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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
PLASMA-THERM, INC.
(NAME OF SUBJECT COMPANY)
PLASMA-THERM, INC.
(NAME OF PERSON(S) FILING STATEMENT)
VOTING COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
727900102
(CUSIP NUMBER OF CLASS OF SECURITIES)
STACY L. WAGNER
CHIEF FINANCIAL OFFICER, TREASURER AND CORPORATE SECRETARY
PLASMA-THERM, INC.
10050 16TH STREET NORTH
ST. PETERSBURG, FLORIDA 33716
(727) 577-4999
(NAME,ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICE AND COMMUNICATIONS ON BEHALF OF THE
PERSON(S) FILING STATEMENT)
WITH COPIES TO:
MARTIN A. TRABER, ESQUIRE
MATTHEW J. FOSTER, ESQUIRE
FOLEY & LARDNER
100 NORTH TAMPA STREET
SUITE 2700
TAMPA, FLORIDA 33602
(813) 229-2300
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Plasma-Therm, Inc., a Florida
corporation (the "Company" or "Plasma-Therm"), and the address of the principal
executive offices of the Company is 10050 16th Street North, St. Petersburg,
Florida 33716. The title of the class of equity securities to which this
Solicitation/Recommendation Statement on Schedule 14D-9 (this "Statement")
relates is the voting common stock, par value $0.01 per share, of Plasma-Therm
(the "Shares").
ITEM 2. TENDER OFFER OF THE BIDDER.
This Statement relates to the tender Offer by Volcano Acquisition Corp.
("Purchaser"), a Florida corporation and a wholly-owned subsidiary of
Oerlikon-Buhrle USA, Inc., a Delaware corporation ("Parent"), and an indirect
wholly-owned subsidiary of Oerlikon-Buhrle Holding AG ("OBH") a Swiss
corporation, to purchase all of the issued and outstanding Shares at a price of
$12.50 per Share net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated December 27, 1999 (the
"Offer to Purchase"), and the related Letter of Transmittal (together,
constituting the "Offer").
The Offer is being made in accordance with the Agreement and Plan of
Merger, dated as of December 20, 1999 (the "Merger Agreement"), among the
Company, Parent and Purchaser. The Merger Agreement provides that, as soon as
practicable following the business day on which the last to be satisfied or
waived of the conditions to the Merger (as defined below) set forth in the
Merger Agreement is satisfied or waived, Purchaser will be merged with and into
Plasma-Therm (the "Merger"). Following consummation of the Merger, Plasma-Therm
will continue as the surviving corporation (the "Surviving Corporation") and
will become a wholly-owned subsidiary of Parent. A copy of the Merger Agreement
is filed as Exhibit (c)(1) hereto and is incorporated herein by reference.
As set forth in the Tender Offer Statement on Schedule 14D-1 of
Purchaser enclosed herewith (the "Schedule 14D-1"), the principal executive
offices of each of Parent and Purchaser are located at c/o Oerlikon-Buhrle
Holding AG, Hofwiesenstrasse 135, CH-8021, Zurich, Switzerland.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and business address of the Company, which is the person
filing this Statement, are set forth in Item 1 above.
(b) Except as set forth in or incorporated by reference in this Item
3(b), to the knowledge of the Company, as of the date hereof, there are no
material contracts, agreements, arrangements or understandings and actual or
potential conflicts of interest between the Company or its affiliates and (i)
its executive officers, directors or affiliates or (ii) the Purchaser, Parent or
any of their respective executive officers, directors or any of their respective
affiliates.
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Certain contracts, agreements, arrangements or understandings between the
Company and certain of its executive officers, directors and affiliates are
described under the caption "Certain Transactions" of the Company's Information
Statement Pursuant to Section 14(f) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and Rule 14f-1 thereunder (the "Information
Statement"), which is attached hereto as Annex A. The Company has also (i)
entered into a Termination, Noncompetition and Mutual Release Agreement with Mr.
Ronald S. Deferrari, the Company's current President, and (ii) entered into
amendments of certain employment agreements with certain named Executive
Officers as described in this Item 3 under the subheading "Amendments to
Employment Agreements and Severance Arrangements with Named Executive Officers;"
provided, however, such amendments and agreements shall only become effective
upon the Closing of the Offer.
THE TRANSACTION DOCUMENTS
THE MERGER AGREEMENT
The following is a summary of the material terms of the Merger
Agreement. This summary is not a complete description of the terms and
conditions thereof and is qualified in its entirety by reference to the full
text thereof, which is incorporated herein by reference and a copy of which has
been filed with the Commission as an exhibit to the Schedule 14D-1. The Merger
Agreement may be examined, and copies thereof may be obtained, as set forth in
Section 8.
The Offer. The Merger Agreement provides for the commencement of the
Offer as soon as reasonably practicable, and in any event within five business
days, after the first public announcement of the Merger Agreement. The
obligations of Purchaser to consummate the Offer and accept for payment or pay
for any Shares tendered pursuant to the Offer is subject only to the
satisfaction of certain conditions, including the satisfaction of the condition
requiring that by the Expiration Date (as defined in the Schedule 14D-1) a
number of Shares which together with any Shares owned by Parent, Purchaser and
the Parent Companies (as defined in the Merger Agreement), constitute more than
50% of the outstanding Shares (on a fully diluted basis) be tendered (the
"Minimum Condition").
The Merger Agreement provides that, subject to the terms and conditions
of the Merger Agreement at the Effective Time (as defined in the Merger
Agreement), the Merger will be consummated and the Company will become a
wholly-owned subsidiary of Parent. At the Effective Time, each Share issued and
outstanding immediately prior to the Effective Time (other than Shares owned by
Parent, Purchaser or any other direct or indirect subsidiary of Parent or Shares
that are owned by the Company or any of its subsidiaries and in each case not
held on behalf of third parties or Shares owned by Dissenting Shareholders (as
defined in the Merger Agreement)) will be canceled, extinguished and converted
into the right to receive, without interest, an amount in cash equal to $12.50
per Share or such higher price per Share as shall have been paid in the Offer
(the "Merger Consideration").
The Merger Agreement requires the Company to take all necessary actions
to cause (including plan amendments) prior to the Effective Time each
outstanding option to purchase
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Shares which had not vested immediately prior to such time to become vested and
fully exercisable. In addition, the Company is obligated to take all necessary
actions to cause each then outstanding option granted under the Stock Plans to
purchase Shares (a "Company Option"), whether vested or unvested, to be
cancelled, with the holder thereof becoming entitled to receive an amount of
cash equal the difference, if any, between $12.50 (or such higher price per
Share as shall have been paid in the Offer) and the exercise price of such
Option less any required withholding taxes.
Representations and Warranties. The Merger Agreement contains
representations and warranties by the Company regarding, among other things, its
organization, its capitalization, its authority relative to the Merger
Agreement, consents and approvals necessary for the consummation of the Offer
and the Merger, the Opinion of CIBC World Markets Corp., the Company's filings
and reports with and to the Securities and Exchange Commission (the "SEC"), the
absence of certain changes in its business, the absence of litigation, certain
employee matters, compliance with laws, inapplicability of takeover statutes,
environmental matters, taxes, labor matters, intellectual property, brokers and
finders, year 2000 compliance, title to its assets, insurance policies, material
contracts, the vote required to approve the Merger Agreement and the
transactions contemplated thereby, and the information to be included in the
Offer documents. The Merger Agreement contains representations and warranties by
each of Parent and Purchaser regarding, among other things, its organization,
its authority relative to the Merger Agreement and the Offer, and consents and
approvals necessary for the Offer and the Merger, compliance with laws,
inapplicability of takeover statutes, the funds necessary to consummate the
Offer and the Merger, and the information to be included in the Offer documents
Conditions to the Merger. The respective obligation of each party to
effect the Merger is subject to the satisfaction or waiver at or prior to the
Effective Time of each of the following conditions: (i) If required by the FBCA,
the Merger, this Agreement and the plan of merger shall have been duly approved
by holders of a majority of the outstanding Shares in accordance with applicable
law and the articles of incorporation and bylaws of the Company, (ii) the
waiting period applicable to the consummation of the Merger under the HSR Act
shall have expired or been earlier terminated; (iii) no court or Governmental
Entity of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, law, ordinance, rule, regulation, judgment,
decree, injunction or other order that is in effect and permanently enjoins or
otherwise prohibits consummation of the Merger (collectively, an "Order"), and
(iv) Purchaser (or one of the Parent Companies) shall have purchased Shares in
an amount equal to at least the Minimum Condition pursuant to the Offer.
Conduct of Interim Operations. The Company has agreed that, prior to
the Effective Time, (i) its operations and business shall be conducted in the
ordinary and usual course and, to the extent consistent therewith, (ii) it shall
use its best reasonable efforts to preserve its business organization intact and
maintain its existing relations and goodwill with customers, suppliers,
distributors, creditors, lessors, employees and business associates, maintain in
effect all existing material qualifications, licenses, permits, approvals and
other authorizations, comply with all applicable Laws, keep available the
services of their officers and employees and maintain satisfactory
relationships with those persons having business relationships with
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them; (iii) promptly upon the discovery thereof notify Parent of the existence
of any breach of any representation or warranty contained in the Merger
Agreement (or, in the case of any representation or warranty that makes no
reference to Material Adverse Effect, any breach of such representation or
warranty in any material respect) or the occurrence of any event that would
cause any representation or warranty contained in the Merger Agreement no
longer to be true and correct (or, in the case of any representation or
warranty that makes no reference to Material Adverse Effect, to no longer be
true and correct in any material respect). Without limiting the generality of
the foregoing, except as otherwise set forth in Section 8.1(a) of the Company
Disclosure Letter, the Company covenants and agrees that, from the date hereof
and prior to the Effective Time (unless Parent shall otherwise approve in
writing, which approval shall not be unreasonably withheld or delayed, and
except as otherwise expressly contemplated by the Merger Agreement or by
Law):(i) it shall not (x) except to the extent required by law or the rules and
regulations of NASDAQ, amend its articles of incorporation or bylaws; (y)
split, combine or reclassify its outstanding shares of capital stock; (aa)
declare, set aside or pay any dividend payable in cash, stock or property in
respect of any capital stock or (bb) repurchase, redeem or otherwise acquire
any shares of its capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital stock (other than
options granted prior to the date hereof, in accordance with their respective
terms as in effect on the date hereof or as contemplated by the Merger
Agreement); (ii) it shall not (x) issue, sell, pledge, dispose of or encumber
any shares of, or securities convertible into or exchangeable or exercisable
for, or options, warrants, calls, commitments or rights of any kind to acquire,
any shares of its capital stock of any class or any voting debt or any other
property or assets (other than shares issuable pursuant to options (whether or
not vested) outstanding on the date hereof under the Company Stock Plan); (y)
lease, license, guarantee, mortgage, pledge, or encumber any other property or
assets which have an aggregate fair market value in excess of $10,000 or incur
or modify any material indebtedness for borrowed money or guarantee any such
indebtedness in an amount in excess of, in the aggregate, $10,000; (z) other
than in the ordinary and usual course of business, transfer, sell or dispose of
any other property or assets, which have an aggregate fair market value in
excess of $10,000 or (aa) by any means, make any significant acquisition of, or
investment in, assets or stock (whether by way of merger, consolidation, tender
offer, share exchange or other activity) of any person in an amount in excess
of, in the aggregate, $10,000; (iii) it shall not terminate, establish, adopt,
enter into, make any new grants or awards under, amend or otherwise modify, any
Compensation and Benefit Plans, or increase the salary, wage, bonus or other
compensation of any employees except for grants or awards or increases under
existing Compensation and Benefit Plans occurring in the ordinary and usual
course of business (which shall include normal periodic performance reviews and
related compensation and benefit increases), annual reestablishment of
Compensation and Benefit Plans and the provision of individual compensation or
benefit plans and agreements for newly hired non-key employees of the Company
hired in the ordinary course of business consistent with past practices to
replace employees leaving the Company or except for actions necessary to
satisfy existing contractual obligations under Compensation and Benefit Plans
or agreements existing as of the date hereof; (iv) it shall not enter into any
transaction involving a merger, consolidation, reorganization, share exchange,
or similar transaction involving, or any purchase of any assets or any
securities of it; (v) it shall not settle or compromise any pending or
threatened litigation, other than settlements which involve solely the payment
of money (without
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admission of liability) not to exceed $100,000 in any one case; (vi) it shall
not assume, guarantee or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person;
(vii) it shall not make or forgive any loans, advances or capital contributions
to, or investments in, any other person in excess of $20,000 in any one case;
(viii) it shall not make any Tax election or settle any Tax liability; (ix) it
shall not waive, amend or allow to lapse any term or condition of any
confidentiality or "standstill" agreement to which the Company is a party,
unless such lapse occurs in accordance with such agreements terms; (x) it shall
not grant or amend any stock related or performance awards except as listed on a
Schedule to the Merger Agreement; (xi) it shall not make any material changes in
the type or amount of their insurance coverage or permit any insurance policy
naming the Company or any Subsidiary as a beneficiary or a loss payee to be
canceled or terminated other than in the ordinary course of business or except
as otherwise provided in the Merger Agreement; (xii) it shall not make any
capital expenditures in the aggregate for the Company in excess of the amounts
specified in the Company's budget for capital expenditures, a true and complete
copy of which was previously delivered to Parent, or otherwise acquire assets
not in the ordinary course of business; (xiii) it shall not, except as may be
required by law or generally acceptable accounting principles and with prior
written notice to Parent, change any material accounting principles or practices
used by the Company; (xiv) it shall not enter into any Contracts for
Derivatives; (xv) it shall not waive, relinquish, release or terminate any right
or claim, including any such right or claim under any material contract or
permit any rights of material value to use any Intellectual Property to lapse or
be forfeited, in each case, except in the ordinary course of business consistent
with the past practice of the Company; (xvi) it shall not take any action to
cause the Shares to be delisted from NASDAQ prior to the completion of the Offer
or (if no Offer is made) the Merger; and (xvii) it will not authorize or enter
into an agreement to do anything prohibited by the foregoing.
No Solicitation. Pursuant to the Merger Agreement, the Company has agreed that
neither it nor any of its officers and directors shall, and that it shall direct
and use its best reasonable efforts to cause its employees, agents and other
representatives (including any investment banker, attorney or accountant
retained by it) (collectively, "Representatives") not to, directly or
indirectly, initiate, solicit, encourage or otherwise facilitate any inquiries
or the making of any proposal or offer with respect to an Acquisition Proposal
(as defined below). The Company also agreed that neither it nor any of its
officers and directors shall, and that it shall direct and use its reasonable
best efforts to cause its and its Subsidiaries' Representatives not to, directly
or indirectly, engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any Person
relating to an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal; provided, however, that
nothing contained in the Merger Agreement shall prevent either the Company or
any of its representatives or the Board of Directors of the Company from (A)
complying with Rule 14e-2 promulgated under the Exchange Act with regard to an
Acquisition Proposal or otherwise complying with the Exchange Act; (B) providing
information in response to a request therefor by a Person who has made an
unsolicited written Acquisition Proposal; (C) engaging in any negotiations or
discussions with any Person who has made an unsolicited Acquisition Proposal or
otherwise facilitating any effort or attempt to implement an Acquisition
Proposal if (i) the Acquisition Proposal is a Superior Proposal (as defined
below) and (ii) the Company's Board of Directors determines,
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upon advice from outside legal counsel to the Company, that the failure to
engage in the negotiations or discussions or provide the information would
result in a breach of the fiduciary duties of the Board of Directors of the
Company under applicable law. The Company has agreed that any information
furnished to any Person in connection with any Acquisition Proposal shall be
provided pursuant to a confidentiality and standstill agreement on customary
terms. Subject to all of the foregoing requirements, the Company will
immediately notify Parent orally and in writing if any discussions or
negotiations are sought to be initiated, any inquiry or proposal is made, or any
information is requested by any Person with respect to any Acquisition Proposal
or which could lead to a Acquisition Proposal and immediately notify Parent of
all material terms of any Acquisition Proposal on a timely, ongoing basis of the
status and content of any discussions or negotiations with any Person.
In the event the Board of Directors of the Company has determined that
a Acquisition Proposal constitutes a Superior Proposal, (i) the Company shall
promptly notify the Parent and (ii) for a period of three business days after
delivery of such notice, the Company and its representatives, if requested by
Parent, shall negotiate in good faith with Parent to make such adjustments to
the terms and conditions of this Agreement as would enable the Company to
proceed with the transactions contemplated hereby on such adjusted terms. After
such three business day period, the Board of Directors of the Company may then
(and only then) withdraw or modify its approval or recommendation of the Merger
and the Merger Agreement and recommend the Superior Proposal.
The Company agrees not to release any Person from, or waive any
provision of, any standstill agreement to which it is a party or any
confidentiality agreement between it and another Person who has made, or who may
reasonably be considered likely to make, a Acquisition Proposal, or who the
Company or any of its Representatives have had discussions with regarding a
proposed, potential or contemplated Company Acquisition Transaction unless the
Company's Board of Directors shall conclude, in good faith, that such action
will lead to a Superior Proposal and after considering applicable provisions of
state law, and upon advice from outside legal counsel to the Company, with
respect to whether such action is required for the Board of Directors to act in
a manner consistent with its fiduciary duties under applicable law.
For purposes of the Merger Agreement, "Acquisition Proposal" means,
with respect to the Company, any inquiry, proposal or offer from any Person
relating to any (A) direct or indirect acquisition or purchase of a business of
the Company or any of its Subsidiaries, that constitutes 25% or more of the
consolidated net revenues, net income or assets of the Company and its
Subsidiaries, (B) direct or indirect acquisition or purchase of 25% or more of
any class of equity securities of the Company or any of its Subsidiaries whose
business constitutes 25% or more of the consolidated net revenues, net income or
assets of the Company and its Subsidiaries, (C) tender offer or exchange offer
that if consummated would result in any person beneficially owning 25% or more
of the capital stock of the Company, or (D) merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its Subsidiaries whose business constitutes 25%
or more of the consolidated net revenues, net income or assets of the Company
and its Subsidiaries. Each of the transactions referred to in clauses (A)-(D) of
the definition of
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Acquisition Proposal, other than any such transaction to which Parent or any of
its Subsidiaries is a party, is referred to as a "Company Acquisition
Transaction"
"Superior Proposal" means any bona fide written offer made by a Person
to acquire, directly or indirectly, for consideration consisting of cash and/or
securities, all of the Shares then outstanding or all or substantially all the
assets of the Company (A) on terms that the Board of Directors of the Company
determines in its good faith judgment (after consultation with a financial
advisor of nationally recognized reputation and taking into account all the
terms and conditions of the offer deemed relevant by such Board of Directors,
including any break-up fees, expense reimbursement provisions, conditions to
consummation, and the ability of the party making such proposal to obtain
financing for such offer) are materially more favorable from a financial point
of view to its stockholders than $12.50 per Share; and (B) that constitutes a
transaction that, in such Board of Directors' judgment, is reasonably likely to
be consummated on the terms set forth, taking into account all legal, financial,
regulatory and other aspects of such proposal.
Except as expressly permitted in the Merger Agreement, neither the
Board of Directors of the Company nor any committee thereof may withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to
Parent, the approval or recommendation by the Board of the Merger Agreement or
the Merger, or approve or recommend, or propose publicly to approve or
recommend, any Acquisition Proposal or Company Acquisition Transaction. The
Company may take and disclose to its shareholders a position contemplated by
Rule 14e-2 promulgated under the Exchange Act. The Company has agreed to
immediately cease and cause to be terminated any existing discussions or
negotiations with any parties conducted prior to the signing of the Merger
Agreement with respect to any Acquisition Proposal.
Indemnification. Parent has agreed that the Articles of Incorporation
and Bylaws shall contain the provisions with respect to indemnification set
forth in Article IV of the bylaws of the Company on the date of this Agreement
and shall provide for indemnification to the fullest extent permitted by and in
accordance with the FBCA, which provisions shall not be amended, repealed or
otherwise modified for a period of six years after the Effective Time (or, in
the case of matters known prior to the Effective Time which have not been
resolved prior to the sixth anniversary of the Effective Time, until such
matters are finally resolved) in any manner that would adversely affect the
rights thereunder of individuals who at any time prior to the Effective Time
were directors or officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, the
transactions contemplated by the Merger Agreement). Following the Effective
Time, Surviving Corporation shall indemnify and hold harmless, to the fullest
extent permitted under applicable law (and Surviving Corporation shall also
advance expenses as incurred to the fullest extent permitted under applicable
law, provided that the person to whom the expenses are advanced provides an
undertaking to repay such advance if it is ultimately determined that such
person is not entitled to indemnification), each present and former director,
officer of the Company (collectively, the "Indemnified Parties") against any
costs or expenses (including attorneys' fees), judgments, fines, losses, claims,
damages or liabilities (collectively, "Costs") incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
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administrative or investigative, arising out of or pertaining to acts or
omissions by them in their capacity as such existing or occurring at or prior to
the Effective Time, including the transactions contemplated by this Agreement.
The Surviving Corporation shall maintain the Company's existing officers' and
directors' liability insurance ("D&O Insurance") until July 31, 2002 and shall
agree to indemnify the directors and officers of Company to the fullest extent
permitted by Florida law for acts or omissions by them in their capacity as such
existing or occurring at or prior to the Effective Time, including the
transactions contemplated by the Merger Agreement.
Shareholder Meeting. The Merger Agreement provides that, if approval or
action in respect of the Merger by the shareholders of the Company is required
by applicable law, the Company, acting through the Board of Directors, shall (i)
call as promptly as practicable following consummation of the Offer, a meeting
of its shareholders (the "Shareholder Meeting") for the purpose of voting upon
the Merger, (ii) hold the Shareholder Meeting as soon as practicable following
the purchase of Shares pursuant to the Offer, and (iii) recommend to its
shareholders the approval of the Merger. At the Shareholders Meeting, Parent and
Offeror shall cause all Shares then owned by them to be voted in favor of
approval and adoption of the Merger. The Merger Agreement provides that,
notwithstanding the foregoing, if Parent, Offeror or any other subsidiary of
Parent shall acquire at least 80% of the outstanding Shares, the parties thereto
shall take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the expiration of the Offer without a
shareholders meeting in accordance with Section 607.1104 of the Florida Law.
TERMINATION.
Termination by Mutual Consent. The Merger Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, by
mutual written consent of the Company, Merger Sub and Parent by action of their
respective Boards of Directors.
Termination by Either Parent or the Company. The Merger Agreement may
be terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the Board of Directors of either Parent or the Company (i) if
any governmental order restraining, enjoining or otherwise prohibiting
consummation of the Offer and/or the Merger shall become final and
non-appealable after the parties have used their respective reasonable best
efforts to have such governmental order removed, repealed or overturned (whether
before or after the approval by the shareholders of the Company) (ii) if the
Offer shall have expired or terminated without any Shares being purchased
therein, although this right to terminate is not be available to any party whose
failure to fulfill any obligation under the Merger Agreement has been the cause
of, or resulted in, the failure of the Merger Sub to purchase Shares in the
Offer; or (iii) if the Effective Time shall not occur by June 30, 2000, unless
the Effective Time shall not have occurred because of a material breach of the
Merger Agreement by the party seeking to terminate the Merger Agreement.
Termination by the Company. The Merger Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, by action
of the Board of Directors of the Company:
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(i) at any time prior to the time Parent, Merger Sub or any of their
affiliates shall purchase Shares pursuant to the Offer, upon three business
days' prior notice to Parent if, as a result of a Superior Proposal, (A) the
Board of Directors shall have concluded in good faith, after considering
applicable provisions of state law and after consultation with outside counsel,
that the failure to accept such Superior Proposal could reasonably be expected
to constitute a breach of its fiduciary duties; (B) the Company shall have
complied with all its obligations under the Merger Agreement; and (C) during the
three business days prior to any such termination, the Company shall, and shall
cause its respective financial and legal advisors to, in good faith, seek to
negotiate with Parent to make such adjustment in the terms and conditions of the
Merger Agreement as would enable the Company to proceed with the transactions
contemplated herein; or
(ii) if, prior to the purchase of Shares pursuant to the Offer, there
has been a material breach or failure to perform by Parent or Merger Sub of any
of their respective material covenants or agreements contained in the Merger
Agreement, which breach or failure to perform is not curable, or if curable, has
not been cured within five days after written notice of such breach or failure
is given by the Company to the party committing such breach or failure, except,
in any case, such breaches or failures which are not reasonably likely to
materially and adversely affect Parents' or Merger Sub's ability to consummate
the Offer or the Merger.
Termination by Parent. The Merger Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by Parent:
(i) if, due to an occurrence that, if occurring after the commencement
of the Offer, would result in a failure to satisfy any of the conditions to the
Offer, Parent, Merger Sub, or any of their affiliates shall have failed to
commence the Offer on or prior to five business days following the date of the
initial public announcement of the Offer; except that Parent may not terminate
under this provision if Parent is in material breach of this Agreement; or
(ii) if, prior to the purchase of Shares pursuant to the Offer, the
Board of Directors of the Company shall have withdrawn, or modified or changed
in a manner adverse to Parent or Merger Sub its approval or recommendation of
the Offer, the Merger Agreement or the Merger or shall have recommended a
Superior Proposal or shall have resolved to do either of the foregoing; or
(iii) if, prior to the purchase of Shares pursuant to the Offer, there
has been a material breach or failure to perform by the Company of any of its
material covenants or agreements contained in this Agreement, which breach or
failure to perform is not curable, or if curable, has not been cured within five
days after written notice of such breach or failure is given by Parent to the
Company.
