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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
TELXON CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NOT APPLICABLE
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
TEXLON LOGO
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Frank E. Brick
President and
Chief Executive Officer
August 28, 1998
Dear Fellow Stockholder:
I am pleased to advise you that Telxon Corporation and Guy P. Wyser-Pratte
have settled their dispute over the matters that Mr. Wyser-Pratte announced his
intention to propose at the Company's Annual Meeting of Stockholders scheduled
for September 15, 1998. Mr. Wyser-Pratte has agreed to withdraw his proposals
and his nomination of a candidate for election to the Board of Directors.
The settlement, which is described in detail in the accompanying Supplement
to the Company's August 11, 1998 Proxy Statement previously mailed to you, will
enable the Board of Directors and management to continue to focus their full
attention on maximizing and protecting the value of the Company for our
stockholders.
Your Board of Directors unanimously recommends that you vote for the
election of Richard J. Bogomolny and John H. Cribb to the Company's Board of
Directors, who, as a result of the settlement, will be the only persons standing
for election at the Annual Meeting. In order to ensure that your vote for the
Board's above two nominees is counted, please sign, date and mail the enclosed
revised white proxy card. Your prompt attention will be greatly appreciated.
Sincerely yours,
/s/ Frank E. Brick
FRANK E. BRICK
President and Chief Executive Officer
TELXON CORPORATION / 3330 West Market Street / P.O. Box 5582 / Akron,
Ohio 44334-0582
<PAGE> 3
1998 ANNUAL MEETING OF STOCKHOLDERS
Telxon Corporation Logo
3330 West Market Street
Akron, Ohio 44333
------------------
SUPPLEMENT TO
PROXY STATEMENT
This Supplement (the "Supplement") amends the Proxy Statement dated August
11, 1998 (the "Proxy Statement") and the related Notice of Annual Meeting of
Stockholders of Telxon Corporation (the "Company") previously sent to the
Company's stockholders in connection with the 1998 Annual Meeting of
Stockholders of the Company to be held on Tuesday, September 15, 1998 at 10:00
A.M., E.D.T., at the Weathervane Community Playhouse, 1301 Weathervane Lane,
Akron, Ohio 44313 (the "Annual Meeting"). The record date for the determination
of the holders of common stock, par value $.01 per share (the "Common Stock"),
of the Company who are entitled to notice of and to vote at the Annual Meeting
continues to be the same July 17, 1998 record date as specified in the Proxy
Statement.
This Supplement contains important information relating to a Settlement
Agreement dated August 26, 1998 (the "Settlement Agreement") by and among the
Company and Wyser-Pratte & Co., Inc., Guy P. Wyser-Pratte, and Eric Longmire
(collectively, the "Wyser-Pratte Group"), which had previously reported
beneficial ownership of approximately 4.9% of the Company's outstanding shares
of Common Stock. As more fully described below, the Settlement Agreement
provides, among other things, that (i) the Wyser-Pratte Group will withdraw its
nomination of Jonathan R. Macey for election as a director of the Company and
all other stockholder proposals it submitted to the Company, including those
regarding proposed bylaw amendments, (ii) the Company and the Wyser-Pratte Group
will cooperate with each other to select a candidate to fill the existing
vacancy (the "Vacancy") on the Company's Board of Directors (the "Board") by
October 31, 1998, (iii) the Company and the Wyser-Pratte Group will withdraw all
litigation relating to the Wyser-Pratte Group's announced proposals and the
Company's Annual Meeting, (iv) the Company has agreed from September 1, 1998
through May 31, 1999 to take all corporate actions necessary to declare its
Rights Agreement inapplicable to any fully financed, all-cash tender offer to
purchase all of the Company's outstanding Common Stock that, among other
requirements, is proposed after September 1, 1998 and ensures holders of the
Company's Common Stock a per share price that is the greater of an amount in
excess of $40 and 140% of the average closing price per share of the Company's
Common Stock on the Nasdaq National Market System during a specified 20 trading
day period ending before announcement of the tender offer, and (v) the
Wyser-Pratte Group and its affiliates and associates will cease any further
proxy solicitations of the Company's stockholders, as well as refrain from
taking certain other actions, until January 1, 2000.
The Company previously furnished to stockholders, together with the Proxy
Statement, a white proxy card which identified Richard J. Bogomolny and John H.
Cribb as the nominees of the Board to stand for election at the Annual Meeting
as the class of directors to hold office for three-year terms expiring at the
2001 annual meeting. Pursuant to the Settlement Agreement, the Company and the
Wyser-Pratte Group have agreed to cooperate with each other to select one new
candidate by no later than October 31, 1998 to fill the Vacancy on the Board to
serve for the remainder of the three-year term expiring at the 1999 annual
meeting. In the event the
<PAGE> 4
Company and the Wyser-Pratte Group are unable to mutually agree on a candidate
by October 31, 1998, the Company has agreed that the Vacancy will be filled by
Mr. Macey.
