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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION,
WASHINGTON, D.C. 20549
------------------
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------
ZING TECHNOLOGIES, INC.
(Name of Subject Company (issuer))
IRC ACQUISITION CORPORATION (OFFEROR)
a wholly-owned subsidiary of
INTERNATIONAL RECTIFIER CORPORATION
(Names of Filing Persons (identifying status as offeror, issuer or other person)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
989601109
(CUSIP Number of Class of Securities)
L. Michael Russell, Esq.
International Rectifier Corporation
233 Kansas Street
El Segundo, CA 90245
(310) 726-8000
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on behalf of filing persons)
COPY TO:
Kendall Bishop, Esq.
O'Melveny & Myers LLP
1999 Avenue of the Stars, Suite 700
Los Angeles, CA 90067
(310) 553-6700
February 7, 2000
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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$37,502,116 $7,500
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* Estimated for purposes of calculating the amount of the filing fee only. The
amount assumes the purchase of 2,441,544 shares of common stock of Zing
Technologies, Inc. at a price per share of $15.36 in cash (the "Offer
Price"). Such number of shares represents all such shares outstanding as of
January 26, 2000 on a fully-diluted basis. The amount of the filing fee
calculated in accordance with Rule 0-11 of the Securities Exchange Act of
1934, as amended, equals 1/50 of 1% of the transaction value.
/ / Check the 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.
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Amount previously paid: N/A Form or Registration No.: N/A
Filing party: N/A Date Filed: N/A
</TABLE>
/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
/X/ third-party tender offer subject to Rule 14d-1.
/ / issuer tender offer subject to Rule 13e-4.
/ / going-private transaction subject to Rule 13e-3.
/ / amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: / /
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SCHEDULE TO
This Tender Offer Statement on Schedule TO ("Schedule TO") relates to the
offer by IRC Acquisition Corporation, a New York corporation (the "Purchaser")
and a direct, wholly-owned subsidiary of International Rectifier Corporation, a
Delaware corporation ("Parent"), to purchase all of the outstanding shares of
common stock, par value $0.01 per share (the "Shares"), of Zing Technologies,
Inc. at a purchase price of $15.36 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated February 7, 2000 and in the related Letter of
Transmittal (which, together with any supplements or amendments, collectively
constitute the "Offer"), copies of which are attached as Exhibits (a)(1)(A) and
(a)(1)(B) hereto, respectively. The item numbers and responses thereto below are
in accordance with the requirements of Schedule TO.
ITEM 1. SUMMARY TERM SHEET.
The information set forth in the Offer to Purchase under "Summary Term
Sheet," is incorporated herein by reference.
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ITEM 2. SUBJECT COMPANY INFORMATION.
(a) The name of the subject company is Zing Technologies, Inc.,
a New York corporation (the "Company"). The address of the
Company's principal executive offices is 115 Stevens Avenue,
Valhalla, NY 10595. Its telephone number is 914-747-7474.
(b) The class of equity securities to which this Schedule TO
relates is Common Stock, par value $0.01 per Share of the
Company. The information set forth in the Offer to Purchase
under "Introduction" is incorporated herein by reference.
(c) The information set forth in the Offer to Purchase under
Section 6 ("Price Range of Shares; Dividends") is
incorporated herein by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a), (b), (c)(1, 2, 5) This Statement is being filed by the Purchaser and Parent.
The information set forth in the Offer to Purchase under
"Introduction", in Section 8 ("Certain Information
Concerning the Purchaser and Parent") and in Schedule I to
the Offer to Purchase is incorporated herein by reference.
(c)(3-4) During the last five years, none of the Purchaser, Parent
or, to the best of their knowledge, any of the persons
listed in Schedule I to the Offer to Purchase (i) has been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) was a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order
enjoining further violations of or prohibiting activities
subject to federal or state securities laws or finding any
violation with respect to such laws.
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ITEM 4. TERMS OF THE TRANSACTION.
(a)(1)(i - viii, xii), The information set forth in the Offer to Purchase under
(a)(2)(i - iv, vii). "Introduction", Section 1 ("Terms of the Offer; Expiration
Date"), Section 2 ("Acceptance for Payment and Payment for
Shares"), Section 3 ("Procedure for Tendering Shares"),
Section 4 ("Withdrawal Rights"), Section 5 ("Certain Tax
Considerations"), Section 11 ("Purpose of the Offer; Plans
for the Company; Merger Agreement; Shareholder Support
Agreement; Stock Option Agreement; Confidentiality
Agreement"), Section 14 ("Certain Conditions of the Offer"),
and Section 15 ("Certain Legal Matters and Regulatory
Approval") is incorporated herein by reference.
(a)(1)(ix) Not applicable.
(a)(1)(x) Not applicable.
(a)(1)(xi) Not applicable.
(a)(2)(v) Not applicable.
(a)(2)(vi) Not applicable.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(a) No transactions, other than those described in paragraph
(b), have occurred during the past two years between the
filing person and the Company or any of its affiliates that
are not natural persons.
(b) The information set forth in the Offer to Purchase under
"Introduction", Section 10 ("Background of the Offer;
Contacts with the Company") and Section 11 ("Purpose of the
Offer; Plans for the Company; Merger Agreement; Shareholder
Support Agreement; Stock Option Agreement; Confidentiality
Agreement") is incorporated herein by reference.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a) The information set forth in the Offer to Purchase under
"Introduction", Section 10 ("Background of the Offer;
Contacts with the Company") and Section 11 ("Purpose of the
Offer; Plans for the Company; Merger Agreement; Shareholder
Support Agreement; Stock Option Agreement; Confidentiality
Agreement") is incorporated herein by reference.
(c) The information set forth in the Offer to Purchase under
"Introduction", Section 10 ("Background of the Offer;
Contacts with the Company"), Section 11 ("Purpose of the
Offer; Plans for the Company; Merger Agreement; Shareholder
Support Agreement; Stock Option Agreement; Confidentiality
Agreement"), Section 12 ("Dividends and Distributions"), and
Section 13 ("Effect of the Offer on the Market for the
Shares; NASDAQ National Market Listing and Exchange Act
Registration") is incorporated herein by reference.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a), (b), (d) The information set forth in the Offer to Purchase under
Section 9 ("Source and Amount of Funds") is incorporated
herein by reference.
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2
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ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a), (b) The information set forth in the Offer to Purchase under
"Introduction", Section 8 ("Certain Information Concerning
the Purchaser and Parent"), Section 10 ("Background of the
Offer; Contacts with the Company") and Section 11 ("Purpose
of the Offer; Plans for the Company; Merger Agreement;
Shareholder Support Agreement; Stock Option Agreement;
Confidentiality Agreement") is incorporated herein by
reference.
ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
(a) The information set forth in the Offer to Purchase under
"Introduction" and Section 16 ("Fees and Expenses") is
incorporated herein by reference.
ITEM 10. FINANCIAL STATEMENTS.
(a), (b) The Purchaser and Parent do not believe that any of the
financial statements of either of them or of any of their
affiliates are material to a decision by shareholders of the
Company whether to sell, tender or hold Shares because the
consideration offered consists solely of cash, the offer is
not subject to any financing condition, Parent is a public
reporting company under Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, that files
reports electronically on EDGAR, and the offer is for all
outstanding securities of the subject class.
ITEM 11. ADDITIONAL INFORMATION.
(a) The information set forth in the Offer to Purchase under
"Introduction", Section 11 ("Purpose of the Offer; Plans for
the Company; Merger Agreement; Shareholder Support
Agreement; Stock Option Agreement; Confidentiality
Agreement"), Section 13 ("Effect of the Offer on the Market
for the Shares, NASDAQ National Market Listing and Exchange
Act Registration") and Section 15 ("Certain Legal Matters
and Regulatory Approvals") is incorporated herein by
reference.
(b) The information set forth in the Offer to Purchase and the
related Letter of Transmittal, copies of which are filed as
Exhibits (a)(1)(A) and (a)(1)(B) hereto, respectively, is
incorporated herein by reference.
ITEM 12. EXHIBITS.
(a)(1)(A) Offer to Purchase, dated February 7, 2000.
(a)(1)(B) Letter of Transmittal.
(a)(1)(C) Notice of Guaranteed Delivery.
(a)(1)(D) Form of letter from Morrow & Co., Inc. to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(1)(E) Form of letter to clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(1)(F) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
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(a)(1)(G) Joint press release issued by Parent and the Company on
January 28, 2000 (incorporated by reference to the Schedule
TO-C filed January 28, 2000).
(b) Credit Agreement, dated July 1, 1999, by and among Parent,
as borrower, and the initial lenders named therein, and
Sanwa Bank California, as Syndication Agent, and Banque
Nationale de Paris, as Sole Arranger, Administrative Agent
and Issuing Bank (incorporated by reference to the Form 8-K
filed by Parent on July 6, 1999).
(d)(1) Agreement and Plan of Reorganization, dated January 27,
2000, by and among the Company, the Purchaser and Parent.
(d)(2) Stock Option Agreement, dated January 27, 2000, by and among
the Company and the Purchaser.
(d)(3) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and John F. Catrambone.
(d)(4) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and Robert E. Schrader
IRA.
(d)(5) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and Robert and Deborah
Schrader.
(d)(6) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and The Robert Schrader
1998 Grantor Retained Annuity Trust.
(d)(7) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and Robert Schrader.
(d)(8) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and John Allwein.
(d)(9) Incentive Compensation Agreement, dated January 27, 2000, by
and between Parent and John Catrambone.
(d)(10) Confidentiality Agreement, dated August 27, 1999, by and
between Parent and Fleet National Bank.
(g) Not applicable.
(h) Not applicable.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Not applicable.
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4
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
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IRC ACQUISITION CORPORATION
By: /s/ L. Michael Russell
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Name: L. Michael Russell
--------------------------------------
Its: Vice President
--------------------------------------
INTERNATIONAL RECTIFIER CORPORATION
By: /s/ Alexander Lidow
--------------------------------------
Name: Alexander Lidow
--------------------------------------
Its: Chief Executive Officer
--------------------------------------
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Dated: February 7, 2000
5
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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(a)(1)(A) Offer to Purchase, dated February 7, 2000.
(a)(1)(B) Letter of Transmittal.
(a)(1)(C) Notice of Guaranteed Delivery.
(a)(1)(D) Form of letter from Morrow & Co., Inc. to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(1)(E) Form of letter to clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(1)(F) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(1)(G) Joint press release issued by Parent and the Company on
January 28, 2000 (incorporated by reference to the Schedule
TO-C filed on January 28, 2000).
(b) Credit Agreement, dated July 1, 1999, by and among Parent,
as borrower, and the initial lenders named therein, and
Sanwa Bank California, as Syndication Agent, and Banque
Nationale de Paris, as Sole Arranger, Administrative Agent
and Issuing Bank (incorporated by reference to the Form 8-K
filed by Parent on July 6, 1999).
(d)(1) Agreement and Plan of Reorganization, dated January 27,
2000, by and among the Company, the Purchaser and Parent.
(d)(2) Stock Option Agreement, dated January 27, 2000, by and among
the Company and the Purchaser.
(d)(3) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and John F. Catrambone.
(d)(4) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and Robert E. Schrader
IRA.
(d)(5) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and Robert and Deborah
Schrader.
(d)(6) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and The Robert Schrader
1998 Grantor Retained Annuity Trust.
(d)(7) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and Robert Schrader.
(d)(8) Shareholder Support Agreement, dated January 27, 2000, by
and between Parent, the Purchaser and John Allwein.
(d)(9) Incentive Compensation Agreement, dated January 27, 2000, by
and between Parent and John Catrambone.
(d)(10) Confidentiality Agreement, dated August 27, 1999, by and
between Parent and Fleet National Bank.
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6
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ZING TECHNOLOGIES, INC.
AT
$15.36 NET PER SHARE
BY
IRC ACQUISITION CORPORATION
A DIRECT WHOLLY-OWNED SUBSIDIARY OF
INTERNATIONAL RECTIFIER CORPORATION
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MARCH 6, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THIS OFFER IS BEING MADE IN ACCORDANCE WITH AN AGREEMENT AND PLAN OF
REORGANIZATION (THE "MERGER AGREEMENT"), DATED AS OF JANUARY 27, 2000, BY AND
AMONG ZING TECHNOLOGIES, INC., A NEW YORK CORPORATION (THE "COMPANY"), IRC
ACQUISITION CORPORATION, A NEW YORK CORPORATION (THE "PURCHASER"), AND
INTERNATIONAL RECTIFIER CORPORATION, A DELAWARE CORPORATION ("PARENT"). THE
BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER, THE
MERGER, THE STOCK OPTION AGREEMENT (EACH AS DEFINED BELOW), AND THE PURCHASE OF
SHARES CONTEMPLATED BY THE OFFER AND THE STOCK OPTION AGREEMENT, AND HAS
DETERMINED THAT THE OFFER DESCRIBED HEREIN IS IN THE BEST INTEREST OF THE
COMPANY'S SHAREHOLDERS AND RECOMMENDS THAT ALL SHAREHOLDERS TENDER THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES OF COMMON STOCK, $0.01 PAR VALUE, OF THE COMPANY (THE "SHARES") WHICH
WOULD REPRESENT AT LEAST TWO-THIRDS OF THE OUTSTANDING SHARES OF THE COMPANY ON
A FULLY-DILUTED BASIS (THE "MINIMUM CONDITION") AND (2) THE EXPIRATION OR
TERMINATION OF ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED, BEFORE THE EXPIRATION DATE OF THE OFFER.
THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS. SEE
SECTION 14.
IN THE EVENT THAT MORE THAN TWO-THIRDS AND LESS THAN 90% OF THE OUTSTANDING
SHARES OF THE COMPANY ARE TENDERED PURSUANT TO THE OFFER AND NOT WITHDRAWN, THE
PURCHASER MAY, UNDER CERTAIN CIRCUMSTANCES DESCRIBED BELOW, EXERCISE THE TOP-UP
STOCK OPTION (AS DEFINED BELOW).
THE OFFER IS NOT CONDITIONED UPON PARENT OR THE PURCHASER OBTAINING
FINANCING.
<PAGE>
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 AND
(A) MAIL OR DELIVER IT, TOGETHER WITH THE CERTIFICATE(S) EVIDENCING THE
TENDERED SHARES AND ANY OTHER REQUIRED DOCUMENTS, TO THE DEPOSITARY, OR
(B) TENDER SUCH SHARES PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER
SET FORTH IN SECTION 3; OR
(II) REQUEST SUCH SHAREHOLDER'S BROKER, DEALER, COMMERCIAL BANK, TRUST
COMPANY OR OTHER NOMINEE TO EFFECT THE TRANSACTION FOR SUCH SHAREHOLDER.
A SHAREHOLDER WHOSE SHARES ARE REGISTERED IN THE NAME OF A BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST CONTACT SUCH BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IF SUCH SHAREHOLDER
DESIRES TO TENDER SHARES SO REGISTERED.
A SHAREHOLDER WHO DESIRES TO TENDER SHARES AND WHOSE CERTIFICATES EVIDENCING
SUCH SHARES ARE NOT IMMEDIATELY AVAILABLE, OR WHO CANNOT COMPLY WITH THE
PROCEDURES FOR BOOK-ENTRY TRANSFER DESCRIBED IN THIS OFFER TO PURCHASE ON A
TIMELY BASIS, MAY TENDER SUCH SHARES BY FOLLOWING THE PROCEDURES FOR GUARANTEED
DELIVERY SET FORTH IN SECTION 3.
QUESTIONS AND REQUESTS FOR ASSISTANCE, OR FOR ADDITIONAL COPIES OF THIS
OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL OR OTHER OFFER MATERIALS, MAY BE
DIRECTED TO THE INFORMATION AGENT AT ITS ADDRESS AND TELEPHONE NUMBER SET FORTH
ON THE BACK COVER OF THIS OFFER TO PURCHASE. SHAREHOLDERS MAY ALSO CONTACT
BROKERS, DEALERS, COMMERCIAL BANKS OR TRUST COMPANIES FOR ASSISTANCE CONCERNING
THE OFFER.
FEBRUARY 7, 2000
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TABLE OF CONTENTS
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PAGE
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SUMMARY TERM SHEET....................................................... 1
INTRODUCTION............................................................. 6
THE OFFER................................................................ 8
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE......................... 8
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES............... 11
SECTION 3. PROCEDURE FOR TENDERING SHARES.............................. 12
SECTION 4. WITHDRAWAL RIGHTS........................................... 15
SECTION 5. CERTAIN TAX CONSIDERATIONS.................................. 15
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS............................ 15
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY.................. 16
SECTION 8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT..... 18
SECTION 9. SOURCE AND AMOUNT OF FUNDS.................................. 19
SECTION 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.......... 20
SECTION 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; MERGER 23
AGREEMENT; SHAREHOLDER SUPPORT AGREEMENT; STOCK OPTION
AGREEMENT; CONFIDENTIALITY AGREEMENT......................
SECTION 12. DIVIDENDS AND DISTRIBUTIONS................................. 35
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NASDAQ 35
NATIONAL MARKET LISTING AND EXCHANGE ACT REGISTRATION.....
SECTION 14. CERTAIN CONDITIONS OF THE OFFER............................. 36
SECTION 15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.............. 38
SECTION 16. FEES AND EXPENSES........................................... 42
SECTION 17. MISCELLANEOUS............................................... 42
SCHEDULE I ............................................................. S-1
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SUMMARY TERM SHEET
IRC Acquisition Corporation is offering to purchase all of the outstanding
common stock of Zing Technologies, Inc. for $15.36 per share in cash. Through a
question and answer format, this Summary Term Sheet will explain to you, the
shareholders of Zing Technologies, Inc., the important terms of the proposed
transaction. This explanation will assist you in deciding whether to tender your
shares to IRC Acquisition Corporation. This Summary Term Sheet serves only as an
introduction, and we urge you to carefully read the remainder of the Offer to
Purchase and the accompanying Letter of Transmittal in order to fully educate
yourself on the details of the proposed transaction. Cross-referenced text
refers to sections within the Offer to Purchase, unless otherwise noted.
WHO IS OFFERING TO BUY THE COMMON STOCK OF ZING TECHNOLOGIES, INC.?
- Our name is IRC Acquisition Corporation. We are a New York corporation
formed for the purpose of making a cash tender offer for all of the
outstanding shares of common stock of Zing Technologies, Inc. ("Zing"). We
are a direct, wholly-owned subsidiary of International Rectifier
Corporation, a Delaware corporation, whose shares are listed on the New
York Stock Exchange. See "Introduction."
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER? HOW MUCH IS
IRC ACQUISITION CORPORATION OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
- We are offering to purchase all of the outstanding shares of common stock
of Zing for $15.36 per share, net to you, in cash. See "Introduction."
WHAT IS THE PURPOSE OF THE TENDER OFFER?
- The purpose of the tender offer is to enable International Rectifier
Corporation to acquire control of Zing. See "Introduction" and Section 11
("Purpose of the Offer; Plans for the Company; Merger Agreement;
Shareholder Support Agreement; Stock Option Agreement; Confidentiality
Agreement").
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
- We are not obligated to purchase any shares that you validly tender unless
the number of shares validly tendered and not withdrawn before the
expiration date of the offer represents, in the aggregate, at least
two-thirds of the outstanding shares of Zing.
- We are also not obligated to purchase any shares which you validly tender
if, among other things:
- Zing and its subsidiary, Omnirel LLC, do not continue to operate their
businesses according to ordinary and past practices,
- there is a material adverse change in Zing, Omnirel LLC or their
businesses, or
- the applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, has not expired or been
terminated.
- We are also not obligated to purchase any shares you validly tender if any
other conditions as set forth in Section 14 ("Certain Conditions to the
Offer") and discussed in Section 1 ("Terms of the Offer; Expiration Date")
are not satisfied or waived.
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HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
- Our offer to purchase your shares expires at 12:00 midnight, New York City
time, on Monday, March 6, 2000. This is called the initial expiration
date. See Section 1 ("Terms of the Offer; Expiration Date").
CAN IRC ACQUISITION CORPORATION EXTEND THE OFFER PAST THIS EXPIRATION DATE AND
UNDER WHAT CIRCUMSTANCES?
- Yes, we can extend the offer past the initial expiration date. If we
choose to do so, you will be able to tender your shares until 12:00
midnight, New York City time, on the new expiration date.
- Several terms, which were negotiated by the parties, define the
circumstances in which we can extend the offer, including:
- if any conditions to the offer have not been satisfied or waived,
- for any period required by a Securities and Exchange Commission
rule or regulation, or
- for ten business days if all conditions are satisfied and shareholders
have tendered more than 67% but less than 90% of the outstanding shares
of common stock of Zing.
- See Section 1 ("Terms of the Offer; Expiration Date").
HOW DO I FIND OUT IF IRC ACQUISITION CORPORATION EXTENDS THE OFFER?
- We will announce an extension no later than 9:00 a.m., New York City time,
on the business day after a scheduled expiration date by issuing a press
release to the Dow Jones News Service. See Section 1 ("Terms of the Offer;
Expiration Date").
HOW DO I GET PAID FOR MY TENDERED SHARES?
- We will pay for the shares accepted for payment by depositing the purchase
price with ChaseMellon Shareholder Services, L.L.C., (who is the
depositary in this offer.) The depositary will act as your agent and will
transmit to you the payment for all shares accepted for payment. See
Section 2 ("Acceptance for Payment and Payment for Shares").
HOW DO I TENDER MY SHARES?
- To tender your shares, you must deliver your share certificates, together
with a completed letter of transmittal, to the depositary on or prior to
the expiration date. If your shares are held in street name, you can
tender the shares by your nominee through The Depository Trust Company.
- If you cannot get all of the documents or instruments that you are
required to deliver to the depositary, you can still tender your shares if
a bank, broker, dealer, credit union, savings association or other entity
which is a member in good standing of a recognized Medallion Signature
Guarantee Program or any other eligible institution guarantees that the
depositary will receive the missing items within three NASDAQ National
Market trading days. For the tender to be valid, the depositary must
actually receive the missing items within that three day period.
- See Section 3 ("Procedure for Tendering Shares").
2
<PAGE>
UNTIL WHAT TIME CAN I WITHDRAW MY PREVIOUSLY TENDERED SHARES?
- You can withdraw your tendered shares at any time on or prior to a
scheduled expiration date. After the offer expires, the tender is
irrevocable unless we have not accepted for payment your shares by
April 7, 2000. At and after this date, you can withdraw your tendered
shares until we accept them for payment. See Section 4 ("Withdrawal
Rights").
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
- To withdraw your shares, you must deliver written, telegraphic or
facsimile transmission notice of withdrawal to the depositary that
specifies your name, the number of shares being withdrawn, and the name of
the registered holder of the shares, if different from the person who
tendered the shares. See Section 4 ("Withdrawal Rights").
WHAT ARE THE TAX CONSEQUENCES OF THE SALE OF SHARES TO IRC ACQUISITION
CORPORATION?
- The sale of shares to us is a taxable transaction for federal, and
possibly state, income tax purposes. In general, you will recognize gain
or loss equal to the difference between the tax basis of your shares and
the amount of cash that you receive from us for the shares.
- We encourage you to consult with your own tax advisor about the particular
effect the tender will have on you.
- See Section 5 ("Certain Tax Considerations").
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
- On January 27, 2000, the last full trading day before we announced the
offer, the closing price per share of Zing common stock on the NASDAQ
National Market was $15.00. On February 4, the last full trading day
before we commenced the offer, the closing price per share of Zing common
stock on the NASDAQ National Market was $15.125.
- Between December 31, 1999 and February 4, 2000, the closing sale price of
a share of Zing common stock ranged between $12.00 and $15.906.
- We encourage you to obtain a current market quotation for your shares
before deciding whether to tender your shares.
- See Section 6 ("Price Range of Shares; Dividends").
WHAT IS THE TOTAL AMOUNT OF FUNDS THAT IRC ACQUISITION CORPORATION WILL REQUIRE
TO CONSUMMATE THE PROPOSED TRANSACTION?
- We estimate that International Rectifier Corporation and we will require
approximately $37.5 million to consummate the tender offer and merger. See
Section 9 ("Source and Amount of Funds"). After payment of debt owed by
Zing and Omnirel LLC, we anticipate that Zing will have approximately $9.0
million in cash at the time the offer terminates.
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DOES IRC ACQUISITION CORPORATION HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
- Yes, we will obtain all necessary funds through capital contributions or
advances by International Rectifier Corporation. International Rectifier
Corporation has sufficient funds from cash and credit agreements to fully
fund the offer and the subsequent merger. International Rectifier
Corporation has received all required approvals from the lenders who fund
these credit agreements. See Section 9 ("Source and Amount of Funds").
IS IRC ACQUISITION CORPORATION'S FINANCIAL CONDITION RELEVANT TO MY DECISION ON
WHETHER TO TENDER SHARES IN THE OFFER?
- We do not think our financial condition is relevant to your decision
whether to tender shares and accept the offer because: the offer consists
solely of cash, the offer is not subject to any financing condition,
International Rectifier Corporation has adequate cash and credit
facilities available, International Rectifier Corporation is a public
reporting company that files reports electronically on EDGAR, and the
offer is for all outstanding shares of Zing's common stock.
WHAT DOES THE ZING BOARD OF DIRECTORS THINK OF THE TENDER OFFER AND MERGER?
- On January 19, 2000, the Board of Directors of Zing unanimously adopted
resolutions determining that the offer, the merger, the merger agreement,
and all other agreements to the tender offer and merger were fair to you
and in your best interests.
- Your Board of Directors recommends that you accept the offer and tender
your shares.
- See "Introduction" and Section 11 ("Purpose of the Offer; Plans for the
Company; Merger Agreement; Shareholder Support Agreement; Stock Option
Agreement; Confidentiality Agreement").
HAVE ANY SHAREHOLDERS ALREADY AGREED TO TENDER THEIR SHARES?
- Yes, shareholders holding shares representing approximately 57% of the
outstanding shares of common stock of Zing entered into Shareholder
Support Agreements in which each has agreed to tender all of his or her
shares in the offer.
- See "Introduction" and Section 11 ("Purpose of the Offer; Plans for the
Company; Merger Agreement; Shareholder Support Agreement; Stock Option
Agreement; Confidentiality Agreement").
IF AT LEAST TWO-THIRDS OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WHAT
HAPPENS TO ZING AFTER THE OFFER?
- International Rectifier Corporation, Zing, and we have entered into a
merger agreement that provides for IRC Acquisition Corporation to merge
with and into Zing. The merger is dependent on shareholders owning at
least two-thirds of Zing's outstanding stock voting in favor of the
transaction. If the tender offer is successful, we will own at least
two-thirds of Zing's outstanding shares and intend to vote these shares in
favor of the merger.
- Therefore, if we acquire at least two-thirds of the outstanding shares of
Zing pursuant to the offer, we will merge with and into Zing. Once the
merger takes place, Zing will no longer be publicly owned. Subject to any
appraisal rights properly exercised under New York law, upon
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consummation of the merger, (i) each outstanding share will convert into
and represent the right to receive $15.36 per share in cash (or any higher
price per share that is paid in the tender offer) and (ii) Zing will
become a wholly-owned subsidiary of International Rectifier Corporation.
In such case, Zing common stock will no longer be traded through the
NASDAQ National Market or on a securities exchange.
- See "Introduction", Section 13 ("Effect of the Offer on the Market for the
Shares"), and, for a more complete discussion of appraisal rights, see
Section 15 ("Certain Legal Matters and Regulatory Approvals").
IF I DECIDE NOT TO TENDER BUT THE TENDER OFFER IS SUCCESSFUL, WHAT WILL HAPPEN
TO MY SHARES?
- If the tender offer is successful and the subsequent merger occurs,
shareholders who do not tender will receive the same amount of cash per
share that they would have received if they had tendered, subject to any
rights of appraisal which they properly exercise under New York law.
Therefore, if you do not tender and do not exercise appraisal rights, and
if the merger occurs, the only difference to you between tendering in the
offer and not tendering is that you will receive payment LATER without any
interest.
- See Section 13 ("Effect of the Offer on the Market for the Shares") and
Section 15 ("Certain Legal Matters and Regulatory Approvals").
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
- Shareholders can call Morrow & Co. at (800) 566-9061. Morrow & Co. is
acting as the information agent for the tender offer.
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TO: THE HOLDERS OF COMMON STOCK OF
ZING TECHNOLOGIES, INC.:
INTRODUCTION
IRC Acquisition Corporation, a New York corporation (the "Purchaser") and a
direct, wholly-owned subsidiary of International Rectifier Corporation, a
Delaware corporation ("Parent"), hereby offers to purchase all of the
outstanding shares of Common Stock, par value $0.01 per share (the "Shares"), of
Zing Technologies, Inc., a New York corporation (the "Company"), at a purchase
price of $15.36 per Share (such price, or such higher price per Share as may be
paid in the Offer, being referred to herein as the "Offer Price"), net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, together with any supplements or amendments, collectively
constitute the "Offer"). Tendering shareholders who are record owners of their
Shares and tender directly to the Depositary (as defined below) 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 transfer
and sale of Shares pursuant to the Offer. Shareholders who hold their Shares
through a broker or bank should consult such institution as to whether it
charges any service fee. The Purchaser will pay all fees and expenses of
ChaseMellon Shareholder Services, L.L.C., as Depositary (the "Depositary") and
Morrow & Co., Inc., as Information Agent (the "Information Agent"), incurred in
connection with the Offer. See Section 16.
The Offer is conditioned upon, among other things, (1) there having been
validly tendered and not properly withdrawn prior to the expiration of the Offer
a number of Shares which would represent at least two-thirds of the total number
of outstanding Shares (assuming all outstanding options to purchase Shares are
cashed out for the difference between the Offer Price and the option exercise
price) (the "Minimum Condition") and (2) any waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (the "HSR
Act") having expired or been terminated. The Company has informed the Purchaser
that as of January 26, 2000, there were 2,406,837 Shares issued and outstanding,
34,707 Shares of Common Stock reserved for issuance under the Company's
outstanding stock option agreements, and no other stock of the Company
outstanding or committed to be issued. Based on this information, and assuming
all holders of outstanding options to purchase Shares of Common Stock will have
entered into agreements to accept cash in lieu of the right to exercise such
options effective on the date the Purchaser purchases the Shares pursuant to the
Offer, the Purchaser believes that the Minimum Condition will be satisfied if
the Purchaser acquires at least 1,604,558 Shares in the Offer. Parent does not
directly or indirectly hold any Shares. Certain other conditions to the Offer
are described in Section 14.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS" OR THE
"BOARD") HAS UNANIMOUSLY APPROVED THE OFFER, THE MERGER, AND THE PURCHASE OF
SHARES BY THE PURCHASER CONTEMPLATED BY THE OFFER AND THE STOCK OPTION AGREEMENT
AND HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER (INCLUDING THE
OFFER PRICE OF $15.36 PER SHARE IN CASH) ARE IN THE BEST INTEREST OF THE
COMPANY'S SHAREHOLDERS, AND RECOMMENDS THAT ALL SHAREHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
The Offer is being made pursuant to the Agreement and Plan of
Reorganization, dated as of January 27, 2000 (the "Merger Agreement"), by and
among the Company, Parent and the Purchaser. The Merger Agreement provides,
among other things, that as soon as practicable after the consummation of the
Offer and satisfaction or, to the extent permitted under the Merger Agreement,
waiver of all conditions to the Merger and in accordance with the applicable
provisions of the New York Business Corporation Law ("NYBCL"), the Purchaser
will be merged with and into the
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Company (the "Merger"). Upon consummation of the Merger, the Company will be the
surviving corporation of the Merger and a direct wholly-owned subsidiary of
Parent. Thereupon, each outstanding Share (other than treasury Shares and Shares
held by shareholders, if any, who properly exercise appraisal rights) will be
converted into and represent the right to receive $15.36 in cash, or any higher
price that may be paid per Share in the Offer, without interest. See Section 11.
The Merger shall become effective upon the filing of a Certificate of Merger
with the Secretary of State of the State of New York or at such time thereafter
as is provided in the Certificate of Merger (the "Effective Time").
The purpose of the Offer, the Merger and the Merger Agreement is to enable
Parent to acquire control of the entire equity interest of the Company. The
Merger Agreement provides that, promptly following the purchase of and payment
for a number of Shares that satisfies the Minimum Condition pursuant to the
Offer, and from time to time thereafter, Parent shall be entitled to designate
on the Board of Directors, on each committee of the Board of Directors (other
than any committee established to take action under the Merger Agreement or
related agreements), and on the board of directors and each committee of Omnirel
LLC, the Company's only subsidiary, up to such number of directors as will give
the Purchaser representation on such board or committee equal to the product of
(i) the total number of directors on the Board and (ii) the percentage that the
number of Shares owned by the Purchaser and its affiliates bears to the total
number of outstanding Shares; provided, however, that until the Effective Time,
there shall be at least two directors on Company's Board of Directors who are
directors on the date of the Merger Agreement and who are not officers of the
Company (the "Continuing Directors"). In the Merger Agreement, the Company,
subject to certain limitations (see Section 11), has agreed to take all action
necessary to cause the Purchaser's designees to be elected or appointed as
directors of the Company, including increasing the size of the Board or securing
the resignation of incumbent directors or both. The Merger Agreement also
provides that certain Company actions prior to the Effective Time must be
approved by the Continuing Directors (see Section 11).
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including, if required by NYBCL, the approval and adoption
of the Merger Agreement by the requisite vote of the shareholders of the
Company. See Section 11, Section 14 and Section 15. Under the Company's
Certificate of Incorporation and NYBCL, the holders of Shares have one vote for
each Share owned of record. Under the Company's Certificate of Incorporation and
NYBCL, a two-thirds vote of the then outstanding Shares is required to approve
and adopt the Merger Agreement and the Merger. Consequently, if the Minimum
Condition is satisfied, the Purchaser will have sufficient voting power to
approve and adopt the Merger Agreement and the Merger without the vote of any
other shareholders.
Under NYBCL, if the Purchaser acquires, pursuant to the Offer or otherwise,
at least 90% of the then outstanding Shares, the Purchaser will be able to
consummate the Merger, without a vote of the Company's shareholders. In such
event, Parent and the Purchaser will take all necessary and appropriate action
to cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of the Company's shareholders. If, however, the
Purchaser does not acquire at least 90% of the then outstanding Shares pursuant
to the Offer or otherwise, and a vote of the Company's shareholders is required
under NYBCL, a longer period of time will be required to effect the Merger. See
Section 11 and Section 15.
Concurrently with the execution of the Merger Agreement, and as a condition
and inducement to Parent's and the Purchaser's entering into the Merger
Agreement, the Company entered into a Stock Option Agreement dated as of the
date of the Merger Agreement (the "Stock Option Agreement") with the Purchaser.
Pursuant to the Stock Option Agreement, the Company granted to the Purchaser an
irrevocable option (the "Top-Up Stock Option") to purchase that number of Shares
(the "Top-Up Option Shares") equal to the number of Shares that, when added to
the number of Shares owned by
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the Purchaser and Parent immediately following consummation of the Offer, will
constitute 90% of the Shares then outstanding (assuming the issuance of the
Top-Up Option Shares) at a purchase price per Top-Up Option Share equal to the
Offer Price, subject to the terms and conditions set forth in the Stock Option
Agreement, including, without limitation, that the Top-Up Stock Option would not
be exercisable if the number of Shares subject thereto exceeds the number of
authorized Shares available for issuance. If the Top-Up Stock Option is
exercised by the Purchaser (resulting in the Purchaser and Parent owning 90% or
more of the Shares then outstanding), the Purchaser will be able to effect a
short-form merger under NYBCL, subject to the terms and conditions of the Merger
Agreement. For a description of the Stock Option Agreement, see Section 11.
Concurrently with the execution of the Merger Agreement, and as a condition
and inducement to Parent's and the Purchaser's entering into the Merger
Agreement, John Catrambone, Robert E. Schrader IRA, Robert and Deborah Schrader,
The Robert Schrader 1998 Grantor Retained Annuity Trust, Robert Schrader, and
John Allwein each entered into a Shareholder Support Agreement (each, a
"Shareholder Support Agreement") with the Purchaser dated as of the date of the
Merger Agreement pursuant to which, among other things, each agreed to tender
his or her Shares in the Offer. These shareholders own approximately 57% of the
outstanding shares of the Company. For a description of the Shareholder Support
Agreements, see Section 11.
On January 19, 2000, the Board of Directors of the Company unanimously
adopted resolutions determining that the Offer, the Merger, the Merger
Agreement, and the purchase of Shares by the Purchaser contemplated by the Offer
and the Stock Option Agreement are fair to and in the best interests of the
Company's shareholders and recommending that the Company's shareholders accept
the Offer and tender their Shares pursuant to the Offer. Accordingly,
Section 912 of NYBCL (which restricts the ability of an "interested shareholder"
from engaging in a "business combination" with a New York corporation for a
period of five years following the date on which such shareholder became an
interested shareholder) is inapplicable to the Offer and the Merger. See
Section 15.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
THE OFFER
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject
to the conditions of the Offer (including, if the Offer is extended or amended,
the terms and conditions of such extension or amendment), the Purchaser will,
and Parent will cause it to, accept for payment and pay for all Shares validly
tendered on or prior to the Expiration Date, and not properly withdrawn as
permitted by Section 4 below, that the Purchaser is obligated to purchase. For
purposes of the Offer, the term "Expiration Date" means 12:00 midnight, New York
City time, on Monday, March 6, 2000 (the "Initial Expiration Date"), unless and
until the Purchaser, in its sole discretion (subject to the terms of the Merger
Agreement), 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, shall expire.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition and the expiration or termination of all waiting periods
imposed by the HSR Act. The Offer is also subject to certain other conditions
set forth in Section 14 below. If any of these conditions are not satisfied or
if any events specified in Section 14 have occurred or are determined by the
Purchaser to have occurred, prior to the Expiration Date, the Purchaser reserves
the right (but is not obligated), subject to the terms of the Merger Agreement
and whether or not any Shares have theretofore been accepted for payment, to
waive any of the conditions of the Offer and to make any change in the terms or
conditions of the Offer in its sole discretion; provided, however, that no
change or waiver may be
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made, without the prior written consent of the Company, that decreases the price
per Share payable in the Offer, decreases the number of Shares sought in the
Offer, changes the form of consideration payable in the Offer, or imposes or
alters the conditions to the Offer in addition to or from those set forth in
Section 14 or in a manner that is otherwise materially adverse to the holders of
the Shares.
The Merger Agreement provides that, notwithstanding the foregoing, without
the consent of the Company, the Purchaser will have the right to extend the
Offer beyond the Initial Expiration Date only in the following events: (i) from
time to time if, at the Initial Expiration Date (or extended expiration date of
the Offer, if applicable) any of the conditions to the Offer shall not have been
satisfied or waived, until such conditions are satisfied or waived, (ii) for any
period required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "Commission") or the staff thereof
applicable to the Offer or any period required by applicable law, or (iii) if
all conditions to the Offer are satisfied or waived and the Shares validly
tendered and not withdrawn pursuant to the Offer represent more than two-thirds
of the total issued and outstanding Shares on a fully diluted basis, the
Purchaser may extend the Offer for a period not to exceed ten business days;
provided that as of the date the Offer is extended, all conditions previously
imposed (other than certain of the Company's obligations regarding its
operations and its cooperation with the Purchaser) shall be deemed satisfied as
of such extended expiration date, whether any such condition is in fact
satisfied on such dates.
In addition to the Purchaser's rights to extend and amend the Offer subject
to the provisions of the Merger Agreement, the Purchaser (i) will not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, pay for, and may delay the acceptance for payment
of, or payment for, any tendered shares, and (ii) may terminate the Offer or
amend the Offer as to any Shares not then paid for, if any of the conditions
specified in Section 14 exists. The Purchaser acknowledges that
(a) Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Purchaser to pay the consideration offered or
return the Shares tendered promptly after the termination or withdrawal of the
Offer, and (b) the Purchaser may not delay acceptance for payment of, or payment
for (except as provided in clause (i) of the first sentence of this paragraph),
any Shares upon the occurrence of any of the conditions specified in Section 14
without extending the period of time during which the Offer is open.
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by a public announcement thereof, with any
announcement of an extension to be made no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
Except as provided by applicable law (including Rules 14d-4(c), 14d-6(d) and
14e-1 under the Exchange Act, which require that material changes be promptly
disseminated to shareholders in a manner reasonably designed to inform them of
such changes) and without limiting the manner in which the Purchaser may choose
to make any public announcement, the Purchaser shall have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a press release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer or if it
waives a material condition of the Offer, the Purchaser will extend the Offer to
the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange
Act. Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, the Purchaser should decide to decrease the number of Shares being sought
(provided that a decrease would require the Company's consent) or to increase or
decrease the Offer Price (provided that a decrease would require the Company's
consent), such decrease in the number of Shares being sought or such increase or
decrease in the Offer Price will be applicable to all shareholders whose Shares
are accepted for payment pursuant to the Offer. If at the time notice of any
such decrease in the number of Shares being sought or increase or decrease in
the Offer Price is first published, sent or given to holders of such Shares, the
Offer is scheduled to expire prior to the tenth business day from and including
the date that such notice is first so published, sent or given, then the
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Offer will be extended at least until the expiration of such tenth business day
period. For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or a federal holiday and consists of the time period from
12:01 a.m. through 12:00 Midnight, New York City time.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT. During any extension of the Offer, all Shares previously tendered and
not withdrawn will remain tendered pursuant to the Offer, subject to the rights
of a tendering shareholder to withdraw his Shares. See Section 4.
Pursuant to Rule 14d-11 under the Exchange Act, Purchaser may, subject to
certain conditions, provide a subsequent offering period of from three business
days to twenty business days in length following the expiration of the Offer on
the Expiration Date ("Subsequent Offering Period"). A Subsequent Offering Period
would be an additional period of time, following the expiration of the Offer and
the purchase of Shares in the Offer, during which shareholders may tender Shares
not tendered into the Offer. A Subsequent Offering Period, if one is included,
is not an extension of the Offer which already will have been completed.
During a Subsequent Offering Period, tendering shareholders will not have
withdrawal rights and Purchaser will promptly purchase and pay for any Shares
tendered at the same price paid in the Offer. Rule 14d-11 provides that
Purchaser may provide a Subsequent Offering Period so long as, among other
things, (i) the initial twenty business days period of the Offer has expired;
(ii) the Purchaser offers the same form and amount of consideration for Shares
in the Subsequent Offering Period as in the Offer; (iii) the Purchaser accepts
and promptly pays for all securities tendered during the Offer prior to its
expiration; (iv) the Purchaser announces the results of the Offer, including the
approximate number and percentage of Shares deposited in the Offer, no later
than 9:00 a.m. Eastern time on the next business day after the Expiration Date
and immediately begins the Subsequent Offering Period; and (v) the Purchaser
immediately accepts and promptly pays for Shares as they are tendered during the
Subsequent Offering Period. In a public release, the Commission has expressed
the view that the inclusion of a Subsequent Offering Period would constitute a
material change to the terms of the Offer requiring the Purchaser to disseminate
new information to shareholders in a manner reasonably calculated to inform them
of such change sufficiently in advance of the Expiration Date (generally five
business days). In the event the Purchaser elects to include a Subsequent
Offering Period, it will notify shareholders of the Company consistent with the
requirements of the Commission.
THE PURCHASER DOES NOT CURRENTLY INTEND TO INCLUDE A SUBSEQUENT OFFERING
PERIOD IN THE OFFER, ALTHOUGH IT RESERVES THE RIGHT TO DO SO IN ITS SOLE
DISCRETION. PURSUANT TO RULE 14D-7 UNDER THE EXCHANGE ACT, NO WITHDRAWAL RIGHTS
APPLY TO SHARES TENDERED DURING A SUBSEQUENT OFFERING PERIOD WITH RESPECT TO
SHARES TENDERED IN THE OFFER AND ACCEPTED FOR PAYMENT. THE SAME CONSIDERATION,
THE OFFER PRICE, WILL BE PAID TO SHAREHOLDERS TENDERING SHARES IN THE OFFER OR
IN A SUBSEQUENT OFFERING PERIOD, IF ONE IS INCLUDED.
The Company has provided the Purchaser with the Company's shareholder list
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 whose names
appear on the Company's shareholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, 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.