Effect of Termination and Abandonment. In the event of termination of
the Merger Agreement and the abandonment of the Merger, written notice must be
given to the other party or parties specifying the provision thereof pursuant to
which such termination was made; and the Agreement shall become void and of no
effect with no liability on the part of any party
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thereto (or of any of its directors, officers, employees, agents, legal and
financial advisors or other representatives) except as provided in 10.5(b);
provided, however, (i) no such termination shall relieve any party of any
liability or damages resulting from any fraud or willful breach of the Merger
Agreement and (ii) notwithstanding (i) above, in the event the Merger Agreement
is terminated by Parent because of a willful breach of a representation or
warranty of the Company then the Parent may recover a reimbursement of its
out-of-pocket expenses not to exceed $1,500,000, with such recovery not to limit
the rights of Parent set forth in the following paragraph.
Termination Fees. In the event that (I) (a) an Acquisition Proposal
shall have been made to the Company or any third party shall have publicly
announced an intention (whether or not conditional) to make an Acquisition
Proposal with respect to the Company and thereafter the Merger Agreement is
terminated by the Company or Parent under certain circumstances and (b) the
Person making the Acquisition Proposal which was outstanding at the time of the
termination (the "Acquiring Party") has entered into an agreement with the
Company to consummate such Acquisition Proposal within nine months of such
termination, and such Acquisition Proposal is consummated, or (II) any Person
within nine months of termination of the Merger Agreement has acquired, by
purchase, merger, consolidation, sale, assignment, lease, transfer or otherwise,
in one transaction or any related series of transactions a majority of the
voting power of the outstanding securities of the Company or all or
substantially all of the assets of the Company, then, in the event the
circumstances described in (I) or (II) has occurred then the Company shall
promptly, pay Parent a termination fee of $6,000,000 in same day funds to an
account previously designated by Parent to the Company in writing; provided,
however, that in the event the Company has already reimbursed the out-of-pocket
expenses of Parent pursuant to the last sentence of the preceding paragraph,
then, in such event, the termination fee payable pursuant to this sentence shall
be $6,000,000 less the amount of such reimbursement. The Company's payment of
this termination fee is the sole and exclusive remedy of Parent and Merger Sub
against the Company and its respective directors, officers, employees, agent,
advisors or other representatives in the event the Merger Agreement is
terminated and the termination fee is payable.
Certain Employee Matters. Except for the Company's Stock Option Plan,
Parent agreed that, during the period commencing at the Effective Time and
ending on the first anniversary thereof, the employees of the Company will
continue to be provided with benefits under employee benefit plans that are no
less favorable in the aggregate than the Plans currently provided by the Company
to such employees. Following the Effective Time, Parent shall cause service by
employees of the Company (and any predecessor entities) to be taken into account
for all purposes (including, without limitation, eligibility to participate,
eligibility to commence benefits, vesting, benefit accrual and severance) under
any benefit plans of Parent (including the Surviving Corporation). From and
after the Effective Time, Parent shall (i) cause to be waived any pre-existing
condition limitations under benefit plans of Parent in which employees of the
Company participate and (ii) cause to be credited to any deductible or out of
pocket expense of Parent's plans any deductibles and out-of-pocket expenses
incurred by such employees and their beneficiaries and dependents during the
portion of the calendar year prior to participation in the benefit plans
provided by Parent and its Subsidiaries. Parent shall, and shall cause the
Surviving Corporation to, honor all employee benefit obligations to
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current and former employees under the Compensation and Benefit Plans and all
employee severance plans and all employment or severance agreements entered into
by the Company or adopted by the Board of Directors of the Company prior to the
date of the Merger Agreement.
Amendment. Subject to the provisions of applicable law, at any time
prior to the Effective Time, the parties to the Merger Agreement may modify or
amend the Merger Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties; provided, that in the case of the
Company any such waiver must be approved by a majority of the directors who are
not affiliated with Parent.
Timing. The exact timing and details of the Merger will depend upon
legal requirements and a variety of other factors, including the number of
Shares acquired by Offeror pursuant to the Offer. Although Parent has agreed to
cause the Merger to be consummated on the terms contained in the Merger
Agreement, there can be no assurance as to the timing of the Merger.
The foregoing description of the terms and provisions of the Merger
Agreement is qualified in its entirety by reference to the text of the Merger
Agreement, which is filed as Exhibit (c)(1) to this Statement and is available
for inspection and copying at the principal office of the SEC or may be viewed
and printed from the SEC web site at http://www.sec.gov.
TENDER AND VOTING AGREEMENTS
Concurrently with the execution and delivery of the Merger Agreement,
each of the directors and executive officers of the Company who hold at least 1%
of the outstanding Shares on a fully diluted basis, have entered into the Tender
and Voting Agreement with Purchaser and Parent. Pursuant to the Tender and
Voting Agreement, such directors and officers (the "T&V Shareholders") have
agreed, among other things, to tender promptly the Shares held by them pursuant
to the Offer, and not to withdraw any such Shares, and to various other
provisions described below.
Transfer of the Shares. The Tender and Voting Agreement provides that
during its term, except as otherwise expressly provided therein, each T&V
Shareholder agrees that such T&V Shareholder will not (a) tender into any tender
or exchange offer or otherwise sell, transfer, pledge, assign, hypothecate or
otherwise dispose of, or encumber with any lien, any of the Shares, except for
transfers by operation of Law; provided that any such transferee shall be bound
by the terms of the Tender and Voting Agreement, (b) acquire any Shares
(otherwise than in connection with a transaction in connection with adjustments
or by exercising any of options held by such T&V Shareholder), (c) deposit the
Shares into a voting trust, enter into a voting agreement or arrangement with
respect to the Shares or grant any proxy or power of attorney with respect to
the Shares, (d) enter into any contract, option or other arrangement (including
any profit sharing arrangement) or undertaking with respect to the direct or
indirect acquisition or sale, transfer, pledge, assignment, hypothecation or
other disposition of any interest in or the voting of any Shares or any other
securities of the Company, (e) exercise any rights (including, without
limitation, under Section 607.1302 of Florida Law) to demand appraisal of any
Shares which may arise with respect to the Merger, or (f) take any other
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action that would in any way restrict, limit or interfere with the performance
of such T&V Shareholder's obligations under such Agreement or the transactions
contemplated thereby or which would otherwise diminish the benefits of the
Tender and Voting Agreement to Parent or Offeror.
Tender of Shares. The Tender and Voting Agreement provides that each T&V
Shareholder agrees that such T&V Shareholder will validly tender (or cause the
record owner of such shares to validly tender) and sell (and not withdraw)
pursuant to and in accordance with the terms of the Offer not later than the
fifth business day after commencement of the Offer (or the earlier of the
expiration date of the Offer and the fifth business day after such Shares are
acquired by such T&V Shareholder), or, if the T&V Shareholder has not received
the Offer documents by such time, within two business days following receipt of
such documents, all of the then outstanding Shares beneficially owned by such
T&V Shareholder (including the Shares outstanding as of the date of the Merger
Agreement and shares issued following the exercise (if any) of the T&V
Shareholder's Options.
Representations and Warranties. Under the Tender and Voting Agreement,
the T&V Shareholders made customary representations and warranties to Parent and
Offeror, including with respect to their authority to enter into and perform
their obligations under the Tender and Voting Agreement, the due execution and
delivery by the T&V Shareholders of the Tender and Voting Agreement and their
good title to all of the Shares, free and clear of all encumbrances.
Each of Parent and Purchaser has also made customary representations and
warranties under the Tender and Voting Agreements, including with respect to
Parent's and Purchaser's authority to enter into and perform its obligations
under the Tender and Voting Agreement, and the due execution and delivery by
Parent and Purchaser of the Tender and Voting Agreement.
Termination. The Tender and Voting Agreement will terminate upon the
earliest of: (i) as to any T&V Shareholder upon the purchase of all the Shares
beneficially owned by such Shareholder pursuant to the Offer in accordance with
the Tender and Voting Agreement, (ii) the Effective Time; or (iii) termination
of the Merger Agreement in accordance with its terms.
The foregoing is a summary of certain provisions of the Tender and Voting
Agreement, copies of which have been filed as exhibits to the Schedule 14D-1 and
which are available in the manner set forth in Section 8. Such summary is
qualified in its entirety by reference to the text of such agreement.
AMENDMENTS TO EMPLOYMENT AGREEMENTS AND SEVERANCE ARRANGEMENTS WITH
NAMED EXECUTIVE OFFICERS
In connection with the Offer, the Purchaser requested that the Company
enter into Employment Agreement Amendments with Mr. Edmond A. Richards and Ms.
Stacy L. Wagner. The Employment Agreement Amendments shall only become effective
upon the Closing of the Offer. The amendments are substantially similar in that
each Employment Agreement Amendment extends the term of each Employment
Agreement for a period of three
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(3) years following the Closing of the Offer. The Employment Agreement
Amendments also extended the non-compete period such that each of the named
Executive Officers will be prohibited from competing with Plasma-Therm for a
period of two (2) years following the termination of the Employment Agreements,
regardless of the reason for such termination.
The Company and Mr. Ronald S. Deferrari, the current President of the
Company have entered into a Termination, Settlement and Mutual Release Agreement
(the "Departure Agreement"). The Departure Agreement will only become effective
and Mr. Deferrari will leave the Company's employment and give up his rights
under his existing employment agreement upon the Closing of the Offer. Pursuant
to the Departure Agreement, Mr. Deferrari will be paid the sum of One Million
Dollars ($1,000,000) payable in one lump sum due one day after Closing of the
Offer. Additionally, the term of Mr. Deferrari's non-compete provision will be
extended to cover the two (2) year period following the Closing of the Offer.
CONFIDENTIALITY AGREEMENT
On September 1, 1999, prior to receiving confidential information
relating to the Company, an Affiliate (as that term is defined in the
Confidentiality agreement) of Parent and the Company entered into a
confidentiality agreement (the "Confidentiality Agreement"). Pursuant to the
Confidentiality Agreement, the Affiliate of Parent agreed that it would treat
certain information furnished to it by the Company as confidential. The
Confidentiality Agreement also included a Standstill Agreement pursuant to which
the parties agreed that, for a period of six months following the date of the
Agreement, each of the parties and its affiliates (as defined in Rule 12b-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act), will
not (and will not assist or encourage others to) directly or indirectly, without
the written consent of the other party: (a) acquire or agree, offer, seek or
propose to acquire, or cause to be acquired, ownership (including but not
limited to, beneficial ownership as defined in Rule 13d-3 under the Exchange
Act) of any of the other party's assets or businesses or any securities issued
by the other party, or any bank debt, claims or other obligations of the other
party, or any rights or options to acquire such ownership, directly or from a
third party, or (b) seek or propose to influence or control the management or
policies of the other party or to obtain representation on the other's board of
directors, or solicit, participate in the solicitation of, any proxies or
consents with respect to any securities of the other, or make any public
announcement with respect to any of the foregoing or request permission to do
any of the foregoing, (c), enter into any discussions, negotiations,
arrangements or understandings with any third party with respect to the
foregoing; or (d) seek or request permission or participate in any effort to do
any of the foregoing or make or seek permission to make any public announcement
with respect to any of the foregoing.
A copy of the Confidentiality Agreement is attached hereto as Exhibit
(c)(5) and is incorporated herein by reference and the foregoing description is
qualified in its entirety by reference to the Confidentiality Agreement.
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ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) Recommendation of the Board of Directors; Background of the
Transaction
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Company Board, at a meeting held on December 20, 1999, determined
unanimously that the Offer and the Merger are fair to, and in the best interests
of, the Company and its shareholders and recommends that shareholders of the
Company accept the Offer and tender their Shares to Purchaser pursuant to the
Offer. A letter to the shareholders of the Company communicating the
recommendation of the Company Board is attached hereto as Exhibit (a)(2) and is
incorporated herein by reference.
BACKGROUND OF THE TRANSACTION
On or about September 28, 1998, Ronald S. DeFerrari, the Company's
current President, was requested by the Board of Directors of the Company (the
"Company Board") to make a presentation on the strategic direction of the
Company, proposed partnerships and/or strategic alliances. The discussions were
centered around an acquisition strategy, with the goal of the Company to become
a one stop shop, capable of supplying a complete set of plasma based technology,
processes and platforms to all of its customers in its specific target markets.
Management and the Company Board believed that it would be in the best interest
of the Company to retain a financial advisor, and subsequently retained CIBC
World Markets Corp. ("CIBC World Markets"), to assist the Company in its
exploration of expansion strategies and evaluation of potential acquisitions and
strategic partnerships.
During late 1998 and early 1999, the Company held preliminary
discussions with three companies for the purpose of investigating a merger
transaction whereby the Company would remain as the surviving entity. During the
first half of 1999, the Company suspended these discussions as a result of the
downturn in the semiconductor industry, echoed by the downturn in the Company's
markets served.
On or about August 1999, the President and management of the Company
revisited the possibility of a business combination for the Company. The Company
had received inquiries from companies indicating interest in a strategic
transaction with the Company in which the surviving corporation would not be the
Company. As a result of these inquiries, management requested that CIBC World
Markets assist the Company in establishing a process to solicit third party
indications of interest in a possible transaction with the Company. On September
23, 1999, guidelines for submitting proposals were distributed to potential
parties, which set a deadline for submission of such proposals of September 27,
1999. Prior to requesting indications of interest, the Company entered into
confidentiality agreements with each party involved to permit the exchange of
confidential information between the parties for the purpose of evaluating the
merits of a potential transaction.
During a meeting of the Company Board held on September 15, 1999,
Ronald S. DeFerrari reviewed the Company's activities with respect to
investigating a possible business combination. The Company Board discussed at
length the possibilities for maximizing long
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and short-term value for the Company's shareholders, and decided to proceed with
the process of soliciting third party indications of interest and investigating
a possible business combination.
By September 27, 1999, two companies submitted indications of interest.
A third indication of interest was received on October 4, 1999 from OBH which
previously had requested and received from the Company an extension of the
September 27, 1999 deadline until October 4, 1999.
On October 5, 1999, the Company Board met with the Company's senior
management and legal and financial advisors and discussed the indications of
interest received. Company "A" proposed a fixed purchase price, payable in
Company "A" shares. Company "B" proposed a fixed range of purchase prices
payable in Company "B" shares. OBH proposed a cash transaction for between
$65 million and $80 million. After review and discussion, the Company Board
directed CIBC World Markets to inform OBH that it would have to increase its
interest level in order to continue to participate in the process. The Company
Board also directed its advisors to request that Company "A" and Company "B"
revise their proposals and increase their proposed prices. Furthermore, the
financial advisors were directed to request that Company "A" and Company "B"
resubmit their proposals to include an exchange ratio, subject to collars.
On October 8, 1999, Company "A" and Company "B" resubmitted their
proposals. In addition, both Company "A" and Company "B" converted their
proposals from a fixed price to an exchange ratio subject to collars.
During the two-week period beginning October 18, 1999, Company "A" and
Company "B" were permitted to conduct a due diligence investigation of the
Company. During the same period, the Company also conducted due diligence on
Company "A" and Company "B." The Company's President, COO, and one member of the
Company's Board conducted strategic due diligence, focusing on the synergies of
the combination of the two companies and sales and marketing strategies, whereas
the Company's CFO and accounting advisors conducted financial and tax due
diligence.
On October 25, 1999, the Company's legal counsel forwarded a draft form
of merger agreement to both Company "A" and Company "B." On November 4, 1999,
both companies made general, but not specific, comments on the form of merger
agreement.
On November 3, 1999, Company "B" increased and changed its bid to a
fixed exchange ratio with a downside collar protection for the Company. On
November 4, 1999, Company "A" also increased its bid, keeping the form of its
bid with an exchange ratio with collars.
On November 5, 1999, representatives of OBH and officers of Company met in St.
Petersburg.
On November 8, 1999, the Company Board met with the Company's senior
management, accountants and legal and financial advisors to review Company "A's"
and
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Company "B's" revised proposals and general comments to the Company's form of
merger agreement. At the meeting, CIBC World Markets reviewed with the Company
Board in detail the terms of the resubmitted proposals of Company "A" and
Company "B." The Company's President, COO, CFO and accounting firm reviewed with
the Company Board the results of their due diligence activities.
Also, on November 8, 1999, OBH resubmitted its bid, increasing its cash
offer for 100% of the outstanding shares of the Company to $120 million (or
approximately $10.00 per Share). In addition, the proposal included an
alternative structure which would result in a merger involving certain U.S.
operations of OBH in exchange for a combination of cash and stock in the
surviving entity. After lengthy discussions regarding each offer, the Company
Board concluded that in order to continue to participate in the process, OBH
would have to further increase its cash offer and clarify certain elements of
the alternative structure reflected in its revised proposal. The Company Board
instructed CIBC World Markets to inform OBH of its decision. After review of the
general comments made by Company "A" and Company "B" to the Company's form of
merger agreement, the Company Board also determined that insufficient
information had been provided to select a proposal and directed CIBC World
Markets to inform Company "A" and Company "B" to provide detailed mark-ups of
the Company's form of merger agreement. In addition, the Company Board
instructed CIBC World Market to request that Company "A" resubmit its proposal
to reflect a fixed exchange ratio without collars.
Between November 8 and November 18, the Company received detailed
mark-ups to the Company's form of merger agreement from Company "A" and Company
"B."
On November 16, 1999, Company "A" resubmitted its proposal with a fixed
exchange ratio without collars.
On November 17, 1999, executive management of OBH and the Chairman and
one additional member of OBH's board met with the Company at the Company's
offices to further discuss a proposed transaction with the Company.
Presentations were given by both OBH and the Company.
On November 18 , 1999, the Company Board met with the Company's senior
management and legal and financial advisors to review the current status of
negotiations. At the meeting, the Company Board reviewed with CIBC World Markets
and management the revised terms of the proposals submitted by Company "A" and
Company "B." Management recommended that the Company Board proceed with
negotiations with Company "B" in light of, among other things, the increased
value of Company "B's" offer as a result of increases in the per share market
price of Company "B's" stock (Company "A's" stock had increased, but at a much
lower rate), the relative size of each company, and the synergies associated
with the lines of business of each company. After lengthy discussion and careful
review of management's recommendation, the Company Board directed management to
proceed with the negotiations of a proposed transaction with Company "B" and to
inform Company "A" of its decision.
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On November 18, 1999, as instructed by the Company Board, CIBC World
Markets and the Company's President informed Company "A" of the Company's
decision to move forward with another party.
On November 19, 1999, the Company received a verbal indication from OBH
that it would be willing to increase its cash offer and, on November 22, 1999,
received a written offer from OBH of $11.25 per Share in cash. The Company Board
directed CIBC World Markets to inform OBH that its offer was still too low and
that the Company Board had decided to move forward with another party.
On November 24, 1999, the Company received a letter from Company "B's"
CEO suggesting that it would be difficult for either company to be in a position
to execute a definitive agreement by December 2, 1999 and requesting that
Company "B" and the Company continue their negotiations. Negotiations with
Company "B" on the proposed merger agreement continued.
On November 30, 1999, OBH sent a letter to the Company stating that it
was prepared to increase its proposed cash offer to $12.50 a Share.
On December 2, 1999, the Company Board met with the Company's senior
management and legal and financial advisors to review the current status of
negotiations with Company "B" and to review OBH's increased cash offer. At this
meeting, the Company Board reviewed with CIBC World Markets a comparison of the
proposals of Company "B" and Parent in light of the letter received from OBH.
The Company's legal advisors then updated the Company Board as to the
status of the Company's merger agreement negotiations with Company "B." They
informed the Company Board that there remained several significant outstanding
business issues with respect to, among other things, termination fees, pooling,
materiality qualifiers, and the operations of the surviving corporation after
the merger. In addition, the CFO informed the Company Board that Company "B" was
still in the process of completing due diligence, and that there were open
issues related to their due diligence.
The CFO then presented to the Company Board the increased cash offer
from OBH. The CFO also informed the Company Board that OBH had requested an
extension until December 16, 1999 to complete any remaining due diligence and to
negotiate a definitive agreement. After lengthy discussion, the Company Board
concluded that a definitive agreement with Company "B" could not be reached
quickly given the open issues. As a result, the Company Board determined to
grant OBH an extension until December 16, 1999, contingent upon receiving
written confirmation that OBH's board of directors had approved Parent's revised
cash offer, and to conduct parallel negotiations with OBH and Company "B."
Upon the conclusion of the Company Board meeting on December 2, 1999,
the Company's CEO and Chairman and President informed OBH of its intention to
proceed with parallel negotiations with OBH and another party.
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On or about December 2, 1999, the Company's CEO informed the CEO of
Company "B" that the Company Board could not approve a definitive agreement with
Company "B" as a result of the various open issues. In addition, he informed the
CEO that the Company had received an unsolicited increased offer from another
party, which the Company Board had directed management to pursue until December
16, 1999. The CEO of Company "B" agreed to continue to negotiate the outstanding
issues in the proposed merger agreement with the Company until December 17,
1999, but indicated that if a definitive agreement were not executed by that
time, Company "B" would rescind its offer. The CEO followed up this conversation
in a letter addressed to the Company's CEO dated December 10, 1999.
On December 4, 1999, the Company received written confirmation that
OBH's board of directors had confirmed OBH's increased cash offer. The
letter also stated that OBH's board of directors would meet on December 20,
1999 for final approval of the transaction.
For the following two weeks, negotiation of a definitive agreement was
ongoing with both Company "B" and OBH. On December 15, 1999, the CEO and CFO
of the Company had a conference call with Company "B," at which time all
remaining open issues related to the proposed merger agreement were resolved
with the exception of pooling issues.
During the same two-week period, the Company's management received an
unsolicited letter from Company "D" indicating that it was aware that the
Company was in the process of considering certain proposals regarding a
potential business combination. Company "D" was not originally invited to submit
an indication of interest because it was privately held at the time and, in the
Company's view, did not compare favorably from a financial standpoint with other
potential partners. However, because Company "D" recently had become a publicly
traded company, the Company's management immediately contacted the Company Board
and its legal and financial advisors to discuss the letter. After consideration
of a financial comparison to Company "B" and OBH, the Company Board decided that
it would materially jeopardize the potential transactions with Company "B" and
OBH if the Company were to commence negotiations with Company "D" at that late
date.
On December 17, 1999, the Company Board met with the Company's senior
management and legal and financial advisors to review the status of negotiations
with Company "B" and OBH, which negotiations had been substantially completed.
The Company's legal counsel reviewed for the Company Board the major points in
each definitive agreement, noting (i) that the transaction with Company "B" was
subject to approval by its shareholders and that there was no guarantee that
such approval would be obtained and (ii) that the poolability of a transaction
with Company "B" was still open. The Company Board withheld its decision to
select a partner until December 20, 1999 for a number of reasons, including in
order to allow the Company Board time to read in detail both agreements over the
weekend. After the Company Board meeting, the CFO contacted the CFO of Company
"B" to inquire about the pooling issue and was informed that the pooling issue
had still not been resolved.
Also on December 17, 1999, following the Company Board meeting, the CEO
informed the CEO of Company "B" that the Company's decision had been delayed
until
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December 20, 1999. The CEO of Company "B" agreed to extend the deadline
for its offer until December 20, 1999.
On December 20, 1999, the Company Board met with the Company's senior
management and legal and financial advisors to review the status of negotiations
with Company "B" and OBH. Management informed the Company Board that the
pooling issues with Company "B" were still not resolved. The Company Board also
was informed that the board of directors of OBH had approved and authorized
the execution and delivery of the proposed merger agreement. At this meeting,
CIBC World Markets reviewed with the Company Board its financial analysis of
Parent's offer and delivered its opinion as to the fairness, from a financial
point of view, of the $12.50 per Share cash consideration to be received by the
holders of Shares (other than Parent and its affiliates) pursuant to the Merger
Agreement. After full review and discussion, the Company Board authorized the
execution and delivery of the Merger Agreement with Parent.
On December 20, 1999, the Merger Agreement was executed and OBH and the
Company publicly announced the Offer and Merger.
(b) Reasons for the Recommendation
In reaching the recommendation referred to in Item 4(a), the Company
Board took into account numerous factors, including but not limited to the
following:
1. The familiarity of the Company Board with the financial
condition, results of operations, competitive position, business and
prospects of the Company, as reflected in the Company's historical and
projected financial information, current economic and market conditions
and the nature of the industry in which it operates.
2. The Company's prospects if it were to remain independent,
including the risks of competing against companies which have far
greater resources, distribution capacity, product offerings and market
reach than the Company.
3. The historical market prices of, and recent trading
activity in, the Shares, particularly the fact that the Offer and the
Merger will enable the shareholders of the Company to realize a premium
of approximately 33% over the closing price of the Shares on the last
trading day prior to the public announcement of the Merger Agreement on
December 20, 1999 and a premium of approximately 56% to the closing
price of the Shares thirty (30) days preceding the date of the Merger
Agreement.
