<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
(AMENDMENT NO. 8)
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
VLSI TECHNOLOGY, INC.
(NAME OF SUBJECT COMPANY)
KPE ACQUISITION INC.
KONINKLIJKE PHILIPS ELECTRONICS N.V.
(ROYAL PHILIPS ELECTRONICS)
(BIDDERS)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED RIGHTS)
(TITLE OF CLASS OF SECURITIES)
981270109
(CUSIP NUMBER OF CLASS OF SECURITIES)
WILLIAM E. CURRAN
PRESIDENT
KPE ACQUISITION INC.
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
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
<S> <C>
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$1,202,229,000.00 $240,445.80
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</TABLE>
* For purposes of calculating the filing fee only. This calculation assumes
the purchase of 57,249,000 Shares (equal to (A) the sum of (i) 47,191,000
Shares issued and outstanding as of May 1, 1999, according to VLSI
Technology, Inc. (the "Company") plus (ii) 11,293,000 Shares subject to
issuance upon exercise of options for Shares, according to the Company,
less (B) 1,235,000 Shares beneficially owned by KPE Acquisition Inc. and
its affiliates), at $21.00 per Share.
** 1/50 of one percent of Transaction Valuation. $60,174.62 is being paid with
this filing because $180,271.18 was previously paid on March 5, 1999.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: $180,271.18 Filing Party: Koninklijke Philips Electronics N.V.
Form of Registration No.: 14D-1 Date filed: March 5, 1999
</TABLE>
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<PAGE> 2
This Amendment No. 8 amends and supplements the Tender Offer Statement on
Schedule 14D-1, as amended, originally filed on March 5, 1999 (the "Schedule
14D-1") by Koninklijke Philips Electronics N.V., a company incorporated under
the laws of The Netherlands ("Royal Philips"), and KPE Acquisition Inc. (the
"Purchaser"), a Delaware corporation and an indirect wholly owned subsidiary of
Royal Philips, with respect to the Purchaser's offer to purchase all outstanding
shares of Common Stock, par value $.01 per share (the "Common Stock"), including
the associated rights to purchase preferred stock (the "Rights" and, together
with the Common Stock, the "Shares") of VLSI Technology, Inc., a Delaware
corporation (the "Company"), pursuant to the Offer to Purchase, dated March 5,
1999 (the "Offer to Purchase"), as amended and supplemented by the supplement
thereto dated May 5, 1999 (the "Supplement"), and the related revised (green)
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer"), which are annexed to and filed
with this Amendment No. 8 as Exhibits (a)(15) and (a)(16), respectively. Unless
otherwise defined herein, all capitalized terms used herein shall have the
respective meanings given such terms in the Offer to Purchase.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(b) Reference is hereby made to the information set forth in the
"Introduction," Section 1 ("Amended Terms of the Offer; Expiration Date") and
Section 7 ("The Merger Agreement") of the Supplement, which is incorporated
herein by reference.
(c) Reference is hereby made to the information set forth in Section 2
("Price Range of Shares; Dividends") of the Supplement, 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 1 ("Amended Terms of the Offer; Expiration Date"),
Section 4 ("Certain Information Concerning the Purchaser and Royal Philips"),
Section 5 ("Background of the Offer since April 7, 1999; Contacts with the
Company"), Section 6 ("Plans for the Company"), Section 7 ("The Merger
Agreement") and Section 8 ("Certain Conditions to the Offer") of the Supplement,
which is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is hereby made to the information set forth in Section 9
("Source and Amount of Funds") of the Supplement, which is incorporated herein
by reference.
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 1 ("Amended Terms of the Offer; Expiration Date"),
Section 5 ("Background of the Offer since April 7, 1999; Contacts with the
Company"), Section 6 ("Plans for the Company"), Section 7 ("The Merger
Agreement") and Section 8 ("Certain Conditions to the Offer") of the Supplement,
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 4
("Certain Information Concerning the Purchaser and Royal Philips") of the
Supplement, which is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(b)-(c) Reference is hereby made to the information set forth in Section 10
("Certain Legal Matters; Regulatory Compliance") of the Supplement, which is
incorporated herein by reference.
<PAGE> 3
(e) Reference is hereby made to the information set forth in Section 7
("The Merger Agreement") and Section 10 ("Certain Legal Matters;
Regulatory Compliance") of the Supplement, which is incorporated
herein by reference.
(f) Reference is hereby made to the entire text of the Supplement,
which is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C> <C>
(a)(15) -- Supplement to Offer to Purchase dated May 5, 1999.
(a)(16) -- Revised Letter of Transmittal.
(a)(17) -- Revised Notice of Guaranteed Delivery.
(a)(18) -- Form of Second Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(19) -- Form of Second Letter to Clients for Use by Brokers,
Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(20) -- IRS Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
</TABLE>
<PAGE> 4
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: May 5, 1999
KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ GUIDO R.C. DIERICK
------------------------------------
Name: Guido R.C. Dierick
Title: Director and Deputy
Secretary
KPE ACQUISITION INC.
By: /s/ BELINDA CHEW
------------------------------------
Name: Belinda Chew
Title: Vice President
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C> <C>
(a)(15) -- Supplement to Offer to Purchase dated May 5, 1999.
(a)(16) -- Revised Letter of Transmittal.
(a)(17) -- Revised Notice of Guaranteed Delivery.
(a)(18) -- Form of Second Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(19) -- Form of Second Letter to Clients for Use by Brokers,
Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(20) -- IRS Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
</TABLE>
<PAGE> 1
SUPPLEMENT TO OFFER TO PURCHASE DATED MARCH 5, 1999
KPE ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
KONINKLIJKE PHILIPS ELECTRONICS N.V.
(ROYAL PHILIPS ELECTRONICS)
HAS INCREASED THE PRICE OF ITS OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE PREFERRED STOCK)
OF
VLSI TECHNOLOGY, INC.
TO
$21.00 NET PER SHARE
THE EXPIRATION DATE OF THE OFFER HAS BEEN EXTENDED SUCH THAT THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
MAY 14, 1999, UNLESS THE OFFER IS FURTHER EXTENDED.
THE BOARD OF DIRECTORS OF VLSI TECHNOLOGY, INC. ("THE COMPANY") HAS
UNANIMOUSLY DETERMINED THAT EACH OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN
THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING THE OFFER AND THE
MERGER, HAS DECLARED THAT THE MERGER AGREEMENT IS ADVISABLE AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT WITHDRAWN A NUMBER OF
SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE (INCLUDING THE ASSOCIATED
RIGHTS (THE "RIGHTS") TO PURCHASE PREFERRED STOCK) (COLLECTIVELY, THE "SHARES")
OF THE COMPANY WHICH, TOGETHER WITH THE SHARES BENEFICIALLY OWNED BY THE
PURCHASER AND ITS AFFILIATES, WILL CONSTITUTE AT LEAST A MAJORITY OF THE
OUTSTANDING SHARES ON A FULLY DILUTED BASIS AS OF THE DATE THE SHARES ARE
ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER (THE "MINIMUM TENDER CONDITION"). THE
OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS DESCRIBED IN SECTION 8. THE
OFFER IS NOT CONDITIONED UPON ROYAL PHILIPS OR THE PURCHASER OBTAINING
FINANCING.
The Dealer Manager for the Offer is:
[Credit Suisse First Boston logo]
<PAGE> 2
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should (1) complete and sign either the original blue or revised green
Letter of Transmittal or a facsimile thereof in accordance with the instructions
in the Letter of Transmittal, including any required signature guarantees, and
mail or deliver the Letter of Transmittal or such facsimile with such
stockholder's certificate(s) for the tendered Shares and any other required
documents to the Depositary (as defined herein), (2) follow the procedure for
book-entry tender of Shares set forth in Section 3 of the Offer to Purchase or
(3) request such stockholder's broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for such stockholder. Stockholders
having Shares 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 they desire to tender Shares so registered.
Unless the context requires otherwise, all references to Shares herein shall
include the associated Rights.
The Rights are presently evidenced by the certificates for the Common Stock
and a tender by a stockholder of such stockholder's shares of Common Stock will
also constitute a tender of the associated Rights. A stockholder who desires to
tender Shares and whose certificates for such Shares are not immediately
available, or who cannot comply with the procedure for book-entry transfer on a
timely basis, may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3 of the Offer to Purchase.
Questions and requests for assistance may be directed to the Information
Agent (as defined herein) or to the Dealer Manager (as defined herein) at their
respective addresses and telephone numbers set forth on the back cover of this
Supplement. Requests for additional copies of this Supplement, the Offer to
Purchase and the revised (green) Letter of Transmittal may be directed to the
Information Agent, the Dealer Manager or to brokers, dealers, commercial banks
or trust companies.
May 5, 1999
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<C> <S> <C>
Introduction................................................ 1
1. Amended Terms of the Offer; Expiration Date................. 3
2. Price Range of Shares; Dividends............................ 3
3. Certain Information Concerning the Company.................. 4
4. Certain Information Concerning the Purchaser and Royal
Philips..................................................... 6
5. Background of the Offer since April 7, 1999; Contacts with
the Company................................................. 6
6. Plans for the Company....................................... 6
7. The Merger Agreement........................................ 6
8. Certain Conditions to the Offer............................. 14
9. Source and Amount of Funds.................................. 15
10. Certain Legal Matters; Regulatory Compliance................ 15
11. Miscellaneous............................................... 16
</TABLE>
<PAGE> 4
TO THE HOLDERS OF SHARES OF
VLSI TECHNOLOGY, INC.:
INTRODUCTION
The following information amends and supplements the Offer to Purchase,
dated March 5, 1999 (the "Offer to Purchase"), of KPE Acquisition Inc., a
Delaware corporation (the "Purchaser") and an indirect wholly owned subsidiary
of Koninklijke Philips Electronics N.V., a company organized under the laws of
The Netherlands ("Royal Philips"). Pursuant to this Supplement, the Purchaser is
now offering to purchase all of the outstanding shares of Common Stock, par
value $.01 per share (the "Common Stock"), of VLSI Technology, Inc., a Delaware
corporation (the "Company"), including the associated rights to purchase
Preferred Stock (the "Rights") issued pursuant to the First Amended and Restated
Rights Agreement, dated as of August, 12, 1992 (as amended, the "Rights
Agreement"), between the Company and The First National Bank of Boston (the
Common Stock and the Rights together are referred to herein as the "Shares"), at
$21.00 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related revised (green)
Letter of Transmittal (which together with any amendments or supplements hereto
or thereto, collectively constitute the "Offer"). Tendering stockholders who
have Shares registered in their own name and who tender directly to the
Depositary will not be obligated to pay brokerage fees or commissions or,
subject to Instruction 6 of the Letter of Transmittal, transfer taxes on the
purchase of Shares by the Purchaser pursuant to the Offer. Stockholders who hold
their Shares through their broker or bank should consult with such institution
as to whether there are any fees applicable to a tender of Shares. The Purchaser
will pay all charges and expenses of The Bank of New York (the "Depositary"),
Credit Suisse First Boston Corporation ("Credit Suisse First Boston") as the
dealer manager (the "Dealer Manager") and Innisfree M&A Incorporated (the
"Information Agent"). Unless the context requires otherwise, all references to
Shares herein 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.
Except as otherwise set forth in this Supplement and in the revised (green)
Letter of Transmittal, the terms and conditions previously set forth in the
Offer to Purchase and the related original (blue) Letter of Transmittal remain
applicable in all respects to the Offer, and this Supplement should be read in
conjunction with the Offer to Purchase. Unless the context otherwise requires,
capitalized terms used but not defined herein have the meanings ascribed to them
in the Offer to Purchase.
Procedures for tendering Shares are set forth in Section 3 of the Offer to
Purchase. Tendering stockholders may continue to use the original (blue) Letter
of Transmittal and the original (green) Notice of Guaranteed Delivery previously
circulated with the Offer to Purchase, or they may use the revised (green)
Letter of Transmittal and the revised (grey) Notice of Guaranteed Delivery
circulated with this Supplement. While the Letter of Transmittal previously
circulated with the Offer to Purchase refers only to the Offer to Purchase,
stockholders using such document to tender their Shares will nevertheless be
deemed to be tendering pursuant to the amended Offer (including the amendments
and supplements made by this Supplement) and will receive the increased Offer
price per Share described in this Supplement if Shares are accepted for payment
and paid for by the Purchaser pursuant to the Offer.
