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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X]Preliminary Proxy Statement
[_]Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[_]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
EXIDE ELECTRONICS GROUP, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DANAHER CORPORATION
PQR ACQUISITION CORPORATION
(NAME OF PERSONS FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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PRELIMINARY MATERIALS
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SOLICITATION STATEMENT
OF
DANAHER CORPORATION
AND
PQR ACQUISITION CORPORATION
TO CALL A
SPECIAL MEETING OF SHAREHOLDERS
OF
EXIDE ELECTRONICS GROUP, INC.
This Solicitation Statement and the accompanying GOLD Appointment of
Designated Agents ("Agent Designation") are being furnished to holders of
outstanding shares of Common Stock, par value $.01 per share (the "Common
Stock") and outstanding shares of Series G Convertible Preferred Stock, par
value $.01 per share (the "Preferred Stock") of Exide Electronics Group, Inc.,
a Delaware corporation (the "Company"), in connection with the solicitation of
Agent Designations from holders of the shares of Common Stock and Preferred
Stock. Unless the context indicates otherwise, as used herein Shares shall
mean shares of Common Stock and Preferred Stock and all outstanding warrants
to purchase shares of Common Stock at $13.475 per share of common stock (the
"Warrants") and shareholders shall mean holders of Shares. Unless the context
indicates otherwise, all references to shares of Common Stock shall include
the associated Rights issued pursuant to the Rights Agreement, dated as of
November 25, 1992 (the "Rights Agreement") between the Company and First Union
National Bank of North Carolina, as Rights Agent. The Agent Designations are
being solicited by Danaher Corporation ("Parent"), a Delaware corporation, and
PQR Acquisition Corporation (the "Purchaser"), a Delaware corporation and a
wholly owned subsidiary of Parent, to provide for the calling of a special
meeting of shareholders of the Company (the "Special Meeting") for the purpose
of considering and voting on the proposals described below under the heading
"Special Meeting Proposals" (the "Special Meeting Proposals"). The principal
executive offices of the Company are located at 8609 Six Forks Road, Raleigh,
North Carolina 27615.
This Solicitation Statement and accompanying GOLD Agent Designation are
first being furnished to Company shareholders on or about July , 1997. Agent
Designations must be delivered to Parent on or before August , 1997, unless
such date is extended by Parent and the Purchaser, in their sole discretion.
THIS SOLICITATION STATEMENT IS BEING MADE BY PARENT AND THE PURCHASER AND
NOT ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD").
THE AGENT DESIGNATIONS WILL NOT CONFER ANY RIGHTS TO VOTE ON MATTERS BROUGHT
BEFORE THE SPECIAL MEETING AND NO PROXIES FOR SUCH VOTES ARE BEING SOLICITED
WITH THIS SOLICITATION STATEMENT. IF THE SPECIAL MEETING IS CALLED, PARENT AND
THE PURCHASER WILL SEND SHAREHOLDERS OF THE COMPANY ADDITIONAL PROXY MATERIALS
SOLICITING PROXIES TO VOTE ON THE SPECIAL MEETING PROPOSALS.
On July 10, 1997, the Purchaser commenced a tender offer to purchase (the
"Offer") all of the outstanding shares of Common Stock and Preferred Stock for
$20 per share and all of the outstanding Warrants for $6.525 per Warrant to
purchase one share of Common Stock, in each case net to the seller in cash,
upon the terms and subject to the conditions set forth in an Offer to Purchase
dated July 10, 1997, as the same may be amended from time to time (the "Offer
to Purchase"), and the related Letter of Transmittal (the "Letter of
Transmittal") (which as amended from time to time together constitute the
"Offer").
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PURPOSE OF THE SOLICITATION
Pursuant to this Solicitation Statement, Parent and the Purchaser are
soliciting Agent Designations from holders of outstanding Shares to call the
Special Meeting. By executing an Agent Designation, a shareholder will
designate specified persons as agents (each a "Designated Agent") of the
Company shareholders with authority to take all actions, other than voting the
Shares at the Special Meeting, permitted to be taken by such shareholders
under the Delaware General Corporation Law (the "GCL") in order to call and
convene the Special Meeting. The Special Meeting is being called to consider
and vote upon the Special Meeting Proposals, which include, among other
things, (i) the amendment of the Company By-Laws to increase the size of the
Board from 9 to 19 (ii) the election of 10 Parent nominees (the "Parent
Nominees") as directors of the Company (who would then constitute a majority
of the Board), (iii) the repeal of any By-Laws or amendments adopted by the
Company after December 21, 1989 and prior to the effectiveness of the
foregoing proposals, (iv) any proposals made in respect of actions taken that
could impede, delay or make more costly to Parent or DH Holdings Corp., a
Delaware corporation and a wholly owned subsidiary of Parent ("DHHC"), the
acquisition of the Company or any of its securities or assets or gaining
control of the Company, including through the election of a majority of the
Board and (v) the transaction of such other business as may properly come
before the Special Meeting or any adjournment or postponement thereof.
IF YOU BELIEVE THAT YOU SHOULD HAVE THE OPPORTUNITY TO DECIDE THE FUTURE OF
YOUR COMPANY AND THAT YOU SHOULD HAVE THE CHANCE TO RECEIVE $20 NET PER SHARE
IN CASH FOR ALL OF YOUR SHARES, PARENT AND THE PURCHASER URGE YOU TO SIGN AND
RETURN YOUR GOLD AGENT DESIGNATION.
YOUR AGENT DESIGNATION IS IMPORTANT. PLEASE SIGN, DATE AND RETURN THE
ACCOMPANYING GOLD AGENT DESIGNATION TODAY.
NEITHER THE CALL OF THE SPECIAL MEETING NOR SHAREHOLDER APPROVAL OF THE
SPECIAL MEETING PROPOSALS WILL REQUIRE YOU TO TENDER YOUR SHARES TO THE
PURCHASER. TENDERING SHARES PURSUANT TO THE OFFER WILL NOT CONSTITUTE A VOTE
IN FAVOR OF THE SPECIAL MEETING PROPOSALS. INSTEAD, YOU MUST AUTHORIZE THE
CALL OF THE SPECIAL MEETING BY USING THE ENCLOSED GOLD AGENT DESIGNATION AND
MUST ALSO VOTE IN FAVOR OF THE SPECIAL MEETING PROPOSALS VOTED UPON AT THE
SPECIAL MEETING. THE FAILURE TO EXECUTE AND RETURN THE GOLD AGENT DESIGNATION
WILL HAVE THE SAME EFFECT AS OPPOSING THE CALL OF THE SPECIAL MEETING AND MAY
RESULT IN WITHDRAWAL OF THE OFFER.
On July 10, 1997, the Purchaser commenced the Offer for all outstanding
shares of Common Stock and Preferred Stock for $20 per Share and for all
outstanding Warrants for $6.525 per Warrant to purchase one share of Common
Stock, in each case net to the seller in cash. The purpose of the Offer is to
acquire control of, and the entire equity interest in, the Company. Parent
intends, following the completion of the Offer, to effect a merger or similar
business combination between the Company and the Purchaser at the same price
per Share to be paid in the Offer (the "Proposed Merger"), on the terms and
subject to the conditions described below and in the Offer to Purchase. See
"Terms and Conditions of the Offer" below.
Parent intends to seek to negotiate with the Company with respect to the
acquisition of the Company. If such negotiations result in a definitive merger
agreement between the Company and Parent, certain material terms of the Offer
may change and Parent would not proceed with any solicitation with regard to
the Special Meeting. Accordingly, such negotiations could result in, among
other things, termination of the Offer and submission of a different
acquisition proposal to the Company's shareholders for their approval. During
the course of discussions with the Company, Parent offered to pay $22 per
share subject to confidential due diligence and negotiations. See
"Background".
The Schedule 14D-1, which includes the Offer to Purchase and was filed by
the Purchaser with the Securities and Exchange Commission (the "Commission")
on July 10, 1997, and all amendments thereto should be available for
inspection at the public reference facilities of the Commission at 450 Fifth
Street, N.W., Washington, DC 20549, and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, NY 10048
and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL 60661.