4. The fact that the Offer and the Merger provides for a
prompt cash tender offer for all Shares to be followed by a merger for
the same consideration.
5. The opinion of CIBC World Markets dated December 20, 1999
to the effect that, as of such date and based upon and subject to
certain matters stated in such opinion, the $12.50 per Share cash
consideration to be received in the Offer and the Merger by holders of
Shares (other than Parent and its affiliates) was fair, from a
financial point of view, to such holders. The full text of the written
opinion dated December 20, 1999 of
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CIBC World Markets, which sets forth the assumptions made, matters
considered and limitations on the review undertaken, is attached hereto
as Exhibit (a)(1) and is incorporated herein by reference. The opinion
of CIBC World Markets is directed only to the fairness, from a
financial point of view, of the $12.50 per Share cash consideration to
be received in the Offer and the Merger by holders of Shares (other
than Parent and its affiliates) and is not intended to constitute, and
does not constitute, a recommendation as to whether any stockholder
should tender Shares pursuant to the Offer. HOLDERS OF SHARES ARE URGED
TO READ SUCH OPINION CAREFULLY IN ITS ENTIRETY.
6. The financial and other terms and conditions of the Offer,
the Merger and the Merger Agreement including, the terms and conditions
of the Merger Agreement, including (i) the provision permitting the
Company Board to amend or withdraw its recommendation made above, if it
determines that it is consistent with its fiduciary duties to do so,
(ii) the provision permitting the Company Board to terminate the Merger
Agreement consistent with such fiduciary duties and the terms of the
Merger Agreement, (iii) the provision which, while prohibiting the
Company and its officers, directors and agents from directly or
indirectly initiating, soliciting, encouraging or otherwise
facilitating any Acquisition Proposal, permits the Company and its
officers, directors and agents, to the extent that the Company Board
had determined that it would be a breach of its fiduciary duties to not
do so, to engage in negotiations or discussions concerning, or provide
any information, to any person relating to an Acquisition Proposal, and
(iv) the amount of the Termination Fee and the circumstances under
which it would become payable.
7. The fact that the obligations of Parent and Purchaser to
consummate the Offer and the Merger pursuant to the terms of the Merger
Agreement are not conditioned upon obtaining financing and that Parent
and Purchaser have represented in the Merger Agreement that they will
have the funds necessary to consummate the Offer and the Merger.
8. The fact that the conditions to the stock merger proposed
by Company "B" (including the pooling condition and the condition
requiring approval by Company "B's" shareholders) made it a more
difficult transaction to consummate.
The Company Board did not assign relative weights to the factors or
determine that any factor was of particular importance. Rather, the Company
Board viewed their position and recommendation as being based on the totality of
the information presented to and considered by it.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The Company retained CIBC World Markets to act as its exclusive
financial advisor in connection with the Offer and the Merger. Pursuant to the
terms of its engagement, the Company has agreed to pay CIBC World Markets for
its services upon completion of the Offer and the Merger an aggregate fee of
approximately $1.7 million. The Company also has agreed to reimburse CIBC World
Markets for its reasonable out-of-pocket expenses, including
20
<PAGE> 22
reasonable fees and disbursements of legal counsel, and to indemnify CIBC World
Markets and related parties against certain liabilities, including liabilities
under the federal securities laws, arising out of its engagement. In the
ordinary course of business, CIBC World Markets and its affiliates may actively
trade securities of the Company and affiliates of Parent for their own account
and for the accounts of customers and, accordingly, may at any time hold a long
or short position in such securities.
Except as disclosed herein, neither the Company nor any person acting
on its behalf currently intends to employ, retain or compensate any other person
to make solicitations or recommendations to security holders on its behalf
concerning the Offer or the Merger.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) On November 22, 1999, Mr. Gianoplus purchased 5,000 Shares at a
price of $3.60 per Share and 5,000 Shares at a price of $3.75 per Share pursuant
to previously granted options to purchase Shares. Except as set forth in this
Item 6, no transactions in the Shares have been effected during the past 60 days
by the Company or, to the best of the Company's knowledge, by any executive
officer, director, affiliate or subsidiary of the Company.
(b) To the best of the Company's knowledge, except for Shares the sale
of which may trigger liability for the holder(s) under Section 16(b) of the
Exchange Act each executive officer, director and affiliate of the Company
currently intends to tender all Shares to the Purchaser over which he or she has
sole dispositive power as of the expiration date of the Offer.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as set forth in this Schedule 14D-9 and the Merger
Agreement, no negotiation is being undertaken or is underway by the Company in
response to the Offer which relates to or would result in (i) an extraordinary
transaction, such as a merger or reorganization, involving the Company; (ii) a
purchase, sale, or transfer of a material amount of assets by the Company; (iii)
a tender Offer for or other acquisition of securities by or of the Company; or
(iv) any material change in the present capitalization or dividend policy of the
Company.
(b) Except as set forth in this Schedule 14D-9 and the Merger
Agreement, there are no transactions, resolutions of the Company Board,
agreements in principle, or signed contracts in response to the Offer that
relate to or would result in one or more of the events referred to in Item 7(a)
above.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
CERTAIN RELATIONSHIPS
Mr. Richard T. Heglin was the former President of Leybold Semiconductor
Vacuum Systems, a Division of Leybold Vakuum GMBH of Cologne, Germany until
April 1999. During calendar year 1998, Mr. Heglin was also President of Balzers
and Leybold Taiwan,
21
<PAGE> 23
located in Hsinchu, R.O.C., and has been with the company for more than five
years. Each of the foregoing entities is affiliated with Parent and Purchaser.
ANTITRUST
Under the HSR Act, and the rules that have been promulgated thereunder
by the Federal Trade Commission (the "FTC"), certain acquisition transactions
may not be consummated unless certain information has been furnished to the
Antitrust Division of the United States Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied. The acquisition of Shares by Purchaser pursuant to the Offer is
subject to such requirements.
Pursuant to the requirements of the HSR Act, Parent and the Company
intend to file the required Notification and Report Forms (the "Forms") with the
Antitrust Division and the FTC as soon as reasonably practicable. The statutory
waiting period applicable to the purchase of Shares pursuant to the Offer is to
expire at 11:59 PM., New York City time, on the fifteenth day after Parent has
filed its Form. However, prior to such date, the Antitrust Division or the FTC
may extend the waiting periods by requesting additional information or
documentary material relevant to the acquisition. If such a request is made, the
waiting period will be extended until 11:59 PM., New York City time on the tenth
day after substantial compliance by the Parent with such request. Thereafter,
such waiting periods can be extended only by court order. A request is expected
to be made pursuant to the HSR Act for early termination of the applicable
waiting period. There can be no assurance, however, that the waiting period will
be terminated early.
The Antitrust Division and the FTC frequently scrutinize the legality
under the antitrust laws of transactions. At any time before or after the
consummation of any such transaction, the Antitrust Division or the FTC could,
notwithstanding termination of the waiting period, take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Shares pursuant to the Offer or
seeking divestiture of the Shares so acquired or divestiture of substantial
assets of the Purchaser or the company. Private parties may also bear legal
actions under the antitrust laws. There can be no assurance that a challenge to
the Offer on antitrust grounds will not be made, or if such a challenge is made,
what the result will be.
EXON-FLORIO AMENDMENT
The Exon-Florio amendment to Section 721 of the Defense Production Act
of 1950 ("Exon-Florio Amendment") applies to all acquisitions proposed or
pending on or after August 23, 1988, by or with foreign persons which could
result in foreign control of persons engaged in interstate commerce in the
United States. The Exon-Florio Amendment empowers the President of the United
States to prohibit or suspend mergers, acquisitions or takeovers by or with
foreign persons if the President finds, after investigation, credible evidence
that the foreign person might take action that threatens to impair the national
security of the United States and that other provisions of existing law do not
provide adequate and appropriate authority to protect the national security.
22
<PAGE> 24
The President has designated the Committee on Foreign Investment in the
United States ("CFIUS") as the agency authorized under the Exon-Florio Amendment
to receive notices and other information and to conduct a review process which
consists of a determination whether an investigation should be undertaken and
making any such investigation. Any determination by CFIUS that an investigation
is called for must be made within thirty days after its acceptance of written
notification concerning a proposed transaction. In the event that CFIUS
determines to undertake an investigation, such investigation must be completed
within forty-five days after such determination. Upon completion or termination
of any such investigation, CFIUS must report to the President and present its
recommendation. The President then has fifteen days in which to suspend or
prohibit the proposed transaction or to seek other appropriate relief. In order
for the President to exercise his authority to suspend or prohibit a proposed
transaction, the President must make two findings: (i) that there is credible
evidence that leads the President to believe that the foreign interest
exercising control might take action that threatens to impair national security,
and (ii) that provisions of law other than the Exon-Florio Amendment and the
International Emergency Economic Powers Act do not in the President's judgment
provide adequate and appropriate authority for the President to protect the
national security in connection with the acquisition. Such findings are not
subject to judicial review. If the President makes such findings, he may take
action for such time as he considers appropriate to suspend or prohibit the
relevant acquisition. The President may direct the Attorney General to seek
appropriate relief, including divestment relief, in the District Courts of the
United States in order to implement and enforce the Exon-Florio Amendment. The
Exon-Florio Amendment does not obligate the parties to a proposed acquisition to
notify CFIUS of a proposed transaction. However, if notice of a proposed
acquisition is not submitted to CFIUS, then the transaction remains indefinitely
subject to review by the President under the Exon-Florio Amendment, unless it is
determined that CFIUS does not have jurisdiction over the transaction.
The Purchaser and the Company will make a filing under the Exon-Florio
Amendment. There can be no assurance that CFIUS will not determine to conduct an
investigation of the proposed acquisition of the Company and, if an
investigation is commenced, there can be no assurance regarding the outcome of
such investigation. If the results of such investigation are adverse to the
Purchaser, the Purchaser is not obligated to accept for payment or pay for any
Shares tendered pursuant to the Offer.
STATE TAKEOVER LAWS
The Company is incorporated under the laws of the State of Florida. The
Florida Business Corporation Act (the "FBCA") contains certain provisions
relating to "affiliated transactions" which regulate, among other things,
certain business combinations, including mergers and consolidations, involving a
Florida corporation with any person who is the beneficial owner of more than 10
percent of the outstanding voting Shares of such corporation (an "Interested
Shareholder"). Under Section 607.0901 of the FBCA (the 'Affiliated Transactions
Statute"), with certain exceptions, a corporation incorporated under the laws of
Florida shall not engage in such a transaction with an Interested Shareholder
unless the transaction is approved by the holders of two-thirds of the voting
Shares other than the Shares owned by the Interested Shareholder. Such
exceptions include transactions approved by a
23
<PAGE> 25
majority of the corporation's directors who are not affiliated or associated
with the Interested Shareholder. At a meeting held on December 20, 1999, the
Company Board none of the members of which are affiliated or associated with
Purchaser or Parent, unanimously approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, and
determined that each of the Offer and Merger are fair to and in the best
interests of the shareholders of the Company.
The FBCA also contains provisions relating to acquisitions of "control
Shares," which is defined as Shares that entitle a person to exercise more than
certain specified proportions of the voting power of a public corporation
incorporated under the laws of Florida (commencing with the acquisition of 20%
or more of the voting Shares of such corporation). Section 607.0902 of the FBCA
(the "Control Share Acquisitions Statute") limits the voting rights of control
Shares acquired in certain types of acquisitions (a "control-share acquisition")
unless the acquisition of the control Shares has been approved by the board of
directors of such corporation or certain other statutory conditions have been
met. At the meeting of the Company Board held on December 20, 1999, the Company
Board unanimously approved the acquisition of the Shares pursuant to the Merger
Agreement (including the Offer and the Merger).
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. Description
(a)(1) Opinion of CIBC World Markets Corp., dated December 20, 1999*
(a)(2) Letter to Shareholders, dated as of December 27, 1999*
(c)(1) Agreement and Plan of Merger dated as of December 20, 1999,
among Company, Parent and Purchaser
(c)(2) Form of Amendment to Employment Agreement between the Company
and certain named Executive Officers
(c)(3) Confidentiality Agreement, between Parent and the Company,
dated as of September 1, 1999
(c)(4) Termination, Noncompetition and Mutual Release Agreement,
between the Company and Ronald S. Deferrari, dated December
20, 1999.
(c)(5) Tender and Voting Agreement among Parent, Purchaser and the
Shareholders listed on Schedule A thereto, dated as of
December 20, 1999
- --------------------
*Included in the Schedule 14D-9 mailed to the Company's shareholders.
24
<PAGE> 26
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 27, 1999
PLASMA-THERM, INC.
By: /s/ Ronald H. Deferrari
-------------------------------------
Name: Ronald H. Deferrari
Title: Chairman of the Board and
Chief Executive Officer
25
<PAGE> 27
ANNEX I
INFORMATION STATEMENT PURSUANT TO SECTION 14(F)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER
GENERAL
This Information Statement is being mailed on or about December 27, 1999,
as part of the Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") of Plasma-Therm, Inc., a Florida corporation (the "Company"),
with respect to the tender offer (the "Offer") by Volcano Acquisition Corp.
("Purchaser"), a Florida corporation and a wholly-owned subsidiary of
Oerlikon-Buhrle USA, Inc., a Delaware corporation ("Parent"), which is a
wholly-owned subsidiary of Oerlikon-Buhrle Holding AG ("OBH") to the holders of
record of the issued and outstanding voting common stock, par value $0.01 per
share, of the Company ("Shares"). Capitalized terms used and not otherwise
defined herein shall have the meaning set forth in the Schedule 14D-9. This
Information Statement is being distributed in connection with the possible
election of persons designated by Parent to a majority of the seats on the
Company Board. The tender Offer is being made by Purchaser for all of the
outstanding Shares at a price of $12.50 per Share net to the Seller in cash,
pursuant to the terms of the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of December 20, 1999, by and among the Company, Parent and
Purchaser. The Merger Agreement provides that, subject to the terms and
conditions of the Merger Agreement, following the purchase of Shares pursuant to
Offer, at the effective time of the Merger, the Purchaser will be merged with
and into the Company, and the Company will be the surviving corporation and
become a wholly-owned subsidiary of the Parent.
If requested by Parent, the Company shall to the extent permitted by law,
promptly following the purchase by Merger Sub of Shares pursuant to the Offer in
accordance with the terms hereunder, take, at its expense, all actions necessary
(including calling a special meeting of the Board of Directors of the Company
or, only if necessary, the shareholders of the Company for this purpose) to
cause natural Persons designated by Parent to become directors of the Company so
that the total number of such natural Persons equals that number of directors,
rounded up to the next whole number, which represents the product of (x) the
total number of directors on the board of directors of the Company multiplied by
(y) the percentage that the number of Shares so accepted for payment plus any
shares beneficially owned by Parent or its affiliates on the date hereof bears
to the number of Shares outstanding at the time of such acceptance for payment;
provided, however, that prior to the Effective Time the total number of
directors designated by Parent will not exceed 75% of the Board of Directors of
the Company. At such time, the Company shall also cause persons designated by
Parent to constitute the same percentage (rounded up to the next whole number)
as is on the Company's Board of Directors of (i) each committee of the Company's
Board of Directors; (ii) each board of directors (or similar body) of each
Subsidiary of the Company, and (iii) each committee (or similar body) of each
such board. In furtherance thereof, the Company will increase the size of the
board of directors of the Company, or use its best efforts to secure the
resignation of
<PAGE> 28
directors, or both, as is necessary to permit Parent's designees to be elected
to the board of directors of the Company; provided, however, that prior to the
Effective Time, the board of directors of the Company shall always have at least
three members who are neither officers of Parent nor designees, shareholders or
affiliates of Parent.
This Information Statement is required by Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder. You are urged to read this
Information Statement carefully. You are not, however, required to take any
action in connection with this Information Statement.
The Offer commenced on December 27, 1999 and is scheduled to expire at
12:00 midnight, New York City time, on January 25, 2000, at which time, if all
conditions to the Offer have been satisfied or waived and certain other
circumstances do not exist, Purchaser will purchase all of the Shares validly
tendered pursuant to the Offer and not withdrawn.
The information contained in this Information Statement concerning
Purchaser, Parent and the Acquisition Designees (as defined below) has been
furnished to the Company by Parent, and the Company assumes no responsibility
for the accuracy or completeness of any such information.
At the close of business on December 20, 1999, there were 11,252,311
issued and outstanding Shares, which is the only class of securities the Company
has outstanding. Each Share entitles its record holder to one vote.
DESIGNEES TO THE COMPANY BOARD
Purchaser has informed the Company that it currently intends to choose the
following persons as the designees (the "Acquisition Designees") it has the
right to designate to the Company Board pursuant to the Merger Agreement.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AGE AND OTHER INFORMATION
- ---- --- ----------------------
<S> <C> <C>
Dr. Beat Baumgartner 49 Chief Financial Officer, Chairman of the Board of
Directors, President and Treasurer of Parent.
Thomas Emch 49 General Counsel. General Counsel of Siemens Building
Technologies Group from 1996 until 1999. General
Counsel of the Sika Group from 1985 until 1996.
</TABLE>
I-2
<PAGE> 29
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AGE AND OTHER INFORMATION
- ---- --- ----------------------
<S> <C> <C>
Heinz Kundert 47 Chief Operating Officer. Chief Operating Officer of
Balzers and Leybold Holding AG Division (high
technology) since 1998. Head of Balzers Processing
Systems Division of Balzers and Leybold Holding AG,
a wholly-owned subsidiary of OBH, from 1991 until 1998.
Martin E. Bader 41 Member of the Board of Directors and Vice-President.
Head of the Semi-conductor Division of Balzers Limited,
a wholly-owned subsidiary of OBH, since August 1987.
Dr. Bader is a citizen of Germany.
Peter Ruof 64 Member of the Board of Directors and Secretary.
Chairman of Blackwood Capital Group L.L.C. Mr. Ruof is a
citizen of Germany and his business address is Blackwood
Capital Group L.L.C., 200 East 33 Street, New York, New
York 10016.
</TABLE>
It is expected that the first of the Acquisition Designees to assume
office would assume office at any time following the purchase by Purchaser of a
number of Shares in an amount equal to or greater than the number of Shares
necessary to satisfy the Minimum Condition, which purchase cannot be earlier
than January 26, 2000, and that, upon assuming office, the Acquisition Designees
will thereafter constitute at least a majority of the entire Company Board. This
step will be accomplished at a meeting or by written consent of the Company
Board provided that the size of the Company Board will be increased and
sufficient numbers of current directors will resign such that, immediately
following such action, the number of vacancies to be filled by the Acquisition
Designees will constitute at least a majority of the available positions on the
Company Board or such greater percentage as may be required pursuant to the
terms of the Merger Agreement. It is currently not known which, if any, of the
current directors of the Company will resign. Purchaser has informed the Company
that each of the officers listed above has consented to act as a director of the
Company, if so designated.
The directors of Merger Sub immediately prior to the Effective Time shall
be the directors of the Surviving Corporation as of the Effective Time and until
their successors are duly appointed or elected in accordance with applicable
law.
None of the executive officers and directors of Parent or Purchaser
currently is a director of, or holds any position or office with, the Company.
The Company has been advised that, to the best knowledge of Parent and
Purchaser, none of Parent's or Purchaser's
I-3
<PAGE> 30
directors or executive officers beneficially owns any equity securities, or
rights to acquire any equity securities, of the Company and none has been
involved in any transactions with the Company or any of its directors, executive
officers, affiliates or associates which are required to be disclosed pursuant
to the rules and regulations of the SEC.
BOARD OF DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE PRINCIPAL OCCUPATION
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ronald H. Deferrari...... 59 1975 Founder and Chairman of the Board of
Directors since 1975; President of the
Company from 1975 to 1995; Chief
Executive Officer, Chief Financial
Officer and Treasurer until September
1998. Re-appointed Chief Executive
Officer in March 1999.
- -----------------------------------------------------------------------------------------
Anastasios S. Gianoplus.. 69 1989 President of Open Retail Systems,
Inc., a supplier of software systems
and services to the retail industry,
since July 1995. From August 1988 to
June 1995, Mr. Gianoplus served as
Executive Vice President of Compex
Corporation, a provider of computer
systems and services to government and
industry.
- -----------------------------------------------------------------------------------------
Richard T. Heglin........ 63 1997 Owner and operator of Richard T.
Heglin PE, L.L.C., providing
management consulting services in the
areas of general management,
marketing, distribution and joint
ventures. Former President of Leybold
Semiconductor Vacuum Systems, a
Division of Leybold Vakuum GMBH of
Cologne, Germany until April 1999.
During calendar year 1998, Mr. Heglin
was also President of Balzers and
Leybold Taiwan, located in Hsinchu,
R.O.C., and has been with the company
for more than five years.
- -----------------------------------------------------------------------------------------
Lubek Jastrzebski........ 50 1996 Vice President and founder of
Semiconductor Diagnostics Inc. (SDI)
of Tampa, a provider of sophisticated
contamination monitoring equipment to
the integrated circuit (IC) industry,
for more than 10 years.
- -----------------------------------------------------------------------------------------
</TABLE>
CURRENT BOARD OF DIRECTORS; COMMITTEES, MEETINGS AND COMPENSATION OF DIRECTORS
The Board of Directors held seven meetings during fiscal 1999. In addition
to formal meetings of the Board of Directors and its committees, the directors
have frequent informal communications among themselves and with other executives
regarding Board and Committee issues. The Board of Directors has no standing
nominating committee or committee performing similar functions. The entire Board
of Directors serves as the Compensation Committee.
The Audit Committee of the Board of Directors currently consists of
Messrs. Gianoplus and Jastrzebski. The Audit Committee has responsibility for
reviewing matters
I-4
<PAGE> 31
involving the retention of auditors, for overseeing internal audit matters, for
responding to and resolving issues with the Company's auditors and for reporting
on these issues to the Board of Directors for appropriate action. The Audit
Committee held one meeting during fiscal 1999.
The Stock Option Committee of the Board of Directors currently consists of
Messrs. Gianoplus and Jastrzebski. The Stock Option Committee has responsibility
for administering the Company's stock option plans. Under the terms of the
Company's 1995 Stock Incentive Plan, each member of the Committee shall be
granted on each June 30 annually, an option to purchase 5,000 shares of the
Company's Common Stock at an exercise price equal to 60% of the fair market
value of the shares on the date the option is granted. All options proposed to
be granted by the Stock Option Committee are approved by the entire Board of
Directors prior to grant. The Stock Option Committee held one meeting during
fiscal 1999.
Mr. Gianoplus, Mr. Heglin and Dr. Jastrzebski are compensated at the rate
of $20,000, $15,000, and $15,000 per year, respectively, for services as a
director. They are also entitled to reimbursement of expenses. During fiscal
1999, certain directors were granted stock options. Mr. Gianoplus and Dr.
Jastrzebski were each granted options to acquire 5,000 shares, on June 30, 1999.
The options are exercisable at an exercise price of $1.65.
Ronald H. Deferrari receives no separate compensation for services as a
director.
Each director other than Mr. Deferrari is also receiving an additional
$1,500 per board meeting for meetings held related to potential business
combinations.
I-5
<PAGE> 32
EXECUTIVE OFFICERS OF THE COMPANY AND KEY EMPLOYEES
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Ronald H. Deferrari 59 Chairman of the Board and
Chief Executive Officer
Ronald S. Deferrari 36 President
Edmond A. Richards 49 Vice President of Engineering
& Chief Operating Officer
Stacy L. Wagner 36 Chief Financial Officer,
Treasurer & Corporate Secretary
Dr. Jay N. Sasserath 37 Vice President of Strategic
Marketing & Business Unit
Director, MEMS and Opto/Tele
Business Units
Robert D. Anderson,Jr. 59 Vice President of Operations
</TABLE>
- -------------------------
Ronald H. Deferrari is the founder, Chief Executive Officer and Chairman
of the Board of Directors of the Company and the father of Ronald S. Deferrari.
Mr. Deferrari served as President of the Company since its formation in 1975
until Ronald S. Deferrari became President in 1995.
Ronald S. Deferrari has served as President since June 1995. Mr. Deferrari
has been employed with the Company in various capacities since 1983. Prior to
his current position, he served as Chief Executive Officer, Chief Operating
Officer and Director of Sales and Marketing.
Edmond A. Richards, PE, was appointed Chief Operating Officer in July
1999. Mr. Richards has served as Vice President of Engineering since October
1996. From 1994 to 1996, Mr. Richards served as Director of Engineering and has
been employed with the Company for over twenty years. Since 1991, Mr. Richards
has held various engineering management positions and prior to 1996, he served
as General Manager of the Company for 11 years.
Stacy L. Wagner, CPA, was appointed Chief Financial Officer, Treasurer and
Corporate Secretary in September 1998. Prior to her current positions, she
served as Vice President of Finance and Administration. Ms. Wagner has held
various financial managerial positions since her employment in 1993. Prior to
joining the Company, Ms. Wagner was employed by Grant Thornton LLP and Coopers &
Lybrand.
Dr. Jay N. Sasserath has served as Vice President of Strategic Marketing
since December 1996. In addition, Dr. Sasserath is the Business Unit Director of
the MEMS and Optoelectronics/Telecommunications business units. Prior to joining
the Company, he held
I-6
<PAGE> 33
various management positions in marketing and technical areas at Materials
Research Corporation in New York.