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SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. 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
and not properly withdrawn on or prior to the Expiration Date promptly after the
Expiration Date provided that the conditions of the Offer set forth in Section
14, including, without limitation, the expiration or termination of the waiting
period applicable to the acquisition of Shares pursuant to the Offer under the
HSR Act, have been satisfied or waived prior to the Expiration Date. In
addition, subject to applicable rules of the Commission, the Purchaser expressly
reserves the right to delay acceptance for payment of, or payment for, Shares
pending receipt of any other regulatory approvals specified in Section 15.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn if, as 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. 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
tendering shareholders for the purpose of receiving payments from the Purchaser
and transmitting those payments to shareholders whose Shares have been accepted
for 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"), or
timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of
such Shares, if such procedure is available, into the Depositary's account at
The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to
the procedures set forth in Section 3, (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 3) in
connection with a book-entry transfer, and (iii) any other documents required by
the Letter of Transmittal. For a description of the procedure for tendering
Shares pursuant to the Offer, see Section 3. Accordingly, payment may be made to
tendering shareholders at different times if delivery of the Shares and other
required documents occur at different times.
If for any reason whatsoever acceptance for payment of or payment for any
Shares tendered pursuant to the Offer is delayed or the Purchaser is unable to
accept for payment or pay for Shares tendered pursuant to the Offer, then,
without prejudice to the Purchaser's rights set forth herein, the Depositary may
nevertheless, on behalf of the Purchaser, retain tendered Shares, and those
Shares may not be withdrawn except to the extent that the tendering shareholder
is entitled to exercise and duly exercises withdrawal rights as described in
Section 4, subject, however, to the Purchaser's obligation under Rule 14e-1(c)
under the Exchange Act to pay for Shares tendered or return those Shares
promptly after termination or withdrawal of the Offer.
If, prior to the Expiration Date, the Purchaser increases the consideration
offered to shareholders pursuant to the Offer, such increased consideration will
be paid to all shareholders whose Shares are purchased pursuant to the Offer,
even if those Shares were tendered prior to the increase in consideration.
The Purchaser reserves the right to transfer or assign, in whole at any time
or in part from time to time, to one or more of the Purchaser's affiliates, the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer or prejudice the rights of tendering shareholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
If any tendered Shares are not accepted for payment for any reason or if
Share Certificates are submitted for more Shares than are tendered, Share
Certificates evidencing unpurchased or untendered Shares will be returned (or,
in the case of Shares tendered by book-entry transfer into the Depositary's
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account at the Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, such Shares will be credited to an account maintained at the
Book-Entry Transfer Facility), without expense to the tendering shareholder, as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
SECTION 3. PROCEDURE FOR TENDERING SHARES.
VALID TENDER. Except as set forth below, in order for Shares to be validly
tendered pursuant to the Offer, (i) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed with any required signature
guarantees, or an Agent's Message in connection with a book-entry delivery of
Shares, and any other documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase on or prior to the Expiration Date, and either
(a) Share Certificates evidencing tendered Shares must be received by the
Depositary at such address, or (b) the Shares must be tendered pursuant to the
procedure for book-entry transfer described below and a Book-Entry Confirmation
must be received by the Depositary, in each case on or prior to the Expiration
Date, or (ii) the tendering shareholder must comply with the guaranteed delivery
procedures described below. The term "Agent's Message" means a message from the
Book-Entry Transfer Facility transmitted to, and received by, the Depositary
forming a part of a Book-Entry Confirmation, which states that (x) the
Book-Entry Transfer Facility has received an express acknowledgment from the
participant in the Book-Entry Transfer Facility tendering the Shares that are
the subject of the Book-Entry Confirmation, (y) the participant has received and
agrees to be bound by the terms of the Letter of Transmittal and (z) the
Purchaser may enforce such agreement against the participant.
If Share Certificates are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof) must
accompany each delivery.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of the Book-Entry Transfer
Facility may make book-entry delivery of Shares by causing the Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's transfer procedures. However, although delivery of Shares may be
effected through book-entry transfer at the Book-Entry Transfer Facility, a
Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed with any required signature guarantees, or an Agent's Message in
connection with a book-entry transfer, and any other documents required by the
Letter of Transmittal, must in any case be received by the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase on or prior
to the Expiration Date, or the tendering shareholder must comply with the
guaranteed delivery procedures described below. Delivery of documents to the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures does not constitute delivery to the Depositary.
SIGNATURE GUARANTEES. No signature guarantee is required for shares
tendered (i) by a registered holder of Shares who has not completed either the
box labeled "Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. All other tenders of shares must have the signatures on
the Letters of Transmittal guaranteed by a firm which is a bank, broker, dealer,
credit union, savings association or other entity which is a member in good
standing of a recognized Medallion Signature Guarantee Program or by any other
"eligible guarantor institution," as defined in Rule 17Ad-15 under the Exchange
Act (each of the foregoing, an "Eligible Institution"). See Instruction 1 of the
Letter of Transmittal. If a Share Certificate is registered in the name of a
person other than the person who signs the Letter of Transmittal, or if payment
is to be made, or a Share Certificate not accepted for payment or not tendered
is to be returned, to a person other than the registered holder(s), the Share
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<PAGE>
Certificate must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appears on
the Share Certificate, with the signature(s) on such Share Certificate or stock
powers guaranteed as provided above. See Instructions 1 and 5 of 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, time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date, or a shareholder cannot complete the
procedure for delivery by book-entry transfer on a timely basis, then such
shareholder's Shares may nevertheless be tendered, provided that all of the
following conditions are satisfied:
(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 herewith, is
received by the Depositary as provided below on or prior to the Expiration
Date; and
(iii) the Share Certificates evidencing all tendered Shares, in proper
form for transfer, or a Book-Entry Confirmation, together with 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) and any other documents required by the Letter
of Transmittal, are received by the Depositary within three NASDAQ National
Market trading days after the date of execution of the Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution and a representation that the shareholder
owns the Shares tendered within the meaning of, and that the tender of the
Shares effected thereby complies with, Rule 14e-4 under the Exchange Act, each
in the form set forth in the 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 (i) Share Certificates evidencing such Shares or a
Book-Entry Confirmation of the delivery of such Shares (if available), (ii) a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) or, in the case of a book-entry transfer, an Agent's Message, and
(iii) any other documents required by the Letter of Transmittal. Accordingly,
payment may not be made to all tendering shareholders at the same time and will
depend upon when Share Certificates are received by the Depositary or Book-Entry
Confirmations of tendered Shares are received in the Depositary's account at the
Book-Entry Transfer Facility.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION
AND RISK OF THE 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.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares pursuant to any of the procedures described above will be determined
by the Purchaser, in its sole discretion, which determination shall be final and
binding on all parties. The Purchaser reserves the absolute right to reject any
and all tenders determined by it not to be in proper form or the acceptance for
payment of which may, in the opinion of its counsel, be unlawful. The Purchaser
also reserves the absolute right to waive any defect or irregularity in any
tender of 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
13
<PAGE>
been validly made until all defects and irregularities have been cured or
waived. None of the Purchaser, Parent, any of their affiliates or assigns, the
Depositary, the Information Agent 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.
APPOINTMENT AS PROXY. By executing a Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints the Purchaser, its officers
and its designees, and each of them, as the shareholder's attorneys-in-fact and
proxies, with full power of substitution, in the manner set forth in the Letter
of Transmittal, to the full extent of such 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
issued or issuable in respect of the Shares on or after the date of this Offer
to Purchase). All such powers of attorney and proxies shall be considered
irrevocable and coupled with an interest in the tendered Shares. Such
appointment will be effective if, when and only to the extent that, the
Purchaser accepts such Shares for payment. Upon such acceptance for payment, all
prior powers of attorney and proxies given by the shareholder with respect to
the Shares (and such other Shares and securities) will, without further action,
be revoked, and no subsequent powers of attorney, proxies or written consents
may be given or executed (and if given or executed will not be deemed effective
with respect thereto by the shareholder). The Purchaser, its officers and its
designees will, with respect to the Shares (and such other Shares and
securities) for which such appointment is effective, be empowered to exercise
all voting and other rights of the shareholder as they in their sole discretion
may deem proper at any annual or special meeting of the Company's shareholders
or any adjournment or postponement thereof, by written consent in lieu of any
such meeting or otherwise. The Purchaser reserves the right to require that, in
order for Shares to be deemed validly tendered, immediately upon the Purchaser's
payment for such Shares, the Purchaser must be able to exercise full voting
rights with respect to such Shares and other securities, including voting at any
meeting of shareholders or acting by written consent without a meeting.
BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under the
"backup withholding" provisions of federal income tax law, the Depositary may be
required to withhold 31% of the amount of any payments of cash pursuant to the
Offer. In order to avoid backup withholding, each shareholder surrendering
Shares in the Offer to the extent not previously provided must provide the payor
of such cash with the 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 the shareholder is not subject to backup
withholding. Certain shareholders (including, among others, all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
If a shareholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on the shareholder and payment of cash to the shareholder pursuant to
the Offer may be subject to backup withholding. All shareholders surrendering
Shares pursuant to the Offer should complete and sign the Substitute Form W-9
included in 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 Depositary).
Non-corporate foreign shareholders should complete and sign 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 of the
Letter of Transmittal.
OTHER REQUIREMENTS. The tender of Shares pursuant to any one of the
procedures described above will constitute the tendering shareholder's
acceptance of the Offer, as well as the tendering shareholder's representation
and warranty that (i) such shareholder is the owner of the Shares within the
meaning of Rule 14e-4 promulgated under the Exchange Act, (ii) the tender of
such Shares complies with Rule 14e-4 and (iii) such shareholder has the full
power and authority to tender and assign the Shares tendered, as specified in
the Letter of Transmittal. The Purchaser's acceptance for payment of Shares
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.
14
<PAGE>
SECTION 4. WITHDRAWAL RIGHTS. Shares tendered pursuant to the Offer may be
withdrawn at any time on or prior to the Expiration Date. Thereafter, such
tenders are irrevocable, except that they may be withdrawn at any time after
April 7, 2000.
To be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary (in accordance with the
Offer) at one of its addresses set forth on the back cover of this Offer to
Purchase. Any 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, if different from that of the person who
tendered such Shares. If Share 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, the serial numbers shown on
such Share Certificates must be submitted to the Depositary and the signature(s)
on the notice of withdrawal must be guaranteed by an Eligible Institution,
unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares. Withdrawals of Shares may not be
rescinded. Any Shares properly withdrawn will thereafter be deemed not to have
been validly tendered for purposes of the Offer. However, withdrawn Shares may
be re-tendered at any time on or prior to the Expiration Date by following one
of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, Parent, any of their affiliates or assigns, the Depositary, the
Information Agent 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 5. CERTAIN TAX CONSIDERATIONS. Sales of Shares by shareholders of
the Company pursuant to the Offer will be taxable transactions for federal
income tax purposes and may also be taxable transactions under applicable state
and local and other tax laws. In general, a shareholder will recognize gain or
loss equal to the difference between the tax basis of his or her Shares and the
amount of cash received in exchange therefor. Such gain or loss will be capital
gain or loss if the Shares are capital assets in the hands of the shareholder
and will be long-term gain or loss if the holding period for the Shares is more
than one year as of the date of the sale of such Shares. The foregoing
discussion may not apply to shareholders who acquire their Shares pursuant to
the exercise of stock options or other compensation arrangements with the
Company or who are not citizens or residents of the United States or who are
otherwise subject to special tax treatment under the Internal Revenue Code of
1986, as amended (the "Code").
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. DUE TO THE INDIVIDUAL NATURE OF
TAX CONSEQUENCES, SHAREHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS
AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM,
INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY
STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS AND CHANGES IN SUCH TAX LAWS.
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS. On January 11, 2000, there
were 664 holders of record of the Company's Shares. The Company's Shares are
traded on the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") National Market ("NNM") under the symbol ZING. The
following table sets forth, for the periods indicated, the high and low closing
sale prices per Share as reported in the Company's Annual Report on Form 10-KSB
for the fiscal year ended June 30, 1999 (the "Company 10-KSB") with respect to
the fiscal years ended
15
<PAGE>
June 30, 1999 and June 30, 1998, and thereafter in published financial sources
and do not include commissions. To date, the Company has paid no dividends on
the Shares.
<TABLE>
<CAPTION>
LOW HIGH
-------- --------
<S> <C> <C>
CURRENT FISCAL YEAR ENDING JUNE 30, 2000
First Quarter............................................. $ 7.125 $ 9.187
Second Quarter............................................ 6.438 12.875
Third Quarter (through February 4, 2000).................. 12.000 15.906
FISCAL YEAR ENDED JUNE 30, 1999
First Quarter............................................. 7.437 8.875
Second Quarter............................................ 4.500 8.500
Third Quarter............................................. 6.000 8.875
Fourth Quarter............................................ 5.750 8.500
FISCAL YEAR ENDED JUNE 30, 1998
First Quarter............................................. 9.250 11.000
Second Quarter............................................ 7.750 10.500
Third Quarter............................................. 7.500 9.250
Fourth Quarter............................................ 7.500 9.000
</TABLE>
On January 27, 2000, the last full day of trading prior to the public
announcement of the transactions contemplated by the Merger Agreement, the
reported closing sales price per Share on the NNM was $15.00. On February 4,
2000, the last full day of trading prior to commencement of the Offer, the
reported closing sales price per Share on the NNM was $15.125.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL. The Company is a New York corporation with its headquarters
located at 115 Stevens Avenue, Valhalla, NY 10595. According to the Company's
10-KSB, the Company, through a wholly-owned operating subsidiary, Omnirel LLC,
engages in the manufacture and sale of "high reliability" multi-chip power
semiconductors, integrated power modules and packaged semiconductor components
in military, industrial and high-end commercial markets.
FINANCIAL INFORMATION. The following selected consolidated financial data
relating to the Company and its subsidiary has been taken or derived from the
audited financial statements contained in the Company 10-KSB and the unaudited
financial statements contained in the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1999 (the "Company 10-Q"). More
comprehensive financial information is included in the Company 10-KSB and
Company 10-Q and the other documents filed by the Company with the Commission,
and the financial data set forth below is qualified in its entirety by reference
to such reports and other documents including the financial statements (and the
notes thereto) contained therein. Such reports and other documents may be
examined and copies may be obtained from the offices of the Commission in the
manner set forth below.
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<PAGE>
ZING TECHNOLOGIES, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED
ENDED JUNE 30,
------------------- ------------------------------
9/30/99 9/30/98 1999 1998 1997
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATING DATA:
Net sales...................................... $ 6,002 $ 5,969 $25,362 $21,773 $21,300
Cost of sales.................................. 3,792 3,826 16,193 13,744 12,116
------- ------- ------- ------- -------
Gross profits.................................. 2,210 2,143 9,169 8,029 9,184
Selling, general and administrative expenses... 1,322 1,328 6,059 5,279 6,257
Research and development of product and process
technology................................... 446 426 1,853 1,843 1,773
Depreciation and amortization of property,
plant and equipment.......................... 148 155 578 571 603
Interest expense............................... 279 272 1,069 1,041 993
Interest and other (income) loss, net.......... (893) 53 (2,033) (2,409) (3,597)
------- ------- ------- ------- -------
Income (loss) before income taxes and item
shown below.................................. 908 (91) 1,649 1,704 3,155
Cost in connection with acquisition of minority
of subsidiary................................ 1,227
-------
Income (loss) before taxes..................... 908 (91) 1,649 1,704 1,928
Provision for taxes............................ 205 271 181 320
------- ------- ------- ------- -------
Net income (loss).............................. 703 (91) 1,378 1,523 1,608
Basic income (loss) per share.................. 0.29 (0.04) 0.57 0.60 0.64
Diluted income (loss) per share................ 0.29 (0.04) 0.56 0.60 0.64
BALANCE SHEET DATA (at end of period):
Total current assets........................... $32,974 $32,169 $32,169 $28,896 $30,645
Total assets................................... 40,819 39,890 39,890 36,171 38,007
Long-term debt, net of current portion......... 3,074 3,231 3,231 3,013 2,903
Shareholders' equity........................... 21,624 21,149 21,149 19,015 19,970
</TABLE>
Except as otherwise set forth in this Offer to Purchase, the information
concerning the Company contained herein has been furnished by the Company or has
been taken from or is based upon reports and other documents on file with the
Commission or otherwise publicly available. Although neither the Purchaser nor
Parent has any knowledge that would indicate that any statements contained
herein based upon such reports and documents are untrue, neither the Purchaser
nor Parent takes any responsibility for the accuracy, validity or completeness
of the information contained in such reports and other documents 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 but that are unknown to the
Purchaser or Parent.
AVAILABLE INFORMATION. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the information and reporting
requirements of the Exchange Act and in accordance therewith is obligated to
file periodic reports, proxy statements and other information with the
Commission 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
17
<PAGE>
granted to them, the principal holders of the Company's securities and any
material interest of such persons in transactions with the Company is required
to be disclosed in such proxy statements and distributed to the Company's
shareholders and filed with the Commission. These reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission located in Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and should also be available for inspection and copying
at prescribed rates at the regional offices of the Commission located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661,
and Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of
this material may also be obtained by mail, upon payment of the Commission's
customary fees, from the Commission's principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549. In addition, such material should also be
available for inspection at the offices of the NASD located at 1735 K. St.,
N.W., Washington, D.C., 20006.
SECTION 8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT.
GENERAL. The Purchaser, a newly incorporated New York corporation and a
direct wholly-owned subsidiary of Parent, was organized in connection with the
Offer and has not carried on any activities to date other than in connection
with the Offer and the Merger Agreement. Until immediately prior to the time the
Purchaser purchases Shares pursuant to the Offer, it is not anticipated that the
Purchaser will have any significant assets or liabilities or will engage in
activities other than those incident to its formation and capitalization and the
transactions contemplated by the Offer or the Merger. Because the Purchaser is a
newly formed corporation and has minimal assets and capitalization, no
meaningful financial information regarding the Purchaser is available. The
principal executive office of the Purchaser is located at 233 Kansas Street, El
Segundo, CA 90245, and the telephone number at such office is (310) 726-8000.
All outstanding shares of common stock of the Purchaser are owned by Parent.
Parent is a Delaware corporation with principal executive offices located at
233 Kansas Street, El Segundo, CA 90245, and the telephone number at such office
is (310) 726-8000. The principal business of Parent is the design and
manufacture of power semiconductors that refine electricity from wall outlets or
batteries into a more usable form, a process which Parent calls "power
conversion."
FINANCIAL INFORMATION. Because the only consideration in the Offer and
Merger is cash, and in view of the relatively small amount of consideration
payable in relation to the financial capability of Parent and its affiliates,
the Purchaser believes the financial condition of Parent, the Purchaser and
their affiliates is not material to a decision by a holder of Shares whether to
sell, tender or hold Shares pursuant to the Offer. However, consolidated
financial statements (including notes thereto) of Parent are contained in
Parent's Annual Report for the year ended June 30, 1999 (the "Parent Annual
Report") and in Parent's Quarterly Report for the quarter ended December 31,
1999 (the "Parent Quarterly Report"). Such reports and other documents may be
examined and copies may be obtained from the offices of the Commission in the
manner set forth below.
AVAILABLE INFORMATION. Parent is subject to the information and reporting
requirements of the Exchange Act and in accordance therewith is obligated to
file certain periodic reports, proxy statements and other information with the
Commission 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 granted to them, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company is required to be disclosed in such proxy
statements and distributed to the Company's shareholders and filed with the
Commission. These reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission
located in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection and copying at prescribed rates at the
regional offices of the Commission located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago,
18
<PAGE>
Illinois 60661, and Seven World Trade Center, Suite 1300, New York, New York
10048. Copies of this material may also be obtained by mail, upon payment of the
Commission's customary fees, from the Commission's principal office at
450 Fifth Street, N.W., Washington, D.C. 20549. In addition, such material
should also be available for inspection at the offices of the New York Stock
Exchange, Inc. located at 11 Wall Street, New York, NY 10005.
The name, present principal occupation or employment, five-year employment
history and citizenship of each of the directors and executive officers of the
Purchaser and Parent as well as the name, principal business and address of the
corporation or other organization in which such present occupation or employment
is carried on are set forth in Schedule I hereto.
Except as described in the Offer to Purchase, none of the Purchaser, Parent
or, to the best of their knowledge, any of the persons listed on Schedule I or
any associate or wholly-owned or majority-owned subsidiary of the Purchaser,
Parent or any of the persons so listed, beneficially owns or has a right to
acquire directly or indirectly any Shares. None of the Purchaser, Parent, or, to
the best of their knowledge, any of the persons or entities referred to above,
or any of the respective executive officers, directors or subsidiaries of any of
the foregoing, has effected any transactions in the Shares during the past sixty
(60) days. Except as described in this Offer to Purchase, none of the Purchaser,
Parent, or, to the best of their knowledge, any of the persons listed on
Schedule I, has any contract, arrangement, understanding or relationship with
any other person with respect to any securities of the Company, including but
not limited to contracts, arrangements, understandings or relationships
concerning the transfer or voting of such securities, joint ventures, loan or
option arrangements, puts or calls, guarantees of loans, guarantees against
loss, or the giving or withholding of proxies. Except as set forth in this Offer
to Purchase, none of the Purchaser, Parent, or, to the best of their knowledge,
any of the persons listed on Schedule I, has had any business relationships or
transactions with the Company or any of its executive officers, directors or
affiliates that are required to be reported under the rules and regulations of
the Commission applicable to the Offer. Except as set forth in this Offer to
Purchase, there have been no contacts, negotiations or transactions between any
of Parent, the Purchaser or, to the best knowledge of the Purchaser and Parent,
any of the persons listed on Schedule I, on the one hand, and the Company or its
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, a tender offer or other acquisition of securities, an election of
directors, or a sale or other transfer of a material amount of assets.
SECTION 9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required
by the Purchaser and Parent to purchase all of the outstanding shares of the
Company (including the cash out of stock options as described in Section 11) is
approximately $37.5 million. The total amount of funds required by the Purchase
and Parent to be used in the transaction, including the payment of related fees
and expenses (approximately $1.2 million), is estimated to be approximately
$38.7 million.
The Offer is not conditioned upon any financing arrangements. The Purchaser
will obtain all necessary funds through capital contributions or advances to be
made by Parent. Parent has sufficient funds available to it, from cash on hand
and from undrawn or available credit under its existing revolving credit
facilities and other sources, to fund fully all of its requirements and the
Purchaser's requirements in connection with the Offer and the Merger. Under a
Credit Agreement dated July 1, 1999 ("Facility") by and among Parent, as
borrower, and a syndicate of financial institutions for which Banque Nationale
de Paris acts as administrative agent, Parent may borrow up to an aggregate
amount of $225,000,000 for general corporate purposes, including transactions
contemplated by the Offer, provided that the Requisite Lenders (as such term is
defined under such Credit Agreement) must approve the Offer, the Merger, and the
acquisition of the Shares under the terms of the Merger Agreement. Such
Requisite Lenders have given their approval. Parent's ability to borrow under
the Facility is also conditioned on compliance with certain covenants and
satisfaction of certain other requirements. Parent is currently in compliance
with these covenants and requirements and believes that funds will be available
prior to the time that funds are required to pay for Shares tendered in the
19
<PAGE>
Offer. Parent anticipates that any indebtedness incurred through borrowings
under the Facility will be repaid from a variety of sources, which may include,
but may not be limited to, funds generated internally by Parent and its
affiliates (including, following the Merger, funds generated by the Company) and
sales of equity or debt securities of the Company in private or public
offerings. No decision has been made concerning the method Parent will employ to
repay such indebtedness. Such decision will be made based on Parent's review
from time to time of the advisability of particular actions, as well as on
prevailing interest rates and financial and other economic conditions and such
other factors as Parent may deem appropriate. A copy of the Facility is
incorporated by reference as an Exhibit to the Schedule TO. There are no
alternative financing arrangements in the event the primary financing becomes
unavailable.
SECTION 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
In January of 1999, Parent retained Hankin & Co. ("HCO") to provide certain
financial advisory services and to assist Parent in locating potential
acquisitions to help grow the business of Parent. On March 3, 1999, the Company
retained FleetBoston Robertson Stephens, Inc. ("Fleet") as its financial advisor
in considering the Company's financial and strategic alternatives, including the
possible sale of (or other extraordinary transactions involving) the Company and
its subsidiary, Omnirel LLC ("Omnirel").
The Offer and the Merger represent the culmination of a series of
negotiations between Parent and the Company that began at Parent's initiation in
the summer of 1999. In July of 1999, Mr. Nick Thornburn, an employee of Omnirel
and a former employee of Parent, spoke to Mr. Robert Mueller, Executive Vice
President--External Affairs and Business Development and member of the board of
directors of Parent, about the possibility of Omnirel and Parent conducting
business with each other. Mr. Mueller spoke with Mr. Walter Lifsey, Vice
President of Government and Space Products of Parent, who, through
Mr. Thornburn, contacted Mr. John Catrambone, president and chief executive
officer of Omnirel, towards the end of July, 1999. Mr. Lifsey and
Mr. Catrambone arranged for a meeting on August 10, 1999, while Mr. Lifsey was
visiting some of Parent's distributors in New York.
On August 10, 1999, Mr. Lifsey and Mr. Catrambone met and exchanged general
industry and company information, including a general discussion of business
conditions in the space, military, and high reliability markets. Following the
meeting, Mr. Catrambone gave Mr. Lifsey an escorted tour of the Omnirel
manufacturing facility in Leominster, Massachusetts. Mr. Catrambone and
Mr. Lifsey then discussed in general terms their current and future growth
strategies and, among other things, the possibility of an acquisition by Parent
of the Company.
During the following week, Mr. Lifsey discussed with Dr. Alexander Lidow,
chief executive officer and a member of the board of directors of Parent,
Mr. Lifsey's visit with Mr. Catrambone and the brief discussion they had
regarding a possible acquisition. Dr. Lidow instructed Mr. Lifsey to obtain more
information regarding the Company.
On August 17, 1999, Mr. Lifsey telephoned Mr. Catrambone and affirmed
Parent's interest in continuing discussions regarding a possible acquisition.
Later that day, Mr. John Allwein, chief financial officer of Omnirel, faxed a
general overview and summary of Omnirel, under letterhead of Fleet, advisor to
the Company, to Mr. Lifsey.
A few days later, Fleet telephoned Mr. Lifsey to determine if Parent was
serious about pursuing an acquisition. At the conclusion of this conversation
Fleet faxed Mr. Lifsey a proposed Confidentiality Agreement which was executed,
after minor adjustments to the terms, by Parent on August 27, 1999.
After receiving the signed Confidentiality Agreement, Fleet sent Mr. Lifsey
a detailed Confidential Descriptive Memorandum that Mr. Lifsey, in turn,
provided to HCO for review on September 3, 1999. The cover letter to this
Memorandum asked Parent to provide a "non-binding written indication of
interest" by September 10, 1999.
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On September 7, 1999, a representative of HCO telephoned a representative of
Fleet to express Parent's interest in evaluating a possible acquisition of
Omnirel and to request extension of Fleet's September 10, 1999 deadline for
response, which extension was granted. HCO also requested additional information
including Omnirel's capital investment forecast for future years.
On September 8, 1999, HCO received Omnirel's five year capital investment
forecast from Fleet. Representatives of HCO discussed by telephone various
financial statement and forecast matters with representatives of Fleet. On
September 9, 1999, HCO received Omnirel's loan balance and forecast from Fleet.
During the period from September 9, 1999 through September 23, 1999, Parent
and HCO conducted a series of internal meetings and telephone calls to determine
if Parent wanted to proceed with negotiations for a possible acquisition, and,
if so, at what price. Contemporaneously, representatives of HCO began informal
conversations on valuation ranges and possible acquisition structures with
representatives of Fleet.
On September 23, 1999, HCO conveyed a written, non-binding letter of
interest on behalf of Parent to Fleet expressing an interest in acquiring
Omnirel for $21.5 million on a "cash-free/debt-free" basis, subject to, among
other things, the completion of legal and business due diligence, satisfactory
definitive documentation and the receipt of the necessary approvals and
consents.
From September 24, 1999 through October 1, 1999, representatives of HCO and
representatives of Fleet continued telephone conversations resulting in an
invitation for representatives of Parent and HCO to visit Omnirel to hear
Omnirel's management deliver a presentation concerning Omnirel, its prospects,
and the reasons why Omnirel warranted a higher valuation than the one
contemplated by Parent.
On October 14 and October 15, 1999, Mr. Dean McKay, a representative of HCO,
Mr. Ivo Jurek, Vice President of Electronic Motion Systems for Parent,
Mr. Michael McGee, Executive Vice President and Chief Financial Officer of
Parent, Mr. Bel Lazar, Director of Government and Space Operations for Parent,
and Mr. Lifsey visited Omnirel and attended the presentation.
During the following week, representatives of Parent and representatives of
HCO met to discuss the proposed transaction.
On October 22, 1999, representatives of HCO sent a comprehensive due
diligence information request form to Mr. Robert A. Snape, director of Fleet's
mergers and acquisitions group.
From October 22, 1999 through October 29, 1999, representatives of HCO and
representatives of Fleet continued telephone conversations concerning various
alternative transaction structures including acquisition of the Company for cash
or stock as well as the possibility of a pooling-of-interests transaction.
On October 29, 1999, representatives of HCO transmitted, via Fleet, to
Mr. Catrambone a proposed letter of intent indicating Parent's interest in
acquiring Omnirel for $24 million on a "cash-free/debt-free" basis, subject to,
among other things, the completion of legal and business due diligence,
satisfactory definitive documentation and the receipt of the necessary approvals
and consents.
From November 1, 1999 through November 7, 1999, representatives of HCO and
representatives of Fleet continued telephone conversations concerning
alternative valuations and structures, including the possibility of a tax-free
reorganization.
On November 12, 1999, representatives of HCO telephoned representatives of
Fleet to advise Fleet that Parent would be sending a letter through Fleet to the
Board of Directors of the Company. This letter expressed Parent's interest in
acquiring the Company for $31 million of Parent's stock in a transaction
intended to qualify as a tax-free reorganization, subject to, among other
things, the
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completion of legal and business due diligence, satisfactory definitive
documentation and the receipt of the necessary approvals and consents.
On November 15, 1999, representatives of HCO and representatives of Fleet
discussed by telephone the details of Parent's November 12, 1999 letter.
During the next two weeks, representatives of HCO and representatives of
Fleet continued to discuss the proposed transaction, including structure, price
and other terms.
On December 3, 1999, Mr. V. Shannon Clyne, managing director of HCO, after
conversations with Mr. Lifsey and Dr. Lidow, indicated to Fleet that HCO was
advising Parent to offer a price that equaled $28 million of Parent's stock on a
"cash-free/debt-free" basis plus the Company's net cash and marketable
securities less net debt, subject to the completion of legal and business due
diligence, satisfactory definitive documentation and the receipt of the
necessary approvals and consents. Mr. Clyne also conveyed Parent's interest in
retaining the services of Mr. Catrambone and Parent's willingness to negotiate a
stay bonus. That same weekend, the Board of Directors of the Company met with
Fleet to discuss all pending offers for Omnirel since the Company began
considering the possibility of its sale in March of 1999.
On December 6, 1999, representatives of HCO and representatives of Fleet
held telephone discussions to clarify the terms of Parent's proposal, followed
by two confirming faxes regarding the clarifications of Parent's proposal.
On December 8 and 9, 1999, representatives of HCO, Parent, Fleet and the
Company continued telephone discussions and agreed to structure the transaction
as an all-cash acquisition and agreed on a purchase price for the Company of
$28.5 million, plus net cash less net debt, less certain transaction-related
expenses, subject to completion of legal and business due diligence,
satisfactory definitive documentation and the receipt of the necessary approvals
and consents.
On December 10 and 13, 1999, representatives of HCO, Parent, Fleet and the
Company (including counsel to Parent and counsel to the Company) held telephone
discussions about the Company's desire to consummate the transaction quickly,
and the parties agreed to structure the transaction as an all-cash tender offer
with a back-end merger. Counsel to Parent commenced preparation of the Merger
Agreement among Parent, the Company, and a newly-formed wholly-owned subsidiary
of Parent as well as preparation of several ancillary agreements.
On December 15, 1999, O'Melveny & Myers LLP, counsel to Parent, transmitted
the first draft of the Merger Agreement to Morrison Cohen Singer & Weinstein,
LLP, counsel to the Company. From December 15, 1999 through January 26, 2000,
representatives of Parent and representatives of the Company spoke on several
occasions, exchanged several drafts, and continued to negotiate the terms of the
Merger Agreement as well as the ancillary agreements, including the Stock Option
Agreement, an incentive compensation agreement with Mr. Catrambone, and the
Stockholder Support Agreements (each such agreement is described further in
Section 11 ("Purpose of the Offer; Plans for the Company; Merger Agreement;
Shareholder Support Agreement; Stock Option Agreement; Confidentiality
Agreement")).
On December 28, 1999, representatives of Parent's counsel commenced legal
due diligence at the offices of Morrison Cohen Singer & Weinstein, LLP, counsel
to the Company, and, on January 3, 2000, representatives of Parent began
business due diligence at the Company's facilities in Massachusetts. From
January 3, 2000 through January 21, 2000, representatives of Parent's counsel
and of Parent continued due diligence.
On January 9, 2000, the Board of Directors of Parent met to consider the
proposed transaction. At the meeting, Dr. Alexander Lidow reviewed the
discussions between the parties and reviewed the proposal. After extensive
discussion, the Board of Directors of Parent unanimously recommended that Parent
proceed with the transaction subject to final approval of the definitive
documents.
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On January 18 and 19, 2000, the Board of Directors of the Company met to
consider the proposed transaction and the proposed Merger Agreement (and the
ancillary agreements) and reviewed the course of the discussions and
negotiations with Parent. After extensive discussion, the Board unanimously
adopted resolutions determining that the Offer, the Merger, the Merger
Agreement, and the purchase of Shares by the Purchaser contemplated by the Offer
and the Stock Option Agreement were fair to and in the best interests of the
Company's shareholders and recommended that the Company's shareholders accept
the Offer and tender their Shares pursuant to the Offer.
On January 27, 2000, the Board of Directors of Parent and the Board of
Directors of the Purchaser, by unanimous written consent, approved the tender
offer, the merger transactions, and the related agreements.
On January 27, 2000, the Merger Agreement, the Shareholder Support
Agreements, the Stock Option Agreement, and the incentive compensation agreement
were executed by the parties thereto.
On January 28, 2000, Parent and the Company issued a joint press release
announcing the Offer.
SECTION 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; MERGER AGREEMENT;
SHAREHOLDER SUPPORT AGREEMENT; STOCK OPTION AGREEMENT; CONFIDENTIALITY
AGREEMENT.
PURPOSE OF THE OFFER. The purpose of the Offer, the Merger and the Merger
Agreement is to enable Parent to acquire control of the entire equity interest
of the Company. Upon consummation of the Merger, the Company will become a
direct wholly-owned subsidiary of Parent. The Offer is being made pursuant to
the Merger Agreement. The Board of Directors of the Company has unanimously
recommended that all holders of Shares tender such Shares pursuant to the Offer.
The Board of Directors has unanimously approved the Merger Agreement and the
transactions contemplated thereby, including the Offer, the Merger, and the
purchase of Shares by the Purchaser contemplated by the Offer and the Stock
Option Agreement, which approval the Purchaser believes satisfies the relevant
requirements of NYBCL.
PLANS FOR THE COMPANY. Parent intends, upon acquiring control of the
Company, to continue its review and evaluation of the Company and its subsidiary
and their respective assets, businesses, corporate structure, capitalization,
operations, properties, policies, management and personnel. Generally, Parent
intends to integrate the Company's business into Parent's business, with a view
to achieving operating efficiencies and cost savings while maintaining and
enhancing customer service. After Parent concludes its review of the Company, it
is possible that Parent might modify some of its current plans.
Except as described above or elsewhere in this Offer to Purchase, Parent has
no present plans or proposals that would relate to or result in an extraordinary
corporate transaction involving the Company or its subsidiary (such as a merger,
reorganization, liquidation, or sale or other transfer of a material amount of
assets), any material change in the Company's capitalization or dividend policy,
or any other material change in the Company's corporate structure or business.
THE MERGER AGREEMENT
MERGER AGREEMENT. The following is a summary of certain provisions of the
Merger Agreement. The summary is qualified in its entirety by reference to the
Merger Agreement, which is incorporated herein by reference and a copy of which
has been filed with the Commission as an exhibit to Parent's Tender Offer
Statement on Schedule TO (the "Schedule TO"). In particular, when the term
"material adverse effect" is used herein it has the meaning as defined in the
Merger Agreement. The Merger Agreement may be examined and copies may be
obtained at the place and in the manner set forth in Section 7 of this Offer to
Purchase.
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THE OFFER. The Merger Agreement provides for the making of the Offer by the
Purchaser. The Offer is conditioned upon, among other things, satisfaction of
the Minimum Condition and the expiration or termination of all waiting periods
imposed by the HSR Act. The Offer is also subject to certain other conditions
set forth in Section 14 below. If any of the conditions are not satisfied or any
events specified in Section 14 have occurred or are determined by the Purchaser
to have occurred, prior to the Expiration Date, the Purchaser reserves the right
(but is not obligated), subject to the terms of the Merger Agreement and whether
or not any Shares have theretofore been accepted for payment, to waive any of
the conditions of the Offer and to make any change in the terms or conditions of
the Offer in its sole discretion; provided, however, that no change or waiver
may be made, without the prior written consent of the Company, that decreases
the price per Share payable in the Offer, decreases the number of Shares sought
in the Offer, changes the form of consideration payable in the Offer, or imposes
or alters the conditions to the Offer in addition to or from those set forth in
Section 14 or in a manner that is otherwise materially adverse to the holders of
the Shares.
The Merger Agreement provides that, notwithstanding the foregoing, without
the consent of the Company, the Purchaser will have the right to extend the
Offer beyond the Initial Expiration Date only in the following events: (i) from
time to time if, at the Initial Expiration Date (or extended expiration date of
the Offer, if applicable) any of the conditions to the Offer have not been
satisfied or waived, until such conditions are satisfied or waived, (ii) for any
period required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "Commission") or the staff thereof
applicable to the Offer or any period required by applicable law, or (iii) if
all conditions to the Offer are satisfied or waived and the Shares validly
tendered and not withdrawn pursuant to the Offer represent more than two-thirds
of the total issued and outstanding Shares on a fully diluted basis, the
Purchaser may extend the Offer for a period not to exceed ten business days;
provided that as of the date the Offer is extended, all conditions previously
imposed (other than certain of the Company's obligations regarding its
operations and its cooperation with the Purchaser) shall be deemed satisfied as
of such extended expiration date, whether any such condition is in fact
satisfied on such dates.
In addition to the Purchaser's rights to extend and amend the Offer subject
to the provisions of the Merger Agreement, the Purchaser (i) will not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, pay for, and may delay the acceptance for payment
of, or payment for, any tendered shares, and (ii) may terminate the Offer or
amend the Offer as to any Shares not then paid for, if any of the conditions
specified in Section 14 exists. The Purchaser acknowledges that
(a) Rule 14e-1(c) under the Exchange Act requires the Purchaser to pay the
consideration offered or return the Shares tendered promptly after the
termination or withdrawal of the Offer, and (b) the Purchaser may not delay
acceptance for payment of, or payment for (except as provided in clause (i) of
the first sentence of this paragraph), any Shares upon the occurrence of any of
the conditions specified in Section 14 without extending the period of time
during which the Offer is open.
The Company has informed the Purchaser that as of January 26, 2000, there
were 2,406,837 Shares issued and outstanding, 34,707 Shares of Common Stock
reserved for issuance under the Company's outstanding stock option agreements,
and no other stock of the Company outstanding or committed to be issued. Based
on this information, and assuming all holders of outstanding options to purchase
Shares of Common Stock will have entered into agreements to accept cash in lieu
of the right to exercise such options effective on the date the Purchaser
purchases the Shares pursuant to the Offer, the Purchaser believes that the
Minimum Condition will be satisfied if the Purchaser acquires at least 1,604,558
Shares in the Offer. Parent does not directly or indirectly hold any Shares.
Certain other conditions to the Offer are described in Section 14.
COMPANY ACTION. The Merger Agreement states that the Board of Directors, at
a meeting duly called and held, (i) unanimously determined that the Merger
Agreement, the Stock Option Agreement and the transactions contemplated thereby,
including the Offer, the Merger, and the
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purchase of Shares by the Purchaser contemplated by the Offer and the Stock
Option Agreement, are fair and in the best interests of Company's shareholders,
(ii) unanimously approved and adopted the Merger Agreement, the Stock Option
Agreement, and the transactions contemplated thereby, including the Offer, the
Merger, and the purchase of Shares by the Purchaser contemplated by the Offer
and the Stock Option Agreement, in accordance with the requirements of NYBCL,
and (iii) unanimously resolved to recommend acceptance of the Offer and approval
and adoption of the Merger Agreement and the Merger by its shareholders. The
Company has been advised that all of its directors, and each of its executive
officers who has been informed of the transactions contemplated by the Merger
Agreement and who owns Shares, intend to tender their Shares pursuant to the
Offer and, if applicable, to vote in favor of the Merger.
THE COMPANY'S BOARD OF DIRECTORS. The Merger Agreement provides that,
promptly following the purchase of and payment for a number of Shares that
satisfies the Minimum Condition pursuant to the Offer, and from time to time
thereafter, Parent shall be entitled to designate on the Board of Directors, on
each committee of the Board of Directors (other than any committee established
to take action under the Merger Agreement or related agreements), and on each
the board of directors and each committee of Omnirel LLC, up to such number of
directors as will give the Purchaser representation on such board or committee
equal to the product of (i) the total number of directors on the Board and
(ii) the percentage that the number of Shares owned by the Purchaser and its
affiliates bears to the total number of outstanding Shares. Notwithstanding the
foregoing, in the event that Parent's designees are to be appointed or elected
to the Company's Board of Directors, until the Effective Time, there shall be at
least two Continuing Directors (as defined in the "Introduction") on the
Company's Board of Directors, provided that in the event that the number of
Continuing Directors shall be reduced below two for any reason whatsoever, any
remaining Continuing Directors (or Continuing Director, if there shall be only
one remaining) shall be entitled to designate persons to fill such vacancies who
shall be deemed to be Continuing Directors for purposes of the Merger Agreement.
The Company has agreed, upon request of the Purchaser, promptly either to
increase the size of the Board (to the extent permitted by the Company's
Certificate of Incorporation) and/or to use its reasonable best efforts to
secure the resignations of such number of directors as is necessary to enable
the Purchaser's designees to be elected to the Board and to cause the
Purchaser's designees to be so elected. The Merger Agreement also provides that
following the election or appointment of the Purchaser's designees to the
Company's Board of Directors, until the Effective Time, any amendment of the
Merger Agreement requiring action by the Board or any amendment to the
Certificate of Incorporation or by-laws of the Company, any termination of the
Merger Agreement by the Company, any extension of time for performance of any of
the obligations or other acts of Parent or the Purchaser or any waiver of
compliance with any of the agreements or conditions contained herein for the
benefit of the Company and any material transaction with Parent, the Purchaser
or any affiliate thereof, unless such transaction is on terms no less favorable
to the Company than the Company would obtain in a similar transaction with an
unrelated third party, will require the approval of a majority of the Continuing
Directors. The Company's obligation to appoint the Purchaser's designees to the
Board of Directors is subject to Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder.
THE MERGER. The Merger Agreement provides that, following the purchase of
Shares pursuant to the Offer, the approval of the Merger Agreement by the
shareholders of the Company and the satisfaction or waiver of the other
conditions to the Merger, the Purchaser shall be merged with and into the
Company, in accordance with NYBCL, whereupon the separate existence of the
Purchaser shall cease and the Company shall be the surviving corporation (the
"Surviving Corporation"). The Merger shall become effective upon the filing of a
Certificate of Merger with the Secretary of State of the State of New York or at
such time thereafter as is provided in the Certificate of Merger (the "Effective
Time"). As a result of the Merger, all of the rights, privileges, powers and
franchises of the Company and the Purchaser shall vest in the Surviving
Corporation, and all restrictions, disabilities,
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liabilities and obligations of the Company and the Purchaser shall become the
restrictions, disabilities, liabilities and obligations of the Surviving
Corporation.
CONVERSION OF SHARES. The Merger Agreement provides that at the Effective
Time, (i) each issued and outstanding Share (other than Shares owned directly or
indirectly by Parent or any of its subsidiaries or by the Company as treasury
stock, and other than Shares owned by shareholders who have properly exercised
rights of appraisal under NYBCL) will be converted into the right to receive
$15.36 per Share or any higher price per Share that may be paid pursuant to the
Offer, without interest (the "Merger Consideration"), and (ii) each issued and
outstanding share of common stock of the Purchaser will be converted into and
become one fully paid and non-assessable share of common stock of the Surviving
Corporation (which will constitute the only issued and outstanding capital stock
of the Surviving Corporation). The Surviving Corporation will, thereupon, become
a direct, wholly-owned subsidiary of Parent.
