<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE
ACT OF 1934
----------------
EXIDE ELECTRONICS GROUP, INC.
(NAME OF SUBJECT COMPANY)
PQR ACQUISITION CORPORATION
DANAHER CORPORATION
(BIDDERS)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED RIGHTS)
(TITLE OF CLASS OF SECURITIES)
302052 6 10 5
(CUSIP NUMBER OF CLASS OF SECURITIES)
SERIES G CONVERTIBLE PREFERRED STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
NOT AVAILABLE
(CUSIP NUMBER OF CLASS OF SECURITIES)
WARRANTS TO PURCHASE SHARES OF COMMON STOCK
(TITLE OF CLASS OF SECURITIES)
302052 6 11 3
(CUSIP NUMBER OF CLASS OF SECURITIES)
Patrick W. Allender
PQR Acquisition Corporation
c/o Danaher Corporation
1250 24th Street, N.W., Suite 8000
Washington, D.C. 20037
Telephone: (202) 828-0850
(Name, address and telephone number of person authorized to receive notices and
communications on behalf of Bidders)
WITH A COPY TO:
Morris J. Kramer, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Telephone: (212) 735-3000
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<PAGE>
Calculation of Filing Fee
<TABLE>
<CAPTION>
Transaction Valuation* Amount of Filing Fee**
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<S> <C>
$234,065,669 $46,813.14
</TABLE>
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* For purposes of calculating the filing fee only. This calculation assumes
the purchase of an aggregate of (i) 10,493,260 shares of Common Stock
(including the associated Rights) consisting of 10,049,543 shares of Common
Stock and 841,017 shares of Common Stock issuable upon exercise of options
(less 397,300 shares of Common Stock owned by Parent) at a purchase price
of $20 per share of Common Stock, (ii) an aggregate of 1,000,000 shares of
Preferred Stock, at a purchase price of $20 per share of Preferred Stock
and (iii) Warrants to purchase an aggregate of 643,750 shares of Common
Stock, at a purchase price of $6.525 per Warrant.
** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one
percent of the value of the aggregate shares of Common Stock, shares of
Preferred Stock and Warrants purchased.
[_] 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.
Amount Previously Paid: None
Form or Registration No.: Not applicable
Filing Party: Not applicable
Date Filed: Not applicable
2
<PAGE>
Page 1 of
CUSIP NO.
1.
NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DANAHER CORPORATION
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2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
[_]
(b)
[X]
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3.
SEC USE ONLY
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4.
SOURCE OF FUNDS BK,WC
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5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) [_]
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6.
CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
397,300
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8.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES
[_]
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9.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) [_] %
4%
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10.
TYPE OF REPORTING PERSON
HC AND CO
3
<PAGE>
Page 2 of
CUSIP NO.
1.
NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PQR ACQUISITION CORPORATION
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2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
[_]
(b)
[X]
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3.
SEC USE ONLY
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4.
SOURCE OF FUNDS AF
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5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) [_]
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6.
CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
- --------------------------------------------------------------------------------
8.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES
[_]
100
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9.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) [_] %
Less than 1%
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10.
REPORTING PERSON
CO
4
<PAGE>
This Schedule 14D-1 Tender Offer Statement (this "Statement") relates to the
offer by PQR Acquisition Corporation, a Delaware corporation (the
"Purchaser"), and a wholly owned subsidiary of Danaher Corporation, a Delaware
corporation ("Parent"), to purchase all outstanding shares of common stock,
par value $.01 per share (the "Common Stock"), all outstanding shares of
Series G Convertible Preferred Stock, par value $.01 per share (the "Preferred
Stock") and all outstanding warrants to purchase shares of Common Stock at
$13.475 per share of Common Stock (the "Warrants") of Exide Electronics Group,
Inc., a Delaware corporation (the "Company"), at a 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, without interest
thereon (the "Offer Price"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated July 10, 1997 (the "Offer to Purchase")
and in the related Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer"). Copies of the Offer to Purchase and the
Letter of Transmittal are annexed hereto as Exhibits (a)(1) and (a)(2),
respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Exide Electronics Group, Inc., a
Delaware corporation (the "Company"). The address of the Company's principal
executive offices is 8609 Six Forks Road, Raleigh, North Carolina 27615.
(b) The information set forth in the Introduction of the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in Section 6 of the Offer to Purchase is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d); (g) This Statement is being filed on behalf of Parent and the
Purchaser for purposes of the Schedule 14D-1. The information set forth in the
Introduction, Section 9 and Schedule I of the Offer to Purchase is
incorporated herein by reference.
(e)-(f) During the last five years, neither Parent nor the Purchaser, nor,
to the best knowledge of Parent and the Purchaser, the persons listed in
Schedule I of the Offer to Purchase, has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Sections 8,9 and 11
and Schedule I of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 10 of the Offer to Purchase is
incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(b) The information set forth in the Introduction, and Sections 11 and
12 of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Sections 11 and 12 of the Offer to Purchase
is incorporated herein by reference.
5
<PAGE>
(d)-(e) The information set forth in Sections 6,7, 12 and 13 of the Offer to
Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Sections 7 and 12 of the Offer to
Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Sections 8 and 9 and
Schedule I of the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, and Sections 7, 8, 9, 11 and
12 of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Sections 11 and 16 of the
Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 of the Offer to Purchase is
incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Sections 8, 9, 11, and 12 of the Offer to
Purchase is incorporated herein by reference.
(b)-(c), (e) The information set forth in Section 15 of the Offer to
Purchase is incorporated herein by reference.
(d) The information set forth in Sections 7 and 12 of the Offer to Purchase
is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2), respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1)Offer to Purchase dated July 10, 1997.
(a)(2)Letter of Transmittal.
(a)(3)Notice of Guaranteed Delivery.
(a)(4)Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(a)(5)Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(6)Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7)Text of Press Release issued by Parent on July 10, 1997.
(a)(8)Form of Summary Advertisement dated July 10, 1997.
(b)(1) Credit Agreement, dated as of September 7, 1990, among Danaher
Corporation, the financial institutions listed therein and Bankers
Trust Company, as Agent, filed as Exhibit 10(b) to the Annual Report on
Form 10-K for Danaher Corporation, for the year ended December 31,
1996, and incorporated herein by reference.
(b)(2) Commitment Letter, dated June 12, 1997 between Parent and the Bank of
Nova Scotia.
(b)(3) Commitment Letter, dated July 9, 1997 between Parent and the Chase
Manhattan Bank.
(b)(4) Commitment Letter, dated June 16, 1997 between Parent and SunTrust
Bank.
(b)(5) Commitment Letter, dated June 12, 1997 between Parent and the First
National Bank of Chicago.
(c)None.
(d)None.
(e)Not applicable.
(f) None.
(g)(1) Complaint For Declaratory and Injunctive Relief filed July 9, 1997 by
Danaher Corporation and PQR Acquisition Corporation In the Court of
Chancery of the State of Delaware.
6
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: July 10, 1997
PQR ACQUISITION CORPORATION
By: /s/ Patrick W. Allender
---------------------------------
Name: Patrick W. Allender
Title:Vice President and
Treasurer
DANAHER CORPORATION
By: /s/ Patrick W. Allender
---------------------------------
Name: Patrick W. Allender
Title:Senior Vice President,
Chief Financial Officer
and Secretary
Dated: July 10, 1997
7
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO.
(a)(1)Offer to Purchase dated July 10, 1997.
(a)(2)Letter of Transmittal.
(a)(3)Notice of Guaranteed Delivery.
(a)(4)Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(a)(5)Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(6)Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7)Text of Press Release issued by Parent on July 10, 1997.
(a)(8)Form of Summary Advertisement dated July 10, 1997.
(b)(1) Credit Agreement, dated as of September 7, 1990, among Danaher
Corporation, the financial institutions listed therein and Bankers
Trust Company, as Agent, filed as Exhibit 10(b) to the Annual Report on
Form 10-K of Danaher Corporation, for the year ended December 31, 1996,
and incorporated herein by reference.
(b)(2) Commitment Letter, dated June 12, 1997 among Parent and the Bank of
Nova Scotia.
(b)(3) Commitment Letter, dated July 9, 1997 among Parent and the Chase
Manhattan Bank.
(b)(4) Commitment Letter, dated June 16, 1997 among Parent and SunTrust Bank.
(b)(5) Commitment Letter, dated June 12, 1997 among Parent and the First
National Bank of Chicago.
(c)None.
(d)None.
(e)Not applicable.
(f)None.
(g)(1) Complaint For Declaratory and Injunctive Relief filed July 9, 1997 by
Danaher Corporation and PQR Acquisition Corporation In the Court of
Chancery of the State of Delaware.
<PAGE>
Exhibit 99(A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
AND
ALL OUTSTANDING SHARES OF SERIES G CONVERTIBLE PREFERRED STOCK
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
AT
$20 NET PER SHARE OF COMMON STOCK AND PREFERRED STOCK
AND
$6.525 NET PER WARRANT
BY
PQR ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, AUGUST 6, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED A NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED
BY PARENT, WOULD REPRESENT AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A
FULLY DILUTED BASIS ON THE DATE OF PURCHASE, (II) THE RIGHTS HAVING BEEN
REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED OR
ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER AND (III) THE
BOARD OF DIRECTORS OF THE COMPANY HAVING APPROVED THE OFFER AND THE PROPOSED
MERGER FOR PURPOSES OF SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW OR
THE PURCHASER BEING SATISFIED IN ITS SOLE DISCRETION, THAT SECTION 203 IS
OTHERWISE INAPPLICABLE TO THE PROPOSED MERGER. SEE SECTION 14. THE OFFER IS
NOT CONDITIONED ON THE RECEIPT OF FINANCING.
--------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares should either (i) complete and sign the Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, have such shareholder's signature thereon guaranteed if required
by Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal (or such facsimile) and any other required documents to the
Depositary and either deliver the certificates for such Shares to the
Depositary along with the Letter of Transmittal (or facsimile) or deliver such
Shares pursuant to the procedure for book-entry transfer as set forth in
Section 2 or (ii) request such shareholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such shareholder.
A shareholder 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 such shareholder
desires to tender such Shares. As used herein, Shares means shares of Common
Stock and Preferred Stock and Warrants, and shareholders means holders of
Shares, unless the context indicates otherwise.
References to shares of Common Stock include references to the associated
Rights, unless the context indicates otherwise. In order validly to tender
shares of Common Stock, a shareholder must tender the associated Rights.
Unless and until the Distribution Date of the Rights, the tender of a share of
Common Stock will constitute the tender of the associated Rights. See Section
2.
If a shareholder desires to tender Shares and such shareholder's
certificates for Shares are not immediately available or the procedure for
book-entry transfer cannot be completed on a timely basis, or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, such shareholder's tender may be effected by following the procedure for
guaranteed delivery set forth in Section 2.
Questions and requests for assistance may be directed to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, the Dealer Manager, or to D.F. King &
Co., Inc., the Information Agent, at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other related materials may be obtained from the
Information Agent or from brokers, dealers, commercial banks and trust
companies.
--------------
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
July 10, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Introduction............................................................... 1
Section 1. Terms of the Offer............................................. 4
Section 2. Procedures for Tendering Shares................................ 6
Section 3. Withdrawal Rights.............................................. 9
Section 4. Acceptance for Payment and Payment............................. 9
Section 5. Certain Federal Income Tax Consequences........................ 10
Section 6. Price Range of the Shares; Dividends on the Shares............. 11
Section 7. Effect of the Offer on the Market for the Shares;
Exchange Act Registration; Margin Regulations................ 11
Section 8. Certain Information Concerning the Company..................... 13
Section 9. Certain Information Concerning Parent and the Purchaser........ 18
Section 10. Source and Amount of Funds..................................... 20
Section 11. Background of the Offer........................................ 20
Section 12. Purpose of the Offer; Plans for the Company.................... 24
Section 13. Dividends and Distributions.................................... 26
Section 14. Certain Conditions of the Offer................................ 27
Section 15. Certain Legal Matters.......................................... 31
Section 16. Fees and Expenses.............................................. 33
Section 17. Miscellaneous.................................................. 34
Schedule I--Directors and Executive Officers of Parent and the Purchaser... S-1
Schedule II--Transactions in Shares by Parent and the Purchaser............ S-3
</TABLE>
<PAGE>
To the Holders of Shares of
Exide Electronics Group, Inc.:
PQR Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Danaher Corporation, a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $.01 per share (the "Common Stock"), all outstanding shares of
Series G Convertible Preferred Stock, par value $.01 per share (the "Preferred
Stock"), and all outstanding warrants to purchase shares of Common Stock at
$13.475 per share of Common Stock (the "Warrants") of Exide Electronics Group,
Inc., a Delaware corporation (the "Company"), at a 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, without interest
thereon (the "Offer Price"), upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"). Unless
the context indicates otherwise, as used herein, Shares shall mean shares of
Common Stock and Preferred Stock and 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.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer. However, any tendering shareholder or other payee who fails to complete
and sign the Substitute Form W-9 that is included in the Letter of Transmittal
may be subject to a required backup federal income tax withholding of 31% of
the gross proceeds payable to such shareholder or other payee pursuant to the
Offer. See Section 2. The Purchaser will pay all charges and expenses of
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), as
Dealer Manager (in such capacity, the "Dealer Manager"), First Chicago Trust
Company of New York, as Depositary (the "Depositary"), and D.F. King & Co., as
Information Agent (the "Information Agent"), incurred in connection with the
Offer. See Section 16.
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 the consummation of
the Offer, a merger or other transaction (the "Proposed Merger"), pursuant to
which each then outstanding share of Common Stock and Preferred Stock (other
than Shares owned by the Purchaser or Parent and, if applicable, Shares owned
by shareholders who perfect their dissenters' rights under Delaware law),
would be converted into the right to receive an amount in cash equal to the
price per share of Common Stock and Preferred Stock paid pursuant to the
Offer. See Sections 11 and 12.
There is no mechanism whereby holders of outstanding warrants to purchase
common stock of a Delaware corporation may be compelled by operation of law to
exchange their warrants for merger consideration. Following the Proposed
Merger, it appears that, by their terms, upon exercise of a Warrant, the
holder thereof would receive net consideration equal to the difference, per
share of Common Stock for which the Warrant can be exercised, between the
exercise price of the Warrant (currently $13.475), and the cash price paid per
share of Common Stock pursuant to the Merger. See Sections 11 and 12.
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 referred to below. 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
Section 11.
In order to increase the likelihood that the Company and the Purchaser enter
into the Proposed Merger, Parent and the Purchaser have taken preliminary
steps to commence a solicitation of appointments of designated agents ("agent
designations") to call a special meeting of the Company's shareholders (the
"Special Meeting") at which, among other things, Parent and the Purchaser will
propose that the holders of shares of Common Stock
<PAGE>
and Preferred Stock (i) increase the size of the Board of Directors of the
Company from 9 to 19, (ii) elect 10 nominees (the "Parent Nominees") of Parent
as directors of the Company (who would then constitute a majority of the Board
of Directors) and (iii) repeal any by-laws or amendments thereto adopted by
the Company after December 21, 1989, the date of the most recent by-laws
publicly disclosed by the Company prior to the announcement of the terms of
the Offer. See Section 8 and 12.
The Offer does not constitute a solicitation of proxies or agent
designations for any meeting of the Company's shareholders. Any such
solicitation will be made only pursuant to proxy materials complying with the
requirements of Section 14(a) of the Securities Exchange Act of 1934 (the
"Exchange Act"), and the rules and regulations thereunder.
The Offer is subject to a number of conditions, including 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.
According to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997 (the "Company 10-Q"), 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 Preferred Stock votes
together with the 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 (the "Company 10-K"), 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 a
Stockholder Agreement, dated as of March 13, 1996 (the "Fiskars Stockholder
Agreement"), between the Company and Fiskars, Fiskars may not tender Shares in
the Offer, must vote all Shares held by them as directed by the Board of
Directors of the Company, may not sell Shares in the open market other than
pursuant to a registration statement or Rule 144 under the Securities Act of
1933, may not sell Shares to a third party without first offering such Shares
to the Company and are otherwise subject to various standstill provisions
preventing such holders from participating in or encouraging an effort to
acquire the Company. See Section 8.
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.
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.
Based on the foregoing and assuming no additional Shares (or options,
warrants or rights exercisable for, or securities convertible into Shares)
have been issued other than as set forth above (other than Shares issued
pursuant to the exercise of the stock options and Warrants referred to above),
if the Purchaser were to purchase 5,869,856 Shares pursuant to the Offer, the
Minimum Condition would be satisfied.
2
<PAGE>
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 the 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 the Rights, other than the acquiring person, would
be entitled to exercise the Rights to purchase Common Stock at one-half of the
then current market price. The Rights will not become exercisable if the
Outside Directors determine that the Offer is a Permitted Offer (as such terms
are defined in the Rights Agreement). See Section 8.
Based upon publicly available information, the Purchaser believes that as of
the date hereof, the Rights are not exercisable, that Rights Certificates have
not been issued and that the Rights are 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 (or such later date as the Continuing Directors may determine), unless
prior to such date the Company's Board of Directors redeems all of the Rights
or amends the Rights Agreement to delay the Distribution Date. The Board of
Directors 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).
The Purchaser believes that under the circumstances of the Offer, the Board
has a fiduciary obligation to redeem the Rights (or amend the Rights Agreement
to make the Rights inapplicable to the Offer and the Proposed Merger or
determine that the Offer is a Permitted Offer), and the Purchaser is hereby
requesting that the Board do so. However, there can be no assurance that the
Board will redeem the Rights (or amend the Rights Agreement or make such
determination). The Purchaser has commenced litigation against the Company in
the Court of Chancery of the State of Delaware seeking, among other things, an
order compelling the Board to redeem the Rights or to amend the Rights
Agreement to make the Rights inapplicable to the Offer and the Proposed Merger
on the grounds that failure to do so would constitute a breach of fiduciary
duty to the Company's stockholders. There can be no assurance that such an
order will be obtained.
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 of Directors of
the Company having approved the Offer or the Proposed Merger for purposes of
Section 203 of the Delaware General Corporation Law (the "GCL") or the
Purchaser being satisfied, in its sole discretion, that, after consummation of
the Offer, Section 203 will be otherwise inapplicable to the Proposed Merger
or other business combination (as defined therein) to which the Purchaser is
directly or indirectly a party (the "Section 203 Condition").
Section 203 of the GCL, in general, prohibits business combination
transactions involving a Delaware corporation such as the Company 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 of Directors of the
Company 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.
See Section 15.
Promptly following their election, the Parent Nominees intend to approve the
Offer and the Proposed Merger for purposes of Section 203 of the GCL.
The Purchaser believes that under the circumstances of the Offer, the Board
has a fiduciary obligation to approve the Offer and the Proposed Merger for
purposes of Section 203 of the GCL and the Purchaser is hereby requesting that
the Board do so. However, there can be no assurance that the Board will do so.
The Purchaser has commenced litigation against the Company in the Court of
Chancery of the State of Delaware seeking,
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among other things, an order compelling the Board to approve the Offer and the
Proposed Merger for purposes of Section 203 of the GCL on the grounds that
failure to do so would constitute a breach of fiduciary duty to the Company's
stockholders. There can be no assurance that such an order will be obtained.
Certain other conditions to the Offer are described in Section 14. The
Purchaser expressly reserves the right, in its sole discretion, to waive any
one or more of the conditions to the Offer. See Sections 14 and 15. The Offer
is not conditioned on the receipt of financing.
There is approximately $125,000,000 outstanding principal amount of 11 1/2%
Senior Subordinated Notes due 2006 of the Company. Upon a change of control of
the Company, (which would include the consummation of the Offer if Parent
becomes the beneficial owner of more than 50% of the outstanding voting
Shares) or the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors (which would be the case
if the Purchaser Nominees are elected at the Special Meeting without the
approval of the Continuing Directors), each holder of Notes will have the
right to demand that the Company offer to repurchase the holder's Notes at
101% of their principal amount, plus accrued interest, within ten days of the
consummation of the Offer. If the holders of the Notes were to demand payment
under these provisions, and the Company did not have adequate funds to make
such payment, the Company could be in default under the Notes (and possibly in
default under other obligations with "cross-default" provisions) which could
have a material adverse effect on the Company. Based on discussions with
possible financing sources, Parent believes that if Parent were in control of
the Company, adequate financing would be available to make such payments, if
necessary. A "Continuing Director" as the term applies to the Notes, means, as
of any date of determination, any member of the Board of Directors of the
Company who (i) was a member of such Board of Directors on the date of the
indenture governing the Notes or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
SECTION 1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares
validly tendered prior to the Expiration Date. The term "Expiration Date"
means 12:00 midnight, New York City time, on Wednesday, August 6, 1997, unless
and until the Purchaser, in its sole discretion, shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by the Purchaser, will expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition, the Rights Condition, the Section 203 Condition, the
expiration or termination of all waiting periods imposed by the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, and the regulations
thereunder (the "HSR Act") and the satisfaction of the other conditions set
forth in Section 14. The Offer is not conditioned on the receipt of financing.
Subject to the applicable rules and regulations of the Securities Exchange
Commission (the "Commission"), the Purchaser reserves the right, in its sole
discretion, at any time and from time to time, and regardless of whether or
not any of the events set forth in Section 14 hereof shall have occurred or
shall have been determined by the Purchaser to have occurred, to (a) extend
the period of time during which the Offer is open, and thereby delay
acceptance for payment of and the payment for any Shares, by giving oral or
written notice of such extension and delay to the Depositary or (b) waive or
reduce any condition or amend the Offer in any other respect by giving oral or
written notice of such waiver or amendment to the Depositary. During any such
extension, all Shares previously tendered and not properly withdrawn will
remain subject to the Offer, subject to the right of a tendering shareholder
to withdraw such shareholder's Shares. See Section 3. Under no circumstances
will interest be paid on the purchase price for tendered Shares, whether or
not the purchaser exercises its right to extend the Offer.
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If by the Expiration Date any or all of the conditions to the Offer have not
been satisfied or waived, the Purchaser reserves the right (but shall not be
obligated), subject to the applicable rules and regulations of the Commission,
to (a) terminate the Offer and not accept for payment or pay for any Shares
and return all tendered Shares to tendering shareholders, (b) waive or reduce
all the unsatisfied conditions and accept for payment and pay for all Shares
validly tendered prior to the Expiration Date, (c) extend the Offer and,
subject to the right of shareholders to withdraw Shares until the Expiration
Date, retain the Shares that have been tendered during the period or periods
for which the Offer is extended or (d) amend the Offer.
The rights reserved by the Purchaser in the two preceding paragraphs are in
addition to the Purchaser's rights pursuant to Section 14. There can be no
assurance that the Purchaser will exercise its right to extend the Offer. Any
extension, amendment, delay, waiver or termination will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-l(d) under the Securities Exchange Act of 1934 (the "Exchange Act")
requires that the announcement be issued no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date, or the first opening of the New York Stock Exchange (the "NYSE") on the
next business day after the previously scheduled Expiration Date, in
accordance with the public announcement requirements of Rule 14d-4(c) under
the Exchange Act. Subject to applicable law (including Rules 14d-4(c) and 14d-
6(d) under the Exchange Act, which require that any material change in the
information published, sent or given to shareholders in connection with the
Offer be promptly disseminated to shareholders in a manner reasonably designed
to inform shareholders of such change), and without limiting the manner in
which the Purchaser may choose to make any public announcement, the Purchaser
will not have any obligation to publish, advertise or otherwise communicate
any such public announcement other than by making a release to the Dow Jones
News Service. As used in this Offer to Purchase, "business day" has the
meaning set forth in Rule 14d-1 under the Exchange Act.
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment (whether before or after its acceptance
for payment of Shares) for Shares or it is unable to pay for Shares pursuant
to the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Purchaser, and such Shares may not be withdrawn except to the extent tendering
shareholders are entitled to withdrawal rights as described in Section 3.
