TELXON CORP
8-K, 1998-05-13
CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS)
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<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549




                                    FORM 8-K


                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934





          DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): May 8, 1998





                               TELXON CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

          DELAWARE                  0-11402                    74-1666060
(STATE OR OTHER JURISDICTION     (COMMISSION                  (IRS EMPLOYER
      OF INCORPORATION)           FILE NUMBER)              IDENTIFICATION NO.)

                   3330 WEST MARKET STREET, AKRON, OHIO 44333
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

         ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (330) 664-1000




                                       1

<PAGE>   2


ITEM 5.  OTHER EVENTS.

         As previously reported by the registrant in a Current Report on Form
8-K dated April 21, 1998 and filed April 27, 1998, the registrant received a
letter from Symbol Technologies, Inc. expressing interest in a business
combination with the registrant.

         On May 8, 1998, the registrant issued a press release announcing that
its board of directors had determined that Symbol's suggested business
combination is not in the best interest of Telxon and its shareholders. A copy
of the press release is included as Exhibit 99.1 to this Current Report on 
Form 8-K and incorporated herein by reference.

         Also on May 8, 1998, two purported class actions, naming the registrant
and its directors as defendants, were filed in the Delaware Court of Chancery on
behalf of all stockholders of the registrant allegedly injured or threatened
with injury as the result of the conduct alleged in the lawsuits. Copies of the
Complaints instituting the lawsuits are included as Exhibits 99.2 and 99.3 to
this Current Report on Form 8-K. The registrant believes that these lawsuits are
without merit and intends vigorously to defend them.

ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

          (c) Exhibits.

              99.1  Press Release issued by the registrant on May 8, 1998.

              99.2  Class Action Complaint instituting Great Neck Capital
                    Appreciation Partners, L.P., and Solomon Glazer individually
                    and on behalf of all others similarly situated, against Dr.
                    Raj Reddy, John H. Cribb, Frank E. Brick, Richard J.
                    Bogomolny, Robert A. Goodman, Norton W. Rose and Telxon
                    Corp., filed May 8, 1998 in the Court of Chancery of the
                    State of Delaware in and for New Castle County, Civil Action
                    No. 16366NC.

              99.3  Complaint instituting Robert Silverman v. Telxon Corp.,
                    Frank E. Brick, Robert A. Goodman, Dr. Raj Reddy, John H.
                    Cribb, Richard J. Bogomolny and Norton W. Rose, filed May 8,
                    1998 in the Court of Chancery of the State of Delaware in
                    and for New Castle County, C. A. No. 16367.




                                       2


<PAGE>   3



                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                                TELXON CORPORATION



DATE:  May 12, 1998                             By: /s/ Kenneth W. Haver
                                                    -------------------------
                                                    Kenneth W. Haver
                                                    Senior Vice President and
                                                    Chief Financial Officer






                                       3

<PAGE>   4




                                INDEX TO EXHIBITS

99.1     Press Release issued by the registrant on May 8, 1998, filed herewith.

99.2     Class Action Complaint instituting Great Neck Capital Appreciation
         Partners, L.P., and Solomon Glazer individually and on behalf of all
         others similarly situated, against Dr. Raj Reddy, John H. Cribb, Frank
         E. Brick, Richard J. Bogomolny, Robert A. Goodman, Norton W. Rose and
         Telxon Corp., filed May 8, 1998 in the Court of Chancery of the State
         of Delaware in and for New Castle County, Civil Action No. 16366NC,
         filed herewith.

99.3     Complaint instituting Robert Silverman v. Telxon Corp., Frank E.
         Brick, Robert A. Goodman, Dr. Raj Reddy, John H. Cribb, Richard J.
         Bogomolny and Norton W. Rose, filed May 8, 1998 in the Court of
         Chancery of the State of Delaware in and for New Castle County, C. A.
         No. 16367, filed herewith.





<PAGE>   1





                                                                EXHIBIT  99.1


[TELXON LOGO]

                                                                  NEWS RELEASE



                       TELXON REJECTS SYMBOL TECHNOLOGIES
                       SUGGESTION OF BUSINESS COMBINATION

         AKRON, Ohio -- May 8, 1998 -- Telxon Corporation (Nasdaq - NNM: TLXN)
announced today that having reviewed Symbol Technologies, Inc.'s (NYSE:SBL)
indication of interest outlined in Symbol's April 8 letter to Telxon, Telxon's
board of directors unanimously has determined that Symbol's suggested business
combination is not in the best interest of Telxon and its shareholders.

