<PAGE>
================================================================================
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)
(AMENDMENT NO. 1)
--------------
E-SYSTEMS, INC.
(NAME OF SUBJECT COMPANY)
RTN ACQUISITION CORPORATION
RAYTHEON COMPANY
(BIDDER)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS OF SECURITIES)
269157301
(CUSIP NUMBER OF CLASS OF SECURITIES)
--------------
THOMAS D. HYDE, ESQ.
GENERAL COUNSEL
RAYTHEON COMPANY
141 SPRING STREET
LEXINGTON, MASSACHUSETTS 02173
(617) 862-6600
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF THE BIDDER)
--------------
COPIES TO:
MARTIN LIPTON, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
================================================================================
<PAGE>
This Amendment No. 1 amends and supplements the Tender Offer Statement
on Schedule 14D-1, dated April 3, 1995 (the "Schedule 14D-1") filed by Raytheon
Company, a Delaware corporation ("Parent") and its wholly-owned subsidiary RTN
Acquisition Corporation, a Delaware corporation (the "Purchaser"), in connection
with their Offer as set forth in the Schedule 14D-1. Capitalized terms used and
not defined herein shall have the meanings ascribed thereto in the Schedule 14D-
1. By this amendment the Schedule 14D-1 is hereby amended in the respects set
forth below.
ITEM 10. ADDITIONAL INFORMATION.
Item 10 is hereby amended and supplemented by adding thereto the
following:
(e) On April 3, 1995, five suits were filed, and on April 4, 1995,
three additional suits were filed, in the Court of Chancery in Delaware by
alleged stockholders of the Company against the Company, the members of the
Company's Board and Parent. Each of these suits was filed as a purported class
action on behalf of all stockholders of the Company except the defendants and
their affiliates. In each of the complaints, which are virtually identical,
plaintiffs allege, among other things, that various of the defendants have
breached their fiduciary duties to plaintiffs in connection with the Offer and
the Merger by (a) failing to explore adequately all alternatives available to
the Company's stockholders (including soliciting other possible bids for the
Company, conducting an active market check to determine the Company's worth as a
takeover candidate or negotiating with any other interested third party), (b)
undervaluing the Company by ignoring the full value of its assets and future
prospects, (c) putting their own interests before those of stockholders and (d)
denying stockholders the opportunity to share in the true value of the Company,
including the Company's future growth. Plaintiffs
<PAGE>
further allege that the intrinsic value of the Company's equity is materially
greater than the consideration being offered to stockholders. These complaints
seek, among other things, (i) class certification, (ii) a declaratory judgment
that the Offer and the Merger are unfair, unjust and inequitable to plaintiffs,
(iii) a declaratory judgment that various of the defendants have breached their
fiduciary duties to plaintiffs, (iv) preliminary and permanent injunctive relief
enjoining defendants from proceeding with or consummating the proposed Offer and
Merger, (v) a court order requiring the Company and the Board to undertake an
appropriate valuation of the Company, to enhance the attractiveness of the
Company as an acquisition candidate and to maximize stockholder value, (vi)
rescission of the Merger if consummated and (vii) joint and several damages.
Copies of the respective complaints are attached hereto as Exhibit (g)(1)
through (g)(8), and are incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended and supplemented by adding thereto to the
following:
(g)(1) - Complaint in Leon Sarfan v. E-Systems, Inc. (C.A. No. 14171), filed
------------------------------
in the Court of Chancery in Delaware on April 3, 1995.
(g)(2) - Complaint in Edith Citron v. Roland Haden (C.A. No. 14172), filed in
----------------------------
the Court of Chancery in Delaware on April 3, 1995.
(g)(3) - Complaint in George R. Savani v. James A. Bitonli (C.A. No. 14174),
------------------------------------
filed in the Court of Chancery in Delaware on April 3, 1995.
(g)(4) - Complaint in Ruth Ellen Rosenfelder v. C. Roland Haden (C.A. No.
-----------------------------------------
14175), filed in the Court of Chancery in Delaware on April 3, 1995.
(g)(5) - Complaint in Frederick Rand v. Lowell Lawson (C.A. No. 14176), filed
-------------------------------
in the Court of Chancery in Delaware on April 3, 1995.
(g)(6) - Complaint in Max Fecht v. A. Lowell Lawson (C.A. No. 14178), filed
-----------------------------
in the Court of Chancery in Delaware on April 4, 1995.
(g)(7) - Complaint in Moise Katz v. C. Roland Haden (C.A. No. 14180), filed
-----------------------------
in the Court of Chancery in Delaware on April 4, 1995.
-2-
<PAGE>
(g)(8) - Complaint in Charlotte Heller v. C. Roland Haden (C.A. No. 14181),
-----------------------------------
filed in the Court of Chancery in Delaware on April 4, 1995.
-3-
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: April 6, 1995
RAYTHEON
By: /s/ Christoph L. Hoffman
--------------------------------
Name: Christoph L. Hoffmann
Title: Executive Vice President
RTN ACQUISITION CORPORATION
By: /s/ Christoph L. Hoffman
--------------------------------
Name: Christoph L. Hoffmann
Title: Executive Vice President
-4-
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
(g)(1) -- Complaint in Leon Sarfan v. E-Systems, Inc. (C.A. No. 14171), filed
------------------------------
in the Court of Chancery in Delaware on April 3, 1995.
(g)(2) -- Complaint in Edith Citron v. Roland Haden (C.A. No. 14172), filed
----------------------------
in the Court of Chancery in Delaware on April 3, 1995.
(g)(3) -- Complaint in George R. Savani v. James A. Bitonli (C.A. No. 14174),
------------------------------------
filed in the Court of Chancery in Delaware on April 3, 1995.
(g)(4) -- Complaint in Ruth Ellen Rosenfelder v. C. Roland Haden (C.A. No.
-----------------------------------------
14175), filed in the Court of Chancery in Delaware on April 3,
1995.
(g)(5) -- Complaint in Frederick Rand v. Lowell Lawson (C.A. No. 14176),
-------------------------------
filed in the Court of Chancery in Delaware on April 3, 1995.
(g)(6) -- Complaint in Max Fecht v. A. Lowell Lawson (C.A. No. 14178), filed
-----------------------------
in the Court of Chancery in Delaware on April 4, 1995.
(g)(7) -- Complaint in Moise Katz v. C. Roland Haden (C.A. No. 14180), filed
-----------------------------
in the Court of Chancery in Delaware on April 4, 1995.
(g)(8) -- Complaint in Charlotte Heller v. C. Roland Haden (C.A. No. 14181),
-----------------------------------
filed in the Court of Chancery in Delaware on April 4, 1995.
-5-
<PAGE>
EXHIBIT (g)(1)
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
LEON SARFAN, Civil Action No. 14171
Plaintiff,
CLASS ACTION COMPLAINT
----------------------
V.
E-SYSTEMS, INC., C. ROLAND HADEN,
MARTIN R. HOFFMAN, F. GENE KEIFFER,
FRANCINE I. NEFF, JAMES A. BITONTI,
S. LEE KLING, DAVID R. TACKE,
E. F. BUEHRING, CHARLES A. GABRIEL,
A. LOWELL LAWSON and RAYTHEON CO.,
Defendants.
Plaintiff, by his attorneys, alleges upon information and belief,
except with respect to his ownership of E Systems, Inc. ("ESI" or the "Company")
common stock as follows:
PARTIES
-------
1. Plaintiff is the owner of shares of defendant ESI.
2. E Systems, Inc. is a Delaware corporation with offices at 6250 LBJ
Freeway, P.O. Box 666248, Dallas, Texas 75266-0248. ESI, among other things,
designs, develops and integrates sophisticated reconnaissance and surveillance
systems, develops and produces a broad range of systems and products for
instantaneous communication, and develops and manufactures automatic control
products for aircraft. As of September 30, 1994, ESI had approximately
34,033,245 shares of stock outstanding held by over 10,000 shareholders of
record.
3. Defendant C. Roland Haden is a director of ESI.
<PAGE>
4. Defendant Martin R. Hoffman is a director of ESI.
6. Defendant E. Gene Keiffer is chairman of the board and director of
ESI.
5. Defendant Francine I. Neff is a director of ESI.
6. Defendant James A. Bitonti is a director of ESI.
7. Defendant S. Lee Kling is a director of ESI.
8. Defendant David R. Tacke is a director of ESI.
9. Defendant E. F. Buehring is a director of ESI.
10. Defendant Charles A. Gabriel is a director of ESI.
11. Defendant A. Lowell Lawson is chief executive officer, president,
chief operating officer and a director of ESI.
12. The foregoing individual directors of ESI (collectively the
"Director Defendants"), owe fiduciary duties to ESI and its shareholders.
13. Raytheon Co. ("Raytheon") is a Delaware corporation with executive
offices at 141 Spring Street, Lexington, Massachusetts 02173-7899. Raytheon,
among other things, designs, develops and manufactures electronic systems and
components. As of October 2, 1994, Raytheon had approximately 131,575,000
shares of common stock outstanding. Raytheon has knowingly and substantially
participated in, and is benefitting by, the breaches of fiduciary duty alleged
herein, and therefore is liable as a aider and abetter thereof.
2
<PAGE>
CLASS ACTION ALLEGATIONS
------------------------
14. Plaintiff brings this action on his own behalf and as a class action
on behalf of all shareholders of defendant ESI (except defendants herein and any
person, firm, trust, corporation or other entity related to or affiliated with
any of the defendants) or their successors in interest, who have been or will be
adversely affected by the conduct of defendants alleged herein.
15. This action is properly maintainable as a class action for the
following reasons:
(a) The class of shareholders for whose benefit this action is brought
is so numerous that joinder of all class members is impracticable. As of
September 30, 1994, there were over 34 million shares of defendant ESI's common
stock outstanding owned by over 10,000 shareholders of record scattered
throughout the United States.