STOCK OPTIONS. The Merger Agreement provides that at the closing of the
Offer, each holder of outstanding options issued by the Company to purchase
Shares, whether or not vested or exercisable, will, upon surrender of such
options, be entitled to an amount of cash determined by multiplying (i) the
excess, if any, of the Merger Consideration over the applicable exercise price
of such option by (ii) the number of Shares covered by such option, and each
such surrendered option shall terminate. At the Effective Time, any remaining
outstanding options issued by the Company will terminate, and the holders
thereof shall be entitled to receive, whether or not vested or exercisable, an
amount of cash determined by multiplying (i) the excess, if any, of the Merger
Consideration over the applicable exercise price of such option by (ii) the
number of Shares covered by such option. Any such payments shall be reduced by
applicable withholding taxes and without interest paid thereon.
Prior to the closing of the Offer, the Company will take all actions
(including, if appropriate, amending the terms of any option plan or agreement)
that are within its power to give effect to the transactions contemplated by the
immediately preceding paragraph.
SURVIVING CORPORATION. The Merger Agreement provides that the certificate
of incorporation and by-laws of the Purchaser at the Effective Time will be the
certificate of incorporation and by-laws of the Surviving Corporation until
amended in accordance with applicable law, except that the name of the Surviving
Corporation will be Zing Technologies, Inc. The Merger Agreement also provides
that the directors of the Purchaser at the Effective Time will be the directors
of the Surviving Corporation, and the officers of the Purchaser at the Effective
Time will be the officers of the Surviving Corporation.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties of the parties, including, without
limitation, representations by the Company with respect to its existence, good
standing, and corporate authority; the authorization, validity and effect of
agreements; capitalization; subsidiaries; other interests; conflicts, required
filings, and consents; compliance; Commission filings; financial statements and
undisclosed liabilities; absence of certain changes; material contracts;
litigation; taxes; employee benefits plans; labor and employment matters;
brokers; year 2000 compliance; insurance; properties; environmental laws;
related party transactions; bank accounts; intellectual property; minute books;
accounting records and internal controls; past product liability and returns;
disclosure; and disclosure schedules. Certain representations and warranties in
the Merger Agreement contain exceptions for matters that would or could, as the
case may be, not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the Company (and its subsidiary, taken
as a whole) or Parent (and its subsidiaries, taken as a whole).
INTERIM OPERATIONS. Pursuant to the Merger Agreement, the Company has
agreed that, during the period from the date of the Merger Agreement to the
Effective Time (unless Parent
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otherwise agrees in writing), the Company will, and will cause its subsidiary
to, operate its business only in the ordinary course of business consistent with
past practices and use its commercially reasonable efforts to (i) preserve its
existing business organization, insurance coverage, material rights, material
licenses or permits, advantageous business relationships, material agreements
and credit facilities; and (ii) retain its key officers and employees. Pursuant
to the Merger Agreement, without limiting the generality of the foregoing, the
Company will not and will not permit its subsidiary to: (A) enter into any
material transaction or commitment, or sell, lease, or dispose of or acquire any
material properties or assets, except purchases and sales of inventory in the
ordinary course of business consistent with past practices; (B) implement any
new employee benefit plan, or employment, compensatory or severance agreement;
(C) amend any existing employee benefit plan or employment agreement except as
required by law or by the Merger Agreement; (D) enter into, amend or terminate
any material contract except as required by law or by the Merger Agreement;
(E) take any action that would jeopardize the continuance of its material
supplier or customer relationships; (F) make any material change in the nature
of their businesses and operations; (G) enter into any transaction or agreement
with any officer, director or affiliate of the Company or its subsidiary or make
any loan or advance to any employee of Company or its subsidiary; (H) incur or
agree to incur any obligation or liability (absolute or contingent) that
individually calls for payment by the Company or its subsidiary of more than
$25,000 in any specific case or $100,000 in the aggregate, excluding purchases
of inventory in the ordinary course of business; (I) make any change to its
accounting (including tax accounting) methods, principles or practices, except
as may be required by United States generally accepted accounting principles and
except, in the case of tax accounting methods, principles or practices, in the
ordinary course of business of the Company or its subsidiary consistent with
past practice or any change in its tax elections that would materially increase
its tax liabilities; (J) authorize or make capital expenditures in excess of
$25,000; (K) mortgage or otherwise encumber or subject to any lien any
properties or assets except pursuant to existing agreements; (L) grant, confer
or award any bonuses or other forms of cash incentives to any officer, director
or employee except consistent with past practice; (M) enter into any new bank
credit agreement or line of credit or amend in any material respect its existing
bank credit agreement or lines of credit; (N) grant any severance or termination
pay to, or enter into any new employment or severance agreement with any present
or future officer, employee or director, other than consistent with past
practices; (O) take any action that would make any representation or warranty of
the Company under the Merger Agreement to be inaccurate in any material (except
where such representation or warranty is already qualified as to materiality)
respect or omit to take any action necessary to prevent such representation or
warranty from being inaccurate in any material (except where such representation
or warranty is already qualified as to materiality) respect; (P) acquire any
capital stock; or (Q) authorize, commit or agree to take, any of the foregoing
actions.
Furthermore, pursuant to the Merger Agreement, the Company has agreed that,
during the period from the date of the Merger Agreement to the Effective Time
(unless Parent otherwise agrees in writing), it will not (i) declare, set aside
or pay any dividend or make any other distribution or payment with respect to
any shares of its capital stock or other ownership interests, or (ii) directly
or indirectly redeem, purchase or otherwise acquire any shares of its capital
stock, or make any commitment for any such action. Furthermore, the Company will
not and will not permit its subsidiary to (iii) amend its certificate of
incorporation or bylaws or other charter documents, (iv) issue any shares of
capital stock, effect any stock split or reclassification or otherwise change
(or agree to change) its equity securities, options, warrants, or convertible
instruments as they existed on the date of the Merger Agreement, except pursuant
to the exercise of options, warrants, conversion rights and other contractual
rights existing on the date of the Merger Agreement and disclosed pursuant to
the Merger Agreement, or (v) grant, confer or award any option, warrant,
conversion right or other right not existing on the date of the Merger Agreement
to acquire any shares of its capital stock.
NO SOLICITATION. In the Merger Agreement, the Company has agreed not to,
directly or indirectly, through any officer, director, employee, agent,
investment banker, attorney, accountant, or
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other representative of the Company or its subsidiary, (i) solicit, initiate,
encourage, discuss or negotiate any "Business Combination Proposal" (as defined
below) or (ii) engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person
relating to a Business Combination Proposal (excluding the Merger), or otherwise
facilitate any effort or attempt to make or implement a Business Combination
Proposal. A "Business Combination Proposal" means a merger, acquisition,
consolidation or similar transaction involving, or relating to the purchase of
(1) any assets of the Company or of the Company subsidiary, other than in the
ordinary course of business, (2) shares of Company capital stock, or (3) the
capital stock of the Company subsidiary. Except as prohibited by ongoing
obligations, if any, set forth in any existing confidentiality agreement, the
Company has agreed to notify Parent immediately if any inquiries or proposals
relating to a Business Combination Proposal are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, it or any of its subsidiaries.
INSPECTION OF RECORDS; ACCESS AND INFORMATION; COOPERATION AND
NOTIFICATION. Pursuant to the Merger Agreement, from the date of the Merger
Agreement until the Effective Time, the Company will (i) give Parent, its
counsel, financial advisors, auditors and other authorized representatives full
access to the offices, records and files, correspondence, audits and properties,
as well as to all information relating to commitments, contracts, titles and
financial position, or otherwise pertaining to the business and affairs of the
Company and its subsidiary, (ii) furnish to Parent, its counsel, financial
advisors, auditors and other authorized representatives such financial and
operating data and other information as such persons may reasonably request, and
(iii) instruct the employees, counsel and financial advisors of the Company and
its subsidiary to cooperate with Parent in its investigation of the business of
the Company and its subsidiary. The Company has agreed to confer on a regular
and frequent basis with Parent or its representatives to discuss, subject to
applicable law, material operational matters and the general status of the
Company's and its subsidiary's ongoing operations. The Company has also agreed
to (a) notify Parent of any significant changes in its and its subsidiary's
business, properties, assets, condition (financial or other), results of
operations or prospects, (b) notify Parent of any notice or other communication
from a governmental or regulatory agency or authority, or from any third party
alleging the consent of such person is or may be required, in connection with
the transactions contemplated by the Merger Agreement, and (c) deliver to Parent
true and correct copies of any report, statement or schedule filed with the
Commission subsequent to the date of the Merger Agreement. Furthermore, both
Parent and the Company must promptly advise the other of material inaccuracies
in any of its representations, warranties or nonperformance of any covenant or
of certain other material changes or events and must promptly provide the other
party with copies of all filings made by such party or its subsidiary with any
governmental entity in connection with the Merger Agreement and the transactions
contemplated thereby.
FILINGS; THIRD PARTY CONSENTS; OTHER ACTIONS. Subject to the terms and
conditions of the Merger Agreement, the Company and Parent have agreed to (and,
if applicable, cause their subsidiaries to) (i) promptly make their respective
filings and thereafter make any other required submissions under the HSR Act
with respect to the Merger; (ii) use all reasonable efforts to cooperate with
one another in (a) determining which filings are required to be made prior to
the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from any
governmental entity in connection with the execution and delivery of the Merger
Agreement and the consummation of the transactions contemplated thereby and (b)
timely making all such filings and timely seeking and obtaining all such
consents, approvals, permits or authorizations; and (iii) use all reasonable
efforts to take, or cause to be taken, all other action and do, or cause to be
done, all other things necessary, proper or appropriate to consummate and make
effective the transactions contemplated by the Merger Agreement. Each party must
promptly notify the other parties of any failure or prospective failure to
obtain any such consents and, if requested by
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another party, must provide such other party with copies of all material filings
and correspondence in connection with, and evidence of, all consents applied for
or obtained.
FINANCIAL INFORMATION. Pursuant to the Merger Agreement, until the
Effective Time or, if earlier, the date of the termination of the Merger
Agreement in accordance with its terms, the Company has agreed to deliver as
soon as practicable but in no event later than thirty days after the end of each
fiscal month and forty-five days after the end of each fiscal quarter prior to
the Effective Date, beginning with the periods included in the second quarter of
fiscal 2000, its unaudited consolidated financial information for such period as
prepared by the Company's management, prepared in accordance with GAAP
consistently applied and fairly reflecting its consolidated financial condition
and the consolidated results of operations.
INDEMNIFICATION AND INSURANCE. From and after the Effective Time, Parent
has agreed to indemnify, defend and hold harmless to the fullest extent that the
Company would have been permitted under applicable law the present and former
officers and directors of the Company (the "Indemnified Parties") in respect of
acts or omissions occurring at or before the Effective Time. For a period of
seven years from the Effective Date, Parent must cause the Surviving Corporation
or its successor to keep in effect (i) provisions in its certificate of
incorporation and by-laws providing for indemnification of the Indemnified
Parties that is substantially the same as is currently set forth in the
Company's certificate of incorporation and by-laws, giving effect for any
successor to the laws of the state of incorporation of such successor, and
(ii) the current policies of directors' and officers' liability insurance and
fiduciary liability insurance maintained by the Company (provided that either
Parent or the Surviving Corporation may substitute therefor policies of at least
the same coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured than such existing insurance).
However, if such insurance cannot be so maintained or obtained at a premium not
greater than 150% of the premium for the Company's current directors' and
officers' liability insurance, then Parent may maintain or obtain as much of
such insurance as can be maintained or obtained at a cost equal to 150% of the
current annual premiums of the Company for such insurance. For two years after
the Effective Time, Parent must cause to be maintained either the Company's
present insurance policy covering the Company's Retirement Savings Plan or a new
policy with substantially similar terms, which may be an insurance policy that
covers Parent and its subsidiaries.
ANTI-TAKEOVER STATUTES. The Company has agreed pursuant to the Merger
Agreement that if any anti-takeover or similar statute is applicable to the
transactions contemplated thereby it has and will grant such approvals and take
such actions as are necessary so that the transactions contemplated by the
Merger Agreement may be consummated as promptly as practicable on its terms and
otherwise act to eliminate the effects of such takeover statute on the
transactions by the Merger Agreement.
MISCELLANEOUS COMPANY OBLIGATIONS AND AGREEMENTS. The Company has agreed
pursuant to the Merger Agreement that, prior to or at the closing of the Offer,
(i) the Company shall have paid or caused to be paid all amounts owing to banks,
brokers and other financial institutions by the Company or its subsidiary, other
than certain amounts owed to Fleet National Bank, and (ii) the Unlimited
Guaranty and Indemnity Agreement between Fleet National Bank and the Company
dated August 28, 1997 shall be terminated.
INCENTIVE COMPENSATION AGREEMENT WITH JOHN CATRAMBONE. On January 27, 2000,
John Catrambone, the president and chief executive officer of Omnirel LLC,
entered into an incentive compensation agreement (the "Catrambone Incentive
Compensation Agreement") with the Parent. In order to induce Mr. Catrambone to
become an employee of Parent, Parent has agreed, pursuant to the Catrambone
Incentive Compensation Agreement, to pay or cause to be paid to Mr. Catrambone
incentive bonus payments on the following schedule: $250,000 within ten days
following the Commencement Date (as defined in the Catrambone Incentive
Compensation
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Agreement) and $250,000 within ten days following the one-year anniversary of
the Commencement Date. If the Company terminates Mr. Catrambone's employment
without Cause (as defined in the Catrambone Incentive Compensation Agreement) or
if Mr. Catrambone terminates his employment for Good Reason (as defined in the
Catrambone Incentive Compensation Agreement) or if Mr. Catrambone dies, the
Company shall pay Mr. Catrambone (or his estate or legal representatives) all
remaining bonus payments within thirty days of such event. If Mr. Catrambone's
employment is terminated for any other reason (including but not limited to
voluntary termination by Mr. Catrambone), all outstanding payments shall be paid
according to the schedule stated above. Regardless of the above schedule, Mr.
Catrambone must not resign for one year from the Commencement Date (except for
death or for Good Reason) in order to receive any bonus payments. The above is a
summary of the Catrambone Incentive Compensation Agreement, incorporated herein
by reference, a copy of which has been filed with the Commission as an exhibit
to the Schedule TO. Such summary is qualified in its entirety by reference to
the Catrambone Incentive Compensation Agreement.
CONDITIONS TO THE MERGER. The Merger Agreement provides that the respective
obligations of the Company, Parent and the Purchaser to consummate the Merger
are subject to the satisfaction at or prior to the Effective Time of certain
conditions, including: (i) the Merger Agreement and the transactions
contemplated thereby shall have been approved in the manner required by NYBCL,
by the Company's certificate of incorporation and by the applicable regulations
of any stock exchange or other regulatory body, as the case may be, by the
holders of the shareholders of the Company; (ii) the waiting period applicable
to the consummation of the Merger under the HSR Act shall have expired or been
terminated; (iii) none of the parties shall be subject to any order or
injunction of a court of competent jurisdiction, which prohibits the
consummation of the transactions contemplated by the Merger Agreement, and (iv)
all consents, authorizations, orders and approvals of (or filings or
registrations with) any governmental commission, board or other regulatory body
required in connection with the execution, delivery and performance of the
Merger Agreement shall have been obtained or made, except for filings in
connection with the Merger and any other documents required to be filed after
the Effective Time and except where the failure to have obtained or made any
such consent, authorization, order, approval, filing or registration would not
have a material adverse effect on the business, results of operations or
financial condition of Parent and the Company (and their respective
subsidiaries), taken as a whole, following the Effective Time.
The obligations of the Company to consummate the Merger are subject to the
satisfaction of the following further conditions: (i) Parent shall have
performed in all material respects its agreements contained in the Merger
Agreement required to be performed on or before the closing date of the Merger
as specified in the Merger Agreement (the "Closing Date"), and the
representations and warranties of Parent and the Purchaser contained in the
Merger Agreement and in any document delivered in connection therewith shall be
true and correct as of the Closing Date as if made on the Closing Date, except
(a) for changes specifically permitted by the Merger Agreement and (b) that
those representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date, and the Company
shall have received a certificate of the Chief Executive Officer, the Chief
Operating Officer, or an Executive Vice President of Parent, dated the Closing
Date, certifying to such effect; and (ii) the Purchaser will have purchased
Shares constituting at least two-thirds of the total issued and outstanding
Shares on a fully diluted basis pursuant to the Offer unless the failure of the
Purchaser to so purchase such shares is a result of a material breach of any
representation, warranty, or condition of the Company under the Merger
Agreement.
The obligations of Parent to consummate the Merger are subject to the
satisfaction of the following further conditions: (i) the Company shall have
performed in all material respects its agreements contained in the Merger
Agreement required to be performed on or before the Closing Date, and the
representations and warranties of the Company contained in the Merger Agreement
and
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in any document delivered in connection therewith shall be true and correct as
of the Closing Date as if made on the Closing Date, except (a) for changes
specifically permitted by the Merger Agreement and (b) that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date, and Parent shall have
received a certificate of the President or a Senior Vice President of the
Company, dated the Closing Date, certifying to such effect; (ii) from the date
of the Merger Agreement through the Effective Time, there shall not have
occurred any change in the financial condition, business or operations of the
Company and its subsidiary, taken as a whole that would have or would be
reasonably likely to have a material adverse effect; (iii) after the Effective
Time, no person shall have any right under any stock option agreement or any
appreciation right plan (or any right granted thereunder) or other plan, program
or arrangement to acquire any equity securities of the Company; (iv) the
Shareholder Support Agreement shall have remained in full force and effect
through the closing or termination of the Offer, whichever first occurs;
(v) the Company shall have obtained the consent or approval of each person whose
consent or approval shall be required under any material contract to which the
Company or its subsidiary is a party; and (vi) the Purchaser will have purchased
the Shares pursuant to the Offer unless the failure of the Purchaser to so
purchase such shares is a result of a material breach of any representation,
warranty, or condition of the Purchaser under the Merger Agreement.
TERMINATION. The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, (notwithstanding any approval
of the Merger Agreement by the shareholders of the Company):
(i) by the mutual consent of the Company and Parent;
(ii) by action of the Board of Directors of either Parent or the Company, if
(a) the Merger shall not have been consummated by June 30, 2000; provided, in
the case of a termination pursuant to this clause (a), that the terminating
party shall not have breached in any material respect its obligations under the
Merger Agreement in any manner that shall have proximately contributed to the
failure to consummate the Merger by June 30, 2000; (b) the approval of the
Company's shareholders required by the Merger Agreement shall not have been
obtained at a meeting duly convened therefor or at any adjournment thereof;
(c) the Purchaser shall not have accepted for payment any Shares pursuant to the
Offer before the 41st business day following commencement of the Offer or the
Purchaser shall have failed to commence the Offer within 30 days following the
date of the Merger Agreement; provided that the right to terminate the Merger
Agreement pursuant to this clause (c) shall not be available to any party whose
breach of any provision of the Merger Agreement results in the failure of the
acceptance for payment by the Purchaser of any Shares pursuant to the Offer by
such time or of the Offer to be commenced by such time; or (d) there shall be
any law or regulation that makes acceptance for payment of, and payment for, the
Shares pursuant to the Offer or consummation of the Merger illegal or otherwise
prohibited or any judgment, injunction, order or decree of any court or
governmental body having competent jurisdiction enjoining Purchaser from
accepting for payment of, and paying for, the Shares pursuant to the Offer or
the Company or Parent from consummating the Merger and such judgment,
injunction, order or decree shall have become final and non-appealable; provided
that the party seeking to terminate the Merger Agreement pursuant to this clause
(d) shall have used all reasonable efforts to remove such injunction, order or
decree;
(iii) by the Company, if (a) there has been a breach by Parent of any
representation or warranty contained in the Merger Agreement which would have or
would be reasonably likely to have an material adverse effect on Parent or
impair the ability of Parent or the Purchaser to timely consummate the
transactions contemplated by the Merger Agreement; or (b) if Parent has not
commenced the Offer within the time specified in the Merger Agreement or if
there has been a material breach of any other covenant or agreement set forth in
the Merger Agreement on the part of Parent, which breach is not curable or, if
curable, is not cured within 30 days after written notice of such breach is
given by the Company to Parent; and
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(iv) by Parent, if (a) there has been a breach by the Company of any
representation or warranty contained in the Merger Agreement which would have or
would be reasonably likely to have a material adverse effect on the Company; or
(b) there has been a material breach of any of the covenants or agreements set
forth in the Merger Agreement on the part of the Company, which breach is not
curable or, if curable, is not cured within 30 days after written notice of such
breach is given by Parent to the Company.
At any time before the Effective Time, any party to the Merger Agreement may
by action of such party's board of directors, to the extent legally allowed,
extend the time for performance of any of the obligations of the other parties,
waive any inaccuracies in the representations and warranties made to such party,
or waive compliance with any of the agreements or conditions for the benefit of
such party contained in the Merger Agreement.
In the event that the Merger Agreement is terminated, all obligations of the
parties will terminate, except the obligations of the parties pursuant to
certain provisions of the Merger Agreement related to survival; expenses;
assignment; and certain other miscellaneous provisions. However, nothing in the
Merger Agreement shall prejudice the ability of a non-breaching party from
seeking damages from any other party for any willful breach of the Merger
Agreement, including without limitation, attorneys' fees and the right to pursue
any remedy at law or in equity.
EXPENSES. Except where expressly provided otherwise, the Merger Agreement
provides that all costs and expenses incurred in connection with the Merger
Agreement and the transactions contemplated thereby will be paid by the party
incurring such expenses.
AMENDMENTS. Any provision of the Merger Agreement may be amended or waived
prior to the Effective Time, if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by the Company, Parent and the
Purchaser, or in the case of a waiver, by the party against whom the waiver is
to be effective; provided that after the adoption of the Merger Agreement by the
shareholders of the Company, no amendment shall be made which by law requires
the further approval of shareholders without obtaining such further approval.
SHAREHOLDER SUPPORT AGREEMENT
Concurrently with the execution of the Merger Agreement, Parent and the
Purchaser entered into separate Shareholder Support Agreements with each of John
Catrambone, Robert E. Schrader IRA, Robert and Deborah Schrader, The Robert
Schrader 1998 Grantor Retained Annuity Trust, Robert Schrader, and John Allwein
(each, a "Supporting Shareholder") pertaining to Shares held by each of them.
These Supporting Shareholders own approximately 57% of the outstanding Shares of
the Company. The following is a summary of certain provisions of the Shareholder
Support Agreements, each of which is incorporated herein by reference and a copy
of which has been filed with the Commission as an exhibit to the Schedule TO.
Such summary is qualified in its entirety by reference to the Shareholder
Support Agreements.
AGREEMENT TO TENDER. Pursuant to the Shareholder Support Agreements, each
Supporting Shareholder irrevocably and unconditionally agrees to validly tender
(and not withdraw), pursuant to and in accordance with the terms of the Offer,
all of the Shares that such Supporting Shareholder owns as of the date of the
Shareholder Support Agreements as well as any additional Shares that such
Supporting Shareholder may own, whether acquired by purchase, exercise of
options or otherwise, at any time thereafter (the "Supporting Shares").
VOTING AGREEMENT. Until the termination of the applicable Shareholder
Support Agreement, each Supporting Shareholder irrevocably and unconditionally
agrees to vote or cause to be voted all Supporting Shares that such Supporting
Shareholder is entitled to vote at the time of any vote of the shareholders of
the Company where such matters arise (i) in favor of the approval and adoption
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of the Merger Agreement and in favor of the transactions contemplated thereby,
(ii) against any proposal or transaction which could prevent or delay the
consummation of the transactions contemplated by the Merger Agreement, and
(iii) against any corporate action the consummation of which would frustrate the
purposes, or prevent or delay the consummation, of the transactions contemplated
by the Merger Agreement.
PROXY. Pursuant to the Shareholder Support Agreements, each Supporting
Shareholder (i) revokes any and all previous proxies granted with respect to the
Supporting Shares owned by such Supporting Shareholder, and (ii) grants a
limited irrevocable proxy, within the meaning of NYBCL, appointing the Purchaser
as such Supporting Shareholder's attorney-in-fact and proxy, with full power of
substitution, for and in such Supporting Shareholder's name, to vote, express
consent or dissent, or otherwise to utilize such voting power in such manner and
upon and limited to only those matters referred to in the section on "VOTING
AGREEMENT" above, as the Purchaser or its proxy or substitute shall, in the
Purchaser's sole discretion, deem proper with respect to the Supporting Shares
owned by such Supporting Shareholder.
ADDITIONAL AGREEMENTS. Each of the parties to the Shareholder Support
Agreements agrees to use all reasonable efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations and which may be required under
any agreements, contracts, commitments, instruments, understandings,
arrangements or restrictions of any kind to which such party is a party or by
which such party is governed or bound, to consummate and make effective the
transactions contemplated by the Shareholder Support Agreements, to obtain all
necessary waivers, consents and approvals and effect all necessary registrations
and filings, responses to requests for additional information related to such
filings, and submission of information requested by governmental authorities.
REPRESENTATIONS AND WARRANTIES. The Shareholder Support Agreements contain
customary representations and warranties of the parties thereto.
NO PROXIES FOR OR ENCUMBRANCES ON SHAREHOLDER SHARES. Except pursuant to
the terms of the Shareholder Support Agreements, each Supporting Shareholder
agrees that, without the prior written consent of the Purchaser, such Supporting
Shareholder will not directly or indirectly, (i) grant any proxies or enter into
any voting trust or other agreement or arrangement with respect to the voting of
the Supporting Shares owned by such Supporting Shareholder or (ii) sell, assign,
transfer, encumber or otherwise dispose of, or enter into any contract, option
or other arrangement or understanding with respect to the direct or indirect
sale, assignment, transfer, encumbrance or other disposition of, any Supporting
Shares owned by such Supporting Shareholder during the term of the applicable
Shareholder Support Agreement. Each Supporting Shareholder agrees not to seek or
solicit any such sale, assignment, transfer, encumbrance or other disposition or
any such contract, option or other arrangement or assignment or understanding
and agrees to notify the Purchaser promptly and to provide all details requested
by the Purchaser if such Supporting Shareholder shall be approached or
solicited, directly or indirectly, by any person with respect to any of the
foregoing.
INDEMNIFICATION. Parent agrees to indemnify and hold harmless the
Supporting Shareholders against any Losses (as defined in the Shareholder
Support Agreements) made against each of the Supporting Shareholders by any
third party with respect to the matters covered by the Merger Agreement.
AMENDMENTS; TERMINATION. The Shareholder Support Agreements may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties thereto. Each
Shareholder Support Agreement terminates on the earliest to occur of (i) tender
and acceptance pursuant to this Offer of the Supporting Shares owned by such
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Supporting Shareholder, (ii) the consummation of the Merger, (iii) the six month
anniversary of such Shareholder Support Agreement and (iv) the termination of
the Merger Agreement.
STOCK OPTION AGREEMENT
The following is a summary of certain provisions of the Stock Option
Agreement entered into between the Company and the Purchaser, incorporated
herein by reference and a copy of which has been filed with the Commission as an
exhibit to the Schedule TO. Such summary is qualified in its entirety by
reference to the Stock Option Agreement.
Under the Stock Option Agreement, the Company granted to the Purchaser an
irrevocable Top-Up Stock Option to purchase that number of Top-Up Option Shares
equal to the number of Shares that, when added to the number of Shares owned by
the Purchaser and Parent immediately following consummation of the Offer, will
constitute 90% of the Shares then outstanding (assuming the issuance of the
Top-Up Option Shares) at a purchase price per Top-Up Option Share equal to the
Offer Price. However, the Top-Up Stock Option will not be exercisable if the
number of Shares subject thereto exceeds the number of authorized Shares
available for issuance.
Subject to the terms and conditions of the Stock Option Agreement, the
Top-Up Stock Option may be exercised by the Purchaser, at its election, in
whole, but not in part, at any one time after the occurrence of a Top-Up
Exercise Event (as defined below) and prior to the Top-Up Termination Date (as
defined below). A "Top-Up Exercise Event" shall occur for purposes of the Stock
Option Agreement upon the Purchaser's acceptance for payment pursuant to the
Offer of Shares constituting, together with Shares owned directly or indirectly
by Parent, more than two-thirds but less than 90% of the Shares then
outstanding. The "Top-Up Termination Date" shall occur for purposes of the Stock
Option Agreement upon the earliest to occur of: (i) the Effective Time;
(ii) the date which is 20 business days after the occurrence of a Top-Up
Exercise Event; and (iii) the termination of the Merger Agreement.
The obligation of the Company to deliver Top-Up Option Shares upon the
exercise of the Top-Up Stock Option is subject to the following conditions:
(i) any applicable waiting period under the HSR Act shall have expired or been
terminated; and (ii) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the exercise of the Top-Up
Stock Option or the delivery of the Top-Up Option Shares in respect of any such
exercise.
Any provision of the Stock Option Agreement may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to the Stock Option Agreement or, in the case of a
waiver, by each party against whom the waiver is to be effective.
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CONFIDENTIALITY AGREEMENT
On August 27, 1999, Parent and Fleet National Bank, financial advisor to the
Company, entered into a Confidentiality Agreement. Each party has agreed therein
that for three years following the date of the Confidentiality Agreement, it
will keep confidential all nonpublic, confidential, or proprietary information
of the other party, subject to certain exceptions, and will use the confidential
information for no purpose other than evaluating a possible transaction between
the Company and Parent. The foregoing is a summary of certain provisions of the
Confidentiality Agreement and is qualified in its entirety by reference to the
Confidentiality Agreement. The Confidentiality Agreement is incorporated herein
by reference and a copy has been filed with the Commission as an exhibit to the
Schedule TO. The Confidentiality Agreement shall survive termination of the
Merger Agreement.
SECTION 12. DIVIDENDS AND DISTRIBUTIONS. As described above, the Merger
Agreement provides that, from the date of the Merger Agreement to the Effective
Time (unless Parent agrees otherwise in writing), the Company will not
(i) declare, set aside or pay any dividend or make any other distribution or
payment with respect to any shares of its capital stock or other ownership
interests, or (ii) directly or indirectly redeem, purchase or otherwise acquire
any shares of its capital stock, or make any commitment for any such action.
Furthermore, the Company will not and will not permit its subsidiary to
(iii) amend its certificate of incorporation or bylaws or other charter
documents, (iv) issue any shares of capital stock, effect any stock split or
reclassification or otherwise change (or agree to change so) its equity
securities, options, warrants, or convertible instruments as they existed on the
date of the Merger Agreement, except pursuant to the exercise of options,
warrants, conversion rights and other contractual rights existing on the date of
the Merger Agreement and disclosed pursuant to the Merger Agreement, or
(v) grant, confer or award any option, warrant, conversion right or other right
not existing on the date of the Merger Agreement to acquire any shares of its
capital stock.
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the preceding paragraphs, and
nothing herein shall constitute a waiver by the Purchaser or Parent of any of
its rights under the Merger Agreement or a limitation of remedies available to
the Purchaser or Parent for any breach of the Merger Agreement, including
termination thereof.
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NASDAQ
NATIONAL MARKET LISTING AND EXCHANGE ACT REGISTRATION. The purchase of Shares
pursuant to the Offer will reduce the number of Shares that might otherwise
trade publicly and will reduce the number of holders of Shares, which could
adversely affect the liquidity and market value of the remaining Shares held by
shareholders other than the Purchaser. The Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would have
an adverse or beneficial effect on the market price for, or marketability of,
the Shares or whether such reduction would cause future market prices to be
greater or less than the Offer Price.
Depending upon the aggregate market value and per Share price of any Shares
not purchased pursuant to the Offer, following the Offer the Shares may no
longer meet the standards for continued listing on the NASDAQ National Market
which requires an issuer to have at least 100,000 publicly held Shares with an
aggregate market value of at least $5,000,000. Shares held by directors and
officers (or their immediate families) of the Company and other concentrated
holdings of 10% or more of the Shares outstanding generally will not be
considered to be publicly held for the purpose of the foregoing standards. In
the event that the Shares were no longer quoted on the NASDAQ National Market,
it is possible that the Shares could continue to trade in the over-the-counter
market and that quotations would continue to be reported through other sources.
The extent of the public market for the Shares and the availability of such
quotations would, however, depend upon the number of shareholders remaining at
such time, the interest in maintaining a market in the Shares on the part of
securities
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firms, the possible termination of registration of the Shares under the Exchange
Act, as described below, and other factors.
The Shares are currently registered under the Exchange Act. Such
registration of the Shares may be terminated upon application of the Company to
the Commission if the Shares are not listed on a national securities exchange or
quoted on the NASDAQ National Market and there are fewer than 300 holders of
record of the Shares. Deregistration of the Shares under the Exchange Act would
reduce substantially the information required to be furnished by the Company to
holders of Shares and to the Commission and would render inapplicable certain of
the provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of Section 14(a) that the Company
furnish shareholders with proxy materials in connection with shareholders'
meetings and the requirements of Rule 13e-3 promulgated under the Exchange Act
with respect to "going private" transactions. It is the current intention of
Parent to cause the Company to deregister the Shares after the consummation of
the Offer if the requirements for termination of registration are met.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be "margin securities." The Shares currently are "margin
securities" under the rules 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 Shares. Depending
upon factors similar to those described above regarding listing and market
quotations, it is possible that following the Offer, the Shares would cease to
constitute "margin securities" for the purpose of the Federal Reserve Board's
margin regulations and, therefore, could no longer be used as collateral for
margin loans made by brokers.
SECTION 14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other
provision of the Offer, and in addition to (and not in limitation of) the
Purchaser's rights to amend the Offer (subject to the terms of the Merger
Agreement), the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including, without
limitation, Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or to return tendered Shares promptly after termination or
withdrawal of the Offer), pay for any Shares tendered pursuant to the Offer, and
may postpone the acceptance for payment or, subject to the restrictions referred
to above, payment for, any Shares tendered pursuant to the Offer, and may
terminate or amend the Offer and not accept for payment any Shares if:
(i) the Minimum Condition shall not have been satisfied or waived pursuant
to the Merger Agreement prior to the Expiration Date,
(ii) any applicable waiting period under the HSR Act shall not have expired
or been terminated prior to the Expiration Date,
(iii) at any time on or after the date of the Merger Agreement and prior to
the Initial Expiration Date of the Offer (or extended expiration date of the
Offer only if under the Merger Agreement these conditions remain applicable),
any of the following conditions exist:
(a) there shall be instituted and remain pending any action,
investigation or proceeding by any government or governmental authority or
agency, domestic or foreign, or by any other person, before any court or
governmental authority or agency, domestic or foreign,
(1) challenging the acquisition by Parent or the Purchaser of any
Shares under the Offer, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or the performance of any of the
other transactions contemplated by the Merger Agreement or seeking to
require the Company, Parent or the Purchaser to pay any damages related
to the Offer, the Merger or the other transactions contemplated by the
Merger Agreement that are material in relation to the Company taken as a
whole,
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(2) seeking to impose limitations on the ability of the Purchaser, or
to render the Purchaser unable to accept for payment, pay for or purchase
some or all of the Shares pursuant to the Offer and the Merger,
(3) seeking to restrain or prohibit Parent's ownership or operation
(or that of Parent's subsidiaries) of all or any portion of the business
or assets of the Company or its subsidiary or of Parent or its
subsidiaries or to compel Parent or its subsidiaries to dispose of or
hold separate all or any portion of the business or assets of the Company
or its subsidiary or of Parent or its subsidiaries,
(4) seeking to impose limitations on the ability of Parent, the
Purchaser or any other subsidiary 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 subsidiary of Parent on all matters properly presented to the
Company's shareholders, except such limitations on voting securities as
may be required as a result of Parent or the Purchaser not complying with
applicable securities laws,
(5) seeking to require divestiture by Parent, the Purchaser or any
other subsidiary of Parent of any Shares, or
(6) that otherwise is reasonably likely to have a material adverse
effect on the Company; or
(b) there shall have been any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Merger, by any
court, government or governmental authority or agency, domestic or foreign,
other than the routine application of the waiting period provisions of the
HSR Act to the Offer or the Merger, that is reasonably likely, directly or
indirectly, to result in any of the consequences referred to in clauses
(1) through (6) of paragraph (a) above; or
(c) the Board of Directors of the Company (1) shall have withdrawn, or
modified in a manner adverse to Parent, its approval or recommendation of
the Merger Agreement, the Offer or the Merger or (2) shall have failed to
reaffirm such approval or recommendation upon Parent's reasonable request;
or
(d) the Company shall have breached or failed to perform in any material
respect any obligation or to comply in any material respect with any
agreement or covenant of the Company required to be performed or complied
with by it under the Merger Agreement prior to the consummation of the
Offer; or any representations and warranties of the Company contained in the
Merger Agreement shall not be true and correct, individually or in the
aggregate, so as to be reasonably likely to have a material adverse effect
on the Company, in each case, when made or (except those that speak as to a
specific date) as of the expiration date as set forth in the first sentence
to this clause (iii) of the Offer as if made at and as of such time; or
(e) there shall have occurred a commencement of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States that is reasonably expected to have a
material adverse effect on the Company; or
(f) the Merger Agreement shall have been terminated by Parent in
accordance with its terms; or
(g) Parent shall not have received an opinion from Morrison Cohen Singer
& Weinstein, LLP pursuant to the Merger Agreement in substantially the form
attached to the Merger Agreement,
(iv) the Catrambone Incentive Compensation Agreement in substantially the
form attached to the Merger Agreement shall not be in effect, or
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(v) any employee of the Company, or the Company subsidiary, who owes any
indebtedness to the Company or any Company subsidiary has not either (1) repaid
all principal and interest due thereon in full or (2) instructed ChaseMellon
Shareholder Services, L.L.C. to pay to Parent an amount equal to such principal
and interest out of the proceeds due such employee pursuant to the Offer and to
remit the balance of such proceeds to such employee.
Except as otherwise provided in the Merger Agreement, the foregoing
conditions are for the sole benefit of Parent and the Purchaser and may, subject
to the terms of the Agreement, be waived by Parent or the Purchaser in whole or
in part at any time and from time to time in their discretion. The failure by
Parent or the Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts and circumstances, and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time
prior to the earlier of the scheduled expiration date of the Offer or when
payment for the Shares tendered pursuant to the Offer should have been made by
Parent or the Purchaser.
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.
SECTION 15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
GENERAL. The Purchaser is not aware of any material pending legal
proceeding relating to the Offer. Except as otherwise set forth in this Offer to
Purchase, based upon an examination of publicly available information filed by
the Company with the Commission, neither the Purchaser nor Parent is aware of
(i) any license or other regulatory permit that appears to be material to the
business of the Company and its subsidiary, taken as a whole, that might be
adversely affected by the Purchaser's acquisition of Shares (and the indirect
acquisition of the stock of the Company's subsidiary) pursuant to the Offer or
the Merger, or (ii) any filings, approvals or other actions by or with any
domestic (federal or state), foreign or supranational governmental authority or
administrative or regulatory agency that would be required prior to the
acquisition of Shares (or the indirect acquisition of the stock of the Company's
subsidiary) by the Purchaser as contemplated herein. Should any such approval or
other action be required, it is the Purchaser's present intention to seek such
approval or action. However, except as otherwise set forth in this Offer to
Purchase, the Purchaser does not presently intend to delay the purchase of
Shares tendered pursuant to the Offer pending the receipt of any such approval
or the taking of any such action (subject to the Purchaser's right to delay or
decline to purchase Shares if any of the conditions in Section 14 shall have
occurred). There can be no assurance that any such approval or other action, if
needed, would be obtained without substantial conditions or that adverse
consequences might not result to the business of the Company, Parent or the
Purchaser or that certain parts of the businesses of the Company, Parent or the
Purchaser might not have to be disposed of or held separate or other substantial
conditions complied with in order to obtain such approval or other action or, in
the event that such approval was not obtained or such other action was not
taken, any of which could cause the Purchaser to elect to terminate the Offer
without the purchase of the Shares thereunder. The Purchaser's obligation under
the Offer to accept for payment and pay for Shares is subject to certain
conditions discussed in Section 14, including conditions relating to the legal
matters discussed in this Section 15.
STATE TAKEOVER STATUTES--NEW YORK. The Company is incorporated under the
laws of the State of New York and is subject to the provisions of Section 912 of
NYBCL regulating certain business combinations. Section 912 of NYBCL prevents a
domestic corporation from engaging, in certain circumstances, in a "business
combination", which includes a merger or sale of more than 10% of the
corporation's assets with any "interested shareholder" (generally defined as a
shareholder who, together with its affiliates and associates, owns 20% or more
of the corporations' outstanding voting
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shares) for five years following such interested shareholder's stock acquisition
unless one of the following conditions is satisfied: (i) the business
combination or the purchase of stock made by such interested shareholder had
been approved by the board of directors prior to such interested shareholder's
stock acquisition date, (ii) the business combination is approved by a majority
of shareholders other than the interested shareholder no earlier than five years
after such interested shareholder's stock acquisition date, or (iii) the price
paid to all shareholders meets certain conditions relating to the type and
minimum amount of consideration to be paid to shareholders other than the
interested shareholder. A New York corporation may "opt out" of the provisions
of Section 912 with an express provision in its original certificate of
incorporation or an express provision in its certificate of incorporation or
by-laws resulting from a shareholders' amendment approved by at least a majority
of the outstanding voting shares (other than the interested shareholders), which
amendment generally will not become effective until 18 months after the date of
such amendment. In connection with the review of the proposed transaction, the
Company's Board of Directors prior to the execution of the Merger Agreement
unanimously (i) approved the Offer, the Merger, and the purchase of Shares
contemplated by the Offer and the Stock Option Agreement, (ii) determined that
the terms of the Offer and the Merger, including the Offer Price of $15.36 per
Share in cash, are in the best interest of the shareholders of the Company, and
(iii) recommended that the shareholders of the Company accept the Offer and
tender their Shares pursuant to the Offer. Accordingly, the Purchaser and Parent
believe that Section 912 of NYBCL is inapplicable to the Merger Agreement, the
Offer and the Merger because its provisions have been satisfied.
STATE TAKEOVER STATUTES--OTHER. A number of other states have also adopted
takeover laws and regulations which purport to varying degrees to be applicable
to attempts to acquire securities of corporations which are incorporated in such
states or which have or whose business operations have substantial economic
effects in such states, or which have substantial assets, security holders,
principal executive offices or principal places of business therein. The
Company, directly or through its subsidiary, conducts business in a number of
states throughout the United States, some of which have enacted such laws.
Except as described herein, the Purchaser does not know whether any of these
laws will, by their terms, apply to the Offer or any merger or other business
combination between the Purchaser or any of its affiliates and the Company and
has not complied with any such laws. To the extent that certain provisions of
these state takeover statutes purport to apply to the Offer, the Purchaser
believes that such laws conflict with federal law and constitute an
unconstitutional burden on interstate commerce. In 1982, the Supreme Court of
the United States, in Edgar v. MITE Corp., invalidated on constitutional grounds
the Illinois Business Takeovers Act, 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
of the United States held that the State of Indiana could, as a matter of
corporate law and in particular those aspects of corporate law concerning
corporate governance, constitutionally disqualify a potential acquirer from
voting on the affairs of a target corporation without the prior approval of the
remaining shareholders; provided that such laws were applicable only under
certain conditions. Subsequently, a number of federal courts have ruled that
various state takeover statutes were unconstitutional insofar as they apply to
corporations incorporated outside the state of enactment.
Should any person seek to apply any state takeover law, the Purchaser will
take reasonable efforts to resist such application, 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 or 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 or pay for any Shares tendered
pursuant to the Offer or be delayed in continuing or consummating the Offer and
the Merger. In such case, the Purchaser may not be obligated to accept for
payment, or pay for, any Shares tendered. See Section 14.
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APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, shareholders of the Company at the
time the Merger is consummated would have certain rights to dissent and demand
appraisal of their Shares under Section 623 of NYBCL. Dissenting shareholders
who comply with the requisite statutory procedures under NYBCL would be entitled
to a judicial determination and payment of the "fair value" of their Shares as
of the close of business on the day prior to the date of shareholder
authorization of the Merger, together with interest thereon, at such rate as the
court finds equitable, from the date the Merger is consummated until the date of
payment. Under NYBCL, in fixing the fair value of the Shares, a court would
consider the nature of the transaction giving rise to the shareholders' right to
receive payment for Shares and its effects on the Company and its shareholders,
the concepts and methods then customary in the relevant securities and financial
markets for determining fair value of Shares of a corporation engaging in a
similar transaction under comparable circumstances, and all other relevant
factors. The foregoing summary of the rights of objecting shareholders does not
purport to be a complete statement of the procedures to be followed by
shareholders desiring to exercise any available dissenters' rights. The
preservation and exercise of dissenters' rights require strict adherence to the
applicable provisions of NYBCL.