However, the ability of the Purchaser to delay the payment for Shares that the
Purchaser has accepted for payment is limited by Rule 14e-1(c) under the
Exchange Act, which requires that a bidder pay the consideration offered or
return the securities tendered by or on behalf of holders of securities
promptly after the termination or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will extend the Offer and disseminate additional tender offer
materials to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under
the Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities
sought, a minimum period of 10 business days is generally required to allow
for adequate dissemination to shareholders and investor response. If the
Purchaser should decide to change the price offered or the percentage of
securities sought of any of the Common Stock, Preferred Stock, or Warrants,
such change will be applicable to all shareholders who hold any of such
respective class of securities.
A request is being made to the Company pursuant to Rule 14d-5 of the
Exchange Act for the use of the Company's shareholder lists and security
position listings for the purpose of disseminating the Offer to holders of
Shares. This Offer to Purchase, the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares, and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the shareholder
lists, or, if applicable, who are listed as participants in a clearing
agency's security position listing, for subsequent transmittal to beneficial
owners of Shares, by the Purchaser following receipt of such lists or listings
from the Company, or by the Company if it so elects.
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<PAGE>
SECTION 2. PROCEDURES FOR TENDERING SHARES
Valid Tender. For a shareholder validly to tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or in
the case of a book-entry transfer, an Agent's Message (as defined below), and
any other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date and either (i) certificates for tendered Shares ("Share
Certificates") must be received by the Depositary at one of such addresses or
(ii) such Shares must be delivered pursuant to the procedures for book-entry
transfer set forth below (and a Book-Entry Confirmation (as defined below)
received by the Depositary), in each case prior to the Expiration Date, or (b)
the tendering shareholder must comply with the guaranteed delivery procedures
set forth below.
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Common Stock at the Depository Trust Company ("DTC") and the Philadelphia
Depository Trust Company (the "Book-Entry Transfer Facilities") for purposes
of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in any of the Book-
Entry Transfer Facilities' systems may make book-entry delivery of Shares by
causing a Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with such Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at a Book-
Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or an Agent's Message, and any other required documents, must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration
Date, or the tendering shareholder must comply with the guaranteed delivery
procedures described below. The confirmation of a book-entry transfer of
Shares into the Depositary's account at a Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." DELIVERY
OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-
ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
Participants in DTC may tender their Shares in accordance with DTC's
Automated Tender Offer Program, to the extent it is available to such
participants for the Shares they wish to tender. A shareholder tendering
through the Automated Tender Offer Program must expressly acknowledge that the
shareholder has received and agreed to be bound by the Letter of Transmittal
and that the Letter of Transmittal may be enforced against such shareholder.
If Rights Certificates have been distributed to holders of Shares, such
holders are required to tender, or (if such procedure is available) make book-
entry transfer of, Rights Certificates representing a number of Rights equal
to the number of Shares being tendered in order to effect a valid tender of
such Shares.
Neither Preferred Stock nor Warrants may be tendered by book-entry transfer.
Neither Book-Entry Confirmations, nor Agent's Messages are available with
respect to Preferred Stock or Warrants.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER.
SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
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Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (a) if the Letter of Transmittal is signed by the registered
holder (which term, for purposes of this Section, includes any participant in
any of the Book-Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that 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"). In all other cases, all signatures on the Letter
of Transmittal must be guaranteed by an Eligible Institution. See Instructions
1 and 5 to the Letter of Transmittal. If Share Certificates are registered in
the name of a person other than the signer of the Letter of Transmittal, or if
payment is to be made or Share Certificates for Shares not tendered or not
accepted for payment are to be returned to a person other than the registered
holder of the Share Certificates surrendered, the tendered Share Certificates
must be endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name or names of the registered holders appear on the
Share Certificates, with the signatures on the Share Certificates or stock
powers guaranteed as described above. See Instructions 1 and 5 to the Letter
of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share Certificates are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all the following conditions are met:
(i) the tender is 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, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the Share Certificates and Rights Certificates, representing all
tendered Shares, in proper form for transfer (or a Book-Entry Confirmation
with respect to all such Shares), together with a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and any other required documents are received by the
Depositary within three trading days after the date of execution of such
Notice of Guaranteed Delivery, or in the case of the Rights Certificates,
three business days after the date Rights Certificates are distributed to
shareholders. A "trading day" is any day on which the New York Stock
Exchange (the "NYSE") is open for business.
The Notice of Guaranteed Delivery 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 in the form set forth
in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (a) Share Certificates for (or a timely Book-
Entry Confirmation with respect to) such Shares and if the Distribution Date
has occurred, Rights Certificates for a Book-Entry Confirmation, if available,
with respect to such Rights (unless the Purchaser elects, in its sole
discretion, to make payment for such Shares pending receipt of the Rights
Certificates for or a Book-Entry Confirmation, if available, with respect to
such Rights), (b) a Letter of Transmittal (or 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, and (c) any other
documents required by the Letter of Transmittal. Accordingly, tendering
shareholders may be paid at different times depending upon when Share
Certificates (or Rights Certificates) or Book-Entry Confirmations with respect
to Shares (or Rights, if available) are actually received by the Depositary.
Under no circumstances will interest be paid on the purchase price of the
Shares to be paid by the Purchaser, regardless of any extension of the Offer
or any delay in making such payment.
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The Purchaser's acceptance for payment of Shares validly tendered pursuant
to the Offer will constitute a binding agreement between the tendering
shareholder and the Purchaser upon the terms and subject to the conditions of
the Offer.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of the Purchaser
as such shareholder's attorneys-in-fact and proxies in the manner set forth in
the Letter of Transmittal, each with full power of substitution, to the full
extent of such shareholder's rights with respect to the Shares tendered by
such shareholder and accepted for payment by the Purchaser and with respect to
any and all other Shares or other securities or rights issued or issuable in
respect of such Shares on or after July 9, 1997 (the "Applicable Date"). All
such proxies will be irrevocable and considered coupled with an interest in
the tendered Shares. Such appointment will be effective when, and only to the
extent that, the Purchaser accepts such Shares for payment pursuant to the
Offer. Upon such acceptance for payment, all prior powers of attorney, proxies
and consents given by such shareholder with respect to such Shares or other
securities or rights will, without further action, be revoked and no
subsequent powers of attorney, proxies, consents or revocations may be given
(and, if given, will not be deemed effective). The designees of the Purchaser
will thereby be empowered to exercise all voting and other rights with respect
to such Shares and other securities or rights in respect of any annual,
special, adjourned or postponed meeting of the Company's shareholders, actions
by written consent in lieu of any such meeting or otherwise, as they in their
sole discretion deem proper. The Purchaser reserves the right to require that,
in order for Shares to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser must be able
to exercise full voting, consent and other rights with respect to such Shares
and other securities or rights, including voting at any meeting of
shareholders.
The foregoing proxies are effective only upon acceptance for payment of
Shares pursuant to the Offer. The Offer does not constitute a solicitation of
proxies, absent a purchase of Shares, for any meeting of the Company's
shareholders, which will be made only pursuant to separate proxy solicitation
materials complying with the Exchange Act.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Purchaser, in its sole discretion,
whose determination will be final and binding on all parties. The Purchaser
reserves the absolute right to reject any or all tenders determined by it not
to be in proper form or the acceptance for payment of or payment for which
may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser
also reserves the absolute right to waive any defect or irregularity in the
tender of any Shares of any particular shareholder whether or not similar
defects or irregularities are waived in the case of other shareholders. No
tender of Shares will be deemed to have been validly made until all defects or
irregularities relating thereto have been cured or waived. None of the
Purchaser, Parent, the Depositary, the Information Agent, the Dealer Manager
or any other person will be under any duty to give notification of any defects
or irregularities in tenders or incur any liability for failure to give any
such notification. The Purchaser's interpretation of the terms and conditions
of the Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding on all parties.
Backup Withholding. In order to avoid "backup withholding" of federal income
tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such shareholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such shareholder is not subject to backup withholding. If a
shareholder does not provide such shareholder's correct TIN or fails to
provide the certifications described above, the Internal Revenue Service (the
"IRS") may impose a penalty on such shareholder and the payment of cash to
such shareholder pursuant to the Offer may be subject to backup withholding of
31% of the amount of such payment. All shareholders surrendering Shares
pursuant to the Offer should complete and sign the main signature form and the
Substitute Form W-9 included as part of the Letter of Transmittal to provide
the information and certification necessary to avoid backup withholding
(unless an applicable exemption exists and is proved in a manner satisfactory
to the Purchaser and the Depositary).
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Noncorporate foreign shareholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See
Instruction 9 to the Letter of Transmittal.
SECTION 3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn pursuant to the procedures set forth below at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after September 7,
1997.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
its address set forth on the back cover of this Offer to Purchase and must
specify the name of the person having tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder of the
Shares to be withdrawn, if different from the name of the person who tendered
the Shares. If Share Certificates or Rights Certificates have been delivered
or otherwise identified to the Depositary, then, prior to the physical release
of such Share Certificates or Rights Certificates, the serial numbers shown on
such Share Certificates or Rights Certificates must be submitted to the
Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by
an Eligible Institution. If Shares or Rights have been delivered pursuant to
the procedure for book-entry transfer as set forth in Section 2, any notice of
withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares or Rights and otherwise comply with such Book-Entry Transfer Facility's
procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by again following
one of the procedures described in Section 2 at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding on all parties. None
of the Purchaser, Parent, the Depositary, the Information Agent, the Dealer
Manager or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability
for failure to give any such notification.
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay for all
Shares validly tendered promptly after the Expiration Date. All questions as
to the satisfaction of such terms and conditions will be determined by the
Purchaser, in its sole discretion, whose determination will be final and
binding on all parties. See Sections 1 and 14. The Purchaser expressly
reserves the right, in its sole discretion, to delay acceptance for payment of
or payment for Shares in order to comply in whole or in part with any
applicable law, including, without limitation, the HSR Act. See Section 15.
Any such delays will be effected in compliance with Rule 14e-l(c) under the
Exchange Act (relating to a bidder's obligation to pay for or return tendered
securities promptly after the termination or withdrawal of such bidder's
offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) Share
Certificates for (or a timely Book-Entry Confirmation with respect to) such
Shares, (b) a Letter of Transmittal (or 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, and (c) any other documents
required by the Letter of Transmittal. The per Share consideration paid to any
shareholder pursuant to the Offer will be the highest per Share consideration
paid to any other shareholder of the same class pursuant to the Offer.
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For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to the Purchaser as,
if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance for payment of such Shares. Payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
validly tendering shareholders for the purpose of receiving payment from the
Purchaser and transmitting payment to tendering shareholders. Under no
circumstances will interest be paid on the purchase price of the Shares to be
paid by the Purchaser, regardless of any extension of the Offer or any delay
in making such payment. Upon the deposit of funds with the Depositary for the
purpose of making payments to tendering shareholders, the Purchaser's
obligation to make such payment shall be satisfied and tendering shareholders
must thereafter look solely to the Depositary for payment of amounts owed to
them by reason of the acceptance for payment of Shares pursuant to the Offer.
The Purchaser will pay any stock transfer taxes with respect to the transfer
and sale to it or its order pursuant to the Offer, except as otherwise
provided in Instruction 6 of the Letter of Transmittal, as well as any charges
and expenses of the Depositary and the Information Agent.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange
Act), the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares, and such Shares may not be withdrawn except to the extent
tendering shareholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, Share Certificates for any such unpurchased Shares will be returned,
without expense to the tendering shareholder (or, in the case of Shares
delivered by book-entry transfer of such Shares into the Depositary's account
at a Book-Entry Transfer Facility pursuant to the procedure set forth in
Section 2, such Shares will be credited to an account maintained at the
appropriate Book-Entry Transfer Facility), as promptly as practicable after
the expiration, termination or withdrawal of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Parent, or to one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase Shares tendered pursuant
to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering shareholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the Offer or the Proposed Merger will be a
taxable transaction for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be a taxable transaction
under applicable state, local or foreign income or other tax laws. Generally,
for federal income tax purposes, a tendering shareholder will recognize gain
or loss equal to the difference between the amount of cash received by the
shareholder pursuant to the Offer or the Proposed Merger and the aggregate tax
basis in the Shares tendered by the shareholder and purchased pursuant to the
Offer or converted in the Proposed Merger, as the case may be. Gain or loss
will be calculated separately for each block of Shares tendered and purchased
pursuant to the Offer or converted in the Proposed Merger, as the case may be.
If Shares are held by a shareholder as capital assets, gain or loss
recognized by the shareholder will be capital gain or loss, which will be
long-term capital gain or loss if the shareholder's holding period for the
Shares exceeds one year. Under present law, long-term capital gains recognized
by an individual shareholder will generally be taxed at a maximum federal
marginal tax rate of 28%, and long-term capital gains recognized by a
corporate shareholder will be taxed at a maximum federal marginal tax rate of
35%.
THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY
NOT BE APPLICABLE WITH RESPECT TO SHARES RECEIVED AS COMPENSATION OR WITH
RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL
10
<PAGE>
TAX TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE
COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT
APPLY TO A HOLDER OF SHARES IN LIGHT OF INDIVIDUAL CIRCUMSTANCES. SHAREHOLDERS
ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE PROPOSED MERGER.
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES
The Common Stock is listed on the Nasdaq National Market stock market under
the symbol XUPS. The following table sets forth the high and low closing sales
prices per share of Common Stock, as reported in publicly available sources
for the periods indicated. The Company did not pay any dividends on the Common
Stock during such periods.
<TABLE>
<CAPTION>
HIGH LOW
------ --------
<S> <C> <C>
1995:
First quarter................................................ $20 $15 3/4
Second quarter............................................... 23 15 1/2
Third quarter................................................ 25 1/4 18 3/4
Fourth quarter............................................... 20 3/4 14
1996:
First quarter................................................. 15 1/4 11 3/4
Second quarter................................................ 17 1/8 9 1/2
Third quarter................................................. 12 5/8 8 3/4
Fourth quarter................................................ 14 3/4 10
1997:
First quarter................................................ 16 10 7/8
Second quarter............................................... 12 8 1/2
Third quarter (through July 8)............................... 13 1/8 12 7/16
</TABLE>
On July 9, 1997, the date of the announcement of the terms of the Offer and
the last full trading day before commencement of the Offer, the closing sale
price for the Common Stock was $20 5/8 per share. SHAREHOLDERS ARE URGED TO
OBTAIN CURRENT MARKET QUOTATIONS FOR THE COMMON STOCK.
By their terms, each share of Preferred Stock pays dividends of $.80 per
share per year through March 31, 2001 and $1.20 per share thereafter. The
Warrants do not pay dividends. No price quotations are available for the
Preferred Stock or the Warrants.
SECTION 7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE ACT
REGISTRATION; MARGIN REGULATIONS
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Depending upon the aggregate market value and per share price of any shares
of Common Stock not purchased pursuant to the Offer, the Common Stock may no
longer meet the standards of the National Association of Securities Dealers,
Inc. (the "NASD") for continued inclusion in the Nasdaq National Market, which
require that an issuer have at least 200,000 publicly held shares with a
market value of $1 million held by at least 400 stockholders or 300
stockholders holding round lots and have net tangible assets of at least
$1 million, $2 million or $4 million depending on profitability levels during
the issuer's four most recent fiscal years. If these standards are not met,
the Common Stock might nevertheless continue to be included in the NASD's
Nasdaq Stock Market with quotations published in the Nasdaq "additional list"
or in one of the "local lists." However, if the number of holders of Common
Stock falls below 300, or if the number of shares of publicly held Common
Stock falls below 100,000, or if there are not at least two market makers for
such
11
<PAGE>
Common Stock, NASD rules provide that the Common Stock would no longer be
"qualified" for Nasdaq Stock Market reporting, and the Nasdaq Stock Market
would cease to provide any quotations. Common Stock held directly or
indirectly by an officer or director of the Company, or by any beneficial
owner of more than 10% of the shares of Common Stock, ordinarily will not be
considered as being publicly held for this purpose. If, as a result of the
purchase of Common Stock pursuant to the Offer or otherwise, the Common Stock
no longer meets the NASD requirements for continued inclusion in any tier of
the Nasdaq National Market or in any other tier of the Nasdaq Stock Market,
and the Common Stock is no longer included in any tier of the Nasdaq National
Market, the market for such Common Stock could be adversely affected.
In the event the Common Stock no longer meets the requirements of the NASD
for inclusion in any tier of the Nasdaq Stock Market, quotations might still
be available from other sources. The extent of the public market for Common
Stock and availability of such quotations would, however, depend upon the
number of holders of Common Stock remaining at such time, the interest in
maintaining a market in the Common Stock on the part of securities firms, the
possible termination of registration under the Exchange Act, as described
below, and other factors.
Neither the Preferred Stock nor the Warrants are listed on any exchange or
traded on the Nasdaq National Market.
Exchange Act Registration. The Common Stock is currently registered under
the Exchange Act. Registration of the Common Stock under the Exchange Act may
be terminated upon application of the Company to the Commission if the Common
Stock is neither listed on a national securities exchange nor held by 300 or
more holders of record. Termination of registration of the Common Stock under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to its shareholders and to the Commission and would
make certain provisions of the Exchange Act no longer applicable to the
Company, such as the short-swing profit recovery provisions of Section 16(b)
of the Exchange Act, the requirement of furnishing a proxy statement pursuant
to Section 14(a) of the Exchange Act in connection with shareholders' meetings
and the related requirement of furnishing an annual report to shareholders and
the requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions. Furthermore, the ability of "affiliates" of the Company
and persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act
of 1933, as amended, may be impaired or eliminated. The Purchaser intends to
seek to cause the Company to apply for termination of registration of the
Common Stock under the Exchange Act as soon after the completion of the Offer
as the requirements for such termination are met.
If registration of the Common Stock is not terminated prior to the Proposed
Merger, then the Common Stock will be delisted from all stock exchanges and
the registration of the Common Stock under the Exchange Act will be terminated
following the consummation of the Proposed Merger.
Neither the Preferred Stock nor the Warrants are registered under the
Exchange Act.
Margin Regulations. Shares of Common Stock are currently "margin securities"
under the regulations of the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Common Stock.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, shares of the
Common Stock would no longer constitute "margin securities" for the purposes
of the margin regulations of the Federal Reserve Board and therefore could no
longer be used as collateral for loans made by brokers.
Neither the Preferred Stock nor the Warrants are "margin securities."
12
<PAGE>
SECTION 8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Delaware corporation with its principal offices at 8609 Six
Forks Road, Raleigh, North Carolina 27615. According to the Company 10-K, the
Company's principal line of business is the design, manufacture, marketing and
servicing of a broad line of uninterruptible power systems ("UPS"), related
equipment, and power management and facilities monitoring software. UPS
products protect computers and other sensitive electronic equipment against
electrical power distortions and interruptions by providing temporary backup
power from batteries in the event of an outage. More sophisticated UPS
products also provide additional protection by continuously cleaning and
conditioning electrical power. The Company's broad range of UPS products
include small systems for use with personal computers, workstations,
client/server platforms, telecommunications hardware, servers/intranets,
hubs/routers, and large standard or customized systems for use with mainframe
computers, data centers, and similar applications. The Company's power
management software products monitor, track, and communicate electrical power
data and other related environmental events in an enterprise's power, network,
and computer systems infrastructure that can threaten performance of
information technology ("IT") systems, thereby giving network and facilities
managers the ability to control their IT and power systems more effectively.
Set forth below is certain selected consolidated financial information with
respect to the Company and its subsidiaries excerpted from the information
contained in the Company 10-K and the Company 10-Q. More comprehensive
financial information is included in the Company 10-K, the Company 10-Q and
other documents filed by the Company with the Commission, and the following
summary is qualified in its entirety by reference to such information. The
Company 10-K, the Company 10-Q and such other documents should be available
for inspection and copies thereof should be obtainable in the manner set forth
below under "Available Information."
EXIDE ELECTRONICS GROUP, INC.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED FISCAL YEAR ENDED
MARCH 31, SEPTEMBER 30,
------------------ -------------------------------
1997 1996 1996 1995 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net Sales................ $269,760 $184,991 $459,936 $390,978 $363,983
Net Earnings (Loss) Ap-
plicable to Common
Shareholders Before Ex-
traordinary Item........ 773 (8,645) (11,065) 6,793 8,385
Earnings (Loss) per Share:
Net Earnings (Loss) Be-
fore Extraordinary Item. 0.08 (0.93) (1.15) 0.84 1.07
Net Earnings (Loss)...... (0.16) (0.93) (1.15) 0.84 1.07
Balance Sheet Data (at end
of period):
Total Assets............. 488,081 508,150 489,747 256,451 224,676
Working Capital.......... 110,699 135,475 115,867 105,543 93,337
Long Term Debt and Subor-
dinated Notes........... 220,137 259,411 232,267 80,258 58,400
Redeemable Preferred
Stock................... 18,597 18,028 18,312 -- 10,000
Total Shareholders' Equi-
ty...................... 93,613 98,165 96,339 83,767 67,462
</TABLE>
The Rights. The following is a summary of the material terms of the Rights
Agreement, a copy of which has been filed with the Securities and Exchange
Commission as Exhibit 1 to the Company's Current Report on Form 8-K dated
November 25, 1992. A copy of the Rights Agreement is available as set forth in
"Available Information." This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
On November 10, 1992, the Board of Directors of the Company declared a
dividend distribution of one Right for each outstanding share of Common Stock.
The dividends were payable on December 7, 1992. Pursuant
13
<PAGE>
to the Rights Agreement, each Right, when exercisable, entitles the registered
holder to purchase from the Company one one-hundredth of a share of Series F
Junior Participating Preferred Stock (the "Series F Preferred") at a price of
$80 per one one-hundredth of a share, subject to adjustment (as adjusted, the
"Purchase Price").
Certificates. Currently, the Rights are evidenced by the certificates for
shares of Common Stock to which they are attached and the transfer of any
certificate representing Common Stock in respect of which Rights have been
issued also constitutes the transfer of the associated Rights. Rights
Certificates will be distributed as soon as practicable following the
Distribution Date, which is the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more (except pursuant to a Permitted Offer (as defined
below)) of the outstanding Common Stock (the "Stock Acquisition Date") or (ii)
10 business days (or such later date as the Continuing Directors (as defined
below) may determine) following the commencement of a tender offer or exchange
offer the consummation of which would result in the beneficial ownership by a
person of 15% or more of the outstanding Common Stock. Notwithstanding the
foregoing, Massachusetts Mutual Life Insurance Company (together with its
affiliates, "Mass Mutual"), which at the time the Rights Agreement was
executed held notes convertible into more than 15% of Common Stock, will not
be deemed an Acquiring Person unless it becomes the beneficial owner of more
than 22% of the Common Stock then outstanding (other than as a result of
adjustments in the number of shares of Common Stock Mass Mutual is eligible to
receive upon conversion of the notes, acquisitions of Common Stock by the
Company or other actions of the Company or any other party which increase the
number of shares of Common Stock beneficially owned by Mass Mutual, so long as
Mass Mutual has not acquired Common Stock, or taken other actions, which
caused the proportionate number of shares of Common Stock beneficially owned
by Mass Mutual to exceed the 22% figure).
Expiration and Exercise. The Rights are not exercisable before the
Distribution Date and will expire at the close of business on December 7,
2002. The registered holder of any Rights Certificates may exercise the Rights
evidenced thereby at any time after the Distribution Date, and upon such
exercise will receive, for the Purchase Price of $80, one one-hundredth of a
share of Series F Preferred and cash, if any, payable in lieu of issuance of
fractional shares.
