase
Warrants on the Nasdaq National Market was $7.63 per Common Stock Purchase
Warrant. Holders of Common Stock Purchase Warrants are urged to obtain current
market quotations for the Common Stock Purchase Warrants.
The Common Stock Purchase Warrants are not entitled to dividends.
Special Common Stock Warrant. The Special Common Stock Warrant is owned by a
single holder. No price quotations are available for the Special Common Stock
Warrant. The Special Common Stock Warrant is not entitled to dividends.
7. Certain Information Concerning the Company.
The Company. The information concerning the Company contained in this Offer
to Purchase, including financial information, has been taken from or is based
upon publicly available documents and records on file with the Commission and
other public sources. Neither Parent nor the Purchaser assumes any
responsibility for the accuracy or completeness of the information concerning
the Company contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to
Parent or the Purchaser.
The Company provides information technology services and solutions to
enhance the ability of its customers to operate efficiently and more cost
effectively through common operating environments, common support
environments, specialized solutions and the Internet. These services and
solutions include network and desktop computing infrastructure design,
integration, security and management, help desk support, maintenance, warranty
support, procurement, resale and installation of information technology and
communications equipment, application software design and support, and
standardized and customizable solutions encompassing customer
13
<PAGE> 17
delivery channels for financial services institutions, electronic commerce and
Internet-based commercial applications. The Company provides these services
and solutions to customers on six continents and in major markets around the
world. The Company's customers include banking and other financial services
institutions, insurance companies, governments and their affiliates, including
the governments of the United States, Italy, and the European Commission,
public authorities and utilities, and commercial enterprises in the retail,
oil and gas, computer and telecommunications sectors. The Company has
approximately 20,300 employees in 45 countries of which approximately 15,500
have technical skills. The address of the Company's principal executive
offices is 290 Concord Road, Billerica, Massachusetts 01821. The telephone
number of the Company at such offices is (978) 625-5000.
Capital Structure. The authorized capital of the Company consists of (i) the
Common Stock and (ii) preferred stock designated as the Series A Preferred
Stock, the Series B Preferred Stock and Series C Junior Participating
Preferred Stock (the "Series C Preferred Stock").
(a) Common Stock
Each share of Common Stock is entitled to one vote. The Common Stock ranks
junior to the Series A Preferred Stock and the Series B Preferred Stock with
respect to dividends and rights on liquidation, winding up and dissolution.
(b) Rights
In accordance with the Rights Agreement, on April 22, 1998, the Board of
Directors authorized and declared a dividend distribution of one Right for
each share of Common Stock outstanding at the close of business on May 1,
1998, and has authorized the issuance of one Right for each share of Common
Stock of the Company issued between May 1, 1998 and the Distribution Date (as
defined below). Each Right entitles the holder to purchase from the Company
1/1000th of a share of Series C Preferred Stock at a price of $120 per
1/1000th of a share of Series C Preferred Stock, subject to adjustment.
Currently, the Rights are evidenced by the certificates for Common Stock
registered in the names of the holders of Common Stock (which certificates
shall be deemed also to be certificates for Rights) and not by Rights
Certificates, and the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock of the Company (including a
transfer to the Company).
The Rights become exercisable upon the close of business on the tenth day
following the earlier to occur of (i) a public announcement that a person or a
group of affiliated persons other than (a) the Company, (b) any subsidiary of
the Company, (c) any employee benefit plan of the Company or its subsidiary or
an entity established pursuant to the terms of such plan, (d) any person whose
interest in the Company rises to 15% or more solely because of a repurchase of
shares of Common Stock by the Company or (e) any person who certifies to the
Company that shares in excess of 14.9% were acquired inadvertently or without
knowledge of the terms of the Rights and who does not thereafter acquire
additional shares of Common Stock while the beneficial owner of 15% or more of
shares of Common Stock, has acquired or obtained rights to acquire beneficial
ownership of 15% or more of shares of Common Stock then outstanding (such
person, an "Acquiring Person") or (ii) the commencement of or public
announcement of the intention to make a tender or exchange offer by a person
who, upon consummation thereof, would become an Acquiring Person (the
"Distribution Date"). The Purchaser has been advised by the Company that the
Company and the Board of Directors have taken all necessary action to render
the Rights Agreement inapplicable with respect to the Offer and the Merger.
At any time prior to the Distribution Date, the Company may redeem the
Rights, in whole but not in part, for $0.01 per Right. The Rights will expire
at the close of business on April 22, 2008, if not redeemed by the Company at
an earlier date.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
1/1000th of a share of Series C Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall
14
<PAGE> 18
anything contained in the Rights Agreement or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders, or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions of the Rights Agreement.
(c) Series A Preferred Stock
Each share of Series A Preferred Stock is entitled to one vote and votes
together as one class with the holders of Common Stock and Series B Preferred
Stock. The Series A Preferred Stock ranks senior to the Common Stock and
Series B Preferred Stock with respect to dividends and rights on liquidation,
winding up and dissolution. The holders of Series A Preferred Stock are
entitled to cumulative cash dividends in the amount of $45.00 per share per
annum, payable quarterly in arrears. If six quarterly dividends have not been
declared and paid or set apart for payment, whether or not consecutive, the
number of directors constituting the Board of Directors shall be increased by
two and the holders of the Series A Preferred Stock, voting separately as a
class, will be entitled to elect such additional directors.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of the outstanding Series A Preferred
Stock have a liquidation preference of $1,000 per share, plus accrued and
unpaid dividends. Neither a consolidation or merger of the Company with
another corporation nor a sale or transfer of all or substantially all of the
Company's assets will be considered a liquidation, dissolution or winding up
of the Company.
Each share of Series A Preferred Stock is convertible, at any time, at the
option of the holder thereof, and without the payment of additional
consideration, into such number of shares of Common Stock as is determined by
dividing $1,000 by the initial conversion price of $23.00. The conversion
price may be adjusted from time to time pursuant to the terms of the
certificate of designation of the Series A Preferred Stock. The Purchaser has
been advised by the Company that the initial conversion price for the Series A
Preferred Stock has not been adjusted. The holders of the 90,000 issued and
outstanding shares of Series A Preferred Stock would, upon conversion, be
entitled to receive an aggregate number of 3,913,043 shares of Common Stock.
In the event of a merger or consolidation in which the holders of the
Company's issued and outstanding Common Stock immediately prior to the
effective date of such merger or consolidation will not hold at least 50% of
the outstanding voting securities of the surviving corporation, each share of
Series A Preferred Stock shall, immediately prior to the merger or
consolidation, be mandatorily converted into shares of Common Stock, at the
then applicable conversion price. The Merger would be such an event.
The Company is obligated to redeem all Series A Preferred Stock, with cash
or Common Stock, by October 1, 2003 or within 180 days of the receipt by the
Company of a written notice delivered by the holders thereof on or after May
30, 2002. The redemption price shall be $1,000 per share, subject to certain
adjustments from time to time. The Company has advised the Purchaser that the
redemption price of the Series A Preferred Stock has not been adjusted.
(d) Series B Preferred Stock
Each share of Series B Preferred Stock is entitled to one vote and votes
together as one class with the holders of Common Stock and Series A Preferred
Stock. Series B Preferred Stock ranks senior to the Common Stock of the
Company and junior to Series A Preferred Stock with respect to dividends and
rights on liquidation, winding up and dissolution. Subject to the rights of
the holders of Series A Preferred Stock, the holders of Series B Preferred
Stock are entitled to cumulative cash dividends equal to $65.00 per share per
annum payable quarterly in arrears. If six quarterly dividends have not been
declared and paid or set apart for payment, whether or not consecutive, the
number of directors constituting the Board of Directors of the Company shall
be increased by two and the holders of the Series B Preferred Stock, voting
separately as a class, will be entitled to elect such additional directors.
15
<PAGE> 19
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of the Series B Preferred Stock have a
liquidation preference, subject to the liquidation preference of the holders
of the Series A Preferred Stock, of $1,000 per share, plus accrued and unpaid
dividends. Neither a consolidation or merger of the Company with another
corporation nor a sale or transfer of all or substantially all of the
Company's assets will be considered a liquidation, dissolution or winding up
of the Company.
Each share of Series B Preferred Stock is convertible, at the sole option of
its holder, into such number of shares of Common Stock as is determined by
dividing $1,000 by the initial conversion price of $26.5625. The conversion
price may be adjusted from time to time pursuant to the terms of the
certificate of designation of the Series B Preferred Stock. The Purchaser has
been advised by the Company that the initial conversion price for the Series B
Preferred Stock has not been adjusted. The holders of the 143,750 shares of
Series B Preferred Stock would, upon conversion, be entitled to an aggregate
number of 5,411,765 shares of Common Stock. In any merger, consolidation, sale
of substantially all of the Company's assets or reclassification or
recapitalization of the Common Stock in which the shares of Common Stock are
converted into the right to receive stock, other securities or other property
(including cash or any combination thereof), each share of Series B Preferred
Stock which is not converted into the right to receive stock, securities or
other property with respect to such transaction shall thereafter be
convertible into the kind and amount of shares of stock, other securities or
property receivable (including cash and any combination thereof) upon the
consummation of such transaction, at the election of a holder of that number
of shares or fraction thereof of Common Stock into which one share of Series B
Preferred Stock was convertible immediately prior to such merger,
consolidation, sale of assets or reclassification or recapitalization. The
Company shall not agree to a merger, consolidation, sale of assets or
reclassification or recapitalization unless such transaction is in accordance
with the rights of the holders of Series B Preferred Stock mentioned above and
until it has entered into an agreement with the successor or purchasing entity
for the benefit of the holders of Series B Preferred Stock that contains
provisions allowing holders of Series B Preferred Stock to convert such stock
into the consideration received by holders of Common Stock at the conversion
price in effect immediately prior to the merger.
The Company may, at its option, redeem the Series B Preferred Stock, in
whole or in part, during the twelve-month periods beginning on March 1, 1999,
March 1, 2000 and March 1, 2001 at a redemption price of $1,030, $1,020 and
$1,010, respectively per share of Series B Preferred Stock, plus all accrued
and unpaid dividends. After March 1, 2002, the redemption price per share of
Series B Preferred Stock is $1,000 plus all accrued and unpaid dividends.
All of the shares of Series B Preferred Stock are deposited with ASTT under
a Deposit Agreement dated as of February 27, 1996, by and among the Company,
ASTT, as depositary and the holders of depositary receipts pursuant to which
depositary receipts (the "Depositary Receipts") evidencing Depositary Shares
are issued. Each holder of a Depositary Receipt is entitled, proportionately,
to all the rights and preferences of, and subject to all of the limitations
of, the interest in the Series B Preferred Stock represented thereby
(including rights and preferences with respect to dividends, voting,
conversion, redemption and liquidation).
(e) Common Stock Purchase Warrants
Each Common Stock Purchase Warrant entitles its holder to purchase one share
of Common Stock at an initial exercise price of $21.45 per share of Common
Stock as may be adjusted from time to time. The Purchaser has been advised by
the Company that the initial exercise price for each Common Stock Purchase
Warrant has not been adjusted. The Common Stock Purchase Warrants expire on
July 2, 2001. Upon a merger of the Company into another entity, the Company or
the surviving entity shall execute with the warrant agent an agreement which
gives the holder the right upon payment of the exercise price in effect
immediately prior to such merger to purchase upon exercise of each Common
Stock Purchase Warrant the kind of shares and other securities and property
which such holder would have been entitled to receive upon consummation of
such merger had such Common Stock Purchase Warrant been exercised immediately
prior to such action.
16
<PAGE> 20
(f) Special Common Stock Warrant
On February 27, 1998, the Company issued one warrant which entitles the
holder to purchase 1,000,000 shares of Common Stock at the initial purchase
price of $23.00 per share, as adjusted from time to time, on or before the
effective date of the Merger. The Purchaser has been advised by the Company
that the initial purchase price has not been adjusted.
The Special Common Stock Warrant may be exercised by the holder thereof in
whole or in part. The holder shall pay the purchase price payable upon
exercise of the Special Common Stock Warrant by canceling a portion of the
Special Common Stock Warrant whose fair market value equals the aggregate
purchase price payable upon such exercise, as follows: upon exercise, the
number of shares of Common Stock to be issued to the holder shall equal (i)
the difference between the fair market value per share of Common Stock as of
the effective date of exercise minus the purchase price per share, (ii)
multiplied by the number of shares of Common Stock with respect to which the
Special Common Stock Warrant is exercised (iii) divided by the fair market
value per share of Common Stock as of the exercise date.
Upon any capital reorganization or reclassification of Common Stock (other
than a change in par value or a subdivision or combination of such Common
Stock), the holder of the Special Common Stock Warrant shall have the right to
receive upon exercise of the Special Common Stock Warrant the kind and amount
of shares of stock or other securities or property which the holder would have
been entitled to receive if, immediately prior to any such reorganization or
reclassification, the holder had held the number of shares of Common Stock
which were then purchasable upon the exercise of the Special Common Stock
Warrant.
Financial Information. Set forth below is certain selected consolidated
financial information relating to the Company and its subsidiaries which has
been excerpted or derived from the financial statements contained in the
Company's Annual Reports on Form 10-K for the transition period from July 1,
1998 to December 31, 1998 and for the fiscal years ended June 30, 1998, and
June 30, 1997. More comprehensive financial information is included in these
reports and other documents filed by the Company with the Commission. The
financial information that follows is qualified in its entirety by reference
to these reports and other documents, including the financial statements and
related notes contained therein. These reports and other documents may be
inspected at, and copies may be obtained from, the same places and in the
manner set forth below under "Available Information".
17
<PAGE> 21
WANG LABORATORIES, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
Six Months Ended Year Ended Year Ended Year Ended
December 31, June 30, June 30, June 30,
1998 1998(1) 1997(1) 1996(1)
---------------- ---------- ---------- ----------
($ in millions except per share data)
<S> <C> <C> <C> <C>
Income Statement Data:
Revenues.................... $1,818.0 $1,887.0 $1,268.4 $1,013.9
Income (loss) from
continuing operations
before discontinued
operations................. (39.8) (251.6) (6.7) 63.5
Income (loss) from
discontinued operations.... 76.6 (69.0)
-------- -------- -------- --------
Net income (loss)........... (39.8) (251.6) 69.9 (5.5)
Dividends and accretion on
preferred stock............ (7.0) (14.1) (14.1) (22.6)
-------- -------- -------- --------
Net income (loss) applicable
to common holders.......... $ (46.8) $ (265.7) $ 55.8 $ (28.1)
Net income (loss) per share:
Basic
Continuing operations... $ (1.01) $ (6.54) $ (0.56) $ 1.13
Discontinued
operations............. -- -- 2.06 (1.91)
-------- -------- -------- --------
Net Income (loss)........... $ (1.01) $ (6.54) $ 1.50 $ (0.78)
Diluted
Continuing operations... $ (1.01) $ (6.54) $ (0.56) $ 1.07
-------- -------- -------- --------
Discontinued
operations............. -- -- 2.06 (1.81)
-------- -------- -------- --------
Net Income (loss)........... $ (1.01) $ (6.54) $ 1.50 $ (0.74)
Balance Sheet Data (at
period end):
Total assets................ $2,369.8 $2,249.4 $1,034.8 $ 856.6
Depreciable assets, net..... 236.0 214.1 123.0 137.3
Working capital............. 100.6 50.1 126.1 86.7
Long-term debt, excluding
liabilities subject to
compromise................. 250.7 116.9 -- --
Series A Preferred Stock.... 86.5 86.2 85.5 84.8
Stockholders' equity
(deficit).................. 348.2 382.5 422.8 343.1
</TABLE>
- --------
(1) Certain prior years' amounts have been reclassified to conform to the
presentation for the six months ended December 31, 1998.
Recent Developments. On May 4, 1999, the Company reported revenues for the
first quarter ending March 31, 1999 of $789.0 million and EBITDA of $52.2
million. The Company reported a net loss for the quarter of $57.7 million or a
loss of $1.25 per share. During the quarter, the Company recorded
restructuring charges and integration-related period costs of $51.5 million.
The Company ended the period with consolidated cash balances of $182.0 million
and total debt of $346.0 million.
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and is required to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
the Company's directors and officers, their remuneration, stock options
granted to them, the principal holders of the Company's securities, any
material interests of such persons in transactions with the Company and other
matters is required to be disclosed in reports filed with the Commission.
These reports and other information should be available for inspection at the
public reference facilities of the Commission located in Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and also should be available for
inspection and copying at prescribed rates at regional offices of the
Commission located at Seven World Trade Center, New York, New York 10048 and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this
material may also be obtained by mail, upon payment of the Commission's
customary fees, from the Commission's principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549. Electronic filings filed through the
Commission's Electronic Data Gathering, Analysis and Retrieval system
("EDGAR"), including those made by or in respect of the Company, are publicly
available through the Commission's home page on the Internet at
http://www.sec.gov.
18
<PAGE> 22
Certain Financial Projections for 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 non-public information
provided by the Company, including certain projected financial information
(the "Projections") for the fiscal year ending December 31, 1999. The Company
does not in the ordinary course publicly disclose projections and the
Projections were not prepared with a view to public disclosure. The Company
has advised Parent and the Purchaser that the Projections were prepared by the
Company's management based on numerous assumptions including, among others,
projections of revenues, gross profit, operating and other expenses,
depreciation and amortization, capital expenditure and working capital
requirements. The Projections do not give effect to the Offer or the potential
combined operations of Parent and the Company. Such information is set forth
below in this Offer to Purchase for the limited purpose of giving the holders
of the Offer Securities access to financial projections prepared by the
Company's management that were made available to Parent and the Purchaser in
connection with the Merger Agreement and the Offer.
19
<PAGE> 23
WANG LABORATORIES, INC.
PROJECTED FINANCIAL PERFORMANCE
<TABLE>
<CAPTION>
First Second Third Fourth Calendar
Quarter Quarter Quarter Quarter Year
1999 1999 1999 1999 1999
------- ------- ------- ------- --------
($ in millions)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Consolidated Total Revenue.......... 768.7 840.7 829.6 990.8 3,429.7
Services Revenue.................... 482.0 529.0 535.0 596.0 2,141.9
EBITA(/1/).......................... 20.5 44.3 46.2 80.7 191.7
Operating Cash Flow................. (66.3) 4.9 5.2 50.0 (6.2)
</TABLE>
- --------
(/1/)EBITA means earnings before interest, income taxes and amortization from
continuing operations, calculated by adjusting the loss from operations
for non-recurring charges, amortization expense and other income.
CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS
Certain matters discussed herein are forward-looking statements that involve
risks and uncertainties. Forward-looking statements include the information
set forth above in "Certain Financial Projections for the Company".
While presented with numerical specificity, the Projections were 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 fiscal year 1999 may vary materially from those shown
above.
In addition, the 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 the Projections or
expressed any conclusion or provided any other form of assurance with respect
to the Projections and accordingly assume no responsibility for the
Projections. The 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 Commission 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 the Projections herein should not be regarded as a
representation by Parent and the Purchaser or any other person that the
projected results will be achieved. The Projections should be read in
conjunction with the historical financial information of the Company included
above. None of Parent, the Purchaser or any other person 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.
Such statements should be viewed with caution.
8. Certain Information Concerning the Purchaser and Parent.
The Purchaser. The Purchaser, a newly incorporated Delaware corporation, has
not conducted any business other than in connection with the Offer and the
Merger Agreement. All of the issued and outstanding shares of capital stock of
the Purchaser are beneficially owned by Parent. The principal address of the
Purchaser is 1013 Centre Road, Wilmington, Delaware 19805. The telephone
number of the Purchaser at such office is (800) 927-9800.
Parent. Parent is a public company with limited liability incorporated under
the laws of The Netherlands with its corporate seat in Amsterdam, The
Netherlands. Parent provides information and communication technology services
in The Netherlands, various other European countries, the United States and
Mexico. Parent's common shares are listed on the AEX-Stock Exchange (formerly
known as the Amsterdam Stock Exchange). The principal executive offices of
Parent are located at Donauweg 10, 1043 AJ Amsterdam, P.O. Box 652, 1000 AR
Amsterdam, The Netherlands. The telephone number of Parent at such offices is
011-31-20-586-1412 (Investor Relations Department).
20
<PAGE> 24
Financial Information. Parent is not subject to the informational and
reporting requirements of the Exchange Act and is not required to file reports
and other information with the Commission relating to its businesses,
financial condition or other matters. Set forth below are certain selected
consolidated financial data with respect to Parent and its consolidated
subsidiaries for Parent's last three fiscal years (collectively, the "Parent
Financial Statements"). The Parent Financial Statements have been extracted or
derived from the 1998 audited consolidated financial statements of Parent (the
"1998 Consolidated Statements"). The 1998 Consolidated Statements have been
filed with the Commission as an exhibit to the Purchaser's Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1") relating to this Offer, and
the summary below is qualified by reference to such report, which may be
inspected and obtained at the office of the Commission as set forth in Section
7--"Certain Information Concerning the Company". All the financial information
and related notes contained therein are incorporated herein by reference.
The Parent Financial Statements are presented in Dutch Guilders ("Guilders"
or "NLG") and are prepared in accordance with accounting principles generally
accepted in The Netherlands ("Dutch GAAP"). As of each of December 31, 1996,
December 31, 1997, December 31, 1998 and May 7, 1999, the rate in New York
City for cable transfers in foreign currencies as certified for custom
purposes by the Federal Reserve Bank of New York (the "Noon Buying Rate"), was
NGL 1.73 = U.S. $1.00, NGL 2.03 = U.S. $1.00, NGL 1.88 = U.S. $1.00 and NGL
2.20 = U.S. $1.00, respectively.
21
<PAGE> 25
GETRONICS NV
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
Fiscal year
-----------------------------------------------------------
1998(/3/) 1997(/4/) 1996
----------------- ----------------- -----------------
(in millions of Guilders, except per share amounts)
<S> <C> <C> <C>
Consolidated Earnings
Data
Net sales............. 3,459.2 2,776.5 2,210.7
Added value........... 1,647.6 1,237.9 1,029.1
Operating result...... 319.3 236.5 181.3
Group earnings before
taxes................ 326.6 251.2 200.1
Net profit............ 240.2 180.0 131.6
Cash flow(/1/)........ 291.5 212.9 179.4
Balance Sheet Data
Capital employed...... 524.2 286.8 331.1
Group equity.......... 383.8 154.2 260.2
Market capitalization
as at December 31.... 8,374.0 5,662.0 4,075.0
Data per ordinary share
of NLG 0.25 nominal
value
Net earnings(/1/)..... 2.69 2.06 1.52
Cash flow(/1/),(/2/).. 3.26 2.44 2.08
Shareholders' equity.. 4.04 1.65 2.94
<CAPTION>
December 31, December 31, December 31,
1998 1997 1996
----------------- ----------------- -----------------
(in millions of Guilders)
<S> <C> <C> <C>
Consolidated Balance
Sheet Data
Total assets.......... 1,392.3 1,024.5 986.6
Long-term borrowings.. 22.3 11.5 3.1
Shareholders' equity.. 364.1 144.9 255.2
</TABLE>
- --------
(1) Cash flow is defined as the total of net earnings (excluding extraordinary
income), depreciation of tangible fixed assets and minority interests. The
figures for 1997 have been adjusted by excluding extraordinary income to
facilitate comparison.
(2) On the basis of the average number of shares outstanding. The figures for
1997 have been adjusted by excluding extraordinary income to facilitate
comparison.
(3) With effect from July 1, 1998, the financial data of Grupo CP and IBM ASAP
have been included in the consolidation.
(4) With effect from October 1, 1997, the financial data of ARK ASA has been
included in the consolidation and with effect from January 1, 1997 the
financial data of RAET N.V. has been included in the consolidation.
Differences between Dutch GAAP and U.S. GAAP
The differences between Dutch GAAP and United States generally accepted
accounting principles ("U.S. GAAP") which materially affect Parent's reported
net earnings and shareholders' equity are explained below.
Goodwill: Under Dutch GAAP, the amount of goodwill included in the price of
acquired companies (and minority interests when applicable) is deducted from
shareholders' equity in the year of acquisition. Under U.S. GAAP, goodwill is
capitalized and amortized over the estimated life, not to exceed 40 years.
Deferred income tax assets have not been valued. Since the deferred income tax
assets of Parent mainly relate to acquired goodwill, the capitalization of
deferred income taxes would have an effect on the shareholders' equity and the
tax charge. Under U.S. GAAP, deferred income tax assets are recognized fully
and a provision is made for valuation allowance if recovery is less than
likely.
Pension Cost: Under Dutch GAAP, pension costs are based on actuarial
computed contributions to foundations. Liabilities for past service
obligations should be recorded. Under U.S. GAAP, pension costs are computed in
accordance with the provisions of Statement of Financial Accounting Standard
No. 87, "Employer's Accounting for Pensions" and include current service
costs, interest costs and amortization of prior service costs.
Millennium Provision: Under Dutch GAAP, a provision is allowed to provide
for millennium costs. Under U.S. GAAP, it is not allowed to provide for a
millennium provision, given the restrictions to the definition of provisions
under U.S. GAAP.
22
<PAGE> 26
Dividends: Under Dutch GAAP, it is appropriate to record a liability for a
cash dividend prior to approval thereof by the annual general meeting of
shareholders. Under U.S. GAAP, it is not appropriate to record a liability for
dividends/distribution to shareholders subject to approval of the annual
general meeting of shareholders.
Extraordinary Results: Under Dutch GAAP, items that are defined as revenues
and expenses not arising from the ordinary course of business may be accounted
for as extraordinary items. Under U.S. GAAP, such items would be recorded in
income from operations.
Earnings Per Share: Under Dutch GAAP, the disclosure of earnings per share
("EPS") is allowed without taking into account a fully diluted EPS
calculation. Under U.S. GAAP, the use of weighted average potential dilutive
shares, as denominator for diluted EPS, is required.
Main Accounting Principles Applied by Parent
Income Statement Data: Net sales reflect proceeds from goods and services
provided to third parties during the year under review. Projects are included
in net sales at the moment of final delivery. The cost of sales is the average
of the historical cost of the goods and services purchased from third parties.
Differences in exchange rates as well as allocations to the provision for
obsolescence are included. The balance of interest income and expense is
presented in the income statement. Income tax is calculated, on the basis of
the applicable tax rates, on the earnings before taxes, taking into account
exempt profit components. Timing differences resulting from determination of
the result for tax purposes are added to or deducted from the provision for
deferred taxes. Deferred tax debits have not been valued.
Balance Sheet Data: Tangible fixed assets are valued at cost less
accumulated depreciation. Depreciation is calculated according to the
straight-line method, based on the estimated useful lives. Where the company
has a significant influence on financial and business policies, non-
consolidated investments are stated at net asset value. Other investments are
stated at cost, taking account of a lasting impairment in value. Inventories
are valued at the lower of average cost and marked price, taking into account
a normal realizable margin, reduced by provisions for obsolescence. Work-in-
progress is valued on the basis of materials used and labor costs less
anticipated losses determined on a project basis and installments billed in
advance. Securities are valued at the lower of acquisition cost and stock
market value. Debentures are stated at nominal value, after adjustment for the
non-amortized part of the premium/discount. Amortization of the
premium/discount is on a straight-line basis for the remaining life to
maturity. Provisions are made for risks and liabilities related to operations.
Income from lease contracts is deferred and amortized over the lease term. A
provision is included for repurchase commitments for lease contracts above
residual value. Deferred tax liabilities resulting from timing differences in
the profit determination for the financial statements and for tax purposes are
stated at the tax rates prevailing in the country concerned. The warranty
provision is formed for providing additional services and to cover any
technical faults relating to goods and services provided. The pension
provision only concerns the past-service commitments with regard to pensions
and other non-activity plans, determined on an actuarial basis. The actuarial
interest rate used is 4%.
During the last five years, none of Parent, the Purchaser or to the best of
their knowledge, any of the persons listed in Schedule I hereto (i) has been
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
Except as described in this Offer to Purchase (i) none of Parent, the
Purchaser or to the best of their knowledge, any of the persons listed in
Schedule I to this Offer to Purchase or any associate or majority-owned
subsidiary of Parent, or the Purchaser beneficially owns or has any right to
acquire, directly or indirectly, any equity securities of the Company and (ii)
none of Parent, the Purchaser or to the best of their knowledge, any of the
persons or entities referred to above or any director, executive officer or
subsidiary of any of the foregoing has effected any transaction in such equity
securities during the past 60 days. The Purchaser and Parent disclaim
23
<PAGE> 27
beneficial ownership of any Offer Securities owned by any pension plans of
Parent or the Purchaser or any affiliate of Parent or the Purchaser.
Except as described in this Offer to Purchase, none of Parent, the Purchaser
or to the best of their knowledge, any of the persons listed in Schedule I to
this Offer to Purchase has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or voting of such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies. Except as set forth in this Offer to Purchase, since July 1, 1995,
none of Parent, the Purchaser or to the best of their knowledge, any of the
persons listed on Schedule I hereto has had any business relationship or
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 Commission applicable to the Offer. Except as set forth in this Offer to
Purchase, since July 1, 1995, there have been no contacts, negotiations or
transactions between any of Parent, the Purchaser or any of their subsidiaries
or, to the best knowledge of Parent, or the Purchaser, 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 or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.
9. Source and Amount of Funds. The Offer is not conditioned upon any
financing arrangements. The amount of funds required by the Purchaser to
purchase all of the outstanding Offer Securities pursuant to the Offer and to
pay related fees and expenses is expected to be approximately $1.82 billion.
The Purchaser intends to obtain such funds from Parent and/or one or more of
its affiliates, which will obtain such funds from cash on hand, proceeds from
a convertible preferred stock offering by Parent completed in April of 1999
and through a loan facility (the "Credit Facility") to be provided by ABN AMRO
Bank N.V. and ING Bank N.V. (the "Banks"). Parent has received a commitment
letter dated May 3, 1999 (the "Commitment Letter") from the Banks pursuant to
which the Banks have agreed to lend to Parent and/or one or more of its
affiliates up to NLG 4 billion for the Offer. The Credit Facility will expire
364 days after execution of the agreement evidencing the Credit Facility.
Borrowings under the Credit Facility will bear interest at the rate of
LIBOR/EURIBOR plus (i) 100 basis points per annum until September 30, 1999,
(ii) 125 basis points per annum from September 30, 1999 until December 31,
1999 and (iii) 125 basis points per annum from and after December 31, 1999,
unless the uncanceled amount of the Credit Facility as at close of business in
Amsterdam on December 31, 1999 is more than NLG 2 billion, in which case the
margin for such period will be 175 basis points per annum. Parent will use the
funds from the Credit Facility to finance the Purchaser, directly or
indirectly, through its affiliates.
Parent currently intends to refinance the Credit Facility through a combined
common stock and preferred stock equity offering prior to the end of 1999,
although no assurances can be given that such equity offering will occur.
The foregoing summary of the source and amount of funds is subject to the
preparation and completion of a definitive credit agreement for the Credit
Facility and is qualified in its entirety by reference to the text of the
Commitment Letter, a copy of which has been filed as an exhibit to the
Schedule 14D-1. The Commitment Letter may be inspected at, and copies may be
obtained from, the same places and in the manner set forth in Section 7--
"Certain Information Concerning the Company". If and when definitive
agreements relating to the Credit Facility are executed, copies will be filed
as exhibits to an amendment to the Schedule 14D-1.
The margin regulations promulgated by the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") place restrictions on the amount
of credit that may be extended for the purposes of purchasing margin stock,
including if such credit is secured directly or indirectly by margin stock.
The Purchaser believes that the financing of the acquisition of the Offer
Securities will be in full compliance with, or not subject to, the margin
regulations.
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10. Background of the Offer.
On November 13, 1998, Frans Kleipool, Director of Corporate Planning of
Parent, contacted Credit Suisse First Boston Corporation ("CSFB") in order to
arrange a meeting between Parent and the Company. Shortly thereafter, CSFB
informed Parent that Joseph M. Tucci, Chairman and Chief Executive Officer of
the Company, would be interested in exchanging views about a possible business
combination of the Company and Parent with A.H.J. Risseeuw, the then Chief
Executive Officer of Parent.
On December 18, 1998, Mr. Tucci was introduced by a representative of CSFB
to Mr. Risseeuw at a meeting of the three parties. Mr. Tucci and Mr. Risseeuw
generally discussed the business opportunities for both companies and agreed
to investigate further the possibilities of a business combination.
From late December 1998 to early February 1999, Jan Docter, the Chief
Financial Officer of Parent, and Franklyn A. Caine, then Chief Financial
Officer of the Company, separately had several telephone discussions with
representatives of CSFB relating to possible financial and financing
structures for the acquisition of the Company by Parent.
On February 17, 1999, Messrs. Kleipool and Docter, and Peter van Voorst, a
member of the executive board of Parent, met with representatives of CSFB and
Mr. Tucci to discuss the preliminary scope and timing of limited due diligence
reviews of the Company by Parent and of Parent by the Company.
On March 1, 1999, Mr. Van Voorst met with Kevin Roche, Vice President of
Service Planning of the Company, to discuss operational issues. Messrs. Docter
and Van Voorst and Cees van Luijk, the new Chief Executive Officer of Parent,
also met with Messrs. Tucci and Caine, Albert A. Notini, Executive Vice
President of the Company, and Jeremiah J.J. van Vuuren, President and Chief
Operating Officer, International, of the Company, to discuss operational and
business issues in connection with a possible business combination. Also on
March 1, 1999, the parties signed the Confidentiality Agreement (as defined
below).
On March 2, 1999, further talks were held between the senior management
teams of Parent and the Company. Each of the Company and Parent made a
presentation to the other party regarding its respective operations, market
positioning and financial profile. Issues related to a possible business
combination were discussed.
On March 14, 1999, Messrs. Tucci and Risseeuw had a telephone conversation
in which they further discussed certain issues related to a possible business
combination.
From March 20, 1999 through May 3, 1999, Parent's legal and financial
advisors, together with representatives of Parent, conducted legal and
financial due diligence investigations of the Company.
On March 21, 1999, Messrs. Tucci, Docter and Kleipool met to discuss the
general market trends in the systems integration industry. On March 22, 1999,
Messrs. Caine, Docter and Kleipool met to discuss the integration of
management control processes, procurement and business development. They also
agreed on a more definitive procedure and structure for the due diligence
process.
On March 31, 1999 and April 1, 1999, Mr. Tucci met with Mr. Van Luijk and
Mr. Hartgert Langman, Chairman of the Supervisory Board of Parent, to further
discuss issues regarding a possible business combination.
On April 9, 1999, Messrs. Van Vuuren, Docter and Van Voorst met in Amsterdam
to discuss the Company's operations in Europe.
On April 14, 1999, representatives of the Company and of Parent and their
legal advisors met to discuss the results of the due diligence findings. On
April 14 and 15, 1999, representatives of the Company and of Parent met to
review information regarding the Company's European operations.
On April 21 and 22, 1999, representatives of Parent and the Company met to
review information regarding the Company's United States operations.
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On April 23, 1999, Messrs. Van Luijk and Tucci met to discuss the terms of a
possible business combination. Mr. Van Luijk made a proposal to Mr. Tucci to
purchase all of the Common Stock and other securities of the Company for a
purchase price based on $29.25 per share of Common Stock, subject to certain
terms and conditions, including the negotiation of a mutually satisfactory
merger agreement.
On April 26, 1999, the supervisory board of Parent approved Mr. Van Luijk's
proposal to Mr. Tucci to acquire the Company, subject to a number of
additional conditions. Subsequent to the approval by the supervisory board,
Messrs. Van Luijk and Tucci had a telephone conversation in which they
discussed certain aspects of the conditions imposed on Parent's proposal by
Parent's supervisory board.
On April 27, 1999, Messrs. Van Luijk and Tucci had several telephone
conversations to further discuss the conditions imposed on Parent's proposal
by Parent's supervisory board.
On April 28, 1999, the Board of Directors of the Company met to discuss the
proposal of Parent, as communicated to Mr. Tucci by Mr. Van Luijk. After the
meeting, Mr. Tucci informed Mr. Van Luijk of the issues raised by the Board of
Directors of the Company with respect to Parent's proposal.
From April 22 to May 2, 1999, the parties and their legal counsel negotiated
the terms of the proposed merger.
On May 2, 1999, Parent was advised by Messrs. Tucci and Notini that the
Company's Board of Directors had on that day reviewed the terms of the
proposed merger agreement and had, subject to the satisfactory conclusion of
the negotiation of the proposed merger agreement, determined that the proposed
Offer and Merger are in the best interests of the Company and the Company's
holders of Offer Securities, approved the Offer and the Merger and recommended
acceptance of the Offer by the Company's stockholders.
Following the Company's Board of Directors meeting, the Merger Agreement was
finalized and executed by the parties on May 3, 1999. The Company and Parent
each announced the execution of the Merger Agreement in press releases issued
before the Nasdaq Stock Market's National Market and Amsterdam Exchanges,
respectively, opened on May 4, 1999.
11. Purpose of the Offer; Plans for the Company; Certain Agreements.
Purpose of the Offer. The purpose of the Offer is to enable Parent to
acquire the entire equity interest in the Company. Upon consummation of the
Merger, the surviving corporation will become an indirect wholly-owned
subsidiary of Parent.
Plans for the Company. Subject to certain matters described below, it is
currently expected that, initially following the Merger, the business and
operations of the Company will generally continue as it is currently being
conducted. Parent currently intends to cause the Company's operations to
continue to be run and managed by, amongst others, the Company's existing
executive officers. Parent will continue to evaluate all aspects of the
business, operations, capitalization and management of the Company during the
pendency of the Offer and after the consummation of the Offer and the Merger
and will take such further 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.
Parent is currently evaluating an acquisition structure pursuant to which,
prior to the purchase of any Offer Securities pursuant to the Offer, all of
the capital stock of the Purchaser will be transferred to a general
partnership formed pursuant to the laws of Delaware (the "General
Partnership"). The partners of the General Partnership will be a limited
liability company established pursuant to the laws of The Netherlands, all of
the interests of which will be held by Parent, and another limited liability
company also established pursuant to the laws of The Netherlands, all of the
interests of which will be held by a wholly-owned subsidiary of Parent.
Immediately following the Merger, the surviving corporation and all of its
subsidiaries organized under the laws of any of the states of the United
States (other than Wang Government Services, Inc. ("WGSI")) will be liquidated
and all of their respective assets will be assigned, conveyed and transferred
to, and all of their
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respective liabilities will be assumed by, the General Partnership. WGSI,
which has received facility security clearance from the Department of Defense
("DoD"), will remain a separate corporation, the shares of which will be
wholly-owned by the General Partnership. All work on classified government
contracts performed by other divisions or units of the Company will be
transferred to WGSI. WGSI plans to enter into a foreign ownership, control and
influence ("FOCI") mitigation arrangement with the Defense Security Service
("DSS") that will satisfy security requirements under Executive Order 12829 of
the National Industrial Security Program ("NISP"), by limiting Parent's
control over WGSI and access to classified information, but will permit WGSI
to perform classified contracts. Parent is currently also considering the
transfer of certain non-U.S. subsidiaries of the Company to other non-U.S.
affiliates of Parent.
Except as otherwise discussed in this Offer to Purchase, Parent has no
present plans or proposals that would result in any extraordinary corporate
transaction, such as a merger, reorganization, liquidation involving the
Company or any of its subsidiaries, or sale or transfer of a material amount
of assets of the Company or any of its subsidiaries or in any other material
changes to the Company's capitalization, dividend policy, corporate structure,
business or composition of the Board of Directors or the management of the
Company except that Parent intends to review the composition of the boards of
directors (or similar governing bodies) of the Company and its subsidiaries
and to cause the election to such boards of directors (or similar governing
bodies) of certain of its representatives.
Merger Agreement. The following is a summary of the material terms of the
Merger Agreement. The 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 with the Commission as an exhibit to the Schedule 14D-1. The
Merger Agreement may be inspected at, and copies may be obtained from, the
same places and in the manner set forth in Section 7--"Certain Information
Concerning the Company".
The Offer. The Merger Agreement provides that the Purchaser will commence
the Offer and that the obligation of the Purchaser to consummate the Offer and
to accept for payment and to pay for any Offer Securities tendered pursuant to
the Offer shall be subject to only those conditions set forth herein. The
Purchaser may not amend or change any of the conditions set forth in Section
14 --"Conditions of the Offer" without the prior written consent of the
Company.
Pursuant to the terms of the Merger Agreement, the Company has consented to
the Offer and has represented that the Board of Directors has (i) determined
that each of the Offer and the Merger is fair to, and in the best interest of,
the holders of the Offer Securities and declared that the Offer and the Merger
are advisable, (ii) approved the Offer and the Merger in accordance with the
provisions of the DGCL and (iii) recommended that the holders of the Offer
Securities accept the Offer and tender the Offer Securities pursuant to the
Offer and that the holders of Common Stock, Series A Preferred Stock and
Series B Preferred Stock approve and adopt the Merger Agreement.
The Merger. The Merger Agreement provides that, subject to the terms and
conditions thereof, and in accordance with the DGCL, the Purchaser shall be
merged with and into the Company as soon as practicable following the
satisfaction or waiver of the conditions set forth in the Merger Agreement
(such date, the "Closing Date"), which conditions are described below.
Following the Merger, the separate corporate existence of the Purchaser will
cease and the Company will continue as the surviving corporation (the
"Surviving Corporation").
At the Effective Time, each issued and outstanding share of Common Stock
(including the associated Rights), each issued and outstanding share of Series
B Preferred Stock and each issued and outstanding Common Stock Purchase
Warrant (the Common Stock Purchase Warrants, the Common Stock and the Series B
Preferred Stock, collectively, the "Company Stock") (other than shares of
Company Stock held by any subsidiary of the Company or in the treasury of the
Company, or, directly or indirectly, by Parent, the Purchaser or any other
subsidiary of Parent, which shares of Company Stock will cease to be
outstanding and be canceled and retired and none of which shall receive any
payment with respect thereto, and other shares of Company Stock, if any, held
by holders who perfect their appraisal rights under the DGCL) will by virtue
of the Merger and without any
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<PAGE> 31
action by the holders thereof, be converted into the right to receive, in the
case of the Common Stock, $29.25 in cash, be converted into the right to
receive, in the case of the Common Stock Purchase Warrants, $7.80 in cash, and
become convertible into the right to receive, in the case of Series B
Preferred Stock, $1,101.17 in cash (such amount, with respect to each such
share of Company Stock, the "Applicable Merger Consideration") payable to the
holder thereof, without interest thereon.
At the Effective Time, each issued and outstanding share of Series A
Preferred Stock, shall, without any action on the part of the holders thereof,
be converted into such number of fully paid and nonassessable shares of Common
Stock as is determined by dividing $1,000 by 23, such shares of Common Stock
thereafter to be converted into the right to receive $29.25 in cash, without
interest thereon.
At the Effective Time, the Special Common Stock Warrant shall, by virtue of
the Merger and without any action on the part of the holder thereof, expire.
At the Effective Time, the Stock Appreciation Right of Ing. C. Olivetti &
Co. S.p.A. (the "Olivetti Warrant"), dated March 17, 1998, shall, by virtue of
the Merger and without any action on the part of the holder thereof, become
exercisable for the kind and amount of shares of stock or other securities or
property which the holder would have been entitled to receive if, immediately
prior to the Effective Time, such holder had exercised the Olivetti Warrant
and the Company had elected to pay the amount due in Common Stock.
At the Effective Time, each share of common stock, par value $0.01 per
share, of the Purchaser then issued and outstanding will, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into 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 respective obligations of Parent and
the Purchaser, on the one hand, and the Company, on the other hand, to effect
the Merger are subject to the satisfaction or waiver (subject to applicable
law), at or prior to the Effective Time, of each of the following conditions:
(i) the Merger Agreement and the Merger shall have been approved and adopted
by holders of a majority of the Common Stock, the Series A Preferred Stock and
the Series B Preferred Stock (voting as one class, with each share of such
capital stock having one (1) vote); (ii) no preliminary or permanent
injunction or other order shall have been issued by any federal, state or
foreign governmental or regulatory agency, body or authority and be in effect
at the Effective Time which prohibits, restrains, enjoins or restricts the
consummation of the Merger; provided, however, that, in the case of a decree,
injunction or other order, each of the parties to the Merger Agreement shall
have used reasonable best efforts to prevent the entry of any such injunction
or other order and to appeal as promptly as possible any decree, injunction or
other order that may have been rendered; (iii) no federal, state or foreign
statute, rule, regulation, executive order, decree or order of any kind shall
have been enacted, entered, promulgated or enforced by any court or
governmental authority which prohibits, restrains, enjoins or restricts the
Merger or has the effect of making the Merger illegal; and (iv) the Purchaser
shall have purchased shares of Offer Securities pursuant to the Offer in a
number sufficient to satisfy the Minimum Condition.
Directors and Officers of the Surviving Corporation. The Merger Agreement
provides that, at the Effective Time, the directors of the Purchaser
immediately prior to the Effective Time shall be the directors of the
Surviving Corporation, each of such directors to hold office, subject to the
applicable provisions of the certificate of incorporation and by-laws of the
Surviving Corporation, until the next annual stockholders' meeting of the
Surviving Corporation and until their respective successors shall be duly
elected or appointed and qualified. At the Effective Time, the officers of the
Company immediately prior to the Effective Time shall, subject to the
applicable provisions of the certificate of incorporation and by-laws of the
Surviving Corporation, be the officers of the Surviving Corporation until
their respective successors shall be duly elected or appointed and qualified.
Company Stockholders' Meeting. Pursuant to the Merger Agreement, promptly
following the purchase of the Offer Securities pursuant to the Offer, if
required by law in order to consummate the Merger, the Company,
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<PAGE> 32
acting through its Board of Directors, shall, in accordance with applicable
law, (i) duly call, convene and hold a meeting of the stockholders of the
Company (the "Stockholders' Meeting") for the purpose of voting upon the
Merger Agreement and the Merger and (ii) take all action necessary and
advisable to secure the vote of stockholders required by applicable law and
the Company's certificate of incorporation or the Company's by-laws to obtain
the approval for the Merger Agreement and the Merger. The Company has agreed
that it shall include in the proxy statement or information statement required
in connection with the Stockholders' Meeting (the "Proxy Statement") the
recommendation of its Board of Directors that the stockholders of the Company
approve and adopt the Merger Agreement and approve the Merger. Parent shall
cause all shares of capital stock of the Company owned by Parent and its
direct and indirect subsidiaries (including the Purchaser) to be voted in
favor of the Merger and the Merger Agreement.
Interim Operations. The Merger Agreement provides that the Company agrees
that, except as permitted, required or specifically contemplated by, or
otherwise described in, the Merger Agreement or otherwise consented to or
approved in writing by Parent, during the period commencing on May 3, 1999
until such time as nominees of Parent shall comprise more than half of the
members of the Board of Directors of the Company or the Merger Agreement shall
have been terminated pursuant to its termination provisions, each of the
Company and its subsidiaries will conduct its operations only according to its
ordinary and usual course of business consistent with past practice and use
its reasonable best efforts to preserve intact its respective business
organization, keep available the services of its officers and employees and
maintain satisfactory relationships with licensors, suppliers, distributors,
clients, joint venture partners and others having significant business
relationships with them and the Company shall not, and shall cause each of its
subsidiaries not to (i) amend its certificate of incorporation or its by-laws
(or comparable governing documents), (ii) except (A) upon the exercise of
Options, Common Stock Purchase Warrants or the Special Common Stock Warrant,
(B) upon the conversion of the Series A Preferred Stock or Series B Preferred
Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement,
dated as of March 17, 1998, by and between the Company and Ing. C. Olivetti &
Co. S.p.A, (the "Olivetti Agreement"), issue or sell, or authorize to issue or
sell, any shares of its capital stock or any other securities, or issue or
sell, or authorize to issue or sell, any securities convertible into, or
options, warrants or rights to purchase or subscribe to, or enter into any
arrangement or contract with respect to the issuance or sale of, any shares of
its capital stock or any other securities, or make any other changes in its
capital structure; (iii) sell or pledge or agree to sell or pledge any stock
or other equity interest owned by it in any other person except to the extent
required to be pledged to the collateral agent under the Credit Facility, (iv)
except in the case of the Company's wholly-owned subsidiaries, in the ordinary
course of business consistent with past practice, declare, pay or set aside
any dividend (other than dividends on the Series A Preferred Stock or Series B
Preferred Stock in accordance with the terms of their respective Certificates
of Designation) or other distribution or payment with respect to, or split,
combine, redeem or reclassify, or purchase or otherwise acquire, any shares of
its capital stock, (v) enter into any contract or commitment with respect to
capital expenditures with a value in excess of, or requiring expenditures by
the Company and its subsidiaries in excess of, $10 million, individually, or
enter into contracts or commitments with respect to capital expenditures in
excess in the aggregate of those provided for in the Company's calendar year
1999 Plan (the "Plan"); (vi) acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any
other manner, any material business or any person, or otherwise acquire any
assets of any person (other than (A) the purchase of assets in the ordinary
course of business and consistent with past practice, (B) intercompany
transactions and (C) acquisitions which in the aggregate do not exceed $10
million), (vii) except in the ordinary course of business consistent with the
Plan, including without limitation the implementation of the Company's job
structures and broad banding program and its various variable compensation
programs (including its management incentives and sales compensation plans),
and except to the extent required under benefit plans, agreements, collective
bargaining agreements or their arrangements as in effect on the date of the
Merger Agreement or applicable law, rule or regulation, increase materially
the compensation or fringe benefits of any of its directors, officers or
employees or grant any severance or termination pay or enter into any
employment, consulting or severance agreement or arrangement with any present
or former director, officer or other employee of the Company or any of its
subsidiaries, or establish, adopt, enter into or, except in connection with
the merger of various plans which will not materially increase the benefits
payable thereunder, amend or terminate any collective bargaining, bonus,
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profit sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
directors, officers or employees; provided, however, the Company may enter
into agreements to provide salary continuation benefits for six months
following an employee's termination without cause so long as on and after
January 1, 1999, the Company shall not be permitted to enter into such
agreements with more than 25 employees and the aggregate maximum potential
cost to the Company of all such agreements shall not exceed $1,000,000, (vii)
except in the ordinary course of business consistent with past practice,
transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of,
encumber or subject to any lien, any material assets or incur or modify any
indebtedness or other material liability, or issue any debt securities or
assume, guarantee or endorse or otherwise as an accommodation become
responsible for the obligations of any person or, make any loan or other
extension of credit, (ix) agree to the settlement of any material claim or
litigation except for settlements which have been specifically reserved for in
the Company's 1998 financial statements and except for settlements which
individually do not exceed $300,000 and which in the aggregate, when
aggregated with the Excess Settlement Amounts (as hereinafter defined), do not
exceed $2,000,000; provided further that certain items may only be settled for
amounts in excess of the amounts reserved therefor in the Company's 1998
financial statements (the "Excess Settlement Amounts") to the extent that the
Excess Settlement Amounts, when aggregated with all other settlements after
the date of the Merger Agreement, do not exceed $2,000,000, (x) make or
rescind any material tax election or settle or compromise any material tax
liability, (xi) adopt or enter into a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its material subsidiaries (other than
the Merger), (xii) except in the ordinary course of business consistent with
past practice, pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction of claims,
liabilities or obligations reflected or reserved against in, or contemplated
by, the consolidated financial statements (or the notes thereto) contained in
any forms, reports, schedules, statements, registration statements and other
filings filed by the Company and its subsidiaries with the Commission since
June 30, 1997, together with any exhibits, any amendments thereto and
information incorporated by reference therein, (xiii) except in the ordinary
course of business consistent with past practice, enter into any agreement,
understanding or commitment that restrains, limits or impedes the Company's or
any of its subsidiaries' ability to compete with or conduct any business or
line of business, including, but not limited to, geographic limitations on the
Company's or any of its subsidiaries' activities, (xiv) take any action,
engage in any transaction or enter into any agreement which would cause any of
the offer conditions set forth in Section 14--"Conditions of the Offer" to not
be satisfied, (xv) in the case of the Company only, take any action including,
without limitation, the adoption of any shareholder rights plan or amendments
to its certificate of incorporation or by-laws (or comparable governing
documents), which would, directly or indirectly, restrict or impair the
ability of Parent to vote, or otherwise to exercise the rights and receive the
benefits of a stockholder with respect to, securities of the Company that may
be acquired or controlled by Parent or the Purchaser or permit any stockholder
to acquire securities of the Company on a basis not available to Parent or the
Purchaser in the event that Parent or the Purchaser were to acquire any shares
of its capital stock; or (xvi) agree, in writing or otherwise, to take any of
the foregoing actions.