"GOING PRIVATE" TRANSACTIONS. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which the Purchaser seeks to acquire the remaining Shares not held by it. The
Purchaser believes, however, that Rule 13e-3 is not applicable to the Merger.
Rule 13e-3 requires, among other things, that certain financial information
concerning the Company and certain information relating to 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 consummation of the transaction.
SHAREHOLDER APPROVAL. Under NYBCL, the approval of the Company's Board of
Directors and the affirmative vote of the holders of a two-thirds majority of
the outstanding Shares are required to approve and adopt the Merger Agreement
and the transactions contemplated thereby. The Company has represented in the
Merger Agreement that the execution and delivery of the Merger Agreement and the
Stock Option Agreement by the Company and the consummation by the Company of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to the approval and
adoption of the Merger by the shareholders of the Company in accordance with
NYBCL. In addition, the Company has represented that the affirmative vote of the
holders of a two-thirds majority of the outstanding Shares is the only vote of
the holders of any of the Company's capital stock necessary in connection with
the consummation of the Merger. Therefore, unless the Merger is consummated in
accordance with the short-form merger provisions under NYBCL described below (in
which case no action by the shareholders of the Company, other than the
Purchaser, will be required to consummate the Merger), the only remaining
corporate action of the Company will be the approval and adoption of the Merger
Agreement and the transactions contemplated thereby by the affirmative vote of
the holders of a two-thirds majority of the Shares. The Merger Agreement
provides that Parent will vote all Shares beneficially owned by it in favor of
the adoption of the Merger Agreement at the Company's shareholder's meeting. In
the event that the Purchaser acquires that percentage of outstanding Shares at
least equal to the Minimum Condition, it would have the ability to ensure
approval of the Merger by the shareholders of the Company.
SHORT-FORM MERGER. NYBCL would permit the Merger to occur without a vote of
the Company's shareholders (a "short-form merger") if the Purchaser were to
acquire at least 90% of the outstanding Shares. If, however, the Purchaser does
not acquire at least 90% of the then outstanding
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Shares pursuant to the Offer or otherwise, and a vote of the Company's
shareholders is required under NYBCL, a longer period of time will be required
to effect the Merger.
APPROVAL UNDER THE COMPANY'S CERTIFICATE OF INCORPORATION. Paragraph
Seventh of the Company's Restated Certificate of Incorporation provides that if
any person owns of record or beneficially (directly or indirectly) more than 10%
of the shares of Common Stock of the Company, then certain transactions
(including the Merger) may not be effected without the affirmative vote of the
holders of at least two-thirds of the shares of Common Stock of the Company,
unless such transaction (such as the Merger) was approved in advance by the
Company's board of directors prior to the time that such person became such an
owner of more than 10% of the shares of Common Stock of the Company. On
January 19, 2000, the Board of Directors of the Company unanimously approved the
Merger Agreement and the transactions contemplated thereby, including the Offer,
the Merger, and the purchase of Shares contemplated by the Offer and the Stock
Option Agreement. As a result of such unanimous approval by the Company's board
of directors, the provisions of Paragraph Seventh of the Company's Restated
Certificate of Incorporation shall not apply to the Merger Agreement, the Stock
Option Agreement, the Offer or the Merger.
ANTITRUST. Under the HSR Act and the rules 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 FTC and the Antitrust Division of the Department of Justice
(the "Antitrust Division") and certain waiting period requirements have been
satisfied. The acquisition of Shares by the Purchaser pursuant to the Offer is
subject to the HSR Act requirements. See Section 2.
Under the provisions of the HSR Act applicable to the purchase of Shares
pursuant to the Offer, such purchase may not be made until the expiration of a
15-calendar day waiting period following the required filing of a Pre-merger
Notification and Report Form under the HSR Act by Parent, which Parent intends
to submit as soon as practicable after the date hereof. The waiting period under
the HSR Act would expire at 11:59 p.m., New York City time, 15 days after the
filing date, unless early termination of the waiting period were granted or
Parent received a request from the Antitrust Division or the FTC for additional
information or documentary material prior thereto. If such a request were made,
the waiting period applicable to the Offer will expire on the tenth calendar day
after the date of substantial compliance by Parent with such request.
Thereafter, the waiting period may be extended by court order or by consent of
Parent. Although the Company is required to file certain information and
documentary material with the Antitrust Division and the FTC in connection with
the Offer, neither the Company's failure to make such filings nor a request to
the Company from the Antitrust Division or the FTC for additional information or
documentary material will extend the waiting period.
The waiting period under the HSR Act may be terminated by the FTC and the
Antitrust Division prior to its expiration. Accordingly, pursuant to the HSR
Act, each of Parent and the Company intend to request early termination of the
waiting period applicable to the Offer. There can be no assurance, however, that
the 15-day HSR Act waiting period will be terminated early. Shares will not be
accepted for payment or paid for pursuant to the Offer until the expiration or
earlier termination of the applicable waiting period under the HSR Act. See
Section 2 and Section 14. Subject to Section 4, any extension of the waiting
period will not give rise to any withdrawal rights not otherwise provided for by
applicable law. If the Purchaser's acquisition of Shares is delayed due to a
request by the Antitrust Division or the FTC for additional information or
documentary material pursuant to the HSR Act, the Offer will be extended in
certain circumstances.
No separate HSR Act requirements with respect to the Merger or the Merger
Agreement will apply if the 15-day waiting period relating to the Offer (as
described above) has expired or been terminated. However, if the Offer is
withdrawn or if the filing relating to the Offer is withdrawn prior to the
expiration or termination of the 15-day waiting period relating to the Offer,
the Merger may not
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be consummated until 30 calendar days after receipt by the Antitrust Division
and the FTC of the Pre-merger Notification and Report Forms of both Parent and
the Company, unless the 30-day period is earlier terminated by the Antitrust
Division and the FTC. Within such 30-day period, the Antitrust Division or the
FTC may request additional information or documentary materials from Parent
and/or the Company, in which event, the acquisition of Shares pursuant to the
Merger may not be consummated until twenty (20) days after both Parent and the
Company substantially comply with such requests. Thereafter, the waiting periods
may be extended only by court order or by consent.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer. At any time before or after the purchase by
the Purchaser of Shares pursuant to the Offer, either the FTC or the Antitrust
Division 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 seeking the divestiture of Shares purchased
by the Purchaser or the divestiture of substantial assets of Parent, the Company
or any of their respective subsidiaries. Private parties and state attorneys
general may also bring legal action under federal or state antitrust laws under
certain circumstances. Although the Purchaser believes that the acquisition of
Shares pursuant to the Offer would not violate the antitrust laws, there can be
no assurance that a challenge to the Offer on antitrust grounds will not be made
or, if a challenge is made, what the outcome will be.
SECTION 16. FEES AND EXPENSES. Except as set forth below, neither Parent
nor the Purchaser will pay any fees or commissions to any broker, dealer or
other person in connection with the solicitation of tenders of Shares pursuant
to the Offer.
Hankin & Co. ("HCO") has provided certain financial advisory services to
Parent and the Purchaser in connection with the acquisition of the Company.
Parent has agreed to pay HCO a fee of $600,000 payable upon consummation of the
Offer. The Purchaser has also retained Morrow & Co., Inc. to act as the
Information Agent and ChaseMellon Shareholders Services, L.L.C. to act as the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telegraph and personal interview and may
request brokers, dealers and other nominee shareholders to forward the Offer
materials to beneficial owners. The Information Agent and the Depositary will
receive reasonable and customary compensation for their services relating to the
Offer and will be reimbursed for certain out-of-pocket expenses, including the
fees and expenses of legal counsel. The Purchaser and Parent have also agreed to
indemnify the Information Agent and the Depositary against certain liabilities
and expenses in connection with the Offer, including certain liabilities under
the federal securities laws.
Brokers, dealers, commercial banks and trust companies will, upon request,
be reimbursed by the Purchaser for customary mailing and handling expenses
incurred by them in forwarding the Offer materials to their customers.
SECTION 17. MISCELLANEOUS. The Offer is being made solely by this Offer to
Purchase and the related Letter of Transmittal and is being made to all holders
of Shares. The Purchaser is not aware of any state where the making of the Offer
is prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute or
seek to have such statute declared inapplicable to the Offer. If after such good
faith effort, the Purchaser cannot comply with such state statute, the Offer
will not be made to (nor will tenders be accepted from or on behalf of) the
holders of Shares in such state. In any jurisdiction where the securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Purchaser by one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED IN THIS OFFER
TO PURCHASE 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 Schedule TO
(including exhibits) pursuant to Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to the Offer. Such statement and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained from the offices of the Commission (except that they will not be
available at the regional offices of the Commission) in the manner set forth in
Section 7 of this Offer to Purchase.
IRC ACQUISITION CORPORATION
February 7, 2000
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
1. DIRECTORS AND EXECUTIVE OFFICERS OF INTERNATIONAL RECTIFIER
CORPORATION. The following table sets forth the name, business address, present
principal occupation or employment and five-year employment history of the
directors and executive officers of Parent. The business address of each
director and executive officer is 233 Kansas Street, El Segundo, CA 90245,
unless otherwise set forth below. Unless otherwise indicated, each occupation or
employment set forth opposite an individual's name refers to occupation or
employment with Parent.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS CITIZENSHIP
- ------------------------------------- -------------------------------------------------- -------------
<S> <C> <C>
Eric Lidow(1) Mr. Lidow has been a Director of Parent since United States
1947. He is the Chairman of the Board of
Directors of Parent.
Alexander Lidow(1) Dr. Lidow has been a Director of Parent since United States
1994. He has been the Chief Executive Officer of
Parent since his election on March 6, 1995. He
is also on the Board of Overseers for the RAND
Corporation and on the Board of Trustees of the
California Institute of Technology.
Donald S. Burns Mr. Burns has been a Director of Parent since United States
Prestige Holdings, Ltd. 1993. He is also the Chairman of the Board,
5967 Redondo Drive President and Chief Executive Officer of
Bonsall, CA 92003 Prestige Holdings, Ltd., an investment advisory
firm.
George Krsek Dr. Krsek has been a Director of Parent since United States
Konec, Inc. 1979. From August 1994 to December 1997, he was
3840 E. 44th Street, #609 the Managing Member of Konec L.L.C., a
Tucson, AZ 85713 management consulting firm. In December 1997,
Konec L.L.C. converted to Konec, Inc., and he
became the President and Chairman of the Board
of Konec, Inc.
Derek B. Lidow(1) Dr. Lidow has been a Director of Parent since United States
iSuppli, Inc. 1994. He is the President, Chief Executive
P. O. Box 30464 SMB Officer and also a Director of iSuppli Inc., an
5th Floor internet company. He is also a Director and
Queensgate House, George Chief Executive Officer of Lidow
Town, Grand Cayman Technologies, Inc., a Member of the Leadership
Cayman Islands, B.W.I. Council of the School of Engineering of
Princeton University, and a Trustee of the Los
Angeles Philharmonic. He was a Chief Executive
Officer of Parent from March 6, 1995 until
June 15, 1999. Prior to that he served in
various managerial positions within Parent.
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS CITIZENSHIP
- ------------------------------------- -------------------------------------------------- -------------
<S> <C> <C>
Minoru Matsuda Mr. Matsuda has been a Director of Parent since Japan
Kanazawa Institute of 1997. Since April 1997 he has been a Professor
Technology at the Kanazawa Institute of Technology in
7-1 Ohgigaoka Nonoichi Ishikawa, Japan. He was employed by Hitachi Ltd.
Ishikawa 921-8501 Japan from 1960 to March 1997, his last position being
Senior Counsel-Intellectual Property.
Robert J. Mueller Mr. Mueller has been a Director of Parent since United States
1990. He is also the Executive Vice President of
External Affairs and Business Development. He
has been employed by Parent since 1961 in
various managerial positions.
James D. Plummer Dr. James D. Plummer has been a Director of Parent United States
Stanford University since 1994. He is also the Frederick Emmons
Terman Engineering Terman Professor of Engineering, Dean of the
Mail Code 4027 School of Engineering and Director of the
380 Panama Mall Stanford Nanofabrication Facility at Stanford
Stanford, CA 94305 University.
Jack O. Vance Dr. Vance has been a Director of Parent since United States
Management Research, Inc. 1988. He is the Managing Director of Management
3592 Venture Drive Research, a management consulting firm. He is
Huntington Beach, CA 92649 also a Director of The Olson Company, King's
Seafood Co., First Consulting Group, Semtech
Corporation, Mathers Fund, Inc., and Hankin &
Co. He was formerly a Managing Director of the
Los Angeles office of McKinsey & Co., a
management consulting firm.
Rochus E. Vogt Dr. Vogt has been a Director of Parent since 1984. United States
California Institute of He is the R. Stanton Avery Distinguished Service
Technology Mail Code 103-33 Professor and Professor of Physics at California
1200 E. California Blvd. Institute of Technology.
Pasadena, Ca 91107
Nabeel Gareeb Mr. Gareeb was elected Executive Vice President, United States
Components Group in November 1999. He has been
employed by Parent since August 1992 in various
managerial positions.
Michael P. McGee Mr. McGee is the Executive Vice President and United States
Chief Financial Officer of Parent. He joined
Parent in July 1990 as Director of Corporate
Accounting and was promoted to Corporate
Controller in December 1990. Mr. McGee became
Vice President, Controller and Principal
Accounting Officer in 1991, and, in 1993, became
Vice President and Chief Financial Officer. In
November 1998, Mr. McGee was elected Executive
Vice President.
</TABLE>
S-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS CITIZENSHIP
- ------------------------------------- -------------------------------------------------- -------------
<S> <C> <C>
L. Michael Russell Mr. Russell is the Executive Vice President, United States
Secretary and General Counsel of Parent. He
joined Parent as Vice President and General
Counsel in January 1997. He became Secretary in
February 1997 and in November 1998 he was
elected Executive Vice President. Mr. Russell
was General Counsel, Consumer & Industrial
Segment, and Chief International Counsel of
Teledyne, Inc., where he was employed in the
Corporate Legal Department for more than five
years immediately prior to joining the Company.
</TABLE>
- ------------------------
FOOTNOTES
(1) Drs. Alexander and Derek B. Lidow are sons of Eric Lidow.
2. DIRECTORS AND EXECUTIVE OFFICERS OF IRC ACQUISITION CORPORATION. The
following table sets forth the name, business address, present principal
occupation or employment and five-year employment history of the directors and
executive officers of the Purchaser. The business address of each director and
executive officer is 233 Kansas Street, El Segundo, CA 90245, unless otherwise
set forth below. Unless otherwise indicated, each occupation or employment set
forth opposite an individual's name refers to occupation or employment with
Purchaser.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS CITIZENSHIP
- ------------------------------------- -------------------------------------------------- -------------
<S> <C> <C>
Alexander Lidow Dr. Lidow has been a Director of the Purchaser United States
since incorporation in January 2000. He is the
Chairman and the President of the Purchaser. He
is also on the Board of Overseers for the RAND
Corporation and on the Board of Trustees of the
California Institute of Technology. He is also a
Director and Officer of Parent. See above.
Michael P. McGee Mr. McGee has been a Director of the Purchaser United States
since incorporation in January 2000. He is
Treasurer and Vice President--Finance of the
Purchaser. He is also an Officer of Parent. See
above.
L. Michael Russell Mr. Russell has been a Director of the Purchaser United States
since incorporation in January 2000. He is Vice
President, Secretary and General Counsel of the
Purchaser. He is also an Officer of Parent. See
above.
</TABLE>
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 or his
broker, dealer, commercial bank, trust company or other nominee to the
Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND:
ChaseMellon Shareholder Services, (FOR ELIGIBLE INSTITUTIONS ONLY) ChaseMellon Shareholder Services,
L.L.C. (201) 296-4293 L.L.C.
Reorganization Department CONFIRM FACSIMILE BY TELEPHONE: 120 Broadway, 13th Floor
P.O. Box 3301 (201) 296-4860 New York, NY 10271
South Hackensack, NJ 07606 (FOR CONFIRMATION ONLY)
BY OVERNIGHT COURIER:
ChaseMellon Shareholder Services,
L.L.C.
85 Challenger Road
Ridgefield Park, NJ 07660
</TABLE>
Any questions and requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal and related materials may be directed to
the Information Agent at its address and telephone number set forth below.
Shareholders may also contact their broker, dealer, commercial bank or trust
company for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, NY 10022
Call Collect (212) 754-8000
Banks and Brokerage Firms, Please Call:
(800) 662-5200
SHAREHOLDERS PLEASE CALL: (800) 566-9061
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
ZING TECHNOLOGIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 7, 2000
BY
IRC ACQUISITION CORPORATION
A DIRECT WHOLLY-OWNED SUBSIDIARY OF
INTERNATIONAL RECTIFIER CORPORATION
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MARCH 6, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND:
ChaseMellon Shareholder Services, (FOR ELIGIBLE INSTITUTIONS ONLY) ChaseMellon Shareholder Services,
L.L.C. (201) 296-4293 L.L.C.
Reorganization Department CONFIRM FACSIMILE BY TELEPHONE: 120 Broadway, 13th Floor
P.O. Box 3301 (201) 296-4860 New York, NY 10271
South Hackensack, NJ 07606 (FOR CONFIRMATION ONLY)
BY OVERNIGHT COURIER:
ChaseMellon Shareholder Services,
L.L.C.
85 Challenger Road
Ridgefield Park, NJ 07660
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
<S> <C> <C> <C>
(PLEASE FILL IN EXACTLY AS NAME(S) APPEARS ON SHARE (ATTACH ADDITIONAL LIST, IF NECESSARY)
CERTIFICATE(S))
- ---------------------------------------------------------------------------------------------------------------
SHARE CERTIFICATE SHARES NUMBER OF
NUMBER(S)* REPRESENTED SHARES
BY SHARE TENDERED**
CERTIFICATE(S)*
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
TOTAL SHARES
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-Entry Shareholders (as defined below).
** Unless otherwise indicated, all Shares represented by certificates delivered
to the Depositary will be deemed to have been tendered. See Instruction 4.
<PAGE>
This Letter of Transmittal is to be completed by shareholders either if
certificates evidencing Shares are to be forwarded herewith or, unless an
Agent's Message (as defined in Section 3 of the Offer to Purchase (which is
defined below)) is utilized, if tenders of Shares are to be made by book-entry
transfer into the account of ChaseMellon Shareholder Services, L.L.C., as
Depositary (the "Depositary"), at The Depository Trust Company (the "Book-Entry
Transfer Facility"), pursuant to the procedures set forth in Section 3 of the
Offer to Purchase (as defined below). Shareholders who tender Shares by
book-entry transfer are referred to herein as "Book-Entry Shareholders."
Shareholders whose Share certificates are not immediately available or who
cannot deliver their Share certificates and all other required documents to the
Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase), or who cannot complete the procedure for book-entry transfer on a
timely basis, must tender their Shares according to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
/ / CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution ______________________________________________
Deliver by Book-Entry Transfer to the Book-Entry Transfer Facility (The
Depository Trust Company)
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:
Name(s) of Registered Owner(s): ____________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery: ______________________________
/ / Check box if delivered by Book-Entry Transfer to the Book-Entry
Transfer Facility (The Depository Trust Company)
Account Number ________________ Transaction Code Number _______________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to IRC Acquisition Corporation (the
"Purchaser"), a New York corporation and a direct wholly-owned subsidiary of
International Rectifier Corporation, a Delaware corporation, ("Parent"), the
above-described shares of common stock, par value $0.01 per share (the
"Shares"), of Zing Technologies, Inc., a New York corporation (the "Company"),
at a purchase price of $15.36 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated February 7, 2000 (the "Offer to Purchase") and in this
Letter of Transmittal (which, together with any supplements and amendments,
collectively constitute the "Offer"). Receipt of the Offer is hereby
acknowledged. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of this Letter of
Transmittal, stock transfer taxes on the transfer and sale of Shares pursuant to
the Offer. The Purchaser will pay all fees and expenses of ChaseMellon
Shareholder Services, L.L.C., as Depositary (the "Depositary") and Morrow &
Co., Inc., as Information Agent (the "Information Agent") incurred in connection
with the Offer. The undersigned understands that the Purchaser reserves the
right to transfer or assign, in whole or from time to time in part, to one or
more of its affiliates, the right to purchase all or any portion of the Shares
tendered pursuant to the Offer.
Upon the terms and conditions of the Offer and subject to, and effective
upon, acceptance for payment for the Shares tendered herewith in accordance with
the terms of the Offer, the undersigned hereby sells, assigns and transfers to,
or upon the order of, the Purchaser all right, title and interest in and to all
of the Shares that are being tendered hereby and any and all dividends,
distributions (including any and all other Shares or other securities) or rights
declared, paid or issued with respect to the tendered Shares on or after
February 7, 2000 and payable or distributable to the undersigned on a date prior
to the transfer to the name of the Purchaser or nominee or transferee of the
Purchaser on the Company's stock transfer records of the Shares (and all such
other Shares or securities) tendered herewith, and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares (and all such other Shares or securities) with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to (a) deliver such Share certificates or transfer
ownership of such Shares (and all such other Shares or securities) on the
account books maintained by the Book-Entry Transfer Facility, together in either
case with all accompanying evidences of transfer and authenticity, to the
Depositary for the account of the Purchaser upon receipt by the Depositary of
the purchase price, (b) present such Shares (and all such other Shares or
securities) for transfer on the books of the Company and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and all such other Shares or securities), all in accordance with the
terms and subject to the conditions of the Offer.
By executing this Letter of Transmittal, a tendering shareholder irrevocably
appoints the Purchaser, its officers and its designees, and each of them, as the
shareholder's attorneys-in-fact and proxies, with full power of substitution, in
the manner set forth in this Letter of Transmittal, 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 issued or issuable in respect of the Shares on or
after February 7, 2000). All such powers of attorney and proxies shall be
considered irrevocable and coupled with an interest in the tendered Shares. Such
appointment will be effective if, when and only to the extent that, the
Purchaser accepts such Shares for payment. Upon such acceptance for payment, all
prior powers of attorney and proxies given by the shareholder with respect to
the Shares (and such other Shares and securities) will, without further action,
be revoked, and no subsequent powers of attorney, proxies or written consents
may be given or executed (and if given or executed will not be deemed effective
with respect thereto by the shareholder). The Purchaser, its officers and its
designees will, with respect to the Shares (and such other Shares and
securities) for which such appointment is effective, be empowered to exercise
all voting and other rights of the shareholder as they in their sole discretion
may deem proper at any annual or special meeting of the Company's shareholders
or any adjournment or postponement thereof, by written consent in lieu of any
such meeting or otherwise. The Purchaser reserves the right to require that, in
order for Shares to be deemed validly tendered, immediately upon the Purchaser's
payment for such Shares, the Purchaser must be able to exercise full voting
rights with respect to such Shares and other securities, including voting at any
meeting of shareholders or acting by written consent without a meeting.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
all such other Shares or securities) tendered hereby, (b) the undersigned owns
the tendered Shares within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (c) the tender
of the tendered Shares complies with
3
<PAGE>
Rule 14e-4 under the Exchange Act, and (d) when the Shares (and all such other
Shares or securities) are accepted for payment by the Purchaser, the Purchaser
will acquire good, marketable and unencumbered title to the Shares (and all such
other Shares or securities), free and clear of all liens, restrictions, charges
and encumbrances, and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares (and all such other
Shares or securities) tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Except as
stated in the Offer, this tender is irrevocable.
The undersigned understands that valid tenders of Shares pursuant to any of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto and acceptance for payment of such Shares will constitute a
binding agreement between the undersigned and the Purchaser upon the terms and
subject to the conditions set forth in the Offer, including without limitation
the undersigned's representation that the undersigned owns the Shares (and all
such other Shares or securities) being tendered. Without limiting the foregoing,
if the price to be paid in the Offer is amended as described in the Offer to
Purchase, the price to be paid to the undersigned will be the amended price
regardless of the price stated in this Letter of Transmittal. The undersigned
recognizes that under certain circumstances set forth in the Offer to Purchase,
the Purchaser may not be required to accept for payment any of the Shares
tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or issue or return any
certificate(s) for Shares not tendered or not accepted for payment in the
name(s) of the undersigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility
designated above). Similarly, unless otherwise indicated herein under "Special
Delivery Instructions," please mail the check for the purchase price and/or any
certificate(s) for Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the undersigned at the address shown
below the undersigned's signature(s). In the event that both the Special
Delivery Instructions and the Special Payment Instructions are completed, please
issue the check for the purchase price and/or any certificate(s) for Shares not
tendered or accepted for payment in the name of, and deliver such check and/or
such certificates to, the person(s) so indicated. The undersigned recognizes
that the Purchaser has no obligation, pursuant to the Special Payment
Instructions, to transfer any Shares from the name(s) of the registered
holder(s) thereof if the Purchaser does not accept for payment any of the Shares
so tendered.
4
<PAGE>
- ------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased (less the amount of any federal income and backup withholding tax
required to be withheld) or certificates for Shares not tendered or not
purchased are to be issued in the name of someone other than the
undersigned.
Issue: / / check
/ / certificate(s) to:
Name: ______________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION NUMBER)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased (less the amount of any federal income and backup withholding tax
required to be withheld) or certificates for 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 below the undersigned's
signature(s).
Mail: / / check
/ / certificate(s) to:
Name: ______________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION NUMBER)
- ------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 7)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
SIGNATURE(S) OF OWNERS(S)
Dated ______________, 2000
Name(s) ____________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity (Full Title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________________
Taxpayer Identification Number or Social Security Number ___________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, please set forth full
title and see Instruction 5.)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED; SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized Signature(s) ____________________________________________________
Name(s) ____________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
Area Code and Telephone Number _____________________________________________
Dated ______________, 2000
- --------------------------------------------------------------------------------
6
<PAGE>
<TABLE>
<C> <S> <C>
- -------------------------------------------------------------------------------------------------------------------------
PAYER: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
- -------------------------------------------------------------------------------------------------------------------------
Name --------------------------------------------------------
Address ------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
(City) (State) (Zip Code)
SUBSTITUTE PART I TAXPAYER IDENTIFICATION NUMBER--FOR ALL ACCOUNTS
FORM W-9 Enter your Taxpayer Identification Number in the appropriate box. For most
DEPARTMENT OF THE TREASURY individuals and sole proprietors, this is your Social Security Number. For
INTERNAL REVENUE SERVICE other entities, it is your Employer Identification Number. If you do not
PAYER'S REQUEST FOR have a number, see "Obtaining a Number" in the enclosed GUIDELINES FOR
TAXPAYER IDENTIFICATION NUMBER CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
("GUIDELINES").
Note: If the account is in more than one name, see the chart on page 1
of the enclosed GUIDELINES to determine what number to enter.
SOCIAL SECURITY NUMBER
OR
EMPLOYER IDENTIFICATION NUMBER
-----------------------------------------------------------------
PART II FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING PLEASE WRITE "EXEMPT" HERE
(SEE ENCLOSED GUIDELINES)
-----------------------------------------------------------------
PART III PLEASE CHECK THE BOX AT RIGHT IF YOU HAVE APPLIED FOR, AND
ARE AWAITING RECEIPT OF, YOUR TAXPAYER IDENTIFICATION NUMBER / /
- -------------------------------------------------------------------------------------------------------------------------
CERTIFICATION--Under penalty of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be
issued to me);
(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, or (b) I have not
been notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding; and
(3) Any information provided on this form is true, correct and complete.
YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP
WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN AND YOU HAVE NOT RECEIVED A NOTICE FROM
THE IRS ADVISING YOU THAT BACKUP WITHHOLDING HAS TERMINATED.
</TABLE>
SIGNATURE _______________________________ DATE _______________________________
<TABLE>
<C> <S> <C>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU
PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR ADDITIONAL DETAILS.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalty of perjury that a Taxpayer Identification Number has
not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a Taxpayer Identification Number within
60 days, 31% of all reportable payments made to me thereafter will be withheld
until I provide a number.
Signature: ___________________________ Date: ___________________________, 2000
- --------------------------------------------------------------------------------
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERM AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" above, or (b)
if such Shares are tendered for the account of a firm which is a bank, broker,
dealer, credit union, savings association or other entity which is a member in
good standing of a recognized Medallion Signature Guarantee Program (each of the
foregoing being referred to as an "Eligible Institution"). In all other cases,
all signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5 of this Letter of Transmittal.
2. REQUIREMENTS OF TENDER; DELIVERY OF LETTER OF TRANSMITTAL AND
SHARES. This Letter of Transmittal is to be completed by shareholders either if
certificates are to be forwarded herewith or, unless an Agent's Message is
utilized, if tenders are to be made pursuant to the procedure for tender by
book-entry transfer set forth in Section 3 of the Offer to Purchase. Share
certificates for all physically delivered Shares, or timely confirmation (a
"Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility, as well as this Letter
of Transmittal (or a facsimile hereof), properly completed and duly executed
with any required signature guarantees, or an Agent's Message in 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 front page of this Letter of Transmittal on or prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase). Shareholders
whose Share certificates are not immediately available or who cannot deliver
their Share certificates and all other required documents to the Depositary on
or prior to the Expiration Date or who cannot complete the procedure for
delivery by book-entry transfer on a timely basis may tender their Shares by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedure (as set forth in Section 3 of the Offer to
Purchase). Pursuant to such procedure: (a) such tender must be made by or
through an Eligible Institution; (b) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form made available by the
Purchaser, must be received by the Depositary on or prior to the Expiration
Date; and (c) the Share certificates for all physically delivered Shares (or a
Book-Entry Confirmation) representing all tendered Shares, in proper form for
transfer, in each case together with 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 delivery, an Agent's Message) and
any other documents required by this Letter of Transmittal, must be received by
the Depositary within three NASDAQ National Market trading days after the date
of execution of such Notice of Guaranteed Delivery. If Share certificates are
forwarded separately to the Depositary, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER (INCLUDING, IN
THE CASE OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). 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 (unless you are tendering all of the Shares
you own). All tendering shareholders, by execution of this Letter of Transmittal
(or a facsimile hereof), waive any right to receive any notice of the acceptance
of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all of the Shares evidenced by any Share certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares
8
<PAGE>
Tendered." In such a case, new Share certificates for the Shares that were
evidenced by your old Share certificates, but were not tendered by you, will be
sent to you (unless otherwise provided in the appropriate box on this Letter of
Transmittal) as soon as practicable after the Expiration Date. All Shares
represented 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 certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or not purchased are to be issued in the
name of a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) 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 the
certificate(s) for such Shares. Signatures on such certificates or stock powers
must be guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay or cause to be paid any stock transfer taxes with
respect to the transfer and sale of Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificate(s) for Shares not tendered or accepted for payment are to be
registered in the name of, any person other than the registered holder(s), if a
transfer tax is imposed for any reason other than the sale or transfer of Shares
to the Purchaser pursuant to the Offer, or if tendered certificate(s) are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered holder(s) or such person) payable on account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or an exemption therefrom is submitted.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, or any
Shares not tendered or not purchased are to be returned to, a person other than
the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
8. WAIVER OF CONDITIONS. The conditions of 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. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN"), generally
the shareholder's Social Security Number or federal Employer Identification
Number, on Substitute Form W-9 above. Failure to provide the information on the
form may subject the tendering shareholder to 31% federal income tax withholding
on the payment of the purchase price. The box in Part 3 of the form may be
checked 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. If the box in
Part 3 is checked and the Depositary is not provided with a TIN by the time of
payment, the Depositary will withhold 31% of all payments of the purchase price
thereafter until a TIN is provided to the Depositary.
Under the federal income tax law, a shareholder whose tendered Shares are
accepted for purchase is required by law to provide the Depositary (as payer)
with such shareholder's correct TIN on Substitute Form W-9 above. If
9
<PAGE>
such shareholder is an individual, the TIN is his or her Social Security Number.
If a shareholder fails to provide the correct TIN to the Depositary, such
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, the shareholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 for additional
instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments made to the shareholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part III of the Substitute Form W-9 may be checked if the
tendering shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part III is
checked, the shareholder or other payee must also complete the Certificate of
Awaiting Taxpayer Identification Number on the Substitute Form W-9 in order to
avoid backup withholding. Notwithstanding that the box in Part III is checked
and the Certificate of Awaiting Taxpayer Identification Number is completed, the
Depositary will withhold 31% of all payments made prior to the time a properly
certified TIN is provided to the Depositary.
The shareholder is required to give the Depositary the Social Security
Number or Employer Identification Number of the record owner of the Shares or of
the last transferee appearing on the transfers attached to, or endorsed on, the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 for additional guidance on which
number to report.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests
for assistance may be directed to the Information Agent at its address and
telephone numbers set forth below. Additional copies of the Offer to Purchase,
this Letter of Transmittal and the Notice of Guaranteed Delivery may also be
obtained from the Information Agent at its address and telephone number set
forth below, or from brokers, dealers, commercial banks or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate evidencing
Shares has been lost, destroyed or stolen, the shareholder should promptly
notify the Depositary. The shareholder will then be instructed as to the steps
that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER WITH
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF
GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE.
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, NY 10022
Call Collect (212) 754-8000
Banks and Brokerage Firms, Please Call:
(800) 662-5200
SHAREHOLDERS PLEASE CALL: (800) 566-9061
10
<PAGE>
NOTICE OF GUARANTEED DELIVERY
TO TENDER SHARES OF COMMON STOCK
OF
ZING TECHNOLOGIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 7, 2000
BY
IRC ACQUISITION CORPORATION
A DIRECT WHOLLY-OWNED SUBSIDIARY OF
INTERNATIONAL RECTIFIER CORPORATION
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MARCH 6, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
As set forth in Section 3 of the Offer to Purchase (as defined below), this
Notice of Guaranteed Delivery, or one substantially equivalent hereto, must be
used to accept the Offer (as defined below) if (i) certificates evidencing
Shares of common stock, par value $0.01 per share (the "Shares"), are not
immediately available, (ii) the certificates evidencing Shares and all other
required documents cannot be delivered to the Depositary on or prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), or
(iii) the procedure for delivery by book-entry transfer cannot be completed on a
timely basis. This instrument may be transmitted by facsimile transmission or
delivered by hand or mail to the Depositary.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND:
ChaseMellon Shareholder (FOR ELIGIBLE INSTITUTIONS ChaseMellon Shareholder
Services, L.L.C. ONLY) Services, L.L.C.
Reorganization Department (201) 296-4293 120 Broadway, 13th Floor
P.O. Box 3301 CONFIRM FACSIMILE BY New York, NY 10271
South Hackensack, NJ 07606 TELEPHONE:
(201) 296-4860
(FOR CONFIRMATION ONLY)
BY OVERNIGHT COURIER:
ChaseMellon Shareholder
Services, L.L.C.
85 Challenger Road
Ridgefield Park, NJ 07660
</TABLE>
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 TO THE DEPOSITARY.
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, the
signature guarantee must appear on the applicable space provided in the
signature box in the Letter of Transmittal.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
- --------------------------------------------------------------------------------
Ladies and Gentlemen:
The undersigned hereby tender(s) to IRC Acquisition Corporation, a New
York corporation (the "Purchaser") and a direct wholly-owned subsidiary of
International Rectifier Corporation, a Delaware corporation (the "Parent"),
upon the terms and subject to the conditions set forth in the Offer to
Purchase dated February 7, 2000 (the "Offer to Purchase") and in the related
Letter of Transmittal (which, together with any supplements and amendments,
collectively constitute the "Offer"), receipt of which is hereby
acknowledged, the number of Shares indicated below of Zing
Technologies, Inc., a New York corporation (the "Company"), pursuant to the
guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase.
<TABLE>
<S> <C>
SIGN HERE
- ---------------------------------------- -------------------------------------------
Number of Shares Signature(s)
- ---------------------------------------- -------------------------------------------
Certificate Nos. (if available) Name(s) (Please Print or Type)
Check box if Shares will be tendered by Address:
book-entry transfer: / /
- ---------------------------------------- -------------------------------------------
Tendering Institution
Account No. -------------------------------------------
- ------------------------------ Zip Code
Dated: ----------------------------, 2000 -------------------------------------------
Area Code and Telephone No.
</TABLE>
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program, (a) represents that the
above named person(s) "own(s)" the Shares tendered hereby within the meaning
of Rule 14e-4 under the Securities Exchange Act of 1934, as amended
("Rule 14e-4"), (b) represents that the tender of those Shares complies with
Rule 14e-4, and (c) guarantees to deliver to the Depositary either the
certificates evidencing all tendered Shares, in proper form for transfer, or
to deliver Shares pursuant to the procedure for book-entry transfer into the
Depositary's account at The Depository Trust Company identified above (the
"Book-Entry Transfer Facility"), in either case together with the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed
with any required signature guarantees, or an Agent's Message (as defined in
the Offer to Purchase) in the case of a book-entry delivery, and any other
required documents, all within three NASDAQ National Market trading days
after the date hereof.
<TABLE>
<S> <C>
- ---------------------------------------- -------------------------------------------
Name of Firm Authorized Signature
- ---------------------------------------- Name: ------------------------------------
Address (Please Print or Type)
---------------------------------------- Title: -------------------------------------
Zip Code (Please Print or Type)
Area Code and
Telephone No.: Dated: -------------------------------, 2000
- ---------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES EVIDENCING SHARES WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
- --------------------------------------------------------------------------------
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ZING TECHNOLOGIES, INC.
AT
$15.36 NET PER SHARE
BY
IRC ACQUISITION CORPORATION
A DIRECT WHOLLY-OWNED SUBSIDIARY OF
INTERNATIONAL RECTIFIER CORPORATION
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MARCH 6, 2000, UNLESS THE OFFER IS EXTENDED.
February 7, 2000
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been engaged by IRC Acquisition Corporation (the "Purchaser"), a New
York corporation and a direct wholly-owned subsidiary of International Rectifier
Corporation, a Delaware corporation ("Parent"), to act as Information Agent in
connection with the Purchaser's offer to purchase for cash all of the
outstanding shares of common stock, par value $0.01 per share, of Zing
Technologies, Inc., a New York corporation (the "Company"), (the "Shares") at a
purchase price of $15.36 per Share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal (which, together with any
supplements or amendments, collectively constitute the "Offer") enclosed
herewith. Holders of Shares whose certificates evidencing such Shares are not
immediately available or who cannot deliver their Share certificates and all
other required documents to ChaseMellon Shareholder Services, L.L.C. (the
"Depositary") on or prior to the Expiration Date (as defined in the Offer to
Purchase), or who cannot complete the procedures for book-entry transfer on a
timely basis, must tender their Shares according to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF SHARES WHICH CONSTITUTES AT LEAST TWO-THIRDS OF THE TOTAL NUMBER OF
OUTSTANDING SHARES OF THE COMPANY ON A FULLY-DILUTED BASIS (THE "MINIMUM
CONDITION"). THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE THE
INTRODUCTION AND SECTION 14 OF THE OFFER TO PURCHASE.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated February 7, 2000.
2. The BLUE Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of a signed Letter of Transmittal
may be used to tender Shares.
3. The GREY Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if Share certificates are not immediately available, if such
certificates and all other required documents cannot be delivered to the
Depositary by the Expiration Date, or if the procedure for book-entry transfer
cannot be completed by the Expiration Date.
<PAGE>
4. A YELLOW printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining your clients' instructions with
regard to the Offer.
5. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 providing information relating to backup federal income tax
withholding.
6. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, MARCH 6, 2000, UNLESS THE OFFER
IS EXTENDED.
The Board of Directors of the Company has unanimously approved the Offer,
the Merger, the Merger Agreement, the Stock Option Agreement (each as defined in
the Offer to Purchase), and the purchase of Shares contemplated by the Offer and
the Stock Option Agreement, and determined that the terms of the Offer and the
Merger are fair to, and in the best interests of, the Company's shareholders,
and has recommended acceptance of the Offer and approval and adoption of the
Merger Agreement by the Company's shareholders (if such approval is required by
applicable law). Accordingly, the Board of Directors of the Company unanimously
recommends that the Company's shareholders accept the Offer and tender their
Shares of common stock pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will be deemed to have accepted for payment, and will
pay for, all Shares validly tendered and not properly withdrawn prior to the
Expiration Date when, as and if the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance of such Shares for payment pursuant
to the Offer. Payment for Shares purchased pursuant to the Offer will be made
only after timely receipt by the Depositary of certificates for such Shares (or
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility (as described in the Offer to
Purchase)), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) (unless, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase) is utilized) and any other
documents required by the Letter of Transmittal.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal with any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and any other required documents should be sent
to the Depositary, and (ii) Share certificates representing the tendered Shares
should be delivered to the Depositary, or such Shares should be tendered by
book-entry transfer into the Depositary's account maintained at the Book-Entry
Transfer Facility (as described in the Offer to Purchase), all in accordance
with the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Depositary and the Information Agent as described
in the Offer to Purchase) in connection with the solicitation of tenders of
Shares pursuant to the Offer. The Purchaser will, however, upon request,
reimburse brokers, dealers, commercial banks and trust companies for reasonable
and necessary clerical and mailing expenses incurred by you in forwarding any of
the enclosed materials to your clients. The Purchaser will pay or cause to be
paid any stock transfer taxes payable on the transfer of Shares to it, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
2
<PAGE>
Any inquiries you may have with respect to the Offer should be addressed to
us at our address and telephone numbers set forth on the back cover of the Offer
to Purchase.
VERY TRULY YOURS,
MORROW & CO., INC.
AS INFORMATION AGENT
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE COMPANY, THE
DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ZING TECHNOLOGIES, INC.
AT
$15.36 NET PER SHARE
BY
IRC ACQUISITION CORPORATION
A DIRECT WHOLLY-OWNED SUBSIDIARY OF
INTERNATIONAL RECTIFIER CORPORATION
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MARCH 6, 2000, UNLESS THE OFFER IS EXTENDED.
February 7, 2000
TO OUR CLIENTS:
Enclosed for your consideration is an Offer to Purchase dated February 7,
2000 (the "Offer to Purchase") and the related Letter of Transmittal relating to
an offer by IRC Acquisition Corporation (the "Purchaser"), a New York
corporation and a direct wholly-owned subsidiary of International Rectifier
Corporation, a Delaware corporation ("Parent"), to purchase all of the
outstanding shares of common stock, par value $0.01 per share, of Zing
Technologies, Inc., a New York corporation (the "Company"), (the "Shares") at a
purchase price of $15.36 per Share (such price, or such higher price per Share
as may be paid in the Offer, being referred to herein as the Offer Price), net
to the seller in cash, without interest thereon, upon the terms and subject to
the conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (which, together with any supplements or amendments, collectively
constitute the "Offer"). 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 PURSUANT TO YOUR
INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION
ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of such Shares held by us for your account, pursuant to the
terms and subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The Offer Price is $15.36 per Share, net to the seller in cash, without
interest thereon.
2. The Offer is being made for all outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 midnight, New York
City time, on March 6, 2000, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, there being validly
tendered and not properly withdrawn on or prior to the Expiration Date (as
defined in the Offer to Purchase) a number of Shares which constitutes at least
two-thirds of the outstanding Shares of the Company on a fully-diluted basis
(the "Minimum Condition"). The Offer is also subject to other terms and
conditions. See the Introduction and Section 14 of the Offer to Purchase.
5. The Board of Directors of the Company has unanimously approved the
Offer, the Merger, the Merger Agreement, the Stock Option Agreement (each as
defined in the Offer to Purchase), and the purchase of Shares contemplated by
the Offer and the Stock Option Agreement, and determined that the
<PAGE>
terms of the Offer and the Merger are fair to, and in the best interests of, the
Company's shareholders, and has recommended acceptance of the Offer and approval
and adoption of the Merger Agreement by the Company's shareholders (if such
approval is required by applicable law). Accordingly, the Board of Directors of
the Company unanimously recommends that the Company's shareholders accept the
Offer and tender their Shares of common stock pursuant to the Offer.