"Flip-In." In the event that a person becomes the beneficial owner of 15% or
more (22% in the case of Mass Mutual) of the then outstanding Common Stock
(except pursuant to a Permitted Offer), each holder of a Right will thereafter
have the right to receive, upon exercise, Common Stock (or, in certain
circumstances, cash property or other securities of the Company) having a
value equal to two times the exercise price of the Right. Notwithstanding any
of the foregoing, following the occurrence of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by an Acquiring Person will be
null and void. However, Rights are not exercisable following the occurrence of
the events set forth above until such time as the Rights are no longer
redeemable by the Company as set forth below.
For example, at an exercise price of $80 per Right, each Right not owned by
an Acquiring Person (or certain related parties) following an event set forth
in the preceding paragraph would entitle its holder to purchase $160 worth of
Common Stock (or other consideration, as noted above) for $80. Assuming that
each share of Common Stock had a value of $20 at such time, the holder of each
valid Right would be entitled to purchase eight shares of Common Stock for
$80.
"Flip-Over." In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than
a merger which follows an offer described in the second preceding paragraph),
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which have previously have
been voided as set forth above) shall thereafter have the right to receive,
upon exercise, common stock of the acquiring company having a value equal to
two time the exercise price of the Right, i.e., common stock of the acquiring
company having a value of $160 for each Right, for the $80 exercise price.
14
<PAGE>
Exchange Feature. At any time after a person or group of affiliated or
associated persons become an Acquiring Person, the Board of Directors of the
Company may exchange the Rights (other than in whole or in part), at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
Adjustment for Dilution. The Purchase Price payable, and the number of one
one-hundredths of a share of Series F Preferred or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of the Series F Preferred, (ii)
upon the grant to holders of the Series F Preferred of certain rights or
warrants to subscribe for Series F Preferred or convertible securities at less
than the current market price of the Series F Preferred or (iii) upon the
distribution to holders of the Series F Preferred of evidences of indebtedness
or assets (excluding regular quarterly cash dividends) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued and in lieu thereof,
an adjustment in cash will be made based on the market price of the Series F
Preferred on the last trading date prior to the date of exercise.
Redemption. In general, the Company may redeem the Rights in whole, but not
in part, at any time until ten days following the Stock Acquisition Date, at a
price of $.01 per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors). Under certain circumstances set
forth in the Rights Agreement, the decision to redeem the Rights will require
the concurrence of a majority of the Continuing Directors, but the Continuing
Directors' concurrence is not required if a person is making a cash tender
offer pursuant to a Schedule 14D-1 for all outstanding shares of Common Stock
of the Company not owned by the person or its affiliates. After the redemption
period has expired, the Company's right of redemption may be reinstated (with
the concurrence of the Continuing Directors) if an Acquiring Person reduces
his beneficial ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving the Company and
there are no other Acquiring Persons. Immediately upon the action of the Board
of Directors of the Company ordering redemption of the Rights, with, where
required, the concurrence of the Continuing Directors, the Rights will
terminate and the only right of the holders of Rights will be to receive the
$.01 redemption price.
Permitted Offer. A tender or exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by the Outside Directors (as
defined below) to be fair to and otherwise in the best interests of the
Company and its shareholders is a Permitted Offer under the Rights Agreement.
A Permitted Offer does not trigger the exercisability of the Rights.
Continuing and Outside Directors. The term "Continuing Director" means any
member of the Board of Directors of the Company who was a member of the Board
prior to the date of the Rights Agreement, and any person who is subsequently
elected to the Board if such person is recommended or approved by a majority
of the Continuing Directors, but shall not include an Acquiring Person or an
affiliate or associate of an Acquiring Person, or any representative of the
foregoing entities. The term "Outside Directors" means "Continuing Directors"
who are not officers of the Company.
Stockholder Rights. Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the distribution
of the Rights will not be subject to federal taxation to stockholders or to
the Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of the
acquiring company as set forth above.
Amendments. Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement may
be amended by the
15
<PAGE>
Board in order to cure any ambiguity, defect or inconsistency or to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided, however, no amendment to
adjust the time period governing redemption may be made at such time as the
Rights are not redeemable.
The Stockholders Agreement. According to the Company Proxy Statement, all of
the outstanding shares of Preferred Stock were issued to 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
the Stockholders Agreement between the Company and Fiskars, Fiskars is
prohibited from tendering its shares or otherwise participating in the Offer.
Fiskars may not tender its Shares in any tender or exchange offer by a person
or entity other than the Company except if (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 merge, 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 stockholder meetings, must vote all
Shares held by them as directed by the Board of Directors of the Company, 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 Stockholders
Agreement requires Fiskars to offer Shares to the Company before Fiskars
accepts any offer to purchase Shares from a third party, subject to Fiskars's
right to tender Shares in a tender offer in accordance with the provisions
described above. The foregoing description of the Fiskars Stockholder
Agreement is qualified by reference to the text of the agreement, which has
been filed as Exhibit 4.6 to the Company's Registration Statement on S-4, File
No. 333-2471, and may be obtained in the manner specified in Section 8 under
the caption "Available Information."
The 11 1/2% Notes. There is approximately $125,000,000 outstanding principal
amount of 11 1/2% Senior Subordinated Notes due 2006 of the Company. Upon a
change of control of the Company, which includes the consummation of the Offer
(provided that Parent was the beneficial owner of more than 50% of the
outstanding voting Shares) or the first day on which a majority of the members
of the Board of Directors of the Company are not Continuing Directors (which
would be the case if the Purchaser Nominees are elected at the Special Meeting
without the approval of the Continuing Directors), each holder of Notes will
have the right to demand that the Company offer to repurchase the holder's
Notes at 101% of their principal amount, plus accrued interest, within ten
days of the consummation of the Offer. If the holders of the Notes were to
demand payment under these provisions, and the Company did not have adequate
funds to make such payment, the Company could be in default under the Notes
(and possibly in default under other obligations with "cross-default"
provisions) which could have a material adverse effect on the Company. Based
on discussions with possible financing sources, Parent believes that if Parent
were in control of the Company, adequate financing would be available to make
such payments, if necessary.
By-Laws. 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 (the "Amended
and Restated 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
16
<PAGE>
Current Report on Form 8-K dated July 9, 1997. A copy is available as set
forth in "Available Information." This summary does not purport to be complete
and is qualified in its entirety by reference to the Amended and Restated By-
Laws which are incorporated herein by reference.
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. The Request Record Date must be no more than 10 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 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 violate
Delaware law. See Section 15.
Available Information. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning the Company's directors and
officers, their remuneration, stock options and other matters, the principal
holders of the Company's securities and any material interest of
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such persons in transactions with the Company is required to be disclosed in
proxy statements distributed to the Company's shareholders and filed with the
Commission. Such reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 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 at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission also maintains a web site at
http://www.sec.gov that contains reports, proxy statements and other
information. Such reports, proxy statements and other information concerning
the Company may also be inspected at the offices of the Nasdaq Stock Market,
Reports Section, at 1753 K Street, Washington, D.C. 20006.
Company Information. The information concerning the Company contained in this
Offer to Purchase has been taken from or based upon publicly available
documents on file with the Commission and other publicly available information.
Although the Parent and the Purchaser do not have any knowledge that any such
information is untrue, neither the Purchaser nor Parent takes any
responsibility for the accuracy or completeness of such information or for any
failure by the Company to disclose events that may have occurred and may affect
the significance or accuracy of any such information.
SECTION 9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER
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 this segment 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.
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 Holding 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. DH Holdings Corp., a Delaware corporation
and a direct wholly owned subsidiary of Parent ("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.
See Schedule II.
Set forth below is a summary of certain consolidated financial information
with respect to Parent and its subsidiaries excerpted or derived from the
information contained in Parent's Annual Report on Form 10-K for the year ended
December 31, 1996 (the "Parent 10-K") and Parent's Quarterly Report on Form 10-
Q for the quarter ended March 31, 1997 (the "Parent 10-Q"). More comprehensive
financial information is included in the complete financial statements of
Parent contained in the Parent 10-K and the Parent 10-Q on file with the
Commission, and such financial statements are incorporated herein by reference.
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DANAHER CORPORATION
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, FISCAL YEAR ENDED DECEMBER 31,
----------------------------- --------------------------------
1997 1996 1996 1995 1994
-------------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Net Revenues.......... $ 466,441 $ 409,557 $1,811,878 $1,486,769 $1,113,973
Net Earnings from
Continuing
Operations........... 31,535 26,928 127,959 105,766 72,319
Net Earnings.......... 31,535 106,739 207,770 108,316 81,650
Earnings per Share:
From Continuing
Operations........... 0.52 0.45 2.13 1.77 1.24
Net Earnings.......... 0.52 1.79 3.47 1.81 1.40
Balance Sheet Data (at
end of period):
Total Assets.......... 1,794,658 1,503,480 1,765,074 1,485,991 1,105,645
Working Capital....... 61,203 15,266 72,168 62,332 (18,017)
Long Term Debt........ 190,900 101,680 219,570 268,617 116,515
Total Shareholders'
Equity............... 817,463 679,778 800,261 586,311 476,100
</TABLE>
Available Information. Parent is subject to the informational requirements of
the Exchange Act and, in accordance therewith, files reports relating to its
business, financial condition and other matters. Information, as of particular
dates, concerning Parent's directors and officers, their remuneration, stock
options and other matters, the principal holders of Parent's securities and any
material interest of such persons in transactions with Parent is required to be
disclosed in proxy statements distributed to Parent's shareholders and filed
with the Commission. Such reports, proxy statements and other information
should be available for inspection at the Commission and copies thereof should
be obtainable from the Commission and the Nasdaq National Market in the same
manner as is set forth with respect to the Company in Section 8.
Contacts, etc. with the Company. Except as set forth in this Offer to
Purchase, neither Parent, Purchaser or any other affiliate of Parent nor, to
the best knowledge of Parent or Purchaser, any of the persons listed in
Schedule I hereto, or any associate or majority-owned subsidiary of such
persons (collectively, the "Purchaser Entities"), beneficially owns any equity
security of the Company, and no Purchaser Entity, or, to the best knowledge of
Parent, Purchaser, or any other affiliate of Parent, any of the other persons
referred to above, or any of the respective directors, executive officers or
subsidiaries of any of the foregoing, has effected any transaction in any
equity security of the Company during the past 60 days.
Except as set forth in this Offer to Purchase, no Purchaser Entity, or, to
the best knowledge of any Purchaser Entity, any of the persons listed in
Schedule I hereto has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
without limitation, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies. Except as set
forth in this Offer to Purchase, no Purchaser Entity, or, to the best knowledge
of any Purchaser Entity, any of the persons listed in Schedule I hereto has had
any transactions with the Company, or any of its executive officers, directors
or affiliates that would require reporting under the rules of the Commission.
Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between any Purchaser Entity, or their respective
subsidiaries, or, to the best knowledge of any Purchaser Entity, any of the
persons listed in Schedule I hereto, on the one hand, and the Company or its
executive officers, directors or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other
19
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acquisition of securities, election of directors, or a sale or other transfer
of a material amount of assets that would require reporting under the rules of
the Commission.
SECTION 10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase all of the
Shares pursuant to the Offer and to pay fees and expenses related to the Offer
and the Proposed Merger is estimated to be approximately $250 million. The
Purchaser plans to obtain all funds needed for the Offer and the Proposed
Merger through a capital contribution from Parent.
Parent intends to obtain funds for its capital contribution through its
existing Credit Agreement, dated as of September 7, 1990, as amended, among
Parent and the banks listed therein (the "Credit Facility"), and through a
committed credit line provided by the banks listed therein (the "Committed
Line"). The Credit Facility provides for revolving credit of up to $250
million for general corporate purposes through September 30, 2001. At present,
there is no outstanding indebtedness under the Credit Facility. Loans under
the Credit Facility bear interest at one of the following rates, as selected
by Parent on the date of borrowing: (i) the Base Rate (as defined in the
Credit Facility); (ii) Adjusted CD Rate (as defined in the Credit Facility);
or (iii) the Eurodollar Rate (as defined in the Credit Facility) plus, in the
case of (ii) and (iii), a margin (ranging from 1/8 of one percent to 3/8 of
one percent) based on the leverage ratio of Parent at the end of the fiscal
quarter most recently then ended. As of the date hereof, the applicable margin
would be 1/8 of one percent, which margin is expected to increase to 1/4 of
one percent based on the pro forma capitalization of Parent after the Offer
and the Proposed Merger. The effective interest rate as of the date hereof
would be approximately 6.0%. The Credit Facility contains covenants relating
to, among other things, the maintenance of working capital, net worth debt
levels and interest coverage and restrictions on the payment of dividends. The
members of the bank group providing the Credit Facility are Bankers Trust
Company, Bank of America Illinois, the First National Bank of Chicago, The
Chase Manhattan Bank (National Association), Bank of Nova Scotia, Industrial
Bank of Japan, Bank of Tokyo, NationsBank Corporation, Dresdner Bank
Aktiengesellschaft, The Fuji Bank, SunTrust Bank, The Northern Trust Company,
Sumitomo Bank, Wachovia Bank of Georgia, and Sanwa Bank. The Committed Line
provides for credit of up to $400 million through a date 364 days following
execution of final credit documentation, under substantially the same terms
and conditions as the Credit Facility. The banks providing the Committed Line
are the First National Bank of Chicago, The Chase Manhattan Bank, Bank of Nova
Scotia and SunTrust Bank, each of which has furnished a commitment letter to
Parent.
The foregoing summary of the Credit Facility and the Committed Line is
qualified in its entirety by reference to the Credit Facility and the
Committed Line, which are incorporated herein by reference.
Although no definitive plan or arrangement for repayment of borrowings under
the Credit Facility or Committed Line has been made, Parent anticipates such
borrowings will be repaid with internally generated funds (including, if the
Proposed Merger is accomplished, those of the Company) and from other sources
which may include the proceeds of future bank refinancings or the public or
private sale of debt or equity securities. No decision has been made
concerning the method Parent will use to repay the borrowings under the Credit
Facility. Such decision will be made based on Parent's review from time to
time of the advisability of particular actions, as well as prevailing interest
rates, financial and other economic conditions and such other factors as
Parent may deem appropriate.
SECTION 11. BACKGROUND OF THE OFFER
From June 10 to June 11, the Chairman of the Board of Parent ("Parent's
Chairman") made three unsuccessful attempts to contact the Chairman of the
Board of the Company ("Company's Chairman") by
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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.
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.
21
<PAGE>
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.
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 Bylaws to add procedures relating to
the call of a special meeting. Parent believes that the amendments violate
Delaware law. See Sections 8 and 15.
22
<PAGE>
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 confidentially/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.
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, Parent commenced litigation against this Company in
the Court of Chancery of the State of Delaware. See Section 15 for a
description of the litigation.
On July 10, 1997, Parent commenced the Offer.
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SECTION 12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY
Purpose. The purpose of the Offer and the Proposed Merger is to enable Parent
to acquire control of, and the entire equity interest in, the Company. The
Offer, as the first step in the acquisition of the Company, is intended to
facilitate the acquisition of all the Shares. Parent currently intends to
propose and seek to consummate, as soon as practicable following the
consummation of the Offer, the Proposed Merger. The purpose of the Proposed
Merger is to acquire all Common Stock and Preferred Stock not purchased
pursuant to the Offer or otherwise. Pursuant to the Proposed Merger, each then
outstanding share of Common Stock and Preferred Stock (other than Shares owned
by Parent or any of its subsidiaries and Shares owned by shareholders who
perfect any applicable dissenters' rights under the GCL) would be converted
into the right to receive an amount in cash equal to the price per share paid
by the Purchaser pursuant to the Offer. Although it is the Purchaser's current
intention to propose and seek to enter into a definitive agreement with the
Company with respect to the Proposed Merger and to consummate the Proposed
Merger as promptly as practicable, there can be no assurance that the Proposed
Merger will be consummated or, if consummated, of the timing or terms thereof.
Consummation of the Proposed Merger will require the adoption of a resolution
by the Company's board of directors approving the Proposed Merger and the
affirmative vote of the holders of a majority of the Shares. Alternatively, if
the Purchaser purchases 90% or more of the then outstanding Common Stock and
90% or more of the then outstanding Preferred Stock, the Proposed Merger could
be consummated with the approval of the other shareholders through a Short-Form
Merger. See "The Proposed Merger" below.
In order to increase the likelihood that the Company and the Purchaser enter
into the Proposed Merger, Parent and the Purchaser have taken preliminary steps
to commence a solicitation of agent designations to call the Special Meeting of
the Company's shareholders at which, among other things, Parent and the
Purchaser will propose that the holders of Shares (i) increase the size of the
Board of Directors of the Company from 9 to 19, (ii) elect 10 Parent Nominees
as directors of the Company (who would then constitute a majority of the Board
of Directors) and (iii) repeal any by-laws adopted by the Company after
December 21, 1989, the date of the most recent by-laws publicly disclosed by
the Company prior to the announcement of the terms of the Offer. The Parent
Nominees will, if elected at the Special Meeting, and subject to their
fiduciary duties, be committed to take such actions as may be required to
facilitate prompt consummation of the Offer and the Proposed Merger. See
Section 8 for a description of the Company's by-laws relating to a call of a
special meeting.
This Offer does not constitute a solicitation of proxies or agent
designations for any meeting of the Company's shareholders. Any such
solicitation will be made only pursuant to proxy or other materials complying
with the requirements of Section 14(a) of the Exchange Act and the rules and
regulations thereunder.
Plans for the Company. In connection with the Offer, Parent and the Purchaser
have reviewed, and will continue to review, on the basis of publicly available
information, various possible business strategies that they might consider in
the event that the Purchaser acquires control of the Company, whether pursuant
to this Offer, the Proposed Merger or otherwise. If and to the extent that the
Purchaser acquires control of the Company or otherwise obtains access to the
books and records of the Company, Parent and Purchaser intend to conduct a
detailed review of the Company and its assets, corporate structure, dividend
policy, capitalization, operations, properties, policies, management and
personnel and consider and determine what, if any, changes would be desirable
in light of the circumstances which then exist. Such strategies could include,
among other things, changes in the Company's business, corporate structure,
Certificate of Incorporation, By-Laws, capitalization, management or dividend
policy.
24
<PAGE>
Except as described in this Offer to Purchase, Parent and the Purchaser have
no present plans or proposals that would result in an extraordinary corporate
transaction, such as a merger, consolidation, reorganization, liquidation or
sale or transfer of a material amount of assets, involving the Company or any
of its subsidiaries, or any material changes in the Company's present
capitalization, dividend policy, employee benefit plans, corporate structure
or business or any material changes or reductions in the composition of its
management or personnel.
The Proposed Merger. In general, under the GCL and the Company's Certificate
of Incorporation, the Proposed Merger requires the approval of the Company's
Board of Directors and the approval by the holders of a majority of all
outstanding Shares.
Article Fourth, Section 4 of the Company's Certificate of Incorporation
provides that if there is a change in a majority of the Board over a 24-month
period (which would be the case of the Special Meeting is called and the
Parent Nominees are elected) or there is a 20% shareholder (which would be the
case if the Purchaser acquires Shares in the Offer and the Minimum Condition
were satisfied), then an 80% vote shall be required for (1) a merger of the
Company with a corporate entity, (2) a sale of all or substantially all of the
assets of the Company or (3) the amendment of these charter provisions. The
Company Board may waive (1) or (2) as to any transaction with a subsidiary of
the Company in which the 20% holder does not hold an interest.
The Purchaser believes that it will be able to effect a transaction (such as
a reverse stock split or a merger of the Company with a subsidiary of the
Company in which the Purchaser does not own any capital stock) in which all
shares of Common Stock and Preferred Stock not beneficially owned by the
Purchaser will be converted into the right to receive cash if the transaction
is supported by the Company Board and a majority of the voting power of the
outstanding Shares, even if the transaction is not supported by the holders of
80% of the voting power of the outstanding Shares. Accordingly, if the
Purchaser acquires more than a majority of the outstanding Shares pursuant to
the Offer, the Purchaser believes it would have the voting power to approve
the Proposed Merger (which term includes the transactions referred to in the
preceding sentence as well as a merger of the Purchaser) without the vote of
any other shareholders and could effect the Proposed Merger by so voting and
by action of the Boards of Directors of the Purchaser and the Company. This
will be the case if the Minimum Condition is satisfied. If, however, the
Purchaser is not able to effect a Proposed Merger in which the shareholder
vote requirement is a majority of the voting power of the outstanding Shares,
the Purchaser intends to submit the Proposed Merger to the vote of the
shareholders in accordance with Article Fourth, Section 4 of the Certificate
of Incorporation.
Further, the GCL provides that if a parent corporation owns at least 90% of
each class of stock of a subsidiary, the parent corporation can effect a
merger (a "Short-Form Merger") with that subsidiary without a stockholder
vote. Accordingly, if, as a result of the Offer or otherwise, the Purchaser
owns at least 90% of the outstanding Shares, after consummation of the Offer,
a Short-Form Merger could be effected without prior notice to, or any action
by, any other stockholder of the Company.
In order to increase the likelihood that the Board of Directors of the
Company approves the Proposed Merger (whether or not the Proposed Merger can
be effected as a Short-Form Merger), Parent and the Purchaser have taken
preliminary steps to commence a solicitation of agent designations for the
calling of the Special Meeting at which, among other things, Parent and the
Purchaser will propose that the holders of Shares (i) increase the size of the
Board of Directors of the Company from 9 to 19, (ii) elect 10 nominees (the
"Parent Nominees") of Parent as directors of the Company (who would then
constitute a majority of the Board of Directors) and (iii) repeal any by-laws
adopted by the Company after December 21, 1989. The Parent Nominees will, if
elected at the Special Meeting, and subject to their fiduciary duties, be
committed to take such actions as may be required to facilitate prompt
consummation of the Offer and the Proposed Merger.
Neither Parent nor the Purchaser can give any assurance as to whether, as a
result of information hereafter obtained by either Parent or the Purchaser,
changes in general economic or market conditions or in the business of the
Company, or other presently unforeseen factors, the Proposed Merger will be
submitted to the Company's
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shareholders or whether the Proposed Merger will be delayed or abandoned.
Whether or not the Proposed Merger is consummated, Parent and the Purchaser
reserve the right to acquire additional Shares following the expiration of the
Offer through private purchases, market transactions, tender or exchange
offers or otherwise on terms and at prices that may be more or less favorable
than those of the Offer or, subject to any applicable legal restrictions, to
dispose of any or all Shares acquired by Parent and the Purchaser.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Proposed Merger is consummated, stockholders 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.
The foregoing summary of the rights of objecting stockholders does not
purport to be a complete statement of the procedures to be followed by
stockholders desiring to exercise their appraisal rights. The preservation and
exercise of appraisal rights are conditioned on strict adherence to the
applicable provisions of the GCL.
"Going Private" Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions
and which may under certain circumstances be applicable to the Proposed
Merger. However, Rule 13e-3 would be inapplicable if (i) the Shares are
deregistered under the Exchange Act prior to the Proposed Merger or other
business combination or (ii) the Proposed Merger or other business combination
is consummated within one year after the purchase of the Shares pursuant to
the Offer and the amount paid per Share in the Proposed Merger or other
business combination is at least equal to the amount paid per Share in the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the proposed transaction and
the consideration offered to minority shareholders in such transaction be
filed with the Commission and disclosed to shareholders prior to the
consummation of the transaction.
See Section 15 for a description of Section 203 of the GCL.
SECTION 13. DIVIDENDS AND DISTRIBUTIONS
If, on or after the Applicable Date, the Company should (a) split, combine
or otherwise change the Shares or its capitalization, (b) acquire or otherwise
cause a reduction in the number of outstanding Shares or other securities or
(c) issue or sell additional Shares (other than the issuance of Shares under
option prior to the Applicable Date, in accordance with the terms of such
options as publicly disclosed prior to the Applicable Date), shares of any
other class of capital stock, other voting securities or any securities
convertible into, or rights, warrants or options, conditional or otherwise, to
acquire, any of the foregoing, then, subject to the provisions of Section 14,
the Purchaser, in its sole discretion, may make such adjustments as it deems
appropriate in the Offer
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Price and other terms of the Offer, including, without limitation, the number
or type of securities offered to be purchased.