Robert D. Anderson Jr. has served as Vice President of Operations since
February 1999. Mr. Anderson brings over 30 years of semiconductor engineering
and manufacturing experience to the Company. From 1988 to 1999, Mr. Anderson
served in various senior management capacities at Machine Technology, Inc.,
Fusion Semiconductor Systems and Eaton Semiconductor Equipment Operations. From
1968 to 1988, Mr. Anderson served in various capacities at International
Business Machines Corporation ("IBM").
OTHER KEY EMPLOYEES
Dr. David J. Johnson, Process Scientist, has seventeen years of experience
in the plasma-processing field and has been employed with the Company since
1979. Dr. Johnson is the Director of Research and Development with
responsibility over all the Company's research and development. He is a widely
acknowledged expert in the area of metal etching for the manufacture of silicon
integrated circuits and complements this with knowledge and publications in
virtually every aspect of plasma processing.
Dr. Christopher Constantine, Applications Scientist, has been employed
with the Company since 1984. He has acquired considerable experience working in
the ECR and ICP plasma processes after an extensive career in traditional
parallel plate plasmas, and is widely acknowledged for his expertise.
Lynn E. Ochs, Director of Sales, has been employed with the Company since
1996. Mr. Ochs brings over 20 years of semiconductor capital equipment
experience to the Company, having held similar positions at Applied Materials,
Perkin-Elmer and Bruce Technologies.
David G. Hartel, Director of Customer Service, joined the Company in March
1999. From April 1997 to March 1999, Mr. Hartel served as Regional Service
Manager for Mattson Technology, Inc., a manufacturer of advanced fabrication
equipment to the semiconductor manufacturing industry. From 1988 to 1997, Mr.
Hartel served in various management capacities at Lam Research Corporation, a
manufacturer of semiconductor processing equipment used in the fabrication of
integrated circuits.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, officers and beneficial
owners of more than 10% of the Company's Common Stock to file with the
Securities and Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Based solely on its review of the copies of such
reports received by it or written representations from reporting persons, the
Company believes that during the fiscal year ended November 30, 1999, its
officers, directors and holders of more than 10% of the Company's Common Stock
complied with all Section 16(a)
I-7
<PAGE> 34
filing requirements, except that during fiscal 1999, the Form 3 for Mr. Anderson
was filed late.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of November 30, 1999 by
each person known to the Company to own beneficially more than five percent of
the Company's Common Stock, each director, each nominee for election as a
director, each executive officer, and all executive officers and directors as a
group.
<TABLE>
<CAPTION>
AMOUNT PERCENT
BENEFICIALLY OF
NAME OF BENEFICIAL OWNER OWNED (1) CLASS
------------------------ --------- -----
<S> <C> <C>
Ronald H. Deferrari (2) ....................... 2,038,300 18.11%
Anastasios S. Gianoplus (3) ................... 45,000 *
Richard T. Heglin (4) ......................... 6,000 *
Lubek Jastrzebski (5) ......................... 45,000 *
Ronald S. Deferrari (6) ....................... 581,892 4.93%
Edmond A. Richards (7) ........................ 281,000 2.44%
Stacy L. Wagner (8) ........................... 218,000 1.91%
Jay N. Sasserath (9) .......................... 117,500 1.03%
Robert D. Anderson, Jr. (10) .................. 25,000 *
All directors and executive officers as a group
(9 persons) ................................. 3,357,692 26.90%
</TABLE>
- ------------------
* Less than one percent.
FOOTNOTES:
(1) The named shareholders have sole voting and dispositive power with
respect to all shares shown as being beneficially owned by them, except
as otherwise indicated.
(2) The number of shares reflected includes (i) 500,000 shares owned by the
Ronald H. Deferrari Revocable Trust U/T/A 8/9/97 for which Ronald H.
Deferrari is the sole trustee; (ii) 390,000 shares held by the R & C
Deferrari Family Limited Partnership (the "R&C Deferrari FLP"), the
general partner of which is R & C Management, Inc.; (iii) 390,000 shares
held by the R & S Deferrari Family Limited Partnership (the "R&S
Deferrari FLP"), the general partner of which is R & S Management, Inc.;
and (iv) 320,000 shares held by the R & D Deferrari Family Limited
Partnership (the "R&D Deferrari FLP"), the general partner of which is R
& D Management, Inc. Ronald H. Deferrari is the sole limited partner and
is the sole officer, director and shareholder of the general partners of
the R&C Deferrari FLP, the R&S Deferrari FLP and the R&D Deferrari FLP,
and has sole voting and dispositive power over the shares owned thereby.
Ronald H. Deferrari is the founder of the Company. His address is 10050
16th Street North, St. Petersburg, Florida 33716. Ronald H. Deferrari is
the father of Ronald S. Deferrari.
(3) The number of shares reflected includes 20,000, 5,000 and 5,000 shares
which Mr. Gianoplus has the right to acquire pursuant to currently
exercisable stock options at exercise prices of $4.12, $6.97 and $6.19
per share, respectively. The number of shares reflected does not include
5,000 shares which Mr. Gianoplus has the right to acquire pursuant to a
stock option exercisable after June 30, 2000, at an exercise price of
$1.65 per share.
(4) The number of shares reflected includes 5,000 shares which Mr. Heglin has
the right to acquire pursuant to currently exercisable stock options at a
price of $6.19 per share.
(5) The number of shares reflected includes 5,000, 20,000, 5,000, 5,000,
5,000 and 5,000 shares which Dr. Jastrzebski has the right to acquire
pursuant to currently exercisable stock options at exercise prices of
$3.87, $4.12, $3.60, $6.97, $6.19 and $3.75 per share, respectively. The
number of shares reflected does not include
I-8
<PAGE> 35
5,000 shares which Dr. Jastrzebski has the right to acquire pursuant to a
stock option exercisable after June 30, 2000, at an exercise price of
$1.65 per share.
(6) The number of shares reflected includes 110,000, 150,000, 125,000,
125,000 and 50,000 shares which Mr. Deferrari has the right to acquire
pursuant to currently exercisable stock options at exercise prices of
$3.87, $4.12, $6.97, $6.19 and $4.75 per share, respectively. Ronald S.
Deferrari is the son of Ronald H. Deferrari.
(7) The number of shares reflected includes 50,000, 30,000, 50,000, 15,000
and 20,000 shares which Mr. Richards has the right to acquire pursuant to
currently exercisable stock options at exercise prices of $4.12, $6.97,
$6.19, $4.75 and $2.41 per share, respectively. The number of shares
reflected also includes 100,000 shares which Mr. Richards has the right
to acquire pursuant to a stock option exercisable after January 20, 2000,
at an exercise price of $2.75 per share.
(8) The number of shares reflected includes 50,000, 10,000, 15,000, 10,000,
10,000, 15,000 and 20,000 shares which Ms. Wagner has the right to
acquire pursuant to currently exercisable stock options at exercise
prices of $3.87, $5.25, $4.12, $6.97, $6.19, $4.75 and $2.41 per share,
respectively. The number of shares reflected also includes 50,000 shares
which Ms. Wagner has the right to acquire pursuant to a stock option
exercisable after January 20, 2000, at an exercise price of $2.75 per
share.
(9) The number of shares reflected includes 50,000, 50,000, 7,500 and 10,000
shares which Dr. Sasserath has the right to acquire pursuant to currently
exercisable stock options at exercise prices of $6.97, $6.19, $4.75 and
$2.41 per share, respectively.
(10) The number of shares reflected includes 25,000 shares which Mr. Anderson
has the right to acquire pursuant to a currently exercisable stock option
at an exercise price of $2.41 per share.
STOCK PRICE PERFORMANCE GRAPH
The following graph sets forth the Company's total cumulative shareholder
return as compared to The CRSP Total Return Index for The Nasdaq Stock Market
(US Companies) Composite Index and the Nasdaq Industrial and Commercial
Machinery and Computer Equipment Index for the past five fiscal years. The graph
shows the comparative values for $100 invested on November 30, 1994.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
PLASMA-THERM, INC.
<TABLE>
<CAPTION>
Beginning
Transaction Closing No. Of Dividend Dividend Shares Ending Cum. Tot.
Date* Type Price** Shares*** per Share Paid Reinvested Shares Return
- ------ ----------- ------- --------- --------- -------- ---------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30-Nov-94 Begin 4.625 21.62 21.622 100.00
30-Nov-95 Year End 3.188 21.62 21.622 68.92
30-Nov-96 Year End 3.688 21.62 21.622 79.73
30-Nov-97 Year End 8.500 21.62 21.622 183.78
30-Nov-98 Year End 3.750 21.62 21.622 81.08
30-Nov-99 End 8.375 21.62 21.622 181.08
</TABLE>
* Specified ending dates or ex-dividends dates.
** All Closing Prices and Dividends are adjusted for stock splits and stock
dividends.
*** "Begin Shares" based on $100 Investment.
PLASMA THERM CORP
<TABLE>
<CAPTION>
Cumulative Total Return
-----------------------------------------------------------------
11/94 11/95 11/96 11/97 11/98 11/99
<S> <C> <C> <C> <C> <C> <C>
PLASMA-THERM, INC. 100 69 80 184 81 181
PEER GROUP 100 149 202 264 354 556
NASDAQ STOCK MARKET (U.S.) 100 143 175 217 267 448
</TABLE>
There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
above. The Company does not make or endorse any predictions as to future stock
performance.
The stock price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this Schedule
14D-9 into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended (collectively the "Acts"), except to
the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under the Acts.
I-9
<PAGE> 36
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation for the last three fiscal years paid or accrued by the Company's
Chief Executive Officer and each of the four other most highly compensated
executive officers of the Company who earned more than $100,000 (determined as
of November 30, 1999):
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------------------------------------------
AWARDS PAYOUTS
------------------- -------
OTHER RESTRICTED ALL OTHER
ANNUAL STOCK OPTIONS/ LTIP COMPEN-
FISCAL SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS SATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($) (#) ($) ($)
- --------------------------- ------- -------- -------- ----------- -------- --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RONALD H. DEFERRARI (3) 1999 $150,000 -- $34,200 -- -- -- --
Chairman of the Board and 1998 $150,000 $100,000 $33,296 -- -- -- --
former Chief Executive 1997 $150,000 $100,000 $33,454 -- -- -- --
Officer, Chief Financial
Officer and Treasurer.
Re-appointed as Chief
Executive Officer in
March 1999
RONALD S. DEFERRARI (4) 1999 $160,000 $110,597 $38,354 -- 50,000 -- --
President and Chief 1998 $160,000 $199,529 $35,363 -- 125,000 -- --
Executive Officer 1997 $160,000 $250,000 $18,968 -- 275,000 -- --
(CEO until March 1999)
EDMOND A. RICHARDS (5) 1999 $146,772 $ 12,500 -- -- 135,000 -- --
Vice President of 1998 $146,772 $ 19,953 -- -- 50,000 -- --
Engineering and Chief 1997 $146,772 $ 25,201 -- -- 80,000 -- --
Operating Officer
STACY L. WAGNER (6) 1999 $100,000 $ 12,500 $ 7,200 -- 85,000 -- --
Chief Financial Officer, 1998 $ 91,290 $ 39,906 $ 9,300 -- 10,000 -- --
Treasurer and Corporate 1997 $ 76,370 $ 50,400 -- -- 25,000 -- --
Secretary
JAY N. SASSERATH (7) 1999 $112,000 -- $ 7,200 -- 17,500 -- $16,288
Vice President of 1998 $112,800 $ 19,953 $ 7,200 -- 50,000 -- --
Strategic Marketing and 1997 -- -- -- -- -- -- --
Business Unit Director,
MEMS and Opto/Tele
ROBERT D. ANDERSON, JR. (8) 1999 $ 87,730 -- -- -- 25,000 -- --
Vice President of
Operations
</TABLE>
(1) Reflects bonuses based on fiscal year net income prior to 1999. Bonuses
are paid quarterly based on quarterly net income before bonuses, for the
first three fiscal quarters, and are reconciled for the full fiscal year
after the fiscal year end. The bonuses are subject to certain
limitations, which vary among the individuals. See footnote (4), (5) and
(6) below for explanation of 1999 bonus' paid.
(2) Automobile allowance.
(3) In May 1994, the Company entered into an employment agreement with Ronald
H. Deferrari for a term of three years. The agreement was amended in June
1995, and in January 1997, the Board of Directors resolved to permit Mr.
Deferrari's employment agreement to renew automatically, in accordance
with its terms, for an additional three-year term. Under Mr. Deferrari's
current agreement, he receives $150,000 in base salary per year and a
bonus equal to 3% of the Company's fiscal year
I-10
<PAGE> 37
net earnings, such bonus not to exceed $100,000 annually, and
reimbursement for payments related to the lease or purchase of two
automobiles. Upon termination of the agreement, including termination
upon death or disability, Mr. Deferrari is entitled to receive the full
compensation provided thereunder for the remainder of the term of the
agreement, unless the termination is made by the Company based upon
reasonable cause as defined in the agreement, in which case the
compensation shall continue for one year from the notice of termination.
Mr. Deferrari is entitled to terminate the agreement in the event of a
change in control of the Company, in which case Mr. Deferrari also will
be entitled to receive the full compensation provided thereunder for the
remainder of the agreement term. Ronald H. Deferrari is the father of
Ronald S. Deferrari.
(4) In May 1994, the Company entered into an employment agreement with Ronald
S. Deferrari for a term of three years. In June 1995, the agreement was
amended to reflect his promotion from Executive Vice President to
President. In addition, Mr. Deferrari was entitled to receive $160,000
per year in base salary, an annual bonus equal to 5% of the Company's
fiscal year net earnings, such bonus not to exceed $150,000, and
reimbursement for payments related to the lease or purchase of two
automobiles. In January 1997, the Board of Directors resolved to provide
Mr. Deferrari with a new employment agreement for a three-year term,
commencing as of January 22, 1997. Under the new agreement, Mr. Deferrari
is entitled to receive $160,000 per year in base salary, an annual bonus
equal to 5% of the Company's fiscal year net earnings, such bonus not to
exceed $250,000, and reimbursement for payments related to the lease or
purchase of two automobiles. If the agreement is terminated due to death
or disability, Mr. Deferrari is entitled to receive full compensation for
the then remaining term of the agreement. If the agreement is terminated
by the Company with cause or by Mr. Deferrari without cause, Mr.
Deferrari is entitled to receive a severance package of six months salary
and benefits (the "severance package") as set forth in the agreement. If
the agreement is terminated by the Company without cause, Mr. Deferrari
is entitled to receive full compensation for the then remaining term of
the agreement as well as the severance package. In the event of a change
in control or change in the Board of Directors of the Company (as those
terms are defined in the agreement), (a) the term of the agreement will
be extended, to the extent necessary, so that there are 18 months
remaining in the term from the time of the change in control or change in
the Board of Directors; and (b) Mr. Deferrari commits to continue to
perform his duties under the agreement for 18 months after the time of
the change in control or change in the Board of Directors after which he
may terminate the agreement without a loss of benefits, as if the Company
had terminated the agreement without cause, except that if Mr. Deferrari
terminates the agreement in the event of a change in control or if the
Company terminates the agreement subsequent to a change in control, Mr.
Deferrari is entitled to receive at least 12 months of salary and
benefits. In October 1998, the agreement was amended to reflect Mr.
Deferrari's promotion to Chief Executive Officer. Additionally, under the
amended agreement, the Board of Directors resolved to remove the annual
bonus compensation cap of $250,000. In addition, in the event of a change
in control, (a) all stock options granted to Mr. Deferrari under the
Company's 1995 Stock Incentive Plan (the "Plan") shall immediately become
fully vested and exercisable; and (b) in the event of a change in
control, the Stock Option Committee may accelerate the termination of Mr.
Deferrari's stock options granted under the Plan to a date no earlier
than six months following the date of a change in control. On July 19,
1999, the agreement was amended to extend the initial term of the
agreement for an additional one-year period to January 21, 2001. In
addition, the agreement was amended to reflect a change in Mr.
Deferrari's annual bonus compensation to one-half of one percent (0.5%)
on all system, spare parts and labor sales, to be paid quarterly,
effective June 1, 1999, having a maximum annual amount of $250,000.
Additionally, the agreement was amended to reflect that Mr. Deferrari's
duties would be performed in St. Petersburg, Florida. Ronald S. Deferrari
is the son of Ronald H. Deferrari.
(5) The Company entered into an employment agreement with Mr. Richards for a
three-year term, commencing as of January 22, 1997. Under the agreement,
Mr. Richards is entitled to receive $146,772 per year in base salary and
an annual bonus equal to 0.5% of the Company's fiscal year net earnings,
such bonus not to exceed $50,000. If the agreement is terminated due to
death or disability or by the Company without cause, Mr. Richards is
entitled to receive full compensation for the then remaining term of the
agreement. In the event of a change in control (as that term is defined
in the agreement), (a) the term of the agreement will be extended, to the
extent necessary, so that
I-11
<PAGE> 38
there are 18 months remaining in the term from the time of the change in
control; and (b) Mr. Richards commits to continue to perform his duties
under the agreement for 18 months after the time of the change in control
after which he may terminate the agreement without a loss of benefits, as
if the Company had terminated the agreement without cause. On October 1,
1998, the agreement was amended to address the vesting of options granted
under the Plan upon a change in control. In the event of a change in
control, (a) all stock options granted to Mr. Richards under the Plan
shall immediately become fully vested and exercisable; and (b) in the
event of a change in control, the Stock Option Committee may accelerate
the termination of Mr. Richard's stock options granted under the Plan to
a date no earlier than six months following the date of a change in
control. On June 30, 1999, the agreement was amended to change the term
of the initial agreement to a period of two and one-half years,
terminating on June 30, 1999. In addition, the agreement was amended to
reflect that Mr. Richards' duties would be performed in St. Petersburg,
Florida. During fiscal year 1999, Mr. Richards was awarded a bonus of
$12,500 by the Board of Directors for the services and special effort
rendered to the Board of Directors related to the merger.
(6) The Company entered into an employment agreement with Stacy L. Wagner for
a three-year term, commencing as of January 22, 1997. If the agreement is
terminated due to death or disability or by the Company without cause,
Ms. Wagner is entitled to receive full compensation for the then
remaining term of the agreement. In addition, in the event of a change in
control (as that term is defined in the agreement), (a) the term of the
agreement will be extended, to the extent necessary, so that there are 12
months remaining in the term from the time of the change in control; and
(b) Ms. Wagner commits to continue to perform her duties under the
agreement for 12 months after the time of the change in control after
which she may terminate the agreement without a loss of benefits, as if
the Company had terminated the agreement without cause. The agreement was
amended, effective August 19, 1997 to reflect Ms. Wagner's promotion from
Vice President of Finance and Controller to Vice President of Finance and
Administration. In addition, Ms. Wagner is entitled to receive a base
salary of $85,000 per year, and an annual bonus equal to 1% of the
Company's fiscal year net earnings, such bonus not to exceed $100,000,
plus a monthly car allowance of $600. On October 1, 1998, the agreement
was amended, to reflect Ms. Wagner's promotion to Chief Financial
Officer, Treasurer and Secretary. Under the amended agreement, Ms. Wagner
is entitled to receive $100,000 per year in base salary. Additionally, in
the event of a change in control, (a) all stock options granted to Ms.
Wagner under the Plan shall immediately become fully vested and
exercisable; and (b) in the event of a change in control, the Stock
Option Committee may accelerate the termination of Ms. Wagner's stock
options granted under the Plan to a date no earlier than six months
following the date of a change in control. On June 30, 1999, the
agreement was amended to change the term of the initial agreement to a
period of two and one-half years, terminating on June 30, 1999. In
addition, the agreement was amended to reflect that upon a change in
control, if the term of the agreement has less than 18 months remaining,
the term shall be extended so that an 18 month term remains from the time
of the change in control to the end of the term. In the event that more
than 18 months of the term exists as of the time of a change in control,
there will be no change in the term. Additionally, the agreement was
amended to reflect that Ms. Wagner commits to continue to perform her
duties under the agreement for a minimum of 18 months after a change in
control. At the end of 18 months after a change in control, Ms. Wagner
has the option to voluntarily terminate this agreement without a loss of
benefits, as if the Company had terminated the agreement "without cause".
In addition, the agreement was amended to reflect that Ms. Wagner's would
be performed in St. Petersburg, Florida. During fiscal year 1999, Ms.
Wagner was awarded a bonus of $12,500 by the Board of Directors for the
services and special effort rendered to the Board of Directors related to
the merger.
(7) The Company entered into an employment agreement with Jay N. Sasserath
for a three-year term, commencing as of October 1, 1998. Under the
agreement, Dr. Sasserath is entitled to receive $112,800 per year in base
salary and an annual bonus equal to 0.5% of the Company's fiscal year net
earnings, such bonus not to exceed $50,000, plus a monthly car allowance
of $600. If the agreement is terminated due to death or disability or by
the Company without cause, Dr. Sasserath is entitled to receive full
compensation for the then remaining term of the agreement. In the event
of a change in control (as that term is defined in the agreement), (a)
the term of the agreement will be extended, to the extent necessary, so
that there are 12 months remaining in the term from the time of
I-12
<PAGE> 39
the change in control; (b) Dr. Sasserath commits to continue to perform
his duties under the agreement for 12 months after the time of the change
in control after which he may terminate the agreement without a loss of
benefits, as if the Company had terminated the agreement without cause;
(c) all stock options granted to Dr. Sasserath under the Plan shall
immediately become fully vested and exercisable; and (d) in the event of
a change in control, the Stock Option Committee may accelerate the
termination of Dr. Sasserath's stock options granted under the Plan to a
date no earlier than six months following the date of a change in
control. On January 28, 1999, the agreement was amended to reflect an
increase in the annual bonus equal to 1% of the Company's fiscal year net
earnings, such bonus not to exceed $100,000.
(8) On July 7, 1999, the Company entered into a letter agreement with Robert
D. Anderson, Jr. Under the letter agreement, Mr. Anderson is entitled to
an annual bonus equal to 0.5% of the Company's fiscal year net earnings,
such bonus not to exceed $50,000. In addition, in the event of a change
in control, the Company will guarantee Mr. Anderson's employment 12
months beyond the change of control date or at the sole option of the new
owner pay Mr. Anderson through that date. In consideration for the salary
continuance, Mr. Anderson agreed to perform his duties through June 30,
2000.
The following table provides certain information regarding the stock
options granted during fiscal 1999 to the executive officers named in the
Summary Compensation Table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
PERCENT OF REALIZABLE
NUMBER OF TOTAL VALUE AT ASSUMED
SHARES OPTIONS/SARS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO EXERCISE OR PRICE APPRECIATION FOR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION OPTION TERM
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
---- ----------- ----------- --------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Ronald H. Deferrari........ -- -- -- -- -- --
Ronald S. Deferrari........ 50,000 8% $ 4.75 01/08/02 $ 37,436 $ 78,613
Edmond A. Richards......... 15,000 2% $ 4.75 01/08/02 $ 11,231 $ 23,584
Edmond A. Richards......... 20,000 3% $ 2.41 04/07/02 $ 7,598 $ 15,954
Edmond A. Richards......... 100,000 16% $ 2.75 07/20/02 $ 43,347 $ 91,025
Stacy L. Wagner............ 15,000 2% $ 4.75 01/08/02 $ 11,231 $ 23,584
Stacy L. Wagner............ 20,000 3% $ 2.41 04/07/02 $ 7,598 $ 15,954
Stacy L. Wagner............ 50,000 8% $ 2.75 07/20/02 $ 21,673 $ 45,513
Jay N. Sasserath........... 7,500 1% $ 4.75 01/08/02 $ 5,615 $ 11,792
Jay N. Sasserath........... 10,000 2% $ 2.41 04/07/02 $ 3,799 $ 7,977
Robert D. Anderson, Jr..... 25,000 4% $ 2.41 04/07/02 $ 9,497 $ 19,943
</TABLE>
I-13
<PAGE> 40
The following table sets forth information with respect to grants of stock
options during fiscal 1999 to the executive officers named in the Summary
Compensation Table.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SHARES UNEXERCISED UNEXERCISED
ACQUIRED OPTIONS/SARS OPTIONS/SARS
ON VALUE AT FY-END(#) FY-END($)*
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald H. Deferrari............ -- -- -- -- -- --
Ronald S. Deferrari (1)........ -- -- 560,000 -- 1,763,800 --
Edmond A. Richards (2)......... -- -- 165,000 100,000 537,825 562,500
Stacy L. Wagner (3)............ 10,000 11,300 130,000 50,000 529,900 281,250
Jay N. Sasserath (4)........... -- -- 117,500 -- 266,338 --
Robert D. Anderson, Jr. (5).... -- -- 25,000 -- 149,125 --
</TABLE>
* Based on the closing price of the Company's Common Stock on
November 30, 1999 as quoted on The Nasdaq Stock Market.