The Company has also agreed to consult at least bi-weekly (or such shorter
intervals as Parent may reasonably request) with Parent on ongoing operational
issues with respect to the business and, in any event, shall keep Parent fully
informed with respect to the progress of certain transactions. Each of the
parties agrees to designate an officer to serve as its designated
representative to facilitate these consultations (each, a "Designated
Representative"). The Designated Representative of Parent shall use its
reasonable efforts to respond to written requests for waivers of the covenants
under the immediately preceding paragraph in no more than 48 hours from the
time of receipt.
No Solicitation. The Company and its affiliates and each of their respective
officers, directors, employees, representatives, consultants, investment
bankers, attorneys, accountants and other agents shall immediately cease any
discussions or negotiations with any other parties that may be ongoing with
respect to any Acquisition Proposal (as defined below). Other than in
accordance with the paragraph below, the Company shall not, directly
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<PAGE> 34
or indirectly, take (and the Company shall not authorize or permit its
affiliates or its or its affiliates' officers, directors, employees,
representatives, consultants, investment bankers, attorneys, accountants or
other agents, to so take) any action to (i) solicit, initiate, facilitate or
encourage the making of any Acquisition Proposal or any inquiries or the
making of any proposal that may reasonably be expected to lead to any
Acquisition Proposal (including, without limitation, by taking any action that
would make the Rights Agreement or Section 203 of the DGCL inapplicable to an
Acquisition Proposal), (ii) participate in any way in discussions or
negotiations with, or furnish or disclose any information to, any person
(other than Parent, the Purchaser or the agents or representatives of Parent
or the Purchaser) in connection with any Acquisition Proposal, (iii) enter
into any agreement, arrangement or understanding with respect to any
Acquisition Proposal or enter into any arrangement, understanding or agreement
requiring it to abandon, terminate or fail to consummate the Merger or any
other transaction contemplated by the Merger Agreement, (iv) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Parent or the
Purchaser, the approval and recommendation of the Offer and the Merger
Agreement or (v) approve or recommend, or propose to approve or recommend, any
Acquisition Proposal.
The Merger Agreement provides that the Company may take any of the actions
prohibited by clauses (ii) through (v) of the second sentence of the
immediately preceding paragraph in response to an unsolicited Acquisition
Proposal if (1) the Company is in compliance with its obligations under the
next paragraph, (2) with respect to any action that would otherwise be
prohibited by clause (ii) of the second sentence of the immediately preceding
paragraph, (A) such action is taken subject to a confidentiality agreement
with terms not more favorable to such third party than the terms of the
Confidentiality Agreement entered into between the Company and Parent dated as
of February 26, 1999 (the "Confidentiality Agreement"), (B) the Board of
Directors determines, after receiving advice from outside nationally
recognized legal counsel to the Company and from nationally recognized
investment bankers, that such Acquisition Proposal is reasonably likely to
result in a Superior Proposal (as hereinafter defined) within a reasonable
period of time and such determination remains in effect at all times that the
Company is taking any of the actions prohibited by clause (ii) with respect to
such Acquisition Proposal and (C) the Board of Directors determines, after
receiving advice from outside nationally recognized legal counsel to the
Company, that the failure to take such action would likely breach the
fiduciary duties of the Board of Directors and (3) with respect to any action
that would otherwise be prohibited by clauses (iii) through (v) of the second
sentence of the immediately preceding paragraph, such Acquisition Proposal is
a Superior Proposal and the Board of Directors determines, based on advice
from outside nationally recognized legal counsel to the Company and nationally
recognized investment bankers, that the failure to take such action would
likely breach the fiduciary duties of the Board of Directors. "Acquisition
Proposal" shall mean a proposal or offer for a merger or consolidation with
the Company, sale or purchase of substantial assets or stock of the Company,
tender or exchange offer for capital stock of the Company, or business
combination or change in control or similar transaction involving the Company,
other than the Offer and the Merger. "Superior Proposal" shall mean a bona
fide proposal made by a third party to acquire all of the capital stock
(including the Common Stock Purchase Warrants and the Special Common Stock
Warrant) of the Company which (i) the Board of Directors determines in its
good faith reasonable judgment, after receiving advice from nationally
recognized investment bankers and outside nationally recognized legal counsel
to the Company, would, if consummated, result in a transaction that is more
favorable to the Company's stockholders than the transactions contemplated
hereby, (ii) with respect to which the Company has received a representation
and warranty with regard to the financing therefor no less favorable to the
Company than the representation as to the sufficiency of funds provided by
Parent and the Purchaser in the Merger Agreement, and the Company has no
reason to believe that such representation is not true (it being understood
that a representation which refers to highly confident letters and similar
letters shall not be considered at least as favorable to the Company as the
representation regarding the sufficiency of funds of Parent and the
Purchaser), and (iii) is not subject to any financing or due diligence
condition.
The Merger Agreement provides that, in addition to the obligations of the
Company set forth two paragraphs above, on the date thereof, the Company shall
advise Parent of any request for information or of any Acquisition Proposal,
or any inquiry, proposal, discussions or negotiation with respect to any
Acquisition Proposal, the terms and conditions of such request, Acquisition
Proposal, inquiry, proposal, discussion or negotiation and the
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Company shall promptly provide to Parent copies of any written materials
received by the Company in connection with any of the foregoing, and the
identity of the person making any such Acquisition Proposal or such request,
inquiry or proposal or with whom any discussion or negotiation are taking
place. The Company shall promptly provide to Parent any written non-public
information concerning the Company provided to any other person in connection
with any Acquisition Proposal which was not previously provided to Parent. In
the event that the Board of Directors has determined, after receiving advice
from nationally recognized investment bankers and outside nationally
recognized legal counsel, that an Acquisition Proposal is a Superior Proposal,
the Company shall deliver to Parent written notice of such determination.
During the three (3) business day period immediately succeeding delivery of
such notice, the Company shall, and shall cause its financial and legal
advisors to, inform Parent of the terms and conditions of such Superior
Proposal, and the identity of the person making such Superior Proposal, and
the Company shall, and shall cause its financial and legal advisors to,
negotiate with Parent to agree to a modification of the terms and conditions
of the Merger Agreement as would enable the Company to proceed with the
transactions contemplated by the Merger Agreement on such adjusted terms.
The Merger Agreement provides that, immediately following the purchase of
Offer Securities pursuant to the Offer, the Company shall request each person
which has heretofore executed a confidentiality agreement in connection with
its consideration of acquiring the Company or any portion thereof to return
all confidential information heretofore furnished to such person by or on
behalf of the Company.
Directors' and Officers' Insurance and Indemnification. The Merger Agreement
provides that the certificate of incorporation and the by-laws of the
Surviving Corporation shall contain the provisions with respect to
indemnification and exculpation from liability set forth in the Company's
certificate of incorporation and by-laws on May 3, 1999, which provisions
shall not be amended, repealed or otherwise modified for a period of six years
from the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who on or prior to the Effective Time were
directors, officers, employees or agents of the Company (the "Indemnified
Parties"), unless such modification is required by law. In addition, pursuant
to the Merger Agreement, the Surviving Corporation shall, for a period of six
years from the Effective Time, either (a) maintain in effect the Company's
current directors' and officers' liability insurance covering the Indemnified
Parties; provided, however, that in no event shall Parent be required to
expend in any one year an amount in excess of 125% of the annual premiums
currently paid by the Company for such insurance which the Company represents
to be $694,000 for the twelve month period ending on December 31, 1999;
provided further, that if the annual premiums of such insurance coverage
exceed such amount, the Surviving Corporation shall be obligated to obtain a
policy with the greatest coverage available for a cost not exceeding such
amount; provided further that the Surviving Corporation may substitute for
such Company policies policies providing at least the same coverage and
containing terms and conditions which are no less advantageous provided that
said substitution does not result in any gaps or lapses in coverage with
respect to matters occurring prior to the Effective Time or (b) cause the
Parent's directors' and officers' liability insurance then in effect to cover
the Indemnified Parties with respect to those matters covered by the Company's
directors' and officers' liability policy.
The Surviving Corporation shall indemnify all Indemnified Parties to the
fullest extent permitted by applicable law with respect to all acts and
omissions arising out of such individuals' services as officers, directors,
employees or agents of the Company or any of its subsidiaries or as trustees
or fiduciaries of any plan for the benefit of employees of the Company or any
of its subsidiaries occurring prior to the Effective Time including, without
limitation, the transactions contemplated by the Merger Agreement.
Compensation and Benefits. Pursuant to the Merger Agreement, until the first
anniversary of the Effective Time, the Surviving Corporation shall ensure that
all employees and officers of the Company receive benefits that, taken as a
whole, are not materially less favorable in the aggregate to the benefits
received by such individuals immediately prior to May 3, 1999 under applicable
Employee Benefit Plans (other than any Employee Benefit Plan providing for
stock based compensation or benefits), which Employee Benefit Plan shall mean
each domestic and foreign employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974 as amended and the
rules and regulations thereunder ("ERISA"),
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whether or not subject to ERISA, and each stock option, stock appreciation
right, restricted stock, stock purchase, incentive, bonus, profit-sharing,
savings, deferred compensation, health, medical, dental, life insurance,
disability, accident, supplemental unemployment or retirement, employment,
severance or salary or benefits continuation or fringe benefit plan, program,
arrangement, agreement or commitment currently maintained by the Company or
any subsidiary thereof for the benefit of any employee, director, former
employee, former director of the Company or any of its subsidiaries or to
which the Company or any subsidiary thereof (including all employers (whether
or not incorporated) that would be treated together with the Company as a
single employer within the meaning of Section 414 of the United States
Internal Revenue Code of 1986, as amended) contributes (or has any obligation
to contribute), has any liability or is a party. Notwithstanding anything in
the Merger Agreement to the contrary, from and after the Effective Time, the
Surviving Corporation shall have sole discretion over the hiring, promotion,
retention, termination and other terms and conditions of the employment of the
employees of the Surviving Corporation consistent with applicable law. With
respect to each employee benefit plan (as defined in Section 3(3) of ERISA) or
similar policy or program provided by the Surviving Corporation to employees
of the Company (the "Surviving Corporation Plans"), for purposes of
determining eligibility to participate, vesting and entitlement to benefits
(including severance benefits and vacation entitlement, but not for accrual of
pension benefits), service with the Company (or predecessor employers to the
extent the Company provides past service credit) shall be treated as service
with the Surviving Corporation (except to the extent such recognition would
result in duplication of benefits). Such service shall also apply for purposes
of satisfying any waiting periods, evidence of insurability requirements or
the application of any pre-existing condition limitations. Employees of the
Company shall be given credit for amounts paid under a corresponding welfare
benefit plan during the same period for purposes of applying deductibles, co-
payments and out-of-pocket maximums as though such amounts had been paid in
accordance with the terms of the applicable Surviving Corporation Plan. Except
as otherwise provided in this paragraph, nothing in the section on employee
benefits in the Merger Agreement shall prevent Parent or the Surviving
Corporation from amending or terminating any Employee Benefit Plan in
accordance with its terms. At the Effective Time, the Surviving Corporation
shall assume and honor, or cause the applicable subsidiary to assume and
honor, in accordance with their terms (i) all employment, severance and each
other compensation agreement and arrangement existing prior to the execution
of the Merger Agreement which are between the Company or any subsidiary and
any director, officer or employee thereof and (ii) all collective bargaining
agreements or shop agreements or other arrangements with unions, workers
councils or similar organizations. The Company and Parent agree that the
consummation of the offer shall constitute a "change in control" for purposes
of all Employee Benefit Plans which contain such provisions. Parent shall, as
soon as practicable after the Effective Date, commence the implementation of a
stock incentive plan pursuant to which certain employees of Parent and the
Surviving Corporation will be granted, on an annual basis, stock options
entitling the holders thereof to receive, in the aggregate, upon exercise
thereof pursuant to the terms and conditions of such stock incentive plan,
1.4% of the shares of common stock of Parent issued and outstanding as of the
first day of the fiscal year of Parent during which such grant was made,
provided that nothing shall obligate Parent to structure such stock incentive
plan in a manner which would obligate it to any disclosure requirement under
the Securities Act of 1933, as amended, the Exchange Act or the rules and
regulations promulgated thereunder, other than as may be required by Rule
12g3-2(b) under the Exchange Act.
Options. Pursuant to the Merger Agreement, prior to the Effective Time, the
Board of Directors (or, if appropriate, any committee thereof) shall take all
actions and shall use its reasonable best efforts to obtain all necessary
consents and releases from all of the holders of all Options heretofore
granted under any compensatory stock option plan of the Company or otherwise
(the "Stock Plans"), to (i) provide for the cancellation, effective at the
Effective Time, subject to the payment provided for in the next sentence being
made, of all Options, (ii) terminate, as of the Effective Time, the Stock
Plans and any other plan, program or arrangement providing for the issuance or
grant of any other interest in respect of the capital stock of the Company or
any of its subsidiaries (collectively with the Stock Plans, referred to as the
"Stock Incentive Plans") and (iii) amend, as of the Effective Time, the
provisions of any other Employee Benefit Plan (as defined in the immediately
preceding paragraph) providing for the issuance, transfer or grant of any
capital stock of the Company or any such subsidiary, or any interest in
respect of any capital stock of the Company or any such subsidiary, to provide
no continuing rights to acquire, hold, transfer or grant any capital stock of
the Company or any such subsidiary or any interest in the
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capital stock of the Company or any such subsidiary. Stock Plans shall not
include any Intercompany Convertible Instruments (defined as any instrument
held pursuant to the Intercompany Convertible Instruments Agreement dated as
of October 29, 1993 by and between the Company and ASTT), and Options shall
not include any options granted under any Intercompany Convertible Instrument.
Immediately prior to the Effective Time, each Option, whether or not then
vested or exercisable, shall no longer be exercisable for the purchase of
shares of Common Stock but shall entitle each holder thereof, in cancellation
and settlement therefor, to payments by the Company in cash (the "Cash
Payment"), at the Effective Time, equal to the product of (a) the total number
of shares of Common Stock subject to such Option, whether or not then vested
or exercisable, and (b) the amount by which the Applicable Merger
Consideration for shares of Common Stock exceeds the exercise price per share
of Common Stock subject to such Option, each such Cash Payment to be paid to
each holder of an outstanding Option at the Effective Time. The Company shall
deliver to Parent on the date that is two (2) business days prior to the
Effective Time a list of the Options which are outstanding as of such date,
together with detailed calculations of the Cash Payments relating to such
Options as if the Effective Time had occurred on such date. Except as
otherwise contemplated in the Merger Agreement, any then outstanding stock
appreciation rights or limited stock appreciation rights issued by the Company
or any subsidiary of the Company shall be canceled immediately prior to the
Effective Time without any payment therefor. The Company shall use its
reasonable best efforts to ensure that neither it nor any of its subsidiaries
is or will be bound by any Options, other options, warrants, rights or
agreements which would entitle any person, other than Parent or its
affiliates, to own any capital stock of the Company or any of its subsidiaries
or to receive any payment in respect thereof. Notwithstanding any other
provision of this paragraph, the Company shall not be required to purchase any
minority equity interests in any of its subsidiaries. Notwithstanding any
other provision of the section on options in the Merger Agreement to the
contrary, payment of the Cash Payment may be withheld with respect to any
Option until necessary consents and releases are obtained. The Company shall
take all steps as may be required to provide that with respect to each
individual who is a director or officer of the Company immediately prior to
the Effective Time all transactions contemplated by the Merger Agreement with
respect to Offer Securities held by such person shall be exempt under the
Exchange Act in accordance with the terms and conditions set forth in that
certain No-Action Letter, dated January 12, 1999, issued by the Securities and
Exchange Commission to Skadden, Arps, Slate, Meagher & Flom LLP. Immediately
prior to the Merger, the Company shall cause any restrictions imposed on the
606,500 shares of Common Stock which were issued to certain employees and the
outright, unencumbered ownership of which is subject to the fulfillment of
certain conditions, to be lifted.
Agreement to Use Reasonable Best Efforts. Pursuant to the Merger Agreement
and subject to the terms and conditions thereof, each of the Company, Parent
and the Purchaser shall, and the Company shall cause each of its subsidiaries
to, cooperate and use their reasonable best efforts to take, or cause to be
taken, all appropriate action, and to make, or cause to be made, all filings
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by the Merger
Agreement including, without limitation, their reasonable best efforts to
obtain, prior to the Closing Date, all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities and
parties to contracts with the Company and its subsidiaries as are necessary
for consummation of the transactions contemplated by the Merger Agreement and
to fulfill the conditions to the Offer and the Merger; provided, however, that
no loan agreement or contract for borrowed money shall be repaid except as
currently required by its terms, in whole or in part, and no contract shall be
amended to increase the amount payable thereunder or otherwise to be more
burdensome to the Company or any of its subsidiaries in order to obtain any
such consent, approval or authorization without the prior written consent of
Parent (which shall not be unreasonably withheld). Without limiting the
generality of the foregoing, without the prior written consent of the Company,
neither Parent nor the Purchaser will take any action which would cause any of
the conditions set forth in the Commitment Letter not to be satisfied or which
would make its representation regarding the sufficiency of funds of Parent and
the Purchaser untrue.
In addition, the Merger Agreement provides that each party thereto shall (i)
take promptly all actions necessary to make the filings required of it or any
of its affiliates under any applicable antitrust laws in connection with the
Merger Agreement and the transactions contemplated thereby, (ii) comply at the
earliest
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practicable date with any formal or informal request for additional
information or documentary material received by it or any of its affiliates
from any antitrust authority and (iii) cooperate with one another in
connection with any filing under applicable antitrust laws and in connection
with resolving any investigation or other inquiry concerning the transactions
contemplated by the Merger Agreement initiated by any antitrust authority.
Each party to the Merger Agreement shall use its reasonable best efforts to
resolve such objections, if any, as may be asserted with respect to the
transactions contemplated by the Merger Agreement under any antitrust law.
Each party to the Merger Agreement shall promptly inform the other parties of
any material communication made to, or received by such party from, any
antitrust authority or any other governmental or regulatory authority
regarding any of the transactions contemplated thereby.
The Merger Agreement also provides that the Company and Parent shall, as
soon as practicable and in any event within five (5) days of the date of the
Merger Agreement, file a voluntary notification pursuant to, and in compliance
with, Exon-Florio and shall use their reasonable best efforts to respond to
any inquiries from governmental officials with respect thereto.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and the Purchaser with
respect to, among other things, its organization, corporate authority,
capitalization, financial statements, public filings, litigation, compliance
with laws, consent and approvals, employee benefit plans, brokers' or finders'
fees, state takeover statutes, voting requirements, undisclosed liabilities,
taxes, intellectual property, Year 2000 compliance and the absence of any
material adverse changes in the Company since December 31, 1998.
Termination. The Merger Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the Merger by the
Company's stockholders (a) by mutual consent of the Company, on the one hand,
and of Parent and the Purchaser, on the other hand; provided, however, that
after consummation of the Offer, the consent of a majority of the Independent
Directors (defined as a director who is a director on May 3, 1999 and who is
not an affiliate or associate of Parent or the Purchaser or any other person
who beneficially owns Offer Securities representing 5% or more of the Common
Stock Equivalents, or is designated by a majority of the directors of the
Company who are such directors) shall also be required to terminate the Merger
Agreement, (b) by either Parent, on the one hand, or the Company, on the other
hand, if any statute, rule or regulation shall have been promulgated which
prohibits the consummation of the Offer or the Merger or if any order or
injunction of a court of competent jurisdiction which prohibits consummation
of the Offer or the Merger shall have become final and nonappealable, (c) by
either Parent, on the one hand, or the Company, on the other hand, if the
Offer shall have expired without any Offer Securities being purchased pursuant
thereto as a result of the failure to meet any one or more of the tender offer
conditions set forth in Section 14--"Conditions of the Offer", provided,
however, that the right to terminate the Merger Agreement shall not be
available (i) to the Company if the Merger Agreement may be terminated by
Parent pursuant to clause (d) set forth below in this paragraph and (ii) to
Parent if the Merger Agreement may be terminated by the Company pursuant to
clause (g) set forth below in this paragraph, (d) by Parent, in the event of,
at any time prior to consummation of the Offer, a breach by the Company of any
representation, warranty, covenant or agreement contained in the Merger
Agreement which, if uncured, would give rise to the failure of a condition set
forth in clause (v)(e) or (f) of the tender offer conditions set forth in
Section 14--"Conditions of the Offer" and such breach is incapable of being
cured or, if capable of being cured, has not been cured within fifteen (15)
business days following receipt by the Company of written notice of such
breach from Parent and has not been waived by Parent pursuant to the
provisions hereof, (e)(i) by Parent if, at any time prior to consummation of
the Offer, (A) the Company shall have (w) entered into any agreement,
arrangement or understanding with respect to any Acquisition Proposal, (x)
withdrawn or modified, or proposed to withdraw or modify, in a manner adverse
to Parent or the Purchaser, the approval and recommendation of the Offer and
the Merger Agreement, or (y) approved or recommended, or proposed to approve
or recommend, any Acquisition Proposal or (z) announced a neutral position
with respect to any Acquisition Proposal and does not reject or recommend such
Acquisition Proposal within three (3) business days of the announcement of
such neutral position, (B) the Board of Directors or any committee thereof
shall have failed to reaffirm its approval and recommendation of the Offer,
the Merger and the Merger Agreement
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within three (3) business days of Parent's request for such reaffirmation, or
(C) the Company or the Board of Directors or any committee thereof shall have
resolved to do any of the foregoing or (ii) by the Company if, at any time
prior to consummation of the Offer, the Company shall have entered into an
agreement to effect a Superior Proposal and the entering into of such
agreement is permitted in accordance with the provision on no solicitation of
the Merger Agreement described above and the fees payable by the Company to
Parent in an amount equal to $65,000,000 are paid simultaneously with such
termination, (f) by Parent, if the Minimum Condition shall not have been
satisfied by the expiration date of the Offer and on or prior to such date a
third party shall have made or caused to be made a proposal, or public
announcement of a proposal, to the Company or its stockholders with respect to
(A) the acquisition of the Company by merger, tender offer or otherwise; (B) a
merger, consolidation or similar business combination with the Company or any
of its subsidiaries; (C) the acquisition of 20% or more of the assets of the
Company and its subsidiaries, taken as a whole; (D) the acquisition of 20% or
more of the Common Stock Equivalents of the Company or (E) the adoption by the
Company of a plan of liquidation or the declaration or payment of an
extraordinary dividend (any of the proposed transactions enumerated in clauses
(A) through (E), an "Alternative Proposal"), (g) by the Company, in the event
of, at any time prior to consummation of the Offer, (i) a breach by Parent or
the Purchaser of any representation or warranty contained in the Merger
Agreement which, if uncured, would result in any such representation or
warranty that is qualified as to materiality being untrue or incorrect in any
respect or in any such representation or warranty that is not so qualified
being untrue or incorrect in any material respect, in each case as of the date
of the consummation of the Offer as though made on or as of such date, except
(x) for changes specifically permitted by the Merger Agreement and (y) that,
to the than Evaluation Material) solely for the purpose of evaluating a
possible business transaction (the "Possible Transaction") and to keep such
information confidential; provided, however, that (i) the Evaluation Material
may be disclosed to Parent's Advisors who need extent such representations and
warranties address matters only as of a particular date, such representations
and warranties shall, to such extent, be true and correct at and as of such
particular date as if made at and as of such particular date or (ii) Parent or
the Purchaser shall have failed to perform in all material respects any
obligation or to comply in any material respect with any agreement or covenant
of Parent or the Purchaser to be performed or complied with by it under the
Merger Agreement, and, in the case of either clause (i) or (ii), such breach
or failure is incapable of being cured or, if capable of being cured, has not
been cured within fifteen (15) business days following receipt by Parent of
written notice of such breach from the Company or has not been waived by the
Company pursuant to the provisions hereof, (h) by the Company, if Parent or
the Purchaser shall have failed to commence the Offer within six (6) business
days following the date of the Merger Agreement; (i) by Parent, on the one
hand, or the Company, on the other hand, if the acceptance for payment of the
Offer Securities shall not have occurred within one hundred twenty (120) days
after commencement of the Offer, provided, however, that the right to
terminate the Merger Agreement shall not be available (i) to the Company if
the Merger Agreement may be terminated by Parent pursuant to clause (d) above
or if any of the events set forth in clauses (v) (g) or (h) of the tender
offer conditions set forth in Section 14--"Conditions of the Offer" shall have
occurred or an Alternative Proposal shall have been outstanding at any time
during the thirty (30) day period ending prior to such date of proposed
termination and (ii) to Parent if the Merger Agreement may be terminated by
the Company pursuant to clause (g) above.
The Merger Agreement provides that, in the event of termination of the
Merger Agreement pursuant to the provisions described above by Parent, on the
one hand, or the Company, on the other hand, no party will incur any liability
to any other party except for breach of the Merger Agreement and the survival
of certain provisions relating to the representations and warranties of the
Company, Parent and the Purchaser regarding broker's and finder's fees,
confidentiality, fees and expenses, the applicable law and the waiver of jury
trial.
Confidentiality Agreement. The following is a summary of the Confidentiality
Agreement. The summary is qualified in its entirety by reference to the
Confidentiality Agreement, a copy of which has been filed with the Commission
as an exhibit to the Schedule 14D-1. The Confidentiality Agreement can be
inspected at, and copies may be obtained from, the same places and in the
manner set forth in Section 7--"Certain Information Concerning the Company".
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Pursuant to the Confidentiality Agreement, Parent has agreed, among other
things, to use any information concerning the Company (whether prepared by the
Company, its Advisors (as defined below) or otherwise) (the "Evaluation
Material") (but excluding information which (i) was already in Parent's
possession, provided that such information is not known by Parent to be
subject to another confidentiality agreement with the Company or another
party, (ii) was, is or will be in the public domain other than as a result of
a disclosure by Parent or Parents' directors, officers, employees, agents or
advisors (collectively, "Advisors"), (iii) was, is or will be available to
Parent on a non-confidential basis from a source other than the Company or its
Advisors, provided that such source is not known by Parent to be bound by a
confidentiality agreement with the Company or another party or (iv) has been
independently acquired or developed by Parent or its Advisors based on
information other to know such information solely for the purpose of
evaluating the Possible Transaction and (ii) any disclosure of the Evaluation
Material may be made to which the Company consents in writing. Both Parent and
the Company (each, a "Party" and, collectively, the "Parties") have agreed
that for a period commencing on February 26, 1999 and ending two years after
the termination of the Confidentiality Agreement, neither Party will hire or
solicit for employment any of each other's employees, including employees of
their respective subsidiaries, with whom Parent or its Advisors, on the one
hand, or the Company and its Advisors, on the other, have had contact during
the course of discussions related to the Possible Transaction. The
Confidentiality Agreement and all obligations thereunder will terminate two
years from February 26, 1999. The Company also agreed to treat any information
concerning Parent's business with the same confidentiality and subject to the
same restrictions as the Confidentiality Agreement requires Parent to observe
with respect to the information provided by the Company to Parent.
12. Dividends and Distributions. As described above, the Merger Agreement
provides that the Company shall not (i) except (A) upon the exercise of
Options, Common Stock Purchase Warrants or the Special Common Stock Warrant,
(B) upon the conversion of the Series A Preferred Stock or Series B Preferred
Stock and (C) pursuant to the terms of the Olivetti Agreement, issue or sell,
or authorize to issue or sell, any shares of its capital stock or any other
securities, or issue or sell, or authorize to issue or sell, any securities
convertible into, or options, warrants or rights to purchase or subscribe to,
or enter into any arrangement or contract with respect to the issuance or sale
of, any shares of its capital stock or any other securities, or make any other
changes in its capital structure or (ii) except in the case of wholly-owned
subsidiaries of the Company, in the ordinary course of business consistent
with past practice, declare, pay or set aside any dividend (other than
dividends on the Series A Preferred Stock or the Series B Preferred Stock in
accordance with the terms of their respective certificates of designation) or
other distribution or payment with respect to, or split, combine, redeem or
reclassify, or purchase or otherwise acquire, any shares of its capital stock
or its other securities.
If, on or after May 3, 1999, the Company should engage in the conduct
referred to in the preceding paragraph, then, subject to the provisions of
Section 14--"Conditions of the Offer", the Purchaser, in its sole discretion,
may make such adjustments as it deems appropriate in the Offer Price and other
terms of the Offer, including, without limitation, the number or type of
securities offered to be purchased.
If, on or after May 3, 1999, the Company should declare, pay or set aside
any dividend (other than dividends on Series A Preferred Stock or Series B
Preferred Stock in accordance with the terms of their respective certificates
of designation) or other distribution with respect to its capital stock
payable or distributable to holders of record on a date prior to the transfer
of the Offer Securities purchased pursuant to the Offer to Purchase on the
Company's stock transfer records, then, subject to the provisions of Section
14--"Conditions of the Offer", (i) the Offer Price may, in the sole discretion
of the Purchaser, be reduced by the amount of any such cash dividend or cash
distribution and (ii) the whole of any such dividend, distribution or issuance
to be received by the tendering holders will (x) be received and held by the
tendering holders for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering holder to the Depositary
for the account of the Purchaser, accompanied by appropriate documentation of
transfer, or (y) at the direction of the Purchaser, be exercised for the
benefit of the Purchaser, in which case the proceeds of each exercise will
promptly be remitted to the Purchaser. Pending such remittance and subject to
applicable law, the Purchaser will be entitled to all rights and privileges as
owner of any such dividend or other distribution and may withhold the
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entire Offer Price or deduct from the Offer Price the amount or value thereof,
as determined by the Purchaser in its sole discretion.
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the preceding paragraphs except as
permitted, required or specifically contemplated by the Merger Agreement and
nothing herein shall constitute a waiver by Parent or the Purchaser of any of
its rights under the Merger Agreement or a limitation of remedies available to
Parent or the Purchaser for any breach of the Merger Agreement, including
termination thereof.
13. Effect of the Offer on the Market for the Offer Securities; Exchange Act
Registration.
Market for Offer Securities. The purchase of shares of Common Stock and
Common Stock Purchase Warrants pursuant to the Offer will reduce the number of
holders of such securities and the number of such securities that might
otherwise trade publicly and could adversely affect the liquidity and market
value of such remaining securities held by the public.
Depending upon the aggregate market value and per share price of any shares
of Common Stock not purchased pursuant to the Offer, the Common Stock may no
longer meet the standards of the NASD for continued inclusion in the Nasdaq
National Market, which require, among other things, that an issuer have at
least 750,000 publicly held shares with a market value of at least $5 million
held by at least 400 holders holding round lots and have net tangible assets
of at least $4 million. If these standards are not met, the Common Stock might
nevertheless continue to be included in the NASD's Nasdaq Stock Market (the
"Nasdaq Stock Market") with quotations published in the Nasdaq "additional
list" or in one of the "local lists". However, if the number of holders of
Common Stock falls below 300, or if the number of shares of publicly held
Common Stock falls below 500,000, or if there are not at least two market
makers for such Common Stock, NASD rules provide that the Common Stock would
no longer be "qualified" for Nasdaq Stock Market reporting, and the Nasdaq
Stock Market would cease to provide any quotations. Common Stock held directly
or indirectly by an officer or director of the Company, or by any beneficial
owner of more than 10% of the shares of Common Stock, ordinarily will not be
considered as being publicly held for this purpose. If, as a result of the
purchase of Common Stock pursuant to the Offer or otherwise, the Common Stock
no longer meets the NASD requirements for continued inclusion in any tier of
the Nasdaq National Market, and the Common Stock is no longer included in any
tier of the Nasdaq Stock Market, the market for such Common Stock could be
adversely affected.
Depending upon the number of Common Stock Purchase Warrants and shares of
Common Stock purchased pursuant to the Offer, the Common Stock Purchase
Warrants may no longer meet the requirements of the NASD for continued
inclusion of a warrant in the Nasdaq National Market, which require among
other things, that the stock of the issuer of such warrant continue to be
listed on the Nasdaq National Market or a national securities exchange. If
these requirements are not met, the Common Stock Purchase Warrants might
nevertheless continue to be included in the Nasdaq Stock Market with
quotations published in the Nasdaq "additional list" or in one of the "local
lists". Depending upon the number of Common Stock Purchase Warrants and shares
of Common Stock purchased pursuant to the Offer, the Common Stock Purchase
Warrants may no longer be "qualified" for Nasdaq Stock Market reporting and
the Nasdaq Stock Market would cease to provide any quotations. If, as a result
of the purchase of Common Stock Purchase Warrants or shares of Common Stock,
pursuant to the Offer or otherwise, the Common Stock Purchase Warrants no
longer meet the requirements of the NASD for continued inclusion in the Nasdaq
Stock Market, the market for the Common Stock Purchase Warrants could be
adversely affected.
In the event the Common Stock and the Common Stock Purchase Warrants no
longer meet the requirements of the NASD for inclusion in any tier of the
Nasdaq Stock Market, quotations might still be available from other sources.
The extent of the public market for Common Stock and Common Stock Purchase
Warrants and availability of such quotations would, however, depend upon the
number of holders of Common Stock and Common Stock Purchase Warrants remaining
at such time, the interest in maintaining a market in the Common
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Stock and the Common Stock Purchase Warrants on the part of securities firms,
the possible termination of registration under the Exchange Act, as described
below, and other factors.
Exchange Act Registration. The Common Stock and the Common Stock Purchase
Warrants are currently registered under the Exchange Act. Registration of the
Common Stock and the Common Stock Purchase Warrants under the Exchange Act may
be terminated upon application of the Company to the Commission if the Common
Stock and the Common Stock Purchase Warrants are neither listed on a national
securities exchange nor held by 300 or more holders of record. Termination of
registration of the Common Stock and the Common Stock Purchase Warrants under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to its stockholders and to the Commission and would
make certain provisions of the Exchange Act no longer applicable to the
Company, such as the short-swing profit recovery provisions of Section 16(b)
of the Exchange Act, the requirement of furnishing a proxy statement pursuant
to Section 14(a) of the Exchange Act in connection with stockholders' meetings
and the related requirement of furnishing an annual report to stockholders and
the requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions. Furthermore, the ability of "affiliates" of the Company
and persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act
of 1933, as amended, may be impaired or eliminated. The Purchaser intends to
seek to cause the Company to apply for termination of registration of the
Common Stock and the Common Stock Purchase Warrants under the Exchange Act as
soon after the completion of the Offer as the requirements for such
termination are met.
If registration of the Common Stock is not terminated prior to the Merger,
then the Common Stock will be delisted from all stock exchanges and the
registration of the Common Stock under the Exchange Act will be terminated
following the consummation of the Merger.
Margin Regulations. The shares of Common Stock, the Common Stock Purchase
Warrants and the Special Common Stock Warrant are currently "margin
securities," as such term is defined under the regulations of the Federal
Reserve Board, which has the effect, among other things, of allowing brokers
to extend credit on the collateral of the Common Stock, the Common Stock
Purchase Warrants and the Special Common Stock Warrant. Depending upon factors
similar to those described above regarding listing and market quotations, it
is possible that, following the Offer, shares of the Common Stock, the Common
Stock Purchase Warrants and the Special Common Stock Warrant would no longer
constitute "margin securities" for the purposes of the margin regulations of
the Federal Reserve Board and therefore could no longer be used as collateral
for loans made by brokers. In any event, the shares of Common Stock, the
Common Stock Purchase Warrants and the Special Common Stock Warrant will cease
to be "margin securities" if registration of the Common Stock, the Common
Stock Purchase Warrants and the Special Common Stock Warrant under the
Exchange Act is terminated.
None of the Series A Preferred Stock, the Series B Preferred Stock or the
Depositary Shares is a "margin security".
14. Conditions of the Offer. Notwithstanding any other provision of the
Offer or the Merger Agreement, the Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) under the Exchange Act (relating to the
Purchaser's obligation to pay for or return tendered Offer Securities promptly
after termination or withdrawal of the Offer), pay for any Offer Securities
tendered pursuant to the Offer and may terminate the Offer and may postpone
the acceptance of, and payment for, any Offer Securities if (i) there shall
not have been validly tendered and not properly withdrawn prior to the
expiration of the Offer, Offer Securities which represent at least a majority
of all of the Common Stock Equivalents on the date of purchase, (ii) any
applicable waiting period (and any extension thereof) under the HSR Act shall
not have expired or been terminated, prior to the expiration of the Offer,
(iii) a decision of the Commission of the European Community that the purchase
of the Offer Securities pursuant to the Offer and the Merger are compatible
with the common market shall not have been received prior to the expiration of
the Offer, (iv) any applicable waiting period under Exon-Florio shall not have
expired or been terminated prior to the
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expiration of the Offer or (v) if, at any time after the date of the Merger
Agreement and at or before the time of payment for any such Offer Securities
(whether or not any Offer Securities have theretofore been accepted for
payment or paid for pursuant to the Offer), any of the following shall occur:
(a) there shall be instituted or pending any action or proceeding by any
government or governmental authority or agency, domestic or foreign, or by
any other person, domestic or foreign, before any court of competent
jurisdiction or governmental authority or agency, domestic or foreign,
which could reasonably be expected to (i) make illegal, or directly or
indirectly prohibit or make materially more costly the Offer or the Merger
or result in material damages, (ii) result in a prohibition or material
limitation on the ownership or operation by Parent or the Purchaser of all
or any material portion of the business or assets of the Company and its
subsidiaries taken as a whole or compel Parent or the Purchaser to dispose
of or hold separately all or any material portion of the business or assets
of Parent and its subsidiaries taken as a whole or the Company and its
subsidiaries taken as a whole, or impose any material limitation on the
ability of Parent or the Purchaser to conduct its business or own such
assets, (iii) result in an imposition of limitations on the ability of
Parent or the Purchaser effectively to exercise full rights of ownership of
the Offer Securities including, without limitation, the right to vote any
Offer Securities acquired or owned by the Purchaser or Parent on all
matters properly presented to the Company's stockholders or (iv) a
requirement of divestiture by Parent or the Purchaser of any Offer
Securities;
(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended or issued and applicable to or
deemed applicable to (i) Parent, the Purchaser, the Company or any
subsidiary of the Company or (ii) the Offer or the Merger, by any
legislative body, court, government or governmental, administrative or
regulatory authority or agency, domestic or foreign, other than the routine
application of the waiting period provisions of the HSR Act or Exon-Florio
or the modification and reporting requirements under European Community
antitrust laws (in each case with respect to the Offer or to the Merger),
that could reasonably be expected to result directly or indirectly, in any
of the consequences referred to in paragraph (a) above;
(c) there shall have occurred, any event, change, occurrence, effect,
fact or circumstance which has or could reasonably have, a Material Adverse
Effect (as such term is defined below) or a Performance Material Adverse
Effect (as such term is defined below) on the Company;
(d) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any United States securities
exchange, in any United States over-the-counter market or the AEX-Stock
Exchange for a period in excess of 12 hours (excluding any coordinated
trading halt triggered solely as a result of a specified decrease in a
market index), (ii) any decline in the Morgan Stanley World Index in excess
of 23% measured from the close of business on the trading day next
preceding the date of the Merger Agreement, (iii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States or any other jurisdiction in which any bank or other
financial institution in any manner involved with the financing of the
Offer or the Merger is incorporated or (iv) any material limitation
(whether or not mandatory) by any Federal, state or foreign governmental
authority or agency on, the extension of credit by banks or other lending
institutions which materially and adversely affects the ability of Parent
to obtain the financing necessary to effect the Offer or the Merger;
(e) any of the representations or warranties made by the Company in the
Merger Agreement that are qualified as to materiality shall be untrue or
incorrect in any respect or any such representations and warranties that
are not so qualified shall be untrue or incorrect in any material respect,
in each case as of the date of the consummation of the Offer as though made
on or as of such date, except (i) for changes specifically permitted by the
Merger Agreement and (ii) that to the extent such representations and
warranties address matters only as of a particular date, such
representations and warranties shall, to such extent, be true and correct
at and as at such particular date as if made at and as of such particular
date;
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(f) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement on or prior to the date of consummation of the Offer;
(g) the Board of Directors or any committee thereof shall have withdrawn,
or modified or proposed to withdraw or modify, in a manner adverse to
Parent or the Purchaser, the approval and recommendation of the Offer and
the Merger Agreement, or approved or recommended, or proposed to approve or
recommend, any Acquisition Proposal, or announced a neutral position with
respect to any Acquisition Proposal and does not reject or recommend such
Acquisition Proposal within three (3) business days of the announcement of
such neutral position or, upon request by Parent, shall have failed to
reaffirm its approval and recommendation of the Offer, the Merger and the
Merger Agreement within three (3) business days of the Purchaser's request
for such affirmation or shall have resolved to do any of the foregoing;
(h) beneficial ownership (determined for the purposes of this paragraph
(h) as set forth in Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of the capital stock of the Company shall have been acquired by any
person or group (as defined in Section 13(d)(3) under the Exchange Act); or
(i) the Merger Agreement shall have been terminated in accordance with
its terms.
"Material Adverse Effect", with respect to any person, shall mean a material
adverse effect on the business, assets, liabilities, results of operations or
financial condition of such person and its subsidiaries, taken as a whole;
provided that none of the Company Excluded Factors (as such term is defined
below) shall be deemed by itself or themselves, either alone or in combination
with one or more other Company Excluded Factors, to constitute a Material
Adverse Effect on the Company.
"Performance Material Adverse Effect," with respect to any person, shall
mean a material adverse effect on the ability of such person to perform its
obligations under the Merger Agreement or to consummate the transactions
contemplated thereby.
"Company Excluded Factors" shall mean: (a) any change, in and of itself, in
the market price or trading volume of the Offer Securities; (b) any failure,
in and of itself, by the Company to meet the revenue or earnings predictions
of equity analysts as reflected in the First Call consensus estimate, or any
other revenue or earnings predictions or expectations, for any period ending
(or for which earnings are released) on or after the date of the Merger
Agreement and prior to the Effective Time; or (c)(i) employee attrition (other
than senior managers) and (ii) the loss of existing customers by WGSI or the
failure or delay by existing or prospective customers of WGSI to purchase or
enter into agreements to purchase services or solutions from the Company or
any of its subsidiaries, in each case arising out of, resulting from or
attributable to (x) the announcement of the Merger Agreement and the
transactions contemplated thereby or (y) Parent's announcement or other
communication of the plans or intentions of Parent with respect to the conduct
of any business of the Company or any of its subsidiaries.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser, or may be waived by
Parent or the Purchaser (except for the Minimum Condition), in whole or in
part at any time and from time to time in their respective sole discretion.
The failure by Parent or the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
15. Certain Legal Matters; Regulatory Approvals.
General. Except as otherwise disclosed herein, based on a review of publicly
available information filed by the Company with the Commission, neither Parent
nor the Purchaser is aware of (i) any license or regulatory permit that
appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the acquisition of Offer
Securities by the Purchaser pursuant to the Offer or the
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Merger or (ii) any approval or other action by any governmental,
administrative or regulatory agency or authority, domestic or foreign, that
would be required for the acquisition or ownership of Offer Securities by the
Purchaser as contemplated herein. Should any such approval or other action be
required, the Purchaser currently contemplates that it would seek such
approval or action. The Purchaser's obligation under the Offer to accept for
payment and pay for Offer Securities is subject to certain conditions. See
Section 14--"Conditions of the Offer". While the Purchaser does not currently
intend to delay the acceptance for payment of Offer Securities tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or action, if needed, would be obtained or
would be obtained without substantial conditions or that adverse consequences
might not result to the business of the Company, Parent or the Purchaser or
that certain parts of the businesses of the Company, Parent or the Purchaser
might not have to be disposed of in the event that such approvals were not
obtained or any other actions were not taken.
State Takeover Laws. The Company is incorporated under the laws of the State
of Delaware. In general, Section 203 of the DGCL 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 the date the interested stockholder
became an interested stockholder, the board of directors of the corporation
approved either the business combination or the transaction in which the
interested stockholder became an interested stockholder. The Company has
represented to Parent and the Purchaser in the Merger Agreement that the Board
of Directors has approved the Offer, the Merger and the Merger Agreement and
that such approval is sufficient to render the provisions of Section 203 of
the DGCL inapplicable to the Offer, the Merger and the Merger Agreement.
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, holders, 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 holders. The
state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of holders in the state and were
incorporated there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. Based on information supplied by representations of the Company in the
Merger Agreement, the Purchaser does not believe that any state takeover
statutes apply to the Offer. Neither Parent nor the Purchaser has currently
complied with any state takeover statute or regulation. The Purchaser reserves
the right to challenge the applicability or validity of any state law
purportedly applicable to the Offer or the Merger and nothing in this Offer to
Purchase or any action taken in connection with the Offer or the Merger is
intended as a waiver of such right. 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 or the Merger, the Purchaser might be required to file
certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, the Purchaser might be unable to accept
for payment any Offer Securities tendered pursuant to the Offer, or be delayed
in continuing or consummating the Offer and the Merger. In such case, the
Purchaser may not be obligated to accept for payment any Offer Securities
tendered. See Section 14--"Conditions of the Offer".
Appraisal Rights. No appraisal rights are available to holders of Offer
Securities in connection with the Offer.
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However, if the Merger is consummated, a holder of Common Stock, Series A
Preferred Stock or Series B Preferred Stock will have certain rights under
Section 262 of the DGCL to dissent and demand appraisal of, and payment in
cash for the fair value of, that holder's shares of Common Stock, Series A
Preferred Stock and/or Series B Preferred Stock. Those rights, if the
statutory procedures are complied with, could lead to a judicial determination
of the fair value (excluding any value arising from the Merger) required to be
paid in cash to dissenting stockholders for their shares of Common Stock,
Series A Preferred Stock and/or Series B Preferred Stock. Any judicial
determination of the fair value of shares of Common Stock, Series A Preferred
Stock and/or Series B Preferred Stock could be based upon considerations other
than or in addition to the Offer Price and the market value of the shares of
Common Stock, Series A Preferred Stock and/or Series B Preferred Stock,
including asset values and the investment value of the shares of Common Stock,
Series A Preferred Stock and/or Series B Preferred Stock. The value so
determined could be more or less than the Offer Price. Failure to follow the
steps required by Section 262 of the DGCL for perfecting appraisal rights may
result in the loss of those rights.
If a holder who demands appraisal under Section 262 of the DGCL fails to
perfect, or effectively withdraws or loses, its right to appraisal, as
provided in the DGCL, the shares of Common Stock, Series A Preferred Stock
and/or Series B Preferred Stock of that holder will be converted into the
merger consideration in accordance with the Merger Agreement. A holder may
withdraw his demand for appraisal by delivering to the Purchaser a written
withdrawal of such demand for appraisal and acceptance of the Merger.
The foregoing summary of the rights of objecting holders does not purport to
be a complete statement of the procedures to be followed by holders desiring
to exercise any available dissenters' rights. The preservation and exercise of
dissenters' rights require strict adherence to the applicable provisions of
the DGCL.
Going Private Transactions. Rule 13e-3 under the Exchange Act is applicable
to certain "going-private" transactions. The Purchaser does not believe that
Rule 13e-3 will be applicable to the Merger, unless, among other things, the
Merger is completed more than one year after termination of the Offer. If
applicable, Rule 13e-3 would require, among other things, that certain
financial information regarding the Company and certain information regarding
the fairness of the Merger and the consideration offered holders of the
Company therein be filed with the Commission and disclosed to stockholders of
the Company prior to consummation of the Merger.
Regulatory Approvals.
(a) Antitrust--U.S.
Under the HSR Act and the rules that have been promulgated thereunder by the
Federal Trade Commission ("FTC"), certain mergers and acquisitions may not be
consummated unless certain information has been furnished to the Antitrust
Division of the Department of Justice (the "Antitrust Division") and the FTC
and certain waiting period requirements have been satisfied. The acquisition
of Offer Securities by the Purchaser pursuant to the Offer is subject to the
HSR Act requirements.
Under the provisions of the HSR Act applicable to the purchase of Offer
Securities pursuant to the Offer, such purchase may not be made until the
expiration of a 15-calendar day waiting period following the required filing
of a Notification and Report Form under the HSR Act by Parent, which Parent
submitted on May 4, 1999. Accordingly, the waiting period under the HSR Act
will expire at 11:59 P.M., New York City time, on May 19, 1999, unless early
termination of the waiting period is granted or Parent receives a request for
additional information or documentary material prior thereto. If either the
FTC or the Antitrust Division were to request additional information or
documentary material from Parent prior to the expiration of the 15-day waiting
period, the waiting period would be extended and would expire at 11:59 P.M.,
New York City time, on the tenth calendar day after the date of substantial
compliance by Parent with such request. Thereafter, the waiting period could
be extended only by court order or by consent of Parent. If the acquisition of
Offer Securities 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 purchase of and payment for Offer Securities pursuant to the
Offer will be deferred until 10
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days after the request is substantially complied with unless the waiting
period is terminated sooner by the FTC or the Antitrust Division (and assuming
all of the other Offer conditions have been satisfied or waived). See Section
2--"Acceptance for Payment and Payment for Offer Securities". Only one
extension of such waiting period pursuant to a request for additional
information or documentary material is authorized by the rules promulgated
under the HSR Act, except by court order or by consent. Although the Company
is required to file certain information and documentary material with the
Antitrust Division and the FTC in connection with the Offer, neither the
Company's failure to make such filings nor a request to the Company from the
Antitrust Division or the FTC for additional information or documentary
material will extend the waiting period. However, if the Antitrust Division or
the FTC raises substantive issues in connection with a proposed transaction,
the parties frequently engage in negotiations with the relevant governmental
agency concerning possible means of addressing these issues and may agree to
delay consummation of the transaction while such negotiations continue.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Offer
Securities by the Purchaser pursuant to the Offer. At any time before or after
the Purchaser's purchase of Offer Securities, either the Antitrust Division or
the FTC could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking to enjoin the
acquisition of Offer Securities pursuant to the Offer or seeking divestiture
of Offer Securities acquired by the Purchaser or divestiture of substantial
assets of Parent, the Company or any of their respective subsidiaries. State
attorneys general may also bring legal action under the antitrust laws, and
private parties may bring such action under certain circumstances. Parent and
the Purchaser believe that the acquisition of Offer Securities by the
Purchaser 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 a challenge is made, what the result will be. See Section 14--
"Conditions of the Offer" for certain conditions to the Offer, including
conditions with respect to litigation and certain governmental actions.