If, on or after the Applicable Date, the Company should declare or pay any
cash dividend on the Shares (other than regular quarterly cash dividends in an
amount not to exceed $0.20 per share of Preferred Stock) or other distribution
on the Shares, or issue with respect to the Shares any additional Shares,
shares of any other class of capital stock, other voting securities or any
securities convertible into, or rights, warrants or options, conditional or
otherwise, to acquire, any of the foregoing, payable or distributable to
shareholders of record on a date prior to the transfer of the Shares purchased
pursuant to the Offer to the Purchaser or its nominee or transferee on the
Company's stock transfer records, then, subject to the provisions of Section
14, (a) the Offer Price may, in the sole discretion of the Purchaser, be
reduced by the amount of any such cash dividend or cash distribution and (b)
the whole of any such noncash dividend, distribution or issuance to be received
by the tendering shareholders will (i) be received and held by the tendering
shareholders for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering shareholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (ii) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance
and subject to applicable law, the Purchaser will be entitled to all rights and
privileges as owner of any such noncash dividend, distribution, issuance or
proceeds and may withhold the entire Offer Price or deduct from the Offer Price
the amount or value thereof, as determined by the Purchaser in its sole
discretion.
SECTION 14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other term or provision of the Offer, the Purchaser will
not be required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-l(c) under the Exchange Act
(relating to a bidder's obligation to pay for or return tendered securities
promptly after the termination or withdrawal of such bidder's offer), to pay
for any Shares not theretofore accepted for payment or paid for, and may
terminate the Offer, unless (1) the Minimum Condition shall have been
satisfied, (2) the Rights Condition shall have been satisfied, (3) the Section
203 Condition shall have been satisfied and (4) any waiting period under the
HSR Act applicable to the purchase of Shares pursuant to the Offer shall have
expired or been terminated. Furthermore, notwithstanding any other term or
provision of the Offer, the Purchaser will not be required to accept for
payment or, subject as aforesaid, to pay for any Shares not theretofore
accepted for payment or paid for, and may terminate or amend the Offer if, at
any time on or after the Applicable Date, and before the acceptance of such
Shares for payment or, subject to any applicable rules and regulations of the
Commission, the payment therefor, any of the following events or facts shall
have occurred:
(a) there shall be threatened, instituted or pending any action,
proceeding, application or counterclaim by any court, government or
governmental, regulatory or administrative authority or agency, domestic,
foreign or supranational (each, a "Governmental Entity"), or by any other
person, before any court or Governmental Entity, (i)(A) challenging or
seeking to, or which is reasonably likely to, make illegal, delay or
otherwise directly or indirectly restrain or prohibit, or seeking to, or
which is reasonably likely to, impose voting, procedural, price or other
requirements, in addition to those required by Federal securities laws and
the GCL, in connection with, the making of the Offer, the acceptance for
payment of, or payment for, some of or all the Shares by Parent, the
Purchaser, or any other affiliate of Parent or the consummation by Parent,
the Purchaser, or any other affiliate of Parent of the Proposed Merger or
other similar business combination with the Company, (B) seeking to obtain,
or which is reasonably likely to result in, damages or (C) otherwise
directly or indirectly relating to the transactions contemplated by the
Offer, the Proposed Merger or any such business combination, (ii) seeking
to, or which is reasonably likely to, prohibit the ownership or operation
by Parent, the Purchaser, or any other affiliate of Parent of all or any
portion of the business or assets of the Company and its subsidiaries or of
Parent, the Purchaser, or any other affiliate of Parent or to compel
Parent, the Purchaser, or any other affiliate of Parent to dispose of or
hold separate all or any portion of the business or assets of the Company
or any of its subsidiaries or of Parent, the Purchaser, or any other
affiliate of Parent or seeking to impose, or which is reasonably likely to
result in, any limitation on the
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ability of Parent, the Purchaser, or any other affiliate of Parent to
conduct their respective businesses or own such assets, (iii) seeking to,
or which is reasonably likely to, impose or confirm limitations on the
ability of Parent, the Purchaser, or any other affiliate of Parent
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote any Shares acquired or owned by
Parent, the Purchaser, or any other affiliate of Parent on all matters
properly presented to the Company's shareholders, (iv) seeking to, or which
is reasonably likely to, require divestiture by Parent, the Purchaser, or
any other affiliate of Parent of any Shares, (v) seeking, or which is
reasonably likely to result in, any material diminution in the benefits
expected to be derived by Parent, the Purchaser, or any other affiliate of
Parent as a result of the transactions contemplated by the Offer, the
Proposed Merger or other similar business combination with the Company,
(vi) otherwise directly or indirectly relating to the Offer or which
otherwise, in the sole judgment of the Purchaser, might materially
adversely affect the Company or any of its subsidiaries or Parent, the
Purchaser, or any other affiliate of Parent or the value of the Shares or
(vii) in the sole judgment of the Purchaser, materially adversely affecting
the business, properties, assets, liabilities, capitalization,
shareholders' equity, condition (financial or otherwise), operations,
licenses or franchises, results of operations or prospects of the Company
or any of its subsidiaries;
(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued or deemed applicable to (i)
Parent, the Purchaser, or any other affiliate of Parent or the Company or
any of its subsidiaries or (ii) the Offer or the Proposed Merger or other
similar business combination by Parent, the Purchaser, or any other
affiliate of Parent with the Company, by any government, legislative body
or court, domestic, foreign or supranational, or Governmental Entity, other
than the routine application of the waiting period provisions of the HSR
Act to the Offer, that, in the sole judgment of the Purchaser, might,
directly or indirectly, result in any of the consequences referred to in
clauses (i) through (vii) of paragraph (a) above;
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or otherwise), operations, licenses or franchises,
results of operations or prospects of the Company or any of its
subsidiaries that, in the sole judgment of the Purchaser, is or may be
materially adverse to the Company or any of its subsidiaries, or the
Purchaser shall have become aware of any facts that, in the sole judgment
of the Purchaser, have or may have material adverse significance with
respect to either the value of the Company or any of its subsidiaries or
the value of the Shares to Parent, the Purchaser, or any other affiliate of
Parent;
(d) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the
United States, (ii) any extraordinary or material adverse change in the
financial markets or major stock exchange indices in the United States or
abroad or in the market price of Shares, (iii) any change in the general
political, market, economic or financial conditions in the United States or
abroad that could, in the sole judgment of the Purchaser, have a material
adverse effect upon the business, properties, assets, liabilities,
capitalization, shareholders' equity, condition (financial or otherwise),
operations, licenses or franchises, results of operations or prospects of
the Company or any of its subsidiaries or the trading in, or value of, the
Shares, (iv) any material change in United States currency exchange rates
or any other currency exchange rates or a suspension of, or limitation on,
the markets therefor, (v) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (vi) any
limitation (whether or not mandatory) by any Governmental Entity on, or
other event that, in the sole judgment of the Purchaser, might affect, the
extension of credit by banks or other lending institutions, (vii) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States,
(viii) any decline in the Dow Jones Industrial Average or the Standard &
Poor's Index of 500 Industrial Companies by an amount in excess of 20%
measured from the close of business on the date hereof or (ix) in the case
of any of the foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof;
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(e) the Company or any of its subsidiaries, joint ventures or
partnerships or other affiliates shall have (i) split, combined or
otherwise changed, or authorized or proposed a split, combination or other
change of, the Shares or its capitalization, (ii) acquired or otherwise
caused a reduction in the number of, or authorized or proposed the
acquisition or other reduction in the number of, outstanding Shares or
other securities or equity interests, (iii) issued, distributed or sold, or
authorized or proposed the issuance, distribution or sale of, additional
Shares (other than the issuance of Shares under option prior to the
Applicable Date in accordance with the terms of such options as publicly
disclosed prior to the Applicable Date), shares of any other class of
capital stock or equity interests, other voting securities or any
securities convertible into, or rights, warrants or options, conditional or
otherwise, to acquire, any of the foregoing, (iv) declared or paid, or
proposed to declare or pay, any dividend (other than regular quarterly cash
dividends not to exceed $0.20 per share of Preferred Stock) or other
distribution, whether payable in cash, securities or other property, on or
with respect to any shares of capital stock of the Company, (v) altered or
proposed to alter any material term of any outstanding security or material
contract, permit or license, (vi) incurred any debt other than in the
ordinary course of business or any debt containing, in the sole judgment of
the Purchaser, burdensome covenants or security provisions, (vii)
authorized, recommended, proposed or entered into an agreement with respect
to any merger, consolidation, liquidation, dissolution, business
combination, acquisition of assets, disposition of assets, release or
relinquishment of any material contractual or other right of the Company or
any of its subsidiaries or any comparable event not in the ordinary course
of business, (viii) authorized, recommended, proposed or entered into, or
announced its intention to authorize, recommend, propose or enter into, any
agreement or arrangement with any person or group that in the sole judgment
of the Purchaser could adversely affect either the value of the Company or
any of its subsidiaries, joint ventures or partnerships or the value of the
Shares to Parent, the Purchaser, or any other affiliate of Parent, (ix)
entered into or amended any employment, change of control, severance,
executive compensation or similar agreement, arrangement or plan with or
for the benefit of any of its employees, consultants or directors other
than in the ordinary course of business or entered into or amended any
agreements, arrangements or plans so as to provide for increased or
accelerated benefits to the employees as a result of or in connection with
the transactions contemplated by the Offer, (x) except as may be required
by law, taken any action to terminate or amend any employee benefit plan
(as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended) of the Company or any of its subsidiaries, or the
Purchaser shall have become aware of any such action that was not disclosed
in publicly available filings prior to the Applicable Date, (xi) amended,
or authorized or proposed any amendment to, its Certificate of
Incorporation or its By-Laws, or the Purchaser shall become aware that the
Company or any of its subsidiaries shall have proposed or adopted any such
amendment that was not disclosed in publicly available filings prior to the
Applicable Date or (xii) otherwise acted out of the ordinary course of
business, consistent with past practice;
(f) a tender or exchange offer for any Shares shall have been made or
publicly proposed to be made by any other person (including the Company or
any of its subsidiaries or affiliates), or it shall have been publicly
disclosed or the Purchaser shall have otherwise learned that (i) any
person, entity (including the Company or any of its subsidiaries) or
"group" (within the meaning of Section 13(d)(3) of the Exchange Act) shall
have acquired or proposed to acquire beneficial ownership of more than 5%
of any class or series of capital stock of the Company (including the
Shares), through the acquisition of stock, the formation of a group or
otherwise, or shall have been granted any right, option or warrant,
conditional or otherwise, to acquire beneficial ownership of more than 5%
of any class or series of capital stock of the Company (including the
Shares), other than acquisitions for bona fide arbitrage purposes only and
other than as disclosed in a Schedule 13G or 13D on file with the
Commission prior to the Applicable Date, (ii) any such person, entity or
group that prior to the Applicable Date, had filed such a Schedule with the
Commission has acquired or proposes to acquire, through the acquisition of
stock, the formation of a group or otherwise, beneficial ownership of 1% or
more of any class or series of capital stock of the Company (including the
Shares), or shall have been granted any right, option or warrant,
conditional or otherwise, to acquire beneficial ownership of 1% or more of
any class or series of capital stock of the Company (including the Shares),
(iii) any person or group shall have entered into a definitive agreement or
an agreement in principle
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or made a proposal with respect to a tender offer or exchange offer or a
merger, consolidation or other business combination with or involving the
Company or (iv) any person shall have filed a Notification and Report Form
under the HSR Act (or amended a prior filing to increase the applicable
filing threshold set forth therein) or made a public announcement
reflecting an intent to acquire the Company or any assets or subsidiaries
of the Company;
(g) the Purchaser shall become aware (i) that any contractual right of
the Company or any of its subsidiaries shall be impaired or otherwise
adversely affected or that any amount of indebtedness of the Company or any
of its subsidiaries shall become accelerated or otherwise become due or
become subject to acceleration prior to its stated due date, in any case
with or without notice or the lapse of time or both as a result of or in
connection with the transactions contemplated by the Offer or the Proposed
Merger or any other business combination involving the Company, which, in
the aggregate, would be material, (ii) of any covenant, term or condition
in any of the Company's or any of its subsidiaries' instruments or
agreements that has or may have, in the aggregate, a material adverse
effect on (x) the business, properties, assets, liabilities,
capitalization, shareholders' equity, condition (financial or otherwise),
operations, management, key personnel, licenses, franchises, results of
operations or prospects of the Company or any of its subsidiaries
(including, but not limited to, any event of default that may result from
the consummation of the Offer, the acquisition of control of the Company or
any of its subsidiaries or the Proposed Merger or any other business
combination involving the Company) or (y) the value of the Shares in the
hands of Parent, the Purchaser or any of their respective affiliates or (z)
the consummation by Parent, the Purchaser or any of their respective
affiliates of the Offer and the Proposed Merger or any other business
combination involving the Company or (iii) that any report, document or
instrument of the Company or any of its subsidiaries filed with the
Commission contained, when filed, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading or that the Company or any of
its subsidiaries shall have failed to file any such report, document or
instrument;
(h) any approval, permit, authorization, favorable review or consent of
any Governmental Entity (including those described or referred to in
Section 15) shall not have been obtained on terms satisfactory to Purchaser
in its sole discretion; or
(i) the Purchaser shall have reached an agreement or understanding with
the Company providing for termination of the Offer, or Parent, the
Purchaser, or any other affiliate of Parent shall have entered into a
definitive agreement or announced an agreement in principle with the
Company providing for a merger or other business combination with the
Company or the purchase of stock or assets of the Company;
which, in the sole judgment of the Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by Parent, the
Purchaser, or any other affiliate of Parent) giving rise to any such
condition, makes it inadvisable to proceed with the Offer or with such
acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent and may be asserted by the Purchaser regardless of the circumstances
giving rise to any such condition or may be waived by the Purchaser in whole
or in part at any time and from time to time in its sole discretion. The
failure by the Purchaser at any time to exercise any of the foregoing rights
will not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances will not be deemed a waiver
with respect to any other facts and circumstances and each such right will be
deemed an ongoing right that may be asserted at any time and from time to
time. Any determination by the Purchaser concerning the events described in
this Section 14 will be final and binding upon all parties.
A public announcement will be made of a material change in, or waiver of,
such conditions to the extent required by Rules 14d-4(c) and 14d-6(d) under
the Exchange Act, and the Offer will be extended in connection with any such
change or waiver to the extent required by such rules.
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SECTION 15. CERTAIN LEGAL MATTERS
General. Except as otherwise disclosed herein, based on a review of publicly
available information filed by the Company with the Commission, neither the
Purchaser nor Parent is aware of (i) any license or regulatory permit that
appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the acquisition of
Shares by the Purchaser pursuant to the Offer or the Proposed Merger or (ii)
any approval or other action, by any governmental, administrative or
regulatory agency or authority, domestic, foreign or supranational, that would
be required for the acquisition or ownership of Shares by the Purchaser as
contemplated herein. Should any such approval or other action be required, the
Purchaser currently contemplates that such approval or action would be sought.
While the Purchaser does not currently intend to delay the acceptance for
payment of Shares tendered pursuant to the Offer pending the outcome of any
such matter, there can be no assurance that any such approval or action, if
needed, would be obtained or would be obtained without substantial conditions
or that adverse consequences might not result to the business of the Company,
the Purchaser or Parent or that certain parts of the businesses of the
Company, the Purchaser or Parent might not have to be disposed of in the event
that such approvals were not obtained or any other actions were not taken. The
Purchaser's obligation under the Offer to accept for payment and pay for
Shares is subject to certain conditions. See Section 14.
Antitrust. Under the HSR Act, and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. Parent intends to file a Notification and Report Form with
respect to the Offer and the Proposed Merger promptly.
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares under the Offer may not be consummated until the expiration of a 15-
calendar day waiting period following the filing by Parent. Parent intends to
make such filing on July 10, 1997. Accordingly, the waiting period with
respect to the Offer would expire at 11:59 p.m., New York City time, on July
25, 1997 unless Parent receives a request for additional information or
documentary material, or the Antitrust Division and the FTC terminate the
waiting period prior thereto. If, within such 15-day period, either the
Antitrust Division or the FTC requests additional information or material from
Parent concerning the Offer, the waiting period will be extended and would
expire at 11:59 p.m., New York City time, on the tenth calendar day after the
date of substantial compliance by Parent with such request. Only one extension
of the waiting period pursuant to a request for additional information is
authorized by the HSR Act. Thereafter, such waiting period may be extended
only by court order or with the consent of Parent. The Purchaser will not
accept for payment Shares tendered pursuant to the Offer unless and until the
waiting period requirements imposed by the HSR Act with respect to the Offer
have been satisfied. See Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of
Shares pursuant to the Offer and the Proposed Merger. At any time before or
after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the acquisition
of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares
acquired by the Purchaser or divestiture of substantial assets of Parent or
its subsidiaries. Private parties and state attorneys general may also bring
action under the antitrust laws under certain circumstances. Based upon an
examination of publicly available information relating to the businesses in
which Parent and the Company are engaged, Parent and the Purchaser believe
that the acquisition of Shares by the Purchaser will not violate the antitrust
laws. Nevertheless, there can be no assurance that a challenge to the Offer or
other acquisition of Shares by the Purchaser on antitrust grounds will not be
made or, if such a challenge is made, of the result. See Section 14 for
certain conditions to the Offer, including conditions with respect to
litigation and certain governmental actions.
Litigation. 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
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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.
Business Combination Transactions. Section 203 of the GCL, in general,
prohibits a Delaware corporation such as the Company from engaging in a
"Business Combination" (defined as a variety of transactions, including
mergers, as set forth below) with an "Interested Stockholder" (defined
generally as a person that is the beneficial owner of 15% or more of a
corporation's outstanding voting stock) for a period of three years following
the date that such person became an Interested Stockholder unless (a) prior to
the date such person became an Interested Stockholder, the board of directors
of the corporation approved either the Business Combination or the transaction
that resulted in the stockholder becoming an Interested Stockholder, (b) upon
consummation of the transaction that resulted in the stockholder becoming an
Interested Stockholder, the Interested Stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding stock held by directors who are also officers of the
corporation and employee stock ownership plans that do not provide employees
with the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer or (c) on or subsequent to
the date such person became an Interested Stockholder, the Business
Combination is approved by the board of directors of the corporation and
authorized at a meeting of stockholders, and not by written consent, by the
affirmative vote of the holders of at least 66 2/3% of the outstanding voting
stock of the corporation not owned by the Interested Stockholder.
Section 203 of the GCL provides that, during such three-year period, the
corporation may not merge or consolidate with an Interested Stockholder or an
affiliate or associate thereof, and also may not engage in certain other
transactions with an Interested Stockholder or any affiliate or associate
thereof, including, without limitation, (a) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of assets (except
proportionately as a stockholder of the corporation) having an aggregate
market value equal to 10% or more of the aggregate market value of all assets
of the corporation determined on a consolidated basis or the aggregate market
value of all the outstanding stock of a corporation; (b) any transaction which
results in the issuance or transfer by the corporation or by certain
subsidiaries thereof of any stock of the corporation or such subsidiaries to
the Interested Stockholder, except pursuant to a transaction which effects a
pro rata distribution to all stockholders of the corporation; (c) any
transaction involving the corporation or certain subsidiaries thereof which
has the effect of increasing the proportionate share of the stock of any class
or series, or securities convertible into the stock of any class or series, of
the corporation or any such subsidiary which is owned directly or indirectly
by the Interested Stockholder (except as a result of immaterial changes due to
fractional share adjustments); or (d) any receipt of the Interested
Stockholder of the benefit (except proportionately as a stockholder or such
corporation) of any loans, advances guarantees, pledges or other financial
benefits provided by or through the corporation.
The Offer is conditioned on the Section 203 Condition being satisfied. See
Section 14 and 15.
Other State Laws. A number of other states have adopted laws and regulations
applicable to attempts to acquire securities of corporations which are
incorporated, or have substantial assets, shareholders, principal executive
offices or principal places of business, or whose business operations
otherwise have substantial economic effects, in such states. In 1982, in Edgar
v. MITE Corp., the Supreme Court of the United States
32
<PAGE>
invalidated on constitutional grounds the Illinois Business Takeover Statute,
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. However, in 1987 in CTS Corp. v.
Dynamics Corp. of America, the Supreme Court held that the Indiana Control
Share Acquisition Act was constitutional. Such Act, by its terms, is
applicable only to corporations that have a substantial number of shareholders
in Indiana and are incorporated there. Subsequently, a number of federal
courts ruled that various state takeover statutes were unconstitutional
insofar as they apply to corporations incorporated outside the state of
enactment.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. The Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer and has not complied with any such laws. Should any
person seek to apply any state takeover law, the Purchaser will take such
action as then appears desirable, which may include challenging the validity
or applicability of any such statute in appropriate court proceedings. In the
event it is asserted that one or more state takeover laws is applicable to the
Offer and the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, the Purchaser might be
required to file certain information with, or receive approvals from, the
relevant state authorities. In addition, if enjoined, the Purchaser might be
unable to accept for payment any Shares tendered pursuant to the Offer, or be
delayed in continuing or consummating the Offer. In such case, the Purchaser
may not be obligated to accept for payment any Shares tendered. See Section
14.
Foreign Approvals. According to the Company 10-K, the Company owns property
in a number of other foreign countries and jurisdictions. In connection with
the acquisition of the Shares pursuant to the Offer, the laws of certain of
those foreign countries and jurisdictions may require the filing of
information with, or the obtaining of the approval of, governmental
authorities in such countries and jurisdictions. The governments in such
countries and jurisdictions might attempt to impose additional conditions on
the Company's operations conducted in such countries and jurisdictions as a
result of the acquisition of the Shares pursuant to the Offer or the Proposed
Merger. There can be no assurance that the Purchaser will be able to cause the
Company or its subsidiaries to satisfy or comply with such laws or that
compliance or non-compliance will not have adverse consequences for the
Company or any subsidiary after purchase of the Shares pursuant to the Offer
or the Proposed Merger.
SECTION 16. FEES AND EXPENSES
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 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.
33
<PAGE>
D.F. King & Co., Inc. has been retained by the Purchaser as Information
Agent in connection with the Offer. The Information Agent may contact holders
of Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee shareholders to forward material
relating to the Offer to beneficial owners of Shares. The Purchaser will pay
the Information Agent reasonable and customary compensation for all such
services in addition to reimbursing the Information Agent for reasonable out-
of-pocket expenses in connection therewith. The Purchaser has agreed to
indemnify the Information Agent against certain liabilities and expenses in
connection with the Offer, including, without limitation, certain liabilities
under the federal securities laws.
First Chicago Trust Company of New York has been retained as the Depositary.
The Purchaser will pay the Depositary reasonable and customary compensation
for its services in connection with the Offer, will reimburse the Depositary
for its reasonable out-of-pocket expenses in connection therewith and will
indemnify the Depositary against certain liabilities and expenses in
connection therewith, including, without limitation, certain liabilities under
the federal securities laws.
Except as set forth above, neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks
and trust companies and other nominees will, upon request, be reimbursed by
Parent or the Purchaser for customary clerical and mailing expenses incurred
by them in forwarding offering materials to their customers.
