<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
SCHEDULE 14D-1
Tender Offer Statement
Pursuant to Section 14(d)(1) of
the Securities Exchange Act of 1934
and
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Griffin Technology Incorporated
(Name of Subject Company)
D-GT Acquisition, Incorporated
and
Diebold, Incorporated
(Bidders)
Common Stock, $0.05 Par Value
(Title of Class of Securities)
398268102
(CUSIP Number of class of Securities)
Warren W. Dettinger
Vice President and Secretary
D-GT Acquisition, Incorporated
c/o Diebold, Incorporated
818 Mulberry Road, S.E.
P.O. Box 8230
Canton, Ohio 44711-8230
(216) 490-5037
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications on Behalf of the Bidders)
Copies to:
Lyle G. Ganske, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
(216) 586-3939
October 20, 1995
(Date of event which requires
filing of this Statement
on Schedule 13D)
Page 1 of 10 Pages
The Index to Exhibits begins on Page 11
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================
Transaction Valuation: Amount of Filing Fee:
<S> <C>
$19,676,529(*) $4,035.31**
================================================================================
</TABLE>
(*) Determined in accordance with Rule 0-11(d) under the Securities Exchange Act
of 1934. This Transaction Valuation assumes, solely for purposes of calculating
the Filing Fee for this Schedule 14D-1, the purchase of 2,538,907 shares of
common stock, par value $0.05 per share (the "Shares"), of the Subject Company
at $7.75 per Share in cash. Such number of Shares represents all of the Shares
outstanding as of October 23, 1995, and assumes the exercise or conversion of
all existing options, rights and securities which were then exercisable or
convertible into Shares.
**Includes a Schedule 13D filing fee of $100.
/ / Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or schedule and the date of its filings.
Amount Previously Paid: None
---------------------------------------------------------
Form or Registration No.: Not applicable
-------------------------------------------------------
Filing Party: Not applicable
------------------------------------------------------------------
Date Filed: Not applicable
---------------------------------------------------------------------
Page 2 of 10
<PAGE> 3
- ------------------------ ---------------------
CUSIP No. 14D-1 Page ___ of ___ Pages
- ------------------------ ---------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
D-GT ACQUISITION, INCORPORATED
34-1811448
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCES OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
761,966**
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
30.0% as of October 23, 1995
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 10
<PAGE> 4
- ---------------------------- ---------------------
CUSIP No. 253651103 14D-1 Page ___ of ___ Pages
- ---------------------------- ---------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DIEBOLD, INCORPORATED
34-0183970
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCES OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
761,966**
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES* / /
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
30.0% as of October 23, 1995
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON*
CO, HC
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- --------------------------------------------------------------------------------
**On October 20, 1995, D-GT Acquisition, Incorporated, a New York corporation
(the "Purchaser"), entered into Shareholder Tender Agreements, each dated as
of October 20, 1995 (the "Shareholder Tender Agreements"), with each of the
directors (the "Seller Shareholders") of Griffin Technology Incorporated, a
New York corporation (the "Company"), pursuant to which each of the Seller
Shareholders agreed to sell and tender (and not withdraw) all Shares owned
(beneficially or of record) by such Seller Shareholder pursuant to and in
accordance with the terms of the Purchaser's Offer to Purchase dated October
26, 1995 (the "Offer to Purchase"). The Seller Shareholders own in the
aggregate 761,966 Shares, which represent approximately 30.0% of the Shares
outstanding on October 23, 1995 on a fully diluted basis. The number of Shares
subject to the Shareholder Tender Agreements is reflected in rows 7 and 9 of
each of the tables above. The Shareholder Tender Agreements remain in effect
until either the Shares are purchased in accordance with the terms of the Offer
or the Agreement and Plan of Merger, dated as of October 20, 1995, among the
Purchaser, the Company and Diebold, Incorporated is terminated. The Shareholder
Tender Agreements are described more fully in Section 10, "Background of the
Offer; the Merger Agreement; the Shareholder Tender Agreements; the
Confidentiality Agreement; Appraisal Rights," of the Offer to Purchase.
Page 4 of 10
<PAGE> 5
Introduction
This Schedule 14D-1 relates to a tender offer by D-GT
Acquisition, Incorporated, a New York corporation (the "Purchaser") and a wholly
owned subsidiary of Diebold, Incorporated, an Ohio corporation (the "Parent"),
to purchase all the outstanding shares of common stock, par value $0.05 per
share (the "Shares"), of Griffin Technology Incorporated, a New York corporation
(the "Company"), at $7.75 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in its Offer to Purchase dated October
26, 1995 (the "Offer to Purchase"), a copy of which is attached hereto as
Exhibit 1, and in the related Letter of Transmittal, a copy of which is
attached hereto as Exhibit 2, which together constitute the "Offer." The Offer
is made pursuant to an Agreement and Plan of Merger, dated as of October 20,
1995, among the Parent, the Purchaser and the Company (the "Merger Agreement"),
a copy of which is attached hereto as Exhibit (c) 1.
This Statement shall also constitute a Schedule 13D with
respect to Shareholder Tender Agreements, dated as of October 20, 1995 (the
"Shareholder Tender Agreements"), entered into by each of the directors of the
Company (the "Seller Shareholders") and the Purchaser. Pursuant to the
Shareholder Tender Agreements, each Seller Shareholder has agreed to tender and
sell (and not withdraw) all Shares owned (beneficially or of record) by such
Seller Shareholder pursuant to and in accordance with the Offer. A copy of the
form of Shareholder Tender Agreement is filed as Exhibit (c) 2 hereto.
Item 1. Security and Subject Company.
(a) The name of the subject company is Griffin Technology
Incorporated, a New York corporation. The address of its principal executive
offices is 1133 Corporate Drive, Farmington, New York 14425.
(b) The information set forth in the Introduction of the Offer
to Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of
Shares; Dividends") of the Offer to Purchase is incorporated herein by
reference.
Item 2. Identity and Background
(a)-(d), (g) The Purchaser is a New York corporation. All of
the outstanding capital stock of Purchaser is owned by the Parent. The
information set forth in Section 8 ("Certain Information Concerning the
Purchaser and the Parent") and
Page 5 of 10
<PAGE> 6
Schedule I of the Offer to Purchase is incorporated herein by reference.
(e)-(f) None of the Purchaser, the Parent or, to the best
knowledge of the Purchaser and the Parent, any of the persons listed in
Schedule I to the Offer to Purchase, has during the last five years been (i)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of a 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.
Item 3. Past Contacts, Transactions or Negotiations with the
Subject Company.
(a)-(b) The information set forth in (i) Section 7 ("Certain
Information Concerning the Company"), Section 8 ("Certain Information
Concerning the Purchaser and the Parent"), and Section 10 ("Background of the
Offer; the Merger Agreement; the Shareholder Tender Agreements; the
Confidentiality Agreement; Appraisal Rights") of the Offer to Purchase, (ii)
the Merger Agreement, and (iii) the Shareholder Tender Agreements is
incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a) The information set forth in the Introduction and Section
9 ("Source and Amount of Funds") of the Offer to Purchase is incorporated herein
by reference.
(b) Not applicable.
(c) Not applicable.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the
Bidder.
(a)-(e) The information set forth in (i) the Introduction and
Section 11 ("Purpose of the Offer; Plans for the Company") of the Offer to
Purchase, (ii) the Merger Agreement, and (iii) the Shareholder Tender Agreements
is incorporated herein by reference.
(f)-(g) The information set forth in Section 12 ("Effect of
the Offer on the Market for the Shares; NASDAQ Quotations; Registration Under
the Exchange Act") of the Offer to Purchase is incorporated herein by
reference.
Item 6. Interest in Securities of the Subject Company.
Page 6 of 10
<PAGE> 7
(a)-(b) The information set forth in (i) the Introduction and
Section 8 ("Certain Information Concerning the Purchaser and the Parent"), (ii)
the Merger Agreement, and (iii) the Shareholder Tender Agreements is
incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with
Respect to the Subject Company's Securities.
The information set forth in (i) the Introduction, Section 8
("Certain Information Concerning the Purchaser and the Parent"), and Section 10
("Background of the Offer; the Merger Agreement; the Shareholder Tender
Agreements; the Confidentiality Agreement; Appraisal Rights"), (ii) the Merger
Agreement, and (iii) the Shareholder Tender Agreements is incorporated herein
by reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth in the Introduction and Section 17
("Fees and Expenses") of the Offer to Purchase is incorporated herein by
reference.
Item 9. Financial Statements of Certain Bidders.
The information set forth in Section 8 ("Certain Information
Concerning the Purchaser and the Parent") of the Offer to Purchase is
incorporated herein by reference.
Item 10. Additional Information.
(a) None.
(b)-(c) The information set forth in Section 16 ("Certain
Legal Matters; Regulatory Approvals") of the Offer to Purchase is incorporated
herein by reference.
(d) The information set forth in Section 12 ("Effect of the
Offer on the Market for the Shares; NASDAQ Quotation; Registration under the
Exchange Act") is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase, the
Letter of Transmittal, the Merger Agreement and the Shareholder Tender
Agreements is incorporated herein by reference in its entirety.
Item 11. Material to be Filed as Exhibits.
Page 7 of 10
<PAGE> 8
(a) 1............................... Offer to Purchase, dated
October 26, 1995
(a) 2............................... Letter of Transmittal
(a) 3............................... Form of Letter from the Dealer
Managers to Brokers, Dealers,
Commercial Banks, Trust
Companies and Nominees
(a) 4............................... Form of Letter from Brokers,
Dealers, Commercial Banks,
Trust Companies and Nominees
to their Clients
(a) 5............................... Form of Notice of Guaranteed
Delivery
(a) 6............................... Guidelines for
Certification of Taxpayer
Identification Number on
Substitute Form W-9
(a) 7............................... Press Release issued
on October 23, 1995 by the
Parent and the Company
(a) 8............................... Summary Advertisement, dated
October 26, 1995
(c) 1............................... Agreement and Plan of Merger,
dated as of October 20, 1995,
among the Parent, the Purchaser
and the Company
(c) 2.............................. Form of Shareholder Tender
Agreement
(c) 3............................... Confidentiality Agreement
(d) ................................ None
(e) ................................ Not applicable
(f) ................................ None
Page 8 of 10
<PAGE> 9
SIGNATURE
After due inquiry and to the best of its knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: October 24, 1995
D-GT Acquisition, Incorporated
By: /s/ Gerald F. Morris
-----------------------
Gerald F. Morris
Vice President
Diebold, Incorporated
By: /s/ Gerald F. Morris
-----------------------
Gerald F. Morris
Executive Vice President
and Chief Financial Officer
Page 9 of 10
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Page No.
- ------- ----------- --------
<S> <C> <C>
Exhibit (a) 1................................. Offer to Purchase, dated October 25, 1995
Exhibit (a) 2................................. Letter of Transmittal
Exhibit (a) 3................................. Form of Letter from the Dealer
Managers to Brokers, Dealers,
Commercial Banks, Trust Companies
and Nominees
Exhibit (a) 4................................. Letter from Brokers, Dealers,
Commercial Banks, Trust
Companies and Nominees to their
Clients
Exhibit (a) 5................................. Form of Notice of Guaranteed
Delivery
Exhibit (a) 6................................. Guidelines for
Certification of Taxpayer
Identification Number on
Substitute Form W-9
Exhibit (a) 7................................. Press Release issued on
October 23, 1995 by the Parent
and the Company
Exhibit (a) 8................................. Summary Advertisement, dated
October 26, 1995
Exhibit (c) 1................................. Agreement and Plan of Merger, dated
as of October 20, 1995, among the Parent,
the Purchaser and the Company
Exhibit (c) 2................................. Form of Shareholder Tender
Agreement
Exhibit (c) 3................................. Confidentiality Agreement
</TABLE>
Page 10 of 10
<PAGE> 1
Draft of October 26, 1995
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
GRIFFIN TECHNOLOGY INCORPORATED
BY
D-GT ACQUISITION, INCORPORATED
A WHOLLY OWNED SUBSIDIARY
OF
DIEBOLD, INCORPORATED
AT
$7.75 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, NOVEMBER 27, 1995, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF GRIFFIN TECHNOLOGY INCORPORATED (THE "COMPANY")
UNANIMOUSLY HAS DETERMINED THAT THE OFFER AND THE MERGER DESCRIBED HEREIN ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY, HAS
APPROVED THE OFFER AND THE MERGER AND RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN IMMEDIATELY PRIOR TO THE EXPIRATION DATE (AS DEFINED
HEREIN) THAT NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $0.05 PER SHARE (THE
"SHARES"), OF THE COMPANY, REPRESENTING AT LEAST TWO-THIRDS OF THE TOTAL NUMBER
OF SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS.
------------------------
IMPORTANT
Any shareholder desiring to tender Shares should either (1) complete and
sign the Letter of Transmittal (or facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and deliver it to the Depositary with
the certificate(s) representing tendered Shares and all other required documents
or tender such Shares pursuant to the procedures for book-entry transfer set
forth in Section 3 or (2) request his or her broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for him or her. A
shareholder having Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such person if he or she
desires to tender such Shares.
Any shareholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply with
the procedures for book-entry transfer on a timely basis may tender such Shares
pursuant to the guaranteed delivery procedure set forth in Section 3.
Questions and requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
or the Dealer Managers at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may also be obtained from the Information Agent, the Dealer Managers or
from brokers, dealers, commercial banks or trust companies.
------------------------
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
October 26, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
--------------------------------------------------------------------------------- --------
<S> <C>
Introduction.....................................................................
1. Terms of the Offer; Expiration Date.......................................... 2
2. Acceptance for Payment and Payment........................................... 2
3. Procedure for Tendering Shares............................................... 3
4. Withdrawal Rights............................................................ 5
5. Certain Tax Considerations................................................... 6
6. Price Range of Shares; Dividends............................................. 6
7. Certain Information Concerning the Company................................... 7
8. Certain Information Concerning the Purchaser and the Parent.................. 10
9. Source and Amount of Funds................................................... 14
10. Background of the Offer; the Merger Agreement; the Shareholder Tender
Agreements; the Confidentiality Agreement; Appraisal Rights.................. 14
11. Purpose of the Offer; Plans for the Company.................................. 24
12. Effect of the Offer on the Market for the Shares; NASDAQ Quotations;
Registration under the Exchange Act.......................................... 24
13. Dividends and Distributions.................................................. 25
14. Extension of Tender Period; Amendment; Termination........................... 25
15. Certain Conditions to the Offer.............................................. 26
16. Certain Legal Matters; Regulatory Approvals.................................. 28
17. Fees and Expenses............................................................ 30
18. Miscellaneous................................................................ 30
</TABLE>
Schedule I - Directors and Executive Officers of the Parent and the Purchaser
Schedule II - Certain Information About the Parent Required by New York Law
Exhibit A - Agreement and Plan of Merger
<PAGE> 3
To the Holders of Common Stock of
GRIFFIN TECHNOLOGY INCORPORATED:
INTRODUCTION
D-GT Acquisition, Incorporated, a New York corporation (the "Purchaser")
and a wholly owned subsidiary of Diebold, Incorporated, an Ohio corporation (the
"Parent"), hereby offers to purchase all outstanding shares of common stock, par
value $0.05 per share (the "Shares"), of Griffin Technology Incorporated, a New
York corporation (the "Company"), at $7.75 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer"). Tendering shareholders will not be obligated to pay
brokerage fees or commissions or, except as set forth in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer. The Purchaser will pay all charges and expenses
of Goldman, Sachs & Co. ("Goldman Sachs"), the Dealer Managers for the Offer
(the "Dealer Managers"), National City Bank (the "Depositary") and D.F. King &
Co., Inc. (the "Information Agent") incurred in connection with the Offer. See
Section 17.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN IMMEDIATELY PRIOR TO THE EXPIRATION DATE (AS DEFINED
BELOW) THAT NUMBER OF SHARES REPRESENTING AT LEAST TWO-THIRDS OF THE TOTAL
NUMBER OF SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM
CONDITION"). SEE SECTION 15.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS" OR THE
"BOARD") UNANIMOUSLY HAS DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY, HAS APPROVED THE
OFFER AND THE MERGER AND RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of October 20, 1995 (the "Merger Agreement"), among the Parent, the Purchaser
and the Company. The Merger Agreement provides, among other things, that the
Purchaser will make the Offer and that following the purchase of the Shares
pursuant to the Offer and the satisfaction of the other conditions set forth in
the Merger Agreement and in accordance with relevant provisions of the New York
Business Corporation Law ("NYBCL"), the Purchaser will be merged with and into
the Company (the "Merger"). Following the consummation of the Merger, the
Company will continue as the surviving corporation (the "Surviving Corporation")
and will be a wholly owned subsidiary of the Parent. At the effective time of
the Merger (the "Effective Time"), each Share issued and outstanding immediately
prior to the Effective Time (other than Shares held in the treasury of the
Company or owned by the Parent or any wholly owned subsidiary of the Parent and
other than Shares held by shareholders exercising appraisal rights pursuant to
Sections 623 and 910 of the NYBCL) will be cancelled and automatically converted
into the right to receive $7.75 in cash or any higher price per Share that may
be paid pursuant to the Offer, without interest. See Section 10.
Pursuant to the NYBCL, the affirmative vote of the holders of two-thirds of
the outstanding Shares is required to approve and adopt the Merger Agreement and
the Merger. Concurrently with the execution of the Merger Agreement, the
Purchaser entered into agreements (the "Shareholder Tender Agreements") with
each director of the Company (each, a "Seller Shareholder" and, collectively,
the "Seller Shareholders"), owning, in the aggregate 761,966 Shares
(representing approximately 30% of the Shares outstanding on October 23, 1995 on
a fully diluted basis). Pursuant to the Shareholder Tender Agreements, each
Seller Shareholder has agreed to tender and sell (and not withdraw) all Shares
owned (beneficially or of record) by such Seller Shareholder pursuant to and in
accordance with the Offer. The Shareholder Tender Agreements also provide that
the Purchaser is entitled to receive a fee from the Seller Shareholders, under
certain circumstances, in connection with certain subsequent transactions
involving the Shares. See Section 10.
<PAGE> 4
According to the Company, as of October 23, 1995, there were 2,384,707
Shares outstanding, and not more than 154,200 Shares subject to issuance
pursuant to stock options under the Company's stock option plans. As a result,
the Purchaser believes that the Minimum Condition would be satisfied if at least
1,692,605 Shares are validly tendered and not withdrawn immediately prior to the
Expiration Date. Pursuant to the Shareholder Tender Agreements, the Seller
Shareholders have agreed to tender 761,966 Shares to the Purchaser pursuant to
the Offer. Therefore, the Purchaser will need to have only 930,639 Shares
validly tendered and not withdrawn pursuant to the Offer, in addition to the
Shares subject to the Shareholder Tender Agreements, in order to satisfy the
Minimum Condition.
Donaldson, Lufkin and Jenrette, Incorporated ("DLJ"), financial advisor to
the Company, has delivered to the Board of Directors its written opinion to the
effect that, as of the date of the Merger Agreement, the $7.75 in cash to be
received by the holders of Shares in the Offer and the Merger is fair to such
holders from a financial point of view. A copy of such opinion is included with
the Company's Solicitation/Recommendation Statement on Schedule 14D-9, which is
being mailed to shareholders concurrently herewith, and shareholders are urged
to read the opinion in its entirety for a description of the assumptions made,
factors considered and procedures followed by DLJ.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions of the Offer, the Purchaser will accept for payment and pay for all
Shares that have been validly tendered prior to the Expiration Date and not
withdrawn as permitted by Section 4. The term "Expiration Date" means 12:00
Midnight, New York City time, on Monday, November 27, 1995, unless the Purchaser
shall have extended, in its sole discretion, the period of time for which the
Offer is open, in which event the term "Expiration Date" means the latest time
and date at which the Offer, as so extended by the Purchaser, shall expire.
The Offer is subject to certain conditions set forth in Section 15,
including satisfaction of the Minimum Condition and the expiration or
termination of the waiting period applicable to the Purchaser's acquisition of
Shares pursuant to the Offer under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"). If any such condition is not satisfied,
the Purchaser may (i) terminate the Offer and return all tendered Shares to
tendering shareholders, (ii) extend the Offer and, subject to withdrawal rights
as set forth in Section 4, retain all such Shares until the expiration of the
Offer as so extended, (iii) waive such condition and, subject to any requirement
to extend the period of time during which the Offer is open, purchase all Shares
validly tendered by the Expiration Date and not withdrawn or (iv) delay
acceptance for payment of or payment for Shares, subject to applicable law,
until satisfaction or waiver of the conditions to the Offer; provided, however,
that, unless previously approved by the Company in writing, no change may be
made which decreases the price per Share payable in the Offer, which changes the
form of consideration to be paid in the Offer, which reduces the maximum number
of Shares to be purchased in the Offer, which imposes conditions to the Offer in
addition to those set forth in Section 15 or which broadens the scope of such
conditions. For a description of the Purchaser's right to extend the period of
time during which the Offer is open, and to amend, delay or terminate the Offer,
see Section 14.
The Company has provided or will provide the Purchaser with the Company's
shareholder list and security position listings for the purpose of disseminating
the Offer to holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares and will be furnished to
brokers, banks and similar persons whose names, or the names of whose nominees,
appear on the shareholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer, the Purchaser will accept for payment and pay for all
Shares validly tendered by the Expiration Date and not properly withdrawn at the
earliest time following expiration of the Offer that all conditions to the Offer
shall have been satisfied or waived by the Purchaser. For a description of the
Purchaser's right to terminate the
2
<PAGE> 5
Offer and not accept for payment or pay for Shares or to delay acceptance for
payment of or payment for Shares, see Section 14.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) tendered Shares when, as and if the
Purchaser gives oral or written notice to the Depositary of its acceptance of
the tenders of such Shares. Payment for Shares accepted for payment pursuant to
the Offer will be made by deposit of the purchase price with the Depositary,
which will act as agent for the tendering shareholders for the purpose of
receiving payments from the Purchaser and transmitting such payments to
tendering shareholders. In all cases, payment for Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or of a confirmation of a book-entry transfer
of such Shares into the Depositary's account at the Book-Entry Transfer Facility
(as defined in Section 3)), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) (unless, in the case of book-entry transfer,
an Agent's Message (as defined in Section 3) is utilized) and any other required
documents. For a description of the procedure for tendering Shares pursuant to
the Offer, see Section 3. Accordingly, payment may be made to tendering
shareholders at different times if delivery of the Shares and other required
documents or an Agent's Message occurs at different times. Under no
circumstances will interest be paid by the Purchaser on the consideration paid
for Shares pursuant to the Offer, regardless of any delay in making such
payment.
If the Purchaser increases the consideration to be paid for Shares pursuant
to the Offer, the Purchaser will pay such increased consideration for all Shares
purchased pursuant to the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates the right to purchase
Shares tendered pursuant to the Offer, but any such transfer or assignment will
not relieve the Purchaser of its obligations under the Offer or prejudice the
rights of tendering shareholders to receive payment for Shares validly tendered
and accepted for payment.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for such unpurchased or untendered Shares will be returned (or, in
the case of Shares tendered by book-entry transfer, such Shares will be credited
to an account maintained at the Book-Entry Transfer Facility), without expense
to the tendering shareholder, as promptly as practicable following the
expiration or termination of the Offer.
3. PROCEDURE FOR TENDERING SHARES. To tender Shares pursuant to the Offer,
either (a) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other documents required by the Letter of Transmittal
or an Agent's Message must be received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase and either (i)
certificates for the Shares to be tendered must be received by the Depositary at
one of such addresses or (ii) such Shares must be delivered pursuant to the
procedures for book-entry transfer described below (and a confirmation of such
delivery received by the Depositary, including an Agent's Message if the
tendering shareholder has not delivered a Letter of Transmittal), in each case
prior to the Expiration Date, or (b) the guaranteed delivery procedure described
below must be complied with. The term "Agent's Message" means a message
transmitted by the Book-Entry Transfer Facility to and received by the
Depositary and forming a part of a book-entry confirmation, which states that
the Book-Entry Transfer Facility has received an express acknowledgement from a
participant in the system established by such Book-Entry Transfer Facility
tendering the Shares which are the subject of such book-entry confirmation that
such participant has received and agrees to be bound by the terms of the Letter
of Transmittal and that the Purchaser may enforce such agreement against such
participant.
Book-Entry Transfers. The Depositary will cause a book-entry account in
respect of the Shares to be established at The Depository Trust Company, the
Midwest Securities Trust Company and the Philadelphia Depository Trust Company
(hereinafter collectively referred to as the "Book-Entry Transfer Facility" and,
individually, a "Book-Entry Transfer Facility") in connection with the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the system of the Book-Entry
Transfer Facility may make book-entry delivery of Shares by causing a Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account in
accordance with the procedures of such Book-Entry
3
<PAGE> 6
Transfer Facility. However, although delivery of Shares may be effected through
book-entry transfer, the Letter of Transmittal (or facsimile thereof) properly
completed and duly executed together with any required signature guarantees and
any other required documents or an Agent's Message must, in any case, be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date, or the guaranteed
delivery procedure described below must be complied with. Delivery of the Letter
of Transmittal and any other required documents to a Book-Entry Transfer
Facility does not constitute delivery to the Depositary.
Signature Guarantees. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a bank, broker or other
institution which is a member of the Medallion Signature Guaranty Program (each,
an "Eligible Institution"). Signatures on a Letter of Transmittal need not be
guaranteed (a) if the Letter of Transmittal is signed by the registered holder
of the Shares tendered therewith and such holder has not completed the box
entitled "Special Payment Instructions" on the Letter of Transmittal or (b) if
such Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates evidencing such Shares are not
immediately available or time will not permit all required documents to reach
the Depositary on or prior to the Expiration Date, or such shareholder cannot
complete the procedure for delivery by book-entry transfer on a timely basis,
such Shares may nevertheless be tendered if all of the following conditions are
met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Purchaser is received by
the Depositary (as provided below) by the Expiration Date; and
(iii) the certificates for such Shares (or a confirmation of a
book-entry transfer of such Shares into the Depositary's account at a
Book-Entry Transfer Facility), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantee and any other documents required by the Letter of
Transmittal or an Agent's Message, are received by the Depositary within
three National Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System trading days after the date of execution of the Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile transmission or mail to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in such Notice.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING THROUGH A BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION
AND RISK OF THE TENDERING SHAREHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF CERTIFICATES FOR SHARES ARE SENT BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
Federal Income Tax Withholding. Under the federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain shareholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering shareholder must provide the Depositary with such
shareholder's correct taxpayer identification number and certify that such
shareholder is not subject to such backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal (see paragraph 8 of
the Terms and Conditions of the Offer set forth in the Letter of Transmittal) or
by filing a Form W-9 with the Depositary prior to any such payments. If the
shareholder is a nonresident alien or foreign entity not subject to back-up
withholding, the shareholder must give the Depositary a completed Form W-8
Certificate of Foreign Status prior to receipt of any payments.
Appointment of Proxy. By executing a Letter of Transmittal or causing a
Book-Entry Transfer Facility to transmit an Agent's Message, a tendering
shareholder irrevocably appoints designees of the Purchaser as
4
<PAGE> 7
such shareholder's proxies in the manner set forth in the Letter of Transmittal
to the full extent of such shareholder's rights with respect to the Shares
tendered by such shareholder and accepted for payment by the Purchaser (and any
and all other shares of common stock or other securities issued or issuable in
respect of such Shares on or after October 20, 1995). All such proxies shall be
irrevocable and coupled with an interest in the tendered Shares. Such
appointment is effective only upon the acceptance for payment of such Shares by
the Purchaser. Upon such acceptance for payment, all prior proxies and consents
granted by such shareholder with respect to such Shares and other securities
will, without further action, be revoked, and no subsequent proxies may be given
nor subsequent written consents executed by such shareholder (and, if given or
executed, will be deemed ineffective). Such designees of the Purchaser will be
empowered to exercise all voting and other rights of such shareholder as they,
in their sole discretion, may deem proper at any annual, special or adjourned
meeting of the Company's shareholders, by written consent or otherwise. The
Purchaser reserves the right to require that, in order for Shares to be validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Shares, the Purchaser is able to exercise full voting rights with respect to
such Shares and other securities (including voting at any meeting of
shareholders then scheduled or acting by written consent without a meeting).
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering shareholder's acceptance of the terms and
conditions of the Offer, as well as the tendering shareholder's representation
and warranty that (a) such shareholder has the full power and authority to
tender, sell, assign and transfer the tendered Shares (and any and all other
shares of common stock or other securities issued or issuable in respect of such
Shares on or after October 20, 1995), and (b) when the same are accepted for
payment by the Purchaser, the Purchaser will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claims. The Purchaser's acceptance for payment of
Shares tendered pursuant to the Offer will constitute a binding agreement
between the tendering shareholder and the Purchaser upon the terms and subject
to the conditions of the Offer.
Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. The Purchaser
reserves the absolute right to reject any or all tenders of Shares determined by
it not to be in proper form or the acceptance for payment of or payment for
which may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser
also reserves the absolute right to waive any defect or irregularity in any
tender of Shares. No tender of Shares will be deemed to have been properly made
until all defects and irregularities relating thereto have been cured or waived.
The Purchaser's interpretation of the terms and conditions of the Offer in this
regard will be final and binding. None of the Purchaser, the Dealer Managers,
the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defect or irregularity in tenders or incur any
liability for failure to give any such notification.
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are
irrevocable, except that they may be withdrawn at any time after December 24,
1995 unless theretofore accepted for payment as provided in this Offer to
Purchase.
To be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase and must specify the name of
the person who tendered the Shares to be withdrawn and the number of Shares to
be withdrawn and the name of the registered holders of the Shares, if different
from that of the person who tendered such Shares. If the Shares to be withdrawn
have been delivered to the Depositary, a signed notice of withdrawal with
(except in the case of Shares tendered by an Eligible Institution) signatures
guaranteed by an Eligible Institution must be submitted prior to the release of
such Shares. In addition, such notice must specify, in the case of Shares
tendered by delivery of certificates, the name of the registered holder (if
different from that of the tendering shareholder) and the serial numbers shown
on the particular certificates evidencing the Shares to be withdrawn or, in the
case of Shares tendered by book-entry transfer, the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares. Withdrawals may
5
<PAGE> 8
not be rescinded, and Shares withdrawn will thereafter be deemed not validly
tendered for purposes of the Offer. However, withdrawn Shares may be retendered
by again following one of the procedures described in Section 3 at any time
prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. None of the Parent,
the Purchaser, the Dealer Managers, the Depositary, the Information Agent or any
other person will be under any duty to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.
5. CERTAIN TAX CONSIDERATIONS. Sales of Shares by shareholders of the
Company pursuant to the Offer will be taxable transactions for federal income
tax purposes and may also be taxable transactions under applicable state and
local and other tax laws.
In general, a shareholder will recognize gain or loss equal to the
difference between the tax basis of his Shares and the amount of cash received
in exchange therefor. Such gain or loss will be a capital gain or loss if the
Shares are capital assets in the hands of the shareholder and will be long-term
gain or loss if the holding period for the Shares is more than one year as of
the date of the sale of such Shares.
The foregoing discussion may not apply to shareholders who acquired their
Shares pursuant to the exercise of stock options or other compensation
arrangements with the Company or who are not citizens or residents of the United
States or who are otherwise subject to special tax treatment under the Internal
Revenue Code of 1986, as amended.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY
AND IS BASED UPON PRESENT LAW. SHAREHOLDERS SHOULD 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.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are traded in the
over-the-counter market and price quotations are reported in the National Market
System of NASDAQ under the Symbol "GRIF". The following table sets forth, for
the periods indicated, the reported high and low sales prices for the Shares as
reported by NASDAQ. According to published financial sources, the Company did
not pay any cash dividends on the Shares during such time periods.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1993:
First Quarter.............................. $ 11 $10
Second Quarter............................. 111/2 10
Third Quarter.............................. 11 91/2
Fourth Quarter............................. 11 93/4
YEAR ENDED DECEMBER 31, 1994:
First Quarter.............................. $ 101/2 $ 9
Second Quarter............................. 10 63/4
Third Quarter.............................. 81/4 63/4
Fourth Quarter............................. 81/4 7
YEAR ENDED DECEMBER 31, 1995:
First Quarter.............................. $ 81/4 $ 7
Second Quarter............................. 81/4 7
Third Quarter.............................. 81/2 7
Fourth Quarter (through October 20,
1995)................................... 81/4 71/4
</TABLE>
The Merger Agreement prohibits the Company from declaring or paying any
dividend or other distribution on the Shares prior to the consummation of the
Merger.
There were no Shares traded on October 20, 1995, the last full day of
trading prior to the first public announcement of the Offer. The last reported
bid and asked prices for the Shares on October 20, 1995 as
6
<PAGE> 9
reported by NASDAQ were $7 1/4 and $8 1/2, respectively. On October 25, 1995,
the last full day of trading prior to the commencement of the Offer, no Shares
were traded. The last reported bid and asked prices for the Shares on October
25, 1995 as reported by NASDAQ were $7 3/8 and $8, respectively.
As of October 23, 1995, there were approximately 1,002 holders of record of
outstanding Shares according to the Company.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a New York
corporation organized in 1962 under the name R. D. Products, Inc. The Company's
principal executive offices are located at 1133 Corporate Drive, Farmington, New
York 14425. The company is principally engaged in the design, manufacture and
marketing of microcomputer systems, software and accessories and identification
cards. The Company markets these products to colleges and universities in the
United States.
The following summary financial information has been taken or derived from
the audited financial statements contained in the Company's Annual Report on
Form 10-KSB for the fiscal year ended June 30, 1995 (the "Company 10-KSB"). More
comprehensive financial information is included in the Company 10-KSB and other
documents filed by the Company with the Securities and Exchange Commission (the
"Commission"). The financial information that follows is qualified in its
entirety by reference to the Company 10-KSB and such other documents and all the
financial information and related notes contained therein. Copies of the Company
10-KSB may be examined at or obtained from the Commission in the manner set
forth below.