(b) Antitrust--EC.
The EC Merger Regulation (Council Regulation No. 4064/89 of December 21,
1989, as amended) requires notification to the European Commission, within
seven days of the conclusion of an agreement to acquire a controlling interest
or the launch of a cash tender offer therefor, of all concentrations between
companies which are deemed to have a "Community dimension" because they exceed
certain global and European turnover thresholds. Such concentrations may not
be consummated until the European Commission, acting within fixed deadlines,
approves them as being "compatible with the common market". A concentration is
compatible with the common market if it does not create or strengthen a
dominant position as a result of which effective competition would be
significantly impeded in the European Economic Area (the "EEA"), or in a
substantial part of it.
The European Commission has exclusive competence for approving or
prohibiting concentrations with a Community dimension--however, it may, upon
request, refer the case to the national antitrust authority of a particular
member state if the concentration has a specific effect on the territory of
the requesting member state.
The notification involves the disclosure to the European Commission of
detailed information, especially regarding the structure of the relevant
markets and the parties' competitive position. Upon receipt of a notification,
the European Commission conducts a preliminary review with a maximum duration
of one month from notification, which may be extended to six weeks in certain
circumstances. This preliminary review concludes with a decision either to
approve the notified concentration (with or without conditions) or to initiate
an in-depth investigation if the concentration raises serious doubts as to its
compatibility with the common market. Such an in-depth investigation has a
maximum duration of four months, and must end with a European Commission
decision either approving the concentration (with or without conditions) or
prohibiting it. If the European Commission raises substantive issues in
connection with the proposed concentration, the parties may negotiate with the
European Commission to find a solution, which may take the form of an
undertaking to make structural modifications to the entity resulting from the
concentration on conditions and within a timeframe agreed with the European
Commission.
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Parent and the Company, including their respective affiliates, each conduct
substantial operations within the EEA and satisfy the applicable turnover
thresholds, with the result that the acquisition of Offer Securities will
amount to a concentration with a Community dimension and, therefore, be
subject to the requirement of notification to, and approval by, the European
Commission.
Parent and the Purchaser believe that the concentration effected by the
acquisition of the Offer Securities by the Purchaser will be considered to be
compatible with the common market, and approved by the European Commission
during the preliminary review phase. However, it cannot be ruled out that the
European Commission might seek to require structural undertakings as a
condition to its approval, and/or to open a second phase investigation to
examine serious doubts as regards compatibility with the common market.
(c) Australia Foreign Investment Review Board.
Australia's foreign investment policy is administered by the Federal
Treasurer under the Foreign Acquisitions and Takeovers Act 1975 and guidelines
and other requirements established by government statement. Under current
government directives, proposals to take over an offshore company with
Australian subsidiaries or assets valued over Australian Dollars 20 million or
exceeding half the global asset value may be subject to examination under the
foreign investment policy. The foreign investment policy states that offshore
takeovers of this nature normally do not raise issues which would be contrary
to Australia's national interest. The policy states that where issues are
raised the Australian government would normally seek to resolve any concerns
through consultation with the parties involved. An informal notification may
also be made to the Australian Competition and Consumer Commission, who will
analyze the effect of the proposal on competition using their Merger
Guidelines. These Guidelines consider factors such as market share, the spread
of market power and the impact imports have on the market. The Purchaser may,
after reviewing relevant information regarding the Company, determine to make
such notifications.
(d) FOCI Arrangement.
Pursuant to the NISP, when a United States facility which has security
clearances for classified information is acquired by a non-United States
entity, the clearances of that United States facility are invalidated by the
DoD unless the parties have entered into a FOCI mitigation arrangement
suitable to the DoD which either clears the foreign entity for access to the
classified information or sets up barriers to foreign access to the
information. WGSI has received a facility security clearance from the DSS
permitting it to receive classified data, and is involved in performance under
classified contracts.
In order for WGSI to maintain its facility security clearance following the
Purchaser's purchase of the Offer Securities, the Purchaser will be required
to enter into a FOCI mitigation arrangement with the DoD in the form of either
a proxy agreement, voting trust agreement or special security agreement, each
of which will limit the Purchaser's control over and access to WGSI. If the
Purchaser does not conclude a suitable FOCI mitigation arrangement with the
DoD prior to the Expiration Date, the existing facility security clearances of
WGSI will be invalidated by the DoD until such time as the FOCI mitigation
arrangement has been concluded. Until such time, WGSI will be able to continue
performance under classified contracts unless one or more agencies object to
such continued performance, but no new security clearances will be granted to
WGSI.
(e) Exon-Florio.
As part of the Omnibus Trade and Competitiveness Act of 1988, a new Section
(the "Exon-Florio Amendment") was added to Title VII of the Defense Production
Act of 1950, 50 U.S.C. App. 2158, et seq. (the "DPA Act"), to empower the
President or his designee to take certain actions in relation to mergers,
acquisitions and takeovers by foreign persons which could result in foreign
control of a person engaged in interstate commerce in the United States. In
particular, the Exon-Florio Amendment enables the President to suspend or
prohibit any acquisitions by foreign persons which threaten to impair the
national security of the United States, and to divest such transactions that
have been concluded.
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Under the terms of the Exon-Florio Amendment, a foreign company or United
States subsidiary of a foreign company acquiring a United States company may
notify the Committee on Foreign Investment in the United States ("CFIUS") of
the proposed transaction, whereupon the CFIUS or the President must decide
within 30 days whether to investigate the transaction. On May 7, 1999, the
Purchaser filed a notification with CFIUS pursuant to Section 721 of the DPA
Act. CFIUS has 30 days from the date of filing of the completed notice to make
a determination as to whether an investigation is necessary. If an
investigation is undertaken of the proposed transaction and CFIUS determines
that United States national security may be impaired by the proposed
transaction, then CFIUS may recommend to the President that he suspend or
prohibit the transaction, or direct the United States Attorney General to seek
divestment relief in United States district court. The Purchaser does not
believe that the Offer threatens to impair the national security of the United
States.
16. Fees and Expenses. Except as set forth below, neither Parent nor the
Purchaser will pay any fees or commissions to any broker, dealer or other
person for soliciting tenders of Offer Securities pursuant to the Offer.
Merrill Lynch is acting as the Dealer Manager in connection with the Offer
and ABN AMRO Bank N.V. and Merrill Lynch are acting as financial advisors to
the Purchaser in connection with the Purchaser's proposed acquisition of the
Company. Each of ABN AMRO Bank N.V. and Merrill Lynch will receive reasonable
and customary compensation for their respective services as Dealer Manager
and/or financial advisor as the case may be, will be reimbursed for certain
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities and expenses in connection therewith, including certain
liabilities under the United States federal securities laws.
The Purchaser and Parent have also retained Citibank, N.A., as the
Depositary. The Depositary has not been retained to make solicitations or
recommendations in its role as Depositary. The Depositary will receive
reasonable and customary compensation for its services, will be reimbursed for
certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith, including certain
liabilities under the United States federal securities laws.
In addition, the Purchaser and Parent have retained Morrow & Co., Inc. to
act as the Information Agent in connection with the Offer. The Information
Agent will receive reasonable and customary compensation for its services,
will be reimbursed for certain reasonable out-of-pocket expenses and will be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities under the United States federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
the Purchaser for customary mailing and handling expenses incurred by them in
forwarding offering material to their customers.
17. Miscellaneous. The 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 the Purchaser becomes aware of any
valid state statute prohibiting the making of the Offer or the acceptance of
the Offer Securities pursuant thereto, the Purchaser will make a good faith
effort to comply with such state statute or seek to have such statute declared
inapplicable to the Offer. If, after such good faith effort, the Purchaser
cannot comply with any such state statute, the Offer will not be made to (and
tenders will not be accepted from or on behalf of) the holders of Offer
Securities 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 the Purchaser by the Dealer
Manager or one or more registered brokers or dealers which are licensed under
the laws of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Parent or the Purchaser not contained in this
Offer to Purchase or in the Letters of Transmittal and, if given or made, such
information or representation must not be relied upon as having been
authorized.
46
<PAGE> 50
Parent and the Purchaser have filed with the Commission the Schedule 14D-1,
together with exhibits, pursuant to Section 14(d)(1) of the Exchange Act and
Rule 14d-3 promulgated thereunder, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. The Schedule 14D-1
and any amendments thereto, including exhibits, may be inspected at, and
copies may be obtained from, the same places and in the manner set forth in
Section 7--"Certain Information Concerning the Company" (except that they will
not be available at the regional offices of the Commission).
Getronics Acquisition, Inc.
May 10, 1999
47
<PAGE> 51
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF GETRONICS NV AND
GETRONICS ACQUISITION, INC.
1. SUPERVISORY BOARD, BOARD OF MANAGEMENT AND EXECUTIVE OFFICERS OF
GETRONICS NV.
Set forth below is the name, present principal occupation or employment and
material occupations, positions, offices or employments for the past five
years of each member of the Supervisory Board, the Board of Management and
each executive officer of Getronics NV. The principal address of Getronics NV
and, unless indicated below, the current business address for each individual
listed below is Donauweg 10, 1043 AJ Amsterdam, P.O. Box 652, 1000 Amsterdam,
The Netherlands, Telephone: 011-31-20-5861412. Each such person is, unless
indicated below, a citizen of The Netherlands. Members of the Supervisory
Board are identified by an asterisk and members of the Board of Management are
identified by two asterisks.
<TABLE>
<CAPTION>
Name and Current Present Principal Occupation or Employment;
Business Address Material Positions Held During the Past Five Years
---------------- ----------------------------------------------------
<C> <S>
H. Langman*...................... Chairman of the Supervisory Board of Getronics NV;
President
of the Supervisory Board of NV Elektr.Prod.mij. Oost-en
Noord-Nederland; President of the Supervisory Board of
HAL Holding
NV; President of the Supervisory Board of IHC Caland
NV; President of the Supervisory Board of NV Petroleum-
Mij.
"Moeara-Enim"; President of the Supervisory Board of
OTRA NV; President of the Supervisory Board of van
Lanschot Bankiers; President of the Supervisory Board
of Siemens Nederland; President of the Supervisory
Board of Vendex International NV; President of the
Supervisory Board of Holland Chemical Int. NV; Member
of the Supervisory Board of Sonepar Distribution;
Member of the Supervisory Board of Oranje-Nassau Group
BV
P.Bouw*.......................... Member of the Supervisory Board of Getronics NV; Former
CEO of KLM NV; Member of the Supervisory Board of De
Nederlandsche Bank NV; Member of the Supervisory Board
of NV Nederlandse Spoorwegen; Member of the Supervisory
Board of Koninklijke Pakhoed NV; Member of the
Supervisory Board of Oce NV
N.G. Ketting*.................... Member of the Supervisory Board of Getronics NV;
President of the Supervisory Board of Holec Holland NV;
President of the Supervisory Board of NV AVIRA; Member
of the Supervisory Board of NKF Holding NV; Member of
the Supervisory Board of Koninklijke Gist-Brocades NV
M.Ververs*....................... Member of the Supervisory Board of Getronics NV; Former
CEO of Wolters Kluwer NV; Member of the Supervisory
Board of Oce NV; Member of the Supervisory Board of
Koninklijke Sphinx Gustavsberg NV; Member of the
Supervisory Board of CSM NV; Member of the Supervisory
Board of De Boer Unigro NV; Member of the Supervisory
Board of Rijnconsult BV; Member of the Supervisory
Board of ING Group NV
</TABLE>
I-1
<PAGE> 52
<TABLE>
<CAPTION>
Name and Current Present Principal Occupation or Employment;
Business Address Material Positions Held During the Past Five Years
---------------- ----------------------------------------------------
<C> <S>
C.G. van Luijk**................. President and Chief Executive Officer of Getronics NV;
Chairman of the Board of Management of Getronics NV;
Director and President of Getronics Acquisition, Inc.;
Former CEO of Pricewaterhouse Coopers NV; Former Global
Middle Market Leader of PricewaterhouseCoopers Global
Organization
P.K. van Voorst**................ Senior Vice President of Getronics NV; Director and
Secretary of Getronics Acquisition, Inc.
J.L. Docter**.................... Chief Financial Officer of Getronics NV; Director and
Treasurer of Getronics Acquisition, Inc.
R.W.M. Kropholler**.............. Director of Human Resources of Getronics NV; Former
Manager of Human Resources of Philips NV; Former
Manager of Human Resources of AT&T; Former Group
Director of Human Resources of Origin International BV
L.J.E. Smits**................... Director of Corporate Accounts of Getronics NV; Former
Member of the Board of Management of Berenschot BV
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF GETRONICS ACQUISITION, INC.
Set forth below is the name, present principal occupation or employment and
material occupations, positions, offices or employments for the past five
years of each director and executive officer of Getronics Acquisition, Inc.
Each person identified below has held his position since the formation of
Getronics Acquisition, Inc. on April 30, 1999. The principal address of
Getronics Acquisition, Inc. is 1013 Centre Road, Wilmington, Delaware 19805,
Telephone: (800) 927-9800. The current business address for each individual
listed below is Donauweg 10, 1043 AJ Amsterdam, P.O. Box 652, 1000 Amsterdam,
The Netherlands, Telephone: 011-31-20-5861412. Each such person is, unless
indicated below, a citizen of The Netherlands. Directors are identified by an
asterisk.
<TABLE>
<CAPTION>
Name and Current Present Principal Occupation or Employment;
Business Address Material Positions Held During the Past Five Years
---------------- ----------------------------------------------------
<C> <S>
C.G. van Luijk*.................. President of Getronics Acquisition, Inc.; President and
Chief Executive Officer of Getronics NV; Chairman of
the Board of Management of Getronics NV; Former CEO of
Pricewaterhouse Coopers NV; Former Global Middle Market
Leader of PricewaterhouseCoopers Global Organization
J.L. Docter*..................... Treasurer of Getronics Acquisition, Inc.; Chief
Financial Officer of Getronics NV
P.K. van Voorst*................. Secretary of Getronics Acquisition, Inc.; Senior Vice
President of Getronics NV
F.A.R.N. Kleipool................ Director of Corporate Planning of Getronics NV; Former
Financial Director of RAET N.V.; Director of Getronics
Acquisition, Inc.
S.A. van Maasakker............... Corporate Secretary and Head Legal Counsel of Getronics
NV; Former Corporate Secretary and Legal Counsel of KNP
LEYKAM Austria AG; Director of Getronics Acquisition,
Inc.; Former Legal Counsel of Buhrmann
M. Kimmel........................ Director of Personnel & Organization of Getronics
Maintenance & Installation; Director of Personnel &
Organization of Getronics Networks & Services
A. Smeding....................... Manager Group Accounting & Consolidation; Manager Group
Reporting & Information
</TABLE>
I-2
<PAGE> 53
Copies of the Letters of Transmittal, properly completed and duly signed,
will be accepted. The Letters of Transmittal, certificates for the Offer
Securities and any other required documents should be sent by each holder of
Offer Securities or such holder's broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of the addresses set forth
below:
The Depositary for the Offer is:
Citibank, N.A.
By Hand: By Mail: By Overnight Courier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Actions Corporate Actions Corporate Actions
111 Wall Street, P.O. Box 2544 525 Washington Boulevard
5th Floor Window Jersey City, New Jersey Suite 4660
New York, New York 10043 07303-2544 Jersey City, New Jersey
07303
For Information:
(877) 248-4237
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers as set forth below. Additional copies of this Offer to Purchase, the
Letters of Transmittal, or other related tender offer materials may be
obtained from the Information Agent or from brokers, dealers, commercial banks
or trust companies.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue
5th Floor
New York, New York 10022
Call Collect (212) 754-8000
Toll Free: (800) 566-9061
Bankers and Brokerage Firms, Please Call: (800) 662-5200
Stockholders, Please Call: (800) 566-9061
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
North Tower
New York, New York 10281-1305
(212) 449-8971 (Call Collect)
<PAGE> 1
Exhibit 2
LETTER OF TRANSMITTAL
To Tender
Shares of Common Stock (Including the Associated Rights), Shares of 6 1/2%
Series B Cumulative Convertible Preferred Stock, Depositary Shares (each
representing a 1/20th interest in a share of 6 1/2% Series B Cumulative
Convertible Preferred Stock) and/or Common Stock Purchase Warrants
of
Wang Laboratories, Inc.
Pursuant to the Offer to Purchase
Dated May 10, 1999
by
Getronics Acquisition, Inc.
a wholly-owned subsidiary of
Getronics NV
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JUNE 7, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
Citibank, N.A.
<TABLE>
<S> <C> <C>
By Hand: By Mail: By Overnight Courier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Actions Corporate Actions Corporate Actions
111 Wall Street, 5th Floor Window P.O. Box 2544 525 Washington Boulevard, Suite 4660
New York, New York 10043 Jersey City, New Jersey 07303-2544 Jersey City, New Jersey 07303
</TABLE>
For Information:
(877) 248-4237
DESCRIPTION OF OFFER SECURITIES TENDERED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) and Address(es) of Registered Holder(s)
(Pease fill in, if blank, exactly as name(s) appear(s)l Offer Securities Tendered
on the certificate(s)) (Attach additional list if necessary)
----------------------------------------------------------------------------------------------------------
Total Number of
Offer Securities
Offer Security Evidenced by Number
Certificate Offer Security of Offer Securities
Number(s) Certificate(s) Tendered:*
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
<S> <C> <C> <C>
Total Offer Securities
Tendered......................
</TABLE>
- --------------------------------------------------------------------------------
* Unless otherwise indicated, it will be assumed that all Offer Securities
evidenced by any Offer Security Certificate(s) delivered to the
Depositary are being tendered. See Instruction 4.
<PAGE> 2
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders of certificates
representing (i) shares of Common Stock, (ii) shares of Series B Preferred
Stock, (iii) Depositary Shares and/or (iv) Common Stock Purchase Warrants (as
such terms are defined in the Offer to Purchase and, collectively, the "Offer
Securities") (such holders of Offer Securities, collectively, the "Holders").
If you hold Offer Securities in book-entry form, you may tender your Offer
Securities by book-entry transfer to the account maintained by the Depositary
at The Depository Trust Company ("DTC") (the "Book-Entry Transfer Facility"),
along with an Agent's Message (as defined in the Offer to Purchase), pursuant
to the procedures set forth in Section 3--"Procedures for Tendering Offer
Securities" of the Offer to Purchase. Holders who tender Offer Securities by
book-entry transfer are referred to herein as "Book-Entry Holders" and other
Holders are referred to herein as "Certificate Holders."
Holders whose certificates evidencing Offer Securities (the "Offer Security
Certificates") are not immediately available or who cannot deliver their Offer
Security Certificates and all other documents required hereby to the
Depositary on or prior to the Expiration Date (as defined in Section 1--"Terms
of the Offer" of the Offer to Purchase), or who cannot comply with the book-
entry transfer procedures on a timely basis, may nevertheless tender their
Offer Securities according to the guaranteed delivery procedure set forth in
Section 3--"Procedures for Tendering Offer Securities" of the Offer to
Purchase. See Instruction 2 of this Letter of Transmittal. DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
[_]CHECK HERE IF THE OFFER SECURITIES ARE BEING TENDERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s) _________________________________________
Window Ticket Number (if any) ___________________________________________
Date of Execution of Notice of Guaranteed Delivery ______________________
Name of Institution which Guaranteed Delivery ___________________________
[_]CHECK HERE IF TENDER IS BEING MADE OF LOST OR MUTILATED SECURITIES. SEE
INSTRUCTION 9.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
2
<PAGE> 3
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Getronics Acquisition, Inc. (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of
Getronics NV, a public company with limited liability incorporated under the
laws of The Netherlands with its corporate seat in Amsterdam, The Netherlands
("Parent"), (i) the above-described shares of common stock, par value $0.01
per share, including the associated rights ("Common Stock"), (ii) the above-
described shares of 6 1/2% Series B Cumulative Convertible Preferred Stock,
par value $0.01 per share ("Series B Preferred Stock"), (iii) the above-
described depositary shares, each representing a 1/20th interest in a share of
Series B Preferred Stock ("Depositary Shares") and/or (iv) the above-described
warrants, other than the Special Common Stock Warrant (as defined in the Offer
to Purchase), to purchase shares of Common Stock ("Common Stock Purchase
Warrants" and together with Common Stock, Series B Preferred Stock and
Depositary Shares, the "Offer Securities") of Wang Laboratories, Inc., a
company organized under the laws of Delaware (the "Company") upon the terms
and subject to the conditions set forth in the Offer to Purchase dated May 10,
1999 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and
in this Letter of Transmittal (which, as may be amended and supplemented from
time to time, together with the Offer to Purchase, constitutes the "Offer").
The undersigned understands that the Purchaser reserves the right to assign to
an affiliate of the Parent the right to purchase all or any portion of the
Offer Securities tendered pursuant to the Offer, but the undersigned further
understands that any such assignment will not relieve the Purchaser of its
obligations under the Offer and will in no way prejudice the rights of
tendering Holders to receive payment for the Offer Securities validly tendered
and accepted for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, subject to, and
effective upon, acceptance for payment of and payment for the Offer Securities
tendered herewith in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon
the order of, the Purchaser, all right, title and interest in and to all of
the Offer Securities that are being tendered hereby and any and all dividends,
distributions, rights, or other securities issued or issuable in respect of
such Offer Securities on or after May 3, 1999 (collectively, "Distributions"),
and appoints the Depositary the true and lawful agent and attorney-in-fact of
the undersigned with respect to such Offer Securities and all Distributions
with full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest) to (a) transfer ownership of such
Offer Securities and all Distributions, together with all accompanying
evidences of transfers and authenticity, to or upon the order of the
Purchaser, (b) present such Offer Securities and all Distributions for
transfer on the books of the Company and (c) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Offer Securities
and all Distributions, all in accordance with the terms and subject to the
conditions of the Offer as set forth in the Offer to Purchase.
The undersigned hereby irrevocably appoints each designee of the Purchaser
as such attorney-in-fact and proxy of the undersigned, with full power of
substitution, to vote in such manner as each such attorney-in-fact and proxy
(or any substitute thereof) shall deem proper in its sole discretion, and to
otherwise act (including pursuant to written consent) to the full extent of
the undersigned's rights with respect to the Offer Securities and all
Distributions tendered hereby and accepted for payment by the Purchaser prior
to the time of such vote or action. All such proxies shall be considered
coupled with an interest in the tendered Offer Securities and shall be
irrevocable and are granted in consideration of, and is effective upon, the
acceptance for payment of such Offer Securities and all Distributions by the
Purchaser in accordance with the terms of the Offer. Such acceptance for
payment by the Purchaser shall revoke, without further action, any other proxy
or power of attorney granted by the undersigned at any time with respect to
such Offer Securities and all Distributions and no subsequent proxies or
powers of attorney will be given (or, if given, will not be deemed effective)
with respect thereto by the undersigned. The designees of the Purchaser will,
with respect to the Offer Securities, rights or other securities for which the
appointment is effective, be empowered to exercise all voting and other rights
as they in their sole discretion may deem proper at any annual, special,
adjourned or postponed meeting of the Company's stockholders, by written
consent or otherwise, and the Purchaser reserves the right to require that, in
order for the Offer Securities, rights or other securities to be deemed
validly tendered, immediately upon the Purchaser's acceptance for payment of
such Offer Securities, the Purchaser must be able to exercise all rights
(including, without limitation, all voting rights and rights of conversion)
with respect to such Offer Securities, rights or other securities and receive
all dividends and distributions.
3
<PAGE> 4
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Offer Securities
and all Distributions tendered hereby and that, when the same are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment, and transfer of the Offer Securities and all
Distributions tendered hereby. In addition, the undersigned shall promptly
remit and transfer to the Depositary for the account of the Purchaser any and
all Distributions in respect of the Offer Securities tendered hereby,
accompanied by appropriate documentation of transfer and, pending such
remittance or appropriate assurance thereof, the Purchaser shall be entitled
to all rights and privileges as owner of any such Distributions and may
withhold the entire purchase price or deduct from the purchase price the
amount or value thereof, as determined by the Purchaser in its sole
discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Subject to the withdrawal rights set forth in Section 4--
"Withdrawal Rights" of the Offer to Purchase, the tender of the Offer
Securities and related Distributions hereby made is irrevocable.
The undersigned understands that tenders of the Offer Securities pursuant to
any of the procedures described in Section 3--"Procedures for Tendering Offer
Securities" of the Offer to Purchase and in the instructions hereto will
constitute the undersigned's acceptance of the terms and conditions of the
Offer. The Purchaser's acceptance for payment of such Offer Securities will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions set forth in the Offer. The
undersigned recognizes that under certain circumstances set forth in the Offer
to Purchase, the Purchaser may not be required to accept for payment any of
the Offer Securities tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates
evidencing Offer Securities ("Offer Security Certificates") not tendered or
not accepted for payment in the name(s) of the registered holder(s) appearing
under "Description of Offer Securities Tendered." Similarly, unless otherwise
indicated under "Special Delivery Instructions," please mail the check for the
purchase price and/or return any Offer Security Certificates not tendered or
not accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Offer
Securities Tendered." In the event that both the Special Delivery Instructions
and the Special Payment Instructions are completed, please issue the check for
the purchase price and/or issue any Offer Security Certificates not so
tendered or accepted for payment in the name of, and deliver said check and/or
return such Offer Security Certificates to, the person or persons so
indicated. The undersigned recognizes that the Purchaser has no obligation,
pursuant to the Special Payment Instructions, to transfer any Offer Securities
from the name of the registered holder thereof if the Purchaser does not
accept for payment any of the Offer Securities so tendered.
4
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7) (See Instructions 1, 5, 6 and 7)
To be completed ONLY if To be completed ONLY if
certificate(s) for Offer certificate(s) for Offer
Securities not tendered or not Securities not tendered or not
purchased and/or the check for purchased and/or the check for
the purchase price of Offer the purchase price of Offer
Securities purchased are to be Securities purchased are to be
issued in the name of someone sent to someone other than the
other than the undersigned. undersigned, or to the
undersigned at an address other
than that shown above.
Issue check and/or certificate(s)
to:
Name: ____________________________
Mail check and/or certificate(s)
to:
Please Type or Print
Address: _________________________ Name: ___________________________
Please Type or Print
__________________________________
(Include Zip Code) Address: ________________________
_________________________________* _________________________________
(Tax Identification or Social (Include Zip Code)
Security No.) _________________________________
(See Substitute Form W-9 Included (Tax Identification or Social
Herewith) Security No.)
__________________________________ (See Substitute Form W-9
* Signature Guarantee required Included Herewith)
5
<PAGE> 6
IMPORTANT
HOLDER(S) SIGN HERE
(See Instructions 1 and 5)
(Please Complete Substitute Form W-9 Contained Herein)
Signature(s) of Holder(s): _____________________________________________________
Date: _________________________ , 1999
- --------------------------------------
(Tax Identification or Social
Security No.)
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Offer
Security Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificate(s) and documents
transmitted with this Letter of Transmittal. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or other persons acting in a fiduciary or representative capacity,
please provide the following information and see Instruction 5.)
Name(s): _______________________________________________________________________
(Please Print)
Capacity (Full Title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Telephone No.)
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
(Please Type or Print)
Title: _________________________________________________________________________
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(Include Zip Code)
Name of Firm: __________________________________________________________________
Area Code and Telephone Number: ________________________________________________
Date: _________________________ , 1999
6
<PAGE> 7
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loan associations and brokerage
houses) which is a participant in the Security Transfer Agents Medallion
Program, The New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (an "Eligible Institution"). Signatures
on this Letter of Transmittal need not be guaranteed (a) if this Letter of
Transmittal is signed by the registered Holder(s) of the Offer Securities
tendered herewith and such Holder(s) have not completed the box entitled
"Special Payment Instructions" on this Letter of Transmittal or (b) if such
Offer Securities are tendered for the account of an Eligible Institution. See
Instruction 5 of this Letter of Transmittal.
2. Delivery of Letter of Transmittal and Offer Security Certificates or
Book-Entry Confirmations. This Letter of Transmittal is to be used if Offer
Security Certificates are to be forwarded herewith. Offer Security
Certificates evidencing all physically tendered Offer Securities along with
this Letter of Transmittal (or a copy thereof), properly completed and duly
executed with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
one of its addresses set forth herein on or prior to the Expiration Date (as
defined in Section 1--"Terms of the Offer" of the Offer to Purchase). Offer
Securities held through DTC must be tendered to the Depositary by means of
delivery of an Agent's Message (as more fully described in the Offer to
Purchase). The Depositary Shares may be tendered only means of Book-Entry
Transfer (as such securities have been issued only in book-entry form).
Holders whose Offer Security Certificates are not immediately available or
who cannot deliver their Offer Security Certificates and all other required
documents to the Depositary on or prior to the Expiration Date or who cannot
complete the procedures for book-entry transfer on a timely basis may
nevertheless tender their Offer Securities by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedure set forth in Section 3--"Procedures for Tendering Offer Securities"
of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be
made by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Purchaser, must be received by the Depositary on or prior to the
Expiration Date; and (iii) Offer Security Certificates, as well as a Letter of
Transmittal, properly completed and duly executed with any required signature
guarantees, and all other documents required by this Letter of Transmittal
must be received by the Depositary within three New York Stock Exchange
trading days after the date of execution of such Notice of Guaranteed
Delivery.
If Offer Security Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal (or a
copy thereof) must accompany each such delivery.
The method of delivery of this Letter of Transmittal, Offer Security
Certificates and all other required documents, including delivery through the
Book-Entry Transfer Facility, where applicable, is at the election and risk of
the tendering Holder. Delivery will be deemed made only when actually received
by the Depositary. If such delivery is by mail, registered mail with return
receipt requested, properly insured, is recommended. In all cases, sufficient
time should be allowed to assure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Offer Securities will be purchased. All tendering Holders, by
execution of this Letter of Transmittal (or a copy hereof), waive any right to
receive any notice of the acceptance of their Offer Securities for payment.
3. Inadequate Space. If the space provided under "Description of Offer
Securities Tendered" is inadequate, the Offer Security Certificate numbers
and/or the number of Offer Securities should be listed on a separate schedule
and attached hereto.
4. Partial Tenders (Applicable to Holders of Offer Security Certificates
Only). If fewer than all the Offer Securities evidenced by any Offer Security
Certificate submitted are to be tendered, fill in the number of Offer
Securities which are to be tendered in the box entitled "Number of Offer
Securities Tendered." In such cases, new Offer Security
7
<PAGE> 8
Certificate(s) evidencing the remainder of the Offer Securities that were
evidenced by Offer Security Certificate(s) delivered to the Depositary will be
sent to the person signing this Letter of Transmittal, unless otherwise
provided in the box entitled "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Offer
Securities represented by Offer Security Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered Holders of the Offer
Securities tendered hereby, the signatures must correspond with the names as
written on the face of the Offer Security Certificates without alteration,
enlargement or any change whatsoever.
If any of the Offer Securities tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Offer Securities are registered in different names on
several Offer Security Certificates, it will be necessary to complete, sign
and submit as many separate Letters of Transmittal as there are different
registrations of the Offer Securities.
If this Letter of Transmittal or any Offer Security Certificate or stock
power is signed by a trustee, executor, administrator, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
evidence satisfactory to the Depositary and the Purchaser of such person's
authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Offer Securities transmitted hereby, no endorsements of Offer Security
Certificates or separate stock powers are required unless payment is to be
made to, or Offer Security Certificates evidencing the Offer Securities not
tendered or purchased are to be issued in the name of, a person other than the
registered holder(s). Signatures on such Offer Security Certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder of the Offer Securities tendered hereby, the Offer Security
Certificate(s) must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered holder or
holders appear(s) on such Offer Security Certificate(s). Signatures on such
Offer Security Certificates or stock powers must be guaranteed by an Eligible
Institution.
6. Transfer Taxes. Except as otherwise provided in this Instruction 6, the
Purchaser will pay or cause to be paid any transfer taxes with respect to the
transfer and sale of purchased Offer Securities to it or its order pursuant to
the Offer. If, however, payment of the purchase price of any Offer Securities
purchased is to be made to or, in the circumstances permitted hereby, if Offer
Security Certificates for the Offer Securities not tendered or purchased are
to be registered in the name of any person other than the registered holder,
or if tendered Offer Security Certificates are registered in the name of any
person other than the person(s) signing this Letter of Transmittal, the amount
of any transfer taxes (whether imposed on the registered holder or such
person) payable on account of the transfer to such person will be deducted
from the purchase price if satisfactory evidence of the payment of such taxes,
or exemption therefrom, is not submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Offer Security Certificates listed in
this Letter of Transmittal.
7. Special Payment and Delivery Instructions. If a check for the purchase
price is to be issued in the name of, and/or Offer Security Certificates for
the Offer Securities not tendered or not accepted for payment are to be issued
in the name of a person other than the signer of this Letter of Transmittal or
if a check and/or such Offer Security Certificates are to be mailed to someone
other than the signer of this Letter of Transmittal or to an address other
than that shown above, the appropriate boxes on this Letter of Transmittal
should be completed.
8. Requests for Assistance or Additional Copies. Questions or requests for
assistance may be directed to, or additional copies of the Offer to Purchase,
this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender
offer materials may be obtained from, the Information Agent or the Dealer
Manager at their respective addresses set forth on the back cover of the Offer
to Purchase or from your broker, dealer, commercial bank or trust company.
8
<PAGE> 9
9. Lost or Destroyed Offer Security Certificates. If any Offer Security
Certificates have been lost or destroyed, the Holder should promptly notify
the Company's transfer agent, American Stock Transfer and Trust Company at
(212) 936-5100. The Holder will then be instructed as to the procedure to be
followed in order to replace the relevant Offer Security Certificates. This
Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost or destroyed Offer Security Certificates have
been followed.
IMPORTANT TAX INFORMATION
Under United States federal income tax law, a tendering Holder may be
subject to backup withholding tax at a rate of 31% with respect to payments by
the Depositary pursuant to the Offer unless such Holder (i) is a corporation
or other exempt recipient and, if required, establishes its exemption from
backup withholding, (ii) provides its correct taxpayer identification number
("TIN"), certifies that it is not currently subject to backup withholding and
otherwise complies with applicable requirements of the backup withholding
rules, or (iii) certifies as to its non-United States status. Completion of a
Substitute Form W-9, in the case of a U.S. Holder, provided in this Letter of
Transmittal should be used for this purpose. Failure to provide such Holder's
TIN on the Substitute Form W-9, if applicable, may subject the tendering
Holder (or other payee) to a $50 penalty imposed by the Internal Revenue
Service ("IRS"). More serious penalties may be imposed for providing false
information which, if willfully done, may result in fines and/or imprisonment.
The box in part 3 of the Substitute Form W-9 may be checked if the tendering
Holder (or other payee) is required to submit a Substitute Form W-9 and has
not been issued a TIN and has applied for a TIN or intends to apply for a TIN
in the near future. If the box in Part 3 is so checked and the Depositary is
not provided with a TIN by the time of payment, the Depositary will withhold
31% on all such payments of the Offer Price until a TIN is provided to the
Depositary. In order for a foreign Holder to qualify as an exempt recipient,
that Holder should submit an IRS Form W-8 or a Substitute Form W-8, signed
under penalties of perjury, attesting to that Holder's exempt status. Such
forms can be obtained from the Depositary. Failure to provide the information
on the form may subject tendering Holders to 31% United States federal income
tax withholding on the payment of the purchase price of cash pursuant to the
Offer.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A COPY HEREOF) TOGETHER WITH OFFER
SECURITY CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS OR THE
NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY ON
OR PRIOR TO THE EXPIRATION DATE.
9
<PAGE> 10
TO BE COMPLETED BY ALL TENDERING HOLDERS
PAYER'S NAME: Citibank, N.A.
- --------------------------------------------------------------------------------
Part 1--PLEASE PROVIDE YOUR
TIN IN THE BOX AT RIGHT AND ----------------------
CERTIFY BY SIGNING AND Social Security Number
DATING BELOW
SUBSTITUTE OR
Form W-9
Department of ----------------------
the Treasury Employer Identification
Internal Number
Revenue ----------------------------------------------------------
Service Part 2--If you are Part 3--If you are
exempt from backup awaiting your TIN,
withholding, please please check the
check the box: [_] box: [_]
Payer's
Request for
Taxpayer ----------------------------------------------------------
Identification
Number ("TIN") Part 4--Certification--Under penalties of
and perjury, I certify that:
Certification
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am waiting
for a number to be issued to me), and
(2) I am not subject to backup withholding because (i)
I am exempt from backup withholding, (ii) I have
not been notified by the Internal Revenue Service
(the "IRS") that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (iii) the IRS has
notified me that I am no longer subject to backup
withholding.
Certification Instructions--You must cross out item
(2) above if you have been notified by the IRS that
you are subject to backup withholding because of
under-reporting interest or dividends on your tax
return.
----------------------------------------------------------
Signature ________________________ Date __________
Name (Please Print) _________________________________
Address _____________________________________________
City, State and Zip Code ____________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF THE SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration office or (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all reportable cash
payments made to me thereafter will be withheld until I provide a taxpayer
identification number.
Signature: ____________________________________ Date: ______________
10
<PAGE> 11
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue
5th Floor
New York, New York 10022
Call Collect: (212) 754-8000
Toll Free: (800) 566-9061
Bankers and Brokerage Firms, Please Call: (800) 662-5200
Stockholders, Please Call: (800) 566-9061
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
North Tower
New York, New York 10281-1305
(212) 449-8971 (Call Collect)
11
<PAGE> 12
LETTER OF TRANSMITTAL
To Tender
Shares of 4 1/2% Series A Cumulative Convertible Preferred Stock
and/or
The Special Common Stock Warrant
of
Wang Laboratories, Inc.
Pursuant to the Offer to Purchase
Dated May 10, 1999
by
Getronics Acquisition, Inc.
a wholly-owned subsidiary of
Getronics NV
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JUNE 7, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
Citibank, N.A.
<TABLE>
<S> <C> <C>
By Hand: By Mail: By Overnight Courier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Actions Corporate Actions Corporate Actions
111 Wall Street, 5th Floor Window P.O. Box 2544 525 Washington Boulevard, Suite 4660
New York, New York 10043 Jersey City, New Jersey 07303-2544 Jersey City, New Jersey 07303
</TABLE>
For Information:
(877) 248-4237
DESCRIPTION OF SECURITIES TENDERED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) and Address(es) of Registered Holder(s)
(Pease fill in, if blank, exactly as name(s) appear(s)l Securities Tendered
on the certificate(s)) (Attach additional list if necessary)
-----------------------------------------------------------------------------------------------
Total Number
of Securities
Security Evidenced by Number
Certificate Security of Securities
Number(s) Certificate(s) Tendered:*
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
<S> <C> <C> <C>
Total Securities
Tendered.................
</TABLE>
- --------------------------------------------------------------------------------
* Unless otherwise indicated, it will be assumed that all Securities
evidenced by any Security Certificate(s) delivered to the Depositary are
being tendered. See Instruction 4.
<PAGE> 13
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by the holder ("Holder") of
certificates representing (i) Series A Preferred Stock and (ii) the Special
Common Stock Warrant (as such terms are defined in the Offer to Purchase and,
collectively, the "Securities").
If certificates evidencing Securities (the "Security Certificates") are not
immediately available or cannot be delivered along with all other documents
required hereby to the Depositary on or prior to the Expiration Date (as
defined in Section 1--"Terms of the Offer" of the Offer to Purchase), the
Holder may nevertheless tender its Securities according to the guaranteed
delivery procedure set forth in Section 3--"Procedures for Tendering Offer
Securities" of the Offer to Purchase. See Instruction 2 of this Letter of
Transmittal.
[_]CHECK HERE IF THE SECURITIES ARE BEING TENDERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s) _________________________________________
Window Ticket Number (if any) ___________________________________________
Date of Execution of Notice of Guaranteed Delivery ______________________
Name of Institution which Guaranteed Delivery ___________________________
[_]CHECK HERE IF TENDER IS BEING MADE OF LOST OR MUTILATED SECURITY
CERTIFICATES. SEE INSTRUCTION 9.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
2
<PAGE> 14
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Getronics Acquisition, Inc. (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of
Getronics NV, a public company with limited liability incorporated under the
laws of The Netherlands with its corporate seat in Amsterdam (Municipality
Amsterdam), The Netherlands ("Parent"), (i) the above-described shares of 4
1/2% Series A Cumulative Convertible Preferred Stock, par value $0.01 per
share ("Series A Preferred Stock") and/or (ii) the above-described warrant to
purchase a certain number of shares of Common Stock upon exercise thereof
("Special Common Stock Warrant" and together with Series A Preferred Stock,
the "Securities") of Wang Laboratories, Inc., a company organized under the
laws of Delaware (the "Company") upon the terms and subject to the conditions
set forth in the Offer to Purchase dated May 10, 1999 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, as may be amended and supplemented from time to time,
together with the Offer to Purchase, constitutes the "Offer"). The undersigned
understands that the Purchaser reserves the right to assign to an affiliate of
the Parent the right to purchase all or any portion of the Securities tendered
pursuant to the Offer, but the undersigned further understands that any such
assignment will not relieve the Purchaser of its obligations under the Offer
and will in no way prejudice the rights of the Holder to receive payment for
the Securities validly tendered and accepted for payment pursuant to the
Offer.
Upon the terms and subject to the conditions of the Offer, subject to, and
effective upon, acceptance for payment of and payment for the Securities
tendered herewith in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon
the order of, the Purchaser, all right, title and interest in and to all of
the Securities that are being tendered hereby and any and all dividends,
distributions, rights, or other securities issued or issuable in respect of
such Securities on or after May 3, 1999 (collectively, "Distributions"), and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Securities and all Distributions with full
power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest) to (a) transfer ownership of such
Securities and all Distributions, together with all accompanying evidences of
transfers and authenticity, to or upon the order of the Purchaser, (b) present
such Securities and all Distributions for transfer on the books of the Company
and (c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Securities and all Distributions, all in accordance with the
terms and subject to the conditions of the Offer as set forth in the Offer to
Purchase.
The undersigned hereby irrevocably appoints each designee of the Purchaser
as such attorney-in-fact and proxy of the undersigned, with full power of
substitution, to vote in such manner as each such attorney-in-fact and proxy
(or any substitute thereof) shall deem proper in its sole discretion, and to
otherwise act (including pursuant to written consent) to the full extent of
the undersigned's rights with respect to the Securities and all Distributions
tendered hereby and accepted for payment by the Purchaser prior to the time of
such vote or action. All such proxies shall be considered coupled with an
interest in the tendered Securities and shall be irrevocable and are granted
in consideration of, and is effective upon, the acceptance for payment of such
Securities and all Distributions by the Purchaser in accordance with the terms
of the Offer. Such acceptance for payment shall revoke, without further
action, any other proxy or power of attorney granted by the undersigned at any
time with respect to such Securities and all Distributions and no subsequent
proxies will be given (or, if given, will not be deemed effective) with
respect thereto by the undersigned. The designees of the Purchaser will, with
respect to the Securities, rights or other securities for which the
appointment is effective, be empowered to exercise all voting and other rights
as they in their sole discretion may deem proper at any annual, special,
adjourned or postponed meeting of the Company's stockholders, by written
consent or otherwise, and the Purchaser reserves the right to require that, in
order for the Securities, rights or other securities to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Securities, the Purchaser must be able to exercise all rights (including,
without limitation, all voting rights and rights of conversion) with respect
to such Securities, rights or other securities and receive all dividends and
distributions.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Securities and
all Distributions tendered hereby and that, when the same are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request,
3
<PAGE> 15
execute and deliver any additional documents deemed by the Depositary or the
Purchaser to be necessary or desirable to complete the sale, assignment, and
transfer of the Securities and all Distributions tendered hereby. In addition,
the undersigned shall promptly remit and transfer to the Depositary for the
account of the Purchaser any and all Distributions in respect of the
Securities tendered hereby, accompanied by appropriate documentation of
transfer and, pending such remittance or appropriate assurance thereof, the
Purchaser shall be entitled to all rights and privileges as owner of any such
Distributions and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof, as determined by the Purchaser in
its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Subject to the withdrawal rights set forth in Section 4--
"Withdrawal Rights" of the Offer to Purchase, the tender of the Securities
hereby made is irrevocable.
The undersigned understands that tenders of the Securities pursuant to any
of the procedures described in Section 3--"Procedures for Tendering Offer
Securities" of the Offer to Purchase and in the instructions hereto will
constitute the undersigned's acceptance of the terms and conditions of the
Offer. The Purchaser's acceptance for payment of such Securities will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions set forth in the Offer to Purchase.
The undersigned recognizes that under certain circumstances set forth in the
Offer to Purchase, the Purchaser may not be required to accept for payment any
of the Securities tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates
evidencing Securities ("Security Certificates") not tendered or not accepted
for payment in the name(s) of the registered holder(s) appearing under
"Description of Securities Tendered." Similarly, unless otherwise indicated
under "Special Delivery Instructions," please mail the check for the purchase
price and/or return any Security Certificates not tendered or not accepted for
payment (and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Securities Tendered." In
the event that both the Special Delivery Instructions and the Special Payment
Instructions are completed, please issue the check for the purchase price
and/or issue any Security Certificates not so tendered or accepted for payment
in the name of, and deliver said check and/or return such Security
Certificates to, the person or persons so indicated. The undersigned
recognizes that the Purchaser has no obligation, pursuant to the Special
Payment Instructions, to transfer any Securities from the name of the
registered holder thereof if the Purchaser does not accept for payment any of
the Securities so tendered.
4
<PAGE> 16
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7) (See Instructions 1, 5, 6 and 7)
To be completed ONLY if To be completed ONLY if
certificate(s) for Securities certificate(s) for Securities
not tendered or not purchased not tendered or not purchased
and/or the check for the and/or the check for the
purchase price of Securities purchase price of Securities
purchased are to be issued in purchased are to be sent to
the name of someone other than someone other than the
the undersigned. undersigned, or to the
undersigned at an address other
than that shown above.
Issue check and/or certificate(s)
to:
Name: ____________________________
Mail check and/or certificate(s)
to:
Please Type or Print
Address: _________________________ Name: ___________________________
Please Type or Print
__________________________________
(Include Zip Code) Address: ________________________
_________________________________* _________________________________
(Tax Identification or Social (Include Zip Code)
Security No.) _________________________________
(See Substitute Form W-9 Included (Tax Identification or Social
Herewith) Security No.)
__________________________________ (See Substitute Form W-9
* Signature Guarantee required Included Herewith)
5
<PAGE> 17
IMPORTANT
HOLDER(S) SIGN HERE
(See Instructions 1 and 5)
(Please Complete Substitute Form W-9 Contained Herein)
Signature(s) of Holder(s): _____________________________________________________
Date: _________________________ , 1999
- --------------------------------------
(Tax Identification or Social
Security No.)
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Security Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificate(s) and documents
transmitted with this Letter of Transmittal. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or other person acting in a fiduciary or representative capacity,
please provide the following information and see Instruction 5.)
Name(s): _______________________________________________________________________
(Please Print)
Capacity (Full Title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Telephone No.)
GUARANTEE OF SIGNATURE(s)
(See Instructions 1 and 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
(Please Type or Print)
Title: _________________________________________________________________________
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(Include Zip Code)
Name of Firm: __________________________________________________________________
Area Code and Telephone Number: ________________________________________________
Date: _________________________ , 1999
6
<PAGE> 18
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loan associations and brokerage
houses) which is a participant in the Security Transfer Agents Medallion
Program, The New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (an "Eligible Institution"). Signatures
on this Letter of Transmittal need not be guaranteed (a) if this Letter of
Transmittal is signed by the registered Holder(s) of the Securities tendered
herewith and such Holder(s) have not completed the box entitled "Special
Payment Instructions" on this Letter of Transmittal or (b) if such Securities
are tendered for the account of an Eligible Institution. See Instruction 5 of
this Letter of Transmittal.
2. Delivery of Letter of Transmittal and Security Certificates. This Letter
of Transmittal is to be used if Security Certificates are to be forwarded
herewith. Security Certificates evidencing all physically tendered Securities
along with this Letter of Transmittal (or a copy thereof), properly completed
and duly executed with any required signature guarantees, and any other
documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth herein on or prior to the
Expiration Date (as defined in Section 1--"Terms of the Offer" of the Offer to
Purchase).
If the Security Certificates are not immediately available or cannot be
delivered along with all other required documents to the Depositary on or
prior to the Expiration Date, Microsoft may nevertheless tender its Securities
by properly completing and duly executing a Notice of Guaranteed Delivery
pursuant to the guaranteed delivery procedure set forth in Section 3--
"Procedures for Tendering Offer Securities" of the Offer to Purchase. Pursuant
to such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, must be
received by the Depositary on or prior to the Expiration Date; and (iii)
Security Certificates as well as a Letter of Transmittal, properly completed
and duly executed with any required signature guarantees, and all other
documents required by this Letter of Transmittal must be received by the
Depositary within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery.
If Security Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal (or a
copy thereof) must accompany each such delivery.
The method of delivery of this Letter of Transmittal, Security Certificates
and all other required documents is at the election and risk of the tendering
Holder. Delivery will be deemed made only when actually received by the
Depositary. If such delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed to assure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Securities will be purchased. Microsoft, by execution of this
Letter of Transmittal (or a copy hereof), waives any right to receive any
notice of the acceptance of its Securities for payment.
3. Inadequate Space. If the space provided under "Description of Securities
Tendered" is inadequate, the Security Certificate numbers and/or the number of
Securities should be listed on a separate schedule and attached hereto.
4. Partial Tenders. If fewer than all the Securities evidenced by any
Security Certificate submitted are to be tendered, fill in the number of
Securities which are to be tendered in the box entitled "Number of Securities
Tendered." In such cases, new Security Certificate(s) evidencing the remainder
of the Securities that were evidenced by Security Certificate(s) delivered to
the Depositary will be sent to the person signing this Letter of Transmittal,
unless otherwise provided in the box entitled "Special Delivery Instructions"
on this Letter of Transmittal, as soon as practicable after the Expiration
Date. All Securities represented by Security Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the
Securities tendered hereby, the signatures must correspond with the names as
written on the face of the Security Certificates without alteration,
enlargement or any change whatsoever.
7
<PAGE> 19
If this Letter of Transmittal or any Security Certificate or stock power is
signed by a trustee, executor, administrator, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and evidence satisfactory to the
Depositary and the Purchaser of such person's authority so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Securities transmitted hereby, no endorsements of Security Certificates or
separate stock powers are required unless payment is to be made to, or
Security Certificate(s) evidencing the Securities not tendered or purchased
are to be issued in the name of, a person other than the registered holder(s).
