<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
E-SYSTEMS, INC.
(Name of Subject Company)
RTN Acquisition Corporation
Raytheon Company
(Bidders)
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 bidder)
Copies to:
MARTIN LIPTON, ESQ.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
---------------------- ----------------------
<S> <C>
$2,340,169,984 $468,034.00
</TABLE>
* For purposes of calculating the filing fee only. This calculation assumes
the purchase of all 36,565,156 outstanding shares (on a fully diluted basis,
assuming the exercise of all outstanding stock options) of Common Stock par
value $1.00 per share of Target, Inc. at $64.00 per share net to the seller
in cash.
** The fee, calculated in accordance with Rule 0-11(d) of the Securities
Exchange Act of 1934, is 1/50 of one percent of the aggregate Transaction
Valuation.
[_] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and date of its filing.
Amount Previously Paid:None Filing Party:N/A
Form or Registration No.:N/A Date Filed:N/A
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(Page 1 of 8 Pages)
<PAGE>
CUSIP No. 269157301 14D-1 Page 2 of 8 Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
RTN Acquisition Corporation (04-3267820)
- ----------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) [_]
(b) [_]
- ----------------------------------------------------------------------
3. SEC Use Only
- ----------------------------------------------------------------------
4. Sources of Funds
AF
- ----------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(e) or 2(f) [_]
- ----------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- ----------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by
Each Reporting Person
- 0 -
- ----------------------------------------------------------------------
8. Check if the Aggregate Amount in Row (7) excludes
Certain Shares [_]
- ----------------------------------------------------------------------
9. Percent of Class Represented by Amount
in Row (7)
- 0 -
- ----------------------------------------------------------------------
10. Type of Reporting Person
CO
<PAGE>
CUSIP No. 269157301 14D-1 Page 3 of 8 Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Raytheon Company (04-1760395)
- -----------------------------------------------------------------------
2. Check the Appropriate Box if a Member of Group
(a) [_]
(b) [_]
- -----------------------------------------------------------------------
3. SEC Use Only
- -----------------------------------------------------------------------
4. Sources of Funds
BK
- -----------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(e) or 2(f) [_]
- -----------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- -----------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by
Each Reporting Person
- 0 -
- -----------------------------------------------------------------------
8. Check if the Aggregate Amount in Row (7) excludes
Certain Shares [_]
- -----------------------------------------------------------------------
9. Percent of Class Represented by Amount
in Row (7)
- 0 -
- -----------------------------------------------------------------------
10. Type of Reporting Person
CO
- -----------------------------------------------------------------------
<PAGE>
This Schedule 14D-1 relates to the offer by RTN Acquisition Corporation (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Raytheon
Company, a Delaware corporation ("Parent"), to purchase all outstanding shares
on a fully-diluted basis (assuming exercise of all outstanding stock options)
of Common Stock, par value $1.00 per share (the "Shares"), of E-Systems, Inc.,
a Delaware corporation (the "Company"), and the associated Preferred Stock
Purchase Rights (the "Rights") issued pursuant to the Rights Agreement, dated
as of October 7, 1994, between the Company and Society National Bank, as Rights
Agent (as the same may be amended, the "Rights Agreement"), at a purchase price
of $64.00 per Share (and associated Right), net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer"), which are annexed to and filed with this Schedule 14D-
1 as Exhibits (a)(1) and (a)(2), respectively. This Schedule 14D-1 is being
filed on behalf of the Purchaser and Parent.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is E-Systems, Inc. The address of its
principal executive offices is 6250 LBJ Freeway, P.O. Box 660248, Dallas, Texas
75766-0248.
(b) Reference is hereby made to the information set forth in the
"Introduction," Section 1 ("Terms of the Offer") and Section 11 ("Purpose of
the Offer; The Merger Agreement; Statutory Requirements; Appraisal Rights;
Plans for the Company; The Rights") of the Offer to Purchaser, which is
incorporated herein by reference.
(c) Reference is hereby made to the information set forth in Section 6
("Price Range of the Shares; Dividends") of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser") and Schedule I ("Directors and Executive Officers of Parent and the
Purchaser") of the Offer to Purchase, which is incorporated herein by
reference.
(e)-(f) During the last five years, neither Parent nor the Purchaser, nor, to
the best of their knowledge, any of their respective executive officers and
directors listed in Schedule I ("Directors and Executive Officers of Parent and
the Purchaser") of the Offer to Purchase, which is incorporated herein by
reference, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, Federal
or State securities laws or finding any violation of such laws.
(g) Reference is hereby made to the information set forth in Schedule I
("Directors and Executive Officers of Parent and the Purchaser") of the Offer
to Purchase, which is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning Parent and the
Purchaser"), Section 10 ("Background of the Offer; Contacts with the Company")
and Section 11 ("Purpose of the Offer; The Merger Agreement; Statutory
Requirements; Appraisal Rights; Plans for the Company; The Rights") of the
Offer to Purchase, which is incorporated herein by reference.
(Page 4 of 8 Pages)
<PAGE>
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is made to the information set forth in Section 12 ("Source
and Amount of Funds") of the Offer to Purchase, which is incorporated herein by
reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) Reference is hereby made to the information set forth in the
"Introduction," Section 7 ("Possible Effects of the Offer on the Market for the
Shares; Stock Exchange Listing; Exchange Act Registration; Margin
Regulations"), Section 10 ("Background of the Offer; Contacts with the
Company"), Section 11 ("Purpose of the Offer; The Merger Agreement; Statutory
Requirements; Appraisal Rights; Plans for the Company; The Rights") and Section
13 ("Dividends and Distributions") of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning Parent and the Purchaser") and Schedule I
("Directors and Executive Directors of Parent and the Purchaser") of the Offer
to Purchase, which is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Reference is hereby made to the information set forth in the "Introduction,"
Section 9 ("Certain Information Concerning Parent and the Purchaser"), Section
10 ("Background of the Offer; Contacts with the Company"), Section 11 ("Purpose
of the Office; The Merger Agreement; Statutory Requirements; Appraisal Rights;
Plan for the Company; The Rights") and Section 15 ("Certain Legal Matters;
Required Regulatory Approvals") of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the information set forth in Section 16 ("Certain
Fees and Expenses") of the Offer to Purchase, which is incorporated herein by
reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Reference is hereby made to the information set forth in Section 9 ("Certain
Information Concerning Parent and the Purchaser") of the Offer to Purchase,
which is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Reference is hereby made to the information set forth in the
"Introduction," Section 10 ("Background of the Offer; Contacts with the
Company") and Section 11 ("Purpose of the Offer; The Merger Agreement;
Statutory Requirements; Appraisal Rights; Plans for the Company; The Rights")
of the Offer to Purchase, which is incorporated herein by reference.
(b)-(c) Reference is hereby made to the information set forth in the
"Introduction," Section 11 ("Purpose of the Offer; The Merger Agreement;
Statutory Requirements; Appraisal Rights; Plans for the Company;
(Page 5 of 8 Pages)
<PAGE>
The Rights") and Section 15 ("Certain Legal Matters; Required Regulatory
Approvals") of the Offer to Purchase, which is incorporated herein by
reference.
(d) Reference is hereby made to the information set forth in Section 7
("Possible Effects of the Offer on the Market for the Shares; Stock Exchange
Listing; Exchange Act Registration; Margin Regulations") of the Offer to
Purchase, which is incorporated herein by reference.
(e) To the best knowledge of Parent and the Purchaser, no such proceedings
are pending or have been instituted.
(f) Reference is hereby made to the entire texts of the Offer to Purchase and
the related Letter of Transmittal, which are incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) --Offer to Purchase, dated April 3, 1995.
(a)(2) --Letter of Transmittal.
(a)(3) --Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(4) --Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(5) --Notice of Guaranteed Delivery.
(a)(6) --Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
(a)(7) --Press release issued by Parent on April 3, 1995.
(a)(8) --Form of Summary Advertisement, dated April 3, 1995.
(b)(1) --Commitment Letter, dated April 1, 1995 by and among Parent and
Chemical Bank; Chemical Securities Inc.; Bank of America National
Trust and Savings Association; BA Securities, Inc.; The Chase
Manhattan Bank, N.A.; and Chase Securities, Inc.
(c)(1) --Agreement and Plan of Merger dated as of April 2, 1995 by and among
the Company, the Purchaser and Parent.
(d) --Not applicable.
(e) --Not applicable.
(f) --Not applicable.
(Page 6 of 8 Pages)
<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 3, 1995
RAYTHEON COMPANY
By:
-------------------------------------
Name: Christoph L. Hoffmann
Title: Executive Vice President
RTN AQUISITION CORPORATION
By:
-------------------------------------
Name: Christoph L. Hoffmann
Title: President
(Page 7 of 8 Pages)
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
(a)(1) --Offer to Purchase, dated April 3, 1995.
(a)(2) --Letter of Transmittal.
(a)(3) --Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(4) --Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(5) --Notice of Guaranteed Delivery.
(a)(6) --Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
(a)(7) --Press release issued by Parent on April 3, 1995.
(a)(8) --Form of Summary Advertisement, dated April 3, 1995.
(b)(1) --Commitment Letter, dated April 1, 1995 by and among Parent and
Chemical Bank; Chemical Securities Inc.; Bank of America National
Trust and Savings Association; BA Securities, Inc.; The Chase
Manhattan Bank, N.A.; and Chase Securities, Inc.
(c)(1) --Agreement and Plan of Merger dated as of April 2, 1995 by and among
the Company, the Purchaser and Parent.
(d) --Not applicable.
(e) --Not applicable.
(f) --Not applicable.
</TABLE>
(Page 8 of 8 Pages)
<PAGE>
Exhibit 99(a)(1)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
E-SYSTEMS, INC.
by
RTN Acquisition Corporation
a wholly-owned subsidiary
of
RAYTHEON COMPANY
at
$64.00 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, APRIL 28, 1995, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF E-SYSTEMS, INC. (THE "COMPANY") UNANIMOUSLY HAS
DETERMINED THAT THE CONSIDERATION TO BE PAID FOR EACH SHARE IN THE OFFER AND
THE MERGER DESCRIBED HEREIN IS FAIR TO THE STOCKHOLDERS OF THE COMPANY AND
THAT THE OFFER AND THE MERGER ARE OTHERWISE IN THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE OFFER AND THE MERGER AND
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES (AS
HEREINAFTER DEFINED) PURSUANT TO THE OFFER.
----------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SHARES REPRESENTING AT
LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES OF COMMON STOCK OF
THE COMPANY ON A FULLY-DILUTED BASIS (ASSUMING THE EXERCISE OF ALL
OUTSTANDING OPTIONS) BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE
EXPIRATION OF THE OFFER.
----------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such
stockholder's Shares (as hereinafter defined) either should (a) complete
and sign the Letter of Transmittal (or a facsimile thereof) in accordance
with the instructions in the Letter of Transmittal and mail or deliver it
together with the certificate(s) representing tendered Shares and any other
required documents to the Depositary or tender such Shares pursuant to the
procedures for book-entry transfer set forth in Section 3 or (b) request
such stockholder's broker, dealer, commercial bank, trust company or other
nominee to effect such transaction. A stockholder whose Shares are
registered in the name of a broker, dealer, commercial bank, trust company
or other nominee must contact such broker, dealer, commercial bank, trust
company or other nominee if such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply
with the procedures for book-entry transfer on a timely basis may tender
such Shares by following the procedures for guaranteed delivery set forth
in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other related materials may be obtained from the
Information Agent or from brokers, dealers, commercial banks and trust
companies.
----------------
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
April 3, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Introduction............................................................. 1
1. Terms of the Offer.................................................. 2
2. Acceptance for Payment and Payment.................................. 4
3. Procedures for Accepting the Offer and Tendering Shares............. 5
4. Withdrawal Rights................................................... 8
5. Certain Tax Consequences............................................ 9
6. Price Range of the Shares; Dividends................................ 10
7. Possible Effects of the Offer on the Market for the Shares; Stock
Exchange Listing; Exchange Act Registration; Margin Regulations..... 10
8. Certain Information Concerning the Company.......................... 11
9. Certain Information Concerning Parent and the Purchaser............. 13
10. Background of the Offer; Contacts with the Company.................. 15
11. Purpose of the Offer; The Merger Agreement; Statutory Requirements;
Appraisal Rights; Plans for the Company; The Rights................. 16
12. Source and Amount of Funds.......................................... 27
13. Dividends and Distributions......................................... 28
14. Certain Conditions of the Offer..................................... 29
15. Certain Legal Matters; Required Regulatory Approvals................ 30
16. Certain Fees and Expenses........................................... 32
17. Miscellaneous....................................................... 33
Schedule I--Directors and Executive Officers of Parent and the Purchaser. 35
</TABLE>
<PAGE>
To: All Holders of Shares of Common Stock of E-Systems, Inc.
INTRODUCTION
RTN Acquisition Corporation (the "Purchaser"), a Delaware corporation and a
wholly-owned subsidiary of Raytheon Company, a Delaware corporation ("Parent"),
hereby offers to purchase all outstanding shares of Common Stock, par value
$1.00 per share (the "Shares"), of E-Systems, Inc., a Delaware corporation (the
"Company"), and the associated Preferred Stock Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of October 7, 1994, between
the Company and Society National Bank, as Rights Agent (as the same may be
amended, the "Rights Agreement"), at a purchase price of $64.00 per Share (and
associated Right), net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in this Offer to Purchase and
in the related Letter of Transmittal (which together constitute the "Offer").
Unless the context otherwise requires, all references to Shares shall include
the associated Rights and all references to the Rights shall include all
benefits that may inure to holders of the Rights pursuant to the Rights
Agreement, including the right to receive any payment due upon redemption of
the Rights.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. However, any tendering stockholder or other payee who
fails to complete and sign the Substitute Form W-9 that is included in the
Letter of Transmittal may be subject to a required backup federal income tax
withholding of 31% of the gross proceeds payable to such stockholder or other
payee pursuant to the Offer. See Section 3. The Purchaser will pay all charges
and expenses of Bear, Stearns & Co. Inc., as Dealer Manager (the "Dealer
Manager"), The First National Bank of Boston, as Depositary (the "Depositary"),
and D.F. King & Co., Inc., as Information Agent (the "Information Agent"),
incurred in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
CONSIDERATION TO BE PAID FOR EACH SHARE IN THE OFFER AND THE MERGER IS FAIR TO
THE STOCKHOLDERS OF THE COMPANY AND THAT THE OFFER AND THE MERGER ARE OTHERWISE
IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES.
The Offer is conditioned upon, among other things, at least a majority of the
total number of outstanding Shares (assuming exercise of all outstanding stock
options) being validly tendered and not withdrawn prior to the Expiration Date
(as defined in Section 1) (the "Minimum Condition"). The Purchaser reserves the
right (subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission") and the prior written consent of the
Company), which it presently has no intention of exercising, to waive or reduce
the Minimum Condition and to elect to purchase, pursuant to the Offer, a
smaller number of Shares. The Offer is also subject to certain other terms and
conditions. See Sections 1, 14, and 15 below.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of April 2, 1995 (the "Merger Agreement"), among the Company, the Purchaser
and Parent pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company (the "Merger"), with the Company continuing as the
surviving corporation (the "Surviving Corporation"). In the Merger, each
outstanding Share (other than Shares held by Parent, the Purchaser or any
subsidiary of Parent or the Purchaser or in the treasury of the Company, which
Shares, by virtue of the Merger and without any action on the part of the
holder thereof, shall be cancelled with no payment being made with respect
thereto, and other than Shares, if any, held by stockholders who perfect their
appraisal rights under Delaware law ("Dissenting Shares")) will, by virtue of
the Merger and without
<PAGE>
any action by the holder thereof, be converted into the right to receive
$64.00 net to its holder in cash, or any higher price paid per Share in the
Offer (the "Merger Consideration"), payable to the holder thereof, without
interest thereon, upon the surrender of the certificate formerly representing
such Share. The Merger Agreement is more fully described in Section 11 below.
Certain federal income tax consequences of the sale of Shares pursuant to the
Offer and the Merger, as the case may be, are described in Section 5 below.
Each of CS First Boston Corporation ("CS First Boston") and Morgan Stanley &
Co. Incorporated ("Morgan Stanley"), the Company's financial advisors, has
delivered to the Board of Directors of the Company a written opinion to the
effect that, as of the date of the Merger Agreement, the per Share
consideration to be received by the Stockholders of the Company pursuant to
the Offer is fair to the stockholders of the Company from a financial point of
view.
A copy of each such opinion is included with the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-
9"), which is being mailed to stockholders concurrently herewith, and
stockholders are urged to read the opinion in its entirety for a description
of the assumptions made, matters considered and limitations of the review
undertaken by each of CS First Boston and Morgan Stanley.
The Company's Certificate of Incorporation requires the affirmative vote of
holders of 80% of the outstanding Shares to approve the Merger. As a result,
even if the Minimum Condition and the other conditions to the Offer are
satisfied and the Offer is consummated, it is possible that the Purchaser may
not own a sufficient number of Shares to ensure that the Merger will be
approved by the Company's stockholders. See Section 11.
The Company has advised the Purchaser that, to the knowledge of the Company,
all of its executive officers and directors intend to tender all Shares which
are held of record or beneficially owned by such persons pursuant to the Offer
(other than Shares issuable upon exercise of stock options and Shares, if any,
which if tendered would cause such persons to incur liability under section 16
of the Exchange Act).
The Company has informed the Purchaser that, as of March 30, 1995, there
were 34,173,453 Shares issued and outstanding and 2,391,703 Shares reserved
for issuance upon the exercise of outstanding stock options.
THE OFFER IS CONDITIONED UPON THE FULFILLMENT OF CERTAIN CONDITIONS
DESCRIBED IN SECTION 14 BELOW. THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, APRIL 28, 1995, UNLESS EXTENDED.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and thereby purchase all
Shares validly tendered and not withdrawn in accordance with the procedures
set forth in Section 4 on or prior to the Expiration Date. The term
"Expiration Date" means 12:00 midnight, New York City time, on Friday, April
28, 1995, unless and until the Purchaser, in its sole discretion, shall have
extended the period of time for which the Offer is open, in which event the
term "Expiration Date" shall mean the time and date at which the Offer, as so
extended by the Purchaser, shall expire.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and purchase, as soon as permitted under the terms of
the Offer, all Shares validly tendered and not withdrawn prior to the
expiration of the Offer. If at the Expiration Date, the conditions to the
Offer described in Section 14 hereof shall not have been satisfied or earlier
waived but, in the reasonable belief of Parent, may be satisfied
2
<PAGE>
prior to September 30, 1995, then, subject to the provisions of the Merger
Agreement, the Purchaser will extend the Expiration Date for an additional
period or periods of time by giving oral or written notice of such extension to
the Depositary. Any individual extension of the Offer shall be for a period of
no more than 15 business days. During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer and subject to the
right of a tendering stockholder to withdraw such stockholder's Shares. See
Section 4.
Subject to the applicable regulations of the Commission and the terms of the
Merger Agreement, the Purchaser also expressly reserves the right, in its sole
discretion, at any time or from time to time, to (i) delay acceptance for
payment of or, regardless of whether such Shares were theretofore accepted for
payment, payment for any Shares pending receipt of any regulatory or
governmental approvals specified in Section 15; (ii) terminate the Offer
(whether or not any Shares have theretofore been accepted for payment) if any
condition referred to in Section 14 has not been satisfied or upon the
occurrence of any event specified in Section 14; and (iii) except as set forth
in the Merger Agreement, waive any condition or otherwise amend the Offer in
any respect, in each case, by giving oral or written notice of such delay,
termination, waiver or amendment to the Depositary and, other than in the case
of any such waiver, by making a public announcement thereof. The Purchaser
acknowledges (i) that Rule 14e-1(c) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), requires the Purchaser to pay the
consideration offered or return the Shares tendered promptly after the
termination or withdrawal of the Offer and (ii) that the Purchaser may not
delay acceptance for payment of, or payment for (except as provided in clause
(i) of the preceding sentence), any Shares upon the occurrence of any event
specified in Section 14 without extending the period of time during which the
Offer is open.
The rights reserved by the Purchaser in the preceding paragraph are in
addition to the Purchaser's rights pursuant to Section 14. Any such extension,
delay, termination or amendment will be followed as promptly as practicable by
public announcement thereof, and such announcement in the case of an extension
will be made no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date. Without limiting the manner
in which the Purchaser may choose to make any public announcement, subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that material changes be promptly disseminated to holders of
Shares), the Purchaser shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to the Dow Jones News Service.
In the Merger Agreement, the Purchaser has agreed that, without the prior
written consent of the Company, it will not (i) decrease the price per Share or
change the form of consideration payable in the Offer, (ii) decrease the number
of Shares sought, (iii) amend or waive satisfaction of the Minimum Condition or
(iv) impose additional conditions to the Offer or amend any other term of the
Offer in any manner adverse to the holders of Shares.
If the Purchaser makes a material change in the terms of the Offer, or if it
waives a material condition to the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period
during which an offer must remain open following material changes in the terms
of the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
materiality of the changes. In the Commission's view, an offer should remain
open for a minimum of five business days from the date the material change is
first published, sent or given to stockholders, and, if material changes are
made with respect to information that approaches the significance of price and
the percentage of securities sought, a minimum of ten business days may be
required to allow for adequate dissemination and investor response. With
respect to a change in price, a minimum ten-business-day period from the date
of such change is generally required to allow for adequate dissemination to
stockholders. Accordingly, if prior to the Expiration Date, the Purchaser
decreases the number of Shares being sought, or increases or decreases the
consideration offered pursuant to the Offer, and if the Offer is scheduled to
expire at any time earlier than the period ending on the tenth business day
from the date that notice of such increase or decrease is first published, sent
or given to holders of Shares, the Offer will be extended at least until the
3
<PAGE>
expiration of such period of ten business days. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New
York City time.
As of the date of this Offer to Purchase, the Rights are evidenced by the
certificates representing Shares and do not trade separately. Accordingly, by
tendering a certificate representing Shares, a stockholder is automatically
tendering a similar number of associated Rights. If, however, pursuant to the
Rights Agreement or for any other reason, the Rights detach and separate
certificates representing rights ("Rights Certificates") are issued,
stockholders will be required to tender one Right for each Share tendered in
order to effect a valid tender of such Share.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION.
Consummation of the Offer is also conditioned upon expiration or termination
of all waiting periods imposed by the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations thereunder (the "HSR Act"), and
the other conditions set forth in Section 14 below. The Purchaser reserves the
right (but shall not be obligated), in accordance with applicable rules and
regulations of the Commission and with the Merger Agreement, to waive any or
all of such conditions. If, by the Expiration Date, any or all of such
conditions have not been satisfied, the Purchaser may, in the exercise of its
good faith judgment, elect to (i) extend the Offer and, subject to applicable
withdrawal rights, retain all tendered Shares until the expiration of the
Offer, as extended, subject to the terms of the Offer and the Merger Agreement;
(ii) waive all of the unsatisfied conditions (other than the Minimum Condition)
and, subject to complying with applicable rules and regulations of the
Commission, accept for payment all Shares so tendered and not extend the Offer;
or (iii) terminate the Offer and not accept for payment any Shares and return
all tendered Shares to tendering stockholders. In the event that the Purchaser
waives any condition set forth in Section 14, the Commission may, if the waiver
is deemed to constitute a material change to the information previously
provided to the stockholders, require that the Offer remain open for an
additional period of time and/or that the Purchaser disseminate information
concerning such waiver.
In the Merger Agreement, the Purchaser has agreed that, upon the terms and
subject to the conditions to the Offer, the Purchaser will accept for payment,
all Shares validly tendered and not withdrawn prior to the expiration of the
Offer as soon as it is permitted under the terms of the Offer.
In addition, the Purchaser has agreed that it will not, without the prior
written consent of the Company, (i) decrease the price per Share or change the
form of consideration payable in the Offer, (ii) decrease the number of Shares
sought, (iii) amend or waive satisfaction of the Minimum Condition or (iv)
impose additional conditions to the Offer or amend any other term of the Offer
in any manner adverse to the holders of Shares.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and will be furnished by the Purchaser to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the securityholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing,
for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of the Offer as so
extended or amended), the Purchaser will purchase, by accepting for payment,
and will pay for, all Shares validly tendered and not withdrawn (as permitted
by Section 4) prior to the Expiration Date promptly after the later to occur of
(i) the Expiration Date and (ii) the satisfaction or waiver of the conditions
to the Offer set forth in Section 14. See Section 14. In addition, subject to
applicable rules of the Commission, the Purchaser expressly reserves the right
to delay acceptance for payment of, or payment for, Shares pending receipt of
any regulatory or governmental approvals specified in Section 15.
4
<PAGE>
For information with respect to approvals required to be obtained prior to
the consummation of the Offer, including under the HSR Act and other laws and
regulations, see Section 15.
In all cases, payment for Shares purchased pursuant to the Offer will be made
only after timely receipt by the Depositary of (i) certificates representing
such Shares ("Share Certificates") or timely confirmation (a "Book-Entry
Confirmation") of the book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company, Midwest Securities Trust Company or
Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities") pursuant to the procedures set forth in Section 3; (ii) the
appropriate Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees or an Agent's Message
(as defined below) in connection with a book-entry transfer; and (iii) any
other documents required by the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-Entry
Confirmation that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of such Shares for payment pursuant to the Offer. In all
cases, upon the terms and subject to the conditions of the Offer, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price therefor with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting payment to validly tendering stockholders.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID
BY THE PURCHASER.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than
are tendered, Share Certificates representing unpurchased or untendered Shares
will be returned, without expense to the tendering stockholder (or, in the case
of Shares delivered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3,
such Shares will be credited to an account maintained within such Book-Entry
Transfer Facility), as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER SHALL INCREASE THE
CONSIDERATION OFFERED TO HOLDERS OF SHARES PURSUANT TO THE OFFER, SUCH
INCREASED CONSIDERATION SHALL BE PAID TO ALL HOLDERS OF SHARES THAT ARE
PURCHASED PURSUANT TO THE OFFER, WHETHER OR NOT SUCH SHARES WERE TENDERED PRIOR
TO SUCH INCREASE IN CONSIDERATION.
The Purchaser reserves the right, subject to the provisions of the Merger
Agreement, to transfer or assign, in whole or from time to time in part, to one
or more of the Purchaser's subsidiaries or affiliates the right to purchase all
or any portion of the Shares tendered pursuant to the Offer, but any such
transfer or assignment will not relieve the Purchaser of its obligations under
the Offer or prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares. Except as set forth below, in order for Shares to be
validly tendered pursuant to the Offer, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together
5
<PAGE>
with any required signature guarantees or an Agent's Message in connection with
a book-entry delivery of Shares and any other documents required by the Letter
of Transmittal must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase on or prior to the Expiration
Date and either (i) Share Certificates representing tendered Shares must be
received by the Depositary or tendered pursuant to the procedure for book-entry
transfer set forth below and Book-Entry Confirmation must be received by the
Depositary, in each case on or prior to the Expiration Date, or (ii) the
guaranteed delivery procedures set forth below must be complied with.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, RIGHTS CERTIFICATES (IF
APPLICABLE), THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER, AND DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will make a request to establish accounts
with respect to the Shares at each of the Book-Entry Transfer Facilities for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the system of any
Book-Entry Transfer Facility may make book-entry delivery of Shares by causing
such Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at such Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery of
Shares may be effected through book-entry transfer into the Depositary's
account at a Book-Entry Transfer Facility, the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other required documents must, in any case, be transmitted to
and received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase on or prior to the Expiration Date, or the
guaranteed delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program (an "Eligible Institution"),
unless the Shares tendered thereby are tendered (i) by a registered holder of
Shares who has not completed either the box labeled "Special Payment
Instructions" or the box labeled "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. See
Instruction 1 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
of the Letter of Transmittal.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) must accompany each such delivery.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available or time will not permit all required documents
6
<PAGE>
to reach the Depositary on or prior to the Expiration Date or the procedures
for book-entry transfer cannot be completed on a timely basis, such Shares or
Rights may nevertheless be tendered if all of the following guaranteed delivery
procedures are duly complied with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation) representing
all tendered Shares, in proper form for transfer together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by the
Letter of Transmittal are received by the Depositary within five New York
Stock Exchange, Inc. ("NYSE") trading days after the date of execution of
such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery and a representation that the stockholder on whose behalf
the tender is being made is deemed to own the Shares being tendered within the
meaning of Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or, of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and any other documents required by the appropriate Letter of
Transmittal. Accordingly, payment might not be made to all tendering
stockholders at the same time, and will depend upon when Share Certificates are
received by the Depositary or Book-Entry Confirmations of such Shares are
received into the Depositary's account at a Book-Entry Transfer Facility.
Backup Federal Income Tax Withholding. Under the backup federal income tax
withholding laws applicable to certain stockholders (other than certain exempt
stockholders, including, among others, all corporations and certain foreign
individuals), the Depositary may be required to withhold 31% of the amount of
any payments made to such stockholders pursuant to the Offer or the Merger. To
prevent backup federal income tax withholding, each such stockholder must
provide the Depositary with such stockholder's correct taxpayer identification
number and certify that such stockholder is not subject to backup federal
income tax withholding by completing the Substitute Form W-9 included in the
Letter of Transmittal. See Instruction 9 of the Letter of Transmittal.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser, and each of them,
as such stockholder's agents, attorneys-in-fact and proxies, with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares and other securities or rights issued or issuable in
respect of such Shares on or after the date of this Offer to Purchase, other
than regular cash dividends at a rate not exceeding $.375 per Share per
quarter, payable on the Company's customary dividend payment dates. All such
powers of attorney and proxies shall be considered irrevocable and coupled with
an interest in the tendered Shares. Such appointment will be effective upon the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Upon such acceptance for payment, all other powers of
attorney and proxies given by such stockholder with respect to such Shares and
such other securities or rights prior to such payment will be revoked, without
further action, and no subsequent powers of attorney and proxies may be given
by such stockholder (and, if given, will not be deemed effective). The
designees of the Purchaser will, with respect to the Shares and such other
securities and rights for which such appointment is
7
<PAGE>
effective, be empowered to exercise all voting and other rights of such
stockholder as they in their sole discretion may deem proper at any annual or
special meeting of the Company's stockholders, or any adjournment or
postponement thereof, or by consent in lieu of any such meeting or otherwise.
In order for Shares to be deemed validly tendered, immediately upon the
acceptance for payment of such Shares, the Purchaser or its designee must be
able to exercise full voting rights with respect to such Shares and other
securities, including voting at any meeting of stockholders.
Determination of Validity. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding on all parties. The
Purchaser reserves the absolute right to reject any or all tenders determined
by it not to be in proper form or the acceptance of or payment for which may,
in the opinion of the Purchaser's counsel, be unlawful. The Purchaser also
reserves the absolute right to waive any of the conditions of the Offer or any
defect or irregularity in any tender of Shares of any particular stockholder
whether or not similar defects or irregularities are waived in the case of
other stockholders.
The Purchaser's interpretation of the terms and conditions of the Offer will
be final and binding. No tender of Shares will be deemed to have been validly
made until all defects and irregularities with respect to such tender have been
cured or waived by the Purchaser. None of Parent, the Purchaser or any of their
respective affiliates or assigns, the Dealer Manager, the Depositary, the
Information Agent or any other person or entity will be under any duty to give
any notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
The Purchaser's acceptance for payment of Shares tendered pursuant to any of
the procedures described above will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time on or prior to the Expiration Date and, unless
theretofore accepted for payment as provided herein, may also be withdrawn at
any time after June 1, 1995 (or such later date as may apply in case the Offer
is extended).
If, for any reason whatsoever, acceptance for payment of any Shares tendered
pursuant to the Offer is delayed, or the Purchaser is unable to accept for
payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to the Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of the Purchaser, retain tendered Shares and such
Shares may not be withdrawn except to the extent that the tendering stockholder
is entitled to and duly exercises withdrawal rights as described in this
Section 4. Any such delay will be by an extension of the Offer to the extent
required by law.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn, and (if Share
Certificates have been tendered) the name of the registered holder of the
Shares as set forth in the Share Certificate, if different from that of the
person who tendered such Shares. If Share Certificates have been delivered or
otherwise identified to the Depositary, then prior to the physical release of
such certificates, the tendering stockholder must submit the serial numbers
shown on the particular certificates evidencing the Shares to be withdrawn and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Shares tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in Section 3, the notice of withdrawal must
specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares, in which case a
notice
8
<PAGE>
of withdrawal will be effective if delivered to the Depositary by any method of
delivery described in the first sentence of this paragraph. Withdrawals of
Shares may not be rescinded. Any Shares properly withdrawn will be deemed not
validly tendered for purposes of the Offer, but may be tendered at any
subsequent time prior to the Expiration Date by following any of the procedures
described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of Parent, the
Purchaser or any of their respective affiliates or assigns, the Dealer Manager,
the Depositary, the Information Agent or any other person or entity will be
under any duty to give any notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
5. CERTAIN TAX CONSEQUENCES.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local, foreign and other tax laws. For
federal income tax purposes, each selling or exchanging stockholder would
generally recognize gain or loss equal to the difference between the amount of
cash received and such stockholder's tax basis for the sold or exchanged
Shares. Such gain or loss will be capital gain or loss (assuming the Shares are
held as a capital asset) and any such capital gain or loss will be long term
if, as of the date of sale or exchange, the Shares were held for more than one
year or will be short term if, as of such date, the Shares were held for one
year or less.