(1) Of the 560,000 stock options held by Mr. Deferrari on November 30, 1999
(a) 110,000 were granted on April 30, 1996, expire on April 30, 2000, and
became exercisable on October 30, 1996, at an exercise price of $3.87 per
share; (b) 150,000 were granted on May 6, 1997, expire on May 6, 2000,
and became exercisable on November 6, 1997, at an exercise price of $4.12
per share; (c) 125,000 were granted on August 19, 1997, expire on August
19, 2000, and became exercisable on February 19, 1998, at an exercise
price of $6.97 per share; (d) 125,000 were granted on January 13, 1998,
expire on January 13, 2001, and became exercisable on July 13, 1998, at
an exercise price of $6.19 per share; and (e) 50,000 were granted on
January 8, 1999, expire on January 8, 2002, and became exercisable on
July 8, 1999, at an exercise price of $4.75 per share.
(2) Of the 165,000 currently exercisable stock options held by Mr. Richards
on November 30, 1999 (a) 50,000 were granted on May 6, 1997, expire on
May 6, 2000, and became exercisable on November 6, 1997, at an exercise
price of $4.12 per share; (b) 30,000 were granted on August 19, 1997,
expire on August 19, 2000, and became exercisable on February 19, 1998,
at an exercise price of $6.97 per share; (c) 50,000 were granted on
January 13, 1998, expire on January 13, 2001, and became exercisable on
July 13, 1998, at an exercise price of $6.19 per share; (d) 15,000 were
granted on January 8, 1999, expire on January 8, 2002, and became
exercisable on July 8, 1999, at an exercise price of $4.75 per share; and
(e) 20,000 were granted on April 7, 1999, expire on April 7, 2002, and
became exercisable on October 7, 1999 at an exercise price of $2.41 per
share. Mr. Richards also holds currently unexercisable options to
purchase 100,000 options which were granted on July 20, 1999, expire on
July 20, 2002, and become exercisable on January 20, 2000 at a price of
$2.75 per share.
(3) Of the 130,000 currently exercisable stock options held by Ms. Wagner on
November 30, 1999 (a) 50,000 were granted on April 30, 1996, expire on
April 30, 2000, and became exercisable on October 30, 1996, at an
exercise price of $3.87 per share; (b) 10,000 were granted on June 26,
1996, expire on June 26, 2000, and became exercisable on December 26,
1996, at an exercise price of $5.25 per share; (c) 15,000 were granted on
May 6, 1997, expire on May 6, 2000, and became exercisable on November 6,
1997, at an exercise price of $4.12 per share; (d) 10,000 were granted on
August 19, 1997, expire on August 19, 2000, and became exercisable on
February 19, 1998, at an exercise price of $6.97 per share; (e) 10,000
were granted on January 13, 1998, expire on January 13, 2001, and became
exercisable on July 13, 1998, at an exercise price $6.19 per share; (f)
15,000 were granted on January 8, 1999, expire on January 8, 2002, and
became exercisable on July 8, 1999, at an exercise price of $4.75 per
share; and (g) 20,000 were granted on April 7, 1999, expire on April 7,
2002, and became exercisable on October 7, 1999, at an exercise price of
$2.41 per share. Ms.
I-14
<PAGE> 41
Wagner also holds currently unexercisable options to purchase 50,000
options which were granted on July 20, 1999, expire on July 20, 2002, and
become exercisable on January 20, 2000 at a price of $2.75 per share.
(4) Of the 117,500 stock options held by Dr. Sasserath on November 30, 1999
(a) 50,000 were granted on August 19, 1997, expire on August 19, 2000,
and became exercisable on February 19, 1998, at an exercise price of
$6.97; (b) 50,000 were granted on January 13, 1998, expire on January 13,
2001, and became exercisable on July 13, 1998, at an exercise price of
$6.19 per share; (c) 7,500 were granted on January 8, 1999, expire on
January 8, 2002, and became exercisable on July 8, 1999, at an exercise
price of $4.75 per share; and (d) 10,000 were granted on April 7, 1999,
expire on April 7, 2002, and became exercisable on October 7, 1999, at an
exercise price of $2.41 per share.
(5) Of the 25,000 stock options held by Mr. Anderson on November 30, 1999,
all 25,000 were granted on April 7, 1999, expire on April 7, 2002, and
became exercisable on October 7, 1999, at an exercise price of $2.41 per
share.
EMPLOYMENT AGREEMENT AMENDMENTS AND
SEVERANCE AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
In connection with the Offer, the Purchaser requested that the Company
enter into Employment Agreement Amendments with Mr. Edmond A. Richards and Ms.
Stacy L. Wagner (the "Employment Agreement Amendments"). The Employment
Agreement Amendments shall only become effective upon the Closing of the Offer.
The amendments are substantially similar in that each Employment Agreement
Amendment extends the term of each Employment Agreement for a period of three
(3) years following the Closing of the Offer. The Employment Agreement
Amendments also extended the non-compete period such that each of the named
Executive Officers will be prohibited from competing with Plasma-Therm for a
period of two (2) years following the termination of the Employment Agreements,
regardless of the reason for such termination.
The Purchaser also requested that the Company enter into a Termination,
Noncompetition and Mutual Release Agreement with Mr. Ronald S. Deferrari, the
current President of the Company (the "Departure Agreement"). The Departure
Agreement will only become effective upon the Closing of the Offer. Pursuant to
the Departure Agreement, Mr. Deferrari will be paid the sum of One Million
Dollars ($1,000,000) payable in one lump sum due one day after Closing of the
Offer. Additionally, the term of Mr. Deferrari's non-compete provision will be
extended to cover the two (2) year period following the Closing of the Offer.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of all of the members of the
Board of Directors. Stock option grants are considered part of the overall
compensation for executive officers and directors of the Company, and members of
the Stock Option Committee are granted options pursuant to a specified formula
under the Company's 1995 Stock Incentive Plan. Anastasios S. Gianoplus and Lubek
Jastrzebski were each granted options to purchase 5,000 shares during fiscal
1999.
I-15
<PAGE> 42
REPORT BY THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Board of Directors reviews annually the compensation to be paid to the
Company's executive officers. In making such review, the Board of Directors
evaluates information supplied by management. The compensation provided by the
Company to executive officers includes salary, stock options and bonuses. The
Company's compensation policies are structured to enable the Company to attract,
retain and motivate highly qualified executive officers and to reward
contributions to the Company's success. The objective is to provide a management
team that will consistently produce superior results for the Company and its
shareholders. The Board of Directors negotiates employment agreements, including
provisions for salary and bonuses, with each of the Company's executive
officers. Currently, pursuant to the Company's employment agreements with its
executive officers, each executive officer receives a fixed annual base salary
and a bonus equal to a fixed percentage of the Company's net earnings for each
fiscal year during the term of the agreement, with the exception of Ronald S.
Deferrari. On July 19, 1999, Mr. Deferrari's agreement was amended to reflect a
change in his annual bonus compensation to one-half of one percent (0.5%) on all
systems, spare parts and labor sales, to be paid quarterly, effective June 1,
1999.
SALARY. The Board of Directors' policy is to negotiate salaries including
the salary of Ronald H. Deferrari, the Company's Chairman and Chief Executive
Officer, in relation to the contribution of each incumbent and to grant merit
increases based on individual performance. The Board of Directors considers the
financial condition of the Company, earnings in an absolute manner and in
relation to the previously established business plan, other measures of business
success and the degree of difficulty in achieving these levels. Executive
officer compensation for the last three years is set forth in the Summary
Compensation Table.
STOCK OPTIONS/BONUSES. The Board of Directors believes that providing a
portion of an executive's annual incentive compensation in the form of stock
options in addition to cash bonuses encourages the executive to share with
outside shareholders the goals of increasing the value of the Company's stock
and contributing to the success of the Company. The Board of Directors
encourages stock ownership by management. Option grants are based upon the
contributions of each individual executive toward achievement of corporate and
individual goals during the previous fiscal year. Ronald H. Deferrari, the
Company's founder and Chief Executive Officer, has not been granted options to
acquire the Company's Common Stock since its inception. Executive officer stock
option grants for the last three years are listed in the Summary Compensation
Table. Similarly, bonus formulas are based on the Company's net earnings and
revenues, instead of other measures of performance, because net earnings have a
significant effect on the market price of the Common Stock.
In May 1994, the Company entered into a three-year employment agreement
with Ronald H. Deferrari, the Company's founder and former Chief Executive
Officer. Pursuant to the agreement, Mr. Deferrari receives $150,000 in base
salary per year and a bonus equal to 5% of the Company's net earnings, for each
fiscal year during the term of the agreement, such bonus not to exceed $100,000.
Additionally, Mr. Deferrari receives reimbursement for lease payments and other
expenses related to two automobiles. In June 1995, Mr. Deferrari's bonus
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<PAGE> 43
percentage was decreased from 5% to 3% of the Company's fiscal year net
earnings. Mr. Deferrari suggested such decrease so that certain other key
employees could receive bonuses without increasing the overall size of the bonus
pool. In January 1997, the Board of Directors resolved to permit Mr. Deferrari's
employment agreement to renew automatically, in accordance with its terms, for
an additional three-year term. In September, 1998, Mr. Deferrari resigned as
Chief Executive Officer, Chief Financial Officer and Treasurer of the Company.
In March 1999, the Board of Directors re-appointed Mr. Deferrari as Chief
Executive Officer. See Footnote (3) to the Summary Compensation Table.
In May 1994, the Company entered into a three-year employment agreement
with Ronald S. Deferrari. The agreement was amended in June 1995 to reflect Mr.
Deferrari's promotion from Executive Vice President to President. Pursuant to
this agreement, Mr. Deferrari was entitled to receive $160,000 per year in base
salary, an annual bonus equal to 5% of the Company's fiscal year net earnings,
such bonus not to exceed $150,000, and reimbursement for lease payments and
expenses related to two automobiles. In January 1997, the Board of Directors
resolved to provide Mr. Deferrari with a new employment agreement for a
three-year term, with an increase in the annual bonus compensation cap to
$250,000. In October 1998, the agreement was amended to reflect Mr. Deferrari's
promotion to Chief Executive Officer, and to address the vesting of options
granted under the Plan upon a change in control. Additionally, under the amended
agreement, the Board of Directors resolved to remove the annual bonus
compensation cap of $250,000. On July 19, 1999, the agreement was amended to
extend the initial term of the agreement for an additional one-year period to
January 21, 2001. In addition, the agreement was amended to reflect a change in
Mr. Deferrari's annual bonus compensation to one-half of one percent (0.5%) on
all system, spare parts and labor sales, to be paid quarterly, effective June 1,
1999, having a maximum annual amount of $250,000. Additionally, the agreement
was amended to reflect that Mr. Deferrari's duties would be performed in St.
Petersburg, Florida. See Footnote (4) to the Summary Compensation Table.
Effective January 22, 1997, the Company entered into an employment
agreement with Edmond A. Richards for a three-year term. Under the agreement,
Mr. Richards is entitled to receive $146,772 per year in base salary and an
annual bonus equal to 0.5% of the Company's fiscal year net earnings, such bonus
not to exceed $50,000. On October 1, 1998, the agreement was amended to address
the vesting of options granted under the Plan upon a change in control. On June
30, 1999, the agreement was amended to change the term of the initial agreement
to a period of two and one-half years, terminating on June 30, 1999. In
addition, the agreement was amended to reflect that Mr. Richards' duties would
be performed in St. Petersburg, Florida. See Footnote (5) to the Summary
Compensation Table.
The Company entered into an employment agreement with Stacy L. Wagner for
a three-year term, commencing as of January 22, 1997. The agreement was amended,
effective August 19, 1997, to reflect Ms. Wagner's promotion to Vice President
of Finance and Administration. Under the amended agreement, Ms. Wagner is
entitled to receive $85,000 per year in base salary and an annual bonus equal to
1% of the Company's fiscal year net earnings, such bonus not to exceed $100,000,
plus a monthly car allowance of $600. On October 1, 1998, the agreement was
amended, to reflect Ms. Wagner's promotion to Chief
I-17
<PAGE> 44
Financial Officer, Treasurer and Secretary, and an increase in Ms. Wagner's base
salary to $100,000 per year. Additionally, the amended agreement addresses the
vesting of options granted under the Plan upon a change in control. On June 30,
1999, the agreement was amended to change the term of the initial agreement to a
period of two and one-half years, terminating on June 30, 1999. In addition, the
agreement was amended to reflect that upon a change in control, if the term of
the agreement has less than 18 months remaining, the term shall be extended so
that an 18 month term remains from the time of the change in control to the end
of the term. In the event that more than 18 months of the term exists as of the
time of a change in control, there will be no change in the term. Additionally,
the agreement was amended to reflect that Ms. Wagner commits to continue to
perform her duties under the agreement for a minimum of 18 months after a change
in control. At the end of 18 months after a change in control, Ms. Wagner has
the option to voluntarily terminate this agreement without a loss of benefits,
as if the Company had terminated the agreement "without cause". In addition, the
agreement was amended to reflect that Ms. Wagner's duties would be performed in
St. Petersburg, Florida. See Footnote (6) to the Summary Compensation Table.
Effective October 1, 1998, the Company entered into an employment
agreement with Jay N. Sasserath for a three-year term. Under the agreement, Dr.
Sasserath is entitled to receive $112,800 per year in base salary and an annual
bonus equal to 0.5% of the Company's fiscal year net earnings, such bonus not to
exceed $50,000, plus a monthly car allowance of $600. On January 28, 1999, the
agreement was amended to reflect an increase in the annual bonus equal to 1% of
the Company's fiscal year net earnings, such bonus not to exceed $100,000. See
Footnote (7) to the Summary Compensation Table.
On July 7, 1999, the Company entered into a letter agreement with Robert
D. Anderson, Jr. Under the letter agreement, Mr. Anderson is entitled to an
annual bonus equal to 0.5% of the Company's fiscal year net earnings, such bonus
not to exceed $50,000. In addition, in the event of a change in control, the
Company will guarantee Mr. Anderson's employment 12 months beyond the change of
control date or at the sole option of the new owner pay Mr. Anderson through
that date. In consideration for the salary continuance, Mr. Anderson agreed to
perform his duties through June 30, 2000. See Footnote (8) to the Summary
Compensation Table.
SECTION 162(m). Section 162(m) to the Internal Revenue Code of 1986, as
amended (the "Code"), prohibits a deduction to any publicly held corporation for
compensation paid to a "covered employee" in excess of $1 million per year (the
"Dollar Limitation"). A covered employee is any employee who appears in the
Summary Compensation Table who also is employed by the Company on the last day
of the Company's calendar year. The Compensation Committee does not expect the
deductibility of compensation paid in 1999 to any executive officer to be
affected by Section 162(m). The Compensation Committee may consider alternatives
to its existing compensation programs in the future with respect to qualifying
executive compensation for deductibility.
The Company generally is entitled to a tax deduction upon an employee's
exercise of nonqualified options in an amount equal to the excess of the value
of the shares on the date of exercise over the exercise price. Such deduction is
considered compensation for purposes of
I-18
<PAGE> 45
the Dollar Limitation with respect to options having an exercise price less than
fair market value at the date of grant. Deductibility of compensation in future
years to the named executive officers may be affected by the Dollar Limitation
if they remain covered employees and exercise options in amounts which would
result in compensation to them exceeding the Dollar Limitation in any year. As
of November 30, 1999, five named executive officers, Ronald S. Deferrari, Edmond
A. Richards, Stacy L. Wagner, Jay N. Sasserath and Robert D. Anderson, Jr. held
then currently exercisable options to acquire 560,000 165,000, 130,000, 117,500
and 25,000 shares, respectively, of the Company's Common Stock, with values
based on the closing price of the Company's Common Stock as reported on The
Nasdaq Stock Market of approximately $4,690,000, $1,381,875, $1,088,750,
$984,063, and $209,375 respectively. Mr. Richards and Ms Wagner also hold
options to purchase 100,000 and 50,000 shares, respectively, which become
exercisable on January 20, 2000, with values based on the closing price of the
Company's Common Stock as reported on The Nasdaq Stock Market of approximately
$837,500 and $418,750, respectively. Ronald S. Deferrari, Edmond A. Richards,
Stacy L. Wagner, Jay N. Sasserath and Robert D. Anderson, Jr. each have agreed
to cooperate with the Company in exercising their options so as to minimize any
loss of deductibility due to the Dollar Limitations, however, no assurances can
be given in that regard. Ronald H. Deferrari, the Company's Chairman, has not
been granted any options to acquire the Company's Common Stock since its
inception.
Members of the Board of Directors:
Ronald H. Deferrari, Chairman
Anastasios S. Gianoplus
Richard T. Heglin
Lubek Jastrzebski
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<PAGE> 46
EXHIBIT INDEX
-------------
Exhibit No. Description
(a)(1) Opinion of CIBC World Markets Corp., dated December 20, 1999*
(a)(2) Letter to Shareholders, dated as of December 27, 1999*
(c)(1) Agreement and Plan of Merger dated as of December 20, 1999,
among Company, Parent and Purchaser
(c)(2) Form of Amendment to Employment Agreement between the Company
and certain named Executive Officers
(c)(3) Confidentiality Agreement, between Parent and the Company,
dated as of September 1, 1999
(c)(4) Termination, Noncompetition and Mutual Release Agreement,
between the Company and Ronald S. Deferrari, dated December
20, 1999.
(c)(5) Tender and Voting Agreement among Parent, Purchaser and the
Shareholders listed on Schedule A thereto, dated as of
December 20, 1999
- --------------------
*Included in the Schedule 14D-9 mailed to the Company's shareholders.
<PAGE> 1
EXHIBIT (a)(1)
[LETTERHEAD OF CIBC WORLD MARKETS CORP.]
December 20, 1999
The Board of Directors
Plasma-Therm, Inc.
10050 16th Street North
St. Petersburg, Florida 33716
Members of the Board:
You have asked CIBC World Markets Corp. ("CIBC World Markets") to render a
written opinion ("Opinion") to the Board of Directors as to the fairness, from
a financial point of view, to the holders of the common stock of Plasma-Therm,
Inc. ("Plasma-Therm") of the Cash Consideration (defined below) to be received
pursuant to the Agreement and Plan of Merger, dated as of December 20, 1999
(the "Merger Agreement"), by and among Plasma-Therm, Oerlikon-Buhrle USA, Inc.
("Oerlikon"), an affiliate of Oerlikon-Buhrle Holding AG ("Oerlikon Holding"),
and Volcano Acquisition Corp., a wholly owned subsidiary of Oerlikon ("Sub").
The Merger Agreement provides for, among other things, (i) the commencement by
Sub of a tender offer to purchase all outstanding shares of the common stock,
par value $0.01 per share, of Plasma-Therm (the "Plasma-Therm Common Stock"
and, such tender offer, the "Tender Offer") at a purchase price of $12.50 per
share, net to the seller in cash (the "Cash Consideration") and (ii) subsequent
to the Tender Offer, the merger of Sub with and into Plasma-Therm (the "Merger"
and, together with the Tender Offer, the "Transaction") pursuant to which each
outstanding share of Plasma-Therm Common Stock not previously tendered will be
converted into the right to receive the Cash Consideration.
In arriving at our Opinion, we:
(a) reviewed the Merger Agreement;
(b) reviewed audited financial statements of Plasma-Therm for the fiscal
years ended November 30, 1996, November 30, 1997 and November 30, 1998;
(c) reviewed unaudited financial statements of Plasma-Therm for the fiscal
year ended November 30, 1999;
(d) reviewed financial projections of Plasma-Therm prepared by the
management of Plasma-Therm;
(e) reviewed the historical market prices and trading volume for
Plasma-Therm Common Stock;
(f) held discussions with the senior management of Plasma-Therm with
respect to the business and prospects for future growth of
Plasma-Therm;
(g) reviewed and analyzed certain publicly available financial data for
certain companies we deemed comparable to Plasma-Therm;
(h) reviewed and analyzed certain publicly available information for
transactions that we deemed comparable to the Transaction;
<PAGE> 2
The Board of Directors
Plasma-Therm, Inc.
December 20, 1999
Page 2
(i) reviewed public information concerning Plasma-Therm;
(j) at the request of Plasma-Therm, approached and held discussions with
certain third parties to solicit indications of interest in the
possible acquisition of Plasma-Therm; and
(k) performed such other analyses, reviewed such other information and
considered such other factors as we deemed appropriate.
In rendering our Opinion, we relied upon and assumed, without independent
verification or investigation, the accuracy and completeness of all of the
financial and other information provided to or discussed with us by
Plasma-Therm and its employees, representatives and affiliates. With respect to
forecasts of the future financial condition and operating results of
Plasma-Therm provided to or discussed with us, we assumed, at the direction of
the management of Plasma-Therm, without independent verification or
investigation, that such forecasts were reasonably prepared on bases reflecting
the best available information, estimates and judgments of the management of
Plasma-Therm. We have neither made nor obtained any independent evaluations or
appraisals of the assets or the liabilities (contingent or otherwise) of
Plasma-Therm or affiliated entities. We are not expressing any opinion as to
the underlying valuation, future performance or long-term viability of
Plasma-Therm, or the price at which Plasma-Therm Common Stock will trade
subsequent to announcement of the Transaction. Our Opinion is necessarily based
on the information available to us and general economic, financial and stock
market conditions and circumstances as they exist and can be evaluated by us on
the date hereof. It should be understood that, although subsequent developments
may affect this Opinion, we do not have any obligation to update, revise or
reaffirm the Opinion.
As part of our investment banking business, we are regularly engaged in
valuations of businesses and securities in connection with acquisitions and
mergers, underwritings, secondary distributions of securities, private
placements and valuations for other purposes.
We have acted as financial advisor to Plasma-Therm in connection with the
Transaction and to the Board of Directors of Plasma-Therm in rendering this
Opinion and will receive a fee for our services, a significant portion of which
is contingent upon consummation of the Transaction. We also will receive a fee
upon the delivery of this Opinion. In the ordinary course of business, CIBC
World Markets and its affiliates may actively trade securities of Plasma-Therm
and Oerlikon Holding for their own account and for the accounts of customers
and, accordingly, may at any time hold a long or short position in such
securities.
Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the Cash Consideration to be received by the holders of Plasma-Therm
Common Stock (other than Oerlikon and its affiliates) in the Transaction is
fair from a financial point of view to such holders. This Opinion is for the
use of the Board of Directors of Plasma-Therm, and does not constitute a
recommendation to any stockholder as to whether such stockholder should tender
shares of Plasma-Therm Common Stock in the Tender Offer or how such stockholder
should vote on any matters relating to the proposed Transaction.
Very truly yours,
/s/ CIBC WORLD MARKETS CORP.
----------------------------
CIBC WORLD MARKETS CORP.
<PAGE> 1
Exhibit (a)(2)
Plasma-Therm, Inc.
10050 16th Street North
St. Petersburg, Florida 33716
[LOGO OF PLASMA-THERM]
December 27, 1999
Dear fellow shareholder:
I am pleased to inform you that on December 20, 1999, our Company,
Plasma-Therm, Inc., entered into a Merger Agreement with Oerlikon-Buhrle USA,
Inc., ("Oerlikon-Buhrle") and Volcano Acquisition Corp. ("Purchaser"), a
wholly-owned subsidiary of Oerlikon-Buhrle. Pursuant to the Merger Agreement,
Purchaser is today commencing a Tender Offer to purchase all outstanding Shares
of voting common stock, par value $0.01 per share, of the Company at a price of
$12.50 per share, which represents approximately a 33% premium to the Company's
closing stock price on December 17, 1999, the last trading day prior to the
announcement of this transaction and a premium of approximately 56% to the
closing stock price thirty (30) days preceding the date of the Merger Agreement.
The Merger Agreement provides that each share not acquired by the Purchaser in
the Offer will be exchanged for the same consideration payable pursuant to the
Offer in cash in connection with the Merger of the Purchaser with and into the
Company, which is expected to occur as soon as practicable following the
purchase of Shares in the Offer, and the Company will become a wholly-owned
subsidiary of Oerlikon-Buhrle.
Your Board of Directors has unanimously approved the Merger Agreement
and determined that the Offer and the Merger are fair to, and in the best
interests of, the shareholders of the Company. Accordingly, your Board of
Directors recommends that you accept the Offer and tender your Shares to the
Purchaser pursuant to the Offer. In arriving at its recommendation, the Board of
Directors gave careful consideration to a number of factors which are described
in the enclosed Schedule 14D-9. Additional information with respect to the
transaction is contained in the enclosed Schedule 14D-9.
Also enclosed are Purchaser's Offer to Purchase, dated December 27,
1999, and related materials, including a Letter of Transmittal to be used for
tendering your Shares. These documents set forth the terms and conditions of the
Tender Offer and provide instructions as to how to tender your Shares. On behalf
of the Company, I urge you to read the enclosed material and consider this
information carefully and I would like to personally thank you for your time as
a shareholder of the Company.
Sincerely,
/s/Ronald H. Deferrari
Ronald H. Deferrari
Chairman of the Board and
Chief Executive Officer
<PAGE> 1
EXHIBIT (C)(1)
AGREEMENT AND PLAN OF MERGER
By and Among
PLASMA-THERM, INC.
OERLIKON-BUHRLE USA, INC.
and
VOLCANO ACQUISITION CORP.