7
<PAGE> 10
GRIFFIN TECHNOLOGY INCORPORATED
SUMMARY STATEMENT OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES:
Service fees...................................... $12,590,200 $13,350,400 $13,294,600
Net sales......................................... 5,321,800 3,597,100 3,599,900
----------- ----------- -----------
Total revenues............................... 17,912,000 16,947,500 16,894,500
COSTS AND EXPENSES:
Cost of sales..................................... 3,397,400 2,489,600 2,620,500
Service of electronic systems..................... 4,262,000 3,777,700 3,832,100
Amortization of electronic systems................ 2,107,500 2,095,900 2,178,300
Selling, general and administrative............... 4,340,800 4,442,900 4,573,400
Research and development.......................... 2,688,300 2,484,800 2,451,500
Amortization of software costs.................... 330,300 312,600 228,800
Interest.......................................... 533,700 368,300 354,700
----------- ----------- -----------
Total costs and expenses..................... 17,660,000 15,971,800 16,239,300
Income before income taxes.......................... 252,000 975,700 655,200
Provision for income taxes.......................... 89,300 315,900 152,000
NET INCOME.......................................... 162,700 659,800 503,200
========== ========== ==========
RETAINED EARNINGS:
Beginning of period............................... 2,836,100 2,176,300 1,673,100
End of period..................................... $ 2,998,800 $ 2,836,100 $ 2,176,300
Earnings per common and common equivalent share..... $ .07 $ .28 $ .21
Weighted average number of common and common
equivalent shares outstanding..................... 2,387,896 2,383,309 2,376,969
========== ========== ==========
</TABLE>
8
<PAGE> 11
GRIFFIN TECHNOLOGY INCORPORATED
BALANCE SHEET
<TABLE>
<CAPTION>
JUNE 30,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash..................................................... $ 119,200 $ 60,500
Accounts receivable...................................... 3,946,800 3,391,200
Inventories.............................................. 3,903,900 3,776,100
Prepaid expenses and other current assets................ 218,000 139,500
Refundable income taxes.................................. 76,600
Deferred income tax charges.............................. 409,000 388,500
Electronic systems, at cost.............................. 13,947,900 13,933,200
Less - Accumulated amortization....................... (13,945,600) (13,923,100)
----------- -----------
Net electronic systems.............................. 2,300 10,100
----------- -----------
Total current assets............................. 8,599,200 7,842,500
----------- -----------
LONG-TERM ELECTRONIC SYSTEMS, AT COST...................... 16,942,500 15,626,100
Less -- Accumulated amortization......................... (11,174,700) (9,089,700)
----------- -----------
Net electronic systems................................ 5,767,800 6,536,400
Property, plant and equipment, at cost..................... 5,730,200 5,540,700
Less -- Accumulated depreciation and amortization........ (4,213,100) (3,899,300)
----------- -----------
Net property, plant and equipment..................... 1,517,100 1,641,400
Deferred software costs, net............................... 1,018,000 1,135,800
Other assets............................................... 371,900 108,500
----------- -----------
Total assets..................................... $17,274,000 $17,264,600
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt........................ $ 600,000 $ 600,000
Accounts payable......................................... 981,700 1,038,000
Accrued payroll and related taxes........................ 484,300 561,500
Other accrued liabilities and expenses................... 448,600 204,000
Income taxes payable..................................... 47,200 50,600
Unearned service fees.................................... 1,861,700 2,400,800
----------- -----------
Total current liabilities........................ 4,423,500 4,854,900
OTHER LIABILITIES:
Long-term debt........................................... 5,600,000 5,500,000
Employee stock purchase plan............................. 11,800 19,800
Deferred income tax credits.............................. 633,100 532,100
----------- -----------
Total liabilities................................ 10,668,400 10,906,800
SHAREHOLDERS' EQUITY:
Common stock, par value $.05 per share
Authorized -- 6,000,000 shares
Issued and outstanding 2,382,747 and 2,362,364 shares,
respectively 119,100 118,100
Capital in excess of par value........................... 3,487,700 3,403,600
Retained earnings........................................ 2,998,800 2,836,100
----------- -----------
Total shareholders' equity....................... 6,605,600 6,357,800
----------- -----------
Total liabilities and shareholders' equity....... $17,274,000 $17,264,600
========== ==========
</TABLE>
9
<PAGE> 12
The Company is subject to the information filing requirements of the
Securities Exchange Act of 1934, as amended (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, options granted to them, the principal holders of the Company's
securities and any material interest of such persons in transactions with the
Company is required to be described in periodic statements filed with the
Commission. These reports and other information, including the Company 10-KSB
included as an exhibit to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9, should be available for inspection and copying at the
Commission's office at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the Commission located at 75 Park Place, New York, New
York 10007 and Northwestern Atrium Center, 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.
The above information concerning the Company has been taken from or based
upon the Company 10-KSB and other publicly available documents on file with the
Commission and other publicly available information. Although neither the
Purchaser nor the Parent has any knowledge that would indicate that such
information contained herein based upon such documents is untrue, neither the
Purchaser nor the Parent takes any responsibility for, or makes any
representation with respect to, the accuracy or completeness of the information
contained in such documents or for any failure by the Company to disclose events
that may have occurred and may affect the significance or accuracy of any such
information but which are unknown to the Purchaser or the Parent.
In the course of the discussions between representatives of the Parent and
the Company (see Section 10) the Company provided to the Parent's
representatives its projection that revenues for the Company's fiscal year
ending June 30, 1996 would increase by at least $500,000 and pre-tax income
would be in excess of $1,000,000 for the same period. These projections should
be read together with the financial statements of the Company referred to
herein. These projections were not prepared with a view to public disclosure or
compliance with published guidelines of the Commission or the guidelines
established by the American Institute of Certified Public Accountants regarding
projections, and are included in this Offer to Purchase only because they were
provided to the Parent. None of the Parent, the Purchaser or the Company, or any
of their respective financial advisors or the Dealer Managers assumes any
responsibility for the accuracy of these projections. These projections are
based upon a variety of assumptions relating to the businesses of the Company
which may not be realized and are subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company. There can be
no assurance that these projections will be realized, and actual results may
vary materially from those shown.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND THE PARENT. The
Purchaser is a recently incorporated New York corporation and a wholly owned
subsidiary of the Parent. To date, Purchaser has not conducted any business
other than in connection with the Offer. Until immediately prior to the time the
Purchaser purchases Shares pursuant to the Offer, it is not anticipated that the
Purchaser will have any significant assets or liabilities or engage in
activities other than those incident to the transactions contemplated by the
Offer. Because the Purchaser is a recently formed corporation and has minimal
assets and capitalization, no meaningful financial information regarding the
Purchaser is available.
The Parent is an Ohio corporation organized in 1876, succeeding a
proprietorship established in 1859. The Parent develops, manufactures, sells and
services automated teller machines, electronic and physical security systems,
various equipment used to equip bank facilities, software and systems for global
financial and commercial markets. The Parent's telephone number is (216)
489-4000.
The name, citizenship, business address, principal occupation or employment
and five year employment history of each of the directors and executive officers
of the Purchaser and the Parent are set forth in Schedule I hereto. The
principal executive offices of the Parent and the Purchaser are located at 5995
Mayfair Road,
10
<PAGE> 13
North Canton, Ohio 44720. Schedule II hereto contains certain additional
information about the Parent required by New York State law.
Set forth below is a summary of certain consolidated financial information
with respect to the Parent and its consolidated subsidiaries excerpted or
derived from the information contained in or incorporated by reference into the
Parent's Annual Report on Form 10-K for the fiscal year ended December 31, 1994
(the "Parent 10-K") and into the Parent's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1995 (the "Parent 10-Q"). More
comprehensive financial information is included in or incorporated by reference
into the Parent 10-K, the Parent 10-Q and other documents filed by the Parent
with the Commission, and the financial information summary set forth below is
qualified in its entirety by reference to the Parent 10-K, the Parent 10-Q and
such other documents and all the financial information and related notes
contained therein. The Parent 10-K and the Parent 10-Q are incorporated herein
by reference.
11
<PAGE> 14
DIEBOLD, INCORPORATED AND SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
DECEMBER 31, SEPTEMBER
---------------------------------- 30,
1994 1993 1992 1995*
-------- -------- -------- -----------
<S> <C> <C> <C> <C>
Net sales
Products.......................................... $479,314 $367,385 $298,039 $ 392,063
Services.......................................... 280,857 255,892 245,813 227,884
-------- -------- -------- -----------
760,171 623,277 543,852 619,947
-------- -------- -------- -----------
Cost of sales
Products.......................................... 311,790 233,041 185,534 245,013
Services.......................................... 192,699 180,198 172,497 163,152
-------- -------- -------- -----------
504,489 413,239 358,031 408,165
-------- -------- -------- -----------
Gross profit........................................ 255,682 210,038 185,821 211,782
Selling and administrative expense.................. 128,309 106,110 96,100 102,964
Research, development and engineering expense....... 36,599 34,838 35,920 31,316
-------- -------- -------- -----------
164,908 140,948 132,020 134,280
-------- -------- -------- -----------
Operating profit.................................... 90,774 69,090 53,801 77,502
Other income (expense)
Investment income................................. 11,051 10,477 9,307 11,412
Miscellaneous, net................................ (5,899) (4,813) (5,788) (6,593)
Minority interest................................. (1,948) (4,239) (2,484) (715)
-------- -------- -------- -----------
Income before taxes and cumulative effect of change
in accounting principles.......................... 93,978 70,515 54,836 81,606
Taxes on income..................................... 30,467 22,141 13,699 26,930
-------- -------- -------- -----------
Income before cumulative effect of change in
accounting principles............................. 63,511 48,374 41,137 --
Cumulative effect of change in accounting
principles........................................ -- -- (17,932) --
-------- -------- -------- -----------
Net income.......................................... $ 63,511 $ 48,374 $ 23,205 $ 54,676
======== ======== ======== ============
Weighted average number of shares................... 30,330 30,231 30,075 30,503
Income per share
before cumulative effect of change........... $ 2.09 $ 1.60 $ 1.37 $ 1.79
Cumulative effect of change.................. -- -- (0.60) --
-------- -------- -------- -----------
Net income........................................ $ 2.09 $ 1.60 $ 0.77 $ 1.79
======== ======== ======== ============
</TABLE>
- ---------------
* Unaudited
12
<PAGE> 15
DIEBOLD, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER
--------------------- 30,
1994 1993 1995*
-------- -------- ----------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents......................... $ 17,285 $ 39,006 $ 42,730
Short-term investments............................ 38,400 32,907 29,262
Trade receivables................................. 153,107 129,256 178,115
Inventories....................................... 85,543 74,983 85,071
Deferred income taxes............................. 24,572 18,125 --
Prepaid expense and other current assets.......... 7,182 17,223 31,746
-------- -------- ----------
Total current assets...................... 326,089 311,500 366,924
Securities and other investments.................... 155,800 181,332 150,585
Property, plant and equipment, at cost.............. 152,314 146,400 173,113
Less accumulated depreciation and amortization.... 87,601 85,740 94,047
-------- -------- ----------
64,713 60,660 79,066
Deferred income taxes............................... 5,042 -- 4,433
Other assets........................................ 110,239 55,527 118,254
-------- -------- ----------
$661,883 $609,019 $719,262
======== ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable (and other current liabilities
for 9/30/95)................................... $ 60,962 $ 44,592 $119,401
Estimated income taxes............................ 2,814 3,899 --
Accrued insurance................................. 16,350 15,149 --
Accrued installation costs........................ 8,822 7,611 --
Deferred income................................... 46,470 53,629 55,311
Other current liabilities......................... 20,046 13,691 --
-------- -------- ----------
Total current liabilities................. 155,464 138,571 174,712
-------- -------- ----------
Pensions............................................ 10,545 8,111 15,333
Postretirement benefits............................. 21,627 21,521 21,707
Deferred income taxes............................... -- 2,194 --
Minority interest................................... 15,028 11,575 14,290
Commitments and contingencies....................... -- -- --
Shareholders' Equity
Preferred Shares, no par value, authorized
1,000,000 shares, none issued.................. -- -- --
Common Shares, par value $1.25; authorized
50,000,000 shares; issued 30,515,146,
30,288,734 and 30,609,638 shares, respectively;
outstanding 30,460,046, 30,259,566 and
30,525,907, respectively....................... 38,144 37,861 38,262
Additional capital.................................. 68,320 64,423 70,319
Retained earnings................................... 365,513 328,684 398,226
Treasury shares, at cost (55,100, 29,168 and 83,731
shares, respectively)............................. (3,186) (1,744) (3,749)
Other............................................... (9,572) (2,177) (9,838)
-------- -------- ----------
Total shareholders' equity................ 459,219 427,047 493,220
-------- -------- ----------
$661,883 $609,019 $719,262
======== ======== ==========
</TABLE>
- ---------------
* Unaudited
13
<PAGE> 16
The Parent is subject to the informational filing 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 Parent's directors and
officers, their remuneration, options granted to them, the principal holders of
the Parent's securities and any material interest of such persons in
transactions with the Parent is required to be described in periodic statements
filed with the Commission. Such reports and other information, including the
Parent 10-K and the Parent 10-Q, may be inspected and copies may be obtained
from the offices of the Commission in the same manner as set forth in Section 7.
Except as set forth in this Offer to Purchase, none of the Parent, the
Purchaser or any of their affiliates (collectively, the "Purchaser Entities"),
or, to the best knowledge of any of the Purchaser Entities, any of the persons
listed in Schedule I, has any contract, arrangement, understanding or
relationship (whether or not legally enforceable) with any other person with
respect to any securities of the Company, including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any securities of the Company, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss or the
giving or withholding of proxies. Except as set forth in this Offer to Purchase,
none of the Purchaser Entities, or, to the best knowledge of any of the
Purchaser Entities, any of the persons listed in Schedule I, has had, since July
1, 1992, any transactions with the Company or any of its executive officers,
directors or affiliates that would require reporting under the rules of the
Commission. Except as set forth in this Offer to Purchase, since July 1, 1992,
there have been no contacts, negotiations or transactions between the Purchaser
Entities, or their respective subsidiaries or, to the best knowledge of any of
the Purchaser Entities, any of the persons listed in Schedule I, and the Company
or its affiliates, concerning a merger, consolidation or acquisition, tender
offer or other acquisition of securities, election of directors or a sale or
other transfer of a material amount of assets. None of the Purchaser Entities
or, to the best knowledge of any of the Purchaser Entities, any of the persons
listed in Schedule I, beneficially owns any Shares or has effected any
transactions in the Shares in the past 60 days.
9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the
Purchaser to acquire all outstanding Shares pursuant to the Offer and the
Merger, to consummate the transactions contemplated by the Merger Agreement, and
to pay fees and expenses related to the Offer and the Merger is estimated to be
approximately $20,200,000. These funds are expected to be provided to the
Purchaser in the form of capital contributions or advances made by the Parent.
The Parent plans to obtain the funds for such capital contributions or advances
from its available cash and working capital. The Purchaser has not conditioned
the Offer on obtaining financing.
10. BACKGROUND OF THE OFFER; THE MERGER AGREEMENT; THE SHAREHOLDER TENDER
AGREEMENTS; THE CONFIDENTIALITY AGREEMENT; APPRAISAL RIGHTS.
BACKGROUND OF THE OFFER
(a) The first discussion about the possibility of acquiring the Company
occurred shortly before February 22, 1994, when a representative of the Parent
discussed the possibility of such a transaction with Mr. Mark Hill, a former
employee of the Company. A representative of the Parent also had a separate
conversation with Mr. Anthony Ryanczak, Vice President of Business Development
of the Company. These conversations occurred at a conference in San Diego,
California. While these conversations were informal and preliminary, the
subjects included the Company's ownership and business prospects, as well as the
potential acquisition of the Company by the Parent.
In April-May of 1994, DLJ, the Company's financial advisor, contacted Mr.
Robert Barone, the former Vice Chairman of the Parent, to inquire about the
Parent's potential interest in an acquisition of the Company. This proposal was
reviewed by Mr. Barone, Mr. Robert Warren, the Vice President and Treasurer of
the Parent, and Mr. Randy Wheeler, the Parent's Director of Integrated Campus
Access Management. Based on this initial review, it was determined not to pursue
the inquiry because the Parent felt that its own product line was sufficiently
strong, and the financial advisor was unwilling to alter a confidentiality
agreement that was
14
<PAGE> 17
viewed as onerous by the Parent. In addition, the Parent viewed other business
priorities as offering better opportunities.
On June 20, 1994, a telephone conversation occurred between Mr. Philip
Herman, a 10% shareholder of the Company, and Mr. Gregg A. Searle, Executive
Vice President of the Parent. During this conversation, Mr. Herman inquired
about the Parent's failure to pursue the April-May inquiry and suggested a
personal meeting to determine whether the Parent had any present interest in a
potential acquisition.
On June 29, 1994, Mr. Herman met with Mr. Searle in New York to discuss the
Parent's reasons for its failure to pursue the April-May inquiry and to review
the overall prospects of the Company. At that meeting, Mr. Searle indicated that
he would investigate the Parent's potential interest in reconsidering its prior
decision not to explore a potential transaction.
On July 7, 1994, at Mr. Herman's request, Mr. Mark Reinart, Senior Product
Analyst of the Parent, called Mr. Ryanczak to discuss the Company's products and
business and the prospects for a potential transaction. It was agreed that Mr.
Reinart would make an effort to investigate the Company's products at an
upcoming trade show in Kansas City on July 13, 1994. Mr. Reinart also performed
further investigation and analysis of the Company and its customers.
On July 13, 1994, Mr. Searle called Mr. Herman to report that the Parent
had reconsidered its position and was interested in exploring the possibility of
acquiring the Company. Mr. Searle suggested that Mr. Reinart engage in further
discussions with representatives of the Company to investigate the possible
synergies inherent in such a transaction between the Parent and the Company.
On July 18, 1994, Mr. Peter Rackov, then a financial analyst (now a former
employee of the Parent), contacted DLJ to confirm the Parent's interest in
reopening discussions with the Company regarding a potential acquisition. On the
following day, DLJ confirmed that, although the Company was already engaged in
negotiations with other potential acquirors, the Company was willing to reopen
discussions with the Parent.
On July 19, 1994, the Parent and the Company entered into a confidentiality
agreement prepared by the Company's financial advisor. On the following day, the
Parent was provided with a confidential information memorandum describing the
business and prospects of the Company.
On July 27 or 28, 1994, a telephone conversation occurred between Mr.
Herman and Mr. Searle. During this conversation, Messrs. Herman and Searle
agreed that, due to the sensitivity of the information that would be exchanged,
future negotiations would be handled through DLJ. At that point, both Mr. Herman
and Mr. Searle expressed the desire that further negotiations would lead to a
successful conclusion of a potential transaction.
On August 28-30, 1994, the Parent's representatives traveled to Los Angeles
to conduct due diligence investigations, including visits to the Company
facilities, evaluations of the Company's operations, analysis of the Company's
products and technological capabilities, review of opportunities for profit
improvements based on synergies resulting from a business combination, as well
as a general overview of the strengths and weaknesses and resources of both the
Company and the Parent. These investigations also included interviews of various
representatives of the Company, including Robert S. Urland, President and Chief
Executive Officer of the Company, and Mr. Gary Lorenz, Chief Technologist of the
Company. At these meetings certain confidential and proprietary information
about the business of the Company was provided to the representatives of the
Parent. Presentations by the Company's management were also made to the Parent's
representatives.
In October 1994, discussions took place between counsel for the Parent and
counsel for the Company toward negotiation of a definitive purchase agreement.
However, these discussions were broken off on October 17, 1994, and negotiations
in furtherance of the transaction were suspended, when the Parent learned that
certain liabilities of the Company were not capable of being quantified before
the proposed transaction date.
Between October 1994 and May 1995, the Parent continued to review
information provided by the Company concerning the potential liabilities that
prompted the Parent to break off discussions with the Company. In January and
February 1995, representatives of the Parent and the Company met on several
15
<PAGE> 18
occasions to discuss these potential liabilities. In addition to these
discussions, the Company and the Parent also engaged in discussions, on a
sporadic basis, regarding other aspects of a proposed acquisition transaction
between the Company and the Parent.
On May 15, 1995, a telephone conversation occurred between Mr. Searle and
Mr. Herman, during which Mr. Herman indicated his concern about the breakdown in
the discussions between the Parent and the Company and inquired as to the
Parent's interest, at that time, in acquiring the Company.
From late May 1995 to mid-June 1995, Mr. Searle and other representatives
of the Parent had numerous discussions with representatives of the Company
regarding the Parent's interest in acquiring the Company. On or about June 21,
1995, the Parent received a memorandum dated June 15, 1995 prepared by the
Company for DLJ outlining the outlook for the Company's business for fiscal
years 1995 and 1996, as well as a draft merger agreement. Representatives of the
Parent discussed the information concerning the Company's financial outlook with
DLJ in late June 1995 and early July 1995.
On July 18, 1995, the board of directors of the Parent authorized the
Parent to proceed with an acquisition of the Company. Subsequent to this
authorization, representatives of the Parent and the Company continued to
discuss the terms of the proposed acquisition transaction, including the terms
of the Merger Agreement. These discussions culminated in a presentation by Mr.
Urland to the Parent's executive team on the merits of an acquisition of the
Company by the Parent. On August 23, 1995, the executive team of the Parent
authorized certain officers of the Parent to negotiate the terms of such an
acquisition.
Thereafter, a draft of the Merger Agreement was prepared, distributed and
subsequently negotiated by representatives of the Company and the Parent. On
October 17, 1995, the board of directors of the Parent approved the Merger
Agreement. On October 19, 1995, the Company and the Parent reached tentative
agreement on a per share price for the Shares of $7.75 and the Company, the
Parent and the Purchaser finalized the terms of the Merger Agreement and the
Shareholder Tender Agreements.
On October 20, 1995, the Board and the board of directors of the Purchaser
approved the Merger Agreement. Thereafter, the Purchaser, the Parent and the
Company executed and delivered the Merger Agreement and each of the Seller
Shareholders and the Purchaser executed and delivered the Shareholder Tender
Agreements.
THE MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement, a
copy of which is attached hereto as Exhibit A and is incorporated herein by
reference. Such summary is qualified in its entirety by reference to the Merger
Agreement.
The Offer. The Merger Agreement provides for the making of the Offer by the
Purchaser. The obligation of Purchaser to accept for payment and pay for Shares
tendered pursuant to the Offer is subject to the satisfaction of the Minimum
Condition and certain other conditions that are described in Section 15. The
Purchaser has agreed that, without the written consent of the Company, no change
in the Offer may be made which changes the form of consideration to be paid or
decreases the price per Share or the maximum number of Shares sought in the
Offer or which imposes conditions to the Offer in addition to the Minimum
Condition and those other conditions described in Section 15 or which broadens
the scope of such conditions.
The Merger. The Merger Agreement provides that, following the purchase of
Shares pursuant to the Offer, the approval of the Merger Agreement by the
shareholders of the Company (if required) and the satisfaction or waiver of the
other conditions to the Merger, the Purchaser will be merged with and into the
Company. The Merger shall become effective at such time as a certificate of
merger is filed by the Secretary of State of the State of New York, or at such
later time as is specified in such certificate of merger (the "Effective Time").
As a result of the Merger, all of the properties, rights, privileges and
franchises of the Company and the Purchaser shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and the
Purchaser shall become the debts, liabilities and duties of the Surviving
Corporation.
At the Effective Time, by virtue of the Merger (i) each issued and
outstanding Share held in the treasury of the Company, or by the Parent, the
Purchaser or any other wholly owned subsidiary of the Parent shall be
16
<PAGE> 19
cancelled, and no payment shall be made with respect thereto; (ii) each share of
common stock of the Purchaser then outstanding shall be converted into and
become one share of common stock of the Surviving Corporation; and (iii) each
Share outstanding immediately prior to the Effective Time shall, except as
otherwise provided in (i) above and except for Shares held by shareholders
exercising appraisal rights pursuant to Sections 623 and 910 of the NYBCL, be
converted into the right to receive $7.75 in cash or any higher price per Share
that may be paid pursuant to the Offer, without interest.
The Merger Agreement provides that the certificate of incorporation and
by-laws of the Company at the Effective Time will be the certificate of
incorporation and by-laws of the Surviving Corporation. The Merger Agreement
also provides that the directors of the Purchaser at the Effective Time will be
the directors of the Surviving Corporation and the officers of the Company at
the Effective Time will be the officers of the Surviving Corporation.
Recommendation. The Merger Agreement states that the Board of Directors has
(i) determined that the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger, are fair to, and in the best
interests of, the shareholders of the Company, (ii) approved and adopted the
Merger Agreement and the transactions contemplated thereby, including the Offer,
the Merger and the Shareholder Tender Agreements and the transactions
contemplated thereby and (iii) resolved to recommend acceptance of the Offer,
the tender of the Shares thereunder and approval and adoption of the Merger
Agreement and the Merger by the Company's shareholders. This recommendation of
the Board of Directors may be withdrawn, modified or amended if the Board, by a
majority vote, determines in its good faith judgment, based as to legal matters
on the written opinion of legal counsel, that such withdrawal, amendment or
modification is required by the Board for the proper discharge of its fiduciary
duties. Any such withdrawal, modification or amendment may give rise to certain
termination rights on the part of the Parent and the Purchaser, as described
below.
Interim Agreements of the Parent, Purchaser and the Company. Pursuant to
the Merger Agreement, the Company has covenanted and agreed that, during the
period from the date of the Merger Agreement to the Effective Time, the Company
will conduct its business and operations according to its ordinary and usual
course of business consistent with past practice. Pursuant to the Merger
Agreement, without limiting the generality of the foregoing, and except as
otherwise expressly provided in the Merger Agreement, prior to the Effective
Time, the Company will not, without the prior written consent of Purchaser: (i)
amend its charter or by-laws; (ii)(a) create, incur or assume any indebtedness
for money borrowed, including obligations in respect of capital leases, except
(A) purchase money mortgages granted in connection with past practice, or (B)
indebtedness for borrowed money incurred in the ordinary course of business not
aggregating in excess of $8.0 million outstanding at any time under its existing
Fifth Amended and Restated Revolving Credit and Term Loan Agreement with The
Chase Manhattan Bank, N.A. as the same may be amended from time to time ("Credit
Agreement"), provided that the proceeds thereof are not distributed to the
shareholders of the Company; or (b) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person; provided, however, that the Company may
endorse negotiable instruments in the ordinary course of business consistent
with past practice; (iii) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of the Shares; (iv) issue, sell, grant, purchase or redeem, or issue or
sell any securities convertible into, or options with respect to, or warrants to
purchase or rights to subscribe to, or subdivide or in any way reclassify, any
Shares, except in any case above pursuant to outstanding stock purchase rights;
(v)(a) increase the rate of compensation payable or to become payable by the
Company to its directors, officers or employees whether by salary or bonus, by
more than four percent per person on an annual basis for directors and officers
of the Company and by more than four and one-half percent in the aggregate for
all other employees of the Company (excluding commission-only compensation, the
rate of which shall not be increased); or (b) increase the rate or term of, or
otherwise alter, any bonus, insurance, pension or other employee benefit plan,
payment or arrangement made to, for or with any such directors, officers or
employees; (vi) enter into any agreement, commitment or transaction (other than
certain borrowings described above), except agreements, commitments or
transactions in the ordinary course of business consistent with past practice;
(vii) sell, transfer, mortgage, pledge, grant any security interest or permit
the imposition of any lien or other encumbrance on any asset other than in the
ordinary course of business consistent with past practice
17
<PAGE> 20
and except pursuant to the Credit Agreement; (viii) waive any right under
certain contracts and other agreements if such waiver would have a Material
Adverse Effect; (ix) make any material change in its accounting methods or
practices or make any material change in depreciation or amortization policies
or rates adopted by it for accounting purposes or, other than normal writedowns
or writeoffs consistent with past practices, make any writedowns of inventory or
writeoffs of notes or accounts receivable; (x) make any loan or advance to any
of its shareholders, officers, directors, employees (other than advances to
field sales personnel, vacation advances, relocation advances and travel
advances in each case made in the ordinary course of business in a manner
consistent with past practice), or make any other loan or advance to any other
person or group otherwise than in the ordinary course of business consistent
with past practice; (xi) terminate or fail to renew, where such renewal is at
the Company's option, any contract or other agreement (excluding customer leases
or contracts), the termination or failure of which to renew would have a
Material Adverse Effect; (xii) enter into any collective bargaining agreement;
(xiii) make any addition to or modification of the Company's employee benefits
plans; (xiv) take, agree to take, or knowingly permit to be taken any action, or
do or, with respect to anything within the Company's control, knowingly permit
to be done anything in the conduct of its business which would be contrary to or
in breach of any of the terms or provisions of the Merger Agreement, or which
would cause any of the representations of the Company to be or become untrue in
any material respect; or (xv) agree to do any of the foregoing.
When used in the Merger Agreement, the term "Material Adverse Effect" means
a material adverse effect on the business, assets, prospects, financial
condition or results of operation of the Company or on the ability of the
Company to consummate the transactions contemplated by the Merger Agreement.
Other Agreements of the Parent, the Purchaser and the Company.
In the Merger Agreement, the Company, its affiliates and their respective
officers, directors, employees, representatives and agents have agreed that they
shall immediately cease any existing discussions or negotiations, if any, with
any parties conducted heretofore with respect to any acquisition of all or any
material portion of the assets of, or any equity interest in, the Company or any
business combination with the Company, subject to certain exceptions. The
Company may, directly or indirectly, furnish information and access, in each
case only in response to unsolicited requests therefor, to any corporation,
partnership, person or other entity or group pursuant to confidentiality
agreements that do not prohibit or restrict disclosure of any matter to the
Parent, and may participate in discussions and negotiate with such entity or
group concerning any merger, sale of assets, sale of shares of capital stock or
similar transaction involving the Company or any division of the Company, only
if such entity or group has submitted a written proposal to the Board relating
to any such transaction and the Board by a majority vote determines in its good
faith judgment, based as to legal matters on the written opinion of legal
counsel, that failing to take such action would constitute a breach of the
Board's fiduciary obligations under applicable law. The Board shall promptly
advise the Parent orally or in writing of any takeover proposal and any
inquiries or developments with respect thereto. Except as set forth above,
neither the Company or any of its affiliates, nor any of its or their respective
officers, directors, employees, representatives or agents shall, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than the Parent and the Purchaser, any
affiliate or associate of the Parent and the Purchaser or any designees of the
Parent and Purchaser) concerning any merger, sale of assets, sale of shares of
capital stock or similar transaction involving the Company or any substantial
portion of the assets of the Company or take any other action to facilitate the
making of a proposal that constitutes or could reasonably be expected to lead to
an acquisition proposal, provided, however, that nothing in the Merger Agreement
shall prevent the Board from approving or recommending to the Company's
shareholders any unsolicited tender offer or exchange offer by a third party as
contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange Act in the
event any unsolicited takeover proposal shall have been made by a third party,
if, in the good faith judgment of the Board, based as to legal matters on the
written opinion of legal counsel, that withdrawing or modifying such approval or
recommendation is required under applicable law in the proper discharge of its
fiduciary duties.
18
<PAGE> 21
Pursuant to the Merger Agreement, between the date hereof and the Effective
Time, the Company will give the Parent and the Purchaser and their authorized
representatives reasonable access to all personnel, books, records, plants,
offices, and other facilities and properties of the Company, will permit the
Parent and the Purchaser to make such inspections as the Parent and the
Purchaser may reasonably request and will cause the Company's officers to
furnish the Purchaser with such financial and operating data and other
information with respect to the business and properties of the Company as the
Purchaser may from time to time reasonably request.
The Merger Agreement provides that promptly upon the purchase of Shares by
the Purchaser, the Purchaser shall be entitled to designate the number of
directors, rounded up to the next whole number, on the Company's Board of
Directors that equals the product of (i) the total number of directors on the
Board of Directors (giving effect to the election of any additional directors
pursuant to this paragraph) and (ii) the percentage that the number of Shares
owned by the Purchaser (including Shares accepted for payment) bears to the
total number of Shares outstanding on a fully diluted basis, and the Company
shall cause the Purchaser's designees to be elected or appointed to the Board of
Directors, including, without limitation, increasing the number of directors,
and seeking and accepting resignations of its incumbent directors.
Notwithstanding the foregoing, the Company has agreed to use its best efforts to
ensure that three of the current members of the Board who are not officers,
employees or affiliates of the Company remain members of the Board until the
Effective Time.
Pursuant to the Merger Agreement, the Company shall at the Parent's
request, cause a meeting of its shareholders (the "Company Shareholder Meeting")
to be duly called and held as soon as practicable (provided the Purchaser shall
have accepted for payment and paid for Shares pursuant to the Offer) for the
purposes of voting on the approval and adoption of the Merger Agreement, the
Merger and the transactions contemplated thereby.
The Merger Agreement provides that the Company will promptly prepare and
file with the Commission under the Exchange Act a proxy statement relating to
the Company Shareholder Meeting (the "Proxy Statement"). The Company has agreed,
subject to the fiduciary duties of its Board of Directors, based as to legal
matters on the written opinion of legal counsel, to use all reasonable efforts
to obtain the necessary approvals by its shareholders of the Merger Agreement,
and the Merger and the transactions contemplated thereby. The Parent has agreed
to vote and to cause its affiliates (including, without limitation, the
Purchaser) to vote all Shares owned by them in favor of adoption of the Merger
Agreement. Notwithstanding the foregoing, in the event that the Purchaser
acquires at least 90% of the outstanding Shares and the Purchaser so requests,
the Parent, the Purchaser and the Company will take all actions necessary and
appropriate to cause the Merger to become effective without a meeting of the
shareholders of the Company in accordance with Sections 905 or 907 of the NYBCL.
The Parent has agreed that all rights to indemnification now existing in
favor of the directors and officers of the Company as provided in the Company's
by-laws as of the date of the Merger Agreement shall survive the Merger and
shall continue in full force and effect for a period of at least six years. For
a period of at least six years after the Effective Time, the Purchaser has
agreed to indemnify and hold harmless, to the maximum extent permitted by the
NYBCL, each of the present or former directors and officers of the Company and
advance expenses in connection with such indemnification. In addition, the
Parent has agreed that for three years after the Effective Time, the Parent will
cause the Surviving Corporation to use its best reasonable efforts to maintain,
if available for an annual premium not in excess of $60,000, officers' and
directors' liability insurance with respect to acts or omissions occurring prior
to the Effective Time covering each such person currently covered by the
Company's officers' and directors' liability insurance policy on terms no less
favorable than those of such policy in effect on the date of the Merger
Agreement or at the Effective Time, or if such insurance coverage is not
available for an annual premium not in excess of $60,000, to obtain the amount
of coverage that is available for an annual premium of $60,000.
The Merger Agreement provides that the Company, the Purchaser and the
Parent will each use their best efforts to consummate the transactions
contemplated by the Merger Agreement.
19
<PAGE> 22
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including,
without limitation, representations by the Company as to undisclosed
liabilities, certain changes or events concerning its businesses, compliance
with applicable law, employee benefit plans, litigation and environmental
liabilities. In addition, the Company represented to the Parent and the
Purchaser that the Board, at a meeting duly called and held, has (i) determined
that the Merger Agreement and the transactions contemplated thereby, including
the Offer and the Merger, are fair to, and in the best interests of, the
shareholders of the Company, and (ii) approved and adopted the Merger Agreement
and the transactions contemplated thereby, including the Offer and the Merger,
and the Shareholder Tender Agreements and the transactions contemplated thereby
in all respects and that such approval constitutes approval of the Offer, the
Merger Agreement and the Merger and the Shareholder Tender Agreements and the
transactions contemplated thereby for purposes of Sections 902 and 912 of the
NYBCL and similar statutes of other states that might be deemed applicable.