The foregoing discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation, individuals
who are not citizens or residents of the United States and foreign
corporations, or entities that are otherwise subject to special tax treatment
under the Internal Revenue Code of 1986, as amended (such as insurance
companies, tax-exempt entities and regulated investment companies).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER AND MERGER,
INCLUDING FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES.
9
<PAGE>
6. PRICE RANGE OF THE SHARES; DIVIDENDS.
According to the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 (the "Form 10-K"), the Shares are listed and traded on the
NYSE under the symbol "ESY." The following table sets forth, for the periods
indicated, the reported high and low sale prices for the Shares on the NYSE
Composite Tape and the amount of cash dividends paid per Share, as reported in
the Form 10-K with respect to periods occurring in 1993 and 1994, and as
reported thereafter by published financial sources, with respect to periods
occurring in 1995.
E-SYSTEMS, INC.
<TABLE>
<CAPTION>
CASH
HIGH LOW DIVIDENDS
------- ------- ---------
<S> <C> <C> <C>
1993
First Quarter...................................... $44 1/4 $36 1/4 $.275
Second Quarter..................................... $43 $39 5/8 $.275
Third Quarter...................................... $48 7/8 $41 3/4 $.275
Fourth Quarter..................................... $46 1/4 $41 5/8 $.275
1994
First Quarter...................................... $46 3/4 $40 $.30
Second Quarter..................................... $45 1/8 $36 3/8 $.30
Third Quarter...................................... $44 7/8 $37 1/4 $.30
Fourth Quarter..................................... $42 1/2 $36 1/2 $.30
1995
First Quarter...................................... $45 7/8 $40 1/2 $.375
</TABLE>
On March 31, 1995, the last full day of trading prior to the announcement of
the execution of the Merger Agreement and commencement of the Offer, according
to published sources, the reported closing price on the NYSE Composite Tape for
the Shares was $45 3/8 per Share.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK EXCHANGE
LISTING; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Possible Effects of the Offer on the Market for the Shares. The purchase of
Shares pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public. The purchase of Shares
pursuant to the Offer can also be expected to reduce the number of holders of
Shares. The Purchaser cannot predict whether the reduction in the number of
Shares that might otherwise trade publicly would have an adverse or beneficial
effect on the market price for or marketability of the Shares or whether it
would cause future market prices to be greater or less than the Offer price
therefor.
Stock Exchange Listing. According to the NYSE's published guidelines, the
NYSE would consider delisting the Shares if, among other things, the number of
record holders of at least 100 Shares should fall below 1,200, the number of
publicly held Shares (exclusive of holdings of officers, directors, their
immediate families and other concentrated holdings of 10% or more ("NYSE
Excluded Holdings")) should fall below 600,000 or the aggregate market value of
publicly held Shares (exclusive of NYSE Excluded Holdings) should fall below
$5,000,000.
Depending upon the number of Shares acquired pursuant to the Offer, the
Shares may no longer meet the requirements for continued listing on the NYSE.
If as a result of the purchase of Shares pursuant to the Offer, Shares no
longer meet the requirements of the NYSE for continued listing and the listing
of the Shares is discontinued, the market for the Shares could be adversely
affected.
In the event that the Shares were no longer listed or traded on the NYSE, it
is possible that the Shares would trade on another securities exchange or in
the over-the-counter market and that price quotations would be reported by such
exchange through the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or other sources. Such trading and the availability
of such quotations would, however, depend upon the number of stockholders
and/or the aggregate market value of the Shares remaining at such
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<PAGE>
time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act as described below and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. The purchase of the Shares pursuant to the Offer may result in
the Shares becoming eligible for deregistration under the Exchange Act.
Registration of the Shares may be terminated upon application by the Company
to the Commission if the Shares are not listed on a "national securities
exchange" and there are fewer than 300 record holders of Shares. Termination
of registration of the Shares under the Exchange Act would substantially
reduce the information required to be furnished by the Company to its
stockholders and the Commission and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b) and the requirements of furnishing a proxy statement in connection with
stockholders' meetings pursuant to Section 14(a) or 14(c) and the related
requirement of an annual report, no longer applicable to the Company. If the
Shares are no longer registered under the Exchange Act, the requirements of
Rule 13e-3 under the Exchange Act with respect to "going private" transactions
would no longer be applicable to the Company. Furthermore, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of such securities pursuant to Rule 144 promulgated under
the Securities Act of 1933, as amended, may be impaired or, with respect to
certain persons, eliminated. If registration of the Shares under the Exchange
Act were terminated, the Shares would no longer be "margin securities" or
eligible for stock exchange listing or NASDAQ reporting. The Purchaser
believes that the purchase of the Shares pursuant to the Offer may result in
the Shares becoming eligible for deregistration under the Exchange Act, and it
would be the intention of the Purchaser to cause the Company to make an
application for termination of registration of the Shares as soon as possible
after successful completion of the Offer if the Shares are then eligible for
such termination.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from the NYSE and the registration of the Shares
under the Exchange Act will be terminated following the consummation of the
Merger.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which have the effect, among other things, of
allowing brokers to extend credit on the collateral of such Shares for the
purpose of buying, carrying or trading in securities ("Purpose Loans").
Depending upon factors such as the number of record holders of the Shares and
the number and market value of publicly held Shares, following the purchase of
Shares pursuant to the Offer, the Shares might no longer constitute "margin
securities" for purposes of the Federal Reserve Board's margin regulations
and, therefore, could no longer be used as collateral for Purpose Loans made
by brokers. In addition, if registration of the Shares under the Exchange Act
were terminated, the Shares would no longer constitute "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive offices
located at 6250 LBJ Freeway, Dallas, Texas 75240. The following description of
the Company's business has been taken from the Form 10-K and is qualified in
its entirety by reference to the Form 10-K:
The Company designs, develops and produces advanced electronic systems
and products, primarily for sale in defense related markets, and
provides various related technical services. The Company's largest
business segments are the design, development and production of
reconnaissance and surveillance systems and command, control and
communications systems which represented approximately 75% of the
Company's sales in 1994. The Company also designs, develops and
manufactures intelligence collection and processing systems, which
through reconnaissance and surveillance activities collect radio
frequency signals and images, process that data, correlate it with
other information ("fusion"), and communicate the information to users
including various decision makers, such as battlefield tactical
commanders and the National Command Authority. In addition, the company
produces navigation and control systems, and performs aircraft
maintenance and modification and other services.
11
<PAGE>
The selected financial information of the Company and its consolidated
subsidiaries set forth below has been excerpted and derived from the Form 10-K.
More comprehensive financial and other information is included in such report
(including management's discussion and analysis of financial condition and
results of operations) and in other reports and documents filed by the Company
with the Commission. The financial information set forth below is qualified in
its entirety by reference to such reports and documents filed with the
Commission and the financial statements and related notes contained therein.
These reports and other documents may be examined and copies thereof may be
obtained in the manner set forth below.
E-SYSTEMS, INC.
SUMMARY OF OPERATIONS AND FINANCIAL CONDITION
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31
----------------------------------
1994 1993 1992
SUMMARY OF OPERATIONS: ---------- ---------- ----------
<S> <C> <C> <C>
Net sales.................................. $2,028,300 $2,097,114 $2,094,913
Operating costs and expenses............... 1,850,334 1,916,458 1,924,177
Special charges............................ (24,495) -- --
---------- ---------- ----------
Profit from continuing operations.......... 153,471 180,656 170,736
Other income (expense)--net................ (9,370) 5,830 (600)
Interest expense........................... (2,412) (6,211) (7,664)
---------- ---------- ----------
Income before federal income taxes and the
cumulative effect of a change in account-
ing principle............................. 141,689 180,275 162,472
Federal income taxes....................... 46,049 58,409 53,453
---------- ---------- ----------
Income before cumulative effect of a change
in accounting principle................... 95,640 121,866 109,019
Cumulative effect of a change in accounting
principle................................. -- -- (178,510)
Net income (loss).......................... $ 95,640 $ 121,866 $ (69,491)
========== ========== ==========
Earnings (loss) per share:
Continuing operations.................... $ 2.79 $ 3.58 $ 3.31
Cumulative effect of a change in account-
ing principle........................... -- -- (5.42)
---------- ---------- ----------
Total.................................. $ 2.79 $ 3.58 $ (2.11)
========== ========== ==========
Cash dividends declared per common share... $ 1.20 $ 1.10 $ 1.00
========== ========== ==========
YEAR-END FINANCIAL POSITION:
Bookings................................... $2,526,567 $1,910,532 $1,905,319
Backlog.................................... $2,631,308 $2,133,041 $2,319,623
Working capital............................ $ 583,813 $ 580,898 $ 497,960
Current ratio.............................. 3.97 4.44 3.01
Total assets............................... $1,374,167 $1,279,173 $1,253,573
Total assets less excess cost of assets
acquired over book value.................. 1,272,205 1,216,772 1,188,845
Long-term debt............................. $ 10,115 $ 7,873 $ 34,119
Total debt................................. $ 19,632 $ 33,129 $ 103,920
Stockholders' equity at year-end........... $ 836,629 $ 769,996 $ 660,000
</TABLE>
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning the Company's business, principal physical
properties, capital structure, material
12
<PAGE>
pending legal proceedings, operating results, financial condition, directors
and officers (including their remuneration and the stock options granted to
them), the principal holders of the Company's securities, any material
interests of such persons in transactions with the Company and certain other
matters is required to be disclosed in proxy statements and annual reports
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements and other information may be inspected and copied at
the Commission's public reference facilities at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and should also be available for
inspection at the following regional offices of the Commission: 7 World Trade
Center, New York, New York 10048 and 500 West Madison Street, Chicago, Illinois
60661-2511; and copies may be obtained by mail at prescribed rates from the
principal office of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. Reports, proxy statements and other information concerning the Company
also should be available for inspection at the NYSE, 20 Broad Street, New York,
New York 10005.
Although neither Parent nor Purchaser has any knowledge that any such
information is untrue, neither Parent nor the Purchaser takes any
responsibility for the accuracy or completeness of information contained in
this Offer to Purchase with respect to the Company or any of its subsidiaries
or affiliates or for any failure by the Company to disclose events which may
have occurred or may affect the significance or accuracy of any such
information.
In the course of the discussions between representatives of Parent and the
Company (see Section 10) certain projections of future operating performance
were furnished to Parent's representatives. These projections were not prepared
with a view to public disclosure or compliance with published guidelines of the
Commission or the guidelines established by the American Institute of Certified
Public Accountants regarding projections, and are included in this Offer to
Purchase only because they were provided to Parent. Neither Parent, the
Purchaser nor the Company, nor either of their financial advisors nor the
Dealer Manager assumes any responsibility for the accuracy of these
projections. While presented with numerical specificity, these projections are
based upon a variety of assumptions relating to the businesses of the Company
which may not be realized and are subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company. There can
be no assurance that the projections will be realized, and actual results may
vary materially from those shown.
Set forth below is a summary of the projections. The projections should be
read together with the financial statements of the Company referred to herein.
E-SYSTEMS, INC.
PROJECTED FINANCIAL INFORMATION
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------
1995 1996 1997
------- ------- -------
<S> <C> <C> <C>
Sales................................................... $2,207 $2,443 $2,700
Net income.............................................. 136 150 169
Earnings per share...................................... 3.95 4.32 4.84
Bookings................................................ 2,389 2,222 2,545
Backlog................................................. 2,813 2,735 2,580
</TABLE>
In addition, the Company provided Parent with certain information relating to
division-level projected operating performance in 1998 and 1999. Such
information does not include corporate-level costs, allocations and similar
adjustments required to permit meaningful consolidation.
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.
Parent is a Delaware corporation whose principal executive offices are
located at 141 Spring Street, Lexington, Massachusetts 02173. Parent is an
international, high technology company which operates in four
13
<PAGE>
businesses: commercial and defense electronics, engineering and construction,
aircraft and major appliances. Its principal business is the design,
manufacture and servicing of advanced electronic devices, equipment and systems
for government and commercial use. Through a diversification program begun in
1964, Parent has expanded into aircraft products, engineering and construction
services, major appliances and textbook publishing. In recent years, Parent has
strengthened its businesses through consolidation, operational improvement and
acquisitions and diversified core defense technologies into commercial markets
while remaining a strong defense company.
The Purchaser's principal executive offices are located at c/o Raytheon
Company, 141 Spring Street, Lexington, Massachusetts 02173. The Purchaser is a
newly-formed Delaware corporation and a wholly-owned subsidiary of Parent. The
Purchaser has not conducted any business other than in connection with the
Offer and the Merger.
The name, business address, citizenship, present principal occupation and
employment history for the past five years of each of the directors and
executive officers of Parent and the Purchaser are set forth in Schedule I.
Parent is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning Parent's business, principal physical properties,
capital structure, material pending legal proceedings, operating results,
financial condition, directors and officers (including their remuneration and
stock options granted to them), the principal holders of Parent's securities,
any material interests of such persons in transactions with Parent and certain
other matters is required to be disclosed in proxy statements and annual
reports distributed to Parent's stockholders and filed with the Commission.
Such reports, proxy statements and other information may be inspected and
copied at the Commission's public reference facilities and should also be
available for inspection in the same manner as set forth with respect to the
Company in Section 8.
Set forth below is certain consolidated financial information with respect to
Parent and its consolidated subsidiaries for its fiscal years ended and as of
December 31, 1994, 1993 and 1992. More comprehensive financial and other
information is included in Parent's Annual Report on Form 10-K for its fiscal
year ended December 31, 1994 (including management's discussion and analysis of
financial condition and results of operations) and in other reports and
documents filed by Parent with the Commission. The financial information set
forth below is qualified in its entirety by reference to such reports and
documents filed with the Commission and the financial statements and related
notes contained therein. These reports and other documents may be examined and
copies thereof may be obtained in the manner set forth above.
14
<PAGE>
RAYTHEON COMPANY
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31
--------------------------------------
1994 1993 1992
---------- --------- ---------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.................................. $10,012.9 $9,201.2 $9,058.2
Operating expenses......................... 8,934.5 8,281.3 8,164.6
Income before taxes ....................... 1,149.7(1) 1,047.3 956.0
Net income................................. $ 759.2(2) $ 693.0 $ 635.1
Net income per share
Outstanding shares....................... $ 5.74(2) $ 5.11 $ 4.72
Fully diluted............................ $ 5.71(2) $ 5.07 $ 4.68
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital............................ $ 1,702.4 $1,809.0 $1,639.0
Total assets............................... 7,395.4 7,257.7 6,015.1
Long-term debt............................. 24.5 24.4 25.3
Total debt................................. 1,057.6 897.6 732.0
Stockholders' equity....................... 3,928.2 4,297.9 3,843.2
</TABLE>
(1) Excludes first quarter 1994 restructuring provision of $249.8 million.
(2) Excludes first quarter 1994 after-tax restructuring provision of $162.3
million or $1.23 per share.
Except as set forth elsewhere in this Offer to Purchase or Schedule I hereto:
(i) neither Parent nor the Purchaser nor, to the knowledge of Parent or the
Purchaser, any of the persons listed in Schedule I hereto or any associate or
majority-owned subsidiary of Parent or the Purchaser or any of the persons so
listed, beneficially owns or has a right to acquire any Shares or any other
equity securities of the Company; (ii) neither Parent nor the Purchaser nor, to
the knowledge of Parent or the Purchaser, any of the persons or entities
referred to in clause (i) above or any of their executive officers, directors
or subsidiaries has effected any transaction in the Shares or any other equity
securities of the Company during the past 60 days; (iii) neither Parent nor the
Purchaser nor, to the knowledge of Parent or the Purchaser, any of the persons
listed in Schedule I hereto, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company (including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations); (iv) since January 1, 1992, there have
been no transactions which would require reporting under the rules and
regulations of the Commission between Parent or the Purchaser or any of their
respective subsidiaries or, to the knowledge of Parent or the Purchaser, any of
the persons listed in Schedule I hereto, on the one hand, and the Company or
any of its executive officers, directors or affiliates, on the other hand; and
(v) since January 1, 1992, there have been no contacts, negotiations or
transactions between Parent or the Purchaser or any of their respective
subsidiaries or, to the knowledge of Parent or the Purchaser, any of the
persons listed in Schedule I hereto, on the one hand, and the Company or any of
its subsidiaries or affiliates, on the other hand, concerning a merger,
consolidation or acquisition, a tender offer or other acquisition of
securities, an election of directors or a sale or other transfer of a material
amount of assets.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
In response to the dramatic decline in defense procurement and the resulting
consolidation of the United States defense industry, Parent has and continues
to explore opportunities to expand its defense business and
15
<PAGE>
to apply its defense technologies and skills in commercial markets. In the fall
of 1994, Parent began a series of discussions with Bear, Stearns & Co. Inc.
("Bear Stearns") regarding strategic alternatives available to Parent in order
to achieve these objectives. Based on public information, Bear Stearns analyzed
a number of possible acquisitions by Parent, including an acquisition of the
Company. Bear Stearns informed Parent that it was familiar with the Company and
had held discussions with the Company concerning the Company's strategic
alternatives.
In January 1995, Bear Stearns arranged and attended a meeting between Dennis
J. Picard, Chairman and Chief Executive Officer of Parent, and A. Lowell
Lawson, Chairman and Chief Executive Officer of the Company. Prior to this
meeting, there had been no contacts between Parent and the Company with respect
to any possible business combination between them. At the meeting, each of
Messrs. Picard and Lawson discussed his company's strategic goals and agreed to
consider in greater detail a possible acquisition of the Company by Parent. To
this end, meetings of senior management of Parent and the Company and
representatives of Bear Stearns were held in late January, February and early
March of 1995. In addition, on January 23, 1995, Parent and the Company entered
into a confidentiality agreement providing for the disclosure by the Company of
certain non-public information to Parent.
On March 23, 1995, Messrs. Picard and Lawson agreed to begin detailed
negotiations of an acquisition by Parent of the Company. Parent began an
intensive due diligence review of the Company on March 25, 1995. Negotiation of
the Merger Agreement commenced on March 28, 1995 and was concluded on April 2,
1995 with the unanimous approval of the Merger Agreement by the boards of
directors of Parent and the Company and the execution of the Merger Agreement.
11. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; STATUTORY REQUIREMENTS;
APPRAISAL RIGHTS; PLANS FOR THE COMPANY; THE RIGHTS.
Purpose. The purpose of the Offer and the Merger is to acquire control of,
and the entire equity interest in, the Company.
The Merger Agreement. The following summary description of the Merger
Agreement is qualified in its entirety by reference to such agreement, which
has been filed as an exhibit to the Tender Offer Statement on Schedule 14D-1
filed with the Commission by Parent and Purchaser (the "Schedule 14D-1"), which
may be examined and copies obtained as set forth in Section 8 above (except
that it will not be available at the regional offices of the Commission).
The Merger Agreement provides that in accordance with the provisions thereof
and the General Corporation Law of the State of Delaware (the "DGCL"), at the
date and time when the Merger shall become effective pursuant to Section 2.02
of the Merger Agreement (the "Effective Time"), the Purchaser will be merged
with and into the Company, and the Company will be the surviving corporation
(hereinafter sometimes called the "Surviving Corporation") and continue its
corporate existence under the laws of the State of Delaware. At the Effective
Time the separate existence of the Purchaser shall cease.
Pursuant to the Merger Agreement, as of the Effective Time, by virtue of the
Merger and without any action on the part of the holders thereof, each Share
issued and outstanding immediately prior to the Effective Time (other than any
Shares held by Parent, the Purchaser, any subsidiary of Parent or the Purchaser
or in the treasury of the Company which Shares, by virtue of the Merger and
without any action on the part of the holder thereof, shall be cancelled and
retired and shall cease to exist with no payment being made with respect
thereto, and other than any Dissenting Shares) will be converted into the right
to receive $64.00 net to its holder in cash or any higher price per Share paid
in the Offer, payable to the holder thereof, without interest thereon, upon
surrender of the certificate formerly representing such Share.
For a description of certain appraisal rights available to stockholders under
the DGCL in connection with the Merger, see "Appraisal Rights" below in this
Section 11.
16
<PAGE>
As of the Effective Time, by virtue of the Merger and without any action on
the part of the holders thereof, each share of capital stock of the Purchaser
issued and outstanding immediately prior to the Effective Time will be
converted into and become one fully paid and nonassessable share of Common
Stock, par value $1.00 per share, of the Surviving Corporation.
Under the Merger Agreement, the Company has agreed to take all actions
necessary to provide that immediately prior to consummation of the Offer (i)
each outstanding option to purchase Shares (the "Options") granted under the
Company's 1980 Stock Option Plan, 1982 Incentive Stock Option Plan, 1988
Employee Stock Option Plan or 1994 Employee Stock Option Plan, in each case as
amended (collectively, the "Option Plans"), whether or not then exercisable or
vested, will become fully exercisable and vested, (ii) each Option which is
then outstanding will be cancelled and (iii) in consideration of such
cancellation, and except to the extent that Parent or the Purchaser and the
holder of any such Option otherwise agree, the Company (or, at Parent's option,
Parent or the Purchaser) will pay to such holders of Options an amount in
respect thereof equal to the product of (A) the excess, if any, of the Merger
Price over the exercise price thereof and (B) the number of Shares subject
thereto (such payment to be net of applicable withholding taxes); provided that
the foregoing shall not require any action which violates the Option Plans. The
Merger Agreement provides that if it is determined that compliance with any of
the foregoing would cause any individual subject to Section 16 of the Exchange
Act to become subject to the profit recovery provisions thereof, any Options
held by such individual will be cancelled or purchased, as the case may be, as
promptly thereafter as possible so as not to subject such individual to any
liability pursuant to Section 16, and such individual will be entitled to
receive from the Company or the Surviving Corporation at the Effective Time or
as soon as practicable thereafter (or, if later, the date six months and one
day following the grant of such option), for each Share subject to an Option,
an amount equal to the excess, if any, of the Merger Price over the exercise
price of such Option.
Except as provided in the Merger Agreement or as otherwise agreed to by the
parties and to the extent permitted by the Option Plans (i) the Option Plans
will terminate as of the Effective Time and the provisions in any other plan,
program or arrangement providing for the issuance or grant by the Company or
any of its subsidiaries of any interest in respect of the capital stock of the
Company or any of its subsidiaries (other than the 1994 Employee Stock Option
Plan (the "EMASS Option Plan") of EMASS, Inc. ("EMASS"), a subsidiary of the
Company) will be deleted as of the Effective Time and (ii) the Company will use
all reasonable efforts to ensure that following the Effective Time no holder of
Options or any participant in any Option Plan or any other such plans, programs
or arrangements (other than the EMASS Option Plan) shall have any right
thereunder to acquire any equity securities of the Company, the Surviving
Corporation or any subsidiary thereof. The Merger Agreement also provides that
options outstanding as of the date of the Merger Agreement to purchase not more
than 920,000 shares of common stock of EMASS pursuant to the EMASS Option Plan
will become fully vested upon consummation of the Offer and remain outstanding
after the Effective Time, and also provides that additional options to purchase
up to 150,000 shares of common stock of EMASS may be granted at the Company's
or EMASS's discretion prior to the Control Date.
Pursuant to the Merger Agreement, the Company has agreed to take all actions
to provide that each share of restricted stock granted under the Option Plans
shall become fully vested and free of restrictions immediately prior to the
consummation of the Offer and that any holder of restricted stock may elect to
authorize the Company to retain a number of Shares from such grant having an
aggregate value (based upon $64.00 per Share) equal to the sum of (i) the
aggregate purchase price for such Shares under the applicable Option Plan and
(ii) any withholding taxes applicable to the vesting of such grant, in lieu of
the payment of such amounts in cash.
The Merger Agreement provides that the Certificate of Incorporation and By-
Laws of the Purchaser will be the Certificate of Incorporation and By-Laws of
the Surviving Corporation until thereafter amended as provided by law, except
that the name of the Surviving Corporation will be "E-Systems, Inc."
Under the Merger Agreement the directors of the Purchaser immediately prior
to the Effective Time will be the initial directors of the Surviving
Corporation and will hold office until their respective successors are duly
elected and qualified, or their earlier death, resignation or removal. The
officers of the Company
17
<PAGE>
immediately prior to the Effective Time will be the initial officers of the
Surviving Corporation and will hold office until their respective successors
are duly elected and qualified, or their earlier death, resignation or removal.
AGREEMENTS OF THE COMPANY, PARENT AND THE PURCHASER. The Merger Agreement
provides that, if required by applicable law in order to consummate the Merger,
the Company, acting through its Board of Directors, shall, in accordance with
applicable law, duly call, give notice of, convene and hold a special meeting
of its stockholders (the "Special Meeting") as soon as practicable following
the purchase of and payment for Shares by the Purchaser pursuant to the Offer
for the purpose of considering and adopting Merger Agreement and such other
matters as may be necessary to consummate the transactions contemplated in the
Merger Agreement.
Under the Merger Agreement, in the event that Parent, the Purchaser or any
other subsidiary of Parent acquires at least 90% of the outstanding Shares
pursuant to the Offer or otherwise, at the request of Parent or the Purchaser,
Parent, the Purchaser and the Company will take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable after the
acceptance for payment and purchase of Shares by the Purchaser pursuant to the
Offer without a meeting of stockholders of the Company in accordance with
Section 253 of the DGCL.
In the Merger Agreement, the Company has covenanted and agreed that, except
as contemplated by the Merger Agreement or as expressly agreed to in writing by
Parent, during the period from the date of the Merger Agreement to the Control
Date (as defined in "Directors" below in this Section 11), each of the Company
and its subsidiaries will conduct its operations according to its ordinary
course of business consistent with past practice and will use commercially
reasonable efforts to preserve intact its business organization, to keep
available the services of its key employees and to maintain satisfactory
relationships with material suppliers, distributors, customers and others
having business relationships with it and will take no action not required by
law that would materially adversely affect the ability of the parties to
consummate the transactions contemplated by the Merger Agreement or be
materially inconsistent with such transactions.
In the Merger Agreement, the Company has covenanted and agreed that prior to
the Control Date it will keep Parent advised of the status of all discussions
and negotiations concerning possible acquisitions and dispositions by it or any
of its subsidiaries of any corporations or businesses, and has further agreed
that without the prior written consent of Parent it will not make, or agree to
make, any such acquisition or disposition; provided that the foregoing
restriction shall not apply to certain transactions previously disclosed by the
Company to Parent. Decisions regarding other acquisitions or dispositions will
be made by the chief executive officers of Parent and the Company.
Under the Merger Agreement, the Company has agreed that prior to the
Effective Time it will not, and will not authorize or permit any of its
subsidiaries or any of its or its subsidiaries' directors, officers, employees,
agents or representatives, directly or indirectly, to solicit, initiate,
facilitate or encourage (including by way of furnishing or disclosing non-
public information) any inquiries or the making of any proposal with respect to
any merger, consolidation or other business combination involving the Company
or its subsidiaries or acquisition of all or substantially all of the assets or
capital stock of the Company and its subsidiaries taken as a whole (an
"Acquisition Transaction") or negotiate, explore or otherwise engage in
substantive discussions with any person (other than Parent, the Purchaser or
their respective directors, officers, employees, agents and representatives)
with respect to any Acquisition Transaction or enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the Merger or any other transactions contemplated by the Merger
Agreement; provided that the Company may in response to an unsolicited written
proposal with respect to an Acquisition Transaction from a third party furnish
information to such third party; negotiate, explore or otherwise engage in
substantive discussions with such third party; and enter into any such
agreement, arrangement or understanding, in each case only if the Board of
Directors of the Company determines in good faith by a majority vote, after
consultation with its
18
<PAGE>
financial advisors and outside legal counsel, that failing to take such action
would create a reasonable possibility of a breach of the fiduciary duties of
the Board of Directors of the Company in connection with seeking an Acquisition
Transaction that is more favorable to the stockholders of the Company than the
Offer and the Merger. The Company has agreed to advise Parent immediately in
writing of the receipt of any inquiries or proposals relating to an Acquisition
Transaction and any actions described in this paragraph, unless the Company's
Board of Directors determines in good faith by a majority vote, after
consultation with its outside legal counsel, that taking such action would
create a reasonable possibility of a breach of the fiduciary duties of the
Company's Board of Directors in connection with seeking an Acquisition
Transaction that is more favorable to the stockholders of the Company than the
Offer and the Merger.
Pursuant to the Merger Agreement, from the date of the Merger Agreement until
the Effective Time, and subject to any access, disclosure, copying or other
limitations imposed by applicable law or the terms of any of the Company's or
its subsidiaries' classified contracts (including any such contracts or
arrangements with the U.S. or foreign governments), the Company has agreed to
give Parent and its authorized representatives (including counsel,
environmental and other consultants, accountants and auditors) access during
normal business hours upon reasonable prior notice to all facilities, personnel
and operations and to all books and records of the Company and its
subsidiaries, and to permit Parent to make such inspections as it may
reasonably require and to cause its officers and those of its subsidiaries to
furnish Parent with such financial and operating data and other information
with respect to its business and properties as Parent may from time to time
reasonably request. Pursuant to the Merger Agreement, Parent has agreed that
any information furnished to Parent, its subsidiaries or its authorized
representatives will be subject to provisions of the letter agreement dated
January 23, 1995 between Parent and the Company.
The Merger Agreement provides that, subject to the terms and conditions
therein provided and applicable law, each of the Company, Parent and the
Purchaser will use its reasonable best efforts promptly to consummate the
transactions contemplated by the Merger Agreement, including, without
limitation using such reasonable best efforts to (i) obtain all necessary
consents, approvals or waivers under its material contracts and (ii) lift any
legal bar to the Merger; provided, however, that the foregoing will not require
Parent, the Purchaser or any other affiliate of Parent to agree to any action
or restriction which, if imposed by a governmental entity, would constitute a
condition described in paragraph (A) of Section 14.
Under the Merger Agreement, before issuing any press release or otherwise
making any public statements with respect to the Merger Agreement, the Offer or
the Merger, Parent, the Purchaser and the Company will consult with each other
as to its form and substance and will not issue any such press release or make
any such public statement prior to such consultation, except in either case as
may be required by law or any obligations pursuant to any listing agreement
with any national securities exchange.
Under the Merger Agreement, from and after the Effective Time, Parent will
and will cause the Surviving Corporation to indemnify, defend and hold harmless
the present and former officers, directors, employees and agents of the Company
and its subsidiaries against all losses, claims, damages, expenses or
liabilities arising out of or related to actions or omissions or alleged
actions or omissions occurring at or prior to the Effective Time (i) to the
full extent permitted by Delaware law or, if the protections afforded thereby
to an indemnified person are greater, (ii) to the same extent and on the same
terms and conditions (including with respect to advancement of expenses)
provided for in the Company's Certificate of Incorporation and By-Laws and
agreements in effect at the date of the Merger Agreement (to the extent
consistent with applicable law), which provisions will survive the Merger and
continue in full force and effect after the Effective Time.
Pursuant to the Merger Agreement, for a period of six years after the
Effective Time, Parent has agreed to cause to be maintained in effect the
current policies of directors' and officers' liability insurance maintained by
the Company (provided that Parent may substitute therefor policies with
reputable and financially sound carriers of at least the same coverage and
amounts containing terms and conditions which are no less advantageous) with
respect to claims arising from or related to facts or events which occurred at
or before the Effective Time; provided, however, that Parent is not obligated
to make annual premium payments for
19
<PAGE>
such insurance to the extent such premiums exceed 250% of the annual premiums
paid as of the date of the Merger Agreement by the Company for such insurance.
Parent has agreed pursuant to the Merger Agreement that following
consummation of the Offer, it will cause the Company to honor in accordance
with their terms certain existing employment contracts and employee benefits in
effect on the date of the Merger Agreement and as amended as contemplated by
the Merger Agreement and has further agreed to guarantee unconditionally the
prompt payment when due of all amounts payable pursuant to the terms of such
employment contracts and arrangements. In addition, Purchaser has agreed in the
Merger Agreement to provide or cause the Company to provide to individuals who
are employed by the Company or any of its subsidiaries until the third
anniversary of the Effective Time employee benefits that are in the aggregate
no less favorable than those provided to them as of the date hereof. Employees
of the Surviving Corporation will be eligible to participate in Parent's
various compensation plans on a basis comparable to that of similarly situated
employees of the Parent and its subsidiaries. The Company has also agreed to
take all steps necessary to ensure that none of the transactions contemplated
by the Merger Agreement will constitute a "change of control" as defined in
certain of the Company's retirement plans.