6. 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 transfer and sale of Shares pursuant to
the Offer. However, federal income tax backup withholding at a rate of 31% may
be required, unless a exemption is provided or unless the required taxpayer
identification information is provided. See Instruction 9 of the Letter of
Transmittal.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Purchaser
is not aware of any state where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If the
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a
good faith effort to comply with any such state statute or seek to have such
statute declared inapplicable to the Offer. If after such good faith effort, the
Purchaser cannot comply with such state statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) the holders of Shares in
such state. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser by one or more registered brokers
or dealers that are licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. An envelope to return your
instructions to us is enclosed. If you authorize a tender of your Shares, all
such Shares will be tendered unless otherwise specified in such instruction
form. Your instructions should be forwarded to us in ample time to permit us to
submit a tender on your behalf on or prior to the Expiration Date. Holders of
Shares whose Share certificates (as defined in the Offer to Purchase) are not
immediately available or who cannot deliver their certificates and all other
required documents to ChaseMellon Shareholder Services, L.L.C., as depositary
(the "Depositary"), or complete the procedures for book-entry transfer on or
prior to the Expiration Date must tender their Shares according to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
Payment for Shares purchased pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (a) Share certificates or timely
confirmation of the book-entry transfer of such Shares into the account
maintained by the Depositary at The Depository Trust Company (the "Book-Entry
Transfer Facility"), pursuant to the procedure set forth in Section 3 of the
Offer to Purchase, (b) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed with any required signature guarantees, or
an Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery, and (c) any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering shareholders
at the same time depending upon when Share certificates for or confirmation of
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility are actually received by the Depositary.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ZING TECHNOLOGIES, INC.
The undersigned acknowledge(s) receipt of your letter enclosing the Offer to
Purchase dated February 7, 2000 (the "Offer to Purchase") and the related Letter
of Transmittal pursuant to an offer by IRC Acquisition Corporation, a New York
corporation and a direct wholly-owned subsidiary of International Rectifier
Corporation, a Delaware corporation, to purchase all outstanding shares of
common stock, par value $0.01 per share, of Zing Technologies, Inc., a New York
corporation (the "Shares").
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) which are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal
furnished to the undersigned.
<TABLE>
<S> <C>
Number of Shares to be Tendered: SIGN HERE
- ------------------------------------- Shares* --------------------------------------------
SIGNATURE(S)
Account Number ----------------------------- --------------------------------------------
Dated ---------------------------------, 2000 --------------------------------------------
- --------------------------------------------- ---------------------------------------------
AREA CODE AND PHONE NUMBER PLEASE PRINT NAME(S) AND ADDRESS(ES) HERE
- ---------------------------------------------
TAX IDENTIFICATION NUMBER OR SOCIAL SECURITY
NUMBER
</TABLE>
* Unless otherwise indicated, it will be assumed that all of your Shares held
by us for your account are to be tendered.
3
<PAGE>
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., 000-000000. The table below will help determine the number to
give the Payer.
<TABLE>
- -------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- -------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, any one of the
individuals(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for incompetent person(3)
a designated ward, minor,
or incompetent person
7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also
trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under state
law
- -------------------------------------------------------
- -------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
<S> <C>
- -------------------------------------------------------
8. Sole proprietorship The owner(4)
9. A valid trust, estate, Legal entity (Do not
or pension trust 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 The corporation
11. Religious, charitable, The organization
or educational
organization
12. Partnership account held The partnership
in the name of the
business
13. Association, club or The organization
other tax-exempt
organization
14. A broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of
Agriculture in the name
of a public entity (such
as a state of local
governmental school
district or prison) that
receives agricultural
program payments
- -------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a Social Security Number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's Social Security Number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's Social Security Number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
Note: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a Taxpayer Identification Number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
- - A corporation.
- - A financial institution.
- - An organization exempt from tax under section 501(a) or an individual
retirement plan.
- - The United States or any agency or instrumentality thereof.
- - A state, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government, or 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 nonresident 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
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE. Section 6109 requires most recipients of dividend interest,
or other payments to give Taxpayer Identification Numbers to payers who must
report the payments to the IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBERS.--If you fail
to furnish your Taxpayer Identification Number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE>
AGREEMENT AND
PLAN OF REORGANIZATION
by and among
IR,
MERGER SUB
and
ZT
dated as of January 27, 2000
<TABLE>
<S> <C> <C>
1.1 The Offer.............................................................1
1.2 Company Action........................................................3
1.3 Directors.............................................................3
ARTICLE II
THE MERGER
2.1 The Merger............................................................4
2.2 Effective Time........................................................5
2.3 Closing of the Merger.................................................5
2.4 Effects of the Merger.................................................5
2.5 Certificate of Incorporation and By-laws..............................5
2.6 Directors.............................................................5
2.7 Officers..............................................................5
2.8 Conversion of Shares..................................................5
2.9 Delivery of Merger Consideration......................................6
2.10 Dissenting Shares.....................................................7
2.11 Treatment of ZT Options...............................................8
2.12 Adjustments...........................................................8
</TABLE>
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ZT
<TABLE>
<S> <C> <C>
3.1 Existence; Good Standing; Corporate Authority.........................8
3.2 Authorization, Validity and Effect of Agreements......................9
3.3 Capitalization........................................................9
3.4 Subsidiaries.........................................................10
3.5 Other Interests......................................................10
3.6 No Conflict; Required Filings and Consents...........................10
3.7 Compliance...........................................................11
3.10 Absence of Certain Changes...........................................13
3.11 Material Contracts...................................................13
3.12 Litigation...........................................................14
3.13 Taxes................................................................14
3.14 Employee Benefit Plans...............................................15
3.15 Labor and Employment Matters.........................................17
3.16 No Brokers...........................................................17
3.17 Year 2000 Compliance.................................................17
3.18 Insurance............................................................18
3.19 Properties...........................................................18
3.20 Environmental Laws...................................................18
3.21 Related Party Transactions...........................................20
3.22 Bank Accounts........................................................20
3.23 Intellectual Property................................................21
3.24 Minute Books.........................................................21
3.25 Accounting Records; Internal Controls................................21
3.26 Past Product Liability and Returns...................................21
3.27 Full Disclosure......................................................21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF IR AND MERGER SUB
4.1 Existence; Good Standing; Corporate Authority........................22
4.2 Authorization, Validity and Effect of Agreements.....................22
4.3 No Conflict; Required Filings and Consents...........................22
4.4 No Brokers...........................................................23
4.5 Full Disclosure......................................................24
4.6 Financing............................................................24
ARTICLE V
COVENANTS
5.1 Alternative Proposals................................................24
5.2 Interim Operations...................................................25
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
5.4 Filings, Other Action................................................26
5.5 Third-Party Consents.................................................26
5.6 Inspection of Records; Access and Information........................26
5.7 Publicity............................................................27
5.8 Expenses.............................................................27
5.9 Insurance; Indemnity.................................................27
5.10 Appreciation Rights..................................................28
5.11 Cooperation, Notification............................................28
5.12 Financial Statements.................................................29
5.13 Commercially Reasonable Efforts......................................29
5.14 Anti-takeover Statutes...............................................29
5.15 Merger Without Meeting of Shareholders...............................29
5.16 Payment of Debt......................................................29
5.17 Guaranty and Indemnity Agreement.....................................29
ARTICLE VI
CONDITIONS
6.1 Conditions to Each Party's Obligation to Effect the Merger...........30
6.2 Conditions to Obligation of ZT to Effect the Merger..................30
6.3 Conditions to Obligation of IR to Effect the Merger..................31
ARTICLE VII
TERMINATION
7.1 Termination by Mutual Consent........................................32
7.2 Termination by Either IR or ZT.......................................32
7.3 Termination by ZT....................................................32
7.4 Termination by IR....................................................33
7.6 Extension, Waiver....................................................33
ARTICLE VIII
GENERAL PROVISIONS
8.1 Nonsurvival of Representations, Warranties and Agreements............34
8.2 Notices..............................................................34
8.3 Assignment; Binding Effect...........................................34
8.4 Entire Agreement.....................................................34
8.5 Amendment............................................................35
8.6 Governing Law........................................................35
8.7 Counterparts.........................................................35
8.8 Headings.............................................................35
8.9 Interpretation.......................................................35
8.10 Waivers..............................................................35
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
8.11 Incorporation of Exhibits............................................36
8.12 Severability.........................................................36
8.13 Enforcement of Agreement.............................................36
8.14 Definitions of Subsidiary, Person and Knowledge......................36
8.15 Waiver Of Jury Trial.................................................36
</TABLE>
4
<PAGE>
LIST OF EXHIBITS
<TABLE>
<S> <C>
EXHIBIT A Stock Option Agreement
EXHIBIT B ZT Shareholder Support Agreement
EXHIBIT C Offer Conditions
EXHIBIT D Incentive Compensation Agreement with
International Rectifier Corporation
EXHIBIT E Form of Opinion of Counsel to ZT
EXHIBIT F Incentive Compensation Agreement with
Omnirel LLC
</TABLE>
5
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
dated as of January 27, 2000, is by and among International Rectifier
Corporation, a Delaware corporation ("IR"), Zing Technologies, Inc., a New York
corporation ("ZT"), and IRC Acquisition Corporation, a New York corporation and
a direct wholly owned subsidiary of IR ("Merger Sub").
RECITALS
A. ZT and IR have determined to engage in the transactions
(the "Transactions") contemplated by (i) the Stock Option Agreement dated as of
the date hereof among ZT, IR, and Merger Sub (the "Stock Option Agreement")
attached as EXHIBIT A and (ii) this Agreement, including (a) the commencement of
an Offer (as defined below) by Merger Sub to purchase any and all of the
outstanding shares of common stock, $0.01 par value, of ZT ("ZT Common Stock"),
and (b) a business combination whereby Merger Sub will be merged with and into
ZT, with ZT continuing as the surviving corporation of such merger and a direct
wholly-owned subsidiary of IR (the "Merger").
B. The respective boards of directors of ZT, IR and Merger Sub
have approved and declared advisable this Agreement and the Transactions.
C. To induce IR to enter into this Agreement, certain
shareholders of ZT have executed a shareholder support agreement ("ZT
Shareholder Support Agreement") with IR in the form of EXHIBIT B.
ARTICLE I
THE OFFER
1.1 THE OFFER.
(a) Provided that nothing shall have occurred that would result in a
failure to satisfy any of the conditions set forth in EXHIBIT C hereto, as
promptly as practicable after the date hereof, Merger Sub shall, and IR shall
cause Merger Sub to, commence (within the meaning of Rule 14d-2 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) promptly, but
in no event later than the tenth business day after the date of this Agreement,
an offer (the "Offer") to purchase any and all of the outstanding shares of ZT
Common Stock at a price of fifteen dollars and thirty-six cents ($15.36) per
share (the "Offer Price"), net to the seller in cash. The initial expiration
date of the Offer shall be the twentieth business day from and after the date
the Offer is commenced, including the date of commencement as the first business
day in accordance with Rule 14d-2 under the Exchange Act (the "Initial
Expiration Date"). The obligation of Merger Sub to accept for payment, purchase
and pay for shares of ZT Common Stock shall be subject, except as provided in
Section 1.1(b), only to the satisfaction of the condition that a number of
shares of ZT Common Stock representing not less than two-thirds of the total
issued and outstanding shares of ZT Common Stock on a fully-diluted basis on the
date such shares are purchased pursuant to the Offer have been validly tendered
and not withdrawn
1
<PAGE>
prior to the expiration of the Offer (the "Minimum Condition") and of the
other conditions set forth in EXHIBIT C hereto; provided, however, that
Merger Sub expressly reserves the right to waive any of the conditions to the
Offer and to make any change in the terms or conditions of the Offer in its
sole discretion, subject to Section 1.1(b).
(b) Without the prior written consent of ZT, neither IR nor Merger Sub
will decrease the price per share of ZT Common Stock payable in the Offer,
decrease the number of shares of ZT Common Stock sought in the Offer, change the
form of consideration payable in the Offer, or impose or alter the conditions to
the Offer in addition to or from those set forth in EXHIBIT C or in a manner
that is otherwise materially adverse to the holders of shares of ZT Common
Stock. Notwithstanding anything in this Agreement to the contrary, without the
consent of ZT, Merger Sub shall have the right to extend the Offer beyond the
Initial Expiration Date only in the following events: (i) from time to time if,
at the Initial Expiration Date (or extended expiration date of the Offer, if
applicable), any of the conditions to the Offer shall not have been satisfied or
waived, until such conditions are satisfied or waived; (ii) for any period
required by any rule, regulation, interpretation or position of the Securities
and Exchange Commission (the "SEC") or the staff thereof applicable to the Offer
or any period required by applicable law, or (iii) if all conditions to the
Offer are satisfied or waived and the shares of ZT Common Stock validly tendered
and not withdrawn pursuant to the Offer represent more than two-thirds of the
total issued and outstanding shares of ZT Common Stock on a fully diluted basis,
Merger Sub may extend the Offer for a period not to exceed ten business days;
provided that as of the date the Offer is extended, all conditions previously
imposed (other than compliance with Sections 5.2 and 5.6) shall be deemed
satisfied as of such extended expiration date, whether any such condition is in
fact satisfied on such dates. Subject to the foregoing and to the terms and
conditions of the Offer, Merger Sub shall, and IR shall cause it to, accept for
payment and pay for, as promptly as practicable after the expiration of the
Offer, all shares of ZT Common Stock properly tendered and not withdrawn
pursuant to the Offer that Merger Sub is obligated to purchase. IR shall provide
or cause to be provided to Merger Sub on a timely basis the funds necessary to
pay for any shares of ZT Common Stock that Merger Sub becomes obligated to
accept for payment, and pay for, pursuant to the Offer.
(c) As soon as practicable after the date hereof, IR and Merger Sub
shall file with the SEC a Tender Offer Statement on Schedule TO (the "Schedule
TO") with respect to the Offer, which will contain the offer to purchase and
form of the related letter of transmittal (such Schedule TO and such documents
included therein pursuant to which the Offer will be made, together with any
supplements or amendments thereto, the "Offer Documents"). IR and ZT each agrees
promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that such information shall have become false or
misleading in any material respect. IR and Merger Sub agree to take all steps
necessary to cause the Schedule TO as so corrected to be filed with the SEC and
the other Offer Documents as so corrected to be disseminated to holders of
shares of ZT Common Stock, in each case as and to the extent required by
applicable federal securities laws. ZT and its counsel shall be given an
opportunity to review and comment on the Offer Documents prior to their being
filed with the SEC or disseminated to the holders of shares of ZT Common Stock.
2
<PAGE>
1.2 COMPANY ACTION.
(a) ZT hereby consents to the Offer and represents that its board of
directors, at a meeting duly called and held has (i) unanimously determined that
this Agreement, the Stock Option Agreement and the Transactions, including the
Offer, the Merger, and the purchase of Shares contemplated by the Offer and the
Stock Option Agreement, are fair to and in the best interests of ZT's
shareholders, (ii) unanimously approved and adopted this Agreement, the Stock
Option Agreement, the ZT Shareholder Support Agreement and the Transactions,
including the Offer, the Merger, and the purchase of Shares contemplated by the
Offer and the Stock Option Agreement, in accordance with the requirements of the
Business Corporation Law of the State of New York (the "NYBCL") and (iii)
unanimously resolved to recommend acceptance of the Offer and approval and
adoption of this Agreement and the Merger by its shareholders. ZT has been
advised that all of its directors, and each of its executive officers who has
been informed of the Transactions and who owns shares of ZT Common Stock, intend
to tender their shares of ZT Common Stock pursuant to the Offer and, if
applicable, to vote in favor of the Merger. ZT will cause its transfer agent to
promptly furnish IR with a list of ZT's shareholders, mailing labels and any
available listing or computer file containing the names and addresses of all
record holders of shares of ZT Common Stock and lists of securities positions of
shares of ZT Common Stock held in stock depositories and to provide to IR such
additional information (including, without limitation, updated lists of
shareholders, mailing labels and lists of securities positions) and such other
assistance as IR may reasonably request in connection with the Offer.
(b) As soon as practicable on the day that the Offer is commenced, ZT
shall file with the SEC and disseminate to holders of shares of ZT Common Stock,
in each case as and to the extent required by applicable federal securities
laws, a Solicitation/Recommendation Statement on Schedule 14D-9 (together with
any amendments or supplements thereto, the "Schedule 14D-9") that shall reflect
the recommendations of ZT's board of directors referred to above. ZT and IR each
agree promptly to correct any information provided by it for use in the Schedule
14D-9 if and to the extent that it shall have become false or misleading in any
material respect. ZT agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to holders
of shares of ZT Common Stock, in each case as and to the extent required by
applicable federal securities laws. IR and its counsel shall be given an
opportunity to review and comment on the Schedule 14D-9 prior to its being filed
with the SEC.
1.3 DIRECTORS.
(a) Promptly following the purchase of and payment for a number of
shares of ZT Common Stock that satisfies the Minimum Condition, and from time to
time thereafter, IR shall be entitled to designate the number of directors,
rounded up to the next whole number, on ZT's board of directors that equals the
product of (i) the total number of directors on ZT's board of directors (giving
effect to the election of any additional directors pursuant to this Section) and
(ii) the percentage that the number of shares of ZT Common Stock beneficially
owned by IR (including shares of ZT Common Stock paid for pursuant to the Offer)
bears to the total number of shares of ZT Common Stock outstanding, and ZT shall
take all action within its power to cause IR's designees to be elected or
appointed to ZT's board of directors, including, without limitation, increasing
the number of directors, and seeking and accepting resignations of
3
<PAGE>
incumbent directors. At such time, ZT will also use its reasonable best
efforts to cause individual directors designated by IR to constitute the
number of members, rounded up to the next whole number, on (i) each committee
of ZT's board of directors other than any committee of such Board established
to take action under this Agreement or the Stock Option Agreement and (ii)
each board of directors of each ZT Subsidiary (as defined in Section 8.14),
and each committee thereof, that represents the same percentage as such
individuals represent on the ZT board of directors. Notwithstanding the
foregoing, in the event that IR's designees are to be appointed or elected to
ZT's board of directors, until the Effective Time (as defined below), such
board of directors shall have at least two directors who are directors on the
date of this Agreement and who are not officers of ZT (the "Continuing
Directors"); provided that in the event that the number of Continuing
Directors shall be reduced below two for any reason whatsoever, any remaining
Continuing Directors (or Continuing Director, if there shall be only one
remaining) shall be entitled to designate persons to fill such vacancies who
shall be deemed to be Continuing Directors for purposes of this Agreement.
(b) ZT's obligations to appoint IR's designees to the ZT board of
directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. ZT shall promptly take all actions, and shall include in
the Schedule 14D-9 such information with respect to ZT and its officers and
directors, as Section 14(f) and Rule 14f-1 require in order to fulfill its
obligations under this Section. IR shall supply to ZT in writing and be solely
responsible for any information with respect to itself and its nominees,
officers, directors and affiliates required by Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of IR's designees pursuant to
Section 1.3(a) and until the Effective Time, the approval of the Continuing
Directors shall be required to authorize (and such authorization shall
constitute the authorization of the ZT board of directors and no other action on
the part of ZT, including any action by any other director of ZT, shall be
required to authorize) any termination of this Agreement by ZT, any amendment of
this Agreement requiring action by the ZT board of directors, any amendment of
the certificate of incorporation or bylaws of ZT, any extension of time for
performance of any obligation or action hereunder by IR or Merger Sub, any
waiver of compliance with any of the agreements or conditions contained herein
for the benefit of ZT and any material transaction with IR, Merger Sub or any
affiliate thereof unless such transaction is on terms no less favorable to ZT
than ZT would obtain in a similar transaction with an unrelated third party.
ARTICLE II
THE MERGER
2.1 THE MERGER. At the Effective Time (as defined in Section 2.2
below) and upon the terms and subject to the conditions of this Agreement and
in accordance with the NYBCL, Merger Sub will be merged with and into ZT.
Following the Merger, ZT will continue as the surviving corporation (the
"Surviving Corporation") and as a wholly owned subsidiary of IR, and the
separate corporate existence of Merger Sub will cease.
4
<PAGE>
2.2 EFFECTIVE TIME. Subject to the provisions of this Agreement, the
parties will cause the Merger to be consummated by filing an appropriate
certificate of merger (the "Certificate of Merger") with the Secretary of
State of the State of New York in such form as required by, and executed in
accordance with, the relevant provisions of the NYBCL as soon as practicable
on or after the Closing Date (as defined in Section 2.3 below). The Merger
will become effective upon such filing or at such time thereafter as is
provided in the Certificate of Merger (the "Effective Time", and the date of
such effectiveness shall be the "Effective Date").
2.3 CLOSING OF THE MERGER. The closing of the Merger (the "Closing")
will take place at a time and on a date to be specified by the parties, which
will be no later than the last business day of the month in which the
conditions set forth in ARTICLE VI (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the fulfillment or
waiver of those conditions) are satisfied or waived (the "Closing Date"), at
the offices of O'Melveny & Myers LLP, 1999 Avenue of the Stars, Los Angeles,
California, unless the parties agree to another time, date or place in
writing.
2.4 EFFECTS OF THE MERGER. The Merger will have the effects set
forth in the NYBCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all properties, rights, privileges,
powers and franchises of ZT and Merger Sub will vest in the Surviving
Corporation, and all debts, liabilities and duties of ZT and Merger Sub will
become the debts, liabilities and duties of the Surviving Corporation.
2.5 CERTIFICATE OF INCORPORATION AND BY-LAWS. The certificate of
incorporation and bylaws of Merger Sub in effect at the Effective Time will
be the certificate of incorporation and bylaws of the Surviving Corporation
until respectively amended in accordance with their terms and applicable law,
except that the name of the Surviving Corporation will be Zing Technologies,
Inc.
2.6 DIRECTORS. The directors of Merger Sub at the Effective Time
will be the initial directors of the Surviving Corporation, each to hold
office in accordance with the certificate of incorporation and bylaws of the
Surviving Corporation until such director's successor is duly elected and
qualified.
2.7 OFFICERS. The officers of Merger Sub as of the Effective Time
will be the initial officers of the Surviving Corporation until such
officer's successor is duly elected or appointed and qualified.
2.8 CONVERSION OF SHARES. At the Effective Time and without any
action on the part of the holder thereof, each issued and outstanding share
of ZT Common Stock will convert into the right to receive an amount in cash
equal to fifteen dollars and thirty-six cents ($15.36) (the "Merger
Consideration"). As a result of the Merger, each issued and outstanding share
of common stock, $1.00 par value, of Merger Sub will be converted into and
become one fully paid and non-assessable share of common stock, $0.01 par
value, of the Surviving Corporation. Notwithstanding anything contained in
this Section 2.8 to the contrary, each share of ZT Common Stock issued and
held in ZT's treasury immediately before the Effective Time, and each share
of ZT Common Stock held by IR, Merger Sub, any other IR Subsidiary or any ZT
5
<PAGE>
Subsidiary immediately before the Effective Time, will, by virtue of the
Merger, cease to be outstanding and will be cancelled and retired without
payment of any consideration therefor.
2.9 DELIVERY OF MERGER CONSIDERATION.
(a) Promptly after the Effective Time, IR shall deposit or cause to be
deposited in trust (the "Payment Fund") with an agent reasonably acceptable to
ZT (the "Payment Agent") for the benefit of the holders of certificates
representing the shares of ZT Common Stock issued and outstanding as of the
Effective Time (collectively "ZT Certificates"), the aggregate Merger
Consideration, as and when needed, to be paid in respect of the shares of ZT
Common Stock. The Payment Fund shall not be used for any other purpose. The
Payment Fund may be invested by the Paying Agent, as directed by Surviving
Corporation, in (i) obligations of or guaranteed by the United States, (ii)
commercial paper rated A-1, P-1 or A-2, P-2, and (iii) certificates of deposit,
bank repurchase agreements and bankers acceptances of any bank or trust company
organized under federal law or under the law of any state of the United States
or of the District of Columbia that has capital, surplus and undivided profits
of at least $1 billion or in money market funds which are invested substantially
in such investments. Any net earnings with respect thereto shall be paid to the
Surviving Corporation as and when requested by the Surviving Corporation.
(b) As soon as reasonably practicable after the Effective Time, IR will
instruct the Payment Agent to mail to each holder of record of ZT Common Stock
immediately before the Effective Time (excluding any shares of ZT Common Stock
cancelled pursuant to Section 2.8):
(1) a letter of transmittal (the "Letter of Transmittal")
(which will specify that delivery will be effected, and risk of loss and
title to the ZT Certificates will pass, only upon delivery of such ZT
Certificates to the Payment Agent and will be in such form and have such
other provisions as IR specifies), and
(2) instructions for use in effecting the surrender of each
ZT Certificate in exchange for the aggregate Merger Consideration with
respect to the shares of ZT Common Stock formerly represented thereby.
(c) IR and the Surviving Corporation shall cause the Payment Agent to
pay to the holders of a Certificate, as soon as practicable after receipt of any
Certificate (or in lieu of such Certificate an affidavit of lost, stolen or
destroyed share certificates (including customary indemnity or bond against
loss) in form and substance reasonably satisfactory to IR) together with the
Letter of Transmittal, duly executed, and such other documents as IR or the
Payment Agent reasonably request, in exchange therefor a check in the amount
equal to the cash, if any, which such holder has the right to receive pursuant
to the provisions of this ARTICLE II, less the amount of any applicable
withholding taxes. No interest shall be paid or accrued on any cash payable upon
the surrender of any Certificate. Each Certificate surrendered in accordance
with the provisions of this Section 2.9(c) shall be cancelled forthwith.
(d) In the event of a transfer of ownership of shares of ZT Common
Stock which is not registered in the transfer records of ZT, the Merger
Consideration may be paid to
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the transferee only if (i) the Certificate representing such shares of ZT
Common Stock surrendered to the Paying Agent in accordance with Section
2.9(c) hereof is properly endorsed for transfer or is accompanied by
appropriate and properly endorsed stock powers and is otherwise in proper
form to effect such transfer, (ii) the person requesting such transfer pays
to the Paying Agent any transfer or other taxes payable by reason of such
transfer or establishes to the satisfaction of the Paying Agent that such
taxes have been paid or are not required to be paid, and (iii) such person
establishes to the satisfaction of IR that such transfer would not violate
any applicable federal or state securities laws.
(e) At and after the Effective Time, each holder of a Certificate that
represented issued and outstanding shares of ZT Common Stock immediately prior
to the Effective Time shall cease to have any rights as a shareholder of ZT,
except for the right to surrender his or her Certificate in exchange for the
Merger Consideration multiplied by the number of shares represented by such
Certificate and except as otherwise provided by applicable law, and no transfer
of shares of ZT Common Stock shall be made on the stock transfer books of the
Surviving Corporation.
(f) Any portion of the Payment Fund (including any interest received
with respect thereto), which remains unclaimed six months after the Effective
Time, will be paid to the Surviving Corporation upon demand. Any holders of
Certificates who have not theretofore complied with this Section 2.9 will
thereafter look only to the Surviving Corporation and IR for payment (subject to
applicable abandoned property, escheat and similar laws) of their claim for the
Merger Consideration, without interest thereon. Notwithstanding the foregoing,
neither IR, the Surviving Corporation nor the Paying Agent shall be liable to a
holder of a Certificate for any Merger Consideration properly delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(g) Any portion of the Merger Consideration made available to the
Payment Agent pursuant to Section 2.9(a) to pay for shares of ZT Common Stock
for which appraisal rights have been perfected shall be returned to IR, upon
demand.
2.10 DISSENTING SHARES . Notwithstanding anything in this Agreement
to the contrary, shares of ZT Common Stock that are issued and outstanding
immediately before the Effective Time and that are held by shareholders who
have (a) not voted such shares in favor of the Merger (or consented thereto
in writing), (b) delivered a written objection to the Merger and a demand for
appraisal of such shares of ZT Common Stock in accordance with Section 623 of
the NYBCL (insofar as such Section is applicable to the Merger and provides
for appraisal rights with respect to it) and (c) not failed to perfect or
have not effectively withdrawn or lost their rights to appraisal and payment
under the NYBCL, shall not be converted into the right to receive the Merger
Consideration as provided in Section 2.8 hereof. Instead, ownership of such
shares will entitle the holder thereof to receive the consideration
determined pursuant to Section 623 of the NYBCL; provided, however, that if
such holder fails to perfect or effectively withdraws such holder's right to
appraisal and payment under the NYBCL, each of such shares shall thereupon be
deemed to have been converted, at the Effective Time, into the right to
receive the Merger Consideration, without any interest thereon, upon
surrender of the Certificate or Certificates in the manner provided in
Section 2.8 hereof. ZT will give IR (d) prompt notice of any demands (or
withdrawals of demands) for appraisal received by ZT pursuant to the
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applicable provisions of the NYBCL and any other instruments served pursuant
to the NYBCL and received by ZT and (e) the opportunity to participate in all
negotiations and proceedings with respect to demands for appraisal under the
NYBCL. ZT will not, except with the prior consent of IR (which consent will
not be unreasonably withheld), make any payment with respect to any such
demands for appraisal or offer to settle, or settle, any such demands.
2.11 TREATMENT OF ZT OPTIONS. At the closing of the Offer, each
holder of outstanding ZT options shall, upon surrender of such options, be
entitled to receive from IR or the Surviving Corporation, for each ZT option
surrendered, an amount equal to the product of (i) the Merger Consideration
minus the exercise price of such ZT option surrendered by such holder
multiplied by (ii) the number of shares of ZT Common Stock covered by such ZT
option, less any applicable withholding taxes, and without interest paid
thereon, and each such surrendered ZT option shall terminate. At the
Effective Time, any remaining ZT options shall terminate, and the holders
thereof shall be entitled to receive from IR or the Surviving Corporation,
for each ZT option held, an amount equal to the product of (i) the Merger
Consideration minus the exercise price of such ZT option held by such holder
multiplied by (ii) the number of shares of ZT Common Stock covered by such ZT
option, less any applicable withholding taxes, and without interest paid
thereon. Prior to the closing of the Offer, ZT shall take all actions
(including, if appropriate, amending the terms of any option plan or
arrangement) that are within its power to give effect to the transactions
contemplated by this Section 2.11.
2.12 ADJUSTMENTS. If, during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of ZT
Common Stock shall occur, including by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of
shares of ZT Common Stock, or stock dividend thereon with a record date
during such period, the cash payable pursuant to the Offer, the Merger
Consideration and any other amounts payable pursuant to this Agreement shall
be appropriately adjusted.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ZT
Except as set forth in the disclosure letter delivered at or
before the execution of this Agreement to IR (provided that an item on such
disclosure schedule is deemed to qualify only the particular Subsection or
Subsections specified for such item unless from the description of such item it
is clear that such item should qualify another Subsection, in which case such
disclosure will qualify such other Subsection) (the "ZT Disclosure Letter"), ZT
represents and warrants to IR and Merger Sub as of the date of this Agreement as
follows:
3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. ZT is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of New York. ZT is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of
any other state of the United States in which the character of the properties
owned or leased by it or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified or to be
in good standing would not have a material adverse effect on the business,
results of operations or financial condition of ZT and the ZT Subsidiaries
(as defined in Section 8.14) taken as a whole (a "ZT
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Material Adverse Effect"). ZT has all requisite corporate power and authority
to own, operate and lease its properties and carry on its business as now
conducted and as described in ZT's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1999. The copies of ZT's certificate of
incorporation and bylaws made available to IR are true and correct as of the
date hereof.
3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. ZT has the
requisite corporate power and authority to execute and deliver this Agreement
and all agreements and documents contemplated hereby. The Agreement, the
Merger, and the purchase of shares of ZT Common Stock contemplated by the
Offer and the Stock Option Agreement have been approved by ZT's board of
directors and, subject only to the adoption of this Agreement and the
transactions contemplated hereby by the holders of two-thirds of the total
issued and outstanding shares of ZT Common Stock on a fully-diluted basis,
the consummation by ZT of the transactions contemplated hereby has been duly
authorized by all requisite corporate action. This Agreement constitutes, and
all agreements and documents contemplated hereby (when executed and delivered
pursuant hereto for value received) will constitute, the valid and legally
binding obligations of ZT, enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general principles of equity.
3.3 CAPITALIZATION.
(a) The authorized capital stock of ZT consists of 12,000,000 shares of
ZT Common Stock, $0.01 par value. As of January 26, 2000, there were 2,406,837
shares of ZT Common Stock issued and outstanding, plus 657,955 shares of ZT
Common Stock held in ZT's treasury. All issued and outstanding shares of ZT
Common Stock are duly authorized, validly issued, fully paid, nonassessable,
free of preemptive rights, and were issued in compliance with all applicable
laws except where non-compliance does not affect ownership of such share or
create any encumbrance thereon or result in a ZT Material Adverse Effect.
(b) The ZT Disclosure Letter lists all outstanding options, warrants
and other rights to purchase shares of ZT's Common Stock as of January 26, 2000
with descriptions of such options, warrants and other rights.
(c) Since January 26, 2000, (i) no options, warrants or other rights to
purchase shares of ZT Common Stock have been granted, and (ii) no additional
shares of capital stock of ZT have been issued, except pursuant to the exercise
of outstanding options.
(d) Except as set forth in paragraphs (a), (b) and (c) above and on the
ZT Disclosure Letter, ZT does not have any shares of its capital stock issued or
outstanding and does not have any outstanding subscriptions, options, warrants,
calls, subscriptions, convertible securities, rights or other agreements or
commitments obligating ZT or any ZT Subsidiary to issue, transfer or sell any
shares of capital stock of ZT or any ZT Subsidiary. ZT has no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the shareholders of ZT on any matter. Any equity securities,
which were issued and reacquired by
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ZT, were so reacquired in compliance with all applicable laws, and ZT does
not have any obligation or liability with respect thereto.
3.4 SUBSIDIARIES. Each ZT Subsidiary is a corporation, limited
liability company or partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
has the corporate, limited liability company or partnership power and
authority to own its properties and to carry on its business as it is now
being conducted, and is duly qualified to do business and is in good standing
in each jurisdiction in which the ownership of its property or the conduct of
its business requires such qualification, except for jurisdictions in which
such failure to be so qualified or to be in good standing would not have a ZT
Material Adverse Effect. The copies of the organizational and charter
documents for the ZT Subsidiaries made available to IR are true and correct
as of the date hereof. The ZT Disclosure Letter lists all of the ZT
Subsidiaries and correctly sets forth the capitalization of each Subsidiary,
the jurisdiction in which each ZT Subsidiary is organized or formed, each
jurisdiction in which each such ZT Subsidiary is qualified or licensed to do
business as a foreign corporation, limited liability company or partnership,
and the current directors and executive officers of each ZT Subsidiary. All
outstanding securities or other ownership interests in each ZT Subsidiary are
(i) owned of record and beneficially by ZT or another of ZT's wholly-owned
Subsidiaries and subject to no lien (other than liens for taxes not yet due
and payable), claim, charge or encumbrance, and (ii) have been duly
authorized, are validly issued, fully paid and nonassessable.
3.5 OTHER INTERESTS. Except for interests in ZT Subsidiaries,
neither ZT nor any ZT Subsidiary owns directly or indirectly any interest or
investment (whether equity or debt) in any corporation, partnership, limited
liability company, joint venture, business, trust or other entity except
money market securities.
3.6 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by ZT do not, and the
consummation by ZT of the transactions contemplated hereby will not,
(1) conflict with or violate the certificate of
incorporation or bylaws or equivalent organizational documents of (i) ZT or
(ii) any ZT Subsidiary,
(2) subject to making the filings and obtaining the
approvals identified in Section 3.6(b) of this Agreement, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to ZT
or any ZT Subsidiary or by which any property or asset of ZT or any ZT
Subsidiary is bound or affected, or
(3) subject to making the filings and obtaining the
approvals identified in Section 3.6(b) of this Agreement, result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, result in the loss of a material
benefit under, or give to others any right of purchase or sale, or any right
of termination, amendment, acceleration, increased payments or cancellation
of, or result in the creation of a lien or other encumbrance on any property
or asset of ZT or any ZT Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
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instrument or obligation (each, a "Contract") to which ZT or any ZT
Subsidiary is a party or by which ZT or any ZT Subsidiary or any property or
asset of ZT or any ZT Subsidiary is bound or affected;
except, in the case of clauses (2) and (3), for any such conflicts,
violations, breaches, defaults or other occurrences which would not prevent
or delay consummation of any of the transactions contemplated hereby in any
material respect, or otherwise prevent ZT from performing its obligations
under this Agreement in any material respect, and would not, individually or
in the aggregate, have a ZT Material Adverse Effect.
(b) The execution and delivery of this Agreement by ZT do not, and the
consummation by ZT of the transactions contemplated hereby will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign (each a
"Governmental Entity") or any other third-party, except
(1) for:
(i) applicable requirements, if any, of the Exchange Act, the
Securities Act of 1933 as amended (the "Securities Act"), state
securities or "blue sky" laws ("Blue Sky Laws") and state takeover
laws,
(ii) the pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the rules and regulations thereunder (the "HSR Act"),
(iii) filing of the Certificate of Merger as required by the
NYBCL,
(iv) applicable requirements, if any, of the Internal Revenue
Code of 1986, as amended (the "Code") and state, local and foreign tax
laws,
(v) banks which hold commercial loans to be paid off pursuant
to Section 5.16 hereof; and
(2) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications,
would not prevent or delay consummation of any of the transactions
contemplated hereby in any material respect, or otherwise prevent ZT
from performing its obligations under this Agreement in any material
respect, and would not, individually or in the aggregate, have a ZT
Material Adverse Effect.
3.7 COMPLIANCE. ZT and each ZT Subsidiary are in compliance with
(a) all laws, rules, regulations, orders, judgments and decrees
applicable to ZT or any ZT Subsidiary or by which any property or asset of ZT
or any ZT Subsidiary is bound or affected, or
(b) all Contracts to which ZT or any ZT Subsidiary is a party or by
which ZT or any ZT Subsidiary or any property or asset of ZT or any ZT
Subsidiary is bound or affected,
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except in both (a) and (b) where failure to comply would not, individually or in
the aggregate, have a ZT Material Adverse Effect. ZT and the ZT Subsidiaries
have obtained all licenses, permits and other authorizations and have taken all
actions required by applicable law or governmental regulations in connection
with their business as now conducted, except where the failure to obtain any
such item or to take any such action would not have, individually or in the
aggregate, a ZT Material Adverse Effect.
3.8 SEC DOCUMENTS.
(a) ZT has delivered copies to IR of: (i) ZT's annual reports on Form
10-KSB for its fiscal years ended June 30, 1999, 1998, 1997, and 1996, (ii) ZT's
quarterly reports on Form 10-Q for its fiscal quarter ended September 30, 1999,
(iii) its proxy or information statements relating to meetings of, or actions
taken without a meeting by, the shareholders of ZT held since January 11, 1999,
and (iv) all of its other reports, statements, schedules and registration
statements filed with the SEC since January 11, 1999 (the documents referred to
in this Section 3.8(a), collectively, the "ZT Reports").
(b) As of the filing date, each ZT Report complied as to form in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act, as the case may be.
(c) As of its filing date (or, if amended or superceded by a filing
prior to the date hereof, on the date of such later filing), each ZT Report
filed pursuant to the Exchange Act did not, and each such ZT Report filed
subsequent to the date hereof will not, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
(d) Each ZT Report that is a registration statement, as amended or
supplemented, if applicable, filed pursuant to the Securities Act, as of the
date such statement or amendment became effective, did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
3.9 FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES. The audited
consolidated financial statements and unaudited consolidated interim
financial statements of ZT included in the ZT Reports fairly present, in
conformity with generally accepted accounting principles ("GAAP") applied on
a consistent basis (except as may be indicated in the notes thereto), the
consolidated balance sheets of ZT and its consolidated Subsidiaries as of the
dates thereof and their consolidated results of operations and cash flows for
the periods then ended (subject to normal year-end adjustments and footnotes
in the case of any unaudited interim financial statements). Except as and to
the extent reflected or reserved against in such consolidated balance sheets
(including the notes thereto), ZT does not have any liabilities or
obligations (absolute or contingent) of a nature required to be or
customarily reflected in a consolidated balance sheet (or the notes thereto)
prepared in accordance with GAAP consistently applied. The consolidated
statements of operations present fairly in all material respects the results
of operations of ZT for the periods indicated.
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3.10 ABSENCE OF CERTAIN CHANGES. Except as specifically
contemplated by this Agreement, since September 30, 1999 there has not been
(a) any ZT Material Adverse Effect or any circumstance or event that could
reasonably be expected to have a ZT Material Adverse Effect; (b) any
declaration, setting aside or payment of any dividend or other distribution
with respect to its capital stock; (c) any material change in its accounting
principles, practices or methods; or (d) any damage or destruction to, or
loss of, any physical property, whether or not covered by insurance, that had
or could have a ZT Material Adverse Effect. Since September 30, 1999, neither
ZT nor any ZT Subsidiary has taken any other action that it would be
prohibited from taking after the date hereof pursuant to Section 5.2.
3.11 MATERIAL CONTRACTS. The ZT Disclosure Letter sets
forth a complete and accurate list of any of the following to which ZT or any
ZT Subsidiary is a party or by which ZT or any ZT Subsidiary is bound (each,
a "ZT Material Contract"):
(a) all written management, compensation, employment or other
contracts entered into with any executive officer or director of ZT or any ZT
Subsidiary;
(b) all contracts or agreements under which ZT or any ZT
Subsidiary has any outstanding indebtedness, obligation or liability for
borrowed money or the deferred purchase price of property or has the right or
obligation to incur any such indebtedness, obligation or liability;
(c) all bonds or agreements of guarantee or indemnification in
which ZT or any ZT Subsidiary acts as surety, guarantor or indemnitor with
respect to any obligation (fixed or contingent), other than any such bonds or
agreements entered into in connection with an asset or stock acquisition or
disposition made by ZT or any ZT Subsidiary and other than any such guarantees
of the obligations of ZT or any ZT Subsidiary;
(d) all noncompete agreements to which ZT, any ZT
Subsidiary or any affiliate thereof is a party;
(e) all partnership and joint venture agreements;
(f) each other contract or agreement listed as an exhibit to
ZT's most recent Form 10-K and 10-Q; and
(g) all agreements relating to material business acquisitions
or dispositions during the last three years, including any separate tax or
indemnification agreements.
Except as set forth in the ZT Disclosure Letter, (i) neither ZT nor any
ZT Subsidiary is in default under the terms of any ZT Material Contract, which
default permits the other party to adversely alter or terminate any rights of ZT
or any ZT Subsidiary or accelerate the obligations of ZT or any ZT Subsidiary
under such ZT Material Contract or to collect damages, (ii) to the Knowledge (as
defined in Section 8.14) of ZT, no other party thereto is in default in any
material respect under the terms of any ZT Material Contract, (iii) each ZT
Material Contract is valid, binding and in full force and effect in all material
respects, and (iv) all contracts or agreements
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under which ZT or any ZT Subsidiary has any outstanding indebtedness,
obligation or liability for borrowed money may be prepaid in full without any
prepayment penalties.
3.12 LITIGATION. There is no action, suit or proceeding pending
against ZT or any ZT Subsidiary or, to the Knowledge of ZT, threatened
against ZT or any ZT Subsidiary, at law or in equity, or before or by any
federal or state court, commission, board, bureau, agency or instrumentality,
that (i) if resolved adversely to it would have a ZT Material Adverse Effect
or (ii) could reasonably be expected to impair its ability to consummate the
Merger. ZT is not aware of any judicial or administrative decision affecting
it or any ZT Subsidiary that could reasonably be expected to impair its
ability to consummate the Merger.
3.13 TAXES.
(a) ZT and each ZT Subsidiary have timely filed all material tax
returns and reports required to be filed by it, or requests for extensions to
file such returns or reports have been timely filed and granted and have not
expired, and all tax returns and reports are complete and accurate in all
material respects. ZT and each ZT Subsidiary have paid (or ZT has paid on its
behalf) all taxes required to be paid by it as shown on such returns. The most
recent financial statements contained in the ZT Reports reflect an adequate
reserve for all unpaid taxes (whether or not disputed and whether or not due) of
ZT and ZT Subsidiaries with respect to all taxable periods and portions thereof
ending on or before the date of such financial statements and no liabilities for
taxes have been incurred by ZT or any ZT Subsidiary subsequent to such date
other than resulting from liquidation of its debt and investment portfolio and
other than in the ordinary course of its business. No deficiencies for any
material amount of taxes have been proposed, asserted or assessed against ZT or
any ZT Subsidiary, nor, as of the date of this Agreement, is any audit,
examination or similar proceeding pending or proposed with respect to taxes of
ZT or any ZT Subsidiary. No requests for waivers of the time to assess any taxes
against ZT or any ZT Subsidiary have been granted or are pending, except for
requests with respect to such taxes that have been adequately reserved for in
the most recent financial statements contained in ZT Reports.
(b) Neither ZT nor any ZT Subsidiary has entered into any
compensatory agreement, plan or arrangement covering any person as to which
payment or vesting thereunder (including any payment or vesting as a result
of the Merger) could result in a nondeductible expense to ZT or any ZT
Subsidiary by reason of Section 280(G) of the Code.