(b) There are questions of law and fact which are common to members of
the Class and which predominate over any questions affecting any individual
members. The common questions include, inter alia, the following:
----- ----
i. Whether one or more of the defendants has engaged in a plan and
scheme to enrich themselves at the expense of defendant ESI's public
stockholders.
ii. Whether the ESI Board has engaged in a proper process to ensure
maximization of shareholder value.
3
<PAGE>
iii. Whether the Defendant Directors have breached their
fiduciary duties owned by them to plaintiff and members of the Class, and/or
have aided and abetted in such breach, by virtue of their participation and/or
acquiescence and by their other conduct complained of herein;
iv. Whether the Defendant Directors have wrongfully failed to
seek a purchaser of ESI at the highest possible price and, instead, have allowed
the valuable assets of defendant ESI to be acquired by Raytheon at an unfair and
inadequate price;
v. Whether plaintiff and the other members of the Class will be
irreparably damaged by the transactions complained of herein; and
vi. Whether defendants have breached or aided and abetted the
breaches of the fiduciary and other common law duties owed by them to plaintiff
and the other members of the Class.
16. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of
plaintiff are typical of the claims of the other members of the Class and
plaintiff has the same interest as the other members of the Class. Accordingly,
plaintiff is adequate representatives of the Class and will fairly and
adequately protect the interests of the Class.
17. Plaintiff anticipates that there will not be any difficulty in the
management of this litigation.
4
<PAGE>
18. For the reasons stated herein, a class action is superior to other
available methods for the fair and efficient adjudication of this action.
SUBSTANTIVE ALLEGATIONS
-----------------------
19. On April 3, 1995, Raytheon and ESI announced a definitive agreement
pursuant to which Raytheon will acquire ESI for $64 cash per share, or an
aggregate $2.3 billion (the "Transaction"). The acquisition will be undertaken
pursuant to a first step tender offer beginning April 3, 1995, and closing April
28, 1995. Reportedly, under the terms of the agreement, any rival bidder would
have to pay $75 million break-up fee, plus expenses, to Raytheon.
20. The proposed Transaction is wrongful, unfair and harmful to ESI's
public stockholders, the Class members. The proposed Transaction will deny
plaintiff and other Class members their rights to share appropriately in the
true value of the Company's assets and future growth in profits and earnings,
while usurping the same for the benefit of defendant Raytheon.
21. Defendants, acting in concert, have violated their fiduciary duties
owed to the public shareholders of ESI and put certain of defendants' own
personal interests and the interests of defendant Raytheon ahead of the
interests of the ESI public shareholders.
22. The Director Defendants apparently failed to (1) undertake an
adequate evaluation of ESI's worth as a potential
5
<PAGE>
merger/acquisition candidate; (2) take adequate steps to enhance ESI's value
and/or attractiveness as a merger/acquisition candidate; or (3) effectively
expose ESI to the marketplace in an effort to create an active and open auction
for ESI. Instead, defendants have agreed to a sale of ESI to Raytheon and have
included a $75 million breakup fee.
23. While the Director Defendants of ESI should continue to seek out
other possible purchasers of the assets of ESI or its stock in a manner designed
to obtain the best transaction reasonably available for ESI's shareholders, or
seek to enhance the value of ESI for all its current shareholders, they have
instead resolved to wrongfully allow Raytheon to obtain the valuable assets of
ESI at an inadequate price, which disproportionately benefits Raytheon.
24. These tactics pursued by the defendants are, and will continue to
be, wrongful, unfair and harmful to ESI's public shareholders. These maneuvers
by the defendants will deny members of the Class their right to share
appropriately in the true value of ESI's assets, future earnings and businesses.
25. In contemplating, planning and/or effecting the foregoing specified
acts and in pursuing and timing the Transaction, defendants are not acting in
good faith toward plaintiff and the Class, and defendants have breached, and are
breaching, their fiduciary duties to plaintiff and the Class.
6
<PAGE>
26. Because the Defendant Directors (and those acting in concert with
them) dominate and control the business and corporate affairs of ESI and because
they are in possession of private corporate information concerning ESI's
businesses and future prospects, there exists an imbalance and disparity of
knowledge and economic power between the defendants and the public shareholders
of ESI which makes it inherently unfair to ESI' public shareholders.
27. By reason of the foregoing acts, practices and course of conduct,
the Director Defendants have failed to use the required care and diligence in
the exercise of their fiduciary obligations owed to ESI and their public
shareholders.
28. As a result of the actions of the defendants, plaintiff and the
Class have been and will be damaged in that they will not receive the fair value
of ESI's assets and business in exchange for their ESI's shares, and have been
and will be prevented from obtaining a fair price for their shares of ESI common
stock.
29. Unless enjoined by this Court, the Defendant Directors will continue
to breach their fiduciary duties owed to plaintiff and the Class, all to the
irreparable harm of the Class.
30. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demand judgment as follows:
(a) Declaring that this action may be maintained as a class action;
7
<PAGE>
(b) Declaring that the proposed Transaction is unfair, unjust and
inequitable to plaintiffs and the other members of the Class;
(c) Enjoining preliminarily and permanently the defendants from taking
any steps necessary to accomplish or implement the proposed Transaction that is
not fair and equitable, and enjoining any improper device which impedes
maximization of shareholder value;
(d) Requiring defendants to compensate plaintiffs and the members of
the Class for all losses and damages suffered and to be suffered by them as a
result of the acts and transactions complained of herein, together with
prejudgment and post-judment interest;
(e) Awarding plaintiffs the costs and disbursements of this action,
including reasonable attorneys', accountants', and experts' fees; and
(f) Granting such other and further relief as may be just and proper.
Dated: April 3, 1995 CHIMICLES, JACOBSEN & TIKELLIS
/s/
______________________________
Pamela S. Tikellis
James C. Strum
Robert J. Kriner, Jr.
One Rodney Square
P.O. Box 1035
Wilmington, DE 19899
(302)686-2500
8
<PAGE>
OF COUNSEL:
WOLF HALDENSTEIN ADLER FREEMAN & HERZ, LLP
Jeffrey G. Smith, Esquire
270 Madison Avenue, 9th Floor
New York, New York 10016
9
<PAGE>
EXHIBIT (g)(2)
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
EDITH CITRON,
Plaintiff, C.A. No. 14172
- v. -
ROLAND HADEN, MARTIN HOFFMAN, GENE
KIEFFER, FRANCINE NEFF, JAMES BITONTI,
LEE KLING, DAVID TACKE, F. BUEHRING,
CHARLES GABRIEL, LOWELL LAWSON and
E-SYSTEMS, INC.,
Defendants.
CLASS ACTION COMPLAINT
----------------------
THE PARTIES
-----------
1. Plaintiff, Edith Citron is and has been at all relevant times the
owner of shares of common stock of E-Systems, Inc. ("E-Systems" or the
"Company").
2. Defendant E-Systems is a corporation organized and existing under the
laws of the State of Delaware with its principal executive offices located in
Dallas, Texas. The Company manufactures electronic systems and products for
military and commercial security systems. Products include surveillance
applications, deception devices, data processing and information displays. The
Company also produces automatic control systems for aircrafts, missile steering
and navigational devices.
<PAGE>
3. (a) Defendant Roland Haden ("Haden") is and was at all times relevant
hereto a director and/or officer of the Company.
(b) Defendant Martin Hoffman ("Hoffman") is and was at all times
relevant hereto a director and/or officer of the Company.
(c) Defendant Gene Kieffer ("Kieffer") is and was at all times relevant
hereto a director and/or officer of the Company.
(d) Defendant Francine Neff ("Neff") is and was at all times relevant
hereto a director and/or officer of the Company.
(e) Defendant James Bitonti ("Bitonti") is and was at all times relevant
hereto a director and/or officer of the Company.
(f) Defendant Lee Kling ("Kling") is and was at all times relevant
hereto a director and/or officer of the Company.
(g) Defendant David Tacke ("Tacke") is and was at all times relevant
hereto a director and/or officer of the Company.
(h) Defendant F. Buehring ("Buehring") is and was at all times relevant
hereto a director and/or officer of the Company.
2
<PAGE>
(i) Defendant Charles Gabriel ("Gabriel") is and was at all times
relevant hereto a director and/or officer of the Company.
(j) Defendant Lowell Lawson ("Lawson") is and was at all times relevant
hereto a director and/or officer of the Company.
4. The defendants named in paragraph 3 above ("Individual Defendants"),
as directors and/or officers of E-Systems, owe fiduciary duties of good faith,
loyalty, fair dealing, due care, and candor to plaintiff and the other members
of the Class (as defined below).
CLASS ACTION ALLEGATIONS
------------------------
5. Plaintiff brings this action pursuant to Rule 23 of the Rules of this
Court, on behalf of herself and all other stockholders of the Company as of
April 3, 1995 (except the defendants herein and any persons, firms, trust,
corporation, or other entity related to or affiliated with them) and their
successors in interest, who are or will be threatened with deprivation of their
equity interest in E-Systems by reason of the proposed transaction described
herein (the "Class").
6. This action is properly maintainable as a class action for the
following reasons:
(a) The Class is so numerous that joinder of all members is
impracticable. There are over 34 million shares
3
<PAGE>
of E-Systems' common stock outstanding. There are over 10,000 holders of record.
(b) There are questions of law and fact which are common to the
Class including, inter alia, the following:
----- ----
(i) Whether defendants have engaged and are continuing
to engage in a plan and scheme to benefit themselves at the expense of the
members of the Class;
(ii) Whether defendants have disclosed all material
facts in connection with the challenged transaction; and
(iii) Whether plaintiff and the other members of the
Class would be irreparably damaged were defendants not enjoined from effecting
the transaction challenged herein;
(c) The claims of plaintiff are typical of the claims of the
other members of the Class in that all members of the Class will be injured by
defendants' actions.
(d) Plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature. Plaintiff
is an adequate representative of the Class.