Conditions to the Merger. The obligations of each of the Parent, the
Purchaser and the Company to effect the Merger are subject to the satisfaction
of certain conditions, including (i) the Purchaser shall have accepted for
payment Shares tendered pursuant to the Offer; (ii) the Merger Agreement shall
have been adopted by the requisite vote, if any is required, of the shareholders
of the Company in accordance with applicable law; (iii) no order, statute, rule,
regulation, executive order, stay, decree, judgment or injunction shall have
been enacted, entered, issued, promulgated or enforced by any court or
governmental authority which prohibits or restricts the consummation of the
Merger; and (iv) any waiting period applicable to the Merger under the HSR Act
shall have terminated or expired. The obligation of the Purchaser and the Parent
to effect the Merger is further subject to satisfaction of the conditions,
unless waived by the Parent, that (i) the Company shall have performed and
complied in all material respects with the agreements and obligations contained
in the Merger Agreement required to be performed and complied with by it at or
prior to the Effective Time, (ii) all outstanding stock options of the Company
shall have been surrendered to the Company as provided in the Merger Agreement
and cancelled by the Company, and (iii) the Parent shall have received a comfort
letter, in form and substance reasonably requested by the Parent, from Price
Waterhouse LLP regarding the updating of the Company's most recent financial
statements. The obligation of the Company to effect the Merger is further
subject to the Parent and the Purchaser having performed and complied in all
material respects with the agreements and obligations contained in the Merger
Agreement required to be performed and complied with by each of them at or prior
to the Effective Time.
Termination. The Merger Agreement may be terminated and the Offer and the
Merger may be abandoned at any time prior to the Effective Time: (i) by mutual
written consent of the Parent, the Purchaser and the Company; (ii) by the Parent
and the Purchaser or the Company if any court of competent jurisdiction in the
United States or other United States governmental body shall have issued an
order, decree or ruling or taken any other final action restraining, enjoining
or otherwise prohibiting the Merger or the acceptance for payment of and payment
for the Shares and such order, decree, ruling or other action shall have become
nonappealable; (iii) by the Parent and Purchaser if, due to an occurrence or
circumstance which would result in a failure to satisfy any of the conditions
set forth in Section 15, the Purchaser shall have (a) failed to commence the
Offer within five days following the initial public announcement of the Offer,
(b) terminated the Offer, or (c) failed to pay for Shares pursuant to the Offer
within 75 days following the commencement of the Offer; (iv) by the Company if
(a) there shall not have been a material breach of any representation, warranty,
covenant or agreement on the part of the Company and the Purchaser shall have
(A) failed to commence the Offer within five days following the initial public
announcement of the Offer, (B) terminated the Offer, or (C) failed to pay for
Shares pursuant to the Offer within 75 days following the commencement of the
Offer, or (b) prior to the purchase of Shares pursuant to the Offer, a
corporation, partnership, person or other entity or group shall have made a bona
fide offer that the Board by a majority vote determines, in its good faith
judgment and in the discharge of its fiduciary duties, based as to legal matters
on the written opinion of legal counsel, is more favorable to the Company's
shareholders than the Offer and the Merger, provided that such termination under
this clause (b) shall not be effective until payment of the Termination Fee (as
defined below); (v) by the Parent and Purchaser prior to the purchase of Shares
pursuant to the Offer if (a) there shall have been a breach of any
representation or warranty on the part of the Company having a
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Material Adverse Effect on the Company or materially adversely affecting (or
materially delaying) the consummation of the Offer, (b) there shall have been a
breach of any covenant or agreement on the part of the Company resulting in a
Material Adverse Effect on the Company or materially adversely affecting (or
materially delaying) the consummation of the Offer, (c) the Company shall engage
in negotiations with any entity or group (other than the Parent or the
Purchaser) that has proposed a Third Party Acquisition (as defined below), (d)
the Board shall have withdrawn or modified (including by amendment of the
Schedule 14D-9) in a manner adverse to the Purchaser its approval or
recommendation of the Offer, the Merger Agreement or the Merger or shall have
recommended another offer, or shall have adopted any resolution to effect any of
the foregoing, or (e) the Minimum Condition shall not have been satisfied by the
expiration date of the Offer and on or prior to such date an entity or group
(other than the Parent or Purchaser) shall have made and not withdrawn a
proposal with respect to a Third Party Acquisition; or (vi) by the Company if
(a) there shall have been a breach of any representation or warranty on the part
of the Parent or Purchaser which materially adversely affects (or materially
delays) the consummation of the Offer, or (b) there shall have been a material
breach of any covenant or agreement on the part of the Parent or Purchaser and
which materially adversely affects (or materially delays) the consummation of
the Offer.
Termination Fee and Expenses. In the event the Company terminates the
Merger Agreement pursuant to clause (iv)(b) of the preceding paragraph, the
Company shall reimburse the Parent, the Purchaser and their affiliates (not
later than one business day after submission of statements therefore) for all
actual documented out-of-pocket fees and expenses, actually and reasonably
incurred by any of them or on their behalf in connection with the Offer and the
Merger and the consummation of all transactions contemplated by the Merger
Agreement (including, without limitation, attorneys' fees payable to financing
sources, investment bankers, counsel to any of the foregoing and accountants and
filing fees and printing costs) (the "Expense Reimbursement Amount"). In the
event that the Parent and the Purchaser terminates the Merger Agreement pursuant
to clause (iii) of the preceding paragraph (but only if such termination is
based on a failure to satisfy clause (a) or clause (iii)(c)(e) or (f) of Annex A
to the Merger Agreement) or clause (v) of the preceding paragraph, (i) the
Company shall reimburse the Parent or their affiliates for up to $250,000 of the
Expense Reimbursement Amount, and (ii) and such amount shall be paid to the
Parent, the Purchaser or their affiliates, as directed by the Parent, together
with interest thereon at the rate of 8% per annum, in 24 consecutive monthly
installments of an amount equal to 1/24th of the lesser of $250,000 or the
Expense Reimbursement Amount, commencing on the first business day of the month
immediately following the month in which the Parent, the Purchaser or such
affiliate(s) became entitled to receive such amount. Pursuant to the Merger
Agreement, in the event the Company terminates the Merger Agreement pursuant to
clause (iv)(b) of the preceding paragraph or in the event the Parent and the
Purchaser terminate the Merger Agreement pursuant to clause (v) (b), (c), (d) or
(e) of the preceding paragraph, the Company shall pay to the Purchaser the
amount of $1 million less the Shareholder Amount (as defined below) (the
"Termination Fee") as liquidated damages immediately upon such a termination as
well as all amounts to which the Parent and Purchaser would be entitled pursuant
to the previous sentences of this paragraph. The term "Shareholder Amount" means
the aggregate amount paid by the Seller Shareholders to the Purchaser pursuant
to the terms of the Shareholder Tender Agreements.
"Third Party Acquisition" means the occurrence of any of the following
events: (i) the acquisition of the Company by merger or otherwise by any person
(which includes a "person" as such term is defined in Section 13(d) (3) of the
Exchange Act) or entity other than the Parent, the Purchaser or any affiliate
thereof (a "Third Party"); (ii) the acquisition by a Third Party of more than
30% of the total assets of the Company; (iii) the acquisition by a Third Party
of 30% or more of the outstanding Shares; (iv) the adoption by the Company of a
plan of liquidation or the declaration or payment of an extraordinary dividend;
or (v) the repurchase by the Company of more than 20% of the outstanding Shares.
Pursuant to the Merger Agreement, in the event of the termination and
abandonment of the Merger Agreement, the Merger Agreement will become void and
have no effect, without any liability on the part of any party or its
affiliates, directors, officers or shareholders, other than certain provisions
of the Merger Agreement relating to the termination fee, expenses of the parties
and confidentiality of information, provided, that a party will not be relieved
from liability for any breach of the Merger Agreement.
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Costs and Expenses. Except as discussed above, the Merger Agreement
provides that all costs and expenses incurred in connection with the
transactions contemplated by the Merger Agreement shall be paid by the party
incurring such costs and expenses.
Amendments and Modifications. Subject to applicable law, at any time prior
to the Effective Time, the Merger Agreement may be amended, modified or
supplemented by a written agreement of the Parent (for itself and the Purchaser)
and the Company executed by duly authorized officers of the respective parties
except that after the earlier of (i) the purchase by the Purchaser of more than
50% of the outstanding Shares on a fully diluted basis, and (ii) the meeting of
the shareholders of the Company to approve the Merger, the price per Share to be
paid pursuant to the Merger Agreement to the holders of Shares may not be
decreased and the form of consideration to be received by the holders of such
Shares in the Merger may not be altered without approval of such holders.
THE SHAREHOLDER TENDER AGREEMENTS
Concurrently with the execution of the Merger Agreement, the Purchaser
entered into the Shareholder Tender Agreements with the Seller Shareholders. The
Seller Shareholders own in the aggregate, 761,966 Shares (representing, on
October 23, 1995, approximately 32% of the Shares outstanding on a primary basis
and approximately 30% of the Shares outstanding on a fully diluted basis).
Pursuant to the Shareholder Tender Agreements, each Seller Shareholder has
agreed to tender and sell (and not withdraw) all Shares owned (beneficially or
of record) by such Seller Shareholder to the Purchaser pursuant to and in
accordance with the terms of the Offer. Except with respect to the Seller
Shareholder Fee (as described below), the Shareholder Tender Agreements remain
in effect until either the Shares are purchased in accordance with the terms of
the Offer or the Merger Agreement is terminated.
During the term of the Shareholder Tender Agreements, the Seller
Shareholders will not, except pursuant to the terms of the Offer, (i) offer to
sell, sell, pledge or otherwise dispose of or transfer any interest in or
encumber with any lien any of the Shares, (ii) acquire any shares of common
stock of the Company or other securities (except for additional shares of common
stock or securities which will constitute Shares), (iii) deposit the Shares into
a voting trust or arrangement with respect to the Shares or grant any proxy or
power of attorney with respect to the Shares or (iv) enter into any contract,
option or other arrangement or undertaking with respect to the sale, assignment
or other disposition of or transfer of any interest in or the voting of any
Shares or any other securities of the Company. In addition, the Seller
Shareholders agree to comply with the requirements of Section 6.13 of the Merger
Agreement, which provides, among other things, that such Seller Shareholders
will not, directly or indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to any corporation,
partnership, person or other entity or group (other than the Purchaser and the
Parent and their affiliates and associates) concerning any merger, sale of
assets, sale of shares of capital stock or similiar transaction involving the
Company, or take any action to facilitate the making of a proposal that
constitutes or could reasonably be expected to lead to an acquisition proposal.
See Section 10, regarding other agreements of the Parent, the Purchaser and the
Company.
Each Seller Shareholder appoints the Purchaser, or its nominee, during the
term of the Shareholder Tender Agreements, as his or her proxy for and in his or
her name to vote each of his or her Shares at any annual, special or adjourned
meeting of the shareholders of the Company, including the right to sign his or
her name (as shareholder) to any consent, certificate or other document relating
to the Company which the laws of the State of New York may require or permit:
(i) in favor of the Merger, the execution and delivery by the Company of the
Merger Agreement and the approval and adoption of the terms thereof; (ii)
against any action or agreement that would result in a breach in any respect of
any covenant, agreement, representation or warranty of the Company under the
Merger Agreement; and (iii) against the following actions (other than the Merger
and the other transactions contemplated by the Merger Agreement): (a) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company; (b) a sale, lease or transfer of a
material amount of assets of the Company, or a reorganization, recapitalization,
dissolution or liquidation of the Company; and (c) (A) any change in a majority
of the persons who constitute the Board of Directors as of the date hereof; (B)
any change in the present capitalization of the Company or any amendment of the
Company's Certificate of Incorporation or By-Laws, as amended to date; (C) any
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other material change in the Company's corporate structure or business; or (D)
any other action which, in the case of each of the matters referred to in
clauses (c)(A), (B), (C) and (D), is intended, or could reasonably be expected,
to impede, interfere with, delay, postpone, or adversely affect the Merger and
the other transactions contemplated by the Merger Agreement and the Seller
Shareholder Agreements. The proxy and power of attorney provided for in the
Seller Shareholder Agreements is irrevocable and, pursuant thereto, each Seller
Shareholder revoked all other proxies with respect to the Shares that he or she
may have heretofore made or granted.
The Shareholder Tender Agreements provide that the Seller Shareholders
agree to pay to the Purchaser a fee ("Seller Shareholder Fee") if, as provided
below, the Merger Agreement is terminated and the Seller Shareholders
subsequently sell or otherwise dispose of their Shares in a Subsequent
Transaction (as defined below). Specifically, a Seller Shareholder Fee is
payable by a Seller Shareholder to the Purchaser if: (i) the Purchaser or the
Company terminate the Merger Agreement in accordance with its terms (other than
a termination by the Company because of (a) a breach by the Purchaser or the
Parent of any of their respective convenants, agreements, representations or
warranties contained in the Merger Agreement which materially adversely affects
(or materially delays) the consummation of the Offer or (b) in the absence of a
material breach of any covenant, representation or warranty by the Company, the
failure of the Purchaser to commence or consummate the Offer); and (ii) not
later than two years from the date of such termination, (a) the Board of
Directors approves or recommends any proposal or offer (an "Acquisition
Proposal") concerning any merger, sale of assets, sale of shares of capital
stock or similar transaction involving the Company other than from the
Purchaser, or (b) the Company enters into an agreement with respect to a merger,
acquisition, consolidation, recapitalization, liquidation, dissolution or
similar transaction involving, or any purchase of all or a substantial portion
of the assets or equity securities of, the Company, or (c) the Seller
Shareholder disposes of any or all of his or her Shares to any person not an
affiliate or an associate of the Purchaser or to the Company or any affiliate
thereof (or realizes cash proceeds in respect of such Shares as a result of a
distribution to the Seller Shareholder by the Company following the sale of a
material amount of the Company's assets) in connection with a transaction
proposed, described or set forth in such Acquisition Proposal or agreement or
the Company issues an extraordinary dividend or other distribution in accordance
with such Acquisition Proposal or agreement (each, a "Subsequent Transaction")
at a per Share price or with equivalent per Share proceeds, as the case may be
(the "Subsequent Price") with a value in excess of $7.75 (the "Offer Price").
The Seller Shareholder Fee is an amount equal to the product of (i) the excess
of the Subsequent Price over the Offer Price and (ii) the number of Shares
disposed of or otherwise participating in the Subsequent Transaction.
CONFIDENTIALITY AGREEMENT
On July 19, 1994, the Company, the Parent and DLJ entered into a
confidentiality agreement (the "Confidentiality Agreement"), pursuant to which
the Company agreed to provide certain confidential information (the "Evaluation
Material") to the Parent in connection with the Parent's evaluation of a
possible negotiated transaction involving the Company. The Confidentiality
Agreement provides, among other things, that (i) the Evaluation Material may
only be disclosed to directors, officers, employees, advisors and other
representatives of the Parent who need to know the Evaluation Material in order
to assist in the evaluation of a possible transaction, (ii) the Parent may
disclose Evaluation Material to relevant regulatory authorities, provided the
Parent has received an opinion of counsel that such disclosure is required by
applicable law, exchange requirement or similar obligation and, prior to such
disclosure, the Parent advises and consults with the Company and its legal
counsel regarding the information proposed to be disclosed; (iii) if the Parent
decides not to proceed with a transaction involving the Company, the Parent will
promptly notify DLJ and promptly redeliver to the Company all copies of the
Evaluation Material and all other related materials in its possession; and (iv)
it will remain in effect for two years from the date thereof.
APPRAISAL RIGHTS
Shares that are not voted in favor of the approval and adoption of the
Merger and with respect to which appraisal rights have been demanded and
perfected in accordance with Sections 623 and 910 of the NYBCL and not withdrawn
will not be converted into the right to receive cash at or after the Effective
Time, but such
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Shares shall instead become the right to receive consideration as may be
determined to be due to such holders in respect of such Shares pursuant to the
NYBCL unless such shareholder withdraws its demand for appraisal or becomes
ineligible for such appraisal. If a shareholder withdraws its demand for
appraisal or becomes ineligible for appraisal (through failure to perfect or
otherwise), then, as of the Effective Time or the occurrence of such event,
whichever last occurs, the Shares subject to the demand for appraisal will be
automatically converted into and represent the right to receive $7.75 per Share
or any higher price per Share that may be paid pursuant to the Offer, without
interest.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY.
Purpose of the Offer. The purpose of the Offer is for the Purchaser to
acquire control of, and an equity interest in, the Company. The purpose of the
Merger is to acquire all outstanding Shares not tendered and purchased pursuant
to the Offer. The acquisition of the entire equity interest in the Company has
been structured as a cash tender offer followed by a cash merger in order to
provide a prompt and orderly transfer of ownership of the Company from the
public shareholders to the Parent and to provide shareholders with cash for all
their Shares. The purchase of Shares pursuant to the Offer will increase the
likelihood that the Merger will be effected.
Except as noted in this Offer to Purchase, neither the Parent nor the
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets, involving
the Company, or any material changes in the Company's corporate structure or
business or the composition of its management or personnel.
12. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ QUOTATIONS;
REGISTRATION UNDER THE EXCHANGE ACT. The purchase of Shares pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
may reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by shareholders other
than the Purchaser. The Purchaser cannot predict whether the reduction in the
number of Shares that might otherwise trade publicly would have an adverse or
beneficial effect on the market price for or marketability of the Shares or
whether it would cause future market prices to be greater or less than the Offer
price.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the National Association of
Securities Dealers, Inc. (the "NASD") for continued inclusion in the NASDAQ
System. The NASD requires that an issuer have at least 100,000 publicly held
shares, held by at least 300 shareholders, with a market value of at least
$200,000, have total assets of at least $2 million and have capital and surplus
(total shareholders' equity) of at least $1 million. If, as a result to the
purchase of Shares pursuant to the Offer, the Shares no longer meet the
requirements for inclusion in the NASDAQ System and inclusion of the Shares is
discontinued, the market for the Shares could be adversely affected.
If the NASDAQ System were to cease to publish quotations for the Shares, it
is possible that the Shares would continue to trade in the over-the-counter
market and that price or other quotations would be reported by other sources.
The extent of the public market for such and the availability of such quotations
would depend, however, upon such factors as the number of shareholders and/or
the aggregate market value of such securities remaining at such time, the
interest in maintaining a market in the Shares on the part of securities firms,
the possible termination of registration under the Exchange Act as described
below, and other factors.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of such Shares. Depending upon factors similar to those
described above regarding listing and market quotations, the Shares might no
longer constitute "margin securities" for the purposes of the Federal Reserve
Board's margin regulations and, therefore, could no longer be used as collateral
for loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated if the Shares are not listed on a national
securities exchange and there are less than 300 holders of record. Termination
of the registration of the Shares under the Exchange Act would substantially
reduce the
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information required to be furnished by the Company to holders of Shares and to
the Commission and would make certain of the provisions of the Exchange Act,
such as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy or information statement in connection with
shareholder action and the related requirement of an annual report to
shareholders and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares.
Furthermore, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"). If registration of the Shares under the Exchange
Act were terminated, the Shares would no longer be "margin securities" or
eligible for NASDAQ System reporting. It is the current intention of the Parent
to deregister the Shares after consummation of the Offer if the requirements for
termination of registration are met.
13. DIVIDENDS AND DISTRIBUTIONS. If, on or after the date of the Merger
Agreement, the Company should (i) split, combine or otherwise change the Shares
or its capitalization, (ii) issue or sell any additional securities of the
Company or otherwise cause an increase in the number of outstanding securities
of the Company (except for Shares issuable upon the exercise of employee stock
options outstanding on the date of the Merger Agreement) or (iii) acquire
currently outstanding Shares or otherwise cause a reduction in the number of
outstanding Shares, then, without prejudice to the Purchaser's rights under
Sections 1 and 15, the Purchaser, in its sole discretion, subject to the terms
of the Merger Agreement, may make such adjustments as it deems appropriate in
the offer price and other terms of the Offer.
If, on or after the date of the Merger Agreement, the Company should
declare or pay any dividend on the Shares or make any distribution (including,
without limitation, cash dividends, the issuance of additional Shares pursuant
to a stock dividend or stock split, the issuance of other securities or the
issuance of rights for the purchase of any securities) with respect to the
Shares that is payable or distributable to shareholders of record on a date
prior to the transfer to the name of the Purchaser or its nominee or transferee
on the Company's stock transfer records of the Shares purchased pursuant to the
Offer, then, without prejudice to the Purchaser's rights under Sections 1 and
15, any such dividend, distribution or right to be received by the tendering
shareholders will be received and held by the tendering shareholders for the
account of the Purchaser and will be required to be promptly remitted and
transferred by each tendering shareholder to the Depositary for the account of
the Purchaser, accompanied by appropriate documentation of transfer. Pending
such remittance and subject to applicable law, the Purchaser will be entitled to
all rights and privileges as owner of any such dividend, distribution or right
and may withhold the entire purchase price or deduct from the purchase price the
amount or value thereof, as determined by the Purchaser in its sole discretion.
14. EXTENSION OF TENDER PERIOD; AMENDMENT; TERMINATION. The Purchaser
expressly reserves the right, in its sole discretion, at any time or from time
to time, regardless of whether or not any of the events set forth in Section 15
shall have occurred or shall have been determined by the Purchaser to have
occurred, subject to the terms of the Merger Agreement and applicable rules of
the Commission, (i) to extend the period of time during which the Offer is open
and thereby delay acceptance for payment of, and the payment for, any Shares, by
giving oral or written notice of such extension to the Depositary and (ii) to
amend the Offer in any respect by giving oral or written notice of such
amendment to the Depositary. The rights reserved by the Purchaser in this
paragraph are in addition to the Purchaser's rights to terminate the Offer
pursuant to Section 15. Any extension, amendment or termination will be followed
as promptly as practicable by public announcement thereof, the announcement in
the case of an extension to be issued no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date in
accordance with the public announcement requirements of Rule 14d-4(c) under the
Exchange Act. Any reduction in the purchase price pursuant to the Merger
Agreement will be considered an amendment to the Offer, and will be followed by
the appropriate announcement. Without limiting the obligation of the Purchaser
under such Rule or the manner in which the Purchaser may choose to make any
public announcement, the Purchaser currently intends to make announcements by
issuing a release to the Dow Jones News Service or the Reuters News Service.
The Purchaser also reserves the right, in its sole discretion, in the event
any of the conditions specified in Section 15 shall not have been satisfied and
so long as Shares have not theretofore been accepted for payment,
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to delay (except as otherwise required by applicable law) acceptance for payment
of or payment for Shares or to terminate the Offer and not accept for payment or
pay for Shares.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in Section 4. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by or on behalf of security holders promptly after the termination or withdrawal
of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including the Minimum Condition), the Purchaser will disseminate additional
tender offer materials and extend the Offer to the extent required by Rules
14d-4(c) and 14d-6(d) under the Exchange Act. The minimum period during which
the Offer must remain open following material changes in the terms of the Offer
or information concerning the Offer, other than a change in price or a change in
percentage of securities sought, will depend upon the facts and circumstances,
including the relative materiality of the terms or information. With respect to
a change in price or a change in percentage of securities sought, a minimum ten
business day period is generally required to allow for adequate dissemination to
shareholders and investor response. If prior to the Expiration Date, the
Purchaser should decide to increase the price per Share being offered in the
Offer, such increase will be applicable to all shareholders whose Shares are
accepted for payment pursuant to the Offer. As used in this Offer to Purchase,
"business day" means any day other than Saturday, Sunday or a federal holiday
and consists of the time period from 12:01 A.M. through 12:00 Midnight, New York
City time as computed in accordance with Rule 14d-1 under the Exchange Act.
15. CERTAIN CONDITIONS TO THE OFFER. Notwithstanding any other provisions
of the Offer, the Purchaser shall not be required to accept for payment,
purchase or pay for any Shares of the Company tendered, and may terminate or,
subject to the terms of the Merger Agreement, amend the Offer and may postpone
the acceptance for payment of any Shares, if prior to the time of acceptance for
payment of Shares tendered pursuant to the Offer the Merger Agreement is
terminated or:
(i) the Minimum Condition shall not have been satisfied; or
(ii) any waiting period applicable to the Offer pursuant to the HSR
Act shall not have expired or been terminated; or
(iii) at any time before the time of acceptance for payment for any
such Shares any of the following shall occur or exist:
(a) there shall have been instituted or be pending any action,
proceeding, application, claim or counterclaim by any government or
governmental authority or agency, domestic or foreign, before any court
or governmental regulatory or administrative agency, authority or
tribunal, domestic or foreign, (A) challenging the acquisition by the
Parent or the Purchaser of the Shares, seeking to restrain or prohibit
the making or consummation of the Offer or the Merger or seeking to
obtain from the Parent or the Purchaser any damages that would result in
a Material Adverse Effect if such were assessed against the Company, (B)
seeking to prohibit or materially limit the ownership or operation by
the Parent or the Surviving Corporation of all or any material portion
of the business or assets of the Company or compel the Parent or the
Surviving Corporation to dispose of or to hold separate all or any
material portion of the business or assets of the Company, or to impose
any material limitation on the ability of the Company or the Surviving
Corporation to conduct such business or own such assets, or (C) seeking
to impose material limitations on the ability of the Parent (or any
other affiliate of the Parent) to acquire or hold or to exercise full
rights of ownership of the Shares, including, but not limited to, the
right to vote the Shares purchased by them on all matters properly
presented to the shareholders of the Company; or
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(b) there shall be any statute, rule, regulation, judgment, order
or injunction enacted, promulgated, entered, enforced or deemed
applicable to the Offer, the Merger or the Merger Agreement, or any
other action shall have been taken by any government, governmental
authority or court, domestic or foreign, other than the routine
application to the Offer or the Merger of waiting periods under the HSR
Act, that has, or has a substantial likelihood of resulting in, any of
the consequences referred to in clauses (A) through (C) of paragraph (a)
above; or
(c) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements
contained in the Merger Agreement, or any of the representations and
warranties of the Company set forth in the Merger Agreement shall not
have been true and correct in any material respect when made or, except
for any representations and warranties made as of a specific date, shall
have ceased to be true and correct in any material respect as if made on
and as of the Expiration Date (or, in the case of representations and
warranties that are specifically qualified as to materiality, shall not
have been true and correct when made or shall have ceased to be true and
correct on and as of the Expiration Date); or
(d) there shall have occurred (A) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock
Exchange, Inc., (B) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States (whether
or not mandatory), (C) the commencement of a war, armed hostilities or
other international or national calamity directly or indirectly
involving the United States and having a Material Adverse Effect on or
materially adversely affecting (or materially delaying) the consummation
of the Offer, (D) any limitation (whether or not mandatory), by any U.S.
governmental authority or agency on, or any other event that, in the
judgment of the Parent, is substantially likely to materially adversely
affect, the extension of credit by banks or other financial
institutions, or (E) from the date of the Merger Agreement through the
date of termination or expiration of the Offer, a decline of at least
25% in the Standard & Poor's 500 Index; or
(e) prior to the purchase of Shares pursuant to the Offer, the
Board of Directors shall have withdrawn or modified (including by
amendment of the Schedule 14D-9) in a manner adverse to the Parent its
approval or recommendation of the Offer, the Merger Agreement or the
Merger or shall have recommended another offer for the purchase of the
Shares, which, in the sole judgment of the Parent in any such case, and
regardless of the circumstances (including any action or omission by the
Parent) giving rise to such condition, makes it inadvisable to proceed
with such acceptance for payment except where as a result of the
Company's receipt of an unsolicited acquisition proposal from a third
party (A) the Company issues to its shareholders a communication that
contains only the statements permitted by Rule 14d-9(e) under the
Exchange Act (and does not otherwise withdraw, modify or amend its
approval or recommendation of the transactions contemplated hereby) and
(B) within five business days of issuing such communication the Company
publicly reconfirms its approval and recommendation of the transactions
contemplated by the Offer and the Merger Agreement; or
(f) there shall have occurred since June 30, 1995, a change,
occurrence or circumstance in the Company's business having a Material
Adverse Effect thereon.
The foregoing conditions are for the sole benefit of the Parent and the
Purchaser and may be asserted by the Parent or the Purchaser regardless of the
circumstances giving rise to such conditions (including any action or inaction
by the Purchaser, unless any such action or inaction would constitute a breach
by the Purchaser of any of its covenants under the Merger Agreement) or may be
waived by the Parent or the Purchaser in whole or in part at any time and from
time to time, in the sole discretion of the Parent and the Purchaser. The
conditions may be considered to be material to the Offer. If the Purchaser
waives any material condition of the Offer, it will, if required by applicable
law, extend the period of time during which the Offer is open in accordance with
applicable law for a period sufficient to allow the holders of Shares to
consider the Offer by giving oral or written notice of such extension to the
Depositary and by making a public announcement thereof. The failure by the
Purchaser at any time to exercise any of the foregoing rights will not be deemed
a waiver of any other rights and each such right will be deemed an ongoing right
which may be
27
<PAGE> 30
asserted at any time and from time to time. Any reasonable determination (which
shall be made in good faith) by the Purchaser or the Parent with respect to such
conditions (including, without limitation, the satisfaction of such conditions)
will be final and binding on the parties.
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. Except as described in
this Section 16, based on a review of publicly available information concerning
the Company, neither the Parent nor the Purchaser is aware of any license or
regulatory permit that appears to be material to the business of the Company
that might be adversely affected by the acquisition of Shares by the Purchaser
pursuant to the Offer, the Merger or otherwise or of any approval or other
action by any governmental, administrative or regulatory agency or authority,
domestic or foreign, that would be required prior to the acquisition of Shares
by the Purchaser pursuant to the Offer, the Merger or otherwise. Should any such
approval or other action be required, the Parent and the Purchaser currently
contemplate that it will be sought. While the Purchaser does not currently
intend to delay the acceptance for payment of Shares tendered pursuant to the
Offer pending the outcome of any such matter, there can be no assurance that any
such approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that adverse consequences might not result to
the business of the Company or the Purchaser Entities or that certain parts of
the business of the Company or the Purchaser Entities might not have to be
disposed of in the event that such approvals were not obtained or any other
actions were not taken. The Purchaser's obligation under the Offer to accept for
payment and pay for Shares is subject to certain conditions, including
conditions relating to the legal matters discussed in this Section 16. See
Section 15.
State Takeover Statutes. The Company is incorporated under the laws of the
State of New York. Section 912 of the NYBCL prohibits certain "business
combinations" (defined to include mergers and consolidations) involving a New
York corporation and an "interested shareholder" (defined generally as a person
who is the beneficial owner of 20% or more of the outstanding voting stock of
such New York corporation) for a period of five years following the date on
which such interested shareholder became such (such date, the "stock acquisition
date") unless such business combination or the purchase of stock made by such
interested shareholder on such interested shareholder's acquisition date is
approved by the board of directors of such New York corporation prior to such
interested shareholder's stock acquisition date or certain other statutory
conditions have been met. At a meeting on October 20, 1995, the Board of
Directors approved the Merger Agreement, the Shareholder Tender Agreements, the
Merger, the Offer and the Purchaser's purchase of Shares pursuant to the Offer
and the Shareholder Tender Agreements. Accordingly, the provisions of Section
912 of the NYBCL have been satisfied with respect to the Offer, the Merger and
the Shareholder Tender Agreements, and such provisions will not delay the
consummation of the Merger. Article 16 of the NYBCL also requires a bidder for
shares of a New York corporation to file a registration statement with the
attorney general and satisfy certain disclosure requirements. The Parent and the
Purchaser have filed such a registration statement and this Offer to Purchase
sets forth the information required to be disclosed pursuant to Article 16.
A number of other states have adopted "takeover" statutes that purport to
apply to attempts to acquire corporations that are incorporated in such states,
or whose business operations have substantial economic effects in such states,
or which have substantial assets, security holders, employees, principal
executive offices or places of business in such states.
In Edgar v. MITE Corporation, the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Act, which,
as a matter of state securities law, made takeovers of corporations meeting
certain requirements more difficult. However, in CTS Corp. v. Dynamics Corp. of
America, the Supreme Court held that a state may, as a matter of corporate law
and, in particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining shareholders, provided that
such laws were applicable under certain conditions, in particular, that the
corporation has a substantial number of shareholders in the state and is
incorporated there.
The Company conducts business in a number of states throughout the United
States, some of which have enacted "takeover" statutes. The Purchaser does not
know whether any of these statutes will, by their terms,
28
<PAGE> 31
apply to the Offer, and has not complied with any such statutes other than those
adopted by the State of New York. To the extent that certain provisions of these
statutes purport to apply to the Offer, the Purchaser believes that there are
reasonable bases for contesting such statutes. If any person should seek to
apply any state takeover statute, the Purchaser would take such action as then
appears desirable, which action may include challenging the validity or
applicability of any such statute in appropriate court proceedings. If it is
asserted that one or more takeover statues apply to the Offer, and it is not
determined by an appropriate court that such statute or statutes do not apply or
are invalid as applied to the Offer, the Purchaser might be required to file
certain information with, or receive approvals from, the relevant state
authorities, and the Purchaser might be unable to purchase or pay for Shares
tendered pursuant to the Offer, or be delayed in continuing or consummating the
Offer. In such case, the Purchaser may not be obligated to accept for payment or
pay for Shares tendered.
Antitrust. Under the HSR Act, certain acquisitions may not be consummated
unless information has been furnished to the Federal Trade Commission ("FTC")
and the Antitrust Division of the Department of Justice ("Antitrust Division")
and certain waiting period requirements have been satisfied. The Offer and the
acquisition of Shares pursuant to the Merger Agreement are subject to the HSR
Act, which provides that certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The Parent
expects to file on or before October 26, 1995 a Notification and Report Form
with respect to the Offer.
Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares under the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by the Parent. Accordingly,
if such filing is made on October 26, 1995, the waiting period with respect to
the Offer will expire at 11:59 p.m., New York City time, on November 10, 1995,
unless the Parent receives a request for additional information or documentary
material, or the Antitrust Division and the FTC terminate the waiting period
prior thereto. If, within such 15-day waiting period, either the Antitrust
Division or the FTC requests additional information or material from the Parent
concerning the Offer, the waiting period will 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 the Parent with such request. Only one extension of
the waiting period pursuant to a request for additional information is
authorized by the HSR Act. Thereafter, such waiting period may be extended only
by court order or with the consent of the Parent. The Purchaser will not accept
for payment Shares tendered pursuant to the Offer unless and until the waiting
period requirements imposed by the HSR Act with respect to the Offer have been
satisfied. See Section 15.