Signatures on such Security Certificates or stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder of the Securities tendered hereby, the Security
Certificate(s) must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered holder or
holders appear(s) on such Security Certificate(s). Signatures on such Security
Certificates or stock powers must be guaranteed by an Eligible Institution.
6. Transfer Taxes. Except as otherwise provided in this Instruction 6, the
Purchaser will pay or cause to be paid any transfer taxes with respect to the
transfer and sale of purchased Securities to it or its order pursuant to the
Offer. If, however, payment of the purchase price of any Securities purchased
is to be made to or, in the circumstances permitted hereby, if Security
Certificates for the Securities not tendered or purchased are to be registered
in the name of any person other than the registered holder, or if tendered
Security Certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any transfer taxes
(whether imposed on the registered holder or such person) payable on account
of the transfer to such person will be deducted from the purchase price if
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
not submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Security Certificates listed in this
Letter of Transmittal.
7. Special Payment and Delivery Instructions. If a check for the purchase
price is to be issued in the name of, and/or Security Certificates for the
Securities not tendered or not accepted for payment are to be issued in the
name of a person other than the signer of this Letter of Transmittal or if a
check and/or such Security Certificates are to be mailed to someone other than
the signer of this Letter of Transmittal or to an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed.
8. Requests for Assistance or Additional Copies. Questions or requests for
assistance may be directed to, or additional copies of the Offer to Purchase,
this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender
offer materials may be obtained from, the Information Agent or the Dealer
Manager at their respective addresses set forth on the back cover of the Offer
to Purchase or from your broker, dealer, commercial bank or trust company.
9. Lost or Destroyed Security Certificates. If any Security Certificates
have been lost or destroyed, the Holder should promptly notify the Company's
transfer agent, American Stock Transfer and Trust Company at (212) 936-5100.
The Holder will then be instructed as to the procedure to be followed in order
to replace the relevant Security Certificates. This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost
or destroyed Security Certificates have been followed.
8
<PAGE> 20
IMPORTANT TAX INFORMATION
Under United States federal income tax law, a tendering Holder may be
subject to backup withholding tax at a rate of 31% with respect to payments by
the Depositary pursuant to the Offer unless such Holder (i) is a corporation
or other exempt recipient and, if required, establishes its exemption from
backup withholding, (ii) provides its correct taxpayer identification number
("TIN"), certifies that it is not currently subject to backup withholding and
otherwise complies with applicable requirements of the backup withholding
rules, or (iii) certifies as to its non-United States status. Completion of a
Substitute Form W-9, in the case of a U.S. Holder, provided in this Letter of
Transmittal should be used for this purpose. Failure to provide such Holder's
TIN on the Substitute Form W-9, if applicable, may subject the tendering
Holder (or other payee) to a $50 penalty imposed by the Internal Revenue
Service ("IRS"). More serious penalties may be imposed for providing false
information which, if willfully done, may result in fines and/or imprisonment.
The box in part 3 of the Substitute Form W-9 may be checked if the tendering
Holder (or other payee) is required to submit a Substitute Form W-9 and has
not been issued a TIN and has applied for a TIN or intends to apply for a TIN
in the near future. If the box in Part 3 is so checked and the Depositary is
not provided with a TIN by the time of payment, the Depositary will withhold
31% on all such payments of the Offer Price until a TIN is provided to the
Depositary. In order for a foreign Holder to qualify as an exempt recipient,
that Holder should submit an IRS Form W-8 or a Substitute Form W-8, signed
under penalties of perjury, attesting to that Holder's exempt status. Such
forms can be obtained from the Depositary. Failure to provide the information
on the form may subject tendering Holders to 31% United States federal income
tax withholding on the payment of the purchase price of cash pursuant to the
Offer.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A COPY HEREOF) TOGETHER WITH
SECURITY CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS OR THE
NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY
ON OR PRIOR TO THE EXPIRATION DATE.
9
<PAGE> 21
TO BE COMPLETED BY ALL TENDERING HOLDERS
PAYER'S NAME: Citibank, N.A.
- --------------------------------------------------------------------------------
Part 1--PLEASE PROVIDE YOUR
TIN IN THE BOX AT RIGHT AND ----------------------
CERTIFY BY SIGNING AND Social Security Number
DATING BELOW
SUBSTITUTE OR
Form W-9
Department of ----------------------
the Treasury Employer Identification
Internal Number
Revenue ----------------------------------------------------------
Service Part 2--If you are Part 3--If you are
exempt from backup awaiting your TIN,
withholding, please please check the
check the box: [_] box: [_]
Payer's
Request for
Taxpayer ----------------------------------------------------------
Identification
Number ("TIN") Part 4--Certification--Under penalties of
and perjury, I certify that:
Certification
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am waiting
for a number to be issued to me), and
(2) I am not subject to backup withholding because (i)
I am exempt from backup withholding, (ii) I have
not been notified by the Internal Revenue Service
(the "IRS") that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (iii) the IRS has
notified me that I am no longer subject to backup
withholding.
Certification Instructions--You must cross out item
(2) above if you have been notified by the IRS that
you are subject to backup withholding because of
under-reporting interest or dividends on your tax
return.
----------------------------------------------------------
Signature ________________________ Date __________
Name (Please Print) _________________________________
Address _____________________________________________
City, State and Zip Code ____________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF THE SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration office or (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all reportable cash
payments made to me thereafter will be withheld until I provide a taxpayer
identification number.
Signature: ____________________________________ Date: ______________
10
<PAGE> 22
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue
5th Floor
New York, New York 10022
Call Collect: (212) 754-8000
Toll Free: (800) 566-9061
Bankers and Brokerage Firms, Please Call: (800) 662-5200
Stockholders, Please Call: (800) 566-9061
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
North Tower
New York, New York 10281-1305
(212) 449-8971 (Call Collect)
11
<PAGE> 1
Exhibit 3
FOR IMMEDIATE RELEASE [WANG GLOBAL LOGO]
Contact: Lucy Flynn, Wang
(978) 625-4525 [email protected]
WANG GLOBAL AND GETRONICS REACH AGREEMENT
Creates Five Billion Dollar Global Networked Technology Services and
Business Solutions Company
Wang Global Board Recommends Acceptance of Tender Offer
BILLERICA, Mass. (May 4, 1999) -Wang Global (NASDAQ: WANG) announced today that
it has entered into an agreement with Getronics NV of Amsterdam, the
Netherlands, providing for the acquisition of all the outstanding common stock
of Wang for $29.25 per share in cash. The transaction will be implemented
through a tender offer. The Wang Global board has voted to recommend acceptance
of the offer. The price represents a premium of 39% over the average share price
for the last 30 trading days. The total consideration is approximately $2.0
billion.
In accordance with the agreement, Getronics will promptly commence a cash
tender for any and all outstanding shares of Wang common stock and other
outstanding capital instruments on these terms. Any shares of common stock and
other capital instruments not acquired in the tender offer will be acquired for
cash in a subsequent merger on the same terms.
Wang stated that the tender will be made only pursuant to definitive
offering documents to be filed by Getronics with the Securities and Exchange
Commission.
The combined company will have annual revenues of approximately $5 billion,
33,000 employees, and operations in over 44 countries. It will be the largest
provider of networked technology services and business solutions in Europe and
one of the five largest in the world.
Wang Global Chairman and CEO Joseph M. Tucci will join Getronics
five-person Management Board along with CEO Cees van Luijk, Peter van Voorst and
Jan Docter of Getronics and Mias van Vuuren of Wang Global.
(more)
<PAGE> 2
ABOUT WANG GLOBAL
Headquartered in Billerica, Massachusetts, Wang Global is a leading
international networked technology services and solutions company providing a
comprehensive range of information technology services for today's
network-centric business environments. With annual revenues of over $3.0
billion, Wang Global designs, installs, operates and maintains global computing
and telecommunications networks for some of the world's largest multinational
companies. Services include systems architecture design, installation, warranty,
help desk, maintenance, software support, and management of enterprise networks
to the desktop. Wang Global integration services provide business solutions
primarily for the financial services industry as well as defense and civilian
government agencies. Wang Global employs approximately 20,000 professionals and
has subsidiaries and affiliates in over 40 countries. Information about Wang
Global and its services can be found on the World Wide Web at www.wang.com.
ABOUT GETRONICS
Getronics is one of the largest European computer services companies with
currently 12,500 employees and 1998 net sales of Dfl. 3.5 billion (US $ 1.65
billion).
For further information contact:
Getronics NV
Donauweg 10
1043 AJ Amsterdam
The Netherlands
Tel.: +31 20 586 1501
Fax: + 31 20 586 1568
www.getronics.com
This press release contains forward-looking statements that involve a
number of risks and uncertainties. Among the important factors that could cause
actual results to differ materially from those indicated by such forward-looking
statements are the successful completion of the Getronics transaction, changes
in the mix of the company's services business, competitive pressures, general
economic conditions and the risk factors detailed in the company's periodic
reports and registration statements filed with the Securities and Exchange
Commission.
###
<PAGE> 1
Exhibit 4
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Offer Securities. The Offer is made solely by the Offer to Purchase
dated May 10, 1999 and the related Letters of Transmittal and is being made to
all holders of Offer Securities. The Purchaser is not aware of any state where
the making of the Offer is prohibited by any applicable law. If the Purchaser
becomes aware of any jurisdiction where the making of the Offer or the
acceptance of Offer Securities is not in compliance with any applicable law, the
Purchaser will make a good faith effort to comply with such law. If, after such
good faith effort, the Purchaser cannot comply with such law, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Offer Securities in such jurisdiction. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of the Purchaser by
Merrill Lynch, Pierce, Fenner & Smith Incorporated or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
(Including the Associated Rights),
All of the Outstanding Shares of 41-2% Series A Cumulative
Convertible Preferred Stock,
All of the Outstanding Shares of 61-2% Series B Cumulative
Convertible Preferred Stock,
All of the Outstanding Depositary Shares
(each representing a 1/20th interest in a Share of
61-2% Series B Cumulative Convertible Preferred Stock),
All of the Outstanding Common Stock Purchase Warrants
and
The Outstanding Special Common Stock Warrant
of
Wang Laboratories, Inc.
at
$29.25 Net Per Share of Common Stock,
$1,271.73 Net Per Share of
41-2% Series A Cumulative Convertible Preferred Stock,
$1,101.17 Net Per Share of
61-2% Series B Cumulative Convertible Preferred Stock,
$55.05 Net Per Depositary Share,
$7.80 Net Per Common Stock Purchase Warrant
and
$6,250,000.00 Net for the Special Common Stock Warrant, respectively,
by
Getronics Acquisition, Inc.
A Wholly-Owned Subsidiary of
Getronics NV
Getronics Acquisition, Inc., a Delaware corporation (the "Purchaser"), and a
wholly-owned subsidiary of Getronics NV, a public company with limited liability
incorporated
<PAGE> 2
under the laws of The Netherlands with its corporate seat in Amsterdam, The
Netherlands ("Parent"), is offering to purchase (i) all of the issued and
outstanding shares of common stock, par value $0.01 per share, including the
associated rights (the "Common Stock"), of Wang Laboratories, Inc., a company
organized under the laws of Delaware (the "Company"), at a price of $29.25 per
share of Common Stock, net to the seller in cash, without interest thereon, (ii)
all of the issued and outstanding shares of 41/2% Series A Cumulative
Convertible Preferred Stock, par value $0.01 per share (the "Series A Preferred
Stock"), of the Company, at a price of $1,271.73 per share of Series A Preferred
Stock, net to the seller in cash, without interest thereon, (iii) all of the
issued and outstanding shares of 61/2% Series B Cumulative Convertible Preferred
Stock, par value $0.01 per share (the "Series B Preferred Stock"), of the
Company, at a price of $1,101.17 per share of Series B Preferred Stock, net to
the seller in cash, without interest thereon, (iv) all of the issued and
outstanding depositary shares, each representing a 1/20th interest in a share of
Series B Preferred Stock (the "Depositary Shares"), at a price of $55.05 per
Depositary Share, net to the seller in cash, without interest thereon, (v) all
of the issued and outstanding warrants (other than the Special Common Stock
Warrant) of the Company to purchase shares of Common Stock (the "Common Stock
Purchase Warrants"), at a price of $7.80 per Common Stock Purchase Warrant, net
to the seller in cash, without interest thereon and (vi) the issued and
outstanding warrant of the Company (the "Special Common Stock Warrant") giving
the holder the right to receive a certain number of shares of Common Stock upon
exercise thereof, at a price of $6,250,000.00, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated May 10, 1999 (the "Offer to Purchase") and in the
related Letters of Transmittal (which, as they may be amended and supplemented
from time to time, together constitute the "Offer"). Unless the context
indicates otherwise, as used herein, "Offer Securities" shall mean the shares of
Common Stock, the shares of Series A Preferred Stock, the shares of Series B
Preferred Stock, the Depositary Shares, the Common Stock Purchase Warrants and
the Special Common Stock Warrant. Unless the context indicates otherwise, all
references to shares of Common Stock shall include the associated rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of April 22, 1998,
by and between the Company and the American Stock Transfer and Trust Company
("ASTT"), as Rights Agent.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK
CITY TIME, ON MONDAY, JUNE 7, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not properly withdrawn prior to the expiration of the Offer a
number of Offer Securities which represent at least a majority of the Common
Stock Equivalents (as such term is defined in the Offer to Purchase) on the date
of purchase (the "Minimum Condition"), (ii) the receipt of certain governmental
approvals and (iii) the satisfaction of certain other terms and conditions
described in Section 14 of the Offer to Purchase.
<PAGE> 3
The Company has informed the Purchaser that, as of May 3, 1999, there were
issued and outstanding (i) 47,045,593 shares of Common Stock, (ii) 90,000 shares
of Series A Preferred Stock, (iii) 2,875,000 Depositary Shares (representing
143,750 shares of Series B Preferred Stock), (iv) 7,208,935 Common Stock
Purchase Warrants, (v) the Special Common Stock Warrant and (vi) Options
exercisable into 8,941,077 shares of Common Stock. As a result, as of such date,
the Minimum Condition would be satisfied if, in the aggregate, a combination of
Common Stock, Series A Preferred Stock, Series B Preferred Stock, Depositary
Shares, Common Stock Purchase Warrants and the Special Common Stock Warrant
representing 36,367,045 Common Stock Equivalents would be tendered and not
properly withdrawn prior to the expiration of the Offer.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated as
of May 3, 1999 (the "Merger Agreement"), by and among Parent, the Purchaser and
the Company. The Merger Agreement provides that, promptly upon consummation of
the Offer, Parent will cause the Purchaser to be merged with and into the
Company (the "Merger"). At the effective time of the Merger (the "Effective
Time"), except for the Offer Securities which are held by any subsidiary of the
Company or in the treasury of the Company, or which are held, directly or
indirectly, by Parent or any direct or indirect subsidiary of Parent (including
the Purchaser), all of which shall cease to be outstanding and be canceled and
retired and none of which shall receive any payment with respect thereto and
Offer Securities held by holders exercising their rights to dissent in
accordance with the Delaware General Corporation Law ("DGCL"), (i) each share of
Common Stock (including all associated Rights) issued and outstanding
immediately prior to the Effective Time and all rights in respect thereof shall,
by virtue of the Merger and without any action on the part of the holder
thereof, forthwith cease to exist and be converted into and represent the right
to receive an amount in cash equal to $29.25, without interest, (ii) each share
of Series A Preferred Stock issued and outstanding immediately prior to the
Effective Time and all rights in respect thereof shall, immediately prior to the
Merger and without any action on the part of the holders thereof, be converted
into 43.478 fully paid and nonassessable shares of Common Stock, such shares of
Common Stock thereafter to be treated in accordance with clause (i) above, (iii)
each share of Series B Preferred Stock issued and outstanding immediately prior
to the Effective Time shall, by virtue of the Merger and without any action on
the part of the holders thereof, no longer be convertible into shares of Common
Stock without interest but shall thereafter be convertible, in accordance with
Section 7(E) of the Certificate of Designation of the Series B Preferred Stock,
into the right to receive an amount in cash equal to $1,101.17, without
interest, (iv) each Common Stock Purchase Warrant issued and outstanding
immediately prior to the Effective Time and all rights in respect thereof shall,
by virtue of the Merger and without any action on the part of the holders
thereof, no longer be exercisable into the right to receive Common Stock but
shall become exercisable, in accordance with Section 11.5 of the Warrant
Agreement, dated as of October 29, 1993, by and between the Company and ASTT,
into the right to receive an amount in cash equal to $7.80, without interest and
(v) the Special Common Stock Warrant issued and outstanding immediately prior to
the Effective Time and all rights in respect thereof shall, by virtue of the
Merger and without any action on the part of the holder thereof, expire. The
Merger Agreement is more fully described in Section 11 of the Offer to Purchase.
Under the DGCL, if the Purchaser acquires, pursuant to the Offer
<PAGE> 4
or otherwise, at least 90% of the issued and outstanding shares of each of
Common Stock, the Series A Preferred Stock and the Series B Preferred Stock, the
Purchaser will be able to approve and effect the Merger without a vote of the
Company's stockholders. If, however, the Purchaser does not acquire at least 90%
of the issued and outstanding shares of each of the Common Stock, the Series A
Preferred Stock and the Series B Preferred Stock, pursuant to the Offer or
otherwise, a vote of the Company's stockholders to effect the Merger is required
under the DGCL and a longer period of time will be required to effect the Merger
as described in Section 11 of the Offer to Purchase.
The Board of Directors of the Company (i) has determined that each of the Offer
and the Merger is fair to, and in the best interest of, the holders of the Offer
Securities and has declared that the Offer and the Merger are advisable, (ii)
has approved the Offer and the Merger and (iii) has recommended that the holders
of the Offer Securities accept the Offer and tender their Offer Securities
pursuant to the Offer and that the holders of Common Stock, Series A Preferred
Stock, Series B Preferred Stock and Depositary Shares approve and adopt the
Merger Agreement.
Tendering holders whose Offer Securities are registered in their own name and
who tender directly to the Depositary will not be obligated to pay brokerage
fees or commissions or, except as set forth in Instruction 6 of the applicable
Letter of Transmittal, stock transfer taxes on the purchase of Offer Securities
pursuant to the Offer. For purposes of the Offer, the Purchaser will be deemed
to have accepted for payment (and thereby purchased) Offer Securities validly
tendered and not properly withdrawn if, as and when the Purchaser gives notice
to the Depositary of the Purchaser's acceptance for payment of such Offer
Securities. Upon the terms and subject to the conditions of the Offer, payment
for Offer Securities accepted pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering holders for the purpose of receiving payments from the Purchaser and
transmitting payments to such tendering holders whose Offer Securities have been
accepted for payment. In all cases, payment for Offer Securities purchased
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) the certificates evidencing such Offer Securities or timely confirmation
of a book-entry transfer of such Offer Securities into the Depositary's account
at the Book-Entry Transfer Facility, pursuant to the procedures set forth in
Section 3 of the Offer to Purchase, (ii) the applicable Letter of Transmittal
(or a copy thereof), properly completed and duly executed with any required
signature guarantees, or an Agent's Message (as defined in Section 2 of the
Offer to Purchase) in connection with a book-entry transfer and (iii) any other
documents required by the applicable Letter of Transmittal. Under no
circumstances will interest be paid on the purchase price for the tendered Offer
Securities, regardless of any delay in making such payment or extension of the
Expiration Date.
The term "Expiration Date" shall mean 12:00 Midnight, New York City time, on
Monday, June 7, 1999, unless and until the Purchaser, in accordance with the
terms of the Offer, shall have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by the Purchaser, shall expire.
Subject to the terms of the Merger Agreement and to the applicable rules and
regulations of the Securities and Exchange Commission (the "Commission") and to
applicable law, the Purchaser expressly reserves the right, in its sole
discretion, at any time or from time to time, to extend for any reason the
period of
<PAGE> 5
time during which the Offer is open, including upon the occurrence of any of the
events specified in Section 14 of the Offer to Purchase, by giving notice of
such extension to the Depositary and by making a public announcement thereof.
Subject to the applicable rules and regulations of the Commission and to
applicable law, the Purchaser also expressly reserves the right, in its sole
discretion (subject to the terms of the Merger Agreement), at any time and from
time to time (i) to delay acceptance for payment of, or, regardless of whether
such Offer Securities were theretofore accepted for payment, payment for, any
Offer Securities pending receipt of any governmental approval specified in
Section 15 of the Offer to Purchase or in order to comply in whole or in part
with any other applicable law, (ii) to terminate the Offer and not accept for
payment any Offer Securities if any of the conditions referred to in Section 14
of the Offer to Purchase are not satisfied or, of the events specified in
Section 14 of the Offer to Purchase have occurred and (iii) subject to the terms
of the Merger Agreement, to waive any condition, or otherwise amend the Offer in
any respect, in each case by giving oral or written notice of such delay,
termination, waiver or amendment to the Depositary and by making a public
announcement thereof.
During any such extension, all Offer Securities previously tendered and not
properly withdrawn will remain subject to the Offer, subject to the right of a
tendering holder to withdraw such holder's Offer Securities. Any such extension,
delay, termination, waiver or amendment will be followed, as promptly as
practicable, by a public announcement thereof by 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 Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which require that material changes be promptly disseminated to holders
in a manner reasonably designed to inform them of such changes and without
limiting the manner in which the Purchaser may choose to make any public
announcement, the 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 as otherwise may be required by
applicable law. Except as otherwise provided below, tenders of Offer Securities
made pursuant to the Offer are irrevocable. Offer Securities tendered pursuant
to the Offer may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by the Purchaser pursuant to the Offer,
may also be withdrawn at any time after July 8, 1999, or at such later time as
may apply if the Offer is extended. For a withdrawal to be effective, a written
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth below. Any such notice of withdrawal must specify the name
of the person who tendered the Offer Securities to be withdrawn, the class of
Offer Securities to be withdrawn, the number of Offer Securities to be
withdrawn, and the name of the registered holder of the Offer Securities, if
different from that of the person who tendered such Offer Securities. If
certificates evidencing Offer Securities to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the tendering holders must submit to the Depositary the
serial numbers shown on the particular certificate evidencing the Offer
Securities to be withdrawn and, unless the Offer Securities evidenced by such
certificates have been tendered by an Eligible Institution (as defined in
Section 3 of the Offer to Purchase) the signatures on the notice of withdrawal
must be guaranteed by an Eligible Institution. If
<PAGE> 6
Offer Securities have been tendered pursuant to the procedures for book-entry
transfer set forth in Section 3 of the Offer to Purchase, any notice of
withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Offer Securities
and must otherwise comply with the Book-Entry Transfer Facility's withdrawal
procedures.
Withdrawals of tendered Offer Securities may not be rescinded without the
Purchaser's consent and any Offer Securities properly withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. All questions as to
the form and validity (including time of receipt) of notices of withdrawal will
be determined by the Purchaser, in its sole discretion, which determination will
be final and binding. None of Parent, the Purchaser, the Depositary, the
Information Agent, the Dealer Manager or any other person will be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification. Any
Offer Securities properly withdrawn may be re-tendered at any time prior to the
Expiration Date by following any of the procedures described in Section 3 of the
Offer to Purchase.
The Company has provided the Purchaser with the Company's list of holders of the
Offer Securities and security position listings in respect of the Offer
Securities for the purpose of disseminating the Offer to the holders of Offer
Securities. The Offer to Purchase, the Letters of Transmittal and any other
relevant materials will be mailed to record holders of Offer Securities whose
names appear on the Company's list of holders of the Offer Securities and will
be furnished, for subsequent transmittal to beneficial owners of Offer
Securities, to brokers, dealers, commercial banks, trust companies and similar
persons whose names or the names of whose nominees, appear on the Company's list
of holders of the Offer Securities, or where applicable, who are listed as
participants in a clearing agency's security position listing.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule 14d-6
under the Exchange Act is contained in the Offer to Purchase and is incorporated
herein by reference.
The Offer to Purchase and the related Letters of Transmittal contain important
information that should be read carefully before any decision is made with
respect to the Offer.
Requests for copies of the Offer to Purchase, the related Letters of Transmittal
and other tender offer materials may be directed to the Information Agent as set
forth below, and copies will be furnished promptly at the Purchaser's expense.
Questions or requests for assistance may be directed to the Information Agent or
the Dealer Manager as set forth below.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Banks and Brokerage Firms Call: (800) 662-5200
Shareholders Please Call: (800) 566-9061
The Depositary for the Offer is:
<PAGE> 7
Citibank, N.A.
By Hand:
Citibank, N.A.
Corporate Actions
111 Wall Street, 5th Floor Window
New York, New York 10043
By Mail:
Citibank N.A.
Corporate Actions
P.O. Box 2544
Jersey City, New Jersey 07303-2544
By Overnight Courier:
Citibank N.A.
Corporate Actions, Suite 4660
525 Washington Boulevard
Jersey City, New Jersey 07303
For Information: (877) 248-4237
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
North Tower
New York, New York 10281-1305
(212) 449-8971 (Call Collect)
May 10, 1999
<PAGE> 1
WANG LABORATORIES LOGO EXHIBIT 5
May 10, 1999
Dear Stockholder:
I am pleased to inform you that on May 3, 1999, Wang Laboratories, Inc.
(the "Company") entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Getronics NV, a company organized under the laws of The
Netherlands ("Parent"), and Getronics Acquisition, Inc., a Delaware corporation
and a wholly owned subsidiary of Parent which was formed in connection with the
Merger Agreement (the "Purchaser"). Pursuant to the Merger Agreement, the
Purchaser today commenced a tender offer (the "Offer") to purchase (a) all the
outstanding shares of common stock of the Company at $29.25 per share in cash
and (b) all other outstanding equity instruments of the Company convertible into
or exercisable for common stock at an amount in cash per instrument determined
on an as converted or as exercised basis. Under the Merger Agreement, the Offer
will be followed by a merger (the "Merger") of the Purchaser with and into the
Company, and all shares of common stock (and other equity instruments
convertible into or exercisable for common stock) not purchased in the Offer
will be acquired by Parent, through Purchaser, at the same price (except for the
Series B Preferred Stock, which will become convertible into the right to
receive, upon conversion, cash equal to $1,101.17).
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER
AND THE MERGER AGREEMENT AND HAS DETERMINED THAT THE TERMS OF EACH ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS. ACCORDINGLY, THE
BOARD RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN
THE OFFER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors, including, among other things, the opinion
of Credit Suisse First Boston Corporation, the Company's financial advisor,
that, as of the date of such opinion, the consideration to be received by the
holders of common stock of the Company pursuant to the Offer and the Merger is
fair, from a financial point of view, to such stockholders. The full text of the
opinion is attached as an exhibit to the Schedule 14D-9. Stockholders are urged
to read the opinion carefully and in its entirety.
Attached is a copy of the Schedule 14D-9 filed by the Company with the
Securities and Exchange Commission. The Schedule 14D-9 describes the reasons for
the Board of Directors' recommendation and contains other important information
relating to the Offer. Also enclosed is the Offer to Purchase, dated May 10,
1999, of the Purchaser, together with related materials, including Letters of
Transmittal to be used for tendering your shares. These documents set forth the
terms and conditions of the Offer and the Merger and provide instructions on how
to tender your shares. We urge you to read the Schedule 14D-9 and the enclosed
materials carefully.
Given these developments, we intend to adjourn the annual meeting of
stockholders that is currently scheduled to be held on Wednesday, May 26, 1999,
until Wednesday, June 23, 1999.
Sincerely,
/s/Joseph M. Tucci
JOSEPH M. TUCCI
Chairman and Chief Executive Officer
<PAGE> 1
CREDIT SUISSE FIRST BOSTON LOGO EXHIBIT 6
Board of Directors
Wang Laboratories, Inc.
290 Concord Road
Billerica, Massachusetts 01821
May 2, 1999
Members of the Board:
You have asked us to advise you with respect to the fairness to the holders of
common stock, par value $0.01 per share (the "Common Stock"), of Wang
Laboratories, Inc. (the "Company"), other than Getronics NV (the "Acquiror"),
from a financial point of view of the Common Stock Consideration (as defined
below) to be received by such holders pursuant to the terms of the Agreement and
Plan of Merger (as reflected in the draft dated May 1, 1999) (the "Merger
Agreement") proposed to be entered into among the Company, the Acquiror and
Getronics Acquisition, Inc. (the "Sub"). Capitalized terms used in this letter
without definition have the meanings assigned to such terms in the Merger
Agreement. The Merger Agreement provides for (a) Sub to make a tender offer (the
"Offer") to purchase, at the cash price of $29.25 per share (the "Common Stock
Consideration"), all of the issued and outstanding Common Stock, and at the
Applicable Offer Price, the other Offer Securities of the Company and (b) the
merger (the "Merger" and together with the Offer, the "Transaction") of the Sub
with and into the Company pursuant to which the Company will become a wholly
owned subsidiary of the Acquiror and each share of Common Stock will be
converted into the right to receive the Common Stock Consideration. The Merger
also provides for (A) conversion of (i) each share of Series B Preferred Stock
into the right to receive the Series B Preferred Stock Merger Consideration,
(ii) each Common Stock Purchase Warrant into the right to receive the Common
Stock Warrant Merger Consideration and (iii) each share of Series A Preferred
Stock into such number of shares of Common Stock as provided for under the
Certificate of Designation of the Series A Preferred Stock, (B) the expiration
of the Microsoft Warrants and (C) the Olivetti Warrants becoming exercisable for
the property which the holder thereof would have been entitled to receive if
exercised immediately prior to the Effective Time of the Merger.
In arriving at our opinion, we have reviewed certain publicly available business
and financial information relating to the Company, as well as the Merger
Agreement. We have also reviewed certain other information, including financial
forecasts, provided to us by the Company and have met with the Company's
management to discuss the business and prospects of the Company.
We have also considered certain financial and stock market data of the Company,
and we have compared those data with similar data for other publicly held
companies in businesses similar to the Company and we have considered the
financial terms of certain other business combinations and other transactions
which have recently been effected. We also considered such other information,
financial studies, analyses and investigations and financial, economic and
market criteria which we deemed relevant.
In connection with our review, we have not assumed any responsibility for
independent verification of any of the foregoing information and have relied on
its being complete and accurate in all material respects. With respect to the
financial forecasts, we have assumed that they have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
Company's management as to the future financial performance of the Company. In
addition, we have not been requested to make, and have not made, an independent
evaluation or appraisal of the assets or liabilities (contingent or otherwise)
of the Company, nor have we been furnished with any such evaluations or
appraisals. Our opinion is necessarily based upon
Ex. 6-1
<PAGE> 2
financial, economic, market and other conditions as they exist and can be
evaluated on the date hereof. The Company has informed us that management of the
Company has had conversations with a third party regarding its interest in a
possible acquisition of the Company. Except for approaching another third party
to solicit an indication of interest regarding a possible acquisition of the
Company and holding preliminary discussions with such party prior to the date
hereof, we were not requested to, and did not, solicit third party indications
of interest in acquiring all or any part of the Company.
Furthermore, we have assumed that when executed, the Merger Agreement will be in
a form that does not differ in any material respect from the draft thereof dated
May 1, 1999 reviewed by us and the Transaction will be consummated substantially
in accordance with the terms described in such draft of the Merger Agreement.
We have acted as financial advisor to the Company in connection with the
Transaction and will receive a fee for our services, a significant portion of
which is contingent upon the consummation of the Transaction. We have previously
acted as financial advisor to the Company and have received customary
compensation therefor. In addition, one of our affiliates acted as lead
underwriter in a recently completed offering by the Acquiror and received
customary compensation therefor. In addition, as we advised the Company by
letter dated March 17, 1999, a separate financing team at Credit Suisse First
Boston Corporation and one of its affiliates may provide assistance to the
Acquiror with respect to the debt and equity financing to be obtained by the
Acquiror in connection with the Transaction.
In the ordinary course of our business, we and our affiliates may actively trade
the debt and equity securities of both the Company and the Acquiror for our and
such affiliates' own accounts and for the accounts of customers and,
accordingly, may at any time hold a long or short position in such securities.
It is understood that this letter is for the information of the Board of
Directors in connection with its consideration of the Transaction and does not
constitute a recommendation to any stockholder as to how such stockholder should
vote on the proposed Merger or whether or not such stockholder should tender
shares pursuant to the Offer and is not to be quoted or referred to, in whole or
in part, in any registration statement, prospectus or proxy statement, or in any
other document used in connection with the offering or sale of securities, nor
shall this letter be used for any other purposes, without our prior written
consent.
Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the Common Stock Consideration to be received by the holders of Common
Stock in the Offer and the Merger is fair to such holders, other than the
Acquiror, from a financial point of view.
Very truly yours,
CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ J. CRAIG OXMAN
----------------------------------
Name: J. Craig Oxman
Title: Managing Director
Ex. 6-2
<PAGE> 1
Exhibit 7
EXECUTION COPY
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
GETRONICS NV,
GETRONICS ACQUISITION, INC.
AND
WANG LABORATORIES, INC.
Dated as of May 3, 1999
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS....................................................................1
Section 1.1 Definitions...............................................1
ARTICLE II
THE OFFER......................................................................8
Section 2.1 The Offer.................................................8
Section 2.2 Company Actions...........................................9
Section 2.3 Composition of the Board of Directors....................11
ARTICLE III
THE MERGER....................................................................12
Section 3.1 The Merger...............................................12
Section 3.2 Treatment of Capital Stock and Warrants..................13
Section 3.3 Dissenting Capital Stock.................................14
Section 3.4 Surrender of Certificates................................15
Section 3.5 Payment..................................................15
Section 3.6 No Further Rights of Transfers...........................16
Section 3.7 Stock Option and Other Plans.............................16
Section 3.8 Certificate of Incorporation of the Surviving
Corporation..............................................18
Section 3.9 By-Laws of the Surviving Corporation.....................18
Section 3.10 Directors and Officers of the Surviving
Corporation.............................................18
Section 3.11 Closing.................................................18
Section 3.12 Withholding Rights......................................18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................19
Section 4. Representations and Warranties of the Company.............19
Section 4.1 Due Organization, Good Standing and Corporate Power......19
Section 4.2 Authorization and Validity of Agreement..................19
Section 4.3 Capitalization...........................................19
Section 4.4 Consents and Approvals; No Violations....................21
Section 4.5 Company Reports and Financial Statements.................21
Section 4.6 Absence of Certain Changes...............................22
(i)
<PAGE> 3
Section 4.7 Title to Properties; Encumbrances.......................22
Section 4.8 Compliance with Laws....................................23
Section 4.9 Litigation..............................................23
Section 4.10 Employee Benefit Plans..................................23
Section 4.11 Employment Relations and Agreements.....................25
Section 4.12 Taxes...................................................26
(a) Tax Returns...............................................26
(b) Payment of Taxes..........................................26
(c) Other Tax Matters.........................................26
Section 4.13 Liabilities.............................................27
Section 4.14 Intellectual Property...................................27
Section 4.15 Schedule 14D-1..........................................28
Section 4.16 Broker's or Finder's Fee................................28
Section 4.17 Environmental Laws and Regulations......................28
Section 4.18 State Takeover Statutes.................................29
Section 4.19 Voting Requirements.....................................30
Section 4.20 Rights Agreement........................................30
Section 4.21 Year 2000...............................................30
Section 4.22 Series A and Series B Preferred Stock...................30
Section 4.23 Common Stock Purchase Warrants and Microsoft Warrant....31
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB..............................31
Section 5.1 Due Organization, Good Standing and Corporate Power......31
Section 5.2 Authorization and Validity of Agreement..................31
Section 5.3 Consents and Approvals; No Violations....................32
Section 5.4 Schedule 14D-9 and Proxy Statement.......................32
Section 5.5 Absence of Certain Changes...............................32
Section 5.6 Broker's or Finder's Fee.................................33
Section 5.7 Sub's Operations.........................................33
Section 5.8 Sufficient Funds.........................................33
ARTICLE VI
TRANSACTIONS PRIOR TO CLOSING DATE............................................33
Section 6.1 Access to Information Concerning Properties and
Records..................................................33
Section 6.2 Confidentiality..........................................34
Section 6.3 Conduct of the Business of the Company Pending the
Closing Date.............................................34
Section 6.4 Company Stockholders' Meeting; Preparation of Proxy
Statement; Short Form Merger.............................37
Section 6.5 Reasonable Best Efforts..................................38
Section 6.6 No Solicitation of Other Offers..........................38
Section 6.7 Notification of Certain Matters..........................40
Section 6.8 HSR Act..................................................40
(ii)
<PAGE> 4
Section 6.9 Exon-Florio..............................................41
Section 6.10 Employee Benefits.......................................41
Section 6.11 Directors' and Officers' Insurance......................42
Section 6.12 Rights Agreement........................................44
Section 6.13 Public Announcements....................................44
Section 6.14 Transfer Tax............................................44
Section 6.15 U.S. Real Property Holding Corporation Status...........44
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND SUB.........................45
Section 7.1 Conditions Precedent to Obligations of Parent
and Sub..................................................45
(a) Approval of Company's Stockholders........................45
(b) Injunction................................................45
(c) Statutes..................................................45
(d) Minimum Condition.........................................45
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY............................45
Section 8.1 Conditions Precedent to Obligations of the Company.......45
(a) Approval of Company's Stockholders........................45
(b) Injunction................................................46
(c) Statutes..................................................46
(d) Minimum Condition.........................................46
ARTICLE IX
TERMINATION AND ABANDONMENT...................................................46
Section 9.1 Termination..............................................46
Section 9.2 Effect of Termination....................................48
ARTICLE X
MISCELLANEOUS.................................................................48
Section 10.1 Fees and Expenses.......................................48
Section 10.2 Representations and Warranties..........................49
Section 10.3 Extension; Waiver.......................................49
Section 10.4 Notices.................................................49
Section 10.5 Entire Agreement........................................50
Section 10.6 Binding Effect; Benefit; Assignment.....................50
Section 10.7 Amendment and Modification..............................51
Section 10.8 Further Actions.........................................51
Section 10.9 Headings................................................51
(iii)
<PAGE> 5
Section 10.10 Counterparts...........................................51
Section 10.11 APPLICABLE LAW.........................................51
Section 10.12 Severability...........................................52
Section 10.13 Waiver of Jury Trial...................................52
(iv)
<PAGE> 6
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 3, 1999 (this
"AGREEMENT"), by and among GETRONICS NV, a company organized under the laws of
The Netherlands ("PARENT"), GETRONICS ACQUISITION, INC., a company organized
under the laws of Delaware and a direct wholly-owned subsidiary of Parent
("SUB"), and WANG LABORATORIES, INC., a company organized under the laws of
Delaware (the "COMPANY").
WHEREAS, each of the Supervisory Board and the Executive Board
of Parent and the respective Boards of Directors of Sub and the Company have
approved the acquisition of the Company indirectly by Parent through a
partnership to be formed to conduct business operations in the United States,
which partnership shall directly own Sub;
WHEREAS, in order to consummate such acquisition, each of the
Supervisory Board and the Executive Board of Parent and the respective Boards of
Directors of Sub and the Company have approved the merger of Sub with and into
the Company (the "MERGER"), pursuant to and subject to the terms and conditions
of this Agreement;
WHEREAS, in contemplation of such acquisition, it is proposed
that Sub will make a tender offer (the "OFFER") to purchase all of the issued
and outstanding Offer Securities (as such term is defined in Section 1.1
hereof), in each case subject to the terms and conditions of this Agreement, at
the Applicable Offer Prices (as such term is defined in Section 1.1 hereof); and
WHEREAS, the Board of Directors of the Company (i) has
determined that the Offer and the Merger are fair to, and in the best interest
of, the holders of Offer Securities and has declared that the Offer and the
Merger are advisable, (ii) has approved the Offer and the Merger and (iii) has
recommended that the holders of Offer Securities accept the Offer and tender the
Offer Securities pursuant to the Offer and that the stockholders of the Company
approve and adopt this Agreement;
NOW THEREFORE, in consideration of the premises and of the
mutual covenants, representations, warranties and agreements herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. When used in this Agreement, the
following terms shall have the respective meanings specified therefor below
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined).
"Acquisition Proposal" shall have the meaning set forth in
Section 6.6(b).
<PAGE> 7
"Affiliate" of any Person shall mean any Person directly or
indirectly controlling, controlled by, or under common control with, such
Person; PROVIDED THAT, for the purposes of this definition, "control" (including
with correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or partnership interests, by contract or otherwise.
"Agreement" shall have the meaning set forth in the preamble
hereto.
"Antitrust Authorities" shall mean the Federal Trade
Commission, the Antitrust Division, the attorneys general of the several states
of the United States, the Commission of the European Communities and any other
governmental authority having jurisdiction with respect to the transactions
contemplated hereby pursuant to applicable Antitrust Laws, PROVIDED THAT, for
greater certainty, "Antitrust Authorities" shall not include any Federal
governmental authority acting under authority related to control of foreign
ownership, control or influence or disclosure and control of classified
information.
"Antitrust Law" shall mean the Sherman Act, as amended, the
Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, EU Antitrust Laws and all other federal, state and foreign statutes,
rules, regulations, orders, decrees, administrative and judicial doctrines, and
other laws that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade.
"Alternative Proposal" shall have the meaning set forth in
Section 9.1(f).
"Applicable Merger Consideration" shall mean, with respect to
(i) each share of Common Stock, the Common Stock Merger Consideration, (ii) each
share of Series B Preferred Stock, the Series B Preferred Stock Merger
Consideration and (iii) each Common Stock Purchase Warrant, the Common Stock
Purchase Warrant Merger Consideration.
"Applicable Offer Prices" shall mean, with respect to (i) each
share of Common Stock, the Common Stock Merger Consideration, (ii) each share of
Series A Preferred Stock, $1,271.73, (iii) each share of Series B Preferred
Stock, the Series B Preferred Stock Merger Consideration, (iv) each share of the
Series B Preferred Stock Depositary Shares, $55.05, (v) each Common Stock
Purchase Warrant, the Common Stock Purchase Warrant Merger Consideration and
(vi) the Microsoft Warrant, $6,250,000.
"Bankruptcy Court" shall have the meaning set forth in
Section 4.3.
"Cash Payment" shall have the meaning set forth in
Section 3.7.
"Certificate of Merger" shall have the meaning set forth in
Section 3.1(a).
"Certificates" shall have the meaning set forth in
Section 3.4(a).
"Claims" shall have the meaning set forth in Section 4.17.
-2-
<PAGE> 8
"Closing" shall have the meaning set forth in Section 3.11.
"Closing Date" shall have the meaning set forth in
Section 3.11.
"Code" shall mean the United States Internal Revenue Code of
1986, as amended.
"Commission" shall mean the Securities and Exchange
Commission.
"Commission Filings" shall have the meaning set forth in
Section 4.5.
"Commitment Letter" shall have the meaning set forth in
Section 5.8.
"Common Stock" shall mean shares of common stock, par value
$0.01 per share, of the Company (including the associated Rights (as such term
is defined below)).
"Common Stock Equivalents" shall mean such number of shares of
Common Stock of the Company represented by Offer Securities or Options which, in
the case of (i) one (1) share of Common Stock, is 1, (ii) one (1) share of
Series A Preferred Stock, is 43.478, (iii) one (1) share of Series B Preferred
Stock, is 37.647, (iv) one (1) Series B Preferred Stock Depositary Share, is
1.882, (v) one (1) Common Stock Purchase Warrant, is 1, (vi) the Microsoft
Warrant, is 213,675, and (vii) each Option, is equal to the number of shares of
Common Stock issuable upon exercise of such Option.
"Common Stock Merger Consideration" shall have the meaning set
forth in Section 3.2(a).
"Common Stock Purchase Warrants" shall mean all of the
warrants issued by the Company pursuant to the Common Stock Purchase Warrant
Agreement and outstanding on the date hereof.
"Common Stock Purchase Warrant Agreement" shall mean the
Warrant Agreement, dated as of October 29, 1993, by and between the Company and
American Stock Transfer & Trust Company, as warrant agent.
"Common Stock Purchase Warrant Exercise Price" shall mean the
"Exercise Price", as such term is defined in the Common Stock Purchase Warrant
Agreement.
"Common Stock Warrant Merger Consideration" shall have the
meaning set forth in Section 3.2(c).
"Company" shall have the meaning set forth in the preamble
hereto.
"Company Disclosure Letter" shall have the meaning set forth
in Section 4.
"Company Excluded Factors" shall mean: (a) any change, in and
of itself, in the market price or trading volume of the Offer Securities; (b)
any failure, in and of itself, by the Company to meet the revenue or earnings
predictions of equity analysts as reflected in the First
-3-
<PAGE> 9
Call consensus estimate, or any other revenue or earnings predictions or
expectations, for any period ending (or for which earnings are released) on or
after the date of this Agreement and prior to the Effective Time; or (c)(i)
employee attrition (other than senior managers) and (ii) the loss of existing
customers by Wang Government Services, Inc. or the failure or delay by existing
or prospective customers of Wang Government Services, Inc. to purchase or enter
into agreements to purchase services or solutions from the Company or any of its
Subsidiaries, in each case arising out of, resulting from or attributable to (x)
the announcement of this Agreement and the transactions contemplated thereby or
(y) Parent's announcement or other communication of the plans or intentions of
Parent with respect to the conduct of any business of the Company or any of its
Subsidiaries.
"Company Intellectual Property" shall have the meaning set
forth in Section 4.14(a).
"Company Property" shall have the meaning set forth in
Section 4.17.
"Confidentiality Agreement" shall have the meaning set forth
in Section 6.2.
"Credit Facility" shall have the meaning set forth in
Section 4.13.
"CSFB" shall mean Credit Suisse First Boston Corporation.
"Dissenting Stockholders" shall have the meaning set forth in
Section 3.3.
"Effective Time" shall have the meaning set forth in
Section 3.1(a).
"Employee Benefit Plans" shall have the meaning set forth in
Section 4.10(a).
"Environmental Claims" shall have the meaning set forth in
Section 4.17.
"Environmental Law" shall have the meaning set forth in
Section 4.17.
"ERISA" shall have the meaning set forth in Section 4.10(a).
"EU Antitrust Laws" shall have the meaning set forth in
Section 4.4.
"Excess Settlement Amounts" shall have the meaning set forth
in Section 6.3(b)(ix).
"Exchange Act" shall mean the Securities and Exchange Act of
1934, as amended.
"Exon-Florio" shall mean the Defense Production Act of 1950,
as amended.
"GAAP" shall mean generally accepted accounting principles of
the United States of America, as in effect from time to time.
"Hazardous Materials" shall have the meaning set forth in
Section 4.17.
-4-
<PAGE> 10
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Indemnified Parties" shall have the meaning set forth in
Section 6.11(a).
"Independent Director" shall have the meaning set forth in
Section 2.3(a)
"Intercompany Convertible Instruments" shall mean any
instrument held pursuant to the Intercompany Convertible Instruments Agreement
dated as of October 29, 1993 by and between the Company and American Stock
Transfer & Trust Company.
"Letter of Transmittal" shall have the meaning set forth in
Section 2.1(b).
"Material Adverse Effect", with respect to any Person, shall
mean a material adverse effect on the business, assets, liabilities, results of
operations or financial condition of such Person and its subsidiaries, taken as
a whole; PROVIDED THAT none of the Company Excluded Factors shall be deemed by
itself or themselves, either alone or in combination with one or more other
Company Excluded Factors, to constitute a Material Adverse Effect on the
Company.
"Material Systems" shall have the meaning set forth in
Section 4.21.
"Merger" shall have the meaning set forth in the second
recital hereto.
"Microsoft" shall mean Microsoft Corporation, a company
organized under the laws of Washington.
"Microsoft Warrant" shall mean the warrant issued by the
Company pursuant to the Microsoft Warrant Agreement and outstanding as of the
date hereof.
"Microsoft Warrant Agreement" shall mean the Common Stock
Purchase Warrant Agreement, dated as of February 27, 1998, by and between the
Company and Microsoft.
"Microsoft Warrant Exercise Price" shall mean the "Exercise
Price", as such term is defined in the Microsoft Warrant Agreement.
"Minimum Condition" shall have the meaning set forth in
Annex A.
"Multiemployer Plan" shall have the meaning set forth in
Section 4.10(b).
"Offer" shall have the meaning set forth in the third recital
hereto.
"Offer Documents" shall have the meaning set forth in
Section 2.1(b).
"Offer Securities" shall mean the Common Stock, the Series A
Preferred Stock, the Series B Preferred Stock, the Series B Preferred Stock
Depositary Shares, the Common Stock Purchase Warrants and the Microsoft Warrant.
"Offer to Purchase" shall have the meaning set forth in
Section 2.1(b).
-5-
<PAGE> 11
"Olivetti" shall mean Ing. C. Olivetti & Co. S.p.A., a company
organized under the laws of Italy.
"Olivetti Warrant" shall mean the Olivetti Stock Appreciation
Rights dated March 17, 1998.
"Options" shall have the meaning set forth in Section 3.7.
"Parent" shall have the meaning set forth in the preamble
hereto.
"Parent Disclosure Letter" shall have the meaning set forth in
Section 5.
"Paying Agent" shall have the meaning set forth in
Section 3.4(a).
"Payment Fund" shall have the meaning set forth in
Section 3.5.
"Performance Material Adverse Effect," with respect to any
Person, shall mean a material adverse effect on the ability of such Person to
perform its obligations under this Agreement or to consummate the transactions
contemplated hereby.
"Permits" shall have the meaning set forth in Section 4.8(ii).
"Permitted Investments" shall have the meaning set forth in
Section 3.5.
"Person" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization, a group
and a government or other department or agency thereof.
"Plan" shall mean the Company's calendar year 1999 Plan in the
form provided to Parent prior to the date hereof.
"Proxy Statement" shall have the meaning set forth in
Section 4.4.
"Release" shall have the meaning set forth in Section 4.17.
"Reorganization Plan" shall have the meaning set forth in
Section 4.3
"Restricted Stock" shall mean those 606,500 shares of Common
Stock which were issued to certain employees and the outright, unencumbered
ownership of which is subject to the fulfillment of certain conditions.
"Returns" shall have the meaning set forth in Section 4.12(a).
"Rights" shall mean the Series C Junior Participating
Preferred Stock Purchase Rights issued under the Rights Agreement.
"Rights Agreement" shall mean the Rights Agreement, dated as
of April 22, 1998, by and between the Company and the American Stock Transfer
and Trust Company.
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"Schedule 14D-1" shall have the meaning set forth in
Section 2.1(b).
"Schedule 14D-9" shall have the meaning set forth in
Section 2.2(c).
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Series A Preferred Stock" shall mean shares of 4-1/2% Series
A Cumulative Convertible Preferred Stock, par value $0.01 per share, of the
Company.
"Series A Preferred Stock Conversion Price" shall mean the
"Conversion Price", as such term is defined in the Certificate of Designation of
the Series A Preferred Stock.
"Series B Preferred Stock Merger Consideration" shall have the
meaning set forth in Section 3.2(b).
"Series B Preferred Stock" shall mean shares of 6-1/2% Series
B Cumulative Convertible Preferred Stock, par value $0.01 per share, of the
Company.