Dated as of December 20, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1. The Tender Offer.........................................................................................1
1.1. Tender Offer....................................................................................1
1.2. Tender Offer Statement on Schedule 14D-1........................................................2
1.3. Solicitation/Recommendation Statement on Schedule 14D-9.........................................3
1.4. List of Shareholders............................................................................4
1.5. Changes in Applicable Laws......................................................................4
2. The Merger; Closing; Effective Time......................................................................4
2.1. The Merger......................................................................................4
2.2. Closing.........................................................................................5
2.3. Effective Time..................................................................................5
3. Articles of Incorporation and ByLaws of the Surviving Corporation........................................5
3.1. The Articles of Incorporation...................................................................5
3.2. The Bylaws......................................................................................5
4. Officers and Directors of the Company and the Surviving Corporation......................................5
4.1. Directors.......................................................................................5
4.2. Officers........................................................................................7
5. Effect of the Merger on Capital Stock; Exchange of Certificates..........................................7
5.1. Effect on Capital Stock.........................................................................7
5.2. Surrender of Certificates.......................................................................7
5.3. Dissenters' Rights..............................................................................9
5.4. Adjustments to Prevent Dilution................................................................10
5.5. Merger Without Meeting of Stockholders.........................................................10
6. Representations and Warranties of the Company...........................................................10
6.1. Organization, Good Standing and Qualification..................................................10
6.2. Capital Structure..............................................................................11
6.3. Corporate Authority; Approval and Fairness.....................................................12
6.4. Governmental Filings; No Violations............................................................12
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
6.5. Company Reports; Financial Statements..........................................................13
6.6. Absence of Certain Changes.....................................................................14
6.7. Litigation and Liabilities.....................................................................15
6.8. Employee Benefits..............................................................................15
6.9. Compliance with Laws...........................................................................17
6.10. Takeover Statutes..............................................................................18
6.11. Environmental Matters..........................................................................18
6.12. Taxes..........................................................................................19
6.13. Labor Matters..................................................................................20
6.14. Intellectual Property..........................................................................21
6.15. Brokers and Finders............................................................................22
6.16. Year 2000......................................................................................22
6.17. Title to Assets................................................................................23
6.18. Insurance Policies.............................................................................23
6.19. Material Contracts.............................................................................24
6.20. Vote Required..................................................................................25
6.21. Offer Documents................................................................................25
6.22. No other Representations or Warranties.........................................................26
7. Representations and Warranties of Parent and Merger Sub.................................................26
7.1. Ownership of Company Shares....................................................................26
7.2. Capitalization of Merger Sub...................................................................26
7.3. Organization, Good Standing and Qualification..................................................27
7.4. Corporate Authority; Approval and Fairness.....................................................27
7.5. Governmental Filings; No Violations............................................................27
7.6. Compliance with Laws...........................................................................28
7.7. Takeover Statutes..............................................................................28
7.8. Funds..........................................................................................28
7.9. Other Documents................................................................................28
7.10. No other Representations or Warranties.........................................................29
8. Covenants...............................................................................................29
8.1. Interim Operations of the Company..............................................................29
8.2. Acquisition Proposals..........................................................................32
8.3. Filings; Other Actions; Notification...........................................................34
8.4. Access.........................................................................................36
8.5. Stock Exchange De-listing......................................................................36
8.6. Meetings of the Company's Shareholders.........................................................36
8.7. Publicity......................................................................................38
8.8. Benefits.......................................................................................38
8.9. Indemnification; Directors' and Officers' Insurance............................................39
8.10. Takeover Statute...............................................................................41
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
8.11. Expenses.......................................................................................41
9. Conditions to Each Party's Obligation to Effect the Merger..............................................41
9.1. Shareholder Approval...........................................................................41
9.2. HSR............................................................................................41
9.3. Litigation.....................................................................................41
9.4. Tender Offer...................................................................................42
10. Termination.............................................................................................42
10.1. Termination by Mutual Consent..................................................................42
10.2. Termination by Either Parent or the Company....................................................42
10.3. Termination by the Company.....................................................................42
10.4. Termination by Parent..........................................................................43
10.5. Effect of Termination and Abandonment..........................................................43
11. Miscellaneous and General...............................................................................44
11.1. Survival.......................................................................................44
11.2. Modification or Amendment......................................................................45
11.3. Waiver of Conditions...........................................................................45
11.4. Counterparts...................................................................................45
11.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL..................................................45
11.6. Notices........................................................................................46
11.7. Entire Agreement; NO OTHER REPRESENTATIONS.....................................................47
11.8. No Third Party Beneficiaries...................................................................47
11.9. Obligations of Parent and of the Company.......................................................47
11.10. Severability...................................................................................47
11.11. Interpretation.................................................................................48
11.12. Assignment.....................................................................................48
11.13. Enforcement of Agreement.......................................................................48
11.14. Glossary of Terms..............................................................................48
</TABLE>
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"),
dated as of December 20, 1999, by and among Plasma-Therm, Inc., a Florida
corporation (the "Company"), Oerlikon-Buhrle USA, Inc., a Delaware corporation
("Parent"), and Volcano Acquisition Corp., a Florida corporation and a
wholly-owned subsidiary of Parent ("Merger Sub").
RECITALS
WHEREAS, the respective boards of directors of each of Parent, Merger
Sub and the Company have approved this Agreement and adopted the plan of merger
(the "Plan") set forth herein whereby Merger Sub will merge with and into the
Company upon the terms and subject to the conditions set forth in this Agreement
(the "Merger");
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement;
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent and Merger Sub are entering into agreements with Ronald H.
Deferrari, Ronald S. Deferrari, Edmond A. Richards and Stacy L. Wagner pursuant
to which such stockholders of the Company shall agree to take certain actions to
support the transactions contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. THE TENDER OFFER
1.1. Tender Offer.
Provided that this Agreement shall not have been terminated in
accordance with Section 10 hereof and none of the events set forth in paragraphs
(a) through (g) of Annex A hereto shall have occurred or be existing and the
other conditions to the Offer specified in Annex A shall have been satisfied
(together with such events, the "Offer Conditions"), as soon as reasonably
practicable, and in any event within five Business Days after public
announcement of this Agreement, Merger Sub will commence, within the meaning of
Rule 14d-2 under the Exchange Act (as defined below), a tender offer (the
"Offer") for all of the outstanding Shares (as defined below) at a price of
$12.50 per Share in cash, net to the seller, and, subject only to and in
accordance with the terms and conditions of the Offer, accept for payment Shares
that are validly tendered pursuant to the Offer and not withdrawn immediately
following (unless the Offer shall have been extended in accordance with the
terms hereof) the later of (i) the date on which the waiting period under the
HSR Act has expired or has been terminated, (ii) the date on which the waiting
period under the Exon-Florio Amendment to the Omnibus Trade and Competitiveness
Act of 1988 has expired or has been terminated, and (iii)
<PAGE> 6
the twentieth Business Day after the commencement of the Offer, unless this
Agreement is terminated in accordance with Section 10, in which case the Offer
(whether or not previously extended in accordance with the terms hereof) shall
expire on such date of termination; provided, however, and notwithstanding
anything to the contrary in the foregoing, Parent and Merger Sub agree that
unless the Company is in material breach of this Agreement, if any of the Offer
Conditions specified in paragraphs (a) or (c) of Annex A exists at the time of
the scheduled expiration date of the Offer, Merger Sub shall from time to time
extend the Offer at such times as the Company may request for five Business Days
for each extension, but shall in no event extend the Offer beyond June 30, 2000,
and, provided, further, it is understood and agreed that unless Parent or Merger
Sub is in material breach of this Agreement (A) if any of the Offer Conditions
specified in paragraphs (a) through (h) of Annex A exists at the time of the
scheduled expiration date of the Offer, Merger Sub may extend and re-extend the
Offer on one or more occasions for periods of time (not to exceed ten Business
Days for any particular extension) so that the expiration date of the Offer (as
so extended) is as soon as reasonably practicable or advisable after the date on
which the particular Offer Condition no longer exists, and (B) Merger Sub may
extend and re-extend the Offer on one or more occasions for periods of time (not
to exceed ten Business Days for any particular extension): (i) for any period
required by any rule, regulation, interpretation or position of the SEC (as
defined below) or its staff applicable to the Offer, (ii) for any period
required by applicable law and (C) if on such expiration date there shall have
been validly tendered and not withdrawn more than 50%, but less than 80%, of the
outstanding number of Shares, for an aggregate period of twenty days beyond the
latest expiration date that would be permitted under this sentence; provided,
further, that all extensions of the Offer made by Merger Sub (other than at the
request of the Company) shall not extend the Offer beyond June 30, 2000. Merger
Sub shall not, without the prior written consent of the Company, decrease the
price per Share offered in the Offer, change the form of consideration offered
or payable in the Offer, decrease the numbers of Shares sought in the Offer,
change the conditions to the Offer, impose additional conditions to the Offer,
amend any term of the Offer, in each case, in any manner adverse to the holders
of Shares or waive the Minimum Conditions (as defined in Annex A).
Notwithstanding the above, in the event that Merger Sub has not, on or before
June 30, 2000, accepted pursuant to the Offer for payment more than 50% of the
outstanding Shares of the Company (on a fully diluted basis), then the Agreement
may be terminated by the Board of Directors of either Parent or the Company;
unless such purchase shall not have occurred because of a material breach of
this Agreement by the party seeking to terminate this Agreement.
1.2. Tender Offer Statement on Schedule 14D-1.
As soon as reasonably practicable on the date the Offer is
commenced, Merger Sub shall file a Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1") with the SEC with respect to the Offer. The Schedule 14D-l
shall contain an Offer to Purchase and forms of the related letter of
transmittal and other documents relating to the Offer (which Schedule 14D-1,
Offer to Purchase, letter of transmittal and other documents, together with any
supplements or amendments thereto, are referred to herein collectively as the
"Offer Documents"). Parent and Merger Sub agree that the Company and its
counsel shall be given
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<PAGE> 7
an opportunity to review and comment on the Schedule 14D-l before it is filed
with the SEC. Parent, Merger Sub and the Company each agrees promptly to correct
any information provided by it for use in the Offer Documents that shall have
become false or misleading in any material respect, and Parent, Merger Sub and
the Company further agree to take all steps necessary to cause the Schedule
14D-1 as so corrected to be filed with the SEC and the other Offer Documents as
so corrected to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Parent and Merger Sub
also agree that the Offer Documents shall comply as to form in all material
respects with the requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules and regulations thereunder, and on the date filed
with the SEC and on the date first published, sent or given to the Company's
stockholders, the Offer Documents shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent or Merger Sub with respect to information
supplied by the Company for inclusion in the Offer Documents. Parent and Merger
Sub agree to provide the Company and its counsel in writing with any comments
Parent, Merger Sub or their counsel may receive from the SEC or its staff with
respect to the Offer Documents promptly after receipt of such comments and with
copies of any written responses and telephonic notification of any verbal
responses by Parent, Merger Sub or their counsel.
1.3. Solicitation/Recommendation Statement on Schedule
14D-9.
1.3.(a) Subject to its fiduciary duties, the Company
hereby approves of and consents to the Offer and hereby consents to the
inclusion in the Offer Documents of the recommendation of the Board of Directors
described clause (A) of Section 6.3(b). The Company has been advised by each of
its directors and executive officers holding in excess of 1% of the fully
diluted Shares outstanding that each such person intends to tender all shares of
Common Stock owned by such person pursuant to the Offer, except to the extent of
any restrictions created by Section 16(b) of the Exchange Act.
1.3.(b) The Company shall file a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
with the Securities and Exchange Commission (the "SEC") on the date of the
filing of the Schedule 14D-1 containing the recommendations described in Section
6.3(b) and shall mail the Schedule 14D-9 to the stockholders of the Company;
provided, however, that if the Company's Board of Directors determines
consistent with its fiduciary duties in accordance with Section 8.2 hereof to
amend or withdraw such recommendation, such amendment or withdrawal shall not
constitute a breach of this Agreement. Parent and its counsel shall be given an
opportunity to review and comment on the Schedule 14D-9 before it is filed with
the SEC. Parent, Merger Sub and the Company each agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 that shall have become
false or misleading in any material respect, and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9, as so corrected to be
disseminated to holders of Shares, in each case as and to the extent required by
the applicable federal securities
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<PAGE> 8
laws. The Company also agrees that the Schedule 14D-9 shall comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder, and on the date filed with the SEC and on the date
first published, sent or given to the Company's stockholders, the Schedule 14D-9
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to information supplied by Parent or Merger Sub for inclusion in the
Schedule 14D-9. The Company agrees to provide Parent and Merger Sub and their
counsel in writing with any comments the Company or its counsel may receive from
the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments and with copies of any written response and telephonic
notification of any verbal responses by the Company or its counsel.
1.4. List of Shareholders.
In connection with the Offer, the Company will promptly cause
its Transfer Agent to furnish to Merger Sub mailing labels containing as of a
recent date, the names and addresses of the record holders of Shares and of
those persons becoming record holders subsequent to such date, together with
copies of all lists of stockholders, security position listings and computer
files in the Company's possession or control regarding the beneficial owners of
Shares, and shall furnish to Merger Sub such information and assistance
(including updated lists of stockholders, security position listings and
computer files) as Merger Sub may reasonably request in communicating the Offer
to the Company's stockholders. For purposes of this Agreement, the term
"Business Day" means any day other than Saturday, Sunday or a federal holiday.
1.5. Changes in Applicable Laws
Subject to the terms and conditions of this Agreement, if
there shall occur a change in law or in a binding judicial interpretation of
existing law which would, in the absence of action by the Company or the Board,
prevent the Merger Sub, were it to acquire a specified percentage of the Shares
then outstanding, from approving and adopting this Agreement by its affirmative
vote as the holder of a majority of issued and outstanding Shares and without
the affirmative vote of any other stockholder, the Company will use its
reasonable best efforts to promptly take or cause such action to be taken.
2. THE MERGER; CLOSING; EFFECTIVE TIME
2.1. The Merger.
Upon the terms and subject to the conditions set forth in this
Agreement, at the Effective Time (as hereinafter defined), Merger Sub shall be
merged with and into the Company in accordance with this Agreement and the
separate corporate existence of Merger Sub shall thereupon cease. The Company
shall be the surviving corporation in the Merger (sometimes hereinafter referred
to as the "Surviving Corporation"), and the separate corporate
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<PAGE> 9
existence of the Company with all its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger, except as set forth in
Section 3. The Merger shall have the effects specified in the Florida Business
Corporation Act (the "FBCA").
2.2. Closing.
The closing of the Merger (the "Closing") shall take place (i)
at the offices of Foley & Lardner, 100 North Tampa Street, Suite 2700, Tampa
Florida 33602 at 10:00 A.M. on the third business day after the last to be
satisfied or waived of the conditions set forth in Section 8 hereof shall be
satisfied or waived in accordance with this Agreement or (ii) at such other
place and time and/or on such other date as the Company and Parent may agree in
writing (the "Closing Date").
2.3. Effective Time.
Simultaneously with the Closing, the Company and Parent will
cause Articles of Merger reflecting the provisions set forth in this Agreement
(the "Articles of Merger") to be executed (by the Company and Merger Sub) and
delivered for filing to the Department of State of the State of Florida (the
"Department") as provided in Section 607.1105 of the FBCA. The Merger shall
become effective at the time when the Articles of Merger have been duly filed
with the Department or at such later time agreed by the parties in writing and
provided in the Articles of Merger (the "Effective Time").
3. ARTICLES OF INCORPORATION AND BYLAWS OF THE SURVIVING
CORPORATION
3.1. The Articles of Incorporation.
The articles of incorporation of the Company as in effect
immediately prior to the Effective Time shall be the articles of incorporation
of the Surviving Corporation (the "Articles"), until duly amended as provided
therein or by applicable law, except that Article V of the articles of
incorporation of the Company shall be amended in its entirety to read as
follows: "The total number of shares of all classes of capital stock that the
Corporation shall have authority to issue shall be 1,000 shares of Common Stock,
par value $.01 per share".
3.2. The Bylaws.
The bylaws of the Company in effect at the Effective Time
shall be the bylaws of the Surviving Corporation (the "Bylaws"), until duly
amended as provided therein or by applicable law.
4. OFFICERS AND DIRECTORS OF THE COMPANY AND THE SURVIVING
CORPORATION
4.1. Directors.
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<PAGE> 10
4.1.(a) If requested by Parent, the Company shall to
the extent permitted by law, promptly following the purchase by Merger Sub of
Shares pursuant to the Offer in accordance with the terms hereunder, take, at
its expense, all actions necessary (including calling a special meeting of the
Board of Directors of the Company or, only if necessary, the shareholders of the
Company for this purpose) to cause natural Persons designated by Parent to
become directors of the Company so that the total number of such natural Persons
equals that number of directors, rounded up to the next whole number, which
represents the product of (x) the total number of directors on the board of
directors of the Company multiplied by (y) the percentage that the number of
Shares so accepted for payment plus any shares beneficially owned by Parent or
its affiliates on the date hereof bears to the number of Shares outstanding at
the time of such acceptance for payment; provided, however, that prior to the
Effective Time the total number of directors designated by Parent will not
exceed 75% of the Board of Directors of the Company. At such time, the Company
shall also cause persons designated by Parent to constitute the same percentage
(rounded up to the next whole number) as is on the Company's Board of Directors
of (i) each committee of the Company's Board of Directors; (ii) each board of
directors (or similar body) of each Subsidiary of the Company, and (iii) each
committee (or similar body) of each such board. In furtherance thereof, the
Company will increase the size of the board of directors of the Company, or use
its best efforts to secure the resignation of directors, or both, as is
necessary to permit Parent's designees to be elected to the board of directors
of the Company; provided, however, that prior to the Effective Time, the board
of directors of the Company shall always have at least three members who are
neither officers of Parent nor designees, shareholders or affiliates of Parent
("Parent Insiders"). The Company's obligations to appoint designees to the board
of directors of the Company now shall be subject to Section 14(f) of the
Exchange Act and Rule 14(f)-l thereunder. The Company shall promptly take all
actions required pursuant to such Section and Rule in order to fulfill its
obligations under this Section 4.1 and shall include in the Schedule 14D-9 such
information as is required under such Rule, Section and Schedule. Parent agrees
to furnish to the Company all information concerning Parent's designees which
may be necessary to comply with the foregoing and agrees that such information
will comply with the Exchange Act and the rules and regulations thereunder and
other applicable laws. Notwithstanding anything in this Agreement to the
contrary, in the event that Parent's designees are elected or appointed to the
Board of Directors of the Company after the acceptance for payment of Shares
pursuant to the Offer and prior to the Effective Time, the affirmative vote of
at least a majority of the directors of the Company who are not Parent Insiders
shall be required to (a) amend or terminate this Agreement by the Company, (b)
waive any of the Company's material rights, benefits or remedies hereunder, (c)
extend the time for performance of Parent's and Merger Sub's respective
obligations hereunder, or (d) take any other action by the Company's Board of
Directors under or in connection with this Agreement which would adversely
affect the ability of the shareholders of the Company to receive the Merger
Consideration.
4.1.(b) The directors of Merger Sub immediately prior
to the Effective Time shall be the directors of the Surviving Corporation as of
the Effective Time and until their successors are duly appointed or elected in
accordance with applicable law.
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<PAGE> 11
4.2. Officers.
The persons listed on Schedule 4.2 shall, from and after the
Effective Time, be the officers of the Surviving Corporation until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Articles and the
Bylaws.
5. EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF
CERTIFICATES
5.1. Effect on Capital Stock.
At the Effective Time, as a result of the Merger and without
any action on the part of the holder of any capital stock of the Company:
5.1.(a) Merger Consideration. Each share of the
voting Common Stock, par value $0.01 per share, of the Company (a "Share" and,
collectively, the "Shares") issued and outstanding immediately prior to the
Effective Time (other than Shares owned by Parent, Merger Sub or any other
direct or indirect Subsidiary of Parent (collectively, the "Parent Companies")
or Shares that are owned by the Company and in each case not held on behalf of
third parties or Shares that are owned by Dissenting Shareholders (collectively,
"Excluded Shares")) shall, by virtue of the Merger and without any action on the
part of the holder thereof, be cancelled, extinguished and converted into the
right to receive, without any interest, an amount in cash equal to $12.50 per
Share (the "Merger Consideration") or such greater amount which may be paid
pursuant to the Offer. As a result of the Merger and without any action on the
part of the holder thereof, at the Effective Time, all Shares shall no longer be
outstanding and shall be cancelled and retired and shall cease to exist, and
each certificate (a "Certificate") formerly representing any of such Shares
(other than Excluded Shares) shall thereafter represent only the right to the
Merger Consideration for each Share upon the surrender of such Certificate in
accordance with Section 5.2 or, with respect to Shares held by Dissenting
Shareholders, the right, if any, to receive payment from the Surviving
Corporation of the "fair value" of such Shares as determined in accordance with
Section 607.1302 of the FBCA.
5.1.(b) Cancellation of Shares. Each Excluded Share
shall cease to be outstanding, shall, by virtue of the Merger, be cancelled and
retired without payment of any consideration therefor and shall cease to exist.
5.1.(c) Merger Sub. Each share of Common Stock, par
value $0.01 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation.
5.2. Surrender of Certificates.
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<PAGE> 12
5.2.(a) Paying Agent. At the Effective Time, Parent
shall deposit, or shall cause to be deposited, with The Bank of New York or such
other party reasonably satisfactory to the Company, to act as paying agent (the
"Paying Agent"), selected by Parent (within 15 days after the date hereof) with
the Company's prior approval for the benefit of the holders of Shares, an amount
in cash sufficient in the aggregate to provide all funds necessary for the
Paying Agent to make payments of the Merger Consideration to all holders of
Shares (such cash being hereinafter referred to as the "Exchange Fund") . To the
extent not required within five Business Days for payment with respect to
surrendered Shares, proceeds in the Exchange Fund may be invested by the Paying
Agent, if and as directed by Parent (as long as such investments do not impair
the rights of holders of Shares) in direct obligations of the United States of
America, obligations for which the faith and credit of the United States of
America is pledged to provide for the payment of principal and interest, or
certificates of deposit issued by a commercial bank having at least $10 billion
in assets, and any net earnings with respect thereto shall be paid to Parent as
and when requested by the Parent; provided that at no time may the amount of the
Exchange Fund be reduced below an amount necessary to make payments of the
Merger Consideration for all Shares not theretofore submitted.
5.2.(b) Exchange Procedures. As soon as practicable
after the Effective Time, the Surviving Corporation shall cause the Paying Agent
to mail to each holder of record of Shares immediately prior to the Effective
Time (other than holders of Excluded Shares) (i) a letter of transmittal
specifying that delivery of the Certificates shall be effected, and risk of loss
and title to the Certificates shall pass, only upon delivery of the Certificates
(or affidavits of loss in lieu thereof) to the Paying Agent, such letter of
transmittal to be in such form and have such other provisions as Parent may
reasonably specify, and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the amounts of cash payable hereunder to a
Person other than the Person in whose name the surrendered Certificate is
registered on the transfer books of the Company. Subject to Section 5.2(e), upon
surrender of a Certificate for cancellation to the Paying Agent together with
such letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor a check in an amount equal to (after
giving effect to any required tax withholdings) the Merger Consideration
multiplied by the number of Shares formerly represented by such Certificate and
the Certificate so surrendered shall forthwith be cancelled. No interest will be
paid or accrued on any amount payable upon due surrender of the Certificates. In
the event of a transfer of ownership of Shares that is not registered in the
transfer records of the Company, a check in the amount payable hereunder, upon
due surrender of the Certificate, may be paid to such a transferee if the
Certificate formerly representing such Shares is presented to the Paying Agent,
accompanied by all documents reasonably required to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes have been
paid.
For the purposes of this Agreement, the term "Person" shall
mean any individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity (as hereinafter defined) or other
entity of any kind or nature.
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<PAGE> 13
5.2.(c) Transfers. At or after the Effective Time,
there shall be no transfers on the stock transfer books of the Company of the
Shares that were outstanding immediately prior to the Effective Time. From and
after the Effective Time, the holders of Certificates evidencing ownership of
Shares outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares except as otherwise provided for herein
or by applicable law. If, after the Effective Time, Certificates are presented
to the Surviving Corporation, they shall be canceled and exchanged as provided
in this Section 5.
5.2.(d) Termination of Exchange Fund. Any portion of
the Exchange Fund (including the proceeds of any interest and other income
received by the Paying Agent in respect of all such funds) that remains
unclaimed by the shareholders of the Company for six months after the Effective
Time shall be returned to the Surviving Corporation. Any shareholders of the
Company who have not theretofore complied with this Section 5 shall thereafter
look to the Surviving Corporation for payment of the Merger Consideration
payable upon due surrender of their Certificates (or affidavits of loss in lieu
thereof) in accordance with this Agreement, in each case, without any interest
thereon.
5.2.(e) Lost, Stolen or Destroyed Certificates. In
the event any Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such Certificate to
be lost, stolen or destroyed and, if required by the Parent or Surviving
Corporation, the posting by such Person of a bond in a reasonable amount as the
Parent or Surviving Corporation may direct as indemnity against any claim that
may be made against it with respect to such Certificate, the Paying Agent will
issue in exchange for such lost, stolen or destroyed Certificate the amount of
cash such Persons are entitled to hereunder upon due surrender of the Shares
represented by such Certificate pursuant to this Agreement.