SECTION 17. 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
securities, blue sky or other laws of such jurisdiction. Neither the Purchaser
nor Parent is aware of any jurisdiction in which the making of the Offer or
the acceptance thereof would not be in compliance with the laws of such
jurisdiction. To the extent the Purchaser or Parent becomes aware of any state
law that would limit the class of offerees in the Offer, the Purchaser will
amend the Offer and, depending on the timing of such amendment, if any, will
extend the Offer to provide adequate dissemination of such information to such
holders of Shares prior to the expiration of the Offer. In any jurisdiction
the securities, blue sky or other laws of which require the Offer to be made
by a licensed broker or dealer, the Offer is being made on behalf of the
Purchaser by the Dealer Manager or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser or Parent not contained herein or in
the Letter of Transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized.
The Purchaser and Parent have filed with the Commission a Tender Offer
Statement on Schedule 14d-1 pursuant to Rule 14d-3 under the Exchange Act,
together with exhibits, furnishing certain additional information with respect
to the Offer, and may file amendments thereto. Such Schedule 14d-1 and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained in the manner set forth in Section 8 with respect to the Company
(except that such material will not be available at the regional offices of
the Commission).
PQR Acquisition Corporation
July 10, 1997
34
<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, and material occupations, positions, offices or
employments for the past five years of each director and 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. In addition, except as otherwise noted, each director
and executive officer of Parent has been employed in his or her present
principal occupation listed below during the last five years. Directors of
Parent are indicated by an asterisk.
NAME PRINCIPAL OCCUPATION OR EMPLOYMENT, 5-YEAR
EMPLOYMENT HISTORY
Patrick W. Allender ..... Mr. Allender is Senior Vice President, Chief Finan-
cial Officer and Secretary of Parent. He has held
such position since 1987.
C. Scott Brannan ........ Mr. Brannan is Vice President Administration and
Controller of Parent. He has held such position
since 1987.
Mortimer M. Caplin* ..... Mr. Caplin has been Senior member of Caplin &
One Thomas Circle, N.W. Drysdale, a law firm in Washington, D.C. for more
Washington, D.C. 20005 than five years. He is a Director of Fairchild In-
dustries, Inc., Fairchild Corporation, Presiden-
tial Realty Corporation and Unigene Laboratories,
Inc.
Dennis D. Claramunt ..... Mr. Claramunt was appointed Vice President and
Group Executive of Parent in 1994. He has served
as President of Jacobs Chuck Manufacturing Company
for more than five years.
James H. Ditkoff ........ Mr. Ditkoff was appointed Vice President--
Finance/Tax of Parent in January 1991. He has
served in an executive capacity in finance/tax for
Parent since 1988.
Donald J. Ehrlich* ...... Mr. Ehrlich is the Chairman, President, Chief Exec-
1000 Sagamore Parkway utive Wabash National Corporation Officer and a
South Director of Wabash National Corporation. He is a
Lafayette, Indiana 47905 director of Indiana Secondary Market for Educa-
tional Loans, Inc. and INB National Bank, N.W.
Walter G. Lohr, Jr.* .... Mr. Lohr has been a Partner of Hogan & Hartson, a
111 South Calvert Street law firm in Baltimore, Maryland since 1992. He was
Baltimore, Maryland an attorney in private practice from 1987 to 1992.
21202
Mitchell P. Rales* ...... Mr. Rales is Chairman of the Executive Committee of
Parent. He has held such position since February
1990. He has been a General Partner of Equity
Group Holdings, a general partnership located in
Washington, D.C., with interests in manufacturing
companies, media operations, and publicly traded
securities, since 1979.
George M. Sherman* ...... Mr. Sherman is President, Chief Executive Officer
and a Director of Parent. He has held such posi-
tions since February 1990.
A. Emmet Stephenson, Mr. Stephenson has been President of Stephenson &
Jr.* .................... Company, a private investment management firm in
100 Garfield Street, Denver, Colorado and Senior Partner of Stephenson
Suite 400 Merchant Banking for more than five years.
Denver, Colorado 80206
John P. Watson ..........
Mr. Watson was appointed Vice President and Group
Executive of Parent in 1993. He has served Parent
in an executive capacity in its Tool Group since
September 1990.
S-1
<PAGE>
NAME PRINCIPAL OCCUPATION OR EMPLOYMENT, 5-YEAR
Steven M. Rales* ........ EMPLOYMENT HISTORY
Mr. Rales is Chairman of the Board of Parent, a po-
sition he has held since 1984. He was Chief Execu-
tive Office of Parent until February 1990. He has
been a General Partner of Equity Group Holdings, a
general partnership located in Washington, D.C.,
with interests in manufacturing companies, media
operations, and publicly traded securities, since
1979.
Gregory T. H. Davies .... Mr. Davies was appointed Vice President and Group
Executive of Parent in 1995. He has served as
President of Jacobs Vehicle Systems, Inc. for more
than the past five years.
H.Lawrence Culp, Jr. .... Mr. Culp was appointed Vice President and Group Ex-
ecutive of Parent in 1995. He has served Parent in
an executive capacity (including President since
1993) at Veeder-Root Company for more than the
past five years.
Daniel L. Comas ......... Mr. Comas was appointed Vice President--Corporate
Development of Parent in 1996. He has served Par-
ent in an executive capacity in the corporate de-
velopment area for more than the past five years.
Steven E. Simms ......... Mr. Simms was appointed Vice President and Group
Executive of Parent in 1996. He had previously
served Black & Decker, most recently as Presi-
dent--Worldwide Accessories Business.
Mark C. DeLuzio ......... Mr. DeLuzio was appointed Vice President-Danaher
Corporation Business System ("DBS") of Parent in
1996. He has served Parent as Director-DBS and in
financial and operating positions with Jacobs Ve-
hicle Systems, Inc. for more than the past five
years.
Dennis A. Longo.......... Mr. Longo was appointed Vice President--Human Re-
sources in May 1997. He has served Parent in human
resource management positions since 1991.
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>
S-2
<PAGE>
SCHEDULE II
TRANSACTIONS IN SHARES PARENT AND THE PURCHASER
DHHC has purchased an aggregate of 397,300 shares of Common Stock in open
market transactions executed on the NNM on the dates and at the prices listed
on the table below. As of July 1, 1997, DHHC contributed 100 shares of Common
Stock to the Purchaser. Other than as set forth in this Schedule II, no
Purchaser Entity has effected any transactions in the Shares in the last 60
days.
<TABLE>
<CAPTION>
SHARES
TRANSACTION DATE ACQUIRED PRICE(1)
---------------- -------- -------
<S> <C> <C>
May 9, 1997.............................................. 50,000 10.8750
May 13, 1997............................................. 30,000 11.2500
May 13, 1997............................................. 57,300 11.2500
May 15, 1997............................................. 35,000 11.3750
May 20, 1997............................................. 15,000 11.8750
May 22, 1997............................................. 7,500 11.6250
May 22, 1997............................................. 7,500 11.5000
May 23, 1997............................................. 5,000 11.5000
May 27, 1997............................................. 25,000 11.3750
May 27, 1997............................................. 5,000 11.2500
May 28, 1997............................................. 5,000 11.1250
May 30, 1997............................................. 25,000 11.5825
May 30, 1997............................................. 65,000 11.2500
June 2, 1997............................................. 60,000 11.5625
June 4, 1997............................................. 5,000 11.5000
</TABLE>
- --------
(1) All prices are exclusive of commissions.
S-3
<PAGE>
Manually signed facsimile copies of the 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 shareholder of the
Company or such shareholder'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:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Facsimile By Hand:
First Chicago Trust Transmission: First Chicago Trust Company
Company of New York (201) 222-4720 of New York
Attention: Tenders & or Attention: Tenders &
Exchanges (201) 222-4721 Exchanges
P.O. Box 2565, Suite c/o THE DEPOSITORY
4660 TRUST COMPANY
Jersey City, NJ 07303- 55 Water Street, DTC TAD
2565 Vietnam Veterans Memorial
Plaza
New York, NY 10041
By Overnight Courier: Confirm By Telephone:
First Chicago Trust (201) 222-4707
Company of New York
Attention: Tenders &
Exchanges
Suite 4680-EEG
14 Wall Street, 8th
Floor
New York, NY 10005
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses or telephone numbers
set forth below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and all other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (Call Collect)
or
(800) 290-6432
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1305
1-800-436-1019 (Toll Free)
(212) 449-8209 (Call Collect)
<PAGE>
Exhibit 99(A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK,
SHARES OF SERIES G CONVERTIBLE PREFERRED STOCK
AND
WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED JULY 10, 1997
BY
PQR ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, AUGUST 6, 1997, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attention: Tenders & Exchanges Suite 4680-EEG Attention: Tenders & Exchanges
Attention: Tenders & Exchanges 14 Wall Street, 8th Floor c/o THE DEPOSITORY
P.O. Box 2565, Suite 4660 New York, NY 10005 TRUST COMPANY
Jersey City, NJ 07303-2565 55 Water Street, DTC TAD
Vietnam Veterans Memorial Plaza
New York, NY 10041
</TABLE>
DESCRIPTION OF SHARES TENDERED
<TABLE>
- ---------------------------------------------------------------------------------------------
<CAPTION>
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON CERTIFICATES(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ---------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE EVIDENCED BY NUMBER
CERTIFICATE SHARE OF SHARES
NUMBER(S) CERTIFICATE(S)* TENDERED**
------------------------------------------------
------------------------------------------------
------------------------------------------------
------------------------------------------------
------------------------------------------------
<S> <C> <C> <C>
TOTAL SHARES
- ---------------------------------------------------------------------------------------------
</TABLE>
[_] Check here if tendering Shares of Preferred Stock.
[_] Check here if tendering Warrants.
* Need not be completed by shareholders delivering Shares by book-entry
transfer or in accordance with DTC's ATOP procedures for transfers.
** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Share Certificate delivered to the Depositary are being tendered
hereby. See instruction 4.
<PAGE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM
W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by shareholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at the Depositary Trust Company ("DTC"), or the
Philadelphia Depository Trust Company ("PDTC") (each a "Book-Entry Transfer
Facility" and collectively, the "Book-Entry Transfer Facilities") pursuant to
the book-entry transfer procedure described in Section 2 of the Offer to
Purchase (as defined below). Holders who are participants ("Participants") in
the book-entry facility system of DTC may execute their tender through the
Automated Tender Offer Program of DTC as set forth in Section 2 of the Offer
to Purchase.
Shareholders whose certificates evidencing Shares (the "Share Certificates")
are not immediately available or who cannot deliver their Share Certificates
and all other documents required hereby to the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) or who
cannot complete the procedure for delivery by book-entry transfer on a timely
basis and who wish to tender their Shares must do so pursuant to the
guaranteed delivery procedure described in Section 2 of the Offer to Purchase.
See Instruction 2.
[_]CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution _________________________________________________
Check Box of Applicable Book-Entry Transfer Facility
(CHECK ONE) [_] DTC [_] PDTC
Account Number ____________________Transaction Code Number ____________________
[_]CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY:
Name(s) of Registered Holder(s) _______________________________________________
Window Ticket No. (if any) ____________________________________________________
Date of Execution of Notice of Guaranteed Delivery ____________________________
Name of Institution which Guaranteed Delivery _________________________________
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL
CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to PQR Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Danaher
Corporation, a Delaware corporation (the "Parent"), the above-described shares
of common stock, par value $.01 per share (the "Common Stock"), the above-
described shares of Series G Convertible Preferred Stock, par value $.01 per
share (the "Preferred Stock") and the warrants to purchase shares of Common
Stock at $13.475 per share Common Stock (the "Warrants") of Exide Electronics
Group, Inc., a Delaware corporation (the "Company"), pursuant to Purchaser's
offer to purchase all outstanding Shares, at $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, without interest thereon (the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated July 10, 1997 (the "Offer to Purchase"), receipt of which
is hereby acknowledged, and in this Letter of Transmittal (which, as amended
from time to time, together constitute the "Offer"). The undersigned
understands that Purchaser reserves the right to transfer or assign, in whole
or from time to time in part, to one or more of its affiliates, the right to
purchase all or any portion of the Shares tendered pursuant to the Offer.
Unless the context indicates otherwise, as used herein, Shares shall mean
shares of Common Stock, Preferred Stock and 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.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension
or amendment), the undersigned hereby sells, assigns and transfers to, or upon
the order of, Purchaser all right, title and interest in and to all the Shares
that are being tendered hereby and all dividends, distributions (including,
without limitation, distributions of additional Shares) and rights declared,
paid or distributed in respect of such Shares on or after July 10, 1997
(collectively, "Distributions"), and irrevocably appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares and all Distributions, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver Share Certificates evidencing such Shares and all
Distributions, or transfer ownership of such Shares and all Distributions on
the account books maintained by a Book-Entry Transfer Facility, together, in
either case, with all accompanying evidences of transfer and authenticity, to
or upon the order of Purchaser, (ii) present such Shares and all Distributions
for transfer on the books of the Company and (iii) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares and all
Distributions, all in accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Steven M. Rales, Mitchell P. Rales and Patrick W. Allender of the
Purchaser as proxies of the undersigned, each with full power of substitution,
to the full extent of the undersigned's rights with respect to the Shares
tendered by the undersigned and accepted for payment by the Purchaser (and any
and all Distributions). All such proxies shall be considered coupled with an
interest in the tendered Shares. This appointment will be effective if, when,
and only to the extent that, the Purchaser accepts such Shares for payment
pursuant to the Offer. Upon such acceptance for payment, all prior proxies
given by the undersigned with respect to such Shares (and such other Shares
and securities) will, without further action, be revoked, and no subsequent
proxies may be given nor any subsequent written consent executed by the
undersigned (and, if given or executed, will not be deemed to be effective)
with respect thereto. The designees of the Purchaser named above will, with
respect to the Shares and other securities for which the appointment is
effective, be empowered to exercise all voting and other rights of the
undersigned as they in their sole discretion may deem proper at any annual or
special meeting of the shareholders of the
3
<PAGE>
Company or any adjournment or postponement thereof, by written consent in lieu
of any such meeting or otherwise, and the Purchaser reserves the right to
require that, in order for Shares or other securities to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Shares, the Purchaser must be able to exercise full voting rights with respect
to such Shares.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions, and that when such Shares are accepted for
payment by Purchaser, Purchaser will acquire good, marketable and unencumbered
title thereto and to all Distributions, free and clear of all liens,
restrictions, charges and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Distributions.
In addition, the undersigned shall remit and transfer promptly to the
Depositary for the account of Purchaser all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price, the amount or value of such
Distribution as determined by Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as otherwise stated in the Offer to Purchase, this tender
is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer, including, without
limitation, the undersigned's representation and warranty that the undersigned
owns the Shares being tendered.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased
or not tendered, in the name(s) of the registered holder(s) appearing above
under "Description of Shares Tendered." Similarly, unless otherwise indicated
in the box entitled "Special Delivery Instructions," please mail the check for
the purchase price of all Shares purchased and all Share Certificates
evidencing Shares not tendered or not purchased (and accompanying documents,
as appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares
purchased and return all Share Certificates evidencing Shares not purchased or
not tendered in the name(s) of, and mail such check and Share Certificates to,
the person(s) so indicated. The undersigned recognizes that Purchaser has no
obligation, pursuant to the Special Payment Instructions, to transfer any
Shares from the name of the registered holder(s) thereof if Purchaser does not
purchase any of the Shares tendered hereby.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1,5,6 AND 7)
To be completed ONLY if the check for the purchase price of Shares purchased or
Share Certificates evidencing Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned.
Issue: [_] Check [_] Share Certificate(s) to:
Name: __________________________________________________________________________
(PRINT)
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(ZIP CODE)
- --------------------------------------------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1,5,6 AND 7)
To be completed ONLY if the check for the purchase price of Shares purchased or
Share Certificates evidencing Shares not tendered or not purchased are to be
mailed to someone other than the undersigned, or to the undersigned at an
address other than that shown under "Description of Shares Tendered."
Mail: [_] Check [_] Share Certificate(s) to:
Name: __________________________________________________________________________
(PRINT)
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(ZIP CODE)
5
<PAGE>
IMPORTANT SHAREHOLDERS: SIGN HERE
(ALSO PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
X _____________________________________________________________________
X _____________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated: _______________ , 1997
(Must be signed by registered holder(s) exactly as name(s) appear(s)
on Share Certificates or on a security position listing or by a
person(s) authorized to become registered holder(s) by certificates
and documents transmitted herewith. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative
capacity, please provide the following information. See Instruction
5.)
Name(s): ______________________________________________________________
-----------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): ________________________________________________
Address: ______________________________________________________________
-----------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.: __________________________________________
Taxpayer Identification or Social Security No.: _______________________
(SEE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN
SPACE BELOW
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., or by a financial institution (including most commercial banks, savings
and loan associations and brokerage houses) that 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"), unless (i) this Letter of Transmittal is signed
by the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in a Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares)
tendered hereby and such holder(s) has (have) completed neither the box
entitled "Special Payment Instructions" nor the box entitled "Special Delivery
Instructions" on the reverse hereof or (ii) such Shares are tendered for the
account of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter of
Transmittal is to be used if Share Certificates are to be forwarded herewith,
if Shares are to be delivered by book-entry transfer pursuant to the procedure
set forth in Section 2 of the Offer to Purchase, or Share Certificates
evidencing all physically tendered Shares, or a confirmation of a book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility of
all Shares delivered by book-entry transfer, together in each case with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), or an Agent's Message in connection with a book-entry transfer, and
any other documents required by this Letter of Transmittal, must be received
by the Depositary at one of its addresses set forth on the reverse hereof
prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase). If Share Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal must
accompany each such delivery. Shareholders whose Share Certificates are not
immediately available, who cannot deliver their Share Certificates and all
other required documents to the Depositary prior to the Expiration Date or who
cannot complete the procedure for delivery by book-entry transfer on a timely
basis may tender their Shares pursuant to the guaranteed delivery procedure
described in Section 2 of the Offer to Purchase. Pursuant to such procedure:
(i) such tender must be made by or through an Eligible Institution; (ii) a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by Purchaser, must be received by the
Depositary prior to the Expiration Date; and (iii) the Share Certificates
evidencing all physically delivered Shares in proper form for transfer by
delivery, or a confirmation of a book-entry transfer into the Depositary's
account at a Book-Entry Transfer Facility of all Shares delivered by book-
entry transfer, in each case together with a Letter of Transmittal (or a
facsimile thereof), 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 within three New York Stock
Exchange, Inc. ("NYSE") trading days after the date of execution of such
Notice of Guaranteed Delivery, all as described in Section 2 of the Offer to
Purchase.
Participants in DTC may tender their Shares in accordance with DTC's
Automated Tender Offer Program, to the extent it is available to such
participants for the Shares they wish to tender. A shareholder tendering
through the Automated Tender Offer Program must expressly acknowledge that the
shareholder has received and agreed to be bound by the Letter of Transmittal
and that the Letter of Transmittal may be enforced against such shareholder.
If the tender is not made through ATOP, Certificates, as well as this Letter
of Transmittal (or facsimile thereof), 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 its address
set forth herein on or prior to the Expiration Date to be effective.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE
7
<PAGE>
TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering shareholders waive any
right to receive any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares which are to be tendered in the box entitled "Number of
Shares Tendered." In such cases, new Share Certificate(s) evidencing the
remainder of the Shares that were evidenced by the Share Certificates
delivered to the Depositary herewith will be sent to the person(s) signing
this Letter of Transmittal, unless otherwise provided in the box entitled
"Special Delivery Instructions" on the reverse hereof, as soon as practicable
after the expiration or termination of the Offer. All Shares evidenced by
Share Certificates delivered to the Depositary will be deemed to have been
tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the Share Certificates evidencing such Shares without
alteration, enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate
stock powers are required, unless payment is to be made to, or Share
Certificates evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), in which case,
the Share Certificate(s) evidencing the Shares tendered hereby must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such Share
Certificate(s). Signatures on such Share Certificate(s) and stock powers must
be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on
such Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of such person's authority so to act
must be submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6,
Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If,
8
<PAGE>
however, payment of the purchase price of any Shares purchased is to be made
to, or Share Certificate(s) evidencing Shares not tendered or not purchased
are to be issued in the name of, a person other than the registered holder(s),
the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer
to such other person will be deducted from the purchase price of such Shares
purchased, unless evidence satisfactory to Purchaser of the payment of such
taxes, or exemption therefrom, is submitted. Except as provided in this
Instruction 6, it will not be necessary for transfer tax stamps to be affixed
to the Share Certificates evidencing the Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name
of a person other than the person(s) signing this Letter of Transmittal or if
such check or any such Share Certificate is to be sent to someone other than
the person(s) signing this Letter of Transmittal or to the person(s) signing
this Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on the reverse hereof, the
appropriate boxes on the reverse of this Letter of Transmittal must be
completed.
8. WAIVER OF CONDITIONS. The conditions to the Offer may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Dealer Manager or the
Information Agent at their respective addresses or telephone numbers set forth
below. Additional copies of the Offer to Purchase, this Letter of Transmittal
and the Notice of Guaranteed Delivery may be obtained from the Information
Agent or from brokers, dealers, commercial banks or trust companies.
10. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and
that such shareholder is not subject to backup withholding of federal income
tax. If a tendering shareholder has been notified by the Internal Revenue
Service that such shareholder is subject to back-up withholding, such
shareholder must cross out item (2) of the Certification box of the Substitute
Form W-9, unless such shareholder has since been notified by the Internal
Revenue Service that such shareholder is no longer subject to backup
withholding. Failure to provide the information on the Substitute Form W-9 may
subject the tendering shareholder to 31% federal income tax withholding on the
payment of the purchase price of all Shares purchased from such shareholder.
If the tendering shareholder has not been issued a TIN and has applied for one
or intends to apply for one in the near future, such shareholder should write
"Applied For" in the space provided for the TIN in Part I of the Substitute
Form W-9, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60
days, the Depositary will withhold 31% on all payments of the purchase price
to such shareholder until a TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES
AND SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION
DATE (AS DEFINED IN THE OFFER TO PURCHASE).
9
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is such shareholder's social security
number. If the Depositary is not provided with the correct TIN, the
shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such shareholder with respect
to Shares purchased pursuant to the Offer may be subject to backup withholding
of 31%.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such
statements can be obtained from the Depositary. See the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained from the Internal Revenue
Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that
(i) such shareholder has not been notified by the Internal Revenue Service
that such shareholder is subject to backup withholding as a result of a
failure to report all interest or dividends or (ii) the Internal Revenue
Service has notified such shareholder that such shareholder is no longer
subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the
name of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance
on which number to report. If the tendering shareholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, the shareholder should write "Applied For" in the space provided for
the TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For"
is written in Part I and the Depositary is not provided with a TIN within 60
days, the Depositary will withhold 31% of all payments of the purchase price
to such shareholder until a TIN is provided to the Depositary.
10
<PAGE>
ALL TENDERING SHAREHOLDERS MUST COMPLETE THE FOLLOWING:
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- -------------------------------------------------------------------------------
PART 1-Taxpayer Identifi-
cation Number--For all ac-
counts, enter taxpayer
identification number in
the box at right. (For
most individuals, this is
your social security num-
ber. If you do not have a
number, see Obtaining a
Number in the enclosed
Guidelines.) Certify by
signing and dating below.
Note: If the account is in
more than one name, see
the chart in the enclosed
Guidelines to determine
which number to give the
payer.
----------------------
SUBSTITUTE Social Security Number
FORM W-9
DEPARTMENT OF THE TREASUR
INTERNAL REVENUE SERVICE
OR ----------------------
PAYER'S REQUEST Employer Identification
FOR TAXPAYER Number
IDENTIFICATION
NUMBER ("TIN")
(If awaiting TIN write
"Applied For")
----------------------------------------------------------
PART II--For Payees Exempt From Backup Withholding, see
the enclosed Guidelines and complete as instructed
therein.
CERTIFICATION--Under penalties of perjury, I certify
that:
(1) The number shown on this form is my correct Tax-
payer Identification Number (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either be-
cause I have not been notified by the Internal Rev-
enue Service (the "IRS") that I am subject to
backup withholding as a result of failure to report
all interest or dividends, or the IRS has notified
me that I am no longer subject to backup withhold-
ing.