SHARES PREVIOUSLY VALIDLY TENDERED AND NOT WITHDRAWN CONSTITUTE VALID
TENDERS FOR PURPOSES OF THE OFFER. STOCKHOLDERS ARE NOT REQUIRED TO TAKE ANY
FURTHER ACTION WITH RESPECT TO SUCH SHARES IN ORDER TO RECEIVE THE INCREASED
OFFER PRICE OF $21.00 PER SHARE IF SHARES ARE ACCEPTED FOR PAYMENT AND PAID FOR
BY THE PURCHASER PURSUANT TO THE OFFER, EXCEPT AS MAY BE REQUIRED BY THE
GUARANTEED DELIVERY PROCEDURE IF SUCH PROCEDURE WAS UTILIZED. SEE SECTION 4 OF
THE OFFER TO PURCHASE FOR THE PROCEDURES FOR WITHDRAWING SHARES TENDERED
PURSUANT TO THE OFFER.
The Company, the Purchaser and Royal Philips have entered into an Agreement
and Plan of Merger, dated as of May 1, 1999 (the "Merger Agreement"), which
provides for, among other things, (i) an increase in the price per Share to be
paid pursuant to the Offer from $17.00 per Share to $21.00 per Share, net to the
seller in cash, (ii) the amendment and restatement of the conditions to the
Offer as set forth in their entirety
<PAGE> 5
in Section 8 of this Supplement, (iii) the amendment to the Offer such that the
Offer and withdrawal rights will expire at 12:00 midnight, New York City time,
on Friday, May 14, 1999 and (iv) the merger of the Purchaser with and into the
Company (the "Merger") as promptly as is practicable following the consummation
of the Offer. In the Merger, each Share issued and outstanding immediately prior
to the Merger (other than any Shares held in the treasury of the Company, by
Royal Philips, the Purchaser, any subsidiary of Royal Philips or the Purchaser,
or by any wholly owned subsidiary of the Company and other than any Dissenting
Shares (as such term is defined in the Merger Agreement)) shall be converted
into the right to receive $21.00 in cash, payable to the holder thereof, without
interest thereon, upon surrender of the certificate formerly representing such
Share.
THE BOARD OF DIRECTORS (THE "BOARD") OF THE COMPANY HAS UNANIMOUSLY
DETERMINED THAT EACH OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE MERGER AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING THE OFFER AND THE MERGER,
HAS DECLARED THAT THE MERGER AGREEMENT IS ADVISABLE AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Pursuant to the Merger Agreement, the Company has represented that it has
amended the Rights Agreement to provide that neither Royal Philips nor any of
its "affiliates" or "associates" (each as defined in the Rights Agreement)
(including the Purchaser) shall be deemed an Acquiring Person (as defined in the
Rights Agreement) and that the Distribution Date (as defined in the Rights
Agreement) shall not be deemed to occur, and that the Rights will not separate
from the Shares, as a result of the entering into the Merger Agreement, the
commencement of the Offer or the consummation of the Merger or the other
transactions contemplated thereby. The Company has also agreed that it would
take all necessary action to cause the dilution provisions of the Rights
Agreement to be inapplicable to the transactions contemplated by the Merger
Agreement, without any payment to holders of the Rights issued pursuant to the
Rights Agreement.
The Company has advised Parent and the Purchaser that each member of the
Board and each of the Company's executive officers intends to tender all Shares
owned by such persons pursuant to the Offer, except to the extent of any
restrictions created by Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
Each of the Company's financial advisors, Morgan Stanley & Co. Incorporated
("Morgan Stanley") and Hambrecht & Quist LLC ("Hambrecht & Quist"), has
delivered to the Board a written opinion dated May 1, 1999 to the effect that,
as of such date and based upon and subject to certain matters stated in their
respective opinions, the $21.00 per Share consideration to be received in the
Offer and the Merger by holders of Shares (other than Parent and its affiliates)
pursuant to the Merger Agreement was fair, from a financial point of view, to
such holders. Such opinions are set forth in full as annexes to the Schedule
14D-9 and should be read carefully in their entirety.
MINIMUM TENDER CONDITION. THE OFFER IS CONDITIONED UPON, AMONG OTHER
THINGS, THE MINIMUM TENDER CONDITION. CERTAIN OTHER TERMS AND CONDITIONS TO THE
CONSUMMATION OF THE OFFER ARE DESCRIBED IN SECTION 8 OF THIS SUPPLEMENT.
On May 1, 1999, there were outstanding approximately 47,191,000 Shares and
there were approximately 11,293,000 Shares subject to issuance pursuant to
outstanding stock options, each according to the Company, and, as of such date,
1,235,000 Shares were beneficially owned by KPE Acquisition Inc. and its
affiliates. As a result, the Minimum Tender Condition would be satisfied if at
least 28,007,001 Shares were validly tendered and not withdrawn prior to the
Expiration Date.
THIS SUPPLEMENT, THE OFFER TO PURCHASE AND THE RELATED REVISED (GREEN)
LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ
CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
2
<PAGE> 6
THE TENDER OFFER
1. AMENDED TERMS OF THE OFFER; EXPIRATION DATE.
Pursuant to the Merger Agreement, the Purchaser has agreed to amend the
Offer. The price per Share to be paid pursuant to the Offer has been increased
from $17.00 per Share to $21.00 per Share, net to the seller in cash, upon the
terms and subject to the conditions of the Offer. All stockholders whose Shares
are validly tendered and not withdrawn and accepted for payment pursuant to the
Offer (including Shares tendered and not withdrawn prior to the date of this
Supplement) will receive the increased price.
The Company has amended the Rights Agreement to provide that neither Royal
Philips nor any of Royal Philips' "affiliates" or "associates", including the
Purchaser, will be deemed an Acquiring Person and that the Distribution Date
will not be deemed to occur, and that the Rights will not separate from the
shares of Common Stock, as a result of the entering into the Merger Agreement,
the commencement of the Offer or the consummation of the Merger.
STOCKHOLDERS WILL BE REQUIRED TO TENDER ONE RIGHT (SUBJECT TO ADJUSTMENT)
FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF SHARES UNDER THE
OFFER. ACCORDINGLY, STOCKHOLDERS WHO SELL THEIR RIGHTS SEPARATELY FROM THEIR
SHARES, IN THE EVENT OF A DISTRIBUTION DATE, AND DO NOT OTHERWISE ACQUIRE RIGHTS
MAY NOT BE ABLE TO SATISFY THE REQUIREMENTS OF THE OFFER FOR A VALID TENDER OF
SHARES. UNLESS A DISTRIBUTION DATE OCCURS, A TENDER OF SHARES WILL ALSO
CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
Pursuant to the Merger Agreement, the Offer has been amended such that the
Offer will expire at 12:00 midnight, New York City time, on Friday, May 14,
1999, unless and until the Purchaser, subject to the provisions of the Merger
Agreement, shall have extended the period during which the Offer is open. The
term "Expiration Date" shall mean 12:00 midnight, New York City time, on Friday,
May 14, 1999 or any later time and date at which the Offer, as so extended by
the Purchaser, shall expire. As of the close of business on May 4, 1999,
approximately 235,450 Shares had been tendered and not withdrawn pursuant to the
Offer. See Section 7 of this Supplement for a description of the provisions of
the Merger Agreement regarding extensions of the Offer by the Purchaser.
The Offer is conditioned upon satisfaction of the Minimum Tender Condition
described above in the Introduction and each of the conditions described in
Section 8 of this Supplement. The Purchaser reserves the right (but shall not be
obligated), subject to the provisions of the Merger Agreement, to waive any or
all of such conditions.
The Company has agreed to provide the Purchaser with the Company's
stockholder list and security position listings for the purpose of disseminating
the Offer to holders of Shares. This Supplement, the revised (green) Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares whose names appear on the Company's stockholder list 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 Company's
stockholder list or who are listed as participants in a clearing agency's
security position listing for subsequent transmittal to beneficial owners of
Shares by the Purchaser following receipt of such lists from the Company.
2. PRICE RANGE OF SHARES; DIVIDENDS.
The reported high and low bid quotations for the Shares on the Nasdaq Stock
Market's National Market (the "Nasdaq National Market") during the second
quarter (through May 4, 1999) of the year ending December 31, 1999 were
$20 13/16 and $9 3/4, respectively. On April 30, 1999, the last full day of
trading prior to the announcement of the execution of the Merger Agreement, the
reported closing bid price per Share reported on the Nasdaq National Market was
$18 7/8. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
SHARES.
3
<PAGE> 7
See Section 7 of this Supplement for a discussion of certain limitations
contained in the Merger Agreement on the ability of the Company to declare and
pay dividends.
3. CERTAIN INFORMATION CONCERNING THE COMPANY.
The selected financial information of the Company and its consolidated
subsidiaries set forth below has been excerpted and derived from the Company's
Annual Report on Form 10-K for the fiscal year ended December 25, 1998 (the
"Form 10-K"), and a press release issued by the Company on April 19, 1999, as
reported by Dow Jones News Service. More comprehensive financial and other
information is included in such reports (including management's discussion and
analysis of results of operations and financial position) and in other reports
and documents filed by the Company with the SEC and the financial information
set forth below is qualified in its entirety by reference to such reports and
documents filed with the SEC and all of 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 in Section 8 of the Offer
to Purchase.
VLSI TECHNOLOGY, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED FISCAL YEARS ENDED
----------------------- ---------------------------
APRIL 2, DECEMBER 25, DECEMBER 25, DECEMBER 26,
1999* 1998* 1998 1997
-------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net revenues.............................. $149,577 $137,869 $547,804 $712,653
Gross profit.............................. 57,860 52,982 214,496 307,944
Research and development.................. 31,810 30,659 111,708 98,434
Marketing, general and administrative..... 23,957 21,864 93,769 114,011
Special charge............................ 4,500 -- 7,400 --
Operating income (loss)................... (2,407) 459 1,619 95,499
Interest and other income (expense),
net..................................... 3,517 3,592 15,536 13,581
Net income (loss)......................... $ 4,703 $ 14,817 $ 20,916 $ 71,818
BALANCE SHEET DATA**
Current assets............................ $425,636 $482,711 $482,711 $533,877
Total assets.............................. 882,489 922,045 922,045 922,078
Current liabilities....................... 140,275 183,948 183,948 186,228
Long-term debt, less current maturities... 161,208 164,808 164,808 182,039
Total liabilities......................... 319,041 366,995 366,995 405,683
Shareholders' equity...................... 563,448 555,050 555,050 516,395
</TABLE>
- ---------------
* Source: Press Release of VLSI Technology, Inc. dated April 19, 1999
(unaudited).
** At period end.
Neither Royal Philips nor the Purchaser takes responsibility for the
accuracy or completeness of information contained in this Supplement 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.
Certain Financial Projections. The Company does not as a matter of course
make public forecasts or projections as to its future financial performance.
However, in connection with the negotiations between Royal Philips and the
Company, the Company made available to representatives of Royal Philips certain
non-public information (the "Projections") regarding the Company's projected
operating performance. The Projections indicated that for the period 1999-2002
the Company's revenues would increase by an average of approxi-
4
<PAGE> 8
mately 23.5% annually and the Company's earnings would increase by an average of
approximately 85% annually.
The Projections were prepared by the Company for internal purposes and not
with a view to publication or dissemination to the public. The Projections were
not prepared in accordance with published guidelines of the American Institute
of Certified Public Accountants or the SEC regarding projections and forecasts,
nor have the Projections been audited, examined or otherwise reviewed by
independent auditors of the Company. The Projections necessarily make numerous
assumptions with respect to the Company's performance, general business and
economic conditions and other matters, many of which are beyond the Company's
control and are inherently uncertain. No assurance can be given that the
Projections will be accurate, and actual future performance may be materially
different than the Projections. Inclusion of the Projections should not be
regarded as a representation by the Company, Royal Philips, the Purchaser, or
any other person that the Projections will prove to be correct. The Projections
are included solely because they were provided by the Company to Royal Philips
and the Purchaser.
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4. CERTAIN INFORMATION CONCERNING THE PURCHASER AND ROYAL PHILIPS.
The Purchaser is a Delaware corporation and to date has engaged in no
activities other than those incident to its formation and the commencement,
continuation and amendment of the Offer. The Purchaser is an indirect wholly
owned subsidiary of Royal Philips.