Parent and the Purchaser have agreed in the Merger Agreement that prior to
the consummation of the Offer, the Company's Board of Directors (and following
consummation of the Offer and prior to the Effective Time, a majority of the
Continuing Directors (as hereinafter defined)) may (i) amend the Company's
employee stock ownership plan (the "ESOP") to provide for full vesting of all
account balances and allocations of all unallocated shares, or the proceeds
thereof, as of the Effective Time, and to make other technical or
administrative amendments related thereto, (ii) terminate the ESOP as of the
Effective Time and provide for the orderly liquidation of the assets thereof
or, with the consent of Purchaser (which consent shall not be unreasonably
withheld), merge the ESOP with and into another tax-qualified plan, (iii) amend
the Company's employee savings plan to increase, as of the Effective Time, the
Company's contributions thereunder to reflect any cessation of ESOP
contributions (net of contributions for the benefit of employees of the
Surviving Corporation under Parent's employee stock ownership plan ("Parent's
ESOP"), as described in the succeeding sentence), (iv) authorize amendments to
the employment contract with the Company's Chairman and Chief Executive Officer
to provide that such individual shall serve as Chief Executive Officer of the
Surviving Corporation following the Effective Time and (unless he earlier
resigns) for a period of 3 years thereafter. Parent and the Purchaser also
agreed in the Merger Agreement that if contributions to the ESOP cease on or
after the Effective Time, then as of the date of such cessation, the employees
of the Surviving Corporation and its subsidiaries who would otherwise have been
eligible to receive allocations under the ESOP shall be eligible to participate
in Parent's ESOP as of the date of such cessation. For purposes of the
preceding sentence, all service with the Company and its subsidiaries shall be
recognized for eligibility and vesting purposes.
Parent has acknowledged in the Merger Agreement that the Company's business
presents special situations with respect to the retention and recruitment of
employees and executives and Parent agrees that the Chief Executive Officer of
the Company may from time to time propose special arrangements for such
employees and executives for consideration by Parent. Parent also has
acknowledged in the Merger Agreement that there are approximately 20 key
executives of the Company who, in accordance with the usual procedures of the
Compensation Committee of Parent, will receive appropriate consideration in
connection with the grant of stock options by Parent at the customary time in
July 1995.
Parent and the Purchaser have acknowleged in the Merger Agreement that they
have been informed of the Company's business plan for EMASS and that they are
aware of the Company's commitment to implement that plan so long as it
represents sound business judgment. Parent and the Purchaser have also
acknowledged in the Merger Agreement that although Parent does not currently
have sufficient information to commit to a specific course of action, Parent
and the Purchaser currently plan to pursue and implement, within the same time
frames and upon the same terms and conditions, that portion of such business
plan that contemplates a public offering, spin-off or similar transaction with
respect to the capital stock of EMASS so long as the management of the
Purchaser and Parent concur with the management of the Company that plan
implementation represents the exercise of sound business judgment.
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RIGHTS AGREEMENT. In the Merger Agreement, the Company has represented that
the Company's Board of Directors has taken all necessary action (i) to provide
that neither Parent nor the Purchaser will become an "Acquiring Person," that
no "Trigger Event," "Shares Acquisition Date" or "Distribution Date" (as such
terms are defined in the Rights Agreement) will occur and that Section 13 of
the Rights Agreement will not be triggered, in each case as a result of the
announcement, commencement or consummation of the Initial Offer (as defined in
the Merger Agreement) or the Offer, the execution or delivery of the Merger
Agreement or any amendment thereto or the consummation of the transactions
contemplated thereby and (ii) to redeem the Rights effective immediately prior
to the Purchaser's acceptance of Shares for purchaser in the Offer.
In the Merger Agreement, the Company has covenanted that, except as
contemplated by the preceding paragraph, the Company will not redeem the Rights
or amend or terminate the Rights Agreement prior to the consummation of the
Offer unless (i) required to do so by order of a court of competent
jurisdiction, (ii) the Company's Board of Directors determines in good faith by
a majority vote that the failure to make such redemption, amendment or
termination would create a reasonable possibility of a breach of such board's
fiduciary duties under applicable law or (iii) the Merger Agreement has
theretofore been terminated.
DIRECTORS. In the Merger Agreement, Parent has agreed as promptly as
practicable after the Effective Time to appoint A. Lowell Lawson a director of
Parent for a term expiring at the 1998 annual meeting of stockholders of
Parent. In addition, it is expected that Mr. Lawson will be appointed an
executive vice president of Parent.
In the Merger Agreement, the Company has agreed that, subject to compliance
with the DGCL, the Company's Certificate of Incorporation and other applicable
law, promptly upon the payment by the Purchaser for Shares purchased pursuant
to the Offer, and from time to time thereafter, the Company will, upon request
of Parent, promptly use its best efforts to take all actions necessary to cause
a majority of the directors of the Company to consist of Parent's designees,
including by accepting the resignations of those incumbent directors designated
by the Company or increasing the size of the Company's Board of Directors and
causing Parent's designees to be elected. (The date on which Purchaser's
designees constitute at least a majority of the Company's Board of Directors is
hereinafter referred to as the "Control Date.") The Company's obligations to
appoint Parent's designees to the Board are subject to Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder, if applicable. Following the election
or appointment of Parent's designees as described in this paragraph and prior
to the Effective Time, any amendment or termination of the Merger Agreement by
the Company or the Company's Board of Directors, any extension by the Company
or the Company's Board of Directors, of the time for the performance of any of
the obligations or other acts of Parent or the Purchaser or waiver of any of
the Company's rights hereunder, will require the concurrence of, and only will
be effective if approved by, a majority of the directors of the Company then in
office who are not affiliated with Parent and were not designated by Parent and
(i) were also non-management directors of the Company on the date of the Merger
Agreement or (ii) were elected subsequent to the date of the Merger Agreement
by, or on the recommendation of (A) directors who were directors on the date of
the Merger Agreement or (B) the Continuing Directors (the persons referred to
in clauses (i) and (ii) being the "Continuing Directors"), even if such
majority of the Continuing Directors does not constitute a majority of all
directors then in office. Until the Effective Time, the Company's Board of
Directors shall include three Continuing Directors (subject to their
availability and willingness to serve).
ADVISORY BOARD. Pursuant to the Merger Agreement, during the five-year period
immediately following the Control Date, the Company will maintain an Advisory
Board for the purpose of consulting on matters related to the business of the
Company. The members of the Advisory Board shall be chosen by mutual agreement
of the chief executive officers of the Company and the Parent from among the
individuals who constitute the Company's Board of Directors on the date of the
Merger Agreement, including any of the Continuing Directors, and
representatives of Parent. Parent shall provide or cause the Company to provide
to any members of the Advisory Board that are Continuing Directors compensation
and benefits that in the aggregate are no less favorable than those provided to
the Company's directors as of the date of the Merger
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Agreement. Purchaser agrees that it will pay, or will cause the Surviving
Corporation to pay, in accordance with the terms of the director retirement
policy and executive perquisites for outside board directors of the Company in
effect as of the date of the Merger Agreement, the retirement benefit and
perquisites provided for therein to those directors who are directors of the
Company on the date of the Merger Agreement and who, after either the Control
Date or the Effective Time, do not continue on the Company's Board of Directors
or become members of the Advisory Board.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains certain
representations and warranties by the Company, including representations and
warranties concerning: the organization and qualification of the Company and
its subsidiaries; the capitalization of the Company; the authority of the
Company relative to the execution and delivery of, and consummation of the
transactions contemplated by, the Merger Agreement and approval by the Board of
Directors of the Company regarding certain related matters; the absence of any
violations of the corporate documents and certain instruments of the Company or
its subsidiaries or of any statute, rule, regulation, order or decree, subject
to certain exceptions; the accuracy of reports and documents filed by the
Company with the Commission since January 1, 1993 and certain financial
statements of the Company; the absence since December 31, 1994 (except as
disclosed in prior filings with the Commission) to the date of the Merger
Agreement of any event or occurrence (including the incurrence or existence of
any liability but excluding events or occurrences which relate to general
economic conditions or conditions generally affecting the defense industry)
which, individually or in the aggregate, would have a Company Material Adverse
Effect (as defined in the Merger Agreement); the absence of litigation which
could have a Company Material Adverse Effect; compliance by the Company with
applicable laws, regulations, and similar matters; payment by the Company of
taxes; compliance with certain laws relating to employee benefit plans; the
taking by the Board of Directors of the Company of all appropriate and
necessary action such that the provisions of Section 203 of the DGCL will not
apply to the transactions contemplated by the Merger Agreement; and incurrence
of broker's and similar fees.
The Merger Agreement also contains certain representations and warranties by
Parent and the Purchaser, including that Parent or the Purchaser has and will
have at the time of acceptance for payment and purchase of Shares under the
Offer and at the Effective Time the funds necessary to consummate the Offer and
the Merger and the transactions contemplated thereby and to pay related fees
and expenses.
CONDITIONS TO THE MERGER. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the fulfillment
of each of the following conditions: (i) the Purchaser shall have accepted for
payment and paid for Shares pursuant to the Offer in accordance with the terms
thereof (this condition will be deemed to have been satisfied with respect to
the obligation of Parent and the Purchaser to effect the Merger if the
Purchaser fails to accept for payment or pay for Shares pursuant to the Offer
in violation of the terms of the Offer or the Merger Agreement); (ii) the vote
of the stockholders of the Company necessary to consummate the transactions
contemplated by the Merger Agreement shall have been obtained, if required by
applicable law; and (iii) no statute, rule, regulation, judgment, writ, decree,
order or injunction shall have been promulgated, enacted, entered or enforced,
and no other action shall have been taken, by any domestic, foreign or
supranational government or governmental, administrative or regulatory
authority or agency of competent jurisdiction or by any court or tribunal of
competent jurisdiction, domestic, foreign or supranational, that in any of the
foregoing cases has the effect of making illegal or directly or indirectly
restraining, prohibiting or restricting the consummation of the Merger.
TERMINATION. The Merger Agreement may be terminated at any time prior to the
Effective Time: (i) by mutual written consent of the Boards of Directors of
Parent and the Company; (ii) by either Parent or the Company if, without any
material breach of the terminating party of its obligations under the Merger
Agreement, the purchase of Shares pursuant to the Offer shall not have occurred
on or before September 30, 1995 (which date may be extended by mutual written
consent of the parties to the Merger Agreement); (iii) by Parent or the Company
if the Offer expires or is terminated or withdrawn pursuant to its terms
without any Shares being purchased thereunder; provided, however, that Parent
may not terminate the Merger
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Agreement pursuant to such provision if Parent's or the Purchaser's termination
of, or failure to accept for payment or pay for any Shares tendered pursuant
to, the Offer does not follow the occurrence, or failure to occur, as the case
may be, of any condition to the obligation of the Purchaser to accept for
payment and pay for Shares in the Offer or is otherwise in violation of the
terms of the Offer or the Merger Agreement; (iv) by either Parent or the
Company if any court of competent jurisdiction in the United States or other
governmental body in the United States shall have issued an order (other than a
temporary restraining order), decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase of Shares pursuant
to the Offer or the Merger, and such order, decree, ruling or other action
shall have become final and nonappealable; provided that the party seeking to
terminate the Merger Agreement shall have used its reasonable best efforts,
subject to certain limitations, to remove or lift such order, decree or ruling;
or (v) by the Company if the Offer has not been timely commenced.
The Merger Agreement may be terminated and the Offer and the Merger may be
abandoned by action of the Board of Directors of Parent at any time prior to
the purchase of Shares pursuant to the Offer if (i) the Board of Directors of
the Company shall withdraw, modify or change its recommendation or approval in
respect of the Merger Agreement or the Offer in a manner adverse to Parent,
(ii) the Board of Directors of the Company shall have recommended any proposal
other than by Parent or the Purchaser in respect of an Acquisition Transaction,
or (iii) any corporation, partnership, person, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act) other than Parent or the
Purchaser or any of their respective subsidiaries or affiliates shall have
become the beneficial owner of more than 20% of the outstanding Shares (either
on a primary or a fully-diluted basis).
The Merger Agreement may be terminated and the Merger may be abandoned by
action of the Board of Directors of the Company at any time prior to the
Effective Time (i) if there shall be a material breach of any of Parent's or
the Purchaser's representations, warranties or covenants under the Merger
Agreement, which breach shall not be cured within ten days of notice thereof,
or (ii) to allow the Company to enter into an agreement in respect of an
Acquisition Transaction which the Board of Directors of the Company has
determined is more favorable to the Company and its stockholders than the
transactions contemplated by the Merger Agreement (provided that such
termination shall not be effective unless and until the Company shall have paid
to Parent the fee described in the second paragraph under "Fees and Expenses"
below).
FEES AND EXPENSES. Except to the extent Parent becomes entitled to an expense
reimbursement fee as described in the following paragraph, Parent and the
Company will bear their respective expenses incurred in connection with the
Merger Agreement, the Offer and the Merger, including, without limitation, the
preparation, execution and performance of the Merger Agreement and the
transactions contemplated thereby, and all fees and expenses of investment
bankers, finders, brokers, agents, representatives, counsel and accountants.
If (i) Parent shall have terminated the Merger Agreement as described in the
second paragraph of "Termination" above or (ii) the Company shall have
terminated the Merger Agreement as described in clause (ii) of the third
paragraph of "Termination" above, then the Company shall promptly, but in no
event later than two business days after the date of such termination or event,
pay Parent an expense reimbursement fee of $75,000,000 plus an amount, not in
excess of $20,000,000, equal to Parent's actual and reasonably documented out-
of-pocket expenses directly attributable to the negotiation and execution of
this Agreement and the attempted financing and completion of the Offer and the
Merger, which amount shall be payable in same day funds, provided that no fee
or expense reimbursement shall be paid as described in this paragraph if Parent
shall be in material breach of its obligations under the Merger Agreement.
AMENDMENT. At any time prior to the Effective Time, subject to applicable law
and the provisions of the Merger Agreement described above relating to
approvals by Continuing Directors, the Merger Agreement may be amended,
modified or supplemented only by written agreement of Parent, the Purchaser and
the Company with respect to any of the terms contained therein; provided,
however, that after any approval and
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adoption of the Merger Agreement by the stockholders of the Company, no such
amendment, modification or supplementation shall be made which reduces the
amount of per-share consideration paid in the Merger or the form of
consideration therefor or which in any way materially adversely affects the
rights of such stockholders without the further approval of such stockholders.
WAIVERS. At any time prior to the Effective Time, Parent and the Purchaser,
on the one hand, and the Company, on the other hand, may (i) extend the time
for the performance of any of the obligations or other acts of the other, (ii)
waive any inaccuracies in the representations and warranties of the other
contained herein or in any documents delivered pursuant hereto or (iii) waive
compliance by the other with any of the agreements or conditions contained
herein which may legally be waived. Any such extension or waiver shall be valid
only if set forth in an instrument in writing specifically referring to this
Agreement and signed on behalf of such party.
EFFECTS OF INABILITY TO CONSUMMATE THE MERGER. Pursuant to the Merger
Agreement following the consummation of the Offer subject to certain other
conditions, the Purchaser will be merged with the Company. If, following the
Offer, approval of the Company's stockholders is required by applicable law in
order to consummate the Merger of the Purchaser with the Company, provided that
the Minimum Condition is satisfied without being reduced or waived, the Company
will submit the Merger to the Company's stockholders for approval. If the
Merger is submitted to the Company's stockholders for approval, the Merger will
require the approval of the holders of not less than 80% of the outstanding
Shares, including the Shares owned by the Purchaser. There can be no assurance
that the required vote of the shareholders will be obtained or that the Merger
will be consummated.
If the Merger is consummated, stockholders of the Company who elected not to
tender their the Shares in the Offer will receive the same amount of
consideration in exchange for each Share as they would have received in the
Offer.
If, following the consummation of the Offer, the Merger is not consummated,
Parent, which owns 100% of the Common Stock of the Purchaser, indirectly will
control the number of Shares acquired by the Purchaser pursuant to the Offer.
Under the Merger Agreement, promptly following payment by the Purchaser for
Shares purchased pursuant to the Offer, and from time to time thereafter,
subject to applicable law, the Company has agreed to take all actions necessary
to cause a majority of the directors of the Company selected by Parent to
consist of persons designated by Parent (whether, at the election of the
Company, by means of increasing the size of the board of directors or seeking
the resignation of directors and causing Parent designees to be elected). As a
result of its ownership of such Shares and right to designate nominees for
election to the Company's Board of Directors, Parent indirectly will be able to
influence decisions of the Board and the decisions of the Purchaser as a
stockholder of the Company. This concentration of influence in one stockholder
may adversely affect the market value of the Shares.
If Parent controls more than 50% of the outstanding Shares following the
consummation of the Offer but the Merger is not consummated, stockholders of
the Company, other than those affiliated with Parent, will lack sufficient
voting power to elect directors or to cause other actions to be taken which
require majority approval. If for any reason following completion of the Offer
the Merger is not consummated, Parent and the Purchaser reserve the right to
acquire additional Shares through private purchases, market transactions,
tender or exchange offers or otherwise on terms and at prices that may be more
or less favorable than those of the Offer or, subject to any applicable legal
restrictions, to dispose of any or all Shares acquired by Parent and the
Purchaser.
Statutory Requirements. In general, under the DGCL a merger of two Delaware
corporations requires the adoption of a resolution by the Board of Directors of
each of the corporations desiring to merge approving an agreement of merger
containing provisions with respect to certain statutorily specified matters and
the approval of such agreement of merger by the stockholders of each
corporation by the affirmative vote of the holders of a majority of all the
outstanding shares of stock entitled to vote on such merger. According to the
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Company Certificate of Incorporation, the Shares are the only securities of the
Company which entitle the holders thereof to voting rights.
The DGCL also provides that if a parent company owns at least 90% of each
class of stock of a subsidiary, the parent company can effect a short-form
merger with that subsidiary without the action of the other stockholders of the
subsidiary. Accordingly, if as a result of the Offer or otherwise the Purchaser
acquires or controls the voting power of at least 90% of the Shares, the
Purchaser could, and intends to, effect the Merger without prior notice to, or
any action by, any other stockholder of the Company.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company will
have certain rights under Section 262 of the DGCL to dissent and demand
appraisal of, and payment in cash of the fair value of, their Shares. Such
rights, if the statutory procedures were complied with, could lead to a
judicial determination of the fair value (excluding any element of value
arising from the accomplishment or expectation of the Merger) required to be
paid in cash to such dissenting holders for their Shares. Any such judicial
determination of the fair value of Shares could be based upon considerations
other than, or in addition to, the price paid in the Offer and the market value
of the Shares, including asset values and the investment value of the Shares.
The value so determined could be more or less than the purchase price per the
applicable Share pursuant to the Offer or the consideration per the applicable
Share to be paid in the Merger.
In addition, several decisions by Delaware courts have held that, in certain
instances, a controlling stockholder of a corporation involved in a merger has
a fiduciary duty to the other stockholders that requires the merger to be fair
to such other stockholders. In determining whether a merger is fair to minority
stockholders, the Delaware courts have considered, among other things, the type
and amount of consideration to be received by the stockholders and whether
there were fair dealings among the parties. Although the remedies of rescission
or other damages are possible in an action challenging a merger as a breach of
fiduciary duty, decisions of the Delaware courts have indicated that in most
cases the remedy available in a merger that is found not to be "fair" to
minority stockholders is a damages remedy based on essentially the same
principles as an appraisal.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS.
THE PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE
TO THE APPLICABLE PROVISIONS OF THE DGCL.
Plans for the Company. If Parent acquires control of the Company, it is its
present intent to operate the Company as a subsidiary under the Company's
current name, with the same management and organizational structure and in its
current headquarters in Dallas, Texas. However, Parent will conduct a further
review of the Company and its subsidiaries and their respective assets,
businesses, corporate structure, capitalization, operations, properties,
policies, management and personnel. After such review, Parent will determine
what actions or changes, if any, would be desirable in light of the
circumstances which then exist, and reserves the right to effect such actions
or changes. Parent's decisions could be affected by information hereafter
obtained, changes in general economic or market conditions or in the business
of the Company or its subsidiaries, actions by the Company or its subsidiaries
and other factors.
Except as described in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would relate to or would
result in (i) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries, (ii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries, (iii) any change in the present Board of
Directors or management of the Company, (iv) any material change in the present
capitalization or dividend policy of the Company, (v) any material change in
the Company's corporate structure or business, (vi) causing
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a class of securities of the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association or (vii) a class of
equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act.
"Going Private" Transactions. The Commission has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger. However,
Rule 13e-3 would be inapplicable if (i) the Shares are deregistered under the
Exchange Act prior to the Merger or other business combination or (ii) the
Merger or other business combination is consummated within one year after the
purchase of the Shares pursuant to the Offer and the amount paid per Share in
the Merger or other business combination is at least equal to the amount paid
per Share in the Offer. If applicable, Rule 13e-3 requires, among other things,
that certain financial information concerning the fairness of the proposed
transaction and the consideration offered to minority stockholders in such
transaction be filed with the Commission and disclosed to stockholders prior to
the consummation of the transaction.
The Rights. According to the Company's Registration Statement on Form 8-A
dated October 12, 1994 (the "Company 8-A"), on September 28, 1994, the Board of
Directors of the Company declared a dividend distribution of one Right for each
outstanding Share to purchase one one-thousandth of a share of a new Series A
Junior Participating Preferred Stock. Each Right entitles the registered holder
of Shares to purchase from the Company one one-thousandth of a share of Series
A Junior Participating Preferred Stock at an exercise price of $130.00, subject
to adjustment.
According to the Company 8-A, until the close of business on the Distribution
Date (which will occur on the earlier of 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Shares and 10 business days (or
such later date as the Board of Directors of the Company shall determine)
following the commencement of a tender offer or exchange offer which would
result in a person or group beneficially owning 15% or more of the outstanding
Shares, (i) the Rights will be evidenced by the Share certificates and will be
transferred with and only with such Share certificates, (ii) new Share
certificates will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for Shares
outstanding will also constitute the transfer of the Rights associated with the
Shares represented by such certificate. As soon as practicable after the
Distribution Date, Rights Certificates will be mailed to holders of record of
the Shares as of the close of business on the Distribution Date, and thereafter
the separate Rights Certificates alone will evidence the Rights.
According to the Company 8-A, the Rights are not exercisable until the
Distribution Date. The Rights will expire at the close of business on October
17, 2004, unless earlier redeemed by the Company as described below.
According to the Company 8-A, in the event that the Company is acquired in a
merger or consolidation in which the Company is not the surviving corporation
or 50% or more of the Company's consolidated assets or earning power is sold or
transferred (other than a merger that follows a tender offer determined to be
fair to the stockholders of the Company); each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction will have a value
equal to two times the exercise price of the Right.
According to the Company 8-A, in the event that an Acquiring Person becomes
the beneficial owner of 15% or more of the then outstanding Shares (unless such
acquisition is made pursuant to a tender or exchange offer for all outstanding
shares of the Company at a price determined by a majority of the independent
Directors of the Company who are not representatives, nominees, affiliates or
associates of an Acquiring Person to be fair and otherwise in the best interest
of the Company and its stockholders), each holder of a Right will thereafter
have the right to receive, upon exercise, Shares (or, in certain circumstances,
cash,
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property or other securities of the Company), having a value equal to two times
the exercise price of the Right.
According to the Company 8-A, at any time until 10 days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"). Immediately upon the
action of the Board of Directors of the Company ordering redemption of the
Rights, the Rights will terminate, and the only right of the holders of Rights
will only be entitled to receive the Redemption Price.
According to the Company 8-A, until a Right is exercised, the holder thereof,
as such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
According to the Company 8-A, the terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, except that from and after the Distribution Date, the provisions of the
Rights Agreement and the terms of the Rights may be amended without consent of
such holders only to cure any ambiguity, make certain changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person) or to shorten or lengthen any time period under the
Rights Agreement; provided that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
The foregoing summary of the Rights Agreement does not purport to be complete
and is qualified in its entirety by reference to the Company 8-A and the text
of the Rights Agreement as set forth as an exhibit thereto filed with the
Commission, copies of which may be obtained in the manner set forth in Section
8.
STOCKHOLDERS ARE REQUIRED TO TENDER ONE ASSOCIATED RIGHT FOR EACH SHARE
TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH SHARE. IF THE DISTRIBUTION
DATE DOES NOT OCCUR PRIOR TO THE EXPIRATION DATE, A TENDER OF SHARES WILL ALSO
CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. SEE SECTIONS 1 AND 3.
12. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to purchase all of the
outstanding Shares pursuant to the Offer and to pay fees and expenses related
to the Offer and the Merger is expected to be approximately $2.4 billion. The
Purchaser plans to obtain all funds needed for the Offer and the Merger through
a capital contribution which will be made by Parent. Parent plans to obtain the
funds for such capital contribution pursuant to a financing commitment letter
(the "Commitment"), dated April 1, 1995, from Chemical Bank ("Chemical"),
Chemical Securities Inc. ("Chemical Securities"), Bank of America National
Trust and Savings Association ("BA"), BA Securities, Inc. ("BA Securities"),
The Chase Manhattan Bank, N.A. ("Chase") and Chase Securities, Inc. ("Chase
Securities"). Set forth below is a summary of the principal terms of the
Commitment.
Pursuant to the Commitment, each of Chemical, BA and Chase (collectively the
"Managing Agents") have agreed to provide $1 billion of a $3 billion, five-
year, unsecured, competitive advance/revolving credit facility (the
"Facility"). The proceeds of the Facility may be used to finance the
acquisition of Shares pursuant to the Offer and the Merger and, following the
Merger, to provide working capital to, and for other general corporate purposes
of, Parent, including for commercial paper back-up.
The Commitment is conditioned upon: (i) the satisfaction of each of the
Managing Agents with the structure and terms of the Offer and the Merger, all
legal, tax and accounting matters relating to the Offer and the Merger and all
other agreements to be entered into in connection therewith; (ii) the absence
of any material adverse change since December 31, 1994 in the business, assets,
condition (financial or otherwise) or
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<PAGE>
prospects of Parent and its subsidiaries taken as a whole; (iii) the
negotiation, execution and delivery of definitive credit documentation
satisfactory to the Managing Agents; (iv) there not having occurred and be
continuing an adverse change in financial, banking or capital market conditions
since the April 1, 1995 that in the reasonable judgment of Chemical Securities,
BA Securities and Chase Securities (collectively the "Agents") would have a
material adverse effect on the syndication of the Facility; and (v) the
satisfaction of the Agents that following the date of the Commitment and during
the syndication of the Facility Parent and its subsidiaries shall not have
offered, placed or arranged to be in the process of offering, placing or
arranging any competing issues of debt securities (other than commercial paper)
or competing bank credit facilities of Parent or its subsidiaries.
Two borrowing options will be available under the Facility: a competitive
advance option (the "CAF") and a revolving credit option. Under the CAF, up to
the full aggregate amount of the commitments under the Facility (less any
amounts outstanding as revolving credit loans) may be borrowed, repaid and
reborrowed at the discretion of the lenders who may elect to bid in accordance
with certain auction procedures described in the Commitment. Under the
revolving credit option, up to the full aggregate amount of the commitments
under the Facility (less any amounts outstanding as CAF loans) may be borrowed,
repaid and reborrowed subject only to the satisfaction of applicable conditions
to borrowing.
Interest rates under the CAF will be the rates obtained from bids as selected
by Parent in accordance with the procedures outlined in the Commitment.
Interest rates under the revolving credit option will be at the option of
Parent either (i) the London Interbank Offered Rate (LIBOR) plus spreads
projected to range from 18.75 basis points to 25 basis points depending on
Parent's debt rating or (ii) the highest of (A) Chemical's Prime Rate, (B) the
base CD rate plus 1% and (C) the federal funds effective rate plus 1/2 of 1%.
The credit agreement relating to the Facility will contain customary
representations and warranties and events of default.
Parent has agreed to pay the Managing Agents and the Agents customary
commitment and facility fees as well as certain of the fees and expenses of the
Managing Agents and the Agents and their affiliates arising in connection with
the Commitment and the Financing. In addition, Parent has agreed to indemnify
each of the Managing Agents and the Agents and certain related persons against
certain damages and expenses arising out of any investigation or litigation
relating to the Commitment, the Financing and the acquisition by Parent of the
Company.
No final decisions have been made concerning the method Parent will employ to
refinance and repay the indebtedness incurred by Parent under the Facility.
Such decisions will be based on Parent's review from time to time of the
advisability of particular actions, including the availability of cash flow
generated by Parent, prevailing interest rates, market conditions and other
financial and economic conditions.
The foregoing summary of the Commitment is qualified in its entirety by
reference to the Commitment, which is filed as an exhibit to the Schedule 14D-
1.
13. DIVIDENDS AND DISTRIBUTIONS.
If on or after the date of the Merger Agreement the Company (i) splits,
combines or otherwise changes the Shares or its capitalization, (ii) acquires
Shares or otherwise causes a reduction in the number of Shares, (iii) issues or
sells additional Shares (other than the issuance of Shares reserved for
issuance as of the date of the Merger Agreement under option and employee stock
purchase plans in accordance with their terms as publicly disclosed as of the
date of the Merger Agreement) or any shares of any other class of capital
stock, other voting securities or any securities convertible into or
exchangeable for, or rights (other than the Rights), warrants or options,
conditional or otherwise, to acquire, any of the foregoing or (iv) discloses
that it has taken such action, then, without prejudice to the Purchaser's
rights under Section 14, the Purchaser, in its sole discretion, may make such
adjustments in the purchase price and other terms of the Offer as it deems
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<PAGE>
appropriate to reflect such split, combination or other change or action,
including, without limitation, the Minimum Condition or the number or type of
securities offered to be purchased.
If on or after the date of the Merger Agreement the Company declares or pays
any dividend on the Shares (other than regular quarterly cash dividends at a
rate not exceeding $.375 per Share per quarter, payable on the Company's
customary dividend payment dates) or any distribution (including, without
limitation, the issuance of additional Shares pursuant to a stock dividend or
stock split, the issuance of other securities or the issuance of rights (other
than the separation of the Rights from the Shares) for the purchase of any
securities) with respect to the Shares or Rights (other than the Redemption
Price) that is payable or distributable to stockholders of record on a date
prior to the transfer into the name of the Purchaser or its nominees or
transferees on the Company's stock transfer records of the Shares and Rights
purchased pursuant to the Offer, and if Shares are purchased in the Offer,
then, without prejudice to the Purchaser's rights under Section 14, (i) the
purchase price per Share payable by the Purchaser pursuant to the Offer shall
be reduced by the amount of any such cash dividend or cash distribution and
(ii) any such non-cash dividend, distribution, issuance, proceeds or rights to
be received by the tendering stockholders shall (A) be received and held by the
tendering stockholders for the account of the Purchaser and will be required to
be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer or (B) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance
and subject to applicable law, the Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend, distribution, issuance,
proceeds or rights and may withhold the entire purchase price or deduct from
the purchase price the amount or value thereof, as determined by the Purchaser
in its sole discretion.
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) promulgated under the
Exchange Act (relating to the Purchaser's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay
for, and may delay the acceptance for payment of any tendered Shares and,
except as set forth in the Merger Agreement, amend or terminate the Offer as to
any Shares not then paid for if (i) the Minimum Condition shall not have been
satisfied, (ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated prior to the expiration of the Offer or (iii) at any
time after execution of the Merger Agreement and before the time of payment for
any such Shares (whether or not any Shares have theretofore been accepted for
payment or paid for pursuant to the Offer), any of the following conditions
exists:
(A) there shall be in effect an injunction or other order, decree,
judgment or ruling by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission of
competent jurisdiction or a statute, rule, regulation, executive order or
other action shall have been promulgated, enacted, taken or threatened by a
governmental authority or a governmental, regulatory or administrative
agency or commission of competent jurisdiction which in any such case (I)
restrains or prohibits the making or consummation of the Offer or the
consummation of the Merger, (II) prohibits or restricts the ownership or
operation by Parent or the Purchaser (or any of their respective affiliates
or subsidiaries) of any portion of its or the Company's business or assets
which is material to the business of all such entities taken as a whole, or
compels Parent or the Purchaser (or any of their respective affiliates or
subsidiaries) to dispose of or hold separate any portion of its or the
Company's business or assets which is material to the business of all such
entities taken as a whole, (III) imposes material limitations on the
ability of the Purchaser effectively to acquire or to hold or to exercise
full rights of ownership of the Shares, including, without limitation, the
right to vote the Shares purchased by the Purchaser on all matters properly
presented to the stockholders of the Company, (IV) imposes any material
limitations on the ability of Parent or the Purchaser or any of their
respective affiliates or subsidiaries effectively to control in any
material respect the business and operations of the Company
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<PAGE>
and its subsidiaries, or (V) which otherwise would materially adversely
affect the Company and its subsidiaries taken as a whole; or
(B) the Merger Agreement shall have been terminated by the Company,
Parent or the Purchaser in accordance with its terms; or
(C) (I) the representations and warranties made by the Company in the
Merger Agreement shall not have been true and correct in all material
respects when made or shall have ceased to be true and correct in all
material respects as of the Expiration Date as if made as of such date, or
(II) as of the Expiration Date the Company shall not in all material
respects have performed its material obligations and agreements and
complied with its material covenants to be performed and complied with by
it under the Merger Agreement; or
(D) there shall have occurred (I) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or the over-the-counter market, (II) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (III) from the date of the Merger
Agreement through the date of termination or expiration of the Offer, a
decline of at least 25% in the Standard & Poor's 500 Index, or (IV) in the
case of any of the foregoing existing at the time of the execution of the
Merger Agreement, a material acceleration or worsening thereof; or
(E) Parent, the Purchaser and the Company shall have agreed that the
Purchaser shall amend the Offer to terminate the Offer or postpone the
payment for Shares pursuant thereto.