CERTIFICATE 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 under report-
ing interest or dividends on your tax return. However,
if after being notified by the IRS that you were sub-
ject to backup withholding you received another notifi-
cation from the IRS that you are no longer subject to
backup withholding, do not cross out item (2). (Also
see instructions in the enclosed Guidelines.)
----------------------------------------------------------
SIGNATURE ________________________DATE __________, 1996
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLD-
ING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFI-
CATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
11
<PAGE>
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Call Collect (212) 269-5550
OR
CALL TOLL FREE (800) 290-6432
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1305
1-800-436-1019 (Toll Free)
(212) 449-8209 (Call Collect)
July 10, 1997
12
<PAGE>
Exhibit 99(A)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK,
SHARES OF SERIES G CONVERTIBLE PREFERRED STOCK
AND
WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
TO
PQR ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form hereof,
must be used to accept the Offer (as defined below) if (i) certificates (the
"Share Certificates") evidencing shares of common stock, par value $.01 per
share (the "Common Stock"), shares of Series G Convertible Preferred Stock,
par value $.01 (the "Preferred Stock"), and warrants to purchase shares of
Common Stock at $13.475 per share of Common Stock (the "Warrants"), of Exide
Electronics Group, Inc., a Delaware corporation (the "Company"), are not
immediately available, (ii) time will not permit all required documents to
reach First Chicago Trust Company of New York, as Depositary (the
"Depositary"), prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase (as defined below)) or (iii) the procedure for book-entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand or transmitted by telegram, facsimile
transmission or mail to the Depositary. See Section 2 of the Offer to
Purchase. Unless the context indicates otherwise, as used herein, Shares shall
mean shares of Common Stock, Preferred Stock and 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.
Book-entry transfer and surrender of Shares pursuant to ATOP procedures is
not available with respect to Preferred Stock or Warrants.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Facsimile By Hand:
First Chicago Trust Transmission: First Chicago Trust
Company of New York (201) 222-4720 Company of New York
Attention: Tenders & or Attention: Tenders &
Exchanges (201) 222-4721 Exchanges
P.O. Box 2565, Suite 4660 c/o THE DEPOSITORY
Jersey City, NJ 07303- TRUST COMPANY
2565 55 Water Street, DTC TAD
Vietnam Veterans Memorial
Plaza
New York, NY 10041
By Overnight Courier: Confirm By Telephone:
First Chicago Trust (201) 222-4707
Company of New York
Attention: Tenders &
Exchanges
Suite 4680-EEG
14 Wall Street, 8th Floor
New York, NY 10005
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to PQR Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Danaher
Corporation, a Delaware corporation (the "Parent"), upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated July 10, 1997 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, as amended
from time to time, together constitute the "Offer"), receipt of each of which
is hereby acknowledged, the number of Shares specified below pursuant to the
guaranteed delivery procedures described in Section 2 of the Offer to
Purchase. The number of each type of Share being tendered is specified below.
[_] Check here if tendering Shares of Common Stock
[_] Check here if tendering Shares of Preferred Stock
[_] Check here if tendering Warrants
Number of Shares (specify number of Name(s) of Record Holder(s):
each type):
-------------------------------------
- -------------------------------------
-------------------------------------
- ------------------------------------- PLEASE PRINT
Certificate Nos. (if available): Address(es):_________________________
- ------------------------------------- -------------------------------------
ZIP CODE
Check ONE box if Shares will be
tendered by book-entry transfer Company Area Code and Tel. No.:______
(including through DTC's ATOP):
Area Code and Tel. No.:______________
[_] The Depository Trust Company
Signature(s):________________________
[_] Philadelphia Depository Trust
Company
-------------------------------------
Account Number:______________________
Dated: , 1997
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm that is a commercial bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing
of the Securities Transfer Agents Medallion Program, the New York Stock
Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion
Program hereby (a) represents that the tender of Shares effected hereby
complies with Rule 14e-4 of the Securities Exchange Act of 1934, as amended,
and (b) guarantees delivery to the Depositary, at one of its addresses set
forth above, of Share Certificates evidencing the Shares tendered hereby in
proper form for transfer, or confirmation of book-entry transfer of such
Shares into the Depositary's accounts at The Depository Trust Company, the
Philadelphia Depository Trust Company, (pursuant to the procedures for book-
entry transfer, set forth in Section 2 of the Offer to Purchase), in each case
with delivery of a properly completed and duly executed Letter of Transmittal
(or a facsimile thereof) with any required signature guarantees, or an Agent's
Message (as defined in Section 2 of the Offer to Purchase), and any other
documents required by the Letter of Transmittal, within three New York Stock
Exchange, Inc. trading days after the date of execution of this Notice of
Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
Share Certificates to the Depositary within the time period shown herein.
Failure to do so could result in financial loss to such Eligible Institution.
- --------------------------------------- -------------------------------------
NAME OF FIRM
AUTHORIZED SIGNATURE
- ---------------------------------------
ADDRESS -------------------------------------
- --------------------------------------- TITLE
ZIP CODE
Name:________________________________
Area Code and Tel. No.:______________ PLEASE PRINT
Date: , 1997
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
Exhibit 99(A)(4)
LOGO
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK,
ALL OUTSTANDING SHARES OF SERIES G CONVERTIBLE PREFERRED STOCK
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
AT
$20 NET PER SHARE OF COMMON STOCK
AND PREFERRED STOCK
AND
$6.525 NET PER WARRANT
BY
PQR ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, AUGUST 6, 1997, UNLESS THE OFFER IS EXTENDED.
July 10, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by PQR Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Danaher
Corporation, a Delaware corporation (the "Parent"), 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"), all outstanding
shares of Series G Convertible Preferred Stock, par value $.01 per share (the
"Preferred Stock"), and all outstanding warrants to purchase shares of Common
Stock at $13.475 per share of Common Stock (the "Warrants") of Exide
Electronics Group, Inc., a Delaware corporation (the "Company"), at a 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,
without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated July 10, 1997 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer") enclosed herewith. Unless the context
indicates otherwise, as used herein, Shares shall mean shares of Common Stock,
Preferred Stock and 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 OFFER IS CONDITIONED UPON, AMONG OTHER THINGS (I) THERE BEING VALIDLY
TENDERED A NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED
BY PARENT, WOULD REPRESENT AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A
FULLY DILUTED BASIS ON THE DATE OF PURCHASE, (II) 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 OR THE PROPOSED MERGER, AND (III) THE
BOARD OF DIRECTORS OF THE COMPANY HAVING APPROVED THE OFFER OR THE PROPOSED
MERGER FOR PURPOSES OF SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW OR
THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT, AFTER
CONSUMMATION OF THE OFFER, SECTION 203 WILL BE OTHERWISE INAPPLICABLE TO THE
World Financial Center
North Tower
New York, NY 10281-1305
1-800-436-1019 (Toll Free)
(212) 449-8209 (Call Collect)
<PAGE>
PROPOSED MERGER. SEE SECTION 14 OF THE OFFER TO PURCHASE. THE OFFER IS NOT
CONDITIONED ON THE RECEIPT OF FINANCING.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following
documents:
1. The Offer to Purchase, dated July 10, 1997;
2. The Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares;
3. The Notice of Guaranteed Delivery to be used to accept the Offer if
the certificates evidencing such Shares (the "Share Certificates") are not
immediately available or time will not permit all required documents to
reach the Depositary (as defined in the Offer to Purchase) prior to the
Expiration Date (as defined in the Offer to Purchase) or the procedure for
book-entry transfer cannot be completed by the Expiration Date;
4. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominees, with space
provided for obtaining such clients' instructions with regard to the Offer;
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withheld; and
6. A return envelope addressed to the Depositary.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will purchase, by accepting for payment, and will
pay for the Shares validly tendered prior to the Expiration Date promptly
after the Expiration Date. For purposes of the Offer, the Purchaser will be
deemed to have accepted for payment, and thereby purchased, tendered Shares
as, if and when the Purchaser gives oral or written notice to the Depositary
of the Purchaser's acceptance of such Shares for payment pursuant to the
Offer. In all cases, payment for Shares purchased pursuant to the Offer will
be made only after timely receipt by the Depositary of (i) the Share
Certificates, timely confirmation of a book-entry transfer of such Shares, if
such procedure is available, into the Depositary's account at The Depository
Trust Company ("DTC"), or the Philadelphia Depository Trust Company pursuant
to the procedures set forth in Section 2 of the Offer to Purchase, or
confirmation of surrender of Shares through DTC's Automated Tender Offer
Program ("ATOP"), (ii) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or an Agent's Message (as defined in Section 2 of the Offer to Purchase), in
the case of a book-entry transfer or tender pursuant to ATOP procedures and
(iii) any other documents required by the Letter of Transmittal.
If Rights Certificates have been distributed to holders of Common Shares,
such holders are required to tender or (if such procedure is available) make
book-entry entry-transfer or surrender through ATOP of, Rights Certificates
representing a number of Rights equal to the number of shares of Common Stock
being tendered in order to effect a valid tender of such shares of Common
Stock.
Neither Preferred Stock nor Warrants may be tendered by book-entry transfer
or ATOP. Neither book-entry confirmations, Agent's Messages nor ATOP
procedures are available with respect to Preferred Shares or Warrants.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person (other than the Dealer Manager, the Information Agent and
the Depositary as described in Section 16 of the Offer to
2
<PAGE>
Purchase) in connection with the solicitation of tenders of Shares pursuant to
the Offer. The Purchaser will, however, upon request, reimburse you for
customary mailing and handling expenses incurred by you in forwarding the
enclosed materials to your clients.
The Purchaser will pay any stock transfer taxes incident to the transfer to
it of validly tendered Shares, except as otherwise provided in Instruction 6
of the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, AUGUST 6, 1997 UNLESS THE OFFER IS
EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or a facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Shares should be
delivered or such Shares should be tendered by book-entry transfer or in
accordance with DTC's ATOP procedures, all in accordance with the Instructions
set forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender Shares, but it is impracticable for them
to forward their Share Certificates or other required documents to the
Depositary prior to the Expiration Date or to comply with the procedures for
book-entry transfer or ATOP on a timely basis, a tender may be effected by
following the guaranteed delivery procedures specified under Section 2 of the
Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
D.F. King & Co., Inc., the Information Agent, or Merrill Lynch, Pierce, Fenner
& Smith Incorporated, the Dealer Manager, at their respective addresses and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained by calling D.F.
King & Co., Inc., the Information Agent, collect at (212) 269-5550 or toll-
free at (800) 290-6432, or from brokers, dealers, commercial banks or trust
companies.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER &
SMITH
INCORPORATED,
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
OTHER PERSON AS AN AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE
DEPOSITARY, THE INFORMATION AGENT OR THE DEALER MANAGER, OR ANY AFFILIATE OF
ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT
OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER
OTHER THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
Exhibit 99(A)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK,
ALL OUTSTANDING SHARES OF SERIES G CONVERTIBLE PREFERRED STOCK
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
AT
$20 NET PER SHARE OF COMMON STOCK AND PREFERRED STOCK
AND $6.525 NET PER WARRANT
BY
PQR ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME ON WEDNESDAY, AUGUST 6, 1997, UNLESS THE OFFER IS EXTENDED.
July 10, 1997
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated July 10,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
as amended from time to time, together constitute the "Offer") in connection
with the Offer by PQR Acquisition Corporation, a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Danaher Corporation, a Delaware
corporation (the "Parent"), to purchase all outstanding shares of common
stock, par value $.01 per share (the "Common Stock"), all outstanding shares
of Series G Convertible Preferred Stock, par value $.01 per share (the
"Preferred Stock"), and all outstanding warrants to purchase shares of Common
Stock at $13.475 per share of Common Stock (the "Warrants"), of Exide
Electronics Group, Inc., a Delaware corporation (the "Company"), at a 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,
without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase. Unless the context indicates otherwise, Shares
shall mean the shares of Common Stock and Preferred Stock and Warrants, and
shareholders shall mean holders of Shares.
Shareholders whose certificates evidencing Shares (the "Share Certificates")
are not immediately available or who cannot deliver their Share Certificates
and all other documents required by the Letter of Transmittal to the
Depositary prior to the Expiration Date (as defined in the Offer to Purchase)
or who cannot complete the procedure for delivery by book-entry transfer to
the Depositary's account at a Book-Entry Transfer Facility (as defined in
Section 2 of the Offer to Purchase) on a timely basis and who wish to tender
their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 2 of the Offer to Purchase. See Instruction 2 of the
Letter of Transmittal. Delivery of documents to a Book-Entry Transfer Facility
in accordance with the Book-Entry Transfer Facility's procedures does not
constitute delivery to the Depositary.
THIS MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD BY
US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE HOLDER OF
RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE
MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE
LETTER OF TRANSMITTAL IS BEING FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND
CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
<PAGE>
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account upon the terms and
subject to the conditions set forth in the Offer to Purchase.
Your attention is invited to the following:
1. The tender price is $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 you in cash, without interest thereon.
2. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Wednesday, August 6, 1997, unless the Offer is extended.
3. The Offer is being made for all outstanding Shares.
4. The Offer is conditioned upon, among other things, (i) there being
validly tendered a number of Shares which, when added to the Shares
beneficially owned by Parent, would represent at least a majority of the
Shares outstanding on a fully diluted basis on the date of purchase, (ii)
the Rights having been redeemed by the Board of Directors of the Company or
the Purchaser being satisfied, in its sole discretion, that the Rights have
been invalidated or are otherwise inapplicable to the Offer and the
Proposed Merger, and (iii) the Board of Directors of the Company having
approved the Offer and the Proposed Merger for purposes of Section 203 of
the Delaware General Corporation Law or the Purchaser being satisfied, in
its sole discretion, that Section 203 is otherwise inapplicable to the
Proposed Merger. See Section 14 of the Offer to Purchase.
5. The Offer is not conditioned on the receipt of financing.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto and is being made to all
holders of Shares. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the securities, blue sky or other laws of such jurisdiction. Neither the
Purchaser nor Parent is aware of any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. To the extent the Purchaser or Parent becomes aware of any
state law that would limit the class of offerees in the Offer, the Purchaser
will amend the Offer and, depending on the timing of such amendment, if any,
will extend the Offer to provide adequate dissemination of such information to
such holders of shares prior to the expiration of the Offer. In any
jurisdiction the securities, blue sky or other laws of which require the Offer
to be made by a licensed broker or dealer, the Offer is being made on behalf
of the Purchaser by Merrill Lynch, Pierce, Fenner & Smith Incorporated or one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified on the instruction form contained in this
letter. Your instructions should be forwarded to us in ample time to permit us
to submit a tender on your behalf prior to the expiration of the Offer.
If holders of Shares wish to tender Shares, but it is impracticable for them
to forward their Share Certificates or other required documents to the
Depositary prior to the Expiration Date or to comply with the procedures for
book-entry transfer on a timely basis, a tender may be effected by following
the guaranteed delivery procedures specified under Section 2 of the Offer to
Purchase.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK,
ALL OUTSTANDING SHARES OF SERIES G CONVERTIBLE PREFERRED STOCK
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated July 10, 1997, and the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"), in
connection with the Offer by PQR Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Danaher
Corporation, a Delaware corporation ("Parent"), to purchase all outstanding
shares of common stock, par value $.01 per share (the "Common Stock"), all
outstanding shares of Series G Convertible Preferred Stock, par value $.01 per
share (the "Preferred Stock"), and all outstanding warrants to purchase shares
of Common Stock at $13.475 per share of Common Stock (the "Warrants"), of
Exide Electronics Group, Inc., a Delaware corporation (the "Company"), at a
price equal to $20 per share of Common Stock and Preferred Stock and $6.525
per Warrant to purchase one share of Common Stock, net to the seller in cash
without interest thereon.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) held by you
for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase.
Number of Shares to be Tendered*
Shares
SIGN HERE
-------------------------------------
-------------------------------------
Account Number:________________________ Signature(s)
-------------------------------------
Dated: , 1997 -------------------------------------
Please type or print name(s)
-------------------------------------
-------------------------------------
-------------------------------------
Please type or print address(es)
here
-------------------------------------
Area Code and Telephone Number
-------------------------------------
Taxpayer Identification or
Social Security Number(s)
- --------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<PAGE>
Exhibit 99(A)(6)
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:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF --
- --------------------------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner
of the account
or, if combined
funds, any one
of the
individuals(1)
3. Husband and wife (joint account) The actual owner
of the account
or, if joint
funds, either
person(1)
4. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2)
5. Adult and minor (joint account) The adult or, if
the minor is the
only
contributor, the
minor(1)
6. Account in the name of guardian or committee for a The ward, minor,
designated ward, minor, or incompetent person or incompetent
person(3)
7. a The usual revocable savings trust account (grantor is The grantor-
also trustee) trustee(1)
b So-called trust account that is not a legal or valid The actual
trust under State law owner(1)
8. Sole proprietorship account The owner(4)
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
- ------------------------------------------------------------------------------
<S> <C>
9. A valid trust, estate, or pension trust The legal entity
(Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational organization The organization
account
12. Partnership account held in the name of the business The partnership
13. Association, club, or other tax-exempt organization The organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of Agriculture in the name The public
of a public entity (such as a State or local government, entity
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) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your num-
ber, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual re-
tirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDEN-
TIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.-- Section 6109 requires most recipients of dividend, in-
terest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are re-
quired to file tax returns. Beginning January 1, 1993, 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. Cer-
tain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or pat-
ronage dividends in gross income, such failure will be treated as being due to
negligence and will be subject to a penalty of 5% on any portion of an under-
payment attributable to that failure unless there is clear and convincing evi-
dence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE>
Exhibit (a)(7)
FOR IMMEDIATE RELEASE
CONTACT: Patrick W. Allender
Chief Financial Officer
(202) 828-0850
DANAHER CORPORATION TO TENDER FOR EXIDE ELECTRONICS GROUP,
INC.
AT $20.00 PER SHARE
================================================================================
WASHINGTON, D.C., July 9, 1997... Danaher Corporation (NYSE: DHR)
announced today that it expects to commence promptly a cash tender offer for all
outstanding Exide Electronics Group, Inc. ("Exide") equity securities (common
shares, preferred shares and warrants) at a price equivalent to $20.00 per
share.
George M. Sherman, President and Chief Executive Officer of Danaher, has
sent the attached letter to James A. Risher, President and Chief Executive
Officer of Exide. Danaher noted that its proposed price represents a premium of
55% to yesterday's closing price of Exide's common shares and a premium of 72%
to the closing price on June 11, 1997, the date Danaher first contacted Exide
regarding a possible business combination.
The offer is expected to be conditioned on, among other things, (i) the
tender of a majority of the outstanding shares on a fully diluted basis, (ii)
the redemption or inapplicability of Exide's Rights Plan and (iii) the approval
of the acquisition for purposes of Section 203 of the Delaware General
Corporation Law or the inapplicability of such section. The offer is to be
followed by a merger or similar transaction at the same cash price. The offer
will not be conditioned on financing.
- more -
<PAGE>
In order to increase the likelihood that the offer can be accepted at
the earliest possible date, Danaher has submitted a letter to Exide requesting
that Exide call a special meeting of shareholders and intends to solicit other
Exide shareholders to support the call of the special meeting. At the meeting,
Danaher will seek to elect a majority of the Exide Board and otherwise expedite
the acquisition. Danaher has filed suit in Delaware Chancery Court to compel
Exide to comply with its fiduciary duties in connection with the offer and the
calling of the special meeting and challenging amendments to the Exide bylaws
adopted after Danaher submitted its letter requesting a special meeting.
There are approximately 10 million Exide common shares outstanding, of
which Danaher beneficially owns approximately 397,000. In addition, Exide has
outstanding 1 million preferred shares (convertible one-for-one to common) and
warrants to purchase approximately 643,000 common shares at $13.475 each.
This announcement is not a solicitation of proxies, which will be made
only pursuant to proxy materials filed and disseminated in accordance with the
Securities Exchange Act of 1934.
Headquartered in Raleigh, N.C., Exide Electronics provides Strategic
Power Management (TM) solutions to a broad range of businesses and institutions
worldwide. Exide Electronics' products are used for networking, financial,
medical, industrial, voice and data communications, military and aerospace
applications--wherever continuous power is essential to daily operations.
Danaher Corporation is a leading manufacturer of Tools and Components
and Process/Environmental Controls. (http://www.danaher.com)
Attachment
----------
# # #
<PAGE>
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 over the past month and the letter we
sent 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 personal 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.
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 companies and 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 to our offer,
and hope that it will lead to a negotiated transaction.
Sincerely,
George M. Sherman
President and Chief Executive Officer
<PAGE>
EXHIBIT (a)(8)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase
dated July 10, 1997 and the related Letter of Transmittal. 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 securities, blue sky or other laws of such jurisdiction.
However, the Purchaser may, in its discretion, take such action
as it may deem necessary to make the Offer in any jurisdiction and
extend the Offer to holders of Shares in such jurisdiction. In
those jurisdictions where securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of PQR Acquisition
Corporation by Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Dealer Manager") or one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK,
ALL OUTSTANDING SHARES OF SERIES G
CONVERTIBLE PREFERRED STOCK
AND
ALL OUTSTANDING WARRANTS TO PURCHASE COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
AT
$20 NET PER SHARE OF COMMON STOCK
AND PREFERRED STOCK
AND
$6.525 NET PER WARRANT
BY
PQR ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
PQR Acquisition Corporation, a Delaware corporation (the "Purchaser")
and a wholly owned subsidiary of Danaher Corporation, a Delaware corporation
("Parent"), is offering to purchase all outstanding shares of common stock, par
value $.01 per share (the "Common Stock"), all outstanding shares of Series G
Convertible Preferred Stock, par value $.01 per share (the "Preferred Stock"),
and all outstanding warrants to purchase shares of Common Stock at $13.475 per
share of Common Stock (the "Warrants"), of Exide Electronics Group, Inc., a
Delaware corporation (the "Company"), at a 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, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated July 10, 1997 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). Unless the context indicates otherwise, as used herein, Shares shall
mean shares of Common Stock and Preferred Stock and 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 OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, AUGUST 6, 1997, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING
VALIDLY TENDERED A NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY
OWNED BY PARENT, WOULD REPRESENT AT LEAST A MAJORITY OF THE SHARES OUTSTANDING
ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE, (ii) THE RIGHTS HAVING BEEN
REDEEMED BY THE BOARD OF DIRECTORS OF THE
<PAGE>
COMPANY OR THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT RIGHTS
HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER OR THE PROPOSED
MERGER (AS DEFINED HEREIN), AND (iii) THE BOARD OF DIRECTORS OF THE COMPANY
HAVING APPROVED THE OFFER AND THE PROPOSED MERGER FOR PURPOSES OF SECTION 203 OF
THE DELAWARE GENERAL CORPORATION LAW OR THE PURCHASER BEING SATISFIED, IN ITS
SOLE DISCRETION, THAT SECTION 203 IS OTHERWISE INAPPLICABLE TO THE PROPOSED
MERGER, SEE SECTION 14 OF THE OFFER TO PURCHASE. THE OFFER IS NOT CONDITIONED
ON THE RECEIPT OF FINANCING.