BACKGROUND AND SUBSTANTIVE ALLEGATIONS
--------------------------------------
7. On April 3, 1995 E-Systems announced that Raytheon Co. had agreed to
purchase E-Systems for more than $2.3 billion or $64 per share. Under the
Agreement, Raytheon will commence a tender offer on April 3, 1995,
4
<PAGE>
which is scheduled to close April 28, 1995.
8. The agreement was made without a market check to determine E-Systems'
worth as a take-over candidate, notwithstanding that E-Systems has been
mentioned as a possible takeover target recently.
9. In agreeing to the transaction, the Individual Defendants have
undervalued E-Systems by ignoring the full value of its assets and future
prospects.
10. The defendants are in possession of information concerning the
financial condition and prospects of E-Systems, and especially the true value
and expected increased future value of E-Systems and its assets which they have
not disclosed to E-Systems' public stockholders.
11. The defendant fiduciaries have clear and material conflicts of
interest and are acting to better their own interests at the expense of
E-Systems' public stockholders. For example, under the terms of the agreement,
the entire E-Systems board of directors will be retained as an advisory board
for five years with full compensation.
12. Prior to announcing the proposed transaction, the Individual
Defendants have not adequately considered or encouraged other possible
purchasers of and offers for E-Systems, nor have they acted in a manner designed
to obtain the best transaction available for E-Systems' public stockholders.
5
<PAGE>
13. Indeed, defendants have placed onerous obstacles in the way of any
other emerging bidder. Any potential rival bidder, under the terms of the
proposed transaction, will have to pay a $75 million bust-up fee, plus expenses
to Raytheon.
14. The proposed buyout is wrongful, unfair and harmful to E-Systems'
public stockholders, and represents an effort by E-Systems management to
aggrandize their own financial position and interests at the expense of and to
the detriment of E-Systems' public stockholders. The transaction is an attempt
to deny plaintiff and the other members of the Class their right to share
proportionately in the true value of E-Systems' valuable assets and future
growth in profits and earnings.
15. The Individual Defendants, in failing to disclose the material
non-public information in their possession as to the value of E-Systems' assets,
the full extent of the future earnings potential of E-Systems and its expected
increase in profitability, are not acting in good faith toward plaintiff and the
other members of the Class, and have breached and are breaching their fiduciary
duties to the member of the Class.
16. As a result of the Individual Defendants' unlawful actions,
plaintiff and the other members of the Class will be irreparably harmed in that
they will not receive the true value of E-Systems' assets and business and
6
<PAGE>
will be prevented from obtaining the maximum value of their equity ownership in
a sale of the Company. Unless the proposed transaction is enjoined by the
Court, the Individual Defendants will continue to breach their fiduciary duties
owed to plaintiff and the members of the Class, will not engage in arm's length
negotiations with potential acquirers, and may consummate the proposed
acquisition of E-Systems all to the irreparable harm of the members of the
Class.
17. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff prays for judgment and relief as follows:
(A) Declaring that this lawsuit is properly maintainable as a
class action and certifying plaintiff as a representative of the Class;
(B) Declaring that defendants and each of them have committed or
aided and abetted a gross abuse of trust and have breached their fiduciary and
other duties to plaintiff and the other members of the Class;
(C) Preliminarily and permanently enjoining the defendants and
their counsel, agents, employees and all persons acting under, in concert with,
or for them, from proceeding with, consummating or closing the proposed merger
transaction;
(E) In the event the proposed merger is
7
<PAGE>
consummated, rescinding it and setting it aside;
(F) Awarding compensatory damages against defendants individually and
severally in an amount to be determined at trial, together with prejudgment
interest at the maximum rate allowable by law;
(G) Awarding plaintiff costs and disbursements and reasonable allowances
for plaintiff's counsel and experts' fees and expenses; and
(H) Granting such other and further relief as the Court may deem just
and proper.
Dated: April 3, 1995
ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A.
By: /s/
-------------------------
Suite 214
First Federal Plaza
P.O. Box 1070
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
ABBEY & ELLIS
212 East 39th Street
New York, New York 10016
(212) 889-3700
8
<PAGE>
EXHIBIT (g)(3)
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
GEORGE R. SAVANI, )
)
Plaintiff, ) Civil Action No. 14174
)
- against - )
)
JAMES A. BITONLI, S. LEE KLING, )
DAVID R. TACKE, E. F. BUEHRING, ) CLASS ACTION COMPLAINT
CHARLES A. GABRIEL, A. LOWELL ) ----------------------
LAWSON, C. ROLAND HADEN, MARTIN )
R. HOFFMANN, E. GENE KEIFLER, )
FRANCINE I. NEFF, E-SYSTEMS INC. )
and RAYTHEON COMPANY, )
)
Defendants. )
)
Plaintiff, by his attorneys, alleges upon information and belief,
except for paragraph 1, which is alleged upon knowledge:
THE PARTIES
-----------
1. Plaintiff is the owner of common stock of defendant E-Systems Inc.
("E-Systems" or the "Company") and has been the owner continuously of such
shares since prior to the wrongs complained of herein.
2. Defendant E-Systems is a Delaware corporation with its offices
located at 6250 LBJ Freeway, Dallas, Texas. E-Systems is a major supplier of
military equipment to the Police Department. Its products include surveillance
systems, detector systems, and electronic support services, communication
systems, controls, steering and tracing systems.
<PAGE>
3. Defendants E.F. Buehring, James A.Bitonli, S. Lee Kling, David R.
Tacke, A. Lowell Lawson, E. Gene Keiffer, Charles A. Gabriel, C. Roland Haden
and Francine I. Neff are directors of the Company.
4. Defendant Raytheon Corporation is a corporation with offices at 141
Spring Street, Lexington, Massachusetts 02173. It is sued herein as an aider and
abettor of the breaches of fiduciary duty committed by the individual
defendants.
CLASS ACTION ALLEGATIONS
-------------------------
5. Plaintiff brings this lawsuit on his own behalf and as a class action
on behalf of all holders of the common stock of E-Systems (except defendants
herein and any person, firm, trust, corporation or other entity related to or
affiliated with any of the defendants) and their successors in interest, who
are or will be threatened with the deprivation of their equity interest in
E-Systems by reason of the proposed elimination of the stockholders of E-Systems
through the transaction described herein (the "Class").
6. This action is properly maintainable as a Class action for the
following reasons:
(a) The Class of stockholders for whose benefit this action is brought
is so numerous that joinder of all Class members is impracticable. There are
approximately 34.129 million shares of E-Systems common stock outstanding, owned
by over
2
<PAGE>
10,000 shareholders of record. Members of the Class are scattered throughout the
United States.
(b) There are questions of law and fact which are common to
members of the Class including, inter alia, the following:
----- ----
(i) whether defendants have engaged in a plan and scheme
to deprive the public stockholders of the Company of their investment in
E-Systems on unfair terms;
(ii) whether defendants have engaged in conduct
consisting of unfair dealing to the detriment of the minority public
stockholders of E-Systems;
(iii) whether defendants have breached their fiduciary
and other common-law duties owed by them to plaintiff and the other members of
the Class; and
(iv) whether plaintiff and the Class would be
irreparably harmed were the transaction complained of herein consummated.
(c) The claims of plaintiff are typical of the claims of the
other members of the Class and plaintiff has no interest that is adverse or
antagonistic to the interests of the Class.
(d) Plaintiff is committed to the vigorous prosecution of this
action and has retained competent counsel experienced in litigation of this
nature. Accordingly, plaintiff is an adequate representative of the Class and
will fairly and adequately protect the interests of the Class.
<PAGE>
SUBSTANTIVE ALLEGATIONS
-----------------------
7. On April 3, 1995, it was announced that Raytheon Company, through a
wholly-owned subsidiary, has agreed to purchase E-Systems for $64.00 per share.
8. An unusual feature of the transaction is the retention of the E-
Systems Board of Directors. It was announced that the entire E-Systems Board of
Directors will be retained as an advisory Board for five years with full
compensation.
9. In addition, it was announced that the agreement contains a so-called
"bust-up" fee of $75 million plus expenses. While the expenses cannot presently
be determined, they easily could exceed $25 million.
10. The purpose of the acquisition is to enable Raytheon to acquire one
hundred (100%) percent equity ownership of E-Systems and its valuable assets at
the expense of the E-Systems public stockholders who would be deprived of their
equity investment.
11. The process by which the E-Systems Board has approved the
transaction is tainted by the significant emoluments to be provided to the E-
Systems Board after the transaction closes. Generally, the employment of a
director ends after an acquisition occurs. Here the entire Board will be
retained for a significant time period at full pay as "advisors" in exchange for
their approval of the transaction.
12. The bust-up fee of $75 million plus expenses is unreasonable and
creates an uneven playing field designed to
4
<PAGE>
discourage any other offer for E-Systems. As a result, there will be no open
market test of the transaction and the Class will not be beneficiaries of an
open and healthy auction for the Company. The agreement to the bust-up fee,
together with the creation of the advisory board, is a breach of fiduciary duty
by the director defendants.
13. By reason of their positions with E-Systems, the director
defendants of E-Systems have a fiduciary relationship with the plaintiff and the
members of the Class and owe to them the highest obligations of good faith and
fair dealing. They must act in a disinterested manner in the shareholders' best
interest and may not put their personal interest above those of the class.
14. The director defendants have violated fiduciary and other common
law duties which they owe to plaintiff and the other members of the Class in
that they are not exercising independent business judgment, have acted and are
acting to the detriment of the members of the Class in order to benefit
themselves and others.
15. As a result of defendants' unlawful actions, plaintiff and the other
members of the Class will be irreparably damaged in that they will be denied the
benefits of a value maximizing transaction not compromised by conflicts of
interests.