Copies of such information should be obtainable from the Public Reference
Section of the Commission
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at 450 Fifth Street, N.W., Washington, DC 20549, at prescribed rates. The
Commission also maintains a web site at http://www.sec.gov that contains
reports, proxy statements and other information. Copies of the Offer to
Purchase and related materials can also be obtained from D.F. King & Co., Inc.,
77 Water Street, New York, New York 10005.
EFFECT OF EXECUTION AND DELIVERY OF AGENT DESIGNATIONS
Under the Company By-Laws as in effect on June 12, 1997, the date Parent
submitted a request to call the Special Meeting, a special meeting of the
Company shareholders may be called by the holders of a majority of the
outstanding shares of Common Stock. On June 23, 1997, the Company amended and
restated the By-Laws (the "Amended and Restated By-Laws") to provide that a
Special Meeting may be called by holders of a majority of the outstanding
shares of Common Stock and Preferred Stock, as described below. Parent believes
such amendment violates Delaware law and has commenced suit challenging the
amendment in the Court of Chancery of the State of Delaware. See "Background."
As used herein, "Requisite Holders" shall mean holders required to call the
Special Meeting.
According to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997, as of May 12, 1997, there were outstanding 10,049,543
shares of Common Stock and 1,000,000 shares of Preferred Stock. Each share of
Preferred Stock is convertible into one share of Common Stock and is entitled
to one vote. The shares of Preferred Stock vote together with the shares of
Common Stock as a single class. According to the Company's Proxy Statement for
the Company's 1997 Annual Meeting of Shareholders (the "Company Proxy
Statement"), there were outstanding Warrants to purchase 643,750 shares of
Common Stock at a price of $13.475 per share. According to the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 1996, there were
options to acquire 841,017 shares of Common Stock outstanding at September 30,
1996.
According to the Company Proxy Statement, all of the outstanding shares of
Preferred Stock were issued to Fiskars Holdings, Inc. and Fiskars Oy Ab
("Fiskars") and, as of January 8, 1997 such holders also held 825,000 shares of
Common Stock. Accordingly, such holders held approximately 16.5% of the total
outstanding shares of Common Stock and Preferred Stock. Pursuant to various
provisions in a Stockholder Agreement, dated as of March 13, 1996 (the
"Fiskars Stockholder Agreement"), between the Company and Fiskars, Fiskars are
prohibited from tendering their shares or otherwise participating in the Offer.
Fiskars may not tender their Shares in any tender or exchange offer by a person
or entity other than the Company unless (i) the Board recommends that
shareholders accept such tender or exchange offer; (ii) in connection with such
tender or exchange offer the Board (with members of the Board who have been
designated by Fiskars abstaining) redeems the outstanding Rights; or (iii)
during, prior to or in anticipation of, a tender or exchange offer, the Board
(with members of the Board who have been designated by Fiskars abstaining)
exempts the person making the tender or exchange offer from the operation of
the Rights Agreement. In addition, (i) Fiskars may not initiate, encourage or
cooperate or participate in any proposal to acquire the Company, acquire a
substantial portion of the Company assets, or to merger, restructure, combine
or recapitalize the Company, unless such proposal is supported by the Board and
(ii) Fiskars may not initiate, encourage or cooperate or participate in any
proxy solicitation on behalf of any person other than the Company, the Board or
a person whose solicitation is supported by the Board. Fiskars must cause their
Shares to be represented at shareholder meetings, must vote all Shares held by
them as directed by the Board, and at elections of directors, must vote all
Shares in favor of the election of directors nominated by the Board. Until
March 13, 2001, Fiskars may not sell Shares in the open market other than
pursuant to a registration statement or in accordance with Rule 144 under the
Securities Act of 1933. The Fiskars Stockholder Agreement requires Fiskars to
offer Shares to the Company before Fiskars accept any offer to purchase Shares
from a third party, subject to Fiskars' right to tender Shares in a tender
offer in accordance with the provisions described above.
In addition, according to the Company Proxy Statement, as of January 8, 1997,
the officers and directors of the Company, as a group, held approximately 11.5%
of the Shares outstanding on a fully diluted basis (other than dilution due to
the Warrants) and approximately 8% of the presently outstanding shares of
Common Stock and Preferred Stock.
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The Company's By-Laws, as amended through December 21, 1989, provided that
special meetings of shareholders shall be called at the request in writing of
shareholders owning a majority in the amount of any class of capital stock of
the Company issued and outstanding and entitled to vote, such request to state
the purpose of the proposed meeting.
On June 12, 1997, Parent delivered a letter to the Company pursuant to such
by-law requesting that the Company call the Special Meeting.
On June 23, 1997, the Company amended and restated its By-Laws. These
amendments purported to modify the procedures for calling a special meeting and
added "advance notice" provisions. The Amended and Restated By-Laws were filed
as an exhibit to the Company's Current Report on Form 8-K dated July 9, 1997.
Article II, Section 5(b) of the Amended and Restated By-Laws requires that
shareholders who wish to call a special meeting make a written request to the
Company and that the Board of Directors of the Company fix a record date to
determine the shareholders entitled to request the Special Meeting (the
"Request Record Date"). The Board of Directors must adopt a resolution fixing a
Request Record Date within five business days of receiving the notice and the
Request Record Date must be not more than ten days after the date of the
resolution. If the Board of Directors fails to set a Request Record Date, the
Request Record Date will be the date that the shareholders delivered the
request. To be valid the request must, among other things, set forth the
purpose of the Special Meeting and must include all information regarding the
shareholders, any matters to be brought before the meeting, and any nominees
that are required of shareholders giving notice of nominations of directors or
other business to be brought before an annual meeting. Article II, Section 5(c)
provides that special meetings of shareholders shall be called upon the
delivery of a written request of shareholders of record as of the Request
Record Date representing at least a majority in the amount of the capital stock
of the Company issued and outstanding and entitled to vote on any matter
proposed to be considered at such special meeting. The actions to be taken at
the Special Meeting would require the affirmative vote of a majority of the
voting power of the outstanding Common Stock and Preferred Stock. The
shareholders' request must state, among other things, the specific purpose for
which such special meeting is to be held. Article II, Section 5(d) of the
Amended and Restated By-Laws provides that in the case of any special meeting
called upon the request of shareholders, such special meeting shall be held at
a date, not less than 10 and not more than 60 days after the record date for
the Special Meeting, designated by the Board of Directors of the Company. If
the Board of Directors of the Company does not designate a date for the Special
Meeting within five days of receiving a valid request, then such meeting shall
be held on the 90th day after the delivery date and the record date for the
meeting shall be the 60th day before the meeting. The Board may set a record
date which is not later than 20 business days after the delivery date of the
request and set a meeting not less than 10 days and not more than 60 days after
such record date.
Under the "advance notice" procedures of the Amended and Restated By-Laws, in
order for a shareholder to nominate a person for election to the Board of
Directors of the Company or bring any other business before an annual meeting
of shareholders of the Company, the shareholder must provide notice to the
Company not later than 60 nor earlier than 90 days prior to the first
anniversary of the prior annual meeting, unless the date of the annual meeting
is advanced by more than 30 days or delayed more than 60 days from such
anniversary. As in the case of a request for a special meeting, the shareholder
notice must include information regarding the shareholder, any matters to be
brought before the meeting and any directors to be nominated at the meeting.
The Amended and Restated By-Laws provide that in order for a shareholder to
nominate a person for election to the Board of Directors of the Company, the
shareholder must deliver a written notice to the Company not earlier than the
earlier of (1) the delivery of the request described in Section 5(b) of Article
II of the By-Laws and (2) 90 days prior to such special meeting and not later
than the close of business on the later of (1) the 60th day prior to such
special meeting and (2) the 10th day following the day on which the Company
first makes a public announcement of the date of such special meeting at which
directors may be nominated. Such written notice shall set forth all of the
information that would be required to be set forth in a shareholder's notice
described in the last sentence of the preceding paragraph.
The Amended and Restated By-Laws provide that only persons who are nominated
in accordance with the procedures set forth in the By-Laws shall be eligible to
serve as directors and only such business shall be
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conducted at an annual meeting or a special meeting as shall have been brought
before such meeting in accordance with the procedures set forth in the By-Laws
and as shall have been described in the Company's notice sent to shareholders.
Parent believes that the amendments of the By-Laws set forth above violates
Delaware law. See "Background."
Following receipt of Agent Designations from the Requisite Holders, the
Designated Agents will duly request (the "Request") the Chairman or the
Secretary of the Company to call the Special Meeting and to cause appropriate
notice of the Special Meeting to be given to the Company's shareholders
entitled thereto that the Special Meeting will be not less than 30 nor more
than 40 days after the date of the Request, and will thereupon make appropriate
delivery, to the Chairman or the Secretary of the Company, of the Request.