The foregoing conditions are for the sole benefit of Parent and the Purchaser
and may be asserted by Parent or the Purchaser regardless of the circumstances
(including any action or inaction by Parent or the Purchaser) giving rise to
any such conditions and may be waived by Parent or the Purchaser in whole or in
part at any time and from time to time, in each case, in the exercise of the
good faith judgment of Parent and the Purchaser and subject to the terms of the
Merger Agreement. The failure by Parent or the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
A public announcement may be made of a material change in, or waiver of, such
conditions and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver.
The Purchaser acknowledges that the Commission believes that (i) if the
Purchaser is delayed in accepting the Shares it must either extend the Offer or
terminate the Offer and promptly return the Shares and (ii) the circumstances
in which a delay in payment is permitted are limited and do not include
unsatisfied conditions of the Offer, except with respect to most required
regulatory approvals.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
Except as set forth in this Offer to Purchase, based on its review of
publicly available filings by the Company with the Commission and other
information regarding the Company, neither Parent nor the Purchaser is aware of
any licenses or regulatory permits that appear to be material to the business
of the Company and its subsidiaries, taken as a whole, and that might be
adversely affected by the Purchaser's acquisition of Shares (and the indirect
acquisition of the stock of the Company's subsidiaries) as contemplated herein,
or any filings, approvals or other actions by or with any domestic, foreign or
supranational governmental authority or administrative or regulatory agency
that would be required for the acquisition or ownership of the Shares (or the
indirect acquisition of the stock of the Company's subsidiaries) by the
Purchaser pursuant to the Offer as contemplated herein. Should any such
approval or other action be required, it is presently contemplated that such
approval or action would be sought except as described below under "State
Takeover Laws." Should any such approval or other action be required, there can
be no assurance that any such approval or action would be obtained without
substantial conditions or that adverse consequences might not result to the
Company's or its subsidiaries' businesses, or that certain parts of the
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<PAGE>
Company's, Parent's, the Purchaser's or any of their respective subsidiaries'
businesses might not have to be disposed of or held separate or other
substantial conditions complied with in order to obtain such approval or action
or in the event that such approvals were not obtained or such actions were not
taken. The Purchaser's obligation to purchase and pay for Shares is subject to
certain conditions, including conditions with respect to litigation and
governmental actions. See Introduction and Section 14 for a description
thereof.
State Takeover Laws. A number of states (including Delaware where the Company
is incorporated) have adopted takeover laws and regulations which purport, to
varying degrees, to be applicable to attempts to acquire securities of
corporations which are incorporated in such states or which have substantial
assets, stockholders, principal executive offices or principal places of
business therein. To the extent that certain provisions of certain of these
state takeover statutes purport to apply to the Offer or the Merger, the
Purchaser believes that such laws conflict with federal law and constitute an
unconstitutional burden on interstate commerce. In 1982, the Supreme Court of
the United States, in Edgar v. Mite Corp., invalidated on constitutional
grounds the Illinois Business Takeovers Statute, which as a matter of state
securities law made takeovers of corporations meeting certain requirements more
difficult. The reasoning in such decision is likely to apply to certain other
state takeover statutes. In 1987, however, in CTS Corp. v. Dynamics Corp. of
America, the Supreme Court of the United States held that the State of Indiana
could as a matter of corporate law and, in particular, those aspects of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquiror from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders, provided that such laws were
applicable only under certain conditions. Subsequently, in TLX Acquisition
Corp. v. Telex Corp., a Federal district court in Oklahoma ruled that the
Oklahoma statutes were unconstitutional insofar as they apply to corporations
incorporated outside Oklahoma in that they would subject such corporations to
inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a
Federal district court in Tennessee ruled that four Tennessee takeover statutes
were unconstitutional as applied to corporations incorporated outside
Tennessee. This decision was affirmed by the United States Court of Appeals for
the Sixth Circuit. In December 1988, a Federal district court in Florida held,
in Grand Metropolitan PLC v. Butterworth, that the provisions of the Florida
Affiliated Transactions Act and Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
The Purchaser has not attempted to comply with any state takeover statutes in
connection with the Offer or the Merger. The Purchaser reserves the right to
challenge the validity or applicability of any state law allegedly applicable
to the Offer or the Merger, and nothing in this Offer to Purchase nor any
action taken in connection herewith is intended as a waiver of that right. In
the event that it is asserted that one or more takeover statutes apply to the
Offer or the Merger, and it is not determined by an appropriate court that such
statute or statutes do not apply or are invalid as applied to the Offer or the
Merger, as applicable, the Purchaser may be required to file certain documents
with, or receive approvals from, the relevant state authorities, and the
Purchaser might be unable to accept for payment or purchase Shares tendered
pursuant to the Offer or be delayed in continuing or consummating the Offer. In
such case, the Purchaser may not be obligated to accept for purchase, or pay
for, any Shares tendered. See Section 14.
Antitrust. Under the HSR Act, and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the FTC and the Antitrust
Division of the Department of Justice (the "Antitrust Division") and certain
waiting period requirements have been satisfied. The acquisition of Shares
pursuant to the Offer and the Merger is subject to such requirements.
Under the provisions of the HSR Act applicable to the Offer and the Merger,
the purchase of Shares pursuant to the Offer and the Merger may not be
consummated until the expiration of a 15-calendar-day waiting period following
the filing of certain required information and documentary material with
respect to the Offer with the FTC and the Antitrust Division, unless such
waiting period is earlier terminated by the
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<PAGE>
FTC and the Antitrust Division. The Purchaser expects to file a Premerger
Notification and Report Form with the FTC and the Antitrust Division in
connection with the purchase of Shares pursuant to the Offer and the Merger
under the HSR Act on April 3, 1995, and, in such event, the required waiting
period with respect to the Offer and the Merger will expire at 11:59 p.m., New
York City time, on April 18, 1995, unless earlier terminated by the FTC or the
Antitrust Division or the Purchaser receives a request for additional
information or documentary material prior thereto. If within such 15-calendar-
day waiting period either the FTC or the Antitrust Division were to request
additional information or documentary material from the Purchaser, the waiting
period with respect to the Offer and the Merger would be extended for an
additional period of 10 calendar days following the date of substantial
compliance with such request by the Purchaser. Only one extension of the
waiting period pursuant to a request for additional information is authorized
by the rules promulgated under the HSR Act. Thereafter, the waiting period
could be extended only by court order or with the consent of the Purchaser. The
additional 10-calendar-day waiting period may be terminated sooner by the FTC
or the Antitrust Division. Although the Company is required to file certain
information and documentary material with the FTC and the Antitrust Division in
connection with the Offer, neither the Company's failure to make such filings
nor a request made to the Company from the FTC or the Antitrust Division for
additional information or documentary material will extend the waiting period
with respect to the purchase of Shares pursuant to the Offer and the Merger.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer and the Merger. At any time before or after the
Purchaser's purchase of Shares, the FTC or the Antitrust Division could take
such action under the antitrust laws as either deems necessary or desirable in
the public interest, including seeking to enjoin the purchase of Shares
pursuant to the Offer and the Merger, the divestiture of Shares purchased
pursuant to the Offer or the divestiture of substantial assets of Parent, the
Purchaser, the Company or any of their respective subsidiaries or affiliates.
Private parties as well as state attorneys general may also bring legal actions
under the antitrust laws under certain circumstances. See Section 14.
Based upon an examination of publicly available information relating to the
businesses in which the Company is engaged, the Purchaser believes that the
acquisition of Shares pursuant to the Offer and the Merger should not violate
the applicable antitrust laws. Nevertheless, there can be no assurance that a
challenge to the Offer and the Merger on antitrust grounds will not be made,
or, if such challenge is made, what the result will be. See Section 14.
Foreign Approvals. According to publicly available information, the Company
owns property and conducts business in a number of other foreign countries and
jurisdictions. In connection with the acquisition of the Shares pursuant to the
Offer or the Merger, the laws of certain of those foreign countries and
jurisdictions may require the filing of information with, or the obtaining of
the approval or consent of, governmental authorities in such countries and
jurisdictions. The governments in such countries and jurisdictions might
attempt to impose additional conditions on the Company's operations conducted
in such countries and jurisdictions as a result of the acquisition of the
Shares pursuant to the Offer or the Merger. If such approvals or consents are
found to be required the parties intend to make the appropriate filings and
applications. In the event such a filing or application is made for the
requisite foreign approvals or consents, there can be no assurance that such
approvals or consents will be granted and, if such approvals or consents are
received, there can be no assurance as to the date of such approvals or
consents. In addition, there can be no assurance that the Purchaser will be
able to cause the Company or its subsidiaries to satisfy or comply with such
laws or that compliance or noncompliance will not have adverse consequences for
the Company or any subsidiary after purchase of the Shares pursuant to the
Offer or the Merger.
16. CERTAIN FEES AND EXPENSES.
Bear Stearns is acting as Dealer Manager in connection with the Offer and as
financial advisor to Parent and the Purchaser in connection with the proposed
acquisition of the Company. Parent has paid or is obligated to pay to Bear
Stearns a fee of $5,000,000 and has agreed to pay Bear Stearns additional fees
of
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$5,000,000 upon commencement of the Offer and $4,000,000 if the acquisition of
the Company by Parent is completed. In addition, Parent has agreed to reimburse
Bear Stearns for its reasonable expenses incurred in rendering its services
under its engagement agreement with Parent and has agreed to indemnify Bear
Stearns against certain liabilities and expenses in connection with the Offer
and the Merger, including certain liabilities under the federal securities
laws. Bear Stearns from time to time renders various investment banking
services to Parent and its affiliates for which it is paid customary fees.
D.F. King & Co., Inc. has been retained by the Purchaser as Information Agent
in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee stockholders to forward material
relating to the Offer to beneficial owners of Shares. The Purchaser will pay
the Information Agent reasonable and customary compensation for all such
services in addition to reimbursing the Information Agent for reasonable out-
of-pocket expenses in connection therewith. The Purchaser has agreed to
indemnify the Information Agent against certain liabilities and expenses in
connection with the Offer, including certain liabilities under the federal
securities laws.
In addition, The First National Bank of Boston has been retained as the
Depositary. The Purchaser will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith
and will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including certain liabilities under the federal
securities laws.
Except as set forth above, neither Parent nor the Purchaser will pay any fees
or commissions to any broker, dealer or other person (other than the Dealer
Manager) for soliciting tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies and other nominees will, upon
request, be reimbursed by Parent or the Purchaser for customary clerical and
mailing expenses incurred by them in forwarding offering materials to their
customers.
17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer will be deemed to be
made on behalf of the Purchaser by the Dealer Manager or one or more registered
brokers or dealers that are licensed under the laws of such jurisdiction.
Parent and the Purchaser have filed with the Commission a Schedule 14D-1,
together with exhibits, pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. Such Schedule 14D-1
and any amendments thereto, including exhibits, may be examined and copies may
be obtained from the office of the Commission in the same manner as described
in Section 8 with respect to information concerning the Company, except that
copies will not be available at the regional offices of the Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
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Neither the delivery of the Offer to Purchase nor any purchase pursuant to
the Offer shall under any circumstances create any implication that there has
been no change in the affairs of Parent, the Purchaser, the Company or any of
their respective subsidiaries since the date as of which information is
furnished or the date of this Offer to Purchase.
RTN ACQUISITION CORPORATION
April 3, 1995
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SCHEDULE I
I. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets forth
the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years of each
director and executive officer of Parent. Unless otherwise indicated below each
occupation set forth opposite each person refers to employment with Parent. The
business address of each such person is c/o Raytheon Company, 141 Spring
Street, Lexington, Massachusetts 02173 and each such person is a citizen of the
United States of America.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
<S> <C>
1. DIRECTORS OF PARENT
Charles F. Adams Director, 1938 to 1942 and since 1946. Retired Chairman of
the Board, Raytheon Company.
Max E. Bleck Director since 1990. President since March 1, 1991. Prior
thereto, Mr. Bleck served as President and Chief Executive
Officer of Beech Aircraft Corporation from 1987.
Francis H. Burr Director since 1977. Of Counsel, law firm of Ropes & Gray.
Ferdinand Colloredo- Director since 1987. Chairman and Chief Executive Officer,
Mansfeld Cabot Partners since October 1990. Prior thereto, Mr.
Colloredo-Mansfeld was Chairman and Chief Executive Officer,
Cabot, Cabot & Forbes Realty Advisers, Inc. (predecessor of
Cabot Partners) and Chairman, Chief Executive Officer and
President of Cabot, Cabot & Forbes from 1986. Principal
Business: Real Estate Investment and Management.
Theodore L. Eliot, Jr. Director since 1983. Dean Emeritus of the Fletcher School of
Law and Diplomacy, Tufts University; former U.S. Ambassador.
Barbara B. Hauptfuhrer Director since 1987. Principal Business: Corporate Director.
Richard D. Hill Director since 1974. Retired Chairman, Bank of Boston
Corporation and The First National Bank of Boston.
James N. Land, Jr. Director since 1978. Principal Business: Corporate Financial
Advisor.
Thomas L. Phillips Director since 1962. Retired Chairman of the Board and Chief
Executive Officer, Raytheon Company.
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE YEAR EMPLOYMENT HISTORY
---- ----------------------------
<S> <C>
Dennis J. Picard Director since 1989. Chairman of the Board and Chief
Executive Officer since March 1, 1991. Prior thereto, Mr.
Picard served as President from 1989 and as Senior Vice
President, General Manager of the Missile Systems Division
from 1983.
Warren B. Rudman Director since 1993. Partner, law firm of Paul Weiss,
Rifkind, Wharton & Garrison since January 1992. Prior
thereto, Mr. Rudman served as a United States Senator from
1980.
Joseph J. Sisco Director since 1977. Partner, Sisco Associates (Management
Consultant).
Alfred M. Zeien Director since 1992. Chairman of the Board and Chief
Executive Officer of The Gillette Company since 1991. Prior
thereto, Mr. Zeien served as President of Gillette from 1991
and as Vice Chairman, Gillette International/Diversified
Operations from 1988.
2. EXECUTIVE OFFICERS OF PARENT
Gail P. Anderson Vice President--Human Resources since December 1994. Prior
to assuming his present position Mr. Anderson served as Vice
President--Human Resources, Phillips Petroleum Company from
1986.
Shay D. Assad Vice President--Contracts since July 1994. Prior to assuming
his present position Mr. Assad served as Manager-Contracts,
Missile Systems Division from 1985.
Max E. Bleck President since March 1991. (For further information see
paragraph I.1 above.)
Philip W. Cheney Vice President and Group Executive--Commercial Electronics
since July 1994. Prior to assuming his present position, Dr.
Cheney served as Vice President--Engineering from February
1990.
Peter R. D'Angelo Executive Vice President, Chief Financial Officer and
Controller since March 1995. Prior to assuming his present
position, Mr. D'Angelo served as Vice President, Chief
Financial Officer and Controller from January 1995, as Vice
President and Corporate Controller from 1992 and as
Controller--Missile Systems Division from 1984.
Herbert Deitcher Senior Vice President--Treasurer since November 1989.
David S. Dwelley Vice President--Strategic Business Development since April
1991. Prior to assuming his present position, Mr. Dwelley
served as Vice President--President, Raytheon Europe Limited
from 1989.
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE YEAR EMPLOYMENT HISTORY
---- ----------------------------
<S> <C>
Christoph L. Hoffmann Executive Vice President--Law and Corporate Administration,
and Secretary since March 1995. Prior to assuming his
present position, Mr. Hoffmann served as Senior Vice
President--Law, Human Resources and Corporate
Administration, and Secretary from February 1994, as Vice
President, Secretary and General Counsel from July 1991 and
as Senior Vice President, General Counsel and Secretary of
Pneumo Abex Corporation from 1986. Mr. Hoffmann is the
beneficial owner of 1,000 Shares.
Thomas D. Hyde Vice President and General Counsel since February 1994.
Prior to assuming his present position, Mr. Hyde served as
Assistant General Counsel from August 1992, as Senior Vice
President, General Counsel and Chief Financial Officer of
MNC Financial Inc. Special Assets Bank from 1991 and as Vice
President, Finance of Manville Sales Corporation from 1988.
Frank Kendall Vice President--Engineering since December 1994. Prior to
assuming his present position Mr. Kendall was a civilian
employee with the Department of Defense from 1990.
Charles Q. Miller Executive Vice President and Group Executive and Chairman
and Chief Executive Officer of Raytheon Engineers and
Constructors International, Inc. since March 1995. Prior to
assuming his present position, Mr. Miller served as Senior
Vice President and Group Executive and Chairman and Chief
Executive Officer of Raytheon Engineers and Constructors
International, Inc. from March 1993 and as President, United
Engineers & Constructors, Inc. from 1990.
Dennis J. Picard (See information set forth in paragraph I.1 above.)
Robert A. Skelly Vice President--Assistant to the Executive Office. Prior to
assuming his present position, Mr. Skelly served as Vice
President--Administration, Environmental Quality and
Procurement since September 1992, as Vice President--Public
and Financial Relations from January 1991 and as Assistant
to the President from August 1989.
Robert L. Swam Executive Vice President and Group Executive--Appliance
Group since March 1995. Prior to assuming his present
position, Mr. Swam served as Senior Vice President and Group
Executive--Appliance Group from January 1992 and was an
independent consultant from 1989.
William H. Swanson Executive Vice President and General Manager--Electronic
Systems Division since March 1995. Prior to assuming his
present position, Mr. Swanson served as Senior Vice
President and General Manager--Electronic Systems Division
from January 1995 and as Senior Vice President and General
Manager, Missile Systems Division from 1990.
Arthur E. Wegner Executive Vice President--Chairman and Chief Executive
Officer of Raytheon Aircraft since March 1995. Prior to
assuming his present position, Mr. Wegner served as Senior
Vice President--Chairman and Chief Executive Officer of
Raytheon Aircraft from July 1993 and as Executive Vice
President and President of the Aerospace/Defense Sector of
the United Technologies Corporation from 1989.
Edmund B. Woollen Vice President--Government Marketing since December 1992.
Prior to assuming his present position, Mr. Woollen served
as Vice President, Government Group since 1986.
</TABLE>
37
<PAGE>
II. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years of each
director and executive officer of the Purchaser. Unless otherwise indicated
below each occupation set forth opposite each person refers to employment with
Parent. The business address of each such person is c/o Raytheon Company, 141
Spring Street, Lexington, Massachusetts 02173 and each such person is a citizen
of the United States of America.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
<S> <C>
1. DIRECTORS OF THE PURCHASER
Christoph L. Hoffmann Chairman of Purchaser. (For further information see
paragraph I.2 above.)
David S. Dwelley Director of Purchaser. (For further information see
paragraph I.2 above.)
Sally F. Cloyd Director of Purchaser. Assistant General Counsel since
January 1993. Prior thereto, Ms. Cloyd served as Vice
President, Corporate Counsel and Secretary of Arvin
Industries, Inc. from 1991 and attorney and partner at the
law firm of Schiff Hardin & Waite from 1983.
2. EXECUTIVE OFFICERS OF THE PURCHASER
Christoph L. Hoffmann President of Purchaser. (For further information see
paragraph I.2 above.)
Herbert Deitcher Treasurer of Purchaser. (For further information see
paragraph I.2 above.)
Sally F. Cloyd Vice President and Secretary of Purchaser. (For further
information see paragraph II.1. above.)
John W. Kapples Vice President and Assistant Secretary of Purchaser.
Associate Corporate Counsel since 1994. Prior to assuming
his present position, Mr. Kapples was an attorney at the law
firm of Sullivan & Worcester from 1985.
</TABLE>
38
<PAGE>
Facsimile copies of Letters of Transmittal, properly completed and duly
executed, will be accepted. The appropriate Letter of Transmittal, certificates
for Shares and any other required documents should be sent or delivered by each
stockholder of the Company or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of its addresses set forth
below:
The Depositary for the Offer is:
THE FIRST NATIONAL BANK OF BOSTON
By Mail: By Facsimile Transmission:
The First National Bank of Boston (617) 575-2232
Shareholder Services Division (617) 575-2233
P.O. Box 1889 Mail Stop 45-01-19 (for Eligible Institutions Only)
Boston, Massachusetts 02105 Confirm by Telephone
(617) 575-2700
By Hand: By Overnight Courier:
BancBoston Trust Company The First National Bank of Boston
of New York Shareholder Services Division
55 Broadway, Third Floor Mail Stop 45-01-19
New York, New York 150 Royall Street
Canton, Massachusetts 02021
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth below. Additional copies of this Offer to Purchase, the Letters of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect (212) 269-5550
All Others Call Toll Free (800) 697-6975
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
(800) 307-2327 (Toll free)
<PAGE>
Exhibit 99(a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
of
E-SYSTEMS, INC.
Pursuant to the Offer to Purchase
dated April 3, 1995
by
RTN ACQUISITION CORPORATION
a wholly-owned subsidiary of
RAYTHEON COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, APRIL 28, 1995 UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE FIRST NATIONAL BANK OF BOSTON
By Mail: By Facsimile Transmission:
The First National Bank of Boston (617) 575-2232
Shareholder Services Division (617) 575-2233
P.O. Box 1889 (for Eligible Institutions Only)
Mail Stop 45-01-19 Confirm by Telephone
Boston, Massachusetts 02105 (617) 575-2700
By Hand: By Overnight Courier:
BancBoston Trust Company The First National Bank of Boston
of New York Shareholder Services Division
55 Broadway, Third Floor Mail Stop 45-01-19
New York, New York 150 Royall Street
Canton, Massachusetts 02021
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates for Shares (as defined in the Offer to Purchase dated April 3,
1995 (the "Offer to Purchase")) are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if tenders
of Shares are to be made by book-entry transfer to an account maintained by The
First National Bank of Boston (the "Depositary") at The Depository Trust
Company ("DTC"), Midwest Securities Trust Company ("MSTC") or Philadelphia
Depository Trust Company ("PDTC") (each a "Book-Entry Transfer Facility" and
collectively referred to as the "Book-Entry Transfer Facilities"), pursuant to
the procedures set forth in Section 3 of the Offer to Purchase. Stockholders
who tender Shares by book-entry transfer are referred to herein as "Book-Entry
Stockholders."
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary on or prior to
the Expiration Date (as defined in the Offer to Purchase) or who cannot
complete the procedures for book-entry transfer on a timely basis, must tender
their Shares according to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO
A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER. PLEASE
READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
[_] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution: _________________________________________
Name of Book-Entry Transfer Facility:
(Check one)
[_] The Depository Trust Company (DTC)
[_] Midwest Securities Trust Company (MSTC)
[_] Philadelphia Depository Trust Company (PDTC)
Account Number: ________________________________________________________
Transaction Code Number: _______________________________________________
[_] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s): _______________________________________
Window Ticket Number (if any): _________________________________________
Date of Execution of Notice of Guaranteed Delivery: ____________________
Name of Institution which Guaranteed Delivery: _________________________
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
SHARE CERTIFICATE(S) AND
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE(S) TENDERED
(PLEASE FILL IN, IF BLANK, EXACTLY AS (ATTACH ADDITIONAL LIST,
NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S)) IF NECESSARY)
- --------------------------------------------------------------------------------
TOTAL NUMBER
OF
SHARES
SHARE REPRESENTED NUMBER
CERTIFICATE BY SHARE OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
TOTAL SHARES
- --------------------------------------------------------------------------------
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated it will be assumed that all Shares
represented by Share Certificates delivered to the Depositary are being
tendered. See Instruction 4.
- --------------------------------------------------------------------------------
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to RTN Acquisition Corporation (the
"Purchaser"), a Delaware corporation and a wholly-owned subsidiary of Raytheon
Company, a Delaware corporation ("Parent"), the above described shares of
Common Stock, par value $1.00 per share (the "Shares"), of E-Systems, Inc., a
Delaware corporation (the "Company"), and the associated Preferred Stock
Purchase Rights (the "Rights") issued pursuant to the Rights Agreement, dated
as of October 7, 1994, between the Company and Society National Bank, as Rights
Agent (the "Rights Agreement"), pursuant to the Purchaser's offer to purchase
all outstanding Shares at a price of $64.00 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase, receipt of which is hereby acknowledged,
and in this Letter of Transmittal (which together with the Offer to Purchase
constitute the "Offer"). Unless the context otherwise requires, all references
to Shares shall include the associated Rights and all references to the Rights
shall include all benefits that may inure to the holders of the Rights pursuant
to the Rights Agreement, including the right to receive any payment due upon
redemption of the Rights. The undersigned understands that the Purchaser
reserves the right to transfer or assign, in whole or from time to time in
part, to one or more of its subsidiaries or affiliates the right to purchase
all or any portion of the Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and payment for the
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and transfers
to, or upon the order of, the Purchaser all right, title and interest in and to
all of the Shares that are being tendered hereby and any and all dividends on
the Shares (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or stock split, the issuance of other securities
or the issuance of rights for the purchase of any securities, but excluding
regular cash dividends at a rate not exceeding $.375 per Share per quarter,
payable on the Company's customary dividend payment dates) with respect to the
Shares that are declared or paid by the Company on or after the date of the
Offer to Purchase and are payable or distributable to stockholders of record on
a date prior to the transfer into the name of the Purchaser or its nominees or
transferees on the Company's stock transfer records of the Shares purchased
pursuant to the Offer (collectively "Distributions"), and constitutes and
irrevocably appoints the Depositary the true and lawful agent, attorney-in-fact
and proxy of the undersigned to the full extent of the undersigned's rights
with respect to such Shares (and Distributions) with full power of substitution
(such power of attorney and proxy being deemed to be an irrevocable power
coupled with an interest), to (a) deliver Share Certificates (and
Distributions), or transfer ownership of such Shares on the account books
maintained by the Book-Entry Transfer Facilities, together in either such case
with all accompanying evidences of transfer and authenticity, to or upon the
order of the Purchaser upon receipt by the Depositary, as the undersigned's
agent, of the purchase price, (b) present such Shares (and Distributions) for
transfer on the books of the Company and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares (and Distributions),
all in accordance with the terms of the Offer.
<PAGE>
The undersigned hereby irrevocably appoints Christoph L. Hoffmann and Sally
F. Cloyd, and each of them, the attorneys-in-fact and proxies of the
undersigned, each with full power of substitution, to vote in such manner as
each such attorney and proxy or his or her substitute shall, in his or her sole
discretion, deem proper, and otherwise act (including pursuant to written
consent) with respect to all of the Shares tendered hereby which have been
accepted for payment by the Purchaser prior to the time of such vote or action
(and Distributions) which the undersigned is entitled to vote at any meeting of
stockholders of the Company (whether annual or special and whether or not an
adjourned meeting), or by written consent in lieu of such meeting, or
otherwise. This power of attorney and proxy is coupled with an interest in the
Company and in the Shares and is irrevocable and is granted in consideration
of, and is effective upon, the acceptance for payment of such Shares by the
Purchaser in accordance with the terms of the Offer. Such acceptance for
payment shall revoke, without further action, any other power of attorney or
proxy granted by the undersigned at any time with respect to such Shares (and
Distributions) and no subsequent powers of attorney or proxies will be given
(and if given will be deemed not to be effective) with respect thereto by the
undersigned. The undersigned understands that the Purchaser reserves the right
to require that, in order for Shares to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of such Shares, the Purchaser is
able to exercise full voting rights with respect to such Shares and other
securities, including voting at any meeting of stockholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and Distributions) and that when the same are accepted for payment by
the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby (and
Distributions). In addition, the undersigned shall promptly remit and transfer
to the Depositary for the account of the Purchaser any and all other
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be entitled to all rights
and privileges as owner of such Distributions and may withhold the entire
purchase price or deduct from the purchase price of Shares tendered hereby the
amount or value thereof, as determined by the Purchaser in its sole discretion.
All authority herein conferred or herein agreed to be conferred shall not be
affected by, and shall survive, the death or incapacity of the undersigned and
any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, legal representatives, successors and assigns of the
undersigned. Tenders of Shares pursuant to the Offer are irrevocable, except
that Shares tendered pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date and, unless theretofore accepted for payment
pursuant to the Offer, may also be withdrawn at any time after June 1, 1995.
See Section 4 of the Offer to Purchase.
The undersigned understands that tenders of Shares pursuant to any one of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates not tendered or accepted for payment in the name(s) of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
Share Certificates not tendered or accepted for payment (and accompanying
documents as appropriate) to the undersigned at the address shown below the
undersigned's signature. In the event that both the "Special Delivery
Instructions" and the "Special Payment Instructions" are completed, please
issue the check for the purchase price and/or return any Share Certificates not
tendered or accepted for payment in the name(s) of, and deliver said check
and/or return certificates to, the person or persons so indicated. Stockholders
tendering Shares by book-entry transfer may request that any Shares not
accepted for payment be returned by crediting such account maintained at such
Book-Entry Transfer Facility as such stockholder may designate by making an
appropriate entry under "Special Payment Instructions." The undersigned
recognizes that the Purchaser has no obligation pursuant to the "Special
Payment Instructions" to transfer any Shares from the name of the registered
holder thereof if the Purchaser does not accept for payment any of such Shares.
<PAGE>
- ------------------------------------ -----------------------------------
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share To be completed ONLY if Share
Certificates not tendered or not Certificates not tendered or not
purchased and/or the check for purchased and/or the check for
the purchase price of Shares pur- the purchase price of Shares pur-
chased are to be issued in the chased are to be sent to someone
name of someone other than the other than the undersigned, or to
undersigned, or if Shares ten- the undersigned at an address
dered by book-entry transfer other than that shown on the
which are not purchased are to be front cover.
returned by credit to an account
maintained at a Book-Entry Trans- Mail check and/or certificates to:
fer Facility other than that
designated on the front cover. Name: ............................
(PLEASE PRINT)
Issue check and/or certificates to:
Address:..........................
Name .............................
(PLEASE PRINT) ..................................
Address .......................... ..................................
(INCLUDE ZIP CODE)
..................................
..................................
.................................. (TAXPAYER IDENTIFICATION OR
(INCLUDE ZIP CODE) SOCIAL SECURITY NO.)
..................................
(TAX IDENTIFICATION OR SOCIAL
SECURITY NO.) (SEE SUBSTITUTE
FORM W-9)
[_] Credit unpurchased Shares
tendered by book-entry
transfer to the Book-Entry
Transfer Facility account
set forth below:
[_] DTC [_] MSTC [_] PDTC
..................................
(ACCOUNT NUMBER)
- ------------------------------------ -----------------------------------
<PAGE>
IMPORTANT -- SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9)
..........................................................................
..........................................................................
SIGNATURE(S) OF OWNER(S)
Dated: ...................................................................
(Must be signed by the registered holder(s) exactly as name(s) appear(s)
on the Share Certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide
the necessary information. See Instruction 5.)
Name(s):..................................................................
..................................................................
(PLEASE PRINT)
Capacity (full title):....................................................
Address:..................................................................
..................................................................
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ..........................................
Tax Identification or
Social Security No.: .....................................................
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: ....................................................
Name (Please print): .....................................................
Name of Firm: ............................................................
Address: .................................................................
..........................................................................
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ..........................................
Dated: ..................................................., 199
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures.
No signature guarantee on this Letter of Transmittal is required (i) if this
Letter of Transmittal is signed by the registered holder(s) (which term, for
purposes of this document, shall include any participant in a Book-Entry
Transfer Facility whose name appears on a security position listing as the
owner of Shares) of the Shares tendered herewith, unless such holder(s) has
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the inside front cover hereof or
(ii) if such Shares are tendered for the account of a firm that is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of the Securities Transfer Agents Medallion Program (an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates.