Royal Philips is a company incorporated under the laws of The Netherlands
and is the parent company of the Royal Philips Electronics group. Royal Philips
is one of the world's biggest electronics companies and Europe's largest, with
sales of US$33.9 billion in 1998. Royal Philips, through its subsidiaries Neglin
Lamp and the Purchaser, is the indirect owner of 1,235,000 Shares, which
represents approximately 2.1% of the Shares outstanding as of May 1, 1999 on a
Fully Diluted Basis.
Additional information concerning Royal Philips is set forth in Royal
Philips' Annual Report on Form 20-F (the "Royal Philips Form 20-F") for the
fiscal year ended December 31, 1998, a copy of which may be obtained from the
SEC in the manner set forth with respect to information concerning the Company
in Section 8.
5. BACKGROUND OF THE OFFER SINCE APRIL 7, 1999; CONTACTS WITH THE COMPANY.
On April 7, 1999, Royal Philips and the Company entered into a
Confidentiality/Standstill Agreement, pursuant to which the Company agreed that
it would provide to Royal Philips and its affiliates access to the Company's
senior management and certain non-public information concerning the Company and
its affairs. On April 8 and 9, 1999, representatives of Royal Philips met with
representatives of the Company to conduct due diligence investigations of the
Company's business. Follow-up due diligence investigations continued through the
week of April 24, 1999.
On April 19, 1999, Morgan Stanley and Hambrecht & Quist sent a letter to
third parties, including Royal Philips, inviting the submission of an offer to
acquire all of the Company's Shares pursuant to the enclosed form of merger
agreement. On April 21, 1999, Morgan Stanley and Hambrecht & Quist set April 30,
1999 as the deadline for submitting offers.
On April 30, 1999, Royal Philips submitted its $21.00 per Share offer
together with Royal Philips' proposed changes to the form of merger agreement
circulated by Morgan Stanley and Hambrecht & Quist.
Beginning on the evening of April 30, 1999, and continuing through the
evening of May 1, 1999, Sullivan & Cromwell and Latham & Watkins, counsel to
Royal Philips and the Company, respectively, negotiated the terms of a
definitive merger agreement. The Board unanimously approved the Merger Agreement
at a special meeting of the Board held on May 1, 1999. Royal Philips, Merger Sub
and the Company executed the Merger Agreement in the evening on May 1, 1999.
6. PLANS FOR THE COMPANY.
Pursuant to the Merger Agreement, Royal Philips, the Purchaser and the
Company have agreed, among other things, to modify the composition of the Board
to include designees of Royal Philips following consummation of the Offer and to
make certain changes to the Company's Certificate of Incorporation and Bylaws as
of the Effective Time.
7. THE MERGER AGREEMENT.
The following is a summary of the Merger Agreement, a copy of which is
attached as Exhibit (a)(13) to Amendment No. 7 to Royal Philips' and the
Purchaser's Schedule 14D-1 filed with the SEC with respect to the Offer. Such
summary is qualified in its entirety by reference to the text of the Merger
Agreement.
The Amended Offer. Pursuant to the Merger Agreement, Royal Philips and the
Purchaser have agreed, subject to certain conditions, to amend the Offer (i) to
increase the price per Share to be paid pursuant to the Offer from $17.00 per
Share to $21.00 per Share, net to the seller in cash, (ii) to amend and restate
the conditions to the Offer as set forth in their entirety in Section 8 of this
Supplement, (iii) to amend the Offer
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<PAGE> 10
such that the Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Friday, May 14, 1999 and (iv) to provide for the Merger as
promptly as is practicable following the consummation of the Offer.
The Purchaser has also agreed that it will not, without the prior written
consent of the Company, decrease the price per Share or change the form of
consideration payable in the Offer, decrease the number of Shares sought or
extend the Offer (other than as set forth in the next paragraph), impose
additional conditions to the Offer or amend any other term of the Offer in any
manner adverse to the holders of Shares. The Purchaser further agreed that, upon
the terms and subject to the conditions of the Offer, the Purchaser will accept
for payment and will 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.
Royal Philips and Purchaser also agreed that Purchaser shall not terminate
or withdraw the Offer or extend the scheduled Expiration Date unless at the
Expiration Date the conditions to the Offer described in Annex A of the Merger
Agreement (as set forth in their entirety in Section 8 of this Supplement) shall
not have been satisfied or earlier waived. If at the Expiration Date, such
conditions shall not have been satisfied or earlier waived, Purchaser may and,
if requested by the Company, will (subject to certain exceptions) extend the
Expiration Date on one or more occasions for an additional period or periods of
up to 10 business days at a time until the date which is four months following
the date of the Offer. Purchaser may extend the Offer for up to 10 Business Days
in the event that (i) the conditions to the Offer shall have been satisfied at
the Expiration Date and (ii) the number of Shares tendered and not withdrawn
represent more than 50% but less than 90% of the issued and outstanding shares
of the Company Common Stock.
Company Actions. Pursuant to the Merger Agreement, the Company has
approved of and consented to the Offer and represented that (i) the Board
unanimously (x) determined that the Offer and the Merger are fair to, and in the
best interests of, the stockholders of the Company and (y) approved the Merger
Agreement and the Offer and the Merger and (ii) Morgan Stanley and Hambrecht &
Quist, the Company's financial advisors, have rendered to the Board of Directors
of the Company their respective opinions that the consideration to be received
by the stockholders of the Company pursuant to the Offer and the Merger is fair
to such stockholders (other than Royal Philips and its affiliates) from a
financial point of view.
The Company also has agreed that it shall, no later than four business days
following the date of the Merger Agreement, file with the SEC and cause to be
disseminated to stockholders of the Company, an amendment to the Schedule 14D-9
with respect to the Offer (together with any amendments or supplements thereto,
the "Amended Schedule 14D-9") which amendment shall include, subject to the next
sentence, the recommendation described in the preceding paragraph. Subject to
the provisions of the Merger Agreement described under "Termination" below, 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 fiduciary duty.
Pursuant to the Merger Agreement, promptly upon the purchase of and payment
for any Shares by the Purchaser pursuant to the Offer which represent at least a
majority of the Shares (on a fully diluted basis), Purchaser will be entitled to
designate members of the Board such that Purchaser will have a number of
representatives on the Board, rounded up to the next whole number, equal to the
product of (x) the total number of directors on the Board multiplied by (y) the
percentage of the outstanding Shares owned by Royal Philips or the Purchaser;
provided, however, that until the Effective Time, there shall be at least two
directors who have served as directors as of the date of the Merger Agreement.
The Company will, upon request by the Purchaser, on the date of such request,
increase the size of the Board and, if necessary, secure the resignations of
such number of directors as is necessary to enable Royal Philips' designees to
be elected to the Board and will cause Royal Philips' designees to be so
elected.
Following the election or appointment of the Purchaser's designees and
prior to the Effective Time, except for certain actions which are legally
required to have full Board approval, any action to be taken by the Board with
respect to the Merger Agreement which materially and adversely affects the
interests of the Company's stockholders will require approval by a majority of
the then serving directors, if any, of the Company who have served as directors
as of the date of the Merger Agreement.
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The Merger. The Merger Agreement provides that in accordance with the
provisions thereof, at the Effective Time, the Purchaser will be merged with and
into the Company, and the Company will be the surviving corporation in the
Merger (hereinafter sometimes called the 'Surviving Corporation') and will
continue to be governed by the laws of the State of Delaware. At the Effective
Time, the separate corporate 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 Royal Philips, the Purchaser,
the Company or the holders of the Shares of the Purchaser, each Share issued and
outstanding immediately prior to the Effective Time (other than any Shares owned
by the Company or any of its wholly owned Subsidiaries, Royal Philips, the
Purchaser or any other wholly owned Subsidiary of Royal Philips or Shares which
are held by dissenting stockholders exercising appraisal rights in accordance
with the DGCL) will be converted into the right to receive $21.00 in cash,
without interest. For a description of certain appraisal rights available to
stockholders under Delaware law in connection with the Merger, see Section 11 of
the Offer to Purchase.
As of the Effective Time, by virtue of the Merger and without any action on
the part of Royal Philips, the Purchaser, the Company or the holders of capital
stock of the Purchaser, each share of Common Stock of the Purchaser issued and
outstanding immediately prior to the Effective Time will be converted into one
fully paid and nonassessable share of common stock, par value $0.01 per share,
of the Surviving Corporation.
Under the Merger Agreement, the Company has agreed to use its best efforts
to take all action necessary to provide that, immediately prior to the
consummation of the Offer, each outstanding employee stock option granted to
directors, employees or consultants (an "Option") to purchase Shares under the
Company Equity Plans (as defined in the Merger Agreement) which is not then
exercisable will be exercisable in full and each Option outstanding prior to the
Effective Time pursuant to any of the Company Equity Plans, whether or not then
exercisable, will be canceled and only entitle the holder thereof, upon
surrender thereof, to receive an amount in cash equal to the difference between
$21.00 (or such greater amount which may be paid pursuant to the Offer) and the
exercise price per Share of such Option multiplied by the number of Shares
previously subject to such Option (such payment to be net of applicable
withholding taxes).
The Merger Agreement also provides that, subject to certain exceptions, the
Company shall take all actions necessary to cause the Company Equity Plans to
terminate as of the Effective Time. The Company also agreed that it will use its
reasonable best efforts to ensure that as soon as practicable following the
Effective Time each holder of Options effectively relinquishes all rights with
respect to each holder's outstanding options upon payment therefor in accordance
with the Merger Agreement.
The Merger Agreement provides that at the Effective Time and without any
further action on the part of the Company and the Purchaser, the certificate of
incorporation of the Company shall be amended to read in its entirety as the
certificate of incorporation of the Purchaser reads as in effect immediately
prior to the Effective Time until thereafter amended, provided that such
certificate of incorporation shall be amended to reflect "VLSI Technology, Inc."
as the name of the Surviving Corporation.
Under the Merger Agreement, the bylaws of the Purchaser at the Effective
Time shall be the bylaws of the Company until thereafter changed or amended.
Under the Merger Agreement, subject to applicable law, the directors of the
Purchaser at the Effective Time will be the initial directors of the Surviving
Corporation and will hold office until their respective successors are duly
elected or qualified or until their earlier resignation or removal. Pursuant to
the Merger Agreement, the officers of the Company at the Effective Time will be
the initial officers of the Surviving Corporation and will hold office until
their respective successors are duly elected or qualified or until their earlier
resignation or removal.
Agreements of the Company, Royal Philips and the Purchaser. The Merger
Agreement provides that, if the Minimum Tender Condition is satisfied, at the
request of the Purchaser, the Company will take all action necessary to enable
the Purchaser to adopt the Merger Agreement by written consent (the "Written
Consent") (including the completion and mailing of an information statement
after consultation with Royal Philips and its counsel (the "Information
Statement") advising stockholders of the Company that the requisite number of
stockholders have consented to the Merger) in accordance with applicable law and
the
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<PAGE> 12
Company's certificate of incorporation and bylaws and otherwise to notify the
holders of Shares as promptly as practicable of the approval of the Merger
Agreement and the Merger. Notwithstanding the foregoing, to the extent the
Company is unable or it becomes reasonably impractical for the Company to obtain
the requisite stockholder approval for the Merger Agreement and the Merger, by
means of the Written Consent, the Company shall seek such stockholder approval
pursuant to a stockholder meeting as described below.
Pursuant to the Merger Agreement, if required by applicable law in order to
consummate the Merger, the Company shall, as soon as practicable following the
acquisition by the Purchaser of the Shares pursuant to the Offer, duly call,
give notice of, convene and hold a meeting of its stockholders (the "Company
Stockholders Meeting") for the purpose of obtaining the requisite number of
votes to approve the Merger, and, the Company shall, through the Board,
recommend to its stockholders that they accept the Offer and tender all of their
Shares to the Purchaser and vote in favor of the adoption of the Merger
Agreement; provided, however, that the Board may withdraw, modify or change such
recommendation to the extent that the Board determines to do so in exercise of
its fiduciary duties. Notwithstanding anything to the contrary contained in the
Merger Agreement, if the Minimum Tender Condition is not met, the Company shall
hold the Company Stockholders Meeting for the purpose of allowing the Company's
stockholders to vote on the adoption of the Merger Agreement (including in the
event that the Board has determined at any time subsequent to the date of the
Merger Agreement that the Merger Agreement is no longer advisable and recommends
that the stockholders of the Company reject it). The Merger Agreement provides
that Royal Philips shall vote or cause to be voted all Shares owned of record by
Royal Philips, the Purchaser or any of its other subsidiaries in favor of the
approval of the Merger and adoption of the Merger Agreement. Prior to the
expiration of the Offer, the Merger Agreement provides that Royal Philips shall
not purchase, or agree to purchase, any Shares, except pursuant to the terms of
the Offer and the Merger.
