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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): August 26, 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
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ITEM 5. OTHER EVENTS.
On August 26, 1998, the registrant (the "Company") entered into a
Settlement Agreement with 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), pursuant to which, among other things, (i) the Wyser-Pratte
Group will withdraw its nomination of a candidate for election as a director of
the Company and all other stockholder proposals which it had submitted to the
Company and announced its intention to propose at the Company's Annual Meeting
of Stockholders scheduled for September 15, 1998 (the "Annual Meeting"),
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 on the Company's Board of Directors 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 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 Exhibit 99.1 to this Current Report on
Form 8-K and incorporated herein by reference.
The exhibits to this Current Report on Form 8-K also include the press
release jointly issued by the Company and Mr. Wyser-Pratte (Exhibit 99.2 hereto)
and a separate press release issued by the Company (Exhibit 99.3 hereto). Both
of such press releases were issued on August 26, 1998 and are incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
99.1 Settlement Agreement, dated August 26, 1998, by and
among the registrant, Wyser-Pratte & Co., Inc.,
Guy P. Wyser-Pratte and Eric Longmire.
99.2 Press Release jointly issued by the registrant and
Guy P. Wyser-Pratte on August 26, 1998.
99.3 Press Release issued by the registrant on August 26,
1998.
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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: August 27, 1998 By: /s/ Kenneth W. Haver
--------------------
Kenneth W. Haver
Senior Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
99.1 Settlement Agreement, dated August 26, 1998, by and among the
registrant, Wyser-Pratte & Co., Inc., Guy P. Wyser-Pratte and Eric
Longmire, filed herewith.
99.2 Press Release jointly issued by the registrant and Guy P. Wyser-Pratte
on August 26, 1998, filed herewith.
99.3 Press Release issued by the registrant on August 26, 1998, filed
herewith.
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Exhibit 99.1
Execution Copy
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SETTLEMENT AGREEMENT
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SETTLEMENT AGREEMENT, dated August 26, 1998 ("Agreement"), by and
among Wyser-Pratte & Co. Inc., a New York corporation, Guy P. Wyser-Pratte, a
natural person, and Eric Longmire, a natural person (the foregoing Persons (as
defined below) being collectively referred to herein as the "Wyser-Pratte
Group"); and Telxon Corporation, a Delaware corporation (the "Company").
WHEREAS, on June 11, 1998, certain members of the Wyser-Pratte Group
furnished the Company with a submission dated June 11, 1998 (the "Advance Notice
Submission") of their intention to (i) nominate, and solicit proxies in support
of, one candidate to stand for election (the "Nomination") to the Company's
Board of Directors (the "Board") at the Company's 1998 Annual Meeting of
Shareholders (the "1998 Annual Meeting") 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 1998 Annual Meeting (collectively, the
Nomination and the Proposals referred to herein as the "Proxy Contest");
WHEREAS, the Company commenced an action captioned TELXON CORPORATION
V. GUY P. WYSER-PRATTE AND WYSER-PRATTE & CO. INC., C.A. No. 98-403, against
certain members of the Wyser-Pratte Group in the United States District Court
for the District of Delaware (the "Federal Litigation");
WHEREAS, certain members of the Wyser-Pratte Group commenced an action
captioned GUY P. WYSER-PRATTE V. TELXON CORPORATION, C.A. No. 16580, against the
Company in the Court of Chancery of the State of Delaware (the "Delaware
Litigation" and, together with the Federal Litigation, the "Pending
Litigation");
WHEREAS, the Pending Litigation arises out of and relates to the Proxy
Contest; and
WHEREAS, the Company and the members of the Wyser-Pratte Group have
determined that the interests of the Company and its shareholders, and the
interests of the members of the Wyser-Pratte Group, would best be served by
avoiding the substantial expense and disruption that could be expected to result
from the Proxy Contest and the Pending Litigation, subject to the terms and
conditions set forth herein.