This Letter of Transmittal is to be used either if Share Certificates are to
be forwarded herewith or, unless an Agent's Message is utilized, if tenders are
to be made pursuant to the procedures for tender by book-entry transfer set
forth in Section 3 of the Offer to Purchase. Share Certificates, or timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such
Shares into the Depositary's account at a Book-Entry Transfer Facility, as well
as this Letter of Transmittal (or a facsimile hereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message in
the case of a book-entry delivery, and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date. Stockholders whose
Share Certificates are not immediately available or who cannot deliver their
Share Certificates and all other required documents to the Depositary prior to
the Expiration Date or who cannot complete the procedures for delivery by book-
entry transfer on a timely basis may tender their Shares by properly completing
and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase. Pursuant
to such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, must be
received by the Depositary on or prior to the Expiration Date; and (iii) the
Share Certificates (or a Book-Entry Confirmation) representing all tendered
Shares, in proper form for transfer together with a properly completed and duly
executed Letter of Transmittal (or a facsimile hereof), with any required
signature guarantees (or in the case of a book-entry delivery an Agent's
Message) and any other documents required by this Letter of Transmittal, must
be received by the Depositary within five New York Stock Exchange, Inc.
("NYSE") trading days after the date of execution of such Notice of Guaranteed
Delivery. If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile
hereof) must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED
BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution
of this Letter of Transmittal or facsimile hereof, waive any right to receive
any notice of the acceptance of their Shares for payment.
3. Inadequate Space.
If the space provided herein is inadequate, the certificate numbers and/or
the number of Shares and any other required information should be listed on a
separate schedule attached hereto and separately signed on each page thereof in
the same manner as this Letter of Transmittal is signed.
<PAGE>
4. Partial Tenders (Not Applicable to Stockholders who Tender by Book-Entry
Transfer).
If fewer than all the Shares evidenced by any certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered." In such case, new certificate(s) for the
remainder of the Shares that were evidenced by your old certificate(s) will be
sent to you, unless otherwise provided in the appropriate box marked "Special
Payment Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the certificate(s) without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper evidence satisfactory
to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or purchased are to be issued in the name
of a person other than the registered owner(s). Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered
owner(s) of the Shares listed, the certificates must be endorsed or accompanied
by appropriate stock powers, in either case signed exactly as the name or names
of the registered owner(s) appear(s) on the certificates. Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
6. Stock Transfer Taxes.
Except as set forth in this Instruction 6, the Purchaser will pay or cause to
be paid any stock transfer taxes with respect to the transfer and sale of
purchased Shares to it or its order pursuant to the Offer. If, however, payment
of the purchase price is to be made to, or if certificates for Shares not
tendered or purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered certificates are registered in
the name of any person other than the person(s) signing this Letter of
Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered holder(s) or such person) payable on account of the transfer to such
person will be deducted from the purchase price received by such holder(s)
pursuant to this Offer (i.e., such purchase price will be reduced) unless
satisfactory evidence of the payment of such taxes or exemption therefrom is
submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. Special Payment and Delivery Instructions.
If (i) a check is to be issued in the name of and/or (ii) certificates for
unpurchased Shares are to be returned to a person other than the signer of this
Letter of Transmittal or if a check is to be sent and/or such certificates are
to be returned to someone other than the signer of this Letter of Transmittal
or to an address other than that shown on the front cover hereof, the
appropriate boxes on this Letter of Transmittal should be completed.
Stockholders tendering
<PAGE>
Shares by book-entry transfer (i.e., Book-Entry Stockholders) may request that
Shares not purchased be credited to such account maintained at such Book-Entry
Transfer Facility as such Book-Entry Stockholder may designate hereon. If no
such instructions are given, such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated above. See
Instruction 1.
8. Requests for Assistance or Additional Copies.
Requests for assistance may be directed to the Information Agent at its
addresses set forth below. Requests for additional copies of the Offer to
Purchase and this Letter of Transmittal may be directed to the Information
Agent or to brokers, dealers, commercial banks or trust companies.
<PAGE>
9. 31% Backup Withholding; Substitute Form W-9.
Under U.S. Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
stockholder's correct taxpayer identification number ("TIN") on Substitute Form
W-9 below. If the Depositary is not provided with the correct TIN, the Internal
Revenue Service may subject the stockholder or other payee to a $50 penalty. In
addition, payments that are made to such stockholder or other payee with
respect to Shares purchased pursuant to the Offer may be subject to 31% backup
withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments made to the stockholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
To prevent backup withholding on payments that are made to a stockholder with
respect to Shares purchased pursuant to the Offer, the stockholder is required
to notify the Depositary of such stockholder's correct TIN by completing a
Substitute Form W-9 certifying (i) that the TIN provided on Substitute Form W-9
is correct (or that such stockholder is awaiting a TIN), and (ii) that (a) such
stockholder has not been notified by the Internal Revenue Service that such
stockholder is subject to backup withholding as a result of a failure to report
all interest or dividends or (b) the Internal Revenue Service has notified such
stockholder that such stockholder is no longer subject to backup withholding.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
10. Lost, Destroyed or Stolen Certificates.
If any certificate(s) representing Shares has been lost, destroyed or stolen,
the stockholder should promptly notify the Depositary. The stockholder will
then be instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates
have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON
OR PRIOR TO THE EXPIRATION DATE.
<PAGE>
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
PAYER'S NAME: THE FIRST NATIONAL BANK OF BOSTON
- --------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR Social Security Number
TIN IN THE BOX AT RIGHT AND or Employer ID Number
CERTIFY BY SIGNING AND
SUBSTITUTE DATING BELOW. -----------------------
FORM W-9 --------------------------------------------------------
PART 2--CERTIFICATIONS--Under penalties of perjury, I
certify that:
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am waiting
for a number to be issued to me and have checked
the box in Part 3) and
DEPARTMENT OF THE
TREASURY INTERNAL (2) I am not subject to backup withholding because:
REVENUE SERVICE (a) I am exempt from backup withholding, or (b) I
have not been notified by the Internal Revenue
Service (the "IRS") that I am subject to backup
PAYER'S REQUEST FOR withholding as a result of a failure to report
TAXPAYER IDENTIFICATION all interest or dividends, or (c) the IRS has
NUMBER ("TIN") notified me that I am no longer subject to backup
withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because of underreporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you were subject to backup withholding
you received another notification from the IRS that
you are no longer subject to backup withholding, do
not cross out such item (2).
--------------------------------------------------------
PART 3
SIGNATURE DATE Awaiting TIN [_]
-------------- -------
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
----------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or
delivered an application to receive a taxpayer identification number to
the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application
in the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all reportable
payments made to me will be withheld, but that such amounts will be
refunded to me if I then provide a Taxpayer Identification Number
within sixty (60) days.
Signature: Date:
-------------------------------------------- ----------
----------------------------------------------------------------------------
<PAGE>
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH
STOCKHOLDER OF THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL BANK, TRUST
COMPANY OR OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH
BELOW:
THE DEPOSITARY FOR THE OFFER IS:
THE FIRST NATIONAL BANK OF BOSTON
By Mail: By Facsimile Transmission:
The First National Bank of Boston (617) 575-2232
Shareholder Services Division (617) 575-2233
P.O. Box 1889 (for Eligible Institutions Only)
Mail Stop 45-01-19 Confirm by Telephone
Boston, Massachusetts 02105 (617) 575-2700
By Hand: By Overnight Courier:
BancBoston Trust Company The First National Bank of Boston
of New York Shareholder Services Division
55 Broadway, Third Floor Mail Stop 45-01-19
New York, New York 150 Royall Street
Canton, Massachusetts 02021
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT (212) 269-5550
ALL OTHERS CALL TOLL FREE (800) 697-6975
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New YorK 10167
(800) 307-2327
<PAGE>
Exhibit 99(a)(3)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
E-SYSTEMS, INC.
by
RTN Acquisition Corporation
a wholly-owned subsidiary
of
RAYTHEON COMPANY
at
$64.00 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, APRIL 28, 1995, UNLESS THE OFFER IS EXTENDED.
April 3, 1995
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by RTN Acquisition Corporation, a Delaware corporation
(the "Purchaser"), and Raytheon Company, a Delaware corporation ("Parent"), to
act as financial advisor and Dealer Manager in connection with the Purchaser's
offer to purchase all outstanding shares of Common Stock, par value $1.00 per
share (the "Shares"), of E-Systems, Inc., a Delaware corporation (the
"Company"), and the associated Rights (as defined in the Offer to Purchase
referred to below) at a purchase price of $64.00 per Share, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated April 3, 1995 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together constitute
the "Offer") enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
The Offer is conditioned upon, among other things, Shares representing at
least a majority of the total number of outstanding Shares on a fully-diluted
basis (assuming the exercise of all outstanding options) being validly tendered
and not withdrawn prior to the expiration of the Offer. The Offer is also
subject to other terms and conditions contained in the Offer to Purchase. See
the Introduction and Sections 1, 14 and 15 of the Offer to Purchase.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated April 3, 1995.
2. The Letter of Transmittal for your use to tender Shares and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer.
<PAGE>
4. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if certificates for Shares ("Share Certificates") and all other
required documents are not immediately available or cannot be delivered to
The First National Bank of Boston (the "Depositary") by the Expiration Date
(as defined in the Offer to Purchase) or if the procedure for book-entry
transfer cannot be completed by the Expiration Date.
5. A Letter to stockholders from the Chairman, Chief Executive Officer
and President of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, APRIL 28, 1995, UNLESS
THE OFFER IS EXTENDED.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
Shares, and any other required documents should be sent to the Depositary and
either Share Certificates representing the tendered Shares should be delivered
to the Depositary, or Shares should be tendered by book-entry transfer into the
Depositary's account maintained at one of the Book Entry Transfer Facilities
(as described in the Offer to Purchase), all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a
timely basis, a tender may be effected by following the guaranteed delivery
procedures specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Dealer Manager, as described in the Offer to
Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser
will, however, upon request, reimburse you for customary clerical and mailing
expenses incurred by you in forwarding any of the enclosed materials to your
clients. The Purchaser will pay or cause to be paid any stock transfer taxes
payable on the transfer of Shares to it, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed material may be obtained from, the
Information Agent or the undersigned, at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
Bear, Stearns & Co. Inc.
as Dealer Manager
245 Park Avenue
New York, New York 10167
(800) 307-2327 (Toll free)
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY OTHER PERSON THE AGENT OF PARENT, THE PURCHASER, THE DEALER
MANAGER, THE COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY
AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY
STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED
THEREIN.
2
<PAGE>
Exhibit 99(a)(4)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
E-SYSTEMS, INC.
by
RTN Acquisition Corporation
a wholly-owned subsidiary
of
RAYTHEON COMPANY
at
$64.00 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, APRIL 28, 1995, UNLESS THE OFFER IS EXTENDED.
April 3, 1995
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated April 3,
1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by RTN Acquisition
Corporation, a Delaware corporation (the "Purchaser"), and a wholly-owned
subsidiary of Raytheon Company, a Delaware corporation, to purchase all
outstanding shares of Common Stock, par value $1.00 per share (the "Shares"),
of E-Systems, Inc., a Delaware corporation (the "Company"), and the associated
Rights (as defined in the Offer to Purchase), at a purchase price of $64.00 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase and in the related
Letter of Transmittal enclosed herewith. Unless the context otherwise requires,
all references to Shares shall include the associated Rights and all references
to the Rights shall include all benefits that may inure to holders of the
Rights pursuant to the Rights Agreement (as defined in the Offer to Purchase),
including the right to receive any payment due upon redemption of the Rights.
Holders of Shares whose certificates for such Shares (the "Share Certificates")
are not immediately available, or who cannot deliver their Share Certificates
and all other required documents to the Depositary on or prior to the
Expiration Date (as defined in the Offer to Purchase), or who cannot complete
the procedures for book-entry transfer on a timely basis, must tender their
Shares according to the guaranteed delivery procedures set forth in Section 3
of the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
<PAGE>
Accordingly, we request instructions as to whether you wish to have us tender
on your behalf any or all Shares held by us for your account pursuant to the
terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $64.00 per Share net to you in cash without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer.
2. The Offer is being made for all outstanding Shares.
3. The Offer is conditioned upon, among other things, Shares representing
at least a majority of the total number of outstanding Shares on a fully-
diluted basis (assuming the exercise of all outstanding options) being
validly tendered and not withdrawn prior to the expiration of the Offer.
The Offer is also subject to other terms and conditions contained in the
Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the
Offer to Purchase.
4. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Friday, April 28, 1995, unless the Offer is extended.
6. Payment for Shares purchased pursuant to the Offer will in all cases
be made only after timely receipt by The First National Bank of Boston (the
"Depositary") of (a) Share Certificates or timely confirmation of the book-
entry transfer of such Shares into the account maintained by the Depositary
at The Depository Trust Company, Midwest Securities Trust Company or
Philadelphia Depository Trust Company (collectively, the "Book-Entry
Transfer Facilities"), pursuant to the procedures set forth in Section 3 of
the Offer to Purchase, (b) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or an Agent's Message (as defined in the Offer to Purchase), in
connection with a book-entry delivery, and (c) any other documents required
by the Letter of Transmittal. Accordingly, payment may not be made to all
tendering stockholders at the same time depending upon when certificates
for or confirmations of book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility are actually
received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and
returning to us the instruction form set forth on the back page of this letter.
If you authorize the tender of your Shares, all such Shares will be tendered
unless otherwise specified on the back page of this letter. An envelope to
return your instructions to us is enclosed. Your instructions should be
forwarded to us in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of the Purchaser by Bear, Stearns & Co. Inc., the Dealer Manager for the
Offer, or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL
OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED
PREFERRED STOCK PURCHASE RIGHTS)
OF
E-SYSTEMS, INC.
BY
RTN ACQUISITION CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated April 3, 1995 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer") in connection
with the offer by RTN Acquisition Corporation, a Delaware corporation (the
"Purchaser"), and a wholly-owned subsidiary of Raytheon Company, a Delaware
corporation, to purchase all outstanding shares of Common Stock, par value
$1.00 per share (the "Shares"), of E-Systems, Inc., a Delaware corporation, and
the associated Rights (as defined in the Offer to Purchase), at a purchase
price of $64.00 per Share, net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to
Purchase.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be Tendered: _________ Shares*
Date: _______________________________
- --------
* Unless otherwise indicated, it will be assumed that you instruct us to tender
all Shares held by us for your account.
SIGN HERE
Signature(s)________________________________________________________________
____________________________________________________________________________
(Print Name(s))_____________________________________________________________
____________________________________________________________________________
(Print Address(es))_________________________________________________________
____________________________________________________________________________
(zip code)
(Area Code and Telephone Number(s))_________________________________________
(Taxpayer Identification or Social Security Number(s))______________________
3
<PAGE>
Exhibit 99(a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
E-SYSTEMS, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates
representing shares of Common Stock, par value $1.00 per share (the "Shares"),
of E-Systems, Inc., a Delaware corporation (the "Company"), and the associated
Rights (as defined in the Offer to Purchase), are not immediately available or
time will not permit all required documents to reach The First National Bank of
Boston (the "Depositary") on or prior to the Expiration Date (as defined in the
Offer to Purchase), or the procedures for delivery by book-entry transfer
cannot be completed on a timely basis. This Notice of Guaranteed Delivery may
be delivered by hand or sent by facsimile transmission or mail to the
Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
THE FIRST NATIONAL BANK OF BOSTON
By Mail: By Facsimile Transmission:
The First National Bank of Boston (617) 575-2232
Shareholder Services Division (617) 575-2233
P.O. Box 1889 (for Eligible Institutions Only)
Mail Stop 45-01-19 Confirm by Telephone
Boston, Massachusetts 02105 (617) 575-2700
By Hand: By Overnight Courier:
BancBoston Trust Company The First National Bank of Boston
of New York Shareholder Services Division
55 Broadway, Third Floor Mail Stop 45-01-19
New York, New York 150 Royall Street
Canton, Massachusetts 02021
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee signatures.
If a signature on a Letter of Transmittal is required to be guaranteed by an
"Eligible Institution" under the instructions thereto, such signature guarantee
must appear in the applicable space provided in the signature box on the Letter
of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to RTN Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of Raytheon
Company, a Delaware corporation, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated April 3, 1995 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer"), receipt of each of which is hereby acknowledged, the
number of Shares (including the associated Rights (as defined in the Offer to
Purchase)) indicated below pursuant to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase.
Name(s) of Record Holder(s):
Number of Shares: _________________ -----------------------------------
-----------------------------------
Certificate No(s). (if (Please Print)
available): _______________________ Address(es): ______________________
----------------------------------- -----------------------------------
----------------------------------- -----------------------------------
(Zip Code)
If Share(s) will be tendered by Area Code and Telephone Number(s):
book-entry transfer, check ONE -----------------------------------
box.
-----------------------------------
-----------------------------------
[_] The Depository Trust Company Signature(s):
-----------------------------------
[_] Midwest Securities Trust Company -----------------------------------
-----------------------------------
[_] Philadelphia Depository Trust Company
Account Number: ___________________
Date: _____________________________
-----------------------------------
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, hereby (a) represents that the
tender of Shares effected hereby complies with Rule 14e-4 under the Securities
Exchange Act of 1934, as amended, and (b) guarantees to deliver to the
Depositary at one of its addresses set forth above either the certificates
representing all tendered Shares, in proper form for transfer, a Book-Entry
Confirmation (as defined in the Offer to Purchase), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or, in the case of book-entry delivery of
Shares, an Agent's Message (as defined in the Offer to Purchase), and any
other documents required by the Letter of Transmittal within five New York
Stock Exchange, Inc. ("NYSE") trading days after the date of execution of this
Notice of Guaranteed Delivery.
Name of Firm: _______________________ -------------------------------------
(Authorized Signature)
Address: ____________________________
- ------------------------------------- Title: ______________________________
(Zip Code)
Name: _______________________________
(Please type or print)
Area Code and Telephone Number: _____ Date: _______________________________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
<PAGE>
Exhibit 99(a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification to Give the Payer. - Social
Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000.
Employer identification numbers have nine digits separated by only one hyphen:
i.e. 000-000000. The table below will help determine the number to give the
payer.
- ------------------------- ------------------------
Give the SOCIAL SECURITY
For this type of account: number of-
- ------------------------- ------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the account or,
(joint account) if combined funds, any one of the
individual's/1/
3. Husband and wife (joint The actual owner of the account or,
account) if joint funds, either person/1/
4. Custodian account of a minor The minor/2/
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the
only contributor, the minor/1/
6. Account in the name of The ward, minor, or incompetent person/3/
guardian or committee for a
designated ward, minor, or
incompetent person
7. a The usual revocable savings The grantor-trustee/1/
trust account (grantor is
also trustee)
b So-called trust account that The actual owner/1/
is not a legal or valid
trust under State law
- ------------------------- -------------------------
Give the EMPLOYER
For this type of account: IDENTIFICATION number of-
- ------------------------- -------------------------
8. Sole proprietorship account The Owner/4/
9. A valid trust, estate, or Legal entity (Do not furnish the
pension trust identifying number of the
personal representative or trustee
unless the legal entity itself is
not designated in the account
title.)/5/
10. corporate account The Corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in The partnership
the name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a
State or local government,
school district, or prison)
that receives agricultural
program payments
/1/ List first and circle the name of the person whose number you furnish.
/2/ Circle the minor's name and furnish the minor's social security number.
/3/ Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
/4/ Show the name of the owner.
/5/ List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: if no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain, Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and apply
for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include the
following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject
to backup withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payment of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding
include the following:
. Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments of tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A (a),
6045, and 6050A.
Privacy Act Notice.-Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividends, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.-If you fail
to furnish your taxpayer identification number to payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding.-If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500
(3) Criminal Penalty for Falsifying Information.-Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE
<PAGE>
Exhibit 99(a)(7)
<PAGE>
[LOGO OF RAYTHEON APPEARS HERE] [LOGO OF E-SYSTEMS APPEARS HERE]
FOR IMMEDIATE RELEASE
RAYTHEON AND E-SYSTEMS COMBINE IN MERGER
VALUED AT $2.3 BILLION
Raytheon Launches Cash Tender Offer For E-Systems
Creates Company With Over $12 Billion In Revenues
--------------------------------------------
Lexington, Massachusetts/Dallas, Texas, April 3, 1995 - The boards of
directors of RAYTHEON Company (NYSE:RTN) and E-Systems, Inc. (NYSE:ESY) said
today that they have entered into a definitive agreement to combine the two
companies and have unanimously approved a fully financed $64 per share cash
offer by Raytheon for E-Systems outstanding shares. The merger creates a company
with over $12 billion in annualized revenues in a transaction that is expected
to provide a small increase in Raytheon's earnings per share in 1995 and an
increasingly positive contribution to earnings per share thereafter.
The transaction, valued at approximately $2.3 billion, will be effected
through a cash tender offer that commenced today. The offer is subject to the
receipt of a majority of the E-Systems common shares outstanding and
Hart-Scott-Rodino antitrust review. Unless otherwise extended, the tender offer
is expected to close at midnight on April 28, 1995.
Raytheon has received financing commitments from Chemical Bank, Bank of
America National Trust and Savings Association and The Chase Manhattan Bank to
provide up to $3 billion in the aggregate in unsecured financing to support the
tender offer.
Dennis J. Picard, Raytheon Chairman and Chief Executive Officer, said, "We
are very fortunate to be combining with such a successful growing company in
the defense and government electronics business. The merger of E-Systems and
Raytheon is consistent with our strategy to remain a strong diversified
commercial company and a top tier player in defense. The combination opens new
defense and commercial markets worldwide, brings our annualized electronics
sales to $6 billion and our current electronics backlog to $8 billion. Even
after the merger with E-Systems, over 50 percent of Raytheon's revenues will be
commercial, and we remain committed to growing our commercial businesses.
Despite the added debt due to the merger, our strong balance sheet and cash flow
will provide us with the flexibility to make future acquisitions in our
commercial and defense businesses.
-more-
<PAGE>
-2-
"Raytheon and E-Systems have complementary capabilities and cultures. Our
two companies share a common set of values, high integrity, and strong
determination to deliver high-quality products and services to our customers. We
look forward to welcoming the E-Systems employees to the Raytheon family," Mr.
Picard added.
Lowell Lawson, who will remain Chairman and Chief Executive Officer of
E-Systems and will join Raytheon as an Executive Vice President and a member of
its board of directors, said, "Our board and management team have endorsed the
combination of E-Systems and Raytheon in order to provide our stockholders,
employees, communities, customers and programs with the support necessary to
continue to grow and prosper within the global defense electronics industry.
Raytheon shares the values that we hold important and has made significant
strides in transferring its defense technologies to non-defense areas just as we
have. We are pleased that E-Systems, which will become a wholly-owned subsidiary
of Raytheon, will continue to be headquartered in Dallas, Texas and will operate
under the E-Systems name. The E-Systems board will become an advisory board with
both E-Systems and Raytheon members.
"Raytheon will help support our efforts to effectively serve our unique
customers, guarantee our position as a leader in the defense and government
electronics business and continue our long-standing strategy of expanding our
defense technologies into commercial markets. E-Systems businesses continue to
find a strong customer base both within and beyond the defense electronics
industry. Raytheon gives us an enhanced position for accomplishing our business
objectives," Mr. Lawson concluded.
Bear, Stearns & Co. Inc. is financial advisor to Raytheon and dealer
manager for the tender offer. The tender offer will be made only pursuant to
definitive offering documents to be filed with the Securities and Exchange
Commission.
E-Systems, headquartered in Dallas, Texas with 1994 sales of approximately
$2.0 billion, had a record year-end backlog in excess of $2.6 billion. The
Company's largest business segments include the design, development and
production of reconnaissance and surveillance systems and command, control and
communications for the U.S. government. In addition, the Company has significant
business in the areas of mass storage, electronic imaging and other
information-based technologies. The Company has approximately 16,000 employees.
-more-
<PAGE>
-3-
Raytheon, headquartered in Lexington, Massachusetts, had 1994 sales of
approximately $10.0 billion with a total backlog of approximately $8.0 billion.
The Company has approximately 60,000 employees in four major businesses
including defense and commercial electronics, engineering and construction,
aircraft, and major appliances.
Contacts:
Elizabeth Heller Allen John E. Kumpf
Raytheon Company E-Systems, Inc.
617/860-2141 214/392-4923
Joele Frank
Abernathy MacGregor Scanlon
212/371-5999
# # #
<PAGE>
Exhibit 99(a)(8)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated
April 3, 1995, and the related Letter of Transmittal, and is being made to all
holders of Shares. The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the laws
of such jurisdiction. In any jurisdiction where the securities, blue sky or
other law require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of RTN Acquisition Corporation by
Bear Stearns & Co. Inc. or one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
E-SYSTEMS, INC.
BY
RTN ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
RAYTHEON COMPANY
AT
$64.00 NET PER SHARE
RTN Acquisition Corporation (the "Purchaser"), a Delaware corporation and a
wholly-owned subsidiary of Raytheon Company, a Delaware corporation ("Parent"),
is offering to purchase all outstanding shares of Common Stock, par value $1.00
per share (the "Shares"), of E-Systems, Inc., a Delaware corporation (the
"Company") and the associated Preferred Stock Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of October 7, 1994, between
the Company and Society National Bank, as Rights Agent (the "Rights
Agreement"), at a purchase price of $64.00 per Share (and associated Right),
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in the offer to Purchase, dated April 3, 1995 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer"). Unless the context otherwise requires, all references
to Shares herein and in the Offer to Purchase shall include the associated
Rights and all references to the Rights shall include all benefits that may
inure to holders of the Rights pursuant to the Rights Agreement, including the
right to receive any payment due upon redemption of the Rights.
<PAGE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
APRIL 28, 1995, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated as
of April 2, 1995 (the "Merger Agreement"), among the Company, the Purchaser and
Parent pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company (the "Merger"), with the Company continuing as the
surviving corporation. On the effective date of the Merger, each outstanding
Share (other than any Shares held by Parent, the Purchaser or any subsidiary of
Parent or the Purchaser or in the treasury of the Company, and other than
Shares, if any, held by stockholders who perfect their appraisal rights under
Delaware law) will be converted into the right to receive an amount in cash
equal to $64.00 or any higher price per Share paid in the Offer (without
interest).
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
CONSIDERATION TO BE PAID FOR EACH SHARE IN THE OFFER AND THE MERGER IS FAIR TO
THE STOCKHOLDERS OF THE COMPANY AND THE OFFER AND THE MERGER ARE OTHERWISE IN
THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, AT LEAST A MAJORITY OF THE
TOTAL NUMBER OF OUTSTANDING SHARES (ASSUMING EXERCISE OF ALL OUTSTANDING STOCK
OPTIONS) BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF
THE OFFER. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE THE
INTRODUCTION AND SECTIONS 1, 14 AND 15 OF THE OFFER TO PURCHASE.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of such Shares for payment pursuant to the Offer. In all
cases, upon the terms and subject to the conditions of the Offer, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price therefor with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting payment to validly tendering stockholders. Under no circumstances
will interest on the purchase price for Shares be paid by the Purchaser. In all
cases, payment for Shares purchased pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates representing Shares
(the "Share Certificates") for such Shares or timely confirmation of the book-
entry transfer of such Shares into the Depositary's account at The Depository
Trust Company, Midwest Securities Trust Company or Philadelphia Depository
Trust Company (collectively, the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3 of the Offer to Purchase, (ii) the Letter
of Transmittal delivered with the Offer to Purchase (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry transfer of Shares and (iii) any other documents required by the
Letter of Transmittal.
The Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time, to extend the period during which the Offer is open
for any reason, including the existence of any of the conditions specified in
Section 14 of the Offer to Purchase, by giving oral or written notice of such
extension to the Depositary. Any such extension will be followed as promptly as
practicable by public announcement thereof, and such announcement will be made
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date (as defined below).
2
<PAGE>
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time on or prior
to the Expiration Date and, unless theretofore accepted for payment as provided
in the Offer to Purchase, may also be withdrawn at any time after June 1, 1995
(or such later date as may apply in case the Offer is extended). The term
"Expiration Date" means 12:00 midnight, New York City time, on Friday, April
28,1995, unless and until the Purchaser, subject to the terms of the Merger
Agreement, shall have further extended the period of time for which the Offer
is open, in which event the term "Expiration Date" shall mean the time and date
at which the Offer, as so extended by the Purchaser, shall expire. In order for
a withdrawal to be effective, a written or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of the Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn, and (if Share Certificates
have been tendered) the name of the registered holder of the Shares as set
forth in the Share Certificate, if different from that of the person who
tendered such Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the tendering stockholder must submit the serial numbers shown on
the particular certificates evidencing the Shares to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by a firm that is a
bank, broker, dealer, credit union, savings association or other entity which
is a member in good standing of the Securities Transfer Agents Medallion
Program (an "Eligible Institution"), except in the case of Shares tendered for
the account of an Eligible Institution. If Shares have been tendered pursuant
to the procedures for book-entry transfer set forth in Section 3 of the Offer
to Purchase, the notice of withdrawal must specify the name and number of the
account at the appropriate Book-Entry Transfer Facility to be credited with the
withdrawn Shares, in which case a notice of withdrawal will be effective if
delivered to the Depositary by any method of delivery described in this
paragraph. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Purchaser, in its
sole discretion, whose determination shall be final and binding. Any Shares
properly withdrawn will be deemed not validly tendered for purposes of the
Offer, but may be tendered at any subsequent time prior to the Expiration Date
by following any of the procedures described in Section 3 of the Offer to
Purchase.
The information required to be disclosed pursuant to Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase, and is incorporated herein by
reference.
The Company is providing the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of Transmittal
and, if required, other relevant materials will be mailed to record holders of
Shares and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
3
<PAGE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be obtained at the Purchaser's expense from the Information Agent or from
brokers, dealers, commercial banks and trust companies. Neither Parent nor the
Purchaser will pay any fees or commissions to any broker, dealer or other
person (other than the Dealer Manager) for soliciting tenders of Shares
pursuant to the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect (212) 269-5550
All Others Call Toll Free (800) 697-6975
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
(800) 307-2327 (Toll Free)
April 3, 1995
4
<PAGE>
Exhibit 99(b)(1)
EXECUTION COPY
CHEMICAL BANK
CHEMICAL SECURITIES INC.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
BA SECURITIES, INC.
THE CHASE MANHATTAN BANK, N.A.
CHASE SECURITIES, INC.
In care of Chemical Securities Inc.
270 Park Avenue (4th Floor)
New York, NY 10017
April 1, 1995
Raytheon Company
141 Spring Street
Lexington, MA 02173
Attention: Herbert Deitcher
Senior Vice President and Treasurer
Raytheon Company
----------------
$3,000,000,000 Senior Credit Facility
-------------------------------------
Commitment Letter
-----------------
Ladies and Gentlemen:
We understand that Raytheon Company ("Raytheon") proposes to
acquire all the issued and outstanding shares (the "Shares") of common stock of
E-Systems, Inc., a Delaware corporation ("E-Systems"), pursuant to a merger
agreement to be entered into on a friendly basis between Raytheon and E-Systems
(the "Merger Agreement"). The Merger Agreement will provide for an all cash
tender offer by Raytheon or a wholly owned subsidiary of Raytheon (the "Tender
Offer") followed by a merger for any remaining shares (the "Merger"; the Tender
Offer and the Merger being collectively called the "Acquisition"). You have
advised us that in order to finance the Acquisition you will require a
revolving credit/competitive advance facility in an aggregate principal amount
of $3,000,000,000 (the "Facility"). In addition, the Facility may be used
following the Merger to provide working capital and for other general corporate
purposes of Raytheon, including commercial paper backup.
<PAGE>
2
Each of Chemical Bank, Bank of America National Trust and Savings
Association and The Chase Manhattan Bank, N.A. (each a "Managing Agent" and,
collectively, the "Managing Agents") is pleased to advise you of its several
commitment to provide $1,000,000,000 of the Facility, upon the terms and
subject to the conditions set forth or referred to herein and in the Summary of
Terms and Conditions attached as Exhibit A hereto (the "Term Sheet").
Raytheon hereby engages (a) Chemical Securities Inc. to act as the
arranger and financial advisor (the "Arranger") for the Facility and (b) Chase
Securities, Inc. to act as the syndication agent (the "Syndication Agent") for
the Facility. In addition, Raytheon hereby engages (a) Chemical Bank to act as
administrative agent (the "Administrative Agent") for the Facility and (b) BA
Securities, Inc. to act as documentation agent (the "Documentation Agent" and,
together with the Arranger, the Syndication Agent and the Administrative Agent,
the "Agents") for the Facility. Each Agent hereby accepts such engagement and
shall endeavor, with the assistance of Raytheon, to structure, document and
arrange the Facility and to assemble a syndicate of financial institutions
satisfactory to Raytheon and the Managing Agents to provide the Facility. It
is understood and agreed that the appointment of any co-agents for the Facility
would be subject to the approval of Raytheon and the Managing Agents.