No separate HSR Act waiting period requirements with respect to the Merger
Agreement will apply, so long as the 15-day waiting period expires or is
terminated. Thus, all Shares may be acquired pursuant to the Offer at the close
of the 15-day waiting period or on the tenth calendar day after the date of
substantial compliance with a request for additional information.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of Shares
pursuant to the Offer and the Merger Agreement. At any time before or after the
Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take
such action under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the acquisition of Shares pursuant
to the Offer or otherwise or seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of the Parent or its
subsidiaries. Private parties and state attorneys general may also bring legal
action under the antitrust laws under certain circumstances. Based upon an
examination of publicly available information relating to the businesses in
which the Parent and the Company are engaged, the Parent and the Purchaser
believe that the acquisition of Shares by the Purchaser will not violate the
antitrust laws. Nevertheless, there can be no assurance that a challenge to the
Offer or other acquisition of Shares by the Purchaser on antitrust grounds will
not be made or, if such a challenge is made, of the result. See Section 15 for
certain conditions to the Offer, including conditions with respect to litigation
and certain governmental actions.
Margin Rules. The Purchaser and the Parent believe that the requirements of
the margin regulations promulgated by the Federal Reserve Board are not
applicable to the financing of the Offer and the Merger.
29
<PAGE> 32
Appraisal Rights. If the Merger is consummated, shareholders of the Company
would have certain rights to dissent and demand appraisal of their Shares under
the NYBCL. Dissenting shareholders who comply with the requisite statutory
procedures under the NYBCL would be entitled to judicial determination and
payment of the "fair value" of their Shares as of the close of business on the
day prior to the date of shareholder authorization of the Merger, together with
interest thereon, at such rate as the court finds equitable, from the date the
Merger is consummated until the date of payment. Under the NYBCL, in fixing the
fair value of the Shares, a court would consider the nature of the transaction
giving rise to the shareholder's right to receive payment for Shares and its
effects on the Company and its shareholders, the concepts and methods then
customary in the relevant securities and financial markets for determining fair
value of shares of a corporation engaging in a similar transaction under
comparable circumstances and all other relevant factors. The value so determined
could be more or less than the purchase price offered pursuant to the Offer or
the Merger.
17. FEES AND EXPENSES. The Parent and the Purchaser have engaged Goldman
Sachs as the Dealer Managers in connection with the Offer. The Parent has agreed
to pay Goldman Sachs a fee of $100,000 that will be payable to Goldman Sachs
within fifteen days following any public announcement relating to the
Purchaser's intention to make the Offer. The Purchaser also has agreed to
reimburse Goldman Sachs for its expenses, including reasonable counsel fees, and
to indemnify it against certain liabilities and expenses, including certain
liabilities under the federal securities laws.
The Purchaser has retained D.F. King & Co., Inc. to act as the Information
Agent and National City Bank to act as the Depositary in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telex, facsimile, telegraph and personal interview and may request brokers,
dealers, commercial banks, trust companies and other nominees to forward the
Offer materials to beneficial owners. The Information Agent and the Depositary
each will receive reasonable and customary compensation for their 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 federal securities laws.
Neither the Purchaser nor the Parent will pay any fees or commissions to
any broker or dealer or other persons for soliciting tenders of Shares pursuant
to the Offer (other than the fees of the Dealer Managers, the Information Agent
and the Depositary). Brokers, dealers, commercial banks and trust companies will
be reimbursed by the Purchaser for reasonable expenses incurred by them in
forwarding material to their customers.
18. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction in which
the making of the Offer is not in compliance with applicable law. If the
Purchaser becomes aware of any jurisdiction in which the making of the Offer
would not be in compliance with applicable law, the Purchaser will make a good
faith effort to comply with any such law. If, after good faith effort, the
Purchaser cannot comply with any such law, the Offer will not be made to (nor
will tenders be accepted from or on behalf of) the holders of Shares residing in
such jurisdiction. In any jurisdiction where the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer is
being made on behalf of the Purchaser by the Dealer Managers 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 THE PURCHASER OR THE PARENT NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser has filed with the Commission the Schedule 14D-1 pursuant to
Rule 14d-3 under the Exchange Act, 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 and copies may
be obtained at the same places and in the same manner as set forth in Section 7
(except they will not be available at the regional offices of the Commission).
D-GT ACQUISITION, INCORPORATED
October 26, 1995
30
<PAGE> 33
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF
THE PARENT
The name, business address, present principal occupation or employment and
five-year employment history of each director and executive officer of the
Parent and certain other information are set forth below. Unless otherwise
indicated below, the address of each director and officer is c/o Diebold,
Incorporated, 5995 Mayfair Road, North Canton, Ohio 44720. No information is
provided in the right-hand column where the individual has occupied the position
indicated in the middle column for the past five years. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with the Parent. All directors and officers listed below are citizens
of the United States. Directors are identified by a single asterisk.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES PRINCIPAL OCCUPATION AND
NAME HELD WITH THE PARENT BUSINESS EXPERIENCE
(AGE AT 10/23/95) (YEAR ELECTED) (PAST FIVE YEARS)
- ----------------------------- ------------------------------ ------------------------------
<S> <C> <C>
Robert W. Mahoney* (59) Chairman of the Board (1988), Chairman of the Board and
President (1993) and Chief Chief Executive Officer,
Executive Officer (1985) and 1989-1993
Director (since 1983), member
of the Board Membership and
the Executive Committees
William T. Blair (62) Executive Vice President Vice President and General
(1993) Manager, North American Sales
and Service, 1990-1993
Gerald F. Morris (52) Executive Vice President and Senior Vice President and
Chief Financial Officer (1993) Chief Financial Officer,
1990-1993
Gregg A. Searle (47) Executive Vice President Vice President, 1991-1993
(1993) General Manager, InterBold,
1991-1993
Vice President, U.S. Sales &
Marketing, InterBold,
1990-1991
Alben W. Warf (57) Group Vice President, Self- General Manager, InterBold,
Service Systems (1994) 1993-1994
Vice President, 1993
Vice President, Development
and Manufacturing, InterBold,
1990-1993
Vice President, Development
and Manufacturing, 1990-93
Frank G. D'Angelo (50) Vice President, Information Vice President, 1993-1995
Systems (1995) General Manager and Chief
Executive Officer, Diebold
Mexico, S.A. de C.V.,
1993-1995
Vice President, Customer
Service/Systems Operations and
Support, 1991-1993
Vice President, Software
Development and Support
InterBold, 1990-1991
Warren W. Dettinger (41) Vice President and General
Counsel (1987) and Assistant
Secretary (1989)
</TABLE>
I-1
<PAGE> 34
<TABLE>
<CAPTION>
POSITIONS AND OFFICES PRINCIPAL OCCUPATION AND
NAME HELD WITH THE PARENT BUSINESS EXPERIENCE
(AGE AT 10/23/95) (YEAR ELECTED) (PAST FIVE YEARS)
- ----------------------------- ------------------------------ ------------------------------
<S> <C> <C>
Donald E. Eagon, Jr. (53) Vice President, Corporate
Communications (1990)
Charee Francis-Vogelsang (49) Vice President (1982) and Secretary, InterBold,
Secretary (1978) 1993-Present
Bartholomew J. Frazzitta (53) Vice President and General Vice President and General
Manager, Physical Security Manager, Security Products,
Products Division (1995) 1990- 1995
Michael J. Hillock (44) Vice President and General Vice President, North American
Manager, Sales and Service, Sales Service, Eastern
Europe, Middle East and Africa Division, 1990-1992
(1993)
Larry D. Ingram (49) Vice President, Procurement Divisional Vice President,
and Services (1993) Materials Management 1988-1993
Edgar N. Petersen (57) Vice President and General Vice President and General
Manager, Sales and Service, Manager, International Sales
Canada, Asia Pacific and Latin and Service, 1991-1992
America (1993) Vice President, International
Sales and Marketing,
InterBold, 1990-1991
Charles B. Scheurer (54) Vice President, Vice President, Human
Human Resources (1991) Resources and Corporate
Services, 1988-1991
Robert L. Stockamp (52) Vice President and Corporate
Controller (1990)
Robert J. Warren (49) Vice President and Treasurer
(1990)
Louis V. Bockius, III* (60) Director (since 1978), member Chairman, Bocko Incorporated,
of the Audit and Executive North Canton, Ohio
Committees
Daniel T. Carroll* (69) Director (since 1980), Chairman and President, The
Chairman of the Investment Carroll Group, Inc., Ann
Committee and member of the Arbor, Michigan
Audit Committee
Donald R. Gant* (67) Director (since 1977), Limited Partner, The Goldman
Chairman of the Board Sachs Group L.P., New York,
Membership Committee and New York; Formerly, General
member of the Compensation and Partner, Goldman, Sachs, &
Organization Committee Co., New York, New York
L. Lindsey Halstead* (65) Director (since 1993), member Formerly Chairman of the
of the Board Membership and Board, Ford of Europe
the Audit Committees
Phillip B. Lassiter* (52) Director (since 1995), member Chairman of the Board,
of the Compensation and President and Chief Executive
Organization Committee and the Officer, AMBAC Inc., New York,
Investment Committee New York; Formerly, Group
Executive, Citibank, N.A.
</TABLE>
I-2
<PAGE> 35
<TABLE>
<CAPTION>
POSITIONS AND OFFICES PRINCIPAL OCCUPATION AND
NAME HELD WITH THE PARENT BUSINESS EXPERIENCE
(AGE AT 10/23/95) (YEAR ELECTED) (PAST FIVE YEARS)
- ----------------------------- ------------------------------ ------------------------------
<S> <C> <C>
John N. Lauer* (56) Director (since 1992), Retired, Private Investor;
Chairman of the Executive Formerly, President, Chief
Committee and member of the Operating Officer and
Compensation and Organization Executive Vice President, The
Committee BFGoodrich Company, Akron,
Ohio
William F. Massy* (61) Director (since 1984), Director, Stanford Institute
Chairman of the Compensation for Higher Education Research
and Organization Committee and and Professor of Education and
member of the Investment Business Administration,
Committee Stanford University, Stanford,
California
W.R. Timken, Jr.* (56) Director (since 1986), Chairman of the Board, The
Chairman of the Audit Timken Company, Canton, Ohio
Committee and member of the
Board Membership Committee
</TABLE>
I-3
<PAGE> 36
DIRECTORS AND EXECUTIVE OFFICERS
OF
THE PURCHASER
The name, business address, present principal occupation or employment and
five-year employment history of each director and executive officer of the
Purchaser and certain other information are set forth below. Unless otherwise
indicated below, the address of each director and officer is c/o Diebold,
Incorporated, 5995 Mayfair Road, North Canton, Ohio 44720. No information is
provided in the righthand column where the individual has occupied the position
indicated in the middle column for the past five years. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with the Purchaser. All directors and officers listed below are
citizens of the United States. Directors are identified by a single asterisk.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES PRINCIPAL OCCUPATION AND
NAME HELD WITH THE PURCHASER BUSINESS EXPERIENCE
(AGE AT 10/23/95) (YEAR ELECTED) (PAST FIVE YEARS)
- ----------------------------- ------------------------------ ------------------------------
<S> <C> <C>
Gregg A. Searle* (47) President (1994) and Director Executive Vice President,
(since 1994) Diebold, Incorporated,
1993-Present
Vice President, Diebold,
Incorporated, 1990-1993
General Manager, InterBold,
1991-1993
Gerald F. Morris* (52) Vice President and Treasurer Executive Vice President and
(1994) and Director (since Chief Financial Officer,
1994) Diebold, Incorporated,
1993-Present
Senior Vice President and
Chief Financial Officer,
Diebold, Incorporated,
1990-1993
Warren W. Dettinger (41) Vice President and Secretary Vice President, General
(1994) Counsel and Assistant
Secretary, Diebold,
Incorporated, 1987-Present
Charee Francis-Vogelsang (49) Vice President and Assistant Vice President and Secretary,
Secretary (1994) Diebold, Incorporated,
1983-Present
Robert J. Warren* (49) Director (since 1994) Vice President and Treasurer,
Diebold, Incorporated
1990-Present
</TABLE>
I-4
<PAGE> 37
SCHEDULE II
CERTAIN INFORMATION ABOUT THE PARENT REQUIRED BY NEW YORK LAW
EDUCATIONAL OPPORTUNITIES
The Parent provides educational assistance to all employees who have
completed one year of service. The study program must be consistent with the
Parent's business goals and objectives and applicable to the employee's field of
work.
RELOCATION ADJUSTMENTS
The Parent may reimburse job applicants for reasonable and actual interview
expenses, and may reimburse new and existing employees for reasonable and actual
travel and relocation expenses in accordance with the provisions of corporate
policy.
CHARITABLE CONTRIBUTIONS
The Parent supports a broad spectrum of public interest activities through
a gifts and grants program, with emphasis on recognized agencies in such fields
as health, education, civic affairs and cultural activities.
BENEFIT PLANS
The Parent sponsors a number of retirement plans that cover substantially
all employees. Defined benefit plans for salaried and certain hourly employees
provide benefits based on employees' years of service and compensation. Defined
benefit plans for other hourly employees generally provide benefits of stated
amounts for specified periods of service. A savings plan, with a discretionary
employer contribution match, is made available to most employees.
II-1
<PAGE> 38
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each shareholder
of the Company or his broker, dealer, commercial bank or other nominee to the
Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
NATIONAL CITY BANK
By Mail:
National City Bank, Depositary
P.O. Box 92301
Cleveland, Ohio 44193-0900
(800) 622-6757 (SHAREHOLDER QUESTIONS)
By Facsimile Transmission:
(216) 476-8367
By Hand or Overnight Courier:
National City Bank, Depositary
Corporate Trust Operations
Third Floor -- North Annex
4100 West 150th Street
Cleveland, Ohio 44135-1385
Confirm Facsimile By Telephone:
(216) 476-8049
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Managers at their respective
telephone numbers and locations listed below. You may also contact your broker,
dealer, commercial bank or trust company or nominee for assistance concerning
the Offer.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, New York 10005
BANKS AND BROKERS CALL COLLECT (212) 269-5550
ALL OTHERS CALL TOLL FREE (800) 549-6864
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(800) 323-5678 (TOLL FREE)
October 26, 1995
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
GRIFFIN TECHNOLOGY INCORPORATED
PURSUANT TO THE OFFER TO PURCHASE
DATED OCTOBER 26, 1995
OF
D-GT ACQUISITION, INCORPORATED
A WHOLLY OWNED SUBSIDIARY
OF
DIEBOLD, INCORPORATED
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, NOVEMBER 27, 1995, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
NATIONAL CITY BANK
By Mail:
National City Bank, Depositary
P.O. Box 92301
Cleveland, Ohio 44193-0900
(800) 622-6757 (SHAREHOLDER QUESTIONS)
By Facsimile Transmission:
(216) 476-8367
By Hand or Overnight Courier:
National City Bank, Depositary
Corporate Trust Operations
Third Floor -- North Annex
4100 West 150th Street
Cleveland, Ohio 44135-1385
Confirm Facsimile By Telephone:
(216) 476-8049
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
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 used if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if delivery of Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company,
the Midwest Securities Trust Company or the Philadelphia Depository Trust
Company (hereinafter collectively referred to as the "Book-Entry Transfer
Facility" and, individually, a "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 3 of the Offer to Purchase.
Shareholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) or who cannot complete the procedure for delivery by
book-entry transfer on a timely basis and who wish to tender their Shares must
do so pursuant to the guaranteed delivery procedure set forth in Section 3 of
the Offer to Purchase. See Instruction 2.
<PAGE> 2
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution _______________________________________________
Account Number ______________________________________________________________
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Transaction Code No. ________________________________________________________
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Shareholder(s) _______________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery ______________________________
IF DELIVERY IS BY BOOK-ENTRY TRANSFER, PLEASE PROVIDE THE FOLLOWING:
Name of Tendering Institution ______________________________________________
Account No. ________________________________________________________________
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Transaction Code No. _______________________________________________________
<PAGE> 3
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S) TENDERED
SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST, IF NECESSARY)
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED SHARES
NUMBER(S)* BY CERTIFICATE(S)* TENDERED**
-----------------------------------------------------
<S> <C> <C> <C>
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
TOTAL NUMBER
OF SHARES
- -----------------------------------------------------------------------------------------------------------------------------
<FN>
* Need not be completed by shareholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the
Depositary are being tendered. See Instruction 4.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to D-GT Acquisition, Incorporated, a New
York corporation (the "Purchaser") and a wholly owned subsidiary of Diebold,
Incorporated, the above-described shares of common stock, par value $0.05 per
share (the "Shares"), of Griffin Technology Incorporated, a New York corporation
(the "Company"), pursuant to the Purchaser's offer to purchase all outstanding
Shares at $7.75 per Share, net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
October 26, 1995, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer"). The Purchaser reserves the
right to transfer or assign, in whole or from time to time in part, to one or
more of its affiliates the right to purchase Shares tendered pursuant to the
Offer.
Subject to, and effective upon, acceptance for payment for the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns, and transfers to, or upon the order of, the Purchaser all
right, title and interest in and to all the Shares that are being tendered
hereby (and any and all other shares of common stock or other securities issued
or issuable in respect thereof on or after October 20, 1995) and appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares (and all such other shares of common stock or
securities), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
certificates for such Shares (and all such other shares of common stock or
securities), or transfer ownership of such Shares (and all such other shares of
common stock or securities) on the account books maintained by a Book-Entry
Transfer Facility, together, in any such case, with all accompanying evidence of
transfer and authenticity, to or upon the order of the Purchaser, (b) present
such Shares (and all such other shares of common stock or securities) for
transfer on the books of the Company and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares (and all such other
shares of common stock or securities), all in accordance with the terms of the
Offer.
The undersigned hereby irrevocably appoints Robert W. Mahoney, William
T. Blair, Gerald F. Morris and Gregg A. Searle, and each of them, the attorneys
and proxies of the undersigned, each with full power of substitution, to
exercise all voting and other rights of the undersigned in such manner as each
such attorney and proxy or his substitute shall in his sole discretion deem
proper, with respect to all of the Shares tendered hereby which have been
accepted for payment by the Purchaser prior to the time of any vote or other
action (and any and all other shares of common stock or other securities issued
or issuable in respect thereof on or after October 20, 1995), at any meeting of
the shareholders of the Company (whether annual or special and whether or not
an adjourned meeting), by written consent or otherwise. This proxy is
irrevocable and coupled with an interest in the tendered Shares and is granted
in consideration of, and is effective
<PAGE> 4
upon, the acceptance for payment of such Shares or securities, and no
subsequent proxies will be given or written consents will be executed by the
undersigned (and if given or executed, will not be deemed to be
effective).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any and all other shares of common stock or other
securities issued or issuable in respect thereof on or after October 20, 1995)
and that when the same are accepted for payment by the Purchaser, the Purchaser
will acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
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 Shares tendered hereby (and
all such other shares of common stock or securities).
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
The undersigned understands that a tender of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase will constitute
the tendering shareholder's acceptance of the terms and conditions of the Offer,
as well as the tendering shareholder's representation and warranty that such
shareholder has the full power and authority to tender, sell, assign and
transfer the Shares tendered, as specified in this Letter of Transmittal. The
Purchaser's acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering shareholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated under "Special Payment Instructions", please
issue the check for the purchase price of any Shares purchased, and return any
Shares not tendered or not purchased, in the name(s) of the undersigned (and, in
the case of Shares tendered by book-entry transfer, by credit to the account at
the Book-Entry Transfer Facility designated above). Similarly, unless otherwise
indicated under "Special Delivery Instructions", please mail the check for the
purchase price of any Shares purchased and any certificates for Shares not
tendered or not purchased (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature(s). In the
event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the purchase price of
any Shares purchased and return any Shares not tendered or not purchased in the
name(s) of, and mail said check and any certificates to, the person(s) so
indicated. The undersigned recognizes that the Purchaser has no obligation,
pursuant to the "Special Payment Instructions", to transfer any Shares from the
name of the registered holder(s) thereof if the Purchaser does not accept for
payment any of the Shares so tendered.
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or certificates for Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned, or if Shares tendered
by book-entry transfer that are not purchased are to be returned by credit to an
account at a Book-Entry Transfer Facility other than that designated above.
Issue / / check
/ / certificate(s) to:
Name: _______________________________________________
(Please Print)
Address: ____________________________________________
_____________________________________________________
(Zip Code)
_____________________________________________________
(Taxpayer Identification Number)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or certificates for Shares not tendered or not purchased are to be
mailed to someone other than the undersigned or to the undersigned at an address
other than that shown under "Description of Shares Tendered".
Mail / / check
/ / certificate(s) to:
Name: _______________________________________________
(Please Print)
Address: ____________________________________________
_____________________________________________________
(Zip Code)
/ / Credit unpurchased Shares tendered by book-entry transfer to the account
set forth below:
Name of Account Party __________________________________________________
Account No. ____________________________________________________________
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
<PAGE> 6
IMPORTANT
SHAREHOLDERS: SIGN HERE
(Please complete Substitute Form W-9 below)
______________________________________________________________________________
______________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
DATED: _________________________________________ , 199__
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON SHARE
CERTIFICATES OR ON A SECURITY POSITION LISTING OR BY PERSON(S) AUTHORIZED TO
BECOME REGISTERED HOLDER(S) BY CERTIFICATES AND DOCUMENTS TRANSMITTED HEREWITH.
IF SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-
FACT, OFFICER OF A CORPORATION 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: _____________________________________________________________________
______________________________________________________________________________
(INCLUDING ZIP CODE)
AREA CODE AND TELEPHONE NO.: _________________________________________________
TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NO.: _______________________________________________________
(SEE SUBSTITUTE FORM W-9 BELOW)
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
Authorized Signature: _______________________________________________________
Name: _______________________________________________________________________
(PLEASE TYPE OR PRINT)
Title: ______________________________________________________________________
Name of Firm: _______________________________________________________________
Address: ____________________________________________________________________
_____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.: ________________________________________________
Dated: _____________________________________ , 199__
<PAGE> 7
PAYER'S NAME: NATIONAL CITY BANK
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- Taxpayer Identification Number -- For All Accounts Social Security Number
FORM W-9 Enter your taxpayer identification number in the appropriate OR ________________________
DEPARTMENT OF THE TREASURY box. For most individuals and sole proprietors, this is your Employer Identification
INTERNAL REVENUE SERVICE Social Security Number. For other entities, it is your Employer Number
Identification Number. If you do not have a number, see "How to
Obtain a TIN" in the enclosed Guidelines.
Note: if the account is in more than one name, see the chart on
Page 2 of the enclosed Guidelines to determine what number to
enter.
---------------------------------------------------------------
PART II -- For Payees Exempt Form Backup Withholding (see [ ]Awaiting TIN
enclosed Guidelines and complete as instructed therein).
- -------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(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 either (a) 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 (b) I intend to mail
PAYER'S REQUEST or deliver an application in the near future. I understand that if I do not provide a
FOR TAXPAYER taxpayer identification number within sixty (60) days, 31% of all reportable payments
IDENTIFICATION NUMBER made to me thereafter will be withheld until I provided a number;
(2) I am not subject to backup withholding either because (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service ("IRS") that I
am subject to backup withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding; and
(3) Any other information provided on this form is true, correct and complete.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified by
the IRS that you are currently subject to backup withholding because of underreporting
interest or dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out item (2).
---------------------------------------------------------------------------------------------
SIGNATURE __________________________________________________ DATE __________________ , 199__
- -------------------------------------------------------------------------------------------------------------------------------
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 INSTRUCTIONS.
</TABLE>
<PAGE> 8
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 firm which is a
member of a registered national securities exchange or the National Association
of Securities Dealers, Inc., or by a commercial bank or trust company having an
office or correspondent in the United States (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 Shares (which
term, for purposes of this document, shall include any participant in the
Book-Entry Transfer Facility whose name appears on a security position listing
as the owner of Shares) tendered herewith and such holder(s) have not completed
the instruction entitled "Special Payment Instructions" on this Letter of
Transmittal or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith or
if delivery of Shares is to be made by book-entry transfer, without utilizing an
Agent's Message, pursuant to the procedures set forth in Section 3 of the Offer
to Purchase. Certificates for all physically delivered Shares, or a confirmation
of a book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility of all Shares delivered electronically, as well as either a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantee or an Agent's Message, and any
other documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal by the Expiration Date. Shareholders who cannot deliver their Shares
and all other required documents to the Depositary by the Expiration Date must
tender their Shares pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender
must be made by or through an Eligible Institution, (b) a properly completed and
duly executed Notice of Guaranteed Delivery substantially in the form provided
by the Purchaser must be received by the Depositary by the Expiration Date and
(c) the certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility of all Shares delivered electronically, as well as either a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) with
any required signature guarantee or an Agent's Message, and any other documents
required by this Letter of Transmittal, must be received by the Depositary
within three National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System trading days after the date of execution of such
Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to
Purchase.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING THROUGH A BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION
AND RISK OF THE TENDERING SHAREHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF CERTIFICATES FOR SHARES ARE SENT BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal (or
facsimile thereof) or causing an Agent's Message to be transmitted, the
tendering shareholder waives any right to receive any notice of the acceptance
for payment of Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by book-entry
transfers). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares Tendered". In
such case, a new certificate for the remainder of the Shares represented by the
old certificate will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the appropriate box on this Letter of
Transmittal, as promptly as practicable following the expiration or termination
of the Offer. All Shares represented by certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
<PAGE> 9
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made, or Shares not
tendered or not purchased are to be returned, in the name of any person other
than the registered holder(s). Signatures on any such 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(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Purchaser of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. The Purchaser will pay any stock transfer taxes
with respect to the sale and transfer of any Shares to it or its order pursuant
to the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), or if a transfer tax is imposed for
any reason other than the sale or transfer of Shares to the Purchaser pursuant
to the Offer, then the amount of any stock transfer taxes (whether imposed on
the registered holder(s), such other person or otherwise) will be deducted from
the purchase price unless satisfactory evidence of the payment of such taxes, or
exemption therefrom, is submitted herewith.
7. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares not
tendered or not purchased are to be returned, in the name of a person other than
the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Shareholders tendering Shares by book-entry transfer may request that Shares not
purchased be credited to such account at a Book-Entry Transfer Facility as such
shareholder may designate under "Special Payment Instructions". If no such
instructions are given, any such Shares not purchased will be returned by
crediting the account at a Book-Entry Transfer Facility designated above. If the
box entitled "Special Payment Instructions" is completed, the signature(s) of
the person(s) signing this Letter of Transmittal must be guaranteed. See
Instruction 1.
8. Substitute Form W-9. Under the federal income tax laws, the Depositary
will be required to withhold 31% of the amount of any payments made to certain
shareholders pursuant to the Offer. In order to avoid such backup withholding,
each tendering shareholder, and, if applicable, each other payee, must provide
the Depositary with such shareholder's or payee's correct taxpayer
identification number and certify that such shareholder or payee is not subject
to such backup withholding by completing the Substitute Form W-9 set forth above
or by filing a properly completed Form W-9. In general, if a shareholder or
payee is an individual, the taxpayer identification number is the Social
Security number of such individual. If the Depositary is not provided with the
correct taxpayer identification number, the shareholder or payee may be subject
to a $50 penalty imposed by the Internal Revenue Service. Certain shareholders
or payees (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. In order to satisfy the Depositary that a foreign individual
qualifies as an exempt recipient, such shareholder or payee must submit a
statement, signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Depositary. For further
information concerning backup withholding and
<PAGE> 10
instructions for completing the Substitute Form W-9 (including how to obtain a
taxpayer identification number if you do not have one and how to complete the
Substitute Form W-9 if Shares are held in more than one name), consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Failure to complete the Substitute Form W-9 (or to file a Form W-9) will
not, by itself, cause Shares to be deemed invalidly tendered, but may require
the Depositary to withhold 31% of the amount of any payments made pursuant to
the Offer. Backup withholding is not an additional federal income tax. Rather,
the federal income tax liability of a person subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained provided that the required
information is furnished to the Internal Revenue Service.
NOTE: FAILURE TO COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 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.
9. Requests for Assistance or Additional Copies. Requests for assistance
or additional copies of the Offer to Purchase and this Letter of Transmittal may
be obtained from the Information Agent or the Dealer Managers at their
respective addresses or telephone numbers set forth below.
10. Irregularities. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. The Purchaser
reserves the absolute right to reject any or all tenders of Shares determined by
it not to be in proper form or the acceptance for payment of or payment for
which may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser
also reserves the absolute right to waive any defect or irregularity in any
tender of Shares. No tender of Shares will be deemed to have been properly made
until all defects and irregularities relating thereto have been cured or waived.
The Purchaser's interpretation of the terms and conditions of the Offer in this
regard will be final and binding. None of the Purchaser, the Dealer Managers,
the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defect or irregularity in tenders or incur any
liability for failure to give any such notification.
<PAGE> 11
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
(DO NOT WRITE IN SPACES BELOW)
- -------------------------------------------------------------------------------------------------------------
Date Received __________ Accepted By __________ Checked By __________
- -------------------------------------------------------------------------------------------------------------
SHARES SHARES SHARES CHECK AMOUNT SHARES CERTIFICATE BLOCK
SURRENDERED TENDERED ACCEPTED NO. OF CHECK RETURNED NO. NO.
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Or
Net
- -------------------------------------------------------------------------------------------------------------
Delivery Prepared By __________ Checked By __________ Date __________
- -------------------------------------------------------------------------------------------------------------
</TABLE>
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, New York 10005
BANKS AND BROKERS CALL COLLECT (212) 269-5550
ALL OTHERS CALL TOLL FREE (800) 549-6864
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(800) 323-5678 (TOLL FREE)
<PAGE> 1
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
GRIFFIN TECHNOLOGY INCORPORATED
BY
D-GT ACQUISITION, INCORPORATED
A WHOLLY OWNED SUBSIDIARY
OF
DIEBOLD, INCORPORATED
AT
$7.75 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, NOVEMBER 27, 1995, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks, October 26, 1995
Trust Companies and Other Nominees:
We have been appointed by D-GT Acquisition, Incorporated, a New York
corporation (the "Purchaser") and a wholly owned subsidiary of Diebold,
Incorporated, an Ohio corporation, to act as Dealer Managers in connection with
its offer to purchase all outstanding shares of common stock, par value $0.05
per share (the "Shares"), of Griffin Technology Incorporated, a New York
corporation (the "Company"), at $7.75 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Purchaser's Offer to Purchase, dated October 26, 1995, and the related Letter of
Transmittal (which together constitute the "Offer").
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase, dated October 26, 1995;
2. Letter of Transmittal for your use to tender Shares and for the
information of your clients, together with Guidelines for
Certification of Taxpayer Identification Number on Substitute Form
W-9 providing information relating to backup federal income tax
withholding;
3. Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if certificates for Shares ("Share Certificates") and all other
required documents are not immediately available or cannot be
delivered to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) or if the procedure for book-entry transfer cannot
be completed by the Expiration Date;
4. A form of letter which may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions
with regard to the Offer;
5. Solicitation/Recommendation Statement on Schedule 14D-9 issued by the
Company; and
6. Return envelope addressed to National City Bank, the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, NOVEMBER 27, 1995, UNLESS THE OFFER IS
EXTENDED.
<PAGE> 2
In order to accept the Offer, a properly completed and duly executed Letter
of Transmittal, together with any required signature guarantees, or an Agent's
Message (as defined in the Offer to Purchase) in connection with a book-entry
transfer of Shares, and any other required documents should be sent to the
Depositary and either Share Certificates representing tendered Shares should be
delivered to the Depositary, or Shares should be tendered by book-entry transfer
into the Depositary's account maintained at the Book-Entry Transfer Facility (as
described in the Offer to Purchase), all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender their Shares, but it is impracticable
for them to forward their Share certificates or other required documents to the
Depositary on or prior to the Expiration Date or to complete the procedure for
delivery by book-entry transfer on a timely basis, a tender may be effected by
following the guaranteed delivery procedures specified in Section 3 of the Offer
to Purchase.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other persons (other than the Dealer Managers) for soliciting tenders of
Shares pursuant to the Offer. The Purchaser will, however, upon request,
reimburse you for reasonable expenses incurred by you in forwarding any of the
enclosed materials to your clients. The Purchaser will pay or cause to be paid
any stock transfer taxes payable on the transfer of the Shares to it, except as
set forth in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at their respective addresses and telephone
numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
GOLDMAN, SACHS & CO.
ENCLOSURES
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON AS AN AGENT OF THE PURCHASER, THE COMPANY, ANY AFFILIATE OF THE
COMPANY, DIEBOLD, INCORPORATED, THE DEALER MANAGERS, THE INFORMATION AGENT OR
THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN
THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
GRIFFIN TECHNOLOGY INCORPORATED
BY
D-GT ACQUISITION, INCORPORATED
A WHOLLY OWNED SUBSIDIARY
OF
DIEBOLD, INCORPORATED
AT
$7.75 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, NOVEMBER 27, 1995, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated October
26, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") and other materials relating to the offer by
D-GT Acquisition, Incorporated, a New York corporation (the "Purchaser") and a
wholly owned subsidiary of Diebold, Incorporated, an Ohio corporation, to
purchase all outstanding shares of common stock, par value $0.05 per share (the
"Shares"), of Griffin Technology Incorporated, a New York corporation (the
"Company"), at $7.75 per Share, net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in the Offer.
We are (or our nominee is) the holder of record of Shares held by us for
your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL ACCOMPANYING
THIS LETTER IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender any or all
of the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $7.75 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Monday, November 27, 1995, unless the Offer is
extended.
4. The Board of Directors of the Company unanimously has determined that
the Offer and the Merger (as defined in the Offer to Purchase) are
fair to, and in the best interests of, the shareholders of the
Company, has approved the Offer and the Merger and recommends that
the Company's shareholders accept the Offer and tender their Shares
pursuant to the Offer.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn immediately prior to the
Expiration Date (as defined in the Offer to Purchase) that number of
Shares representing at least two-thirds of the total number of Shares
then outstanding on a fully diluted basis.
6. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, any stock transfer taxes on the purchase of the Shares
by the Purchaser pursuant to the Offer.
<PAGE> 2
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or acceptance thereof would not be in compliance with the laws of 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 Goldman, Sachs & Co., the Dealer
Managers of the Offer, or one or more registered brokers or dealers licensed
under the laws of such jurisdictions.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing and returning to us the
instruction form set forth below. Please forward your instructions to us in
ample time to permit us to submit a tender on your behalf prior to the
Expiration Date. If you authorize the tender of your Shares, all such Shares
will be tendered unless otherwise specified on the instruction form set forth
below.
Instructions with Respect to the
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
GRIFFIN TECHNOLOGY INCORPORATED
BY
D-GT ACQUISITION, INCORPORATED
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated October 26, 1995, and the related Letter of
Transmittal, in connection with the offer by D-GT Acquisition, Incorporated, a
New York corporation and a wholly owned subsidiary of Diebold, Incorporated, an
Ohio corporation, to purchase all outstanding shares of common stock, par value
$0.05 per share (the "Shares"), of Griffin Technology Incorporated, a New York
corporation, at $7.75 per Share, net to the seller in cash, without interest.
