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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1/A
(AMENDMENT NO. 1)
TENDER OFFER STATEMENT
(PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
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VOICE CONTROL SYSTEMS, INC.
(NAME OF SUBJECT COMPANY)
VULCAN MERGER SUB, INC.
a wholly owned subsidiary of
PHILIPS ELECTRONICS NORTH AMERICA
CORPORATION
an indirectly owned subsidiary of
KONINKLIJKE PHILIPS ELECTRONICS N.V.
(ROYAL PHILIPS ELECTRONICS)
(BIDDERS)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
92861B100
(CUSIP NUMBER OF CLASS OF SECURITIES)
WILLIAM E. CURRAN
PRESIDENT
1251 AVENUE OF THE AMERICAS
20TH FLOOR
NEW YORK, NEW YORK 10020
212-536-0500
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
COPIES TO:
NEIL T. ANDERSON, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
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This Amendment No. 1 is filed to supplement and amend the information
set forth in the Tender Offer Statement on Schedule 14D-1 filed by Koninklijke
Philips Electronics N.V., a company incorporated under the laws of The
Netherlands ("Royal Philips"), Philips Electronics North America Corporation, a
Delaware corporation ("Parent"), and Vulcan Merger Sub, Inc., a Delaware
corporation (the "Purchaser"), on May 14, 1999 (the "Schedule 14D-1"), with
respect to shares of Common Stock, par value $0.01 per share (the "Shares"), of
Voice Control Systems, Inc., a Delaware corporation (the "Company"). Unless
otherwise indicated, the capitalized terms used herein shall have the meanings
specified in the Schedule 14D-1, including the Offer to Purchase filed as
Exhibit (a)(1) thereto.
Item 9. Financial Statements of Certain Bidders
1. Section 9 of the Offer to Purchase. The first paragraph below the table
on Page 13 is hereby deleted and replaced with the following:
Royal Philips' financial statements are prepared in
accordance with generally accepted accounting principles in The
Netherlands ("Dutch GAAP"), which differ in certain significant
respects from generally accepted accounting principles in the
U.S. ("U.S. GAAP"). The primary differences between Dutch GAAP
and U.S. GAAP as they relate to the Royal Philips' financial
information presented above are set forth below.
Under Dutch GAAP, goodwill arising from acquisitions prior
to 1992 was charged directly to stockholders' equity. According
to U.S. GAAP, goodwill arising from acquisitions, including those
prior to 1992, is capitalized and amortized over its useful life
up to a maximum period of 40 years. As a result of the sale of
PolyGram, goodwill has been fully amortized and charged to the
gain on disposal in 1998 income under U.S. GAAP.
Royal Philips reported a charge to income from operations of
NLG 726 million for restructurings in its 1998 financial
statements. A portion of this restructuring, NLG 89 million (NLG
51 million net of taxes), was not communicated to employees until
early 1999 and, accordingly, will be recorded under U.S. GAAP as
a charge in 1999. An identical restructuring charge for Grundig
was recorded in 1995 under Dutch GAAP for an amount of NLG 262
million, which under U.S. GAAP was reflected in the 1996
accounts. Until 1997 the Company had an obligation under certain
put options given to other shareholders in Grundig. For the
purposes of U.S. GAAP this liability was recorded in 1995,
whereas under Dutch GAAP it was accrued in 1996. Royal Philips
settled this obligation.
In 1998, Royal Philips reported a charge to net income of
NLG 74 million relating to a higher accumulated benefit
obligation compared to the market value of the plan assets or the
existing level of the pension provision in two of the Company's
pension plans. For U.S. GAAP purposes, this amount is capitalized
as an intangible asset for this additional minimum liability, or
directly charged to comprehensive income.
In July 1995, Royal Philips contributed its net assets of
cable networks, with a book value of approximately NLG 200
million, to UPC, a newly established joint venture in
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which Royal Philips had acquired a 50% interest. Under Dutch
GAAP, this transfer resulted in a gain of NLG 127 million
relating to the partial disposal of its interest in these assets
to the other joint venture party (UIH). For U.S. GAAP purposes,
this gain was not considered realized because the consideration
received by Royal Philips principally consisted of equity and
notes issued by UPC and equity in UIH, instead of cash. In 1997,
Royal Philips sold its 50% interest in this joint venture, the
gain of NLG 127 million on this transaction was recognized under
U.S. GAAP in 1997.
Under Dutch GAAP's historical cost convention, Royal Philips
generally considers the functional currency of entities in a
highly inflationary economy to be the U.S. dollar. Under U.S.
GAAP, the functional currency would be the reporting currency.
The difference between the use of the U.S. dollar as the
functional currency instead of the reporting currency is not
material.
Under Dutch GAAP, securities available for sale are valued
at the lower of cost or net realizable value. Under U.S. GAAP
they are valued at market price, unless such shares are
restricted by contract for a period of one year or more. Under
U.S. GAAP, unrealized holding gains or losses will be credited or
charged to stockholders' equity.