In the Request, the Designated Agents will also request that the Board take
action, within such time as is specified in the Request, to fix a record date
for the determination of the Company's shareholders who are entitled to receive
notice of or to vote at the Special Meeting (the "Special Meeting Record
Date"), in accordance with the Company's Certificate of Incorporation, its By-
Laws and the GCL.
If the Amended and Restated By-Laws are valid under Delaware law, only
holders of record as of the Request Record Date will be entitled to execute
Agent Designations. Otherwise, the Designated Agents will call the Special
Meeting pursuant to the Agent Designation executed by persons who remain
shareholders of record on the date of such call.
Under the Company's Certificate of Incorporation and its By-Laws and the GCL
and subject to their provisions, Requisite Holders are entitled to deliver the
Request and to take all other actions described herein and in the GCL in
connection with calling the Special Meeting, any adjournment thereof, fixing
the time thereof, causing notice thereof to be given to the Company's
shareholders, and causing the Special Meeting Record Date to be fixed. The
Agent Designations grant to the Designated Agents the full rights and authority
of Requisite Holders to take these actions in connection with the Special
Meeting, but THE AGENT DESIGNATIONS WILL NOT GIVE THE DESIGNATED AGENTS THE
RIGHT TO VOTE ANY SHARES AT THE SPECIAL MEETING.
You may revoke your Agent Designation at any time by executing and delivering
a written revocation to Danaher Corporation, c/o D.F. King & Co. Inc., 77 Water
Street, New York, New York 10005 or to Exide Electronics Group, Inc., 8609 Six
Forks Road, Raleigh, North Carolina 27615 (please send a copy of any revocation
sent to the Company to Danaher Corporation, c/o D.F. King & Co. Inc., 77 Water
Street, New York, New York 10005). A revocation may be in any written form,
provided that it clearly states that your Agent Designation is no longer
effective. Any revocation of an Agent Designation will not effect any action
taken by the Designated Agents pursuant to the Agent Designation prior to such
revocation.
THE PURPOSE OF THE SPECIAL MEETING IS TO PROVIDE SHAREHOLDERS OF THE COMPANY
THE OPPORTUNITY TO CONSIDER AND VOTE ON THE SPECIAL MEETING PROPOSALS.
BY AUTHORIZING THE CALL OF THE SPECIAL MEETING, YOU WILL ALLOW THE COMPANY'S
SHAREHOLDERS TO PROTECT THEIR INTERESTS IN THE COMPANY BY EXPRESSING THEIR
VIEWS ON THE OFFER AND THE PROPOSED MERGER DIRECTLY TO THE BOARD.
BY EXECUTING AND RETURNING THE GOLD AGENT DESIGNATION TO PARENT, YOU ARE NOT
COMMITTING TO CAST ANY VOTE IN FAVOR OF OR AGAINST, NOR ARE YOU GRANTING ANY
PROXY TO VOTE ON, ANY MATTER TO BE BROUGHT BEFORE
THE SPECIAL MEETING. EXECUTION AND DELIVERY OF AN AGENT DESIGNATION WILL NOT
OBLIGATE YOU IN ANY WAY TO SELL YOUR SHARES PURSUANT TO THE OFFER. A VALIDLY
EXECUTED AND UNREVOKED AGENT DESIGNATION AUTHORIZES THE DESIGNATED AGENTS (I)
TO CALL THE SPECIAL MEETING, (II) TO CAUSE THE DATE THEREOF TO BE FIXED AND
NOTICE THEREOF, OR OF ANY ADJOURNMENT THEREOF, TO BE GIVEN, (III) TO CAUSE THE
SPECIAL MEETING RECORD DATE, OR A RECORD DATE FOR ANY ADJOURNMENT OF THE
SPECIAL MEETING, TO BE FIXED AND (IV) TO EXECUTE ALL RIGHTS OF REQUISITE
HOLDERS INCIDENTAL TO CALLING AND CONVENING THE SPECIAL MEETING. TO VOTE ON THE
MATTERS TO BE BROUGHT BEFORE THE SPECIAL MEETING YOU MUST VOTE BY PROXY OR IN
PERSON AT THE SPECIAL MEETING. TO ACCEPT THE OFFER YOU MUST FOLLOW THE
PROCEDURES SET FORTH IN THE OFFER TO PURCHASE.
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The tender of Shares pursuant to the Offer does not constitute the grant to
Parent or the Purchaser of any rights to execute Agent Designations with
respect to the tendered Shares until such time as such Shares are accepted for
payment by the Purchaser. Accordingly, it is important that you execute an
Agent Designation even if you tender Shares pursuant to the Offer.
If any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution, only it can execute an Agent Designation for
such Shares and will do so only upon receipt of your specific instructions.
Accordingly, please contact the person responsible for your account and
instruct that person to execute the GOLD Agent Designation.
If the Purchaser should terminate, or materially amend the terms of, the
Offer prior to the delivery of the Request to the Company's officer, Parent or
the Purchaser will disseminate such information regarding such changes to the
Company's shareholders and, in appropriate circumstances, will provide the
Company's shareholders with a reasonable opportunity to revoke their Agent
Designations prior to the date when the Request is delivered to the Company's
officer.
SPECIAL MEETING PROPOSALS
1. The amendment of the Company By-Laws to increase the size of the Board of
Directors of the Company from 9 to 19.
The Company's By-Laws provide that the number of directors on the Board
shall be not less than six nor more than fifteen, with the exact number of
directors to be determined from time to time by a resolution of the Board.
According to publicly available information, the Company currently has nine
directors. At the Special Meeting DHHC will propose that Section 3.1 of the
By-Laws be amended to increase the number of directors of the Company from
nine to nineteen by replacing Article III, Section 1 of the By-Laws, which
currently provides that
"The numbers of directors which shall constitute the whole board shall be
not less than six (6) nor more than fifteen (15), as may be determined from
time to time by a resolution adopted by the board of directors."
with the following sentence:
"The board of directors of the corporation shall consist of nineteen
members."
2. The election of 10 nominees as directors of the Company.
DHHC will designate ten persons to be nominees for election as directors of
the Company at the Special Meeting.
3. The repeal of any By-Laws or amendments adopted by the Company after
December 21, 1989, other than the By-Law proposed by Parent and adopted at the
Special Meeting.
This proposal is designed to prevent the Board from taking actions to amend
the Company's By-Laws to attempt to nullify the actions taken by the
shareholders pursuant to the foregoing proposals or to create new obstacles to
the consummation of the Offer and the Proposed Merger. According to publicly
available information, the Company's By-Laws were adopted on December 21, 1989
and amended and restated on June 23, 1997. This proposal would repeal any
amendment if the Board has adopted since December 21, 1989, or adopted prior
to the effectiveness of the Special Meeting proposals, including the
amendments of June 23, 1997. The purpose of this amendment is to prevent the
Board from creating new obstacles to the consummation of the Offer and the
Proposed Merger and to remove any existing undisclosed obstacles to the
consummation of the Offer and the Proposed Merger.
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4. Such other proposals as Parent or DHHC may propose in respect of any
action taken by the Company, the Board or any of their associates or
affiliates that has, or if consummated would have, the effect of impeding,
delaying or making more costly to Parent or DHHC (i) the acquisition of the
Company or any of its securities or assets or (ii) gaining control of the
Company, including through the election of a majority of the Board.
This proposal is designed to prevent the Company from taking any action that
would impede, delay or make it more costly for Parent or DHHC to effect the
Proposed Merger or to gain control of the Company, including through the
election of a majority of the Board.
5. Any other matter that properly comes before the Special Meeting and any
adjournment thereof.
Under the Amended and Restated By-Laws, only matters set forth on the
Company's Notice of Special Meeting may be brought before the Special Meeting.
THE PARENT NOMINEES WILL, SUBJECT TO THEIR FIDUCIARY DUTIES, SEEK TO GIVE
ALL SHAREHOLDERS THE OPPORTUNITY TO ACCEPT THE OFFER. ACCORDINGLY, THE
EXECUTION OF AN AGENT DESIGNATION WILL ALLOW SHAREHOLDERS TO CONSIDER AND VOTE
FOR THE PARENT NOMINEES AND WILL ENHANCE YOUR CHANCES OF BEING ABLE TO TAKE
ADVANTAGE OF THE OFFER.