The purpose of the Offer is to enable Parent 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 the
consummation of the Offer, a merger or other transaction with the Parent (the
"Proposed Merger"), pursuant to which each then outstanding share of Common
Stock and Preferred Stock (other than Shares owned by the Purchaser or Parent or
any of its subsidiaries and, if applicable, Shares owned by shareholders who
perfect any applicable dissenters' rights under Delaware law) would be converted
into the right to receive an amount in cash equal to the price per share of
Common Stock and Preferred Stock paid by the Purchaser pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered to the Purchaser as,
if and when the Purchaser gives oral or written notice to the Depositary (as
defined in the Offer to Purchase) of the Purchaser's acceptance for payment
of such Shares. Upon the terms and subject to the conditions of the Offer,
payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for validly tendering shareholders for the purpose of receiving payments
from the Purchaser and transmitting such payments to validly tendering
shareholders. Under no circumstances will interest on the purchase price for
Shares be paid by the Purchaser, regardless of any extension of the Offer or
delay in making such payment. In all cases, payment for Shares tendered and
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (i) the certificates evidencing such Shares (the
"Share Certificates"), timely confirmation of a book-entry transfer of Shares
into the Depositary's account at one of the Book-Entry Transfer Facilities (as
defined in Section 2 of the Offer to Purchase) pursuant to the procedures set
forth in Section 2 of the Offer to Purchase, (ii) the Letter of Transmittal (or
a 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 Section 2 of the Offer to Purchase), and (iii) any other
documents required by the Letter of Transmittal.
The Purchaser expressly reserves the right, in its sole discretion, at
any time or from time to time, to extend for any reason the period of time
during which the Offer is open, including the occurence of any condition
specified in Section 14 of the Offer to Purchase, by giving oral or written
notice of such extension to the Depositary. During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer,
subject to the rights of a tendering shareholder to withdraw his Shares. Any
such extension will be followed as promptly as practicable by public
announcement thereof, such announcement to be made no later than 9:00 a.m., New
York City time, on the next busioness day after the previously scheduled
expiration date of the Offer.
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to 12:00 midnight, New York City
time, on Wednesday, August 6, 1997 (or, if the Purchaser shall have extended the
period of time for which the Offer is open, the latest time and date at which
the Offer, as so extended by the Purchaser, shall expire) and, unless
theretofore accepted for payment by the Purchaser pursuant to the Offer, may
also be withdrawn at any time after September 7, 1997. For a withdrawal to be
effective, a written, telegraphic or facsimile transmission notice of withdrawal
must be timely received by the Depositary at its address set forth on the back
cover of the Offer to Purchase. Any such notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and the name of the registered holder of such Shares, if
different from that of the person who tendered such Shares. If Share
Certificates or Rights Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Share Certificates or Rights Certificates, the serial numbers
shown on such Share Certificates or Rights Certificates must be submitted to the
Depositary and the signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution (as defined in Section 2 of the Offer to Purchase),
unless such Shares or Rights have been tendered for the account of an Eligible
Institution. If Shares or Rights have been tendered pursuant to the procedure
for book-entry transfer as set forth in Section 2 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares or Rights
and otherwise comply with such Book-Entry Transfer Facility procedures. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by the Purchaser, in its sole discretion, whose
determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference. Requests are being made to the Company for the use of the Company's
shareholder list and security position listings for the purpose of disseminating
the Offer to holders of Shares and communicating with shareholders in
connection with Offer. The Offer to Purchase and the related Letter of
Transmittal and, if required, other relevant materials will be mailed to
record holders of Shares whose names appear on the Company's shareholder 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
shareholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares by Purchaser following receipt of such lists or listings from
the Company, or by the Company if it so elects.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Dealer
Manager or the Information Agent at their respective addresses and telephone
numbers as set forth below. The Purchaser will not pay any fees or commissions
to any broker or dealer or to any other person (other than the Dealer Manager
and the Information Agent) for soliciting tenders of Shares pursuant to the
Offer. Additional copies of the Offer to Purchase, the Letter of Transmittal and
all other tender offer materials may be obtained from the Information Agent or
from brokers, dealers, commercial banks and trust companies, and will be
furnished promptly at the Purchaser's expense.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (Call Collect)
or
Call Toll Free (800) 290-6432
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1305
1-800-436-1019 (Toll Free)
(212) 449-8209 (Call Collect)
July 10, 1997
<PAGE>
EXHIBIT (b)(2)
SCOTIABANK [LOGO]
THE BANK OF NOVA SCOTIA
New York Agency, One Liberty Plaza, New York, N.Y. 10008
June 12, 1997
Mr. C. Scott Brannan
Vice President Administration & Controller
Danaher Corporation
1250 24th Street, N.W.
Washington, D.C. 20037
Dear Scott:
The Bank of Nova Scotia is pleased to extend to Danaher Corporation a
commitment to provide a $250 million 364-day revolving credit facility. The
terms and conditions of this facility are summarized on the attached indicative
term sheet and are subject to execution of definitive credit documentation.
Unless accepted, this commitment terminates on August 31, 1997.
Sincerely,
/s/ James R. Trimble
James R. Trimble
Accepted and Agreed:
DANAHER CORPORATION
By: /s/ C. Scott Brannan
-------------------------------
Title: Vice President
-------------------------------
Date: July 10, 1997
-------------------------------
Accepted for $100 million.
<PAGE>
ATTACHMENT
DANAHER CORPORATION
INDICATIVE TERMS AND CONDITIONS
Borrower: Danaher Corporation
Bank: The Bank of Nova Scotia
Facility: 364-day revolving credit facility.
Purpose: General corporate, including potential acquisitions.
Amount: Up to US$250,000,000
Maturity: 364 days from closing of credit documentation, but
no later than August 31, 1997.
Pricing: Facility Fee: 0.075% (7.5 bp) per annum, payable on
the commitment amount regardless of usage, payable
on the calendar quarter-end in arrears, based upon
a 360-day year.
LIBOR Interest Rate: 0.125% (12.5 pb) for interest
periods of 1,2 or 3 months, payable at the end of
each interest period, based upon a 360 day year.
Financial
Covenants: Identical to those found in the Borrower's existing
US$250,000,000 syndicated revolving credit
agreement dated September 7, 1990 and as amended
from time to time.
Representations and
Warranties: Similar to those found in the Borrower's existing
credit agreement, including but not limited to:
o acquisitions are in the same general lines of
business in which the Borrower is currently
engaged.
Covenants: Similar to those found in the Borrower's existing
credit agreement.
Events of
Default: Similar to those found in the Borrower's existing
credit agreement.
<PAGE>
Miscellaneous: Similar provisions to those found in the Borrower's
existing credit agreement.
Whether or not the transactions contemplated hereby are
consummated, the Borrower hereby agrees to indemnify and
hold harmless the Bank and its respective directors,
officers, employees and affiliates (each, an
"indemnified person") from and against any and all
losses, claims, damages, liabilities (or actions or
other proceedings commenced or threatened in respect
thereof) and expenses that arise out of, result from or
in any way relate to this commitment letter or the
provision of the Facility, and to reimburse each
indemnified person, upon its demand, for any legal or
other expenses (including the allocated cost of in-house
counsel) incurred in connection with investigating,
defending or participating in any such loss, claim,
damage, liability or action or other proceeding (whether
or not such indemnified person is a party to any action
or proceeding out of which any such expenses arise),
other than any of the foregoing claimed by any
indemnified person to the extent incurred by reason of
the gross negligence or willful misconduct of such
person. The Bank shall not be responsible or liable to
the Borrower or any other person for any consequential
damages which may be alleged. The obligation contained
in this paragraph will survive the closing of the
Facility.
Whether or not any of the credit facilities described
herein is extended to the Borrower, or a credit
agreement or other document is executed, the Borrower
shall pay and reimburse the Bank, immediately upon
demand, for all costs and out-of-pocket expenses
(including the allocated costs of in-house counsel)
expended or incurred by the Bank in connection with the
negotiation, preparation, administration (including
waivers and amendments), and enforcement of this
commitment letter and the loan documents contemplated
hereby.
<PAGE>
EXHIBIT (b)(3)
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017-2070
July 9, 1997
Danaher Corporation
1250 24th Street, N.W.
Suite 800
Washington, D.C. 20037
Attention: Patrick W. Allender
Chief Financial Officer
Re: Acquisition Financing For Danaher Corporation
---------------------------------------------
Dear Mr. Allender:
You have advised The Chase Manhattan Bank (the "Bank") that Danaher
Corporation (the "Borrower") proposes to acquire (the "Acquisition") Exide
Electronics Group, Inc. (the "Target").
You have advised the Bank that you are seeking revolving credit
acquisition financing (the "Facilities") from several lenders to be made
available to the Borrower to provide financing for the Acquisition and certain
related purposes.
The Bank is pleased to commit to provide up to $100,000,000 (the
"Commitment") of the Facilities, all subject to the terms and conditions set
forth herein and subject to the execution of definitive documentation acceptable
to the Bank. The Bank reserves the right to syndicate all or a portion of its
Commitment to a group of banks and/or other financial institutions acceptable to
the Bank.
Amount: Up to a maximum amount of $100,000,000.
Term: Payable in full 364 days from the date of signing the
documentation.
Convenants: Similar to those set forth in the Danaher Corporation Credit
Agreement dated as of September 7, 1990 (as amended from time to
time, the "Credit Agreement") among the Borrower, the Lenders
thereto, the Guarantors and the Agent.
<PAGE>
Purpose: Acquisition financing and related purposes.
Collateral: Similar to those set forth in the Credit Agreement.
Guarantees: Similar to those set forth in the Credit Agreement.
Events of Default: Similar to those set forth in the Credit Agreement.
Representations
and Warranties: Similar to those set forth in the Credit Agreement.
Facility Fee: 0.075% per annum on the Commitment Amount, regardless of
usage, payable quarterly in arrears to the Bank on a 360 day
basis.
Pricing: During any Pricing Period (as defined in the Credit
Agreement) for which the Company's Pricing Level (as defined
in the Credit Agreement) is as set forth below, the amount
indicated:
Pricing Level I -- .125% per annum
Pricing Level II -- .25% per annum
Pricing Level III -- .375% per annum
By your acceptance below you hereby indemnify and hold harmless the Bank
and each of its affiliates (collectively, "Chase") and each of their directors,
officers, and employees (each, an "Indemnified Person") from and against any and
------------------
all losses, claims, damages, liabilities (or actions or other proceedings
commenced or threatened in respect thereof) and expenses that arise out of,
result from or in any way relate to this letter, the Term Sheet, the Commitment,
the Acquisition or the other transactions contemplated hereby or the providing
or syndication of the Facilities, and to reimburse each Indemnified Person, upon
its demand, for any legal or other expenses incurred in connection with
investigating, defending or participating in any such loss, claim, damage,
liability or action or other proceeding (whether or not such Indemnified Person
is a party to any action or proceeding out of which any such expenses arise),
other than any of the foregoing claimed by any Indemnified Person to the extent
determined by final judgment of a court of competent jurisdiction to have been
incurred by reason of the gross negligence or willful misconduct of such person.
The Bank shall not be responsible or liable to the Borrower or any other person
for any consequential damages which may be alleged as a result of this letter.
In addition, the Borrower hereby agrees to reimburse the Bank from time to time
upon demand for the Bank's reasonable out-of-pocket costs and expenses
(including, without limitation, legal fees and expenses, appraisal fees, and
printing, reproduction, document delivery, communication and
<PAGE>
publicity costs) incurred in connection with the preparation, review,
negotiation, execution and delivery of this letter, the Term Sheet, the
definitive financing agreements and the other documents relating to the
Acquisition. Your obligations under this paragraph shall survive any
termination of this letter and shall be effective regardless of whether the
definitive financing agreements are executed.
This letter is delivered to you upon the condition that, prior to your
acceptance of this offer, neither the existence of this letter, the Term Sheet,
the Commitment or the Facilities nor any of their contents shall be disclosed
by you except (i) as may be compelled to be disclosed in a judicial or
administrative proceeding or as otherwise required by law and (ii) on a
confidential and "need to know" basis, to your directors, officers, employees,
advisors and agents.
You acknowledge that Chase may be providing debt financing, equity
capital or other services (including financial advisory services) to other
companies in respect of which you or your affiliates may have conflicting
interests regarding the transaction described herein and otherwise. The Bank
will not use confidential information obtained from you or any of your
affiliates by virtue of the transaction contemplated by this letter or their
other relationships with you and your affiliates in connection with the
performance by the Bank of services for other companies, and the Bank will not
furnish any such information to such other companies. You also acknowledge that
the Bank has no obligation to use in connection with the transactions
contemplated by this letter, or to furnish to you or any of your affiliates,
confidential information obtained from other companies.
The Bank shall have the right to review and approve all public
announcements and filings relating to the Acquisition which refer to the Bank or
Chase before they are made (such approval not to be unreasonably withheld).
The Bank's offer set forth in this letter will terminate at 5:00 p.m. on
Monday, July 21, 1997 unless you accept this letter and the Term Sheet at or
prior to that time by signing and returning to the Bank counterpart of this
letter.
This letter may be executed in any number of counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one
agreement, and this letter and the Term Sheet may not be assigned by you without
the prior written consent of the Bank and may not be amended or any provision
hereof or thereof waived or modified except by an instrument in writing signed
by each of the parties hereto. This letter and the Term Sheet shall be governed
by and construed in accordance with the law of the State of New York.
<PAGE>
We look forward to working with you to complete this transaction.
Very truly yours,
THE CHASE MANHATTAN BANK
By: /s/ William J. Caggiano
---------------------------
Name: William J. Caggiano
Title: Managing Director
AGREED TO AND ACCEPTED:
DANAHER CORPORATION
By: /s/ C. Scott Brannan
----------------------------
Name: C. Scott Brannan
Title: Vice President
DATE: July 10, 1997
<PAGE>
EXHIBIT (b)(4)
SunTrust Bank, Central Florida, N.A. Andrew J. Hines
Mail Code 0-1043 Assistant Vice President
Post Office Box 3803
Orlando, FL 32802
Tel (407) 237-4939
Fax (407) 237-6894
- --------------------------------------------------------------------------------
SUNTRUST
June 16, 1997
Via Facsimile: (202) 828-0860
3 pages
Mr. C. Scott Brannan
Vice President Administration & Controller
Danaher Corporation
1250 24th Street, N.W.
Washington, DC 20037
Dear Scott:
SunTrust Bank, Central Florida, NA is pleased to extend to Danaher Corporation a
commitment to provide a $100 million 364-day revolving credit facility. The
terms and conditions of this facility are summarized on the attached indicative
term sheet and are subject to execution of definitive credit documentation.
Unless accepted, this commitment terminates on August 31, 1997.
The Danaher client team at SunTrust Bank is very pleased that we can be of
assistance in this manner and we look forward to further expanding the
relationship in mutually beneficial ways.
Sincerely,
/s/ Andrew J. Hines
Andrew J. Hines
Assistant Vice President
Accepted and Agreed:
DANAHER CORPORATION
By: /s/ C. Scott Brannan
-----------------------
Title: Vice President
--------------------
Date: July 10, 1997
---------------------
<PAGE>
ATTACHMENT
DANAHER CORPORATION
INDICATIVE TERMS AND CONDITIONS
Borrower: Danaher Corporation
Bank: SunTrust Bank, Central Florida, National Association
Facility: 364-day revolving credit facility.
Purpose: General corporate, including potential acquisitions.
Amount: Up to US$ 100,000,000
Maturity: 364 days from closing of credit documentation, but
no longer than August 31, 1997.
Pricing: Facility Fee: 0.075% (7.5 bp) per annum, payable on
the commitment amount regardless of usage, payable
on the calendar quarter end in arrears based upon a
360 day year.
LIBOR Interest Rate: 0.125% (12.5 pb) for interest
periods of 1,2 or 3 months, payable at the end on
each interest period, based upon a 360 day year.
Financial
Covenants: Identical to those found in the Borrower's existing
US$ 250,000,000 syndicated revolving credit
agreement dated September 7, 1990 and as amended
from time to time.
Representations and
Warranties: Similar to those found in the Borrower's existing
credit agreement, including but not limited to:
o acquisitions are in the same general lines of
business in which the Borrower is currently
engaged.
Covenants: Similar to those found in the Borrower's existing
credit agreement.
Events of
Default: Similar to those found in the Borrower's existing
credit agreement.
<PAGE>
Miscellaneous: Similar provisions to those found in the Borrower's existing
credit agreement.
Whether or not the transactions contemplated hereby are
consummated, the Borrower hereby agrees to indemnify and hold
harmless the Bank and its respective directors, officers,
employees and affiliates (each, an "indemnified person") from
and against any and all losses claimes, damages, liabilities (or
actions or other proceedings commenced or threatened in respect
hereof) and expenses that arise out of, result from or in any
way relate to this commitment letter or the provision of the
Facility, and to reimburse each indemnified person, upon its
demand, for any legal or other expenses (including the allocated
cost of in-house counsel) incurred in connection with
investigating, defending or participating in any such loss,
claim, damage, liability or action or other proceeding (whether
or not such indemnified person is a party to any action or
proceeding out of which any such expenses arise), other than any
of the foregoing claimed by any indemnified person to the extent
incurred by reason of the gross negligence or willful misconduct
of such person. The Bank shall not be responsible or liable to
the Borrower or any other person for any consequential damages
which may be alleged. The obligation contained in this
paragraph will survive the closing of the Facility.
Whether or not any of the credit facilities described herein is
extended to the Borrower, or a credit agreement or other
document is executed, the Borrower shall pay and reimburse the
Bank, immediately upon demand, for all costs and out-of-pocket
expenses (including the allocated costs of in-house counsel)
expended or incurred by the Bank in connection with the
negotiation, preparation, administration (including waivers and
amendments), and enforcement of this commitment letter and the
loan documents contemplated hereby.
<PAGE>
EXHIBIT (b)(5)
[LOGO] FIRST CHICAGO The First National Bank of Chicago
The First National Bank of Chicago 153 West 51st Street
New York, NY 10019
Telephone: 212.273.1023
Facsimile: 212.273.1258
Amy L. Golz
Vice President
June 12, 1997
VIA FACSIMILE & FEDERAL EXPRESS
Mr. C. Scott Brannan
Vice President Administration & Controller
Danaher Corporation
1250 24th Street, N.W.
Washington, DC 20037
Dear Scott,
The First National Bank of Chicago is pleased to offer to Danaher Corporation a
commitment to provide a $100 million 364-day revolving credit facility on the
terms and conditions set forth in the indicative term sheet attached hereto. Our
commitment is subject to the execution of definitive credit documentation.
By its acceptance hereof, Danaher Corporation agrees to the indemnity and
expense reimbursement provisions described in the attached term sheet. Please
indicate your acceptance of this commitment in the space provided below and
return a copy of this letter so executed to the undersigned. This commitment
will expire on August 31, 1997 unless on or prior to such time First Chicago
shall have received a copy of this letter executed by the Borrower.
Scott, First Chicago is delighted to have the opportunity to provide this
commitment to Danaher Corporation and we look forward to working with you to
bring this transaction to a smooth and efficient closing.
Sincerely,
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Amy L. Golz
----------------------
Title: Vice President
----------------------
Accepted and Agreed:
DANAHER CORPORATION
By: /s/ C. Scott Brannan
---------------------
Title: Vice President
--------------------
Date: July 10, 1997
--------------------
<PAGE>
DANAHER CORPORATION
INDICATIVE TERMS AND CONDITIONS
This Term sheet is intended as an outline only and does not purport to summarize
all of the terms, conditions, representations, warranties and other provisions
which would be contained in a definitive loan agreement and other loan
documentation for the financing contemplated hereby.
Borrower: Danaher Corporation ("Borrower" of "The Company")
Lender: The First National Bank of Chicago
Facility: 364-day Revolving Credit Facility
Aggregate
Commitment: $100,000,000.
Maturity: 364 days after the execution of definitive credit
documentation.
Purpose: General corporate purposes, including acquisitions
Facility Fee: 0.075% per annum on the commitment amount,
regardless of usage, payable quarterly in
arrears to the Lender on a 360-day basis.
Pricing: All loans shall bear interest at the Borrower's
option of i) ABR or ii) Eurodollar Rate plus 0.125%.
Eurodollar Rate interest periods shall be one, two
or three months and payable in arrears on the last
day of the applicable interest period, calculated on
a 360-day basis.
Covenants: Similar to those included in the Borrower's existing
US$250,000,000 syndicated Revolving Credit Agreement
dated September 7, 1990 and as amended from time to
time, including a covenant that acquisitions will be
in the same lines of business in which the Borrower
is currently engaged. The financial covenants will
be identical to those in the Revolving Credit
Agreement.
Representations
and Warranties: Similar to those found in the Borrower's existing
Credit Agreement.
Events of Default: Similar to those found in the Borrower's existing
Credit Agreement.
Indemnification: Whether or not the transactions contemplated hereby
are consummated, the Borrower hereby agrees to
indemnify and hold harmless the Bank and its
respective directors, officers, employees and
affiliates (each, an "indemnified person") from and
against any and all losses, claims, damages,
liabilities (or actions or other proceedings
commenced or threatened in respect hereof) and
expenses that arise out of, result from or in any
way relate to this commitment letter or the
provision of the Facility, and to reimburse each
indemnified person, upon its demand, for any legal
or other expenses (including the allocated cost of
in-house counsel) incurred in connection with
investigating, defending or participating in any
such loss, claim, damage, liability or action or
other proceeding (whether or nor such indemnified
person is party to any action or proceeding out of
which any such expenses arise), other than any of
the foregoing claimed by any indemnified person to
the extent incurred by reason of the gross
negligence or willful misconduct of such person. The
Bank shall not be responsible or liable to the
Borrower or any other person for any consequential
damages which may be alleged. The obligation
contained in this paragraph will survive the closing
of the Facility.
Whether or not any of the credit facilities
described herein are extended to the Borrower, or a
credit agreement or other document is executed, the
Borrower shall pay and reimburse the Bank,
immediately upon demand, for all costs and out-of-
pocket expenses (including the allocated costs of
in-house counsel) expended or incurred by the Bank
in connection with the negotiation, preparation,
administration (including waivers and amendments),
and enforcement of this commitment letter and the
loan documents contemplated hereby.
<PAGE>
EXHIBIT (g)(1)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
DANAHER CORPORATION, a Delaware :
corporation, and PQR ACQUISITION :
CORP., a Delaware corporation, :
:
Plaintiff, :
:
v. : C.A. No.
:
EXIDE ELECTRONICS GROUP, :
INC., a Delaware corporation, :
CONRAD A. PLIMPTON, JAMES A. :
RISHER, LANCE L. KNOX, JAMES E. :
FOWLER, RALF R. BOER, RON E. :
DOGGETT, DAVID J. McLAUGHLIN, :
STIG STENDAHL and WAYNE L. :
CLEVENGER, :
:
Defendants. :
VERIFIED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
--------------------------------------------------------
Plaintiffs Danaher Corporation ("Danaher") and PQR Acquisition Corp.
("PQR"), upon knowledge as to themselves and upon information and belief as to
all other matters, allege for their verified complaint as follows:
NATURE OF THE ACTION
--------------------
1. Plaintiffs bring this action against Exide Electronics Group, Inc.
("Exide") and the members of the Exide board of directors (the "Board" or the
"Individual Defendants") for injunctive and declaratory relief to
<PAGE>
prevent the Defendants from interfering with the ability of Exide's stockholders
to realize the substantial benefits offered by PQR's announced offer to purchase
all outstanding shares of Exide for $20 in cash (the "Offer") -- a premium of
72% over Exide's share price on June 11, the day Danaher first contacted Exide.
2. Specifically, Plaintiffs seek (i) to compel the redemption of rights
("Rights") issued pursuant to Exide's stockholder's rights plan (the "Poison
Pill"), (ii) to compel the Board to render the Delaware Business Combination
Statute inapplicable to the proposed purchase, (iii) to compel the Board to call
a special meeting of its stockholders, (iv) to enjoin the Board from taking any
action that would impede or interfere with the Offer or the exercise by Exide's
stockholders of their franchise, and (v) to enjoin the Board from taking any
actions inconsistent with their fiduciary obligations to Exide's stockholders.