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NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements and representations set forth herein, and intending to be legally
bound hereby, the parties to this Agreement hereby agree as follows:
1. SETTLEMENT OF PENDING LITIGATION; MUTUAL RELEASE; BOARD
COMPOSITION; RELATED MATTERS.
(a) Promptly after the date of this Agreement, (i) the Company
shall take all steps necessary to dismiss, as to those members of the Wyser-
Pratte Group who are defendants therein, the Federal Litigation without
prejudice as to such members of the Wyser-Pratte Group, and without costs or
expenses, and (ii) Guy P. Wyser-Pratte shall take all steps necessary to
dismiss, as to the Company, the Delaware Litigation without prejudice, and
without costs or expenses.
(b) (i) Each member of the Wyser-Pratte Group, on its or his
behalf, and on behalf of its or his heirs, estates, personal representatives,
directors, officers, successors, predecessors, subsidiaries, principals,
Affiliates and Associates (the "Wyser-Pratte Releasors"), hereby releases and
forever discharges and covenants not to sue, the Company or any of its
successors, subsidiaries, Affiliates, directors, officers, employees, agents,
representatives, attorneys, advisors or consultants (collectively, the
"Company Releasees"), in connection with or with respect to any and all claims,
suits or causes of action, whether based on any foreign, federal or state law
or right of action, direct, indirect or representative in nature, foreseen or
unforeseen, known or unknown (collectively, "Claims"), which any or all of the
Wyser-Pratte Releasors has, has had or will have against any or all of the
Company Releasees, of any kind whatsoever arising out of or related to any act
or omission by any Company Releasee from the beginning of the world and prior
to the date of this Agreement, other than such Claims as may arise out of or
relate to the execution, delivery, performance or enforcement of this
Agreement.
(ii) The Company, on its behalf, and on behalf of its directors,
officers, successors, predecessors, subsidiaries, principals, Affiliates and
Associates (the "Company Releasors"), hereby releases and forever discharges
and covenants not to sue, each member of the Wyser-Pratte Group, and their
respective successors, subsidiaries, Affiliates, directors, officers,
employees, agents, representatives, attorneys, advisors and consultants
(collectively, the "Wyser-Pratte Releasees"), in connection with or with
respect to any and all Claims which any or all of the Company Releasors has,
has had or will have against any or all of the Wyser-Pratte Releasees, of any
kind whatsoever arising out of or related to any act or omission by any
Wyser-Pratte Releasee from the beginning of the world and prior to the date of
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this Agreement, other than such Claims as may arise out of or relate to the
execution, delivery, performance or enforcement of this Agreement.
(c) Promptly after the date of this Agreement, 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 one existing vacancy
on the Board (the "Vacancy"). 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 shall fail to agree
on a candidate to fill the Vacancy in the manner set forth above on or before
October 31, 1998, the Board shall promptly take all actions necessary to cause
Jonathan R. Macey to be appointed to fill the Vacancy by such date. Each
member of the Wyser-Pratte Group acknowledges that (i) to the best of its or
his knowledge, there are no circumstances that would preclude Mr. Macey from
serving as a member of the Board and (ii) he believes Mr. Macey is a suitable
nominee for election to the Company's Board.
(d) Effective the date of this Agreement, each member of the
Wyser-Pratte Group hereby irrevocably withdraws the Advance Notice Submis-
sion, the Nomination and each Proposal and hereby irrevocably terminates the
Proxy Contest. Each member of the Wyser-Pratte Group shall abstain from voting
any shares owned by him or it in the election of directors at the 1998 Annual
Meeting; and no member of the Wyser-Pratte Group shall grant or otherwise give
his or its proxy to any Person with respect to any such shares.