This will instruct you to tender the number of Shares indicated below (or
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Dated: , 1995
NUMBER OF SHARES TO BE TENDERED:
____________ SHARES*
------------------------------------------------------
------------------------------------------------------
SIGNATURE(S)
------------------------------------------------------
PLEASE PRINT NAME(S)
------------------------------------------------------
------------------------------------------------------
PLEASE PRINT ADDRESS(ES)
------------------------------------------------------
AREA CODE AND TELEPHONE NUMBER(S)
------------------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER(S)
- ---------------
* I (we) understand that if I (we) sign this instruction form without indicating
a lesser number of Shares in the space above, all Shares held by you for my
(our) account will be tendered.
2
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
GRIFFIN TECHNOLOGY INCORPORATED
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery or one substantially equivalent to this
form must be used to accept the Offer (as defined below) if the certificates
representing shares of common stock, par value $0.05 per share, of Griffin
Technology Incorporated (the "Shares"), are not immediately available or time
will not permit all required documents to reach National City Bank (the
"Depositary") on or prior to the Expiration Date (as defined in the Offer to
Purchase), or the procedures for delivery by book-entry transfer cannot be
completed on a timely basis. This Notice of Guaranteed Delivery may be delivered
by hand or transmitted by facsimile transmission or mail to the Depositary. See
Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
NATIONAL CITY BANK
By Mail:
National City Bank, Depositary
P.O. Box 92301
Cleveland, Ohio 44193-0900
(800) 622-6757 (SHAREHOLDER QUESTIONS)
By Facsimile Transmission:
(216) 476-8367
By Hand or Overnight Courier:
National City Bank, Depositary
Corporate Trust Operations
Third Floor -- North Annex
4100 West 150th Street
Cleveland, Ohio 44135-1385
Confirm Facsimile By Telephone:
(216) 476-8049
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to D-GT Acquisition, Incorporated (the
"Purchaser"), a New York corporation and a wholly owned subsidiary of Diebold,
Incorporated, an Ohio corporation, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated October 26, 1995 (the "Offer to
Purchase"), and the related Letter of Transmittal (which together constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares
indicated below pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase.
Share Certificate Nos. (if available): Name(s) of Record Holder(s):
__________________________________ __________________________________
__________________________________ __________________________________
PLEASE TYPE OR PRINT
If Shares will be delivered by
book-entry transfer, check one box:
/ / The Depository Trust Company Address(es)_______________________
/ / Midwest Securities Trust Company __________________________________
ZIP CODE
/ / Philadelphia Depository Trust Company
Area Code and Telephone Number:
Account Number________________________
__________________________________
Dated: , 1995
__________________________________
__________________________________
__________________________________
SIGNATURE(S)
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker or other institution which is a member of a
Medallion Signature Guaranty Program (each, an "Eligible Institution"), hereby
guarantees to deliver to the Depositary at one of its addresses set forth above
either the certificates representing all tendered Shares, in proper form for
transfer, or timely confirmation of a book-entry transfer of such Shares into
the Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase), together with a properly completed and duly executed Letter
of Transmittal (or manually signed facsimile thereof) with any required
signature guarantees, or, in the case of book-entry transfer of Shares, an
Agent's Message (as defined in the Offer to Purchase), and any other documents
required by the Letter of Transmittal within three National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") System trading days
after the date of execution of this Notice of Guaranteed Delivery.
<PAGE> 3
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal (unless
an Agent's Message is utilized) and certificates for Shares to the Depositary
within the time period shown herein. Failure to do so could result in a
financial loss to such Eligible Institution.
Name of Firm:____________________________ _________________________________
AUTHORIZED SIGNATURE
Address:_________________________________
Name:____________________________
PLEASE TYPE OR PRINT
_________________________________________
ZIP CODE
Title:___________________________
Area Code and
Tel. No.:________________________________ Dated:_____________________, 1995
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM. CERTIFICATES ARE TO BE
DELIVERED WITH THE LETTER OF TRANSMITTAL.
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYOR --
Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the Payor.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------- -----------------------------------------------------------
GIVE THE GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF-- NUMBER OF--
- ----------------------------------------------------------- -----------------------------------------------------------
1. An individual's account The individual 8. Sole proprietorship account The Owner(4)
2. Two or more individuals The actual owner 9. A valid trust, estate, Legal entity (Do not
(joint account) of the account or, or pension trust furnish the
if combined funds, identifying number
any one of the of the personal
individuals(1) representative or
trustee unless the
3. Husband and wife The actual owner legal entity itself
(joint account) of the account or, is not designated in
if joint funds, the account title.)(5)
either person(1)
4. Custodian account of a minor The minor(2) 10. Corporate account The Corporation
(Uniform Gift to Minors Act)
11. Religious, charitable, or The organization
5. Adult and minor The adult or, educational organization account
(joint account) if the minor is the
only contributor, 12. Partnership account The partnership
the minor(1) held in the name of the business
6. Account in the name of The ward, minor, 13. Association, club or other The organization
guardian or committee for or incompetent tax-exempt organization
a designated ward, minor, person(3)
or incompetent person 14. A broker or registered nominee The broker or
nominee
7. a. The usual revocable savings The grantor-
trust account (grantor is trustee(1) 15. Account with the Department The public entity
also trustee) of Agriculture in the name of
a public entity (such as a
b. So-called trust account that The actual owner(1) State or local governmental
is not a legal or valid trust school or prison) that receives
under State law agricultural program payments
---------------------------------------------------------- -----------------------------------------------------------------
<FN>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
</TABLE>
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to Partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the account received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
October 23, 1995 FOR MORE INFORMATION:
John Kristoff
(216) 490-3782
DIEBOLD ANNOUNCES AGREEMENT TO PURCHASE
GRIFFIN TECHNOLOGY INCORPORATED
CANTON, Ohio -- Diebold, Incorporated (NYSE:DBD) today
announced that it has entered into a merger agreement to purchase the stock of
Griffin Technology Incorporated (NASDAQ:GRIF), based in Farmington, N.Y.
Pursuant to the merger agreement, Diebold will commence a tender offer for all
issued and outstanding shares of Griffin for $7.75 per share in cash.
In connection with the transaction, certain major shareholders
have agreed to tender to Diebold their shares (representing approximately 32
percent of the issued and outstanding common stock of Griffin).
Griffin, with 1995 fiscal year (June 30, 1995) revenues of
$17.9 million, is a provider of computerized campuswide, card-based systems for
colleges and universities in the United States. Two years ago Diebold started
offering an integrated campus access management (ICAM) system that combines
transaction and security capabilities on a single card. Griffin, with more than
20 years experience, develops, manufactures, sells and services systems for meal
plans, facility access control, photo imaging, vending and electronic payment
systems. The new alliance will have nearly 300 installations.
<PAGE> 2
- 2 -
Robert W. Mahoney, Diebold chairman, president and chief
executive officer, said, "The purchase of Griffin accelerates the strategic
initiative we undertook to expand our presence in the higher education
marketplace, as well as in other campus-type environments. Griffin is well
respected in the college and university market. Our customers will benefit not
only from Griffin's market expertise, but also from Diebold's corporate
reputation and financial strength, nationwide service organization and
technology expertise."
"We also benefit from expanded sales opportunities for both
companies' existing products," Mahoney said.
Robert S. Urland, Griffin president and chief executive
officer, said, "Griffin gains by affiliating with Diebold, a much larger company
with capital to finance new products and geographic expansion for campus card
systems. There are also natural synergies between our companies in products and
software, research and development, service, manufacturing and other operations.
For instance, we will not be in a position to offer existing Griffin customers
an enhanced security product line to integrate with their installed card
systems. It will be a definite plus for Griffin and our college and university
customers," he said.
Diebold, Incorporated, headquartered in Canton, Ohio, is a
world leader in providing card-based transaction systems, security and service
solutions to the financial, education and healthcare industries. Founded in
1859 as a security equipment
<PAGE> 3
- 3 -
company, Diebold currently provides integrated solutions incorporating its
automated teller machines (ATMs), electronic and physical security systems,
electronic payment systems, professional services and software.
<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated
October 26, 1995 and the related Letter of Transmittal and is not being
made to (nor will tenders be accepted from or on behalf of) holders of
Shares residing in any jurisdiction in which the making of the Offer
or acceptance thereof would not be in compliance with the laws
of 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
Goldman, Sachs & Co., the Dealer Managers of the
Offer, or one or more registered brokers or
dealers licensed under the laws of such
jurisdictions.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
GRIFFIN TECHNOLOGY INCORPORATED
BY
D-GT ACQUISITION, INCORPORATED
A WHOLLY OWNED SUBSIDIARY
OF
DIEBOLD, INCORPORATED
AT
$7.75 NET PER SHARE
D-GT Acquisition, Incorporated, a New York corporation (the "Purchaser")
and a wholly owned subsidiary of Diebold, Incorporated, an Ohio corporation (the
"Parent"), is offering to purchase all outstanding shares of common stock, par
value $0.05 per share (the "Shares"), of Griffin Technology Incorporated, a New
York corporation (the "Company"), at $7.75 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated October 26, 1995 (the "Offer to Purchase") and in the
related Letter of Transmittal (which together constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, NOVEMBER 27, 1995, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS
OF THE COMPANY, HAS APPROVED THE OFFER AND THE MERGER AND RECOMMENDS THAT THE
COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN IMMEDIATELY PRIOR TO THE EXPIRATION DATE (AS DEFINED
IN THE OFFER TO PURCHASE) THAT NUMBER OF SHARES REPRESENTING AT LEAST TWO-THIRDS
OF THE TOTAL NUMBER OF SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS (THE
"MINIMUM CONDITION").
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of October 20, 1995 (the "Merger Agreement"), among the Parent, the Purchaser
and the Company. The Merger Agreement provides that, among other things, the
Purchaser will make the Offer and that following the purchase of Shares pursuant
to the Offer and the satisfaction of the other conditions set forth in the
Merger Agreement and in accordance with relevant provisions of the New York
Business Corporation Law ("NYBCL"), the Purchaser will be merged with and into
the Company (the "Merger"). Following the consummation of the
<PAGE> 2
Merger, the Company will continue as the surviving corporation and will be a
wholly owned subsidiary of the Parent. At the effective time of the Merger (the
"Effective Time"), each Share issued and outstanding immediately prior to the
Effective Time (other than Shares held in the treasury of the Company or owned
by the Parent or any wholly owned subsidiary of the Parent and other than Shares
held by shareholders exercising appraisal rights pursuant to Sections 623 and
910 of the NYBCL) will be cancelled and automatically converted into the right
to receive $7.75 in cash or any higher price per Share that may be paid pursuant
to the Offer, without interest.
Pursuant to the NYBCL, the affirmative vote of holders of two-thirds of the
outstanding Shares is required to approve and adopt the Merger Agreement and the
Merger. Concurrently with the execution of the Merger Agreement, the Purchaser
entered into agreements (the "Shareholder Tender Agreements") with each director
of the Company (each a "Seller Shareholder" and, collectively, the "Seller
Shareholders"), owning, in the aggregate, 761,966 Shares (representing
approximately 30% of the Shares outstanding on October 23, 1995 on a fully
diluted basis). Pursuant to the Shareholder Tender Agreements, each Seller
Shareholder has agreed to tender and sell (and not withdraw) all Shares owned
(beneficially or of record) by such Seller Shareholder pursuant to and in
accordance with the terms of the Offer. The Shareholder Tender Agreements also
provide that the Purchaser is entitled to receive a fee from the Seller
Shareholders, under certain circumstances, in connection with certain subsequent
transactions involving the Shares.
The Offer is subject to certain conditions set forth in the Offer to
Purchase. If any such condition is not satisfied, the Purchaser may (i)
terminate the Offer and return all tendered Shares to tendering shareholders,
(ii) extend the Offer and, subject to withdrawal rights as set forth below,
retain all such Shares until the expiration of the Offer as so extended, (iii)
waive such condition and, subject to any requirement to extend the period of
time during which the Offer is open, purchase all Shares validly tendered prior
to the Expiration Date and not withdrawn or (iv) delay acceptance for payment of
or payment for Shares, subject to applicable law, until satisfaction or waiver
of the conditions to the Offer.
The Purchaser expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of such extension to National City Bank
(the "Depositary"). Any such extension will be followed as promptly as
practicable by public announcement thereof no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) tendered Shares when, as and if the
Purchaser gives oral or written notice to the Depositary of its acceptance of
the tenders of such Shares. Payment for Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at the Book-Entry Transfer Facility (as
defined in the Offer to Purchase)), a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) and any other documents required by
the Letter of Transmittal or, in case of book-entry transfer, an Agent's Message
(as defined in the Offer to Purchase).
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn at any time after December 24, 1995 unless
theretofore accepted for payment as provided in the Offer to Purchase. To be
effective, a written, telegraphic or facsimile transmission notice of withdrawal
must be timely received by the Depositary at one of its addresses set forth in
the Offer to Purchase and must specify the name of the person who tendered the
Shares to be withdrawn and the number of Shares to be withdrawn and the name of
the registered holders of the Shares, if different from that of the person who
tendered such Shares. If the Shares to be withdrawn have been delivered to the
Depositary, a signed notice of withdrawal with (except in the case of Shares
tendered by an Eligible Institution (as defined in the Offer to Purchase))
signatures guaranteed by an Eligible Institution must be submitted prior to the
release of such Shares. In addition, such notice must specify, in the case of
Shares tendered by delivery of certificates, the name of the registered holder
(if different from that of the tendering shareholder) and the serial numbers
shown on the particular certificates evidencing the Shares
2
<PAGE> 3
to be withdrawn or, in the case of Shares tendered by book-entry transfer, the
name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, is contained in the Offer to Purchase and is incorporated
herein by reference.
The Company has agreed to provide the Purchaser with the Company's
shareholder list and security position listings for the purpose of disseminating
the Offer to holders of Shares. The Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares and will be furnished to
brokers, banks and similar persons whose names, or the names of whose nominees,
appear on the shareholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Requests for copies of the Offer to Purchase, the related Letter of
Transmittal and other tender offer materials may be directed to the Information
Agent or the Dealer Managers as set forth below, and copies will be furnished
promptly at the Purchaser's expense. The Purchaser will not pay any fees or
commissions to any broker or dealer or any other person (other than the Dealer
Managers) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, New York 10005
BANKS AND BROKERS CALL COLLECT (212) 269-5550
ALL OTHERS CALL TOLL FREE (800) 549-6864
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(800) 323-5678 (TOLL FREE)
October 26, 1995
3
<PAGE> 1
================================================================================
AGREEMENT AND PLAN OF MERGER
AMONG
GRIFFIN TECHNOLOGY INCORPORATED,
DIEBOLD, INCORPORATED
AND
D-GT ACQUISITION, INCORPORATED
Dated as of October 20, 1995
================================================================================
<PAGE> 2
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
(Not Part of the Agreement)
<TABLE>
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<S> <C>
Article I - THE TENDER OFFER.................................................... 2
1.01. The Offer....................................................... 2
1.02. Company Action.................................................. 6
1.03. Board of Directors and Committees;
Section 14(f)................................................. 9
ARTICLE II - THE MERGER......................................................... 11
2.01. The Merger...................................................... 11
2.02. Effective Time.................................................. 12
2.03. Certificate of Incorporation.................................... 12
2.04. By Laws......................................................... 12
2.05. Directors and Officers.......................................... 13
2.06. Further Assurances.............................................. 13
2.07. Shareholders' Meeting........................................... 14
ARTICLE III - CONVERSION OR CANCELLATION OF SHARES;
STOCK RIGHTS...................................................... 17
3.01. Conversion or Cancellation of Shares............................ 17
3.02. Exchange of Certificates; Paying Agent.......................... 18
3.03. Dissenters' Rights.............................................. 21
3.04. Transfer of Shares After the Effective
Time.......................................................... 22
3.05. Company Stock Rights............................................ 22
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE
COMPANY............................................................ 24
4.01. Organization; Qualification..................................... 24
4.02. The Company's Capitalization.................................... 25
4.03. Company Equity Investments...................................... 25
4.04. Authority Relative to this Agreement............................ 26
4.05. Consents and Approvals: No Violation............................ 27
4.06. SEC Reports: Financial Statements............................... 28
4.07. Proxy Statement; Offer Documents................................ 29
4.08. Undisclosed Liabilities......................................... 30
4.09. Absence of Certain Changes or Events............................ 31
4.10. Title, Etc. .................................................... 31
4.11. Patents, Trademarks, Etc. ...................................... 33
4.12. Insurance....................................................... 34
4.13. Employee Benefit Plans.......................................... 34
4.14. Legal Proceedings, Etc. ........................................ 36
4.15. Taxes........................................................... 36
4.16. Material Agreements............................................. 38
</TABLE>
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<PAGE> 3
<TABLE>
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<S> <C>
4.17. Compliance with Law............................................. 39
4.18. Insider Interests............................................... 39
4.19. Accounts Receivable............................................. 39
4.20. Officers, Directors and Employees............................... 40
4.21. Environmental Protection........................................ 40
4.22. Brokers and Finders............................................. 42
4.23. No Other Representations or Warranties.......................... 42
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE PARENT
AND THE PURCHASER................................................... 43
5.01. Corporation Organization........................................ 43
5.02. Authorized Capital.............................................. 43
5.03. Corporation Authority........................................... 43
5.04. No Prior Activities............................................. 44
5.05. No Financing Contingency........................................ 45
5.06. Governmental Filings; No Violations............................. 45
5.07. Brokers and Finders............................................. 46
5.08. Offer Documents; Proxy Statement;
Other Information ............................................ 46
5.09. No Other Representations or Warranties ......................... 47
ARTICLE VI - COVENANTS OF THE PARTIES........................................... 48
6.01. Conduct of Business of the Company.............................. 48
6.02. Notification of Certain Matters................................. 51
6.03. Access to Information........................................... 52
6.04. Further Information............................................. 53
6.05. Further Assurances.............................................. 54
6.06. Interim Financial Statements.................................... 54
6.07. Fairness Opinion................................................ 55
6.08. Best Efforts.................................................... 55
6.09. Filings......................................................... 57
6.10. Public Announcements............................................ 58
6.11. Indemnity; D&O Insurance........................................ 59
6.12. Company Benefit Plans........................................... 62
6.13. Other Potential Bidders......................................... 63
6.14. Employees of the Company........................................ 65
ARTICLE VII - CONDITIONS TO THE MERGER.......................................... 66
7.01. Conditions to Each Party's
Obligation to Effect the Merger............................... 66
7.02. Conditions to the Obligations of
the Parent and the Purchaser to
Effect the Merger............................................. 67
7.03. Conditions to the Obligations of the
Company to Effect the Merger.................................. 67
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
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<S> <C>
ARTICLE VIII - CLOSING.......................................................... 67
8.01. Time and Place................................................... 67
8.02. Filings at the Closing........................................... 68
ARTICLE IX - TERMINATION; AMENDMENT; WAIVER..................................... 68
9.01. Termination...................................................... 68
9.02. Effect of Termination............................................ 71
9.03. Fees and Expenses................................................ 71
ARTICLE X - MISCELLANEOUS....................................................... 73
10.01. Survival of Representations, Warranties,
Covenants and Agreements....................................... 73
10.02. Amendment and Modification....................................... 74
10.03. Waiver of Compliance; Consents................................... 74
10.04. Counterparts..................................................... 75
10.05. Governing Law.................................................... 75
10.06. Notices.......................................................... 75
10.07. Entire Agreement, Assignment, Etc. .............................. 77
10.08. Validity......................................................... 78
10.09. Headings......................................................... 78
10.10. Specific Performance............................................. 78
ANNEX A Certain Conditions to Offer
ANNEX B Form of Shareholder Tender Agreement
</TABLE>
- iii -
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this
"Agreement"), dated as of October 20, 1995, among Griffin Technology
Incorporated, a New York corporation (the "Company"), D-GT Acquisition,
Incorporated, a New York corporation (the "Purchaser"), and Diebold,
Incorporated, an Ohio corporation (the "Parent").
WHEREAS, the Board of Directors of the Company has determined
that it is in the best interests of its shareholders for the Purchaser to
acquire the Company upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Company, the Parent and the Purchaser desire to
make certain representations, warranties and agreements in connection with this
Agreement;
WHEREAS, in furtherance of such acquisition, the Parent
proposes to cause the Purchaser to make a tender offer to purchase all of the
issued and outstanding shares of common stock of the Company, par value $0.05
per share (the "Common Stock"), upon the terms and subject to the conditions of
this Agreement, and the Board of Directors of the Company has approved the offer
and determined to recommend that the Company's shareholders accept the offer;
and
WHEREAS, to complete such acquisition, the respective Boards
of Directors of the Parent, the Purchaser and the Company, and the Parent acting
as the sole shareholder of the Purchaser, have approved the offer and the merger
of the Purchaser with and into the Company upon the terms and subject to the
conditions of
<PAGE> 6
- 2 -
this Agreement, whereby each issued and outstanding share of Common Stock not
owned directly or indirectly by the Parent or the Company, except shares of
Common Stock held by persons who object to such merger and demand payment of the
value of their shares of Common Stock, will be converted into the right to
receive the same price per share of Common Stock paid pursuant to the offer;
NOW, THEREFORE, in consideration of the representations,
warranties and agreements herein contained, the parties hereto hereby agree as
follows:
ARTICLE I
THE TENDER OFFER
1.01. The Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with Article IX and none of the events or
conditions set forth in Annex A shall have occurred and be existing, then, not
later than the fifth business day after the date of this Agreement, the
Purchaser shall, subject to the provisions of this Agreement, commence a tender
offer (the "Offer") for all of the outstanding shares of Common Stock (the
"Shares"), at a price of $7.75 per Share, net to the seller in cash. The
Purchaser shall accept for payment and pay for all Shares that have been validly
tendered and not withdrawn pursuant to the Offer at the earliest time following
expiration of the Offer that all conditions to the Offer shall have been
satisfied or waived by the Purchaser. The obligation of the Purchaser to
commence the Offer shall be subject to the conditions set forth in Annex A
hereto and the obligation of the Purchaser to accept for payment, purchase and
pay for Shares tendered pursuant to the
<PAGE> 7
-3-
Offer shall be subject to such conditions, including the condition that a number
of Shares representing not less than two-thirds of the Shares then outstanding
on a fully diluted basis shall have been validly tendered and not withdrawn
prior to the expiration date of the Offer (the "Minimum Condition"). The
Purchaser expressly reserves the right to increase the price per Share payable
in the Offer or to make any other changes in the terms and conditions of the
Offer; provided, however, that, unless previously approved by the Company in
writing, no change may be made which decreases the price per Share payable in
the Offer, which changes the form of consideration to be paid in the Offer,
which reduces the maximum number of Shares to be purchased in the Offer, which
imposes conditions to the Offer in addition to those set forth in Annex A hereto
or which broadens the scope of such conditions. Notwithstanding the foregoing,
the Purchaser may, without the consent of the Company, (a) extend the Offer if,
at the scheduled expiration date of the Offer, any of the conditions to the
Purchaser's obligation to purchase Shares shall not be satisfied until such time
as such conditions are satisfied, but in no event shall any such extension
continue the Offer beyond the ninetieth day following the commencement of the
Offer, (b) extend the Offer for a period of not more than 15 business days
beyond the latest expiration date that would otherwise be permitted under clause
(a) of this sentence if, on the date of such extension, more than two-thirds but
less than 90 percent of the outstanding Shares has been validly tendered and not
properly withdrawn pursuant to the Offer, or (c) extend the Offer for any reason
for
<PAGE> 8
- 4 -
a period of not more than 10 calendar days beyond the latest expiration date
that would otherwise be permitted under clauses (a) or (b) of this sentence. It
is agreed that the conditions set forth in Annex A are for the sole benefit of
the Parent and the Purchaser and may be asserted by the Parent or the Purchaser
regardless of the circumstances giving rise to any such condition (including any
action or inaction by the Purchaser, unless any such action or inaction by the
Purchaser would constitute a breach by the Purchaser of any of its covenants
under this Agreement) or may be waived by the Parent or the Purchaser, in whole
or in part at any time and from time to time, in its sole discretion. The
failure by the 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. Any reasonable determination (which shall be made in good
faith) by the Parent or the Purchaser with respect to any of the foregoing
conditions (including, without limitation, the satisfaction of such conditions)
shall be final and binding on the parties. The Company agrees that no Shares
held by the Company will be tendered in the Offer.
(b) As promptly as reasonably practicable following execution
of this Agreement, the Parent and the Purchaser shall file with the Securities
and Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1
with respect to the Offer, which shall contain an offer to purchase and related
letter of transmittal and summary advertisement (such Schedule 14D-1 and
<PAGE> 9
- 5 -
the documents therein pursuant to which the Offer will be made, together with
any supplements or amendments thereto, the "Offer Documents"). The Offer
Documents shall comply as to form in all material respects with the requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations promulgated thereunder and, on the date filed with the SEC
and on the date first published, sent or given to the holders of Shares, 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 Parent or the Purchaser
with respect to information supplied by the Company specifically for inclusion
in the Offer Documents. Each of the Parent, the Purchaser and the Company agrees
promptly to correct any information supplied by it specifically for inclusion in
the Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect, and each of the Parent and the
Purchaser further agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
Federal securities laws. The Parent and the Purchaser agree to provide the
Company and its counsel in writing with any comments the Parent, the Purchaser
or their counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
<PAGE> 10
- 6 -
1.02. Company Action. (a) The Company hereby approves of and
consents to the Offer and represents and warrants that the Board of Directors of
the Company (the "Board"), at a meeting duly called and held, has unanimously
adopted resolutions (i) determining that this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, are fair to, and in the
best interests of, the shareholders of the Company, (ii) approving and adopting
this Agreement and the transactions contemplated hereby, including the Offer,
the Merger (as defined in Section 2.01), and the Shareholders Tender Agreements
of even date between the Purchaser and each of the Directors of the Company (the
"Shareholder Tender Agreements") and the transactions contemplated thereby, in
all respects and that such approval constitutes approval of the Offer, this
Agreement, the Merger and the Shareholder Tender Agreements, and the
transactions contemplated hereby and thereby, for purposes of Sections 902 and
912 of the New York Business Corporation Law (the "BCL") and similar provisions
of any other similar state statutes that might be deemed applicable to the
transactions contemplated hereby, and (iii) recommending that the shareholders
of the Company accept the Offer, tender their Shares thereunder to the Purchaser
and approve and adopt this Agreement and the Merger; provided, however, that
such recommendation may be withdrawn, modified or amended to the extent that the
Board, by a majority vote, determines in its good faith judgment, based as to
legal matters on the written opinion of legal counsel, that the Board is
required to do so for the proper discharge of its fiduciary duties. The
foregoing shall
<PAGE> 11
- 7 -
constitute a good faith proposal of the Parent (and the Purchaser) to acquire
the Shares, and acceptance and approval of such proposal by the Board, in
accordance with Section 912 of the BCL.
(b) The Company has been advised by each of its executive
officers who as of the date hereof is aware of the transactions contemplated
hereby and each of its Directors that each such person intends to tender
pursuant to the Offer all Shares owned by such person. The Company represents
that the Board has received the oral opinion of Donaldson, Lufkin & Jenrette,
Incorporated ("DLJ") that the proposed consideration to be received by holders
of Shares pursuant to the Offer and the Merger is fair to such holders from a
financial point of view and that DLJ is prepared to deliver its written opinion
that the proposed consideration to be received by holders of Shares pursuant to
the Offer and Merger is fair to such holders from financial point of view within
three days from the date of this Agreement.
(c) On the date the Offer Documents are filed with the SEC,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9"), containing the recommendation described in
Section 1.02(a) and shall mail the Schedule 14D-9 to the shareholders of the
Company. The Schedule 14D-9 shall comply in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder and on the date filed with the SEC and on the date first published,
sent or
<PAGE> 12
- 8 -
given to the Company's shareholders, and shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied in
writing by the Parent or the Purchaser specifically for inclusion or
incorporation by reference in the Schedule 14D-9. Each of the Company, the
Parent and the Purchaser agrees promptly to correct any information provided by
it for the use in the Schedule 14D-9 if and to the extent that such information
shall have become false or misleading in any material respect, and the Company
further agrees to take all steps necessary to amend or supplement the Schedule
14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed
with the SEC and disseminated to the Company's shareholders, in each case as and
to the extent required by applicable Federal securities laws. The Parent and its
counsel shall be given a reasonable opportunity to review and comment upon the
Schedule 14D-9 and all amendments and supplements thereto prior to their filing
with the SEC or dissemination to shareholders of the Company. The Company agrees
to provide the Parent and its counsel in writing with any comments the Company
or its counsel may receive from the SEC or its Staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments.
(d) In connection with the Offer, the Company will, and will
cause its transfer agent (the "Transfer Agent") to, furnish promptly to the
Parent and the Purchaser mailing labels containing
<PAGE> 13
- 9 -
the names and addresses of all record holders of Shares as of a recent date and
of those persons becoming record holders after such date, together with copies
of all lists of shareholders and security position listing and computer files
and all other information in the Company's possession and control regarding the
beneficial ownership of Shares. The Company shall promptly furnish the Parent
and the Purchaser with such additional information (including, but not limited
to, updated lists of holders of Shares and their addresses, mailing labels and
security position listings and computer files) and such other assistance as the
Parent and the Purchaser or their agents may reasonably request in communicating
the Offer to the record and beneficial holders of Shares.
1.03. Board of Directors and Committees; Section 14(f). (a)
Promptly upon acceptance for payment of, and payment for, Shares pursuant to the
Offer and from time to time thereafter, the Purchaser shall be entitled to
designate up to such number of directors, rounded up to the next whole number,
on the Board as will give the Purchaser representation on the Board equal to the
product of the number of directors on the Board (giving effect to any increase
in the number of directors pursuant to this Section 1.03) and the percentage
that such number of Shares beneficially owned by the Purchaser and its
affiliates bears to the total number of outstanding Shares, and the Company
shall, at such time, cause the Purchaser's designees to be elected or appointed,
upon request by the Purchaser. In connection with the foregoing, the Company
shall promptly, as reasonably agreed by the
<PAGE> 14
-10-
Parent and the Company, either increase the size of the Board and/or secure the
resignation of such number of its current directors as is necessary to enable
the Purchaser's designees to be elected or appointed to the Board and to cause
the Purchaser's designees to be so elected or appointed. At such times and,
subject to the last sentence of this Section 1.03(a), to the extent requested by
the Parent, the Company will use its best efforts to cause persons designated by
the Purchaser to constitute the same percentage of each committee of the Board
(other than any committee of the Board established to take action under this
Agreement) as the Purchaser's designees constitute on the Board. Notwithstanding
the foregoing, the Company, the Parent and the Purchaser shall each use its best
efforts to ensure that three of the members of the Board as of the date hereof
who are not officers, employees or affiliates of the Company (the "Independent
Directors") shall remain members of the Board until the Effective Time (as
defined in Section 2.02 hereof) and if the number of the Independent Directors
shall be reduced below three for any reason, any remaining Independent
Director(s) shall be entitled to designate independent persons to fill such
vacancies and such persons shall be deemed to be Independent Directors; or, if
no Independent Directors then remain, the other directors shall designate three
independent persons to fill such vacancies, and such persons shall be deemed to
be Independent Directors.
(b) The Company's obligation to appoint designees to the Board
shall be subject to Section 14(f) of the Exchange Act, and Rule 14f-1
promulgated thereunder. The Company shall promptly
<PAGE> 15
- 11 -
take all action required pursuant to such Section and Rule in order to fulfill
its obligations under this Section 1.03, including mailing to its shareholders
with the Schedule 14D-9 such information as is required under such Section and
Rule in order to fulfill its obligations under this Section 1.03. The Purchaser
will supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors and
affiliates required by such Section and Rule.
(c) Following the election or appointment of the Purchaser's
designees pursuant to this Section 1.03, any amendment of this Agreement, any
termination of this Agreement by the Company, any recommendation made by the
Board pursuant to Section 2.07(a)(ii) of this Agreement, any actions taken by
the Board pursuant to Section 6.13 of this Agreement, any extension by the
Company of the time for the performance of any of the obligations or other acts
of the Purchaser or the Parent hereunder or waiver of any of the Company's
rights or waiver by the Company of any condition hereunder, will require the
concurrence of a majority of such directors.
ARTICLE II
THE MERGER
2.01. The Merger. Subject to the terms and conditions
of this Agreement, at the Effective Time, the Parent shall cause
the Purchaser to merge (the "Merger") with and into the Company and the separate
corporate existence of the Purchaser shall thereupon cease. The Company shall be
the surviving corporation
<PAGE> 16
- 12 -
in the Merger (the Purchaser and the Company are sometimes hereinafter referred
to as the "Constituent Corporations" and the Company is sometimes hereinafter
referred to as the "Surviving Corporation") and shall, following the Merger, be
governed by the laws of the State of New York, and the separate corporate
existence of the Company, with all its rights, privileges, immunities, powers
and franchises, of a public as well as of a private nature, shall continue
unaffected by the Merger. From and after the Effective Time, the Merger shall
have the effects specified in the BCL.
2.02. Effective Time. At the Closing contemplated in Section
8.01, the Company and the Parent will cause a Certificate of Merger (the "New
York Certificate of Merger") to be executed and filed by the Company and the
Purchaser with the Secretary of State of the State of New York as provided in
the BCL. The Merger shall become effective as of the date and at the time the
New York Certificate of Merger is duly filed with the Secretary of State of the
State of New York, and such time is hereinafter referred to as the "Effective
Time."
2.03. Certificate of Incorporation. The Restated Certificate
of Incorporation of the Company, as amended (the "Restated Certificate"), in
effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation, until duly amended in accordance
with the terms thereof and the BCL.
2.04. By-Laws. The By-Laws of the Company as in effect
immediately prior to the Effective Time shall be the By-Laws of
<PAGE> 17
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the Surviving Corporation, until duly amended in accordance with the terms
thereof and the BCL.
2.05. Directors and Officers. 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 Restated Certificate and By-Laws of
the Surviving Corporation, until their respective successors shall be duly
elected or appointed and qualified. The officers of the Company immediately
prior to the Effective Time shall be the initial officers of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified.
2.06. Further Assurances. If at any time after the
Effective Time the Surviving Corporation shall consider or be
advised that any deeds, bills of sale, assignments or assurances
or any other acts or things are necessary, desirable or proper:
(a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation, its right, title or interest in, to or under
any of the rights, privileges, powers, franchises, properties or assets
of either of the Constituent Corporations, or
(b) otherwise to carry out the purposes of this Agreement,
the proper officers and directors of the Surviving Corporation are hereby
authorized on behalf of the respective Constituent Corporations to execute and
deliver, in the name and on behalf of
<PAGE> 18
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the respective Constituent Corporations, all such deeds, bills of sale,
assignments and assurances and do, in the name and on behalf of the Constituent
Corporations, all such other acts and things necessary, desirable or proper to
vest, perfect or confirm its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of the Constituent
Corporations and otherwise to carry out the purposes of this Agreement.