The Merger Agreement provides that, if required by applicable law, as soon
as practicable following Royal Philips' request, the Company and Royal Philips
shall prepare and file with the SEC the proxy statement relating to the Company
Stockholders Meeting (the "Proxy Statement"). Each of the Company and Royal
Philips shall use its reasonable efforts to cause the Proxy Statement to be
mailed to the Company's stockholders, as promptly as practicable.
Notwithstanding the preceding paragraph or any other provision of the
Merger Agreement, the Merger Agreement provides that in the event that Royal
Philips, the Purchaser, or any of Royal Philips' Subsidiaries shall own at least
90% of the Shares, the Company shall not be required to call the Company
Stockholders Meeting or to file or mail the Proxy Statement, and the parties to
the Merger Agreement shall, at the request of Royal Philips, take all necessary
action to cause the Merger to become effective as soon as practicable after the
acceptance for payment of and payment for Shares by the Purchaser pursuant to
the Offer without a meeting of stockholders of the Company.
In the Merger Agreement, the Company has covenanted and agreed as to itself
and its subsidiaries that, except for certain exceptions, during the period from
the date of the Merger Agreement to the Effective Time, among other things, (i)
each of the Company and its Subsidiaries will conduct its business in the usual,
regular and ordinary course in all material respects, and the Company will use
all commercially reasonable efforts to preserve its business organizations
intact and its existing relations with customers, suppliers, employees and other
business associates; (ii) it will not declare, set aside or pay any dividend in
respect of any Shares or issue any capital stock; and (iii) neither the Company
nor any of its Subsidiaries will make or authorize any capital expenditures in
any manner not reflected in the Company's current budget or incur certain
indebtedness other than in the ordinary course of business.
Pursuant to the Merger Agreement, the Company, its Subsidiaries, or any of
the respective officers and directors of the Company or its Subsidiaries, shall
not, and the Company shall direct and use its reasonable best efforts to cause
its employees, agents and representatives (including, without limitation, any
investment banker, attorney or accountant retained by the Company or any of its
Subsidiaries) not to, take or cause, directly or indirectly, any of the
following actions with any party other than Royal Philips, the Purchaser or
their respective designees: (i) solicit, knowingly encourage, initiate,
participate in or otherwise facilitate any negotiations, inquiries or
discussions with respect to any offer, indication or proposal to acquire all or
more
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than 15% of its business, assets or capital shares whether by merger,
consolidation, other business combination, purchase of assets, reorganization,
tender or exchange offer or otherwise (each of the foregoing, an "Acquisition
Proposal") or (ii) disclose, in connection with an Acquisition Proposal, any
information or provide access to its properties, books or records, except as
required by law or pursuant to a governmental request for information. The
Company also agreed that it will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties previously
with respect to any of the foregoing. The Company agreed that it will take the
necessary steps to promptly inform the individuals or entities referred to in
the first sentence of this paragraph of such obligations that it has undertaken.
The Company also agreed to promptly request each person which has executed a
confidentiality agreement in connection with its consideration of acquiring the
Company and/or any of its Subsidiaries to return or destroy all confidential
information furnished to such person by or on behalf of the Company.
Notwithstanding anything to the contrary contained in the previous
paragraph, the Merger Agreement provides that prior to the Effective Time the
Company may participate in discussions or negotiations with, and furnish
non-public information, and afford access to the properties, books, records,
officers, employees and representatives of the Company to any Person, entity or
group if such Person, entity or group has delivered to the Company, prior to the
date of the Company Stockholders Meeting or the Written Consent, as applicable,
and in writing, an Acquisition Proposal which the Board in its good faith
reasonable judgment determines if consummated would be more favorable, from a
financial point of view, to the Company's stockholders than the transactions
contemplated by the Merger Agreement, which determination may be made only after
the Board receives (i) advice of its legal counsel that the Board would breach
its fiduciary duties if it did not accept the Acquisition Proposal and (ii) an
opinion of its financial advisors to the effect that the Acquisition Proposal is
superior, from a financial point of view, to the Company's stockholders than the
transactions contemplated by this Agreement (a "Superior Proposal"). Pursuant to
the Merger Agreement, in the event the Company receives a Superior Proposal the
Board could execute and enter into an agreement relating to such Superior
Proposal and recommend such Superior Proposal to its stockholders, if the Board
determines that its fiduciary duties require it to do so; in such case, the
Board agrees that it may withdraw, modify or refrain from making its
recommendation of the Merger; provided, however, that the Company agreed that it
shall (i) promptly notify Royal Philips, and in any event within 24 hours, if
any such Acquisition Proposal is received by, any such information is requested
from, or any such negotiations or discussions are sought to be initiated or
continued with, the Company or any of its Subsidiaries, indicating, in
connection with such notice, the name of such person and the material terms of
any such Acquisition Proposal, (ii) provide Royal Philips at least 48 hours'
prior written notice of the Company's intention to execute or enter into an
agreement relating to such Superior Proposal and (iii) terminate the Merger
Agreement by written notice to Royal Philips provided no sooner than 48 hours
after Royal Philips' receipt of a copy of such Superior Proposal (or a
description of the significant terms and conditions thereof).
Pursuant to the Merger Agreement and subject to certain terms therein, from
the date of the Merger Agreement until the earlier of the termination of the
Merger Agreement or the Effective Time, the Company has agreed to, upon
reasonable notice, afford Royal Philips' officers, employees, counsel,
accountants, financial representatives and other representatives access during
normal business hours to its and its Subsidiaries' properties, books, contracts,
records and representatives and, during such period, will furnish promptly all
information concerning its business, properties and personnel as may be
reasonably requested.
Under the Merger Agreement, before issuing any press release or otherwise
making any public announcements with respect to the Merger and other
transactions contemplated by the Merger Agreement, Royal Philips and the Company
will use reasonable efforts to consult with each other.
Under the Merger Agreement, subject to certain terms therein, for a period
of six years after the Effective Time, Royal Philips shall cause to be
maintained any indemnification agreements between the Company and its current or
former officers and directors that may be in effect.
Pursuant to the Merger Agreement, for a period of six years after the
Effective Time, each of Royal Philips and Surviving Corporation has agreed that
it shall maintain the Company's existing directors' and officers' liability
insurance policy and employee benefit fiduciary liability insurance (provided
that Royal
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Philips may substitute therefor policies of substantially similar coverage and
amounts containing terms which are no less advantageous); provided, however,
that Royal Philips is not obligated to make annual premium payments for such
insurance to the extent such premiums exceed 150% of the premiums paid as of the
date of the Merger Agreement by the Company for such insurance.
Pursuant to the Merger Agreement, Royal Philips has agreed that, for the
period of two years commencing on the consummation of the Offer, the employees
of the Company and its Subsidiaries will continue to be provided with benefits
under employee benefit plans (other than the Company's equity plans) with a
value which is comparable in the aggregate with that which is currently provided
by the Company and its Subsidiaries to such employees.
The Merger Agreement further provides that each of Royal Philips, the
Purchaser, and the Company shall cooperate with the other and shall use its
respective reasonable best efforts to reach a mutually satisfactory arrangement
with the United States government or an appropriate agency thereof so that Royal
Philips' acquisition of the Shares would not present national security concerns
on account of the Company being a party to United States government contracts.
See Section 10 ("Certain Legal Matters; Regulatory Compliance").
Rights Agreement. In the Merger Agreement, the Company has represented
that it has amended the Rights Agreement to provide that neither Royal Philips
nor any of its "affiliates" or "associates" (each as defined in the Rights
Agreement) (including the Purchaser) shall be deemed an Acquiring Person (as
defined in the Rights Agreement) and that the Distribution Date (as defined in
the Rights Agreement) shall not be deemed to occur, and that the Rights will not
separate from the Shares, as a result of the entering into the Merger Agreement,
the commencement of the Offer or the consummation of the Merger or the other
transactions contemplated thereby. The Company also agreed that it would take
all necessary action to cause the dilution provisions of the Rights Agreement to
be inapplicable to the transactions contemplated by the Merger Agreement,
without any payment to holders of the Rights issued pursuant to the Rights
Agreement.
Representations and Warranties. The Merger Agreement contains certain
representations and warranties by the Company, including representations and
warranties concerning: the organization, good standing and qualification of the
Company and its Subsidiaries; the capital structure of the Company; the
corporate 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 regarding certain related matters; the substantial
compliance with all applicable law of all Company Benefit Plans (as defined in
the Merger Agreement); 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
and timelines of filing of reports and documents filed by the Company with the
SEC; and the absence since December 31, 1998 to the date of the Merger Agreement
of any event or occurrence which, individually or in the aggregate, would have a
Material Adverse Effect (as defined in the Merger Agreement) on the Company.
The Merger Agreement also contains certain representations and warranties
by Royal Philips and the Purchaser, including that Royal Philips has available,
and will make available to the Purchaser, sufficient funds to consummate the
Offer and the Merger and the transactions contemplated thereby.
Conditions to the Merger. The conditions to the Offer are set forth in
Section 8 ("Certain Conditions to the Offer"). The Company's, Royal Philips' and
the Purchaser's obligations to effectuate the Merger are subject to the
satisfaction or waiver on or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. The Company shall have obtained all
approvals of holders of Shares necessary to approve the Merger Agreement
and all the transactions contemplated thereby (including the Merger) to the
extent required by law.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
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(c) No Injunction or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by a court
or other Governmental Entity of competent jurisdiction shall be in effect
and have the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger; provided, however, that this condition shall
not be available to any party whose failure to fulfill its obligations to
use its reasonable best efforts to obtain necessary approvals to effectuate
the Merger shall have been the cause of, or shall have resulted in, such
order or injunction.
(d) Required Regulatory Approvals. All Required Regulatory Approvals
(as defined in the Merger Agreement) shall have been obtained and shall be
in full force and effect.
(e) Completion of the Offer. The Purchaser shall have (i) commenced
the Offer pursuant to the Merger Agreement and (ii) purchased, pursuant to
the terms and conditions of such Offer, all Shares duly tendered and not
withdrawn; provided, however, that neither Royal Philips nor the Purchaser
shall be entitled to rely on the condition in clause (ii) above if either
of them shall have failed to purchase Shares pursuant to the Offer in
breach of their obligations under the Merger Agreement.
Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, by action taken or authorized by the Board of Directors of
the terminating party or parties, whether before or after adoption of the Merger
Agreement and the matters contemplated herein, including the Merger, by the
stockholders of the Company:
(a) By mutual written consent of Royal Philips and the Company, by
action of their respective Board of Directors;
(b) By either the Company or Royal Philips if (i) the Merger shall not
have been consummated by the date which is four months from the date of the
Merger Agreement; provided further that the right to terminate the Merger
Agreement under this clause (i) shall not be available to any party whose
failure to fulfill any obligation or condition under the Merger Agreement
has been the cause of, or resulted in, the failure of the Merger to occur
on or before such date and shall not be available to Royal Philips if it
has purchased Shares pursuant to the Offer; (ii) the Offer is terminated or
withdrawn pursuant to its terms without any Shares being purchased
thereunder; provided that Royal Philips may terminate the Merger Agreement
pursuant to this clause (ii) only if Royal Philips' or the Purchaser's
termination or withdrawal of the Offer is not in violation of the terms of
the Merger Agreement or the Offer; (iii) any governmental entity shall have
issued an order, decree or ruling to taken any other action (which order,
decree, ruling or other action the parties shall have used their reasonable
efforts to resist, resolve or lift, as applicable) permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by the
Merger Agreement, and such order, decree, ruling or other action shall have
become final and nonappealable; (iv) any approval by the stockholders of
the Company required for the consummation of the Merger or the other
transactions contemplated hereby shall not have been obtained at the
Company Stockholders Meeting or any adjournment thereof by reason of the
failure to obtain the required vote at a duly held meeting of stockholders
or at nay adjournment thereof; and (v) the Offer terminates or expires on
account of the failure of any condition specified in Annex A to the Merger
Agreement without Purchaser having purchased any Shares thereunder
(provided that the right to terminate the Merger Agreement pursuant to this
clause (v) shall not be available to any party whose failure to fulfill any
obligation under the Merger Agreement has been the cause of, or resulted
in, the failure of any such condition);
(c) By Royal Philips, prior to the purchase by Purchaser of Shares
pursuant to the Offer, as applicable, if (i) the Board shall have withdrawn
or adversely modified it recommendation of the Offer, the Merger or the
Merger Agreement or the Board, upon request by Royal Philips, shall fail to
reaffirm such approval or recommendation within 10 business days after such
request if an Acquisition Proposal is pending, or shall have resolved to do
any of the foregoing; (ii) the Board shall have recommended to the
stockholders of the Company that they approve an Acquisition Proposal other
than transactions contemplated by the Merger Agreement; (iii) a tender
offer or exchange offer that, if successful, would result in any person or
"group" becoming a "beneficial owner" (such terms having the meaning in
this Agreement as is ascribed under Regulation 13D under the Exchange Act)
of 15% or more of the outstanding Shares is commenced (other than by Royal
Philips or an affiliate of Royal Philips) and the Board recommends that the
stockholders of the Company tender their shares in such tender or exchange
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offer; (iv) for any reason the Company fails to call and hold the Company
Stockholders Meeting by the date that is four months from the date of the
Merger Agreement (subject to Royal Philips and the Purchaser not having
terminated or withdrawn the Offer in violation of the terms of the Merger
Agreement and Royal Philips and the Purchaser otherwise being in material
breach of any covenant, agreement, representation or warranty set forth in
the Merger Agreement) or (v) the Company or any of its Subsidiaries, or any
of their respective representatives, shall (A) wilfully and materially
breach their obligations relating to an Acquisition Proposal, or (B) or
take an action that would be prohibited relating to an Acquisition Proposal
but for the fact that such Acquisition Proposal is a Superior Proposal;
(d) By Royal Philips, upon (i) prior to the Purchaser's purchase of
Shares pursuant to the Offer, a material breach of any covenant or
agreement on the part of the Company set forth in the Merger Agreement or
(ii) any representation or warranty of the Company that is qualified as to
materiality shall have become untrue; or (iii) any representation or
warranty of the Company that is not so qualified shall have become untrue
in any material respect (a "Terminating Company Breach"); provided,
however, that, such Terminating Company Breach must be reasonably likely to
materially adversely affect the Company or the consummation of the Offer or
the Merger and if such Terminating Company Breach is capable of being cured
by the Company prior to the Effective Time through the exercise of its best
efforts, so long as the Company continues to exercise such best efforts,
Royal Philips may not terminate the Merger Agreement under this section;
and
(e) By the Company, if (i) prior to the purchase by the Purchaser of
Shares pursuant to the Offer, as applicable, the Board determines to accept
a Superior Proposal; (ii) there is a material breach of any covenant or
agreement on the part of Royal Philips or the Purchaser set forth in the
Merger Agreement; or (iii) any representation or warranty of Royal Philips
or the Purchaser that is qualified as to materiality shall have become
untrue or any representation or warranty of Royal Philips or the Purchaser
that is not so qualified shall have become untrue in any material respect
("Terminating Parent Breach"); provided, however, that, such Terminating
Parent Breach must be reasonably likely to materially adversely affect the
consummation of the Offer or the Merger and if such Terminating Parent
Breach is capable of being cured by Royal Philips prior to the Effective
Time through the exercise of its best efforts, so long as Royal Philips
continues to exercise such best efforts, the Company may not terminate the
Merger Agreement under this section; or (iv) if the Purchaser shall have
failed to amend the Offer within the two business day period specified in
the Merger Agreement or Purchaser fails to purchase validly tendered Shares
in violation of the terms of the Offer or the Merger Agreement.
In the event that (x) the Merger Agreement is terminated for the reasons
described in subsection (c) or subsection (e)(i) above or (y) the Offer shall
have remained open for a minimum of at least 20 business days from the date it
is amended pursuant to the Merger Agreement, Royal Philips shall not have
purchased the Minimum Shares pursuant to the Offer and during the pendency of
the Offer there shall have been an Acquisition Proposal made or any person or
group shall have become the beneficial owner of 15% or more of the outstanding
shares of the Company Common Stock, then the Company shall pay Royal Philips in
cash (A) $30,000,000 plus (B) up to $7,500,000 of Royal Philips' reasonable and
documented expenses incurred in connection with the Offer and Merger ((A) and
(B) together, the "Termination Fee"), which amount shall be payable by wire
transfer of immediately available funds no later than two business days after
such termination, in the case of clause (x), or within two business days of the
Company entering into an agreement or a person becoming the beneficial owner of
40% or more of the Company's outstanding Shares, in the case of clause (y);
provided, however, the Termination Fee shall not be payable following
termination by Royal Philips for the reasons described in subsection (c)(v)(B)
above unless within one year of the date of such termination the Company or one
or more of its affiliates enters into an agreement providing for the
consummation of an Acquisition Proposal (as specifically defined for purposes of
this proviso), in which case the Company shall pay Royal Philips the Termination
Fee within two business days after the entry into such agreement; provided,
further, however, that the one year period in the period in the preceding
provision shall be deemed to be two years if the Company enters into an
agreement providing for the consummation of an Acquisition Proposal with the
Person that made the Superior Proposal that caused the Company to take the
actions that triggered Royal Philips' right to terminate under subsection
(c)(v)(B) above.
13
<PAGE> 17
Amendment. Subject to applicable law, the Merger Agreement may be amended
by the parties thereto, by action taken or authorized by their respective Boards
of Directors, at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company.
The capitalized terms used but not otherwise defined in this Section 7
shall have the meanings set forth in the Merger Agreement.
8. CERTAIN CONDITIONS TO THE OFFER.
Pursuant to the Merger Agreement, the conditions of the Offer are amended
and restated in their entirety as follows:
The Offer shall be conditioned upon the Minimum Shares being validly
tendered and not withdrawn prior to the Expiration Date. Moreover,
notwithstanding any other provision of the Offer, and subject to the terms and
conditions of the Merger Agreement, the Purchaser shall not be obligated to
accept for payment any Shares until all Required Regulatory Approvals shall have
been obtained, made or satisfied and until the expiration of any waiting periods
applicable under antitrust or competition laws of any applicable jurisdiction
and the Purchaser shall not be required to accept for payment, purchase or pay
for, and may delay the acceptance for payment of or payment for, any Share
tendered in the Offer, or if the Minimum Shares shall not have been validly
tendered pursuant to the Offer and not withdrawn, may terminate or amend the
Offer, subject to the terms and conditions of the Merger Agreement and the
Purchaser's obligation to extend the Offer pursuant to Section 1.1(b) of the
Merger Agreement, if, prior to the time of acceptance for payment of any such
Shares (whether or not any other Shares have theretofore been accepted for
payment or paid for pursuant to the Offer), any of the following shall occur and
remain in effect:
(a) the Company, Royal Philips and the United States government or
appropriate agency thereof shall not have reached a mutually satisfactory
arrangement so that Royal Philips' acquisition of the Shares would not
present national security concerns on account of the Company being a party
to government contracts; provided that Royal Philips' invocation of this
condition shall be subject to Royal Philips' satisfaction of its
obligations under Section 4.3(b) of the Merger Agreement;
(b) there shall be pending any action, litigation or proceeding
(hereinafter, an "Action") by any Governmental Entity: (i) challenging the
acquisition by Royal Philips or the Purchaser of Shares or seeking to
restrain or prohibit the consummation of the Offer or the Merger; (ii)
seeking to prohibit or impose any material limitations on Royal Philips',
the Purchaser's or any of their respective affiliates' ownership or
operation of all or any material portion of the business or assets of the
Company and its Subsidiaries taken as a whole or the business or assets of
any significant Subsidiary of Royal Philips, or to compel Royal Philips or
the Purchaser to dispose of or hold separate all or any material portion of
Royal Philips' or the Purchaser's or the Company's business or assets
(including the business or assets of their respective affiliates and
Subsidiaries) as a result of the Offer or the Merger; (iii) seeking to
impose material limitations on the ability of Royal Philips or the
Purchaser effectively to acquire or hold, to exercise full rights of
ownership of, the Shares including, without limitation, the right to vote
the Shares purchased by them on an equal basis with all other Shares on all
matters properly presented to the shareholders of the Company, which in the
case of clause (i), (ii) or (iii), if successful or if the Offer were
consummated prior to the resolution thereof, would have a Material Adverse
Effect on the Company or Royal Philips or would materially and adversely
effect the ability of Royal Philips to conduct its business or the business
of the Company following the consummation of the Offer or Royal Philips
demonstrates would reasonably be determined to have a material adverse
effect on the economic or business benefits of the Merger;
(c) any statute, rule, regulation, order or injunction shall be
enacted, promulgated, entered, enforced or deemed to or become applicable
to the Offer or the Merger, or any other action shall have been taken by
any court or other Governmental Entity, that is reasonably expected to
result in any of the effects of any Action referred to in clauses (i)
through (iii) of paragraph (b) above;
(d) there shall have been a Material Adverse Effect on the Company; or
14
<PAGE> 18
(e) the Agreement shall have been terminated by the Company or Royal
Philips or the Purchaser pursuant to its terms.
The foregoing conditions are for the sole benefit of Royal Philips and the
Purchaser and may be asserted by Royal Philips and the Purchaser regardless of
the circumstances giving rise to such condition or, except for the Minimum
Condition, may be waived by Royal Philips and the Purchaser in whole or in part
at any time and from time to time, by express and specific action to that
effect, in whole or in part at any time and from time to time in their sole
discretion. The failure by Royal Philips or the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
The capitalized terms used in this Section 8 shall have the meanings set
forth in the Merger Agreement.
9. SOURCE AND AMOUNT OF FUNDS.
The Purchaser estimates that the total amount of funds required to purchase
all of the outstanding Shares (other than those already owned by Purchaser) on a
Fully Diluted Basis pursuant to the Offer and the Proposed Merger and to pay
related fees and expenses of Royal Philips and the Purchaser will be
approximately $1,121,546,210 (taking into account any proceeds to be received by
the Company upon the exercise of options). The Purchaser will obtain these funds
from Royal Philips, which will utilize its internal cash reserves to finance the
Offer and the Proposed Merger.
10. CERTAIN LEGAL MATTERS; REGULATORY COMPLIANCE.
Antitrust Compliance. On March 23, 1999, the waiting period under the HSR
Act expired with respect to the acquisition of Shares pursuant to the Offer and
the Merger.
Royal Philips is in the process of collecting information from the Company
in order to determine whether prior to consummation of the Offer antitrust or
other competition law filings must be made in Europe. If any such filing is
required, waiting periods or similar timing requirements may apply that would
require that the Offer be extended beyond the Expiration Date.
Government Contracts. In order to determine whether the United States
government would take the position that the Offer and Merger would impair the
national security of the United States on account of the Company's government
contracts, on March 10, 1999, Royal Philips filed a Voluntary Notice pursuant to
the Exon-Florio Amendment and the final regulations thereunder, to notify CFIUS
of the Offer. Because Royal Philips was able to obtain limited information
regarding VLSI's government contracts, CFIUS notified Royal Philips that it
intended to commence an investigation in order to determine the national
security implications of the Offer. In order to avoid the time consuming
investigation process, Royal Philips withdrew its Voluntary Notice with the
expectation that in the context of a possible negotiated transaction between
Royal Philips and the Company a more expedient resolution addressing any
national security concerns could be arranged. Pursuant to the Merger Agreement,
each of Royal Philips, the Purchaser and the Company have agreed to cooperate
with each other and to use its reasonable best efforts to reach a mutually
satisfactory arrangement with the United States government or an appropriate
agency thereof so that Royal Philips' acquisition of the Shares would not
present national security concerns on account of the Company being a party to
government contracts. In determining whether any such arrangement is
satisfactory, Royal Philips must take into account the relative materiality of
the Company's government contract business as compared to the business of the
Company as a whole. Furthermore, the consummation of the Offer is conditioned
upon the parties reaching a mutually satisfactory arrangement with respect to
this matter. Though no assurance can be given, Royal Philips, the Purchaser and
the Company expect that such an arrangement will be reached.
Litigation. On May 4, 1999, Royal Philips and the Purchaser dismissed the
lawsuit they had initiated against the Company and the Board on March 5, 1999 in
the Court of Chancery of the State of Delaware.