Because the Wyser-Pratte Group has agreed to withdraw its nomination of Mr.
Macey and its stockholder proposals as discussed above, the only matter expected
to be considered at the Annual Meeting is the election of Messrs. Bogomolny and
Cribb to the Board. Accordingly, the white proxy card enclosed with this
Supplement differs from the white proxy card previously furnished by the
Company's Board in that it relates only to the election of directors to the
Company's Board and does not contain any stockholder proposals. IF YOU SUBMITTED
OR IF YOU SUBMIT THE WHITE PROXY CARD PREVIOUSLY FURNISHED TO YOU, YOUR VOTES ON
THE DIRECTOR NOMINATIONS WILL REMAIN IN EFFECT, BUT YOUR VOTES ON THE
STOCKHOLDER PROPOSALS WILL BE OF NO EFFECT. BECAUSE THE WYSER-PRATTE GROUP HAS
WITHDRAWN ITS NOMINATION AND PROPOSALS, IF YOU SUBMITTED OR IF YOU SUBMIT THE
GOLD PROXY CARD FURNISHED TO YOU BY THE WYSER-PRATTE GROUP, YOUR VOTES ON SUCH
CARD, INCLUDING ANY VOTES WITH RESPECT TO THE WYSER-PRATTE GROUP'S DIRECTOR
NOMINEE AND ALL OTHER STOCKHOLDER PROPOSALS SUBMITTED TO THE COMPANY, INCLUDING
THOSE REGARDING PROPOSED BYLAW AMENDMENTS, WILL BE OF NO EFFECT, AND THE PERSONS
IDENTIFIED AS PROXIES ON SUCH PROXY CARD WILL NOT BE PERMITTED TO EXERCISE THEIR
AUTHORITY TO VOTE FOR THE ELECTION OF THE BOARD'S NOMINEES AS DIRECTORS. Thus,
if you wish to vote with respect to the Board's nominees and have not previously
done so with a white proxy card, or if you wish to change the votes you may have
previously cast with respect to the election of directors, please submit the
revised white proxy card enclosed with this Supplement.
The Board of Directors does not intend to bring before the Annual Meeting
any matters other than the election of directors specifically described above
and knows of no matters other than the foregoing to come before the Annual
Meeting. If any other business properly comes before the Annual Meeting, it is
the intention of the persons named in the white proxy card to vote such proxy in
accordance with their judgment.
Stockholders are urged to promptly sign, date and return the enclosed white
proxy card in the envelope enclosed for your convenience. If you previously
returned a proxy card with respect to the Annual Meeting, return of the enclosed
proxy card will revoke the prior proxy. Any person signing a proxy in the form
accompanying this Supplement, or in the form previously provided with the Proxy
Statement, has the power to revoke such proxy prior to the closing of the polls
at the Annual Meeting or any adjournment or postponement thereof. A proxy may be
revoked by timely delivery to Innisfree M&A Incorporated, as Tabulating Agent
for the Annual Meeting, of a writing stating that the proxy is revoked or a
subsequent proxy or by attendance at the Annual Meeting or any adjournment or
postponement thereof and voting in person.
BACKGROUND OF THE SETTLEMENT AGREEMENT
On June 11, 1998, certain members of the Wyser-Pratte Group furnished the
Company with a submission (the "Advance Notice Submission") of their intention
to (i) nominate, and solicit proxies in support of, one candidate, Mr. Macey, to
stand for election to the Company's Board at the Annual Meeting (the
"Nomination") and (ii) propose, and solicit proxies in support of, five binding
resolutions (the "Bylaw Proposals") and one non-binding resolution (the "Expense
Proposal" and, together with the Bylaw Proposals, the "Proposals") at the Annual
Meeting (collectively, the Nomination and the Proposals referred to herein as
the "Proxy Contest").
On July 13, 1998, the Company commenced an action against certain members
of the Wyser-Pratte Group in the United States District Court for the District
of Delaware (the "Federal Litigation") seeking to declare certain of the
Proposals invalid and an injunction requiring the Wyser-Pratte Group to correct
false and misleading statements in its proxy materials filed with the Securities
and Exchange Commission (the "SEC"). On August 11, 1998, certain members of the
Wyser-Pratte Group commenced an action against the Company in the Court of
Chancery of
2
<PAGE> 5
the State of Delaware (the "Delaware Litigation" and, together with the Federal
Litigation, the "Pending Litigation") seeking to require the Company to permit
members or agents of the Wyser-Pratte Group to inspect and copy the Company's
stock list and certain related ancillary documents.
Beginning on July 28, 1998 and from time to time through August 26, 1998,
representatives of the Company and representatives of the Wyser-Pratte Group met
by telephone conference to discuss the possibility of avoiding the Proxy
Contest.