Adjournment of Meeting and other Matters
Parent and the Purchaser also anticipate requesting, in the proxy
solicitation relating to the Special Meeting, authority to initiate and vote
for a proposal to adjourn the Special Meeting to allow the solicitation of
additional votes, if necessary, to approve the Special Meeting Proposals.
Neither Parent nor the Purchaser currently anticipates additional Special
Meeting Proposals on any substantive matters. However, Parent and the
Purchaser may elect to cause additional Special Meeting Proposals to be
identified in the notice of, and in the proxy materials for, the Special
Meeting. Under the Amended and Restated By-Laws, only matters set forth on the
Company's Notice of Special Meeting may be brought before the Special Meeting.
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IF PARENT AND THE PURCHASER DO NOT OBTAIN SUFFICIENT AGENT DESIGNATIONS TO
CALL THE SPECIAL MEETING AND IF THE SPECIAL MEETING PROPOSALS ARE NOT APPROVED
BY THE COMPANY'S SHAREHOLDERS, IT IS LESS LIKELY THAT CERTAIN CONDITIONS TO
THE OFFER WILL BE SATISFIED AND THAT SHARES WILL BE ACCEPTED FOR PAYMENT
PURSUANT TO THE OFFER. IN SUCH EVENT, PARENT AND THE PURCHASER MAY EITHER (I)
TERMINATE THE OFFER OR (II) CONTINUE TO PURSUE THE OFFER AND THE SATISFACTION
OF THE CONDITIONS TO THE OFFER THROUGH LITIGATION AND OTHER MEANS. SEE "TERMS
AND CONDITIONS OF THE OFFER".
BACKGROUND
From June 10 to June 11, the Chairman of the Board of Parent made three
unsuccessful attempts to contact the Chairman of the Board of the Company by
telephone. On June 11, 1997, Parent's Chief Executive Officer attempted
unsuccessfully to contact the Company's Chief Executive Officer by telephone.
Accordingly, on June 11, 1997, Parent's Chairman sent the Company's Chairman
the following letter:
June 11, 1997
Mr. Conrad A. Plimpton
Chairman of the Board
Exide Electronics Group, Inc.
8609 Six Forks Road
Raleigh, North Carolina 27615
Dear Mr. Plimpton:
I am writing this letter following three unsuccessful attempts since
yesterday to contact you by telephone. My hope was and is to speak with you
directly regarding a possible business combination between Exide Electronics
Group, Inc. ("Exide") and Danaher Corporation ("Danaher").
As I would have told you had we spoken, we are very impressed with the
business you and your management team have developed and the manner in which
it complements our businesses. We believe that there are clear and compelling
advantages to both Exide and Danaher from the combination of our two
companies.
Because we view this as such an attractive alternative for both of our
companies and our stockholder constituencies, unless we hear from you by 4:00
P.M. tomorrow, we plan to announce a tender offer to purchase all of Exide's
equity securities (common stock, preferred stock and warrants) at a price
equivalent to $20.00 per share of common stock. We believe that this proposal
is extremely attractive as it represents a 72% premium above today's closing
market price of Exide's common stock. We hope that you would view this
proposal as we do--an excellent opportunity for the stockholders of Exide to
realize full value for their shares to an extent not likely to be available to
them in the marketplace for the foreseeable future.
If you would prefer, however, we are prepared to promptly negotiate and
complete a merger agreement (with an accompanying first step tender offer)
which would not be subject to a financing condition; we believe that this
process can be completed in seven to ten days. We realize that there will be
aspects of our offer which you will wish to discuss with us and are prepared
to meet with you and your advisors without delay.
Our price is based upon our review of publicly available information
regarding Exide. If you believe that there are values not reflected in your
public filings, we ask that such information be made available to us so that
we can ensure that our offer reflects those values. In addition, given the
opportunities that will exist for the combined company, we will also be
prepared to discuss the form of consideration and structure of the transaction
in order to permit Exide's stockholders to participate in the growth potential
of the combined company. Finally, we are prepared to discuss your view as to
the proper roles for your officers and managers in the combined company.
8
<PAGE>
We are sure you appreciate the seriousness of our interest in Exide and our
strong preference for a negotiated transaction. We hope that you would agree
that the best way to proceed at this point would be to begin confidential, non-
public discussions to see if we can negotiate a transaction that can be
presented to your stockholders as the joint effort of Exide's and Danaher's
boards of directors and management. At this point, therefore, we hope that you
will accept our offer to negotiate a merger and that this letter and its
contents will remain private between us.
Should you choose to make this letter public and/or explore alternative
combination transactions, we would likely participate in the process. However,
we would not expect to make a comparable offer absent clear and convincing
evidence that such a bid was necessary. We believe that our proposal is
sufficiently attractive (both in terms of value and flexibility) so that you
can proceed on an exclusive basis with us.
We are preparing to send a letter to Nicholas Costanza, Exide's Vice
President, Chief Administrative Officer, General Counsel and Secretary,
requesting a special meeting of stockholders at which we would, among other
things seek to elect a majority of the Board of Exide. We intend to solicit
Exide's common stockholders to support such a call. We would be prepared to
withdraw this request if you are interested in pursuing a negotiated
transaction.
Further, George Sherman, our Chief Executive Officer, would be pleased to
call James Risher to discuss Danaher's business and philosophy. George will be
able to articulate, perhaps better than I, the benefits of both the proposed
combination and of a negotiated transaction.
Finally, I would like to underscore my willingness to visit you as early as
tomorrow at a destination of your choosing to discuss these matters. I look
forward to hearing from you.
Sincerely,
Steven M. Rales
Chairman of the Board
On June 12, 1997, Parent delivered to the Company a letter requesting that
the Company call the Special Meeting.
On June 12, 1997, at approximately 4:00 p.m., the Company's General Counsel
contacted Parent in response to Parent's June 11 letter. The Company's General
Counsel said that the Company's Chief Executive Officer and Chief Financial
Officer were travelling and asked that Parent extend its deadline to noon on
Monday, June 16. Parent agreed to this request.
On June 16, the Company's Chief Executive Officer spoke to Parent's Chief
Executive Officer and they scheduled a meeting for June 18. On June 18, the two
Chief Executive Officers met to discuss generally a possible business
combination and the benefits of a negotiated transaction. The Company's Chief
Executive Officer said that the Company's Board believed that Parent's proposed
price of $20 per share was inadequate. Parent's Chief Executive Officer said
that Parent had based its price on publicly available information and that
Parent would be willing to increase its proposed price if there were values not
reflected in the public information. The Company's Chief Executive Officer
indicated that the Company would be prepared to furnish non-public information
to Parent, subject to a confidentiality agreement. A meeting was tentatively
scheduled for June 23 or 24.
9
<PAGE>
On June 20, counsel for the Company transmitted to counsel for Parent a
proposed confidentiality/standstill agreement. The proposed agreement provided,
among other things, that Parent could not, for one year, propose the
acquisition of the Company or any of its assets or shares. Counsel for Parent
promptly called counsel for the Company to inform him that the standstill
provisions were not acceptable to Parent.
During the weekend, June 21 and 22, the Chief Executive Officers of Parent
and the Company spoke regarding the confidentiality/standstill provisions.
Parent's Chief Executive Officer said that Parent could not agree to the
proposed standstill provisions, and reiterated that Parent would prefer a
negotiated transaction. The Chief Executive Officer of the Company said that
the Company Board was scheduled to meet on June 24 to consider the issue.
On June 24, a representative of Merrill Lynch, Parent's financial advisor,
spoke to a representative of Lazard Freres & Co. LLC ("Lazard Freres"), the
Company's financial advisor. The representative of Lazard Freres said that the
Company Board believed Parent's proposed price was inadequate and that the
Company Board was not willing to furnish non-public information to Parent
without a standstill agreement. By letter dated June 24, counsel for the
Company informed counsel for Parent that the Company Board had met on June 23
and had amended and restated the Company By-Laws to add procedures relating to
the call of a special meeting. Parent believes that the procedures violate
Delaware law. See "Background."
On June 25, Parent's Chief Executive Officer spoke to the Company's Chief
Executive Officer and said that because a negotiated transaction would be in
the best interests of Parent and the Company, Parent was prepared to increase
its offer to $22 per Share subject to confidential due diligence and
negotiations, that Parent would agree not to propose a transaction at a lower
price for six months and that Parent would agree to a two month standstill.