15
<PAGE> 19
11. MISCELLANEOUS.
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. However, the Purchaser may, in its sole discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction.
Neither the Purchaser nor Royal Philips is aware of any jurisdiction in
which the making of the Offer or the acceptance of Shares in connection
therewith would not be in compliance with the laws of such jurisdiction.
The Purchaser and Royal Philips have filed with the SEC a Statement on
Schedule l4D-1 pursuant to Rule l4d-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 Statement and any amendments
thereto, including exhibits, may be examined and copies may be obtained from the
principal office of the SEC in Washington, D.C. in the manner set forth in
Section 9 of the Offer to Purchase.
EXCEPT AS OTHERWISE SET FORTH IN THIS SUPPLEMENT AND IN THE REVISED (GREEN)
LETTER OF TRANSMITTAL, THE TERMS AND CONDITIONS PREVIOUSLY SET FORTH IN THE
OFFER TO PURCHASE REMAIN APPLICABLE IN ALL RESPECTS TO THE OFFER, AND THIS
SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH THE OFFER TO PURCHASE.
No person has been authorized to give any information or make any
representation on behalf of Royal Philips or the Purchaser not contained in this
Supplement, the Offer to Purchase or in the revised (green) Letter of
Transmittal and, if given or made, such information or representation must not
be relied upon as having been authorized.
Neither the delivery of this Supplement or 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 Royal Philips, the
Purchaser, the Company or any of their respective subsidiaries since the date as
of which information is furnished or the date of this Supplement.
KPE ACQUISITION INC.
May 5, 1999
16
<PAGE> 20
Manually signed facsimile copies of the revised (green) Letter of
Transmittal or an original (blue) Letter of Transmittal, properly completed and
duly signed, will be accepted. The Letter of Transmittal, certificates for the
Shares and any other required documents should be sent by each stockholder of
the Company or such stockholder's broker-dealer, commercial bank, trust company
or other nominee to the Depositary as follows:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department (for Eligible Institutions Tender & Exchange Department
P.O. Box 11248 Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR CONFIRMATION TELEPHONE:
(800) 507-9357
</TABLE>
Any questions and requests for assistance or additional copies of the
Supplement, the Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and locations listed below. You
may also contact your broker, dealer, commercial bank or trust company or other
nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Ave., 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
All Others Call Toll Free: (888) 750-5834
The Dealer Manager for the Offer is:
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, New York 10010-3629
Call Toll Free (800) 646-4543
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS
TO PURCHASE PREFERRED STOCK)
OF
VLSI TECHNOLOGY, INC.
AT
$21.00 NET PER SHARE
BY
KPE ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
KONINKLIJKE PHILIPS ELECTRONICS N.V.
(ROYAL PHILIPS ELECTRONICS)
THE EXPIRATION DATE OF THE OFFER HAS BEEN EXTENDED SUCH THAT THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
FRIDAY, MAY 14, 1999, UNLESS THE OFFER IS FURTHER EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (for Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
For Confirmation Telephone:
(800) 507-9357
</TABLE>
DELIVERY OF THIS REVISED LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS REVISED LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS REVISED LETTER OF TRANSMITTAL IS COMPLETED.
This Revised Letter of Transmittal or the original (blue) Letter of
Transmittal previously circulated is to be used either if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in Section 3 of the
Offer to Purchase (as defined below)) is utilized, if delivery is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
(the "Book-Entry Transfer Facility"), pursuant to the procedures set forth in
Section 3 of the Offer to Purchase. Stockholders who deliver Shares by
book-entry transfer are referred to herein as "Book-Entry Stockholders" and
other stockholders are referred to herein as "Certificate Stockholders."
Stockholders whose certificates for Shares are not immediately available or who
cannot comply with the procedure for book-entry transfer on a timely basis, or
who cannot deliver all required documents to the Depositary prior to the
Expiration Date (as defined in the Supplement dated May 5, 1999 to the Offer to
Purchase (the "Supplement")), may tender their Shares in accordance with the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY
DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The Company has amended the Rights Agreement to provide that neither Royal
Philips nor any of Royal Philips' "affiliates" or "associates", including the
Purchaser, will be deemed an Acquiring Person and that the Distribution Date
will not be deemed to occur, and that the Rights will not separate from the
shares of Common Stock, as a result of the entering into the Merger Agreement,
the commencement of the Offer or the consummation of the Merger.
<PAGE> 2
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares described above are being tendered. See Instruction
4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
[ ] CHECK HERE IF CERTIFICATE HAS BEEN LOST OR MUTILATED. SEE SECTION 11.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY FINANCIAL INSTITUTIONS THAT ARE
PARTICIPANTS IN THE SYSTEM OF ANY BOOK-ENTRY TRANSFER FACILITY MAY DELIVER
SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
- --------------------------------------------------------------------------------
If delivered by book-entry transfer, check box: [ ]
Account Number
- --------------------------------------------------------------------------------
Transaction Code Number
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY, ENCLOSE A PHOTOCOPY
OF SUCH NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s)
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
---------------------------------------------------------------
Name of Institution which Guaranteed Delivery
--------------------------------------------------------------------
If delivered by book-entry transfer, check box: [ ]
Account Number
- --------------------------------------------------------------------------------
Transaction Code Number
- --------------------------------------------------------------------------------
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to KPE Acquisition Inc., a Delaware
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Koninklijke Philips Electronics N.V., a company incorporated under the laws of
The Netherlands ("Royal Philips"), the above-described shares, par value $.01
per share (the "Common Stock"), including the associated rights to purchase
preferred stock (the "Rights" and, together with the Common Stock, the
"Shares"), of VLSI Technology, Inc., a Delaware corporation (the "Company"),
pursuant to the Offer to Purchase, dated March 5, 1999, as amended and
supplemented by the Supplement (the "Offer to Purchase"), all of the outstanding
Shares at a price of $21.00 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase, receipt of
which is hereby acknowledged, and in this revised Letter of Transmittal (which,
together with the Offer to Purchase, constitute the "Offer"). The undersigned
understands that the Purchaser reserves the right to transfer or assign, from
time to time, in whole or in part, to one or more of its affiliates, the right
to purchase the Shares tendered herewith.
On the terms and subject to the conditions of the Offer (including the
conditions set forth in Section 13 of the Offer to Purchase and together with,
if the Offer is extended or amended, the terms and conditions of such extension
or amendment), subject to, and effective upon, acceptance for payment of, and
payment for, the Shares tendered herewith in accordance with the terms of the
Offer, the undersigned hereby sells, assigns and transfers to, or upon the order
of, the Purchaser, all right, title and interest in and to all of the Shares
being tendered hereby and any and all cash dividends, distributions, rights,
other Shares or other securities issued or issuable in respect of such Shares on
or after March 4, 1999 (collectively, "Distributions"), and appoints The Bank of
New York (the "Depositary") the true and lawful agent and attorney-in-fact of
the undersigned with respect to such Shares (and any Distributions) with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest) to the fullest extent of such stockholder's
rights with respect to such Shares (and any Distributions) (a) to deliver such
Share Certificates (as defined herein) (and any Distributions) or transfer
ownership of such Shares (and any Distributions) on the account books maintained
by the Book-Entry Transfer Facility, together in either such case with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser, (b) to present such Shares (and any Distributions) for transfer on
the books of the Company and (c) to receive all benefits and otherwise exercise
all rights of beneficial ownership of such Shares (and any Distributions), all
in accordance with the terms and the conditions of the Offer.
The undersigned hereby irrevocably appoints the designees of the Purchaser,
and each of them, the attorneys-in-fact and proxies of the undersigned, each
with full power of substitution, to the full extent of such stockholder's rights
with respect to the Shares tendered hereby which have been accepted for payment
by the Purchaser and with respect to any Distributions. The designees of the
Purchaser will, with respect to the Shares (and any associated Distributions)
for which the appointment is effective, be empowered to exercise all voting and
any other rights of such stockholder, as they, in their sole discretion, may
deem proper at any annual, special or adjourned meeting of the Company's
stockholders, by written consent in lieu of any such meeting or otherwise. This
proxy and power of attorney shall be irrevocable and coupled with an interest in
the tendered Shares. Such appointment is effective when, and only to the extent
that, the Purchaser deposits the payment for such Shares with the Depositary.
Upon the effectiveness of such appointment, without further action, all prior
powers of attorney, proxies and consents given by the undersigned with respect
to such Shares (and any associated Distributions) will be revoked, and no
subsequent powers of attorney, proxies, consents or revocations may be given
(and, if given, will not be deemed effective). The Purchaser reserves the right
to require that, in order for Shares to be deemed validly tendered, immediately
upon the Purchaser's payment for such Shares, the Purchaser must be able to
exercise full voting rights with respect to such Shares (and any associated
Distributions), including voting at any meeting of stockholders.
<PAGE> 4
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distributions) tendered hereby and, when the same are accepted for payment
by the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares (and any Distributions)
tendered hereby. In addition, the undersigned shall promptly remit and transfer
to the Depositary for the account of the Purchaser any and all Distributions in
respect of the 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 any such
Distributions and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof, as determined by the Purchaser in
its sole discretion.
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal 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, personal representatives, successors and
assigns of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to one
of the procedures described in Section 3 of the Offer to Purchase, as amended
and supplemented by the Supplement and 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. The undersigned recognizes that under
certain circumstances set forth in the Offer to Purchase, Purchaser may not be
required to accept for payment any of the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
owner(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered owner(s) appearing under "Description of Shares
Tendered." In the event that both the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or issue any certificates for Shares not tendered or accepted
for payment (and any accompanying documents, as appropriate) in the name of, and
deliver such check and/or return such certificates (and any accompanying
documents, as appropriate) to, the person or persons so indicated. The
undersigned recognizes that the Purchaser has no obligation pursuant to the
Special Payment Instructions to transfer any Shares from the name of the
registered owner thereof if the Purchaser does not accept for payment any of the
Shares so tendered.
<PAGE> 5
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than
the undersigned.
Issue: [ ] Check [ ] Certificate(s) to:
Name:
--------------------------------------------------
(Please Print)
Address:
-----------------------------------------------
------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------
(Tax Identification or Social Security No.)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be sent to someone other than the undersigned,
or to the undersigned at an address other than that above.
Deliver: [ ] Check [ ] Certificate(s) to:
Name:
--------------------------------------------------
(Please Print)
Address:
-----------------------------------------------
----------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------
<PAGE> 6
IMPORTANT
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
(Signature(s) of Holder(s))
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
- --------------------------- , 1999
(Must be signed by registered owner(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered owner(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 set forth full title and see Instruction 5.)
Name(s)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Capacity (Full Title)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDING ZIP CODE)
<TABLE>
<S> <C>
- ---------------------------------------------------------- ----------------------------------------------------------
(AREA CODE AND TELEPHONE NO.) (TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
</TABLE>
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Full Title and Name of Firm
- --------------------------------------------------------------------------------
Dated:
- --------------------------- , 1999
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) which is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (an "Eligible Institution").
Signatures on this Letter of Transmittal need not be guaranteed (a) if this
Letter of Transmittal is signed by the registered owners (which term, for
purposes of this document, includes any participant in the Book-Entry Transfer
Facility's system whose name appears on a security position listing as the owner
of the Shares) of Shares tendered herewith and such registered owner has not
completed the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" on this Letter of Transmittal or (b) if such
Shares are tendered for the account of an Eligible Institution. See Instruction
5 of this Letter of Transmittal.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES OR BOOK-ENTRY
CONFIRMATIONS. This revised Letter of Transmittal or the original (blue) Letter
of Transmittal is to be used either if certificates are to be forwarded herewith
or 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. Certificates for all
physically tendered Shares ("Share Certificates"), or confirmation of any
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of Shares tendered by book-entry transfer, as well as this Letter of
Transmittal properly completed and duly executed with any required signature
guarantees, and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth herein on or
prior to the Expiration Date (as defined in the Offer to Purchase).
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver all other required documents to the Depositary on or prior to
the Expiration Date or who cannot comply with the procedures for book-entry
transfer on a timely basis may nevertheless tender their Shares by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure 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 provided by the Purchaser must be
received by the Depositary prior to the Expiration Date; and (iii) Share
Certificates or confirmation of any book-entry transfer into the Depositary's
account at a Depository Institution of Shares tendered by book-entry transfer,
as well as a Letter of Transmittal, properly completed and duly executed with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and all other documents required by this Letter of
Transmittal, must be received by the Depositary within three New York Stock
Exchange trading days after the date of execution of such Notice of Guaranteed
Delivery.