         Speaking on behalf of the board of directors, Frank Brick, Telxon
president and chief executive officer, said, "Given Telxon's strength,
performance and strategic growth plan, the board remains convinced that it is
clearly inappropriate to sell the company on the terms set forth in the Symbol
letter. In the board's view, Symbol's $38 price is inadequate. Moreover, we
believe a Symbol/Telxon combination raises troubling questions that have not
been addressed by Symbol."

         "The Telxon team remains strongly focused on providing our customers
with world-class mobile information systems, increasing shareholder value
through the development of innovative new products, continuous operating
performance improvements and expansion of our strategic marketing and technology
alliances. Telxon's success in generating consistent revenue and earnings growth
over the last six quarters is evidence of our continued commitment to executing
our business plan with respect to both our core business and our investment in
forward-looking technologies," Brick said.

         Telxon Corporation is a leading global designer and manufacturer of
wireless and mobile information systems for vertical markets. The company
integrates advanced mobile computing and wireless data communication technology
with a wide array of peripherals, application-specific software and global
customer services for its customers in more than 60 countries. Telxon's web site
address is: www.telxon.com.





             Telxon Corporation/Corporate Communications Department
          3330 West Market Street/P.O. Box 5582/Akron, Ohio 44334-0582
                         800-800-8001/Fax (330) 664-2058






<PAGE>   2



         This news release constitutes forward-looking statements that are
inherently subject to risks and uncertainties which would cause Telxon's actual
results to differ materially from the forward-looking statements. The important
factors affecting the realization of those results include, without limitation,
the company's ability to timely develop, introduce, gain and maintain market
acceptance of new and enhanced products, and implement appropriate cost,
efficiency and other operating improvement strategies, as well as general and
industry-specific economic conditions, competitive pressures and rapid
technological change. Reference should be made to the discussion of these and
other factors affecting Telxon's business and results as included from time to
time in the company's filings with the Securities and Exchange Commission.


                                      # # #

For corporate information:

Alex Csiszar
Senior Director, Investor Relations
Telxon Corporation
(330) 664-2961
(800) 800-8001






<PAGE>   1
                                                                  EXHIBIT 99.2

                IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                          IN AND FOR NEW CASTLE COUNTY

- -----------------------------------X
                                    :
GREAT NECK CAPITAL APPRECIATION     :       Civil Action No. 16366NC
PARTNERS, L.P., and SOLOMON GLAZER  :
individually and on behalf of all   :
others similarly situated,          :
                                    :        CLASS
          Plaintiffs,               :        ACTION COMPLAINT
                                    :
         -against-                  :
                                    :
DR. RAJ REDDY, JOHN H. CRIBB,       :
FRANK E. BRICK, RICHARD J.          :
BOGOMOLNY, ROBERT A. GOODMAN,       :
NORTON W. ROSE and TELXON CORP.,    :
                                    :
          Defendants.               :
                                    :
- -----------------------------------X


     Plaintiffs allege upon information and belief except as to paragraph 1,
which is alleged on knowledge, as follows:

                                   THE PARTIES

     1. Plaintiffs are and have at all times relevant hereto, owned shares of
the common stock of Telxon Corp. ("Telxon" or the "Company").

     2. Telxon is a corporation formed under the laws of the State of Delaware
with its principal executive offices located in Akron, Ohio. Telxon's shares are
traded on the NASDAQ under the symbol ("TLXN"). As of July 18, 1997 there were
15,669,350 shares 



<PAGE>   2


of Telxon stock outstanding, held by more than 1,200 shareholders of record.

     3. Defendant Dr. Raj Reddy ("Reddy") is and has been at all relevant times
Chairman of Telxon.

     4. Defendant John H. Cribb ("Cribb") is and has been at all relevant times
a director of Telxon. Cribb served as the Chairman of Telxon International until
his retirement in December, 1996.