16. Plaintiff and the Class have no adequate remedy at law.
5
<PAGE>
WHEREFORE, plaintiff prays for judgment and relief as follows:
(A) Declaring that this lawsuit is properly maintainable as a class
action and certifying plaintiff as the representative of the Class;
(B) Declaring that the defendants and each of them have committed or
aided and abetted a gross abuse of trust and have breached their fiduciary and
other duties to plaintiff and the other members of the Class;
(C) Preliminarily and permanently enjoining the defendants and all
persons acting under, in concert with, or for them, from proceeding with,
consummating or closing the proposed merger transaction;
(D) In the event the proposed merger is consummated, rescinding it and
setting it aside;
(E) Awarding compensatory damages against defendants individually and
severally in an amount to be determined at trial, together with prejudgment
interest at the maximum rate allowable by law;
(F) Awarding plaintiff his costs and disbursements and reasonable
allowances for plaintiff's counsel and experts' fees and expenses; and
(G) Granting such other and further relief as the Court may deem just
and proper.
Dated: April 3, 1995
6
<PAGE>
ROSENTHAL, MONHAIT GROSS
& GODDESS P.A
BY /S/
--------------------------
First Federal Plaza
P.O. Box 1070
Wilmington, Delaware 19899
Attorneys for Plaintiff
of Counsel:
WOLF POPPER ROSS WOLF & JONES, L.L.P.
845 Third Avenue
New York, New York 10022
7
<PAGE>
EXHIBIT (g)(4)
<PAGE>
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------------------x
:
RUTH ELLEN ROSENFELDER, :
:
Plaintiff, :
:
- against - :
:
C. ROLAND HADEN, MARTIN R. HOFFMAN, : C.A. NO. 14175
E. GENE KEIFFER, FRANCINE I. NEFF, :
JAMES A. BITONTI, S. LEE KLING, :
DAVID R. TACKE, E.F. BUEHRING, :
CHARLES A. GABRIEL, A. LOWELL :
LAWSON, E-SYSTEMS, INC., AND :
RAYTHEON COMPANY, :
:
Defendants. :
- ---------------------------------------------x
CLASS ACTION COMPLAINT
----------------------
Plaintiff, by her attorneys, Rosenthal, Monhait, Gross & Goddess, P.A., for
her complaint against defendants, alleges upon information and belief, except
for paragraph 2 hereof, which is alleged upon knowledge as follows:
1. Plaintiff brings this action pursuant to Rule 23 of the Rules of the
Court of Chancery on her behalf and as a class action on behalf of all persons,
other than defendants and those in privity with them, who own the common stock
of E-Systems, Inc. ("E-Systems" or the "Company").
2. Plaintiff has been the owner of the common stock of the Company since
prior to the transaction herein complained of and continuously to date.
3. Defendant E-Systems is a corporation duly organized and existing under
the laws of the State of Delaware. The Company
<PAGE>
designs, develops and integrates sophisticated reconnaissance and surveillance
systems and develops and produces a broad range of systems and products for
instantaneous communication through line-of-sight, satellites or integrated
networks.
4. Defendant Raytheon Company ("Raytheon") is a corporation duly organized
and existing under the laws of the state of Delaware. Raytheon, with its
subsidiaries, makes electronic systems and subsystems, equipment and components
for governmental and commercial use. It also produces aircraft products, heavy
construction equipment and major household appliances, textbook publication and
is engaged in energy and environmental services and other lines of business.
5. Defendant E. Gene Keiffer is a Director and Chairman of the Board of
E-Systems.
6. Defendant A. Lowell Lawson ("Lawson") is a Director, President and
Chief Executive Officer of E-Systems.
7. Defendant C. Roland Haden is a Director of E-Systems.
8. Defendant Martin R. Hoffman is a Director of E-Systems.
9. Defendant Francine I. Neff is a Director of E-Systems.
10. Defendant James A Bitonti is a Director of E-Systems.
11. Defendant S. Lee Kling is a Director of E-Systems.
12. Defendant David R. Tacke is a Director of E-Systems.
-2-
<PAGE>
13. Defendant E. F. Buehring is a Director of E-Systems.
14. Defendant Charles A. Gabriel is a Director of E-Systems.
15. The individual defendants named in paragraphs 5 through 14 are in a
fiduciary relationship with Plaintiff and the other public stockholders of
E-Systems and owe them the highest obligations of good faith and fair dealing.
16. Each Defendant herein is sued individually as conspirator and aider
and abettor, as well as in his capacity as an officer and/or director of the
Company (in the case of the individual defendants), and the liability of each
arises from the fact that he or it has engaged in all or part of the unlawful
acts, plans, schemes, or transactions complained of herein.
CLASS ACTION ALLEGATIONS
------------------------
17. Plaintiff brings this action on her own behalf and as a class action,
pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all
common stock holders of the Company (except the defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defendants) and their successors in interest, who are or will be
threatened with injury arising from defendants' actions as more fully described
herein.
18. This action is properly maintainable as a class action.
19. The class is so numerous that joinder of all members is impracticable.
As of September 30, 1994, there were
-3-
<PAGE>
approximately 34,033,245 shares of E-Systems common stock outstanding, owned by
thousands of stockholders.
20. There are questions of law and fact which are common to the class and
which predominate over questions affecting any individual class member. The
common questions include, inter alia, the following: (a) whether the
----- ----
individualdefendants have breached their fiduciary and other common law duties
owed by them to plaintiff and the members of the class; (b) whether the proposed
transaction, hereinafter described, constitutes a breach of the duty of fair
dealing with respect to the plaintiff and the other members of the class; and
(c) whether the class is entitled to injunctive relief or damages as a result of
the wrongful conduct committed by defendants.
21. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of the
plaintiff are typical of the claims of other members of the class and plaintiff
has the same interests as the other members of the class. Plaintiff will fairly
and adequately represent the class. A class action is superior to any other type
of adjudication of this controversy.
22. Defendants have acted in a manner which affects plaintiff and all
members of the class similarly, thereby making appropriate injunctive relief
and/or corresponding declaratory relief with respect to the class as a whole.
-4-
<PAGE>
SUBSTANTIVE ALLEGATIONS
-----------------------
23. E-Systems mainly designs, develops and makes reconnaissance and
surveillance systems and command, control and communication systems,
intelligence collection and processing systems, navigation and control systems
and performs aircraft maintenance and modification.
24. On April 3, 1995, E-Systems and Raytheon announced an agreement for the
combination of Raytheon and E-Systems. The transaction, valued at approximately
$2.3 billion, will be effected through a cash tender offer commended today. The
Offer is subject to the receipt of the majority of the E-Systems common shares
outstanding and Hart-Scott-Rodino antitrust review.
25. In breach of their fiduciary duties to the public stockholders of
E-Systems, the Board of Directors of E-Systems voted unanimously in favor of the
merger. This was done by the Individual Defendants primarily to protect their
compensation and positions with the Company, for, as reported by the PR Newswire
-----------
on April 3, 1995, Lawson will remain Chairman and Chief Executive Officer of
E-Systems and will join Raytheon as an Executive Vice President and member of
its board of directors. Lawson also stated that "[t]he E-Systems board will
become an advisory board with both E-Systems and Raytheon members."
26. The consideration to be paid to Class members in the proposed
acquisition is unfair and grossly inadequate because, among other things:
-5-
<PAGE>
a. The intrinsic value of E-Systems' common stock is materially in
excess of the amount offered for those securities in the acquisition giving due
consideration to the anticipated operating results, net asset value, cash flow,
and profitability of the Company;
b. the consideration to be paid to Class members is not the result of
an appropriate consideration of the value of E-Systems because the E-Systems
Board approved the proposed merger without undertaking steps to accurately
ascertain E-Systems' value through open bidding or at least a "market check"
mechanism; and
c. the individual defendants have agreed to this transaction to
protect and enhance their compensation and positions with the Company.
27. The individual defendants did not appoint or retain any truly
independent person or entity to negotiate for or on behalf of E-Systems' public
shareholders to promote their best interests in the merger transaction.
28. The individual defendants are engaged in unfair dealing to the
detriment of the Class to whom they owe the highest fiduciary duties. The terms
of the proposed acquisition, and in particular, the unfair and inadequate
consideration to be paid to E-Systems' public shareholders, are not the product
of true arm's length negotiations, but rather the design and plan of defendants
who have substantial conflicts of interest with the Class.
29. Raytheon knowingly aided and abetted the breaches of fiduciary duty
committed by the individual defendants by, among
-6-
<PAGE>
other things, offering to reward them by maintaining and enhancing their
lucrative positions in the combined entity. Indeed, the proposed merger could
not take place without the knowing participation of Raytheon.
30. The terms of the proposed acquisition are grossly unfair to the Class,
and the unfairness is compounded by the gross disparity between the knowledge
and information possessed by defendants by virtue of their positions of control
of E-Systems and that possessed by E-Systems' public shareholders. Defendants'
scheme and intent is to take advantage of this disparity and to induce the Class
to exchange their shares in the merger acquisition for unfair consideration on
the basis of incomplete or inadequate information.
31. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action;
B. enjoining, preliminarily and permanently, the proposed acqusition under
the terms presently proposed;
C. to the extent, if any, that the transaction complained of is
consummated prior to the entry of this Court's final judgment, rescinding the
same or awarding rescissory damages to the Class;
D. directing that defendants account to plaintiff and the Class for all
damages caused to them and account for all profits and any special benefits
obtained by defendants as a result of their unlawful conduct;
-7-
<PAGE>
E. awarding to plaintiff the costs and disbursements of this action,
including a reasonable allowance for the fees and expenses of plaintiff's
attorneys and experts; and
F. granting such other and further relief as the Court deems appropriate.
Dated: April 3, 1995
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By: /s/
_________________________________________
First Federal Plaza, Suite 214
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
GOODKIND LABATON RUDOFF & SUCHAROW LLP
100 Park Avenue
New York, NY 10017-5563
BERNSTEIN LIEBHARD & LIFSHITZ
274 Madison Avenue
New York, New York 10016
(212) 779-1414
-8-
<PAGE>
EXHIBIT (g)(5)
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------------X
|
FREDERICK RAND, | C.A. NO 14176
|
Plaintiff, |
| CLASS ACTION COMPLAINT
against- |
|
LOWELL LAWSON, JAMES A. |
BITONTI, S. LEE KLING, |
DAVID R. TACKE, E.F. |
BUEHRING, CHARLES A. GABRIEL, |
C. ROLAND HADEN, MARTIN R. |
HOFFMAN, E. GENE KEIFFER, |
FRANCINE I. NEFF and |
E-SYSTEMS, INC. |
|
Defendants. |
- -------------------------------------- X
Plaintiff, by his attorneys, alleges upon information and belief, except
for paragraph 2 hereof, which is alleged upon knowledge, as follows:
JURISDICTION
1. This Court has jurisdiction by virtue of the fact that the E-Systems,
Inc. ("E-Systems" or the "Company") is incorporated in the State of Delaware.