"Series B Preferred Stock Conversion Price" shall mean the
"Conversion Price", as such term is defined in the Certificate of Designation of
the Series B Preferred Stock.
"Series B Preferred Stock Depositary Shares" shall mean all of
the issued and outstanding depositary shares representing, in each case, 1/20th
of a share of Series B Preferred Stock.
"Series C Junior Participating Preferred Stock" shall mean
shares of Series C Junior Participating Preferred Stock, par value $0.01 per
share, of the Company.
"Stock Incentive Plans" shall have the meaning set forth in
Section 3.7.
"Stock Plans" shall have the meaning set forth in Section 3.7.
"Stockholders' Meeting" shall have the meaning set forth in
Section 6.4.
"Sub" shall have the meaning set forth in the preamble hereto.
"Subsidiary" with respect to the Company, shall mean and
include (x) any partnership of which the Company or any Subsidiary is a general
partner or (y) any other entity in which the Company or any of its Subsidiaries
owns or has the power to vote 50% or more of the equity interests in such entity
having general voting power to participate in the election of the governing body
of such entity.
"Superior Proposal" shall have the meaning set forth in
Section 6.6(b).
"Surviving Corporation" shall have the meaning set forth in
Section 3.1(b).
"Surviving Corporation Plans" shall have the meaning set forth
in Section 6.10(b).
"Taxes" shall have the meaning set forth in Section 4.12(a).
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"Tender Offer Conditions" shall have the meaning set forth in
Section 2.1.
"Termination Date" shall have the meaning set forth in
Section 9.1(i).
"Transfer Taxes" shall have the meaning set forth in
Section 6.14.
"WARN" shall mean the Federal Workers Adjustment Retraining
and Notification Act.
"Warrants" shall mean, collectively, the Common Stock Purchase
Warrants and the Microsoft Warrant.
"Year 2000 Compliance" shall have the meaning set forth in
Section 4.21.
ARTICLE II
THE OFFER
Section 2.1 THE OFFER. (a) Provided that this Agreement shall
not have been terminated in accordance with Article IX hereof and so long as
none of the events set forth in Annex A hereto (the "TENDER OFFER CONDITIONS")
shall have occurred and be existing, as promptly as practicable, but in no event
later than the fifth (5th) business day after the date of this Agreement, Parent
and Sub shall, and Parent shall cause Sub to, commence (within the meaning of
Rule 14d-2 promulgated under the Exchange Act) the Offer at the Applicable Offer
Prices. The Applicable Offer Prices shall be net to the seller in cash. The
obligations of Sub to accept for payment and to pay for any Offer Securities
tendered shall be subject only to the Tender Offer Conditions, any of which may
be waived by Parent or Sub in their sole discretion; PROVIDED, HOWEVER, that
neither Parent nor Sub shall waive the Minimum Condition without the prior
written consent of the Company. Neither Parent nor Sub shall, without the prior
written consent of the Company, (i) amend or waive the Minimum Condition, (ii)
reduce the number of Offer Securities to be purchased in the Offer, (iii) reduce
the Applicable Offer Prices, (iv) impose additional conditions to the Offer, (v)
change the form of consideration payable in the Offer or (vi) make any other
change to the terms of the Offer which is materially adverse to the holders of
the Offer Securities. Assuming prior satisfaction or waiver of the conditions to
the Offer, Sub shall, as soon as legally permissible after the commencement
thereof, accept for payment, in accordance with the terms of the Offer, the
Offer Securities which are validly tendered and not withdrawn on or prior to the
expiration of the Offer. If, on the expiration date of the Offer, less than 90%
of any of the Common Stock, the Series A Preferred Stock or the Series B
Preferred Stock have been validly tendered and not withdrawn, Sub may,
alternatively and without the consent of the Company, extend the Offer for up to
ten (10) days in the aggregate notwithstanding that all conditions to the Offer
have been satisfied, so long as Sub irrevocably waives the continued
satisfaction of any of the conditions to the Offer, other than (x) the Minimum
Condition; or (y) the condition contained in clause (v)(g) of Annex A, to the
extent this Agreement is terminated pursuant to Section 9.1(e). If, on the
initial scheduled expiration date of the Offer, which shall be twenty (20)
business days after the date the Offer is commenced, all conditions to the Offer
shall not have been satisfied or waived, Sub may, from time to time, extend the
expiration date of the Offer (any such extension to be for ten (10)
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business days or less) up to the Termination Date; PROVIDED, HOWEVER, that Sub
shall extend the expiration date of the Offer from time to time (any such
extension to be ten (10) business days or less) in the event that, on any
scheduled expiration date, (A) the only conditions to the Offer which have not
been satisfied are the Minimum Condition and the condition contained in clause
(iii) of Annex A and (B) Sub reasonably believes that the condition contained in
clause (iii) of Annex A will be satisfied within a reasonable period of time.
(b) The Offer shall be made by means of an offer to purchase
(the "OFFER TO PURCHASE") subject only to the Tender Offer Conditions. As soon
as reasonably practicable on the date the Offer is commenced, Parent and Sub
shall file, and Parent shall cause Sub to file, with the Commission a Tender
Offer Statement on Schedule 14D-1 (together with all amendments and supplements
thereto, the "SCHEDULE 14D-1") with respect to the Offer. The Schedule 14D-1
shall contain (included as an exhibit) or shall incorporate by reference the
Offer to Purchase and a form of the related letter of transmittal (the "LETTER
OF TRANSMITTAL") and summary advertisement, as well as all other information and
exhibits required by law (which Schedule 14D-1, Offer to Purchase, Letter of
Transmittal and such other information and exhibits, together with any
supplements or amendments thereto, are referred to herein collectively as the
"OFFER DOCUMENTS"). The Company and its counsel shall be given reasonable
opportunity to review and comment upon the Schedule l4D-1 prior to its filing
with the Commission. The Schedule 14D-1 will comply in all material respects
with the provisions of applicable federal securities laws and, on the date filed
with the Commission and the date first published, sent or given to the holders
of the Offer Securities, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading, except that no representation is made
by Parent or Sub with respect to any information supplied by the Company in
writing for inclusion in the Schedule 14D-1. Each of the Company, on the one
hand, and Parent and Sub, on the other hand, agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the extent
that the Offer Documents shall be, or have become, false or misleading in any
material respect, and Parent and Sub further agree to take all steps necessary
to cause the Schedule 14D-1 as so corrected to be filed with the Commission and
the other Offer Documents as so corrected to be disseminated to holders of the
Offer Securities, in each case as and to the extent required by applicable
federal securities laws. Each of Parent and Sub agrees to provide the Company
and its counsel with information with respect to any oral comments and copies of
any written comments Parent and Sub or their counsel may receive from the
Commission or its staff with respect to the Offer Documents promptly after the
receipt of such comments and shall provide the Company and its counsel an
opportunity to participate in the response of Parent or Sub to such comments,
including by participating with Parent and Sub or their counsel in any
discussions with the Commission or its staff.
Section 2.2 COMPANY ACTIONS. The Company hereby consents to
the Offer and the Merger and represents and warrants that:
(a) its Board of Directors (at a meeting duly called and held)
has (i) determined that each of the Offer and the Merger is fair to, and in the
best interest of, the holders of the Offer Securities and declared that the
Offer and the Merger are advisable, (ii) approved the Offer and the Merger and
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<PAGE> 15
adopted this Agreement in accordance with the provisions of the Delaware General
Corporation Law and (iii) recommended acceptance of the Offer and approval and
adoption of this Agreement by the stockholders of the Company; PROVIDED,
HOWEVER, that prior to the purchase by Sub of the Offer Securities pursuant to
the Offer and the Merger, the Company may withdraw or modify in a manner adverse
to Parent or Sub such recommendation, PROVIDED THAT the Company has complied
with its obligations pursuant to Section 6.6.
(b) CSFB has delivered to the Board of Directors of the
Company its opinion that the consideration to be received by the stockholders of
the Company, other than Parent and any direct or indirect subsidiary of Parent
(including Sub), pursuant to the Offer and the Merger is fair to such
stockholders from a financial point of view, subject to the assumptions and
qualifications contained in such opinion. The Company has provided to Parent a
true and correct copy of such fairness opinion.
(c) The Company shall file with the Commission, as soon as
reasonably practicable on the date of the commencement of the Offer, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "SCHEDULE 14D-9"), containing the
recommendations referred to in clause (a) of this Section 2.2 and shall
disseminate the Schedule 14D-9 as required by Rule 14d-9 under the Exchange Act.
Parent and Sub and their counsel shall be given reasonable opportunity to review
and comment upon the Schedule l4D-9 prior to its filing with the Commission. The
Schedule 14D-9 will comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the Commission
and on the date first published, sent or given to the holders of Offer
Securities, shall not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading, except that no representation is made by the Company with
respect to any information supplied by Parent or Sub in writing for inclusion in
the Schedule 14D-9. Each of the Company, on the one hand, and Parent and Sub, on
the other hand, agrees promptly to correct any information provided by it for
use in the Schedule 14D-9 if and to the extent that the Schedule 14D-9 shall be,
or have become false or misleading in any material respect; and the Company
further agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the Commission and to be disseminated to holders of
Offer Securities, in each case as and to the extent required by applicable
federal securities laws. The Company agrees to provide Parent and its counsel
with information with respect to any oral comments and copies of any written
comments the Company or its counsel may receive from the Commission or its staff
with respect to the Schedule 14D-9 promptly after the receipt of such comments
and shall provide Parent and its counsel an opportunity to participate in the
response of the Company to such comments, including by participating with the
Company and its counsel in any discussions with the Commission or its staff.
(d) In connection with the Offer, the Company shall promptly
furnish Sub with mailing labels, security position listings and any available
listing or computer list containing the names and addresses of the record
holders of Offered Securities as of the most recent practicable date and shall
furnish Sub with such additional information (including, but not limited to,
updated lists of holders of Offered Securities and their addresses, mailing
labels and lists of security positions) and such other assistance as Sub or its
agents may reasonably request
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in communicating the Offer to the holders of Offered Securities. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Merger, Parent and its Affiliates shall hold in confidence the information
contained in any such labels, listings and files, will use such information only
in connection with the Offer and the Merger and, if this Agreement is
terminated, shall deliver to the Company all copies of such information in their
possession.
Section 2.3 COMPOSITION OF THE BOARD OF DIRECTORS. (a)
Promptly upon the acceptance for payment of, and payment by Sub for, Offer
Securities equal to at least a majority of the Common Stock Equivalents, Sub
shall be entitled to designate up to such number of directors on the Board of
Directors of the Company, rounded up to the next whole number, as will give Sub,
subject to compliance with Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, representation on the Board of Directors of the Company
equal to at least that number of directors which equals the product of the total
number of directors on the Board of Directors of the Company (giving effect to
the directors elected pursuant to this sentence) multiplied by a fraction, the
numerator of which shall be the number of Common Stock Equivalents represented
by Offer Securities beneficially owned by Sub and Parent and the denominator of
which shall be the number of Common Stock Equivalents represented by Offer
Securities then outstanding. Subject to applicable law, the Company shall take
all action requested by Parent which is reasonably necessary to effect any such
election, including mailing to its stockholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, and the Company agrees to make such mailing
with the mailing of the Schedule 14D-9 so long as Sub shall have provided to the
Company on a timely basis all information required to be included in the
Information Statement with respect to Sub's designees. Parent and Sub shall be
solely responsible for any information with respect to either of them and their
nominees, officers, directors and Affiliates required by Section 14(f) and Rule
14f-1. In furtherance thereof, the Company shall increase the size of the Board
of Directors of the Company (subject to the limitations set forth in the
Company's Certificate of Incorporation and the Company's By-Laws), or use its
reasonable best efforts to secure the resignation of directors, or both, as is
reasonably necessary to permit Sub's designees to be elected to the Board of
Directors of the Company; PROVIDED, HOWEVER, in the event that Sub's designees
are elected or appointed to the Board of Directors of the Company, until the
Effective Time, the Board of Directors of the Company shall have at least one
director who is a director on the date hereof and who is not an Affiliate or
associate of Parent or Sub or any other Person who beneficially owns Offer
Securities representing 5% or more of the Common Stock Equivalents, or is
designated by a majority of the directors of the Company who are such directors
(each, an "INDEPENDENT Director"). At the Effective Time, the Company, upon the
request of Parent or Sub, shall use its reasonable best efforts to cause Persons
designated by Sub to constitute the same percentage of each committee of its
Board of Directors, each Board of Directors of each Subsidiary and each
committee of each such Board of Directors (in each case to the extent of the
Company's ability to elect such Persons). Promptly upon the exercise by Sub of
any of the Warrants, the Company shall issue the relevant number of shares of
Common Stock to Sub, all in accordance with the terms of the Common Stock
Purchase Warrant Agreement or the Microsoft Warrant Agreement, as the case may
be.
(b) Following the election or appointment of Sub's designees
pursuant to this Section 2.3 and prior to the Effective Time, any amendment or
termination of this Agreement,
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the Company's Certificate of Incorporation or the Company's By-Laws, any
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of Parent
and Sub or waiver of any of the Company's rights hereunder, and any other
consent or action by the Board of Directors of the Company hereunder, shall
require the concurrence of a majority of the Independent Directors.
Notwithstanding anything in this Agreement to the contrary, in the event that
Parent's and Sub's designees constitute a majority of the directors on the Board
of Directors of the Company, the Independent Directors shall be entitled, on
behalf and at the expense of the Company, to take any action under this
Agreement or in connection with this Agreement and the transactions contemplated
hereby, including taking legal action regarding the enforcement of the terms of
this Agreement.
ARTICLE III
THE MERGER
Section 3.1 THE MERGER. (a) Upon the terms and subject to the
conditions of this Agreement, at the Closing (as such term is defined in Section
3.11), a certificate of merger (the "CERTIFICATE OF MERGER") shall be duly
prepared, executed and acknowledged by Sub and the Company in accordance with
the Delaware General Corporation Law and shall be filed with the Secretary of
State of Delaware as provided in Section 251 of the Delaware General Corporation
Law. The Merger shall become effective upon the filing of the Certificate of
Merger (or at such later time reflected in such Certificate of Merger as shall
be agreed to by Parent and the Company). The date and time when the Merger shall
become effective is hereinafter referred to as the "EFFECTIVE TIME."
(b) At the Effective Time, Sub shall be merged with and into
the Company and the separate corporate existence of Sub shall cease, and the
Company shall continue as the surviving corporation under the laws of the State
of Delaware under the name of "Wang Global Corporation" (the "SURVIVING
CORPORATION").
(c) From and after the Effective Time, the Merger shall have
the effects set forth in Section 259(a) of the Delaware General Corporation Law.
(d) If, at any time after the Effective Time, the Surviving
Corporation shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions or things are necessary or
desirable to continue in, vest, perfect or confirm of record or otherwise in the
Surviving Corporation's right, title or interest in, to or under any of the
rights, properties, privileges, franchises or assets of either of its
constituent corporations acquired or to be acquired by the Surviving Corporation
as a result of, or in connection with, the Merger, or otherwise to effect the
transactions contemplated by this Agreement, the officers and directors of the
Surviving Corporation shall be authorized to execute and deliver, in the name
and on behalf of either of the constituent corporations of the Merger, all such
deeds, bills of sale, assignments and assurances and to take and do, in the name
and on behalf of each of such corporations or otherwise, all such other actions
and things as may be necessary or desirable to vest, perfect or confirm any and
all right, title and interest in, to and under such rights, properties,
privileges,
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<PAGE> 18
franchises or assets in the Surviving Corporation or otherwise to carry out the
intent of this Agreement.
Section 3.2 TREATMENT OF CAPITAL STOCK AND WARRANTS. At the
Effective Time:
(a) Each share of Common Stock (including the associated
Rights) issued and outstanding immediately prior to the Effective Time (other
than (i) any shares of Common Stock which are held by any Subsidiary or in the
treasury of the Company, or which are held, directly or indirectly, by Parent or
any direct or indirect subsidiary of Parent (including Sub), all of which shall
cease to be outstanding and be canceled and retired and none of which shall
receive any payment with respect thereto and (ii) any shares of Common Stock
held by Dissenting Stockholders (as such term is defined in Section 3.3)) and
all rights in respect thereof shall, by virtue of the Merger and without any
action on the part of the holder thereof, forthwith cease to exist and be
converted into and represent the right to receive an amount in cash equal to
$29.25, without interest (the "COMMON STOCK MERGER CONSIDERATION").
(b) Each share of Series B Preferred Stock issued and
outstanding immediately prior to the Effective Time (other than (i) any shares
of Series B Preferred Stock which are held by any Subsidiary or in the treasury
of the Company, or which are held, directly or indirectly, by Parent or any
direct or indirect subsidiary of Parent (including Sub), all of which shall
cease to be outstanding and be canceled and retired and none of which shall
receive any payment with respect thereto and (ii) any shares of Series B
Preferred Stock held by Dissenting Stockholders (as such term is defined in
Section 3.3)) shall, by virtue of the Merger and without any action on the part
of the holders thereof, no longer be convertible into shares of Common Stock but
shall thereafter be convertible, in accordance with Section 7(E) of the
Certificate of Designation of the Series B Preferred Stock, into the right to
receive $1,101.17 (the "SERIES B PREFERRED STOCK MERGER CONSIDERATION").
(c) Each Common Stock Purchase Warrant issued and outstanding
immediately prior to the Effective Time (other than any Common Stock Purchase
Warrants which are held by any Subsidiary or in the treasury of the Company, or
which are held, directly or indirectly, by Parent or any direct or indirect
subsidiary of Parent (including Sub), all of which shall cease to be outstanding
and be canceled and retired and none of which shall receive any payment with
respect thereto) and all rights in respect thereof shall, by virtue of the
Merger and without any action on the part of the holders thereof, no longer be
exercisable into the right to receive Common Stock but shall become exercisable,
in accordance with Section 11.5 of the Common Stock Purchase Warrant Agreement,
into the right to receive $7.80 (the "COMMON STOCK WARRANT MERGER
CONSIDERATION").
(d) Each share of Series A Preferred Stock issued and
outstanding immediately prior to the Effective Time and all rights in respect
thereof shall, immediately prior to the Merger and without any action on the
part of the holders thereof, be converted, in accordance with Section 5(a) of
the Certificate of Designation of the Series A Preferred Stock, into such number
of fully paid and nonassessable shares of Common Stock as is determined by
dividing $1,000 by 23, such shares of Common Stock thereafter to be treated in
accordance with Section 3.2(a).
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(e) The Microsoft Warrant issued and outstanding immediately
prior to the Effective Time and all rights in respect thereof shall, by virtue
of the Merger and without any action on the part of the holder thereof, expire.
(f) The Olivetti Warrant and all rights in respect thereof
shall, by virtue of the Merger and without any action on the part of the holder
thereof, become exercisable for the kind and amount of shares of stock or other
securities or property which the holder would have been entitled to receive if,
immediately prior to the Effective Time, such holder had exercised the Olivetti
Warrant and the Company had elected to pay the amount due in Common Stock.
(g) Each share of common stock, par value $0.01 per share, of
Sub then issued and outstanding shall by virtue of the Merger and without any
action on the part of the holder thereof, become one fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
Section 3.3 DISSENTING CAPITAL STOCK. Notwithstanding anything
contained in this Agreement to the contrary but only to the extent required by
the Delaware General Corporation Law, shares of Common Stock, Series B Preferred
Stock or Series B Preferred Stock Depositary Shares that are issued and
outstanding immediately prior to the Effective Time and are held by holders who
comply with all the provisions of the law of the State of Delaware concerning
the right of holders of Common Stock, Series B Preferred Stock or Series B
Preferred Stock Depositary Shares, as the case may be, to dissent from the
Merger and require appraisal of their shares of Common Stock, Series B Preferred
Stock or Series B Preferred Stock Depositary Shares, as the case may be (such
holders, "DISSENTING STOCKHOLDERS"), shall not be converted into the right to
receive the Applicable Merger Consideration but shall become the right to
receive such consideration as may be determined to be due such Dissenting
Stockholder pursuant to the law of the State of Delaware; PROVIDED, HOWEVER,
that if any Dissenting Stockholder who demands appraisal of such holder's shares
under the Delaware General Corporation Law shall effectively withdraw or lose
(through failure to perfect or otherwise) his or her right to appraisal, then as
of the Effective Time or the occurrence of such event, whichever occurs later,
such holder's shares shall thereupon be deemed to have been converted as of the
Effective Time into the right to receive the Applicable Merger Consideration,
without any interest thereon, and such holder shall no longer be a Dissenting
Stockholder. The Company shall give Parent and Sub (x) notice of any written
demands for appraisal, withdrawals of demands for appraisal and any other
related instruments received by the Company, and (y) the opportunity to direct
all negotiations and proceedings with respect to demands for appraisal. The
Company shall not voluntarily make any payment with respect to any demands for
appraisal and shall not, except with the prior written consent of Parent, settle
or offer to settle any demand.
Section 3.4 SURRENDER OF CERTIFICATES. (a) Prior to the
Effective Time, Parent shall designate a bank or trust company located in the
United States to act as paying agent (the "PAYING AGENT") for the holders of
shares of Common Stock, Series B Preferred Stock, Series B Preferred Stock
Depositary Shares and Common Stock Purchase Warrants in connection with the
Merger to receive in trust funds to make the payments contemplated by Section
3.2. At the Effective Time, Parent shall cause the Paying Agent to mail and/or
make available to each holder of a certificate theretofore evidencing shares of
Common Stock, Series B Preferred Stock, Series B Preferred Stock Depositary
Shares and Common Stock Purchase Warrants (other than those
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<PAGE> 20
which are held by any Subsidiary or in the treasury of the Company or which are
held directly or indirectly by Parent or any direct or indirect subsidiary of
Parent (including Sub)) a notice and letter of transmittal advising such holder
of the effectiveness of the Merger and the procedure for surrendering to the
Paying Agent such certificate or certificates which immediately prior to the
Effective Time represented outstanding Common Stock, Series B Preferred Stock,
Series B Preferred Stock Depositary Shares and Common Stock Purchase Warrants
(the "Certificates") in exchange for the Applicable Merger Consideration
deliverable in respect thereof pursuant to this Article III. Upon the surrender
for cancellation to the Paying Agent of such Certificates, together with a
letter of transmittal, duly executed and completed in accordance with the
instructions thereon, and any other items specified by the letter of
transmittal, the Paying Agent shall promptly pay to the Person entitled thereto
the Applicable Merger Consideration deliverable in respect thereof. Until so
surrendered, each Certificate shall be deemed, for all corporate purposes, to
evidence only the right to receive upon such surrender the Applicable Merger
Consideration deliverable in respect thereof to which such Person is entitled
pursuant to this Article III. No interest shall be paid or accrued in respect of
such cash payments.
(b) If the Applicable Merger Consideration (or any portion
thereof) is to be delivered to a Person other than the Person in whose name the
Certificates surrendered in exchange therefor are registered, it shall be a
condition to the payment of the Applicable Merger Consideration that the
Certificates so surrendered shall be properly endorsed or accompanied by
appropriate stock powers and otherwise in proper form for transfer, that such
transfer otherwise be proper and that the Person requesting such transfer pay to
the Paying Agent any transfer or other taxes payable by reason of the foregoing
or establish to the satisfaction of the Paying Agent that such taxes have been
paid or are not required to be paid.
(c) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed, the Paying Agent will
issue in exchange for such lost, stolen or destroyed Certificate the Applicable
Merger Consideration deliverable in respect thereof as determined in accordance
with this Article III; PROVIDED, THAT the Person to whom the Applicable Merger
Consideration is paid shall, as a condition precedent to the payment thereof,
give the Surviving Corporation a bond in such sum as it may direct or otherwise
indemnify the Surviving Corporation in a manner satisfactory to it against any
claim that may be made against the Surviving Corporation with respect to the
Certificate claimed to have been lost, stolen or destroyed.
Section 3.5 PAYMENT. Concurrently with or immediately prior to
the Effective Time, Sub shall deposit in trust with the Paying Agent cash in
United States dollars in an aggregate amount equal to the product of (i) the
number of shares of Common Stock, Series B Preferred Stock, Series B Preferred
Stock Depositary Shares and Common Stock Purchase Warrants outstanding
immediately prior to the Effective Time (other than shares of Common Stock,
Series B Preferred Stock, Series B Preferred Stock Depositary Shares or Common
Stock Purchase Warrants which are held by any Subsidiary or in the treasury of
the Company or which are held directly or indirectly by Parent or any direct or
indirect subsidiary of Parent (including Sub) or a Person known at the time of
such deposit to be a Dissenting Stockholder) and (ii) the Applicable Merger
Consideration (such amount being hereinafter referred to as the "PAYMENT FUND").
The Payment Fund shall be invested by the Paying Agent as directed by Sub in
direct obligations of the United States, obligations for which the full faith
and credit of the United
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States is pledged to provide for the payment of principal and interest,
commercial paper of an issuer organized under the laws of a state of the United
States rated of the highest quality by Moody's Investors Services, Inc. or
Standard & Poor's Ratings Group or certificates of deposit, bank repurchase
agreements or bankers' acceptances of a United States commercial bank having at
least $1,000,000,000 in assets (collectively, "PERMITTED INVESTMENTS") or in
money market funds which are invested in Permitted Investments, and any net
earnings with respect thereto shall be paid to Sub as and when requested by Sub.
The Paying Agent shall, pursuant to irrevocable instructions, make the payments
referred to in Section 3.2(a) hereof out of the Payment Fund. The Payment Fund
shall not be used for any other purpose. Promptly following the date which is
one hundred and eighty (180) days after the Effective Time, the Paying Agent
shall return to the Surviving Corporation all cash, certificates and other
instruments in its possession that constitute any portion of the Payment Fund,
and the Paying Agent's duties shall terminate. Thereafter, each holder of a
Certificate may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat and similar laws) receive in
exchange therefor the Applicable Merger Consideration, without interest, but
shall have no greater rights against the Surviving Corporation than may be
accorded to general creditors of the Surviving Corporation under applicable law.
Notwithstanding the foregoing, neither the Paying Agent nor any party hereto
shall be liable to any stockholder for any Applicable Merger Consideration
delivered to a public official pursuant to applicable abandoned property,
escheat and similar laws.
Section 3.6 NO FURTHER RIGHTS OF TRANSFERS. At and after the
Effective Time, each holder of capital stock of the Company (other than holders
of Series B Preferred Stock) shall cease to have any rights as a stockholder of
the Company, except for, in the case of a holder of a Certificate (other than
shares of capital stock of the Company to be canceled pursuant to Section 3.2
hereof or held by Dissenting Stockholders), the right to surrender his or her
Certificate in exchange for payment of the Applicable Merger Consideration or,
in the case of a Dissenting Stockholder, to perfect his or her right to receive
payment for his or her shares pursuant to the laws of the State of Delaware if
such holder has validly perfected and not withdrawn or otherwise lost his or her
right to receive payment for his or her shares, and no transfer of shares of
capital stock of the Company (other than shares of Series B Preferred Stock)
shall be made on the stock transfer books of the Surviving Corporation.
Certificates presented to the Surviving Corporation after the Effective Time
shall be canceled and exchanged for cash as provided in this Article III. At the
close of business on the day of the Effective Time the stock ledger of the
Company with respect to capital stock of the Company shall be closed.
Section 3.7 STOCK OPTION AND OTHER PLANS. Prior to the
Effective Time, the Board of Directors of the Company (or, if appropriate, any
committee thereof) shall take all actions and shall use its reasonable best
efforts to obtain all necessary consents and releases from all of the holders of
all the outstanding stock options and other rights to purchase Common Stock (the
"OPTIONS") heretofore granted under any compensatory stock option plan of the
Company or otherwise (the "STOCK PLANS"), to (i) provide for the cancellation,
effective at the Effective Time, subject to the payment provided for in the next
sentence being made, of all Options, (ii) terminate, as of the Effective Time,
the Stock Plans and any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any of its Subsidiaries (collectively with the Stock Plans, referred
to as the "STOCK INCENTIVE PLANS") and (iii) amend, as of the Effective Time,
the provisions of any other Employee
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Benefit Plan providing for the issuance, transfer or grant of any capital stock
of the Company or any such Subsidiary, or any interest in respect of any capital
stock of the Company or any such Subsidiary, to provide no continuing rights to
acquire, hold, transfer or grant any capital stock of the Company or any such
Subsidiary or any interest in the capital stock of the Company or any such
Subsidiary. Stock Plans shall not include any Intercompany Convertible
Instruments and Options shall not include any options granted under any
Intercompany Convertible Instrument. Immediately prior to the Effective Time,
each Option, whether or not then vested or exercisable, shall no longer be
exercisable for the purchase of shares of Common Stock but shall entitle each
holder thereof, in cancellation and settlement therefor, to payments by the
Company in cash (the "CASH PAYMENT"), at the Effective Time, equal to the
product of (x) the total number of shares of Common Stock subject to such
Option, whether or not then vested or exercisable, and (y) the amount by which
the Applicable Merger Consideration for shares of Common Stock exceeds the
exercise price per share of Common Stock subject to such Option, each such Cash
Payment to be paid to each holder of an outstanding Option at the Effective
Time. The Company shall deliver to Parent within five business days of the date
hereof a true and complete list of the Options which are outstanding as of the
date hereof, together with detailed calculations of the Cash Payments relating
to such Options had the Effective Time occurred on the date of delivery thereof.
The Company shall update such list and such calculations as of, and deliver such
update to Parent on, the date that is two (2) business days prior to the
Effective Time, such updated list and calculations made as if the Effective Time
would occur on such date. Except as otherwise contemplated herein, any then
outstanding stock appreciation rights or limited stock appreciation rights
issued by the Company or any Subsidiary of the Company shall be canceled
immediately prior to the Effective Time without any payment therefor. The
Company shall use its reasonable best efforts to ensure that neither it nor any
of its Subsidiaries is or will be bound by any Options, other options, warrants,
rights or agreements which would entitle any Person, other than Parent or its
Affiliates, to own any capital stock of the Company or any of its Subsidiaries
or to receive any payment in respect thereof. Notwithstanding any other
provision of this Section 3.7, the Company shall not be required to purchase any
minority equity interests in any of its Subsidiaries. Notwithstanding any other
provision of this Section 3.7 to the contrary, payment of the Cash Payment may
be withheld with respect to any Option until necessary consents and releases are
obtained. The Company shall take all steps as may be required to provide that
with respect to each individual who is a director or officer of the Company
immediately prior to the Effective Time all transactions contemplated by this
Agreement with respect to stock held by such Person shall be exempt under the
Exchange Act in accordance with the terms and conditions set forth in that
certain No-Action Letter, dated January 12, 1999, issued by the Securities and
Exchange Commission to Skadden, Arps, Slate, Meagher & Flom LLP. Immediately
prior to the Merger, the Company shall cause any restrictions imposed on the
Restricted Stock to be lifted.
Section 3.8 CERTIFICATE OF INCORPORATION OF THE SURVIVING
CORPORATION. The Certificate of Incorporation of the Company, as amended, as in
effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation and shall be amended following the
Merger so that Article 4 thereof reads in its entirety as follows: "The total
number of shares of Common Stock which the Corporation has authority to issue is
1,000 shares of Common Stock, par value one cent ($0.01) per share."
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Section 3.9 BY-LAWS OF THE SURVIVING CORPORATION. The By-Laws
of the Company, as in effect immediately prior to the Effective Time, shall be
the By-Laws of the Surviving Corporation.
Section 3.10 DIRECTORS AND OFFICERS OF THE SURVIVING
CORPORATION. At the Effective Time, the directors of Sub immediately prior to
the Effective Time shall be the directors of the Surviving Corporation, each of
such directors to hold office, subject to the applicable provisions of the
Certificate of Incorporation and By-Laws of the Surviving Corporation, until the
next annual stockholders' meeting of the Surviving Corporation and until their
respective successors shall be duly elected or appointed and qualified. At the
Effective Time, the officers of the Company immediately prior to the Effective
Time shall, subject to the applicable provisions of the Certificate of
Incorporation and By-Laws of the Surviving Corporation, be the officers of the
Surviving Corporation until their respective successors shall be duly elected or
appointed and qualified.
Section 3.11 CLOSING. The Merger (the "CLOSING") shall take
place at 10:00 A.M. at the offices of White & Case LLP, 1155 Avenue of the
Americas, New York, New York 10036 as soon as practicable, but in any event
within three (3) business days after the last of the conditions set forth in
Articles VII and VIII hereof is satisfied or waived or at such other date or
place as the parties hereto shall agree in writing. Such date is herein referred
to as the "CLOSING DATE".
Section 3.12 WITHHOLDING RIGHTS. Parent shall be entitled to
deduct and withhold, or cause to be deducted or withheld, from the consideration
otherwise payable pursuant to this Agreement to any holder of Offer Securities
or Options such amounts as are required to be deducted and withheld with respect
to the making of such payment under the Code, or any provision of applicable
state, local or foreign Tax law. To the extent that amounts are so deducted and
withheld, such deducted and withheld amounts shall be treated for all purposes
of this Agreement as having been paid to such holders in respect of which such
deduction and withholding was made.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Parent and Sub that, except in
connection with the transactions contemplated hereby or as disclosed in the
Company's disclosure letter (the "COMPANY DISCLOSURE LETTER") delivered
concurrently with the delivery of this Agreement:
Section 4.1 DUE ORGANIZATION, GOOD STANDING AND CORPORATE
POWER. Each of the Company and its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and each such Person has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. The Company and each of its Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification
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<PAGE> 24
necessary, except in such jurisdictions where the failure to be so qualified or
licensed and in good standing could not reasonably be expected to have a
Material Adverse Effect on the Company. The Company has, prior to the date of
this Agreement, made available to Parent complete and correct copies of the
Company's Certificate of Incorporation, as amended, and the Company's By-Laws.
Section 4.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. The
Company has the requisite power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and (subject to, if required by
the Delaware General Corporation Law, the approval of the stockholders of the
Company) to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Company, and the consummation
by it of the transactions contemplated hereby, have been duly authorized and
approved by its Board of Directors, and no other corporate action on the part of
the Company is necessary to authorize the execution, delivery and performance of
this Agreement by the Company and the consummation of the transactions
contemplated hereby (other than, if required by the Delaware General Corporation
Law, the approval of this Agreement by the stockholders of the Company and the
filing of appropriate merger documents as required by the Delaware General
Corporation Law). This Agreement has been duly executed and delivered by the
Company and, assuming that this Agreement is a valid and binding obligation of
Parent and Sub enforceable against Parent and Sub, is a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally, and general equitable principles.
Section 4.3 CAPITALIZATION. As of the date of this Agreement,
the authorized capital stock of the Company consists of (a) 5,000,000 shares of
preferred stock, $.01 par value per share, of which 90,000 shares have been
designated as Series A Preferred Stock and are issued and outstanding, 143,750
shares have been designated as Series B Preferred Stock and are issued and
outstanding and 100,000 shares have been designated as Series C Junior
Participating Preferred Stock, none of which are issued and outstanding and (b)
100,000,000 shares of Common Stock, of which 46,696,565 shares are issued and
outstanding (6,000 of which remain in a disputed claims reserve established
pursuant to (i) the reorganization plan of the Company pursuant to Chapter 11 of
the United States Bankruptcy Code that was approved by the United States
Bankruptcy Court for the District of Massachusetts (the "BANKRUPTCY COURT") on
September 20, 1993, (ii) the disclosure statement used to solicit consents to
such reorganization plan and (iii) the signed confirmation order with respect to
such reorganization plan (the documents referred to in clauses (i), (ii) and
(iii) being referred to hereinafter collectively as the "REORGANIZATION PLAN")).
All issued and outstanding shares of Common Stock, Series A Preferred Stock and
Series B Preferred Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. There is no outstanding
subscription, option, warrant, call, right, agreement, commitment, understanding
or arrangement relating to the issuance, sale, delivery, transfer or redemption
of Common Stock, Series A Preferred Stock, Series B Preferred Stock or any other
shares of capital stock of the Company (including any right of conversion or
exchange under any outstanding security or other instrument) other than, in the
case of Common Stock, in each case as of January 31, 1999, (i) shares of Common
Stock which may be issued to wholly-owned Subsidiaries of the Company upon the
conversion of intercompany convertible instruments issued pursuant to the
Reorganization Plan (none of which
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has been converted and all of which are redeemable by payment by the Company of
an amount not exceeding $50,000,000), (ii) up to 7,209,059 shares which may be
issued upon exercise of Common Stock Purchase Warrants issued or issuable to
former stockholders of the Company pursuant to the Reorganization Plan, (iii) up
to 9,324,807 shares of Common Stock which may be issued upon the conversion of
the Series A Preferred Stock and Series B Preferred Stock, (iv) up to 213,675
shares of Common Stock which may be issued upon exercise of the Microsoft
Warrants, (v) shares of Common Stock which may be issued upon the exercise of
the Olivetti Warrant, (vi) 1,500,000 shares of Common Stock which may be issued
pursuant to an Ancillary Consideration Agreement, dated March 17, 1998, by and
between the Company and Olivetti , (vii) up to 13,402,500 shares of Common Stock
which may be issued to employees of the Company pursuant to the Company's 1993
Stock Incentive Plan, 1994 Employees' Stock Incentive Plan, 1995 Employees'
Stock Purchase Plan, Olsy Employee Stock Incentive Plan, the I-Net Rollover
Stock Option Plan, the Parian Rollover Stock Option Plan, the Van Dyke Rollover
Stock Option Plan and the non-plan options, and (viii) up to 240,000 shares of
Common Stock issuable upon the exercise of stock options, granted to the
directors of the Company pursuant to the Company's 1993 and 1995 Directors'
Stock Option Plans. Neither the Company nor any of its Subsidiaries has
authorized or issued and outstanding any bonds, debentures, notes or other
indebtedness the holders of which have the right to vote (or to convert or
exchange such bonds, debentures, notes or other indebtedness into or exercisable
for securities the holders of which have the right to vote) with the
stockholders of such Person on any matter, except for any such bonds,
debentures, notes or other indebtedness the existence of which does not have, or
could not reasonably be expected to have, a Material Adverse Effect. No shares
of the capital stock of the Company are held in its treasury. All issued and
outstanding shares of capital stock of the Company and each of its Subsidiaries
have been duly authorized and validly issued and are fully paid and
nonassessable and none of them is subject to, nor was issued in violation of,
any preemptive rights, except where, in the case of any Subsidiary, the failure
to be so authorized, issued, paid, nonassessable or issued does not have, or
could not reasonably be expected to have, a Material Adverse Effect.
Section 4.4 CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming
(i) the filings required under the HSR Act are made and the waiting period
thereunder has been terminated or has expired, (ii) voluntary notification under
Section 721 of Exon-Florio is made, (iii) the prior notification and reporting
requirements of the European Community pursuant to Council Regulation 4064/89,
as amended (the "EU ANTITRUST LAWS") as well as any antitrust
filings/notifications which must or may be effected at the national level in
countries having jurisdiction are complied with or made, (iv) the requirements
of the Exchange Act relating to the proxy statement or information statement
required in connection with the Stockholders' Meeting (the "PROXY STATEMENT"),
if any, and the Offer are met, (v) the filing of the Certificate of Merger and
other appropriate merger documents, if any, as required by the Delaware General
Corporation Law, are made, (vi) such actions as are necessary in order to comply
with the Industrial Security Regulations of the U.S. Department of Defense and
(vii) approval of the Merger and this Agreement by the stockholders of the
Company, if required by the Delaware General Corporation Law, is received, the
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby will not: (A) violate or
conflict with any provision of the Company's Certificate of Incorporation or the
Company's By-Laws; (B) violate or conflict with any statute, ordinance, rule,
regulation, order or decree of any court or of any governmental or regulatory
body, agency or authority
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applicable to the Company or any of its Subsidiaries or by which any of their
respective properties or assets may be bound, except for such violations or
conflicts which are not "material", as such term is commonly understood in
connection with a Person's disclosure obligations under the Securities Act or
the Exchange Act, (C) require any filing by the Company or any of its
Subsidiaries with, or the obtaining by the Company or any of its Subsidiaries of
any permit, consent or approval of, or the giving of any notice by the Company
or any of its Subsidiaries to, any governmental or regulatory body, agency or
authority, except for such filings, permits, consents or approvals which are not
"material", as such term is commonly understood in connection with a Person's
disclosure obligations under the Securities Act or the Exchange Act; or (D)
result in a violation or breach of, conflict with, constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation, payment or acceleration) under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any of its Subsidiaries under, or give
rise to any obligation, right of termination, cancellation, acceleration or
increase of any obligation or a loss of a material benefit under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, contract, lease, franchise agreement or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party, or by which any such Person or any of its properties or assets are bound,
except for such violations, breaches or conflicts which are not "material", as
such term is commonly understood in connection with a Person's disclosure
obligations under the Securities Act or the Exchange Act.
Section 4.5 COMPANY REPORTS AND FINANCIAL STATEMENTS. Since
June 30, 1997, the Company and its Subsidiaries have filed all forms, reports,
schedules, statements, registration statements and documents with the Commission
required to be filed by it pursuant to the federal securities laws and the
Commission rules and regulations thereunder, and all forms, reports, schedules,
statements, registration statements and other documents filed with the
Commission by the Company and its Subsidiaries have complied in all material
respects with all applicable requirements of the Securities Act or the Exchange
Act, as the case may be, and the Commission rules and regulations promulgated
thereunder. The Company has, prior to the date of this Agreement, made available
to Parent true and complete copies of all forms, reports, schedules, statements,
registration statements and other filings filed by the Company and its
Subsidiaries with the Commission since June 30, 1997 (such forms, reports,
schedules, statements, registration statements and other filings, together with
any exhibits, any amendments thereto and information incorporated by reference
therein, are sometimes collectively referred to as the "COMMISSION FILINGS"). As
of their respective dates or, if amended, as of the date of the last such
amendment prior to the date hereof, the Commission Filings did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the
consolidated balance sheets of the Company and its consolidated Subsidiaries as
of the end of the fiscal years ended June 30, 1998 and June 30, 1997 and as of
the six month period ended December 31, 1998 and the consolidated statements of
operations, consolidated statements of stockholders' equity and consolidated
statements of cash flows of the Company and its consolidated Subsidiaries for
the fiscal years ended June 30, 1998 and June 30, 1997 and for the six month
period ended December 31, 1998 contained in the Commission Filings were prepared
in accordance with GAAP applied on a consistent basis (except as may be
indicated therein or in the notes or schedules thereto) and present fairly, in
all
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material respects, the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and changes in cash flows for the periods then ended. The
Company has heretofore made available to Parent true and correct copies of any
amendments or modifications to any Commission Filings which have not yet been
filed with the Commission but that are required to be filed with the Commission
in accordance with the Securities Act or the Exchange Act, as the case may be,
and the Commission rules and regulations promulgated thereunder.
Section 4.6 ABSENCE OF CERTAIN CHANGES. Except as previously
disclosed in the Commission Filings, since December 31, 1998, (i) there has not
been any event, change, occurrence, effect, fact or circumstance having, or
which could reasonably be expected to have, a Material Adverse Effect or a
Performance Material Adverse Effect on the Company; (ii) the businesses of the
Company and each of its Subsidiaries taken as a whole has been conducted only in
the ordinary course consistent with past practice and (iii) neither the Company
nor any of its Subsidiaries has taken any action referred to in Sections
6.3(b)(i), (iii), (iv), (v), (x), (xi), (xii), (xiii) or (xvi) (but, in the case
of (xvi), only with respect to the sub-clauses of 6.3 previously referred to in
this clause (iii)) hereof.
Section 4.7 TITLE TO PROPERTIES; ENCUMBRANCES. The Company and
each of its Subsidiaries has good, valid and marketable title to, or, in the
case of leased properties and assets, valid leasehold interests in, (i) all of
its material tangible properties and assets (real and personal), including,
without limitation, all the properties and assets reflected in the consolidated
balance sheet as of December 31, 1998 contained in the Commission Filings,
except as indicated in the notes thereto and except for properties and assets
reflected in the consolidated balance sheet as of December 31, 1998 contained in
the Commission Filings which have been sold or otherwise disposed of in the
ordinary course of business after such date and except where the failure to have
such good, valid and marketable title could not reasonably be expected to have a
Material Adverse Effect on the Company, and (ii) all the tangible properties and
assets purchased by the Company and any of its Subsidiaries since December 31,
1998, except for such properties and assets which have been sold or otherwise
disposed of in the ordinary course of business and except where the failure to
have such good, valid and marketable title could not reasonably be expected to
have a Material Adverse Effect on the Company; in each case subject to no
encumbrance, lien, charge or other restriction of any kind or character, except
for (A) liens reflected in the consolidated balance sheet as of December 31,
1998 contained in the Commission Filings, (B) liens consisting of zoning or
planning restrictions, easements, permits and other restrictions or limitations
on the use of real property or irregularities in title thereto which do not
materially detract from the value of, or impair the use of, such property by the
Company or any of its Subsidiaries in the operation of its respective business,
(C) liens for current taxes, assessments or governmental charges or levies on
property not yet due and delinquent and (D) such encumbrances, liens, charges or
other restrictions which could not reasonably be expected to have a Material
Adverse Effect on the Company.
Section 4.8 COMPLIANCE WITH LAWS. (i) Except as disclosed in
the Commission Filings, the Company and its Subsidiaries are in compliance with
all applicable federal, state, local and foreign statutes, laws, regulations,
orders, judgments and decrees except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect or a Performance
Material Adverse Effect on the Company.
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(ii) The Company and its Subsidiaries hold, to the extent
legally required, all federal, state, local and foreign permits, approvals,
licenses, authorizations, certificates, rights, exemptions and orders from
governmental authorities (the "PERMITS") that are material to and required for
the operation of the business of the Company or its Subsidiaries as now
conducted, and there has not occurred any default under any such Permit, except
to the extent that the failure to so hold or such default could not reasonably
be expected to have a Material Adverse Effect or a Performance Material Adverse
Effect on the Company.
Section 4.9 LITIGATION. Except as disclosed in the Commission
Filings, there is no action, suit, proceeding at law or in equity, or any
arbitration or any administrative or other proceeding by or before (or to the
best knowledge of the Company any investigation by) any governmental or other
instrumentality or agency, pending, or, to the best knowledge of the Company,
threatened, against or affecting the Company or any of its Subsidiaries, or any
of their respective properties or rights which could reasonably be expected to
have a Material Adverse Effect or a Performance Material Adverse Effect on the
Company. Neither the Company nor any of its Subsidiaries is subject to any
judgment, order or decree entered in any lawsuit or proceeding which could
reasonably be expected to have a Material Adverse Effect or a Performance
Material Adverse Effect on the Company.
Section 4.10 EMPLOYEE BENEFIT PLANS. (a) "Employee Benefit
Plan" shall mean each domestic and foreign employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations thereunder ("ERISA"), whether or not
subject to ERISA, and each stock option, stock appreciation right, restricted
stock, stock purchase, incentive, bonus, profit-sharing, savings, deferred
compensation, health, medical, dental, life insurance, disability, accident,
supplemental unemployment or retirement, employment, severance or salary or
benefits continuation or fringe benefit plan, program, arrangement, agreement or
commitment currently maintained by the Company or any Subsidiary thereof
(including, for this purpose and for the purpose of all of the representations
in this Section 4.10, all employers (whether or not incorporated) that would be
treated together with the Company as a single employer within the meaning of
Section 414 of the Code) for the benefit of any employee, director, former
employee, former director of the Company or any of its Subsidiaries or to which
the Company or any Subsidiary thereof contributes (or has any obligation to
contribute), has any liability or is a party.
(b)(i) Each Employee Benefit Plan is in substantial compliance
with all applicable laws (including, without limitation, ERISA and the Code) and
has been administered and operated in all material respects in accordance with
its terms; (ii) each Employee Benefit Plan which is intended to be "qualified"
within the meaning of Section 401(a) of the Code has, after 1993, received a
favorable determination letter from the Internal Revenue Service and, to the
best knowledge of the Company, no event has occurred and no condition exists
which could reasonably be expected to result in the revocation of any such
determination; (iii) the actuarial present value of the accumulated plan
benefits (whether or not vested) under each Employee Benefit Plan covered by
Title IV of ERISA (other than any Employee Benefit Plan which is a
"Multiemployer Plan" (as defined in Section 4001(a)(3) of ERISA) (a
"MULTIEMPLOYER PLAN")) as of the close of its most recent plan year did not
exceed the market value of the assets allocable thereto; (iv) no Employee
Benefit Plan covered by Title IV of ERISA (other than any Multiemployer Plan)
has been terminated and no proceedings have been instituted to terminate or
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appoint a trustee under Title IV of ERISA to administer any such plan; (v) no
"reportable event" (as defined in Section 4043 of ERISA) has occurred with
respect to any Employee Benefit Plan covered by Title IV of ERISA (other than
events for which the notice period has been waived or with respect to any
Multiemployer Plan); (vi) no Employee Benefit Plan (other than any Multiemployer
Plan) subject to Section 412 of the Code or Section 302 of ERISA has incurred
any accumulated funding deficiency within the meaning of Section 412 of the Code
or Section 302 of ERISA, or obtained a waiver of any minimum funding standard or
an extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA; (vii) as of the date of this Agreement, none of the Company
nor any of its Affiliates has incurred any unsatisfied withdrawal liability
under Part 1 of Subtitle E of Title IV of ERISA to any Multiemployer Plan and
neither the Company nor any of its Affiliates would be subject to any such
withdrawal liability if, as of the close of the most recent fiscal year of any
such plan ended prior to the date hereof, the Company or any such Affiliate were
to engage in a complete withdrawal (as defined in Section 4203 of ERISA) or
partial withdrawal (as defined in Section 4205 of ERISA) from any such plan;
(viii) full payment has been timely made of all amounts which the Company and/or
its Subsidiaries is required under applicable law or under any Employee Benefit
Plan or related agreement to have paid as of the last day of the most recent
fiscal year of such Employee Benefit Plan ended prior to the date hereof, and
the Company and each such Subsidiary have made adequate provisions, in
accordance with GAAP, in their financial statements for all obligations and
liabilities under all Employee Benefit Plans that have accrued but have not been
paid because they are not yet due under the terms of any such Employee Benefit
Plan or any related agreement or applicable law, and, to the best knowledge of
the Company, no event has occurred or condition exists that would reasonably be
expected to result in a material increase in the level of such amounts paid or
accrued for the most recently ended fiscal year; (ix) no Employee Benefit Plan
provides for post-employment or retiree health, life insurance or other welfare
benefits which could result in a material liability of the Company or any
Subsidiary thereof; (x) neither the Company nor any of its Subsidiaries has any
unfunded liabilities pursuant to any Employee Benefit Plan which is an "employee
pension benefit plan" (within the meaning of Section 3(2) of ERISA) that is not
intended to be qualified under Section 401(a) of the Code; (xi) neither the
Company nor any of its Subsidiaries, nor any of their respective directors,
officers or employees, nor, to the best knowledge of the Company, any other
"disqualified person" or "party in interest" (as defined in Section 4975(e)(2)
of the Code and Section 3(14) of ERISA, respectively) has engaged in any
transaction, act or omission to act in connection with any Employee Benefit Plan
that could reasonably be expected to result in the imposition on the Company or
any of its Subsidiaries of a material penalty or fine pursuant to Section 502 of
ERISA, damages pursuant to Section 409 of ERISA or a tax pursuant to Section
4975 of the Code or any obligation by the Company or any of its Subsidiaries to
indemnify any employee, officer or director of the Company or any of its
Affiliates against any such penalty, fine, damages or tax; (xii) the execution
of this Agreement and the consummation of the transactions contemplated hereby
do not constitute a triggering event under any Employee Benefit Plan, policy,
arrangement, statement, commitment or agreement, which (either alone or upon the
occurrence of any additional or subsequent event) will or may result in any
payment, "parachute payment" (as such term is defined in Section 280G of the
Code), severance, bonus, retirement or job security or similar-type benefit, or
increase any benefits or accelerate the payment or vesting of any benefits to
any employee or former employee or director of the Company or any of its
Subsidiaries; (xiii) no liability, claim, action, audit, examination or
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litigation has been made, commenced or, to the best knowledge of the Company,
threatened with respect to any Employee Benefit Plan (other than routine claims
for benefits payable in the ordinary course) which could result in a material
liability of the Company or any Subsidiary thereof; and (xiv) neither the
Company nor any of its Affiliates has incurred or expects to incur any material
liability (including, without limitation, additional contributions, fines, taxes
or penalties) as a result of a failure to administer or operate any Employee
Benefit Plan that is a "group health plan" (as such term is defined in Section
607(1) of ERISA or Section 5000(b)(1) of the Code) in compliance with the
applicable requirements of Part 6 of Subtitle B of Title I of ERISA or Section
4980B of the Code.