CERTAIN TERMS OF THE SETTLEMENT AGREEMENT
On August 26, 1998, the Company and the Wyser-Pratte Group entered into the
Settlement Agreement, pursuant to which, among other things, the Wyser-Pratte
Group agreed to irrevocably withdraw the Advance Notice Submission, the
Nomination and each Proposal, and to irrevocably terminate the Proxy Contest.
Each member of the Wyser-Pratte Group also agreed to abstain from voting any
shares owned by him or it in the election of directors at the Annual Meeting and
not to grant a proxy to any person with respect to any such shares.
The Settlement Agreement further provides that the Company may submit to
the Wyser-Pratte Group, and the Wyser-Pratte Group may submit to the Company, a
list of candidates proposed by it to fill the Vacancy on the Board, and that
promptly after such candidates have been submitted, the Company and the
Wyser-Pratte Group shall consult with each other to select from among such
candidates one new director to fill the Vacancy by no later than October 31,
1998 (the "Wyser-Pratte Group Nominee"). In the event that the Company and the
Wyser-Pratte Group fail to agree on a candidate to fill the Vacancy before
October 31, 1998, the Board must promptly take all actions necessary to cause
Mr. Macey to be appointed to fill the Vacancy by such date.
The Settlement Agreement also provides that during the period commencing on
September 1, 1998 and ending on May 31, 1999, the Company shall take all
corporate actions necessary to declare the terms and conditions of the Rights
Agreement dated as of August 25, 1987, as amended and restated as of July 31,
1996, between the Company and KeyBank National Association, as rights agent, and
the stock purchase rights granted thereunder, inapplicable to any Qualifying
Offer (as defined below) from and after the day that is 31 business days after
the commencement (as such term is used in Rule 14d-2 promulgated by the SEC
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
such offer through and until the earliest to occur of (i) the date on which such
offer no longer constitutes a Qualifying Offer as a result of any amendment to
such offer, (ii) the date on which such offer is withdrawn and (iii) May 31,
1999. As used in the Settlement Agreement, the term "Qualifying Offer" means any
fully financed, all-cash tender offer to purchase all of the outstanding shares
of Common Stock, on a fully diluted basis: (i) that is subject to Section
14(d)(1) of the Exchange Act; (ii) that is first proposed on or after September
1, 1998; (iii) that is subject to no condition other than (A) the tender to the
offeror of at least a majority of the fully diluted shares of Common Stock, (B)
the expiration of any waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 applicable to the purchase of Common Stock pursuant to
the offer, (C) satisfaction of the offeror with the results of due diligence
performed in accordance with the Settlement Agreement and (D) other customary
conditions dealing with the following subjects: (1) pending or threatened legal
or administrative proceedings, (2) governmental action or enactment or
application of statutes or regulations, (3) extraordinary changes in economic or
political conditions, (4) extraordinary actions or transactions by the Company
with respect to its capitalization, and (5) agreement with the Company on an
alternative transaction; and (iv) pursuant to which the holder of each share of
Common Stock will receive in cash for such share upon consummation of such offer
the greater of (A) an amount in excess of $40 (before giving effect to any
reclassification, share combination, share subdivision, share dividend, share
exchange or similar transaction) and (B) an amount equal to the product of (1)
1.4
3
<PAGE> 6
multiplied by (2) the average closing price per share of Common Stock on the
Nasdaq National Market System, as quoted in The Wall Street Journal, during the
twenty trading day period ending on the day before the fifth trading day
immediately preceding the date on which the first public announcement of such
offer is made.