(c) Except as described in the ZT Disclosure Letter, neither ZT nor
any ZT Subsidiary is liable for the taxes of any person (other than another
current member of the ZT consolidated group), including, without limitation,
as a result of the application of Treasury Regulations Section 1.1502-6, any
analogous provision of state, local or foreign law, or as a result of any
contractual arrangement with any third party or with any taxing authority.
(d) All taxes which ZT and each ZT Subsidiary has been required by
law to withhold or to collect for payment have been duly withheld and
collected, and have been paid or accrued, reserved against and added on the
books of ZT except for a failure to pay taxes where such failure would not
have a ZT Material Adverse Effect. ZT and each ZT Subsidiary has complied in
all material respects with all information reporting and backup withholding
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requirements, including maintenance of required records with respect thereto,
in connection with amounts paid or owing to any employee, independent
contractors, creditor, stockholder or other third party.
(e) As used in this Agreement, "taxes" shall include all Federal,
state, local and foreign income, franchise, property, sales, use, excise and
other taxes, including obligations for withholding taxes from payments due or
made to any other person and any interest, penalties or additions to tax.
3.14 EMPLOYEE BENEFIT PLANS.
(a) EMPLOYEE BENEFIT PLANS, COLLECTIVE BARGAINING AND
EMPLOYEE AGREEMENTS, AND SIMILAR ARRANGEMENTS.
(1) The ZT Disclosure Letter lists all employee
benefit plans and collective bargaining, employment or severance agreements or
other similar arrangements to which or by which ZT or any ZT Subsidiary is
bound, legally or otherwise, or under which there is any continuing obligation
of ZT or any ZT Subsidiary (the "Plans"), including, without limitation, (a) any
profit-sharing, deferred compensation, bonus, stock option, stock purchase,
pension, retainer, consulting, retirement, severance, welfare or incentive plan,
agreement or arrangement, (b) any plan, agreement or arrangement providing for
"fringe benefits" or perquisites to employees, officers, directors or agents,
including but not limited to benefits relating to ZT automobiles, clubs,
vacation, child care, parenting, sabbatical, sick leave, medical, dental,
hospitalization, life insurance and other types of insurance, or (c) any other
"employee benefit plan" within the meaning of Section 3(3) or the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). An example of each
form of award agreement executed pursuant to any Plan has been delivered
previously to IR.
(2) ZT has delivered to IR true and complete copies of all
documents and summary plan descriptions with respect to the Plans or summary
descriptions of any Plans not otherwise in writing.
(3) There are no negotiations, demands or proposals that are
pending or have been made which concern matters now covered, or that would be
covered, by plans, agreements or arrangements of the type described in this
section.
(4) Except where failure to so comply or perform will not
result in a ZT Material Adverse Effect, ZT and each ZT Subsidiary are in full
compliance with the applicable provisions of ERISA (as amended through the
date of this Agreement), the regulations and published authorities
thereunder, and all other laws applicable with respect to the Plans. ZT and
each ZT Subsidiary have performed all of their obligations under the Plans.
To the best Knowledge of ZT as of the date of this Agreement, there are no
Actions (other than routine claims for benefits) pending or threatened
against the Plans or their assets, or arising out of the Plans and all of the
Plans have been operated in compliance with their terms. To the best
Knowledge of ZT, as of the date of this Agreement, no facts exist which could
give rise to any such Actions.
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(5) Except as specified in the ZT Disclosure
Letter, each of the Plans can be terminated by ZT or any ZT Subsidiary, as
applicable, within a period of 30 days following the Effective Time, without
payment of any additional compensation or amount or the additional vesting or
acceleration of any benefits.
(6) All obligations of ZT and each ZT Subsidiary under each
of the Plans (x) that are due prior to the Effective Time have been paid or
will be paid prior to that date, and (y) that have accrued prior to the
Effective Time have been or will be paid or properly accrued at that time.
(7) Except where failure to do so would not have a ZT
Material Adverse Effect, ZT and each ZT Subsidiary have classified all
individuals who perform services for ZT or any ZT Subsidiary correctly under
the Plans, ERISA and the Code as common law employees, independent
contractors or leased employees.
(b) RETIREMENT PLANS.
(1) The ZT Disclosure Letter lists all "employee pension
benefit plans" (within the meaning of Section 3(2) of ERISA) which are also
stock bonus, pension or profit sharing plans within the meaning of Section
401(a) of the Code (the "Retirement Plans").
(2) Each Retirement Plan has been duly authorized by the
appropriate board of directors of ZT and/or ZT Subsidiary whichever is
appropriate. Each Retirement Plan is qualified in form and operation under
Section 401(a) of the Code and each trust under each Retirement Plan is
exempt from tax under Section 501(a) of the Code. No event has occurred that
will or could give rise to disqualification or loss of tax-exempt status of
any Retirement Plan or trust thereunder under such sections. No event has
occurred that will or could subject any Retirement Plan to tax under Section
511 of the Code. No prohibited transaction (within the meaning of Section
4975 of the Code) or party-in-interest transaction (within the meaning of
Section 406 of ERISA) has occurred with respect to any Retirement Plan.
(3) ZT has delivered to IR for each Retirement Plan copies of
the following documents: (i) the Form 5500 filed in each of the most recent
three plan years, including but not limited to all schedules thereto and
financial statements with attached opinions of independent accountants, (ii)
the most recent determination letter from the Internal Revenue Service, (iii)
the consolidated statement of assets and liabilities as of the most recent
valuation date, and (iv) the statement of changes in fund balance and in
financial position or the statement of changes in net assets available for
benefits for the most recently ended plan year. The financial statements so
delivered fairly present the financial condition and the results of
operations of each Retirement Plan as of such dates in accordance with GAAP.
(c) TITLE IV PLANS. No Plan is a "single employer plan" within
the meaning of Section 4001(a)(15) of ERISA or a "multiemployer plan" within
the meaning of Section 3(37) of ERISA. Neither ZT, any ZT Subsidiary nor any
ERISA Affiliate has ever maintained or had an obligation to contribute to a
"single employer plan" within the meaning of Section 4001(a)(15) of ERISA or
a "multiemployer plan" within the meaning of Section 3(37) of ERISA. "ERISA
Affiliate" means any trade or business (whether or not incorporated) that is
or was a member of a
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group of which ZT or any ZT Subsidiary is or was a member and which is or was
under common control with ZT or any ZT Subsidiary within the meaning of
Section 414 (b) or (c) of the Code.
(d) HEALTH PLANS. All group health plans of ZT, each ZT Subsidiary
and any ERISA Affiliate have been operated in compliance with the group
health plan continuation coverage requirements of Section 4980B of the Code.
Except as required under Section 4980B of the Code, neither ZT, any ZT
Subsidiary nor any ERISA Affiliate has any obligation to provide health
benefits to any employee following termination of employment.
(e) FINES AND PENALTIES. There has been no act or omission by ZT,
any ZT Subsidiary or any ERISA Affiliate that has given rise to or may give
rise to fines, penalties, taxes, or related charges under Section 502(c) or
(i) or Section 4071 of ERISA or Chapter 43 of the Code, which fines,
penalties, taxes or related charges, individually or in the aggregate, could
have a ZT Material Adverse Effect.
3.15 LABOR AND EMPLOYMENT MATTERS. There are no labor or collective
bargaining agreements which pertain to ZT or any ZT Subsidiary. To the
Knowledge of ZT, there is no union organizing effort pending or threatened
against ZT or any ZT Subsidiary. There is no labor strike, labor dispute,
work slowdown, stoppage or lockout actually pending, or to the Knowledge of
ZT, threatened against or affecting ZT or any ZT Subsidiary, except as would
not, individually or in the aggregate, have a ZT Material Adverse Effect.
There is no unfair labor practice or labor arbitration proceeding pending or,
to the Knowledge of ZT, threatened against ZT or any ZT Subsidiary relating
to their business, except for any such proceeding, which would not have a ZT
Material Adverse Effect. Except as set forth in the ZT Disclosure Letter,
none of ZT or any ZT Subsidiary is a party to any employment, consulting,
non-competition, severance, or indemnification agreement still in effect with
any current or former executive officer or director of ZT or any ZT
Subsidiary. True and correct copies of such agreements have been furnished to
IR prior to the date hereof.
3.16 NO BROKERS. ZT has not entered into any contract, arrangement
or understanding with any person or firm which may result in the obligation
of ZT or IR to pay any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby, except
that ZT has retained Fleet Bank as its financial advisor, the terms of which
have been disclosed in writing to IR before the date of this Agreement. Other
than as set forth in this Agreement, ZT is not aware of any claim against it
for payment of any finder's fees, brokerage or agent's commissions or other
like payments in connection with the negotiations leading to this Agreement
or the consummation of the transactions contemplated hereby.
3.17 YEAR 2000 COMPLIANCE. To the Knowledge of ZT, after reasonable
investigation of such officers of ZT and the ZT Subsidiaries who are
competent in such matters, ZT reasonably believes that the software products,
computer systems, building systems and electronic equipment with embedded
systems (the "Systems") controlled by the operations of ZT and the ZT
Subsidiaries are capable of providing or are being adapted or replaced to
provide uninterrupted functionality before, on or after January 1, 2000 in
substantially the same manner and with the same functionality as such Systems
perform as of the date hereof ("Year 2000 Compliant"), except for the failure
to have such capability which would not, individually or in
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the aggregate, be reasonably likely to have a ZT Material Adverse Effect. ZT
has made inquiry regarding Year 2000 compliance to each of its and the ZT
Subsidiaries' material suppliers, material customers, landlords and vendors
and established a team to attempt to ensure Year 2000 Compliance at ZT and
each ZT Subsidiary on or before December 31, 1999.
3.18 INSURANCE. ZT and the ZT Subsidiaries are, and at all times
during the past three years have been, insured against all risks normally
insured against by reasonably prudent managers of companies engaged in the
same or a similar lines of business (covering the assets, business,
properties, operations, and employees of ZT and the ZT Subsidiaries), and all
of the insurance policies and bonds maintained by ZT and the ZT Subsidiaries
are in full force and effect. The ZT Disclosure Letter lists all insurance
policies and bonds maintained by ZT and the ZT Subsidiaries. Neither ZT nor
any ZT Subsidiary is in default under any such policy or bond. ZT and the ZT
Subsidiaries have timely filed claims with their respective insurers with
respect to all material matters and occurrences for which they believe they
have coverage. All insurance policies maintained by ZT and the ZT
Subsidiaries will remain in full force and effect and may reasonably be
expected to be renewed on comparable terms following consummation of the
transactions contemplated by this Agreement (subject to such entities'
continuing compliance with the applicable terms thereof and any right of
insurers to terminate without cause), and ZT has received no notice or other
indication from any insurer or agent of any intent to cancel or not to renew
any of such insurance policies. ZT and the ZT Subsidiaries have complied with
and implemented all outstanding (i) requirements of any insurance company
that has issued a policy with respect to any of the material properties and
assets of ZT or any Subsidiary and (ii) the requirements of any Governmental
Entity with respect to any such insurance policy.
3.19 PROPERTIES. ZT and each ZT Subsidiary have good and marketable
title, free and clear of all liens, claims, encumbrances and restrictions
(except liens, claims, encumbrances or restrictions arising under any
existing bank agreements as described in the ZT Reports and liens for taxes
not yet due and payable and statutory liens), to all property and assets
described in the ZT Reports as being owned by it, except such as would not
have a ZT Material Adverse Effect. All leases to which ZT or any ZT
Subsidiary is a party are valid and binding and no default has occurred or is
continuing thereunder, which might result in a ZT Material Adverse Effect. ZT
and the ZT Subsidiaries enjoy peaceful and undisturbed possession under all
such leases to which any of them is a party as lessee with such exceptions as
do not materially interfere with the use made by ZT or any ZT Subsidiary.
There are no material liens on any of the assets of ZT or any ZT Subsidiary
that arose in connection with any failure (or alleged failure) to pay any
Taxes. The plants and equipment of each of ZT and each ZT Subsidiary that are
necessary to the operation of its business are in good operating condition
and repair.
3.20 ENVIRONMENTAL LAWS.
(a) Except as set forth on the ZT Disclosure Letter:
(1) neither ZT nor any present or former ZT Subsidiary has
received any written notice, claim, request for information or demand from
any governmental agency or third party alleging that ZT, any present or
former ZT Subsidiary or any ZT Real Properties is in material violation of,
is subject to any administrative or judicial proceeding pursuant to, or has
any material liability under, any Environmental Law;
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(2) with respect to ZT Real Properties which are currently
owned, leased or operated by ZT or any present or former ZT Subsidiary, to
the Knowledge of ZT, there has not occurred, nor is there presently
occurring, any Release or Releases of any Hazardous Materials at, on, into,
beneath or migrating from such ZT Real Properties which, in the aggregate,
would reasonably be expected to result in a material liability to ZT;
(3) with respect to ZT Real Properties which were previously
owned, leased or operated by ZT or any present or former ZT Subsidiary, there
did not occur any Release or Releases of any Hazardous Materials, at, on,
into, beneath or migrating from such ZT Real Properties during or, to the
knowledge of ZT, prior to the period of ownership, lease or operation by ZT
or any ZT Subsidiary which, in the aggregate, would reasonably be expected to
result in a material liability to ZT;
(4) neither ZT nor any present or former ZT Subsidiary has
Released, or allowed or arranged for any third parties to Release, any
Hazardous Materials at any other site in violation of or which would
reasonably be expected to lead to liability under, any Environmental Law
which, in the aggregate, would reasonably be expected to result in a material
liability with respect to ZT;
(5) to the Knowledge of ZT, neither ZT nor any present or
former ZT Subsidiary is a potentially responsible party with respect to a
federal, state, local or foreign environmental cleanup site or sites or with
respect to investigation or corrective actions under any Environmental Law
with respect to matters which, in the aggregate, would reasonably be expected
to result in a material liability to ZT;
(6) each of ZT and ZT's Subsidiaries is currently in
compliance with all Environmental Laws, and to the extent of any prior
noncompliance by any of ZT or any present or former ZT Subsidiary with
Environmental Laws, such noncompliance has been fully resolved, except where
any failure to comply or failure to resolve noncompliance would not
reasonably be expected to result in a material liability to ZT; and
(7) during the period of ownership, lease or operation by ZT
or any present or former ZT Subsidiary of any ZT Real Properties, ZT or such
Subsidiary operated the ZT Real Properties in compliance with all
Environmental Laws, except where any failure to comply would not reasonably
be expected to result in a material liability to ZT.
(8) There are no costs or liabilities associated with any
capital or operating expenditures of ZT or any present or former ZT
Subsidiary required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license, consent, exemption, franchise,
authorization or other approval, any related constraints on operating
activities or any potential liabilities to third parties under Environmental
Laws which would, singly or in the aggregate, have, or could reasonably be
expected to have, a ZT Material Adverse Effect.
(b) For purposes of this Section,.
(1) "ZT Real Properties" shall mean all real property now or
previously owned, operated or leased by ZT or any present or former ZT
Subsidiary.
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(2) "Hazardous Materials" shall mean asbestos, petroleum
products and all other materials on the date hereof defined as "hazardous
substances", "hazardous wastes", "toxic substances", "solid wastes" or
otherwise on or prior to the date hereof listed or regulated pursuant to the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. (S)9601 et seq. ("CERCLA"); the Resource
Conservation and Recovery Act, 42 U.S.C. (S)(S)6901 et seq. ("RCRA") and any
amendments thereto; the Hazardous Materials Transportation Act, 49 U.S.C.
(S)(S)1801 et seq. ("HMTA"); the Clean Water Act, the Safe Drinking Water
Act; the Atomic Energy Act; the Federal Insecticide, Fungicide, and
Rodenticide Act, the Clean Air Act; or any other similar foreign, federal,
state or local statute, regulation or ordinance or any other law or common
law theory of any foreign, state or federal court, as now in effect, relating
to, or imposing liability or standards of conduct concerning any hazardous or
toxic waste, substance or material.
(3) "Environmental Laws" shall mean any and all foreign,
federal, state and local laws (including, without limitation, common law),
statutes, ordinances, rules, regulations, permits, licenses or other
governmental requirements relating to health, pollution, the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), the release or threatened release, discharge,
emission, of any Hazardous Materials or materials containing Hazardous
Materials or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials or the pollution of the environment, including, without limitation,
CERCLA, RCRA and HMTA.
(4) "Release" shall mean releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, escaping, leaching,
disposing or dumping.
3.21 RELATED PARTY TRANSACTIONS. No director or officer of ZT or
any ZT Subsidiary and no person related to any of them by consanguinity or
marriage has any direct or indirect interest in (i) any equipment or other
property, real or personal, tangible or intangible, including, but without
limitation, any item of intellectual property, used in connection with or
pertaining to ZT's or any ZT Subsidiary's business, or (ii) any creditor,
supplier, customer, manufacturer, agent, representative, or distributor of
products of ZT or any ZT Subsidiary; PROVIDED, HOWEVER, that (A) no such
director or officer or other person shall be deemed to have such an interest
solely by virtue of the ownership of less than 3% of the outstanding voting
stock or debt securities of any publicly-held company, the stock or debt
securities of which are traded on a recognized stock exchange or quoted on
the National Association of Securities Dealers Automated Quotation System,
and (B) no such director or officer or other person shall be deemed to have
such an interest solely by virtue of the ownership by a partnership in which
he is a partner of less than 10% of the outstanding voting stock or debt
securities of any privately held company.
3.22 BANK ACCOUNTS. The ZT Disclosure Letter lists each bank, trust
company, savings institution, brokerage firm, mutual fund or other financial
institution with which ZT or any ZT Subsidiary has an account or safe deposit
box and the names and identification of all persons authorized to draw
thereon or to have access thereto.
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3.23 INTELLECTUAL PROPERTY. The ZT Disclosure Letter contains a
true and correct list of all the patents, patent applications, trademarks,
service marks, trade names, domain names, and registered copyrights owned or
exclusively licensed by ZT or any ZT Subsidiary. ZT and each ZT Subsidiary
own, or possess adequate and enforceable licenses or other rights to use, all
patents, trade secrets, inventions, processes, technology, software,
trademarks, service marks, trade names, domain names, and content
(collectively, "the ZT Intellectual Property") used in the business of ZT or
any ZT Subsidiary as currently conducted, and such ownership, licenses or
rights will not be affected by the consummation of the Merger. Neither ZT nor
any ZT Subsidiary has received any written or oral claim or notice from any
person or entity that its rights in, to and under the ZT Intellectual
Property conflict with or infringe on the rights of any other person. To the
Knowledge of ZT, (i) its rights in, to and under the ZT Intellectual Property
do not conflict with or infringe on the rights of any other person, (ii) no
legal action or proceeding has been initiated, asserted or is pending, nor
has any legal action or proceeding been threatened, against ZT or any ZT
Subsidiary either based upon or challenging or seeking to deny or restrict
its use of any of the ZT Intellectual Property, (iii) the ZT Intellectual
Property is valid and enforceable, and (iv) no other person is using the ZT
Intellectual Property in a manner that conflict or infringes on the rights of
ZT, nor has it made any written or oral claim or notice too such effect.
3.24 MINUTE BOOKS. The minute books of ZT and the ZT Subsidiaries
have been made available to IR and its representatives, accurately reflect
all actions and proceedings taken to date by the respective shareholders,
boards of directors and committees of ZT and the ZT Subsidiaries, and such
minute books contain true and complete copies of the charter documents of ZT
and the ZT Subsidiaries and all related amendments. The stock record books of
ZT and each ZT Subsidiary reflect accurately all transactions in their
respective capital stock of all classes.
3.25 ACCOUNTING RECORDS; INTERNAL CONTROLS. ZT and the ZT
Subsidiaries have records that accurately and validly reflect their
respective transactions, and accounting controls sufficient to insure that
such transactions are (i) executed in accordance with management's general or
specific authorization and (ii) recorded in conformity with GAAP so as to
maintain accountability for assets.
3.26 PAST PRODUCT LIABILITY AND RETURNS. There is not presently
pending nor has there within the last five years been an action, suit or
proceeding initiated against ZT or any ZT Subsidiary, at law or in equity, or
before or by any federal or state court, commission, board, bureau, agency or
instrumentality in connection with any product defect of any product
manufactured or sold by ZT or any ZT Subsidiary. Within the last five years,
the aggregate number of units returned to ZT and any ZT Subsidiary has never
and do not currently exceed, in any class of products sold by ZT or any ZT
Subsidiary, 1% of the total number of units sold in such class.
3.27 FULL DISCLOSURE.
(a) Each document required to be filed by ZT with the SEC or
required to be distributed or otherwise disseminated to the ZT's shareholders
in connection with the Transactions (the "ZT Filings"), including, without
limitation, the Schedule 14D-9 to be filed
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with the SEC in connection with the Merger, and any amendments or supplements
thereto, when filed, distributed or disseminated, as applicable, will comply
as to form in all material respects with the applicable requirements of the
1934 Act.
(b) No information with respect to ZT or any ZT Subsidiaries that
ZT or any ZT Subsidiary furnishes to IR in writing specifically for use in
the Offer Documents at the time of the filing thereof, at the time of any
distribution or dissemination thereof and at the time of the consummation of
the Offer, and no statements by ZT and any ZT Subsidiary contained in this
Agreement and the Schedules attached hereto and any written statement or
certificate furnished or to be furnished to IR pursuant hereto or in
connection with the transactions contemplated hereby, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF IR AND MERGER SUB
IR and Merger Sub each represents and warrants to ZT as of the date
of this Agreement as follows:
4.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Each of IR and
Merger Sub is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, is duly
licensed or qualified to do business as a foreign corporation and is in good
standing under the laws of any other state of the United States in which the
character of the properties owned or leased by it or in which the transaction
of its business makes such qualification necessary, except where the failure
to be so qualified or to be in good standing would not have a material
adverse effect on the business, prospects, results of operations or financial
condition of IR and the IR Subsidiaries taken as a whole (an "IR Material
Adverse Effect"), and has all requisite corporate power and authority to
carry on its business as it is now being conducted.
4.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each of IR
and Merger Sub has the requisite corporate power and authority to execute and
deliver this Agreement and all agreements and documents contemplated hereby,
and the consummation by IR and Merger Sub of the transactions contemplated
hereby has been duly authorized by all requisite corporate action. This
Agreement constitutes, and all agreements and documents contemplated hereby
(when executed and delivered pursuant hereto for value received) will
constitute, the valid and legally binding obligations of IR and Merger Sub,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity.
4.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by IR and Merger
Sub do not, and the consummation by IR and Merger Sub of the transactions
contemplated hereby will not,
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(1) conflict with or violate the certificate of incorporation
or bylaws or equivalent organizational documents of (i) IR or (ii) Merger Sub,
(2) subject to making the filings and obtaining the approvals
identified in Section 4.3(b) of this Agreement, conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to IR or any
Merger Sub or by which any property or asset of IR or any Merger Sub is bound
or affected, or
(3) subject to making the filings and obtaining the approvals
identified in Section 4.3(b) of this Agreement, result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, result in the loss of a material benefit
under, or give to others any right of purchase or sale, or any right of
termination, amendment, acceleration, increased payments or cancellation of,
or result in the creation of a lien or other encumbrance on any property or
asset of IR or any Merger Sub pursuant to, any Contract to which IR or any
Merger Sub is a party or by which IR or any Merger Sub or any property or
asset of IR or any Merger Sub is bound or affected,
except, in the case of clauses (1)(ii), (2) and (3), for any such conflicts,
violations, breaches, defaults or other occurrences which would not prevent
or delay consummation of any of the transactions contemplated hereby in any
material respect, or otherwise prevent IR from performing its obligations
under this Agreement in any material respect, and would not, individually or
in the aggregate, have an IR Material Adverse Effect.
(b) The execution and delivery of this Agreement by IR and Merger
Sub does not, and the consummation of the transactions contemplated hereby by
IR and Merger Sub will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Entity or any
other third-party, except
(1) for
(i) applicable requirements, if any, of the Exchange Act, the
Securities Act, Blue Sky Laws and state takeover laws,
(ii) the pre-merger notification requirements of the HSR Act,
and
(iii) filing of the Certificate of Merger as required by NYBCL,
and
(2) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would
not prevent or delay consummation of any of the transactions contemplated
hereby in any material respect, or otherwise prevent IR or Merger Sub from
performing its obligations under this Agreement in any material respect, and
would not, individually or in the aggregate, have an IR Material Adverse
Effect.
4.4 NO BROKERS. IR has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of ZT
or IR to pay any finder's fee, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby except that IR has retained
Hankin & Co. as its financial advisor, the terms of which have
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been disclosed in writing to ZT before the date of this Agreement. Other than
the foregoing arrangements, IR is not aware of any claim for payment of any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.
4.5 FULL DISCLOSURE.
(a) The information with respect to IR and any IR Subsidiaries that
IR furnishes to ZT in writing specifically for use in any ZT Filing will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading at the time of
the filing of such ZT Filing or any supplement or amendment thereto and at
the time of any distribution or dissemination thereof.
(b) The Offer Documents, when filed, distributed or disseminated,
as applicable, will comply as to form in all material respects with the
applicable requirements of the Exchange Act and, at the time of the filing
thereof, at the time of any distribution or dissemination thereof and at the
time of consummation of the Offer, will not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading, provided that this representation and warranty
will not apply to statements or omissions included in the Offer Documents
based upon information furnished to IR or Merger Sub in writing by ZT
specifically for use therein.
4.6 FINANCING. IR has available, and will make available to Merger
Sub, the funds necessary to consummate the Offer and the Merger and the
transactions contemplated hereby on a timely basis.
ARTICLE V
COVENANTS
5.1 ALTERNATIVE PROPOSALS.
(a) ZT agrees not to, and will not permit any ZT Subsidiary or any
respective officers, directors, employees, agents and representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it or any ZT Subsidiary, collectively its "Representatives") to
solicit, initiate, encourage, discuss or negotiate with any Person (as
defined in Section 8.14) with respect to a merger, acquisition, consolidation
or similar transaction involving, or relating to the purchase of (1) any
assets of ZT or of any ZT Subsidiary, other than in the ordinary course of
business, (2) shares of ZT capital stock, or (3) the capital stock of any ZT
Subsidiary, (any such proposal or offer being referred to in this Agreement
as an "Alternative Proposal") and that neither it nor any ZT Subsidiary will,
nor will it nor any ZT Subsidiary permit its respective Representatives to,
engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating to
an Alternative Proposal (excluding the Merger), or otherwise facilitate any
effort or attempt to make or implement an Alternative Proposal.
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(b) Subject to nondisclosure obligations, if any, set forth in
existing confidentiality agreements, ZT agrees that it will notify IR
immediately if any inquiries or proposals relating to an Alternative Proposal
are received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued with, it
or any ZT Subsidiary.
5.2 INTERIM OPERATIONS. Except as provided in the ZT Disclosure
Letter, ZT covenants and agrees that after the date hereof and prior to the
Effective Time (unless IR shall have agreed in writing):
(a) ORDINARY COURSE. ZT will, and will cause each ZT Subsidiary
to, operate its business only in the ordinary course of business consistent
with past practices and use its commercially reasonable efforts to (i)
preserve its existing business organization, insurance coverage, material
rights, material licenses or permits, advantageous business relationships,
material agreements and credit facilities; and (ii) retain its key officers
and employees. ZT will not and will not permit any ZT Subsidiaries to: (A)
enter into any material transaction or commitment, or sell, lease, or dispose
of or acquire any material properties or assets, except purchases and sales
of inventory in the ordinary course of business consistent with past
practices; (B) implement any new employee benefit plan, or employment,
compensatory or severance agreement; (C) amend any existing employee benefit
plan or employment agreement except as required by Law or by this Agreement;
(D) enter into, amend or terminate any Material Contract except as required
by Law or by this Agreement; (E) take any action that would jeopardize the
continuance of its material supplier or customer relationships; (F) make any
material change in the nature of their businesses and operations; (G) enter
into any transaction or agreement with any officer, director or affiliate of
ZT or any ZT Subsidiary or make any loan or advance to any employee of ZT or
any ZT Subsidiary; (H) incur or agree to incur any obligation or liability
(absolute or contingent) that individually calls for payment by ZT or any ZT
Subsidiary of more than $25,000 in any specific case or $100,000 in the
aggregate, excluding purchases of inventory in the ordinary course of
business; (I) make any change to its accounting (including tax accounting)
methods, principles or practices, except as may be required by United States
GAAP and except, in the case of tax accounting methods, principles or
practices, in the ordinary course of business of ZT or any ZT Subsidiary
consistent with past practice or any change in its tax elections that would
materially increase its tax liabilities; (J) authorize or make capital
expenditures in excess of $25,000; (K) mortgage or otherwise encumber or
subject to any lien any properties or assets except pursuant to existing
agreements; (L) grant, confer or award any bonuses or other forms of cash
incentives to any officer, director or employee except consistent with past
practice; (M) enter into any new bank credit agreement or line of credit or
amend in any material respect its existing bank credit agreement or lines of
credit; (N) grant any severance or termination pay to, or enter into any new
employment or severance agreement with any present or future officer,
employee or director, other than consistent with past practices; (O) take any
action that would make any representation or warranty of ZT hereunder to be
inaccurate in any material (except where such representation or warranty is
already qualified as to materiality) respect or omit to take any action
necessary to prevent such representation or warranty from being inaccurate in
any material (except where such representation or warranty is already
qualified as to materiality) respect; (P) acquire any capital stock of any
Person; or (Q) authorize, or commit or agree to take, any of the foregoing
actions.
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(b) CHARTER DOCUMENTS. Neither ZT nor any ZT Subsidiary will amend
its certificate of incorporation or bylaws or other charter documents.
(c) DIVIDENDS. ZT will not (i) declare, set aside or pay any
dividend or make any other distribution or payment with respect to any shares
of its capital stock or other ownership interests, or (ii) directly or
indirectly redeem, purchase or otherwise acquire any shares of its capital
stock, or make any commitment for any such action.
(d) CAPITALIZATION. Neither ZT nor any ZT Subsidiary will issue any
shares of its capital stock, effect any stock split or reclassification or
otherwise change (or agree to do so) its equity securities, options,
warrants, or convertible instruments as it existed on the date of this
Agreement, except pursuant to the exercise of options, warrants, conversion
rights and other contractual rights existing on the date of this Agreement
and disclosed pursuant to this Agreement. Neither ZT nor any ZT Subsidiary
will grant, confer or award any option, warrant, conversion right or other
right not existing on the date of this Agreement to acquire any shares of its
capital stock or membership interests.
5.3 INTENTIONALLY LEFT BLANK.
5.4 FILINGS, OTHER ACTION. Subject to the terms and conditions
herein provided, ZT and IR shall: (a) promptly make their respective filings
and thereafter make any other required submissions under the HSR Act with
respect to the Merger; (b) use all reasonable efforts to cooperate with one
another in (i) determining which filings are required to be made prior to the
Effective Time with, and which consents, approvals, permits or authorizations
are required to be obtained prior to the Effective Time from, any
Governmental Entity in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and
(ii) timely making all such filings and timely seeking all such consents,
approvals, permits or authorizations; and (c) use all reasonable efforts to
take, or cause to be taken, all other action and do, or cause to be done, all
other things necessary, proper or appropriate to consummate and make
effective the transactions contemplated by this Agreement.
5.5 THIRD-PARTY CONSENTS. Each party must, and must cause its
Subsidiaries to, use all commercially reasonable efforts to obtain all
consents required in connection with the transactions contemplated by this
Agreement, and each party must promptly notify the other parties of any
failure or prospective failure to obtain any such consents and, if requested
by the other party, must provide such other party with copies of all material
filings and correspondence in connection with, and evidence of, all consents
applied for or obtained.
5.6 INSPECTION OF RECORDS; ACCESS AND INFORMATION. From the date of
this Agreement to the Effective Time, ZT will
(a) allow all IR Representatives reasonable access at all
reasonable times to the offices, records and files, correspondence, audits
and properties, as well as to all information relating to commitments,
contracts, titles and financial position, or otherwise pertaining to the
business and affairs, of ZT and the ZT Subsidiaries,
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(b) furnish to IR, IR's counsel, financial advisors, auditors and
other Representatives such financial and operating data and other information
as such persons may reasonably request, and
(c) instruct the employees, counsel and financial advisors of ZT to
cooperate with IR in IR's investigation of the business of ZT and the ZT
Subsidiaries.
5.7 PUBLICITY. The initial press release relating to this Agreement
will be a joint press release and thereafter ZT and IR shall, subject to
their respective legal obligations (including requirements of stock exchanges
and other similar regulatory bodies), consult with each other, and use
reasonable efforts to agree upon the text of any press release, before
issuing any such press release or otherwise making public statements with
respect to the transactions contemplated hereby and in making any filings
with any federal or state governmental or regulatory agency or with any
national securities exchange with respect thereto.
5.8 EXPENSES. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby will be paid by the party incurring such expenses except
as expressly provided in this Agreement.
5.9 INSURANCE; INDEMNITY.
(a) From and after the Effective Time, IR will indemnify, defend
and hold harmless to the fullest extent that ZT would have been permitted
under applicable law each person who is now, or has been at any time before
the date of this Agreement, an officer or director of ZT (individually, an
"Indemnified Party" and collectively, the "Indemnified Parties"), against all
losses, claims, damages, liabilities, costs or expenses (including reasonable
attorneys' fees), judgments, fines, penalties and amounts paid in settlement
in connection with any claim, action, suit, proceeding or investigation
arising out of or pertaining to acts or omissions, or alleged acts or
omissions, by them in their capacities as such occurring at or before the
Effective Time. In the event of any such claim, action, suit, proceeding or
investigation (an "Action"),
(1) any Indemnified Party wishing to claim indemnification must
promptly notify IR thereof,
(2) IR must pay the reasonable fees and expenses of counsel
selected by the Indemnified Party, which counsel shall be reasonably
acceptable to IR, in advance of the final disposition of any such Action to
the full extent permitted by applicable law, upon receipt of any undertaking
required by applicable law, and
(3) IR will cooperate in the defense of any such matter;
PROVIDED that IR will not be liable for any settlement effected without its
written consent and PROVIDED, FURTHER, that IR shall not be obligated
pursuant to this Section to pay the fees and disbursements of more than one
counsel for all Indemnified Parties in any single Action except to the extent
that in the opinion of counsel for the Indemnified Parties reasonably
satisfactory to IR, two or more of such Indemnified Parties have conflicting
interests in the outcome of such action.
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(b) IR must cause the Surviving Corporation of the Merger or its
successor to keep in effect for seven years provisions in its certificate of
incorporation and bylaws providing for indemnification of the Indemnified
Parties that is substantially the same as is currently set forth in the ZT
Certificate of Incorporation and bylaws, giving effect for any successor to
the laws of the state of incorporation of such successor.
(c) For seven years after the Effective Time, IR must cause to be
maintained officers' and directors' liability insurance covering the
Indemnified Parties who are currently covered, in their capacities as
officers and directors, by ZT's existing officers' and directors' liability
insurance policies on terms substantially no less advantageous to the
Indemnified Parties than such existing insurance; PROVIDED that IR will not
be required to pay an annual premium in excess of one and one-half times the
current annual premium paid by ZT for its existing coverage (the "Cap") in
order to maintain or procure such coverage; and PROVIDED, FURTHER, that if
equivalent coverage cannot be obtained, or can be obtained only by paying an
annual premium in excess of the Cap, IR will only be required to obtain as
much coverage as can be obtained by paying an annual premium equal to the Cap.
(d) For two years after the Effective Time, IR must cause to be
maintained either ZT's present insurance policy covering ZT's Retirement
Savings Plan or a new policy with substantially similar terms, which may be
an insurance policy that covers IR and its Subsidiaries.
(e) The provisions of this Section will survive the consummation of
the Merger and expressly are intended to benefit each of the Indemnified
Parties.
5.10 APPRECIATION RIGHTS. Prior to the closing of the Offer, all
appreciation rights outstanding under the Omnirel, L.L.C. Appreciation Rights
Plan shall be terminated.
5.11 COOPERATION, NOTIFICATION.
(a) ZT must confer on a regular and frequent basis with one or more
IR Representatives to discuss, subject to applicable law, material
operational matters and the general status of ZT's and the ZT Subsidiaries'
ongoing operations,
(b) ZT must promptly notify IR of any significant changes in its
and the ZT Subsidiaries' business, properties, assets, condition (financial
or other), results of operations or prospects,
(c) ZT must promptly notify IR of any notice or other communication
(i) from any Person alleging that the consent of such person is or may be
required in connection with the Transactions or (ii) from any governmental or
regulatory agency or authority in connection with the Transactions,
(d) ZT must promptly deliver to IR true and correct copies of any
report, statement or schedule filed with the SEC subsequent to the date of
this Agreement,
(e) Each party must promptly advise the other party of any material
inaccuracy in any of its representations, warranties or nonperformance of any
covenant in this Agreement or of any change or event which has had or,
insofar as reasonably can be foreseen, is
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reasonably likely to result in, in the case of ZT, a ZT Material Adverse
Effect or, in the case of IR, an IR Material Adverse Effect, and
(f) Each party must promptly provide the other party with copies of
all filings made by such party or any of its Subsidiaries with any
Governmental Entity in connection with this Agreement and the transactions
contemplated hereby.
5.12 FINANCIAL STATEMENTS. ZT will deliver to IR, as soon as
reasonably practicable but in no event later than thirty days after the end
of each fiscal month and forty-five days after the end of each fiscal quarter
prior to the Effective Date, beginning with the periods included in the
second fiscal quarter of 2000, its unaudited balance sheet as of such date
and related unaudited statements of income and changes in shareholders'
equity for the period then ended. Such financial statements will be prepared
in accordance with GAAP consistently applied and will fairly reflect ZT's
consolidated financial condition and the consolidated results of its
operations for the periods then ended, subject, in the case of unaudited
interim statements, to the absence of notes and to normal year-end
adjustments. ZT will also deliver to IR the related consolidating statements
for each such period.
5.13 COMMERCIALLY REASONABLE EFFORTS. ZT and IR shall each use its
commercially reasonable efforts to cause all conditions to Closing to be
satisfied.
5.14 ANTI-TAKEOVER STATUTES. If any anti-takeover or similar
statute is applicable to the transactions contemplated hereby, ZT represents
that it has and will grant such approvals and take such actions as are
necessary so that the transactions contemplated hereby may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
eliminate the effects of such takeover statute on the transactions
contemplated hereby.
5.15 MERGER WITHOUT MEETING OF SHAREHOLDERS. If IR, Merger Sub or
any other Subsidiary of IR shall acquire at least 90% of the outstanding
shares of ZT Common Stock pursuant to the Offer or otherwise, the parties
hereto agree, subject to satisfaction or (to the extent permitted hereunder)
waiver of all conditions to the Merger, to take all necessary and appropriate
action to cause the Merger to be effective as soon as practicable after the
acceptance for payment and purchase of shares of ZT Common Stock pursuant to
the Offer without a meeting of shareholders of ZT in accordance with the
NYBCL.
5.16 PAYMENT OF DEBT. Prior to or at the closing of the Offer, ZT
shall have paid or caused to be paid all amounts owing to banks, brokers, and
other financial institutions by either ZT or any ZT Subsidiary, other than
amounts owed to Fleet Bank as contemplated by Section 3.16.
5.17 GUARANTY AND INDEMNITY AGREEMENT. Prior to or at the closing
of the Offer, the Unlimited Guaranty and Indemnity Agreement between Fleet
Bank and ZT dated August 28, 1997 shall be terminated.
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ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger will be subject to
the fulfillment at or before the Closing Date of the following conditions:
(a) This Agreement and the transactions contemplated hereby
shall have been approved in the manner required by applicable law, by the
certificate of incorporation of the corporation and by the applicable
regulations of any stock exchange or other regulatory body, as the case may
be, by the holders of the issued and outstanding shares of capital stock of
ZT.
(b) The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
(c) None of the parties shall be subject to any order or
injunction of a court of competent jurisdiction, which prohibits the
consummation of the transactions contemplated by this Agreement. If any such
order or injunction shall have been issued, each party agrees to use its
commercially reasonable best efforts to have any such injunction lifted.
(d) All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement shall have been obtained or made, except for
filings in connection with the Merger and any other documents required to be
filed after the Effective Time and except where the failure to have obtained
or made any such consent, authorization, order, approval, filing or
registration would not have a material adverse effect on the business,
results of operations or financial condition of IR and ZT (and their
respective Subsidiaries), taken as a whole, following the Effective Time.
6.2 CONDITIONS TO OBLIGATION OF ZT TO EFFECT THE MERGER. The
obligation of ZT to effect the Merger shall be subject to the fulfillment at
or before the Closing Date of the following conditions:
(a) IR shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or before
the Closing Date, and the representations and warranties of IR and Merger Sub
contained in this Agreement and in any document delivered in connection
herewith shall be true and correct as of the Closing Date as if made on the
Closing Date, except (a) for changes specifically permitted by this Agreement
and (b) that those representations and warranties which address matters only
as of a particular date shall remain true and correct as of such date, and ZT
shall have received a certificate of the Chief Executive Officer, Chief
Operating Officer, or an Executive Vice President of IR, dated the Closing
Date, certifying to such effect.
(b) Merger Sub shall have purchased shares of ZT Common Stock
constituting at least two-thirds of the total issued and outstanding shares
of ZT Common Stock on a fully-diluted basis pursuant to the terms and
conditions of the Offer, unless the failure of
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Merger Sub to so purchase such shares is a result of a material breach of any
representation, warranty, or condition of ZT under this Agreement.
6.3 CONDITIONS TO OBLIGATION OF IR TO EFFECT THE MERGER. The
obligation of IR to effect the Merger shall be subject to the fulfillment at
or before the Closing Date of the following conditions:
(a) ZT shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or before
the Closing Date, and the representations and warranties of ZT contained in
this Agreement and in any document delivered in connection herewith shall be
true and correct in all material respects as of the Closing Date as if made
on the Closing Date, except (i) for changes specifically permitted by this
Agreement, and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of such
date, and IR shall have received a certificate of the President or a Senior
Vice President of ZT, dated the Closing Date, certifying to such effect.
(b) Intentionally Left Blank.
(c) From the date of this Agreement through the Effective Time,
there shall not have occurred any change in the financial condition, business
or operations of ZT and the ZT Subsidiaries, taken as a whole that would have
or would be reasonably likely to have a ZT Material Adverse Effect.
(d) After the Effective Time, no person shall have any right
under any stock option plan (or any option granted thereunder) or other plan,
program or arrangement to acquire any equity securities of ZT or of any ZT
Subsidiary.
(e) The ZT Shareholder Support Agreement shall have remained in
full force and effect through the closing or termination of the Offer,
whichever first occurs.
(f) Intentionally Left Blank.
(g) ZT shall have obtained the consent or approval of each
person whose consent or approval shall be required under any Material
Contract to which ZT or any ZT Subsidiaries is a party.
(h) Merger Sub shall have purchased shares of ZT Common Stock
pursuant to the terms and conditions of the Offer, unless the failure of
Merger Sub to so purchase such shares is a result of a material breach of any
representation, warranty, or condition of IR under this Agreement or the
Offer.
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ARTICLE VII
TERMINATION
7.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
and the Merger may be abandoned at any time before the Effective Time, before
or after the approval of this Agreement by the shareholders of ZT, by the
mutual consent of IR and ZT.
7.2 TERMINATION BY EITHER IR OR ZT. This Agreement may be terminated
and the Merger may be abandoned by action of the board of directors of either
IR or ZT, before or after the approval of this Agreement by the shareholders
of ZT, if
(a) the Merger shall not have been consummated by June 30,
2000; PROVIDED, in the case of a termination pursuant to this clause (a),
that the terminating party shall not have breached in any material respect
its obligations under this Agreement in any manner that shall have
proximately contributed to the failure to consummate the Merger by June 30,
2000;
(b) the approval of ZT's shareholders required by Section
6.1(a) shall not have been obtained at a meeting duly convened therefor or at
any adjournment thereof;
(c) Merger Sub shall not have accepted for payment any shares
of ZT Common Stock pursuant to the Offer before the 41st business day
following commencement of the Offer or Merger Sub shall have failed to
commence the Offer within 30 days following the date of this Agreement,
provided that the right to terminate this Agreement pursuant to this Section
7.2(c) shall not be available to any party whose breach of any provision of
this Agreement results in the failure of the acceptance for payment by Merger
Sub of any shares of ZT Common Stock pursuant to the Offer by such time or of
the Offer to be commenced by such time; or
(d) there shall be any law or regulation that makes acceptance
for payment of, and payment for, the shares of ZT Common Stock pursuant to
the Offer or consummation of the Merger illegal or otherwise prohibited or
any judgment, injunction, order or decree of any court or governmental body
having competent jurisdiction enjoining Merger Sub from accepting for payment
of, and paying for, the shares of ZT Common Stock pursuant to the Offer or ZT
or IR from consummating the Merger and such judgment, injunction, order or
decree shall have become final and nonappealable; PROVIDED that the party
seeking to terminate this Agreement pursuant to this clause (d) shall have
used all reasonable efforts to remove such injunction, order or decree.