2.07. Shareholders' Meeting. (a) The Company, acting through
the Board, shall, at the Parent's request and in accordance with applicable law:
(i) duly call, give notice of, convene and hold an
annual or special meeting of its shareholders (the "Shareholders'
Meeting"), to be held as soon as practicable (provided that the
Purchaser shall have accepted for payment and paid for Shares pursuant
to the Offer) for the purpose of approving and adopting this Agreement,
the Merger and the transactions contemplated hereby and thereby;
(ii) subject to the provisions of Section 1.02(a)
(iii), the Board will include in the Proxy Statement (as defined in
Section 4.07) the recommendation of the Board that shareholders of the
Company vote in favor of the approval and adoption of this Agreement
and the Merger and the other transactions contemplated hereby and
thereby and that the cash consideration to be received by the
shareholders of the Company pursuant to the Merger is fair to such
shareholders; and
<PAGE> 19
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(iii) will, as soon as practicable after the Parent's
request, prepare and file a preliminary Proxy Statement with the SEC
and, after consultation with the Parent and the Purchaser, respond
promptly to any comments made by the SEC with respect to the Proxy
Statement and any preliminary version thereof and cause the Proxy
Statement to be mailed to its shareholders at the earliest practicable
time after responding to all such comments to the satisfaction of the
staff of the SEC and to obtain the necessary approvals by its
shareholders of this Agreement.
Without limiting the generality of the foregoing, the Company agrees that its
obligations pursuant to this Section 2.07(a) shall not be affected by either the
commencement, public proposal, public disclosure or other communication to the
Company of any offer to acquire some or all of the Shares or all or any
substantial portion of the assets of the Company or any change in the
recommendation of the Board.
(b) The Company, the Parent and the Purchaser, as the case may
be, shall promptly prepare and file any other filings required under the
Exchange Act or any other Federal or state securities or corporate laws relating
to the Merger and the transactions contemplated herein (the "Other Filings").
Each of the parties hereto shall notify the other parties hereto promptly of the
receipt by it of any comments from the SEC or its staff and of any request of
the SEC for amendments or supplements to the Proxy Statement or by the SEC or
any other governmental officials with respect to any Other Filings or for
additional information
<PAGE> 20
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and will supply the other parties hereto with copies of all correspondence
between it and its representatives, on the one hand, and the SEC or the members
of its staff or any other governmental officials, on the other hand, with
respect to the Proxy Statement, any Other Filings or the Merger. The Company,
the Parent and the Purchaser each shall use its best efforts to obtain and
furnish the information required to be included in the Proxy Statement, any
Other Filings or the Merger. If at any time prior to the time of approval of
this Agreement by the Company's shareholders there shall occur any event that
should be set forth in an amendment or supplement to the Proxy Statement, the
Company shall promptly prepare and mail to its shareholders such amendment or
supplement. The Company shall not mail the Proxy Statement or, except as
required by the Exchange Act or the rules and regulations promulgated
thereunder, any amendment or supplement thereto, to the Company's shareholders
unless the Company has first obtained the consent of the Parent to such mailing.
(c) At the meeting of shareholders, the Parent, the Purchaser
and their affiliates will vote all Shares owned by them in favor of approval and
adoption of this Agreement, the Merger, and the transactions contemplated hereby
and thereby.
(d) Notwithstanding the foregoing, in the event that the
Purchaser shall acquire at least 90 percent of then outstanding Shares, the
parties hereto agree, at the request of the Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective, in accordance with
<PAGE> 21
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Section 905 or 907 of the BCL, as soon as reasonably practicable after such
acquisition and satisfaction or waiver of the conditions of Article VII, without
a meeting of the shareholders of the Company.
ARTICLE III
CONVERSION OR CANCELLATION OF SHARES; STOCK RIGHTS
3.01. Conversion or Cancellation of Shares. At the Effective
Time, by virtue of the Merger and without any action on the part of the holders
thereof:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned by the Parent or any wholly-owned
subsidiary of the Parent (collectively, the "Parent Companies"), Shares held by
shareholders exercising appraisal rights pursuant to Sections 623 and 910 of the
BCL (the "Dissenting Shareholders"), and any Shares held in the treasury of the
Company) shall be converted into and represent the right to receive, without
interest, an amount in cash equal to $7.75 net or such greater amount per
share which may be paid pursuant to the Offer as it may be amended (the "Merger
Consideration") upon surrender of the certificate or certificates that,
immediately prior to the Effective Time, represented issued and outstanding
Shares (the "Certificates"). As of the Effective Time, all such
Shares shall no longer be outstanding, shall be automatically cancelled and
shall cease to exist, and each holder of a Certificate representing any such
Shares shall thereafter cease to have any rights with respect to such Shares,
except the right to receive the Merger Consideration without interest for such
Shares
<PAGE> 22
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upon the surrender of such Certificate or Certificates in accordance with
Section 3.02.
(b) Each Share issued and outstanding immediately prior to the
Effective Time and owned by any of the Parent Companies, and each Share issued
and held in the Company's treasury immediately prior to the Effective Time shall
no longer be outstanding, shall be cancelled without payment of any
consideration therefor and shall cease to exist, and each holder of a
Certificate representing any such Shares shall thereafter cease to have any
rights with respect to such Shares.
(c) Each share of Common Stock, par value $1.00 per share, of
the Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and become one fully-paid and non-assessable share of
Common Stock, par value $0.05 per share, of the Surviving Corporation.
3.02. Exchange of Certificates; Paying Agent. (a) Prior to the
Closing, the Parent shall select a bank or trust company to act as paying agent
(the "Paying Agent") for the payment of the cash consideration specified in
Section 3.01 upon surrender of Certificates converted into the right to receive
cash pursuant to the Merger. From time to time at and after the Effective Time,
the Parent shall make available, or cause the Purchaser or the Surviving
Corporation to make available, to the Paying Agent immediately available funds
in amounts and at times necessary for the payment of the Merger Consideration
(the "Funds") upon surrender of Certificates pursuant to Section 3.01,
<PAGE> 23
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it being understood that any and all interest earned on the Funds shall be paid
over by the Paying Agent as the Parent shall direct.
(b) Promptly after the Effective Time, the Paying Agent shall
mail to each person who was, at the Effective Time, a holder of record of a
Certificate or Certificates, other than the Company or any of the Parent
Companies, a letter of transmittal and instructions for use in effecting the
surrender, in exchange for payment in cash therefor, of the Certificates. The
letter of transmittal shall specify that delivery shall be effected, and risk of
loss and title shall pass, only upon proper delivery to and receipt of such
Certificates by the Paying Agent and shall be in such form and have such
provisions as the Parent shall reasonably specify. Upon surrender to the Paying
Agent of such Certificates, together with the letter of transmittal, duly
executed and completed in accordance with the instructions thereto and such
other documents as may be reasonably required by the Paying Agent, the Paying
Agent shall promptly pay to the persons entitled thereto, out of the Funds, a
check in the amount to which such persons are entitled pursuant to Section
3.01(a), after giving effect to any required tax withholdings, and such
Certificate shall forthwith be cancelled. No interest will be paid or will
accrue on the amount payable upon the surrender of any such Certificates. If
payment is to be made to a person other than the registered holder of the
Certificates surrendered, it shall be a condition of such payment that the
Certificates so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such payment shall pay
<PAGE> 24
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any transfer or other taxes required by reason of the payment to a person other
than the registered holder of the Certificates surrendered or establish to the
satisfaction of the Surviving Corporation or the Paying Agent that such tax has
been paid or is not applicable. Until surrendered as contemplated by this
Section 3.02, each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the amount of
cash, without interest, into which the Shares theretofore represented by such
Certificate shall have been converted pursuant to Section 3.01. No interest
shall accrue or be paid on any portion of the Merger Consideration.
(c) One hundred eighty days following the Effective Time, the
Surviving Corporation shall be entitled to cause the Paying Agent to deliver to
it any Funds (including any interest, dividends, earnings or distributions
received with respect thereto which shall be paid as directed by the Parent)
made available to the Paying Agent by the Parent which have not been disbursed,
and thereafter holders of Certificates who have not theretofore complied with
the instructions for exchanging their Certificates shall be entitled to look
only to the Surviving Corporation for payment as general creditors thereof with
respect to the cash payable upon due surrender of their Certificates.
(d) Except as otherwise provided herein, the Surviving
Corporation shall pay all charges and expenses, including those of the Paying
Agent, in connection with the exchange of the Merger Consideration for
Certificates.
<PAGE> 25
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(e) Notwithstanding anything to the contrary in this Section
3.02, none of the Paying Agent, the Parent, the Company, the Surviving
Corporation or the Purchaser shall be liable to a holder of a Certificate
formerly representing Shares for any amount properly delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If Certificates are not surrendered prior to two years after the Effective Time
(or immediately prior to such earlier date on which any payment pursuant to this
Article III would otherwise escheat or become the property of any Federal, state
or local government agency or authority, court or commission), unclaimed funds
payable with respect to such Certificates shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto.
3.03. Dissenters' Rights. Notwithstanding the provisions of
Section 3.01 or any other provision of this Agreement to the contrary, Shares
that have not been voted in favor of the approval and adoption of the Merger and
with respect to which dissenters' rights shall have been demanded and perfected
in accordance with Sections 623 and 910 of the BCL (the "Dissenting Shares") and
not withdrawn shall not be converted into the right to receive cash at or after
the Effective Time, but such Shares shall become the right to receive such
consideration as may be determined to be due to holders of Dissenting Shares
pursuant to the laws of the State of New York unless and until the holder of
such Dissenting Shares withdraws his or her demand for such
<PAGE> 26
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appraisal or becomes ineligible for such appraisal. If a holder of Dissenting
Shares shall withdraw his or her demand for such appraisal or shall become
ineligible for such appraisal (through failure to perfect or otherwise), then,
as of the Effective Time or the occurrence of such event, whichever last occurs,
such holder's Dissenting Shares shall automatically be converted into and
represent the right to receive the Merger Consideration, without interest, as
provided in Section 3.01(a). The Company shall give the Parent (i) prompt notice
of any demands for appraisal of Shares received by the Company and (ii) the
opportunity to participate in and direct all negotiations and proceedings with
respect to any such demands. The Company shall not, without the prior written
consent of the Parent, make any payment with respect to, or settle, offer to
settle or otherwise negotiate, any such demands.
3.04. Transfer of Shares After the Effective Time. No
transfers of Shares shall be made in the stock transfer books of the Surviving
Corporation at or after the Effective Time. If, after the Effective Time,
Certificates formerly representing Shares are presented to the Surviving
Corporation, they shall be cancelled and exchanged for the Merger Consideration
set forth in Section 3.01.
3.05. Company Stock Rights. (a) With respect to options to
purchase shares of Common Stock of the Company (the "Options") outstanding
pursuant to the Griffin Technology Incorporated 1988 Stock Option Plan (the
"Stock Option Plan"), the Board (or if appropriate, any committee administering
the Stock
<PAGE> 27
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Option Plan) shall, as soon as practicable after the date hereof, adopt such
resolutions or take such other actions as may be required to provide that each
outstanding Option shall be accelerated so as to be fully exercisable prior to
the Effective Time, subject to the condition that the holder of each such Option
shall surrender all of such holder's outstanding and unexercised Options
(whether or not presently exercisable) in consideration of the payment at the
Effective Time of an amount of cash per share subject to each such Option equal
to the difference between the exercise price of such Option and the Merger
Consideration. Prior to the Effective Time, the Company shall use its best
efforts to procure the surrender of all outstanding Options. As to any Option
not so surrendered, the Company shall use its best efforts to obtain, prior to
the Effective Time, the consent of the holder of the Option to acquire upon
payment of the exercise price an amount of cash equal to the Merger
Consideration in lieu of each Share formerly covered thereby.
(b) With respect to outstanding options (the "Purchase Plan
Options", together with the Options, the "Company Stock Rights") to purchase
shares of the Common Stock of the Company pursuant to the Griffin Technology
Incorporated 1986 Employee Stock Purchase Plan (the "Stock Purchase Plan"), the
Company shall take all action necessary prior to the Effective Time to obtain
the agreement of eligible employees under the Stock Purchase Plan to the
cancellation of their subscription agreements thereunder in consideration of
the payment at the Effective Time of an amount of cash per share covered by
any such subscription agreement equal to
<PAGE> 28
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the sum of (i) the difference between the "Purchase Price", as defined in the
Stock Purchase Plan, of each share covered by such subscription agreement and
the consideration per share described in Section 1.01(a) hereof, plus (ii) the
aggregate amount previously deducted from such eligible employee's pay pursuant
to the Stock Purchase Plan with respect to such subscription agreement. The
rights of any such eligible employee under the Stock Purchase Plan who does not
agree to the cancellation of his subscription agreement as described in this
Section 3.05(b) shall be only as set forth in the Stock Purchase Plan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Parent and
the Purchaser that:
4.01. Organization; Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York, and has all requisite corporate power and authority to
own, lease and operate its properties and carry on its business as now being
conducted. The Company is duly qualified to do business and is in good standing
in each jurisdiction in which the nature of the Company's business or the
location of its properties makes such qualification necessary, except for any
such failure to qualify or be in good standing as shall not have a Material
Adverse Effect on the Company. The Company Disclosure Letter (as defined in
Section 4.05) identifies, and the Company has heretofore made available to the
Parent, complete and correct copies of the
<PAGE> 29
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Restated Certificate and By-Laws of the Company, as currently in effect.
4.02. The Company's Capitalization. The authorized capital
stock of the Company consists solely of six million Shares. As of the close of
business on September 28, 1995, there were 2,384,707 shares of Common Stock
issued and outstanding and no Shares held in the Company's treasury. All
outstanding Shares have been duly authorized and validly issued, and, except as
provided in Section 630 of the BCL, are fully paid, nonassessable and were
issued free of preemptive rights. Except for the Company Stock Rights described
in Section 3.05 hereof and except as set forth on the Company Disclosure Letter
there are not now, and at the Effective Time there will not be, any
subscriptions, options, warrants, calls, rights, agreements or commitments
relating to the issuance, sale, delivery or transfer by the Company (including
any right of conversion or exchange under any outstanding security or other
instrument) of its Shares. There are no outstanding contractual obligations of
the Company to repurchase, redeem or otherwise acquire any outstanding Shares.
The Company Disclosure Letter contains a complete and accurate list of all
holders of Options, Purchase Plan Options and any other options or rights of any
kind to purchase or acquire shares of the Common Stock of the Company, together
with the number of such options and the terms of such options held by each such
holder.
4.03. Company Equity Investments. Except as set forth on the
Company Disclosure Letter, the Company does not own, directly or indirectly, or
have the right to acquire, any equity
<PAGE> 30
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security of another entity and has not made any loan or advance to any other
entity.
4.04. Authority Relative to this Agreement. The Company has
full corporate power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly and validly adopted by the Board, and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board and,
except for the approval of the Merger by the holders of at least two-thirds of
the outstanding Shares in accordance with the BCL, no other corporate actions on
the part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby, including the acquisition of
Shares pursuant to the Offer and the Merger. The Company has taken all actions
necessary to render Section 912 of the BCL to be inapplicable to such
transactions and the transactions contemplated by the Shareholder Tender
Agreements. This Agreement has been duly and validly executed and delivered by
the Company and, assuming due authorization, execution and delivery by the
Parent and the Purchaser, constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
to the extent that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting the enforcement
of creditors' rights generally as at the time in effect and by general
principles of equity, regardless of whether
<PAGE> 31
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such enforceability is considered in a proceeding in equity or at law.
4.05. Consents and Approvals; No Violation. Except as set
forth on the Company Disclosure Letter delivered to the Company as of the date
of this Agreement (the "Company Disclosure Letter"), and except for any required
approval of the Merger by the shareholders of the Company and the filing of the
New York Certificate of Merger in accordance with the BCL, neither the
execution, delivery and performance of this Agreement by the Company nor the
consummation by it of the transactions contemplated hereby will (i) conflict
with or result in any breach of any provision of the Restated Certificate or
By-Laws of the Company, (ii) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority, except (A) in connection with the Hart-Scott-Rodino Antitrust of
1976, as amended (the "HSR Act"), (B) where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not have a Material Adverse Effect, and (C) for any requirements which became
applicable to the Company as a result of the specific regulatory status of the
Parent or the Purchaser or as a result of any other facts that specifically
relate to the business or activities in which the Parent or the Purchaser is
or proposes to be engaged; (iii) constitute a breach or result in a default
under, or give rise to any right of termination, amendment, cancellation or
acceleration under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture,
<PAGE> 32
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license, contract, agreement or other instrument or obligation of any kind to
which the Company is a party or by which the Company or any of its assets may be
bound, except for any such breach, default or right as to which requisite
waivers or consents have been obtained or which, in the aggregate, would not
have a Material Adverse Effect; or (iv) assuming compliance with the BCL and the
HSR Act, violate any order, writ, injunction, judgment, decree, law, statute,
rule, regulation or governmental permit or license applicable to the Company or
any of its assets, which violation would have a Material Adverse Effect.
For purposes of this Agreement, "Material Adverse Effect"
means a material adverse effect on the business, assets, prospects, financial
condition or results of operation of the Company or on the ability of the
Company to consummate the transactions contemplated by this Agreement.
4.06. SEC Reports; Financial Statements. The Company has filed
all required forms, reports and documents with the SEC since January 1, 1990
(collectively, the "SEC Reports"), each of which has complied in all material
respects with all applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the Exchange Act, each as in effect on the
dates so filed. None of such forms, reports or documents, including, without
limitation, any financial statements or schedules included or incorporated by
reference therein, contained, when filed, any untrue statement of a material
fact or omitted to state a material fact required to be stated or incorporated
by reference therein or necessary in order to make
<PAGE> 33
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the statements therein, in light of the circumstances under which they were
made, not misleading. The Company has heretofore made available or promptly will
make available to the Parent a complete and correct copy of any amendment,
documents or other instruments which previously had been filed by the Company
with the SEC pursuant to the Exchange Act. The Company has previously furnished
to the Parent audited balance sheets of the Company as of June 30th in each of
the years 1990 through 1995, and the related audited statements of income,
statements of cash flow, changes in shareholders' equity and changes in
financial position of the Company for the fiscal years then ended, together with
the respective reports thereon of Price Waterhouse LLP. The balance sheet of the
Company as of June 30, 1995 is hereinafter referred to as the "Company Balance
Sheet". Each of the balance sheets included in the financial statements referred
to in this Section 4.06 (including the related notes thereto) presents fairly
the financial position of the Company as of their respective dates, and the
other related statements included therein (including the related notes thereto)
present fairly the results of operations, the cash flows, and changes in
shareholders' equity and changes in financial position for the periods then
ended, all in conformity with generally accepted accounting principles applied
on a consistent basis, except as otherwise noted therein.
4.07. Proxy Statement; Offer Documents. Any proxy or similar
materials distributed to the Company's shareholders in connection with the
Merger, including any amendments or supplements thereto (the "Proxy Statement"),
will comply in all
<PAGE> 34
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material respects with applicable federal securities laws and will not contain
any untrue statements of a material fact required to be stated therein or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the Company
with respect to information supplied by the Parent in writing for inclusion in
the Proxy Statement. None of the information supplied by the Company in writing
for inclusion in the Offer Documents or provided by the Company in the Schedule
14D-9 will, at the respective times that the Offer Documents and the Schedule
14D-9 or any amendments or supplements thereto are filed with the SEC and are
first published or sent or given to holders of Shares, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
4.08. Undisclosed Liabilities. Except as set forth on the
Company Disclosure Letter or reflected in the financial statements referred to
in Section 4.06, the Company has no liability or obligation, secured or
unsecured (whether absolute, accrued, contingent or otherwise, and whether due
or to become due) except those which would not, individually or in the
aggregate, have a Material Adverse Effect.
4.09. Absence of Certain Changes or Events. Except as set
forth on the Company Disclosure Letter, since the date of the
<PAGE> 35
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Company Balance Sheet (i) the business of the Company has been conducted in the
ordinary course consistent with past practice (except as otherwise contemplated
by this Agreement), (ii) there has not been any change which has had a Material
Adverse Effect, and (iii) the Company has not taken any action described in
Section 6.01.
4.10. Title, Etc. (a) The Company Disclosure Letter sets forth
a list of all of the land, which includes the buildings, structures and other
improvements located thereon (the "Real Property"), which is owned in fee by the
Company. The Company has, with respect to personal property, good, and, with
respect to real property, good, marketable and insurable, title to all of the
properties and assets which it purports to own and which are material to the
business, operation or financial condition of the Company free and clear of all
mortgages, security interests, liens, claims, charges or other encumbrances of
any nature whatsoever, except for (i) any liens, encumbrances or defects
reflected in the Company Balance Sheet; (ii) any liens, encumbrances or defects
which do not, individually or in the aggregate, materially detract from the fair
market value (free of such liens, encumbrances or defects) of the property or
assets subject thereto or materially interfere with the current use by the
Company of the property or assets subject thereto or affected thereby or
otherwise have a Material Adverse Effect; (iii) any liens or encumbrances for
taxes not delinquent or which are being contested in good faith, provided that
adequate reserves for the same have been established on the Company Balance
Sheet; (iv) any
<PAGE> 36
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liens or encumbrances for current taxes and assessments not yet past due; (v)
any inchoate mechanic's and materialmen's liens and encumbrances for
construction in progress; (vi) any workmen's, repairmen's, warehousemen's and
carriers' liens and encumbrances arising in the ordinary course of business, so
long as such liens have not been filed; (vii) any liens of the type referred to
in (vi) above that have been filed, so long as such liens do not aggregate in
excess of $25,000; (viii) liens securing obligations under the Credit Agreement
(as defined in Section 6.01(b)); and (ix) with respect to Real Property, any
liens, encumbrances or defects which are matters of record, including but not
limited to, easements, quasi-easements, rights of way, land use ordinances and
zoning plans.
(b) The Company Disclosure Letter sets forth a list of all of
the leases and subleases (the "Real Property Leases") under which, as of the
date hereof, the Company has the right to occupy space. The Company has
heretofore delivered to the Parent a true, correct and complete copy of all of
the Real Property Leases, including all amendments thereto. All Real Property
Leases and material leases pursuant to which the Company leases personal
property from others are, in all material respects, valid, binding and
enforceable in accordance with their terms; the Company has not received notice
of any default by the Company under any Real Property Lease which would have a
Material Adverse Effect; there are no existing defaults, or any condition or
event which with the giving of notice or lapse of time would constitute a
default, by the Company thereunder which would have a Material Adverse Effect;
<PAGE> 37
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and, with respect to the Company's obligations thereunder without qualification
and with respect to the obligations of all other parties thereto, to the
knowledge of the Company, no uncured default or event or condition on the part
of any landlord exists under any Real Property Lease which with the giving of
notice or the lapse of time would constitute a default thereunder which would
have a Material Adverse Effect.
(c) All of the land, buildings, structures and other
improvements occupied by the Company in the conduct of its business are included
in the Real Property and the Real Property Leases.
(d) The Company does not own or hold, and is not obligated
under or a party to, any option, right of first refusal or other contractual
right to purchase, acquire, sell or dispose of the Real Property and the Real
Property Leases or any portion thereof or interest therein.
4.11. Patents, Trademarks, Etc. The Company Disclosure Letter
identifies all registered trademarks, copyrights and patents owned or licensed
by the Company as of the date hereof. The Company owns, or is licensed or
otherwise has adequate right to use, all patents, patent rights, trademarks,
trademark rights, service marks, service mark rights, trade names, trade name
rights, copyrights, know-how, technology, trade secrets and other proprietary
information (collectively, the "Intellectual Property") which are material to
the conduct of the business of the Company. Except as set forth in the Company
Disclosure Letter, no claims have been asserted by any person, and the
<PAGE> 38
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Company has not asserted a claim against any person, with respect to any of the
Intellectual Property owned or used by the Company or challenging or questioning
the validity or effectiveness of any license or agreement relating thereto to
which the Company is a party.
4.12. Insurance. The Company Disclosure Letter identifies all
material property, general liability and casualty insurance policies which
currently insure the Company and the Company shall use its reasonable efforts to
keep such policies in full force and effect up to the Closing Date. Such
policies are adequate in the view of the management of the Company for the
assets and operations of the Company.
4.13. Employee Benefit Plans. (a) For purposes of this Section
4.13, "Company Benefit Plans" means all employee benefit plans and arrangements
described in section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), with respect to which the Company has a liability,
whether direct or indirect, actual or contingent, and any material bonus,
incentive and similar plans maintained by the Company.
(b) The Company Disclosure Letter sets forth a list of all
Company Benefit Plans and the Company has delivered or made available to the
Parent, where applicable, accurate and complete copies of all Company Benefit
Plan texts and related agreements.
(c) Except as set forth in the Company Disclosure Letter with
respect to each Company Benefit Plan: (i) such plan has been administered and
enforced in all material respects in accordance with its terms and applicable
law; (ii) to the best of
<PAGE> 39
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the knowledge of the Company after reasonable inquiry, no breach of fiduciary
duty or prohibited transaction has occurred; (iii) no actions, suits, claims or
disputes are pending, or to the knowledge of the Company, threatened; (iv) all
contributions and premiums due have been made on a timely basis; (v) all
contributions made or required to be made under such Company Benefit Plan meet
the requirements for deductibility under the Internal Revenue Code of 1986, as
amended, (the "Code"); and (vi) no Company Benefit Plan is a multiemployer plan
(as defined in ERISA section 3(37)), a multiple employer plan within the meaning
of the Code or ERISA, a defined benefit plan within the meaning of ERISA section
3(35), or a plan subject to section 302 of ERISA or section 412 of the Code.
(d) Except as set forth on the Company Disclosure Letter, the
consummation of the transactions contemplated by this Agreement will not (i)
entitle any individual to severance pay, or (ii) accelerate the time of payment
or vesting, or increase the amount, of compensation due to any individual. The
Company has delivered to the Parent true, correct and complete copies of each
plan, agreement or arrangement relating to the foregoing, including all
amendments thereto.
(e) The Company Disclosure Letter sets forth a description of
all obligations of the Company with respect to retiree medical and retiree life
insurance benefits under the Company Benefit Plans. The Company has delivered to
the Parent written material which is representative in all material respects of
written communications of the Company with respect to retiree
<PAGE> 40
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medical and life benefits under the Company Benefit Plans, a list of which is
set forth on the Company Disclosure Letter.
(f) Each Company Benefit Plan intended to be qualified under
section 401(a) of the Code is so qualified, and each trust or other funding
vehicle related thereto is exempt from federal income tax under section 501(a)
of the Code.
(g) With respect to any insurance policy providing funding for
benefits under any Company Benefit Plan, (i) there is no material liability of
the Company in the nature of a retroactive or retrospective rate adjustment,
loss sharing arrangement, or other actual or contingent liability, nor would
there be any such liability if such insurance policy was terminated on the date
hereof, and (ii) to the knowledge of the Company, no insurance company issuing
any such policy is in receivership, conservatorship, liquidation or similar
proceeding and, to the knowledge of the Company, no such proceeding with respect
to any insurer is imminent.
4.14. Legal Proceedings, Etc. Except as set forth on the
Company Disclosure Letter, (i) there is no claim, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
relating to the Company before any court or governmental or regulatory authority
or body with respect to which there is a reasonable likelihood of a
determination which would have a Material Adverse Effect, and (ii) the Company
is not subject to any outstanding order, writ, judgment, injunction or decree of
any court or governmental or regulatory authority or body.
<PAGE> 41
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4.15. Taxes. Except as set forth on the Company Disclosure
Letter, (i) the Company has paid or adequately reserved for in the Company
Balance Sheet all Taxes (as defined below) required to be paid by it through the
date hereof (other than Taxes or audit adjustments which would not, in the
aggregate, have a Material Adverse Effect) and shall timely pay any Taxes
required to be paid by it after the date hereof and on or before the Effective
Time (unless the payment of such Taxes is being contested by the Company in good
faith), (ii) the Company has filed all notices, reports and returns for Taxes
("Tax Returns") that it is required to file through the date hereof and shall,
on or before the Effective Time, prepare and file, consistent with prior years
in all material respects, all Tax Returns that it is required to file after the
date hereof and on or before the Effective Time, (iii) no penalties or other
charges are due with respect to the late filing of any Tax Return, (iv) the
Company is not currently being audited by any taxing authority, (v) no extension
of time with respect to any date on which any Tax Return was or is to be filed
by the Company is in force as of the date hereof, (vi) no waiver or agreement by
the Company is in force as of the date hereof for the extension of time for the
assessment or payment of any Tax, and (vii) the Company has not agreed to make
and is not required to make any adjustment under Section 481(a) of the Code by
reason of a change in accounting method or otherwise. "Taxes" shall mean all
taxes, levies or other assessments, including, without limitation, income,
excise, property, sales, gross receipts, employment, import and franchise
taxes and customs
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duties imposed by the United States, or any state, county, local or foreign
government, or subdivision or agency thereof, and including any interest,
penalties or additions attributable thereto.
4.16. Material Agreements. Except as set forth on the Company
Disclosure Letter and except for agreements made for the purpose of completing
the transactions contemplated by this Agreement, the Company is not as of the
date hereof a party to, or bound by, any material agreement of any kind to be
performed in whole or in part after the Effective Time. Solely for the purpose
of this Section, the term "material agreement" shall mean (i) any single
agreement which involves the payment or receipt by the Company, subsequent to
the date of this Agreement, of more than $150,000 or (ii) any agreement for
money borrowed or pursuant to which the Company has guaranteed or otherwise
agreed to be responsible for the indebtedness, obligations or liabilities of any
other Person. Except as set forth on the Company Disclosure Letter, there is no
breach or default and there are no facts which with notice or the passage of
time would constitute a breach or default under, or give rise to any right of
termination, amendment, cancellation or acceleration under, whether as a result
of the consummation of the transactions contemplated hereby or otherwise, any
obligation to be performed by any party to a material agreement to which the
Company is a party, which breach, default or right (assuming the exercise
thereof) would have a Material Adverse Effect.
<PAGE> 43
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4.17. Compliance with Law. Except as set forth on the
Company Disclosure Letter, the business of the Company is not being conducted
and the properties and assets of the Company are not currently owned or operated
in violation of any law, ordinance, regulation, order, judgment, injunction,
award or decree of any governmental or regulatory entity or court or arbitrator,
except for possible violations which either individually or in the aggregate do
not, and so far as can be reasonably foreseen will not, have a Material Adverse
Effect.
4.18. Insider Interests. The Company Disclosure Letter
sets forth all material contracts, agreements with and other obligations to
officers, directors and employees or shareholders of the Company. Except as set
forth on the Company Disclosure Letter, no officer, director or shareholder of
the Company, and no entity controlled by any such officer, director or
shareholder, and no relative or spouse who resides with any such officer,
director or shareholder (i) owns, directly or indirectly, any material interest
in any person that is or is engaged in business other than on an arm's-length
basis as, a competitor, lessor, lessee, customer or supplier of the Company or
(ii) owns, in whole or in part, any tangible or intangible property that the
Company uses in the conduct of the business of the Company.
4.19. Accounts Receivable. All accounts receivable
relating to the business of the Company reflected on the Company Balance Sheet,
and all accounts receivable relating to the business of the Company arising
subsequent to the date of the Company Balance Sheet, have arisen in the ordinary
course of
<PAGE> 44
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business. All items which are required by generally accepted
accounting principles to be reflected as accounts receivable on the Company
Balance Sheet and on the books of the Company are so reflected and any reserve
accounts relating thereto have been established in accordance with generally
accepted accounting principles applied in a manner consistent with the Company's
past practices.
4.20. Officers, Directors and Employees. The Company
Disclosure Letter sets forth the name and current compensation of each officer,
director or employee of the Company whose current annual rate of compensation
from the Company (including bonuses but excluding commission-only compensation)
exceeds $50,000.
4.21. Environmental Protection. Except as set forth on
the Company Disclosure Letter, the Company has obtained all material permits,
certificates, licenses, approvals and other authorizations (collectively
"Environmental Permits") relating to pollution or protection of the environment,
including those relating to emissions, discharges, releases of pollutants,
contaminants or chemicals, or industrial, toxic or hazardous substances or
wastes into the environment (including, without limitation, ambient air, surface
water, ground water, or land) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or chemicals, or industrial, toxic or
hazardous substances or wastes. Except as set forth on the Company Disclosure
Letter, the Company is in material compliance with all terms and conditions of
the Environmental Permits, and
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the Company is also in material compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in all applicable environmental laws or
contained in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder, if
any ("Pertinent Environmental Laws"). Except as set forth on the Company
Disclosure Letter, there are no past, present or future events, conditions,
circumstances, activities, practices, incidents, actions or plans which may
materially interfere with or prevent material compliance or continued compliance
with Pertinent Environmental Laws, or which may give rise to any material common
law or legal liability, or otherwise form the basis of any material claim,
action, demand, suit, proceeding, hearing, study or investigation, based on or
related to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant, contaminant or
chemical, or industrial, toxic or hazardous substance or waste. Except as set
forth on the Company Disclosure Letter, there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice or demand letter,
notice of violation, investigation, or proceeding pending or, to the Company's
knowledge, threatened against the Company relating in any way to any Pertinent
Environmental Laws.
4.22. Brokers and Finders. Neither the Company nor any
of its officers, directors or employees has employed any broker,
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finder or investment banker or incurred any liability for any brokerage fees,
commissions, finders' fees or investment banking fees in connection with the
transactions contemplated herein, except that the Company has employed, and will
pay the fees and expenses of, DLJ as its financial advisor, the arrangements
with which have been disclosed in writing to the Parent prior to the date
hereof.
4.23. No Other Representations or Warranties. Except
for the representations and warranties contained in this Agreement, anything
described in or listed in the Company Disclosure Letter, or any other document
delivered pursuant to this Agreement, neither the Company nor any other person
makes any representation or warranty to the Parent or the Purchaser, express or
implied, and the Company hereby disclaims any such representation or warranty,
whether by the Company or any of its officers, directors, employees, agents or
representatives or any other person, notwithstanding the delivery or disclosure
to the Parent or the Purchaser or any of its officers, directors, employees,
agents or representatives or any other person of any document or other
information by the Company or any of its officers, directors, employees, agents
or representatives or any other person. Any document delivered by the Company
pursuant to this Agreement is a true, correct and complete copy of such
document, and has not been modified or amended unless such amendment or
modification is included with such document.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
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THE PARENT AND THE PURCHASER
5.01. Corporation Organization. The Parent is a
corporation duly organized and validly existing and in good standing under the
laws of the State of Ohio and the Purchaser is a corporation duly organized and
validly existing and in good standing under the laws of the State of New York.
The Parent and the Purchaser each has all requisite corporate power and
authority to own its assets and carry on its business as now being conducted or
proposed to be conducted. Each of the Parent and the Purchaser has delivered to
the Company complete and correct copies of its Certificate or Articles of
Incorporation and By-Laws or Code of Regulations, as the case may be, as in
effect on the date hereof.