Section 4.11 EMPLOYMENT RELATIONS AND AGREEMENTS. Except as
could not reasonably be expected to have a Material Adverse Effect or a
Performance Material Adverse Effect on the Company, (i) each of the Company and
its Subsidiaries is in compliance with all federal, foreign, state or other
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and has not and is not engaged in
any unfair labor practice; (ii) no unfair labor practice charge or complaint
against the Company or any of its Subsidiaries is pending before the National
Labor Relations Board or an equivalent tribunal under applicable foreign law;
(iii) there is no labor strike, slowdown, stoppage or dispute actually pending
or, to the best knowledge of the Company, threatened against or involving the
Company or any of its Subsidiaries; (iv) no representation question exists
respecting the employees of the Company or any of its Subsidiaries; (v) neither
the Company nor any of its Subsidiaries is experiencing or has experienced
during the immediately preceding three (3) years any labor strike, slowdown,
stoppage or dispute and (vi) there has been no "mass layoff" or "plant closing"
by the Company as defined in WARN or state law equivalent, or any other mass
layoff or plant closing that would trigger notice pursuant to WARN or state law
equivalent, within ninety (90) days prior to the Closing Date.
Section 4.12 TAXES.
(a) TAX RETURNS. The Company and each of its Subsidiaries has
timely filed or caused to be timely filed with the appropriate taxing
authorities all federal and other returns, statements, forms and reports for
Taxes (as hereinafter defined) ("RETURNS") that are required to be filed by, or
with respect to, the Company and such Subsidiaries on or prior to the Closing
Date. The Returns reflect accurately all liability for Taxes of the Company and
each of its Subsidiaries for the periods covered thereby. "TAXES" shall mean all
taxes, assessments, charges, duties, fees, levies or other governmental charges
including, without limitation, all Federal, state, local, foreign and other
income, franchise, profits, capital gains, capital stock, transfer, sales, use,
occupation, property, excise, severance, windfall profits, stamp, license,
payroll, withholding and other taxes, assessments, charges, duties, fees, levies
or other governmental charges of any kind whatsoever (whether payable directly
or by withholding and whether or not requiring the filing of a Return), all
estimated taxes, deficiency assessments, additions to tax, penalties and
interest and shall include any liability for such amounts as a result of being a
member of a combined, consolidated, unitary or affiliated group.
(b) PAYMENT OF TAXES. The Company and its Subsidiaries have
timely paid all Taxes that are currently due and payable except for those
contested in good faith and for which
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adequate reserves have been made on the financial statements of the Company and
its Subsidiaries in accordance with GAAP.
(c) OTHER TAX MATTERS. (i) The Company and each of its
Subsidiaries have not been the subject of an audit or other examination of Taxes
by the tax authorities of any nation, state or locality with respect to any
taxable period for which the statute of limitations has not expired, nor has the
Company or any of its Subsidiaries received any written notices with respect to
such taxable periods from any tax authority relating to any issue which could
affect the Tax liability of the Company or any of its Subsidiaries that has not
been resolved or paid in full.
(ii) Neither the Company nor any of its Subsidiaries has
been included in any "consolidated," "unitary" or "combined" Return (other than
Returns which include only the Company and any Subsidiaries of the Company)
provided for under the laws of the United States, any foreign jurisdiction or
any state or locality with respect to Taxes for any taxable period for which the
statute of limitations has not expired.
(iii) All Taxes which the Company or any of its
Subsidiaries is (or was) required by law to withhold or collect have been duly
withheld or collected, and have been timely paid over to the proper authorities
to the extent due and payable.
(iv) There are no tax sharing, allocation, indemnification
or similar agreements or arrangements in effect as between the Company, any
Subsidiary, or any predecessor or Affiliate of any of them and any other party
under which Parent, Sub or the Company (or any of its Subsidiaries) could be
liable for any Taxes or other claims of any party other than the Company or any
Subsidiary of the Company.
(v) No indebtedness of the Company or any of its
Subsidiaries consists of "corporate acquisition indebtedness" within the meaning
of Section 279 of the Code.
(vi) Neither the Company nor any of its Subsidiaries has
been required to include in income any adjustment pursuant to Section 481 or any
similar provision of the Code or the corresponding tax laws of any nation, state
or locality by reason of a voluntary change in accounting method initiated by
the Company or any of its Subsidiaries, and the Internal Revenue Service or
other taxing authority has not initiated or proposed any such adjustment or
change in accounting method.
(vii) Neither the Company nor any of its Subsidiaries has,
as of the Closing Date: (A) entered into an agreement or waiver extending any
statute of limitations relating to the payment or collection of Taxes of the
Company or any of its Subsidiaries or (B) is presently contesting the Tax
liability of the Company or any of its Subsidiaries before any court, tribunal
or agency.
(viii) No election under 341(f) of the Code has been made or
shall be made prior to the Closing Date to treat the Company as a consenting
corporation, as defined in Section 341 of the Code.
Section 4.13 LIABILITIES. Neither the Company nor any of its
Subsidiaries has any claims, liabilities or indebtedness, contingent or
otherwise of any kind whatsoever, outstanding
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except (i) as set forth in the Commission Filings, (ii) for liabilities incurred
subsequent to December 31, 1998 in the ordinary course of business consistent
with past practice (other than borrowings (x) under the Company's existing $500
million credit facility (the "CREDIT FACILITY") pursuant to the Credit
Agreement, dated March 13, 1998 by and among the Company, Wang Nederland B.V.,
the lenders from time to time party thereto, Bankers Trust Company, National
Westminster Bank plc and Lehman Commercial Paper Inc. or (y) other ordinary
course borrowings not exceeding, in the aggregate, $50 million) or (z) claims,
liabilities or indebtedness which could not reasonably be expected to have a
Material Adverse Effect on the Company.
Section 4.14 INTELLECTUAL PROPERTY. (a) The Company owns or is
licensed to use, the rights to all patents, trademarks, trade names, service
marks, copyrights together with any registrations and applications therefor,
internet domain names, net lists, schematics, technology, trade secrets, source
codes, know-how, computer software programs or applications including, without
limitation, all object and source codes and tangible or intangible proprietary
information or material used in and material to the business of the Company and
any of its Subsidiaries as currently conducted (the "COMPANY INTELLECTUAL
PROPERTY"), except where the failure to so own or license could not reasonably
be expected to have a Material Adverse Effect on the Company. Neither the
Company nor any of its Subsidiaries is, or as a result of the execution,
delivery or performance of the Company's obligations hereunder will be, in
violation of, or lose any rights pursuant to, any license or agreement, except
as could not reasonably be expected to have a Material Adverse Effect on the
Company.
(b) No claims with respect to the Company Intellectual
Property are pending or, to the best knowledge of the Company, threatened by any
Person (i) that the manufacture, sale or use of any product or process as now
used or offered or proposed for use or sale by the Company or any of its
Subsidiaries infringes on any copyright, trade secret, patent or other
intellectual property right of any Person, or (ii) challenging the ownership,
validity, enforceability or effectiveness of any of the Company Intellectual
Property owned by the Company or any of its Subsidiaries. To the best knowledge
of the Company, all issued patents, all registered trademarks and service marks
and all copyrights owned by the Company or any of its Subsidiaries are valid,
enforceable and subsisting. To the best knowledge of the Company, there has not
been and there is not any material unauthorized use, infringement or
misappropriation of any of the Company Intellectual Property by any third
Person, including, without limitation, any employee or former employee.
(c) No Company Intellectual Property owned by the Company is
subject to any outstanding order, judgment, decree, stipulation or agreement
restricting in any material manner the licensing thereof by the Company or any
of its Subsidiaries.
Section 4.15 SCHEDULE 14D-1. None of the information supplied
by the Company for inclusion or incorporation by reference in the Offer
Documents will at the respective times the Offer Documents are filed with the
Commission, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made, in light of the
circumstance under which they are made, not misleading.
Section 4.16 BROKER'S OR FINDER'S FEE. Except for the fees of
CSFB and Greenhill & Co., LLC (whose fees and expenses will be paid by the
Company in accordance with
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the Company's agreement with such firms, true and correct copies of which have
been previously delivered to Parent by the Company), no agent, broker, Person or
firm acting on behalf of the Company is, or will be, entitled to any commission
or broker's or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by, or under common control with any of the parties
hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
Section 4.17 ENVIRONMENTAL LAWS AND REGULATIONS. Except as
could not reasonably be expected to have a Material Adverse Effect on the
Company, (i) Hazardous Materials have not at any time been Released or disposed
of, on any Company Property, or by the Company on or to the best knowledge of
the Company no Hazardous Materials Released by the Company have migrated to or
been transmitted to any property adjoining or adjacent to any Company Property
or any business or operations of the Company or any of its Subsidiaries, (ii)
the Company and each of its Subsidiaries are in compliance with all
Environmental Laws and the requirements of any permits issued under such
Environmental Laws with respect to any Company Property, (iii) there are no
past, pending or to the knowledge of the Company any threatened Environmental
Claims against the Company or any of its Subsidiaries or any Company Property
and (iv) to the knowledge of the Company, there are no facts or circumstances,
conditions or occurrences regarding any Company Property or any property
adjoining or adjacent to any currently or formerly owned Company Property that
could reasonably be anticipated (A) to form the basis of an Environmental Claim
against the Company or any of its Subsidiaries or any Company Property or (B) to
cause such Company Property to be subject to any restrictions on its ownership,
occupancy, use or transferability under any Environmental Law.
For purposes of this Agreement, the following terms shall have
the following meanings: (i) "COMPANY PROPERTY" means any real property owned,
leased or operated by the Company or any of its Subsidiaries; (ii) "HAZARDOUS
MATERIALS" means (A) any petroleum or petroleum products, radioactive materials,
asbestos in any form that has become friable, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid containing levels
of polychlorinated biphenyls, gas; (B) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "extremely
hazardous substances," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," or words of similar import, under any applicable Environmental Law;
and (iii) "ENVIRONMENTAL LAW" means any federal, state, foreign or local
statute, law, rule, regulation, ordinance, guideline, policy, code or rule of
common law in effect and in each case as amended as of the date hereof and
Closing Date, and any judicial interpretation thereof or administrative order
applicable to the Company or its operations or property as of the date hereof
and Closing Date, including any judicial or administrative order, consent decree
or judgment, relating to the environment, health, safety or Hazardous Materials,
including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et seq.;
the Resource Conservation and Recovery Act, as amended, 42 U.S.C. ss. 6901 et
seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et
seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the Clean
Air Act, 42 U.S.C. ss. 7401 et seq.; Occupational Safety and Health Act, 29
U.S.C. 651 et seq.; Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the
Safe Drinking Water Act, 42 U.S.C. ss. 300f et seq., and their state and local
counterparts and
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equivalents; and (iv) "ENVIRONMENTAL CLAIMS" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings under any
Environmental Law or any permit issued under any such Environmental Law (for
purposes of this subclause (iv), "CLAIMS"), including without limitation (A) any
and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (B) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment; and (v)
"RELEASE" means disposing, discharging, injecting, spilling, leaking, leaching,
dumping, emitting, escaping, emptying or seeping into or upon any land or
surface water or ground water except for releases into the air or surface water
in compliance with Environmental Laws and all applicable permits.
Section 4.18 STATE TAKEOVER STATUTES. The Board of Directors
of the Company has approved the Offer, the Merger and this Agreement and such
approval is sufficient to render inapplicable to the Offer, the Merger and this
Agreement and the other transactions contemplated by this Agreement the
provisions of Section 203 of the Delaware General Corporation Law. Except for
Section 203 of the Delaware General Corporation Law (which has been rendered
inapplicable), no other takeover statute or similar statute or regulation of any
state of the United States of America is applicable to the Offer, the Merger or
this Agreement.
Section 4.19 VOTING REQUIREMENTS. The affirmative vote of the
holders of at least a majority of the outstanding shares of Common Stock, the
Series A Preferred Stock and the Series B Preferred Stock (voting as one class,
with each share of Common Stock, each share of Series A Preferred Stock and each
share of the Series B Preferred Stock having one (1) vote) entitled to be cast
approving this Agreement is the only vote of the holders of any class or series
of the Company's capital stock necessary to approve this Agreement and the
transactions contemplated by this Agreement.
Section 4.20 RIGHTS AGREEMENT. The Company and the Board of
Directors of the Company have taken and will maintain in effect all necessary
action to (i) render the Rights Agreement inapplicable with respect to the
Offer, the Merger and the other transactions contemplated by this Agreement and
(ii) ensure that (y) neither Parent nor Sub nor any of their Affiliates (as
defined in the Rights Agreement) or Associates (as defined in the Rights
Agreement) is considered to be an Acquiring Person (as defined in the Rights
Agreement) and (z) the provisions of the Rights Agreement, including the
occurrence of a Distribution Date (as defined in the Rights Agreement), are not
and shall not be triggered by reason of the announcement or consummation of the
Offer, the Merger or the consummation of any of the other transactions
contemplated by this Agreement. The Company has made available to Parent a
complete and correct copy of the Rights Agreement as amended and supplemented to
the date of this Agreement.
Section 4.21 YEAR 2000. (a) All computer systems, computer
software or technology that are internal and material to the business, finances
or operations of the Company and its Subsidiaries ("MATERIAL SYSTEMS") will not
be materially adversely affected by any problems associated with Year 2000
Compliance. (b) The Company will not suffer a Material
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Adverse Effect caused by any problems associated with Year 2000 Compliance of
any Material Systems. (c) To the best knowledge of the Company, the Company will
not suffer a Material Adverse Effect caused by any problems associated with Year
2000 Compliance of any of its products or services sold or licensed to customers
of the Company and its Subsidiaries. (d) Neither the Company nor any of its
Subsidiaries have received any written claims or demands asserting any problems
associated with Year 2000 Compliance that have had, or could reasonably be
expected to have, a Material Adverse Effect on the Company.
For purposes of this Agreement, "YEAR 2000 COMPLIANCE" means
that a product or system is (i) able to receive, record, store, process,
calculate, manipulate and output dates from and after January 1, 2000, time
periods that include January 1, 2000 and information that is dependent on or
relates to such dates or time periods, in that same manner and with the same
accuracy, functionality, data integrity and performance as when dates or time
periods prior to January 1, 2000 are involved and (ii) able to store and output
date information in a manner that is unambiguous as to century.
Section 4.22 SERIES A AND SERIES B PREFERRED STOCK. Since the
original date of the Certificate of Designation of the Series A Preferred Stock
or the Certificate of Designation of the Series B Preferred Stock, as the case
may be, neither the Series A Preferred Stock Conversion Price nor the Series B
Preferred Stock Conversion Price, as the case may be, has been subject to any
adjustment, whether in accordance with the terms of such Certificate of
Designation or otherwise. Neither the holders of the Series A Preferred Stock
nor the holders of the Series B Preferred Stock are entitled to (i) receive any
accrued dividends which have not been paid when due or (ii) elect members to the
Company's Board of Directors in accordance with the terms of their respective
Certificate of Designation.
Section 4.23 COMMON STOCK PURCHASE WARRANTS AND MICROSOFT
WARRANT. Since the original date of the Common Stock Warrant Purchase Agreement
or the Microsoft Warrant Agreement, as the case may be, (i) neither the Common
Stock Purchase Warrant Exercise Price nor the Microsoft Warrant Exercise Price,
as the case may be, has been subject to any adjustment and (ii) no event has
occurred which would entitle a holder of a Common Stock Purchase Warrant to
exercise such Common Stock Purchase Warrant for more than one share of Common
Stock.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Section 5. Each of Parent and Sub hereby represents and
warrants to the Company that, except in connection with the transactions
contemplated hereby or as set forth on Parent's disclosure letter (the "PARENT
DISCLOSURE LETTER") delivered concurrently with the delivery of this Agreement:
Section 5.1 DUE ORGANIZATION, GOOD STANDING AND CORPORATE
POWER. Parent is a public company with limited liability duly organized and
validly existing under the laws of The Netherlands. Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
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Section 5.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. Each of
Parent and Sub has the requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Parent and Sub, and the consummation by each of them of the
transactions contemplated hereby, have been duly authorized and approved by the
Supervisory Board and the Executive Board of Parent and the Board of Directors
of Sub. No other corporate action on the part of either of Parent or Sub is
necessary to authorize the execution, delivery and performance of this Agreement
by each of Parent and Sub and the consummation of the transactions contemplated
hereby (other than the filing of appropriate merger documents as required by the
Delaware General Corporation Law). This Agreement has been duly executed and
delivered by each of Parent and Sub and, assuming that this Agreement is a valid
and binding obligation of the Company enforceable against the Company, is a
valid and binding obligation of each of Parent and Sub, enforceable against each
of Parent and Sub in accordance with its terms, except that such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally, and
general equitable principles.
Section 5.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming
(i) the filings required under the HSR Act, are made and the waiting period
thereunder has been terminated or has expired, (ii) voluntary notification under
Section 721 of Exon-Florio is made, (iii) the prior notification and reporting
requirements of the European Community pursuant to the EU Antitrust Laws as well
as any antitrust filings/notifications which must or may be effected at the
national level in countries having jurisdiction are made, (iv) the requirements
of the Exchange Act relating to the Proxy Statement, if any, and the Offer are
met, (v) the filing of the Certificate of Merger and other appropriate merger
documents, if any, as required by the Delaware General Corporation Law, are
made, (vi) such actions as are necessary in order to comply with Industrial
Security Regulations of the U.S. Department of Defense and (vii) approval of the
Merger and this Agreement by the stockholders of the Company, if required by the
Delaware General Corporation Law, is received, the execution and delivery of
this Agreement by Parent and Sub and the consummation by Parent and Sub of the
transactions contemplated hereby will not: (A) violate or conflict with any
provision of the Articles of Association of Parent or the Certificate of
Incorporation or the By-Laws of Sub; (B) violate or conflict with any statute,
ordinance, rule, regulation, order or decree of any court or of any governmental
or regulatory body, agency or authority applicable to Parent or any of its
subsidiaries or by which either of their respective properties or assets may be
bound, except for such violations or conflicts which are not "material", as such
term is commonly understood in connection with a Person's disclosure obligations
under the Securities Act or the Exchange Act; (C) require any filing with, or
permit, consent or approval of, or the giving of any notice to, any governmental
or regulatory body, agency or authority, except for such filings, permits,
consents or approvals which are not "material", as such term is commonly
understood in connection with a Person's disclosure obligations under the
Securities Act or the Exchange Act; or (D) result in a violation or breach of,
conflict with, constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, cancellation, payment or
acceleration) under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Parent, or any of
its subsidiaries under, or give rise to any obligation, right of termination,
cancellation, acceleration or increase of any obligation or a loss of a material
benefit under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, franchise,
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permit, agreement, contract, lease, franchise agreement or other instrument or
obligation to which Parent or any of its subsidiaries is a party, or by which
any such Person or any of its properties or assets are bound, except for such
violations, breaches or conflicts which are not "material", as such term is
commonly understood in connection with a Person's disclosure obligations under
the Securities Act or the Exchange Act.
Section 5.4 SCHEDULE 14D-9 AND PROXY STATEMENT. The written
information supplied or to be supplied by Parent and Sub for inclusion in the
Proxy Statement and the Schedule l4D-9 of the Company will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made, in light
of the circumstances under which they are made, not misleading.
Section 5.5 ABSENCE OF CERTAIN CHANGES. Since December 31,
1998, there has not been any event, change, occurrence, effect, fact or
circumstance having, or which could reasonably be expected to have, a Material
Adverse Effect or Performance Material Adverse Effect on Parent.
Section 5.6 BROKER'S OR FINDER'S FEE. Except for ABN Amro Bank
N.V. and Merrill Lynch, Pierce Fenner & Smith Incorporated (whose fees and
expenses as financial advisor to Parent and Sub will be paid by Parent or Sub),
no agent, broker, Person or firm acting on behalf of Parent or Sub is, or will
be, entitled to any commission or broker's or finder's fees from any of the
parties hereto, or from any Person controlling, controlled by, or under common
control with any of the parties hereto, in connection with this Agreement or any
of the transactions contemplated hereby.
Section 5.7 SUB'S OPERATIONS. Sub was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement and has
not engaged in any business activities or conducted any operations other than in
connection with such transactions.
Section 5.8 SUFFICIENT FUNDS. Parent and Sub expect to have
available to them funds sufficient to satisfy all of Parent's and Sub's
respective obligations hereunder pursuant to a definitive commitment letter (the
"Commitment Letter") issued severally by ABN Amro Bank N.V. and ING Bank N.V.,
subject only to the conditions set forth therein. The Commitment Letter has not
been modified, amended or waived by any party thereto. A copy of the Commitment
Letter has previously been delivered to the Company. The Commitment Letter has
been executed by Parent and, to the extent any fees are due to the lenders party
thereto on such date of execution, such fees have been paid.
ARTICLE VI
TRANSACTIONS PRIOR TO CLOSING DATE
Section 6.1 ACCESS TO INFORMATION CONCERNING PROPERTIES AND
RECORDS. During the period commencing on the date hereof until such time as
nominees of Parent shall comprise more than half of the members of the Board of
Directors of the Company or this Agreement shall have been terminated pursuant
to Section 9.1 hereof, the Company shall, and shall cause each of its
Subsidiaries to, upon reasonable notice, afford Parent, Sub, their financing
sources and their
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respective employees, counsel, accountants, consultants and other authorized
representatives, reasonable access during normal business hours to the books and
records of the Company and its Subsidiaries (and in addition, Parent and Sub, in
coordination with the Company's management, shall be given such access also to
the employees and properties of the Company and its Subsidiaries) in order that
they may have the opportunity to make such investigations as they shall desire
of the affairs of the Company and its Subsidiaries; PROVIDED, HOWEVER, that such
investigation shall not affect the representations and warranties made by the
Company in this Agreement. The Company shall furnish promptly to Parent a copy
of each form, report, schedule, statement, registration statement and other
document filed by it or its Subsidiaries during such period pursuant to the
requirements of the Securities Act or the Exchange Act. The Company agrees to
cause its officers and employees to furnish such additional financial and
operating data and other information and respond to such reasonable inquiries as
Parent shall from time to time request.
Section 6.2 CONFIDENTIALITY. Information obtained by Parent
and its counsel, accountants, consultants and other authorized representatives
pursuant to Section 6.1 hereof shall be subject to the provisions of the
Confidentiality Agreement previously entered into between the Company and Parent
(the "CONFIDENTIALITY AGREEMENT").
Section 6.3 CONDUCT OF THE BUSINESS OF THE COMPANY PENDING THE
CLOSING DATE. The Company agrees that, except as permitted, required or
specifically contemplated by, or otherwise described in, this Agreement, as set
forth on Schedule 6.3 of the Company's Disclosure Letter or otherwise consented
to or approved in writing by Parent, during the period commencing on the date
hereof until such time as nominees of Parent shall comprise more than half of
the members of the Board of Directors of the Company or this Agreement shall
have been terminated pursuant to Section 9.1 hereof:
(a) The Company shall, and shall cause each of its
Subsidiaries to, conduct their respective operations only according to
their ordinary and usual course of business consistent with past
practice and use their reasonable best efforts to preserve intact their
respective business organization, keep available the services of their
officers and employees and maintain satisfactory relationships with
licensors, suppliers, distributors, clients, joint venture partners and
others having significant business relationships with them; and
(b) The Company shall not, and shall cause each of its
Subsidiaries not to:
(i) amend its Certificate of Incorporation or
its By-Laws (or comparable governing documents);
(ii) except (A) upon the exercise of Options,
Common Stock Purchase Warrants or the Microsoft Warrant, (B)
upon the conversion of the Series A Preferred Stock or Series
B Preferred Stock and (C) pursuant to the terms of the
Ancillary Consideration Agreement, dated as of March 17, 1998,
by and between the Company and Olivetti, issue or sell, or
authorize to issue or sell, any shares of its capital stock or
any other securities, or issue or sell, or authorize to issue
or sell, any securities convertible into, or options, warrants
or rights to purchase or
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subscribe to, or enter into any arrangement or contract with
respect to the issuance or sale of, any shares of its capital
stock or any other securities, or make any other changes in
its capital structure;
(iii) sell or pledge or agree to sell or pledge
any stock or other equity interest owned by it in any other
Person except to the extent required to be pledged to the
collateral agent under the Credit Facility;
(iv) except in the case of the Company's
wholly-owned Subsidiaries, in the ordinary course of business
consistent with past practice, declare, pay or set aside any
dividend (other than dividends on the Series A Preferred Stock
or Series B Preferred Stock in accordance with the terms of
their respective Certificates of Designation) or other
distribution or payment with respect to, or split, combine,
redeem or reclassify, or purchase or otherwise acquire, any
shares of its capital stock;
(v) enter into any contract or commitment with
respect to capital expenditures with a value in excess of, or
requiring expenditures by the Company and its Subsidiaries in
excess of, $10 million, individually, or enter into contracts
or commitments with respect to capital expenditures in excess
in the aggregate of those provided for in the Plan;
(vi) acquire, by merging or consolidating with,
by purchasing an equity interest in or a portion of the assets
of, or by any other manner, any material business or any
Person, or otherwise acquire any assets of any Person (other
than (A) the purchase of assets in the ordinary course of
business and consistent with past practice, (B) intercompany
transactions and (C) acquisitions which in the aggregate do
not exceed $10 million);
(vii) except in the ordinary course of business
consistent with the Plan including without limitation the
implementation of the Company's job structures and broad
bonding program and its various variable compensation programs
(including its management incentives and sales compensation
plans), and except to the extent required under benefit plans,
agreements, collective bargaining agreements or their
arrangements as in effect on the date of this Agreement or
applicable law, rule or regulation, increase materially the
compensation or fringe benefits of any of its directors,
officers or employees or grant any severance or termination
pay or enter into any employment, consulting or severance
agreement or arrangement with any present or former director,
officer or other employee of the Company or any of its
Subsidiaries, or establish, adopt, enter into or, except in
connection with the merger of various plans which will not
materially increase the benefits payable thereunder, amend or
terminate any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any directors, officers or
employees; PROVIDED, HOWEVER, the Company may enter into
agreements to provide salary continuation benefits for six
months following an
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employee's termination without cause so long as on and after
January 1, 1999, the Company shall not be permitted to enter
into such agreements with more than 25 employees and the
aggregate maximum potential cost to the Company of all such
agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business
consistent with past practice, transfer, lease, license,
guarantee, sell, mortgage, pledge, dispose of, encumber or
subject to any lien, any material assets or incur or modify
any indebtedness or other material liability, or issue any
debt securities or assume, guarantee or endorse or otherwise
as an accommodation become responsible for the obligations of
any Person or, make any loan or other extension of credit;
(ix) agree to the settlement of any material
claim or litigation except for settlements which have been
specifically reserved for in the Company's 1998 financial
statements and except for settlements which individually do
not exceed $300,000 and which in the aggregate, when
aggregated with the Excess Settlement Amounts (as hereinafter
defined), do not exceed $2,000,000; PROVIDED, FURTHER that
those items described in Section 6.3(b)(ix) of the Company
Disclosure Letter may only be settled for amounts in excess of
the amounts reserved therefor in the Company's 1998 financial
statements (the "Excess Settlement Amounts") to the extent
that the Excess Settlement Amounts, when aggregated with all
other settlements after the date hereof , do not exceed
$2,000,000;
(x) make or rescind any material tax election or
settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or
partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the
Company or any of its material Subsidiaries (other than the
Merger);
(xii) except in the ordinary course of business
consistent with past practice, pay, discharge or satisfy any
material claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction of claims,
liabilities or obligations reflected or reserved against in,
or contemplated by, the consolidated financial statements (or
the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business
consistent with past practice, enter into any agreement,
understanding or commitment that restrains, limits or impedes
the Company's or any of its Subsidiaries' ability to compete
with or conduct any business or line of business, including,
but not limited to, geographic limitations on the Company's or
any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction
or enter into any agreement which would cause any of the
Tender Offer Conditions to not be satisfied;
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(xv) in the case of the Company only, take any
action including, without limitation, the adoption of any
shareholder rights plan or amendments to its Certificate of
Incorporation or By-Laws (or comparable governing documents),
which would, directly or indirectly, restrict or impair the
ability of Parent to vote, or otherwise to exercise the rights
and receive the benefits of a stockholder with respect to,
securities of the Company that may be acquired or controlled
by Parent or Sub or permit any stockholder to acquire
securities of the Company on a basis not available to Parent
or Sub in the event that Parent or Sub were to acquire any
shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any
of the foregoing actions.
The Company agrees to consult at least bi-weekly (or such shorter intervals as
Parent may reasonably request) with Parent on ongoing operational issues with
respect to the business and, in any event, shall keep Parent fully informed with
respect to the progress of the transactions described on Schedule 6.3 of the
Company Disclosure Letter. Each of the parties agree to designate an officer to
serve as its designated representative to facilitate these consultations (each,
a "Designated Representative"). The Designated Representative of the Parent
shall use its reasonable efforts to respond to written requests for waivers of
the covenants under this Section 6.3 in no more than 48 hours from the time of
receipt.
Section 6.4 COMPANY STOCKHOLDERS' MEETING; PREPARATION OF
PROXY STATEMENT; SHORT FORM MERGER. (a) Promptly following the purchase of Offer
Securities pursuant to the Offer, if required by law in order to consummate the
Merger, the Company, acting through its Board of Directors, shall, in accordance
with applicable law, duly call, convene and hold a meeting of the stockholders
of the Company (the "STOCKHOLDERS' MEETING") for the purpose of voting upon this
Agreement and the Merger and the Company agrees that this Agreement and the
Merger shall be submitted at such meeting. The Company shall take all action
necessary to solicit from its stockholders proxies, and shall take all other
action necessary and advisable to secure the vote of stockholders required by
applicable law and the Company's Certificate of Incorporation or the Company's
By-Laws to obtain the approval for this Agreement and the Merger. Subject to
Section 6.6 hereof, the Company agrees that it shall include in the Proxy
Statement the recommendation of its Board of Directors that the stockholders of
the Company approve and adopt this Agreement and approve the Merger. Parent
shall cause all shares of capital stock of the Company owned by Parent and its
direct and indirect subsidiaries (including Sub) to be voted in favor of this
Agreement and the Merger.
(b) If stockholder approval of the Merger is required by
law, as promptly as practicable following Parent's request the Company shall
prepare and file a preliminary Proxy Statement with the Commission and shall
promptly use its reasonable best efforts to respond to the comments of the
Commission, if any, in connection therewith and to furnish all information
regarding the Company required in the definitive Proxy Statement (including,
without limitation, financial statements and supporting schedules and
certificates and reports of independent public accountants). Parent, Sub and the
Company shall cooperate with each other in the preparation of the Proxy
Statement. Without limiting the generality of the foregoing, each of Parent and
Sub shall furnish to the Company the information relating to it required by the
Exchange Act to be set forth in the Proxy Statement. As promptly as practicable
after the expiration or termination of
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the Offer, if required by the Delaware General Corporation Law in order to
consummate the Merger, the Company shall cause the definitive Proxy Statement to
be mailed to the stockholders of the Company and, if necessary, after the
definitive Proxy Statement shall have been so mailed, promptly circulate
amended, supplemental or supplemented proxy material and, if required in
connection therewith, resolicit proxies. The Company shall not use any proxy
material in connection with the meeting of its stockholders without Parent's
prior approval.
(c) Notwithstanding the foregoing clauses (a) and (b), in the
event that Sub shall acquire at least 90% of each of the issued and outstanding
shares of Common Stock, shares of Series A Preferred Stock and shares of Series
B Preferred Stock, the Company shall, at the request of Parent and Sub, take all
necessary and appropriate action to cause the Merger to become effective as soon
as reasonably practicable after such acquisition, without a meeting of the
Company's stockholders, in accordance with Section 253 of the Delaware General
Corporation Law.
Section 6.5 REASONABLE BEST EFFORTS. Subject to the terms and
conditions provided herein, each of the Company, Parent and Sub shall, and the
Company shall cause each of its Subsidiaries to, cooperate and use their
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to make, or cause to be made, all filings necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement including, without limitation, their
reasonable best efforts to obtain, prior to the Closing Date, all licenses,
permits, consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with the Company and its
Subsidiaries as are necessary for consummation of the transactions contemplated
by this Agreement and to fulfill the conditions to the Offer and the Merger;
PROVIDED, HOWEVER, that no loan agreement or contract for borrowed money shall
be repaid except as currently required by its terms, in whole or in part, and no
contract shall be amended to increase the amount payable thereunder or otherwise
to be more burdensome to the Company or any of its Subsidiaries in order to
obtain any such consent, approval or authorization without the prior written
consent of Parent (which shall not be unreasonably withheld). Without limiting
the generality of the foregoing, without the prior written consent of the
Company, neither Parent nor Sub will take any action which would cause any of
the conditions set forth in the Commitment Letter not to be satisfied or which
would make its representation in Section 5.8 hereof untrue.
Section 6.6 NO SOLICITATION OF OTHER OFFERS. (a) The Company
and its Affiliates and each of their respective officers, directors, employees,
representatives, consultants, investment bankers, attorneys, accountants and
other agents shall immediately cease any discussions or negotiations with any
other parties that may be ongoing with respect to any Acquisition Proposal (as
defined below). Other than in accordance with Section 6.6(b) hereof, the Company
shall not, directly or indirectly, take (and the Company shall not authorize or
permit its Affiliates or its or its Affiliates' officers, directors, employees,
representatives, consultants, investment bankers, attorneys, accountants or
other agents, to so take) any action to (i) solicit, initiate, facilitate or
encourage the making of any Acquisition Proposal or any inquiries or the making
of any proposal that may reasonably be expected to lead to any Acquisition
Proposal (including, without limitation, by taking any action that would make
the Rights Agreement or Section 203 of the Delaware General Corporation Law
inapplicable to an Acquisition Proposal), (ii) participate in any way in
discussions or negotiations with, or furnish
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or disclose any information to, any Person (other than Parent, Sub or the agents
or representatives of Parent or Sub) in connection with any Acquisition
Proposal, (iii) enter into any agreement, arrangement or understanding with
respect to any Acquisition Proposal or enter into any arrangement, understanding
or agreement requiring it to abandon, terminate or fail to consummate the Merger
or any other transaction contemplated by this Agreement, (iv) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Parent or Sub,
the approval and recommendation of the Offer and this Agreement or (v) approve
or recommend, or propose to approve or recommend, any Acquisition Proposal.
(b) The Company may take any of the actions prohibited by
clauses (ii) through (v) of the second sentence of Section 6.6(a) hereof in
response to an unsolicited Acquisition Proposal if (1) the Company is in
compliance with its obligations under Section 6.6(c) hereof, (2) with respect to
any action that would otherwise be prohibited by clause (ii) of the second
sentence of Section 6.6(a), (A) such action is taken subject to a
confidentiality agreement with terms not more favorable to such third party than
the terms of the Confidentiality Agreement, (B) the Board of Directors of the
Company determines, after receiving advice from outside nationally recognized
legal counsel to the Company and from nationally recognized investment bankers,
that such Acquisition Proposal is reasonably likely to result in a Superior
Proposal within a reasonable period of time and such determination remains in
effect at all times that the Company is taking any of the actions prohibited by
clause (ii) with respect to such Acquisition Proposal and (C) the Board of
Directors of the Company determines, after receiving advice from outside
nationally recognized legal counsel to the Company, that the failure to take
such action would likely breach the fiduciary duties of the Board of Directors
and (3) with respect to any action that would otherwise be prohibited by clauses
(iii) through (v) of the second sentence of Section 6.6(a) such Acquisition
Proposal is a Superior Proposal and the Board of Directors of the Company
determines, based on advice from outside nationally recognized legal counsel to
the Company and nationally recognized investment bankers, that the failure to
take such action would likely breach the fiduciary duties of the Board of
Directors.
"ACQUISITION PROPOSAL" shall mean a proposal or offer for a
merger or consolidation with the Company, sale or purchase of substantial assets
or stock of the Company, tender or exchange offer for capital stock of the
Company, or business combination or change in control or similar transaction
involving the Company, other than the Offer and the Merger.
"SUPERIOR PROPOSAL" shall mean a bona fide proposal made by a
third party to acquire all of the capital stock (including the Warrants) of the
Company which (i) the Board of Directors of the Company determines in its good
faith reasonable judgment, after receiving advice from nationally recognized
investment bankers and outside nationally recognized legal counsel to the
Company, would, if consummated, result in a transaction that is more favorable
to the Company's stockholders than the transactions contemplated hereby, (ii)
with respect to which the Company has received a representation and warranty
with regard to the financing therefor no less favorable to the Company than the
representation contained in Section 5.8 hereof and the Company has no reason to
believe that such representation is not true (it being understood that a
representation which refers to highly confident letters and similar letters
shall not be considered at least as favorable to the Company as the
representation contained in Section 5.8 hereof), and (iii) is not subject to any
financing or due diligence condition.
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(c) In addition to the obligations of the Company set forth in
Section 6.6(a) hereof, on the date thereof, the Company shall advise Parent of
any request for information or of any Acquisition Proposal, or any inquiry,
proposal, discussions or negotiation with respect to any Acquisition Proposal,
the terms and conditions of such request, Acquisition Proposal, inquiry,
proposal, discussion or negotiation and the Company shall promptly provide to
Parent copies of any written materials received by the Company in connection
with any of the foregoing, and the identity of the Person making any such
Acquisition Proposal or such request, inquiry or proposal or with whom any
discussion or negotiation are taking place. The Company shall promptly provide
to Parent any written non-public information concerning the Company provided to
any other Person in connection with any Acquisition Proposal which was not
previously provided to Parent. In the event that the Board of Directors has
determined, after receiving advice from nationally recognized investment bankers
and outside nationally recognized legal counsel, that an Acquisition Proposal is
a Superior Proposal, the Company shall deliver to Parent written notice of such
determination. During the three (3) business day period immediately succeeding
delivery of such notice, the Company shall, and shall cause its financial and
legal advisors to, inform Parent of the terms and conditions of such Superior
Proposal, and the identity of the Person making such Superior Proposal, and the
Company shall, and shall cause its financial and legal advisors to, negotiate
with Parent to agree to a modification of the terms and conditions of this
Agreement as would enable the Company to proceed with the transactions
contemplated hereby on such adjusted terms.
(d) Immediately following the purchase of Offer Securities
pursuant to the Offer, the Company shall request each Person which has
heretofore executed a confidentiality agreement in connection with its
consideration of acquiring the Company or any portion thereof to return all
confidential information heretofore furnished to such Person by or on behalf of
the Company.
Section 6.7 NOTIFICATION OF CERTAIN MATTERS. The Company shall
give prompt notice to Parent, and Parent and Sub shall give prompt notice to the
Company, of the occurrence, or failure to occur, of any event, which occurrence
or failure to occur would be likely to cause any representation or warranty
contained in this Agreement to be untrue in any material respect at any time
from the date of this Agreement to the expiration of the Offer. Each of the
Company and Parent shall give prompt notice to the other party of any notice or
other communication from any third party alleging that the consent of such third
party is or may be required in connection with the transactions contemplated by
this Agreement.
Section 6.8 HSR ACT. (a) Each party hereto shall (i) take
promptly all actions necessary to make the filings required of it or any of its
affiliates under any applicable Antitrust Laws in connection with this Agreement
and the transactions contemplated hereby, (ii) comply at the earliest
practicable date with any formal or informal request for additional information
or documentary material received by it or any of its affiliates from any
Antitrust Authority and (iii) cooperate with one another in connection with any
filing under applicable Antitrust Laws and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement initiated by any Antitrust Authority.
(b) Each party hereto shall use its reasonable best efforts to
resolve such objections, if any, as may be asserted with respect to the
transactions contemplated by this
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Agreement under any Antitrust Law. Without limiting the generality of the
foregoing, "reasonable best efforts" shall include, without limitation:
(i) in the case of each of Parent and the Company:
(A) filing with the appropriate Antitrust Authorities
no later than the fifth (5th) day following the date hereof a
Notification and Report Form with respect to the transactions
contemplated by this Agreement; and
(B) if Parent or the Company receives a formal
request for information and documents from an Antitrust
Authority, substantially complying with such formal request
within 60 days following the date of its receipt thereof or
such shorter period as is required by applicable Antitrust
Laws; and
(ii) in the case of the Company only, subject to Parent's
compliance with clause (i) above, not frustrating or impeding Parent's
strategy or negotiating positions with any Antitrust Authority,
PROVIDED THAT in no event shall Parent or any of its subsidiaries be
required to agree or commit to divest, hold separate, offer for sale,
abandon, limit its operation of or take similar action with respect to
any assets (tangible or intangible) or any business interest of it or
any of its subsidiaries (including, without limitation, the Surviving
Corporation after consummation of the Offer or the Merger) in
connection, with or as a condition to receiving the consent or approval
of, any Antitrust Authority.
(c) Each party hereto shall promptly inform the other
parties of any material communication made to, or received by such party from,
any Antitrust Authority or any other governmental or regulatory authority
regarding any of the transactions contemplated hereby.
Section 6.9 EXON-FLORIO. The Company and Parent shall, as soon
as practicable and in any event within five (5) days of the date of this
Agreement, file a voluntary notification pursuant to, and in compliance with,
Exon-Florio and shall use their reasonable best efforts to respond to any
inquiries from governmental officials with respect thereto.
Section 6.10 EMPLOYEE BENEFITS. (a) Until the first
anniversary of the Effective Time, the Surviving Corporation shall ensure that
all employees and officers of the Company receive benefits that, taken as a
whole, are not materially less favorable in the aggregate to the benefits
received by such individuals immediately prior to the date hereof under
applicable Employee Benefit Plans (other than any Employee Benefit Plan
providing for stock based compensation or benefits).
(b) Notwithstanding anything in this Agreement to the
contrary, from and after the Effective Time, the Surviving Corporation shall
have sole discretion over the hiring, promotion, retention, termination and
other terms and conditions of the employment of the employees of the Surviving
Corporation consistent with applicable law. With respect to each employee
benefit plan (as defined in Section 3(3) of ERISA) or similar policy or program
provided by the Surviving Corporation to employees of the Company (the
"SURVIVING CORPORATION PLANS"), for purposes of determining eligibility to
participate, vesting and entitlement to benefits (including severance benefits
and vacation entitlement, but not for accrual
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of pension benefits), service with the Company (or predecessor employers to the
extent the Company provides past service credit) shall be treated as service
with the Surviving Corporation (except to the extent such recognition would
result in duplication of benefits). Such service shall also apply for purposes
of satisfying any waiting periods, evidence of insurability requirements or the
application of any pre-existing condition limitations. Employees of the Company
shall be given credit for amounts paid under a corresponding welfare benefit
plan during the same period for purposes of applying deductibles, co-payments
and out-of-pocket maximums as though such amounts had been paid in accordance
with the terms of the applicable Surviving Corporation Plan. Except as otherwise
provided in this Section 6.10, nothing herein shall prevent Parent or the
Surviving Corporation from amending or terminating any Employee Benefit Plan in
accordance with its terms. At the Effective Time, the Surviving Corporation
shall assume and honor, or cause the applicable Subsidiary to assume and honor,
in accordance with their terms (i) all employment, severance and each other
compensation agreement and arrangement existing prior to the execution of this
Agreement which are between the Company or any Subsidiary and any director,
officer or employee thereof and (ii) all collective bargaining agreements or
shop agreements or other arrangements with unions, workers councils or similar
organizations. The Company and Parent agree that the consummation of the offer
shall constitute a "change in control" for purposes of all Employee Benefit
Plans which contain such provisions, as more particularly listed on Schedule
4.10(xii) of the Company Disclosure letter.
(c) Parent shall, as soon as practicable after the Effective
Date, commence the implementation of a stock incentive plan pursuant to which
certain employees of Parent and the Surviving Corporation will be granted, on an
annual basis, stock options entitling the holders thereof to receive, in the
aggregate, upon exercise thereof pursuant to the terms and conditions of such
stock incentive plan, 1.4% of the shares of common stock of Parent issued and
outstanding as of the first day of the fiscal year of Parent during which such
grant was made, PROVIDED, THAT nothing herein shall obligate Parent to structure
such stock incentive plan in a manner which would obligate it to any disclosure
requirement under the Securities Act, the Exchange Act or the rules and
regulations promulgated thereunder, other than as may be required by Rule
12g3-2(b) under the Exchange Act.
Section 6.11 DIRECTORS' AND OFFICERS' INSURANCE. (a) The
certificate of incorporation and the by-laws of the Surviving Corporation shall
contain the provisions with respect to indemnification and exculpation from
liability set forth in the Company's Certificate of Incorporation and By-Laws on
the date of this Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who on
or prior to the Effective Time were directors, officers, employees or agents of
the Company (the "INDEMNIFIED Parties"), unless such modification is required by
law.
(b) For a period of six years from the Effective Time, the
Surviving Corporation shall either (x) maintain in effect the Company's current
directors' and officers' liability insurance covering the Indemnified Parties;
PROVIDED, HOWEVER, that in no event shall Parent be required to expend in any
one year an amount in excess of 125% of the annual premiums currently paid by
the Company for such insurance which the Company represents to be $694,000 for
the twelve month period ending on December 31, 1999; PROVIDED FURTHER that if
the annual premiums of such insurance coverage exceed such amount, the Surviving
Corporation
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<PAGE> 47
shall be obligated to obtain a policy with the greatest coverage available for a
cost not exceeding such amount; PROVIDED FURTHER that the Surviving Corporation
may substitute for such Company policies policies providing at least the same
coverage and containing terms and conditions which are no less advantageous
provided that said substitution does not result in any gaps or lapses in
coverage with respect to matters occurring prior to the Effective Time or (y)
cause the Parent's directors' and officers' liability insurance then in effect
to cover the Indemnified Parties with respect to those matters covered by the
Company's directors' and officers' liability policy.
(c) The Surviving Corporation shall indemnify all Indemnified
Parties to the fullest extent permitted by applicable law with respect to all
acts and omissions arising out of such individuals' services as officers,
directors, employees or agents of the Company or any of its Subsidiaries or as
trustees or fiduciaries of any plan for the benefit of employees of the Company
or any of its Subsidiaries occurring prior to the Effective Time including,
without limitation, the transactions contemplated by this Agreement. Without
limitation of the foregoing, in the event any such Indemnified Party is or
becomes involved in any capacity in any action, proceeding or investigation in
connection with any matter, including without limitation, the transactions
contemplated by this Agreement, occurring prior to, and including, the Effective
Time, the Surviving Corporation, from and after the Effective Time, shall pay,
as incurred, such Indemnified Party's reasonable legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith. Subject to Section 6.11(d) below, the Surviving Corporation shall pay
all reasonable expenses, including attorneys' fees, that may be incurred by any
Indemnified Party in enforcing this Section 6.11 or any action involving an
Indemnified Party resulting from the transactions contemplated by this
Agreement.
(d) Any Indemnified Party wishing to claim indemnification
under paragraph (a) or (c) of this Section 6.11, upon learning of any such
claim, action, suit, proceeding or investigation, shall promptly notify the
Surviving Corporation thereof. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the Effective
Time), (i) the Surviving Corporation shall have the right, from and after the
Effective Time, to assume the defense thereof (with counsel engaged by the
Surviving Corporation to be reasonably acceptable to the relevant Indemnified
Party), and the Surviving Corporation shall not be liable to such Indemnified
Party for any legal expenses of other counsel or any other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof, (ii)
such Indemnified Party will cooperate in the defense of any such matter and
(iii) the Surviving Corporation shall not be liable for any settlement effected
without its prior written consent; PROVIDED, THAT the Surviving Corporation
shall not have any obligation hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall ultimately determine, and such
determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law.
(e) In the event Parent or Sub or the Surviving Corporation or
any of their successors or assigns (i) consolidates with or merges into any
other Person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any Person, then, and in each
such case, to the extent necessary to effectuate the purposes of this Section
6.11, proper provision shall be made so that the successors and assigns of
Parent, Sub or the Surviving Corporation, as the case may be, assume the
obligations set forth in this Section 6.11.
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Section 6.12 RIGHTS AGREEMENT. Except to the extent permitted
in accordance with Section 6.6 hereof, the Company shall not (i) redeem the
Rights, (ii) amend (other than to delay the Distribution Date (as defined
therein) or to render the Rights inapplicable to the Offer and the Merger) or
terminate the Rights Agreement prior to the Effective Time without the consent
of Parent, unless required to do so by a court of competent jurisdiction or
(iii) take any action which would allow any Person (as such term is defined in
the Rights Agreement) other than Parent or Sub to be the Beneficial Owner (as
such term is defined in the Rights Agreement) of 15% or more of the Common Stock
without causing a Distribution Date (as such term is defined in the Rights
Agreement) or a Triggering Event (as such term is defined in the Rights
Agreement) to occur.
Section 6.13 PUBLIC ANNOUNCEMENTS. Parent and the Company
shall obtain the consent of the other party before issuing any press release or
otherwise making any public statements with respect to the transactions
contemplated by this Agreement; PROVIDED, HOWEVER, that a party may, without the
prior consent of the other party, issue such press release or make such public
statement as may be required by law or any listing agreement with a national
securities exchange or automated quotation system which Parent or the Company is
a party to, so long as it has used its reasonable best efforts to consult with
the other party prior to issuing such press release or making such public
disclosure.
Section 6.14 TRANSFER TAX. The Company and Parent shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any real property
transfer or gains, sales, use, transfer, value added, stock transfer and stamp
taxes, any transfer, recording, registration and other fees and any similar
taxes which become payable in connection with the transactions contemplated by
this Agreement (together with any related interest, penalties or additions to
tax, "TRANSFER Taxes"). All Transfer Taxes shall be paid by the Company and
expressly shall not be a liability of any holder of Offer Securities.