The Company has amended the Rights Agreement to provide that neither Royal
Phillips nor any of Royal Philips' "affiliates" or "associates", including the
Purchaser, will be deemed an Acquiring Person and that the Distribution Date
will not be deemed to occur, and that the Rights will not separate from the
shares of Common Stock, as a result of the entering into the Merger Agreement,
the commencement of the Offer or the consummation of the Merger.
If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal must accompany each
such delivery.
The method of delivery of Share Certificates and all other required
documents, including delivery through any Book-Entry Transfer Facility, is at
the election and risk of the tendering stockholder. The delivery will be deemed
made only when actually received by the depositary (including, in the case of a
Book-Entry Transfer, by Book-Entry confirmation). If such delivery is by mail,
it is recommended that such certificates and documents be sent by registered
mail, properly insured, with return receipt requested. In all cases, sufficient
time should be allowed to assure 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 thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
<PAGE> 8
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). 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 cases, new certificate(s) for the remainder
of the Shares that were evidenced by the old certificate(s) will be sent to the
registered owner, unless otherwise provided in the appropriate box 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 owners of the Shares
tendered hereby, the signature must correspond with the names as written on the
face of the certificates without alteration, enlargement or any other 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 of the 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-at-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 Parent of their authority so to act must be submitted.
If 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 accepted for payment 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 of the certificates(s) listed, the certificate(s) must be
endorsed or accompanied by the appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or holders appears on the
certificate(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or (in
the circumstances permitted hereby) if certificates for Shares not tendered or
accepted for payment are to be registered in the name of, any person other than
the registered owner, 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 owner or
such person) payable on account of the transfer to such person will be deducted
from the purchase price if satisfactory evidence of the payment of such taxes,
or exemption therefrom, is not submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or accepted for
payment are to be issued or returned to, a person other than the signer of this
Letter of Transmittal or if a check and/or such certificates are to be mailed to
a person other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes on this Letter of Transmittal
should be completed.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or for additional copies of the Offer to Purchase, the
Supplement, the Letter of Transmittal and the Notice of Guaranteed Delivery, may
be directed to the Information Agent or the Dealer Manager at their respective
telephone numbers and
<PAGE> 9
locations set forth below. You may also contact your broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Offer.
9. BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under
the "backup withholding" provisions of federal tax law, the Depositary may be
required to withhold 31% of the purchase price of Shares purchased pursuant to
the Offer. To prevent backup withholding, each tendering stockholder should
complete and sign the Substitute Form W-9 included in this Letter of Transmittal
and either: (a) provide the stockholder's correct taxpayer identification number
("TIN") and certify, under penalties of perjury, that the TIN provided is
correct (or that such stockholder is awaiting a TIN), and that (i) the
stockholder has not been notified by the Internal Revenue Service ("IRS") that
the stockholder is subject to backup withholding as a result of failure to
report all interest or dividends, or (ii) the IRS has notified the stockholder
that the stockholder is no longer subject to backup withholding; or (b) provide
an adequate basis for exemption. If "Applied for" is written in Part I of the
substitute Form W-9, the Depositary will retain 31% of any payment of the
purchase price for tendered Shares during the 60-day period following the date
of the Substitute Form W-9. If the stockholder furnishes the Depositary with his
or her TIN within 60 days of the date of the Substitute W-9, the Depositary will
remit such amount retained during the 60-day period to the stockholder and no
further amounts will be retained or withheld from any payment made to the
stockholder thereafter. If, however, the stockholder has not provided the
Depositary with his or her TIN within such 60-day period, the Depositary will
remit such previously-retained amounts to the IRS as backup withholding and
shall withhold 31% of any payment of the purchase price for the tendered Shares
made to the stockholder thereafter unless the stockholder furnishes a TIN to the
Depositary prior to such payment. In general, an individual's TIN is the
individual's Social Security number. If a certificate for tendered Shares is
registered in more than one name or is not in the name of the actual owner,
consult the Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional guidance on which number to report. If the
Depositary is not provided with the correct TIN or an adequate basis for
exemption, the stockholder may be subject to a $50 penalty imposed by the IRS
and backup withholding at a rate of 31%. Certain holders (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and reporting requirements. In order to satisfy the
Depositary that a foreign individual qualifies as an exempt recipient, such
foreign individual must submit a statement (generally, IRS Form W-8), signed
under penalties of perjury, attesting to that individual's exempt status. A form
for such statements can be obtained from the Depositary.
For further information concerning backup withholding and instructions
for completing the Substitute Form W-9 (including how an individual who does not
have a TIN can obtain one and how to complete the Substitute Form W-9 if Shares
are held in more than one name), consult the Guidelines of the IRS for
Certification of Taxpayer Identification Number on Substitute Form W-9 attached
to this Letter of Transmittal.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Shares to be deemed invalidly tendered, but may require to Depositary to
withhold 31% of the amount of any payments for such Shares. Backup withholding
is not an additional federal income tax. Rather, the federal income tax
liability of a person subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained, provided the appropriate information is furnished to the
IRS.
10. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by
the Purchaser (subject to certain limitations), in whole or in part, at any time
or from time to time, in the Purchaser's sole discretion.
11. LOST OR DESTROYED CERTIFICATES. If any Certificate(s) representing
Shares has been lost or destroyed, the holders should promptly notify the
Company's Transfer Agent, Boston EquiServe, LLP, at 1-800-730-6001. The holders
will then be instructed as to the procedure to be followed 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 REVISED LETTER OF TRANSMITTAL OR AN ORIGINAL (BLUE) LETTER
OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE THEREOF (TOGETHER WITH SHARE
CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE.
<PAGE> 10
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE Name:
FORM W-9 Address: Corporation [ ]
Other(specify) [ ] -----------------
DEPARTMENT OF THE TREASURY Check appropriate box:
INTERNAL REVENUE SERVICE
REQUEST FOR TAXPAYER IDENTIFICATION NUMBER Individual [ ]
(TIN) AND CERTIFICATION Partnership [ ]
- ------------------------------------------------------------------------------------------------------------------------
PART I. Please provide your taxpayer identification number in the space at SSN: ---------------------------------
right. If awaiting TIN, write "Applied For." or
EIN: ---------------------------------
- ------------------------------------------------------------------------------------------------------------------------
PART II. For Payees exempt from backup withholding. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9."
- ------------------------------------------------------------------------------------------------------------------------
PART III. CERTIFICATION
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be
issued to me); and
(2) I am not subject to backup withholding either because: (a) I have not been notified by the IRS that I am subject to
backup withholding as a result of a failure to report all interest or dividends, or (b) the IRS has notified me
that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are subject
to backup withholding because of underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you
are no longer subject to backup withholding, do not cross out item (2).
Signature
----------------------------------------------------------------------------------------------------------------------- Date
----------------------------------------------------------------------------------------------------------------------------- ,
1999
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
<PAGE> 11
Manually signed facsimile copies of this revised Letter of Transmittal or
an original (blue) Letter of Transmittal 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 such stockholder's
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 BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
(for Eligible Institutions
Tender & Exchange Department Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR CONFIRMATION TELEPHONE:
(800) 507-9357
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TO A NUMBER OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Supplement, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and locations listed below. 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:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
ALL OTHERS CALL TOLL FREE: (888) 750-5834
The Dealer Manager for the Offer is:
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, New York 10010-3629
Call Toll Free (800) 848-4543
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE PREFERRED STOCK)
OF
VLSI TECHNOLOGY, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 5, 1999
AND THE SUPPLEMENT THERETO DATED MAY 5, 1999
BY
KPE ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
KONINKLIJKE PHILIPS ELECTRONICS N.V.
(ROYAL PHILIPS ELECTRONICS)
As set forth in Section 3 of the Offer to Purchase (as defined below), this
form or one substantially equivalent may be used to accept the Offer (as defined
below) if certificates for shares of Common Stock, par value $.01 per share (the
"Common Stock"), including the associated rights to purchase Preferred Stock
(the "Rights" and, collectively with the Common Stock, the "Shares"), of VLSI
Technology, Inc., a Delaware corporation (the "Company"), are not immediately
available, or if the procedure for book-entry transfer cannot be complied with
on a timely basis, or all required documents cannot be delivered to the
Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase). This form may be delivered by hand to the Depositary or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution (as defined in Section 3 of the Offer to
Purchase). See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
(for Eligible Institutions Only)
(212) 815-6213
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
For Confirmation Telephone:
(800) 507-9357
</TABLE>
------------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE
DEPOSITARY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to KPE Acquisition Inc., a Delaware
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Koninklijke Philips Electronics N.V., a company incorporated under the laws of
The Netherlands, on the terms and subject to the conditions set forth in the
Offer to Purchase, dated March 5, 1999 (the "Offer to Purchase"), as amended and
supplemented by a Supplement thereto dated May 5, 1999 (the "Supplement") and
the related revised (green) Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "Offer"), receipt of
which is hereby acknowledged, the number of Shares set forth below, all pursuant
to the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase.
Number of Shares:
- ---------------------------------
Certificate Nos.
(if available):
- ---------------------------------------
- ------------------------------------------------------
CHECK BOX IF SHARES
WILL BE TENDERED BY BOOK-ENTRY TRANSFER [ ]
Account Number:
- -----------------------------------
Dated:
- ----------------------------------------------
Name(s) of Record Holder(s):
- -----------------------
- ------------------------------------------------------
- ------------------------------------------------------
Please Print
Address(es):
- ----------------------------------------
- ------------------------------------------------------
Zip Code
Daytime Area Code
and Tel. No.:
- ---------------------------------------
Signature(s):
- ----------------------------------------
- ------------------------------------------------------
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer
to Purchase) with respect to such Shares, in any such case together with a
properly completed and duly executed Letter of Transmittal, with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase), and any other required documents, within THREE trading days after the
date hereof.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
<TABLE>
<S> <C>
Name of Firm:
-------------------------------------
--------------------------------------------
(Authorized Signature)
Address:
------------------------------------------- Name:
--------------------------------------------
(Please Print)
Title:
- -------------------------------------------- --------------------------------------------
(Zip Code)
Area Code and
Tel No.: Dated:
- -------------------------------------------- --------------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES
FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
<TABLE>
<S> <C>
CREDIT FIRST
SUISSE BOSTON
</TABLE>
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue Telephone 212 325 2000
New York, NY 10010-3629
KPE ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
KONINKLIJKE PHILIPS ELECTRONICS N.V.
(ROYAL PHILIPS ELECTRONICS)
HAS INCREASED THE PRICE OF ITS OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE PREFERRED STOCK)
OF
VLSI TECHNOLOGY, INC.
TO
$21.00 NET PER SHARE
THE EXPIRATION DATE OF THE OFFER HAS BEEN EXTENDED SUCH THAT THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
MAY 14, 1999, UNLESS THE OFFER IS FURTHER EXTENDED.
May 5, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by KPE Acquisition Inc., a Delaware corporation (the
"Purchaser") and an indirect wholly owned subsidiary of Koninklijke Philips
Electronics N.V., a company incorporated under the laws of the Netherlands
("Royal Philips"), to act as Dealer Manager in connection with the Purchaser's
offer to purchase all outstanding shares of Common Stock, par value $.01 per
share (the "Common Stock"), including the associated rights to purchase
preferred stock (the "Rights" and, together with the Common Stock, the
"Shares"), of VLSI Technology, Inc., a Delaware corporation (the "Company"), at
$21.00 per Share, net to the seller in cash, on the terms and subject to the
conditions set forth in the Offer to Purchase, dated March 5, 1999 (the "Offer
to Purchase"), as amended and supplemented by the Supplement thereto dated May
5, 1999 (the "Supplement"), and the related revised (green) Letter of
Transmittal (which together with any amendments or supplements thereto,
collectively constitute the "Offer"). Please furnish copies of the enclosed
materials to those of your clients for whom you hold Shares registered in your
name or in the name of your nominee.
The Company has amended the Rights Agreement to provide that neither Royal
Philips nor any of Royal Philips' "affiliates" or "associates", including the
Purchaser, will be deemed an Acquiring Person and that the Distribution Date
will not be deemed to occur, and that the Rights will not separate from the
shares of Common Stock, as a result of the entering into the Merger Agreement,
the commencement of the Offer or the consummation of the Merger.