     5. Defendant Frank E. Brick ("Brick") has been at all relevant times
President and Chief Executive Officer of Telxon. In the year ended March 31,
1997, defendant Brick received a salary of $421,154 and a bonus of $500,000.
Pursuant to an employment agreement for the three fiscal years ending March 31,
2000, Brick is entitled to a base salary of $750,000 per year and to incentive
bonuses of as much as $250,000 per year. In the event that a "change in control"
of Telxon occurs, including a sale or merger of Telxon not approved by Telxon's
board, Brick may elect to terminate his employment and receive a termination
payment of 2.99 times his base salary.

     6. Defendant Robert A. Goodman ("Goodman") is and has been at all relevant
times Secretary, General Counsel and a director of Telxon.





                                       2
<PAGE>   3



     7. Defendants Richard J. Bogomolny ("Bogomolny") and Norton W. Rose
("Rose") are and have been at all relevant times directors of Telxon.

     8. The Individual Defendants set forth in paragraphs 3-7 above are officers
and/or directors of Telxon and as such, are in a fiduciary relationship with
plaintiffs and the other public stockholders of Telxon and owe to plaintiffs and
other members of the class the highest obligations of good faith, fair dealing
and full disclosure.

                            CLASS ACTION ALLEGATIONS

     9. Plaintiffs bring this case on their own behalf and as a class action,
pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all
public stockholders of Telxon, and their successors in interest, who are or will
be threatened with injury arising from defendants' actions as more fully
described herein (the "Class"). Excluded from the Class are defendants herein
and any person, firm, trust, corporation, or other entity related to or
affiliated with any of the defendants.

     10. This action is properly maintainable as a class action.

         (a) The class is so numerous that joinder of all members is
impracticable. As of July 18, 1997 there were 15,669,350 shares 




                                        3

<PAGE>   4



of Telxon stock outstanding, held by more than 1,200 shareholders of record
located throughout the United States;

     (b) There are questions of law and fact which are common to the Class and
which predominate over questions affecting any individual Class member,
including whether the Individual Defendants have breached their fiduciary duties
owed to plaintiffs and other members of the Class;

     (c) Defendants have acted and will continue to act on grounds generally
applicable to the Class, thereby making appropriate final injunctive or
corresponding declaratory relief with respect to the Class as a whole;

     (d) A class action is superior to other methods for the fair and efficient
adjudication of the claims herein asserted and no unusual difficulties are
likely to be encountered in the management of this class action. The likelihood
of individual class members prosecuting separate claims is remote;

     (e) Plaintiffs are committed to the prosecution of this action and have
retained competent counsel experienced in litigation of this nature. Plaintiffs'
claims are typical of the claims of other members of the Class and plaintiffs
have the same interests as the other members of the Class. Accordingly,
plaintiffs are adequate representatives of the Class and will fairly and
adequately protect the interests of the Class.




                                       4
<PAGE>   5



     11. Plaintiffs do not anticipate any difficulty in the management of this
litigation as a class action.

                         BACKGROUND AND CLAIM FOR RELIEF

     12. Telxon designs, makes, integrates, markets and supports
transaction-based wireless workforce automation systems. The Company's products
are sold worldwide for use in vertical markets, including retail, manufacturing,
warehouse/distribution, transportation/logistics, insurance financial services
and route sales.

     13. One of Telxon's customers and competitors is Symbol Technologies, Inc.
("Symbol") a Holtsville, New York-based company that develops, manufactures,
sells and services bar code scanning products, data transaction systems,
wireless local area network adapter cards and radio frequency systems.

     14. On April 21, 1998, The Wall Street Journal reported that Symbol had
made an offer to purchase Telxon for $38 per share, in cash (the "Symbol
Proposal"), a premium of almost 40% over the closing price of Telxon shares on
April 20, 1998.

     15. According to The Wall Street Journal, Symbol's offer was made in an
April 8 letter (the "April 8 letter") from its President and Chief Operating
Offer, Tomo Razmilovic ("Razmilovic") to defendant Brick.




                                       5

<PAGE>   6



     16. In the April 8 letter, Razmilovic reportedly observed that the $38
offer represented an extremely attractive opportunity for Telxon's shareholders,
stating that:


     . . . we are convinced that this provides extraordinary value to your
     shareholders and represents a superior alterative to the status quo or any
     other possibilities you might consider.

     17. Nevertheless, Symbol implied that it was willing to negotiate "all
aspects of a potential transaction" and to discuss "the structure of the
transaction and the form of consideration," thus clearly implying a willingness
to raise its bid and/or swap its own shares for Telxon shares.