7.3 TERMINATION BY ZT. This Agreement may be terminated and the
Merger may be abandoned at any time before the Effective Time, before or
after the approval of this Agreement by the shareholders of ZT, by action of
the board of directors of ZT
(a) if there has been a breach by IR of any representation or
warranty contained in this Agreement which would have or would be reasonably
likely to have an IR Material Adverse Effect or impair the ability of IR or
Merger Sub to timely consummate the transactions contemplated by this
Agreement; or
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(b) if IR has not commenced the offer within the time period
described in Section 1.1(a), or if there has been a material breach of any
other covenant or agreement set forth in this Agreement on the part of IR,
which breach is not curable or, if curable, is not cured within 30 days after
written notice of such breach is given by ZT to IR.
7.4 TERMINATION BY IR. This Agreement may be terminated and the
Merger may be abandoned at any time before the Effective Time, before or
after the approval of this Agreement by the shareholders of ZT referred to in
Section 6.1(a), by action of the board of directors of IR, if
(a) there has been a breach by ZT of any representation or
warranty contained in this Agreement which would have or would be reasonably
likely to have a ZT Material Adverse Effect, or
(b) there has been a material breach of any of the covenants or
agreements set forth in this Agreement on the part of ZT, which breach is not
curable or, if curable, is not cured within 30 days after written notice of
such breach is given by IR to ZT.
7.5 EFFECT OF TERMINATION AND ABANDONMENT. If this Agreement is
terminated and the Merger is abandoned pursuant to this ARTICLE VII, all
obligations of the parties will terminate, except the obligations of the
parties pursuant to this Section 7.5 and Section 5.8 and except for the
provisions of Sections 8.3, 8.4, 8.6, 8.9, 8.12, 8.13 and 8.15. Moreover, if
this Agreement is terminated pursuant to Section 7.3 or 7.4, nothing in this
Agreement shall prejudice the ability of the non-breaching party from seeking
damages from any other party for any willful breach of this Agreement,
including without limitation, attorneys' fees and the right to pursue any
remedy at law or in equity.
7.6 EXTENSION, WAIVER. At any time before the Effective Time, any
party hereto, by action taken by its board of directors, may, to the extent
legally allowed,
(a) extend the time for the performance of any of the
obligations or other acts of the other parties,
(b) waive any inaccuracies in the representations and
warranties made to such party contained in this Agreement or in any document
delivered pursuant hereto and
(c) waive compliance with any of the agreements or conditions
for the benefit of such party contained in this Agreement. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid
only if set forth in writing signed on behalf of such party.
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ARTICLE VIII
GENERAL PROVISIONS
8.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall not survive the Merger,
PROVIDED that the agreements contained in ARTICLE I, Section 5.9 and this
ARTICLE VIII will survive the Merger and Section 7.5 will survive termination.
8.2 NOTICES. Any notice required to be given hereunder will be
sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered
mail (return receipt requested and first-class postage prepaid), addressed as
follows:
<TABLE>
<S> <C>
If to IR: If to ZT:
Attention: Attention:
Telecopier No.: Telecopier No.:
With copies to: With copies to:
O'Melveny & Myers LLP Morrison Cohen Singer Weinstein, LLP
1999 Avenue of the Stars, Suite 700 750 Lexington Avenue
Los Angeles, CA 90067 New York, New York 10022
Attention: Kendall R. Bishop, Esq. Attention: Henry A. Singer, Esq.
Telecopier No.: (310) 246-6779 Telecopier No.: (212) 735-8708
</TABLE>
or to such other address as any party shall specify by written notice so
given, and such notice shall be deemed to have been delivered as of the date
so telecommunicated, personally delivered or mailed.
8.3 ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned by any of the
parties (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Section 5.9, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
8.4 ENTIRE AGREEMENT. This Agreement, the Exhibits, the ZT
Disclosure Letter, and any documents delivered by the parties in connection
herewith constitute the entire agreement among the parties with respect to
the subject matter of this Agreement and supersede
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all prior agreements and understandings among the parties with respect
thereto except the Confidentiality Agreement dated August 23, 1999 between
Fleet National Bank and International Rectifier Corporation (the
"Confidentiality Agreement") which shall continue in full force and effect,
provided that if there is any conflict between the Confidentiality Agreement
and this Agreement, this Agreement shall prevail. The Confidentiality
Agreement shall survive termination of this Agreement. No addition to or
modification of any provision of this Agreement shall be binding upon any
party hereto unless made in writing and signed by all parties hereto.
8.5 AMENDMENT. This Agreement may be amended by the parties hereto,
by action taken by their respective boards of directors, at any time before
or after approval of matters presented in connection with the Merger by the
shareholders of ZT, but after any such shareholder approval, no amendment
shall be made which by law requires the further approval of shareholders
without obtaining such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.
8.6 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to its
rules of conflict of laws.
8.7 COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies of this
Agreement each signed by less than all, but together signed by all of the
parties hereto.
8.8 HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
8.9 INTERPRETATION. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and
vice versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa. Each of the parties has participated in the drafting and negotiation
of this Agreement. If an ambiguity or question of intent or interpretation
arises, this Agreement must be construed as if it is drafted by all the
parties and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of authorship of any of the provisions of
this Agreement
8.10 WAIVERS. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation
by or on behalf of any party, will be deemed to constitute a waiver by the
party taking such action of compliance with any representations, warranties,
covenants or agreements contained in this Agreement. The waiver by any party
hereto of a breach of any provision hereunder will not operate or be
construed as a waiver of any prior or subsequent breach of the same or any
other provision hereunder.
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8.11 INCORPORATION OF EXHIBITS. ZT Disclosure Letter and all
Exhibits attached hereto and referred to in this Agreement are hereby
incorporated in this Agreement and made a part of this Agreement for all
purposes as if fully set forth in this Agreement.
8.12 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
8.13 ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur if any of the provisions of this Agreement was
not performed in accordance with its specific terms or as otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any New York
court, this being in addition to any other remedy to which they are entitled
at law or in equity. In any such action for specific performance, no party
will be required to post a bond.
8.14 DEFINITIONS OF SUBSIDIARY, PERSON AND KNOWLEDGE. As used in
this Agreement, the word "Subsidiary" when used with respect to any party
means any corporation or other organization, whether incorporated or
unincorporated, of which such party directly or indirectly owns or controls
at least a majority of the securities or other interests having by their
terms ordinary voting power to elect a majority of the board of directors or
others performing similar functions with respect to such corporation or other
organization, or any organization of which such party is a general partner.
The word "Person" shall mean an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof. The word "Knowledge" of any Person means the actual
knowledge of such Person's executive officers which in the case of ZT shall
mean only Robert Schrader, Martin Fawer, John Catrambone, John Allwein, and
Thomas Teebagy.
8.15 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties have executed this Agreement
and caused the same to be duly delivered on their behalf on the day and year
first written above.
INTERNATIONAL RECTIFIER CORPORATION
By: /s/ Walter T. Lifsey
--------------------------------
Name: Walter T. Lifsey
Title: Vice President Government and
Space Products
ZING TECHNOLOGIES, INC.
By: /s/ Robert E. Schrader
--------------------------------
Name: Robert E. Schrader
Title: Chief Executive Officer
IRC ACQUISITION CORPORATION
By: /s/ L. Michael Russell
--------------------------------
Name: L. Michael Russell
Title: Vice President
S-1
<PAGE>
EXHIBIT C
OFFER CONDITIONS
Notwithstanding any other provision of the Offer, IR and Merger Sub
shall not be required to accept for payment or pay for any shares of ZT Common
Stock, and may terminate the Offer, if
(i) the Minimum Condition has not been satisfied or waived (pursuant to
Section 1.1(a) of the Agreement) by the scheduled expiration date, as extended,
(ii) the applicable waiting period under the HSR Act shall not have
expired or been terminated by the expiration date of the Offer, as extended,
(iii) at any time on or after the date of the Agreement and prior to
the Initial Expiration Date of the Offer (or extended expiration date of the
Offer only if under the Agreement these conditions remain applicable), any of
the following conditions exist:
(a) there shall be instituted and remain pending any action,
investigation or proceeding by any government or governmental authority or
agency, domestic or foreign, or by any other Person, before any court or
governmental authority or agency, domestic or foreign,
(1) challenging the acquisition by IR or Merger
Sub of any shares of ZT Common Stock under the Offer, seeking to restrain or
prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other transactions contemplated by the Agreement or
seeking to require ZT, IR or Merger Sub to pay any damages related to the Offer,
the Merger or the other transactions contemplated by the Agreement that are
material in relation to ZT taken as a whole,
(2) seeking to impose limitations on the ability
of Merger Sub, or to render Merger Sub unable to accept for payment, pay for or
purchase some or all of the shares of ZT Common Stock pursuant to the Offer and
the Merger,
(3) seeking to restrain or prohibit IR's ownership
or operation (or that of IR's Subsidiaries) of all or any portion of the
business or assets of ZT or the ZT Subsidiaries or of IR or the IR
Subsidiaries or to compel IR or any IR Subsidiaries to dispose of or hold
separate all or any portion of the business or assets of ZT or the ZT
Subsidiaries or of IR or the IR Subsidiaries,
(4) seeking to impose limitations on the ability
of IR, Merger Sub or any other IR Subsidiary effectively to exercise full
rights of ownership of the shares of ZT Common Stock, including, without
limitation, the right to vote any shares of ZT Common Stock acquired or owned
by IR, Merger Sub or any other IR Subsidiary on all matters properly
presented to ZT's shareholders, except such limitations on voting securities
as may be required as a result of IR or Merger Sub not complying with
applicable securities laws,
(5) seeking to require divestiture by IR, Merger Sub
or any other IR Subsidiary of any shares of ZT Common Stock, or
C-1
<PAGE>
(6) that otherwise is reasonably likely to have a ZT
Material Adverse Effect; or
(b) there shall have been any action taken, or any statute,
rule, regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Merger, by any
court, government or governmental authority or agency, domestic or foreign,
other than the routine application of the waiting period provisions of the HSR
Act to the Offer or the Merger, that is reasonably likely, directly or
indirectly, to result in any of the consequences referred to in clauses (1)
through (6) of paragraph (a) above; or
(c) the ZT board of directors (1) shall have withdrawn, or
modified in a manner adverse to IR, its approval or recommendation of the
Agreement, the Offer or the Merger or (2) shall have failed to reaffirm such
approval or recommendation upon IR's reasonable request; or
(d) ZT shall have breached or failed to perform in any
material respect any obligation or to comply in any material respect with any
agreement or covenant of ZT required to be performed or complied with by it
under the Agreement prior to the consummation of the Offer; or any
representations and warranties of ZT contained in the Agreement shall not be
true and correct, individually or in the aggregate, so as to be reasonably
likely to have a ZT Material Adverse Effect, in each case, when made or (except
those that speak as to a specific date) as of the expiration date as set forth
in the first sentence to this clause (iii) of the Offer as if made at and as of
such time; or
(e) there shall have occurred a commencement of a war or armed
hostilities or other national or international calamity directly or indirectly
involving the United States that is reasonably expected to have a ZT Material
Adverse Effect; or
(f) the Agreement shall have been terminated by IR in
accordance with its terms; or
(g) IR shall not have received the opinion of Morrison Cohen
Singer Weinstein, LLP, special counsel to ZT, in substantially the form attached
hereto as EXHIBIT E, or
(iv) the Incentive Compensation Agreement with John Catrambone in
substantially the form attached as EXHIBIT D shall not be in effect, or
(v) any employee of ZT, or any ZT Subsidiary, who owes any indebtedness
to ZT or any ZT Subsidiary has not either (1) repaid all principal and interest
due thereon in full or (2) instructed ChaseMellon Shareholder Services, L.L.C.
to pay to ZT an amount equal to such principal and interest out of the proceeds
due such employee pursuant to the Offer and to remit the balance of such
proceeds to such employee.
Except as otherwise provided in the Merger Agreement, the foregoing
conditions are for the sole benefit of IR and Merger Sub and may, subject to the
terms of the Agreement, be waived by IR and Merger Sub in whole or in part at
any time and from time to time in their discretion. The failure by IR or Merger
Sub at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right, the waiver of any such right with respect to
particular facts
C-2
<PAGE>
and circumstances shall not be deemed a waiver with respect to any other
facts and circumstances, and each such right shall be deemed an ongoing right
that may be asserted at any time and from time to time prior to the earlier
of the scheduled expiration date of the Offer or when payment for the shares
of ZT Common Stock tendered pursuant to the Offer should have been made by
Merger Sub or IR.
C-3
<PAGE>
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT dated as of January 27, 2000 (this "Stock
Option Agreement") is by and between Zing Technologies, Inc., a New York
corporation ("ZT"), and IRC Acquisition Corporation ("Merger Sub"), a New York
corporation and a direct wholly owned subsidiary of International Rectifier
Corporation, a Delaware corporation ("IR").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this Stock
Option Agreement, the parties hereto and IR are entering into an Agreement and
Plan of Merger (as such agreement may hereafter be amended from time to time,
the "Merger Agreement") which provides, upon the terms and subject to the
conditions set forth therein, for (a) the commencement of an offer (the "Offer")
by Merger Sub to purchase any and all of the outstanding shares of common stock,
$0.01 par value, of ZT ("ZT Common Stock"), and (b) a business combination
whereby Merger Sub will be merged with and into ZT, with ZT continuing as the
surviving corporation of such merger and a direct wholly-owned subsidiary of IR
(the "Merger").
WHEREAS, as a condition to the willingness of IR and Merger Sub to enter
into the Merger Agreement, IR and Merger Sub have required that ZT agree, and in
order to induce IR and Merger Sub to enter into the Merger Agreement, ZT has
agreed, to grant to Merger Sub certain options to purchase shares of ZT Common
Stock upon the terms and subject to the conditions of this Stock Option
Agreement; and
WHEREAS, capitalized terms used but not defined in this Stock Option
Agreement shall have the meanings ascribed to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
The Top-Up Option
Section 1.01. Grant of Top-Up Stock Option. Subject to the terms and
conditions set forth herein, ZT hereby grants to Merger Sub an irrevocable
option (the "Top-Up Stock Option") to purchase that number of shares of ZT
Common Stock (the "Top-Up Option Shares") equal to the number of shares of ZT
Common Stock that, when added to the number of shares of ZT Common Stock owned
by Merger Sub and IR immediately following consummation of the Offer, shall
constitute 90% of the shares of ZT Common Stock then outstanding (assuming the
issuance of the Top-Up Option Shares) at a purchase price per Top-Up Option
Share equal to the Merger Consideration per share of ZT Common Stock; provided,
however, that the Top-Up Stock Option shall not be exercisable if the number of
shares of ZT Common Stock subject thereto exceeds the number of authorized
shares of ZT Common Stock available for issuance. ZT agrees to provide IR and
Merger Sub with information regarding the number of shares of ZT Common Stock
available for issuance on an ongoing basis.
<PAGE>
Section 1.02. Exercise of Top-Up Stock Option. (a) Merger Sub may, at its
election, exercise the Top-Up Stock Option in whole, but not in part, at any one
time after the occurrence of a Top-Up Exercise Event (as defined below) and
prior to the Top-Up Termination Date (as defined below).
(b) A "Top-Up Exercise Event" shall occur for purposes of this Stock
Option Agreement upon Merger Sub's payment pursuant to the Offer of shares of ZT
Common Stock constituting, together with shares of ZT Common Stock owned
directly or indirectly by IR, more than two-thirds but less than 90% of the
shares of ZT Common Stock then outstanding. IR or Merger Sub shall deliver a
certificate or letter from ChaseMellon Shareholder Services, L.L.C. (the
"Depositary") stating that such payment has been made.
(c) The "Top-Up Termination Date" shall occur for purposes of this
Stock Option Agreement upon the earliest to occur of: (i) the Effective Time;
(ii) the date which is 20 business days after the occurrence of a Top-Up
Exercise Event; and (iii) the termination of the Merger Agreement.
Notwithstanding the occurrence of the Top-Up Termination Date, Merger
Sub shall be entitled to purchase the Top-Up Option Shares if it has exercised
the Top-Up Stock Option in accordance with the terms hereof prior to such
occurrence, and the occurrence of the Top-Up Termination Date shall not affect
any rights hereunder which by their terms do not terminate or expire prior to or
as of such date.
(d) In the event Merger Sub wishes to exercise the Top-Up Stock
Option, Merger Sub shall send to ZT a written notice (a "Top-Up Exercise
Notice," the date of which notice is referred to herein as the "Top-Up Notice
Date") specifying the denominations of the certificate or certificates
evidencing the Top-Up Option Shares which Merger Sub wishes to receive, the
place for the closing of the purchase and sale pursuant to the Top-Up Stock
Option (the "Top-Up Closing") and a date not earlier than one day nor later than
ten business days after the Top-Up Notice Date for the Top-Up Closing; provided,
however, that (i) if the Top-Up Closing cannot be consummated by reason of any
applicable laws or orders, the period of time that otherwise would run pursuant
to this sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated and (ii) without limiting the
foregoing, if prior notification to or approval of any governmental entity is
required in connection with such purchase, Merger Sub and ZT shall promptly file
the required notice or application for approval and shall cooperate in the
expeditious filing of such notice or application, and the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which, as the case may be, (A) any required notification period has expired or
been terminated or (B) any required approval has been obtained, and in either
event, any requisite waiting period has expired or been terminated. ZT shall,
promptly after receipt of the Top-Up Exercise Notice, deliver a written notice
to Merger Sub confirming the number of Top-Up Option Shares and the aggregate
purchase price therefor.
<PAGE>
ARTICLE 2
Closing
Section 2.01. Conditions to Closing. The obligation of ZT to deliver
Top-Up Option Shares upon the exercise of the Top-Up Stock Option is subject to
the following conditions:
(a) any applicable waiting period under the HSR Act shall have expired
or been terminated; and
(b) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the exercise of the Top-Up Stock
Option or the delivery of the Top-Up Option Shares in respect of any such
exercise.
Section 2.02. Closing. (a) At the Top-Up Closing (i) ZT shall deliver
to Merger Sub (against payment as herein provided) a certificate or certificates
evidencing the applicable number of Top-Up Option Shares (in the denominations
designated by Merger Sub in the Top-Up Exercise Notice) and (ii) Merger Sub
shall purchase each Top-Up Option Share from ZT at the Offer Price. Payment by
Merger Sub of the purchase price for the Top-Up Option Shares may be made, at
the option of Merger Sub, by delivery of (i) immediately available funds by wire
transfer to an account designated by ZT or (ii) a promissory note, in form and
substance reasonably satisfactory to ZT and in a principal face amount equal to
the aggregate amount of the purchase price, which promissory note shall be
secured with property (other than the Top-Up Option Shares) reasonably
acceptable to the parties, shall bear interest at a rate equal to 5% per annum
and shall be payable in full with accrued interest immediately prior to the
Effective Time.
(b) ZT shall pay all expenses, and any and all federal, state and
local taxes and other charges, that may be payable in connection with the
preparation, issuance and delivery of stock certificates under this Section
2.02.
(c) Certificates evidencing Top-Up Option Shares delivered hereunder
may include legends legally required including the legend in substantially the
following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD ONLY
IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
It is understood and agreed that the foregoing legend shall be removed by
delivery of substitute certificate(s) without such legend upon the sale of the
Top-Up Option Shares pursuant to a registered public offering or Rule 144 under
the Securities Act, or any other sale as a result of which such legend is no
longer required.
<PAGE>
ARTICLE 3
Additional Agreements
Section 3.01. Reasonable Best Efforts. Subject to the terms and
conditions of this Stock Option Agreement, Merger Sub and ZT will use their
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate the transactions contemplated by this Stock
Option Agreement.
Section 3.02. Further Assurances. ZT shall perform such further acts
and execute such further documents and instruments as may reasonably be required
to vest in Merger Sub and IR the power to carry out the provisions of this Stock
Option Agreement. If Merger Sub shall exercise the Top-Up Stock Option granted
hereunder in accordance with the terms of this Stock Option Agreement, ZT shall,
without additional consideration, execute and deliver all such further documents
and instruments and take all such further action as Merger Sub or IR may
reasonably request to carry out the transactions contemplated by this Stock
Option Agreement.
ARTICLE 4
Miscellaneous
Section 4.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given as specified in Section 8.2 of the Merger Agreement.
Section 4.02. Amendments; No Waivers. (a) Any provision of this Stock
Option Agreement may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by each party
to this Stock Option Agreement or, in the case of a waiver, by each party
against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 4.03. Expenses. Except as otherwise provided herein or in
Section 5.8 of the Merger Agreement, all costs and expenses incurred in
connection with this Stock Option Agreement shall be paid by the party incurring
such cost or expense.
Section 4.04. Successors and Assigns. The provisions of this Stock
Option Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided that no party may
assign, delegate or otherwise transfer any of its rights or obligations under
this Stock Option Agreement without the consent of each other party hereto,
except that Merger Sub may 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 a portion
of the Top-Up Option Shares pursuant
<PAGE>
to this Stock Option Agreement, but no such transfer or assignment will relieve
Merger Sub of its obligations under this Stock Option Agreement.
Section 4.05. Governing Law. This Stock Option Agreement shall be
governed by and construed in accordance with the law of the State of New York,
without regard to the conflicts of law rules of such state.
Section 4.06. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 4.07. Counterparts; Effectiveness; Benefit. This Stock Option
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Stock Option Agreement shall become effective when
each party hereto shall have received counterparts hereof signed by all of the
other parties hereto. No provision of this Stock Option Agreement is intended to
confer any rights, benefits, remedies, obligations, or liabilities hereunder
upon any Person other than the parties hereto and their respective successors
and assigns.
Section 4.08. Entire Agreement. This Stock Option Agreement, the Merger
Agreement and the Confidentiality Agreement constitute the entire agreement
between the parties with respect to the subject matter of this Stock Option
Agreement and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this Stock
Option Agreement.
Section 4.09. Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
Section 4.10. Severability. If any term, provision, covenant or
restriction of this Stock Option Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Stock
Option Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such a determination, the parties shall negotiate in
good faith to modify this Stock Option Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
Section 4.11. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Stock Option Agreement
were not performed in accordance with the terms hereof and that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Stock Option Agreement or to enforce specifically the performance of the terms
and provisions hereof, in addition to any other remedy to which they are
entitled at law or in equity.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Stock Option
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
ZING TECHNOLOGIES, INC.
By: /s/ Robert E. Schrader
------------------------------------
Name: Robert E. Schrader
Title: Chief Executive Officer
IRC ACQUISITION CORPORATION
By: /s/ L. Michael Russell
------------------------------------
Name: L. Michael Russell
Title: Vice President
<PAGE>
SHAREHOLDER SUPPORT AGREEMENT
This SHAREHOLDER SUPPORT AGREEMENT (this "Agreement") dated as of January
27, 2000, is by and between International Rectifier Corporation, a Delaware
corporation ("IR"), IRC Acquisition Corporation, ("Buyer") a New York
corporation and a direct wholly owned subsidiary of IR and John Catrambone
("Shareholder").
WHEREAS, in order to induce IR and Buyer to enter into an agreement and
plan of reorganization dated as of January 27, 2000 (as amended from time to
time, the "Merger Agreement") with Zing Technologies, Inc., a New York
corporation ("ZT"), Buyer has requested Shareholder, and Shareholder has agreed,
to enter into this Agreement.
WHEREAS, as of the date hereof, Shareholder is the holder of the shares
of capital stock of ZT (the "ZT Stock") listed on the signature page hereof.
Capitalized terms used but not separately defined herein shall have the meanings
ascribed to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Agreement to Offer and Tender
Section 1.01. Agreement to Offer. IR and Buyer hereby agree to make the
Offer on the terms (the "Terms") and as provided in the Merger Agreement.
Section 1.02. Agreement to Tender. Shareholder hereby irrevocably and
unconditionally agrees to validly tender (and not withdraw) or cause to be
validly tendered (and not withdrawn) pursuant to and in accordance with the
Terms of the Offer all of the shares of ZT Stock that Shareholder owns as of the
date hereof as well as any additional shares of ZT Stock that Shareholder may
own, whether acquired by purchase, exercise of options or otherwise, at any time
after the date hereof (the "Shareholder Shares"). Within ten business days after
the commencement of the Offer (or within ten business days after any Shareholder
Shares are acquired during pendency of the Offer, if later), Shareholder shall
deliver to the depositary designated in the Offer (i) a letter of transmittal
with respect to the Shareholder Shares complying with the Terms of the Offer,
(ii) certificates representing all of the Shareholder Shares and (iii) all other
documents or instruments required to be delivered pursuant to the Terms of the
Offer.
ARTICLE 2
Voting Agreement; Grant of Proxy
Section 2.01. Voting Agreement. (a) Until the earliest to occur (the
"Termination Date") of (w) tender and acceptance of the Shareholder Shares
pursuant to the Offer, (x) the consummation of the Merger, (y) the six month
anniversary of the date hereof and (z) the termination of the Merger Agreement,
Shareholder hereby irrevocably and unconditionally agrees to vote or cause to be
voted all Shareholder Shares that Shareholder is entitled to vote at
1
<PAGE>
the time of any vote of the shareholders of ZT where such matters arise (i) in
favor of the approval and adoption of the Merger Agreement and in favor of the
transactions contemplated thereby, (ii) against any proposal or transaction
which could prevent or delay the consummation of the Transactions, and (iii)
against any corporate action the consummation of which would frustrate the
purposes, or prevent or delay the consummation, of the Transactions.
(b) If any shareholder vote in respect of the Merger Agreement or any
of the transactions contemplated by the Merger Agreement is taken by written
consent, the provisions of this Agreement imposing obligations in respect of or
in connection with any vote of shareholders shall also apply.
Section 2.02. Proxy. Shareholder hereby revokes any and all previous
proxies granted with respect to the Shareholder Shares. By entering into this
Agreement, Shareholder hereby grants a limited irrevocable proxy, within the
meaning of the NYBCL, appointing Buyer as Shareholder's attorney-in-fact and
proxy, with full power of substitution, for and in Shareholder's name, to vote,
express consent or dissent, or otherwise to utilize such voting power in such
manner and upon and limited to only those matters referred to in Section 2.01
above, as Buyer or its proxy or substitute shall, in Buyer's sole discretion,
deem proper with respect to the Shareholder Shares. The proxy granted by
Shareholder pursuant to this Article 2 is irrevocable and is granted in
consideration of Buyer's entering into the Merger Agreement and to secure
Shareholder's performance of this agreement and duty to vote or cause to be
voted (including by written consent) all of the Shareholder Shares in favor of
the Merger as set forth in Section 2.01(a) and (b) hereof and such irrevocable
proxy shall remain in effect until the Termination Date, notwithstanding the
death or incapacity of Shareholder; provided, however, that such proxy shall be
revoked on the Termination Date.
ARTICLE 3
Representations and Warranties of Shareholder
Shareholder represents and warrants to Buyer that:
Section 3.01. Valid Title. Shareholder is the beneficial owner of the
Shareholder Shares held by such Shareholder on the date hereof with no
restrictions on Shareholder's voting rights or rights of disposition pertaining
thereto (except securities law requirements and as herein provided). Except as
previously disclosed to Buyer, none of the Shareholder Shares is subject to any
voting trust or other agreement or arrangement with respect to the voting of
such Shareholder Shares (other than this Agreement).
Section 3.02. Binding Effect. This Agreement is the valid and binding
Agreement of Shareholder, enforceable against Shareholder in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
2
<PAGE>
Section 3.03. Total Shares. The number of Shareholder Shares set forth on
the signature page hereto opposite the name of Shareholder are the only shares
of ZT Stock owned by Shareholder.
ARTICLE 4
Representations and Warranties of Buyer
Buyer represents and warrants to Shareholder:
Section 4.01. Corporate Power and Authority. Each of IR and Buyer has
all requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
each of IR and Buyer of this Agreement and the consummation by each of IR and
Buyer of the transactions contemplated hereby have been duly authorized by the
board of directors of each of IR and Buyer and no other corporate action on the
part of either IR or Buyer is necessary to authorize the execution, delivery or
performance by IR or Buyer of this Agreement and the consummation by IR or Buyer
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of IR and Buyer and is a valid and binding Agreement of
each of IR and Buyer, enforceable against each of them in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
ARTICLE 5
Covenants of Shareholder
Shareholder hereby covenants and agrees that:
Section 5.01. No Proxies for or Encumbrances on Shareholder Shares.
Except pursuant to the terms of this Agreement, prior to the Termination Date
Shareholder shall not, without the prior written consent of Buyer, directly or
indirectly, (i) grant any proxies or enter into any voting trust or other
agreement or arrangement with respect to the voting of any Shareholder Shares or
(ii) sell, assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance or other disposition
of, any Shareholder Shares during the term of this Agreement. Shareholder shall
not seek or solicit any such sale, assignment, transfer, encumbrance or other
disposition or any such contract, option or other arrangement or assignment or
understanding and agrees, subject to any restrictions contained in presently
existing confidentiality agreements, to notify Buyer promptly and to provide all
details requested by Buyer if Shareholder shall be approached or solicited,
directly or indirectly, by any person with respect to any of the foregoing.
Section 5.02. Indemnification. IR hereby agrees to indemnify and hold
harmless Shareholder from and against any Losses arising in connection with any
claims made against Shareholder by any third party with respect to the matters
covered in or actions taken by such Shareholder pursuant to this Agreement.
"Losses" means any damage, liabilities or expenses,
3
<PAGE>
including reasonable attorneys' fees incurred in connection with the
investigation and defense of such claims.
Section 5.03. Further Action. Shareholder intends this limited proxy to
be irrevocable and will take such further action and execute such other
instruments as may be necessary to effectuate the intent of this proxy,
including, without limitation, filing written notice of this irrevocable proxy
with the secretary of ZT or permitting Buyer, as such Shareholder's
attorney-in-fact, to file a copy of this Agreement with the secretary of ZT.
ARTICLE 6
Miscellaneous
Section 6.01. Expenses. Except as contemplated in Section 5.02, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section 6.02. Additional Agreements. Subject to the terms and conditions
of this Agreement, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or bound,
to consummate and make effective the transactions contemplated by this
Agreement, to obtain all necessary waivers, consents and approvals and effect
all necessary registrations and filings, responses to requests for additional
information related to such filings, and submission of information requested by
governmental authorities.
Section 6.03. Specific Performance. The parties hereto agree that Buyer
would suffer irreparable damage if for any reason Shareholder failed to perform
any of such Shareholder's obligations under this Agreement, and that Buyer would
not have an adequate remedy at law for money damages in such event. Accordingly,
Buyer shall be entitled to specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by Shareholder.
This provision is without prejudice to any other rights that Buyer may have
against Shareholder for any failure to perform such Shareholder's obligations
under this Agreement.
Section 6.04. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by cable, telegram or telex, or by registered or certified mail
(postage prepaid, return receipt requested) to such party at its address set
forth on the signature page hereto.
Section 6.05. Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
4
<PAGE>
Section 6.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto; provided further that Buyer may
assign its rights and obligations to any affiliate of Buyer without any such
consent.
Section 6.07. Governing Law. This Agreement shall construed in accordance
with and governed by the law of the State of New York without giving effect to
the principles of conflicts of laws thereof.
Section 6.08. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
IRC ACQUISITION CORPORATION
By: /s/ L. Michael Russell
----------------------------------
Name: L. Michael Russell
Title: Vice President
INTERNATIONAL RECTIFIER CORPORATION
By: /s/ Walter T. Lifsey
----------------------------------
Name: Walter T. Lifsey
Title: Vice President Government and
Space Products
SHAREHOLDER
By: /s/ John Catrambone
----------------------------------
Name: John Catrambone
----------------------------
Address: 167 South Street
----------------------------
Carlisle MA 01741
----------------------------------
Shareholder Shares: 209,500
--------------
6
<PAGE>
SHAREHOLDER SUPPORT AGREEMENT
This SHAREHOLDER SUPPORT AGREEMENT (this "Agreement") dated as of
January 27, 2000, is by and between International Rectifier Corporation, a
Delaware corporation ("IR"), IRC Acquisition Corporation, ("Buyer") a New York
corporation and a direct wholly owned subsidiary of IR and Robert E. Schrader
IRA ("Shareholder").
WHEREAS, in order to induce IR and Buyer to enter into an agreement and
plan of reorganization dated as of January 27, 2000 (as amended from time to
time, the "Merger Agreement") with Zing Technologies, Inc., a New York
corporation ("ZT"), Buyer has requested Shareholder, and Shareholder has agreed,
to enter into this Agreement.
WHEREAS, as of the date hereof, Shareholder is the holder of the shares
of capital stock of ZT (the "ZT Stock") listed on the signature page hereof.
Capitalized terms used but not separately defined herein shall have the meanings
ascribed to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Agreement to Offer and Tender
Section 1.01. Agreement to Offer. IR and Buyer hereby agree to make the
Offer on the terms (the "Terms") and as provided in the Merger Agreement.
Section 1.02. Agreement to Tender. Shareholder hereby irrevocably and
unconditionally agrees to validly tender (and not withdraw) or cause to be
validly tendered (and not withdrawn) pursuant to and in accordance with the
Terms of the Offer all of the shares of ZT Stock that Shareholder owns as of the
date hereof as well as any additional shares of ZT Stock that Shareholder may
own, whether acquired by purchase, exercise of options or otherwise, at any time
after the date hereof (the "Shareholder Shares"). Within ten business days after
the commencement of the Offer (or within ten business days after any Shareholder
Shares are acquired during pendency of the Offer, if later), Shareholder shall
deliver to the depositary designated in the Offer (i) a letter of transmittal
with respect to the Shareholder Shares complying with the Terms of the Offer,
(ii) certificates representing all of the Shareholder Shares and (iii) all other
documents or instruments required to be delivered pursuant to the Terms of the
Offer.
ARTICLE 2
Voting Agreement; Grant of Proxy
Section 2.01. Voting Agreement. (a) Until the earliest to occur (the
"Termination Date") of (w) tender and acceptance of the Shareholder Shares
pursuant to the Offer, (x) the consummation of the Merger, (y) the six month
anniversary of the date hereof and (z) the termination of the Merger Agreement,
Shareholder hereby irrevocably and unconditionally agrees to vote or cause to be
voted all Shareholder Shares that Shareholder is entitled to vote at
1
<PAGE>
the time of any vote of the shareholders of ZT where such matters arise (i) in
favor of the approval and adoption of the Merger Agreement and in favor of the
transactions contemplated thereby, (ii) against any proposal or transaction
which could prevent or delay the consummation of the Transactions, and (iii)
against any corporate action the consummation of which would frustrate the
purposes, or prevent or delay the consummation, of the Transactions.
(b) If any shareholder vote in respect of the Merger Agreement or any
of the transactions contemplated by the Merger Agreement is taken by written
consent, the provisions of this Agreement imposing obligations in respect of or
in connection with any vote of shareholders shall also apply.
Section 2.02. Proxy. Shareholder hereby revokes any and all previous
proxies granted with respect to the Shareholder Shares. By entering into this
Agreement, Shareholder hereby grants a limited irrevocable proxy, within the
meaning of the NYBCL, appointing Buyer as Shareholder's attorney-in-fact and
proxy, with full power of substitution, for and in Shareholder's name, to vote,
express consent or dissent, or otherwise to utilize such voting power in such
manner and upon and limited to only those matters referred to in Section 2.01
above, as Buyer or its proxy or substitute shall, in Buyer's sole discretion,
deem proper with respect to the Shareholder Shares. The proxy granted by
Shareholder pursuant to this Article 2 is irrevocable and is granted in
consideration of Buyer's entering into the Merger Agreement and to secure
Shareholder's performance of this agreement and duty to vote or cause to be
voted (including by written consent) all of the Shareholder Shares in favor of
the Merger as set forth in Section 2.01(a) and (b) hereof and such irrevocable
proxy shall remain in effect until the Termination Date, notwithstanding the
death or incapacity of Shareholder; provided, however, that such proxy shall be
revoked on the Termination Date.
ARTICLE 3
Representations and Warranties of Shareholder
Shareholder represents and warrants to Buyer that:
Section 3.01. Valid Title. Shareholder is the beneficial owner of the
Shareholder Shares held by such Shareholder on the date hereof with no
restrictions on Shareholder's voting rights or rights of disposition pertaining
thereto (except securities law requirements and as herein provided). Except as
previously disclosed to Buyer, none of the Shareholder Shares is subject to any
voting trust or other agreement or arrangement with respect to the voting of
such Shareholder Shares (other than this Agreement).
Section 3.02. Binding Effect. This Agreement is the valid and binding
Agreement of Shareholder, enforceable against Shareholder in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
2
<PAGE>
Section 3.03. Total Shares. The number of Shareholder Shares set forth on
the signature page hereto opposite the name of Shareholder are the only shares
of ZT Stock owned by Shareholder.
ARTICLE 4
Representations and Warranties of Buyer
Buyer represents and warrants to Shareholder:
Section 4.01. Corporate Power and Authority. Each of IR and Buyer has
all requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
each of IR and Buyer of this Agreement and the consummation by each of IR and
Buyer of the transactions contemplated hereby have been duly authorized by the
board of directors of each of IR and Buyer and no other corporate action on the
part of either IR or Buyer is necessary to authorize the execution, delivery or
performance by IR or Buyer of this Agreement and the consummation by IR or Buyer
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of IR and Buyer and is a valid and binding Agreement of
each of IR and Buyer, enforceable against each of them in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
ARTICLE 5
Covenants of Shareholder
Shareholder hereby covenants and agrees that:
Section 5.01. No Proxies for or Encumbrances on Shareholder Shares.
Except pursuant to the terms of this Agreement, prior to the Termination Date
Shareholder shall not, without the prior written consent of Buyer, directly or
indirectly, (i) grant any proxies or enter into any voting trust or other
agreement or arrangement with respect to the voting of any Shareholder Shares or
(ii) sell, assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance or other disposition
of, any Shareholder Shares during the term of this Agreement. Shareholder shall
not seek or solicit any such sale, assignment, transfer, encumbrance or other
disposition or any such contract, option or other arrangement or assignment or
understanding and agrees, subject to any restrictions contained in presently
existing confidentiality agreements, to notify Buyer promptly and to provide all
details requested by Buyer if Shareholder shall be approached or solicited,
directly or indirectly, by any person with respect to any of the foregoing.
Section 5.02. Indemnification. IR hereby agrees to indemnify and hold
harmless Shareholder from and against any Losses arising in connection with any
claims made against Shareholder by any third party with respect to the matters
covered in or actions taken by such Shareholder pursuant to this Agreement.
"Losses" means any damage, liabilities or expenses,
3
<PAGE>
including reasonable attorneys' fees incurred in connection with the
investigation and defense of such claims.
Section 5.03. Further Action. Shareholder intends this limited proxy to
be irrevocable and will take such further action and execute such other
instruments as may be necessary to effectuate the intent of this proxy,
including, without limitation, filing written notice of this irrevocable proxy
with the secretary of ZT or permitting Buyer, as such Shareholder's
attorney-in-fact, to file a copy of this Agreement with the secretary of ZT.
ARTICLE 6
Miscellaneous
Section 6.01. Expenses. Except as contemplated in Section 5.02, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section 6.02. Additional Agreements. Subject to the terms and conditions
of this Agreement, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or bound,
to consummate and make effective the transactions contemplated by this
Agreement, to obtain all necessary waivers, consents and approvals and effect
all necessary registrations and filings, responses to requests for additional
information related to such filings, and submission of information requested by
governmental authorities.
Section 6.03. Specific Performance. The parties hereto agree that Buyer
would suffer irreparable damage if for any reason Shareholder failed to perform
any of such Shareholder's obligations under this Agreement, and that Buyer would
not have an adequate remedy at law for money damages in such event. Accordingly,
Buyer shall be entitled to specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by Shareholder.
This provision is without prejudice to any other rights that Buyer may have
against Shareholder for any failure to perform such Shareholder's obligations
under this Agreement.
Section 6.04. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by cable, telegram or telex, or by registered or certified mail
(postage prepaid, return receipt requested) to such party at its address set
forth on the signature page hereto.
Section 6.05. Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
4
<PAGE>
Section 6.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto; provided further that Buyer may
assign its rights and obligations to any affiliate of Buyer without any such
consent.
Section 6.07. Governing Law. This Agreement shall construed in accordance
with and governed by the law of the State of New York without giving effect to
the principles of conflicts of laws thereof.
Section 6.08. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
IRC ACQUISITION CORPORATION
By: /s/ L. Michael Russell
-------------------------------
Name: L. Michael Russell
Title: Vice President
INTERNATIONAL RECTIFIER CORPORATION
By: /s/ Walter T. Lifsey
-------------------------------
Name: Walter T. Lifsey
Title: Vice President Government and
Space Products
SHAREHOLDER
By: /s/ Robert E. Schrader
-------------------------------
Name: Robert E. Schrader IRA
-------------------------------
Address: 72 Haight Crossroad
-------------------------------
Chappaqua, NY 10514
-------------------------------
Shareholder Shares: 60,500
-------------------------------
6
<PAGE>
SHAREHOLDER SUPPORT AGREEMENT
This SHAREHOLDER SUPPORT AGREEMENT (this "Agreement") dated as of January
27, 2000, is by and between International Rectifier Corporation, a Delaware
corporation ("IR"), IRC Acquisition Corporation, ("Buyer") a New York
corporation and a direct wholly owned subsidiary of IR and Robert and Deborah
Schrader ("Shareholder").
WHEREAS, in order to induce IR and Buyer to enter into an agreement and
plan of reorganization dated as of January 27, 2000 (as amended from time to
time, the "Merger Agreement") with Zing Technologies, Inc., a New York
corporation ("ZT"), Buyer has requested Shareholder, and Shareholder has agreed,
to enter into this Agreement.
WHEREAS, as of the date hereof, Shareholder is the holder of the shares
of capital stock of ZT (the "ZT Stock") listed on the signature page hereof.
Capitalized terms used but not separately defined herein shall have the meanings
ascribed to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Agreement to Offer and Tender
Section 1.01. Agreement to Offer. IR and Buyer hereby agree to make the
Offer on the terms (the "Terms") and as provided in the Merger Agreement.
Section 1.02. Agreement to Tender. Shareholder hereby irrevocably and
unconditionally agrees to validly tender (and not withdraw) or cause to be
validly tendered (and not withdrawn) pursuant to and in accordance with the
Terms of the Offer all of the shares of ZT Stock that Shareholder owns as of the
date hereof as well as any additional shares of ZT Stock that Shareholder may
own, whether acquired by purchase, exercise of options or otherwise, at any time
after the date hereof (the "Shareholder Shares"). Within ten business days after
the commencement of the Offer (or within ten business days after any Shareholder
Shares are acquired during pendency of the Offer, if later), Shareholder shall
deliver to the depositary designated in the Offer (i) a letter of transmittal
with respect to the Shareholder Shares complying with the Terms of the Offer,
(ii) certificates representing all of the Shareholder Shares and (iii) all other
documents or instruments required to be delivered pursuant to the Terms of the
Offer.
ARTICLE 2
Voting Agreement; Grant of Proxy
Section 2.01. Voting Agreement. (a) Until the earliest to occur (the
"Termination Date") of (w) tender and acceptance of the Shareholder Shares
pursuant to the Offer, (x) the consummation of the Merger, (y) the six month
anniversary of the date hereof and (z) the termination of the Merger Agreement,
Shareholder hereby irrevocably and unconditionally agrees to vote or cause to be
voted all Shareholder Shares that Shareholder is entitled to vote at
1
<PAGE>
the time of any vote of the shareholders of ZT where such matters arise (i) in
favor of the approval and adoption of the Merger Agreement and in favor of the
transactions contemplated thereby, (ii) against any proposal or transaction
which could prevent or delay the consummation of the Transactions, and (iii)
against any corporate action the consummation of which would frustrate the
purposes, or prevent or delay the consummation, of the Transactions.
(b) If any shareholder vote in respect of the Merger Agreement or any
of the transactions contemplated by the Merger Agreement is taken by written
consent, the provisions of this Agreement imposing obligations in respect of or
in connection with any vote of shareholders shall also apply.