(e) 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 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 (as defined below) 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 with drawn and (iii) May 31,
1999. As used in this Agreement, the term "Qualifying Offer" means any fully
financed, all-cash tender offer to purchase all of the outstanding shares of
Common Stock, par value $.01 per share, of the Company ("Common
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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 this 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 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. If a Qualified Offer is amended one or more times (other than to
decrease the price to be paid for shares of Common Stock), such amendments shall
not be deemed to result in a new offer for purposes of the calculation provided
for in subparagraph (iv) or determining the 31 business day period referred to
above. If prior to making a cash tender offer, an offeror publicly announces a
proposal to acquire all the outstanding shares of Common Stock for cash, the
first public announcement of such cash tender offer shall be deemed to have been
made when such proposal is publicly announced, for purposes of the calculation
provided for in subparagraph (iv). For so long as any offer shall constitute a
Qualifying Offer, the Company shall permit the offeror to conduct such due
diligence as the Board reasonably determines to be necessary to allow such
offeror to determine whether to consummate such offer, subject to the terms and
conditions of a customary confidentiality agreement not including standstill
provisions.
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2. ADDITIONAL COVENANTS OF THE WYSER-PRATTE GROUP.
(a) The covenants and agreements contained in this Section 2
shall terminate on January 1, 2000 (the "Standstill Termination Date").
(b) Each member of the Wyser-Pratte Group jointly and severally
agrees that during the period commencing on the date hereof and ending on the
Standstill Termination Date, without the prior written consent of the Board
specifically expressed in a resolution adopted by a majority of the entire
Board (other than any Wyser-Pratte Nominee), it or he will not, and will cause
each of its or his Affiliates and Associates not to, directly or indirectly,
take any of the following actions with respect to a shareholders meeting held,
or shareholder 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 (as defined below) generally or to
the Company's non-employee directors pursuant to any compensatory plan of the
Company, provided, that any such securities so received shall be subject to
the provisions hereof), 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 Voting Securities;
(ii) whether in connection with the 1998 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 Securities and Exchange Commission ("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 Voting Securities,
initiate, propose or otherwise "solicit" (as such term is defined in Rule
14a-1(l)) shareholders of the Company for the approval of shareholder
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 shareholder proposal, or otherwise communicate with the Com-
pany's shareholders 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;
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(iii) subject to Section 5 hereof, 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 Voting Securities;
(v) deposit any Voting Securities in any voting trust or
subject any Voting Securities to any agreement or other arrangement with
respect to the voting of any Voting Securities;
(vi) execute any written consent as shareholders 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
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 shareholders, (B) representation on the Board, except as
specifically set forth in paragraph (b) of Section 1 hereof, 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 this Agreement; or
(xi) take or cause others to take any action inconsistent with
any of the foregoing.
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3. REPRESENTATIONS AND WARRANTIES OF THE WYSER-PRATTE GROUP.
(a) Each member of the Wyser-Pratte Group which is not a
natural person represents and warrants on its own behalf that it has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of this Agreement and to consummate the transactions contemplated
hereby.
(b) Each member of the Wyser-Pratte Group which is not a
natural person represents and warrants on its own behalf that this Agreement
has been duly authorized, executed, and delivered by it and constitutes its
valid and binding obligation, enforceable against it in accordance with its
terms.
(c) Each member of the Wyser-Pratte Group who is a natural
person represents and warrants on his own behalf that he has the power and
authority to execute, deliver and carry out the terms and provisions of this
Agreement and to consummate the transactions contemplated hereby.
(d) Each member of the Wyser-Pratte Group who is a natural
person represents and warrants on his own behalf that this Agreement has been
duly executed and delivered and constitutes his valid and binding obligation,
enforceable against him in accordance with its terms.
(e) The members of the Wyser-Pratte Group represent and warrant
that (i) together with their Affiliates and Associates, such members benefi-
cially own an aggregate of 800,000 shares of Voting Securities as set forth
by beneficial owner and amount on Exhibit A attached hereto and (ii) such
Voting Securities constitute all of the Voting Securities of the Company
beneficially owned by the members of the Wyser-Pratte Group and such
Affiliates and Associates.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants as follows:
(a) The Company has the corporate power and authority to
execute, deliver and carry out the terms and provisions of this Agreement and
to consummate the transactions contemplated hereby.
(b) This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms.