5.3. Dissenters' Rights.
Notwithstanding anything in this Agreement to the contrary, if
required under the FBCA, but only to the extent required thereby, Shares that
are issued and outstanding immediately prior to the Effective Time and which are
held by shareholders ("Dissenting Shareholders") who (A) have not voted in favor
of or consented to the Merger and (B) in the manner provided in Section 607.1320
of the FBCA shall have delivered a written notice of intent to demand payment
for such Shares if the Merger is effectuated in the time and manner provided in
FBCA and (C) shall not have failed to perfect or shall not have effectively
withdrawn or lost their rights to appraisal and payment under the FBCA shall not
be converted into the right to receive the Merger Consideration, but shall, in
lieu thereof, be entitled to receive the consideration as shall be determined
pursuant to Sections 607.1301 through 607.1320 of the FBCA; provided, however,
that any such holder who shall have failed to perfect or shall have effectively
withdrawn or lost his, her or its right to appraisal and payment under the FBCA,
shall thereupon be deemed to have had such Person's Shares converted, at the
Effective Time, into the right to receive the Merger Consideration set forth
herein, without any interest or dividends thereon. Notwithstanding anything to
the contrary contained in this
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<PAGE> 14
Section 5.3, if (i) the Merger is rescinded or abandoned or (ii) the
stockholders of the Company revoke the authority to effect the Merger, then the
right of any Dissenting Shareholder to be paid the fair value of such Dissenting
Shareholder's Shares pursuant to Section 607.1302 of the FBCA shall cease as
provided in the FBCA. The Company will give Parent prompt notice of any demands
received by the Company for appraisals of Shares held by Dissenting
Shareholders. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to any demands for appraisal or offer to
settle or settle any such demands.
5.4. Adjustments to Prevent Dilution.
The Company shall not, without the prior written consent of
the Parent (which consent shall not be unreasonably withheld), change the number
of Shares, or securities convertible or exchangeable into or exercisable for
Shares, issued and outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse split), stock dividend or
distribution, recapitalization, merger, subdivision, issuer tender or exchange
offer, or other similar transaction. In the event of any such change, the Merger
Consideration shall be equitably adjusted.
5.5. Merger Without Meeting of Stockholders.
Notwithstanding the foregoing, if Merger Sub, or any other
direct or indirect subsidiary of Parent, shall acquire at least 80 percent of
the outstanding Shares, the parties hereto shall take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the expiration of the Offer without a meeting of stockholders
of the Company, in accordance with Section 607.1104 of the FBCA.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth in the disclosure letter delivered to Parent by the
Company on or prior to entering into this Agreement (the "Company Disclosure
Letter"), the Company hereby represents and warrants to Parent and Merger Sub
that (for purposes of the representations and warranties in this Section 6 that
relate to events occurring or conditions existing in the past, references to the
Company shall be deemed to include its previously existing Subsidiary (as such
term is hereinafter defined):
6.1. Organization, Good Standing and Qualification.
The Company has no Subsidiaries (as hereinafter defined). The
Company is a corporation duly organized, validly existing and of active status
under the laws of the State of Florida and has all requisite corporate or
similar power and authority to own, operate and lease its properties and assets
and to carry on its business as presently conducted and is qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the ownership or operation of its properties or conduct of its business
requires such qualification, except where the failure to be so qualified or in
good standing, individually or in the
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<PAGE> 15
aggregate, would not have a Company Material Adverse Effect (as hereinafter
defined). The Company has delivered to Parent complete and correct copies of the
Company's articles of incorporation and bylaws (or comparable governing
instruments), as amended to the date hereof. The Company's articles of
incorporation and bylaws (or comparable governing instruments) so delivered are
in full force and effect.
As used in this Agreement, the term "Subsidiary" means, with
respect to the Company, Parent or Merger Sub, as the case may be, any entity,
whether incorporated or unincorporated, of which at least a majority of the
securities or ownership interests having by their terms ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions is directly or indirectly owned or controlled by such party or by one
or more of its respective Subsidiaries or by such party and any one or more of
its respective Subsidiaries.
As used in this Agreement, the term "Company Material Adverse
Effect" means a material adverse effect on the financial condition, properties,
business, assets, operations or results of operations of the Company taken as a
whole; including any such effect resulting from any change in economic or
business conditions generally or in the industries of the Company specifically.
6.2. Capital Structure.
The authorized capital stock of the Company consists of
25,000,000 Shares, of which 11,252,311 Shares were outstanding as of the close
of business on December 20, 1999. No shares of capital stock of the Company are
held by the Company in its treasury or by the Company's Subsidiaries. All of the
issued and outstanding Shares have been duly authorized and are validly issued,
fully paid and nonassessable. The Company has no Shares reserved for or subject
to issuance, except that, as of December 20, 1999, there were 1,732,750 Company
Options (as defined below) to purchase Shares outstanding, 1,732,750 Shares
reserved in the aggregate for issuance upon exercise of such Company Options
pursuant to the 1995 Stock Incentive Plan as Adopted by the Board of Directors
and the Stock Option Committee on March 17, 1995 and as Amended and Restated
Effective as of May 6, 1997 and as Amended and Restated effective as of January
8, 1999 (the "Company Stock Plan"), and 759,117 Shares were reserved for future
grants under the Company Stock Plan. No shares of capital stock of the Company
are held by the Company in its treasury. Except as set forth above, there are no
other shares of capital stock or voting securities of the Company and there are
preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or to sell any shares of capital stock or
other securities of the Company or any securities or obligations convertible or
exchangeable into or exercisable for, or giving any Person a right to subscribe
for or acquire, any securities of the Company, and no securities or obligations
evidencing such rights are authorized, issued or outstanding. The Company does
not have outstanding any bonds, debentures, notes or other obligations the
holders of which have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the
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<PAGE> 16
shareholders of the Company on any matter ("Voting Debt") After the Effective
Time, and after giving effect to Section 8.8(a) hereof, the Surviving
Corporation will have no obligation to issue, transfer or sell any shares of
capital stock of the Company or the Surviving Corporation pursuant to any
Compensation or Benefit Plan (as defined below). There are no voting trusts or
other agreements or understandings to which the Company or any of the Company's
directors or officers is a party with respect to the voting of capital stock of
the Company.
6.3. Corporate Authority; Approval and Fairness.
6.3.(a) The Company has all requisite corporate power
and authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and all agreements and
documents contemplated hereby or executed in connection herewith (the "Ancillary
Documents") and to consummate, subject only to approval of the Merger by the
holders of a majority of the outstanding Shares if required by applicable law
(the "Company Requisite Vote"), the transactions contemplated by this Agreement
and the Ancillary Documents. This Agreement has been and at the time of
execution each Ancillary Document will have been duly executed and delivered by
the Company, and assuming due authorization, execution and delivery of this
Agreement and the Ancillary Documents by Parent and Merger Sub, each is a valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles (the
"Bankruptcy and Equity Exception").
6.3.(b) The Board of Directors of the Company (A) at
a meeting duly called and held has duly adopted resolutions (i) approving this
Agreement, the Offer and the Merger (as hereinafter defined), determining that
the Merger is advisable and that the terms of the Offer and Merger are fair to,
and in the best interests of, the Company's stockholders and recommending that
the Company's stockholders accept the Offer and approve the Merger and this
Agreement, and (ii) taking all action necessary to render Sections 607.0901 and
607.0902 of the Florida Business Corporation Act, as amended (the "FBCA")
inapplicable to, and have no adverse effect on, Parent and Merger Sub, the
Offer, the Merger, this Agreement, any of the Ancillary Documents or Offer
Documents, and any of the transactions contemplated hereby and thereby, and (B)
has received the opinion of its financial advisor, CIBC World Markets Corp. (the
"Financial Advisor"), to the effect that, as of the date of this Agreement, the
$12.50 per Share cash consideration to be received in the Offer and the Merger,
taken together, by the holders of Shares (other than Parent and its affiliates)
is fair from a financial point of view to such holders. The Company has been
authorized by the Financial Advisor to permit the inclusion of its opinion in
its entirety and references thereto, subject to prior review and consent by the
Financial Advisor (such consent not to be unreasonably withheld) in the Offer to
Purchase, the Schedule 14D-9 and the Proxy Statement (as hereinafter defined).
6.4. Governmental Filings; No Violations.
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6.4.(a) Other than the filings and/or notices (A)
pursuant to Section 2.3, (B) under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), (C) under the Securities Exchange Act
of 1934 (the "Exchange Act"), and (D) under the Exon-Florio Amendment to the
Omnibus Trade and Competitiveness Act of 1988 (the "Exon-Florio Amendment"), no
notices, reports or other filings are required to be made by the Company with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by the Company from, any governmental or regulatory
authority, agency, commission, body or other governmental entity (each a
"Governmental Entity"), in connection with the execution and delivery of this
Agreement and any of the Ancillary Documents by the Company and the consummation
by the Company of the transactions contemplated hereby or thereby, except for
those that the failure to make or obtain, individually or in the aggregate,
would not have a Company Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
6.4.(b) The execution, delivery and performance of
this Agreement and any of the Ancillary Documents by the Company do not, and the
consummation by the Company of the transactions contemplated hereby will not,
constitute or result in (A) a breach or violation of, a conflict with or a
default under, either the articles of incorporation of the Company or bylaws of
the Company or the comparable governing instruments of any of its Subsidiaries,
in each case as amended to date, (B) a breach or violation of, a conflict with,
or a default under, the acceleration of any obligations, the termination or in a
right of termination of, the triggering of any payment or other obligation
pursuant to, there being declared void, voidable, or without further binding
effect, or the creation of a lien, pledge, security interest or other
encumbrance on the assets of the Company (in each case with or without notice,
lapse of time or both) pursuant to, any agreement, lease, contract, note,
mortgage, indenture, arrangement or other commitment or obligation ("Contracts")
not otherwise terminable by the Company thereto on ninety (90) days' or less
notice without payment of any termination fees or other amounts binding upon the
Company or any Law or governmental or non-governmental permit or license to
which the Company is subject or (C) any change in the rights or obligations of
any party under any of the Contracts, except, in the case of clause (B) or (C)
above, for any breach, violation, default, acceleration, creation or change,
that, individually or in the aggregate, would not have a Company Material
Adverse Effect or prevent, materially delay or materially impair the ability of
the Company to consummate the transactions contemplated by this Agreement.
6.5. Company Reports; Financial Statements.
The Company has made available to Parent each registration
statement, report, proxy statement or information statement filed by it since
November 30, 1998 (the "Audit Date") and prior to the date hereof, including (i)
the Company's Annual Report on Form 10-K for the fiscal year ended November 30,
1998, and (ii) the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended February 28, 1999, and May 31, 1999, and August 31, 1999, each in
the form (including exhibits, annexes and any amendments thereto) filed with
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<PAGE> 18
the Securities and Exchange Commission (the "SEC") (collectively, including
amendments of any such reports as amended, the "Company Reports"). As of their
respective dates, (i) the Company Reports complied as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the rules and regulations thereunder, and (ii) none of the Company SEC
Reports contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The consolidated financial statements (including any notes and
related schedules) of the Company included in the Company Reports comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto or, in the case of the unaudited interim financial
statements, as permitted by Form 10-Q of the SEC). Each of the consolidated
balance sheets included in or incorporated by reference into the Company Reports
(including the related notes and schedules) fairly presents the consolidated
financial position of the Company as of its date and each of the consolidated
statements of income and of consolidated statements of cash flow included in or
incorporated by reference into the Company Reports (including any related notes
and schedules) fairly presents the results of operations and cash flows, as the
case may be, of the Company for the periods set forth therein (subject, in the
case of unaudited statements, to the absence of notes and normal year-end audit
adjustments), in each case in accordance with GAAP consistently applied during
the periods involved, except as may be noted therein. The Company has no
liabilities or obligations (whether absolute, accrued, fixed, contingent,
liquidated, unliquidated or otherwise) of any nature, except liabilities,
obligations or contingencies (a) which are reflected on the audited balance
sheet of the Company as at November 30, 1998 (the "Audit Date") (including the
notes thereto), or (b) which (i) individually or in the aggregate, would not
have a Company Material Adverse Effect, or (ii) are disclosed or reflected in
the Company SEC Reports filed after the Audit Date and prior to the date of this
Agreement. The reserves established by the Company in the Company's consolidated
balance sheet as of November 30, 1998 (the "1998 Balance Sheet") are, in the
Company's good faith judgement, adequate to fund the liabilities covered
thereby. Since January 1, 1996, the Company has timely filed with the SEC all
forms, reports and other documents required to be filed prior to the date hereof
pursuant to the Securities Act, the Exchange Act or the rules and regulations
thereunder. This paragraph is qualified in its entirety by those exceptions that
would not have a Company Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
6.6. Absence of Certain Changes.
Except as disclosed in the Company Reports or as permitted
hereunder, since the Audit Date, the Company has conducted its business only in,
and has not engaged in any material transaction other than according to, the
ordinary and usual course of such business consistent with past practice and
there has not been (i) any Company Material Adverse Effect; (ii) any material
damage, destruction or other casualty loss with respect to any material asset or
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<PAGE> 19
material property owned, leased or otherwise used by the Company, not covered by
insurance; (iii) any declaration, setting aside or payment of any dividend or
other distribution in respect of the capital stock of the Company; or (iv) any
change by the Company in accounting principles, practices or methods which is
not required or permitted by GAAP. Since the Audit Date and through the date
hereof, except as provided for herein or as disclosed in the Company Reports,
there has not been any material increase in the compensation payable or that
could become payable by the Company to officers or key employees or any material
amendment of any of the Compensation and Benefit Plans (as hereinafter defined)
other than increases or amendments in the ordinary course.
6.7. Litigation and Liabilities.
Except as disclosed in the Company Reports, there are no
civil, criminal or administrative actions, suits, claims, hearings,
investigations or proceedings pending or, to the knowledge of the executive
officers of the Company listed on Schedule 6.7, after due inquiry("Knowledge of
the Company"), relating to or threatened against the Company.
6.8. Employee Benefits.
6.8.(a) A true and correct copy of each bonus,
deferred compensation, pension, retirement, profit-sharing, thrift, savings,
employee stock ownership, stock bonus, stock purchase, restricted stock, stock
option, employment, termination, severance, compensation, medical, health or
other plan, agreement, policy or arrangement that covers employees or former
employees of the Company ("Employees"), or directors or former directors of the
Company (the "Compensation and Benefit Plans") including amendments thereto and
(i) any trust agreement or insurance contract forming a part of such
Compensation and Benefit Plans, (ii) the two (2) most recent annual actuarial
valuations, if any, prepared for each Company Benefit Plan; (iii) the two (2)
most recent annual reports (Series 5500 and all schedules thereto), if any,
required under ERISA in connection with each Company Benefit Plan or related
trust; (iv) the most recent determination letter received from the IRS, if any,
for each Company Benefit Plan and related trust which is intended to satisfy the
requirements of Section 401(a) of the Code; (v) if the Company Benefit Plan is
funded, the most recent annual and periodic accounting of Company Benefit Plan
assets; and (vi) the most recent summary plan description together with the most
recent summary of material modifications, if any, required under ERISA with
respect to each Company Benefit Plan have been made available to Parent prior to
the date hereof. The Compensation and Benefit Plans are listed in Section 6.8 of
the Company Disclosure Letter and any Compensation and Benefit Plans containing
"change of control" or similar provisions therein are specifically identified in
Section 6.8 of the Company Disclosure Letter.
6.8.(b) All Compensation and Benefit Plans covering
Employees (the "Plans") are in substantial compliance with all applicable laws,
including the Code and the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to the extent applicable. Each Compensation and Benefit Plan
has been administered in substantial compliance with its terms and the
requirements of ERISA and the Code, to the extent
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<PAGE> 20
applicable. Each Plan that is an "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA (a "Pension Plan") and that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service (the "IRS") with respect
to "TRA" (as defined in Section 1 of Rev. Proc. 93-39), and to the Knowledge of
the Company there are no circumstances reasonably likely to result in revocation
of any such favorable determination letter. As of the date hereof, there is no
material pending or, to the Knowledge of the Company, threatened litigation,
regulatory inquiry or audit relating to the Compensation and Benefit Plans.
Neither the Company nor any employee, officer or director thereof, nor, to the
Knowledge of the Company, no other third-party with respect to the Plans, has
engaged in a transaction with respect to any Plan that could subject the Company
to any liability under Section 4975 of the Code or Section 502 of ERISA or could
require indemnification by the Company.
6.8.(c) As of the date hereof, no liability under
Subtitle C or D of Title IV of ERISA has been incurred or is reasonably expected
to be incurred by the Company, any Subsidiary or any entity which is considered
one employer with the Company under Section 4001 of ERISA or Section 414 of the
Code (an "ERISA Affiliate") with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them. The Company, its Subsidiaries
and its ERISA Affiliates have not incurred and do not reasonably expect to incur
any termination or withdrawal liability with respect to a multiemployer plan
under Subtitle C or E to Title IV of ERISA. No notice of a "reportable event"
within the meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any Pension
Plan or by the Company, any Subsidiary or any ERISA Affiliate within the
12-month period ending on the date hereof or will be required to be filed in
connection with the transactions contemplated by this Agreement.
6.8.(d) All contributions required to be made under
the terms of any Compensation and Benefit Plan as of the date hereof have been
timely made or have been reflected on the most recent consolidated balance sheet
filed or incorporated by reference in the Company Reports. Neither any Pension
Plan nor any single-employer plan of an ERISA Affiliate has an "accumulated
funding deficiency," within the meaning of Section 412 of the Code or Section
302 of ERISA and neither the Company nor any ERISA Affiliate has an outstanding
funding waiver (whether or not waived) as of the last day of the most recent
plan year ended prior to the date hereof. Neither the Company nor any ERISA
Affiliates has provided, or is required to provide, security to any Pension Plan
or to any single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Code.
6.8.(e) Under each Pension Plan which is a single
employer plan, as of the last day of the most recent plan year ended prior to
the date hereof, the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001 (a) (16) of ERISA (as
determined on the basis of the actuarial assumptions contained in the Pension
Plan's most recent actuarial valuation), did not exceed the then current value
of the
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<PAGE> 21
assets of such Pension Plan, and there has been no material change in the
financial condition of such Pension Plan since the last day of the most recent
plan year.
6.8.(f) The Company does not have any obligations for
retiree health and life benefits under any Compensation and Benefit Plan. The
Company and its ERISA Affiliates have at all times complied with the
continuation coverage requirements of Code Section 4980B, or similar state law.
6.8.(g) The consummation of the Merger and the other
transactions contemplated by this Agreement will not (x) entitle any Employees
to severance pay, (y) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of compensation or
benefits under, increase the amount payable or trigger any other material
obligation pursuant to, any of the Compensation and Benefit Plans or (z) result
in any breach or violation of, or a default under, any of the Compensation and
Benefit Plans. No payment or benefit which will or may be made by the Company,
Parent, any Subsidiary or any of their respective affiliates with respect to any
Employee will be characterized as an "excess parachute payment," within the
meaning of Section 280G(b)(1) of the Code.
6.8.(h) Each Compensation and Benefit Plan can be
amended, terminated or otherwise discontinued without liability to the Company,
Parent, any Subsidiary or any ERISA Affiliate.
6.8.(i) Notwithstanding anything to the contrary
contained in this Section 6.8, the representations and warranties contained in
this Section 6.8 shall be deemed to be true and correct unless such failures to
be true and correct are reasonably likely to have a Company Material Adverse
Effect.
6.9. Compliance with Laws.
The business of the Company is not in violation of any
federal, state, local or foreign law, statute, ordinance, rule, regulation,
judgment, order, injunction, decree, arbitration award, agency requirement,
license or permit of any Governmental Entity (collectively, "Laws"), except for
violations that would not have a Company Material Adverse Effect or prevent or
materially burden or materially impair the ability of the Company to consummate
the transactions contemplated by this Agreement. No investigation, audit or
review by any Governmental Entity with respect to the Company is pending or, to
the Knowledge of the Company, threatened, nor has any Governmental Entity
indicated an intention to conduct the same, except for those the outcome of
which, individually or in the aggregate, would not have a Company Material
Adverse Effect or prevent or materially burden or materially impair the ability
of the Company to consummate the transactions contemplated by this Agreement.
The Company has all permits, licenses, franchises, variances, exemptions, orders
and other governmental authorizations, consents and approvals from Governmental
Entities necessary to conduct its business as presently conducted, except for
those the absence of which would not have a Company Material Adverse Effect or
prevent or materially burden
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<PAGE> 22
or materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement. Except (i) as disclosed in Schedule 6.9 of the
Disclosure Letter and (ii) for those the absence of which individually or in the
aggregate would not have a Company Material Adverse Effect or prevent or
materially burden or materially impair the ability of the Company to consummate
the transactions contemplated by this Agreement, there is no judgement, decree,
order, injunction, writ or ruling of any Governmental Entity or any arbitration
outstanding against the Company.
6.10. Takeover Statutes.
As of the date hereof, no "fair price," "moratorium," "control
share acquisition," "interested shareholder" or other similar anti-takeover
statute or regulation (including, without limitation, Sections 607.0901 and
607.0902 of the FBCA) (each a "Takeover Statute") or restrictive provision of
any applicable anti-takeover provision in the articles of incorporation of the
Company or bylaws of the Company is applicable to the Company, the Shares, the
Offer, the Merger, this Agreement, the Ancillary Documents, or any of the other
transactions contemplated by this Agreement, and the Company has received an
opinion to that effect from Foley & Lardner ("Outside Counsel").
6.11. Environmental Matters.
Except as disclosed in the Company Reports and except for such
matters that would not, individually or in the aggregate, have a Company
Material Adverse Effect, the Company: (i) is in compliance with all applicable
Environmental Laws (as hereinafter defined); (ii) has obtained and is in
compliance with all permits, licenses, authorizations, registrations and other
governmental consents required by applicable Environmental Laws (as hereinafter
defined) (collectively, "Environmental Permits"); and the Company has made all
appropriate filings for the issuance or renewal of such Environmental Permits
(other than in connection with the transactions contemplated hereby); (iii) all
of the owned real property, leased real property or any other real property
operated or controlled by the Company (collectively, "Real Property") is free of
any contamination arising out of, relating to, or resulting from the release or
other dissemination by the Company of any Hazardous Substances (as hereinafter
defined), and there has been no release or other dissemination at any time of
any Hazardous Substances at, on, about, under or within any Real Property or any
real property formerly owned, leased, operated or controlled by the Company or
any predecessor thereof (other than pursuant to and in accordance with
Environmental Permits); (iv) there are no notices (including, without
limitation, notices that the Company is or may be a potentially responsible
person or otherwise liable in connection with any waste disposal or other site
containing Hazardous Substances), civil, criminal or administrative actions,
suits, hearings, investigations, inquiries or proceedings pending or threatened
that are based on or related to any Environmental Matters (including, without
limitation, the failure to comply with any Environmental Law or the failure to
have, or to comply with, any Environmental Permits); (v) there are no present or
past conditions, events, circumstances, facts, activities, practices, incidents,
actions, omissions or plans: (1) that are reasonably likely to interfere with or
prevent continued compliance by the
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<PAGE> 23
Company with Environmental Laws or the requirements of Environmental Permits, or
(2) that are reasonably likely to give rise to any liability under any
Environmental Laws; (vi) the Company has not disposed of, transported, or
arranged for the transportation of, any Hazardous Substances to any site which
has been placed on the National Priorities List, the Comprehensive Environmental
Response, Compensation and Liability Information System ("CERCLIS") list, or any
comparable state list of properties to be investigated and/or remediated; and
(vii) the Company has delivered or made available to Parent true and complete
copies and results of any material reports, studies, analyses, tests, or
monitoring in the possession of the Company, in each case relating to any
Environmental Matters with respect to the Company (including without limitation
any Hazardous Substances at, on, about, under or within any Real Property or any
real property formerly owned, leased, operated or controlled by the Company or
any predecessor thereof).
As used herein, the term "Environmental Law" means any
federal, state, local or foreign statute, law, regulation, code, order, decree,
permit, authorization, common law or agency requirement as in effect, as
interpreted as of the date hereof relating to: Environmental Matters, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act ("CERCLA"); the Resource Conservation and Recovery Act of
1976, as amended; the Federal Water Pollution Control Act, as amended; the
Federal Clean Air Act, as amended; the Toxic Substances Control Act, as amended;
the Safe Drinking Water Act, as amended; the Pollution Control Act of 1990, as
amended.
As used herein, the term "Environmental Matter" means any
matter arising out of, relating to, or resulting from pollution, contamination,
protection of the environment, human health or safety, health or safety of
employees, sanitation, and any matters relating to emissions, discharges,
disseminations, releases or threatened releases of Hazardous Substances into the
air (indoor and outdoor), surface water, groundwater, soil, land surface or
subsurface, buildings, facilities, real or personal property or fixtures or
otherwise arising out of, relating to, or resulting from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
handling, release or threatened release of Hazardous Substances.