Thereafter, Parent's Chief Executive Officer and the Company's Chief Executive
Officer held a number of discussions regarding a confidentiality/standstill
agreement. During the course of discussions between Parent and the Company,
Parent said that it would pay $22 per Share subject to confidential due
diligence and negotiations. At the Company's request, Parent said that it would
agree that if the Company and Parent could not reach a negotiated transaction
within a two month period, Parent would commence a tender offer at $22 per
share unless there had been a material adverse change in the Company, in which
case Parent would agree to a one year standstill. On July 8, 1997, the Company
informed Parent that the Company would not provide confidential information to
Parent.
On July 9, 1997, Parent publicly announced the terms of the Offer in a press
release and sent the Company the following letter:
July 9, 1997
Mr. James A. Risher
President and Chief Executive Officer
Exide Electronics Group, Inc.
8609 Forks Road
Raleigh, North Carolina 27615
Dear Jim:
As you are aware from our discussions during the past month and our letter of
June 11, 1997, we are impressed with the business you and your management team
have developed and the manner in which it complements our businesses. However,
while we appreciate your efforts to make those discussions productive, we are
disappointed by the lack of progress to date.
In our letter dated June 11, 1997, we offered to purchase all the outstanding
shares of Exide Electronics Group, Inc. ("Exide") at a price equivalent to
$20.00 per share. This proposal represents a 72% premium over Exide's closing
price on June 11, 1997, and a premium of 55% over Exide's closing price
yesterday.
10
<PAGE>
We are particularly disappointed that the Board did not wish to pursue our
offer of $22.00 per share subject to confidential due diligence and
negotiations. While we continue to strongly prefer a negotiated transaction,
in light of the responses from your Board of Directors, we feel compelled to
pursue this matter more expeditiously.
We hereby reiterate our offer to acquire Exide through a negotiated
transaction in which Exide stockholders would receive $20.00 in cash per
share. We continue to believe that a combination of our two companies would
create significant value for our respective stockholders, and that your Board
of Directors, in evaluating our offer, should have the benefit of the response
to our offer from Exide's stockholders.
We plan to promptly commence a cash tender offer for all the outstanding
shares of Exide at a price of $20.00 per share. Our proposal is based solely
upon our review of publicly available information regarding Exide. As we have
discussed, should our review of confidential, non-public information justify,
we are prepared to consider a price in excess of $20.00 per share.
Furthermore, as we have previously stated, in the context of a negotiated
transaction, we would be prepared to discuss all aspects of our offer with
you.
We hope that you and your Board of Directors will give our offer immediate and
thorough consideration. We look forward to your prompt response, and hope that
it will lead to a negotiated transaction.
Sincerely,
George M. Sherman
President and Chief Executive Officer
Also on July 9, 1997, Purchaser filed a Verified Complaint for Declaratory
and Injunctive Relief against the Company and its directors (the "Complaint")
in the Court of Chancery of the State of Delaware. The Complaint alleges,
among other things, that: (i) refusal by the Company Board to redeem the
Rights or make them inapplicable to the Offer constitutes a violation of its
fiduciary duties; (ii) the amendments to the Company's By-laws constitute a
breach of the defendants' fiduciary duties (iii) the failure to render Section
203 of the GCL, inapplicable to the Offer is a breach of fiduciary duty; and
(iv) the adoption of any defensive measure by the defendants which has the
effect of impeding, thwarting, frustrating or interfering with the Proposed
Merger or that would prevent a future board of directors from complying with
its fiduciary duties would constitute a breach of the defendants' fiduciary
duties.
Purchaser seeks declaratory and injunctive relief as follows: (i) an order
compelling the defendants to redeem the Rights or to amend the Rights
Agreement so as to make it inapplicable to the Offer; (ii) an order compelling
the Board to render Section 203 of the GCL inapplicable to the proposed
purchase; (iii) an order compelling the Board to call a special meeting of its
stockholders; (iv) an order enjoining the Board from taking any action that
would impede or interfere with the Offer or the exercise by the Company's
stockholders of their franchise, (v) an order invalidating the amendments to
the Company's By-Laws; (vi) an order awarding Plaintiff their costs and
expenses in the action and (vii) such other relief as the Court deems just and
proper.
On July 10, 1997, Parent commenced the Offer.
11
<PAGE>
TERMS AND CONDITIONS OF THE OFFER
As described above, on July 10, 1997, the Purchaser commenced the Offer at a
purchase price of $20 per share of Common Stock and Preferred Stock and $6.525
per Warrant to purchase one share of Common Stock, in each case net to the
seller in cash. As stated in the Offer to Purchase, the purpose of the Offer
is to acquire control of, and the entire equity interest in, the Company.
Parent currently intends to propose and seek to have the Company consummate,
as soon as practicable following consummation of the Offer, the Proposed
Merger.
The Offer is conditioned, among other things, upon the following:
Minimum Condition. Consummation of the Offer is conditioned upon there being
validly tendered a number of Shares which, when added to the Shares
beneficially owned by Parent, constitutes at least a majority of the Shares
outstanding on a fully diluted basis on the date of purchase (the "Minimum
Condition").
Parent beneficially owns 397,300 shares of Common Stock.
Promptly following their election, the Parent Nominees intend to waive the
provisions of the Stockholder Agreement which prevent Fiskars from tendering
Shares in the Offer.
Rights Condition. The Offer is conditioned on the Rights having been
redeemed by the Board of Directors of the Company or the Purchaser being
satisfied, in its sole discretion, that Rights have been invalidated or are
otherwise inapplicable to the Offer and the Proposed Merger (the "Rights
Condition").
The Rights Agreement provides that the Rights will become exercisable if any
person or group (other than certain existing holders) becomes the beneficial
owner of 15% or more of the Shares, after which, subject to certain
conditions, the holders of Rights, other than the acquiring person, would be
entitled to exercise the Rights to purchase shares of Common Stock at one-half
of the then current market price.
Based upon publicly available information, the Purchaser believes that as of
the date hereof, the Rights were not exercisable, that Rights Certificates had
not been issued and that the Rights were evidenced by the Share Certificates.
The Purchaser believes that, as a result of the Offer, the Distribution Date
(as defined in the Rights Agreement) will be ten business days after the date
hereof, unless prior to such date the Board redeems all of the Rights or
amends the Rights Agreement to delay the Distribution Date. The Board will
continue to be able to redeem the Rights until the earlier of December 2, 2002
(the Final Expiration Date for the Rights) or the Stock Acquisition Date (as
defined in the Rights Agreement).
Promptly following their election, the Parent Nominees intend to redeem the
Rights or render the Rights inapplicable to the Offer and the Proposed Merger.
Section 203 Condition. The Offer is conditioned on the Board having approved
the Offer and the Proposed Merger for purposes of Section 203 of the GCL or
the Purchaser being satisfied, in its sole discretion, that Section 203 is
otherwise inapplicable to the Proposed Merger (the "Section 203 Condition").
Section 203 of the GCL prohibits business combination transactions involving
a Delaware corporation and an "interested stockholder" (defined generally as
any person that directly or indirectly beneficially owns 15% or more of the
outstanding voting stock of the subject corporation) for three years following
the date such person became an "interested stockholder," unless certain
exceptions apply, including, in the case of the Offer, that prior to such date
the Board approved either the business combination or the transaction which
resulted in such person being an interested stockholder and that, upon
consummation of the Offer, the Purchaser owned at least 85% of the total
voting stock of the Company outstanding at the time the transaction commenced.
Promptly following their election, the Parent Nominees intend to approve the
Offer and the Proposed Merger for purposes of Section 203 of the GCL.
12
<PAGE>
The Offer is also subject to other terms and conditions which are described
in the Offer to Purchase and the Letter of Transmittal, copies of which are
available from the Information Agent for the Offer, D.F. King & Co., Inc., 77
Water Street, New York, New York 10005, 1-800-290-6432. If you have not already
received one, Parent and the Purchaser urge you to obtain a copy of the Offer
to Purchase, the Letter of Transmittal and other Offer documents.
APPRAISAL RIGHTS
No appraisal rights are available in connection with the Offer. However, if
the Proposed Merger is consummated, shareholders of the Company may have
certain rights under the GCL to dissent and demand appraisal of, and payment in
cash of the fair value of, their shares of Common Stock and Preferred Stock.
Such rights, if the statutory procedures are complied with, could lead to a
judicial determination of the fair value (excluding any element of value
arising from the accomplishment or expectation of the merger) required to be
paid in cash to such dissenting holders for their Shares. Any such judicial
determination of the fair value of Shares could be based upon considerations
other than or in addition to the price paid in the Offer and the market value
of the Shares, including asset values and the investment value of the Shares.