3. By refusing to deal in good faith with the Plaintiffs in negotiating an
acquisition of Exide by PQR, and by erecting significant new barriers to the
Offer in response to the Plaintiffs' expressions of interest in such an
acquisition, the Exide Board has breached its fiduciary duties to Exide's
stockholders.
2
<PAGE>
BACKGROUND OF THE OFFER
-----------------------
4. On June 12, 1997, Plaintiff PQR delivered to Exide a letter (the
"Proposal") proposing an acquisition of Exide by PQR, for cash consideration
equalling at least the equivalent of $20 per share of Exide common stock for all
of Exide's equity securities -- a 72% premium over the preceding day's $11.625
closing price for a share of Exide common stock.
5. In connection with the Proposal, and in reliance on certain
provisions of Exide's by-laws, PQR sent Exide a letter requesting that a special
meeting be held thirty to forty days following Exide's receipt of requests for
such a meeting from a majority of any class of Exide's stockholders. PQR also
informed Exide that it had taken steps to commence a solicitation (the
"Solicitation") of appointments of designated agents to call a special meeting
of Exide's shareholders (the "Special Meeting") at which, among other things,
PQR would propose that the holders of Exide common and preferred stock (i)
increase the size of Exide's board of directors from 9 to 19, (ii) elect 10
nominees of PQR as Exide directors (who would then constitute a majority of the
Exide board) and (iii) repeal any by-laws or amendments thereto adopted by
3
<PAGE>
the Board after December 21, 1989, the date of the most recent publicly
disclosed by-laws.
6. The Proposal made clear that PQR strongly prefers a negotiated
transaction, and stands ready and willing to discuss all aspects of its proposal
with Exide.
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.
* * *
We are sure you appreciate the seriousness of our
interest in Exide and our strong preference for a negotiated
transaction.
7. At all times, PQR has sought to negotiate in a flexible,
friendly, straightforward and confidential manner with Exide. Before delivering
the Proposal, Steven Rales, the Chairman of Danaher, attempted several
4
<PAGE>
times personally to contact Conrad Plimpton, the Chairman of Exide, but Mr.
Plimpton did not return repeated calls.
8. In the days following delivery of the Proposal, Exide's Board
purported to consider negotiating with PQR and Danaher. While Exide's advisors
claimed to be willing to provide financial data to the Plaintiffs in order to
permit them to refine and potentially increase the Proposal, they conditioned
access to that data on PQR and Danaher's agreement to onerous and unreasonably
lengthy "standstill" and confidentiality agreements. When Danaher and PQR
objected to these conditions, Exide's advisors asked whether Danaher and PQR
preferred a "bloody war."
9. Moreover, at the same time that Exide's CEO was agreeing to meet
with Danaher's CEO, Exide's advisors were making plans to erect new and even
more substantial barriers to an acquisition of Exide than had previously
existed.
10. Specifically, on June 24, Exide's counsel delivered a letter to
counsel for PQR and Danaher, enclosing "amended and restated By-laws of Exide"
(the "Amended By-laws"), which were adopted by the Exide Board on June 23 -- 11
days after receipt by Exide of the Proposal and notice of the Solicitation.
5
<PAGE>
11. The Amended By-laws substantially impair the ability of any Exide
shareholder to request a special meeting of shareholders. Specifically, the
Board adopted amendments that add 1,000,000 shares -- all of which had already
been contractually obligated to vote with the Board -- to the number of shares
of which a majority is required to call a special meeting. The Board also
significantly enhanced its own ability to delay a special meeting by erecting a
number of new and elaborate procedural hurdles. The end result of the Amended
By-laws is that the Board can unilaterally impede the exercise of the
shareholder franchise and delay a special meeting by a minimum of 107 days, or
more than three and one-half months.
12. Despite the Exide Board's unilateral action in adopting the
Amended By-laws, the Plaintiffs continued to seek a negotiated transaction.
Plaintiffs offered as much as $22 per share of Exide common stock for all of
Exide's equity securities subject to confidential due diligence and
negotiations. In response, Exide requested a guarantee that Plaintiffs would
commence an offer at $22 per share if the parties failed to negotiate a mutually
satisfactory transaction. Plaintiffs agreed to this term; however, Exide then
refused to furnish any
6
<PAGE>
financial information or enter into reasonable and appropriate confidentiality
and standstill agreements.
13. In light of these facts, it has become apparent that the Board is
committed to the rejection of any acquisition proposal by the Plaintiffs, and
that it will take all available steps to prevent, delay, block or otherwise
interfere with any such acquisition, as well as any exercise by the Exide
stockholders of their franchise in connection with any such acquisition.
14. Accordingly, on July 9, 1997, PQR announced its intention to
commence a tender offer for all equity securities of Exide for the equivalent of
$20 cash for each share of Exide common stock.
15. The Offer (and the Proposal before it) represent unique and
compelling opportunities for Exide's stockholders to realize value for their
shares far above values available in the market.
16. Notwithstanding the attractiveness of the Offer and the Proposal,
however, Exide continues effectively to refuse to negotiate terms of an
acquisition of Exide by Plaintiffs. Moreover, the Board has available various
defensive measures -- including the Poison Pill, the Delaware Business
Combination Statute, 8 Del. C. (Section) 203 ("Section 203"), certain provisions
-------
of its certifi-
7
<PAGE>
cate of incorporation, and the Amended By-Laws -- which may be used to block the
Offer, and to deprive the Exide stockholders of their fundamental rights as
owners of the company.
17. Given the nature of the Offer and Proposal, and the substantial
value they offer to Exide's stockholders, the Board should not be allowed to
deprive its stockholders of the opportunity to decide upon the merits of the
Offer for themselves. The adoption of the Amended By-Laws, and any use of
Exide's antitakeover devices or other defensive measures against the Offer,
constitute an unreasonable response to the Offer in violation of the Board's
fiduciary duties to Exide's stockholders. Moreover, the adoption of the by-law
amendments is an unlawful manipulation of the corporate machinery that will
disenfranchise Exide shareholders and entrench the current Board.
THE PARTIES
-----------
18. Plaintiff PQR is a Delaware corporation, and is the owner of 100
shares of Exide's common stock. PQR is an indirect wholly-owned subsidiary of
Plaintiff Danaher. The principal executive offices of PQR and Danaher are
located in Washington, D.C. PQR's immediate parent, DH Holdings, a Delaware
corporation, is a direct
8
<PAGE>
wholly-owned subsidiary of Danaher, and is the beneficial owner of 397,300
shares of Exide's common stock, or approximately 4% of the outstanding shares.
19. Defendant Exide is a Delaware corporation with its principal
executive offices located in Raleigh, North Carolina. Exide is a manufacturer
of computer-related equipment; directly or through its subsidiaries, Exide is a
leading manufacturer of uninterruptible power supplies, which are used, among
other things, to guard against ill effects -- such as data loss -- from an
unexpected loss of power to electronic equipment. As of February 11, 1997,
Exide had outstanding 10,049,543 shares of common stock and 1,000,000 shares of
preferred stock.
20. Defendant Conrad A. Plimpton ("Plimpton") has been a director and
Chairman of the Board since 1982. Plimpton also served as secretary of Exide
from 1982 through 1991.
21. Defendant James A. Risher has been a director of Exide since 1986
and also currently serves as President and Chief Executive Officer of Exide.
22. Defendants Lance L. Knox, James E. Fowler, Ralf R. Boer, Ron E.
Doggett, David J. McLaughlin, Stig Stendahl and Wayne Clevenger are currently
directors of
9
<PAGE>
Exide and have been directors of Exide at all times relevant to this action.
FACTUAL ALLEGATIONS COMMON TO ALL COUNTS
----------------------------------------
The Offer
- ---------
23. As outlined above, the Board has recently terminated its
negotiations and refused to discuss and fairly consider the Proposal; and,
despite PQR's express invitation to do so, the Board has declined to further
negotiate with PQR regarding alternative transactions to the Proposal.
Accordingly, although it still strongly preferred (and continues to prefer) a
friendly, negotiated transaction, on July 9, 1997, PQR announced its intention
to commence the Offer for all equity securities of Exide for the equivalent of
$20 cash for each share of Exide common stock.
24. The terms of the Offer are straightforward and non-coercive.
Exide stockholders who tender their shares into the Offer will receive not less
than the equivalent of $20 cash per common share. Moreover, the Offer makes
clear that if it is successful, non-tendering stockholders will promptly receive
the same amount they would have received had they tendered:
The purpose of the Offer is to acquire control
of, and the entire equity interest in, [Exide].
[Danaher] currently intends
10
<PAGE>
to propose and seek to have [Exide] consummate, as soon
as practicable, following the consummation of the Offer,
a merger or other transaction (the "Proposed Merger")
pursuant to which each then outstanding share of [stock]
would be converted into the right to receive an amount
in cash equal to the price per share of [stock] paid [to
tendering stockholders] pursuant to the Offer.
25. Thus, so long as it is clear that the Exide Board is not seeking
to block or delay completion of the Proposed Merger, stockholders will face no
improper coercion to tender, nor will there be any risk of unequal treatment as
a consequence of deciding not to tender their shares pursuant to the Offer.
The Proposal and the Offer
- --------------------------
26. On June 12, 1997, PQR delivered to Exide the Proposal to purchase
Exide. In the Proposal letter, PQR repeatedly made clear that it was ready to
discuss and negotiate any and all terms of the Proposal. In fact, during the
course of the discussions with Exide's representatives (which ultimately proved
to have been conducted by Exide's representatives in bad faith), Plaintiffs made
clear that they were prepared to pay an additional $2 per share subject to
confidential due diligence and negotiations.
27. The Offer, which is not contingent on financing, represents a
unique and compelling opportunity
11
<PAGE>
to enhance value for stockholders of both PQR and Exide. It is non-coercive and
non-discriminatory; it poses no threat to Exide's corporate policy and
effectiveness; it is fair to the Exide stockholders; and it represents a
substantial premium over the market price of Exide common stock immediately
prior to the public announcement of the Offer.
28. The Offer does contain certain ordinary conditions: (i) the valid
tender of sufficient shares such that PQR and Danaher's combined holdings
constitute at least a majority of the shares outstanding on a fully diluted
basis on the date of the purchase; (ii) the redemption of the Rights by the
Exide Board or, alternatively, PQR's having been satisfied that the Rights have
been otherwise rendered inapplicable to the Offer; and (iii) Board approval of
the Offer and Proposed Merger for purposes of 8 Del. C. (Section) 203 or,
-------
alternatively, PQR's having been satisfied that Section 203 is otherwise
inapplicable to the Proposed Merger.
29. Thus, the Offer cannot be completed successfully unless the Board
agrees to remove Exide's anti-takeover devices.
12
<PAGE>
Exide's Poison Pill
- -------------------
30. As currently formulated, Exide's Poison Pill effectively allows
the Board unilaterally to block acquisitions by third parties -- even those,
such as the Offer, providing substantial benefits to Exide's stockholders.
Unless the Rights issued pursuant to the Poison Pill are redeemed or the Poison
Pill is declared inapplicable to PQR, the Poison Pill will effectively entrench
the present directors of Exide and prevent Exide's stockholders from reaping the
benefits of the Offer.
31. Upon information and belief, the Board does not intend to redeem
the Rights, or otherwise make the Poison Pill inapplicable to the Offer.
Exercise of the Rights would substantially dilute the holdings of PQR and make
the Offer prohibitively expensive. Accordingly, the Offer cannot be completed
unless the Board redeems the Rights or amends the Poison Pill to make it
inapplicable to the Offer. Failure to take such actions would effectively and
unilaterally prevent the Exide stockholders from deciding upon the merits of the
Offer for themselves.
Delaware Business Combination Statute
- -------------------------------------
32. Section 203 of the Delaware General Corporation Law, entitled
"Business Combinations with Inter-
13
<PAGE>
ested Stockholders," applies to any Delaware corporation that has not opted out
of the statute's coverage. Exide has not opted out of the statute's coverage.
33. Section 203 was designed to impede coercive and inadequate tender
and exchange offers. Section 203 provides that if a person acquires 15% or more
of a corporation's voting stock (thereby becoming an "interested stockholder"),
such interested stockholder may not engage in a "business combination" with the
corporation (defined to include a merger or consolidation) for three years after
the interested stockholder becomes an interested stockholder, unless (i) prior
to the 15% acquisition, the board of directors has approved either the
acquisition or the business combination; (ii) the interested stockholder
acquires 85% of the corporation's voting stock in the same transaction in which
it crosses the 15% threshold; or (iii) on or subsequent to the date of the 15%
acquisition, the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders (and not by written
consent) by the affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested stockholder.
14
<PAGE>
34. Application of Section 203 to the Offer, which is neither
coercive nor inadequate, would delay completion and consummation of the proposed
acquisition for at least three years. Accordingly, stockholders of Exide would
lose the value of the 72% premium that the Offer represents for at least three
years. Additionally, any number of events could occur within those three years
which would prevent consummation of the Offer altogether.
35. Upon information and belief, the Board intends to refuse to
exempt the Offer from the restrictions of Section 203. Section 203 should not
be used by the Board to obstruct the Offer, which is non-coercive and non-
discriminatory, offers Exide's stockholders a substantial premium for their
shares, and poses no threat to the interests of Exide's stockholders or Exide's
corporate policy and effectiveness.
The June 23, 1997 By-Law Amendments
- -----------------------------------
36. On June 23, 1997, in response to the Solicitation, the Exide
Board amended Exide's bylaws to substantially impair the ability of Exide
shareholders to call a Special Meeting.
37. First, Section 5 of the Exide By-laws was amended to increase the
percentage of shareholders required to request a Special Meeting. Specifically,
this
15
<PAGE>
section now requires the request of the owners of a majority of all issued and
outstanding shares, including both common and preferred, to call a Special
Meeting, as opposed to the owners of a majority of any class, as this section
previously required. Significantly, all of the 1,000,000 shares of preferred
---
outstanding are contractually obligated to vote with the Board. Thus, the
percentage of shares of common required under the new provision is approximately
55.4%, as compared to the former 50% requirement.
38. In addition, the Board amended Section 5 to include complex
Request Record Date and Meeting Record Date procedures, which have the net
effect of allowing the Board to delay a Special Meeting, and thus the exercise
of the shareholder's voting rights, for a minimum of 107 days, or three and one-
half months. Specifically, the amended Section 5 now requires shareholders to
request a Request Record Date, which the Board can schedule for as many as 17
days after the date of such a request. After a Request Record Date has been
set, and the valid requests of a majority of the owners of all issued and
outstanding shares have been certified by a recognized independent inspector of
elections, which can provide an additional significant delay, the Board can
delay the
16
<PAGE>
Special Meeting by 90 days simply by failing to act. Thus, from the date of the
newly imposed first step, the request of a Request Record Date, the Board can
frustrate the voting rights of Exide shareholders for 107 days, in addition to
delay inherent in the certification process.
39. Furthermore, the Board amended the by-laws to include new notice
provisions for all shareholder business or nominations for the election of
directors at a Special Meeting. As these detailed requirements were not in
effect when PQR began the Solicitation, it must now restart the process, causing
still more delay.
40. As a result of the Amended By-laws, and even if Plaintiffs
immediately comply with the Amended By-law procedures, the Exide Board can
- -----------
unilaterally prevent a Special Meeting from being held until at least October
24, 1997.
DECLARATORY RELIEF
------------------
41. The court may grant the declaratory relief sought herein pursuant
to 10 Del. C. (Section) 6501. The Board has demonstrated its unwillingness to
-------
consider any acquisition proposal from the Plaintiffs, and therefore will
neither redeem the Rights nor amend the Poison Pill to make it inapplicable to
the Offer, nor approve the Offer for purposes of Section 203. Similarly, the
Board has
17
<PAGE>
taken action to impede the Solicitation and impair the voting rights of Exide's
stockholders. Such actions, or inactions, of the Board demonstrate that there
is a substantial controversy among the parties.
42. Granting of the requested declaratory relief will serve the
public interest by affording relief from uncertainty and by avoiding delay, and
will conserve judicial resources by avoiding piecemeal litigation.
IRREPARABLE INJURY
------------------
43. Failure to redeem the Rights, to amend the Poison Pill to make it
inapplicable to the Offer, and to approve the Offer for purposes of Section 203
will prevent PQR from proceeding with the Offer. Similarly, the recent
amendment of Exide's by-laws will impede the Solicitation and materially delay
the Special Meeting, thereby impairing the voting rights of all Exide
stockholders, including PQR. The resulting injury to Plaintiffs, and to all
Exide's stockholders, will not be compensable in money damages, and Plaintiffs
have no adequate remedy at law.
18
<PAGE>
COUNT I
-------
Declaratory and Injunctive Relief: The Poison Pill
--------------------------------------------------
44. Plaintiffs repeat and reallege each and every allegation set
forth in paragraphs 1 through 43 as if fully set forth herein.
45. The Exide Board stands in a fiduciary relationship with PQR in
its capacity as an Exide stockholder. As fiduciaries, the directors owe PQR the
highest duties of care, loyalty and good faith.
46. The Offer is non-coercive and non-discriminatory; it is fair to
Exide stockholders; it poses no threat to Exide's corporate policy and
effectiveness; and it represents a substantial premium over the unaffected
market price of Exide common stock.
47. Refusal by the Exide Board to redeem the Rights or to amend the
Poison Pill to make it inapplicable to the Offer constitutes a violation of its
fiduciary duties.
48. Plaintiffs seek (i) a declaration that failure to redeem the
Rights or to amend the Poison Pill to make it inapplicable to the Offer is a
breach of fiduciary duty, and (ii) an injunction compelling Exide to redeem the
Rights or to amend the Poison Pill to make it inapplicable to the Offer.
19
<PAGE>
49. Plaintiffs have no adequate remedy at law.
COUNT II
--------
Declaratory and Injunctive Relief:
----------------------------------
Injury to Shareholder Voting Rights
-----------------------------------
50. Plaintiffs repeat and reallege each and every allegation set
forth in paragraphs 1 through 49 as if fully set forth herein.
51. The recent action by the Exide Board to amend the By-laws to
prevent or delay the Special Meeting, particularly after learning of the
intention of PQR to solicit agent designations to call a Special Meeting,
constitutes an unlawful manipulation of the corporate machinery and will result
in the unlawful entrenchment of the current Board. There is no compelling
justification for such actions by the Board, which will impair the exercise of
stockholder voting rights.
52. Plaintiffs seek (i) a declaration that the adoption of any
defensive measure by the Board, including the Amended By-laws, which has the
effect of impeding, thwarting, frustrating or interfering with the Offer and/or
Solicitation a breach of fiduciary duty; (ii) an order invalidating the Amended
By-laws; and (iii) an injunction prohibiting Exide from adopting any defensive
measure which has the effect of impeding, thwarting,
20
<PAGE>
frustrating or interfering with the Offer and Solicitation, and requiring Exide
to call a Special Meeting and to refrain from taking any actions to delay or
impair the opportunity of Exide stockholders to exercise their voting rights.
53. Plaintiffs have no adequate remedy at law.
COUNT III
---------
Declaratory and Injunctive Relief: Section 203
----------------------------------------------
54. Plaintiffs repeat and reallege each and every
allegation of paragraphs 1 through 53 as if fully set forth herein.
55. Pursuant to Section 203, the Board can render the statute
inapplicable to the Offer by approving the Offer. Failure to approve the Offer
and to take any other steps necessary to render Section 203 inapplicable to the
Offer constitutes a breach of fiduciary duty.
56. Plaintiffs seek (i) a declaration that failure to render Section
203 inapplicable to the Offer is a breach of fiduciary duty, and (ii) an
injunction compelling the Board to render Section 203 inapplicable to the Offer
by approving the Offer.
57. Plaintiffs have no adequate remedy at law.
21
<PAGE>
COUNT IV
--------
Declaratory and Injunctive Relief:
----------------------------------
Anti-Takeover Devices
---------------------
58. Plaintiffs repeat and reallege each and every allegation set
forth in paragraphs 1 through 57 as if fully set forth herein.
59. Adoption of any defensive measures against the Offer and/or
Solicitation -- including, but not limited to, amendments to the Poison Pill,
amendments to Exide's by-laws, alternative transactions with substantial break-
up fees and/or lock-ups, friendly stock issuances, or executive compensation
arrangements with substantial payments triggered by a change in control --that
would have the effect of impeding the Offer or Solicitation, or that would
prevent a future board of directors from complying with its fiduciary duties,
would itself be a violation of fiduciary duties owed to Exide's stockholders.
60. Plaintiffs seek (i) a declaration that the adoption by the Board
of any such defensive measure is a breach of fiduciary duty and (ii) an
injunction prohibiting Exide from adopting any such defensive measure.
61. Plaintiffs have no adequate remedy at law.
22
<PAGE>
WHEREFORE, Plaintiffs respectfully request that this Court enter an
order:
a. declaring that failure to redeem the Rights or to otherwise amend
the Poison Pill to make it inapplicable to the Offer, and to render Section 203
inapplicable to the Offer, is inconsistent with the best interests of Exide's
stockholders and constitutes a breach of fiduciary duty;
b. declaring that the adoption of any defensive measure which has the
effect of impeding, thwarting, frustrating or interfering with the Offer or
Solicitation is inconsistent with the best interests of Exide's stockholders and
constitutes a breach of fiduciary duty;
c. enjoining the Board from adopting any defensive measure which has
the effect of impeding, thwarting, frustrating or interfering with the Offer or
Solicitation;
d. enjoining the Board from taking any action to delay, impede,
postpone or thwart the voting rights of Exide shareholders;
e. enjoining the Board from tilting the playing field or
discriminating against PQR in favor of other bidders;
23
<PAGE>
f. invalidating the Amended By-laws;
g. compelling the Board to call a special meeting of its
stockholders;
h. compelling the Board to treat PQR and all prospective bidders
equally;
i. compelling the Board to redeem the Rights associated with the
Poison Pill or to amend the Poison Pill so as to make it inapplicable to the
Offer, and enjoining the Board from taking any action to implement, distribute
or recognize any rights or powers with respect to said Rights (other than to
redeem the Rights), and from taking any actions pursuant to the Poison Pill that
would dilute or interfere with PQR's voting rights or in any other way
discriminate against PQR in the exercise of its rights with respect to its Exide
stock;
j. compelling the Board to approve the Offer for the purposes of
Section 203, and enjoining the Board from taking any actions to enforce or apply
Section 203 that would impede, thwart, frustrate or interfere with the Offer or
Solicitation;
k. awarding Plaintiffs their costs and expenses in this action,
including reasonable attorneys' fees; and
24
<PAGE>
l. granting such other and further relief as the Court deems
just and proper.
/s/ Thomas J. Allingham
------------------------
Thomas J. Allingham II
George F. Fraley III
Skadden, Arps, Slate,
Meagher & Flom LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
(302) 651-3000
Attorneys for Plaintiffs
OF COUNSEL:
Robert E. Zimet (Of the New York Bar)
Skadden, Arps, Slate,
Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
DATED: July 9, 1997
25
<PAGE>
VERIFICATION
------------
I, Daniel Comas, having been duly sworn according to law,
verify as follows.
1. I am an authorized agent of the plaintiffs Danaher
Corporation and PQR Acquisition Corp. (the "Plaintiffs"), with
specific authority to make this verification.
2. I have personally reviewed the attached Complaint For
Declaratory And Injunctive Relief (the "Complaint"), filed by the
Plaintiffs in the Court of Chancery of the State of Delaware.
3. Insofar as the matter contained in the Complaint concerns the
acts and deeds of the Plaintiffs, I know the allegations to be true
and correct.
<PAGE>
4. Insofar as the matter contained in the Complaint
concerns the acts and deeds of persons or entities other than
the plaintiff, I believe the allegations to be true and correct.
/s/ Daniel L. Comas
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Sworn to and subscribed before
me this 9th day of July, 1997.
/s/ Andrea M. Cunningham
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Notary Public
My Commission expires: March 14, 2001
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