5.02. Authorized Capital. The authorized capital stock
of the Purchaser consists of 100 shares of Common Stock, par value $1.00 per
share, all of which shall be outstanding as of the Effective Time. All of the
issued and outstanding shares of capital stock of the Purchaser are validly
issued, fully paid, nonassessable and free of preemptive rights and all liens.
5.03. Corporation Authority. Each of the Parent and the
Purchaser has the necessary corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution and delivery
of this Agreement by each of the Parent and the Purchaser, the performance by
the Parent and the Purchaser of its obligations hereunder and the consummation
by the Parent and the Purchaser of the transactions contemplated hereby have
been duly authorized by its Board of Directors and no other corporate proceeding
on the part of the Parent or the
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Purchaser is necessary for the execution and delivery of this Agreement by the
Parent and the Purchaser and the performance by the Parent and the Purchaser of
its obligations hereunder and the consummation by the Parent and the Purchaser
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of the Parent and the Purchaser and, assuming the due
authorization, execution and delivery hereof by the Company, is a legal, valid
and binding obligation of the Parent and the Purchaser, enforceable against the
Parent and the Purchaser in accordance with its terms, except to the extent that
its enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
5.04. No Prior Activities. The Purchaser has not
incurred, directly or indirectly, any liabilities or obligations, except those
incurred in connection with its incorporation or with the negotiation of this
Agreement, the Offer Documents, the Regulatory Filings and the consummation of
the transactions contemplated hereby and thereby. The Purchaser has not engaged,
directly or indirectly, in any business or activity of any type or kind, or
entered into any agreement or arrangement with any person or entity, and is not
subject to or bound by any obligation or undertaking, that is not contemplated
by or in connection with this Agreement, the Offer Documents, the Regulatory
Filings and the transactions contemplated hereby and thereby.
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5.05. No Financing Contingency. The Parent has sufficient
funds to consummate all of the transactions contemplated by this Agreement and
will make available to the Purchaser sufficient funds to consummate the Offer
and the Merger.
5.06. Governmental Filings; No Violations. (a) Other
than the Regulatory Filings, no notices, reports or other filings are required
to be made by the Parent or the Purchaser with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
the Parent or the Purchaser from, any governmental or regulatory authorities of
the United States, the several States or any foreign jurisdictions in connection
with the execution and delivery of this Agreement by the Parent and the
Purchaser and the consummation by the Parent and the Purchaser of the
transactions contemplated hereby, the failure to make or obtain any or all of
which could prevent, materially delay or materially burden the transactions
contemplated by this Agreement.
(b) Except as set forth on the Parent Disclosure Letter
delivered to the Company as of the date of this Agreement (the "Parent
Disclosure Letter"), neither the execution and delivery of this Agreement by the
Parent or the Purchaser nor the consummation by the Parent or the Purchaser of
the transactions contemplated hereby nor compliance by the Parent or the
Purchaser with any of the provisions hereof will: (i) conflict with or result in
any breach of any provision of its Certificate or Articles of Incorporation or
By-Laws or Code of Regulations, as the case may be, (ii) result in a violation
or breach of, or constitute (with
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or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, or require any
consent under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, contract, agreement or other instrument or
obligation to which the Parent or the Purchaser is a party or by which it or any
of its properties or assets may be bound, (iii) require the creation or
imposition of any lien upon or with respect to the properties of the Parent or
the Purchaser or (iv) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to the Parent or the Purchaser or any of its properties
or assets, excluding from the foregoing clauses (iii) and (iv) violations,
breaches or defaults which in the aggregate, would not have a material adverse
effect on the business, financial condition or operations of the Parent or the
Purchaser or which would not prevent, materially delay or materially burden the
transactions contemplated by this Agreement.
5.07. Brokers and Finders. Neither the Parent, the Purchaser
nor any of its officers, directors or employees has employed any broker, finder
or investment banker or incurred any liability for any brokerage fees,
commissions, finders fees or investment banking fees in connection with the
transactions contemplated herein, except that the Parent has employed Goldman
Sachs & Co.
5.08. Offer Documents; Proxy Statement; Other
Information. None of the information included in the Offer Documents (including
any amendments or supplements thereto) or any
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schedules required to be filed with the SEC in connection therewith and
described therein as being supplied by the Parent or the Purchaser will, at the
respective times that the Offer Documents or any amendments or supplements
thereto or any such schedules are filed with the SEC, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. None of the
information supplied in writing by the Parent or the Purchaser specifically for
inclusion in the Proxy Statement, Schedule 14D-9 or any statement required
pursuant to Section 14(f) of the Exchange Act or any other schedules or
statements required to be filed with the SEC in connection therewith will
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 not misleading.
5.09 No Other Representations or Warranties. Except for
the representations and warranties contained in this Agreement, anything
described in or listed in the Parent Disclosure Letter, or any other document
delivered pursuant to this Agreement, neither the Parent or the Purchaser nor
any other person makes any representations or warranty to the Company, express
or implied, and the Parent and the Purchaser hereby disclaim any such
representation or warranty, whether by the Parent or the Purchaser or any of its
or their officers, directors, employees, agents or representatives or any other
person, notwithstanding the delivery or disclosure to the Company
<PAGE> 52
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or any of its officers, directors, employees, agents or representatives or any
other person of any document or other information by the Parent and the
Purchaser or any of their officers, directors, employees, agents or
representatives or any other person. Any document delivered by the Parent or the
Purchaser pursuant to this Agreement is a true, correct and complete copy of
such document, and has not been modified or amended unless such amendment or
modification is included with such document.
ARTICLE VI
COVENANTS OF THE PARTIES
6.01. Conduct of Business of the Company. Except as
contemplated by this Agreement or as set forth on the Company Disclosure Letter,
during the period from the date of this Agreement to the Effective Time, the
Company will conduct its business and operations only in the ordinary and usual
course of business consistent with past practice. Without limiting the
generality of the foregoing, and, except as contemplated in this Agreement or as
set forth on the Company Disclosure Letter, prior to the Effective Time, without
the advance written consent of the Parent, the Company will not:
(a) Amend its Restated Certificate or By-Laws;
(b) (i) Create, incur or assume any indebtedness for money
borrowed, including obligations in respect of capital leases, except (A)
purchase money mortgages granted in connection with past practice, (B)
indebtedness for borrowed money incurred in the ordinary course of business not
aggregating in excess of
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$8.0 million outstanding at any time under its existing Fifth Amended and
Restated Revolving Credit and Term Loan Agreement with The Chase Manhattan Bank,
N.A. as the same may be amended from time to time ("Credit Agreement"), provided
that the proceeds thereof are not distributed to the shareholders of the
Company; or (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person; provided, however, that the Company may endorse negotiable
instruments in the ordinary course of business consistent with past practice;
(c) Declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of the Common Stock of the Company;
(d) Issue, sell, grant, purchase or redeem, or issue or sell
any securities convertible into, or options with respect to, or warrants to
purchase or rights to subscribe to, or subdivide or in any way reclassify, any
Shares, except in any case above pursuant to Company Stock Rights;
(e) (i) Increase the rate of compensation payable or to
become payable by the Company to its directors, officers or employees, whether
by salary or bonus, by more than four percent per person on an annual basis for
directors and officers of the Company and by more than four and one-half percent
in the aggregate for all other employees of the Company (excluding
commission-only compensation, the rate of which shall not be increased); or (ii)
increase the rate or term of, or otherwise
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alter, any bonus, insurance, pension, severance or other employee benefit plan,
payment or arrangement made to, for or with any such directors, officers or
employees;
(f) Enter into any agreement, commitment or transaction
(other than borrowings permitted by Section 6.01(b)), except agreements,
commitments or transactions in the ordinary course of business consistent with
past practice;
(g) Sell, transfer, mortgage, pledge, grant any security
interest or permit the imposition of any lien or other encumbrance on any asset
other than in the ordinary course of business consistent with past practice and
except pursuant to the Credit Agreement;
(h) Waive any right under any contract or other agreement
identified on the Company Disclosure Letter if such waiver would have a Material
Adverse Effect;
(i) Make any material change in its accounting methods or
practices or make any material change in depreciation or amortization policies
or rates adopted by it for accounting purposes or, other than normal writedowns
or writeoffs consistent with past practices, make any writedowns of inventory or
writeoffs of notes or accounts receivable;
(j) Make any loan or advance to any of its shareholders,
officers, directors, employees (other than advances to field sales personnel,
vacation advances, relocation advances and travel advances in each case made in
the ordinary course of business in a manner consistent with past practice) or
make any
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other loan or advance to any other person or group otherwise than in
the ordinary course of business consistent with past practice;
(k) Terminate or fail to renew, where such renewal is at the
Company's option, any contract or other agreement (excluding customer leases or
contracts), the termination or failure of which to renew would have a Material
Adverse Effect;
(l) Enter into any collective bargaining agreement;
(m) Make any addition to or modification of the Company
Benefits Plans;
(n) Take, agree to take, or knowingly permit to be taken any
action, or do or, with respect to anything within the Company's control,
knowingly permit to be done anything in the conduct of its business which would
be contrary to or in breach of any of the terms or provisions of this Agreement,
or which would cause any of the representations of the Company to be or become
untrue in any material respect; or
(o) Agree to do any of the foregoing.
6.02. Notification of Certain Matters. The Company shall give
prompt notice to the Parent of: (a) 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; (b) any
notice or other communication from any regulatory authority in connection with
the transactions contemplated by this Agreement; and (c) any claims, actions,
proceedings or investigations commenced or, to the best of its knowledge,
threatened, involving or affecting the Company or any of its properties or
assets, which, if pending on
<PAGE> 56
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the date hereof, would have been required to have been disclosed in the Company
Disclosure Letter pursuant to the provisions of Section 4.14; and (d) the
occurrence of any event having, or which insofar as can be reasonably foreseen
would have, a Material Adverse Effect.
6.03. Access to Information. (a) Between the date of
this Agreement and the Effective Time, the Company will during ordinary business
hours and upon reasonable advance notice, (i) give the Parent and the Parent's
authorized representatives all access the Parent shall reasonably request to all
of its books, records (including, without limitation, the workpapers of the
Company's outside accountants), contracts, commitments, plants, offices and
other facilities and properties, and its personnel, representatives, accountants
and agents; provided, however, that all such access shall take place after
appropriate prior consultation with the officers of the Company, (ii) permit the
Parent to make such inspections thereof as it may reasonably request (including,
without limitation, observing the Company's physical inventory of its assets),
(iii) cause its officers and advisors to furnish to the Parent its financial and
operating data and such other existing information with respect to its business,
properties, assets, liabilities and personnel (including, without limitation,
title insurance reports, real property surveys and environmental reports, if
any), as the Parent may from time to time reasonably request, (iv) take such
actions as the Parent reasonably deems appropriate to verify the existence and
condition of equipment leased by the Company to its customers, and (v)
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permit the Parent's accountants to conduct such confirmation and testing
procedures with respect to the Company's receivables as the Parent reasonably
deems appropriate; provided, however, that (A) any such investigation shall be
conducted in such a manner as not to interfere unreasonably with the operation
of the business of the Company, (B) the Company shall not be required to take
any action which would constitute a waiver of the attorney-client privilege, (C)
the Company need not supply the Parent with any information which it is under a
legal obligation not to supply, and (D) until such time as the Parent and/or its
affiliates are the beneficial owners of a majority of the outstanding Shares,
any such activities by the Parent prior to the purchase by the Purchaser of
Shares pursuant to the Offer shall be for the purposes of verifying the accuracy
of representations and warranties of the Company and the compliance by the
Company with its covenants contained in this Agreement.
(b) Any information provided pursuant to this Agreement shall
be held by the Parent in accordance with and shall be subject to the terms of
the Confidentiality Agreement dated July 19, 1994 between the Company and the
Parent (the "Confidentiality Agreement").
6.04. Further Information. The Company and the Parent
shall give prompt written notice to the other of (i) any representation or
warranty made by it contained in this Agreement becoming untrue or inaccurate in
any material respect (including the Company, the Parent or the Purchaser
receiving knowledge of any fact, event or circumstance which may cause any
representation
<PAGE> 58
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qualified as to knowledge to be or become untrue in any material respect) or
(ii) the failure by it to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Merger Agreement; provided, however, that no such notification shall affect
the representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement. The Company
acknowledges that if, after the date of this Agreement, the Company or the
Parent receives knowledge of any fact, event or circumstance that would cause
any representation or warranty that is conditioned as to the knowledge of the
Company to be or become untrue or inaccurate in any respect, the receipt of such
knowledge shall constitute a breach of the representation or warranty that is so
conditioned as of the date of such receipt.
6.05. Further Assurances. Consistent with the terms and
conditions hereof, each party hereto will execute and deliver such instruments
and take such other action as the other parties hereto may reasonably require in
order to carry out this Agreement and the transactions contemplated hereby and
thereby.
6.06. Interim Financial Statements. Within 45 days
after the end of each fiscal quarter and 90 days after the end of any fiscal
year after the date of this Agreement, and until the Effective Time, the Company
will deliver to the Parent its Form 10-QSB's or 10-KSB's, as the case may be,
for such quarter or year. The financial statements contained therein shall
fairly present their respective financial condition, results of
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operations and cash flows and changes in financial position as at the date or
for the periods indicated in accordance with generally accepted accounting
principles consistently applied in accordance with past practice, shall be
prepared in conformity with the requirements of Regulation S-X under the
Exchange Act and Item 303 of Regulation S-B and shall be accompanied by a
certificate of the principal financial officer (or independent certified public
accountant in the case of year end financials) of the Company to such effect.
6.07. Fairness Opinion. Within three business days of
the execution of this Agreement, the Company shall provide to the Parent a
signed copy of the written opinion of DLJ that the Offer is fair to the Company
shareholders from a financial point of view, which DLJ has advised the Company
it fully expects to be able to deliver at such time.
6.08. Best Efforts. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use their best efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement
and shall use its best efforts to satisfy the conditions to the transactions
contemplated hereby and to obtain all waivers, permits, consents and approvals
and to effect all registrations, filings and notices with or to third parties or
governmental or public bodies or authorities which are necessary or desirable in
connection with the transactions contemplated by this Agreement,
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including, but not limited to, filings to the extent required under the Exchange
Act and HSR Act, and obtaining consent to the Merger from The Chase Manhattan
Bank, N.A. pursuant to the Credit Agreement. If at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers or directors of each of the parties hereto
shall take such action. Without limiting the generality of the foregoing, the
Parent as the sole shareholder of the Purchaser, and the Purchaser as a
shareholder of the Company, will consent and/or vote in favor of the
transactions contemplated hereunder, and Company, the Parent, and the Purchaser
will vigorously defend against any lawsuit or proceeding, whether judicial or
administrative, challenging this Agreement or the consummation of any of the
transactions contemplated hereby. From time to time after the date hereof,
without further consideration, the Company will, at its own expense, execute and
deliver such documents to the Parent as the Parent may reasonably request in
order to consummate such transactions. From time to time after the date hereof,
without further consideration, the Parent will, at its own expense, execute and
deliver such documents to the Company as the Company may reasonably request in
order to consummate the Merger. Notwithstanding the foregoing, a party shall not
be obligated to take any action pursuant to the foregoing if the taking of such
action or the obtaining of any waiver, consent, approval or exemption is
reasonably likely (x) to be materially burdensome to such party and its
subsidiaries taken as a whole or to impact in a materially adverse manner the
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economic or business benefits of the transactions contemplated by this Agreement
so as to render inadvisable the consummation of the transactions contemplated by
this Agreement or (y) to result in the imposition of a condition or restriction
of the type described in paragraph (iii)(a) of Annex A hereto. In connection
with and without limiting the foregoing, the Company and its Board of Directors
shall (i) take all action necessary to ensure that no state takeover statute or
similar statute or regulation is or becomes applicable to the Offer, the Merger,
this Agreement or any of the other transactions contemplated by this Agreement,
and (ii) if any state takeover statute or similar statute or regulation becomes
applicable to the Offer, the Merger, this Agreement or any other transaction
contemplated by this Agreement, take all action necessary to ensure that the
Offer, the Merger and the other transactions contemplated by this Agreement may
be consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Offer, the Merger and the other transactions contemplated by this Agreement.
6.09. Filings. (a) The Company and the Parent will
file, or cause to be filed, as promptly as possible and, in the case of the
Parent in no event later than five business days after the date hereof, with the
United States Federal Trade Commission (the "FTC") and the Antitrust Division of
the United States Department of Justice (the "Department of Justice") pursuant
to the HSR Act the notification required by the HSR Act, including all requisite
documents, materials and information therefor, and
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request early termination of the waiting period under the HSR Act. Each of the
Company and the Parent shall furnish to the other such necessary information and
reasonable assistance as the other may request in connection with its
preparation of any filing or submission which is necessary under the HSR Act.
The Company and the Parent shall each keep the other apprised of the status of
any inquiries or requests for additional information made by any governmental
authority and shall comply promptly with any such inquiry or request.
(b) The Company and the Parent or the Purchaser shall make any
necessary filings with the New York State Department of Taxation and Finance and
shall furnish all supplemental information requested by said Department to
obtain, prior to the completion of the Merger, a statement of any real estate
transfer tax and transfer gains tax due pursuant to Article 31 or 31-B of the
New York Tax Law as a result of the completion of the Offer. The Company shall
pay, when due and payable, any transfer gains tax and real estate transfer tax
assessed by the New York State Department of Taxation and Finance, if
applicable, as well as all fees and charges incurred in connection with any such
filings. The Parent and the Purchaser shall cooperate in providing any documents
or affidavits necessary for any filings.
6.10. Public Announcements. The initial press release
to the transactions contemplated hereby shall be a joint press release, and
thereafter the Company and the Parent shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to the transactions
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contemplated hereby and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by law or
any listing agreement with a national securities exchange or with National
Association of Securities Dealers, Inc., or in order to carry out the fiduciary
duties of the Board, as advised by counsel.
6.11. Indemnity; D&O Insurance. (a) The Parent shall
cause all rights to indemnification by the Company now existing in favor of each
present and former director or officer of the Company (hereinafter referred to
in this Section as the "Indemnified Parties") as provided in the Company's
By-Laws to survive the Merger and to continue in full force and effect as rights
to indemnification by the Surviving Corporation for a period of at least six
years following the Effective Time.
(b) Subject to the terms set forth herein, the Surviving
Corporation shall indemnify and hold harmless, to the fullest extent permitted
under applicable law (and shall also advance expenses as incurred by an
Indemnified Party to the extent permitted under applicable law, provided the
person to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification), each Indemnified Party against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to any action, alleged
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action, omission or alleged omission occurring on or prior to the Effective Time
in their capacity as director or officer (including, without limitation, any
claims, actions, suits, proceedings and investigations which arise out of or
relate to the transactions contemplated by this Agreement) for a period of six
years after the Effective Time, provided that, in the event any claim or claims
are asserted or made within such six year period, all rights to indemnification
in respect of any such claim or claims shall continue until final disposition of
any and all such claims.
(c) Any Indemnified Party wishing to claim indemnification
under this Section 6.11, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify the Surviving Corporation
thereof, but the failure to so notify shall not relieve the Surviving
Corporation of any obligation to indemnify such Indemnified Party or of any
other obligation imposed by this Section 6.11 unless and to the extent that such
failure prejudices the Parent or the Surviving Corporation; it being understood
that it shall be deemed to materially prejudice the Parent or the Surviving
Corporation, as the case may be, if, as a result of such failure to notify, the
Parent or the Surviving Corporation is not given an opportunity to assume the
defense of such claim, action, suit, proceeding or investigation within a
reasonably prompt time after such claim, action, suit, proceeding or
investigation is asserted or initiated. In the event of any such claim, action,
suit, proceeding or investigation, (i) the Surviving Corporation or the
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Parent shall have the right to assume the defense thereof and 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 hereof, except that if the Parent or Surviving Corporation
elects not to assume such defense or counsel for the Indemnified Party advises
that there are issues which raise conflicts of interest between the Parent or
Surviving Corporation and the Indemnified Party, the Indemnified Party may
retain counsel satisfactory to it, and the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Party promptly
as statements therefore are received; provided, however, that in no event shall
the Parent or Surviving Corporation be required to pay fees and expenses,
including disbursements and other charges, for more than one firm of attorneys
in any one legal action or group of related legal actions unless (A) counsel for
the Indemnified Party advises that there are issues which raise conflicts of
interest that require more than one firm of attorneys, or (B) local counsel of
record is needed in any jurisdiction in which any such action is pending, (ii)
the Parent and the Indemnified Party shall cooperate in the defense of any such
matter, and (iii) the Parent and the Surviving Corporation shall not be liable
for any settlement effected without the prior written consent of one of them
(which consent shall not be unreasonably withheld); and provided, further, that
the Parent and Surviving Corporation shall not have any obligation hereunder to
any Indemnified Party if and to the extent a court of competent jurisdiction
ultimately
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determines, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable law.
(d) For three years after the Effective Time, the Parent
shall cause the Surviving Corporation to use its best reasonable efforts to
maintain, if available for an annual premium not in excess of $60,000, officers'
and directors' liability insurance covering the Indemnified Parties who are
presently covered by the Company's officers' and directors' liability insurance,
(copies of which have been delivered to the Parent), with respect to acts or
omissions occurring at or prior to the Effective Time, on terms no less
favorable than those in effect on the date hereof or at the Effective Time, or
if such insurance coverage is not available for an annual premium not in excess
of $60,000 to obtain the amount of coverage that is available for an annual
premium of $60,000.
(e) The covenants contained in this Section 6.11 shall
survive the Effective Time until fully discharged and are intended to benefit
each of the Indemnified Parties.
6.12. Company Benefit Plans. The Company has heretofore
delivered to the Parent a true and complete copy of the Company's employee
severance plan, as in effect on the date of this Agreement (the "Severance
Plan"). The Parent will, and will cause the Surviving Corporation to, provide
severance benefits to all of the employees of the Company as of the date of
acceptance for payment of the Shares of equal or greater value to those set
forth in the Severance Plan for a period of two years following
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the date of acceptance for payment of the Shares. The covenant set forth in the
immediately preceding sentence shall survive the Effective Time until fully
discharged and is intended to benefit all of the employees of the Company as of
the date of acceptance for payment of the Shares. The Parent will not terminate
or cause the termination of any employee or employees of the Company in a manner
that would be in violation of the federal Workers Adjustment, Retraining and
Notification Act.
6.13. Other Potential Bidders. The Company, its
affiliates and their respective officers, directors, employees, investment
bankers, attorneys and other representatives and agents shall immediately cease
any existing discussions or negotiations, if any, with any parties conducted
heretofore with respect to any acquisition of all or any material portion of the
assets of, or any equity interest in, the Company or any business combination
with the Company. Prior to the acceptance for payment of Shares, the Company,
directly or indirectly, (a) may furnish information and access, in each case
only in response to unsolicited requests therefor, to any corporation,
partnership, person or other entity or group pursuant to confidentiality
agreements that do not prohibit or restrict disclosure of any matter to the
Parent, and (b) may participate in discussions and negotiate with such entity or
group concerning any merger, sale of assets, sale of shares of capital stock or
similar transaction involving the Company or any division of the Company, only
if such entity or group to which information or access is furnished or
discussions or negotiations are held has submitted a written proposal to the
Board relating to
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any such transaction and the Board by a majority vote has determined in its good
faith judgment, based as to legal matters on the written opinion of legal
counsel, that failing to take such action would constitute a breach of the
Board's fiduciary obligations under applicable law. Except as set forth above,
neither the Company or any of its affiliates, nor any of its or their respective
officers, directors, employees, representatives or agents, shall, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than the Parent and the Purchaser, any
affiliate or associate of the Parent and the Purchaser or any designees of the
Parent and the Purchaser) concerning any merger, sale of assets, sale of shares
of capital stock or similar transaction involving the Company or any substantial
portion of the assets of the Company, or take any other action to facilitate the
making of a proposal that constitutes or could reasonably be expected to lead to
an acquisition proposal. Without limiting the foregoing, it is understood that
any violation of the restrictions set forth in the preceding sentence by any
executive officer of the Company or any of its subsidiaries, shall be deemed to
be a breach of this Section 6.13 by the Company. The Company shall use its best
efforts to ensure that the officers, directors and employees of the Company and
its subsidiaries and any investment banker or other advisor or representatives
retained by the Company are aware of the restrictions set forth in the preceding
sentences, and the Company hereby represents that the Board has
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adopted resolutions directing the officers, directors and employees of the
Company and its subsidiaries to comply with such restrictions. The Company
promptly shall advise the Parent orally and in writing of any takeover proposal
and any inquiries or developments with respect thereto. Neither the Board nor
any committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to the Parent or the Purchaser the approval or
recommendation by the Board of the Offer, the Merger or this Agreement or (ii)
approve or recommend, or propose to approve or recommend, any takeover proposal
or any other acquisition of Shares other than the Offer and the Merger.
Notwithstanding the foregoing, nothing contained in this Agreement shall prevent
the Board from approving or recommending to the Company shareholders any
unsolicited tender offer or exchange offer by a third party as contemplated by
Rules 14d-9 and 14d-2 promulgated under the Exchange Act (and, in connection
therewith, withdrawing or modifying the approval or recommendation by the Board
of the Offer, the Merger or this Agreement) in the event any unsolicited
takeover proposal shall have been made by a third party if, in the good faith
judgment of the Board, based as to legal matters on the written opinion of legal
counsel, that withdrawing or modifying such approval or recommendation is
required under applicable law in the proper discharge of its fiduciary duties.
6.14. Employees of the Company. Until the Effective
Time or the date of termination of this Agreement, whichever shall occur, and
for a period of one year from the date of termination
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(if termination should occur), neither the Parent nor any affiliate of the
Parent shall directly or indirectly employ, retain or agree to employ or retain
or solicit the employment or retention of any employee of the Company as an
employee or in any other capacity other than pursuant to any general employee
solicitation program conducted by the Parent in a manner consistent with past
practices.
ARTICLE VII
CONDITIONS TO THE MERGER
7.01. Conditions to Each Party's Obligation to Effect the
Merger. If the Offer is consummated, the respective obligations of each
party to this Agreement to consummate the Merger shall be subject to the
following conditions, which have not been waived at or prior to the Closing:
(a) The Purchaser shall have accepted for payment Shares
tendered pursuant to the Offer;
(b) This Agreement and the Merger shall have been approved
and adopted by the requisite vote or consent, if any is required, of the
shareholders of the Company required by the Company's Restated Certificate and
the BCL;
(c) Any waiting period (and any extension thereof) applicable
to the Merger under the HSR Act shall have expired or been terminated; and
(d) No order, statute, rule, regulation, execution order,
stay, decree, judgment, or injunction shall have been enacted, entered, issued,
promulgated or enforced by any court or
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governmental authority which prohibits or restricts the consummation of the
Merger.
7.02. Conditions to the Obligations of the Parent and the
Purchaser to Effect the Merger. The obligation of the Purchaser and the
Parent to effect the Merger shall be further subject to satisfaction of the
conditions, unless waived by the Parent, that (i) the Company shall have
performed and complied in all material respects with the agreements and
obligations contained in this Agreement required to be performed and complied
with by it at or prior to the Effective Time, (ii) all outstanding Options shall
have been surrendered to the Company as provided in Section 3.05(a) of this
Agreement and cancelled by the Company, and (iii) the Parent shall have received
a comfort letter, in form and substance reasonably requested by the Parent, from
Price Waterhouse LLP regarding the updating of the Company's most recent
financial statements.
7.03. Conditions to the Obligations of the Company to Effect
the Merger. The obligation of the Company to effect the Merger shall be further
subject to the Parent and the Purchaser having performed and complied in all
material respects with the agreements and obligations contained in this
Agreement required to be performed and complied with by each of them at or prior
to the Effective Time.
ARTICLE VIII
CLOSING
8.01. Time and Place. The closing of the Merger (the
"Closing") shall take place at the offices of Jones, Day, Reavis &
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Pogue, 599 Lexington Avenue, New York, New York 10022, at 10:00 a.m. local time
on a date to be specified by the parties which shall be no later than the third
business day after the date on which the last of the closing conditions set
forth in Article VII is satisfied or waived (if waivable) unless another time,
date or place is agreed upon in writing by the parties hereto. The date on which
the Closing actually occurs is herein referred to as the "Closing Date."
8.02. Filings at the Closing. At the Closing, the
Purchaser shall cause the New York Certificate of Merger to be filed and
recorded with the Secretary of State of the State of New York in accordance with
the provisions of Section 904 or 905 of the BCL, and shall take any and all
other lawful actions and do any and all other lawful things necessary to cause
the Merger to become effective.
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER
9.01. Termination. This Agreement may be terminated and the
Offer and the Merger may be abandoned at any time prior to the Effective Time:
(a) by mutual written consent of the Parent, the Purchaser
and the Company;
(b) by the Parent and the Purchaser or the Company if any
court of competent jurisdiction in the United States or other United States
governmental body shall have issued an order, decree or ruling or taken any
other final action restraining, enjoining or otherwise prohibiting the Merger or
the acceptance for payment
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and payment for the Shares in the Offer and such order, decree, ruling or other
action is or shall have become nonappealable;
(c) by the Parent and the Purchaser if, due to an occurrence
or circumstance which results in a failure to satisfy any of the conditions set
forth in Annex A hereto, the Purchaser shall have (A) failed to commence the
Offer within five days following the date of the initial public announcement of
the Offer, (B) terminated the Offer or (C) failed to pay for Shares pursuant to
the Offer within 75 days following the commencement of the Offer;
(d) by the Company if (i) there shall not have been a
material breach of any representation, warranty, covenant or agreement on the
part of the Company and the Purchaser shall have (A) failed to commence the
Offer within five days following the date of the initial public announcement of
the Offer, (B) terminated the Offer or (C) failed to pay for Shares pursuant to
the Offer within 75 days following the commencement of the Offer, or (ii) prior
to the purchase of Shares pursuant to the Offer, a corporation, partnership,
person or other entity or group shall have made a bona fide offer that the Board
by a majority vote, determines in its good faith judgment and in the discharge
of its fiduciary duties, based as to legal matters on the written opinion of
legal counsel, is more favorable to the Company's shareholders than the Offer
and the Merger, provided that such termination under this clause (ii) shall not
be effective until payment of the fee required by Section 9.03(b) hereof;
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(e) by the Parent and the Purchaser prior to the purchase of
Shares pursuant to the Offer, if (i) there shall have been a breach of any
representation or warranty on the part of the Company having a Material Adverse
Effect or materially adversely affecting (or materially delaying) the
consummation of the Offer, (ii) there shall have been a breach of any covenant
or agreement on the part of the Company resulting in a Material Adverse Effect
or materially adversely affecting (or materially delaying) the consummation of
the Offer, (iii) the Company shall engage in negotiations with any entity or
group (other than the Parent or the Purchaser) that has proposed a Third Party
Acquisition (as defined below), (iv) the Board shall have withdrawn or modified
(including by amendment of the Schedule 14D-9) in a manner adverse to the
Purchaser, its approval or recommendation of the Offer, this Agreement or the
Merger or shall have recommended another offer, or shall have adopted any
resolution to effect any of the foregoing, or (v) the Minimum Condition shall
not have been satisfied by the expiration date of the Offer and on or prior to
such date an entity or group (other than the Parent or the Purchaser) shall have
made and not withdrawn a proposal with respect to a Third Party Acquisition; or
(f) by the Company if (i) there shall have been a breach of any
representation or warranty on the part of the Parent or the Purchaser which
materially adversely affects (or materially delays) the consummation of the
Offer or (ii) there shall have been a material breach of any covenant or
agreement on the part of
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the Parent or the Purchaser and which materially adversely affects (or
materially delays) the consummation of the Offer.
"Third Party Acquisition" means the occurrence of any of the
following events (i) the acquisition of the Company by merger or otherwise by
any person (which includes a "person" as such term is defined in Section
13(d)(3) of the Exchange Act) or entity other than the Parent, the Purchaser or
any affiliate thereof (a "Third Party"); (ii) the acquisition by a Third Party
of more than 30% of the total assets of the Company, taken as a whole; (iii) the
acquisition by a Third Party of 30% or more of the outstanding Shares; (iv) the
adoption by the Company of a plan of liquidation or the declaration or payment
of an extraordinary dividend; or (v) the repurchase by the Company of more than
20% of the outstanding Shares.
9.02. Effect of Termination. In the event of the termination
and abandonment of this Agreement pursuant to Section 9.01, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party hereto or its affiliates, directors, officers or shareholders, other
than the provision of this Section 9.02 and Sections 6.03(b) and 9.03 hereof.
Nothing contained in this Section 9.02 shall relieve any party from liability
for any breach of this Agreement.
9.03. Fees and Expenses. (a) In the event the Company
terminates this Agreement pursuant to Section 9.01(d)(ii), the Company shall
reimburse the Parent, the Purchaser and their affiliates (not later than one
business day after submission of statements therefore) for all actual
documented out-of-pocket fees
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and expenses, actually and reasonably incurred by any of them or on their behalf
in connection with the Offer and the Merger and the consummation of all
transactions contemplated by this Agreement (including, without limitation,
attorneys' fees, fees payable to financing sources, investment bankers, counsel
to any of the foregoing, and accountants and filing fees and printing costs)
(the "Expense Reimbursement Amount"). In the event the Parent and the Purchaser
terminate this Agreement pursuant to Section 9.01(c) (but only if such
termination is based on a failure to satisfy clause (i) or clause (iii)(c), (e)
or (f) of Annex A hereto) or 9.01(e), (i) the Company shall reimburse the
Parent, the Purchaser or their affiliates for up to $250,000 of the Expense
Reimbursement Amount and (ii) such amount shall be paid to Parent, the Purchaser
or their affiliates, as directed by the Parent, together with interest thereon
at the rate of 8% per annum, in 24 consecutive monthly installments of an amount
equal to 1/24 of the lesser of $250,000 or the Expense Reimbursement Amount,
commencing on the first business day of the month immediately following the
month in which the Parent, the Purchaser or such affiliate(s) became entitled to
receive such amount. The Parent and the Purchaser have provided the Company with
an estimate of the amount of fees and expenses incurred by them through the date
of this Agreement and if the Parent, the Purchaser or their affiliates submit a
request for reimbursement hereunder, the Parent, the Purchaser or such
affiliate(s) will provide the Company in due course with invoices or other
reasonable evidence of such fees and expenses upon request.
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(b) In the event the Company terminates this Agreement
pursuant to Section 9.01(d)(ii) or in the event the Parent and the Purchaser
terminate this Agreement pursuant to 9.01(e)(ii), (iii), (iv) or (v) hereof, the
Parent and the Purchaser would suffer direct and substantial damages, which
damages cannot be determined with reasonable certainty. To compensate the Parent
and the Purchaser for such damages, the Company shall pay to the Purchaser the
amount of $1,000,000 less the Shareholder Amount (as defined below), if any, as
liquidated damages immediately upon such a termination as well as all amounts to
which the Parent and the Purchaser would be entitled pursuant to Section
9.03(a). It is specifically agreed that the amount to be paid pursuant to this
Section 9.03 represents liquidated damages and not a penalty. "Shareholder
Amount" means the aggregate amount paid by the shareholders of the Company who
are parties to Shareholder Tender Agreements to the Purchaser pursuant to
Section 12 thereof.