THE PARTIES
2. Plaintiff Frederick Rand is and at relevant times was the owner of
shares of common stock of E-Systems.
3. Defendant E-Systems has its corporate headquarters at 6250 LBJ
Freeway, Dallas, Texas 75240. The Company is involved in the defense-electronics
industry.
<PAGE>
4. The Company's Board of Directors consists of the following persons:
(a) defendant Lowell Lawson who is, and has been at all relevant
times, Chairman and Chief Executive Officer of the Company. In 1994, he received
a salary of $477,738 plus a bonus of $425,000. Defendant Lawson is Chairman of
the Executive Committee;
(b) defendant James A. Bitonti who is, and has at all relevant
times, been a director of the Company and is a member of the Audit and of the
Compensation and Benefits committees;
(c) defendant S. Lee Kling who is, and has at all relevant
times, been a director of the Company and is a member of the Audit and of the
Compensation and Benefits committees;
(d) defendant David R. Tacke who is, and has at all relevant
times, been a director of the Company and is a member of the Executive Committee
and is a former executive officer of the Company;
(e) defendant E.F. Buehring who is, and has at all relevant
times, been a director of the Company;
(f) defendant Charles A. Gabriel who is, and has at all relevant
times, been a director of the Company and is a member of the Audit Committee;
(g) defendant C. Roland Haden who is, and has at all relevant
times, been a director of the Company;
(h) defendant Martin R. Hoffman who is, and has at all relevant
times, been a director of the Company;
2
<PAGE>
(i) defendant E. Gene Keiffer who is, and has at all relevant
times, been a director of the Company, and is a member of the Executive
Committee, and is a former executive officer of the Company; and
(j) defendant Francine I. Neff who is, and has at all relevant
times, been a director of the Company and is a member the Compensation and
Benefits Committee, and is Chairperson of the Audit Committee.
5. The persons named in paragraph 4 above shall be collectively referred
to herein as the "Individual Defendants."
6. The Individual Defendants, except for Lawson, Tacke and Keiffer, are
paid a retainer fee of $2,000 per month and $1,200 for each board meeting
attended. Directors are also paid $1,200 per committee meeting attended, except
the chairman of the committee is paid $1,500 per committee meeting attended.
7. The Individual Defendants, by reason of their corporate directorships
(and in the case of defendant Lawson, his executive position), stand in a
fiduciary position relative to the Company's shareholders, which fiduciary
relationship, at all times relevant herein, required the Individual Defendants
to exercise their best judgment, and to act in a prudent manner, and in the best
interests of the Company's shareholders. They were and are required to use their
ability to control and manage the Company in a fair, just and equitable manner;
to act in furtherance of the best interests of the Company's shareholders; to
refrain from abusing their positions
3
<PAGE>
of control; and not to favor their own interests at the expense of the Company's
shareholders.
8. Each Individual Defendant herein is sued individually as an aider and
abettor, as well as in his or her capacity as an officer and/or director of the
Company, and the liability of each arises from the fact that he or she has
engaged in all or part of the unlawful acts, plans, schemes, or transactions
complained of herein.
CLASS ACTION ALLEGATIONS
9. Plaintiff brings this action on his own behalf and, pursuant to Rule
23 of the Rules of the Court of Chancery of the State of Delaware, on behalf of
all stockholders of the Company (except the defendants herein and any person,
firm, trust, corporation, or other entity related to or affiliated with any of
the defendants) and their successors in interest, who are or will be threatened
with injury arising from defendants' actions as more fully described herein.
10. Plaintiff seeks injunctive relief and to recover damages for himself
and the other members of the class caused by the breach of fiduciary duties owed
by the Individual Defendants, in that plaintiff and the other members of the
class will not receive their fair proportion of the value of E-System's assets
and businesses, which is not fully reflected in the price to be paid by Raytheon
and which can only truly be determined if the Individual Defendants create a
level playing field for other bidders to come in and bid
4
<PAGE>
for E-Systems. Plaintiff and the other members of the class are being prevented
from obtaining a fair price for their shares of the Company's common stock.
11. The transaction proposed by E-Systems management is being advanced
through unfair dealing, including but not limited to, perquisites to be granted
to the Individual Defendants and the opportunity for all of them to maintain
their positions, along with all attendant compensation, for five years following
the completion of the merger, and in particular for defendant Lawson to not only
maintain his position as Chairman and Chief Executive Officer of E-Systems, but
to also become Executive Vice President and a director of Raytheon following
completion of the transaction. Moreover, the consideration offered is an unfair
price and does not constitute a maximization of stockholder value.
12. The Individual Defendants' decision to agree to the transaction was
given in breach of their fiduciary duties owed to E-Systems' stockholders to
take all necessary steps to ensure that the stockholders will receive the
maximum value realizable for their shares in any merger or acquisition of the
Company. In the context of this action, the Board of Directors of E-Systems must
take all reasonable steps to assure the maximization of stockholder value,
including the implementation of a bidding mechanism to foster a fair auction of
the Company to the highest bidder or the exploration of strategic alternatives
which will return greater or equivalent value to the plaintiff and the class.
13. This action is properly maintainable as a class action.
5
<PAGE>
14. The class is so numerous that joinder of all members is
impracticable. There were 34,129,500 shares of E-Systems common stock issued
and outstanding as of March 3, 1995, which shares are traded on the New York
Stock Exchange. While the exact number of class members is unknown to plaintiff
at this time and can only be ascertained through appropriate discovery,
plaintiff believes that there are thousands of members of the Class.
15. A class action is superior to other methods for the fair and
efficient adjudication of the claims herein asserted and no unusual difficulties
are likely to be encountered in the management of this class action. The
likelihood of individual class members prosecuting separate claims is remote.
16. There are questions of law and fact which are common to the class
and which predominate over questions affecting any individual class member. The
common questions include, inter alia, the following;
----- ----
(a) whether defendants have breached their fiduciary duties by
engaging in concerted and continual action to entrench
themselves in their lucrative positions and to enrich
themselves at the expense of E-Systems' public stockholders;
(b) whether defendants are unlawfully impeding other possible
merger or takeover attempts at the expense of E-Systems'
public stockholders;
(c) whether defendants have failed to disclose all material
facts relating to the takeover including the potential
6
<PAGE>
and expected positive future financial benefits which they
expect to derive;
(d) whether defendants have failed and will fail to negotiate in
good faith with other prospective purchasers of the Company;
and
(e) whether the plaintiff and other members of the class would
be irreparably damaged were the defendants not enjoined from
the conduct described hereinbelow.
17. The prosecution of separate claims would create a risk of either
inconsistent or varying adjudications concerning individual members of the
class, which would establish incompatible standards of conduct for the party
opposing the class, and adjudications concerning individual members of the class
would, as a practical matter, be dispositive of the interests of other members
of the class who are not parties to the adjudications or substantially impair or
impede the ability of other members of the class who are not parties to the
adjudications, to protect their interests. The defendants have acted on grounds
generally applicable to all members of the class, making relief concerning the
class as whole appropriate.
18. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of the
plaintiff are typical of the claims of other members of the class and the
plaintiff has the same interests as the other members of the class. Plaintiff is
an adequate representatives of the class. A class action poses no management
7
<PAGE>
problems and this case is ideally suited for class action certification.
SUBSTANTIVE ALLEGATIONS
19. As reported by Dow Jones on April 3, 1995, as the defense industry
---------
has consolidated in response to plummeting Pentagon spending, E-Systems has
emerged as a unique collection of assets. The Company is heavily involved in
top-secret communications work for the Defense Department, performing about a
third of the business, or about $600 million in contracts annually, producing
Pentagon signal-intelligence systems, space-based imaging work,
reconnaissance-and-surveillance technologies, "command, control and
communications" systems, and aircraft-modification work. Although many other
defense-electronics companies have seen their backlogs slip, E-Systems has seen
its unfilled contracts grow an estimated record $2.6 billion in 1994 -- a
backlog that has already grown in the first quarter of this year and one that
could expand further still during the rest of 1995.
20. On April 3, 1995, it was announced that Raytheon had signed a
definitive agreement to acquire E-Systems in a fully financed $64 per share
offer, or an aggregate $2.3 billion. Under the agreement, Raytheon's tender
offer began April 3 and is scheduled to close April 28, 1995.
21. Under the terms of the agreement, E-Systems will become a wholly
owned subsidiary of Raytheon, but will retain its headquarters in Dallas, Texas,
and will continue to operate under
8
<PAGE>
the E-Systems name; defendant Lowell Lawson will remain Chairman and Chief
Executive Officer of E-Systems and will join Raytheon as an Executive Vice
President and director; and the entire E-Systems board will be retained as an
advisory board for five years with full compensation.
22. Because the $64 per share offering price is 41% higher than the
closing price of E-Systems stock on Friday, March 31, and is at the high end of
what investment bankers believed E-Systems (which was frequently mentioned in
takeover rumors) would fetch, it will be even more difficult for other bidders
to disturb the two companies' friendly transaction. As well, the merger
agreement includes a breakup fee of $75 million, thus virtually guaranteeing no
other competitive bidders for E-Systems, since any rival bidder would have to
pay this $75 million, plus expenses, to Raytheon.