     18. The $38 per share price contemplated in the Symbol Proposal represents
a 40 percent premium to the closing price of $27 11/16 on Monday, April 20, the
last trading day prior to the announcement of the Symbol Proposal.

     19. The initial reaction of the investment community to the Symbol Proposal
was extremely positive. Telxon's shares rose more than $6-15/16 to as much as
$37 1/4 in early trading on April 21.

     20. In contrast to the positive reaction of the investment community,
Telxon, which made no comment in the nearly two-week period since its receipt of
the April 8 letter, finally acknowledged that it has received a letter of
interest from Symbol and merely stated that the letter was being reviewed by the




                                       6

<PAGE>   7


Company's financial and legal advisors and would be considered "in due course."

     21. The Company, however, is clearly resistant to the Symbol Proposal as it
was announced on May 8, 1998, that Telxon had rejected the Symbol Proposal.
Symbol has said it is determined to proceed with its Proposal.
        
     22. Moreover, Telxon has an array of anti-takeover devices in place
designed to thwart hostile bids for the Company, including a shareholder rights
plan (the "poison pill") which effectively bars the open market purchase of its
shares. In addition, Telxon has a staggered board of directors, i.e., only a
third of its directors are up for election at its annual meetings.

                             FIRST CLAIM FOR RELIEF

     23. At all times herein, defendants were and are obligated to adequately
consider, in a timely fashion and on an informed basis, any reasonable proposal
from any party, not to place their own self-interests and personal
considerations ahead of the interests of the stockholders, and to make corporate
decisions in good faith.

     24. Defendants' fiduciary obligations require them to:

         (a) undertake an appropriate evaluation of any bona fide offers,
provide non-public information to such offerors to enable them to make the
highest possible bid for the Company and take such 





                                       7
<PAGE>   8



other appropriate steps to solicit the highest possible bid for the Company; and

         (b) act independently so that the interests of Telxon's public
stockholders would be protected.

     25. By virtue of the acts and conduct alleged herein, the Individual
Defendants, who direct the actions of the Company, have breached their fiduciary
duties owed to plaintiffs and other class members and are entrenching themselves
in office to protect and advance their own parochial interests at the expense of
Telxon. Defendants' conduct has been a breach of their fiduciary obligation and
has violated the mandate of the Company's shareholders to maximize value. The
Individual Defendants have not exercised and are not exercising independent
business judgment and have acted and are acting to the detriment of the Class.

     26. As a result of the foregoing, the Individual Defendants have breached
and/or aided and abetted breaches of fiduciary duties owed to Telxon and its
stockholders. Unless corrected, this conduct will continue to be wrongful,
unfair, and harmful to Telxon's shareholders.

     27. Unless enjoined by this Court, defendants will breach their fiduciary
duties owed to plaintiffs and the other members of the Class and may benefit
themselves in their corporate offices, all to the irreparable harm of the Class,
as aforesaid.




                                       8

<PAGE>   9



     28. Plaintiffs and the other members of the Class have no adequate remedy
at law. 

     WHEREFORE, plaintiffs demand judgment as follows:

     1. declaring this to be a proper class action;

     2. ordering the Individual Defendants to carry out their fiduciary duties
to the plaintiff and the other members of the Class including the following:
     

         (a) cooperate fully with any person or entity, having a bona fide
interest in proposing any transaction which would maximize shareholder value,
including, but not limited to, a buyout or takeover of the Company by Symbol;

         (b) undertake an appropriate evaluation of Telxon's worth as a
merger/acquisition candidate;

         (c) take all appropriate steps to enhance Telxon's value and
attractiveness as a merger/acquisition candidate;

         (d) act independently so that the interests of Telxon's public
stockholders will be protected; and

         (e) adequately ensure that no conflicts of interest exist between the
Individual Defendants' interests and their fiduciary obligation to maximize
stockholder value or, if such conflicts exist, to ensure that all conflicts are
resolved in the best interests of Telxon's public stockholders;





                                       9
<PAGE>   10



     3. ordering defendants, jointly and severally, to account to plaintiffs and
the other members of the Class for all damages suffered and to be suffered by
them as a result of the acts and transactions alleged herein;

     4. requiring defendants to utilize the poison pill in a manner consistent
with maximizing shareholder value;

     5. awarding plaintiffs the costs and disbursements of the action, including
a reasonable allowance for plaintiff's attorney's fees and experts' fees; and 

     6. granting such other and further relief as this Court may deem to be just
and proper.