Each Managing Agent reserves the right, prior to or after the
execution of definitive documentation with respect to the Facility, to
syndicate all or part of its commitment to one or more financial institutions
reasonably acceptable to Raytheon which will become parties to the definitive
credit documentation (such institutions, together with the Managing Agents, the
"Lenders"). No proposed Lender will receive compensation outside the terms
contained herein, in the Term Sheet and in the Fee Letters referred to below in
order to obtain its commitment to participate in the Facility. You agree to
provide such assistance in the syndication effort as may be reasonably
requested, including through your existing lending relationships, by making
members of management of Raytheon and its subsidiaries available to meet with
prospective syndicate members and by assisting the Managing Agents in the
preparation of a financing memorandum and other marketing materials.
You agree to provide the Agents with all information reasonably
requested by them in connection with
<PAGE>
3
the arrangement of the Facility. You represent and covenant that (a) all
information (other than the financial projections referred to below and, with
respect to E-Systems, subject to the limitations on disclosure of classified
information) concerning Raytheon, its subsidiaries, the transactions
contemplated hereby and, to the best of your knowledge, E-Systems, made
available to any Agent or Managing Agent by you or your authorized
representatives is or will be complete and correct in all material respects and
does not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements are made and (b) all financial projections prepared by you or your
authorized representatives and made available to any Agent or Managing Agent
have been or will be prepared in good faith based upon reasonable assumptions.
As consideration for the agreements of the Managing Agents and the
Agents hereunder, you agree to pay the fees provided for in each of the Fee
Letters dated the date hereof and delivered herewith between you and each
Managing Agent (the "Fee Letters") at the times provided therein. Once paid,
such fees shall not be refundable under any circumstances.
The agreements of the Agents and the Managing Agents and the
Managing Agents' several commitments hereunder are subject to (a) the
satisfaction of each Managing Agent with the structure and terms of the
Acquisition, with all legal, tax and accounting matters relating to the
Acquisition and with the terms of the Merger Agreement and all other agreements
to be entered into in connection therewith; (b) the absence of any material
adverse change since December 31, 1994, in the business, assets, condition
(financial or otherwise) or prospects of Raytheon and its subsidiaries and
E-Systems and its subsidiaries, taken as a whole; (c) the negotiation,
execution and delivery of definitive credit documentation satisfactory to the
Managing Agents and their counsel; (d) there not having occurred and being
continuing an adverse change in financial, banking or capital market conditions
since the date hereof that, in the Agents' reasonable judgment, would have a
material adverse effect on the syndication of the Facility; and (e) the Agents'
satisfaction that, following the date hereof and during the syndication of the
Facility, Raytheon and its subsidiaries
<PAGE>
4
shall not have offered, placed or arranged or be in the process of offering,
placing or arranging any competing issues of debt securities (other than
commercial paper) or competing bank credit facilities of Raytheon or its
subsidiaries.
You agree to indemnify and hold harmless each Agent, each Managing
Agent and their respective officers, directors, employees, agents and
affiliates from and against any and all losses, claims, damages, liabilities
and expenses arising out of or in connection with this letter agreement, the
Acquisition or the transactions contemplated hereby or thereby or any claim,
litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any of such indemnified parties is a party thereto, and
to reimburse each of such indemnified parties upon demand for any legal or
other expenses incurred in connection with investigating or defending any of
the foregoing, except to the extent such losses, claims, damages, liabilities
or expenses result from the willful misconduct or gross negligence of the party
seeking indemnification. You also agree to reimburse each Agent and each
Managing Agent for all reasonable out-of-pocket expenses (including, without
limitation, expenses of due diligence, syndication expenses and reasonable
fees, disbursements and other charges of counsel) incurred in connection with
the Facility and the preparation of this letter agreement, the Term Sheet, the
Fee Letters and the definitive documentation for the Facility. The provisions
contained in this paragraph shall remain in full force and effect regardless of
whether definitive financing documentation shall be executed and delivered and
notwithstanding the termination of this letter agreement or the several
commitments of the Managing Agents hereunder.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Term Sheet and the Fee
Letters by signing in the appropriate space below and in the Fee Letters and
returning to each Managing Agent the enclosed duplicate originals of this
letter agreement and such Managing Agent's Fee Letter, not later that 5:00
p.m., New York City time, on April 5, 1995. The several commitments of the
Managing Agents hereunder will expire at such time in the event the Managing
Agents have not received such executed originals in accordance with the
immediately preceding sentence. In the event that the initial borrowing under
the Facility shall not have occurred on or before June 30, 1995, then this
<PAGE>
5
letter agreement and the commitments and obligations contained herein shall in
any event terminate, unless each party hereto shall agree to an extension. The
compensation, reimbursement and indemnification provision contained herein and
in the Fee Letters shall survive any termination hereof.
This letter agreement shall not be assignable by you without the
prior written consent of each Managing Agent, and may not be amended or waived
except by an instrument in writing signed by you, each Agent and each Managing
Agent. This letter agreement may be executed in any number of counterparts,
each of which shall be an original and all of which, when taken together, shall
constitute one agreement. Delivery of an executed counterpart of a signature
page of this letter agreement shall be effective as delivery of a manually
executed counterpart of this letter agreement. This letter agreement is
intended to be solely for the benefit of the parties hereto and is not intended
to confer any benefits upon, or create any rights in favor of, any person other
than the parties hereto. This letter agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
<PAGE>
6
We are very pleased to have the opportunity to assist you in
connection with this important financing.
Very truly yours,
CHEMICAL BANK,
by /s/ M. Arntze
-----------------------
Name: M. Arntze
Title: Managing Director
CHEMICAL SECURITIES INC.,
by /s/ Mathis H. Shinnick
-----------------------
Name: Mathis H. Shinnick
Title: Managing Director
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
by /s/ Thomas J. Somers
-----------------------
Name: Thomas J. Somers
Title: Vice President
BA SECURITIES, INC.,
by /s/ M. Annette Hanami
-----------------------
Name: M. Annette Hanami
Title: Vice President
THE CHASE MANHATTAN BANK,
N.A.,
by /s/ Richard G. Smith
-----------------------
Name: Richard G. Smith
Title: Vice President
<PAGE>
7
CHASE SECURITIES, INC.,
by /s/ Thomas D. Cassin
-----------------------
Name: Thomas D. Cassin
Title: Vice President
Accepted and agreed to
as of the date first written
above:
RAYTHEON COMPANY,
by
-----------------------
Name: Herbert Deitcher
Title: Senior Vice President
and Treasurer
<PAGE>
CONFIDENTIAL EXHIBIT A
April 1, 1995
Raytheon Company
----------------
Competitive Advance/Revolving Credit Facility
---------------------------------------------
Summary of Terms and Conditions
-------------------------------
BORROWER: Raytheon Company, a Delaware corporation ("Raytheon").
- --------
ACQUISITION: Raytheon will acquire all the issued and outstanding capital
- ----------- stock of E-Systems, Inc., a Delaware corporation ("E-
Systems") pursuant to a merger agreement to be entered into
between Raytheon and E-Systems (the "Merger Agreement"). The
Merger Agreement will provide for an all cash tender offer
by Raytheon or a wholly owned subsidiary of Raytheon (the
"Tender Offer") followed by a merger for the remaining
shares (the "Merger" and, together with the Tender Offer,
the "Acquisition").
ARRANGER AND
- ------------
FINANCIAL ADVISOR: Chemical Securities Inc.
- -----------------
SYNDICATION AGENT: Chase Securities, Inc.
- -----------------
DOCUMENTATION
- -------------
AGENT: BA Securities, Inc.
- -----
ADMINISTRATIVE
- --------------
AGENT: Chemical Bank (together with the Arranger, the Syndication
- ----- Agent and the Documentation Agent, the "Agents").
MANAGING AGENTS: Chemical Bank, Bank of America National Trust and
- --------------- Savings Association and The Chase Manhattan Bank, N.A.
FACILITY: Senior, unsecured Competitive Advance/Revolving Credit
- -------- facility in a principal amount of $3,000,000,000 (the
"Facility").
BORROWING Two borrowing options will be
- --------- available under the Facility: (i) a Competitive Advance
OPTIONS: option (the "CAF"),
- -------
<PAGE>
2
and (ii) a Revolving Credit option (the "Revolving Credit").
The CAF will be provided on an uncommitted competitive
advance basis through an auction mechanism. The Revolving
Credit will be provided on a committed basis.
LENDERS: The Managing Agents and a syndicate of lenders arranged by
- ------- the Arranger and the other Agents with the assistance of
Raytheon (the "Lenders").
USE OF PROCEEDS: The proceeds of the Facility will be used to finance the
- --------------- Acquisition. In addition, following the Merger the proceeds
of the Facility may be used to provide working capital and
for other general corporate purposes of Raytheon, including
commercial paper backup.
COMMITMENT Five years from the date of execution
- ---------- of definitive credit documentation
TERMINATION AND (the "Closing Date").
- ---------------
FINAL MATURITY:
- --------------
AVAILABILITY: Under the CAF, up to the full aggregate amount of the
- ------------ remaining commitments under the Facility (less any amounts
outstanding as Revolving Credit loans) may be borrowed,
repaid and reborrowed at the discretion of the Lenders who
may elect to bid in accordance with the procedures described
in Annex II hereto.
Under the Revolving Credit, up to the full aggregate amount
of the remaining commitments under the Facility (less any
amounts outstanding as CAF loans) may be borrowed, repaid
and reborrowed subject only to the satisfaction of
applicable conditions to borrowing.
Availability under each option will be reduced by usage
under the other option on a dollar-for-dollar basis. Total
outstandings under the Facility may not
<PAGE>
3
exceed the amount of the Facility at any time.
FEES AND INTEREST As per attached Annex I.
- -----------------
RATES:
- -----
CAF PROCEDURES: As per attached Annex II.
- --------------
OPTIONAL Upon at least three business days' prior irrevocable written
- -------- notice, the Borrower may at any time in whole permanently
COMMITMENT terminate, or from time to time in part permanently reduce
- ---------- pro rata, the commitments under the Facility; provided that
REDUCTIONS: (i) any outstanding loans that would exceed the reduced
- ---------- commitments must be prepaid together with any related
redeployment costs and (ii) the aggregate commitments of all
Lenders under the Facility may in no event be less than the
aggregate CAF loans outstanding.
OPTIONAL Revolving Credit loans may be prepaid in whole or in part at
- -------- any time at Raytheon's option, subject to reimbursement of
PREPAYMENTS: redeployment costs in the case of LIBOR loans if prepayment
- ----------- occurs other than at the end of an interest period. CAF
loans will not be subject to prepayment.
DOCUMENTATION: A credit agreement (the "Credit Agreement") for the Facility
- ------------- incorporating the terms provided for herein and other
customary terms and provisions as the Managing Agents may
reasonably specify in the context of the transactions
contemplated hereby.
CONDITIONS TO Usual for facilities and transactions of this type, those
- ------------- specified below and others to be reasonably specified by the
EFFECTIVENESS: Managing Agents, including but not limited to satisfactory
- ------------- legal opinions, delivery of financial statements, accuracy
of representations and warranties, absence of defaults,
<PAGE>
4
delivery of borrowing certificates, evidence of authority
and compliance with applicable laws and regulations.
The Lenders shall be reasonably satisfied with the structure
and terms of the Acquisition, and the Tender Offer shall
have been or shall be simultaneously consummated in
accordance with applicable law and the Merger Agreement, and
the Merger Agreement shall have been approved by the boards
of directors of Raytheon and E-Systems.
All requisite governmental authorities and third parties
shall have approved or consented to the contemplated
transactions to the extent required, all applicable waiting
periods shall have expired and there shall be no
governmental or judicial action, actual or threatened,
restraining, preventing or imposing burdensome conditions on
the transactions contemplated hereby.
There shall be no litigation or administrative proceedings
or other legal or regulatory developments, actual or
threatened, that, in the judgment of the Lenders, involve a
reasonable possibility of prohibiting or imposing burdensome
conditions on the Acquisition or the transactions
contemplated hereby.
CONDITIONS TO Delivery of borrowing notice, accuracy of representations
- ------------- and warranties and absence of defaults.
EACH BORROWING:
- --------------
REPRESENTATIONS To include corporate existence and power; corporate and
- --------------- governmental authorization; compliance with laws;
AND WARRANTIES: enforceability; absence of material adverse change; absence
- -------------- of material litigation; accuracy of financial statements;
compliance with Federal Reserve margin regulations; taxes;
employee benefit plans; absence of material misstatements;
and
<PAGE>
5
inapplicability of Investment Company Act of 1940 and Public
Utility Holding Company Act of 1935.
AFFIRMATIVE To include maintenance of corporate existence, rights and
- ----------- franchises; maintenance of insurance; payment of taxes;
COVENANTS: delivery of financial statements and information; notices of
- --------- material litigation and other matters; compliance with laws;
and access to premises and records.
NEGATIVE To include limitation on liens; limitation on sale and
- -------- leaseback transactions; limitation on mergers,
COVENANTS: consolidations and sales of all or substantially all assets.
- ---------
FINANCIAL COVENANT: Total Debt shall not exceed 55% of Total Capitalization
- ------------------ (definitions to be agreed upon).
EVENTS OF DEFAULT: To include material breach of representations and
- ----------------- warranties; nonpayment of principal, interest or other
amounts (with appropriate grace periods in the case of
interest and other amounts); breach of covenants; cross-
payment default and cross-acceleration; certain bankruptcy
or insolvency events; certain ERISA events; and certain
undischarged judgments.
COST AND YIELD The usual for facilities of this type, including but not
- -------------- limited to compensation in respect of redeployment costs,
PROTECTION: reserve requirements, taxes (including gross-up provisions
- ---------- for withholding taxes) and decreased returns resulting from
changes in U.S. or foreign capital adequacy requirements,
guidelines or policies or their interpretation or
application, and any other provisions deemed necessary by
the Administrative Agent to provide customary protection for
U.S. and non-U.S. banks.
<PAGE>
6
ASSIGNMENTS AND Lenders will be permitted to assign and participate loans,
- --------------- notes and commitments. Assignments will be by novation and
PARTICIPATIONS: in minimum amounts of $25,000,000 and, unless being made to
- -------------- an affiliate of the Lender or to another Lender, will
require Raytheon's consent (which will not be unreasonably
withheld). Assignments to any Federal Reserve Bank will be
permitted without consent. Participations will be without
restriction and participants will be entitled to yield and
increased cost protection to the same extent as the
participating Lender. Voting rights of participants will be
limited to changes in amounts, rates, fees, and maturity.
Each assignment will be subject to the payment of a service
fee to the Administrative Agent by the parties to such
assignment.
EXPENSES AND All reasonable out-of-pocket expenses of the Agents and the
- ------------ Managing Agents (and the Lenders for enforcement costs and
INDEMNIFICATION: documentary taxes) associated with (i) the arrangement of
- --------------- the Facility and (ii) the preparation, execution and
delivery and enforcement of the Credit Agreement and the
other documentation contemplated thereby (including
reasonable fees, charges and disbursements of counsel (and,
in the case of enforcement costs, allocated charges of in-
house counsel) for the Agents and the Managing Agents) are
to be paid by Raytheon.
Raytheon will indemnify the Agents, the Managing Agents and
the Lenders and hold them harmless from and against all
costs, expenses (including reasonable fees, charges and
disbursements of counsel) and liabilities, including those
resulting from any litigation or other proceedings
(regardless of whether any Agent, Managing Agent or Lender
is a party thereto), related to or arising
<PAGE>
7
out of the transactions contemplated hereby; provided that
no Agent, Managing Agent or Lender will be indemnified for
its gross negligence or willful misconduct.
GOVERNING LAW: New York.
- -------------
<PAGE>
ANNEX I
FACILITY FEE: A Facility Fee will accrue for the account
- ------------ of the Lenders on the aggregate amount of
the Facility, whether used or unused, and be
payable in arrears at the end of each
calendar quarter and upon any termination
of the commitments. The rates at which the
Facility Fee accrues will depend upon the
Borrower's senior, unsecured, non-
credit-enhanced, long-term debt ratings
(the "Ratings") as set forth in the table
following this Annex I.
INTEREST RATES: Interest will be payable on the loans at the
- -------------- following rates per annum:
CAF
---
The rates obtained from bids as selected by the
Borrower in accordance with the procedures
outlined under CAF Procedures (see Annex II).
Revolving Credit
----------------
(a) LIBOR plus spreads depending upon the
Borrower's Ratings as set forth in the
table following this Annex I
(b) ABR
Interest on ABR borrowings will be payable
quarterly. Interest on LIBOR borrowings will be
payable at the ends of the relevant interest
periods (but not less often than quarterly).
Interest shall be calculated on the basis of the
actual number of days elapsed over a 365/366-day
year for ABR borrowings based on the Prime Rate,
and over a 360-day year for all other borrowings.
<PAGE>
2
ABR
---
Alternate Base Rate ("ABR")--the highest of (i)
Chemical Bank's Prime Rate, (ii) the Base CD Rate
plus 1% and (iii) the Federal Funds Effective Rate
plus 1/2 of 1%.
LIBOR
-----
One, two, three or six month London Interbank
Offered Rate, adjusted for statutory reserves as
incurred ("LIBOR").
<PAGE>
FEE AND SPREAD TABLE 1/
-----------------------
================================================================================
Ratings Facility LIBOR Drawn
(S&P/Moody's)2/ Fee (bp) Spread Cost
(bp) (bp)
- --------------------------------------------------------------------------------
Category 1 AA-/Aa3 or higher 6.00 12.75 18.75
- --------------------------------------------------------------------------------
Category 2 A+/A1, A/A2 or A-/A3 9.00 16.00 25.00
- --------------------------------------------------------------------------------
Category 3 BBB+/Baa1 or BBB/Baa2 15.00 20.00 35.00
- --------------------------------------------------------------------------------
Category 4 BBB-/Baa3 or lower 3/ 22.50 32.50 55.00
================================================================================
1/ Fees and spreads will be based upon the Borrower's senior, unsecured,
non-credit-enhanced, long-term debt ratings as determined by Standard &
Poor's Ratings Group ("S&P") and Moody's Investors Service, Inc. ("Moody's").
2/ In the event of split Ratings, Fees and Spreads will be based on the Category
corresponding to the higher rating.
3/ Or unrated.
<PAGE>
ANNEX II
CAF Procedures
--------------
Acting as Administrative Agent, Chemical Bank ("Chemical") will
manage the CAF, whereby the Lenders may bid on short term loans to the Borrower
on an uncommitted basis. Each Lender may bid up to the full amount of the
requested borrowing regardless of its individual commitment amount under the
Facility. All communications pursuant to the CAF shall be in writing and
according to predetermined formats as set forth in the definitive credit
agreement.
CAF advances, regardless of which Lender or Lenders provide them,
will be deemed to utilize the commitments of all Lenders pro rata in accordance
with their respective shares for purposes of determining (a) the aggregate
remaining availability under the Facility and (b) the remaining availability of
each Lender under the Facility.
To access the CAF (i.e., request an auction), the Borrower will
provide notice to Chemical describing its borrowing request with regard to
amount, value date, maturity date, and type of borrowing.
In accordance with a predetermined schedule, Chemical will relay
to the Lenders the information contained in the borrowing request. Each
Lender, in its sole discretion, may bid on these borrowings. To evidence its
bid each Lender will submit its bid to Chemical stating the amount, interest
rate and other information as required. Chemical will submit its bid directly
to the Borrower at a mutually agreeable time in advance of its receipt of bids
of the other Lenders. Bids not submitted in the format required, or according
to the schedule as determined, will be rejected in Chemical's discretion.
Chemical will arrange the bids in ascending yield order and relay
them to the Borrower, who will be required, by a predetermined time, either (a)
to cancel the borrowing request or (b) to award the mandate(s) on the basis of
yield. The Borrower will inform Chemical of the winning bid(s) and Chemical
will then inform the successful Lender(s).
The advances made in each auction will be under one of the following
options:
LIBOR Auction Advance
Fixed Rate Auction Advance
<PAGE>
Exhibit 99(c)(1)
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 2,
1995 (the "Agreement"), by and among E-SYSTEMS, INC., a Dela-
ware corporation (the "Company"), RTN ACQUISITION CORPORATION,
a Delaware corporation (the "Purchaser"), and RAYTHEON COMPANY,
a Delaware corporation ("Parent"). The Company and the Pur-
chaser are hereinafter sometimes collectively referred to as
the "Constituent Corporations."
RECITALS
WHEREAS, the Boards of Directors of Parent, the Pur-
chaser and the Company have each approved the acquisition of
the Company by Parent upon the terms and subject to the condi-
tions set forth herein;
WHEREAS, in furtherance of such acquisition, the
Boards of Directors of Parent, the Purchaser and the Company
have each approved the merger of the Purchaser with and into
the Company in accordance with the terms of this Agreement and
the General Corporation Law of the State of Delaware (the
"DGCL") and with any other applicable law; and
WHEREAS, the Board of Directors of the Company (the
"Board") has, in light of and subject to the terms and condi-
tions set forth herein, (i) determined that (x) the consider-
ation to be paid for each Share in the Offer and the Merger (as
hereinafter defined) is fair to the stockholders of the Com-
pany, and (y) the Offer and the Merger are otherwise in the
best interests of the Company and its stockholders, and (ii)
resolved to approve and adopt this Agreement and the transac-
tions contemplated hereby and to recommend acceptance of the
Offer and approval and adoption by the stockholders of the
Company of this Agreement.
NOW, THEREFORE, in consideration of the premises and
the mutual representations, warranties, covenants, agreements
and conditions contained herein, the parties hereto agree as
follows:
ARTICLE I
THE OFFER
Section 1.01. The Offer. (a) Provided that this
Agreement shall not have been terminated in accordance with<PAGE>
<PAGE>
Article IX hereof and none of the events set forth in Annex I
hereto shall have occurred and be existing, as promptly as
practicable (but in no event later than five business days from
the date hereof) Purchaser shall commence (within the meaning
of Rule 14d-2 under the Securities Exchange Act of 1934, as
amended (including the rules and regulations promulgated
thereunder, the "Exchange Act")) an offer to purchase all out-
standing shares of Common Stock, par value $1.00 per share (the
"Shares"), of the Company including the associated Preferred
Stock Purchase Rights issued pursuant to the Rights Agreement
dated as of October 7, 1994 (the "Rights Agreement") between
the Company and Society National Bank, as Rights Agent (the
"Rights"), at a price of $64.00 per Share net to the seller in
cash (the "Offer") and, subject to the conditions of the Offer,
shall use all reasonable efforts to consummate the Offer. Ex-
cept where the context otherwise requires, all references
herein to the Shares shall include the associated Rights. The
obligation of the Purchaser to consummate the Offer and to ac-
cept for payment and to pay for any Shares tendered pursuant
thereto shall be subject to only those conditions set forth in
Annex I hereto.
(b) Without the prior written consent of the Com-
pany, the Purchaser shall not (i) decrease the price per Share
or change the form of consideration payable in the Offer, (ii)
decrease the number of Shares sought, (iii) amend or waive
satisfaction of the Minimum Condition (as defined in Annex I)
or (iv) impose additional conditions to the Offer or amend any
other term of the Offer in any manner adverse to the holders of
Shares. Upon the terms and subject to the conditions of the
Offer, the Purchaser will accept for payment and purchase, as
soon as permitted under the terms of the Offer, all Shares
validly tendered and not withdrawn prior to the expiration of
the Offer.
(c) Each of Parent and the Purchaser, on the one
hand, and the Company, on the other hand, agrees promptly to
correct any information provided by it for use in the documents
filed by Parent and the Purchaser with the Securities and Ex-
change Commission (the "SEC") in connection with the Offer (the
"Offer Documents") if and to the extent that it shall have be-
come false or misleading in any material respect, and Parent
and the Purchaser further agree to take all steps necessary to
cause the Offer Documents as so corrected to be filed with the
SEC and to be disseminated to stockholders of the Company, in
each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given a
reasonable opportunity to review and comment upon any Offer
Documents to be filed with the SEC prior to any such filing.
-2-
<PAGE>
(d) The Offer shall be made by means of an offer to
purchase which shall provide for an initial expiration date of
20 business days from the date of commencement. Parent and the
Purchaser agree that the Purchaser shall not terminate or
withdraw the Offer or extend the expiration date of the Offer
unless at the expiration date of the Offer the conditions to
the Offer described in Annex I hereto shall not have been sat-
isfied or earlier waived. If at the expiration date of the
Offer, the conditions to the Offer described in Annex I hereto
shall not have been satisfied or earlier waived but, in the
reasonable belief of Parent, may be satisfied prior to Septem-
ber 30, 1995, the Purchaser shall extend the expiration date of
the Offer for an additional period or periods of time until the
earlier of (i) the date such conditions are satisfied or ear-
lier waived and the Purchaser becomes obligated to accept for
payment and pay for Shares tendered pursuant to the Offer or
(ii) this Agreement is terminated in accordance with its terms;
provided that this sentence shall not be applicable in the
event the conditions set forth in paragraph (c)(ii) of Annex I
hereto shall not have been satisfied or earlier waived at the
expiration date of the Offer. Any individual extension of the
Offer shall be for a period of no more than 15 business days.
Section 1.02. Company Actions. (a) The Company
---------------
hereby approves of and consents to the Offer and represents
that (i) the Board, at a meeting duly called and held, has, in
light of and subject to the terms and conditions set forth
herein, [unanimously] (x) determined that the consideration to
be paid for each Share in the Offer and the Merger is fair to
the stockholders of the Company and the Offer and the Merger
are otherwise in the best interests of the Company and its
stockholders and (y) approved and adopted this Agreement and
the transactions contemplated hereby, including the Offer and
the Merger, and resolved to recommend acceptance of the Offer
and approval and adoption of this Agreement by the stockholders
of the Company and (ii) CS First Boston Corporation and Morgan
Stanley & Co. Incorporated, the Company's financial advisors,
have each rendered to the Board their opinion that the per
share consideration to be received by the stockholders of the
Company pursuant to the Offer and the Merger is fair to such
stockholders from a financial point of view.
(b) The Company hereby agrees promptly to prepare
and, after affording the Purchaser a reasonable opportunity to
review and comment thereon, to file with the SEC and to mail to
its stockholders, a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (together with any
amendments or supplements thereto, the "Schedule 14D-9") con-
taining the recommendation described in Section 1.02(a) hereof
and to disseminate the Schedule 14D-9 as required by Rule 14d-9
-3-
<PAGE>
promulgated under the Exchange Act; provided, however, that,
subject to the provisions of Article IX, such recommendation
may be withdrawn, modified or amended to the extent that the
Board deems it necessary to do so in the exercise of its fidu-
ciary and other legal obligations after consultation with out-
side counsel. Each of the Company, on the one hand, and Parent
and the Purchaser, on the other hand, agree promptly to correct
any information provided by either of them for use in the
Schedule 14D-9 if and to the extent that it shall have become
false or misleading in any material respect, and the Company
further agrees to take all steps necessary to cause the Sched-
ule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the stockholders of the Company, in each case
as and to the extent required by applicable federal securities
laws.
(c) In connection with the Offer, the Company will
furnish the Purchaser with such information (which will be
treated and held in confidence by the Purchaser in accordance
with the terms of the Confidentiality Agreement (as hereinafter
defined)) and assistance as the Purchaser or its agents or rep-
resentatives may reasonably request in connection with the
preparation of the Offer and communicating the Offer to the
record and beneficial holders of the Shares.
Section 1.03. Directors. (a) Subject to compliance
---------
with the DGCL, the Company's Certificate of Incorporation and
other applicable law, promptly upon the payment by the Pur-
chaser for Shares purchased pursuant to the Offer, and from
time to time thereafter, the Company shall, upon request of
Parent, promptly use its best efforts to take all actions nec-
essary to cause a majority of the directors of the Company to
consist of Parent's designees, including by accepting the res-
ignations of those incumbent directors designated by the Com-
pany or increasing the size of the Board and causing Parent's
designees to be elected. The date on which Purchaser's desig-
nees constitute at least a majority of the Board is herein re-
ferred to as the "Control Date."
(b) The Company's obligations to appoint Parent's
designees to the Board shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder, if applicable. The
Company shall promptly take all actions required pursuant to
such Section and Rule in order to fulfill its obligations under
this Section 1.03 and shall include in the Schedule 14D-9 such
information with respect to the Company and its officers and
directors as is required under such Section and Rule in order
to fulfill its obligations under this Section 1.03. Parent
will supply any information with respect to itself and its
-4-
<PAGE>
designees, officers, directors and affiliates required by such
Section and Rule to the Company.
(c) Following the election or appointment of Par-
ent's designees pursuant to this Section 1.03 and prior to the
Effective Time (as hereinafter defined), any amendment or ter-
mination of this Agreement by the Company or the Board, any
extension by the Company or the Board, of the time for the
performance of any of the obligations or other acts of Parent
or the Purchaser or waiver of any of the Company's rights
hereunder, will require the concurrence of, and shall be ef-
fective if and only if approved by, a majority of the directors
of the Company then in office who are not affiliated with Par-
ent and were not designated by Parent and (i) were also non-
management directors of the Company on the date hereof or (ii)
were elected subsequent to the date hereof by, or on the rec-
ommendation of (x) directors who were directors on the date
hereof or (y) the Continuing Directors (the persons referred to
in clauses (i) and (ii) being the "Continuing Directors"), even
if such majority of the Continuing Directors does not consti-
tute a majority of all directors then in office. Until the
Effective Time, the Board shall include three Continuing
Directors (subject to their availability and willingness to
serve).
(d) During the five-year period immediately follow-
ing the Control Date, the Company shall maintain an Advisory
Board for the purpose of consulting on matters related to the
business of the Company. The members of the Advisory Board
shall be chosen by mutual agreement of the Chief Executive
Officer of the Company and the Chief Executive Officer of Par-
ent from among the individuals who constitute the Board on the
date hereof, including any of the Continuing Directors, and
representatives of Parent. Parent shall provide or cause the
Company to provide compensation and benefits to the members of
the Advisory Board that, in the aggregate, are no less favor-
able than those provided to the Company's directors as of the
date hereof. Purchaser agrees that it will pay, or will cause
the Surviving Corporation to pay, in accordance with the terms
of the director retirement policy and the Executive Perquisites
for Outside Board Directors of the Company in effect as of the
date hereof, the retirement benefit and perquisites provided
for therein to those directors who are directors of the Company
on the date hereof and who, after either the Control Date or
the Effective Time, do not continue on the Board or become mem-
bers of the Advisory Board.
-5-
<PAGE>
ARTICLE II
THE MERGER
Section 2.01. The Merger. (a) In accordance with
----------
the provisions of this Agreement and the DGCL, at the Effective
Time, the Purchaser shall be merged with and into the Company
(the "Merger"), and the Company shall be the surviving corpo-
ration (hereinafter sometimes called the "Surviving Corpora-
tion") and shall continue its corporate existence under the
laws of the State of Delaware. At the Effective Time the sep-
arate existence of the Purchaser shall cease.
(b) The name of the Surviving Corporation shall be
"E-Systems, Inc."
(c) The Merger shall have the effects on the Company
and the Purchaser as Constituent Corporations of the Merger as
provided under the DGCL. As of the Effective Time, the Company
shall be a wholly-owned subsidiary of Parent.
Section 2.02. Effective Time. The Merger shall be-
--------------
come effective at the time of filing of, or at such later time
specified in, a certificate of merger (the "Certificate of
Merger") (or, if applicable, a certificate of ownership and
merger), in the form required by and executed in accordance
with the DGCL, filed with the Secretary of State of the State
of Delaware (the "Delaware Secretary of State") in accordance
with the provisions of Section 251 of the DGCL (or in the event
Section 3.04 hereof is applicable, Section 253 of the DGCL).
The date and time when the Merger shall become effective is
herein referred to as the "Effective Time."
Section 2.03. Certificate of Incorporation and By-
------------------------------------
Laws of Surviving Corporation. Subject to Section 2.01(b), the
-----------------------------
Certificate of Incorporation and By-Laws of the Purchaser shall
be the Certificate of Incorporation and By-Laws of the Surviv-
ing Corporation until thereafter amended as provided by law.
Section 2.04. Directors and Officers of Surviving
-----------------------------------
Corporation. (a) Subject to applicable law, the directors of
-----------
the Purchaser immediately prior to the Effective Time shall be
the initial directors of the Surviving Corporation and shall
hold office until their respective successors are duly elected
and qualified, or their earlier death, resignation or removal.
(b) The officers of the Company immediately prior to
the Effective Time shall be the initial officers of the Sur-
viving Corporation and shall hold office until their respective
-6-
<PAGE>
successors are duly elected and qualified, or their earlier
death, resignation or removal.
Section 2.05. Further Assurances. If, at any time
------------------
after the Effective Time, the Surviving Corporation shall con-
sider or be advised that any deeds, bills of sale, assignments,
assurances or any other actions or things are necessary or de-
sirable to vest, perfect or confirm of record or otherwise in
the Surviving Corporation its right, title or interest in, to
or under any of the rights, properties or assets of either of
the Constituent Corporations acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with,
the Merger or otherwise to carry out this Agreement, the of-
ficers of the Surviving Corporation shall be authorized to ex-
ecute and deliver, in the name and on behalf of each of the
Constituent Corporations or otherwise, all such deeds, bills of
sale, assignments and assurances and to take and do, in the
name and on behalf of each of the Constituent Corporations or
otherwise, all such other actions and things as may be neces-
sary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, prop-
erties or assets in the Surviving Corporation or otherwise to
carry out this Agreement in accordance with its terms.