The value so determined could be more or less than the purchase price per Share
pursuant to the Offer or the consideration per Share to be paid in the Proposed
Merger.
In addition, several decisions by Delaware courts have held that, in certain
instances, a controlling stockholder of a corporation involved in a merger has
a fiduciary duty to the other stockholders that requires the merger to be fair
to such other stockholders. In determining whether a merger is fair to minority
stockholders, the Delaware courts have considered, among other things, the type
and amount of consideration to be received by the stockholders and whether
there were fair dealings among the parties. The Delaware Supreme Court has
indicated in recent decisions that in most cases the remedy available in a
merger that is found not to be "fair" to minority stockholders is the right to
appraisal described above or a damages remedy based on essentially the same
principles.
SOLICITATION OF AGENT DESIGNATIONS
Agent Designations may be solicited by mail, telephone or telecopier and in
person. Solicitations may be made by directors, officers, investor relations
personnel and other employees of Parent or the Purchaser, none of whom will
receive additional compensation for such solicitations. Parent has requested
banks, brokerage houses and other custodians, nominees and fiduciaries to
forward all of its solicitation materials to the beneficial owners of the
Shares they hold of record. Parent will reimburse these record holders for
customary clerical and mailing expenses incurred by them in forwarding these
materials to their customers.
Parent has retained D.F. King & Co., Inc. ("King") for solicitation and
advisory services in connection with this solicitation. King will be paid an
aggregate fee of approximately $10,000 for acting as proxy solicitor in
connection with this solicitation, and the solicitation of proxies in
connection with the Special Meeting. King may also receive additional
reasonable and customary compensation for providing additional advisory
services in connection with this solicitation and the other proxy solicitations
described in this paragraph. Parent has also agreed to reimburse King for its
reasonable out-of-pocket expenses and to indemnify King against certain
liabilities and expenses, including liabilities and expenses under the federal
securities laws. King will solicit proxies from individuals, brokers, bank
nominees and other institutional holders.
Merrill Lynch & Co. ("Merrill Lynch") is acting as Dealer Manager in
connection with the Offer and serving as financial advisor to the Purchaser and
Parent in connection with the Proposed Merger. As compensation for such
services, Parent has agreed to pay Merrill Lynch a fee of $500,000, of which
$400,000 is payable upon commencement of the Offer. Parent has also agreed to
pay Merrill Lynch a fee of up to $4,000,000 (less any fees theretofore paid)
contingent upon consummation of an Acquisition Transaction. "Acquisition
13
<PAGE>
Transaction" has been defined to include (i) any merger, consolidation,
reorganization or other business combination pursuant to which the business of
the Company is combined with that of Parent or one of its affiliates, (ii) the
acquisition, directly or indirectly, by Parent or one of its affiliates by way
of a tender or exchange offer, negotiated purchase or other means of at least
50% of the then outstanding capital stock of the Company, (iii) the
acquisition, directly or indirectly, by Parent or one of its affiliates of at
least 50% of the assets of, or of any right to all or a substantial portion of
the revenues or income of the Company or (iv) the acquisition, directly or
indirectly, by Parent or one of its affiliates of control of the Company
through a proxy contest or otherwise than through the acquisition of the
Company's voting capital stock. In addition, Parent has agreed to reimburse
Merrill Lynch for its reasonable out-of-pocket expenses, including, without
limitation, reasonable fees and disbursements of its counsel, incurred in
connection with the Offer and the Proposed Merger or otherwise arising out of
Merrill Lynch's engagement, and has also agreed to indemnify Merrill Lynch (and
certain affiliated persons) against certain liabilities and expenses,
including, without limitation, certain liabilities under the federal securities
laws. Merrill Lynch may from time to time in the future render various
investment banking services to Parent and its affiliates, for which it is
expected it would be paid customary fees.
In connection with Merrill Lynch's engagement as financial advisor, Parent
anticipates that certain employees of Merrill Lynch may communicate in person,
by telephone or otherwise with a limited number of institutions, brokers or
other persons who are the Company shareholders for the purpose of assisting in
the solicitation of proxies for the Special Meeting. Merrill Lynch will not
receive any fee for or in connection with such solicitation activities apart
from the fees which it is otherwise entitled to receive as described above.
The entire expense of soliciting proxies for the Special Meeting is being
borne by Parent or a subsidiary of Parent. Neither Parent nor any such
subsidiary will seek reimbursement for such expenses from the Company. Costs
incidental to these proxies include expenditures for printing, postage, legal
and related expenses and are expected to be approximately $100,000.
If the Purchaser should terminate, or materially amend the terms of, the
Offer prior to the Special Meeting, Parent or the Purchaser will disseminate
such information regarding such changes to the Company shareholders and, in
appropriate circumstances, will provide the Company shareholders with a
reasonable opportunity to revoke their proxies prior to the Special Meeting.
SHAREHOLDER PROPOSALS
According to the Company Proxy Statement, any notice of a qualified
shareholder submitting a proposal for the 1998 Annual Meeting of Shareholders
of the Company must have been received by the Company no later than September
30, 1997 in order for such proposal to be included in the Company's proxy
statement and proxy relating to the 1998 Annual Meeting.
OTHER INFORMATION
Parent is a Delaware corporation which operates a variety of businesses
through two business segments: Tools and Components and Process/Environmental
Controls. The Tools and Components segment is one of the largest domestic
producers and distributors of general purpose mechanics' hand tools and
automotive specialty tools. Other products manufactured by these companies
include tool boxes and storage devices, diesel engine retarders, wheel service
equipment, drill chucks, custom designed headed tools and components, hardware
and components for the power generation and transmission industries, high
quality precision socket screws, fasteners, and high quality miniature
precision parts. The companies in the Process/Environmental segment produce and
sell underground storage tank leak detection systems and temperature, level and
position sensing devices, power switches and controls, telecommunication line
products, power protection products, liquid flow measuring devices and
electronic and mechanical counting and controlling devices.
14
<PAGE>
Approximately 39.4% of the outstanding common stock of the Parent is
beneficially owned by Steven M. Rales and Mitchell P. Rales. The aggregate
holdings for Steven and Mitchell Rales include shares of Parent common stock
owned by Equity Group Holdings L.L.C. ("EGH") and Equity Group Holdings II
L.L.C. ("EGH II") of which Steven and Mitchell Rales are the only members,
along with other shares of common stock of Parent which are directly owned by
such individuals. Steven and Mitchell Rales are directors and executive
officers of Parent as well as directors of Purchaser. EGH and EGH II are
principally engaged in the business of investing in the common stock of
Parent. The offices of Steven M. Rales, Mitchell P. Rales, EGH and EGH II are
located at 1250 24th Street, N.W., Suite 800, Washington, D.C. 20037.
The Purchaser is a newly incorporated Delaware corporation and a wholly
owned subsidiary of Parent which to date has not conducted any business other
than in connection with the Offer and the Proposed Merger. The principal
executive offices of Parent and the Purchaser are located at 1250 24th Street,
N.W., Suite 800, Washington, D.C. 20037. DHHC owns all outstanding shares of
the Purchaser. Of the 397,300 shares of Common Stock beneficially owned by
Parent, 397,200 are held by DHHC and 100 are held by the Purchaser. DHHC
contributed such shares to the Purchaser on July 1, 1997.
Certain information about the directors who are executive officers and the
other executive officers of Parent and the Purchaser and certain employees and
other representatives of Parent who may also assist King in soliciting proxies
is set forth in the attached Schedule I. Schedule II sets forth certain
information, as made available in public documents, regarding Shares held by
the Company's principal shareholders and its management.
THIS PROXY STATEMENT IS NEITHER A REQUEST FOR THE TENDER OF SHARES NOR AN
OFFER WITH RESPECT THERETO. THE PURCHASER'S OFFER IS BEING MADE ONLY BY MEANS
OF THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL. FOR ADDITIONAL COPIES
OF THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL, CALL THE INFORMATION
AGENT FOR THE OFFER, D.F. KING & CO., INC., AT 1-800-290-6432.
PLEASE INDICATE YOUR SUPPORT OF THE PURCHASER'S OFFER BY COMPLETING, SIGNING
AND DATING THE ENCLOSED GOLD AGENT DESIGNATION AND RETURNING IT PROMPTLY TO
DANAHER CORPORATION, PQR ACQUISITION CORPORATION, C/O D.F. KING & CO., INC.,
IN THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF THE ENVELOPE IS MAILED IN
THE UNITED STATES.