                                       10
<PAGE>   11



DATE: May 8, 1998                   CHIMICLES, JACOBSEN & TIKELLIS


                                    /s/ James C. Strum
                                    ------------------------------
                                    Pamela S. Tikellis
                                    James C. Strum
                                    Robert J. Kriner, Jr.
                                    One Rodney Square
                                    P.O. Box 1035
                                    Wilmington, DE 19899
                                    (302) 656-2500

                                    Attorneys for Plaintiffs

OF COUNSEL:

GOODKIND LABATON RUDOFF &
  SUCHAROW LLP
100 Park Avenue
New York, New York 10017
(212) 907-0700

SCHIFFRIN CRAIG & BARROWAY, LLP
Three Bala Plaza East
Suite 400
Bala Cynwyd, PA 19004
(215) 667-7706





                                       11

<PAGE>   1
                                                                   Exhibit 99.3

                IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                          IN AND FOR NEW CASTLE COUNTY

- --------------------------------------------X
ROBERT SILVERMAN,                           :
                                            :
                  Plaintiff,                :
                                            :
V                                           :       C.A. No. 16367
                                            :
TELXON CORP., FRANK E. BRICK, ROBERT A.     :
GOODMAN, DR. RAJ REDDY, JOHN H.             :
CRIBB, RICHARD J. BOGOMOLNY and             :
NORTON W. ROSE,                             :
                                            :
                  Defendants.               :
- --------------------------------------------X

                                    COMPLAINT

     Plaintiff, by his attorneys, alleges upon information and belief, except
with respect to his ownership of Telxon Corp. ("Telxon" or the "Company") common
stock as follows:

                                   THE PARTIES

     1. Plaintiff is the owner of common stock of Telxon.

     2. Defendant Telxon is a Delaware corporation with executive offices at
3330 West Market Street, Akron, Ohio. Telxon designs, develops, manufactures,
markets, integrates and supports portable, batch and wireless transaction-based
work force automation systems.

     3. Defendant Frank E. Brick is President, Chief Executive Officer and a
director of Telxon.

     4. Defendant Robert A. Goodman is Secretary, General Counsel and a director
of Telxon.

     5. Defendant Dr. Raj Reddy is Chairman of the Board and a director of
Telxon.





<PAGE>   2



     6. Defendants John H. Cribb, Richard J. Bogomolny and Norton W. Rose are
directors of Telxon.

     7. The foregoing individual directors of Telxon (collectively the 
"Director Defendants"), owe fiduciary duties to Telxon and its shareholders.

                            CLASS ACTION ALLEGATIONS

         8. Plaintiff brings this action on his own behalf and as a class action
on behalf of all shareholders of defendant Telxon (except defendants herein and
any person, firm, trust, corporation or other entity related to or affiliated
with any of the defendants or their successors in interest), who have been or
will be adversely affected by the conduct of defendants alleged herein.

     9. This action is properly maintainable as a class action for the following
reasons:

        (a) The class of shareholders for whose benefit this action is brought
is so numerous that joinder of all class members is impracticable. As of
December 31, 1997, there were over 15 million shares of defendant Telxon's
common stock outstanding owned by over 1,200 shareholders of record scattered
throughout the United States.

        (b) There are questions of law and fact which are common to members of
the Class and which predominate over any questions affecting any individual
members. The common questions include, inter alia, the following:

            (i) Whether the Director Defendants have breached and are breaching
their fiduciary duties owed by them to plaintiff and members of the Class,
and/or have aided and abetted in such breach;




                                      2


<PAGE>   3



            (ii) Whether the Director Defendants have wrongfully failed to act
in the best interests of Telxon and its shareholders; and

            (iii) Whether plaintiff and the other members of the Class will be
irreparably damaged by the transactions complained of herein.

     10. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of
plaintiff are typical of the claims of the other members of the Class and
plaintiff has the same interest as the other members of the Class. Accordingly,
plaintiff is an adequate representative of the Class and will fairly and
adequately protect the interests of the Class. 

     11. Defendants are acting or refusing to act on grounds generally
applicable to the Class, thereby making appropriate injunctive relief with
respect to the Class as a whole.