Section 6.15 U.S. REAL PROPERTY HOLDING CORPORATION STATUS.
During the period commencing on the date hereof until the Offer, the Company
shall use its reasonable best efforts to determine whether it is a "United
States real property holding corporation" within the meaning of Section
897(c)(2) of the Code and the rules and regulations promulgated thereunder.
Prior to (but in no event more than 30 days before) any payment by Parent or Sub
for the Offer Securities pursuant to the Offer, (i) if the Company determines
that it is not a "United States real property holding corporation," the Company
shall prepare and deliver to Parent and Sub a statement in accordance with
Treasury Regulations Sections 1.1445-2(c)(3) and 1.897-2(h) certifying that the
Company is not, and has not been during the past five years, a "United States
real property holding corporation" for Federal income tax purposes and (ii) if
the Company has not made such a determination, the Company shall notify Parent
and Sub that the statement described in (i) above will not be prepared or
delivered.
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ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND SUB
Section 7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND
SUB. The respective obligations of Parent and Sub to effect the Merger are
subject to the satisfaction or waiver (subject to applicable law), at or prior
to the Effective Time, of each of the following conditions:
(a) APPROVAL OF COMPANY'S STOCKHOLDERS. To the extent required
by applicable law, this Agreement and the Merger shall have been approved and
adopted by holders of a majority of the Common Stock, the Series A Preferred
Stock and the Series B Preferred Stock (voting as one class, with each share of
such capital stock having one (1) vote) in accordance with applicable law, the
Company's Certificate of Incorporation, the Certificate of Designation of the
Series B Preferred Stock, the Certificate of Designation of the Series A
Preferred Stock and the Company's By-Laws;
(b) INJUNCTION. No preliminary or permanent injunction or
other order shall have been issued by any federal, state or foreign court or by
any federal, state or foreign governmental or regulatory agency, body or
authority and be in effect at the Effective Time which prohibits, restrains,
restricts or enjoins the consummation of the Merger, PROVIDED, HOWEVER, that, in
the case of a decree, injunction or other order, each of the parties shall have
used reasonable best efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any such decree, injunction or
other order that may have been rendered;
(c) STATUTES. No federal, state or foreign statute, rule,
regulation, executive order, decree or order of any kind shall have been
enacted, entered, promulgated or enforced by any court or governmental authority
which prohibits, restrains, restricts or enjoins the Merger or has the effect of
making the Merger illegal; and
(d) MINIMUM CONDITION. Sub shall have purchased shares of
Offer Securities pursuant to the Offer in a number sufficient to satisfy the
Minimum Condition.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
Section 8.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
COMPANY. The obligations of the Company to effect the Merger is subject to the
satisfaction or waiver (subject to applicable law), at or prior to the Effective
Time, of each of the following conditions:
(a) APPROVAL OF COMPANY'S STOCKHOLDERS. To the extent required
by applicable law, this Agreement and the Merger shall have been approved and
adopted by holders of a majority of the Common Stock, the Series A Preferred
Stock and the Series B Preferred Stock (voting as one class, with each share of
such capital stock having one (1) vote) in accordance with applicable law, the
Company's Certificate of Incorporation, the Certificate of Designation of
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the Series B Preferred Stock, the Certificate of Designation of the Series A
Preferred Stock and the Company's By-Laws;
(b) INJUNCTION. No preliminary or permanent injunction or
other order shall have been issued by any federal, state or foreign court or by
any federal, state or foreign governmental or regulatory agency, body or
authority and be in effect at the Effective Time which prohibits, restrains,
restricts or enjoins the consummation of the Merger; PROVIDED, HOWEVER, that, in
the case of a decree, injunction or other order, each of the parties shall have
used reasonable best efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any such decree, injunction or
other order that may have been rendered;
(c) STATUTES. No federal, state or foreign statute, rule,
regulation, executive order, decree or order of any kind shall have been
enacted, entered, promulgated or enforced by any court or governmental authority
which prohibits restrains, restricts or enjoins the Merger or has the effect of
making the Merger illegal; and
(d) MINIMUM CONDITION. Sub shall have purchased shares of
Offer Securities pursuant to the Offer in a number sufficient to satisfy the
Minimum Condition.
ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.1 TERMINATION. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time, whether before or after approval of the Merger by the Company's
stockholders:
(a) by mutual consent of the Company, on the one hand, and of
Parent and Sub, on the other hand; provided, however, that after
consummation of the Offer, the consent of a majority of the Independent
Directors shall also be required to terminate this Agreement pursuant
to this clause (a);
(b) by either Parent, on the one hand, or the Company, on the
other hand, if any statute, rule or regulation shall have been
promulgated which prohibits the consummation of the Offer or the Merger
or if any order or injunction of a court of competent jurisdiction
which prohibits consummation of the Offer or the Merger shall have
become final and nonappealable;
(c) by either Parent, on the one hand, or the Company, on the
other hand, if the Offer shall have expired without any Offer
Securities being purchased pursuant thereto as a result of the failure
to meet any one or more of the Tender Offer Conditions, provided,
however, that the right to terminate this Agreement under this clause
(c) shall not be available (i) to the Company if this Agreement may be
terminated by Parent pursuant to Section 9.1(d) hereof and (ii) to
Parent if this Agreement may be terminated by the Company pursuant to
Section 9.1(g) hereof;
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(d) by Parent, in the event of, at any time prior to
consummation of the Offer, a breach by the Company of any
representation, warranty, covenant or agreement contained in this
Agreement which, if uncured, would give rise to the failure of a
condition set forth in clause (v)(e) or (f) of Annex A, and such breach
is incapable of being cured or, if capable of being cured, has not been
cured within fifteen (15) business days following receipt by the
Company of written notice of such breach from Parent and has not been
waived by Parent pursuant to the provisions hereof;
(e) (i) by Parent if, at any time prior to consummation of the
Offer, (A) the Company shall have (w) entered into any agreement,
arrangement or understanding with respect to any Acquisition Proposal,
(x) withdrawn or modified, or proposed to withdraw or modify, in a
manner adverse to Parent or Sub, the approval and recommendation of the
Offer and this Agreement, or (y) approved or recommended, or proposed
to approve or recommend, any Acquisition Proposal or (z) announced a
neutral position with respect to any Acquisition Proposal and does not
reject or recommend such Acquisition Proposal within three (3)
business days of the announcement of such neutral position, (B) the
Company's Board of Directors or any committee thereof shall have failed
to reaffirm its approval and recommendation of the Offer, the Merger
and the Merger Agreement within three (3) business days of Parent's
request for such reaffirmation, or (C) the Company or the Company's
Board of Directors or any committee thereof shall have resolved to do
any of the foregoing or (ii) by the Company if, at any time prior to
consummation of the Offer, the Company shall have entered into an
agreement to effect a Superior Proposal and the entering into of such
agreement is permitted in accordance with Section 6.6 and the fees
payable by the Company to Parent pursuant to Section 10.1(b) are paid
simultaneously with such termination.
(f) by Parent, if the Minimum Condition shall not have been
satisfied by the expiration date of the Offer and on or prior to such
date a third party shall have made or caused to be made a proposal, or
public announcement of a proposal, to the Company or its stockholders
with respect to (A) the acquisition of the Company by merger, tender
offer or otherwise; (B) a merger, consolidation or similar business
combination with the Company or any of its Subsidiaries; (C) the
acquisition of 20% or more of the assets of the Company and its
Subsidiaries, taken as a whole; (D) the acquisition of 20% or more of
the Common Stock Equivalents of the Company or (E) the adoption by the
Company of a plan of liquidation or the declaration or payment of an
extraordinary dividend (any of the proposed transactions enumerated in
clauses (A) through (E), an "ALTERNATIVE PROPOSAL");
(g) by the Company, in the event of, at any time prior to
consummation of the Offer, (i) a breach by Parent or Sub of any
representation or warranty contained in this Agreement which, if
uncured, would result in any such representation or warranty that is
qualified as to materiality being untrue or incorrect in any respect or
in any such representation or warranty that is not so qualified being
untrue or incorrect in any material respect, in each case as of the
date of the consummation of the Offer as though made on or as of such
date, except (x) for changes specifically permitted by the Merger
Agreement and (y) that, to the extent such representations and
warranties address matters only as of a particular date, such
representations and warranties shall, to such extent, be
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true and correct at and as of such particular date as if made at and as
of such particular date or (ii) Parent or Sub shall have failed to
perform in all material respects any obligation or to comply in any
material respect with any agreement or covenant of Parent or Sub to be
performed or complied with by it under this Agreement, and, in the case
of either clause (i) or (ii), such breach or failure is incapable of
being cured or, if capable of being cured, has not been cured within
fifteen (15) business days following receipt by Parent of written
notice of such breach from the Company or has not been waived by the
Company pursuant to the provisions hereof;
(h) by the Company, if Parent or Sub shall have failed to
commence the Offer within six (6) business days following the date of
this Agreement;
(i) by Parent, on the one hand, or the Company, on the other
hand, if the acceptance for payment of the Offer Securities shall not
have occurred within one hundred twenty (120) days after commencement
of the Offer (the "Termination Date"), PROVIDED, HOWEVER, that the
right to terminate this Agreement under this clause (i) shall not be
available (i) to the Company if this Agreement may be terminated by
Parent pursuant to Section 9.1(d) hereof or if any of the events set
forth in clauses (v) (g) or (h) of Annex A shall have occurred or an
Alternative Proposal shall have been outstanding at any time during the
thirty (30) day period ending prior to such date of proposed
termination and (ii) to Parent if this Agreement may be terminated by
the Company pursuant to Section 9.1(g) hereof.
Section 9.2 EFFECT OF TERMINATION. In the event of the
termination of this Agreement pursuant to Section 9.1 hereof by Parent, on the
one hand, or the Company, on the other hand, written notice thereof shall
forthwith be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made (other than termination pursuant to
Section 9.1(a) hereof), and this Agreement shall become void and have no effect,
and there shall be no liability hereunder on the part of Parent, Sub or the
Company, except that Sections 4.16, 5.6, 6.2, 10.1, 10.11 and 10.13 hereof and
this Section 9.2 shall survive any termination of this Agreement. Nothing in
this Section 9.2 shall relieve any party to this Agreement of liability for
breach of this Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.1 FEES AND EXPENSES. (a) Except as provided in
paragraph (b) below and except for damages of one party to this Agreement
resulting from a breach of any term of this Agreement by another party hereto,
all costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
(b) If this Agreement is terminated by (i) Parent or the
Company in accordance with Section 9.1(c) hereof following the occurrence of any
of the events set forth in clauses (v)(g) or (h) of Annex A; (ii) Parent or the
Company, as the case may be, in accordance
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with Section 9.1(e) hereof; (iii) Parent pursuant to Section 9.1(f) if within
nine (9) months of the date of such termination, the Company shall enter into an
agreement with respect to any Acquisition Proposal with any Person or any
Affiliate of such Person who made or caused to be made an Alternative Proposal
prior to the date on which Parent terminated this Agreement pursuant to Section
9.1(f), then the Company shall pay to Parent on the date of such termination
(or, in the case of clause (iii) on the date the Company enters into an
agreement with respect to an Acquisition Proposal) in immediately available
funds an amount equal to $65,000,000 (Sixty-Five Million Dollars).
Section 10.2 REPRESENTATIONS AND WARRANTIES. The respective
representations and warranties of the Company, on the one hand, and Parent and
Sub, on the other hand, contained herein or in any certificates or other
documents delivered prior to or at the Closing shall not be deemed waived or
otherwise affected by any investigation made by any party. Each and every such
representation and warranty shall expire with, and be terminated and
extinguished by, the Closing and thereafter none of the Company, Parent or Sub
shall be under any liability whatsoever with respect to any such representation
or warranty. This Section 10.2 shall have no effect upon any other obligation of
the parties hereto, whether to be performed before or after the Effective Time.
Section 10.3 EXTENSION; WAIVER. At any time prior to the
Effective Time, the parties hereto, by action taken by or on behalf of the
Executive Board of Directors and the respective Boards of Directors of the
Company or Sub, may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein by any other
applicable party or in any document, certificate or writing delivered pursuant
hereto by any other applicable party or (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
Section 10.4 NOTICES. All notices, requests, demands, waivers
and other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered in
person or mailed, certified or registered mail with postage prepaid, or sent by
telex, telegram or telecopier, as follows:
(a) if to the Company, to it at:
Wang Laboratories, Inc.
290 Concord Road
Billerica, MA 01821-4130
Attention: Albert A. Notini, Executive Vice President
Facsimile: (978) 625-5055
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with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, Massachusetts 02108-3194
Attention: David Brewster, Esq.
Facsimile: (617) 573-4862
(b) if to either Parent or Sub, to it at:
Getronics NV
Donauweg 10
P.O. Box 652
1000 AR Amsterdam
The Netherlands
Attention: Jan Docter, Chief Financial Officer
Facsimile: 011 31 20 586-1513
with a copy (which shall not constitute notice) to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Attention: John M. Reiss, Esq.
Facsimile: (212) 354-8113
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third (3rd) business day after
the mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
Section 10.5 ENTIRE AGREEMENT. This Agreement and the annex,
schedules and other documents referred to herein or delivered pursuant hereto,
collectively contain the entire understanding of the parties hereto with respect
to the subject matter contained herein and supersede all prior agreements and
understandings, oral and written, with respect thereto, other than the
Confidentiality Agreement.
Section 10.6 BINDING EFFECT; BENEFIT; ASSIGNMENT. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and, with respect to the provisions of Section 6.11 hereof, shall inure to the
benefit of the Persons or entities benefiting from the provisions thereof who
are intended to be third-party beneficiaries thereof and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, except
that Sub may assign and transfer its right and obligations hereunder to any of
its Affiliates. Except as provided in the immediately preceding sentence,
nothing in this Agreement, expressed or implied, is intended to confer on any
Person other than
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the parties hereto or their respective successors and permitted assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
Section 10.7 AMENDMENT AND MODIFICATION. Subject to applicable
law, this Agreement may be amended, modified and supplemented in writing by the
parties hereto in any and all respects before the Effective Time
(notwithstanding any stockholder approval), by action taken by the Executive
Board of Parent and the respective Boards of Directors of Sub and the Company or
by the respective officers authorized by such Executive Board or Boards of
Directors, PROVIDED, HOWEVER, that after any such stockholder approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval.
Section 10.8 FURTHER ACTIONS. Each of the parties hereto
agrees that, subject to its legal obligations, it will use its reasonable best
efforts to fulfill all conditions precedent specified herein, to the extent that
such conditions are within its control, and to do all things reasonably
necessary to consummate the transactions contemplated hereby.
Section 10.9 HEADINGS. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only, do
not constitute a part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 10.10 COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original, and all
of which together shall be deemed to be one and the same instrument.
Section 10.11 APPLICABLE LAW. THIS AGREEMENT AND THE LEGAL
RELATIONS BETWEEN THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS RULES THEREOF; PROVIDED, HOWEVER, THAT ANY OF THE PROVISIONS
CONTAINED HEREIN WITH REGARD TO THE MERGER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE
CONFLICT OF LAWS RULES THEREOF. THE STATE OR FEDERAL COURTS LOCATED WITHIN THE
COUNTY OF NEW YORK OF THE STATE OF NEW YORK WILL HAVE JURISDICTION OVER ANY AND
ALL DISPUTES BETWEEN THE PARTIES HERETO, WHETHER IN LAW OR EQUITY, ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS
CONTEMPLATED HEREBY AND THE PARTIES CONSENT TO AND AGREE TO SUBMIT TO THE
JURISDICTION OF SUCH COURTS. EACH OF THE PARTIES HEREBY WAIVES AND AGREES NOT TO
ASSERT IN ANY SUCH DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY CLAIM THAT (I) SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
SUCH COURTS, (II) SUCH PARTY AND SUCH PARTY'S PROPERTY IS IMMUNE FROM ANY LEGAL
PROCESS ISSUED BY SUCH COURTS OR (III) ANY LITIGATION OR OTHER PROCEEDING
COMMENCED IN SUCH COURTS IS BROUGHT IN AN INCONVENIENT FORUM.
Section 10.12 SEVERABILITY. If any term, provision, covenant
or restriction contained in this Agreement is held by a court of competent
jurisdiction or other authority to be
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invalid, void, unenforceable or against its regulatory policy, the remainder of
the terms, provisions, covenants and restrictions contained in this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
Section 10.13 WAIVER OF JURY TRIAL. Each of the parties to
this Agreement hereby irrevocably waives all right to a trial by jury in any
action, proceeding or counterclaim arising out of or relating to this Agreement
or the transactions contemplated hereby.
[SIGNATURE PAGE FOLLOWS]
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<PAGE> 57
IN WITNESS WHEREOF, each of Parent, Sub and the Company have
caused this Agreement to be executed by their respective officers thereunto duly
authorized, all as of the date first above written.
GETRONICS NV
By /s/ C.G. van Luijk
--------------------------------
Name: C.G. van Luijk
Title: Chief Executive Officer
GETRONICS ACQUISITION, INC.
By /s/ C.G. van Luijk
--------------------------------
Name: C.G. van Luijk
Title: President
WANG LABORATORIES, INC.
By /s/ Joseph M. Tucci
--------------------------------
Name: Joseph M. Tucci
Title: Chairman and Chief
Executive Officer
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<PAGE> 58
ANNEX A
-------
The capitalized terms used in this Annex A shall have the
meanings set forth in the Agreement to which it is annexed, except that the term
"Merger Agreement" shall be deemed to refer to the Agreement to which this Annex
A is appended and "Purchaser" shall be deemed to refer to Sub.
CONDITIONS TO THE OFFER. Notwithstanding any other provision
of the Offer or the Merger Agreement, Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) under the Exchange Act (relating to
Purchaser's obligation to pay for or return tendered shares promptly after
termination or withdrawal of the Offer), pay for any Offer Securities tendered
pursuant to the Offer and may terminate the Offer and may postpone the
acceptance of, and payment for, any Offer Securities if (i) there shall not have
been validly tendered and not properly withdrawn prior to the expiration of the
Offer, Offer Securities which represent at least a majority of all of the Common
Stock Equivalents on the date of purchase (the "Minimum Condition"), (ii) any
applicable waiting period (and any extension thereof) under the HSR Act shall
not have expired or been terminated, prior to the expiration of the Offer, (iii)
a decision of the Commission of the European Communities that the purchase of
the Offer Securities pursuant to the Offer and the Merger are compatible with
the common market shall not have been received prior to the expiration of the
Offer, (iv) any applicable waiting period under Exon-Florio shall not have
expired or been terminated prior to the expiration of the Offer or (v) if, at
any time after the date of the Merger Agreement and at or before the time of
payment for any such Offer Securities (whether or not any Offer Securities have
theretofore been accepted for payment or paid for pursuant to the Offer), any of
the following shall occur:
(a) there shall be instituted or pending any action or
proceeding by any government or any governmental authority or agency,
domestic or foreign, or by any other Person, domestic or foreign,
before any court of competent jurisdiction or governmental authority or
agency, domestic or foreign, which could reasonably be expected to (i)
make illegal, or directly or indirectly prohibit or make materially
more costly the Offer or the Merger or result in material damages, (ii)
result in a prohibition or material limitation on the ownership or
operation by Parent or Purchaser of all or any material portion of the
business or assets of the Company and its Subsidiaries taken as a whole
or compel Parent or Purchaser to dispose of or hold separately all or
any material portion of the business or assets of Parent and its
Subsidiaries taken as a whole or the Company and its Subsidiaries taken
as a whole, or impose any material limitation on the ability of Parent
or Purchaser to conduct its business or own such assets, (iii) result
in an imposition of limitations on the ability of Parent or Purchaser
effectively to exercise full rights of ownership of the Offer
Securities including, without limitation, the right to vote any Offer
Securities acquired or owned by Purchaser or Parent on all matters
properly presented to the Company's stockholders or (iv) a requirement
of divestiture by Parent or Purchaser of any Offer Securities;
(b) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
proposed, enacted, enforced, promulgated, amended or issued and
applicable to or deemed applicable to (i) Parent, Purchaser, the
Company or any Subsidiary of the Company or (ii) the Offer or the
Merger, by any legislative body, court, government or governmental,
administrative or regulatory
<PAGE> 59
ANNEX A
Page 2
authority or agency, domestic or foreign, other than the routine
application of the waiting period provisions of the HSR Act or
Exon-Florio or the notification and reporting requirements under EU
Antitrust Laws (in each case with respect to the Offer or to the
Merger), that could reasonably be expected to result directly or
indirectly, in any of the consequences referred to in paragraph (a)
above;
(c) there shall have occurred any event, change, occurrence,
effect, fact or circumstance which has or could reasonably be expected
to have, a Material Adverse Effect or a Performance Material Adverse
Effect on the Company;
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any U.S.
securities exchange, in any U.S. over-the-counter market or the
Amsterdam Stock Exchange for a period in excess of 12 hours (excluding
any coordinated trading halt triggered solely as a result of a
specified decrease in a market index), (ii) any decline in the Morgan
Stanley World Index in excess of 23% measured from the close of
business on the trading day next preceding the date of the Merger
Agreement, (iii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or any
other jurisdiction in which any bank or other financial institution in
any manner involved with the financing of the Offer or the Merger is
incorporated; or (iv) any material limitation (whether or not
mandatory) by any Federal, state or foreign governmental authority or
agency on, the extension of credit by banks or other lending
institutions which materially and adversely affects the ability of
Parent to obtain the financing necessary to effect the Offer or the
Merger;
(e) any of the representations or warranties made by the
Company in the Merger Agreement that are qualified as to materiality
shall be untrue or incorrect in any respect or any such representations
and warranties that are not so qualified shall be untrue or incorrect
in any material respect, in each case as of the date of the
consummation of the Offer as though made on or as of such date, except
(i) for changes specifically permitted by the Merger Agreement and (ii)
that to the extent such representations and warranties address matters
only as of a particular date, such representations and warranties
shall, to such extent, be true and correct at and as of such particular
date as if made at and as of such particular date;
(f) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any
agreement or covenant of the Company to be performed or complied with
by it under this Agreement on or prior to the date of the consummation
of the Offer;
(g) the Company's Board of Directors or any committee thereof
shall have withdrawn, or modified or proposed to withdraw or modify, in
a manner adverse to Parent or Purchaser, the approval and
recommendation of the Offer and this Agreement, or approved or
recommended, or proposed to approve or recommend, any Acquisition
Proposal, or announced a neutral position with respect to any
Acquisition Proposal and does not reject or recommend such Acquisition
Proposal within three (3) business days of the announcement of such
neutral position or, upon request by Parent, shall have failed to
reaffirm its approval and recommendation of the Offer, the Merger and
the Merger
<PAGE> 60
ANNEX A
Page 3
Agreement within three (3) business days of the Purchaser's request for
such affirmation or shall have resolved to do any of the foregoing;
(h) beneficial ownership (determined for the purposes of this
paragraph (h) as set forth in Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of the capital stock of the Company shall have been
acquired by any Person or group (as defined in Section 13(d)(3) under
the Exchange Act); or
(i) the Merger Agreement shall have been terminated in
accordance with its terms.
The foregoing conditions are for the sole benefit of Parent
and the Purchaser and may be asserted by Parent or the Purchaser, or may be
waived by Parent or the Purchaser (except for the Minimum Condition), in whole
or in part at any time and from time to time in their respective sole
discretion. The failure by Parent or the Purchaser at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
<PAGE> 1
Exhibit 8
March 31, 1999
Mr. Franklyn A. Caine
60 Cherry Brook Lane
Weston, MA 02193
Dear Frank:
This letter will confirm our discussions surrounding your resignation
from Wang Laboratories, Inc. ("Wang" or the "Company"). You have notified Wang
of your voluntary resignation from your position as Chief Financial Officer as
of March 31, 1999 and as an employee of Wang effective May 15, 1999. For the
time period through March 31, 1999, you will continue to be paid at your current
base salary. For the time period from April 1, 1999 through May 15, 1999 (the
"Continued Employment Period"), Wang has agreed to pay you $4,010.42
semi-monthly, less applicable withholding. You will therefore receive payments
of $4,010.42, less applicable withholding, on April 15, April 30 and May 14,
1999. You have agreed that you will not be entitled to any other salary, bonus
or other monetary compensation from Wang during the Continued Employment Period,
except that with respect to your 1998 Management Incentive Plan ("MIP"), Wang
agrees that you shall be considered under the current terms and conditions of
the MIP in the ordinary course, including the terms and conditions for the
amount and timing of the payout of the MIP and any withholding thereon. On or
about the termination date, you will also be paid for 7.5 days of vacation.
You have agreed that, from April 1 through May 15, 1999, you will
provide Wang, at its direction, with reasonable assistance related to the
transition of your Chief Financial Officer position to a successor, as more
fully set forth on the attached Exhibit A.
As we have discussed, all of your benefits (including but not limited to
participation in Wang's medical, dental, or vision plans, disability plans,
SERP, Retirement Savings Plan, life insurance and AD&D plans, car allowance and
insurance programs and any benefit not specifically identified herein) will
terminate as of March 31, 1999 as if your employment were terminating on that
day, subject only to applicable grace and continuation periods available under
the Company's plans and the law. The foregoing sentence notwithstanding, you
will remain subject to the following benefits during the Employment Continuation
Period: workers' compensation, social security and, where authorized to travel
on behalf of the Company, business travel pay and accident insurance coverage.
You will also remain subject to Wang's expense and reimbursement policy.
Further, you will remain subject to Wang's Employee Stock Incentive Plan
("ESIP") through May 15, 1999.
You hereby agree that your Employment Letter dated June 24, 1994 and
amended, ratified and confirmed on November 20, 1995 and July 1, 1998 (the
"Employment Letter," enclosed herewith) shall, as of March 31, 1999, become null
and void, and you hereby waive any and all rights under the Employment Letter.
The foregoing sentence notwithstanding, Paragraphs 7, 8 and 10 of the Employment
Letter
<PAGE> 2
Mr. Franklyn A. Caine
March 31, 1999
Page 2
shall remain in effect, except that the Wang Employment Agreement signed by you
on June 26, 1994 and enclosed herewith shall remain in effect in its original,
unmodified terms.
You also hereby agree that the Change of Control Severance Agreement
between you and the Company dated May 31, 1994 and amended October 19, 1995,
March 27, 1997 and August 1998 providing for enhanced severance protection in
the event of a change in control of the Company (the "Change of Control
Agreement") shall, as of March 31, 1999, become null and void, and you hereby
waive any and all rights under the Change of Control Agreement.
You further agree that this letter supersedes and cancels any other
prior employment agreements or arrangements you may have entered into with Wang,
its subsidiaries, affiliates, successors, assigns or predecessors in interest.
You also agree that you are not eligible for any severance benefit pursuant to
any severance policy, plan, agreement or arrangement offered by the Company to
full-time employees, including any benefit under Wang's Severance Pay Plan or
pursuant to the Employment Letter or the Change of Control Agreement. By your
signature below, you agree to waive any claim to any such severance benefit.
By our signatures below, we agree to treat the details of this letter
with utmost confidentiality and that we will not disclose them to any third
parties except your immediate family, our respective financial and/or legal
advisors, and such Wang personnel and/or agents as have a need to know this
information for business purposes, or as may be required by applicable law or
regulation.
Thank you for your services to Wang, and good luck in your future
endeavors.
Very truly yours,
/s/ Albert A. Notini
Albert A. Notini
Executive Vice President
AGREED AND ACCEPTED:
/s/ Franklyn A. Caine
______________________________
Franklyn A. Caine
Dated: March 31, 1999
Attachments
<PAGE> 3
Mr. Franklyn A. Caine
March 31, 1999
Page 3
EXHIBIT A
Scope of Responsibilities
You agree to provide reasonable assistance to the Company, under its
direction, with respect to leadership transition matters in the global finance
and IS organizations for the period through May 15, 1999. This will include your
being available at the Company's headquarters offices for no less than one day a
week (approximately 10 hours per week) and available otherwise as you and the
CEO of the Company shall agree. In your transition support capacity, your
primary focus will be assisting the Company in reporting its financial results
for the period ended March 31, 1999 and assisting the transition team in its
efforts to track and report the Company's financial results through May 15,
1999. You will report directly to the CEO of the Company with respect to these
matters.
<PAGE> 1
Exhibit 9
March 12, 1999
Mr. Michael Levinger
50 Bradford Road
Wellesley, MA 02481
Dear Mike:
This letter, along with Wang's Standard Employment Agreement, as
presently modified and attached hereto, sets forth the terms of your employment
with Wang Laboratories, Inc. ("Wang" or "the Company"). The Company agrees to
employ you, and you agree to remain in the employ of the Company, upon the
following terms and conditions.
1. POSITION
You will be employed as Senior Vice President, Marketing, effective as
of April 12, 1999 ("Hire Date").
2. TERM
The terms and conditions of this letter will be in full force and effect
for a three (3) year period commencing on your Hire Date and terminating on
April 11, 2002, unless otherwise terminated as set forth in paragraph 4.
3. COMPENSATION AND BENEFITS
(a) YEARLY PAYMENTS
Your initial base salary will be $285,000 on an annualized basis, and
you will be eligible to participate in an annualized fiscal year bonus plan
targeted at fifty percent (50%) of your base salary, depending upon your
performance against the objectives specified in the plan. For calendar year 1999
you will be eligible for seventy-five percent (75%) of the targeted annual
bonus, fifty percent (50%) of which is guaranteed. Your salary and bonus plan
percentages will be reviewed annually for possible upward adjustment at the
discretion of the Company and as applicable the Board of Directors of the Wang
(the "Board") or a committee of the Board authorized to act on such matters.
(b) STOCK INCENTIVES
<PAGE> 2
Mr. Michael Levinger
March 12, 1999
Page 2
Subject to final approval by the Organization, Compensation and
Nominating Committee of the Board, you will be eligible to receive an option to
purchase one hundred and sixty thousand (160,000) shares of Wang Common Stock.
The option, having a seven (7) year term, will vest in four (4) equal
installments over a four (4) year period, the first installment vesting on the
one (1) year anniversary of the grant date, and the other installments on the
second, third and fourth anniversaries thereafter. The exercise price of this
option will be based on the fair market value of the Common Stock when approved
by the Committee or an authorized designee thereof.
Further, you will receive a grant of twenty-five thousand (25,000)
restricted registered shares of Wang Common Stock (the "Restricted Shares")
which will vest and be freely transferable (subject to applicable law) on the
third anniversary of the date of the grant, subject to (i) the acceleration of
one third of the Restricted Shares, on or after the first anniversary of the
grant date, if the average of the Closing Prices of Wang Common Stock for any
period of 40 consecutive trading days ending on or prior to the first
anniversary of the grant date is $32 per share, (ii) the acceleration of two
thirds of the Restricted Shares, on or after the second anniversary of the grant
date, if the average of the Closing Prices of Wang Common Stock for any period
of 40 consecutive trading days ending on or prior to the second anniversary of
the grant date is $40 per share and (iii) the acceleration of one-half of the
unvested Restricted Shares in the event your employment with the Company is
terminated on a basis which entitles to you to the severance payments as set
forth in paragraph 4 of this letter.(1)
(c) OTHER PROVISIONS
(i) The Company will provide health, vision, dental and disability
coverage to you in accordance with existing Company plans available to all
employees generally. You are eligible to participate in Wang's Retirement
Savings Plan effective as of your Hire Date. You will also be eligible to
participate in Wang's Senior Executive Retirement Plan ("SERP") according to the
terms and conditions of that plan. The Company will provide term life insurance
to you based on your insurability in the amount of five times your base salary
plus target bonus (50% of base salary) compensation. Further, you will receive
the Company's standard personal holiday benefit as well as four weeks of
vacation, accruable ratably over the calendar year. It is understood and agreed
that
- -----------------------------------------
(1) For the purposes of this paragraph, "Closing Price" for each day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case reported in the principal consolidated transaction reporting system with
respect to shares of Common Stock listed or admitted to trading on the New York
Stock Exchange, or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system or as quoted by the Nasdaq National
Market with respect to securities listed or admitted to trading on another
national securities exchange or quoted by the Nasdaq National Market,
respectively, or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange or quoted by the Nasdaq National
Market, the last quoted price, or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers Automated Quotation System or such
other system then in use, or, if on any such date the shares of Common Stock
are not quoted by an such organization, the average of the closing bid and
asked prices as furnished by a professional market marker making a market in
the Common Stock selected by the Committee. "Common Stock" when used herein
shall mean the common stock, par value $0.01 per share, of the Company.
<PAGE> 3
Mr. Michael Levinger
March 12, 1999
Page 3
you will be taking a vacation of three consecutive weeks in 1999. To arrange for
your benefits and receive your Wang Benefits Enrollment Kit, please contact
Maria Haddad, Human Resources Consultant, at (978) 625-7060 upon acceptance of
this offer.
(ii) During your employment, the Company will pay you a monthly
automobile allowance of $585.00 per month. In connection therewith, you
may elect one of two options:
Option 1: Wang will pay the automobile insurance premium for
one automobile if the automobile is leased through the
Wang automobile lease program.
Option 2: You may lease or buy an automobile in your own
personal name (and not through the Wang automobile lease
program), in which case Wang will not pay the automobile
insurance premium in connection with such an
arrangement.
(iii) During your employment, the company will also reimburse
you, at regular intervals and in accordance with Company policy, for all
business travel, telephone and out-of-pocket expenses incurred by you in
the performance of your duties as an employee of the Company.
4. TERMINATION/SEVERANCE COMPENSATION AND BENEFITS
(a) (i) In the event that your employment with the Company is
involuntarily terminated, (other than a termination "for cause," a term which
includes but is not limited to a violation of the standards set forth in Wang's
Standards of Ethics and Business Conduct booklet, or because of your death, in
which case this paragraph is inapplicable), or (ii) if during the term of this
Agreement and without your consent (x) you cease to be a Senior Vice President,
Marketing of the Company (y), either or both of your annual base salary or
target bonus is decreased from the level it was at immediately prior to such
decrease without your consent (a "Decrease Event") (z) your job location is
changed to someplace other than Massachusetts (other than in connection with a
relocation of the Company's worldwide headquarters), and upon the occurrence of
an event set forth in items (x),(y) or (z) above you resign, then Wang will pay
you semi-monthly an eighteen (18) month salary continuance equal to your then
base pay plus the target contained in your bonus plan, at 100% performance, at
the time of your termination (provided that, if your termination follows the
occurrence of a Decrease Event, then the salary and target bonus levels will be
those in effect immediately prior to any such decrease). Wang shall also pay to
you, at such time as Wang pays executives generally under the applicable annual
management incentive plan, the pro rata share of your target bonus (and in the
case of a Decrease Event at the target level immediately prior to such
decrease), calculated at an achievement level equal to Wang's actual performance
(as used for calculating the payout to other executives measured on the same
basis) for financial targets for the year in which your employment was
terminated through the date of your termination (less any amount thereof
previously paid to you). Finally, the restrictions on 50% of your then unvested
Restricted Shares will vest and such shares shall become freely transferable,
subject to applicable law.
<PAGE> 4
Mr. Michael Levinger
March 12, 1999
Page 4
(b) During this salary continuation period, Wang will continue to
provide you with health, vision and dental benefits pursuant to the provisions
of the Consolidated Omnibus Budget Reconciliation Act ("COBRA"). Wang shall pay
the applicable COBRA premium for you during this continuance period. Other
employee benefits will not be continued during this salary continuance period.
(c) In the event you become employed at any time during the eighteen
(18) month salary continuance period, all remaining salary continuance payments
shall terminate as of your date of hire by your new employer, except to the
extent that the total annual compensation for your new employment is less than
the total of your remaining salary continuance payments and, in such event, the
Company shall only pay that amount equal to the difference.
(d) In the event of any dispute between you and the Company as to
whether you have been terminated "for cause" as that term is used in
subparagraph 4(a)(i) above, (i) the Company agrees to pay you, on a semi-monthly
basis, the severance amount set forth in subparagraph 4(a) above during the time
period of any such dispute; and (ii) you and the Company agree that in any such
dispute the party prevailing in a final, non-appealable judgment on the merits
shall bear the other party's reasonable attorneys' fees (the "Prevailing
Party"). In addition, you agree to repay promptly to the Company any funds paid
to you during the period of any such dispute if you are not the Prevailing
Party.
(e) As of April 12, 2002, your employment status will be at will,
meaning that your employment at Wang will be for an indefinite period of time
and will be terminable at any time, with or without cause being shown, by either
you or the Company. Therefore, unless this Agreement is extended in writing, the
terms and conditions contained in paragraph 4 of this letter will conclude at
the end of the three (3) year period set forth herein and the original,
unmodified terms of paragraph 6 of the attached, modified standard Wang
Employment Agreement will be in full force and effect. Wang agrees to meet with
you to discuss whether you and Wang wish to extend this Agreement and the terms
of any such extension not later than six (6) months prior to the expiration of
the three (3) year period described in this letter.
(f) You will also be granted a contingent severance agreement applicable
in the event of a change in control of the Company.
5. NO CONFLICTS OF INTEREST
By signing this letter, you represent that you are not subject to any
restrictions, particularly, but without limitation, in connection with any
previous employment, which prevent you from entering into and performing your
obligations under this letter or which materially and adversely
<PAGE> 5
Mr. Michael Levinger
March 12, 1999
Page 5
affect (or may in the future, so far as you can reasonably foresee, materially
and adversely affect) your right to participate in the affairs of the Company.
6. STANDARDS OF ETHICS AND BUSINESS CONDUCT
You are required to comply with the Company's Standards of Ethics and
Business Conduct (a copy of which is enclosed herewith), and a completed
Standard of Ethics and Business Conduct form (enclosed) is a condition of your
employment.
7. I-9, EXPORT FORMS
Your employment is also contingent upon your ability to provide, within
three (3) business days after commencement of employment, the completed enclosed
I-9 form, and acceptable original documents that will establish your employment
authorization and identity in compliance with the Immigration Reform and Control
Act of 1986. In addition, you are required to complete the U.S. Export
Administration Employment Compliance Form I. If you answer "NO" to question 1
you are required to call H.R. Administration at (978) 625-7061 before you report
to work to complete a U.S. Export Administration Employment Compliance Form II.
Copies of your Visa and Form I-94, will also be required. Your response to the
questions in Form II may affect your eligibility for employment.
8. NON-COMPETITION
By signing this letter, you agree as follows:
(a) During the period of your employment with Wang, and for a period of
twelve (12) months following the termination of your employment, you agree that
you will not, without the prior written consent of Wang, which shall not
unreasonably be withheld, directly or indirectly, whether as a principal, agent,
employee, consultant, contractor, advisor, representative, stockholder (other
than as a holder of an interest of one percent (1%) or less in the equity of any
corporation whose stock is traded on a public stock exchange), or in any other
capacity:
(1) provide services, advice or assistance to any
business, person or entity which competes in the United
States directly, as a primary focus of its business,
with Wang or any of its subsidiaries or affiliates in
the offer, sale or delivery of those desktop and network
services which constitute more than twenty per cent
(20%) of Wang's revenues in the prior twelve month
period or, with respect to identifiable new product or
service offerings (and not categories thereof), those
which are material to Wang and for which you had
responsibility and material and direct involvement
("Competes")(except that this restriction shall not
apply if you provide services, advice or assistance to
or within a separate division or operating unit of any
such business, person or entity that does not itself
compete with Wang or any of its subsidiaries and
<PAGE> 6
Mr. Michael Levinger
March 12, 1999
Page 6
affiliates and you have no substantive involvement with
any part of such business, person or entity that does
Compete with Wang); or
(2) intentionally entice, induce or solicit, or attempt
to entice, induce or solicit, any individual or entity
having a business relationship with Wang, whether as an
employee, consultant, customer or otherwise, to
terminate or cease such relationship.
(b) If your employment is involuntarily terminated, other than for cause
or as a result of your death, or if you resign as a result of one of the reasons
set forth in paragraph 4(a)(ii) herein, the restrictions set forth in
subparagraph 8(a) above shall apply only during your employment and for six (6)
months thereafter.
(c) The parties represent and agree that any breach of this paragraph 8
is likely to cause irreparable injury to Wang, and that damages for any breach
of this paragraph are difficult to calculate. Therefore, upon breach of this
paragraph Wang shall, at its election, be entitled to injunctive and other
equitable relief. However nothing in this sub-paragraph shall limit Wang's right
to seek any relief or remedies, including damages, to which it may be entitled.
(d) It is the intention of the parties that the restrictions contained
in this paragraph 8 be reasonable as to time, geographic scope, and in all other
respects. The parties also intend that this paragraph be enforced to the fullest
extent permissible. Therefore, in the event that any provision of this paragraph
shall be determined by the court to be unreasonable, invalid or unenforceable
such determination shall not invalidate or render unenforceable the remainder of
this paragraph, and the restrictions of this paragraph shall be enforced insofar
as possible.
(e) Notwithstanding the provisions of paragraph 2 of this agreement,
this paragraph 8 shall survive the termination of this agreement.
(f) In the event of any inconsistency or conflict between the language
of this paragraph and the provisions of the Wang General Employment Agreement,
the provisions of this paragraph shall govern. In light of the more detailed
provisions of this paragraph of this letter, is agreed that the provisions of
Paragraph 8 of the Wang Global Employment Agreement are deleted and will have no
force or effect on you.
(g) This paragraph 8 shall be governed by the laws of the Commonwealth
of Massachusetts, and you agree that any suit for violation of this paragraph
may be brought in any court of competent jurisdiction located within the
Commonwealth of Massachusetts.
9. CONFIDENTIALITY
By our signatures below, we agree to treat the details of this letter
with utmost confidentiality and that we will not disclose them to any third
parties except your immediate family,
<PAGE> 7
Mr. Michael Levinger
March 12, 1999
Page 7
or respective financial and/or legal advisors, and such Wang personnel and/or
agents as have a need to know this information for business purposes and as may
otherwise be required by law.
Confirmation of your acceptance of these terms and of your Hire Date by
your signature below would be appreciated within seven (7) business days from
receipt of this letter. By your signature, you acknowledge that you have read
and understand the terms of this agreement and that you are entering into it
knowingly and voluntarily.
Mike, on a more personal note, welcome to the Wang Global. I have no
doubt that you will add a positive new dimension to the team, help us reach our
goals and have a lot of fun doing it. We are all looking forward to working with
you. If you have any questions, please call me at (978) 625-5050.
Regards,
/s/ Joseph M. Tucci
Joseph M. Tucci
Chairman and Chief Executive Officer
Enclosures: Standard Employment Agreement (as presently modified)
New Hire Forms
ACCEPTED AND AGREED TO:
/s/ Michael Levinger
_________________________
Michael Levinger
Dated: March 12, 1999
<PAGE> 1
Exhibit 10
April 21, 1999
Mr. John Cunningham
121 Stonebridge Square
Chappaqua, N.Y. 10514
Dear John:
This letter, along with Wang's Standard Employment Agreement, as
presently modified and attached hereto, sets forth the terms of your employment
with Wang Laboratories, Inc. ("Wang" or "the Company"). The Company agrees to
employ you, and you agree to remain in the employ of the Company, upon the
following terms and conditions.
1. POSITION
Subject to the approval of the Board of Directors of the Company (the
"Board"), you will be employed as Executive Vice President and Chief Financial
Officer of the Company, effective as of the date hereof ("Hire Date").
2. TERM
The terms and conditions of this letter will be in full force and effect
for a one (1) year period commencing on your Hire Date and terminating on the
first anniversary of your Hire date, unless otherwise terminated as set forth in
paragraph 4. Prior to the first anniversary of the Hire Date, the Company and
you will discuss the terms under which this letter will be extended if both
parties wish to do so.
3. COMPENSATION AND BENEFITS
(a) SALARY AND BONUS
Your base salary will be $350,000 on an annualized basis, and you will
be eligible to participate in an annualized fiscal year bonus plan targeted at
fifty percent (50%) of your base salary, depending upon your performance against
the objectives specified in the plan. The company will provide you with a
pro-rata bonus for Calendar Year 1999 and, in the event this letter is not
extended, for Calendar Year 2000.
(b) STOCK INCENTIVES
Subject to final approval by the Organization, Compensation and
Nominating Committee of the Board (the "Committee"), you will be awarded options
to purchase two hundred and forty thousand (240,000) shares of Wang Common Stock
(the "Options"). The Options will
<PAGE> 2
Mr. John Cunningham
April 21, 1999
Page 2
have a seven (7) year term. Eighty thousand (80,000) Options will vest on each
of the first, second and third anniversaries of the Hire Date. The exercise
price of these Options will be equal to the fair market value of the Common
Stock when approved by the Committee.
(c) BENEFITS
(i) The Company will provide standard health, vision, dental, life and
disability coverage to you in accordance with existing Company plans available
to all employees generally. To arrange for your benefits and receive your Wang
Benefits Enrollment Kit, please contact Lynne McCarthy, Human Resources
Director, at (978) 625-7090 upon acceptance of this offer.
(ii) During your employment, the Company will also pay you a
monthly automobile allowance of $585.00 per month. In connection
therewith, you may elect one of two options:
Option 1: Wang will pay the automobile insurance premium for one
automobile if the automobile is leased through the Wang
automobile lease program.
Option 2: You may lease or buy an automobile in your own personal
name (and not through the Wang automobile lease
program), in which case Wang will not pay the automobile
insurance premium in connection with such an
arrangement.
4. TERMINATION
(a) In the event that your employment with the Company is involuntarily
terminated, (other than (i) a termination "for cause," a term which includes but
is not limited to a violation of the standards set forth in Wang's Standards of
Ethics and Business Conduct booklet; (ii) a termination following a Change in
Control of the Company; or (iii) a termination prior to the first Anniversary of
the Hire Date resulting from your death, with respect to each such termination
this paragraph is inapplicable), a total of 80,000 of the Options referenced in
paragraph 3(b) above shall vest as of your termination date, and Wang shall also
pay to you, at such time as Wang pays executives generally under the applicable
annual management incentive plan, the pro rata share of your target bonus,
calculated at an achievement level equal to Wang's actual performance (as used
for calculating the payout to other executives measured on the same basis) for
financial targets for the year in which your employment was terminated through
the date of your termination (less any amount thereof previously paid to you).
(b) Following the first anniversary of your Hire Date, your employment
status will be at will, meaning that your employment at Wang will be for an
indefinite period of time and will be terminable at any time, with or without
cause being shown, by either you or the Company. Therefore, unless this
Agreement is extended in writing, the terms and conditions contained in
paragraph 4(a) of this letter will conclude on the first anniversary of your
Hire Date and the original,
<PAGE> 3
Mr. John Cunningham
April 21, 1999
Page 3
unmodified terms of paragraph 6 of the attached, modified standard Wang
Employment Agreement will be in full force and effect.
5. NO CONFLICTS OF INTEREST
By signing this letter, you represent that you are not subject to any
restrictions, particularly, but without limitation, in connection with any
previous employment, which prevent you from entering into and performing your
obligations under this letter or which materially and adversely affect (or may
in the future, so far as you can reasonably foresee, materially and adversely
affect) your right to participate in the affairs of the Company.
6. STANDARDS OF ETHICS AND BUSINESS CONDUCT
You are required to comply with the Company's Standards of Ethics and
Business Conduct (a copy of which is enclosed herewith), and a completed
Standard of Ethics and Business Conduct form (enclosed) is a condition of your
employment.
7. I-9, EXPORT FORMS
Your employment is also contingent upon your ability to provide, within
three (3) business days after commencement of employment, the completed enclosed
I-9 form, and acceptable original documents that will establish your employment
authorization and identity in compliance with the Immigration Reform and Control
Act of 1986. In addition, you are required to complete the U.S. Export
Administration Employment Compliance Form I. If you answer "NO" to question 1
you are required to call H.R. Administration at (978) 625-7061 before you report
to work to complete a U.S. Export Administration Employment Compliance Form II.
Copies of your Visa and Form I-94, will also be required. Your response to the
questions in Form II may affect your eligibility for employment.
8. NON-COMPETITION
By signing this letter, you agree as follows:
(a) During the period of your employment with Wang, and for a period of
six (6) months following the termination of your employment, you agree that you
will not, without the prior written consent of Wang, which shall not
unreasonably be withheld, directly or indirectly, whether as a principal, agent,
employee, consultant, contractor, advisor, representative, stockholder (other
than as a holder of an interest of one percent (1%) or less in the equity of any
corporation whose stock is traded on a public stock exchange), or in any other
capacity:
(1) provide services, advice or assistance to any
business, person or entity which competes in the United
States directly, as a primary focus of its business,
with Wang or any of its subsidiaries or affiliates in
the offer, sale or delivery of those desktop and network
services which constitute more than twenty per cent
(20%) of Wang's revenues in the prior twelve month
period
<PAGE> 4
Mr. John Cunningham
April 21, 1999
Page 4
or, with respect to identifiable new product or service
offerings (and not categories thereof), those which are
material to Wang and for which you had responsibility
and material and direct involvement ("Competes")(except
that this restriction shall not apply if you provide
services, advice or assistance to or within a separate
division or operating unit of any such business, person
or entity that does not itself compete with Wang or any
of its subsidiaries and affiliates and you have no
substantive involvement with any part of such business,
person or entity that does Compete with Wang); or
(2) intentionally entice, induce or solicit, or attempt
to entice, induce or solicit, any individual or entity
having a business relationship with Wang, whether as an
employee, consultant, customer or otherwise, to
terminate or cease such relationship.
(b) The parties represent and agree that any breach of this paragraph 8
is likely to cause irreparable injury to Wang, and that damages for any breach
of this paragraph are difficult to calculate. Therefore, upon breach of this
paragraph Wang shall, at its election, be entitled to injunctive and other
equitable relief. However nothing in this sub-paragraph shall limit Wang's right
to seek any relief or remedies, including damages, to which it may be entitled.
(c) It is the intention of the parties that the restrictions contained
in this paragraph 8 be reasonable as to time, geographic scope, and in all other
respects. The parties also intend that this paragraph be enforced to the fullest
extent permissible. Therefore, in the event that any provision of this paragraph
shall be determined by the court to be unreasonable, invalid or unenforceable
such determination shall not invalidate or render unenforceable the remainder of
this paragraph, and the restrictions of this paragraph shall be enforced insofar
as possible.
(d) Notwithstanding the provisions of paragraph 2 of this agreement,
this paragraph 8 shall survive the termination of this agreement.
(e) In the event of any inconsistency or conflict between the language
of this paragraph and the provisions of the Wang General Employment Agreement,
the provisions of this paragraph shall govern. In light of the more detailed
provisions of this paragraph of this letter, is agreed that the provisions of
Paragraph 8 of the Wang Global Employment Agreement are deleted and will have no
force or effect on you.
(f) This paragraph 8 shall be governed by the laws of the Commonwealth
of Massachusetts, and you agree that any suit for violation of this paragraph
may be brought in any court of competent jurisdiction located within the
Commonwealth of Massachusetts.