(c) Except as specifically provided in this Section 9.03
each party shall bear its own expenses in connection with this Agreement and the
transactions contemplated hereby.
ARTICLE X
MISCELLANEOUS
10.01. Survival of Representations, Warranties, Covenants
and Agreements. The representations, warranties and agreements of the
parties contained in Sections 2.06, 3.01, 3.02 (but only to the extent that such
Section expressly relates to actions to be taken after the Effective Time),
3.03, 3.04, 3.05, 6.05, 6.08, 6.09, 6.11, 6.12 and Article X hereof, shall
survive
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the consummation of the Offer and the Merger. The agreements of the
parties contained in Sections 6.03, 9.02, 9.03 and Article X hereof and the
representations and warranties in Sections 4.22 and 5.07 shall survive the
termination of this Agreement without termination. All other representations,
warranties, agreements and covenants in this Agreement shall not survive the
consummation of the Offer or the termination of this Agreement.
10.02. Amendment and Modification. Subject to
applicable law, this Agreement may be amended, modified or supplemented only by
written agreement of the Parent (for itself and the Purchaser) and the Company
at any time prior to the Effective Time with respect to any of the terms
contained herein executed by duly authorized officers of the respective parties
except that after the earlier of (a) the purchase by the Purchaser of more than
50% of the outstanding Shares on a fully diluted basis, and (b) the meeting of
shareholders to approve the Merger contemplated by this Agreement, the price per
Share to be paid pursuant to this Agreement to the holders of Shares shall in no
event be decreased and the form of consideration to be received by the holders
of such Shares in the Merger shall in no event be altered without the approval
of such holders.
10.03. Waiver of Compliance; Consents. At any time
prior to the Effective Time, the parties hereto may extend the time for
performance of any of the obligations or other acts or waive any inaccuracies in
the representations and warranties contained herein or in the documents
delivered pursuant hereto. Any failure of the Parent (for itself and the
Purchaser), on the
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one hand, or the Company, on the other hand, to comply with any obligation,
covenant, agreement or condition herein may be waived in writing by the Parent
(for itself and the Purchaser) or the Company, respectively, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of or estoppel with respect
to any subsequent or other failure. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in this Section 10.03.
10.04. Counterparts. This Agreement may be executed in any
number of counterparts each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
10.05. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
its conflicts of laws rules.
10.06. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or mailed by registered or certified mail (return receipt requested) or by
overnight courier service to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
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(a) If to the Company, to:
Prior to the Effective Time,
Griffin Technology Incorporated
1133 Corporate Drive
Farmington, New York 14425
Attention: Robert S. Urland
President and Chief Executive Officer
After the Effective Time,
Robert S. Urland
297 Whispering Hills
Victor, New York 14564
with a copy to:
Nixon, Hargrave, Devans & Doyle
Clinton Square
P.O. Box 1051
Rochester, New York 14603
Attention: John C. Partigan, Esq.
(b) if to the Parent or the Purchaser, to:
If By Mail
Diebold, Incorporated
818 Mulberry Rd. S.E.
P.O. Box 8230
Canton, Ohio 44711-8230
Attention: Gerald F. Morris
Executive Vice President and
Chief Financial Officer
<PAGE> 81
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If by Courier Service or Personal Delivery
Diebold, Incorporated
5995 Mayfair Road
North Canton, Ohio 44720
Attention: Gerald F. Morris
Executive Vice President and
Chief Financial Officer
with copies to:
If By Mail
Diebold, Incorporated
818 Mulberry Rd. S.E.
P.O. Box 8230
Canton, Ohio 44711-8230
Attention: Warren W. Dettinger
Vice President and General Counsel
and
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Lyle G. Ganske, Esq.
If by Courier Service or Personal Delivery
Diebold, Incorporated
5995 Mayfair Road
North Canton, Ohio 44720
Attention: Warren W. Dettinger
Vice President and General Counsel
and
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Lyle G. Ganske, Esq.
10.07. Entire Agreement, Assignment Etc. This Agreement,
which hereby incorporates the Company Disclosure Letter, the Parent Disclosure
Letter, the Confidentiality Agreement and the Shareholder Tender Agreements,
embodies the entire agreement and understanding of the parties hereto in
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respect of the subject matter hereof and, except for Section 6.11 and 6.12, is
not intended to confer upon any other person any rights or remedies hereunder.
This Agreement supersedes all prior agreements and understanding of the parties
with respect to the subject matter hereof other than the Confidentiality
Agreement. This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, but neither this Agreement nor any of the rights,
interest or obligations hereunder shall be assigned by any party hereto without
the prior written consent of the other parties hereto except that the Parent
shall have the right to assign the rights of the Purchaser to any other
(directly or indirectly) wholly-owned subsidiary of the Parent without the prior
written consent of the Company.
10.08. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
10.09. Headings. The Articles and Section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
Agreement of the parties and shall not effect in any way the meaning or
interpretation of this Agreement.
10.10. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is
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accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto on the date
first above written.
GRIFFIN TECHNOLOGY INCORPORATED
By: /s/ Robert S. Urland
-----------------------------
Name: Robert S. Urland
Title: President and CEO
DIEBOLD, INCORPORATED
By: /s/ Gerald F. Morris
-----------------------------
Name: Gerald F. Morris
Title: Executive Vice President
and Chief Financial Officer
D-GT ACQUISITION, INCORPORATED
By: /s/ Gerald F. Morris
-----------------------------
Name: Gerald F. Morris
Title: Vice President
<PAGE> 85
ANNEX A
The capitalized terms used herein have the meanings
set forth in the Agreement and Plan of Merger
to which this Annex A is attached
Notwithstanding any other provision of the Agreement and Plan
of Merger to which this Annex A is attached (the "Merger
Agreement") or the Offer, the Purchaser shall not be required to accept for
payment, purchase or pay for any Shares of the Company tendered, and may
terminate or, subject to the terms of the Merger Agreement, amend the Offer and
may postpone the acceptance for payment of any Shares, if prior to the time of
acceptance for payment of Shares tendered pursuant to the Offer:
(i) at least two-thirds of then outstanding Shares on a fully
diluted basis shall not have been validly tendered and, if tendered,
not withdrawn immediately prior to the expiration of the Offer (the
"Minimum Condition");
(ii) any waiting period applicable to the Offer pursuant to
the HSR Act shall not have expired or been terminated;
(iii) at any time before the time of acceptance for payment for
any such Shares any of the following shall occur or exist:
(a) there shall have been instituted or be pending any
action, proceeding, application, claim or counterclaim by any
government or governmental authority or agency, domestic or
foreign, before any court or governmental regulatory or
administrative agency, authority or tribunal, domestic or
foreign, (i) challenging the acquisition by the Parent or the
Purchaser of the Shares, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger or seeking to
obtain from the Parent or the Purchaser any damages that would
result in a Material Adverse Effect if such were assessed
against the Company, (ii) seeking to prohibit or materially
limit the ownership or operation by the Parent or the Surviving
Corporation of all or any material portion of the business or
assets of the Company or compel the Parent or the Surviving
Corporation to dispose of or to hold separate all or any
material portion of the business or assets of the Company, or
to impose any material limitation on the ability of the Company
or the Surviving Corporation to conduct such business or own
such assets, or (iii) seeking to impose material limitations on
the ability of the Parent (or any other affiliate of the
Parent) to acquire or hold or to exercise full rights of
ownership of the Shares, including, but not limited to,
<PAGE> 86
the right to vote the Shares purchased by them on all matters
properly presented to the stockholders of the Company; or
(b) there shall be any statute, rule, regulation,
judgment, order or injunction enacted, promulgated, entered,
enforced or deemed applicable to the Offer, the Merger or the
Merger Agreement, or any other action shall have been taken by
any government, governmental authority or court, domestic or
foreign, other than the routine application to the Offer or the
Merger of waiting periods under the HSR Act, that has, or has a
substantial likelihood of resulting in, any of the consequences
referred to in clauses (i) through (iii) of paragraph (a)
above; or
(c) the Company shall have breached or failed to
perform in any material respect any of its obligations,
covenants or agreements contained in the Merger Agreement, or
any of the representations and warranties of the Company set
forth in the Merger Agreement shall not have been true and
correct in any material respect when made or, except for any
representations and warranties made as of a specific date,
shall have ceased to be true and correct in any material
respect as if made on and as of the scheduled expiration of the
Offer, as it may be extended from time to time (the
"Expiration Date") (or, in the case of representations
and warranties that are specifically qualified as to
materiality, shall not have been true and correct when made or
shall have ceased to be true and correct on and as of the
Expiration Date); or
(d) there shall have occurred (i) any general
suspension of trading in, or limitation on prices for,
securities on the New York Stock Exchange, Inc. (ii) the
declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States (whether or
not mandatory), (iii) the commencement of a war, armed
hostilities or other international or national calamity
directly or indirectly involving the United States and having a
Material Adverse Effect on or materially adversely affecting
(or materially delaying) the consummation of the Offer, (iv)
any limitation (whether or not mandatory), by any U.S.
governmental authority or agency on, or any other event that,
in the judgment of the Parent, is substantially likely to
materially adversely affect, the extension of credit by banks
or other financial institutions, or (v) from the date of the
Merger Agreement through the date of termination or expiration
of the Offer, a decline of at least 25% in the Standard &
Poor's 500 Index; or
<PAGE> 87
(e) prior to the purchase of Shares pursuant to the
Offer, the Company Board of Directors shall have withdrawn or
modified (including by amendment of the Schedule 14D-9) in a
manner adverse to the Parent its approval or recommendation of
the Offer, the Merger Agreement or the Merger or shall have
recommended another offer for the purchase of the Shares,
which, in the sole judgment of the Parent in any such case, and
regardless of the circumstances (including any action or
omission by the Parent) giving rise to such condition, makes it
inadvisable to proceed with such acceptance for payment except
where as a result of the Company's receipt of an unsolicited
acquisition proposal from a third party (A) the Company issues
to its stockholders a communication that contains only the
statements permitted by Rule 14d-9(e) under the Securities
Exchange Act of 1934 (and does not otherwise withdraw, modify
or amend its approval or recommendation of the transactions
contemplated hereby) and (B) within five business days of
issuing such communication the Company publicly reconfirms its
approval and recommendation of the transactions contemplated by
the Offer and the Merger Agreement; or
(f) There shall have occurred since June 30, 1995, a
change, occurrence or circumstance in the Company's business
having a Material Adverse Effect thereon.
<PAGE> 1
================================================================================
SHAREHOLDER TENDER AGREEMENT
by and between
D-GT ACQUISITION, INCORPORATED
and ___________________
Dated as of October 20, 1995
================================================================================
<PAGE> 2
SHAREHOLDER TENDER AGREEMENT
SHAREHOLDER TENDER AGREEMENT, dated as of October 20, 1995
(this "Agreement"), by and between D-GT ACQUISITION, INCORPORATED, a New York
corporation ("Purchaser"), and ______________________ ("Shareholder").
WHEREAS, the Shareholder is the owner of ________ shares (the
"Shares") of Common Stock, $.05 par value per share (the "Common Stock"), of
Griffin Technology Incorporated, a New York corporation (the "Company"); and
WHEREAS, Diebold, Incorporated, an Ohio corporation ("Parent"),
the Purchaser and the Company, have entered into an Agreement and Plan of
Merger, dated as of the date hereof (as amended from time to time, the "Merger
Agreement"), which provides, among other things, that, upon the terms and
subject to the conditions therein, Purchaser will make a cash tender offer (the
"Offer") for all of the outstanding shares of Common Stock and will merge with
the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Parent and
Purchaser to enter into the Merger Agreement, Purchaser has requested that the
Shareholder agree, and in order to induce Parent and Purchaser to enter into the
Merger Agreement, the Shareholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and
the representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the terms and conditions set forth herein,
the parties hereto hereby agree as follows:
1. Representations and Warranties of the Shareholder. The
Shareholder represents and warrants to the Purchaser as follows:
(a) The Shareholder is the sole lawful, record and
beneficial owner of, and has good, valid and marketable title to, all the
Shares, and there exist no liens, claims, security interests, options, proxies,
voting agreements, charges or encumbrances of whatever nature ("Liens")
affecting the Shares.
(b) Upon transfer to the Purchaser by the
Shareholder of the Shares upon consummation of the Offer or the Merger
(whichever is earlier), Purchaser will have good, valid and marketable title to
the Shares, free and clear of all Liens.
<PAGE> 3
(c) The Shares constitute all of the securities
(as defined in Section 3(10) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), which definition will apply for all purposes of this
Agreement) of the Company beneficially owned (as defined in Rule 13d-3 under the
Exchange Act, which meaning will apply for all purposes of this Agreement),
directly or indirectly, by the Shareholder (excluding any securities
beneficially owned by any of its affiliates or associates (as such terms are
defined in Rule 12b-2 under the Exchange Act, which definition will apply for
all purposes of this Agreement) as to which it does not have voting or
investment power).
(d) Except for the Shares, the Shareholder does
not, directly or indirectly, beneficially own or have any option, warrant or
other right to acquire any securities of the Company that are or may by their
terms become entitled to vote or any securities that are convertible or
exchangeable into or exercisable for any securities of the Company that are or
may by their terms become entitled to vote, nor is the Shareholder subject to
any contract, commitment, arrangement, understanding or relationship (whether or
not legally enforceable) that allows or obligates it to vote or acquire any
securities of the Company.
(e) The execution and delivery of this Agreement
by the Shareholder does not, and the performance by the Shareholder of its
obligations hereunder will not, constitute a violation of, conflict with, result
in a default (or an event which, with notice or lapse of time or both, would
result in a default) under, or result in the creation of any Lien on any Shares
under, (i) any contract, commitment, agreement, understanding, arrangement or
restriction of any kind to which Shareholder is a party or by which the
Shareholder is bound or (ii) any judgment, writ, decree, order or ruling
applicable to the Shareholder.
(f) Neither the execution and delivery of this
Agreement nor the performance by the Shareholder of its obligations hereunder
will violate any order, writ, injunction, judgment, law, decree, statute, rule
or regulation applicable to the Shareholder or require any consent,
authorization or approval of, filing with or notice to, any court,
administrative agency or other governmental body or authority, other than any
required notices or filings pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR Act") or the federal securities laws.
2. Representations and Warranties of Purchaser.
Purchaser represents and warrants to the Shareholder as follows:
(a) Purchaser is duly organized and validly
existing and in good standing under the laws of the State of New York, has the
requisite corporate power and authority to execute
2
<PAGE> 4
and deliver this Agreement and to consummate the transactions contemplated
hereby, and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement. This Agreement has been duly and
validly executed and delivered by Purchaser and constitutes legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, except that (i) the enforceability hereof may be subject to
applicable bankruptcy, insolvency or other similar laws, now or hereinafter in
effect, affecting creditors' rights generally, and (ii) the availability of the
remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of
the court before which any proceeding therefor may be brought.
(b) The execution and delivery of this Agreement
by Purchaser does not, and the performance by Purchaser of its obligations
hereunder will not, constitute a violation of, conflict with, or result in a
default (or an event which, with notice or lapse of time or both, would result
in a default) under, its certificate of incorporation or bylaws or any contract,
commitment, agreement, understanding, arrangement or restriction of any kind to
which Purchaser is a party or by which Purchaser is bound or any judgment, writ,
decree, order or ruling applicable to Purchaser.
(c) Neither the execution and delivery of this
Agreement nor the performance by Purchaser of its obligations hereunder will
violate any order, writ, injunction, judgment, law, decree, statute, rule or
regulation applicable to Purchaser or require any consent, authorization or
approval of, filing with, or notice to, any court, administrative agency or
other governmental body or authority, other than any required notices or filings
pursuant to the HSR Act or the federal securities laws.
3. Tender of Shares. The Shareholder will tender and
sell (and not withdraw) pursuant to and in accordance with the terms of the
Offer all of the Shares. Upon the purchase of all the Shares pursuant to the
Offer in accordance with this Section 3, this Agreement will terminate. In the
event, notwithstanding the provisions of the first sentence of this Section 3,
any Shares are for any reason withdrawn from the Offer or are not purchased
pursuant to the Offer, such Shares will remain subject to the terms of this
Agreement. The Shareholder acknowledges that Purchaser's obligation to accept
for payment and pay for the Shares in the Offer is subject to all the terms and
conditions of the Offer.
4. Transfer of the Shares. During the term of this
Agreement, except as otherwise provided herein, the Shareholder will not (a)
offer to sell, sell, pledge or otherwise dispose of or transfer any interest in
or encumber with any Lien any of the Shares, (b) acquire any shares of Common
Stock or other
3
<PAGE> 5
securities of the Company (otherwise than in connection with a transaction of
the type described in Section 7 and any such additional shares or securities
will be deemed Shares and included in the Shares subject to this Agreement), (c)
deposit the Shares into a voting trust, enter into a voting agreement or
arrangement with respect to the Shares or grant any proxy or power of attorney
with respect to the Shares, or (d) enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect acquisition or
sale, assignment or other disposition of or transfer of any interest in or the
voting of any shares of Common Stock or any other securities of the Company.
5. Voting of Shares. The Shareholder, by this
Agreement, does hereby constitute and appoint Purchaser, or any nominee thereof,
with full power of substitution, during and for the term of this Agreement, as
his true and lawful attorney and proxy for and in his, her or its name, place
and stead, to vote each of such Shares at any annual, special or adjourned
meeting of the stockholders of the Company (and this appointment will include
the right to sign its name (as stockholder) to any consent, certificate or other
document relating to the Company which the laws of the State of New York may
require or permit) (a) in favor of the Merger, the execution and delivery by the
Company of the Merger Agreement and the approval and adoption of the terms
thereof and hereof; (b) against any action or agreement that would result in a
breach in any respect of any covenant, agreement, representation or warranty of
the Company under the Merger Agreement; and (c) against the following actions
(other than the Merger and the other transactions contemplated by the Merger
Agreement): (i) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or its
subsidiaries; (ii) a sale, lease or transfer of a material amount of assets of
the Company or one of its subsidiaries, or a reorganization, recapitalization,
dissolution or liquidation of the Company or its subsidiaries; (iii) (A) any
change in a majority of the persons who constitute the board of directors of the
Company as of the date hereof; (B) any change in the present capitalization of
the Company or any amendment of the Company's Certificate of Incorporation or
By-Laws, as amended to date; (C) any other material change in the Company's
corporate structure or business; or (D) any other action which, in the case of
each of the matters referred to in clauses (iii)(A), (B), (C) and (D), is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone, or adversely affect the Merger and the other transactions contemplated
by this Agreement and the Merger Agreement. This proxy and power of attorney is
a proxy and power coupled with an interest, and the Shareholder declares that it
is irrevocable. The Shareholder hereby revokes all and any other proxies with
respect to the Shares that it may have heretofore made or granted.
4
<PAGE> 6
6. Enforcement of the Agreement. The Shareholders
acknowledge that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that
Purchaser will be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which it is entitled at law or in equity,
including without limitation under Section 12 hereof.
7. Adjustments. The number and type of securities
subject to this Agreement will be appropriately adjusted in the event of any
stock dividends, stock splits, recapitalizations, combinations, exchanges of
shares or the like or any other action that would have the effect of changing
the Shareholder's ownership of the Company's capital stock or other securities.
8. Compliance with Merger Agreement. Shareholder shall comply
with the requirements of Section 6.13 of the Merger Agreement.
9. Termination. Except for Section 13 hereof which will only
terminate as and when provided therein, this Agreement will terminate on the
date the Merger Agreement is terminated in accordance with its terms.
10. Expenses. All fees and expenses incurred by either of the
parties hereto will be borne by the party incurring such fees and expenses.
11. Brokerage. Purchaser and the Shareholder represent
and warrant to the other that the negotiations relevant to this Agreement have
been carried on by Purchaser, on the one hand, and the Shareholder, on the other
hand, directly with the other, and that there are no claims for finder's fees or
brokerage commissions or other like payments in connection with this Agreement
or the transactions contemplated hereby. Purchaser, on the one hand, and the
Shareholder, on the other hand, will indemnify and hold harmless the other from
and against any and all claims or liabilities for finder's fees or brokerage
commissions or other like payments incurred by reason of action taken by it or
any of them, as the case may be.
12. Fee. If (a) Purchaser or the Company terminates the
Merger Agreement pursuant to Article IX thereof and (b) on or after the date
hereof and not later than two years from the date of such termination, (i) the
Board of Directors of the Company approves or recommends any proposal or offer
(an "Acquisition Proposal") concerning any merger, sale of assets, sale of
shares of capital stock or similar transaction involving the Company other than
from Purchaser, or (ii) the Company enters into an agreement with respect to a
merger, acquisition, consolidation,
5
<PAGE> 7
recapitalization, liquidation, dissolution or similar transaction involving, or
any purchase of all or a substantial portion of the assets or equity securities
of, the Company, or (iii) Shareholder disposes of any or all of its Shares to
any person not an affiliate or an associate of Purchaser or to the Company or
any affiliate thereof (or realizes cash proceeds in respect of such Shares as a
result of a distribution to the Shareholder by the Company following the sale of
a material amount of the Company's assets) in connection with a transaction
proposed, described or set forth in such Acquisition Proposal or agreement or
pursuant to such acquisition or (iv) the Company undergoes a recapitalization,
dissolution, liquidation or similar transaction proposed, described or set forth
in such Acquisition Proposal or agreement or the Company issues an extraordinary
dividend or other distribution in accordance with such Acquisition Proposal or
agreement (each, a "Subsequent Transaction") at a per share price or with
equivalent per share proceeds, as the case may be (the "Subsequent Price"), with
a value in excess of $7.75 (the "Offer Price"), then the Shareholder will
promptly pay to Purchaser an amount equal to the product of (x) the excess of
the Subsequent Price over the Offer Price and (y) the number of Shares disposed
of or otherwise participating in the Subsequent Transaction. In the event of any
stock dividends, stock splits, recapitalizations, combinations, exchanges of
shares or the like or any other action that would have the effect of changing
the Shareholder's ownership of the Company's capital stock or other securities,
the Offer Price will be appropriately adjusted for the purpose of this Section
12.
13. Miscellaneous.
(a) All representations and warranties contained
herein will survive the termination hereof.
(b) Any provision of this Agreement may be waived
at any time by the party that is entitled to the benefits thereof. No such
waiver, amendment or supplement will be effective unless in a writing which
makes express reference to this Section 13(b) and is signed by the party or
parties sought to be bound thereby. Any waiver by any party of a breach of any
provision of this Agreement will not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement or one or more sections hereof will not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(c) This Agreement contains the entire agreement
among Purchaser and the Shareholder with respect to the subject matter hereof,
and supersedes all prior agreements among Purchaser and the Shareholder with
respect to such matters. This Agreement may not be amended, changed,
supplemented, waived or
6
<PAGE> 8
otherwise modified, except upon the delivery of a written agreement executed by
the parties hereto.
(d) This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and performed in that state.
(e) The descriptive headings contained herein are
for convenience and reference only and will not affect in any way the meaning or
interpretation of this Agreement.
(f) All notices and other communications hereunder
will be in writing and will be given (and will be deemed to have been duly given
upon receipt) by delivery in person, by telecopy, or by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
If to the Shareholder to:
--------------------------------
--------------------------------
--------------------------------
If to the Purchaser to:
If By Mail
Diebold, Incorporated
818 Mulberry Rd. S.E.
P.O. Box 8230
Canton, Ohio 44711-8230
Attention: Gerald F. Morris
Executive Vice President and
Chief Financial Officer
If By Personal Delivery:
Diebold, Incorporated
5995 Mayfair Road
North Canton, Ohio 44720
Attention: Gerald F. Morris
Executive Vice President and
Chief Financial Officer
7
<PAGE> 9
with copies to:
If By Mail
Diebold, Incorporated
818 Mulberry Rd. S.E.
P.O. Box 8230
Canton, Ohio 44711-8230
Attention: Warren W. Dettinger
Vice President and General Counsel
and
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Lyle G. Ganske
If by Personal Delivery:
Diebold, Incorporated
5995 Mayfair Road
North Canton, Ohio 44720
Attention: Warren W. Dettinger
Vice President and General Counsel
and
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Lyle G. Ganske
or to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
(g) This Agreement may be executed in any number
of counterparts, each of which will be deemed to be an original, but all of
which together will constitute one agreement.
(h) This Agreement is binding upon and is solely
for the benefit of the parties hereto and their respective successors, legal
representatives and assigns. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement will be assigned by any of the
parties hereto without the prior written consent of the other parties, except
that Purchaser will have the right to assign to Purchaser or any other direct or
indirect wholly owned subsidiary of Parent any and all rights and obligations of
Purchaser under this Agreement, including the right to purchase Shares tendered
by the Shareholder pursuant to the terms hereof and the Offer, provided
8
<PAGE> 10
that any such assignment will not relieve Purchaser from any of its obligations
hereunder.
(i) If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party hereto. Upon any such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated by this Agreement are consummated to
the extent possible.
(j) The Shareholder hereby irrevocably and
unconditionally (i) consents to submit to the jurisdiction of the courts of the
State of New York and of the federal courts located in the City of New York for
any disputes arising out of or relating to this Agreement, (ii) waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement in any such court, and (iii) waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
(k) All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity will
be cumulative and not alternative, and the exercise of any thereof by either
party will not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.
9
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first above written.
D-GT ACQUISITION, INCORPORATED
By:
-----------------------------
Name:
Title:
SHAREHOLDER
-----------------------------
-----------------------------
10
<PAGE> 1
DONALDSON, LUFKIN & JENRETTE
Donaldson, Lufkin & Jenrette Securities Corporation - 140 Broadway, New York,
NY 10005-1235 - (212) 504-3000
July 19, 1994
Mr. Peter Rackov
Senior Financial Analyst
Diebold Incorporated
5995 Mayfair Road
North Canton, Ohio 44750
Attention: Mr. Peter Rackov
Senior Financial Analyst
Gentlemen:
In connection with your evaluation of a possible negotiated transaction by
you or one or more of your affiliates, involving Griffin Technology
Incorporated (the "Company") (a "Transaction"), the Company, Donaldson, Lufkin
& Jenrette Securities Corporation ("DLJ"), acting as the Company's exclusive
financial advisor in connection with the proposed Transaction, and their
respective advisors and agents are prepared to make available to you certain
information which is non-public, confidential or proprietary in nature.
As used herein, "Evaluation Material" includes, without limitation, all
information, data, reports, interpretations, projections, forecasts, and
records that contain or otherwise reflect information concerning the Company
provided to you by or on behalf of the Company in connection with your
evaluation of a possible Transaction, together with all analyses, compilations,
studies, and other information, whether prepared by you, your Representatives
or others, which contain or otherwise reflect or are based on any such
Evaluation Material ("Notes"). This Agreement shall be inoperative as to those
particular portions of the Evaluation Material that (i) become generally
available to the public other than as result of a disclosure by your or any of
your Representatives, (ii) were available to you on a non-confidential basis
prior to the disclosure of such Evaluation Material to you pursuant to this
Agreement, provided that the source of such information was not known by you or
any of your Representatives (as defined herein), to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any of its affiliates with
respect to such material or (iii) become available to you on a non-confidential
basis from a source other than the Company or its agents, advisors or
representatives provided that the source of such information was not known by
you or any of your Representatives, to be bound by a confidentiality
<PAGE> 2
Mr. Peter Rackov
Diebold Incorporated
Page 2 July 19, 1994
agreement with or other contractual, legal or fiduciary obligation of
confidentiality to the Company or any of its affiliates with respect to such
material.
In consideration of the Company's providing you with Evaluation Material, by
your execution of this letter agreement (the "Agreement"), you agree for a
period of two years after the date herein to treat all Evaluation Material as
confidential and to use Evaluation Material only for the purpose of evaluating
a possible transaction. You also agree that you will disclose Evaluation
Material only to those of your directors, officers, employees, partners,
affiliates, agents, advisors or representatives ("Representatives") who need to
know the Evaluation Material in order to assist you in your evaluation of the
Transaction (it being understood that such Representatives shall be informed by
you of the confidential nature of such Evaluation Material and shall be
directed by you to keep such Evaluation Material confidentially in accordance
with the provisions of this Agreement, and you shall be satisfied that they
will do so. You will also agree to assist in the enforcement of this Agreement
against any such Representatives, including institution of any action in your
name, where the same may be necessary or desirable.)
In addition, you agree that you will not make any disclosure other than to
relevant regulatory authorities that you or the Company are having or have had
discussions related to a possible Transaction, or that you have received
Evaluation Material, that you are considering a possible Transaction or any of
the terms, conditions or other facts with respect thereto; provided that you
may make such disclosure if you have received the opinion of your counsel that
such disclosure is required by applicable law, exchange requirement or similar
obligation and, prior to such disclosure, you advise and consult with the
Company and its legal counsel concerning the information you propose to
disclose.
Although the Company and DLJ have endeavored to include in the Evaluation
Material information known to them which they believe to be relevant for the
purpose of your investigation, you understand and agree that none of the
Company, DLJ or any of their affiliates, agents, advisors or representatives
(i) have made or make any representation or warranty, expressed or implied, as
to the accuracy or completeness of the Evaluation Material or (ii) shall have
any liability whatsoever to you or your Representatives relating to or
resulting from the use of the Evaluation Material or any errors therein or
omissions therefrom. Nothing contained in this paragraph and no investigation
made by
<PAGE> 3
Mr. Peter Rackov
Diebold Incorporated
Page 3 July 19, 1994
you under this Agreement shall limit or be deemed to modify any representations
or warranties made by the Company in a definitive agreement relating to a
Transaction.
In the event that you or anyone to whom you transmit any Evaluation Material
in accordance with this Agreement are requested or required (by deposition,
interrogatories, requests for information or documents in legal proceedings,
subpoenas, civil investigative demand or similar process), in connection with
any proceeding, to disclose any Evaluation Material, you will give the Company
prompt notice of such request or requirement so that the Company may seek an
appropriate protective order or other remedy and/or waive compliance with the
provisions of this Agreement, and you will cooperate with the Company at the
Company's expense to obtain such protective order. The Company will advise you
promptly of the action that it intends to take. In the event that such
protective order or other remedy is not obtained or the Company waives
compliance with the relevant provisions of this Agreement, you (or such other
persons to whom such request is directed) will furnish only that portion of the
Evaluation Material which is legally required to be disclosed. It is further
agreed that, if in the absence of a protective order you (or such other persons
to who such request is directed) are nonetheless legally compelled to disclose
such information, you may make such disclosure without liability hereunder,
provided that you give the Company notice of the information to be disclosed as
far in advance of its disclosure as is practicable and, upon the Company's
request and at its expense, request that confidential treatment will be
accorded to such information.
If you decide that you do not wish to proceed with a Transaction, you will
promptly notify DLJ of that decision. In that case, or if the Company shall
elect at any time to terminate further access by you to the Evaluation Material
for any reason, you will within promptly redeliver to us all copies of the
Evaluation Material in the possession of you or your affiliates or your
Representatives, will destroy all Notes and will further deliver to DLJ and the
Company a certificate executed by one of your officers indicating that the
requirements of this sentence have been satisfied. Notwithstanding the return
or destruction of Evaluation Material and Notes, you and your Representatives
will continue to be bound by your obligations of confidentiality and other
obligations hereunder.
You hereby acknowledge that you are aware that the securities laws of the
United States prohibiting any person who has material, non-public information
concerning the Company or a
<PAGE> 4
Mr. Peter Rackov
Diebold Incorporated
Page 4 July 19, 1994
possible Transaction involving the Company from purchasing or selling
securities in reliance upon such information or from communicating such
information to any such person or entity under circumstances in which it is
reasonably foreseeable that such person or entity is likely to purchase or sell
such securities in reliance upon such information.
You understand that (i) the Company and DLJ shall conduct the process for a
possible Transaction as they in their sole discretion shall determine
(including, without limitation, negotiating with any prospective buyer and
entering into definitive agreements without prior notice to you or any other
person), (ii) any procedures relating to such a Transaction may be changed at
any time without notice to you or any other person, (iii) the Company shall
have the right to reject or accept any potential buyer, proposal or offer, for
any reason whatsoever, in its sole discretion, and (iv) neither you nor any of
your Representatives shall have any claims whatsoever against the Company or
DLJ or any of their respective directors, officers, stockholders, owners,
affiliates or agents arising out of or relating to the Transaction (other than
those against the parties to a definitive agreement with you in accordance with
the terms thereof).
It is further understood and agreed that DLJ will arrange for appropriate
contacts for due diligence purposes. It is also understood and agreed that,
except as the Company or DLJ may direct or permit, all (i) communications
regarding a possible Transaction, (ii) request for additional information,
(iii) requests for facility tours or management meetings and (iv) discussions
or questions regarding procedures, will be submitted or directed exclusively to
DLJ, and that none of you, your affiliates or your Representatives who are
aware of the Evaluation Material and/or the possibility of a Transaction will
initiate or cause to be initiated any communication with any director, officer
or employee of the Company concerning the Evaluation Material or a Transaction.
You agree that unless and until a definitive agreement between the Company
and you with respect to any 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 Transaction.
All modifications of, waivers of and amendments to this Agreement or any
part hereof must be in writing signed on behalf of you and the Company or by
you and DLJ, as agent for the Company. You acknowledge that the Company is
intended to be
<PAGE> 5
Mr. Peter Rackov
Diebold Incorporated
Page 5 July 19, 1994
benefited by this Agreement and that the Company shall be entitled, either
alone or together with DLJ, to enforce this Agreement and to obtain for itself
the benefit of any remedies that may be available for the breach hereof.
It is further understood and agreed that no failure or delay by any party in
exercising any right, power or privilege under this Agreement shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege hereunder.
In the event that any provision or portion of this letter is determined to
be invalid or unenforceable for any reason, in whole or in part, the remaining
provisions of this letter shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by applicable law.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.
If you are in agreement with the foregoing, please so indicate by signing,
dating and returning one copy of this Agreement, which will constitute our
agreement with respect to the matters set forth herein.
Very truly yours,
GRIFFIN TECHNOLOGY INCORPORATED
By:/s/Robert S.Urland
------------------------------
Robert S. Urland
President and Chief Executive
Officer
Griffin Technology Incorporated
By:/s/Safra A. Catz
------------------------------
Safra A. Catz
Agreed and Accepted: Senior Vice President
DONALDSON, LUFKIN & JENRETTE
DIEBOLD INCORPORATED SECURITIES CORPORATION, as
Exclusive Agent
By:/s/Robert J. Warren
-----------------------------
Title:President and Treasurer
Date:7-19-94