23. As reported by Dow Jones, E-Systems' board has already approved the
---------
tender offer and merger and has recommended that its stockholders accept the
offer. Defendant Lawson said that it made no sense to shop the company around
because "we're not trying to liquidate. We were looking for ways to grow our
company."
24. The $64 per share agreed to by the defendants is unfair to E-
Systems' shareholders and does not reflect the intrinsic value of E-Systems'
stock. It is the result of unfair dealing by the Individual Defendants in an
attempt to entrench themselves in office.
25. The Individual Defendants have at all times been fiduciaries of
E-Systems shareholders. As set forth herein, they
9
<PAGE>
have breached and are continuing to breach their fiduciary duties to E-Systems'
shareholders in order to entrench themselves in office and to continue receiving
their compensation, fees and emoluments of office by entering into the agreement
with Raytheon, including the $75 million breakup fee, which chilled the market
place in order to ensure that no other bidders would attempt to make a bid for
E-Systems.
26. The Individual Defendants have breached their fiduciary duties by
reason of the acts and transactions complained of herein, including their
refusal to negotiate the possible acquisition of E-Systems and to provide
confidential information to potential suitors on the same playing field that it
created for Raytheon.
27. Plaintiff and the other members of the class have been and will be
damaged in that they have not and will not receive their fair proportion of the
value of E-Systems' assets and businesses, which is not fully reflected in the
price to be paid by Raytheon and which can only truly be determined if the
Individual Defendants create a level playing field for other bidders to come in
and bid for E-Systems. Plaintiff and the other members of the class have been
and will be prevented from obtaining a fair price for their shares of the
Company's common stock.
28. Unless enjoined by this Court, the Individual Defendants will
continue to breach their fiduciary duties owed to plaintiff and the other
members of the class, and will entrench themselves in their corporate offices,
all to the irreparable harm of the class, as aforesaid.
10
<PAGE>
29. Plaintiff and the class have no adequate remedy at law. WHEREFORE,
plaintiff demands judgment, as follows:
A. Declaring this to be a proper class action;
B. Ordering the Individual Defendants to carry out their fiduciary
duties to plaintiff and the other members of the class by announcing their
intention to:
1. cooperate fully with any person or entity, having a bona fide
---- ----
interest in proposing any transaction which would maximize shareholder value,
including, but not limited to, a buyout or takeover of the Company;
2. undertake an appropriate evaluation of E-Systems' worth as a
merger/acquisition candidate;
3. take all appropriate steps to enhance E-Systems' value and
attractiveness as a merger/acquisition candidate;
4. take all appropriate steps to effectively expose E-Systems to the
marketplace in an effort to create an active auction for E-Systems;
5. take proper action to maximize the price that E-Systems shareholders
will receive for their shares.
6. act independently so that the interests of E-Systems' public
stockholders will be protected; and
7. adequately ensure that no conflicts of interest exist between
Individual Defendants' own interests and their fiduciary obligations to maximize
stockholder value or, if such conflicts exist, to ensure that all conflicts are
resolved in the best interests of E-Systems' public stockholders;
11
<PAGE>
C. Ordering the Individual Defendants to carry out their fiduciary
duties to plaintiff and the class and requiring them to respond in good faith to
any bona fide potential acquirors of E-Systems;
---- ----
D. Temporarily and permanently enjoining the merger agreement entered
into with Raytheon;
E. Awarding plaintiff the costs and disbursements of the action,
including a reasonable allowance for plaintiff's attorneys' and experts' fees;
and
F. Granting such other and further relief as may be just and proper.
Dated: April 3, 1995
MORRIS AND MORRIS
[SIGNATURE OF KAREN MORRIS APPEARS HERE]
By:_________________________________________
Karen Morris
Patrick F. Morris
Suite 1600
1105 North Market Street
Post Office Box 2166
Wilmington, DE 19999-2166
(302) 426-0400
Attorneys for Plaintiffs
Of Counsel:
Jules Brody
STULL, STULL & BRODY
6 East 45th Street
New York, NY 10017
(212) 687-7230
12
<PAGE>
EXHIBIT (g)(6)
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ----------------------------------------)
MAX FECHT, )
)
Plaintiff, )
)
v. ) C.A. No. 14178
) -------
A. LOWELL LAWSON, JAMES A. BITONTI, )
E.F. BUEHRING, CHARLES A. GABRIEL, )
C. ROLAND HADEN, GENE KEIFFER, S. LEE )
KLING, FRANCINE I. NEFF, DAVID R. )
TACKE, RAYTHEON COMPANY and E-SYSTEMS, )
INC., )
)
Defendants. )
- ----------------------------------------)
CLASS ACTION COMPLAINT
----------------------
Plaintiff, by his attorneys, alleges upon information and belief,
except as to paragraph 1 which is alleged upon knowledge, as follows:
THE PARTIES
-----------
1. Plaintiff Max Fecht is the owner of shares of common stock of
defendant E-Systems, Inc. and has owned such shares at all times relevant
hereto.
2. Defendant E-Systems, Inc. ("E-Systems" or "the Company") is a
corporation duly existing and organized under the laws of the State of Delaware,
with its principal executive offices in Dallas, Texas. Its business includes the
design and development of reconnaissance and surveillance systems,
communications systems, automatic control products and related systems.
<PAGE>
(a) Defendant A. Lowell Lawson is and at all relevant times has
been Chief Executive Officer, Chief Operating Officer, President and Chairman of
the Board of E-Systems.
(b) Defendants James A. Bitoni, E. F. Buehring, Charles A. Gabriel,
C. Roland Haden, Martin R. Hoffman, E. Gene Keiffer, S. Lee Kling, Francine I.
Neff and David R. Tacke are and at all relevant times have been directors of E-
Systems. The defendants named in this paragraph will be referred to as the
"Director Defendants."
3. Defendant Raytheon Company ("Raytheon") is a Delaware corporation
with its principal executive offices located in Lexington, Massachusetts.
Raytheon develops, manufactures and sells various products including electronic
systems, aircraft designs, industrial plants and major appliances.
4. By reason of the Director Defendants' positions as officers and/or
directors of E-Systems, they are in a fiduciary relationship with plaintiff and
the other public stockholders of E-Systems, and owe plaintiff and the other
members of the class the highest obligations of good faith, fair dealing, due
care, loyalty and full and candid disclosure.
CLASS ACTION ALLEGATIONS
------------------------
5. Plaintiff brings this action as a class action, pursuant to Court
of Chancery Rule 23 on behalf of himself and all E-Systems securities holders as
of April 3, 1995 or their successors in interest (the "Class"). Excluded from
the Class are
2
<PAGE>
defendants herein and any person, firm, trust, corporation, or other entity
related to, affiliated with, or controlled by any of the defendants.
6. This action is properly maintainable as a class action.
7. The Class is so numerous that joinder of all members is
impracticable. As of March 3, 1995, there were 34,129,500 shares of E-Systems
common stock outstanding.
8. There are questions of law and fact which are common to the Class
and which predominate over questions affecting any individual Class members. The
common questions include, inter alia, the following:
----- ----
(a) whether the Director Defendants have engaged in conduct
constituting unfair dealing to the detriment of the Class;
(b) whether the merger is grossly unfair to the Class;
(c) whether plaintiff and the other members of the Class would be
irreparably damaged were the transaction complained of herein consummated;
(d) whether the Director Defendants have breached their fiduciary
and other common law duties owed to plaintiff and the Class; and
(e) whether Raytheon has aided and abetted the Director Defendants'
breach of duty to plaintiff and the Class.
9. The claims of plaintiff are typical of the claims of the other
members of the Class and plaintiff has the same interests
3
<PAGE>
as the other members of the Class. The plaintiff is committed to prosecuting
this action and has retained competent counsel experienced in litigation of this
nature. Accordingly, plaintiff is an adequate representative of the Class and
will fairly and adequately protect the interests of the Class.
10. Defendants have acted on grounds generally applicable to the
Class with respect to the matters complained of herein, thereby making
appropriate the relief sought herein with respect to the Class as a whole.
11. The prosecution of separate actions by individual members of the
Class would create a risk of adjudications which would, as a practical matter,
be dispositive of the interests of Class members who are not parties to such
adjudications or substantially impair or impede their ability to protect their
interests.
CAUSE OF ACTION AGAINST ALL DEFENDANTS
--------------------------------------
12. On April 3, 1995, E-Systems and Raytheon announced that they had
entered into an agreement whereby Raytheon would acquire E-Systems in a merger
valued at over $2.3 billion. The acquisition will be affected through a tender
offer at $64 per E-Systems share and a follow-up merger at that price for
untendered shares.
13. The agreement is in furtherance of a plan and scheme which, if
its consummation is not enjoined, will result in the public stockholders of E-
Systems giving up their investment in E-
4
<PAGE>
Systems in a transaction which is inherently unfair to them because of the
unfairly low price and the unfair process by which the deal was agreed to.
14. The consideration to be paid to class members is unfair and
grossly inadequate because, among other things:
(a) The intrinsic value of E-System's common stock is materially
in excess of $64 per share in light of the Company's record backlog of $2.63
billion, its receipt of a $500 million contract from the U.S. Government, its
strong balance sheet and debt level and other factors;
(b) The consideration offered by Raytheon did not result from an
appropriate consideration of the value of E-Systems attributable to the
Company's current and currently anticipated business opportunities. The proposed
consideration fails to reflect E-System's inherent current value, prospects and
future growth and profitability in particular from current contracts, cost
reductions and earnings expected to be realized in the future;
(c) The consideration agreed upon did not result from an
appropriate consideration of the value of E-Systems as the Director Defendants
approved the proposed Merger without undertaking adequate steps to accurately
ascertain E-System's value through open bidding or a thorough "market check"
mechanism;
(d) The Director Defendants have thus far failed to announce any
active auction or open bidding procedures best calculated to maximize
shareholder value and have, instead, agreed
-5-
<PAGE>
to the proposed transaction at a price that will only serve to inhibit the
maximization of shareholder value; and
(e) The agreement provides that if Raytheon's offer is
subsequently rejected in favor of another offer, the successful bidder will pay
Raytheon a bust-up fee of $75 million plus expenses, an amount designed to
prevent plaintiff and the Class from obtaining fair value for their shares of E-
Systems in a free and open auction.