YOUR VOTE IS IMPORTANT! PLEASE SIGN, DATE AND MAIL THE ACCOMPANYING GOLD
AGENT DESIGNATION PROMPTLY.
Danaher Corporation
PQR Acquisition Corporation
July , 1997
15
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
Parent. Set forth below are the name, business address and present principal
occupation or employment of each director who is an executive officer and each
other executive officer of Parent. Except as otherwise noted, the business
address of each such person is 1250 24th Street N.W., Washington, D.C. 20037,
and each such person is a United States citizen. Directors of Parent are
indicated by an asterisk.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION OR EMPLOYMENT
---- ----------------------------------
<C> <S>
Patrick W. Allender................. Mr. Allender is Senior Vice President, Chief
Financial Officer and Secretary of Parent.
C. Scott Brannan.................... Mr. Brannan is Vice President Administration and
Controller of Parent.
Dennis D. Claramunt................. Mr. Claramunt was appointed Vice President and
Group Executive of Parent in 1994.
James H. Ditkoff.................... Mr. Ditkoff was appointed Vice President--
Finance/Tax of Parent in January 1991.
Mitchell P. Rales*.................. Mr. Rales is Chairman of the Executive Committee
of Parent. He has held such position since
February 1990.
George M. Sherman*.................. Mr. Sherman is President, Chief Executive
Officer and a Director of Parent. He has held
such positions since February 1990.
John P. Watson...................... Mr. Watson was appointed Vice President and
Group Executive of Parent in 1993.
Steven M. Rales*.................... Mr. Rales is Chairman of the Board of Parent, a
position he has held since 1984.
Gregory T. H. Davies................ Mr. Davies was appointed Vice President and
Group Executive of Parent in 1995.
H. Lawrence Culp, Jr................ Mr. Culp was appointed Vice President and Group
Executive of Parent in 1995.
Daniel L. Comas..................... Mr. Comas was appointed Vice President--
Corporate Development of Parent in 1996.
Steven E. Simms..................... Mr. Simms was appointed Vice President and Group
Executive of Parent in 1996.
Mark C. DeLuzio..................... Mr. DeLuzio was appointed Vice President--
Danaher Corporation Business System of Parent
in 1996.
Dennis A. Longo..................... Mr. Longo was appointed Vice President--Human
Resources in May 1997.
</TABLE>
The Purchaser. The name and position with the Purchaser of each director and
executive officer of the Purchaser are set forth below. The business address,
present principal occupation or employment, five-year employment history and
citizenship of each such person is set forth above.
<TABLE>
<CAPTION>
NAME POSITION WITH THE PURCHASER
- ---- ---------------------------
<S> <C>
Steven M. Rales.................................... Director
Mitchell P. Rales.................................. Director
George M. Sherman.................................. President and Director
Patrick W. Allender................................ Vice President and Treasurer
C. Scott Brannan................................... Vice President and Secretary
James H. Ditkoff................................... Vice President
Daniel L. Comas.................................... Vice President
</TABLE>
16
<PAGE>
The following individuals constitute representatives of the Dealer Manager
who may solicit proxies:
William Rifkin Managing Director,
Merrill Lynch & Co. Merrill Lynch & Co.
World Financial Center
North Tower
New York, NY 10281-1330
Paul Stefanick Managing Director,
Merrill Lynch & Co. Merrill Lynch & Co.
World Financial Center
North Tower
New York, NY 10281-1330
James C. Katzman Vice President
Merrill Lynch & Co. Merrill Lynch & Co.
World Financial Center
North Tower
New York, NY 10281-1330
In the ordinary course of its business, Merrill Lynch may trade the
securities of the Company for its own account and the accounts of its
customers, and accordingly, may at any time hold a long or short position in
such securities. As of , 1997, Merrill Lynch held a net [long] position
of less than % of the Shares.
17
<PAGE>
SCHEDULE II
PRINCIPAL SHAREHOLDERS OF THE COMPANY AND SHAREHOLDINGS
OF THE COMPANY'S MANAGEMENT
Set forth below is information regarding Shares owned by (i) those persons
owning more than 5% of the outstanding Common Stock and Preferred Stock and
(ii) directors and executive officers of the Company as a group. Such
information is derived from the Company's proxy statement for its 1996 Annual
Meeting of Shareholders and from the Form 13G filed by Dimensional Fund
Advisors on February 12, 1997.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
NAME AND ADDRESS OF BENEFICIALLY PERCENT(2)(3)
TITLE OF CLASS BENEFICIAL OWNER OWNED(1) OF CLASS
-------------- ------------------- ------------ -------------
<S> <C> <C> <C>
Common Stock............ Fiskars Oy Ab 1,825,000(4) 16.5%
Mannerheimintie 14 A
FIN-00100
Helsinki, Finland
Massachusetts Mutual Life 1,146,789(5) 10.4%
Insurance
1295 State Street
Springfield, MA 01111
Duquesne Enterprises, Inc. 1,043,750 9.4%
Grant Building, Suite 240
Pittsburgh, PA 15129
Dimensional Fund Advisors 682,426 6.8%
1299 Ocean Avenue
Santa Monica, CA 90401
Japan Storage Battery Co., Ltd. 645,273 5.8%
1 Inobaba-cho
Nishinosho Kisshoin
Minami-ku
Kyoto, Japan
- --------
(1) Except as indicated in the footnotes to this table, the persons named in
the table have sole voting power with respect to all shares of Common
Stock of the Company shown as beneficially owned by them.
(2) Assumes conversion of 1,000,000 shares of the Series G Preferred Stock
issued to Fiskars, which have the same voting rights as shares of the
Company's Common Stock.
(3) The denominator in this calculation includes 10,049,543 shares of Common
Stock outstanding as of the record date, plus 1,000,000 shares of Series G
Preferred stock on an as-converted basis.
(4) Includes 825,000 shares of Common Stock and 1,000,000 shares of Series G
Preferred Stock which have the same voting rights as shares of the
Company's Common Stock. The 1,000,000 shares of Series G Preferred Stock
is also set forth in the table of ownership of Series G Preferred Stock
set forth below.
(5) Massachusetts Mutual Life Insurance Company, MassMutual Corporate
investors, and MassMutual Participation investors own 802,752, 229,358 and
114,679 shares of Common Stock of the Company, respectively.
<CAPTION>
NUMBER OF
SHARES
NAME AND ADDRESS OF BENEFICIALLY PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNED OF CLASS
- -------------- --------------------------------- ------------ -------------
<S> <C> <C> <C>
Series G Preferred Fiskars Oy Ab 1,000,000(1) 100%
Stock.................. Mannerheimintie 14 A
FIN -00100
Helsinki, Finland
</TABLE>
18
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of January 8, 1997, the record date for
the Company's 1996 Annual Meeting, all directors, director nominees and named
executive officers who are the beneficial owners of the Common Stock of the
Company and such beneficial ownership by all executive officers and directors
as a group:
COMMON STOCK
<TABLE>
<CAPTION>
OPTIONS AND WARRANTS PERCENT OF
NAME AND ADDRESS SHARES OF EXERCISABLE WITHIN COMMON
OF BENEFICIAL OWNER COMMON STOCK(1)(2) 60 DAYS(1) STOCK(3)
- ------------------- ------------------ -------------------- ----------
<S> <C> <C> <C>
Conrad A. Plimpton......... 278,885(4) 17,000(8) 2.7%
James A. Risher............ 273,090 70,103(9) 3.1%
Lance L. Knox.............. 154,890 17,000(8) 1.6%
Ralf R. Boer............... 2,500(5) -- (10) *
Wayne L. Clevenger......... 10,000 17,000(8) *
Ron E. Doggett............. 8,000 12,000(8) *
James E. Fowler............ 1,250 5,750(8) *
David J. McLaughlin........ 4,300 14,500(8) *
Stig G. Stendahl........... -- (5) -- (10) *
Chiaki Tanaka.............. -- (6) 12,000(6)(8) *
Marty R. Kittrell.......... 38,314 30,853(11) *
Warren J. Johnson.......... 24,927 9,552(12) *
William J. Raddi........... 115,000 29,500(13) 1.3%
Mark A. Ascolese........... 38,143 23,500(14) *
All Executive Officers and
Directors as a Group
(17 persons).............. 1,009,031(4)(7) 289,258 11.5%
</TABLE>
- --------
* Less than 1%.