ARTICLE III
CONVERSION OF SHARES
Section 3.01. Effect on Shares and the Purchaser's
------------------------------------
Capital Stock. (a) As of the Effective Time, by virtue of the
-------------
Merger and without any action on the part of the holders
thereof, each Share issued and outstanding immediately prior to
the Effective Time (other than any Shares held by Parent, the
Purchaser or any subsidiary of Parent or the Purchaser or in
the treasury of the Company, which Shares, by virtue of the
Merger and without any action on the part of the holder there-
of, shall be cancelled and retired and shall cease to exist
with no payment being made with respect thereto, and other than
any Dissenting Shares (as hereinafter defined)) shall be con-
verted into the right to receive $64.00 net to its holder in
cash or any higher price per Share paid in the Offer (the
"Merger Price"), payable to the holder thereof, without inter-
est thereon, as set forth in Section 4.02 hereof.
(b) As of the Effective Time, by virtue of the
Merger and without any action on the part of the holders
thereof, each share of capital stock of the Purchaser issued
and outstanding immediately prior to the Effective Time shall
be converted into and become one fully paid and nonassessable
-7-
<PAGE>
share of Common Stock, par value $1.00 per share, of the Sur-
viving Corporation.
Section 3.02. Company Option Plans. (a) The Com-
--------------------
pany shall take all actions necessary to provide that, immedi-
ately prior to the consummation of the Offer, (i) each out-
standing option to purchase Shares (the "Options") granted un-
der any of the Company's 1980 Stock Option Plan, 1982 Incentive
Stock Option Plan, the Company's 1988 Employee Stock Option
Plan or the Company's 1994 Employee Stock Option Plan, each as
amended (collectively, the "Option Plans"), whether or not then
exercisable or vested, shall become fully exercisable and
vested, (ii) each Option which is then outstanding shall be
cancelled and (iii) in consideration of such cancellation, and
except to the extent that Parent or the Purchaser and the
holder of any such Option otherwise agree, the Company (or, at
Parent's option, Parent or the Purchaser) shall pay to such
holders of Options an amount in respect thereof equal to the
product of (A) the excess, if any, of the Merger Price over the
exercise price thereof and (B) the number of Shares subject
thereto (such payment to be net of applicable withholding
taxes); provided that the foregoing shall not require any ac-
tion which violates the Option Plans; provided, further, that
if it is determined that compliance with any of the foregoing
would cause any individual subject to Section 16 of the Ex-
change Act to become subject to the profit recovery provisions
thereof, any Options held by such individual will be cancelled
or purchased, as the case may be, as promptly thereafter as
possible so as not to subject such individual to any liability
pursuant to Section 16, and such individual will be entitled to
receive from the Company or the Surviving Corporation at the
Effective Time or as soon as practicable thereafter (or, if
later, the date six months and one day following the grant of
such option), for each Share subject to an Option, an amount
equal to the excess, if any, of the Merger Price over the per
Share exercise price of such Option.
(b) Except as provided herein or as otherwise agreed
to by the parties and to the extent permitted by the Option
Plans, (i) the Option Plans shall terminate as of the Effective
Time and the provisions in any other plan, program or arrange-
ment, providing for the issuance or grant by the Company or any
of its subsidiaries of any interest in respect of the capital
stock of the Company or any of its subsidiaries (other than the
EMASS Option Plan (as hereinafter defined)) shall be deleted as
of the Effective Time and (ii) the Company shall use all rea-
sonable efforts to ensure that following the Effective Time no
holder of Options or any participant in the Option Plans or any
other such plans, programs or arrangements (other than the
EMASS Option Plan) shall have any right thereunder to acquire
-8-
<PAGE>
any equity securities of the Company, the Surviving Corporation
or any subsidiary thereof.
(c) The Company shall take all actions to provide
that each share of restricted stock granted under the Option
Plans shall become fully vested and free of restrictions im-
mediately prior to the consummation of the Offer and that any
holder of a restricted stock grant may elect to authorize the
Company to retain a number of Shares from such grant having an
aggregate value (based upon $64.00 per Share) equal to the sum
of (i) the aggregate purchase price for such Shares under the
applicable Option Plan and (ii) any withholding taxes appli-
cable to the vesting of such grant, in lieu of the payment of
such amount in cash.
Section 3.03. Stockholders' Meeting. (a) If re-
---------------------
quired by applicable law in order to consummate the Merger, the
Company, acting through the Board, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its stockholders (the "Special Meet-
ing") as soon as practicable following the purchase of and
payment for Shares by the Purchaser pursuant to the Offer
for the purpose of considering and adopting this Agreement
and such other matters as may be necessary to consummate
the transactions contemplated herein;
(ii) prepare and file with the SEC a preliminary
proxy statement relating to the matters to be considered
at the Special Meeting pursuant to this Agreement and use
its reasonable best efforts (x) to obtain and furnish the
information required to be included by the SEC in the
Proxy Statement (as hereinafter defined) and, after con-
sultation with Parent, to respond promptly to any comments
made by the SEC with respect to the preliminary proxy
statement and to cause a definitive proxy statement (the
"Proxy Statement") to be mailed to its stockholders and
(y) subject to the fiduciary obligations of the Board un-
der applicable law, to obtain the necessary approval and
adoption of this Agreement and such other matters as may
be necessary to consummate the transactions contemplated
hereby by its stockholders; and
(iii) subject to the fiduciary obligations of the
Board under applicable law after consultation with outside
counsel, include in the Proxy Statement the recommendation
-9-
<PAGE>
of the Board that stockholders of the Company vote in fa-
vor of the adoption of this Agreement and such other mat-
ters as may be necessary to consummate the transactions
contemplated hereby.
(b) Parent agrees that it will vote, or cause to be
voted, all of the Shares then owned by it, the Purchaser or any
of its other subsidiaries in favor of the approval and adoption
of this Agreement and such other matters as may be necessary to
consummate the transactions contemplated hereby.
Section 3.04. Merger Without Meeting of Stockhold-
------------------------------------
ers. Notwithstanding Section 3.03 hereof, in the event that
---
Parent, the Purchaser or any other subsidiary of Parent shall
acquire at least 90% of the outstanding Shares pursuant to the
Offer or otherwise, the parties hereto agree, at the request of
Parent or the Purchaser, to take all necessary and appropriate
action to cause the Merger to become effective as soon as
practicable after the acceptance for payment and purchase of
Shares by the Purchaser pursuant to the Offer without a meeting
of stockholders of the Company in accordance with Section 253
of the DGCL.
Section 3.05. Consummation of the Merger. As soon
--------------------------
as practicable after the satisfaction or waiver of the condi-
tions set forth in Article VIII hereof, the Surviving Corpora-
tion shall execute in the manner required by the DGCL and file
with the Delaware Secretary of State the Certificate of Merger
(or, in the event Section 3.04 hereof is applicable, the Pur-
chaser shall execute in the manner required by the DGCL and
file with the Delaware Secretary of State a certificate of
ownership and merger), and the parties shall take such other
and further actions as may be required by law to make the
Merger effective as promptly as is practicable.
ARTICLE IV
DISSENTING SHARES; PAYMENT FOR SHARES
Section 4.01. Dissenting Shares. Notwithstanding
-----------------
anything in this Agreement to the contrary, Shares outstanding
immediately prior to the Effective Time and held by a holder
who has not voted in favor of the Merger or consented thereto
in writing and who has demanded appraisal for such Shares in
accordance with Section 262 of the DGCL, if such Section 262
provides for appraisal rights for such Shares in the Merger
("Dissenting Shares"), shall not be converted into the right to
receive the Merger Price, as provided in Section 3.01 hereof,
unless and until such holder fails to perfect or withdraws or
-10-
<PAGE>
otherwise loses his right to appraisal and payment under the
DGCL. If, after the Effective Time, any such holder fails to
perfect or withdraws or loses his right to appraisal, such
Dissenting Shares shall thereupon be treated as if they had
been converted as of the Effective Time into the right to re-
ceive the Merger Price to which such holder is entitled, with-
out interest or dividends thereon. The Company shall give
Parent prompt notice of any demands received by the Company for
appraisal of Shares and Parent shall have the right to partic-
ipate in all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written
consent of Parent, make any payment with respect to, or settle
or offer to settle, any such demands.
Section 4.02. Payment for Shares. (a) From and
------------------
after the Effective Time, a bank or trust company to be desig-
nated by Parent (and reasonably acceptable to the Company)
shall act as paying agent (the "Paying Agent") in effecting the
payment of the Merger Price for certificates (the "Certifi-
cates") formerly representing Shares and entitled to payment of
the Merger Price pursuant to Section 3.01 hereof. At the Ef-
fective Time, Parent or the Purchaser shall deposit, or cause
to be deposited, in trust with the Paying Agent for the benefit
of holders of Shares the aggregate Merger Price to which hold-
ers of Shares shall be entitled at the Effective Time pursuant
to Section 3.01 hereof.
(b) Promptly after the Effective Time, Parent shall
cause the Paying Agent to mail to each record holder of Cer-
tificates that immediately prior to the Effective Time repre-
sented Shares (other than Certificates representing Shares held
by Parent or the Purchaser, any subsidiary of Parent or the
Purchaser or in the treasury of the Company) a form of letter
of transmittal which shall specify that delivery shall be ef-
fected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the
Paying Agent and instructions for use in surrendering such
Certificates and receiving the Merger Price therefor. Upon the
surrender of each such Certificate, the Paying Agent shall pay
the holder of such Certificate in exchange therefor cash in an
amount equal to the Merger Price multiplied by the number of
Shares formerly represented by such Certificate, and such Cer-
tificate shall forthwith be cancelled. Until so surrendered,
each such Certificate (other than Certificates representing
Dissenting Shares and Certificates representing Shares held by
Parent or the Purchaser, any subsidiary of Parent or the Pur-
chaser or in the treasury of the Company) shall represent
solely the right to receive the aggregate Merger Price relating
thereto. No interest shall be paid or accrued on such Merger
Price.
-11-
<PAGE>
(c) Promptly following the date which is nine months
after the Effective Time, the Paying Agent shall deliver to
Parent all cash, Certificates and other documents in its pos-
session relating to the transactions described in this Agree-
ment, and the Paying Agent's duties shall terminate. Thereaf-
ter, each holder of a Certificate formerly representing a Share
(other than Certificates representing Dissenting Shares and
Certificates representing Shares held by Parent or the Pur-
chaser, any subsidiary of Parent or the Purchaser or in the
treasury of the Company) may surrender such Certificate to
Parent and (subject to applicable abandoned property, escheat
and similar laws) receive in consideration therefor the ag-
gregate Merger Price relating thereto, without any interest or
dividends thereon.
(d) The Merger Price shall be net to each holder of
Certificates in cash, subject to reduction only for any appli-
cable federal back-up withholding or, as set forth in Section
4.02(e), stock transfer taxes payable by such holder.
(e) If payment of cash in respect of any Certificate
is to be made to a person other than the person in whose name
such Certificate is registered, it shall be a condition to such
payment that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and
that the person requesting such payment shall have paid any
transfer and other taxes required by reason of such payment in
a name other than that of the registered holder of the Certif-
icate surrendered or shall have established to the satisfaction
of Parent or the Paying Agent that such tax either has been
paid or is not payable.
(f) After the Effective Time, there shall be no
transfers on the stock transfer books of the Surviving Corpo-
ration of any Shares which were outstanding immediately prior
to the Effective Time. If, after the Effective Time, Certifi-
cates formerly representing Shares (other than Certificates
representing Shares held by Parent or the Purchaser, any sub-
sidiary of Parent or the Purchaser or in the treasury of the
Company) are presented to Parent, the Surviving Corporation or
the Paying Agent, they shall be surrendered and cancelled in
return for the payment of the aggregate Merger Price relating
thereto, without interest, as provided in this Article IV,
subject to applicable law in the case of Dissenting Shares.
-12-
<PAGE>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the
Purchaser as follows:
Section 5.01. Organization. The Company and each of
------------
its Significant Subsidiaries (as defined below) is a corpora-
tion duly organized, validly existing and in good standing un-
der the laws of their respective jurisdictions of incorporation
and the Company and each of its Significant Subsidiaries has
all requisite corporate power and authority to own, lease and
operate their respective properties and to carry on their re-
spective businesses as now being conducted. The Company and
each of its subsidiaries is duly qualified or licensed and in
good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary,
except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not, individ-
ually or in the aggregate, have a material adverse effect on
the business, operations, assets, financial condition or re-
sults of operations of the Company and its subsidiaries taken
as a whole (a "Company Material Adverse Effect"). The Company
owns directly all of the outstanding capital stock of each of
its Significant Subsidiaries. As used in this Agreement a
"Significant Subsidiary" means a corporation which is a "sig-
nificant subsidiary" within the meaning of Rule 1-02(w) of
Regulation S-X.
Section 5.02. Capitalization. The authorized capi-
--------------
tal stock of the Company consists of 50,000,000 Shares and
185,000 shares of preferred stock, par value $20.00 per share
("Company Preferred Stock"). As of March 30, 1995, there were
34,173,453 Shares and no shares of Company Preferred Stock is-
sued and outstanding, and there are no Shares or shares of
Company Preferred Stock held in the Company's treasury. As of
the date hereof, there were outstanding options to purchase
2,391,703 Shares under the Option Plans. Except for the Rights
granted pursuant to the Rights Agreement (which shall be re-
deemed pursuant to Section 7.10 hereof), Options under the Op-
tion Plans (which shall be cancelled pursuant to Section
3.02(a) hereof), options outstanding to purchase not more than
920,000 shares of common stock of the Company's subsidiary,
EMASS, Inc. ("EMASS") pursuant to the EMASS 1994 Employee Stock
Option Plan (the "EMASS Option Plan") (which options will
become fully vested upon consummation of the Offer and remain
outstanding after the Effective Time), and additional options
to purchase up to 150,000 shares of EMASS common stock which
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<PAGE>
may be granted at the Company's or EMASS's discretion prior to
the Control Date, there were not as of the date hereof, and at
all times thereafter through the Control Date there will not
be, any existing options, warrants, calls, subscriptions, or
other rights or other agreements or commitments obligating the
Company or any of its subsidiaries to issue, transfer or sell
any shares of capital stock of the Company or any of its sub-
sidiaries or any other securities convertible into or evidenc-
ing the right to subscribe for any such shares. All issued and
outstanding Shares are duly authorized and validly issued,
fully paid, non-assessable and free of preemptive rights with
respect thereto.
Section 5.03. Authority. The Company has full cor-
---------
porate power and authority to execute and deliver this Agree-
ment and, subject to the approval of its stockholders, if re-
quired, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consumma-
tion of the transactions contemplated hereby have been duly and
validly authorized and approved by the Board, and other than
the approval by its stockholders, if required, no other corpo-
rate proceedings are necessary to authorize this Agreement or
the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by
the Company and, assuming this Agreement constitutes a legal,
valid and binding agreement of the other parties hereto, it
constitutes a legal, valid and binding agreement of the Com-
pany, enforceable against it in accordance with its terms.
Section 5.04. No Violations; Consents and Approvals.
-------------------------------------
(a) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor
compliance by the Company with any of the provisions hereof
will (i) violate any provision of its certificate of incorpo-
ration or by-laws, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or
both) a default, or give rise to any right of termination,
cancellation or acceleration or any right which becomes effec-
tive upon the occurrence of a merger, consolidation or change
in control or ownership, under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture or other in-
strument of indebtedness for money borrowed to which the Com-
pany or any of its subsidiaries is a party, or by which the
Company or any of its subsidiaries or any of their respective
properties is bound, or (iii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time
or both) a default, or give rise to any right of termination,
cancellation or acceleration or any right which becomes effec-
tive upon the occurrence of a merger, consolidation or change
in control or ownership, under, any of the terms, conditions or
-14-
<PAGE>
provisions of any license, franchise, permit or agreement to
which the Company or any of its subsidiaries is a party, or by
which the Company or any of its subsidiaries or any of their
respective properties is bound, or (iv) violate any statute,
rule, regulation, order or decree of any public body or au-
thority by which the Company or any of its subsidiaries or any
of their respective properties is bound, excluding from the
foregoing clauses (ii), (iii) and (iv) violations, breaches,
defaults or rights under the laws of any jurisdiction outside
the United States or which, either individually or in the ag-
gregate, would not have a Company Material Adverse Effect or
materially impair the Company's ability to consummate the
transactions contemplated hereby or for which the Company has
received or, prior to the consummation of the Offer, shall have
received appropriate consents or waivers.
(b) No filing or registration with, notification to,
or authorization, consent or approval of, any governmental en-
tity is required in connection with the execution and delivery
of this Agreement by the Company, or the consummation by the
Company of the transactions contemplated hereby, except (i)
expiration of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
(ii) in connection, or in compliance, with the provisions of
the Exchange Act, (iii) the filing of the Certificate of Merger
with the Delaware Secretary of State, (iv) such filings and
consents as may be required under any environmental law per-
taining to any notification, disclosure or required approval
triggered by the Merger or the transactions contemplated by
this Agreement, (v) filing with, and approval of, the New York
Stock Exchange, Inc. and the SEC with respect to the delisting
and deregistration of the Shares, (vi) such consents, approv-
als, orders, authorizations, notifications, registrations,
declarations and filings as may be required under the corpora-
tion, takeover or blue sky laws of various states or non-U.S.
change-in-control laws or regulations and (vii) such other
consents, approvals, orders, authorizations, notifications,
registrations, declarations and filings not obtained or made
prior to the consummation of the Offer the failure of which to
be obtained or made would not, individually or in the aggre-
gate, have a Company Material Adverse Effect, or materially
impair the Company's ability to perform its material obliga-
tions hereunder or prevent the consummation of any of the
transactions contemplated hereby.
Section 5.05. SEC Documents; Financial Statements.
-----------------------------------
(a) The Company has made available to Parent and the Purchaser
copies of each registration statement, report, proxy statement,
information statement or schedule filed with the SEC by the
Company since January 1, 1993 (the "SEC Documents"). As of
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<PAGE>
their respective dates, the Company's SEC Documents complied in
all material respects with the applicable requirements of the
Securities Act of 1933, as amended, and the Exchange Act, as
the case may be, and none of such SEC Documents contained any
untrue statement of a material fact or omitted to state a mate-
rial fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) As of their respective dates, the consolidated
financial statements of the Company included in the Company's
Reports on Form 10-K and Reports on Form 10-Q included in the
SEC Documents were prepared in accordance with generally ac-
cepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated therein
or in the notes thereto) and fairly presented the Company's
consolidated financial position and that of its consolidated
subsidiaries as at the dates thereof and the consolidated re-
sults of their operations and statements of cash flows for the
periods then ended (subject, in the case of unaudited state-
ments, to the lack of footnotes thereto, to normal year-end
audit adjustments and to any other adjustments described
therein).
Section 5.06. Absence of Certain Changes; No Undis-
-------------------------------------
closed Liabilities. (a) Since December 31, 1994, except as
------------------
disclosed in the SEC Documents filed prior to the date hereof,
the Company has not (i) incurred any liability, whether or not
accrued, contingent or otherwise, or suffered any event or oc-
currence (other than events or occurrences which relate to
general economic conditions or conditions generally affecting
the defense industry) which, individually or in the aggregate,
would have a Company Material Adverse Effect or (ii) made any
changes in accounting methods, principles or practices or (iii)
declared, set aside or paid any dividend or other distribution
with respect to its capital stock, other than regular quarterly
cash dividends at a rate not exceeding $.375 per Share per
quarter, payable on the Company's customary dividend payment
dates. Since December 31, 1994 to the date of this Agreement,
each of the Company and its subsidiaries has conducted its
operations according to its ordinary course of business con-
sistent with past practice.
(b) Except as and to the extent disclosed by the
Company in the SEC Documents, as of December 31, 1994, neither
the Company nor any of its subsidiaries had any material
liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by
generally accepted accounting principles to be reflected on a
consolidated balance sheet of the Company and its subsidiaries
-16-
<PAGE>
(including the notes thereto) or which would have, individually
or in the aggregate, a Company Material Adverse Effect.
Section 5.07. Litigation. Except as disclosed by
----------
the Company in the SEC documents, there is no suit, claim, ac-
tion, proceeding or investigation pending or, to the knowledge
of the Company, threatened against the Company or any of its
subsidiaries or any of their respective properties or assets
before any court or governmental entity with respect to which
there is a reasonable likelihood of a determination which, in-
dividually or in the aggregate, would have a Company Material
Adverse Effect. Except as disclosed by the Company in the SEC
Documents, neither the Company nor any of its subsidiaries is
subject to any outstanding order, writ, injunction or decree
which, insofar as can be reasonably foreseen, individually or
in the aggregate, in the future would have a Company Material
Adverse Effect.
Section 5.08. Compliance with Applicable Law. Ex-
------------------------------
cept as disclosed by the Company in the SEC Documents, the
Company and its subsidiaries hold all permits, licenses, vari-
ances, exemptions, orders and approvals of all governmental
entities necessary for the lawful conduct of their respective
businesses (the "Company Permits"), except for failures to hold
such permits, licenses, variances, exemptions, orders and ap-
provals which would not, individually or in the aggregate, have
a Company Material Adverse Effect. Except as disclosed by the
Company in the SEC Documents, the Company and its subsidiaries
are in compliance with the terms of the Company Permits, except
where the failure so to comply would not have a Company Mate-
rial Adverse Effect. Except as disclosed by the Company in the
SEC Documents, the businesses of the Company and its subsid-
iaries are not being conducted in violation of any law, ordi-
nance or regulation of any governmental entity except for vio-
lations or possible violations which individually or in the
aggregate do not, and, insofar as reasonably can be foreseen,
in the future will not, have a Company Material Adverse Effect.
Except as disclosed by the Company in the SEC Documents, and
except for the audit by the Internal Revenue Service of the
Company's qualified benefit plans currently being conducted, no
investigation or review by any governmental entity with respect
to the Company or any of its subsidiaries is pending or, to the
best knowledge of the Company, threatened nor, to the best
knowledge of the Company, has any governmental entity indicated
an intention to conduct the same, other than, in each case,
those which the Company reasonably believes will not have a
Company Material Adverse Effect.
Section 5.09. Taxes. Each of the Company and its
-----
subsidiaries has filed, or caused to be filed, all federal,
-17-
<PAGE>
state, local and foreign income and other material tax returns
required to be filed by it, has paid or withheld, or caused to
be paid or withheld, all taxes of any nature whatsoever, with
any related penalties, interest and liabilities (any of the
foregoing being referred to herein as a "Tax"), that are shown
on such tax returns as due and payable, or otherwise required
to be paid, other than such Taxes as are being contested in
good faith and for which adequate reserves have been estab-
lished and other than where the failure to so file, pay or
withhold would not have a Company Material Adverse Effect.
There are no material claims or assessments pending against the
Company or its subsidiaries for any alleged deficiency in any
Tax, and the Company does not know of any threatened Tax claims
or assessments against the Company or any of its subsidiaries
which if upheld would have a Company Material Adverse Effect.
None of the Company or any of its subsidiaries has made an
election to be treated as a "consenting corporation" under
Section 341(f) of the Internal Revenue Code of 1986, as amended
(the "Code"). There is no material deferred inter-company gain
within the meaning of the Treasury Regulations promulgated un-
der Section 1502 of the Code. There are no waivers or exten-
sions of any applicable statute of limitations to assess any
material Taxes. Other than with respect to returns for the
1994 taxable year, there are no outstanding requests for any
extension of time within which to file any material return or
within which to pay any material Taxes shown to be due on any
return.
Section 5.10. Certain Employee Plans. Each "em-
----------------------
ployee benefit plan," as defined in Section 3(3) of the Em-
ployee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained by the Company or any of its subsidiaries
(the "Plans") complies in all respects with all applicable re-
quirements of ERISA (to the extent required to so comply) and
the Code and other applicable laws, except where failure so to
comply would not have a Company Material Adverse Effect. No
"reportable event" (as such term is defined in ERISA) or ter-
mination has occurred with respect to any Plan under circum-
stances which present a risk of liability to any governmental
entity or other person which would have a Company Material
Adverse Effect. None of the Plans is a multiemployer plan, as
such term is defined in ERISA. Neither the Company and its
subsidiaries, nor any of their respective directors, officers,
employees or agents has, with respect to any Plan, engaged in
any "prohibited transaction", as such term is defined in Sec-
tion 4975 of the Code or Section 406 of ERISA, nor has any Plan
engaged in any such prohibited transaction which could reason-
ably be expected to result in any taxes or penalties or pro-
hibited transactions under Section 4975 of the Code or under
-18-
<PAGE>
Section 502(i) of ERISA, which in the aggregate could reason-
ably be expected to have a Company Material Adverse Effect.
Copies of all of the Company's Plans covering United States
employees of the Company and any related trusts and summary
plan descriptions have been made available to the Purchaser.
Except as specifically contemplated by this Agreement, or as
provided in the SERP (as defined in Section 7.11), the Amended
and Restated Indemnification Agreements between the Company and
its directors and officers, the Option Plans or the EMASS
Option Plan, neither the execution and delivery of this Agree-
ment nor the consummation of the transactions contemplated
hereby will result in, cause the accelerated vesting or deliv-
ery of, or increase the amount or value of, any payment or
benefit to any employee or former employee of the Company or
any of its subsidiaries.
Section 5.11. Rights Agreement. The Board has taken
----------------
all necessary action (i) to provide that neither Parent nor the
Purchaser will become an "Acquiring Person," that no "Trigger-
ing Event," "Stock Acquisition Date" or "Distribution Date" (as
such terms are defined in the Rights Agreement) will occur and
that Section 13 of the Rights Agreement will not be triggered,
in each case as a result of the announcement, commencement or
consummation of the Offer, the execution or delivery of this
Agreement or any amendment hereto or the consummation of the
transactions contemplated hereby and (ii) to redeem the Rights
effective immediately prior to the Purchaser's acceptance of
Shares for purchase pursuant to the Offer.
Section 5.12. Information. None of the Schedule
-----------
14D-9, the Proxy Statement, if any, or any other document filed
or to be filed by or on behalf of the Company with the SEC or
any other governmental entity in connection with the transac-
tions contemplated by this Agreement contained when filed or
will, at the respective times filed with the SEC or other gov-
ernmental entity and, in addition, in the case of the Proxy
Statement, if any, at the date it or any amendment or supple-
ment is mailed to stockholders and at the time of any Special
Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not
misleading; provided that the foregoing shall not apply to in-
formation supplied by Parent or the Purchaser specifically for
inclusion or incorporation by reference in any such document.
The Schedule 14D-9 and the Proxy Statement, if any, will comply
as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder. None of
the information supplied by the Company specifically for in-
clusion or incorporation by reference in the Offer Documents or
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<PAGE>
in any other document filed or to be filed by or on behalf of
Parent or the Purchaser with the SEC or any other governmental
entity in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not
misleading.
Section 5.13. Delaware Section 203. The Board has
--------------------
taken all appropriate and necessary action such that the pro-
visions of Section 203 of the DGCL will not apply to any of the
transactions contemplated by this Agreement.
Section 5.14. Broker's Fees. Except for CS First
-------------
Boston Corporation and Morgan Stanley & Co. Incorporated, nei-
ther the Company nor any of its subsidiaries or any of its di-
rectors or officers has incurred any liability not already paid
and disclosed to Parent or will incur any liability for any
broker's fees, commissions, or financial advisory or finder's
fees in connection with any of the transactions contemplated by
this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND
THE PURCHASER
Parent and the Purchaser represent and warrant to the
Company as follows:
Section 6.01. Organization. Each of Parent and the
------------
Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of Delaware and each of Parent
and the Purchaser has all requisite corporate power and au-
thority to own, lease and operate its properties and to carry
on its business as now being conducted. Purchaser is a wholly
owned subsidiary of Parent.
Section 6.02. Authority. Each of Parent and the
---------
Purchaser has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions con-
templated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby
have been duly and validly authorized and approved by the Board
of Directors of each of Parent and the Purchaser and by Parent
as the sole stockholder of the Purchaser and no other corporate
proceedings are necessary to authorize this Agreement or the
consummation of the transactions contemplated hereby. This
-20-
<PAGE>
Agreement has been duly and validly executed and delivered by
each of Parent and the Purchaser and, assuming this Agreement
constitutes a legal, valid and binding agreement of the Com-
pany, it constitutes a legal, valid and binding agreement of
each of Parent and the Purchaser, enforceable against them in
accordance with its terms.
Section 6.03. No Violations; Consents and Approvals.
-------------------------------------
(a) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor
compliance by Parent or the Purchaser with any of the provi-
sions hereof will (i) violate any provision of their respective
certificates of incorporation or by-laws, (ii) result in a
violation or breach of, or constitute (with or without due no-
tice or lapse of time or both) a default, or give rise to any
right of termination, cancellation or acceleration or any right
which becomes effective upon the occurrence of a merger, under,
any of the terms, conditions or provisions of any note, bond,
mortgage, indenture or other instrument of indebtedness for
money borrowed to which Parent or the Purchaser is a party, or
by which Parent or the Purchaser or any of their respective
properties is bound, (iii) result in a violation or breach of,
or constitute (with or without due notice or lapse of time or
both) a default, or give rise to any right of termination,
cancellation or acceleration or any right which becomes effec-
tive upon the occurrence of a merger, under, any of the terms,
conditions or provisions of any license, franchise, permit or
agreement to which Parent or the Purchaser is a party, or by
which Parent or the Purchaser or any of their respective prop-
erties is bound, or (iv) violate any statute, rule, regulation,
order or decree of any public body or authority by which Parent
or the Purchaser or any of its respective properties is bound,
excluding from the foregoing clauses (ii), (iii) and (iv) vio-
lations, breaches, defaults or rights which, either individu-
ally or in the aggregate, would not have a material adverse
effect on Parent's or the Purchaser's ability to perform their
respective obligations pursuant to this Agreement or consummate
the Offer and the Merger (a "Parent Material Adverse Effect")
or for which Parent or the Purchaser has received appropriate
consents or waivers.
(b) No filing or registration with, notification to,
or authorization, consent or approval of, any governmental en-
tity is required by Parent or the Purchaser in connection with
the execution and delivery of this Agreement, or the consumma-
tion by Parent or the Purchaser of the transactions contem-
plated hereby, except (i) expiration of the waiting period un-
der the HSR Act, (ii) in connection, or in compliance, with the
provisions of the Exchange Act, (iii) the filing of the Cer-
tificate of Merger with the Delaware Secretary of State, (iv)
-21-
<PAGE>
such filings and consents as may be required under any envi-
ronmental law pertaining to any notification, disclosure or
required approval triggered by the Merger or the transactions
contemplated by this Agreement, (v) such consents, approvals,
orders, authorizations, notifications, approvals, registra-
tions, declarations and filings as may be required under the
corporation, takeover or blue sky laws of various states [or
non-U.S. change-in-control laws or regulations] and (vi) such
other consents, orders, authorizations, registrations, decla-
rations and filings not obtained prior to the Effective Time
the failure of which to be obtained or made would not, indi-
vidually or in the aggregate, have a Parent Material Adverse
Effect.
Section 6.04. Information. Neither the Offer Docu-
-----------
ments nor any other document filed or to be filed by or on be-
half of Parent or the Purchaser with the SEC or any other gov-
ernmental entity in connection with the transactions contem-
plated by this Agreement contained when filed or will, at the
respective times filed with the SEC or other governmental en-
tity, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not
misleading; provided that the foregoing shall not apply to in-
formation supplied by the Company specifically for inclusion or
incorporation by reference in any such document. The Offer
Documents will comply as to form in all material respects with
the provisions of the Exchange Act and the rules and regula-
tions thereunder. None of the information supplied by Parent
or the Purchaser specifically for inclusion or incorporation by
reference in the Schedule 14D-9, the Proxy Statement, if any,
or any other document filed or to be filed by or on behalf of
the Company with the SEC or any other governmental entity in
connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or nec-
essary in order to make the statements made therein, in light
of the circumstances under which they were made, not mislead-
ing.
Section 6.05. Broker's Fees. Except for Bear,
-------------
Stearns & Co. Inc., neither Parent nor the Purchaser, nor any
of their respective subsidiaries or directors or officers, has
incurred or will incur any liability for any broker's fees,
commissions, or financial advisory or finder's fees in connec-
tion with any of the transactions contemplated by this Agree-
ment.
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<PAGE>
Section 6.06. Financing. Parent or the Purchaser
---------
will have at the time of acceptance for payment and purchase of
Shares under the Offer and at the Effective Time, the funds
necessary to consummate the Offer and the Merger and the
transactions contemplated thereby and to pay related fees and
expenses.