15. The proposed transaction was negotiated in a relatively short
period of time and provides for the entrenchment of the Director Defendants. The
agreement provides that although E-Systems will become a wholly owned subsidiary
of Raytheon, the Director Defendants will continue in office in an "advisory"
capacity for five (5) years at their current compensation levels. Further,
defendant Lawson will remain as CEO of E-Systems and also become Executive Vice
President of Raytheon. As a result of these provisions, the Director Defendants
lack independence with regard to the Raytheon deal since approval thereof is in
their financial self-interest and another acquiror is unlikely to be so generous
to the Director Defendants. The Director Defendants are unfairly entrenching
themselves at the expense of plaintiff and the Class.
16. By reason of the foregoing, the Director Defendants have violated
their fiduciary duties owed to Class members and defendant Raytheon has aided
and abetted therein.
17. The terms of the proposed merger, and in particular the
consideration to be paid to E-Systems's public shareholders and
6
<PAGE>
the bust-up fee are unfair to the Class because they frustrate a value
maximizing sale of E-Systems.
18. Plaintiff and the Class will suffer irreparable damage unless
defendants are enjoined from breaching their fiduciary duties and/or aiding and
abetting the breach.
19. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action;
B. enjoining, preliminarily and permanently, the proposed merger;
C. to the extent, if any, that the transactions complained of are
consummated prior to the entry of this Court's final judgment, rescinding the
same or awarding rescissory damages to the Class;
D. directing that defendants account to plaintiff and the Class for
all damages caused to them and account for all profits and any special benefits
obtained as a result of their unlawful conduct;
E. awarding to plaintiff the costs and disbursements of this action,
including a reasonable allowance for the fees and expenses of plaintiff's
attorneys and experts; and
7
<PAGE>
F. granting such other further relief as may be just and proper in
the premises.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
/s/
---------------------------------
First Federal Plaza
P.O. Box 1070
Wilmington, Delaware 19899
Telephone: (302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
BERGER & MONTAGUE, P.C.
1622 Locust Street
Philadelphia, PA 19103
(215) 875-3000
8
<PAGE>
EXHIBIT (g)(7)
<PAGE>
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------------x
)
MOISE KATZ, )
)
Plaintiff, )
)
- against - )
)
C. ROLAND HADEN, MARTIN R. HOFFMAN, ) C.A. No. 14180
E. GENE KEIFFER, FRANCINE I. NEFF, )
JAMES A. BITONTI, S. LEE KLING, )
DAVID R. TACKE, E.F. BUEHRING, )
CHARLES A. GABRIEL, A. LOWELL )
LAWSON, E-SYSTEMS, INC., AND )
RAYTHEON COMPANY, )
)
Defendants. )
)
- ---------------------------------------x
CLASS ACTION COMPLAINT
----------------------
Plaintiff, by his attorneys, Rosenthal, Monhait, Gross & Goddess, P.A.,
for his complaint against defendants, alleges upon information and belief,
except for paragraph 2 hereof, which is alleged upon knowledge as follows:
1. Plaintiff brings this action pursuant to Rule 23 of the Rules of the
Court of Chancery on his behalf and as a class action on behalf of all persons,
other than defendants and those in privity with them, who own the common stock
of E-Systems, Inc. ("E-Systems" or the "Company").
2. Plaintiff has been the owner of the common stock of the Company
since prior to the transaction herein complained of and continuously to date.
<PAGE>
3. Defendant E-Systems is a corporation duly organized and existing
under the laws of the State of Delaware. The Company designs, develops and
integrates sophisticated reconnaissance and surveillance systems and develops
and produces a broad range of systems and products for instantaneous
communication through line-of-sight, satellites or integrated networks.
4. Defendant Raytheon Company ("Raytheon") is a corporation duly
organized and existing under the laws of the state of Delaware. Raytheon, with
its subsidiaries, makes electronic systems and subsystems, equipment and
components for governmental and commercial use. It also produces aircraft
products, heavy construction equipment and major household appliances, textbook
publication and is engaged in energy and environmental services and other lines
of business.
5. Defendant E. Gene Keiffer is a Director and Chairman of the Board of
E-Systems.
6. Defendant A. Lowell Lawson ("Lawson") is a Director, President and
Chief Executive Officer of E-Systems.
7. Defendant C. Roland Haden is a Director E-Systems.
8. Defendant Martin R. Hoffman is a Director of E-Systems.
9. Defendant Francine I. Neff is a Director of E-Systems.
10. Defendant James A. Bitonti is a Director of E-Systems.
-2-
<PAGE>
11. Defendant S. Lee Kling is a Director of E-Systems.
12. Defendant David R. Tacke is a Director of E-Systems.
13. Defendant E. F. Buerhring is a Director of E-Systems.
14. Defendant Charles A. Gabriel is a Director of E-Systems.
15. The individual defendants named in paragraphs 5 through 14 are
in a fiduciary relationship with Plaintiff and the other public
stockholders of E-Systems and owe them the highest obligations
of good faith and fair dealing.
16. Each Defendant herein is sued individually as a conspirator and
aider and abettor, as well as in his capacity as an officer
and/or director of the Company (in the case of the individual
defendants), and the liability of each arises from the fact that
he or it has engaged in all or part of the unlawful acts,
plans, schemes, or transactions complained of herein.
CLASS ACTION ALLEGATIONS
------------------------
17. Plaintiff brings this action on his own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of
Chancery, on behalf of all common stockholders of the Company
(except the defendants herein and any person, firm, trust,
corporation, or other entity related to or affiliated with any
of the defendants) and their successors in interest, who are or
will be threatened with injury arising from defendants'
actions as more fully described herein.
-3-
<PAGE>
18. This action is properly maintainable as a class action.
19. The class is so numerous that joinder of all members is
impracticable. As of September 30, 1994, there were approximately 34,033,245
shares of E-Systems common stock outstanding, owned by thousands of
stockholders.
20. There are questions of law and fact which are common to the class
and which predominate over questions affecting any individual class member. The
common questions include, inter alia, the following: (a) whether the
----- ----
individual defendants have breached their fiduciary and other common law duties
owed by them to plaintiff and the members of the class; (b) whether the proposed
transaction, hereinafter described, constitutes a breach of the duty of fair
dealing with respect to the plaintiff and the other members of the class; and
(c) whether the class is entitled to injunctive relief or damages as a result of
the wrongful conduct committed by defendants.
21. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of the
plaintiff are typical of the claims of other members of the class and plaintiff
has the same interests as the other members of the class. Plaintiff will fairly
and adequately represent the class. A class action is superior to any other type
of adjudication of this controversy.
22. Defendants have acted in a manner which affects plaintiff and all
members of the class similarly, thereby making
-4-
<PAGE>
appropriate injunctive relief and/or corresponding declaratory relief with
respect to the class as a whole.
SUBSTANTIVE ALLEGATIONS
-----------------------
23. E-Systems mainly designs, develops and makes reconnaissance and
surveillance systems and command, control and communication systems,
intelligence collection and processing systems, navigation and control systems
and performs aircraft maintenance and modification.
24. On April 3, 1995, E-Systems and Raytheon announced an agreement for
the acquisition of E-Systems by Raytheon for $64 cash for each E-Systems share.
The transaction, valued at approximately $2.3 billion, will be effected through
a cash tender offer followed by a merger for untendered shares.
25. In breach of their fiduciary duties to the public stockholders of
E-Systems, the Board of Directors of E-Systems voted unanimously in favor of the
merger. This was done by the Individual Defendants primarily to protect their
compensation and positions with the Company, for, as reported by the PR Newswire
-----------
on April 3, 1995, Lawson will remain Chairman and Chief Executive Officer of
E-Systems and will join Raytheon as an Executive Vice President and member of
its board of directors. Lawson also stated that "[t]he E-Systems board will
become an advisory board with both E-Systems and Raytheon members."
-5-
<PAGE>
26. The consideration to be paid to Class members in the proposed
acquisition is unfair and grossly inadequate because, among other things:
a. The intrinsic value of E-Systems' common stock is materially
in excess of the amount offered for those securities in the acquisition giving
due consideration to the anticipated operating results, net asset value, cash
flow, and profitability of the Company;
b. the consideration to be paid to Class members is not the
result of an appropriate consideration of the value of E-Systems because the
E-Systems Board approved the proposed merger without undertaking steps to
accurately ascertain E-Systems' value through open bidding or at least a
"market check" mechanism; and
c. the individual defendants have agreed to this transaction to
protect and enhance their compensation and positions with the Company.
27. The individual defendants did not appoint or retain any truly
independent person or entity to negotiate for or on behalf of E-Systems' public
shareholders to promote their best interests in the merger transaction.
28. The individual defendants are engaged in unfair dealing to the
detriment of the Class to whom they owe the highest fiduciary duties. The terms
of the proposed acquisition, and in particular, the unfair and inadequate
consideration to be paid to E-Systems' public shareholders, are not the product
of true arm's
-6-
<PAGE>
length negotiations, but rather the design and plan of defendants who have
substantial conflicts of interest with the Class.
29. Raytheon knowingly aided and abetted the breaches of fiduciary
duty committed by the individual defendants by, among other things, offering to
reward them by maintaining and enhancing their lucrative positions in the
combined entity. Indeed, the proposed merger could not take place without the
knowing participation of Raytheon.