Section 2.02. Proxy. Shareholder hereby revokes any and all previous
proxies granted with respect to the Shareholder Shares. By entering into this
Agreement, Shareholder hereby grants a limited irrevocable proxy, within the
meaning of the NYBCL, appointing Buyer as Shareholder's attorney-in-fact and
proxy, with full power of substitution, for and in Shareholder's name, to vote,
express consent or dissent, or otherwise to utilize such voting power in such
manner and upon and limited to only those matters referred to in Section 2.01
above, as Buyer or its proxy or substitute shall, in Buyer's sole discretion,
deem proper with respect to the Shareholder Shares. The proxy granted by
Shareholder pursuant to this Article 2 is irrevocable and is granted in
consideration of Buyer's entering into the Merger Agreement and to secure
Shareholder's performance of this agreement and duty to vote or cause to be
voted (including by written consent) all of the Shareholder Shares in favor of
the Merger as set forth in Section 2.01(a) and (b) hereof and such irrevocable
proxy shall remain in effect until the Termination Date, notwithstanding the
death or incapacity of Shareholder; provided, however, that such proxy shall be
revoked on the Termination Date.
ARTICLE 3
Representations and Warranties of Shareholder
Shareholder represents and warrants to Buyer that:
Section 3.01. Valid Title. Shareholder is the beneficial owner of the
Shareholder Shares held by such Shareholder on the date hereof with no
restrictions on Shareholder's voting rights or rights of disposition pertaining
thereto (except securities law requirements and as herein provided). Except as
previously disclosed to Buyer, none of the Shareholder Shares is subject to any
voting trust or other agreement or arrangement with respect to the voting of
such Shareholder Shares (other than this Agreement).
Section 3.02. Binding Effect. This Agreement is the valid and binding
Agreement of Shareholder, enforceable against Shareholder in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
2
<PAGE>
Section 3.03. Total Shares. The number of Shareholder Shares set forth on
the signature page hereto opposite the name of Shareholder are the only shares
of ZT Stock owned by Shareholder.
ARTICLE 4
Representations and Warranties of Buyer
Buyer represents and warrants to Shareholder:
Section 4.01. Corporate Power and Authority. Each of IR and Buyer has
all requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
each of IR and Buyer of this Agreement and the consummation by each of IR and
Buyer of the transactions contemplated hereby have been duly authorized by the
board of directors of each of IR and Buyer and no other corporate action on the
part of either IR or Buyer is necessary to authorize the execution, delivery or
performance by IR or Buyer of this Agreement and the consummation by IR or Buyer
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of IR and Buyer and is a valid and binding Agreement of
each of IR and Buyer, enforceable against each of them in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
ARTICLE 5
Covenants of Shareholder
Shareholder hereby covenants and agrees that:
Section 5.01. No Proxies for or Encumbrances on Shareholder Shares.
Except pursuant to the terms of this Agreement, prior to the Termination Date
Shareholder shall not, without the prior written consent of Buyer, directly or
indirectly, (i) grant any proxies or enter into any voting trust or other
agreement or arrangement with respect to the voting of any Shareholder Shares or
(ii) sell, assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance or other disposition
of, any Shareholder Shares during the term of this Agreement. Shareholder shall
not seek or solicit any such sale, assignment, transfer, encumbrance or other
disposition or any such contract, option or other arrangement or assignment or
understanding and agrees, subject to any restrictions contained in presently
existing confidentiality agreements, to notify Buyer promptly and to provide all
details requested by Buyer if Shareholder shall be approached or solicited,
directly or indirectly, by any person with respect to any of the foregoing.
Section 5.02. Indemnification. IR hereby agrees to indemnify and hold
harmless Shareholder from and against any Losses arising in connection with any
claims made against Shareholder by any third party with respect to the matters
covered in or actions taken by such Shareholder pursuant to this Agreement.
"Losses" means any damage, liabilities or expenses,
3
<PAGE>
including reasonable attorneys' fees incurred in connection with the
investigation and defense of such claims.
Section 5.03. Further Action. Shareholder intends this limited proxy to
be irrevocable and will take such further action and execute such other
instruments as may be necessary to effectuate the intent of this proxy,
including, without limitation, filing written notice of this irrevocable proxy
with the secretary of ZT or permitting Buyer, as such Shareholder's
attorney-in-fact, to file a copy of this Agreement with the secretary of ZT.
ARTICLE 6
Miscellaneous
Section 6.01. Expenses. Except as contemplated in Section 5.02, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section 6.02. Additional Agreements. Subject to the terms and conditions
of this Agreement, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or bound,
to consummate and make effective the transactions contemplated by this
Agreement, to obtain all necessary waivers, consents and approvals and effect
all necessary registrations and filings, responses to requests for additional
information related to such filings, and submission of information requested by
governmental authorities.
Section 6.03. Specific Performance. The parties hereto agree that Buyer
would suffer irreparable damage if for any reason Shareholder failed to perform
any of such Shareholder's obligations under this Agreement, and that Buyer would
not have an adequate remedy at law for money damages in such event. Accordingly,
Buyer shall be entitled to specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by Shareholder.
This provision is without prejudice to any other rights that Buyer may have
against Shareholder for any failure to perform such Shareholder's obligations
under this Agreement.
Section 6.04. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by cable, telegram or telex, or by registered or certified mail
(postage prepaid, return receipt requested) to such party at its address set
forth on the signature page hereto.
Section 6.05. Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
4
<PAGE>
Section 6.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto; provided further that Buyer may
assign its rights and obligations to any affiliate of Buyer without any such
consent.
Section 6.07. Governing Law. This Agreement shall construed in accordance
with and governed by the law of the State of New York without giving effect to
the principles of conflicts of laws thereof.
Section 6.08. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
IRC ACQUISITION CORPORATION
By: /s/ L. Michael Russell
------------------------------------
Name: L. Michael Russell
Title: Vice President
INTERNATIONAL RECTIFIER CORPORATION
By: /s/ Walter T. Lifsey
------------------------------------
Name: Walter T. Lifsey
Title: Vice President Government and
Space Products
SHAREHOLDER
By: /s/ Robert Schrader
----------------------------------
By: /s/ Deborah Schrader
----------------------------------
Name: Robert and Deborah Schrader
-------------------------------
Address: 72 Haight Crossroad
----------------------------
Chappaqua, NY 10514
----------------------------------
Shareholder Shares: 145,000
-----------------
6
<PAGE>
SHAREHOLDER SUPPORT AGREEMENT
This SHAREHOLDER SUPPORT AGREEMENT (this "Agreement") dated as of January
27, 2000, is by and between International Rectifier Corporation, a Delaware
corporation ("IR"), IRC Acquisition Corporation, ("Buyer") a New York
corporation and a direct wholly owned subsidiary of IR and The Robert Schrader
1998 Grantor Retained Annuity Trust ("Shareholder").
WHEREAS, in order to induce IR and Buyer to enter into an agreement and
plan of reorganization dated as of January 27, 2000 (as amended from time to
time, the "Merger Agreement") with Zing Technologies, Inc., a New York
corporation ("ZT"), Buyer has requested Shareholder, and Shareholder has agreed,
to enter into this Agreement.
WHEREAS, as of the date hereof, Shareholder is the holder of the shares
of capital stock of ZT (the "ZT Stock") listed on the signature page hereof.
Capitalized terms used but not separately defined herein shall have the meanings
ascribed to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Agreement to Offer and Tender
Section 1.01. Agreement to Offer. IR and Buyer hereby agree to make the
Offer on the terms (the "Terms") and as provided in the Merger Agreement.
Section 1.02. Agreement to Tender. Shareholder hereby irrevocably and
unconditionally agrees to validly tender (and not withdraw) or cause to be
validly tendered (and not withdrawn) pursuant to and in accordance with the
Terms of the Offer all of the shares of ZT Stock that Shareholder owns as of the
date hereof as well as any additional shares of ZT Stock that Shareholder may
own, whether acquired by purchase, exercise of options or otherwise, at any time
after the date hereof (the "Shareholder Shares"). Within ten business days after
the commencement of the Offer (or within ten business days after any Shareholder
Shares are acquired during pendency of the Offer, if later), Shareholder shall
deliver to the depositary designated in the Offer (i) a letter of transmittal
with respect to the Shareholder Shares complying with the Terms of the Offer,
(ii) certificates representing all of the Shareholder Shares and (iii) all other
documents or instruments required to be delivered pursuant to the Terms of the
Offer.
ARTICLE 2
Voting Agreement; Grant of Proxy
Section 2.01. Voting Agreement. (a) Until the earliest to occur (the
"Termination Date") of (w) tender and acceptance of the Shareholder Shares
pursuant to the Offer, (x) the consummation of the Merger, (y) the six month
anniversary of the date hereof and (z) the termination of the Merger Agreement,
Shareholder hereby irrevocably and unconditionally
1
<PAGE>
agrees to vote or cause to be voted all Shareholder Shares that Shareholder is
entitled to vote at the time of any vote of the shareholders of ZT where such
matters arise (i) in favor of the approval and adoption of the Merger Agreement
and in favor of the transactions contemplated thereby, (ii) against any proposal
or transaction which could prevent or delay the consummation of the
Transactions, and (iii) against any corporate action the consummation of which
would frustrate the purposes, or prevent or delay the consummation, of the
Transactions.
(b) If any shareholder vote in respect of the Merger Agreement or any
of the transactions contemplated by the Merger Agreement is taken by written
consent, the provisions of this Agreement imposing obligations in respect of or
in connection with any vote of shareholders shall also apply.
Section 2.02. Proxy. Shareholder hereby revokes any and all previous
proxies granted with respect to the Shareholder Shares. By entering into this
Agreement, Shareholder hereby grants a limited irrevocable proxy, within the
meaning of the NYBCL, appointing Buyer as Shareholder's attorney-in-fact and
proxy, with full power of substitution, for and in Shareholder's name, to vote,
express consent or dissent, or otherwise to utilize such voting power in such
manner and upon and limited to only those matters referred to in Section 2.01
above, as Buyer or its proxy or substitute shall, in Buyer's sole discretion,
deem proper with respect to the Shareholder Shares. The proxy granted by
Shareholder pursuant to this Article 2 is irrevocable and is granted in
consideration of Buyer's entering into the Merger Agreement and to secure
Shareholder's performance of this agreement and duty to vote or cause to be
voted (including by written consent) all of the Shareholder Shares in favor of
the Merger as set forth in Section 2.01(a) and (b) hereof and such irrevocable
proxy shall remain in effect until the Termination Date, notwithstanding the
death or incapacity of Shareholder; provided, however, that such proxy shall be
revoked on the Termination Date.
ARTICLE 3
Representations and Warranties of Shareholder
Shareholder represents and warrants to Buyer that:
Section 3.01. Valid Title. Shareholder is the beneficial owner of the
Shareholder Shares held by such Shareholder on the date hereof with no
restrictions on Shareholder's voting rights or rights of disposition pertaining
thereto (except securities law requirements and as herein provided). Except as
previously disclosed to Buyer, none of the Shareholder Shares is subject to any
voting trust or other agreement or arrangement with respect to the voting of
such Shareholder Shares (other than this Agreement).
Section 3.02. Binding Effect. This Agreement is the valid and binding
Agreement of Shareholder, enforceable against Shareholder in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
2
<PAGE>
Section 3.03. Total Shares. The number of Shareholder Shares set forth on
the signature page hereto opposite the name of Shareholder are the only shares
of ZT Stock owned by Shareholder.
ARTICLE 4
Representations and Warranties of Buyer
Buyer represents and warrants to Shareholder:
Section 4.01. Corporate Power and Authority. Each of IR and Buyer has
all requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
each of IR and Buyer of this Agreement and the consummation by each of IR and
Buyer of the transactions contemplated hereby have been duly authorized by the
board of directors of each of IR and Buyer and no other corporate action on the
part of either IR or Buyer is necessary to authorize the execution, delivery or
performance by IR or Buyer of this Agreement and the consummation by IR or Buyer
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of IR and Buyer and is a valid and binding Agreement of
each of IR and Buyer, enforceable against each of them in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
ARTICLE 5
Covenants of Shareholder
Shareholder hereby covenants and agrees that:
Section 5.01. No Proxies for or Encumbrances on Shareholder Shares.
Except pursuant to the terms of this Agreement, prior to the Termination Date
Shareholder shall not, without the prior written consent of Buyer, directly or
indirectly, (i) grant any proxies or enter into any voting trust or other
agreement or arrangement with respect to the voting of any Shareholder Shares or
(ii) sell, assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance or other disposition
of, any Shareholder Shares during the term of this Agreement. Shareholder shall
not seek or solicit any such sale, assignment, transfer, encumbrance or other
disposition or any such contract, option or other arrangement or assignment or
understanding and agrees, subject to any restrictions contained in presently
existing confidentiality agreements, to notify Buyer promptly and to provide all
details requested by Buyer if Shareholder shall be approached or solicited,
directly or indirectly, by any person with respect to any of the foregoing.
Section 5.02. Indemnification. IR hereby agrees to indemnify and hold
harmless Shareholder from and against any Losses arising in connection with any
claims made against Shareholder by any third party with respect to the matters
covered in or actions taken by such Shareholder pursuant to this Agreement.
"Losses" means any damage, liabilities or expenses,
3
<PAGE>
including reasonable attorneys' fees incurred in connection with the
investigation and defense of such claims.
Section 5.03. Further Action. Shareholder intends this limited proxy to
be irrevocable and will take such further action and execute such other
instruments as may be necessary to effectuate the intent of this proxy,
including, without limitation, filing written notice of this irrevocable proxy
with the secretary of ZT or permitting Buyer, as such Shareholder's
attorney-in-fact, to file a copy of this Agreement with the secretary of ZT.
ARTICLE 6
Miscellaneous
Section 6.01. Expenses. Except as contemplated in Section 5.02, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section 6.02. Additional Agreements. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or bound,
to consummate and make effective the transactions contemplated by this
Agreement, to obtain all necessary waivers, consents and approvals and effect
all necessary registrations and filings, responses to requests for additional
information related to such filings, and submission of information requested by
governmental authorities.
Section 6.03. Specific Performance. The parties hereto agree that Buyer
would suffer irreparable damage if for any reason Shareholder failed to perform
any of such Shareholder's obligations under this Agreement, and that Buyer would
not have an adequate remedy at law for money damages in such event. Accordingly,
Buyer shall be entitled to specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by Shareholder.
This provision is without prejudice to any other rights that Buyer may have
against Shareholder for any failure to perform such Shareholder's obligations
under this Agreement.
Section 6.04. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by cable, telegram or telex, or by registered or certified mail
(postage prepaid, return receipt requested) to such party at its address set
forth on the signature page hereto.
Section 6.05. Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
4
<PAGE>
Section 6.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto; provided further that Buyer may
assign its rights and obligations to any affiliate of Buyer without any such
consent.
Section 6.07. Governing Law. This Agreement shall construed in accordance
with and governed by the law of the State of New York without giving effect to
the principles of conflicts of laws thereof.
Section 6.08. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
IRC ACQUISITION CORPORATION
By: /s/ L. Michael Russell
-----------------------------------------
Name: L. Michael Russell
Title: Vice President
INTERNATIONAL RECTIFIER CORPORATION
By: /s/ Walter T. Lifsey
-----------------------------------------
Name: Walter T. Lifsey
Title: Vice President Government and
Space Products
SHAREHOLDER
By: /s/ Robert Schrader
--------------------------------------
By: /s/ Deborah Schrader
--------------------------------------
Name: Robert and Deborah Schrader
-----------------------------------------
as Trustees of The Robert Schrader
-----------------------------------------
1998 Grantor Retained Annuity Trust
-----------------------------------------
Address: 72 Haight Crossroad
--------------------------------
Chappaqua, NY 10514
-----------------------------------------
Shareholder Shares: 600,000
----------------------
6
<PAGE>
SHAREHOLDER SUPPORT AGREEMENT
This SHAREHOLDER SUPPORT AGREEMENT (this "Agreement") dated as of January
27, 2000, is by and between International Rectifier Corporation, a Delaware
corporation ("IR"), IRC Acquisition Corporation, ("Buyer") a New York
corporation and a direct wholly owned subsidiary of IR and Robert Schrader
("Shareholder").
WHEREAS, in order to induce IR and Buyer to enter into an agreement and
plan of reorganization dated as of January 27, 2000 (as amended from time to
time, the "Merger Agreement") with Zing Technologies, Inc., a New York
corporation ("ZT"), Buyer has requested Shareholder, and Shareholder has agreed,
to enter into this Agreement.
WHEREAS, as of the date hereof, Shareholder is the holder of the shares
of capital stock of ZT (the "ZT Stock") listed on the signature page hereof.
Capitalized terms used but not separately defined herein shall have the meanings
ascribed to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Agreement to Offer and Tender
Section 1.01. Agreement to Offer. IR and Buyer hereby agree to make the
Offer on the terms (the "Terms") and as provided in the Merger Agreement.
Section 1.02. Agreement to Tender. Shareholder hereby irrevocably and
unconditionally agrees to validly tender (and not withdraw) or cause to be
validly tendered (and not withdrawn) pursuant to and in accordance with the
Terms of the Offer all of the shares of ZT Stock that Shareholder owns as of the
date hereof as well as any additional shares of ZT Stock that Shareholder may
own, whether acquired by purchase, exercise of options or otherwise, at any time
after the date hereof (the "Shareholder Shares"). Within ten business days after
the commencement of the Offer (or within ten business days after any Shareholder
Shares are acquired during pendency of the Offer, if later), Shareholder shall
deliver to the depositary designated in the Offer (i) a letter of transmittal
with respect to the Shareholder Shares complying with the Terms of the Offer,
(ii) certificates representing all of the Shareholder Shares and (iii) all other
documents or instruments required to be delivered pursuant to the Terms of the
Offer.
ARTICLE 2
Voting Agreement; Grant of Proxy
Section 2.01. Voting Agreement. (a) Until the earliest to occur (the
"Termination Date") of (w) tender and acceptance of the Shareholder Shares
pursuant to the Offer, (x) the consummation of the Merger, (y) the six month
anniversary of the date hereof and (z) the termination of the Merger Agreement,
Shareholder hereby irrevocably and unconditionally agrees to vote or cause to be
voted all Shareholder Shares that Shareholder is entitled to vote at
1
<PAGE>
the time of any vote of the shareholders of ZT where such matters arise (i) in
favor of the approval and adoption of the Merger Agreement and in favor of the
transactions contemplated thereby, (ii) against any proposal or transaction
which could prevent or delay the consummation of the Transactions, and (iii)
against any corporate action the consummation of which would frustrate the
purposes, or prevent or delay the consummation, of the Transactions.
(b) If any shareholder vote in respect of the Merger Agreement or any
of the transactions contemplated by the Merger Agreement is taken by written
consent, the provisions of this Agreement imposing obligations in respect of or
in connection with any vote of shareholders shall also apply.
Section 2.02. Proxy. Shareholder hereby revokes any and all previous
proxies granted with respect to the Shareholder Shares. By entering into this
Agreement, Shareholder hereby grants a limited irrevocable proxy, within the
meaning of the NYBCL, appointing Buyer as Shareholder's attorney-in-fact and
proxy, with full power of substitution, for and in Shareholder's name, to vote,
express consent or dissent, or otherwise to utilize such voting power in such
manner and upon and limited to only those matters referred to in Section 2.01
above, as Buyer or its proxy or substitute shall, in Buyer's sole discretion,
deem proper with respect to the Shareholder Shares. The proxy granted by
Shareholder pursuant to this Article 2 is irrevocable and is granted in
consideration of Buyer's entering into the Merger Agreement and to secure
Shareholder's performance of this agreement and duty to vote or cause to be
voted (including by written consent) all of the Shareholder Shares in favor of
the Merger as set forth in Section 2.01(a) and (b) hereof and such irrevocable
proxy shall remain in effect until the Termination Date, notwithstanding the
death or incapacity of Shareholder; provided, however, that such proxy shall be
revoked on the Termination Date.
ARTICLE 3
Representations and Warranties of Shareholder
Shareholder represents and warrants to Buyer that:
Section 3.01. Valid Title. Shareholder is the beneficial owner of the
Shareholder Shares held by such Shareholder on the date hereof with no
restrictions on Shareholder's voting rights or rights of disposition pertaining
thereto (except securities law requirements and as herein provided). Except as
previously disclosed to Buyer, none of the Shareholder Shares is subject to any
voting trust or other agreement or arrangement with respect to the voting of
such Shareholder Shares (other than this Agreement).
Section 3.02. Binding Effect. This Agreement is the valid and binding
Agreement of Shareholder, enforceable against Shareholder in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
2
<PAGE>
Section 3.03. Total Shares. The number of Shareholder Shares set forth on
the signature page hereto opposite the name of Shareholder are the only shares
of ZT Stock owned by Shareholder.
ARTICLE 4
Representations and Warranties of Buyer
Buyer represents and warrants to Shareholder:
Section 4.01. Corporate Power and Authority. Each of IR and Buyer has
all requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
each of IR and Buyer of this Agreement and the consummation by each of IR and
Buyer of the transactions contemplated hereby have been duly authorized by the
board of directors of each of IR and Buyer and no other corporate action on the
part of either IR or Buyer is necessary to authorize the execution, delivery or
performance by IR or Buyer of this Agreement and the consummation by IR or Buyer
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of IR and Buyer and is a valid and binding Agreement of
each of IR and Buyer, enforceable against each of them in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
ARTICLE 5
Covenants of Shareholder
Shareholder hereby covenants and agrees that:
Section 5.01. No Proxies for or Encumbrances on Shareholder Shares.
Except pursuant to the terms of this Agreement, prior to the Termination Date
Shareholder shall not, without the prior written consent of Buyer, directly or
indirectly, (i) grant any proxies or enter into any voting trust or other
agreement or arrangement with respect to the voting of any Shareholder Shares or
(ii) sell, assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance or other disposition
of, any Shareholder Shares during the term of this Agreement. Shareholder shall
not seek or solicit any such sale, assignment, transfer, encumbrance or other
disposition or any such contract, option or other arrangement or assignment or
understanding and agrees, subject to any restrictions contained in presently
existing confidentiality agreements, to notify Buyer promptly and to provide all
details requested by Buyer if Shareholder shall be approached or solicited,
directly or indirectly, by any person with respect to any of the foregoing.
Section 5.02. Indemnification. IR hereby agrees to indemnify and hold
harmless Shareholder from and against any Losses arising in connection with any
claims made against Shareholder by any third party with respect to the matters
covered in or actions taken by such Shareholder pursuant to this Agreement.
"Losses" means any damage, liabilities or expenses,
3
<PAGE>
including reasonable attorneys' fees incurred in connection with the
investigation and defense of such claims.
Section 5.03. Further Action. Shareholder intends this limited proxy to
be irrevocable and will take such further action and execute such other
instruments as may be necessary to effectuate the intent of this proxy,
including, without limitation, filing written notice of this irrevocable proxy
with the secretary of ZT or permitting Buyer, as such Shareholder's
attorney-in-fact, to file a copy of this Agreement with the secretary of ZT.
ARTICLE 6
Miscellaneous
Section 6.01. Expenses. Except as contemplated in Section 5.02, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section 6.02. Additional Agreements. Subject to the terms and conditions
of this Agreement, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or bound,
to consummate and make effective the transactions contemplated by this
Agreement, to obtain all necessary waivers, consents and approvals and effect
all necessary registrations and filings, responses to requests for additional
information related to such filings, and submission of information requested by
governmental authorities.
Section 6.03. Specific Performance. The parties hereto agree that Buyer
would suffer irreparable damage if for any reason Shareholder failed to perform
any of such Shareholder's obligations under this Agreement, and that Buyer would
not have an adequate remedy at law for money damages in such event. Accordingly,
Buyer shall be entitled to specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by Shareholder.
This provision is without prejudice to any other rights that Buyer may have
against Shareholder for any failure to perform such Shareholder's obligations
under this Agreement.
Section 6.04. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by cable, telegram or telex, or by registered or certified mail
(postage prepaid, return receipt requested) to such party at its address set
forth on the signature page hereto.
Section 6.05. Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
4
<PAGE>
Section 6.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto; provided further that Buyer may
assign its rights and obligations to any affiliate of Buyer without any such
consent.
Section 6.07. Governing Law. This Agreement shall construed in accordance
with and governed by the law of the State of New York without giving effect to
the principles of conflicts of laws thereof.
Section 6.08. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
IRC ACQUISITION CORPORATION
By: /s/ L. Michael Russell
-----------------------------------------
Name: L. Michael Russell
Title: Vice President
INTERNATIONAL RECTIFIER CORPORATION
By: /s/ Walter T. Lifsey
-----------------------------------------
Name: Walter T. Lifsey
Title: Vice President Government and
Space Products
SHAREHOLDER
By: /s/ Robert Schrader
-----------------------------------------
Name: Robert Schrader
-----------------------------------------
Address: 72 Haight Crossroad
---------------------------------
Chappaqua, NY 10514
-----------------------------------------
Shareholder Shares: 347,211
---------------------
6
<PAGE>
SHAREHOLDER SUPPORT AGREEMENT
This SHAREHOLDER SUPPORT AGREEMENT (this "Agreement") dated as of January
27, 2000, is by and between International Rectifier Corporation, a Delaware
corporation ("IR"), IRC Acquisition Corporation, ("Buyer") a New York
corporation and a direct wholly owned subsidiary of IR and John Allwein
("Shareholder").
WHEREAS, in order to induce IR and Buyer to enter into an agreement and
plan of reorganization dated as of January 27, 2000 (as amended from time to
time, the "Merger Agreement") with Zing Technologies, Inc., a New York
corporation ("ZT"), Buyer has requested Shareholder, and Shareholder has agreed,
to enter into this Agreement.
WHEREAS, as of the date hereof, Shareholder is the holder of the shares
of capital stock of ZT (the "ZT Stock") listed on the signature page hereof.
Capitalized terms used but not separately defined herein shall have the meanings
ascribed to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Agreement to Offer and Tender
Section 1.01. Agreement to Offer. IR and Buyer hereby agree to make the
Offer on the terms (the "Terms") and as provided in the Merger Agreement.
Section 1.02. Agreement to Tender. Shareholder hereby irrevocably and
unconditionally agrees to validly tender (and not withdraw) or cause to be
validly tendered (and not withdrawn) pursuant to and in accordance with the
Terms of the Offer all of the shares of ZT Stock that Shareholder owns as of the
date hereof as well as any additional shares of ZT Stock that Shareholder may
own, whether acquired by purchase, exercise of options or otherwise, at any time
after the date hereof (the "Shareholder Shares"). Within ten business days after
the commencement of the Offer (or within ten business days after any Shareholder
Shares are acquired during pendency of the Offer, if later), Shareholder shall
deliver to the depositary designated in the Offer (i) a letter of transmittal
with respect to the Shareholder Shares complying with the Terms of the Offer,
(ii) certificates representing all of the Shareholder Shares and (iii) all other
documents or instruments required to be delivered pursuant to the Terms of the
Offer.
ARTICLE 2
Voting Agreement; Grant of Proxy
Section 2.01. Voting Agreement. (a) Until the earliest to occur (the
"Termination Date") of (w) tender and acceptance of the Shareholder Shares
pursuant to the Offer, (x) the consummation of the Merger, (y) the six month
anniversary of the date hereof and (z) the termination of the Merger Agreement,
Shareholder hereby irrevocably and unconditionally agrees to vote or cause to be
voted all Shareholder Shares that Shareholder is entitled to vote at
1
<PAGE>
the time of any vote of the shareholders of ZT where such matters arise (i) in
favor of the approval and adoption of the Merger Agreement and in favor of the
transactions contemplated thereby, (ii) against any proposal or transaction
which could prevent or delay the consummation of the Transactions, and (iii)
against any corporate action the consummation of which would frustrate the
purposes, or prevent or delay the consummation, of the Transactions.
(b) If any shareholder vote in respect of the Merger Agreement or any
of the transactions contemplated by the Merger Agreement is taken by written
consent, the provisions of this Agreement imposing obligations in respect of or
in connection with any vote of shareholders shall also apply.
Section 2.02. Proxy. Shareholder hereby revokes any and all previous
proxies granted with respect to the Shareholder Shares. By entering into this
Agreement, Shareholder hereby grants a limited irrevocable proxy, within the
meaning of the NYBCL, appointing Buyer as Shareholder's attorney-in-fact and
proxy, with full power of substitution, for and in Shareholder's name, to vote,
express consent or dissent, or otherwise to utilize such voting power in such
manner and upon and limited to only those matters referred to in Section 2.01
above, as Buyer or its proxy or substitute shall, in Buyer's sole discretion,
deem proper with respect to the Shareholder Shares. The proxy granted by
Shareholder pursuant to this Article 2 is irrevocable and is granted in
consideration of Buyer's entering into the Merger Agreement and to secure
Shareholder's performance of this agreement and duty to vote or cause to be
voted (including by written consent) all of the Shareholder Shares in favor of
the Merger as set forth in Section 2.01(a) and (b) hereof and such irrevocable
proxy shall remain in effect until the Termination Date, notwithstanding the
death or incapacity of Shareholder; provided, however, that such proxy shall be
revoked on the Termination Date.
ARTICLE 3
Representations and Warranties of Shareholder
Shareholder represents and warrants to Buyer that:
Section 3.01. Valid Title. Shareholder is the beneficial owner of the
Shareholder Shares held by such Shareholder on the date hereof with no
restrictions on Shareholder's voting rights or rights of disposition pertaining
thereto (except securities law requirements and as herein provided). Except as
previously disclosed to Buyer, none of the Shareholder Shares is subject to any
voting trust or other agreement or arrangement with respect to the voting of
such Shareholder Shares (other than this Agreement).
Section 3.02. Binding Effect. This Agreement is the valid and binding
Agreement of Shareholder, enforceable against Shareholder in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
2
<PAGE>
Section 3.03. Total Shares. The number of Shareholder Shares set forth on
the signature page hereto opposite the name of Shareholder are the only shares
of ZT Stock owned by Shareholder.
ARTICLE 4
Representations and Warranties of Buyer
Buyer represents and warrants to Shareholder:
Section 4.01. Corporate Power and Authority. Each of IR and Buyer has
all requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
each of IR and Buyer of this Agreement and the consummation by each of IR and
Buyer of the transactions contemplated hereby have been duly authorized by the
board of directors of each of IR and Buyer and no other corporate action on the
part of either IR or Buyer is necessary to authorize the execution, delivery or
performance by IR or Buyer of this Agreement and the consummation by IR or Buyer
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of IR and Buyer and is a valid and binding Agreement of
each of IR and Buyer, enforceable against each of them in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
ARTICLE 5
Covenants of Shareholder
Shareholder hereby covenants and agrees that:
Section 5.01. No Proxies for or Encumbrances on Shareholder Shares.
Except pursuant to the terms of this Agreement, prior to the Termination Date
Shareholder shall not, without the prior written consent of Buyer, directly or
indirectly, (i) grant any proxies or enter into any voting trust or other
agreement or arrangement with respect to the voting of any Shareholder Shares or
(ii) sell, assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance or other disposition
of, any Shareholder Shares during the term of this Agreement. Shareholder shall
not seek or solicit any such sale, assignment, transfer, encumbrance or other
disposition or any such contract, option or other arrangement or assignment or
understanding and agrees, subject to any restrictions contained in presently
existing confidentiality agreements, to notify Buyer promptly and to provide all
details requested by Buyer if Shareholder shall be approached or solicited,
directly or indirectly, by any person with respect to any of the foregoing.
Section 5.02. Indemnification. IR hereby agrees to indemnify and hold
harmless Shareholder from and against any Losses arising in connection with any
claims made against Shareholder by any third party with respect to the matters
covered in or actions taken by such Shareholder pursuant to this Agreement.
"Losses" means any damage, liabilities or expenses,
3
<PAGE>
including reasonable attorneys' fees incurred in connection with the
investigation and defense of such claims.
Section 5.03. Further Action. Shareholder intends this limited proxy to
be irrevocable and will take such further action and execute such other
instruments as may be necessary to effectuate the intent of this proxy,
including, without limitation, filing written notice of this irrevocable proxy
with the secretary of ZT or permitting Buyer, as such Shareholder's
attorney-in-fact, to file a copy of this Agreement with the secretary of ZT.
ARTICLE 6
Miscellaneous
Section 6.01. Expenses. Except as contemplated in Section 5.02, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section 6.02. Additional Agreements. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or bound,
to consummate and make effective the transactions contemplated by this
Agreement, to obtain all necessary waivers, consents and approvals and effect
all necessary registrations and filings, responses to requests for additional
information related to such filings, and submission of information requested by
governmental authorities.
Section 6.03. Specific Performance. The parties hereto agree that Buyer
would suffer irreparable damage if for any reason Shareholder failed to perform
any of such Shareholder's obligations under this Agreement, and that Buyer would
not have an adequate remedy at law for money damages in such event. Accordingly,
Buyer shall be entitled to specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by Shareholder.
This provision is without prejudice to any other rights that Buyer may have
against Shareholder for any failure to perform such Shareholder's obligations
under this Agreement.
Section 6.04. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by cable, telegram or telex, or by registered or certified mail
(postage prepaid, return receipt requested) to such party at its address set
forth on the signature page hereto.
Section 6.05. Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
4
<PAGE>
Section 6.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto; provided further that Buyer may
assign its rights and obligations to any affiliate of Buyer without any such
consent.
Section 6.07. Governing Law. This Agreement shall construed in accordance
with and governed by the law of the State of New York without giving effect to
the principles of conflicts of laws thereof.
Section 6.08. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
IRC ACQUISITION CORPORATION
By: /s/ L. Michael Russell
------------------------------------------
Name: L. Michael Russell
Title: Vice President
INTERNATIONAL RECTIFIER CORPORATION
By: /s/ Walter T. Lifsey
------------------------------------------
Name: Walter T. Lifsey
Title: Vice President Government and
Space Products
SHAREHOLDER
By: /s/ John Allwein
------------------------------------------
Name: John Allwein
------------------------------------------
Address: 9 Honeysuckle Rd
---------------------------------
Westford, MA 01886
------------------------------------------
Shareholder Shares: 16,899
----------------------
6
<PAGE>
INCENTIVE COMPENSATION AGREEMENT
This INCENTIVE COMPENSATION AGREEMENT (this "AGREEMENT"), dated as of
January 27, 2000, is by and between International Rectifier Corporation, a
Delaware corporation ("COMPANY"), and John Catrambone ("EMPLOYEE").
WHEREAS, as of the date hereof, Employee is a key employee of Omnirel LLC
("OMNIREL"), and Company desires to offer Employee an incentive to become an
employee of Company following the earlier to occur of (i) 120 days following the
acquisition by the Company of at least 66-2/3 of the issued and outstanding
common stock of Zing Technologies, Inc., and (ii) the Effective Date
("Commencement Date"). Capitalized terms used but not separately defined herein
shall have the meanings ascribed to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. INCENTIVE COMPENSATION. Company shall pay Employee the following
incentive bonus compensation (each payment, a "BONUS PAYMENT") on the following
dates (each such date, a "PAYMENT DATE"):
(i) The sum of $250,000, within ten days following the
Commencement Date; and
(ii) The sum of $250,000, within ten days following the
one-year anniversary of the Commencement Date.
2. TERMINATION OF EMPLOYMENT. If Company terminates Employee's employment
without Cause (as hereinafter defined) or if Employee terminates his employment
for Good Reason (as hereinafter defined) or if Employee dies, Company shall pay
Employee (or his estate or legal respresentatives) all remaining Bonus Payments
within thirty days of such event. If Employee's employment is terminated by the
Company for any other reason, the amounts described in Section 1 shall be paid
on the Payment Dates. Notwithstanding anything to the contrary in this
Agreement, it is a condition to Employee receiving Bonus Payments hereunder that
Employee not resign as an employee of Company (except for death or resignation
for Good Reason (including disability under Section 3(b)(v))) for one year
following the Commencement Date. Any Bonus Payments received by Employee under
this Agreement shall be deemed an advance by the Company until the condition set
forth in the previous sentence is satisfied.
3. DEFINITIONS.
(a) "CAUSE" shall mean and shall be limited to:
(i) Any action by Employee involving willful malfeasance or a
willful breach of Employee's fiduciary duties in connection
with his employment by Company;
<PAGE>
(ii) The conviction of Employee of a felony; and
(iii) Substantial and continuing neglect or refusal by
Employee to perform the duties ordinarily performed by a
Vice President of Company, consistent with the terms of his
Employment Letter (as hereinafter defined), which refusal
or neglect continues for ten days after written notice
thereof to Employee from the President of Company.
(b) "GOOD REASON" shall mean and shall be limited to:
(i) The assignment to Employee by Company of duties,
individually or in the aggregate, materially inconsistent
with Employee's position of Vice President of Company or
the requirement that his place of employment be a location
more than ten miles from 205 Crawford Street, Leominster,
Massachusetts;
(ii) A material reduction by Company of the duties or
responsibility of Employee or any removal of Employee from
the position of Vice President;
(iii) A material reduction or elimination of Employee's
compensation or benefits;
(iv) Failure of Company to honor the terms of the Employment
Letter; and
(v) Disability of Employee substantially interfering with the
performance of his duties as performed prior to the date of
disability and continuing for a period of ninety days.
(c) "EMPLOYMENT LETTER" shall mean the executed Employment Offer
Summary and related letter from Company to Employee, dated January 18, 2000,
offering employment with Company, copies of which are attached hereto. As of the
Effective Date, the Employment Agreement, dated as of June 26, 1991, originally
among Employee, Omnirel Corporation, and Zeus Components, Inc., as amended, and
any other employment agreement between Employee and Zing Technologies, Inc. or
Omnirel LLC, or any affiliate thereof, shall be terminated and of no further
force and effect.
4. GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the laws of the State of Massachusetts without giving effect to the
principles of conflicts of laws thereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
International Rectifier Corporation
By: /s/ Walter T. Lifsey
-------------------------------
Name: Walter T. Lifsey
-------------------------------
Title: Vice President Government
---------------------------
and Space Products
--------------------------
Address: 233 Kansas St.
--------------------------
El Segundo, CA 90245
---------------------------------
/s/ John Catrambone
---------------------------------
Name: John Catrambone
----------------------------
Address: 167 South St.
----------------------------
Carlisle, MA 01741
----------------------------
<PAGE>
CONFIDENTIALITY AGREEMENT FLEET NATIONAL BANK
ONE FEDERAL STREET
BOSTON, MA 02211
PRIVATE & CONFIDENTIAL PHONE: 617-346-4394
- ---------------------- FAX: 617-346-0091
Mr. Walt Lifsey
Vice President
Government & Space Products August 23, 1999
International Rectifier
233 Kansas
El Segundo, CA 90245
Dear Mr. Lifsey:
As a condition to your being furnished information in connection with
your consideration of a possible transaction involving our client, a company
engaged in the business of manufacturing and distributing power
semiconductors (the "Company"), you agree to treat information concerning
the Company (whether prepared by the Company, its advisors or otherwise)
which is furnished to you by or on behalf of the Company (herein collectively
referred to as the "Evaluation Material") in accordance with the provisions
of this letter and to take or abstain from taking certain other actions
herein set forth. The term Evaluation Material does not include information
which (i) is already in your possession without any obligation of
confidentiality, or (ii) becomes generally available to the public other
than as a result of a disclosure by you or your directors, officers,
employees, agents, or advisors, or (iii) becomes available to you on a
non-confidential basis from a source other than the Company or its advisors,
provided that such source is not known by you to be bound by a
confidentiality agreement with, or other obligation of secrecy to the Company or
another party with respect to the Evaluation Material, (iv) is
independently developed by you, provided the person or persons developing
same have not had access to the Evaluation Material, or (v) is required to be
disclosed pursuant to judicial, administrative, governmental, or regulatory
order.
You hereby agree that the Evaluation Material will be used solely for
the purpose of evaluating a possible transaction between the Company and you,
and that, except as required by law or legal process, the Evaluation Material
will be kept confidential by you and your advisors; provided, however, that
(i) any information contained in the Evaluation Material may be disclosed
to your directors, officers and employees and to representatives of your
advisors who need to know such information for the purpose of evaluating a
possible transaction between the Company and you (it being understood that
such directors, officers, and employees and representatives shall be informed
by you of the confidential nature of such information and shall be directed
by you to treat such information confidentially), and (ii) any disclosure of
such information may be made to which the Company consents in writing.
In addition, without the prior written consent of the Company and except
as required by law or legal process, you will not, and will direct such
directors, officers, and employees and representatives not to, disclose to
any person either the fact that discussions or negotiations are taking place
concerning a possible transaction between the Company and you or any of the
terms, conditions or other facts with respect to any such possible
transaction, including the status thereof.
<PAGE>
August 23, 1999
Page 2
In the event that you or your representatives are required by law or
legal process to disclose all or any part of the information contained in the
Evaluation Material or the fact that discussions or negotiations are taking
place, you agree to immediately notify the Company of the existence,
terms and circumstances surrounding such a request so that it may seek an
appropriate protective order prior to your disclosure of such information.
Although the Company has endeavored to include in the Evaluation
Material information known to it which it believes to be relevant for the
purpose of your investigation, you understand that neither the Company nor
any of its representatives or advisors have made or make any representation
or warranty as to the accuracy or completeness of the Evaluation Material. You
agree that neither the Company nor its representatives or advisors shall have
any liability to you or any of your representatives or advisors resulting from
the use of the Evaluation Material.
In the event that you do not proceed with a transaction with the Company
within a reasonable time, at the request of the Company, you shall promptly
redeliver to the Company all written Evaluation Material and any other
written material containing or reflecting any information in the Evaluation
Material (whether prepared by the Company, its advisors or otherwise) and will
not retain any copies, extracts or other reproductions in whole or in part of
such written material.
You agree that unless and until a definitive agreement between the
Company and you with respect to a transaction has been executed and
delivered, neither the Company nor you will be under any legal obligation of
any kind whatsoever with respect to a transaction by virtue of this letter or
any written or oral expression with respect to a transaction by any of the
Company's or your stockholders, directors, officers, employees, agents or any
other representatives or the Company's or your advisors or their
representatives except, in the case of this letter, for the matters
specifically agreed to herein.
You agree to be responsible for enforcing the confidentiality of the
Evaluation Material with respect to your affiliates, and you agree to take
such action, legal or otherwise, to the extent necessary to prevent any
disclosure or non-permitted use of the Evaluation Materials by any such
affiliate. In the event the Company initiates any action to enforce your
obligations hereunder, you agree to reimburse the Company for all costs and
expenses, including reasonable attorneys' fees and expenses, incurred by it
in this regard.
It is understood and agreed that money damages may not be sufficient
remedy for any breach of this letter agreement by you and that the Company
may be entitled to specific performance as a remedy for any such breach. Such
remedy shall not be deemed to be the exclusive remedy for breach of this letter
agreement but shall be in addition to all other remedies available at law or
in equity.
Unless you purchase the assets or the stock of the Company, you agree
for a period of twelve months after the date hereof, not to actively solicit
employment, directly or as a consultant, of any employee of the Company;
provided, however, that general advertising announcing employment
opportunities or soliciting employment candidates, or independent searches by
outside consultants shall not be comprehended within the meaning of "solicit"
for these purposes.
You understand that Fleet National Bank ("Fleet") has been appointed the
Company's exclusive financial advisor for the purposes of evaluating a
possible transaction. You agree to direct all inquiries relating to the
Company to Fleet representatives and not to contact any stockholder of the
Company or any employee of the Company.
This agreement shall be governed and construed in accordance with the
laws of The Commonwealth of Massachusetts without giving effect to its
conflict of law principles or rules. The parties hereby consent to the
jurisdiction of any state or federal court located within the Commonwealth
of Massachusetts, and irrevocably agree that, subject to the Company's
election, all
<PAGE>
August 23, 1999
Page 3
actions or proceedings arising out of or arising from this letter agreement
shall be litigated in such courts. Recipient accepts, generally and
unconditionally, the exclusive jurisdiction of the aforesaid courts and
waive any defense of FORUM NON CONVENIENS, and hereby irrevocably agrees to
be bound by any judgment rendered by any such court in connection with this
agreement. All obligations under this agreement shall survive your
evaluation of the Evaluation Materials and your discussions and negotiations
with the Company.
The agreement set forth in this letter may be modified or waived only by
a separate writing by the Company and you expressly so modifying or waiving
such agreement.
This agreement shall terminate, and its provisions be of no further
force and effect, after thirty-six months from the date hereof.
If you are in agreement with the foregoing, please have this letter
executed by your authorized representative and return a copy to the
undersigned.
Very truly yours,
FLEET NATIONAL BANK
By: /s/ Mark A. Siegel
------------------------------
Name: Mark A. Siegel
------------------------------
Title: Vice President
------------------------------
Conformed and Agreed to:
INTERNATIONAL RECTIFIER
By: /s/ Walter Lifsey
--------------------------------------
Name: Walt Lifsey
--------------------------------------
Title: V.P. Government & Space Products
--------------------------------------
Date: 8/27/99
--------------------------------------