Under U.S. GAAP, it is not appropriate to record a liability
for dividends/distribution to shareholders subject to approval of
the Annual General Meeting of Shareholders.
Under Dutch GAAP, majority-owned entities are consolidated.
Under U.S. GAAP, consolidation of majority-owned entities is not
permitted if minority interest holders have the right to
participate in operating decisions of the entity. Although Royal
Philips owned 60% of Philips Consumer Communications under U.S.
GAAP the venture with Lucent Technologies could not be
consolidated but should have been accounted for under the equity
method.
Under Dutch GAAP, catalogues of recorded music, music
publishing rights, film rights and theatrical rights belonging to
PolyGram, which company was sold in 1998, were written down if
and to the extent that the present value of the expected income
generated by the acquired catalogues falls below their book
value. Under U.S. GAAP they were initially amortized over a
maximum period of 30 years. As a result of the sale of PolyGram,
the cumulative amortization has been credited to the gain on
disposal in 1998 income under U.S. GAAP.
According to U.S. GAAP, divestments which cannot be regarded
as discontinued segments of business must be included in income
from continuing operations. Under Dutch GAAP, certain material
transactions such as disposals of lines of activities, including
closures of substantial production facilities, have been
accounted for as extraordinary items, which under U.S. GAAP would
be recorded in income from operations.
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Under Dutch GAAP, funding of NavTech activities is accounted
for as results relating to unconsolidated companies whereas under
U.S. GAAP these amounts have to be included in income from
operations as research and development costs.
Item 10. Additional Information.
1. Item 10(b)-(c) of the Schedule 14D-1 is hereby amended as follows:
On May 18, 1999, Parent filed a Notification and Report Form
under the Hart-Scott-Rodino Antitrust Improvement Act of 1976
(the "HSR Act"). On May 26, 1999, Parent received notice of early
termination of the waiting period under the HSR Act. The
expiration of the waiting period was one of the conditions to the
Purchaser's obligations under the Agreement and Plan of Merger,
filed as Exhibit (c)(1) to the Schedule 14D-1, to accept for
payment and pay for the Shares tendered pursuant to the Offer to
Purchase.
2. Item 10(f) of the Schedule 14D-1 is hereby amended as follows:
(a) Section 8 of the Offer to Purchase. The second paragraph on Page
11 is hereby amended and restated as follows:
The Company has advised the Purchaser that it does not as a
matter of course make public any projections as to future
performance or earnings and the foregoing projections are
included in this Offer to Purchase only because this information
was provided to Royal Philips and Parent. The projections were
not prepared with a view to public disclosure or compliance with
the published guidelines of the SEC or the guidelines established
by the American Institute of Certified Public Accountants
regarding projections or forecasts. The projections were based on
estimates and assumptions that are inherently subject to
significant economic and competitive uncertainties, all of which
are difficult to predict and many of which are beyond the
Company's control. Accordingly, there can be no assurance that
the projected results can be realized or that actual results will
not be materially higher or lower than those projected. Neither
Royal Philips, Parent nor the Purchaser or their respective
advisors assumes any responsibility for the accuracy of the
projections. The inclusion of the foregoing projections should
not be regarded as an indication that the Company, Royal Philips,
Parent, the Purchaser or any other person who received such
information considers it an accurate prediction of future events.
Neither the Company, Royal Philips, Parent nor the Purchaser
intends to update, revise or correct such projections if they
become inaccurate.
(b) Section 11 of the Offer to Purchase. The first paragraph of
Section 11 on Page 16 and Page 17 is hereby amended and restated
as following:
Notwithstanding any other provision of the Offer, but
subject to the terms and conditions of the Merger Agreement,
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the Purchaser(x) 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 (y) may delay the acceptance for payment of
or (subject to such rules and regulations, including Rule
14e-1(c)) payment for, any tendered Shares, in each case (i)
majority of the total Shares outstanding on a fully diluted basis
and as will permit the Purchaser to effect the Merger without the
vote of any person other than the Purchaser shall not have been
properly and validly tendered pursuant to the Offer and not
withdrawn prior to the Expiration Date (the "Minimum Condition"),
or (ii) on or after the date of the Merger Agreement, and at or
prior to the Expiration Date, any of the following events shall
occur:
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SIGNATURES
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: June 2, 1999
KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ Eric P. Coutinho
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Name: Eric P. Coutinho
Title: Director and Deputy Secretary
PHILIPS ELECTRONICS HOLDING USA INC.
By: /s/ William E. Curran
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Name: William E. Curran
Title: Senior Vice President-Finance
PHILIPS ELECTRONICS NORTH AMERICA
CORPORATION
By: /s/ William E. Curran
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Name: William E. Curran
Title: Senior Vice President and
Chief Financial Officer
VULCAN MERGER SUB, INC.
By: /s/ William E. Curran
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Name: William E. Curran
Title: President and Chief Executive Officer