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5. PRESS RELEASE; CONFIDENTIALITY. Upon execution of this Agree-
ment, the Company and the Wyser-Pratte Group shall issue a joint press release
in the form attached as Exhibit B hereto (the "Joint Press Release"). None of
the parties hereto will make any public statement (including any statement in
any filing with the SEC or any other governmental agency) regarding this
Agreement or any event occurring prior to the date hereof that is inconsistent
with, or otherwise contrary to, the statements in the Joint Press Release or
that is critical of any other such party or its actions. Nothing herein shall
limit, preclude or prevent either the Company or any member of the Wyser-Pratte
Group from making any public statement regarding this Agreement or any event
occurring prior to the date hereof that is neither inconsistent with, nor
otherwise contrary to, the statements in the Joint Press Release, nor critical
of any other party hereto or its actions, provided that all such public
statements shall be in compliance with applicable securities laws and consistent
with any such party's fiduciary duties to the Company. All parties hereto shall
maintain confidential all information, including documents and other written
materials, disclosed to it by any other party as the result of discovery
provided in connection with the Pending Litigation, except (i) as required by
applicable law (including federal and state securities laws) or (ii) as required
in any action by or before any court or other governmental agency.
6. EXPENSES. The Company shall reimburse the Wyser-Pratte Group
for their reasonable, documented, out-of-pocket expenses incurred in connec-
tion with the Proxy Contest, the Pending Litigation (notwithstanding Section
1(a) hereof) and the negotiation of this Agreement (the "Wyser-Pratte Expenses")
in an aggregate amount not to exceed $250,000. The Company shall pay the
Wyser-Pratte Expenses by check or wire transfer within ten business days after
receipt by the Company of an invoice with respect to the same, together with
supporting documentation (such as law firm billing statements), from the
Wyser-Pratte Group.
7. SPECIFIC PERFORMANCE. Each of the members of the Wyser-
Pratte Group, on the one hand, and the Company on the other hand, hereby ac
knowledges and agrees that irreparable injury to the other party or parties
(as the case may be) hereto would occur in the event any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached and that such injury would not be compensable in
damages. It is accordingly agreed that (a) each party hereto (the "Moving
Party") shall be entitled to specific enforcement of the terms hereof and (b)
the other parties hereto will not take action, directly or indirectly, in
opposition to the Moving Party seeking such relief on the grounds that any
other remedy or relief is available at law or in equity.
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8. NO WAIVER. Any waiver by any party hereto of a breach of any
provision of this Agreement shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of this Agreement. The failure of a party hereto to insist upon
strict adherence to any term of this Agreement on one or more occasions shall
not be considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement.
9. CERTAIN DEFINITIONS. As used in this Agreement, (a) the term
"Person" shall mean any natural person, partnership, corporation, group,
syndicate, trust, government or agency thereof, or any other association or
entity; (b) the terms "Affiliates" and "Associates" shall have the respective
meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange
Act and shall include Persons who are Affiliates or Associates of any Person
on the date hereof and who become Affiliates or Associates of any Person
subsequent to the date hereof; and (c) the term "Voting Securities" shall
mean the shares of Common Stock and any other securities of the Company
entitled to vote in the election of directors, or securities convertible
into, or exercisable or exchangeable for, such Common Stock or such other
securities, whether or not subject to the passage of time or other
contingencies. When used in this Agreement, the word "including" shall be
deemed to be followed by the words "without limitation."
10. SUCCESSORS AND ASSIGNS. All the terms and provisions of
this Agreement shall inure to the benefit of and shall be enforceable by the
respective successors and permitted assigns of the parties hereto; provided
that neither the Company, on the one hand, nor any member of the Wyser-Pratte
Group, on the other hand, may assign or otherwise transfer its rights, duties
or other interests hereunder without the prior written consent of the other
party hereto.
11. SURVIVAL OF REPRESENTATIONS. All representations,
warranties, covenants, agreements and understandings made by the parties in
this Agreement or pursuant hereto shall survive the date hereof until the
Standstill Termination Date, provided that Section 5 hereof shall survive
indefinitely.
12. ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the
entire understanding of the parties hereto with respect to its subject
matter. There are no representations, warranties, agreements, covenants or
undertakings other than those expressly set forth herein. This Agreement may
be amended only by a written instrument duly executed by the parties hereto
or their respective successors or permitted assigns.
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13. HEADINGS. The captions and section headings contained in
this Agreement are for reference purposes only and shall not effect in any
way the meaning or interpretation of this Agreement.
14. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given on the day when delivered by hand, on the day when sent by telecopy and
confirmed and on the fifth business day after being deposited in the mail
(registered or certified, postage prepaid, return receipt requested) to the
respective parties hereto as follows:
If to the Company:
Telxon Corporation
3330 West Market Street
Akron, Ohio 44333
Attention: Legal Department
Telecopy: (330) 664-2009
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
Wilmington, Delaware 19801
Attention: Steven J. Rothschild, Esquire
Telecopy: (302) 651-3000
If to one or more members of the Wyser-Pratte Group:
Wyser-Pratte & Co. Inc.
63 Wall Street
New York, New York 10005
Attention: Mr. Guy P. Wyser-Pratte
Telecopy: (212) 495-5360
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with a copy to:
Howard, Smith & Levin
1330 Avenue of the Americas
New York, New York 10019
Attention: Leonard Chazen, Esquire
Telecopy: (212) 841-1010
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above,
provided that any change of address or addressee shall be deemed given only upon
receipt.
15. GOVERNING LAW; FORUM; SERVICE OF PROCESS. This Agreement
shall be governed by, and construed and enforced in accordance with, the laws
of the State of Delaware, without reference to conflicts of law principles.
16. COUNTERPARTS. This Agreement may be executed in counter
parts, each of which shall be deemed an original, but each of which together
shall constitute one and the same Agreement.
17. WYSER-PRATTE GROUP REPRESENTATIVE. Each member of the
Wyser-Pratte Group hereby irrevocably appoints Guy P. Wyser-Pratte, as such
member's attorney-in-fact and representative (the "Representative"), to act
in such member's place and stead, to do any and all things and to execute any
and all documents and give and receive any and all notices or instructions
in connection with this Agreement and the transactions contemplated hereby.
Notwithstanding any provision hereof to the contrary, the Company shall be
entitled to rely upon, as being binding on each member of the Wyser-Pratte
Group, any action taken by the Representative or upon any document, notice,
instruction or other writing given or executed by the Representative, and any
such act, document, notice, instruction or other writing shall bind each
member of the Wyser-Pratte Group.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, and intending to be legally bound hereby,
each of the undersigned parties has executed and delivered, or caused to be
executed and delivered, this Settlement Agreement on the date first above
written.
TELXON CORPORATION
By: /s/ Kenneth W. Haver
----------------------------
Kenneth W. Haver
Senior Vice President
WYSER-PRATTE & CO. INC.
By: /s/ Guy P. Wyser-Pratte
----------------------------
Guy P. Wyser-Pratte
President
/s/ Guy P. Wyser-Pratte
-------------------------------
Guy P. Wyser-Pratte
/s/ Eric Longmire
-------------------------------
Eric Longmire
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Exhibit 99.2
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[TELXON LOGO]
NEWS RELEASE
TELXON AND WYSER-PRATTE REACH AGREEMENT
AKRON, Ohio and NEW YORK, New York - - August 26, 1998 - - Telxon
Corporation (Nasdaq - NNM: TLXN) and Guy P. Wyser-Pratte today announced that
they have reached an agreement with respect to the Telxon shareholder rights
plan, filling the existing vacancy on Telxon's Board of Directors and the
shareholder proposals which Mr. Wyser-Pratte announced in June, 1998 that he
intended to propose at Telxon's annual meeting scheduled for September 15, 1998.
Telxon has agreed from September 1, 1998 through May 31, 1999 to take all
actions necessary to declare its rights plan inapplicable to any fully financed,
all-cash tender offer to purchase all of Telxon's outstanding common stock that,
among other things, ensures holders of Telxon 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 Telxon common stock on the Nasdaq National Market
System during a specified 20 trading day period ending before announcement of
the tender offer.