9. CONFIDENTIALITY
By our signatures below, we agree to treat the details of this letter
with utmost confidentiality and that we will not disclose them to any third
parties except your immediate family,
<PAGE> 5
Mr. John Cunningham
April 21, 1999
Page 5
or respective financial and/or legal advisors, and such Wang personnel and/or
agents as have a need to know this information for business purposes and as may
otherwise be required by law.
Confirmation of your acceptance of these terms and of your Hire Date by
your signature below would be appreciated within seven (7) business days from
receipt of this letter. By your signature, you acknowledge that you have read
and understand the terms of this agreement and that you are entering into it
knowingly and voluntarily.
John, on a more personal note, welcome to the Wang Global. I have no
doubt that you will add a positive new dimension to the team, help us reach our
goals and have a lot of fun doing it. We are all looking forward to working with
you. If you have any questions, please call me at (978) 625-5050.
Regards,
/s/ Joseph M. Tucci
Joseph M. Tucci
Chairman and Chief Executive Officer
Enclosures: Standard Employment Agreement (as presently modified)
New Hire Forms
ACCEPTED AND AGREED TO:
/s/ John Cunningham
_________________________
John Cunningham
Dated: April 21, 1999
<PAGE> 1
Exhibit 11
February 26, 1999
Getronics NV
Donauweg 10
P.O. Box 652
1000 Amsterdam
Netherlands
Attn: Mr. A.H.J. Risseuw
President and CEO
Gentlemen:
You and Wang Laboratories, Inc. (referred to herein as "Wang Global"
or the "Company") wish to enter into discussion regarding a possible business
transaction (the "Possible Transaction"). In connection with those discussion's
you will be requesting certain non-public information from Wang Global and Wang
Global will be providing it to you. As a condition to Wang Global providing
information to you, you agree to treat any information concerning Wang Global
(whether prepared by the Company, its advisors or otherwise) (herein
collectively referred to as the "Evaluation Material") in accordance with the
provisions of this letter and to take or abstain from taking certain other
actions herein set forth.
1. In connection with the Proposed Transaction, Wang Global also may
request information concerning your business. As a condition to being provided
that information, Wang Global agrees to treat any information concerning your
business (whether prepared by you, your advisors or otherwise) (herein
collectively referred to as the "Your Evaluation Material") with the same
confidentiality and subject to the same restrictions as this letter requires you
to observe with respect to the information provided by Wang Global to you. The
definition of Your Evaluation Materials excludes the same categories of
information as are excluded below from the definition of Wang Global Evaluation
Materials, reversing in that regard, of course, the references to you and Wang
Global. You and Wang Global are referred to herein collectively as the
"Parties."
2. The term "Evaluation Material" does not include information which
(i) is already in your possession, provided that such information is not known
by you to be subject to another confidentiality agreement with or other
obligation of secrecy to Wang Global or another party, (ii) was, is or becomes
generally available to the public other than as a result of a disclosure by you
or your directors, officers, employees, agents or advisors (collectively
"Advisors"), (iii) was, is or becomes available to you on a non-confidential
basis from a source other than Wang Global or its directors, officers,
employees, agents or advisors, provided that such source is not known by you to
be bound by a confidentiality agreement with or other obligation of secrecy to
Wang Global or another Party or (iv) has
<PAGE> 2
February 26, 1999
Page 2
been independently acquired or developed by you or your Advisors based on
information other than Evaluation Material.
3. You hereby agree that the Evaluation Material will be used solely
for the purpose of evaluating the Possible Transaction, and that such
information will be kept confidential by you; provided, however, that (i) any of
such information may be disclosed to your Advisors who need to know such
information for the purpose only of evaluating the Possible Transaction (it
being understood that such Advisors shall be informed by you of the confidential
nature of such information and prior to the receipt of any Evaluation Materials
shall have agreed to treat such information confidentially in accordance with
the terms hereof), and (ii) any disclosure of such information may be made to
which the Company consents in writing. You shall be responsible for any actions
or omissions by your Advisors which if taken or not taken by you would be a
breach of this letter agreement (an "Advisor Breach"), provided that you will
not be responsible for any such Advisor Breach by any of your Advisors who
expressly agrees in writing to be bound by the terms of this letter agreement as
if such Advisor were an original Party hereto and with respect to which Advisor
a signed copy of such agreement to be bound has been provided to the Company.
4. You hereby acknowledge that you are aware, and that you will advise
such Advisors who are informed as to the matters which are the subject of this
letter, that the United States securities laws prohibit any person who has
received from an issuer material, non-public information concerning the matters
which are the subject of this letter from purchasing or selling securities of
such issuer or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
5. Except for the circumstances set forth in paragraph 6 below, you
agree that neither you nor your Advisors shall without the prior written consent
of the Company, disclose to any person either the fact that discussions or
negotiations are taking place concerning a Possible Transaction or any of the
terms, conditions or other facts with respect to any such Possible Transaction,
including the status thereof.
6. In the event that you or any of your Advisors are requested or
required, by oral questions, interrogatories, requests for information or
documents in legal proceedings, subpoena, civil investigative demand or other
similar process, or under applicable law or regulations, to disclose any of the
Evaluation Material or the fact that the Evaluation Material has been made
available to you, that discussions or negotiations are taking place concerning
the Possible Transaction or any of the terms or conditions or other facts with
respect thereto, you shall provide the Company with prompt written notice of any
such request or requirement so that the Company may seek a protective order or
other appropriate remedy. If appropriate, the Company may waive compliance with
the provisions of this letter agreement. If, in the absence of a protective
order or other remedy or the receipt of a waiver from the Company, you or any of
your Advisors are nonetheless, based on the written opinion of your outside
legal counsel, legally compelled to disclose Evaluation Material or other
information to any tribunal or under applicable law or
<PAGE> 3
February 26, 1999
Page 3
regulation or else stand liable for contempt or suffer other material censure or
penalty, you or your Advisor may, without liability hereunder, disclose only
that portion of the Evaluation Material and such other information which your
outside counsel advises you is legally required to be disclosed, provided that
you exercise your best efforts to preserve the confidentiality of the Evaluation
Material and such other information being disclosed, including, without
limitation, by cooperating with the Company to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded
by such tribunal to the Evaluation Material and such other information being
disclosed.
7. You hereby acknowledge and agree that the Evaluation Material is
being furnished to you in consideration of your agreements under this letter,
that you will not propose to the Company or any other person any transaction
between you and the Company and/or its security holders (with respect only to
the securities of the Company) or involving any of its securities or security
holders (with respect only to securities of the Company) unless requested by the
Board of Directors of the Company to make such a proposal, and that you will not
acquire, or assist any other persons in acquiring, directly or indirectly,
control of the Company or any of the Company's securities, businesses or assets
for a period of one year following the termination of this letter, unless the
Company shall have consented in advance in writing to such acquisition.
8. Although the Parties will endeavor to include in the Wang Global
Evaluation Material and Your Evaluation Material, respectively, information that
each believes to be relevant for the purpose of considering the Possible
Transaction and responsive to the other Party's inquiries, the Parties
understand and agree that neither of them nor any of their respective Advisors
have made or will be deemed to have made any representation or warranty as to
the accuracy or completeness of the Evaluation Material or Your Evaluation
Material, as the case may be. The Parties agree that neither of them nor their
respective Advisors shall have any liability to the other Party, or any of its
Advisors, relating to the Evaluation Materials or Your Evaluation Materials
9. In consideration of the Parties making the information and some of
their key executives and employees available to each other to assist in the
analysis of the Possible Transaction, the Parties agree that for a period
beginning as of the date of this letter and ending two years after the
termination of this letter, the Parties shall not hire or solicit for
employment, directly or indirectly any of each others employees, including
employees of their respective subsidiaries, with whom you or your advisors, on
the one hand, or Wang Global and its advisors, on the other, have had contact
during the course of discussions and meetings related to the Possible
Transaction.
10. In the event that you do not proceed with the Possible Transaction
within a reasonable time and upon the request of the Company, you shall promptly
redeliver to the Company or destroy all written Evaluation Material and any
other written material containing or reflecting any information in the
Evaluation Material (whether prepared by the Company, its advisors or otherwise)
and will not retain any copies, extracts or other reproductions in whole or in
part of such written material. All documents, memoranda, notes and other
writings whatsoever prepared by you or your advisors based on the
<PAGE> 4
February 26, 1999
Page 4
information in the Evaluation Material ("Independently Developed Materials.")
shall be destroyed, and upon request of the Company such destruction shall be
certified in writing to the Company by an authorized officer supervising the
destruction; provided, however, that your advisors may retain one copy of
Independently Developed Materials for archival purposes or as may be required by
law or regulatory authority, and such materials shall be maintained on a
confidential basis and shall not be otherwise copied or distributed.
You agree that unless and until a definitive agreement between the
Company and you with respect to the Possible Transaction has been executed and
delivered, neither the Company nor you will be under any legal obligation of any
kind whatsoever with respect to such a transaction by virtue of this or any
written or oral expression with respect to such a transaction by any of its
directors, officers, employees, agents or any other representatives or its
advisors or representatives thereof except, in the case of this letter, for the
matters specifically agreed to herein. The agreement set forth in this paragraph
may be modified or waived only by a separate writing by the Company and you
expressly so modifying or waiving such agreement.
This letter shall be governed by, and construed in accordance
with, the laws of the State of New York. The Parties agree to submit to
exclusive jurisdiction with respect to any disputes arising in connection with
this letter to the courts of the State of New York. The Parties consent to the
award of injunctive relief to and specific performance enforce the terms of
their letter, in addition to any other remedy available at law or in equity and
acknowledging that monetary damage will not be a sufficient remedy. Except as
otherwise specifically set forth herein, this agreement and all obligations
hereunder shall terminate two years from the date hereof.
Very truly yours,
WANG LABORATORIES, INC.
By /s/ Albert A. Notini
------------------------------------
Albert A. Notini, Sr. Vice President
Confirmed and Agreed to:
GETRONICS, NV
By: /s/ Jan Docter CFO
---------------------------------
Date: 1 March '99
-------------------------------
<PAGE> 1
Exhibit 12
COMPENSATION OF DIRECTORS
The director who is employed by the Company or is employed by a stockholder
of the Company is not paid director fees. Directors who are not employed by the
Company or employed by a stockholder of the Company receive an annual fee of
$20,000 plus a fee of $1,000 for each meeting attended. The members of each
Committee receive an annual fee of $1,500, plus a fee of $1,000 for each
Committee meeting attended.
On each of September 30, 1997 and September 30, 1998, under the Company's
1995 Director Stock Option Plan, each of the then current directors of the
Company, other than Mr. Tucci, received an option to purchase 6,500 shares of
Common Stock. These options have an exercise price of $20.367 and $22.48,
respectively, per share. The 1997 grants became exercisable as to 34% of the
shares covered thereby on September 30, 1998, and will become exercisable as to
33% and 33% of the shares covered thereby on September 30, 1999 and September
30, 2000, respectively, provided the optionee continues to serve as a director
of the Company. The 1998 grants will become exercisable as to 34%, 33% and 33%
of the shares covered thereby on September 30, 1999, September 30, 2000 and
September 30, 2001, respectively, provided the optionee continues to serve as a
director of the Company.
In December 1997, under the Company's 1995 Director Stock Option Plan, Dr.
White received an option to purchase 6,500 shares of Common Stock. This option
has an exercise price of $22.77 per share and became exercisable as to 34% of
the shares covered thereby on December 23, 1998 and will become exercisable as
to 33% and 33% of the shares covered thereby on December 23, 1999 and December
23, 2000, respectively, provided the optionee continues to serve as a director
of the Company.
In March 1998, under the Company's 1995 Director Stock Option Plan, Mr.
Erede received an option to purchase 6,500 shares of Common Stock. This option
has an exercise price of $25.18 per share and became exercisable as to 34% of
the shares covered thereby on March 25, 1999 and will become exercisable as to
33% and 33% of the shares covered thereby on March 25, 2000 and March 25, 2001,
respectively, provided the optionee continues to serve as a director of the
Company.
Raymond C. Kurzweil had been retained as a technical advisor by the
Official Committee of Unsecured Creditors in the Company's Chapter 11 proceeding
and, in that capacity, had reviewed the technology and intellectual property of
the Company. Through this review the Company's patent portfolio was identified
as one of the Company's important assets. After joining the Company's Board of
Directors in October 1993, Mr. Kurzweil agreed to continue his work with the
Company's patent portfolio and entered into a technical consulting agreement
with the Company effective October 1993. This agreement provided for
compensation at the rate of $375.00 per hour, not to exceed an average of
$15,000 per month, plus the reimbursement of expenses. The agreement was
approved by the Board of Directors and is subject to the Board's periodic
review. The agreement is terminable upon 30 days' notice by either party. The
agreement was terminated effective June 30, 1998 and the Company's final payment
to Mr. Kurzweil under this agreement was made in July 1998.
In July 1994, the Board of Directors adopted a policy prohibiting
non-employee directors from receiving compensation from the Company other than
in their capacity as directors, absent extraordinary circumstances.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who are beneficial owners of more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership with the Securities and Exchange Commission ("SEC"). Officers,
directors and greater than 10% beneficial owners are required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms that they file. To
the Company's knowledge, based solely on the review of the copies of reports
furnished to Company, and written representations that no other reports were
required during the Fiscal 1998 or the Stub Period, all Section 16(a) filing
requirements applicable to such persons were satisfied during such periods.
8
<PAGE> 2
PROPOSAL TO APPROVE THE AMENDMENT AND RESTATEMENT
OF THE DIRECTOR STOCK OPTION PLAN
On March 24, 1999, the Board of Directors adopted, subject to stockholder
approval, an amendment to and restatement of the Company's 1995 Director Stock
Option Plan, including a change in the name of the Plan to the Director
Compensation and Stock Option Plan (as amended and restated, the "Plan") and an
increase by 300,000 shares of Common Stock in the number of shares available for
issuance under the Plan. The purpose of the Plan is to encourage ownership of
stock of the Company by directors, whose continued services are essential to the
Company's future progress, and to provide them with an incentive to continue as
directors of the Company. The Board of Directors of the Company believes that
the Plan will further align the Director's interests with those of the
shareholders and enhance the Company's ability to attract and retain qualified
directors. A copy of the Plan is attached as Appendix A hereto.
THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT THE APPROVAL OF THE
AMENDMENT TO AND RESTATEMENT OF THE PLAN IS IN THE BEST INTERESTS OF THE COMPANY
AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
SUMMARY OF THE PLAN
The following description of certain features of the Plan is intended to be
a summary only. The summary is qualified by the full text of the Plan.
Subject to adjustment for stock splits, stock dividends and other similar
events, the total number of shares of Common Stock that can be issued under the
Plan is 240,000 shares (prior to giving effect to the proposed amendment). Under
certain circumstances, awards which expire, are forfeited or cancelled without
delivery of shares of Common Stock will be available for future grants under the
Plan. Shares issued under the Plan may be authorized but unissued shares,
treasury shares or shares acquired in the market for the account of the
participant. Only non-employee directors of the Company who are paid fees for
service on the Board of Directors or a committee thereof ("non-employee
directors") are eligible to receive awards under the Plan. The Company currently
has 10 non-employee directors (which number may change in the future). All
options granted under the Plan are non-qualified stock options not entitled to
special tax treatment under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). Through March 29, 1999, options to purchase 266,500 shares
had been granted under the Plan and no shares were available to be granted under
the Plan.
The Plan provides for (i) the grant of shares of Common Stock subject to
risk of forfeiture and restrictions on transfer for a specified period
("Restricted Stock"), (ii) the grant of rights to receive shares of Common Stock
upon settlement subject to risk of forfeiture and restrictions on transfer for a
specified period ("Restricted Stock Units"), and (iii) the grant of
non-qualified stock options to purchase Common Stock. Awards of Restricted
Stock, Restricted Stock Units and options may be granted under the Plan to non-
employee directors in accordance with policies established from time to time by
the Board of Directors.
Restricted Stock and Restricted Stock Units
The Plan provides for the payment of annual retainer fees payable to a
director in his or her capacity as a director for service on the Board of
Directors and committees thereof, to be paid to non-employee directors in the
form of awards of Restricted Stock or Restricted Stock Units, in accordance with
policies established from time to time by the Board of Directors.
Under the initial policy of the Board of Directors for the grant of
Restricted Stock and Restricted Stock Units under the Plan, on the date of each
annual meeting of stockholders at which directors are elected, each non-employee
director, in lieu of the payment in cash of such director's retainer fees, shall
be granted an award of shares of Restricted Stock or Restricted Stock Units, at
such director's election, equal to the sum of such fees divided by the fair
market value of the Common Stock as determined in accordance with the terms of
the Plan. Unless otherwise determined by the Board of Directors, (i) an award of
Restricted Stock or Restricted Stock Units shall vest and not be subject to
forfeiture (A) at the close of business on the day preceding the annual meeting
of stockholders in the third year following the year of grant of such award,
9
<PAGE> 3
(B) upon a "change in control" of the Company (as defined in the Plan) or (C)
upon termination of the director's service due to death, disability or
retirement at or after age 60, and (ii) an award of Restricted Stock or
Restricted Stock Units shall be forfeited upon the termination of the director's
service if such Units are unvested.
Stock Options
Under the initial policy of the Board of Directors for the grant of options
under the Plan, non-employee directors shall receive (i) on the date of each
annual meeting at which a director is automatically granted Restricted Stock or
Restricted Stock Units pursuant to the Plan, an automatic grant of an option to
purchase a number of shares of Common Stock equal to two times the number of
shares of Restricted Stock and Restricted Stock Units granted to the director on
such date (a "Performance Option"), and (ii) an automatic grant of an option to
purchase 6,500 shares of Common Stock (A) on the date a participant is first
elected or appointed as a director (an "Initial Option") and (B) on March 31 of
each year, if such director attended at least 75% of the total number of Board
of Directors meetings and meetings of Board committees on which he or she then
served, held during the preceding fiscal year (an "Annual Option"), provided
that an Annual Option shall not be granted to a director who was granted an
Initial Option during the preceding six months. The exercise price of each
option granted under the Plan shall equal the fair market value of the Common
Stock on the date of grant as determined in accordance with the terms of the
Plan.
Unless otherwise determined by the Board of Directors, each Performance
Option shall vest and become fully exercisable on the earlier of (i) the day
prior to the date of the annual meeting of stockholders in the seventh year
after the date of grant and (ii) the earliest date, following the date of grant,
on which the Market Price (as defined in the Plan) of the Common Stock equals or
exceeds an amount equal to 1.667 times the exercise price of the option. In the
event of a "change in control" of the Company (as defined in the Plan) or
termination of the participant's service as a director due to his or her death,
disability or retirement at or after age 60, all outstanding Performance Options
will immediately vest and become fully exercisable.
Unless otherwise determined by the Board of Directors, each Initial Option
and Annual Option shall vest and become exercisable as to one-third of the
shares subject to such Option on each of the first three anniversaries of the
date of grant, provided the participant continues to serve as a director on such
dates or no longer serves as director due to termination of his or her service
at or after age 60. In the event of a "change in control" of the Company (as
defined in the Plan) unless otherwise determined by the Board of Directors or
specified in the Option grant instrument or termination of the participant's
service as a director due to his or her death or disability, all outstanding
Initial Options and Annual Options will immediately vest and become fully
exercisable.
Deferred Shares and Deferral Accounts
The Plan provides that the Board of Directors may adopt compensation
policies which permit non-employee directors to elect to be paid fees in respect
of service as a director in the form of rights to receive shares of Common Stock
upon settlement and not subject to risk of forfeiture ("Deferred Shares").
A participant may elect to defer receipt of retainer fees in the form of
Deferred Shares. In that event, a number of Deferred Shares equal to the
aggregate amount of such fees divided by the fair market value of the Common
Stock, as determined in accordance with the terms of the Plan, shall be credited
to such director's deferral account. The Plan also permits a participant to
defer receipt of Common Stock to be received upon the exercise of options
granted under the Plan, if the exercise price of such options is paid by
surrender of shares of Common Stock. Deferral accounts shall be settled, with
respect to securities not subject to risk of forfeiture, at such future time as
the participant shall elect by notice to the Company.
Amendments and Termination
The Board of Directors may at any time amend, suspend, discontinue or
terminate the Plan, provided that, without the consent of a participant, no
action shall materially and adversely affect the rights of such
10
<PAGE> 4
participant with respect to any rights to payment of amounts credited to such
participant's account. In addition, amendment or alteration of the Plan shall be
subject to stockholder approval if required by law or the rules of any stock
exchange on which the Common Stock may then be listed.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the United States federal income tax
consequences that generally will arise with respect to options granted under the
Plan and with respect to the sale of Common Stock acquired under the Plan.
Restricted Stock. A participant will not recognize taxable income upon the
grant of a Restricted Stock award unless the participant makes an election under
Section 83(b) of the Code (a "Section 83(b) Election"). If the participant makes
a Section 83(b) Election within 30 days of the date of the grant, then the
participant will recognize ordinary compensation income, for the year in which
the award is granted, in an amount equal to the difference between the fair
market value of the Common Stock at the time the award is granted and the
purchase price paid for the Common Stock. If a Section 83(b) Election is not
made, then the participant will recognize ordinary compensation income, at the
time that the forfeiture provisions or restrictions on transfer lapse, in an
amount equal to the difference between the fair market value of the Common Stock
at the time of such lapse and the original purchase price paid for the Common
Stock. The participant will have a tax basis in the Common Stock acquired equal
to the sum of the price paid and the amount of ordinary compensation income
recognized.
Upon the disposition of the Common Stock acquired pursuant to a Restricted
Stock award, the participant will recognize a capital gain or loss in an amount
equal to the difference between the sale price of the Common Stock and the
participant's tax basis in the Common Stock. This capital gain or loss will be a
long-term capital gain or loss if the shares are held for more than one year.
For this purpose, the holding period shall begin just after the date on which
the forfeiture provisions or restrictions lapse if a Section 83(b) Election is
not made, or just after the award is granted if a Section 83(b) Election is
made.
Restricted Stock Units and Deferred Shares. A participant will not
recognize taxable income upon the grant of a Restricted Stock Unit or the credit
of Deferred Shares under the Plan. Instead, a participant generally will
recognize as ordinary compensation income the fair market value of any Common
Stock delivered in accordance with the terms of the Restricted Stock Unit or
Deferred Shares.
Upon selling any Common Stock received by a participant under the terms of
a Restricted Stock Unit or Deferred Shares, the participant generally will
recognize a capital gain or loss in an amount equal to the difference between
the sale price of the Common Stock and the participant's tax basis in the Common
Stock. This capital gain or loss will be a long-term capital gain or loss if the
participant has held the Common Stock for more than one year prior to the date
of the sale.
Stock Options. A participant will not recognize taxable income upon the
grant of an option under the Plan. Nevertheless, a participant generally will
recognize ordinary compensation income upon the exercise of the option in an
amount equal to the excess of the fair market value of the Common Stock acquired
through the exercise of the option (the "Option Stock") on the exercise date
over the exercise price.
A participant will have a tax basis for any Option Stock equal to the
exercise price plus any income recognized with respect to the option. Upon
selling Option Stock, a participant generally will recognize capital gain or
loss in an amount equal to the difference between the sale price of the Option
Stock and the participant's tax basis in the Option Stock. This capital gain or
loss will be a long-term capital gain or loss if the participant has held the
Option Stock for more than one year prior to the date of the sale and will be a
short-term capital gain or loss if the participant has held the Option Stock for
a shorter period.
Deferral of Certain Option Stock. Under certain circumstances, the Plan
permits a participant to exercise a stock option by delivering to the Company
Common Stock having a fair market value equal in amount to the exercise price,
and elect to convert a portion of the shares of Common Stock deliverable upon
exercise of the stock option into Deferred Shares. The use of this method of
exercise allows a participant to exercise a stock option without incurring any
immediate income taxes. The participant's tax basis in any shares of Common
Stock delivered to the Company to exercise an option generally will be carried
over to an equal
11
<PAGE> 5
number of shares of Common Stock acquired upon exercising the option. A
participant may elect to receive Deferred Shares for any shares in excess of the
number of shares surrendered to exercise the option.
Tax Consequences to the Company. The grant of an option under the Plan
will have no tax consequences to the Company. The Company generally will be
entitled to a business-expense deduction, however, with respect to any ordinary
compensation income recognized by a participant under the Plan.
PROPOSAL TO AMEND THE EMPLOYEES' STOCK INCENTIVE PLAN
The Board of Directors believes that a critical factor in the Company's
growth and profitability is its ability to attract, retain, compensate
competitively and motivate its workforce and align the interests of employees
with the shareholders through the issuance of incentive stock options. To do so,
the Board of Directors believes it is necessary for the Company to have stock
options available for issuance to current employees, including those that obtain
technical certifications and work with customers and clients. On March 24, 1999,
the Board of Directors of the Company adopted, subject to stockholder approval,
an amendment to the Employees' Stock Incentive Plan ("Plan") increasing the
number of shares available under the Plan by 4,630,000 shares, to a total of
13,097,153 shares.
THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT THE AMENDMENT TO THE
EMPLOYEES' STOCK INCENTIVE PLAN IS IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS AND RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
SUMMARY OF THE PLAN
The Plan authorizes the Company to grant stock options for the purchase of,
or make restricted stock awards (i.e., grants of shares of Common Stock subject
to certain restrictions) covering, up to an aggregate of 8,467,153 shares of
Common Stock (prior to giving effect of the proposed amendment) plus such number
of shares that were covered by option grants under the Company's prior Stock
Incentive Plan which have expired, been forfeited or terminated unexercised
since October 26, 1994 (the date that the Board adopted the Plan). Any shares
subject to options granted pursuant to the Plan which terminate or expire
unexercised are available for future grants under the Plan. In addition, any
restricted stock awarded under the Plan which is repurchased by the Company will
be available for subsequent option grants or restricted stock awards under the
Plan. The maximum number of shares for which options or restricted stock awards
may be granted to any one employee during any year is 1,000,000 shares. As of
February 28, 1999 approximately 604,078 shares remained available for future
option grants or restricted stock awards under the Plan.
All employees of the Company or a subsidiary of the Company are eligible to
receive stock options or restricted stock awards under the Plan, but options and
awards are granted only to those employees selected or approved by the
Organization, Compensation and Nominating Committee of the Board of Directors
(the "Committee"), which has been charged with administration of the Plan. The
number and identity of individuals receiving stock options varies from year to
year depending on various factors such as the Company's hiring needs during the
year, employees added through acquisitions, significant promotions and
individual and Company performance. During the period June 30, 1997 through
March 1, 1999, more than 60% of awards were made to program managers and
individual contributors including the individuals who have obtained or who have
enrolled in Wang Global Virtual University to obtain MCSE, MCSD or CCIE
certificates. Because of the uncertainty of these factors, and because of the
discretionary nature of the grant of stock options and restricted stock awards,
the Company cannot now determine the number of options or restricted stock
awards to be granted to any particular executive officer, executive officers as
a group, or non-executive officer employees as a group. As of February 28, 1999,
the Company and its subsidiaries had approximately 20,300 employees.
The Plan is administered by the Committee, which is authorized to implement
and interpret the Plan and to determine, subject to the provisions of the Plan
and the Committee's charter, the employees of the Company or its subsidiaries to
whom, and the time or times at which, options and restricted stock awards are
granted; the number of shares subject to each option or restricted stock award
granted; the designation of a stock option as either an incentive stock option
or a non-statutory stock option; the exercise price of a stock
12
<PAGE> 6
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following Summary Compensation Table sets forth certain information
concerning the compensation for each of the last three fiscal years and the Stub
Period of the Company's Chief Executive Officer and the Company's four other
most highly compensated executive officers during Fiscal 1998 and during the
Stub Period (the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM COMPENSATION
COMPENSATION(1) AWARDS
--------------------- ----------------------------
RESTRICTED SECURITIES
FISCAL STOCK AWARDS UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (#)(2) OPTIONS(#)(3) COMPENSATION($)
--------------------------- ------ --------- -------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Joseph M. Tucci................. 1998s(4) 375,000 787,500(5) -- -- 32,082(6)
Chairman of the Board, President 1998 750,000 356,250(7) -- -- 70,100
and Chief Executive Officer 1997 652,030 4,693,750 230,000 465,000 443,783
1996 551,250 400,000 -- 148,500 49,773
Jeremiah J.J. van Vuuren(8)..... 1998s(4) 240,146 356,792(9) 29,000 -- 42,530(10)
President and Chief Operating 1998 396,988 106,875(7) -- 40,000 76,770
Officer, International 1997 371,963 196,247 25,000 120,000 41,261
1996 263,075 210,000 -- 87,750 34,265
Jose Ofman...................... 1998s(4) 187,500 180,000(11) -- -- 109,541(12)
President and Chief Operating 1998 375,000 106,875(7) -- -- 138,016
Officer, Americas International 1997 102,403(13) -- 50,000 300,000 17,607
Franklyn A. Caine............... 1998s(4) 192,500 245,000(14) 29,000 -- 8,280(15)
Executive Vice President and 1998 350,000 83,125(7) -- 50,000 21,560
Chief Financial Officer 1997 331,618 565,000 15,000 75,000 96,797
1996 325,000 198,000 -- 81,000 30,885
Donald P. Casey................. 1998s(4) 175,000 180,000(16) 14,000 -- 12,543(17)
Chief Technology Officer 1998 350,000 99,750(7) -- 45,000 30,128
1997 350,000 178,834 -- 45,000 25,665
1996 350,000 178,834 -- 87,750 35,476
</TABLE>
- ---------------
(1) Other compensation in the form of perquisites and other personal benefits
has been omitted, in accordance with the rules of the SEC, as the aggregate
amount of such perquisites and other personal benefits constituted less
than the lesser of $50,000 or 10% of the total annual salary and bonus for
each executive officer in each period covered.
(2) During the Stub Period, restricted stock awards of 29,000, 29,000 and
14,000 shares were granted to Messrs. van Vuuren, Caine and Casey,
respectively. The restricted stock vests according to the following: if the
average of the closing prices of the Company's Common Stock for a period of
forty (40) consecutive trading days ending on or prior to July 1, 2001 (the
"First Period") is $33.00 or more, then 34% of the shares vest on the later
of July 1, 2000 or the last trading date of the First Period; and 66% of
the shares vest on July 1, 2001. All restrictions terminate in any event on
July 1, 2005. Based on the closing price of the Common Stock on December
31, 1998 ($27.75), the restricted stock award to Mr. van Vuuren had a value
of $804,750, the restricted stock award to Mr. Caine had a value of
$804,750, and the restricted stock award to Mr. Casey had a value of
$388,500. In 1997, Restricted stock awards of 230,000, 25,000, 50,000 and
15,000 shares were granted to Messrs. Tucci, van Vuuren, Ofman and Caine,
respectively. The restricted stock issued to Mr. Tucci vested 50% on March
26, 1998 and 50% on March 26, 1999. The restricted stock issued to Mr.
Ofman vested 34% on March 26, 1999, and will vest 33% on each of March 26,
2000 and 2001. The restricted stock issued to each of Messrs. Caine and van
Vuuren vested 100% on March 26, 1999. Based on the closing price of the
Common Stock on June 30, 1998, the restricted stock award to Mr. Tucci had
a value of $5,850,625, the restricted stock award to Mr. Ofman had a value
of $1,271,875, the restricted stock award to Mr. van Vuuren had a value of
$635,937.50 and the restricted stock award to Mr. Caine, had a value of
$381,562.50.
(3) Consists of long-term incentive options granted under the Company's
Employees' Stock Incentive Plan or an individual stock incentive plan in
the case of Mr. Ofman.
(4) All compensation, except Bonuses, is for the six-month Stub Period and has
not been annualized.
27
<PAGE> 7
(5) Calendar 1998 bonus consists of $787,500 paid under the Company's executive
bonus plan. Fiscal 1998 bonus consists of $356,250 in Common Stock issued
under the Interim STIP. Fiscal 1997 bonus includes a $4,000,000 special
retention bonus and $693,750 paid under the Company's executive bonus
program. Fiscal 1996 bonus consists of $400,000 paid under the Company's
executive bonus program.
(6) All other compensation for the Stub Period consists of (i) $26,800 in
contributions by the Company under its retirement savings plans and (ii)
$5,282 in premiums paid by the Company on a group term life insurance
policy for the benefit of Mr. Tucci. All other compensation for Fiscal 1998
consists of (i) $60,000 in contributions by the Company under its
retirement savings plans and (ii) $10,100 in premiums paid by the Company
on a group term life insurance policy for the benefit of Mr. Tucci. All
other compensation for Fiscal 1997 consists of (i) $47,014 in contributions
by the Company under its retirement savings plans, (ii) $9,256 in premiums
paid by the Company on a group term life insurance policy for the benefit
of Mr. Tucci and (iii) $387,513 relating to the waiver by the Company of
both the principal and accrued interest under Mr. Tucci's 3% promissory
note. All other compensation for Fiscal 1996 consists of (i) $33,900 in
contributions by the Company under its retirement savings plans, (ii)
$8,402 in premiums paid by the Company on a group term life insurance
policy for the benefit of Mr. Tucci, and (iii) $7,471 consisting of imputed
income as a result of the 3% promissory note from Mr. Tucci.
(7) A six month short-term incentive bonus plan for executive covering the
period July 1, 1997 through December 31, 1997 (the "Interim STIP") was
approved by the Company's Organization, Compensation and Nominating
Committee. The Interim STIP required that all senior executives of the
Company receive and accept bonus earned by them for the period July 1997
through December 1997 to be paid in shares of Common Stock valued at the
closing price of the Common Stock on The Nasdaq Stock Market as of June 30,
1997 which was $21.3125. See "Report of Organization, Compensation and
Nominating Committee on Executive Compensation."
(8) All compensation paid to Mr. van Vuuren is reported in US Dollars although
it is paid in UKL. The currency conversion rate used was $1.6595 per UKL,
$1.666 per UKL, $1.665 per UKL, and $1.5475 per UKL, for the Stub Period,
Fiscal 1998, 1997 and 1996, respectively. The conversion rates used were
those rates published by Reuters News Service on the last day of June of
each year and, for the Stub Period, on the last day of December 1998.
(9) Calendar 1998 bonus consists of $356,792 paid under the Company's executive
bonus plan. Fiscal 1998 bonus consists of $106,875 in Common Stock issued
under the Interim STIP. Fiscal 1997 bonus consists of $196,247 paid under
the Company's executive bonus program. Fiscal 1996 bonus consists of
$210,000 paid under the Company's executive bonus program.
(10) All other compensation for the Stub Period consists of (i) $26,907 in
contributions by the Company under its retirement savings plans and (ii)
$15,623 in a car allowance. All other compensation for Fiscal 1998 consists
of (i) $26,907 in contributions by the Company under its retirement savings
plans, (ii) $18,076 in premiums paid by the Company on a group term life
insurance policy for the benefit of Mr. van Vuuren and (iii) $31,787 in a
car allowance. All other compensation for Fiscal 1997 consists of (i)
$23,351 in contributions by the Company under its retirement savings plans
and (ii) $17,910 in premiums paid by the Company on a group term life
insurance policy for the benefit of Mr. van Vuuren. All other compensation
for Fiscal 1996 consists of (i) $19,474 in contributions by the Company
under its retirement savings plans and (ii) $14,791 in premiums paid by the
Company on a group term life insurance life insurance policy for the
benefit of Mr. van Vuuren.
(11) Calendar 1998 bonus consists of $180,000 paid under the Company's executive
bonus plan. Fiscal 1998 bonus consists of $106,875 in Common Stock issued
under the Interim STIP.
(12) All other compensation for the Stub Period consists of (i) $4,520 in
contributions by the Company under its retirement savings plans, (ii)
$7,473 in premiums paid by the Company on a group term life insurance
policy for the benefit of Mr. Ofman and (iii) $97,548 in relocation costs.
All other compensation for Fiscal 1998 consists of (i) $12,000 in
contributions by the Company under its retirement savings plans, (ii)
$14,946 in premiums paid by the Company on a group term life insurance
policy for the benefit of Mr. Ofman and (iii) $111,070 in relocation costs.
All other compensation for Fiscal 1997 consists of (i) $3,736 in premiums
paid by the Company on a group term life insurance policy for the benefit
of Mr. Ofman and (iii) $13,871 in relocation costs.
(13) Mr. Ofman joined the Company on March 26, 1997, and therefore, did not
receive compensation for all of Fiscal 1997.
28
<PAGE> 8
(14) Calendar 1998 bonus consists of $245,000 paid under the Company's executive
bonus plan. Fiscal 1998 bonus consists of $83,125 in Common Stock issued
under the Interim STIP. Fiscal 1997 bonus consists of a special retention
bonus of $400,000 and $165,000 paid under the Company's executive bonus
program. Fiscal 1996 bonus consists of $198,000 paid under the Company's
executive bonus program.
(15) All other compensation for the Stub Period consists of $8,280 in
contributions by the Company under its retirement savings plans. All other
compensation for Fiscal 1998 consists of $21,560 in contributions by the
Company under its retirement savings plans. All other compensation for
Fiscal 1997 consists of (i) $20,271 in contributions by the Company under
its retirement savings plans and (ii) $76,526 in relocation costs. All
other compensation for Fiscal 1996 consists of (i) $18,225 in contributions
by the Company under its retirement savings plans, (ii) $6,367 in premiums
paid by the Company to Mr. Caine in lieu of payments on a group term life
insurance policy for the benefit of Mr. Caine and (iii) $6,293 in
relocation costs.
(16) Calendar 1998 bonus consists of $180,000 paid under the Company's executive
bonus plan. Fiscal 1998 bonus consists of $99,750 in Common Stock issued
under Interim STIP. Fiscal 1997 bonus consists of $178,834 paid under the
Company's executive bonus program. Fiscal 1996 bonus consists of $178,834
paid under the Company's executive bonus program.
(17) All other compensation for the Stub Period consists of (i) $8,420 in
contributions by the Company under its retirement savings plans and (ii)
$4,123 in premiums paid by the Company on a group term life insurance
policy for the benefit of Mr. Casey. All other compensation for Fiscal 1998
consists of (i) $22,400 in contributions by the Company under its
retirement savings plans and (ii) $7,728 in premiums paid by the Company on
a group term life insurance policy for the benefit of Mr. Casey. All other
compensation for Fiscal 1997 consists of (i) $16,996 in contributions by
the Company under its retirement savings plans and (ii) $8,669 in premiums
paid by the Company on a group term life insurance policy for the benefit
of Mr. Casey. All other compensation for Fiscal 1996 consists of (i)
$21,612 in contributions by the Company under its retirement savings plans,
(ii) $6,586 in premiums paid by the Company on a group term life insurance
life insurance policy for the benefit of Mr. Casey and (iii) $7,278
consisting of imputed income as a result of the 3% promissory note from Mr.
Casey.
OPTION GRANTS
The following table sets forth certain information concerning grants of
stock options during Fiscal 1998 to each of the Named Executives. No options
were granted to the Named Executives during the Stub Period.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------------- VALUE AT ASSUMED
PERCENT OF TOTAL ANNUAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION FOR
SECURITIES GRANTED EXERCISE OPTION TERM(2)
UNDERLYING TO EMPLOYEES PRICE EXPIRATION ----------------------
NAME OPTIONS GRANTED(#) IN FISCAL YEAR ($)(1) DATE 5%($) 10%($)
---- ------------------ ---------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph M. Tucci............. 1998 -- -- -- -- -- --
Jeremiah J.J. van Vuuren.... 1998 40,000(3) 1.8 21.875 11/30/04 297,584 675,116
Jose Ofman.................. 1998 -- -- -- -- -- --
Franklyn A. Caine........... 1998 50,000(3) 2.3 21.875 11/30/04 371,980 843,895
Donald P. Casey............. 1998 45,000(3) 2.1 21.875 11/30/04 334,782 759,505
</TABLE>
- ---------------
(1) The exercise price per share of each option is equal to the fair market
value (the closing price of the Company's common stock on the day before the
day of grant) per share of Common Stock on the date of grant.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date. The gains shown are net of the option exercise price,
but do not include deductions for taxes or other expenses associated with
the exercise of the option or the sale of the underlying shares. The actual
gains, if any, on the stock option exercises will depend on the future
performance of the Common Stock, the op-
29
<PAGE> 9
tionholder's continued employment through the option period, and the date on
which the options are exercised and the underlying shares are sold.
(3) Each option (i) became exercisable as to 25% of the underlying shares on
December 1, 1998, and 25% of the underlying shares will become exercisable
on December 1, 1999, December 1, 2000 and December 30, 2001 and (ii)
generally terminates 30 days after the termination of the optionee's
employment with the Company (but in no event after the expiration date).
OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information concerning option
exercises during the Stub Period (1998s) and Fiscal 1998 by each of the Named
Executives and the number and value of unexercised options held by each of the
Named Executives on December 31, 1998 and June 30, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR END(#) AT FISCAL YEAR END($)(2)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(#) REALIZED(1)($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
Joseph M. Tucci............ 1998s -- -- 897,500/106,000 12,306,395/984,230
1998 -- -- 831,829/171,671 9,675,505/1,294,526
Jeremiah J. J. van
Vuuren................... 1998s -- -- 275,450/61,800 3,503,150/464,688
1998 -- -- 265,450/71,800 2,500,390/687,557
Jose Ofman................. 1998s -- -- 75,000/225,000 712,500/2,137,500
1998 -- -- 75,000/225,000 539,063/1,617,188
Franklyn A. Caine.......... 1998s -- -- 447,000/59,000 7,138,323/413,178
1998 -- -- 400,180/105,820 5,766,888/614,487
Donald P. Casey............ 1998s -- -- 244,150/48,600 3,247,403/329,110
1998 110,000 2,047,625 232,900/59,850 2,344,734/554,795
</TABLE>
- ---------------
(1) Based on the fair market value of the Common Stock on the date of exercise
less the option exercise price.
(2) Based on the fair market value (the closing price of the Company's Common
Stock) of the Common Stock on June 30, 1998 ($25.4375) and December 31, 1998
($27.75), respectively, less the option exercise price.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
In February 1997, the Company entered into an amended and restated
employment agreement ("Restated Agreement") with Mr. Tucci. The Restated
Agreement provides for an annual base salary of $750,000 and an annual
performance bonus targeted at 100% of the base salary, and provide for a minimum
bonus payment of $500,000 for Fiscal 1997. The Restated Agreement also provided
for a special retention payment of $4,000,000 on or about March 24, 1997. The
Restated Agreement provided for Mr. Tucci to be granted a restricted stock award
of 230,000 shares of Common Stock and an LTI Option grant of 365,000 shares of
Common Stock in 1997. The Restated Agreement forgives all amounts due to the
Company under that certain Non-Negotiable Secured Promissory Note dated as of
June 21, 1994 delivered by Mr. Tucci to the Company as amended, in the original
principal amount of $355,071 and releases to Mr. Tucci all shares of the
Company's Common Stock held as collateral for such loan. Finally, the Restated
Agreement provides for the payment of a severance benefit of $4,500,000, payable
in a lump sum equal to $1,500,000 and the balance over a 12-month period,
payable under certain enumerated circumstances (including employment termination
by the Company, an adverse change in job responsibilities, an adverse change in
compensation or the resignation of the executive following a significant
relocation).
30
<PAGE> 10
The Company entered into an employment agreement with Mr. van Vuuren in May
1993 pursuant to which the Company agreed to employ him as a Senior Vice
President of the Company and General Manager of the Company's European
Operations. The agreement, as amended in March 1997 and July 1998, specifies Mr.
van Vuuren's position as President and Chief Operating Officer, International
Operations. Under the terms of the agreement, as amended, Mr. van Vuuren's base
salary for Fiscal 1997 was $325,000 plus a supplemental amount of $50,000
subject to deferral at the option of Mr. van Vuuren. Mr. van Vuuren is also
eligible to participate in a yearly bonus plan targeted at 60% of his base
salary based on his performance against goals specified in the bonus plan. He
will also receive payments in the amount of $400,000 each, if and when the
market price of the Company's Common Stock averages $34.00, $39.00 and $44.00
per share respectively over twenty consecutive trading days. The agreement
provides that, if he is dismissed for any reason, other than for gross
misconduct or violation of the Company's Employee Code of Conduct, Mr. van
Vuuren will receive severance compensation equal to 18 months of base and
supplemental salary to be paid over an 18-month period. Severance payments would
be offset by compensation received from a new employer during such 18-month
period. In March 1997, Mr. van Vuuren received a restricted stock grant for
25,000 shares of Common Stock and an LTI Option grant in the amount of 60,000
shares of Common Stock in 1997. In July 1998 he received a restricted stock
grant for 29,000 shares of Common Stock.
In March 1997, the Company entered into an employment agreement with Mr.
Ofman pursuant to which the Company agreed to employ him as President and Chief
Operating Officer, Americas of the Company, as amended in July 1998. Mr. Ofman's
agreement extends through March 2000. Under the agreement, the Company agreed to
pay Mr. Ofman an annual base salary of $375,000. The agreement also provided for
annual performance-based bonuses to be determined by the Board of Directors
targeted at 60% of annual base salary for achieving 100% of his performance
goals and an over-achievement opportunity of an additional 40% of his annual
base salary for exceeding such performance targets, at the discretion of the
Board of Directors. He will also receive payments in the amount of $400,000
each, if and when the market price of the Company's Common Stock averages
$34.00, $39.00 and $44.00 per share, respectively, over twenty consecutive
trading days. Under the agreement, Mr. Ofman received a restricted stock award
of 50,000 shares of Common Stock and an option grant of 300,000 shares of Common
Stock in 1997. Under his employment agreement Mr. Ofman will receive severance
compensation equal to a lump sum payment equal to six (6) months of his salary
and target bonus plus commencing one month after termination or resignation and
ending eighteen (18) months thereafter, thirty-six (36) semi-monthly payments
equal to one-twenty-fourth ( 1/24) of his annual salary plus target bonus at
100% performance if Mr. Ofman's employment is involuntarily terminated other
than for cause or if Mr. Ofman experiences an adverse change in job
responsibilities. Severance payments would be offset by the compensation Mr.
Ofman received from a new employer during such 18-month period.
In June 1994, the Company entered into an employment agreement with Mr.
Caine pursuant to which the Company agreed to employ him as Executive Vice
President and Chief Financial Officer of the Company. Mr. Caine's agreement, as
amended in November 1995, May 1996, March 1997 and July 1998, extends through
June 30, 2001. Under the agreement, the Company agreed to pay Mr. Caine an
annual base salary and bonus as authorized from time to time by Wang's Chief
Executive Officer and the Organization, Compensation and Nominating Committee of
the Board of Directors. Under his employment agreement Mr. Caine will receive
severance compensation in an amount equal to six months salary and target bonus
payable in a lump sum and eighteen (18) monthly payments equal to one-twelfth
( 1/12) of his annual salary plus target bonus at 100% performance, if Mr.
Caine's employment is involuntarily terminated other than for cause or if Mr.
Caine experiences an adverse change in job responsibilities. Severance payments
would be offset by the compensation Mr. Caine received from a new employer
during such 18-month period. In March 1997, Mr. Caine received a restricted
stock award of 15,000 shares of Common Stock, an LTI Option grant of 25,000
shares of Common Stock and a special retention bonus payment from the Company in
the amount of $400,000 in 1997. In July 1998 he received a restricted stock
grant for 29,000 shares of Common Stock.
In March 1993, the Company entered into an employment agreement with Mr.
Casey. The agreement, as amended in April 1995, July 1996, and July 1998 extends
through June 30, 2001 and provided for an annual base salary and bonus as
authorized from time to time by Wang's Chief Executive Officer and the
31
<PAGE> 11
Organization, Compensation and Nominating Committee of the Board of Directors.
Under his employment agreement Mr. Casey will receive severance compensation in
an amount equal to six (6) months salary and target bonus payable in a lump sum
and twenty-four (24) semi-monthly payments equal to one twenty-fourth ( 1/24) of
his annual salary plus target bonus at 100% performance, if Mr. Casey's
employment is involuntarily terminated other than for cause or if Mr. Casey
experiences an adverse change in job responsibilities. Severance payments would
be offset by the compensation Mr. Casey received from a new employer during such
18-month period. In July 1998, Mr. Casey received a restricted stock grant for
14,000 shares of Common Stock.
The Company is a party to contingent severance compensation agreements
("Severance Agreements") with nine executive officers (including Messrs. Tucci,
van Vuuren, Ofman, Caine and Casey) which would become operative following a
"change in control" of the Company, as defined in the Severance Agreements. The
Company believes that these agreements will better ensure the retention of those
officers and enable them to devote their full attention and energies to the
Company's business without the distractions that might arise in the
circumstances addressed in the agreements. The Severance Agreements continue in
effect while the executive is employed by the Company for a period of three
years, automatically renew for additional one year terms and remain in effect
for 36 months after the month in which a change in control occurs. If the
executive's employment is terminated following a change in control, the
executive would become entitled to various benefits under the Severance
Agreement, including (in lieu of a payment under any other severance plan or
agreement) a lump sum severance payment equal to 2.99 times the average annual
compensation received by the executive for the two previous years, unless the
executive's employment was terminated (i) because of death or disability, (ii)
by the Company for cause, or (iii) by the executive without "good reason," as
defined in the Severance Agreements.
The Severance Agreements for each of Messrs. Tucci, Caine and Casey provide
that in the event the total payments to the executive under the agreement are
subject in whole or in part to the excise tax (the "Excise Tax") imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), the
Company will pay the executive an additional amount in the form of a gross-up
payment such that the net amount retained by the executive after payment of the
Excise Tax on the total payments and any federal, state and local income taxes
on the gross-up payment equals the total payments the executive would have
received absent the Excise Tax. The Severance Agreement for Mr. van Vuuren
provides that the lump sum payment would be subject to reduction to the extent
that any payment (whether under the Severance Agreement or otherwise) to Mr. van
Vuuren was subject to the Excise Tax imposed under Section 4999 of the Code if
such reduction would result in a greater after-tax payment to Mr. van Vuuren.
CERTAIN TRANSACTIONS
Since April 1995, the Company and Microsoft Corporation ("Microsoft") have
maintained a worldwide technical, service and marketing alliance pursuant to
which the Company acts as an authorized provider of end-user support services
for Microsoft products. On March 23, 1998, the Company and Microsoft announced
an expansion of their strategic alliance. The Company will significantly extend
its services capacity by training and certifying 2,500 professionals as
Microsoft Certified Systems Engineers and Microsoft Certified Solution
Developers. In addition, the Company will open two Centers of Excellence, one in
Billerica and one in Italy. Under the terms of the agreement, Microsoft will
fund the costs associated with the program. These costs are expected to
approximate $25 million over the next three years. The funding will be repaid in
equal installments over five years, with the first payment due in 2001. Since
April 1996, Michael W. Brown, the Chief Financial Officer of Microsoft until
July 1997, has been a director of the Company.
In connection with the Company's acquisition of Olsy (see "Agreements Among
Stockholders -- Olivetti Agreements"), Wang assumed obligations and liabilities
associated with the going concern. These obligations included employee
liabilities as well as contract commitments and other business relationships. A
complete discussion of the terms and conditions of the Acquisition is more fully
set forth in the Stock Purchase Agreement filed as an Appendix to the Company's
Form 8-K filed on March 17, 1998.
32