ARTICLE VII
COVENANTS
Section 7.01. Conduct of Business of the Company.
----------------------------------
Except as contemplated by this Agreement or as expressly agreed
to in writing by Parent, during the period from the date of
this Agreement to the Control Date, each of the Company and its
subsidiaries will conduct its operations according to its or-
dinary course of business consistent with past practice, and
will use commercially reasonable efforts to preserve intact its
business organization, to keep available the services of its
key employees and to maintain satisfactory relationships with
suppliers, distributors, customers and others having material
business relationships with it and will take no action not re-
quired by law which would materially adversely affect the
ability of the parties to consummate the transactions contem-
plated by this Agreement or be materially inconsistent with
such transactions. The Company shall make such notifications
to the U.S. Department of Defense and certain other classified
customers of the Company as the Company determines are neces-
sary to comply with the foregoing covenant.
Section 7.02. Acquisitions and Divestitures. Prior
-----------------------------
to the Control Date, the Company shall keep Parent advised of
the status of all discussions and negotiations concerning pos-
sible acquisitions and divestitures by the Company or any of
its subsidiaries of any corporations or businesses, and the
Company agrees that without the prior written consent of Parent
it shall not make, or agree to make, any such acquisition or
divestiture; provided that the foregoing restriction shall not
apply to the transactions involving Asta and ATM previously
disclosed by the Company to Parent. Other acquisition or dis-
position transactions will be determined by mutual agreement
after consultation between the chief executive officers of
Parent and the Company.
Section 7.03. No Solicitation. (a) The Company
---------------
agrees that, prior to the Effective Time, it shall not, and
shall not authorize or permit any of its subsidiaries or any of
its or its subsidiaries' directors, officers, employees, agents
-23-
<PAGE>
or representatives, directly or indirectly, to solicit, ini-
tiate, facilitate or encourage (including by way of furnishing
or disclosing non-public information) any inquiries or the
making of any proposal with respect to any merger, consolida-
tion or other business combination involving the Company or its
subsidiaries or acquisition of all or substantially all of the
assets or capital stock of the Company and its subsidiaries
taken as a whole (an "Acquisition Transaction") or negotiate,
explore or otherwise engage in substantive discussions with any
person (other than Parent, the Purchaser or their respective
directors, officers, employees, agents and representatives)
with respect to any Acquisition Transaction or enter into any
agreement, arrangement or understanding requiring it to aban-
don, terminate or fail to consummate the Merger or any other
transactions contemplated by this Agreement; provided that the
Company may, in response to an unsolicited written proposal
with respect to an Acquisition Transaction from a third party,
furnish information to, and negotiate, explore or otherwise
engage in substantive discussions with such third party, and
enter into any such agreement, arrangement or understanding, in
each case only if the Board determines in good faith by a ma-
jority vote, after consultation with its financial advisors and
outside legal counsel of the Company, that failing to take such
action would create a reasonable possibility of a breach of the
fiduciary duties of the Board in connection with seeking an Ac-
quisition Transaction that is more favorable to the stockhold-
ers of the Company than the Offer and the Merger.
(b) The Company shall immediately advise Parent in
writing of the receipt of any inquiries or proposals relating
to an Acquisition Transaction and any actions taken pursuant to
Section 7.03(a), unless the Board determines in good faith by a
majority vote, after consultation with its outside legal
counsel, that taking such action would create a reasonable
possibility of a breach of the fiduciary duties of the Board in
connection with seeking an Acquisition Transaction that is more
favorable to the stockholders of the Company than the Offer and
the Merger.
Section 7.04. Access to Information. From the date
---------------------
of this Agreement until the Effective Time, and subject to any
access, disclosure, copying or other limitations imposed by
applicable law or the terms of any of the Company's or its
subsidiaries' classified contracts (including any such con-
tracts or arrangements with the U.S. or foreign governments),
the Company will give Parent and its authorized representatives
(including counsel, environmental and other consultants, ac-
countants and auditors) access during normal business hours
upon reasonable prior notice to all facilities, personnel and
operations and to all books and records of the Company and its
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<PAGE>
subsidiaries, will permit Parent to make such inspections as it
may reasonably require and will cause its officers and those of
its subsidiaries to furnish Parent with such financial and op-
erating data and other information with respect to its business
and properties as Parent may from time to time reasonably re-
quest. Parent agrees that any information furnished to it, its
subsidiaries or its authorized representatives pursuant to this
Section 7.04 will be subject to the provisions of the letter
agreement dated January 23, 1995 between Parent and the Company
(the "Confidentiality Agreement").
Section 7.05. Reasonable Best Efforts; Other Ac-
----------------------------------
tions. Subject to the terms and conditions herein provided and
-----
applicable law, each of the Company, Parent and the Purchaser
shall use its reasonable best efforts promptly to take, or
cause to be taken, all other actions and do, or cause to be
done, all other things necessary, proper or appropriate under
applicable laws and regulations to consummate and make effec-
tive the transactions contemplated by this Agreement, includ-
ing, without limitation, using such reasonable best efforts to
(i) obtain all necessary consents, approvals or waivers under
its material contracts and (ii) lift any legal bar to the
Merger; provided, however, that the foregoing shall not require
Parent, the Purchaser or any other affiliate of Parent to agree
to any action or restriction which, if imposed by a governmen-
tal entity, would constitute a condition described in paragraph
(a) of Annex I to this Agreement.
Section 7.06. Public Announcements. Before issuing
--------------------
any press release or otherwise making any public statements
with respect to this Agreement, the Offer or the Merger, Par-
ent, the Purchaser and the Company will consult with each other
as to its form and substance and shall not issue any such press
release or make any such public statement prior to such con-
sultation, except in either case as may be required by law or
any obligations pursuant to any listing agreement with any na-
tional securities exchange.
Section 7.07. Notification of Certain Matters. Each
-------------------------------
of the Company and Parent shall give prompt notice to the other
party of (i) the occurrence, or non-occurrence, of any event
the occurrence, or non-occurrence, of which would be likely to
cause either (A) any representation or warranty of any party
contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the
acceptance for payment of Shares pursuant to the Offer, (B) any
condition set forth in Annex I to be unsatisfied in any mate-
rial respect at any time from the date hereof to the date the
Purchaser purchases Shares pursuant to the Offer or (C) any
condition set forth in Article VIII hereof to be unsatisfied in
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<PAGE>
any material respect at any time from the date hereof to the
Effective Time, and (ii) any material failure of the Company or
Parent, as the case may be, or any officer, director, employee
or agent thereof, to comply with or satisfy any covenant, con-
dition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice
pursuant to this Section 7.07 shall not limit or otherwise
affect the remedies available hereunder to the party receiving
such notice.
Section 7.08. Indemnification. (a) From and after
---------------
the Effective Time, Parent shall, and shall cause the Surviving
Corporation to, indemnify, defend and hold harmless the present
and former officers, directors, employees and agents of the
Company and its subsidiaries (the "Indemnified Parties")
against all losses, claims, damages, expenses or liabilities
arising out of or related to actions or omissions or alleged
actions or omissions occurring at or prior to the Effective
Time (i) to the full extent permitted by Delaware law or, if
the protections afforded thereby to an Indemnified Person are
greater, (ii) to the same extent and on the same terms and
conditions (including with respect to advancement of expenses)
provided for in the Company's Certificate of Incorporation and
By-Laws and agreements in effect at the date hereof (to the
extent consistent with applicable law), which provisions will
survive the Merger and continue in full force and effect after
the Effective Time. Without limiting the foregoing, (i) Parent
shall, and shall cause the Surviving Corporation to, periodi-
cally advance expenses (including attorney's fees) as incurred
by an Indemnified Person with respect to the foregoing to the
full extent permitted under applicable law, and (ii) any de-
termination required to be made with respect to whether an In-
demnified Party shall be entitled to indemnification shall, if
requested by such Indemnified Party, be made by independent
legal counsel selected by the Surviving Corporation and rea-
sonably satisfactory to such Indemnified Party.
(b) For a period of six years after the Effective
Time, Parent shall cause to be maintained in effect the current
policies of directors' and officers' liability insurance main-
tained by the Company (provided that Parent may substitute
therefor policies with reputable and financially sound carriers
of at least the same coverage and amounts containing terms and
conditions which are no less advantageous) with respect to
claims arising from or related to facts or events which oc-
curred at or before the Effective Time; provided, however, that
Parent shall not be obligated to make annual premium payments
for such insurance to the extent such premiums exceed 250% of
the annual premiums paid as of the date hereof by the Company
for such insurance (the "Maximum Amount"). If the amount of
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<PAGE>
the annual premiums necessary to maintain or procure such in-
surance coverage exceeds the Maximum Amount, Parent and the
Surviving Corporation shall maintain the most advantageous
policies of directors' and officers' insurance obtainable for
an annual premium equal to the Maximum Amount.
(c) The provisions of this Section 7.08 are intended
to be for the benefit of, and shall be enforceable by each In-
demnified Party, his or her heirs and his or her representa-
tives.
Section 7.09. Expenses. Except as set forth in
--------
Section 9.05(b) hereof, Parent and the Company shall bear their
respective expenses incurred in connection with this Agreement,
the Offer and the Merger, including, without limitation, the
preparation, execution and performance of this Agreement and
the transactions contemplated hereby, and all fees and expenses
of investment bankers, finders, brokers, agents, representa-
tives, counsel and accountants.
Section 7.10. Rights Agreement. Except as contem-
----------------
plated by Section 5.11 hereof, the Company shall not redeem the
Rights or amend or terminate the Rights Agreement prior to the
consummation of the Offer unless (i) required to do so by order
of a court of competent jurisdiction (ii) the Board determines
in good faith by a majority vote that the failure to make such
redemption, amendment or termination would create a reasonable
possibility of a breach of the Board's fiduciary duties under
applicable law or (iii) this Agreement has theretofore been
terminated.
Section 7.11. Employee Benefits. (a) Following the
-----------------
consummation of the Offer, (i) Purchaser shall cause the Com-
pany to honor in accordance with their terms the employment
contracts and other arrangements set forth on Schedule 7.11,
the Company's Executive Supplemental Retirement Plan ("SERP"),
the Trust Agreement between the Company and Society National
Bank dated as of May 19, 1994, and the Trust Agreement between
the Company and AmeriTrust Company National Association dated
as of June 23, 1987, as amended, in each case as in effect on
the date hereof and as amended as contemplated by this Agree-
ment, and (ii) Parent shall unconditionally guarantee the
prompt payment when due of all amounts payable pursuant to the
terms of the aforementioned employment contracts and the SERP,
including any costs incurred by employees or former employees
(or their respective beneficiaries) in enforcing their rights
under such contracts or under the SERP. The provisions of the
preceding sentence are intended to be for the benefit of, and
shall be enforceable by, each of the employees and former em-
ployees (and their respective beneficiaries) who are parties to
-27-
<PAGE>
such employment contracts or such other arrangements, who are
participants in the SERP or such other arrangements, or who are
beneficiaries under either of such Trust Agreements.
(b) Until the third anniversary of the Effective
Time, Purchaser shall provide or cause the Company to provide
to individuals who are employed by the Company or any of its
subsidiaries employee benefits that are in the aggregate no
less favorable than those provided to them as of the date
hereof. Without limiting the generality of the foregoing,
Parent agrees that, following the Effective Time, employees of
the Surviving Corporation shall be eligible to participate in
Parent's various compensation plans on a basis comparable to
that of similarly situated employees of Parent and its
subsidiaries.
(c) Before the consummation of the Offer, the Com-
pany shall take all steps necessary to ensure that none of the
transactions contemplated by this Agreement shall constitute or
result in a "Change of Control" as defined in the Company's
Salaried Employees Retirement Plan and HRB Systems, Inc. Sala-
ried Employees Retirement Plan.
(d) Parent and Purchaser agree that prior to the
consummation of the Offer, the Board (and following consumma-
tion of the Offer and prior to the Effective Time, a majority
of the Continuing Directors) may (i) amend the ESOP to provide
for full vesting of all account balances and allocations of all
unallocated shares, or the proceeds thereof, as of the Effec-
tive Time, and to make other technical or administrative
amendments related thereto, (ii) terminate the ESOP as of the
Effective Time and provide for the orderly liquidation of the
assets thereof or, with the consent of Purchaser (which consent
shall not be unreasonably withheld), merge the ESOP with and
into another tax-qualified plan, (iii) amend the Company's
Employee Savings Plan to increase, as of the Effective Time,
the Company's contributions thereunder to reflect any cessation
of ESOP contributions (net of contributions for the benefit of
employees of the Surviving Corporation under Parent's employee
stock ownership plan ("Parent's ESOP"), as described in the
succeeding sentence), (iv) authorize amendments to the employ-
ment contract with the Company's Chairman and Chief Executive
Officer to provide that such individual shall serve as Chief
Executive Officer of the Surviving Corporation following the
Effective Time and (unless he earlier resigns) for a period of
3 years thereafter. Parent and the Purchaser agree that if
contributions to the ESOP cease on or after the Effective Time,
then as of the date of such cessation, the employees of the
Surviving Corporation and its subsidiaries who would otherwise
have been eligible to receive allocations under the ESOP shall
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<PAGE>
be eligible to participate in Parent's ESOP as of the date of
such cessation. For purposes of the preceding sentence, all
service with the Company and its subsidiaries shall be recog-
nized for eligibility and vesting purposes.
(e) Parent recognizes that the Company's business
presents special situations with respect to the retention and
recruitment of employees and executives and Parent agrees that
the Chief Executive Officer of the Company may from time to
time propose special arrangements for such employees and execu-
tives for consideration by Parent. Parent also recognizes that
there are approximately 20 key executives of the Company who,
in accordance with the usual procedures of the Compensation
Committee of Parent, will receive appropriate consideration in
connection with the grant of stock options by Parent at the
customary time in July 1995.
Section 7.12. Board Representation. At the Effec-
--------------------
tive Time or as soon as practicable thereafter, Parent shall
use its best efforts and take all reasonable steps to cause A.
Lowell Lawson to be appointed as a director of Parent for a
term ending at the 1998 annual meeting of stockholders of
Parent.
Section 7.13. Maintenance of the Company's Head-
----------------------------------
quarters and Separate Identity. It is Parent's and the Pur-
------------------------------
chaser's present intent to operate the Company as a subsidiary
of Parent under the Company's current name, with the same man-
agement and organizational structure and in its current head-
quarters in Dallas, Texas.
Section 7.14. EMASS. Parent and the Purchaser
-----
acknowledge that they have been informed of the Company's
business plan for EMASS and that they are aware of the Com-
pany's commitment to implement that plan so long as it rep-
resents sound business judgment. Although Parent does not
currently have sufficient information to commit to a specific
course of action, Parent and the Purchaser currently plan to
pursue and implement, within the same time frames and upon the
same terms and conditions, that portion of such business plan
that contemplates a public offering, spin-off or similar
transaction with respect to the capital stock of EMASS so long
as the management of the Purchaser and Parent concur with the
management of the Company that plan implementation represents
the exercise of sound business judgment.
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<PAGE>
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF PARENT,
THE PURCHASER AND THE COMPANY
The respective obligations of each party to effect
the Merger shall be subject to the satisfaction or, if permis-
sible, waiver at or prior to the Effective Time of each of the
following conditions:
Section 8.01. Purchase of Shares. The Purchaser
------------------
shall have accepted for payment and paid for Shares pursuant to
the Offer in accordance with the terms thereof; provided that
this condition shall be deemed to have been satisfied with re-
spect to the obligation of Parent and the Purchaser to effect
the Merger if the Purchaser fails to accept for payment or pay
for Shares pursuant to the Offer in violation of the terms of
the Offer or of this Agreement.
Section 8.02. Stockholder Approval. The vote of the
--------------------
stockholders of the Company necessary to consummate the trans-
actions contemplated by this Agreement shall have been ob-
tained, if required by applicable law.
Section 8.03. No Legal Impediments. No statute,
--------------------
rule, regulation, judgment, writ, decree, order or injunction
shall have been promulgated, enacted, entered or enforced, and
no other action shall have been taken, by any domestic, foreign
or supranational government or governmental, administrative or
regulatory authority or agency of competent jurisdiction or by
any court or tribunal of competent jurisdiction, domestic,
foreign or supranational, that in any of the foregoing cases
has the effect of making illegal or directly or indirectly
restraining, prohibiting or restricting the consummation of the
Merger.
ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.01. Termination. This Agreement may be
-----------
terminated (and the Merger contemplated hereby may be abandoned
notwithstanding approval thereof by the stockholders of the
Company) at any time prior to the Effective Time:
(a) by mutual written consent of the Boards of Di-
rectors of Parent and the Company;
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<PAGE>
(b) by either Parent or the Company if, without any
material breach of such terminating party of its obliga-
tions under this Agreement, the purchase of Shares pursu-
ant to the Offer shall not have occurred on or before
September 30, 1995, which date may be extended by mutual
written consent of the parties hereto;
(c) by Parent or the Company if the Offer expires or
is terminated or withdrawn pursuant to its terms without
any Shares being purchased thereunder; provided, however,
that Parent may not terminate this Agreement pursuant to
this Section 9.01(c) if Parent's or the Purchaser's ter-
mination of, or failure to accept for payment or pay for
any Shares tendered pursuant to, the Offer does not follow
the occurrence, or failure to occur, as the case may be,
of any condition set forth in Annex I hereto or is other-
wise in violation of the terms of the Offer or this
Agreement;
(d) by either Parent or the Company if any court of
competent jurisdiction in the United States or other gov-
ernmental body in the United States shall have issued an
order (other than a temporary restraining order), decree
or ruling or taken any other action restraining, enjoining
or otherwise prohibiting the purchase of Shares pursuant
to the Offer or the Merger, and such order, decree, ruling
or other action shall have become final and nonappealable;
provided that the party seeking to terminate this Agree-
ment shall have used its reasonable best efforts, subject
to Section 7.05, to remove or lift such order, decree or
ruling; or
(e) by the Company if the Offer has not been timely
commenced in accordance with Section 1.01(a) hereof.
Section 9.02. Termination by Parent. This Agreement
---------------------
may be terminated and the Offer and the Merger may be abandoned
by action of the Board of Directors of Parent, at any time
prior to the purchase of Shares pursuant to the Offer, if (a)
the Board shall withdraw, modify or change its recommendation
or approval in respect of this Agreement or the Offer in a
manner adverse to Parent, (b) the Board shall have recommended
any proposal other than by Parent or the Purchaser in respect
of an Acquisition Transaction or (c) any corporation, partner-
ship, person, other entity or group (as defined in Section
13(d)(3) of the Exchange Act) other than Parent or the Pur-
chaser or any of their respective subsidiaries or affiliates
shall have become the beneficial owner of more than 20% of the
outstanding Shares (either on a primary or a fully diluted
basis).
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<PAGE>
Section 9.03. Termination by the Company. This
--------------------------
Agreement may be terminated and the Merger may be abandoned by
action of the Board, at any time prior to the Effective Time,
(a) if there shall be a material breach of any of Parent's or
the Purchaser's representations, warranties or covenants here-
under, which breach shall not be cured within ten days of no-
tice thereof, or (b) to allow the Company to enter into an
agreement in respect of an Acquisition Transaction which the
Board has determined is more favorable to the Company and its
stockholders than the transactions contemplated hereby (pro-
vided that the termination described in this clause (b) shall
not be effective unless and until the Company shall have paid
to Parent the fee described in Section 9.05(b) hereof).
Section 9.04. Procedure for Termination. In the
-------------------------
event of termination and abandonment of the Merger and the Of-
fer by Parent or the Merger by the Company pursuant to this
Article IX, written notice thereof shall forthwith be given to
the other.
Section 9.05. Effect of Termination. (a) In the
---------------------
event of termination of this Agreement pursuant to this Article
IX, the Merger shall be deemed abandoned and this Agreement
shall forthwith become void, without liability on the part of
any party hereto except as provided in this Section 9.05 and
Sections 1.02(c) and 7.09 and the last sentence of Section
7.04, except that nothing herein shall relieve any party from
liability for any breach of this Agreement.
(b) If (i) Parent shall have terminated this Agree-
ment pursuant to Section 9.02 hereof or (ii) the Company shall
have terminated this Agreement pursuant to Section 9.03(b)
hereof, then in either such case the Company shall promptly,
but in no event later than two business days after the date of
such termination or event, pay Parent a termination fee of
$75,000,000 plus an amount, not in excess of $20,000,000, equal
to Parent's actual and reasonably documented out-of-pocket
expenses directly attributable to the negotiation and execution
of this Agreement and the attempted financing and completion of
the Offer and the Merger, which amount shall be payable in same
day funds, provided, that no fee or expense reimbursement shall
be paid pursuant to this Section 9.05(b) if Parent shall be in
material breach of its obligations hereunder. In no event
shall the Company be required to pay more than one termination
fee and reimbursement of expenses pursuant to this Section
9.05(b).
-32-
<PAGE>
ARTICLE X
DEFINITIONS
Section 10.01. Terms Defined in the Agreement. The
following terms used herein shall have the meanings ascribed in
the indicated sections.
<TABLE>
<S> <C>
Acquisition Transaction.......................... 7.03(a)
Agreement........................................ Preamble
Board............................................ Recitals
Certificate of Merger............................ 2.02
Certificates..................................... 4.02(a)
Code............................................. 5.09
Company.......................................... Preamble
Company Material Adverse Effect.................. 5.01
Company Permits.................................. 5.08
Company Preferred Stock.......................... 5.02
Constituent Corporations......................... Preamble
Continuing Directors............................. 1.03(c)
Control Date..................................... 1.03(a)
Delaware Secretary of State...................... 2.02
DGCL............................................. Recitals
Dissenting Shares................................ 4.01
Effective Time................................... 2.02
EMASS............................................ 5.02
EMASS Option Plan................................ 5.02
ERISA............................................ 5.10
Exchange Act..................................... 1.01(a)
HSR Act.......................................... 5.04(b)
Merger........................................... 2.01(a)
Merger Price..................................... 3.01
Minimum Condition................................ Annex I
Offer............................................ 1.01(a)
Offer Documents.................................. 1.01(c)
Option Plans..................................... 3.02(a)
Options.......................................... 3.02(a)
Parent........................................... Preamble
Parent Material Adverse Effect................... 6.03(a)
Paying Agent..................................... 4.02(a)
person........................................... 11.09
Plans............................................ 5.10
Proxy Statement.................................. 3.03(a)(ii)
Purchaser........................................ Preamble
Rights........................................... 1.01(a)
Rights Agreement................................. 1.01(a)
Schedule 14D-9................................... 1.02(b)
SEC.............................................. 1.01(c)
SEC Documents.................................... 5.05(a)
Shares........................................... 1.01(a)
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Significant Subsidiary........................... 5.01
Special Meeting.................................. 3.03(a)(i)
subsidiary....................................... 11.09
Surviving Corporation............................ 2.01(a)
Tax.............................................. 5.09
</TABLE>
ARTICLE XI
MISCELLANEOUS
Section 11.01. Amendment and Modification. At any
--------------------------
time prior to the Effective Time, subject to applicable law and
the provisions of Section 1.03(c) hereof, this Agreement may be
amended, modified or supplemented only by written agreement
(referring specifically to this Agreement) of Parent, the Pur-
chaser and the Company with respect to any of the terms con-
tained herein; provided, however, that after any approval and
adoption of this Agreement by the stockholders of the Company,
no such amendment, modification or supplementation shall be
made which reduces the Merger Price or the form of consider-
ation therefor or which in any way materially adversely affects
the rights of such stockholders, without the further approval
of such stockholders.
Section 11.02. Waiver. At any time prior to the
------
Effective Time, Parent and the Purchaser, on the one hand, and
the Company, on the other hand, may (i) extend the time for the
performance of any of the obligations or other acts of the
other, (ii) waive any inaccuracies in the representations and
warranties of the other contained herein or in any documents
delivered pursuant hereto and (iii) waive compliance by the
other with any of the agreements or conditions contained herein
which may legally be waived. Any such extension or waiver
shall be valid only if set forth in an instrument in writing
specifically referring to this Agreement and signed on behalf
of such party.
Section 11.03. Survivability; Investigations. The
-----------------------------
respective representations and warranties of Parent, the Pur-
chaser and the Company contained herein or in any certificates
or other documents delivered prior to or as of the Effective
Time (i) shall not be deemed waived or otherwise affected by
any investigation made by any party hereto and (ii) shall not
survive beyond the Effective Time. The covenants and agree-
ments of the parties hereto (including the Surviving Corpora-
tion after the Merger) shall survive the Effective Time without
limitation (except for those which, by their terms, contemplate
a shorter survival period).
-34-
<PAGE>
Section 11.04. Notices. All notices and other com-
-------
munications hereunder shall be in writing and shall be deliv-
ered personally or by next-day courier or telecopied with con-
firmation of receipt, to the parties at the addresses specified
below (or at such other address for a party as shall be speci-
fied by like notice; provided that notices of a change of ad-
dress shall be effective only upon receipt thereof). Any such
notice shall be effective upon receipt, if personally delivered
or telecopied, or one day after delivery to a courier for next-
day delivery.
(a) if to the Company, to
E-Systems, Inc.
6250 LBJ Freeway
Dallas, Texas 75240
Telecopy: (214) 392-4890
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telecopy: (212) 735-2000
Attention: Peter A. Atkins, Esq.
(b) if to Parent or the Purchaser, to
Raytheon Company
141 Spring Street
Lexington, Massachusetts 02173
Telecopy: (617) 860-2924
Attention: Thomas D. Hyde, Vice President
and General Counsel
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: (212) 403-2000
Attention: Elliott V. Stein, Esq.
Section 11.05. Assignment. This Agreement and all
----------
of the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors
and permitted assigns, but neither this Agreement nor any of
-35-
<PAGE>
the rights, interests or obligations hereunder shall be as-
signed by any of the parties hereto without the prior written
consent of the other parties. This Agreement, except for the
provisions of Sections 1.03(d), 3.02(a), 7.08, 7.11(a) and 7.12
(which are intended to be for the benefit of the persons iden-
tified therein, and may be enforced by such persons), is not
intended to confer any rights or remedies hereunder upon any
other person except the parties hereto.
Section 11.06. Governing Law. This Agreement shall
-------------
be governed by the laws of the State of Delaware (regardless of
the laws that might otherwise govern under applicable Delaware
principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect,
performance and remedies.
Section 11.07. Counterparts. This Agreement may be
------------
executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument.
Section 11.08. Severability. In case any one or
------------
more of the provisions contained in this Agreement should be
invalid, illegal or unenforceable in any respect against a
party hereto, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby and such invalidity, illegality or
unenforceability shall only apply as to such party in the spe-
cific jurisdiction where such judgment shall be made.
Section 11.09. Interpretation. The article and
--------------
section headings contained in this Agreement are solely for the
purpose of reference, are not part of the agreement of the
parties and shall not in any way affect the meaning or inter-
pretation of this Agreement. As used in this Agreement, (i)
the term "person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unin-
corporated organization and a government or any department or
agency thereof; and (ii) the term "subsidiary" of any specified
corporation shall mean any corporation of which a majority of
the outstanding securities having ordinary voting power to
elect a majority of the board of directors are directly or in-
directly owned by such specified corporation or any other per-
son of which a majority of the equity interests therein are,
directly or indirectly, owned by such specified corporation.
Section 11.10. Guarantee. Parent hereby guarantees
---------
the due performance by the Purchaser of all of the Purchaser's
obligations (including obligations to cause the Company to take
-36-
<PAGE>
or refrain from taking action) under this Agreement or incurred
in connection with the Offer and the Merger.
Section 11.11. Post-Control Date Actions. Notwith-
-------------------------
standing anything in this Agreement to the contrary, from and
after the Control Date the Company shall not be deemed for
purposes hereof to be in breach of this Agreement if such
breach was caused by Parent in its capacity as the controlling
stockholder of the Company or by action of the Board taken with
the approval of a majority of Parent's designees thereto.
Section 11.12. Entire Agreement. This Agreement,
----------------
including the schedules, annexes and exhibits hereto and the
documents and instruments referred to herein and therein, to-
gether with the Confidentiality Agreement, embodies the entire
agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein and supersedes
all prior agreements and understandings between the parties
with respect to such subject matter. There are no representa-
tions, promises, warranties, covenants, or undertakings in re-
spect of such subject matter, other than those expressly set
forth or referred to herein and therein.
-37-
<PAGE>
IN WITNESS WHEREOF, Parent, the Purchaser and the
Company have caused this Agreement to be signed by their re-
spective duly authorized officers as of the date first above
written.
RAYTHEON COMPANY
By: /s/ David S. Dwelley
--------------------------
Name:
Title:
RTN ACQUISITION CORPORATION
By: /s/ Herbert Deitcher
--------------------------
Name:
Title:
E-SYSTEMS, INC.
By: /s/ A. Lowell Lawson
--------------------------
Name:
Title:
-38-
<PAGE>
ANNEX I
Conditions to the Offer. Notwithstanding any other
-----------------------
provision of the Offer, the Purchaser shall not be required to
accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) promulgated
under the Exchange Act (relating to the Purchaser's obligation
to pay for or return tendered Shares promptly after termination
or withdrawal of the Offer), pay for, and (subject to any such
rules or regulations) may delay the acceptance for payment of
any tendered Shares and (except as provided in this Agreement)
amend or terminate the Offer as to any Shares not then paid for
if (i) the condition that there shall be validly tendered and
not withdrawn prior to the expiration of the Offer a number of
Shares which represents at least a majority of the number of
Shares outstanding on a fully diluted basis (assuming the
exercise of all outstanding Options) shall not have been sat-
isfied (the "Minimum Condition") or (ii) any applicable waiting
period under the HSR Act shall not have expired or been termi-
nated prior to the expiration of the Offer or (iii) at any time
after the date of this Merger Agreement and before the time of
payment for any such Shares (whether or not any Shares have
theretofore been accepted for payment or paid for pursuant to
the Offer), any of the following conditions exists:
(a) there shall be in effect an injunction or other
order, decree, judgment or ruling by a court of competent ju-
risdiction or by a governmental, regulatory or administrative
agency or commission of competent jurisdiction or a statute,
rule, regulation, executive order or other action shall have
been promulgated, enacted, taken or threatened by a governmen-
tal authority or a governmental, regulatory or administrative
agency or commission of competent jurisdiction which in any
such case (i) restrains or prohibits the making or consummation
of the Offer or the consummation of the Merger, (ii) prohibits
or restricts the ownership or operation by Parent or the Pur-
chaser (or any of their respective affiliates or subsidiaries)
of any portion of its or the Company's business or assets which
is material to the business of all such entities taken as a
whole, or compels Parent or the Purchaser (or any of their re-
spective affiliates or subsidiaries) to dispose of or hold
separate any portion of its or the Company's business or assets
which is material to the business of all such entities taken as
a whole, (iii) imposes material limitations on the ability of
the Purchaser effectively to acquire or to hold or to exercise
full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by the Pur-
chaser on all matters properly presented to the stockholders of
the Company, (iv) imposes any material limitations on the
ability of Parent or the Purchaser or any of their respective
<PAGE>
affiliates or subsidiaries effectively to control in any mate-
rial respect the business and operations of the Company and its
subsidiaries, or (v) which otherwise would materially adversely
affect the Company and its subsidiaries taken as a whole; or
(b) this Agreement shall have been terminated by the
Company, Parent or the Purchaser in accordance with its terms; or
(c) (i) the representations and warranties made by
the Company in this Agreement shall not have been true and
correct in all material respects when made, or shall have
ceased to be true and correct in all material respects as of
the Expiration Date (as defined in the Offer Documents) as if
made as of such date, or (ii) as of the Expiration Date the
Company shall not in all material respects have performed its
material obligations and agreements and complied with its ma-
terial covenants to be performed and complied with by it under
this Agreement; or
(d) there shall have occurred (i) any general sus-
pension of, or limitation on prices for, trading in securities
on any national securities exchange or the over-the-counter
market, (ii) a declaration of a banking moratorium or any sus-
pension of payments in respect of banks in the United States
(whether or not mandatory), (iii) from the date of this Merger
Agreement through the date of termination or expiration of the
Offer, a decline of at least 25% in the Standard & Poor's 500
Index, or (iv) in the case of any of the foregoing existing at
the time of the execution of this Agreement, a material ac-
celeration or worsening thereof; or
(e) Parent, the Purchaser and the Company shall have
agreed that the Purchaser shall amend the Offer to terminate
the Offer or postpone the payment for Shares pursuant thereto.
The foregoing conditions are for the sole benefit of
Parent and the Purchaser and may be asserted by Parent or the
Purchaser regardless of the circumstances (including any action
or inaction by Parent or the Purchaser) giving rise to any such
conditions and may be waived by Parent or the Purchaser in
whole or in part at any time and from time to time, in each
case, in the exercise of the good faith judgment of Parent and
the Purchaser and subject to the terms of this Agreement. The
failure by Parent or the Purchaser at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time.
-2-