Under the Settlement Agreement, the Wyser-Pratte Group agreed to certain
"standstill" restrictions for a period ending on January 1, 2000. Pursuant to
these restrictions, the members of the Wyser-Pratte Group have agreed not to,
and to cause their affiliates and associates not to, take any of the following
actions with respect to a stockholders meeting held, or stockholder consent
delivered, on or before January 1, 2000: (i) acquire, offer or propose to
acquire, or agree to acquire (except, in any case, by way of stock dividends or
other distributions or rights to purchase voting securities authorized by the
Board and made available to holders of voting securities generally or to the
Company's non-employee directors pursuant to any compensatory plan of the
Company), directly or indirectly, whether by purchase, tender offer or exchange
offer, through the acquisition of control of another person, by joining a
partnership, limited partnership, syndicate, association or other "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) or otherwise, any
Company voting securities; (ii) whether in connection with the Annual Meeting,
the Proxy Contest or otherwise, make, or in any way participate, directly or
indirectly, in any "solicitation" (as such term is defined in Rule 14a-1(l)
promulgated by the SEC under the Exchange Act ("Rule 14a-1(l)")) of proxies or
consents (whether or not relating to the election or removal of directors), seek
to advise, encourage or influence any person with respect to the voting of any
Company voting securities, initiate, propose or otherwise "solicit" (as such
term is defined in Rule 14a-1(l)) stockholders of the Company for the approval
of stockholder proposals (whether made pursuant to Rule 14a-8 promulgated by the
SEC under the Exchange Act or otherwise), induce or attempt to induce any other
person to initiate any such stockholder proposal, or otherwise communicate with
the Company's stockholders or others pursuant to the rules governing the
solicitation of proxies promulgated by the SEC under the Exchange Act with
respect to any such proposal; (iii) subject to certain provisions of the
Settlement Agreement, make any public announcement with respect to any proposal
or offer involving any merger, consolidation, business combination, tender offer
or exchange offer, sale or purchase of assets, sale or purchase of securities,
dissolution, liquidation, restructuring, recapitalization or similar
transactions of or involving the Company or any of its affiliates; (iv) form,
join or in any way participate in any "group" (within the meaning of Section
13(d)(3) of the Exchange Act) with respect to any Company voting securities; (v)
deposit any Company voting securities in any voting trust or subject any Company
voting securities to any agreement or other arrangement with respect to the
voting of such securities; (vi) execute any written consent as stockholders with
respect to the Company or its voting securities; (vii) otherwise act, alone or
in concert with others, to control or seek to control, or influence or seek to
influence, the Board, the management or the policies of the Company, other than
through non-public communications with the directors of the Company, including
the Wyser-Pratte Group Nominee acting in his capacity as a director of the
Company; (viii) seek, alone or in concert with others, (A) to call a meeting of
the Company's stockholders, (B) representation on the Board, except as
specifically set forth in the Settlement Agreement, or (C) the removal of any
member of the Board; (ix) make any publicly disclosed proposal regarding any of
the foregoing; (x) publicly disclose any request to amend, waive or terminate
any provision of the Settlement Agreement; or (xi) take or cause others to take
any action inconsistent with any of the foregoing.
Pursuant to the Settlement Agreement, the Company has agreed to reimburse
the Wyser-Pratte Group for reasonable, documented, out-of-pocket expenses
incurred in connection with the Proxy Contest, the Pending Litigation and the
negotiation of the Settlement Agreement in an amount not to exceed $250,000.
4
<PAGE> 7
The foregoing summary of the Settlement Agreement is qualified in its
entirety by reference to the full text of the Settlement Agreement, a copy of
which is included as an exhibit to the Company's Current Report on Form 8-K
dated August 26, 1998 and filed with the SEC on August 27, 1998.
By Order of the Board of Directors,
Robert A. Goodman
Secretary
August 28, 1998
5
<PAGE> 8
[TELXON LOGO]
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS -- SEPTEMBER 15, 1998
P The undersigned stockholder hereby appoints Frank E. Brick, Dr. Raj
Reddy and Norton W. Rose, as Proxies, each with the power to
appoint his substitute, and hereby authorizes any of them to
R represent and to vote, as provided on the reverse side hereof, all
of the Common Stock of Telxon Corporation which the undersigned, as
of the July 17, 1998 Record Date for the Annual Meeting, is
O entitled to vote at the Annual Meeting of Stockholders to be held
on September 15, 1998 or any adjournment or postponement thereof.
X THIS PROXY, WHEN PROPERLY EXECUTED AND TIMELY RETURNED, WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE
Y ELECTION OF THE BOARD'S DIRECTOR NOMINEES NAMED IN PROPOSAL 1.
--------------------------------------------------------------
IMPORTANT -- THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND RETURN TODAY.
--------------------------------------------------------------
................................................................................
DETACH CARD
<PAGE> 9
(continued from reverse side)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE BOARD'S NOMINEES
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1. Election of Directors -- FOR
Board's Nominees: R. Bogomolny and J. Cribb FOR WITHHELD BOTH
BOTH BOTH EXCEPT:
[ ] [ ] [ ]
----------------------------------------
(Except nominee written above)
</TABLE>
IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
Dated:----------------------------, 1998
Signature(s)----------------------------
----------------------------------------
Title:----------------------------------
PLEASE SIGN EXACTLY AS NAME APPEARS
HEREON. JOINT OWNERS SHOULD EACH SIGN.
WHEN SIGNING AS AN EXECUTOR, CORPORATE
OFFICER OR IN ANY OTHER REPRESENTATIVE
CAPACITY, PLEASE GIVE FULL TITLE AS
SUCH.
................................................................................
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE BOARD'S
DIRECTOR NOMINEES NAMED IN PROPOSAL 1.
PLEASE SIGN, DATE AND RETURN THE ABOVE PROXY CARD TODAY
USING THE POSTAGE-PAID ENVELOPE PROVIDED, WHETHER OR NOT
YOU EXPECT TO ATTEND THE ANNUAL MEETING.