30. The terms of the proposed acquisition are grossly unfair to the
Class, and the unfairness is compounded by the gross disparity between the
knowledge and information possessed by defendants by virtue of their positions
of control of E-Systems and that possessed by E-Systems' public shareholders.
Defendants' scheme and intent is to take advantage of this disparity and to
induce the Class to exchange their shares in the merger acquisition for unfair
consideration on the basis of incomplete or inadequate information.
31. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action;
B. enjoining, preliminarily and permanently, the proposed
acquisition under the terms presently proposed;
C. to the extent, if any, that the transaction complained of is
consummated prior to the entry of this Court's final judgment, rescinding the
same or awarding rescissory damages to the Class;
-7-
<PAGE>
D. directing that defendants account to plaintiff and the Class for all
damages caused to them and account for all profits and any special benefits
obtained by defendants as a result of their unlawful conduct;
E. awarding to plaintiff the costs and disbursements of this action,
including a reasonable allowance for the fees and expenses of plaintiff's
attorneys and experts; and
F. granting such other and further relief as the Court deems
appropriate.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
BY: ------------------------------------
First Federal Plaza, Suite 214
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
Attorneys for plaintiff
OF COUNSEL:
WECHSLER SKIRNICK HARWOOD HALEBIAN
& FEFFER LLP
805 Third Avenue, 7th Floor
New York, NY 10022
-8-
<PAGE>
EXHIBIT (g)(8)
<PAGE>
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------------x
)
CHARLOTTE HELLER, )
)
Plaintiff, )
)
- against - )
)
C. ROLAND HADEN, MARTIN R. HOFFMAN, ) C.A. No. 14181
E. GENE KEIFFER, FRANCINE I. NEFF, )
JAMES A. BITONTI, S. LEE KLING, )
DAVID R. TACKE, E.F. BUEHRING, )
CHARLES A. GABRIEL, A. LOWELL )
LAWSON, E-SYSTEMS, INC., AND )
RAYTHEON COMPANY, )
)
Defendants. )
)
- ---------------------------------------x
CLASS ACTION COMPLAINT
______________________
Plaintiff, by her attorneys, Rosenthal, Monhait, Gross & Goddess, P.A.,
for her complaint against defendants, alleges upon information and belief,
except for paragraph 2 hereof, which is alleged upon knowledge as follows:
1. Plaintiff brings this action pursuant to Rule 23 of the Rules of the
Court of Chancery on her behalf and as a class action on behalf of all persons,
other than defendants and those in privity with them, who own the common stock
of E-Systems, Inc. ("E-Systems" or the "Company").
2. Plaintiff has been the owner of the common stock of the Company
since prior to the transaction herein complained of and continuously to date.
<PAGE>
3. Defendant E-Systems is a corporation duly organized and existing
under the laws of the State of Delaware. The Company designs, develops and
integrates sophisticated reconnaissance and surveillance systems and develops
and produces a broad range of systems and products for instantaneous
communication through line-of-sight, satellites or integrated networks.
4. Defendant Raytheon Company ("Raytheon") is a corporation duly
organized and existing under the laws of the state of Delaware. Raytheon, with
its subsidiaries, makes electronic systems and subsystems, equipment and
components for governmental and commercial use. It also produces aircraft
products, heavy construction equipment and major household appliances, textbook
publication and is engaged in energy and environmental services and other
lines of business.
5. Defendant E. Gene Keiffer is a Director and Chairman of the Board of
E-Systems.
6. Defendant A. Lowell Lawson ("Lawson") is a Director, President and
Chief Executive Officer of E-Systems.
7. Defendant C. Roland Haden is a Director of E-Systems.
8. Defendant Martin R. Hoffman is a Director of E-Systems.
9. Defendant Francine I. Neff is a Director of E-Systems.
10. Defendant James A. Bitonti is a Director of E-Systems.
-2-
<PAGE>
11. Defendant S. Lee Kling is a Director of E-Systems.
12. Defendant David R. Tacke is a Director of E-Systems.
13. Defendant E. F. Buerhring is a Director of E-Systems.
14. Defendant Charles A. Gabriel is a Director of E-Systems.
15. The individual defendants named in paragraphs 5 through 14 are
in a fiduciary relationship with plaintiff and the other public stockholders of
E-Systems and owe them the highest obligations of good faith and fair dealing.
16. Each defendant herein is sued individually as a conspirator and
aider and abettor, as well as in his capacity as an officer and/or director of
the Company (in the case of the individual defendants), and the liability of
each arises from the fact that he or it has engaged in all or part of the
unlawful acts, plans, schemes, or transactions complained of herein.
CLASS ACTION ALLEGATIONS
------------------------
17. Plaintiff brings this action on her own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all common stockholders of the Company (except the defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defendants) and their successors in interest, who are or will be
threatened with injury arising from defendants' actions as more fully described
herein.
-3-
<PAGE>
18. This action is properly maintainable as a class action.
19. The class is so numerous that joinder of all members is
impracticable. As of September 30, 1994, there were approximately 34,033,245
shares of E-Systems common stock outstanding, owned by thousands of
stockholders.
20. There are questions of law and fact which are common to the class
and which predominate over questions affecting any individual class member. The
common questions include, inter alia, the following: (a) whether the
----- ----
individual defendants have breached their fiduciary and other common law duties
owed by them to plaintiff and the members of the class; (b) whether the proposed
transaction, hereinafter described, constitutes a breach of the duty of fair
dealing with respect to the plaintiff and the other members of the class; and
(c) whether the class is entitled to injunctive relief or damages as a result of
the wrongful conduct committed by defendants.
21. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of the
plaintiff are typical of the claims of other members of the class and plaintiff
has the same interests as the other members of the class. Plaintiff will fairly
and adequately represent the class. A class action is superior to any other type
of adjudication of this controversy.
22. Defendants have acted in a manner which affects plaintiff and all
members of the class similarly, thereby making
-4-
<PAGE>
appropriate injunctive relief and/or corresponding declaratory relief with
respect with respect to the class as a whole.
SUBSTANTIVE ALLEGATIONS
23. E-Systems mainly designs, develops and makes reconnaissance and
surveillance systems and command, control and communication systems,
intelligence collection and processing systems, navigation and control systems
and performs aircraft maintenance and modification.
24. On April 3, 1995, E-Systems and Raytheon announced an agreement
for the acquisition of E-Systems by Raytheon for $64 cash for each E-Systems
share. The transaction, valued at approximately $2.3 billion, will be effected
through a cash tender offer followed by a merger for untendered shares.
25. In breach of their fiduciary duties to the public stockholders of E-
Systems, the Board of Directors of E-Systems voted unanimously in favor of the
merger. This was done by the Individual Defendants primarily to protect their
compensation and positions with the Company, for, as reported by the PR Newswire
-----------
on April 3, 1995, Lawson will remain Chairman and Chief Executive Officer of E-
Systems and will join Raytheon as an Executive Vice President and member of its
board of directors. Lawson also stated that "[t]he E-Systems board will become
an advisory board with both E-Systems and Raytheon members."
-5-
<PAGE>
26. The consideration to be paid to Class members in the proposed
acquisition is unfair and grossly inadequate because, among other things:
a. The intrinsic value of E-Systems' common stock is materially
in excess of the amount offered for those securities in the acquisition giving
due consideration to the anticipated operating results, net asset value, cash
flow, and profitability of the Company;
b. the consideration to be paid to Class members is not the
result of an appropriate consideration of the value of E-Systems because the
E-Systems Board approved the proposed merger without undertaking steps to
accurately ascertain E-Systems' value through open bidding or at least a "market
check" mechanism; and
c. the individual defendants have agreed to this transaction to
protect and enhance their compensation and positions with the Company.
27. The individual defendants did not appoint or retain any truly
independent person or entity to negotiate for or on behalf of E-Systems' public
shareholders to promote their best interests in the merger transaction.
28. The individual defendants are engaged in unfair dealing to the
detriment of the Class to whom they owe the highest fiduciary duties. The terms
of the proposed acquisition, and in particular, the unfair and inadequate
consideration to be paid to E-Systems' public shareholders, are not the product
of true arm's
-6-
<PAGE>
length negotiations, but rather the design and plan of defendants who have
substantial conflicts of interest with the Class.
29. Raytheon knowingly aided and abetted the breaches of fiduciary duty
committed by the individual defendants by, among other things, offering to
reward them by maintaining and enhancing their lucrative positions in the
combined entity. Indeed, the proposed merger could not take place without the
knowing participation of Raytheon.
30. The terms of the proposed acquisition are grossly unfair to the
Class, and the unfairness is compounded by the gross disparity between the
knowledge and information possessed by defendants by virtue of their positions
of control of E-Systems and that possessed by E-Systems' public shareholders.
Defendants' scheme and intent is to take advantage of this disparity and to
induce the Class to exchange their shares in the merger acquisition for unfair
consideration on the basis of incomplete or inadequate information.
31. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action;
B. enjoining, preliminarily and permanently, the proposed acquisition
under the terms presently proposed;
C. to the extent, if any, that the transaction complained of is
consummated prior to the entry of this Court's final judgment, rescinding the
same or awarding rescissory damages to the Class;
-7-
<PAGE>
D. directing that defendants accounts to plaintiff and the Class for all
damages caused to them and account for all profits and any special benefits
obtained by defendants as a result of their unlawful conduct;
E. awarding to plaintiff the costs and disbursements of this action,
including a reasonable allowance for the fees and expenses of plaintiff's
attorneys and experts; and
F. granting such other and further relief as the Court deems
appropriate.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
/S/
By: __________________________________
First Federal Plaza, Suite 214
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
Attorneys for Plaintiff
of COUNSEL:
FARUQI & FARUQI LLP
415 Madison Avenue
New York, NY 10017
KAUFMAN MALCHMAN KIRBY
& SQUIRE
919 Third Avenue
New York, NY 10022
-8-