Telxon and Mr. Wyser-Pratte have agreed to consult with each other to
select a candidate to fill the existing vacancy on Telxon's Board of Directors.
In the event that Telxon and Mr. Wyser-Pratte are unable to agree on a mutually
acceptable candidate, Telxon has agreed to permit Jonathan R. Macey to fill that
vacancy by October 31, 1998. Mr. Wyser-Pratte is withdrawing his nomination of
Professor Macey for election to the Telxon Board at the 1998 shareholders
meeting.
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
Mr. Wyser-Pratte has agreed to withdraw all shareholder proposals submitted
to Telxon, including those regarding proposed bylaw amendments. Moreover,
Mr. Wyser-Pratte has agreed to not make any further proxy solicitations of
Telxon's shareholders through January 1, 2000.
In addition, Telxon and Mr. Wyser-Pratte have agreed to withdraw all
litigation relating to Mr. Wyser-Pratte's announced proposals and Telxon's
annual meeting.
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 around the world.
Telxon's global web site address is: http://www.telxon.com.
# # #
For more information:
Alex Csiszar
Vice President, Investor Relations
Telxon Corporation
(330) 664-2961
Eric Longmire
Senior Managing Director
Wyser-Pratte & Co, Inc.
(212) 495-5357
<PAGE> 1
Exhibit 99.3
------------
[TELXON LOGO]
NEWS RELEASE
TELXON SAYS PROXY SETTLEMENT
IN BEST INTERESTS OF SHAREHOLDERS
AUGUST 26, 1998 - - AKRON, Ohio - - Telxon Corporation (Nasdaq - NNM:
TXLN) said today that the settlement it reached with Guy Wyser-Pratte is in the
best interests of Telxon shareholders.
Frank E. Brick, Telxon president and chief executive officer, said the
terms of the settlement, which ended a proxy contest and terminated all pending
litigation between the companies, will enable management to intensify its focus
on executing its business plan while continuing to protect Telxon from low-ball
unsolicited offers. "The settlement also avoids continuing legal fees and proxy
solicitation expenses," Brick said. "Telxon will continue to execute its
long-term strategy that is geared towards growing earnings 30 percent per year
on a 15 percent revenue gain," he added.
Under the agreement, the Telxon board will not invoke the company's
shareholder rights provision if Telxon receives a fully financed all-cash offer
above $40 per share or a price that is 140 percent above a twenty day average
closing price of Telxon stock, whichever is greater. This provision becomes
effective September 1, 1998 and expires May 31, 1999. Brick said, "Obviously,
what we agreed to is only temporary and is only applicable to offers in excess
of a minimum price."
Brick said, "Wyser-Pratte indicated that he initiated his proxy
proposals in reaction to our Board's rejection of takeover proposals from Symbol
Technologies. Symbol never made a firm definitive offer. Recognizing its
fiduciary responsibilities, the Telxon board of directors authorized management
to meet with Symbol on several different occasions to determine if a deal could
be done that would deliver adequate value to Telxon shareholders."
"While Symbol's public statements indicated friendly intentions, its
private tactics were in fact hostile," Brick explained. Brick said he suspects
that Symbol's actions were "simply a competitive effort to disrupt our business.
I believe that
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
Symbol was never really serious about completing a deal at the prices
indicated, and that our board acted appropriately in rejecting Symbol's
proposals," Brick continued.
"Clearly, one of the primary reasons we entered into the settlement was
that it was consistent with the positions our board took with respect to
Symbol's $40 proposal and its inadequacies," he concluded.
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 around the world.
Telxon's global web site address is: http://www.telxon.com.
Other than the summarized terms of the settlement agreement with
Wyser-Pratte, this news release constitutes forward-looking statements that are
inherently subject to risks and uncertainties which could 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 gain and maintain market acceptance of its products,
and implement appropriate cost reduction, 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 more information:
Alex Csiszar
Vice President, Investor Relations
Telxon Corporation
(330) 664-2961