     12. The prosecution of separate actions by individual members of the Class
could create a risk of inconsistent or varying adjudications with respect to
individual members of the class which would establish incompatible standards of
conduct of defendants or adjudications with respect to individual members of the
Class which would as a practical matter be dispositive of the interests of the
other members not parties to the adjudications.

     13. Plaintiff anticipates that there will not be any difficulty in the
management of this litigation.

     14. For the reasons stated herein, a class action is superior to other
available methods for the fair and efficient adjudication of this action.




                                       3


<PAGE>   4




                             SUBSTANTIVE ALLEGATIONS

     15. In a press release on April 21, 1998, Symbol Technologies, Inc.
("Symbol") announced an unsolicited proposal to acquire Telxon for $38 per share
cash for each share of Telxon stock (the "Offer"). The Offer, which represents a
40% premium for Telxon shareholders, was communicated by Symbol in a letter to
Telxon's President and Chief Executive Officer Frank Brick on April 8, 1998.

     16. Although Symbol stated that it was prepared to negotiate all aspects of
a potential transaction, including the structure of the transaction and the form
of consideration, it was announced on May 8, 1998 that Telxon had rejected the
Offer. Symbol has said it is determined to proceed with the proposed
transaction.

     17. Telxon has in place a shareholder rights plan or poison pill which
effectively precludes any bona fide offer to acquire Telxon, including the
Offer. Telxon also has a staggered board whereby only one-third of the directors
are elected in any given year.

     18. The Director Defendants are violating fiduciary duties owed to the
public shareholders of Telxon. The Director Defendants are obligated to but
have, to date, failed to act in the best interests of Telxon and its
shareholders, including adequate consideration of whether all bona fide offers
or proposals to acquire the Company or its assets are in the best interests of
the shareholders. Instead, the Director Defendants are entrenching themselves in
office and refusing to negotiate with Symbol and fully inform themselves
regarding the Symbol Offer.



                                       4


<PAGE>   5



     19. The conduct of the Director Defendants in connection with the Symbol
proposal is, and unless corrected, will continue to be, wrongful, unfair and
harmful to Telxon's public shareholders.

     20. Because the Director Defendants (and those acting in concert with them)
dominate and control the business and corporate affairs of Telxon and because
they are in possession of private corporate information concerning Telxon's
businesses and future prospects, there exists an imbalance and disparity of
knowledge and economic power between the Director Defendants and the members of
the Class.

     21. Unless enjoined by the Court, the Director Defendants will continue to
breach their fiduciary duties owed to the plaintiff and the Class, all to the
irreparable harm of the Class.

     22. Plaintiff has no adequate remedy at law. 

     WHEREFORE, plaintiff demands judgment as follows:

         (a) Declaring that this action may be maintained as a class action;

         (b) Enjoining preliminarily and permanently the Director Defendants to
adequately consider and negotiate with respect to all bona fide offers or
proposals for the Company or its assets, in the best interests of Telxon
shareholders;

         (c) Requiring the Director Defendants to properly employ the Company's
poison pill and all other defensive measures in accordance with their fiduciary
duties and so as to maximize shareholder value;



                                       5


<PAGE>   6



         (d) Requiring defendants to compensate plaintiff and the members of the
Class for all losses and damages suffered and to be suffered by them as a result
of the wrongful conduct complained of herein, together with prejudgment and
post-judgment interest;

         (e) Awarding plaintiff the costs and disbursements of this action,
including reasonable attorneys', accountants', and experts' fees; and

         (f) Granting such other and further relief as may be just and proper.



DATE: May 8, 1998                        CHIMICLES, JACOBSEN & TIKELLIS


                                         /s/ James C. Strum
                                         -------------------------------
                                         Pamela S. Tikellis
                                         James C. Strum
                                         Robert J. Kriner, Jr.
                                         One Rodney Square
                                         P.O. Box 1035
                                         Wilmington, DE 19899
                                         (302) 656-2500

                                         Attorneys for Plaintiff

OF COUNSEL:

WOLF, HALDENSTEIN, ADLER,
   FREEMAN & HERZ, LLP
270 Madison Avenue
New York, NY 10016

MALINA & WOLSON
Lincoln Building
60 East 42nd Street
New York, New York 10165





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