<PAGE> 2
Tendering stockholders may continue to use the original (blue) Letter of
Transmittal and the original Notice of Guaranteed Delivery previously circulated
with the Offer to Purchase, or may use the revised (green) Letter of Transmittal
and the revised (blue) Notice of Guaranteed Delivery circulated with the
Supplement. While the original (blue) Letter of Transmittal previously
circulated with the Offer to Purchase refers only to the Offer to Purchase,
stockholders using such document to tender their Shares and Rights will
nevertheless be deemed to be tendering pursuant to the amended Offer (including
the amendments and supplements made by the Supplement) and will receive $21.00
for each Share validly tendered and not properly withdrawn and if Shares are
accepted for payment and paid for by the Purchaser pursuant to the Offer.
Enclosed herewith are the following documents:
1. Supplement, dated May 5, 1999;
2. The revised (green) Letter of Transmittal to be used by stockholders of
the Company in accepting the Offer;
3. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of your nominee,
with space provided for obtaining such clients' instructions with regard
to the Offer;
4. The revised (grey) Notice of Guaranteed Delivery;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to The Bank of New York, the Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT WITHDRAWN A NUMBER OF
SHARES WHICH, TOGETHER WITH THE SHARES BENEFICIALLY OWNED BY THE PURCHASER AND
ITS AFFILIATES, WILL CONSTITUTE AT LEAST A MAJORITY OF THE OUTSTANDING SHARES ON
A FULLY DILUTED BASIS AS OF THE DATE THE SHARES ARE ACCEPTED FOR PAYMENT
PURSUANT TO THE OFFER. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS
DESCRIBED IN SECTION 8 OF THE SUPPLEMENT. THE OFFER IS NOT CONDITIONED UPON
ROYAL PHILIPS OR THE PURCHASER OBTAINING FINANCING.
We urge you to contact your clients promptly. Please note that the Offer
and withdrawal rights will expire at 12:00 Midnight, New York City time, on
Friday, May 14, 1999, unless the Offer is extended.
<PAGE> 3
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares or timely confirmation of the book-entry transfer of such Shares
into the Depositary's account at the Book-Entry Transfer Facility (as defined in
the Offer to Purchase) pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, (ii) the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase)) and (iii) any other documents
required by such Letter of Transmittal. UNDER NO CIRCUMSTANCES WILL INTEREST BE
PAID ON THE PURCHASE PRICE FOR SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER
OR ANY DELAY IN MAKING SUCH PAYMENT PURSUANT TO THE OFFER.
Neither Royal Philips nor the Purchaser will pay any fees or commissions to
any broker or dealer or other person (other than the Depositary, the Information
Agent and the Dealer Manager, as disclosed in the Offer to Purchase) in
connection with the solicitation of tenders of Shares pursuant to the Offer. You
will be reimbursed upon request for customary mailing and handling expenses
incurred by you in forwarding the enclosed offering materials to your clients.
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 the enclosed Supplement. Requests for additional
copies of the enclosed materials may be directed to the Information Agent or the
Dealer Manager or to brokers, dealers, commercial banks or trust companies.
Very truly yours,
CREDIT SUISSE FIRST BOSTON CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON, THE AGENT OF ROYAL PHILIPS, THE PURCHASER, THE DEALER MANAGER,
THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR
MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER NOT
CONTAINED IN THE OFFER TO PURCHASE, THE SUPPLEMENT OR THE LETTER OF TRANSMITTAL.
<PAGE> 1
KPE ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
KONINKLIJKE PHILIPS ELECTRONICS N.V.
(ROYAL PHILIPS ELECTRONICS)
HAS INCREASED THE PRICE OF ITS OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE PREFERRED STOCK)
OF
VLSI TECHNOLOGY, INC.
TO
$21.00 NET PER SHARE
THE EXPIRATION DATE OF THE OFFER HAS BEEN EXTENDED SUCH THAT THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
MAY 14, 1999, UNLESS THE OFFER IS FURTHER EXTENDED.
To Our Clients:
Enclosed for your consideration is a Supplement dated May 5, 1999 (the
"Supplement") to the Offer to Purchase, dated March 5, 1999 (the "Offer to
Purchase"), and the related revised (green) Letter of Transmittal (which
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to the offer by KPE Acquisition Inc., a Delaware corporation
(the "Purchaser") and an indirect wholly owned subsidiary of Koninklijke Philips
Electronics N.V., a corporation incorporated under the laws of The Netherlands
("Royal Philips"), to purchase for cash, all of the outstanding shares of Common
Stock, par value $.01 per share (the "Common Stock"), including the associated
rights to purchase preferred stock (the "Rights"), of VLSI Technology, Inc., a
Delaware corporation (the "Company") (the Common Stock and the Rights together
are referred to herein as the "Shares"), on the terms and subject to the
conditions set forth in the Offer. The Company has amended the Rights Agreement
to provide that neither Royal Philips nor any of Royal Philips' "affiliates" or
"associates", including the Purchaser, will be deemed an Acquiring Person and
that the Distribution Date will not be deemed to occur, and that the Rights will
not separate from the shares of Common Stock, as a result of the entering into
the Merger Agreement, the commencement of the Offer or the consummation of the
Merger.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE REVISED (GREEN) LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED TO
TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The Offer price is $21.00 per Share, net to the Seller in cash, without
interest thereon, upon the terms and subject to the conditions of the
Offer.
2. The Offer is being made for all of the outstanding Shares.
<PAGE> 2
3. The Offer is conditioned upon, among other things, there being validly
tendered prior to the expiration of the Offer a number of Shares which,
together with the Shares beneficially owned by the Purchaser and its
affiliates, will constitute at least a majority of the outstanding Shares
on a fully diluted basis as of the date the Shares are accepted for
payment pursuant to the Offer (the "Minimum Tender Condition"). The Offer
is also subject to certain other conditions described in Section 8 of the
Supplement. The Offer is not conditioned upon Royal Philips or the
Purchaser obtaining financing.
4. THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MAY 14, 1999, UNLESS THE OFFER IS EXTENDED BY THE
PURCHASER (THE "EXPIRATION DATE").
5. Any stock transfer taxes applicable to a sale of Shares to the Purchaser
will be borne by the Purchaser, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
6. Tendering Shareholders will not be obligated to pay brokerage fees or
commissions to the Dealer Manager, the Depositary, or the Information
Agent or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer. However, federal income tax backup withholding at
a rate of 31% may be required, unless an exemption in provided or unless
the required taxpayer identification information is provided. See
Instruction 9 of the Letter of Transmittal.
Your instructions to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the Expiration Date.
If you wish to have us tender any of 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 on the detachable part hereof. Your
instructions should be forwarded to us in ample time to permit us to submit a
tender on your behalf prior to the Expiration Date.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by The Bank of New York (the
"Depositary"), of (a) certificates for (or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) with respect to) such Shares, (b) either the
original (blue) or the revised (green) Letter of Transmittal, properly completed
and duly executed, with any required signature guarantees, or, in the case of a
book-entry transfer effected pursuant to the procedure set forth in Section 3 of
the Offer to Purchase, an Agent's Message, and (c) any other documents required
by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at
different times depending upon when certificates for Shares or Book-Entry
Confirmations with respect to Shares are actually received by the Depositary.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR SHARES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING PAYMENT PURSUANT
TO THE OFFER.
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 or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities or blue sky laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed
made on behalf of the Purchaser by Credit Suisse First Boston Corporation, the
Dealer Manager for the Offer, or one or more registered brokers or dealers that
are licensed under the laws of such jurisdiction. An envelope in which to return
your instructions to us is enclosed. If you authorize tender of your Shares, all
such Shares will be tendered unless otherwise indicated in such instruction
form. Please forward your instructions to us as soon as possible to allow us
ample time to tender Shares on your behalf prior to the expiration of the Offer.
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE PREFERRED STOCK)
OF
VLSI TECHNOLOGY, INC.
The undersigned acknowledge(s) receipt of your letter, the Offer to
Purchase, dated March 5, 1999 (the "Offer to Purchase"), as amended and
supplemented by the Supplement thereto dated May 5, 1999 (the "Supplement") and
the related revised (green) Letter of Transmittal relating to the offer by KPE
Acquisition Inc., a Delaware corporation and an indirect wholly owned subsidiary
of Koninklijke Philips Electronics N.V., a company incorporated under the laws
of The Netherlands, to purchase for $21.00 net to the seller in cash all
outstanding shares of Common Stock, par value $.01 per share (the "Common
Stock"), including the associated rights to purchase preferred stock (the
"Rights"), of VLSI Technology, Inc., a Delaware corporation. The Common Stock
and the Rights together are referred to herein as the "Shares."
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, on the terms and subject to the
conditions set forth in the Offer to Purchase, the Supplement and the related
Letter of Transmittal.
<TABLE>
<S> <C>
Number of Shares to be Tendered:* SIGN HERE
-------------------Shares
-----------------------------------------------------
Daytime Area Code
and Tel. No.
- -------------------------------------------
-----------------------------------------------------
Signature(s)
Taxpayer Identification
No. or Social Security No.
- ----------------------------- -----------------------------------------------------
Dated: ---------------------------------------- ,
1999
-----------------------------------------------------
(Please print name(s) and address(es))
</TABLE>
- ---------------
* Unless otherwise indicated, it will be assumed that all your Shares are to be
tendered.
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: e.g.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: e.g., 00-0000000. The table below will help determine the name and
number to give the payer.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE NAME AND
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT NUMBER OF--
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under state law
5. Sole proprietorship The owner(3)
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE NAME AND
EMPLOYER
FOR THIS TYPE OF ACCOUNT IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
6. A valid trust, estate, or pension The legal entity(4)
trust
7. Corporate account The corporation
8. Association, club, religious, The organization
charitable, educational or other
tax-exempt organization account
9. Partnership account The partnership
10. A broker or registered nominee The broker or
nominee
11. 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
- ------------------------------------------------------------
</TABLE>
(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) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your Social Security Number or
Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the identifying number of the personal representative or
trustee unless the legal entity itself is not designated in the account
title.)
NOTE: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A TAXPAYER IDENTIFICATION NUMBER
Persons without a taxpayer identification number should apply for one and
write "Applied for" in Part 1 of Substitute Form W-9. Individuals should file
Form SS-5, Application for a Social Security Card (or, in the case of resident
aliens who do not have and are not eligible for Social Security numbers, Form
W-7, Application for Individual Taxpayer Identification Number), corporations,
partnerships or other entities should file Form SS-4, Application for Employer
Identification Number. Form SS-5 may be obtained from local Social Security
Administration offices. Forms W-7 and SS-4 may be obtained from the IRS by
calling 1-800-TAX-FORM (1-800-829-3676).
NOTE: Writing "Applied for" in Part 1 means that you have already applied for a
TIN or that you intend to apply for one soon.
The following persons are exempt from backup withholding on payments from
the sale of Shares pursuant to the Offer:
- A corporation.
- An organization exempt from tax under Section 501(a) of the Internal
Revenue Code.
- An individual retirement plan ("IRA").
- A custodial account under Section 403(b)(7) of the Internal Revenue Code.
- The United States or any of its agencies or instrumentalities.
- A State, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
- A foreign government or any of its political subdivisions, agencies or
instrumentalities.
- A foreign central bank of issue.
- A dealer in securities or commodities required to register in the United
States or a possession of the United States.
- A futures commission merchant registered with the Commodities Futures
Trading Commission.
- A real estate investment trust.
- An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- A common trust fund operated by a bank under Section 584(a) of the
Internal Revenue Code.
- A financial institution.
- A person registered under the Investment Advisers Act of 1940 who
regularly acts as a broker.
Such persons should nevertheless complete Substitute Form W-9 to avoid
possible erroneous withholding. An exempt person should enter the correct TIN in
part I, write "Exempt" in Part II, and sign and date the form.
PRIVACY ACT NOTICE. -- Section 6109 of the Internal Revenue Code requires most
recipients of dividend, interest, or other payments to give taxpayer
identification numbers to payers who must report the payments to IRS. The IRS
uses the numbers for identification purposes and to help verify the accuracy of
individuals' tax returns. The IRS may also provide this information to the
Department of Justice for civil and criminal litigation and to states, cities
and the District of Columbia to help carry out their tax laws.
Payers must be given the numbers whether or not recipients are required to file
tax returns. Payers must generally withhold 31% of taxable interest, dividend,
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