(1) Except as indicated in the footnotes to this table, the persons named in
the table have sole voting and investment power with respect to the
shares of Common Stock of the Company shown as beneficially owned by
them.
(2) Does not include options and warrants to purchase shares of Common Stock
which are listed separately under the next column "Options and Warrants
Exercisable Within 60 Days".
(3) Represents the percent of shares of Common Stock held and options and
warrants exercisable within 60 days after the record date. The numerator
in this calculation includes the shares of Common Stock plus options and
warrants exercisable within 60 days held by the beneficial owner. The
denominator includes 10,049,543 shares of Common Stock outstanding as of
the record date plus 1,000,000 shares of Series G Preferred Stock on an
as-converted basis.
(4) Includes 2,300 shares held by custodian for the Conrad A. Plimpton SERP
Trust.
(5) Does not include the 825,000 shares of Common Stock or the 1,000,000
shares of Series G Preferred Stock held by Fiskars. Messrs. Boer and
Stendahl have shared voting and investment power over any such shares and
disclaim beneficial ownership of such shares.
(6) Does not include 595,273 shares of Common Stock which were acquired July
1, 1995, upon conversion of the Series D and E Preferred held by JSB. Mr.
Tanaka, as an officer of JSB, has shared voting and investment power over
such shares and disclaims beneficial ownership of such shares. Mr. Tanaka
will not seek re-election as director when his current term expires in
February 1997.
(7) Does not include 50,000 shares of Common Stock currently owned by JSB or
595,273 shares of Common Stock which were acquired upon conversion of the
Series D and E Preferred held by JSB. Mr Tanaka, as an officer of JSB,
has shared voting and investment power over such shares and disclaims
beneficial ownership of such shares. Does not include 825,000 shares of
Common Stock or the 1,000,000 shares if Series G Preferred Stock held by
Fiskars. Messrs. Boer and Stendahl have shared voting and investment
power over any such shares and disclaim beneficial ownership of such
shares.
(8) Does not include an option to purchase 1,500 shares of Common Stock which
is not exercisable within 60 days after the record date.
19
<PAGE>
(9) Does not include an option to purchase 20,000 shares of Common Stock which
is not exercisable within 60 days after the record date.
(10) Does not include an option to purchase 3,000 shares of Common Stock which
is not exercisable within 60 days after the record date.
(11) Does not include an option to purchase 29,250 shares of Common Stock which
is not exercisable within 60 days after the record date.
(12) Does not include an option to purchase 15,500 shares of Common Stock which
is not exercisable within 60 days after the record date.
(13) Does not include an option to purchase 20,000 shares of Common Stock which
is not exercisable within 60 days after the record date.
(14) Does not include an option to purchase 24,500 shares of Common Stock which
is not exercisable within 60 days after the record date.
Except as otherwise noted, the information concerning the Company in this
Proxy Statement has been taken from or is based upon documents and records on
file with the Commission and other publicly available information. Neither the
Purchaser nor Parent takes any responsibility for the accuracy or completeness
of the information contained in such documents and records, or for any failure
by the Company or any other third party to disclose events that may have
occurred and may affect the significance or accuracy of any such information
but which are unknown to the Purchaser and Parent.
20
<PAGE>
IMPORTANT
Your support is important. No matter how many Shares you own, please give
Parent your Agent Designation by:
SIGNING the enclosed GOLD Agent Designation card,
DATING the enclosed GOLD Agent Designation card, and
MAILING the enclosed GOLD Agent Designation card TODAY in
the envelope provided (no postage is required if mailed in the United States).
If you have any questions, would like a copy of the Offer to Purchase and
the Letter of Transmittal or require any additional information concerning the
Offer, please contact the Information Agent for the Offer,D.F. King & Co.,
Inc., 77 Water Street, New York, New York 10005, 1-800-290-6432. If you have
any questions or require any additional information concerning this Statement,
please contact D.F. King & Co. at the address set forth below. If any of your
Shares are held in the name of a brokerage firm, bank, bank nominee or other
institution, only it can vote such Shares and only upon receipt of your
specific instructions. Accordingly, please contact the person responsible for
your account and instruct that person to execute the GOLD Agent Designation
card.
21
<PAGE>
AGENT DESIGNATION CARD
THIS AGENT DESIGNATION IS SOLICITED BY DANAHER CORPORATION AND PQR
ACQUISITION CORPORATION FOR THE APPOINTMENT OF DESIGNATED AGENTS TO CALL A
SPECIAL MEETING OF SHAREHOLDERS OF EXIDE ELECTRONICS GROUP, INC.
Each of the undersigned hereby constitutes and appoints Steven M. Rales,
Mitchell P. Rales and Patrick W. Allender, and each of them, with full power of
substitution, the proxies and agents of each of the undersigned (said proxies
and agents, together with each substitute appointed by any of them, if any,
collectively, the "Designated Agents") in respect of all shares of Common
Stock, par value $.01 per share, and shares of Series G Convertible Preferred
Stock, par value $.01 per share (collectively, the "Shares") of Exide
Electronics Group, Inc. (the "Company") owned by the undersigned to do any or
all of the following, to which each of the undersigned hereby consents:
1. To take all such action as shall be necessary or appropriate to call (BUT
NOT TO VOTE AT) a special meeting of the shareholders of the Company (the
"Special Meeting") for the following purposes:
A. To consider and vote upon a proposal to amend the By-Laws of the Company
by replacing Article III, Section 1 of the By-Laws, with the following
sentence: "The board of directors of the corporation shall consist of 19
members."
B. To consider and vote upon a proposal to elect ten persons designated by
DHHC ("DHHC") to the Board of Directors of the Company.
C. To consider and vote upon a proposal to repeal any By-Laws or amendments
thereto adopted by the Company after December 21, 1989, other than the
By-Law proposed by DHHC and adopted at the Special Meeting.
D. To consider and vote upon such other proposals as Danaher Corporation or
DHHC may propose in respect of any action taken by the Company, the
Board or any of their associates or affiliates that has, or if
consummated would have, the effect of impeding, delaying or making more
costly to Parent or DHHC (i) the acquisition of the Company or any of
its securities or assets or (ii) gaining control of the Company,
including through the election of a majority of the Board.
E. To consider and vote upon any other matter that properly comes before
the Special Meeting and any adjournment thereof.
2. To request, in a writing delivered either in person or by registered mail
to the President or the Secretary of the Company, that such officer forthwith
cause to be given, to the Company's shareholders entitled thereto, notice of
the Special Meeting to be held on a date not less than 30 nor more than 40 days
after the receipt of such request, as such officer may fix; or to cause such
notice to be given by any designated representative.
3. To request that the Chairman or Secretary of the Company fix a record date
for the determination of the shareholders of the Company, who are entitled to
receive notice of and to vote at the Special Meeting, within such period as the
Designated Agents may request.
4. If the Company or the Secretary duly fixes the record date for the Special
Meeting, then also, if such Designated Agents determine that it is necessary to
do so, to request that the Chairman or the Secretary of the Company fix another
record date for any adjournment of the Special Meeting, subject to the
limitations set forth in Section 213 of the GCL, and to the extent and in the
manner provided by the GCL, to give notice thereof and of the date to which the
Special Meeting shall have been adjourned to the Company's shareholders of
record as of said new record date in accordance with the same requirements as
those applying to a meeting newly called.
5. To exercise any and all of the other rights of each of the undersigned
incidental to (i) calling the Special Meeting, (ii) causing notice of the
Special Meeting and any adjournment thereof to be given to the Company's
shareholders, (iii) causing a record date to be fixed for the determination of
the Company's shareholders entitled to notice of and to vote at the Special
Meeting and at any adjournment thereof, and (iv) causing the purposes of
22
<PAGE>
the authority expressly granted hereinabove to the Designated Agents to be
carried into effect; provided, however, that NOTHING CONTAINED IN THIS
INSTRUMENT SHALL BE CONSTRUED TO GRANT TO THE DESIGNATED AGENTS THE RIGHT,
POWER OR AUTHORITY TO VOTE ANY SHARES OWNED BY THE UNDERSIGNED AT THE SPECIAL
MEETING.
Dated: , 1997
_____________________________________
(Signature)
_____________________________________
(Signature, if jointly held)
Title: ______________________________
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing as an attorney,
executor, administrator trustee or
guardian, give full title as such.
If a corporation, sign in full
corporate name by President or
other authorized officer. If a
partnership, sign in partnership
name by authorized person.
PLEASE SIGN, DATE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.
23