As used herein, the term "Hazardous Substance" means any
substance that is listed, classified or regulated pursuant to any Environmental
Law including any petroleum product or any by-product or fraction thereof,
asbestos or asbestos-containing material, lead-containing paint or plumbing,
polychlorinated biphenyls, radioactive material or radon , urea formaldehyde
foam insulation, natural gas; and any chemicals, materials or substances, which
are defined as "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous substances," "toxic substances," "pollutants,"
"contaminants," or words of similar import under any Environmental Law.
6.12. Taxes.
(i) The Company has duly and timely filed (taking into account
any extension of time within which to file) all Tax Returns (as defined below)
required to be filed and all such
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<PAGE> 24
filed Tax Returns are true, correct and complete in all material respects; (ii)
the Company has paid all Taxes (as defined below) that are shown as due on such
filed Tax Returns or that the Company is obligated to withhold from amounts
owing to any employee, creditor or third party, except with respect to matters
contested in good faith and that would not have a Company Material Adverse
Effect; (iii) the most recent financial statements contained in the reports
filed with the SEC by the Company reflect full reserves for all Taxes payable by
the Company for all Tax periods and portions thereof through the date of such
financial statements, (iv) no deficiency or adjustment for any Taxes has been
proposed, asserted or assessed against the Company that has not been paid or
fully reserved for on the financial statements of the Company, and, to the
Knowledge of the Company, no such deficiency or adjustment has been threatened;
(v) there are no Liens for Taxes upon the assets or property of the Company,
except Liens for current Taxes not yet due; (vi) the Company has withheld and
paid over to the relevant Tax authority all Taxes required to have been withheld
and paid in connection with payments to employees, independent contractors,
creditors, shareholders or other third parties; (vii) the Company is not a party
to any Tax sharing, Tax allocation, Tax indemnity or similar agreement; (viii)
no "consent" within the meaning of Section 341(f) of the Code has been filed
with respect to the Company; and (ix) has not waived any statute of limitations
with respect to Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency, except, in each case, for those failures to file or
pay or those waivers that would not have a Company Material Adverse Effect. As
of the date hereof, there are not pending or, to the Knowledge of the Company,
threatened in writing, any audits, examinations, investigations or other
proceedings in respect of Taxes or Tax matters and there are no outstanding
waivers or pending requests for waivers to extend the statutory period of
limitations to assess any Taxes on the Company.
As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the terms "Taxes", and "Taxable") includes all federal,
state, local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, severances, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
transfer, license, premium, alternative or added minimum, production, value
added, occupancy and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts and any interest in respect of such penalties and
additions and including any liability in respect of any Tax as a transferee or
successor, by Law, Contract or otherwise, (ii) the term "Tax Return" includes
all returns and reports (including elections, declarations, disclosures,
schedules, estimates, forms, claims for refund, declaration of estimated Tax and
information returns) required to be supplied to a Tax authority relating to
Taxes and (iii) "Audit" shall mean any audit, assessment of Taxes, other
examination by any Tax authority, proceeding or appeal of such proceeding
relating to Taxes.
6.13. Labor Matters.
The Company is not the subject of any labor dispute (other
than routine individual grievances) or labor arbitration proceeding or any
material proceeding asserting that
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<PAGE> 25
the Company has committed an unfair labor practice nor is there pending or, to
the Knowledge of the Company, threatened, nor since January 1, 1996 has there
been any (i) labor strike, dispute, walk-out, work stoppage, slow-down or
lockout, labor dispute (other than routine individual grievances) or labor
arbitration proceeding or any involving the Company, or (ii) any activity or
proceeding by a labor union or representative thereof to organize any employees
of the Company.
6.14. Intellectual Property.
6.14.(a) Company possess all right, title and
interest in and to the Company Intellectual Property, free and clear of any
encumbrances licenses or other restriction, or are properly licensed to use the
Company Intellectual Property , and has the right to require the applicant of
any Company Intellectual Property which is an application, including but not
limited to patent applications, trademark applications, service mark
applications, copyright applications, or mask work applications, to transfer
ownership to the Company of the application and of the registration once it
issues, and to the Knowledge of the Company all registered patents, trademarks,
service marks and copyrights are valid and subsisting and in full force and
effect in each case, except for any failures of the foregoing that, individually
or in the aggregate, would not have a Material Adverse Effect.
6.14.(b) Except as disclosed in the Company
Disclosure Letter:
(i) the Company is not, nor will it be as a
result of the execution and delivery of this Agreement or the
performance of its obligations hereunder, in violation of any
licenses, sublicenses and other agreements as to which the
Company is a party as of the date hereof and pursuant to which
the Company is authorized to use any third-party patents,
trademarks, service marks, copyrights, trade secrets or
computer software;
(ii) The Company Intellectual Property is all
the Intellectual Property that is necessary for the ownership,
maintenance and operation of the Company's properties and
assets and the Company have the right to use all of the
Company Intellectual Property in all jurisdictions in which
the Company has conducted its business and the consummation of
the transactions contemplated hereby will not alter or impair
any such rights;
(iii) to the Knowledge of the Company no third
party has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Company Intellectual
Property;
(iv) to the Knowledge of the Company no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand has been made, is pending, or, to
the Knowledge of the Company, is threatened which challenges
the legality, validity, enforceability, use or ownership of
any Company Intellectual Property;
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<PAGE> 26
(v) to the Knowledge of the Company, Company
has not, and the continued operation of the business as
presently conducted will not, interfere with, infringe upon,
misappropriate or otherwise come into conflict with any
intellectual property rights of third parties, and the Company
has not received any charge, complaint, claim, demand or
notice so alleging (including any claim that the Company must
license or refrain from using any intellectual property rights
of any third party);
(vi) the Company has never agreed to indemnify
any person for or against any interference, infringement,
misappropriation or other conflict with respect to any Company
Intellectual Property;
"Company Intellectual Property" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereon, and all patents, patent applications and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof, (b) all
trademarks, service marks, trade dress, logos, trade names, domain names, and
corporate names, together with all translations, adaptations, derivations and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations and renewals in connection therewith, (c) all
copyrights and all applications, registrations and renewals in connection
therewith, (d) all mask works and all applications, registrations and renewals
in connection therewith, (e) all trade secrets and confidential business
information (including ideas, research and development, know-how formulas,
compositions, manufacturing and production processes and techniques, methods,
schematics, technology, technical data, designs, drawings, flowcharts, block
diagrams, specifications, customer and supplier lists, print and cost
information and business and marketing plans and proposals), (f) all computer
software (including data and related documentation), (g) all other proprietary
rights, (h) all copies and tangible embodiments of the foregoing categories of
intellectual property listed in subsections (a) through (g) herein (in whatever
form or medium), and (i) all licenses, sublicenses, agreements, or permissions
related to the foregoing categories of intellectual property listed in
subsections (a) through (g) herein (categories (a) through (i) herein are
collectively referred to as "Intellectual Property") which is owned by or
licensed to Company and is used, or has been used in connection with the
business.
6.15. Brokers and Finders.
Except for CIBC World Markets Corp., the arrangements with
which have been disclosed to Parent prior to the date hereof, neither the
Company nor any of its officers, directors or employees has employed any broker
or finder or has entered into any contract, arrangement or understanding which
may result in the obligation of Parent or the Company to pay any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated by
this Agreement.
6.16. Year 2000.
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6.16.(a) The Company has developed a plan which it
reasonably believes is designed to confirm that all computer software and
systems (including hardware, firmware, operating system software, utilities,
embedded processors and application's software) used in and material to the
business of the Company are designed to operate during and after the calendar
year 2000 to accurately process data (including but not limited to calculating,
comparing and sequencing) from, into and between the twentieth and twenty-first
centuries, including leap year calculations and the Company is not aware of any
flaws in any of the computer software and systems owned by it and used in and
material to the business of the Company that would have a Company Material
Adverse Effect.
6.16.(b) Except for such matter that would not
individually or in the aggregate, have a Company Material Adverse Effect, none
of the computer software, computer firmware, computer hardware (whether general
or special purpose) or other similar or related items of automated, computerized
or software systems that are used or relied on by any Entity in the conduct of
its business, and none of the products and services sold, licensed, rendered, or
otherwise provided by any Entity in the conduct of its business, (collectively,
"Software, Hardware, and Services") will malfunction, cease to function,
generate incorrect data or produce incorrect results when processing, providing
or receiving (i) date-related data from, into and between the twentieth and
twenty-first centuries or (ii) date-related data in connection with any valid
date in the twentieth and twenty-first centuries, provided that the Software,
Hardware, and Services are used in accordance with their product documentation
and provided that all external third party hardware, software, firmware and
services used in combination therewith properly exchange date data with the
Software, Hardware, and Services.
6.17. Title to Assets.
Except as set forth in the 1998 Balance Sheet, the Company has
good and marketable title to all of its real and personal properties and assets
reflected on the 1998 Balance Sheet (other than assets disposed of since
November 30, 1998 in the ordinary course of business consistent with past
practice or acquired since November 30, 1998), in each case free and clear of
all claims, liens, pledges, encumbrances, security interests, options, or other
similar restrictions ("Encumbrances") except for (i) Encumbrances which secure
indebtedness which is properly reflected in the 1998 Balance Sheet or in the
Company Reports, (ii) liens for Taxes accrued but not yet payable; (iii) liens
arising as a matter of law in the ordinary course of business with respect to
obligations incurred after the date of the 1998 Balance Sheet, provided that the
obligations secured by such liens are not delinquent; and (iv) such
imperfections of title and Encumbrances, if any, as would not, individually or
in the aggregate, have a Material Adverse Effect. Except for intellectual
property which is specifically dealt with in Section 6.14 above and except as
set forth in the Company Disclosure Letter, the Company either owns, or has
valid leasehold interests in, all properties and assets used by it in the
conduct of its business except where the absence of such ownership or leasehold
interest would not, individually or in the aggregate, have a Company Material
Adverse Effect.
6.18. Insurance Policies.
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The Company maintains in force insurance policies and bonds in
such amounts and against such liabilities and hazards as are consistent with
industry practice. A complete list of all material insurance policies is set
forth in the Company Disclosure Letter. Except as set forth in the Company
Disclosure Letter, the Company is not now liable, nor will it become liable, for
any retroactive premium adjustment not reflected in the 1998 Balance Sheet. All
such policies are valid and enforceable and in full force and effect, all
premiums owed in respect thereof have been timely paid, and the Company has not
received any notice of premium increase or cancellation with respect to any of
its insurance policies or bonds. Except as set forth in the Company Disclosure
Letter and except for any matters which, individually or in the aggregate, would
not have a Company Material Adverse Effect or prevent or materially burden or
materially impair the ability of the Company to consummate the transaction
contemplated by this Agreement, there are no claims pending as to which the
insurer has denied liability or is reserving its rights, and all claims have
been timely and properly filed. Within the last three years, the Company has not
been refused any insurance coverage sought or applied for, and the Company has
no reason to believe that their existing insurance coverage cannot be renewed as
and when the same shall expire, upon terms and conditions standard in the market
at the time renewal is sought.
6.19. Material Contracts.
6.19.(a) The Company has delivered or made available
to the Parent true and complete copies (or in the case of oral contracts,
summaries), of each of the Company's Material Contracts. For the purposes
hereof, "Material Contracts" means all (i) Contracts for borrowed money or
guarantees thereof, (ii) Contracts to acquire or dispose of any businesses or
any material assets other than sales of the Company's products in the ordinary
course of business and purchases of supplies and equipment in the ordinary
course of business, (iii) Contracts involving any swap or option transaction
relating to commodities, interest rates, foreign exchange, or currency or other
similar transactions customarily known as a derivative ("Derivatives"); (iv)
Contracts containing an agreement by the Company restricting its ability to
engage in any line of business or other activity; (v) Contracts entered into by
the Company, any of its Subsidiaries or their respective predecessors since
January 1, 1996 involving the sale or other disposition by such parties of one
or more business units, divisions or entities (including former Subsidiaries)
with respect to which the Company's surviving liability (including indemnities),
or other obligations (including deferred payment and earn-out obligations),
could reasonably be expected to exceed $100,000, or which require funds to be
held in trust or escrow for the benefit of a third party; (vi) Contracts
involving the investment, including by way of capital contribution, loan or
advance, by the Company or any of its Subsidiaries of more than $10,000 in any
other person, firm or entity; (vii) Contracts to purchase materials, supplies or
other assets, other than purchase orders entered into in the ordinary course of
business, involving obligations of more than $25,000 individually, and $100,000
in the aggregate; (viii) Contracts with any of the Company's top ten customers,
as determined by net sales to such customers for the one-year period ended
November 30, 1998 and (ix) other Contracts which involve the payment or receipt
of $100,000 or more per year.
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6.19.(b) Each Material Contract is in full force and
effect and enforceable in accordance with its terms, subject to the Bankruptcy
and Equity Exception.
6.19.(c) The Company has not received any written
notice of default under any Material Contract, no default (beyond any applicable
grace or cure period) has occurred under any Material Contract on the part of
the Company, or, to the Company's knowledge, on the part of any party thereto,
nor has any event occurred which, with the giving of notice or the lapse of time
or both, would constitute any default on the part of the Company under any
Material Contract nor, to the Company's knowledge, has any event occurred which
with the giving of notice or lapse of time, or both, would constitute any
default on the part of any other party to any Material Contract.
6.19.(d) Except as described in Section 6.18 of the
Disclosure Letter, no consent or approval of any party to any of the Material
Contracts is required for the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby to which
the Company is a party.
6.19.(e) To the knowledge of the Company, except for
Contracts to which the Company is a party, no officer, director or employee of
the Company is bound by any Contract that purports to limit the ability of such
officer, director or employee to (i) engage in or continue any conduct, activity
or practice relating to the business of the Company, or (ii) assign to any
Person any rights to any invention, improvement or discovery.
6.20. Vote Required.
Unless the Merger may be consummated in accordance with
Section 607.1104 of the FBCA, in which case no vote of the holders of the Shares
is required to approve the Merger, this Agreement and the transactions
contemplated hereby, the Company Requisite Vote is the only vote or approval of
the holders of any series or class of the Company's capital stock necessary to
adopt this Agreement and approve the transactions contemplated hereby.
6.21. Offer Documents.
None of the information contained in the Schedule 14D-9, the
information statement, if any, filed by the Company in connection with the Offer
pursuant to Rule 14f-1 under the Exchange Act (the "Information Statement"), any
related schedule required to be filed by the Company with the SEC or any
amendment or supplement thereto, at the respective times such documents are
filed with the SEC or first published, sent or given to the Company's
stockholders, contain or will contain any untrue statement of a material fact or
omit or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading except that no
representation is made by the Company with respect to information supplied by
Parent or Merger Sub specifically for inclusion in the Schedule 14D-9 or
Information Statement or any schedule, amendment or supplement. None of the
information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Offer
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Documents will, at the date of filing with the SEC, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at any time prior
to acceptance of the offer and payment for the Shares by Merger Sub, the Company
shall obtain knowledge of any facts with respect to itself, any of its officers
and directors that would require the supplement or amendment to any of the
foregoing documents in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or to comply with
applicable Laws, such amendment or supplement shall be promptly filed with the
SEC and, as required by Law, disseminated to the stockholders of the Company,
and in the event Parent shall advise the Company as to its obtaining knowledge
of any facts that would make it necessary to supplement or amend any of the
foregoing documents, the Company shall promptly amend or supplement such
document as required and distribute the same to its stockholders.
6.22. No other Representations or Warranties.
Except for the representations and warranties contained in
this Agreement or in the Ancillary Documents, neither the Company nor any other
Person makes any other express or implied representation or warranty on behalf
of the Company or any of its Affiliates.
7. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.
Except as set forth in the disclosure letter delivered to the Company
by Parent on or prior to entering into this Agreement (the "Parent Disclosure
Letter"), Parent and Merger Sub each hereby represent and warrant to the Company
that:
7.1. Ownership of Company Shares.
Neither Parent nor any of its Subsidiaries (i) owns any of the
Shares, and (ii) will acquire any of the Shares except pursuant to the Offer.
7.2. Capitalization of Merger Sub.
The authorized capital stock of Merger Sub consists of 100
shares of Common Stock, par value $.01 per share, of Merger Sub all of which are
validly issued and outstanding. All of the issued and outstanding capital stock
of Merger Sub is, and at the Effective Time will be, owned by Parent, and there
are (i) no other shares of capital stock or voting securities of Merger Sub
authorized, (ii) no securities of Merger Sub convertible into or exchangeable
for shares of capital stock or voting securities of Merger Sub and (iii) no
options or other rights to acquire from Merger Sub, and no obligations of Merger
Sub to issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of Merger Sub.
Merger Sub has not conducted any business prior to the date hereof and has no,
and prior to the Effective Time will have no, assets, liabilities or obligations
of any nature
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other than those incident to its formation and pursuant to or in connection with
this Agreement, the Offer and the Merger and the other transactions contemplated
by this Agreement.
7.3. Organization, Good Standing and Qualification.
Each of Parent and Merger Sub is a corporation duly organized,
validly existing and in good standing (or active status) under the laws of its
jurisdiction of organization and has all requisite corporate or similar power
and authority to own, operate and lease its properties and assets and to carry
on its business as presently conducted and is qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where the ownership
or operation of its properties or conduct of its business requires such
qualification, except where the failure to be so qualified or in good standing,
individually or in the aggregate, would not have a Parent Material Adverse
Effect (as hereinafter defined). Parent has delivered to the Company a complete
and correct copy of Merger Sub's articles of incorporation and bylaws (or
comparable governing instruments), as amended to the date hereof. Merger Sub's
articles of incorporation and bylaws (or comparable governing instruments) so
delivered are in full force and effect.
As used in this Agreement, the term "Parent Material Adverse
Effect" means a material adverse effect that materially adversely effects the
ability of Parent to consummate the transactions contemplated by this Agreement
or that would prevent or materially delay the consummation of the Merger.
7.4. Corporate Authority; Approval and Fairness.
No vote of holders of capital stock of Parent is necessary to
approve this Agreement, the Offer and the Merger and the other transactions
contemplated hereby. Each of Parent and Merger Sub has all requisite corporate
power and authority and has taken all corporate action necessary in order to
execute, deliver and perform its obligations under this Agreement, and the
Ancillary Documents, and to consummate the transactions contemplated hereby and
thereby. The consummation of the transactions contemplated hereby and thereby
has been duly authorized by the respective Boards of Directors of Parent and
Merger Sub and no other corporate proceeding on the part of Parent or Merger Sub
is necessary to authorize the execution and delivery of this Agreement and the
Ancillary Documents, by Parent and Merger Sub and the consummation of the
transactions contemplated hereby and thereby. This Agreement has been and at the
time of execution each Ancillary Document will have been duly executed and
delivered by Parent and Merger Sub and, assuming due authorization, execution
and delivery of this Agreement and the Ancillary Documents, by the Company, each
is a valid and binding agreement of Parent and Merger Sub, enforceable against
each of Parent and Merger Sub in accordance with its terms, subject to the
Bankruptcy and Equity Exception.
7.5. Governmental Filings; No Violations.
7.5.(a) Other than the filings and/or notices (A)
pursuant to Section 2.3, (B) under the HSR Act, (C) the Exchange Act and (D)
under the Exon-Florio Amendment, no
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notices, reports or other filings are required to be made by Parent or Merger
Sub with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Parent or Merger Sub from, any
Governmental Entity, in connection with the execution and delivery of this
Agreement and the Ancillary Documents by Parent and Merger Sub and the
consummation by Parent and Merger Sub of the Merger, the Offer and the other
transactions contemplated hereby and thereby, except for those that the failure
to make or obtain, individually or in the aggregate, would not have a Parent
Material Adverse Effect.
7.5.(b) The execution, delivery and performance of
this Agreement and the Ancillary Documents by Parent and Merger Sub do not, and
the consummation by Parent and Merger Sub of the Offer, the Merger or the other
transactions contemplated hereby and thereby will not, constitute or result in a
breach or violation of, or conflict with, or a default under, either the
articles of incorporation or bylaws of Parent and Merger Sub or the comparable
governing instruments of any of Parent's Subsidiaries, in each case as amended
to date.
7.6. Compliance with Laws.
The business of Parent and its Subsidiaries taken as a whole
is not being conducted in violation of any Laws, except for violations that
would not have a Parent Material Adverse Effect.
7.7. Takeover Statutes.
No Takeover Statute or restrictive provision of any applicable
anti-takeover provision in the certificate of incorporation of Parent or bylaws
of Parent is, applicable to Parent, Merger Sub, the Offer, the Merger or any of
the other transactions contemplated by this Agreement.
7.8. Funds.
Parent and Merger Sub will have the funds necessary to
consummate the Offer and the Merger.
7.9. Other Documents.
None of the information contained in the Schedule 14D-1, any
related schedule required to be filed by the Parent or Merger Sub with the SEC
or any amendment or supplement thereto, at the respective times such documents
are filed with the SEC or first published, sent or given to the Company's
stockholders, contain or will contain any untrue statement of a material fact or
omit or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading except that no
representation is made by Parent or Merger Sub with respect to information
supplied by Company specifically for inclusion in the Schedule 14D-1 or any
schedule, amendment or supplement. None of the information supplied
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or to be supplied by Parent or Merger Sub for inclusion or incorporation by
reference in the Schedule 14D-9 or the Information Schedule or related schedule,
amendment or supplement will, at the date of filing with the SEC, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. If at any
time prior to acceptance of the offer and payment for the Shares by Merger Sub,
either Parent or Merger Sub shall obtain knowledge of any facts with respect to
itself, any of its officers and directors or any of its Subsidiaries that would
require the supplement or amendment to any of the foregoing documents in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or to comply with applicable Laws, such
amendment or supplement shall be promptly filed with the SEC and, as required by
Law, disseminated to the stockholders of the Company, and in the event Company
shall advise Parent or Merger Sub as to its obtaining knowledge of any facts
that would make it necessary to supplement or amend any of the foregoing
documents, Parent or Merger Sub shall promptly amend or supplement such document
as required and distribute the same to its stockholders.
7.10. No other Representations or Warranties.
Except for the representations and warranties contained in
this Agreement or in the Ancillary Documents neither Parent nor any other Person
makes any other express or implied representation or warranty on behalf of
Parent or any of its Affiliates.
8. COVENANTS
8.1. Interim Operations of the Company.
From the date hereof through the Effective Time, the Company
covenants and agrees that (i) its operations and business shall be conducted in
the ordinary and usual course and, to the extent consistent therewith, (ii) it
shall use its best reasonable efforts to preserve its business organization
intact and maintain its existing relations and goodwill with customers,
suppliers, distributors, creditors, lessors, employees and business associates,
maintain in effect all existing material qualifications, licenses, permits,
approvals and other authorizations, comply with all applicable Laws, keep
available the services of their officers and employees and maintain satisfactory
relationships with those persons having business relationships with them; (iii)
promptly upon the discovery thereof notify Parent of the existence of any breach
of any representation or warranty contained herein (or, in the case of any
representation or warranty that makes no reference to Material Adverse Effect,
any breach of such representation or warranty in any material respect) or the
occurrence of any event that would cause any representation or warranty
contained herein no longer to be true and correct (or, in the case of any
representation or warranty that makes no reference to Material Adverse Effect,
to no longer be true and correct in any material respect). Without limiting the
generality of the foregoing, except as otherwise set forth in Section 8.1(a) of
the Company Disclosure Letter, the Company covenants and agrees that, from the
date hereof and prior to the Effective Time (unless Parent shall otherwise
approve in writing, which approval shall not be unreasonably
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withheld or delayed, and except as otherwise expressly contemplated by this
Agreement or by Law):
(i) it shall not (x) except to the extent
required by law or the rules and regulations of NASDAQ, amend
its articles of incorporation or bylaws; (y) split, combine or
reclassify its outstanding shares of capital stock; (aa)
declare, set aside or pay any dividend payable in cash, stock
or property in respect of any capital stock or (bb)
repurchase, redeem or otherwise acquire any shares of its
capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital
stock (other than Options granted prior to the date hereof, in
accordance with their respective terms as in effect on the
date hereof or as contemplated by this Agreement);
(ii) it shall not (x) issue, sell, pledge,
dispose of or encumber any shares of, or securities
convertible into or exchangeable or exercisable for, or
options, warrants, calls, commitments or rights of any kind to
acquire, any shares of its capital stock of any class or any
Voting Debt or any other property or assets (other than Shares
issuable pursuant to options (whether or not vested)
outstanding on the date hereof under the Company Stock Plan);
(y) lease, license, guarantee, mortgage, pledge, or encumber
any other property or assets which have an aggregate fair
market value in excess of $10,000 or incur or modify any
material indebtedness for borrowed money or guarantee any such
indebtedness in an amount in excess of, in the aggregate,
$10,000; (z) other than in the ordinary and usual course of
business, transfer, sell or dispose of any other property or
assets, which have an aggregate fair market value in excess of
$10,000 or (aa) by any means, make any significant acquisition
of, or investment in, assets or stock (whether by way of
merger, consolidation, tender offer, share exchange or other
activity) of any person in an amount in excess of, in the
aggregate, $10,000;
(iii) it shall not terminate, establish,
adopt, enter into, make any new grants or awards under, amend
or otherwise modify, any Compensation and Benefit Plans, or
increase the salary, wage, bonus or other compensation of any
employees except for grants or awards or increases under
existing Compensation and Benefit Plans occurring in the
ordinary and usual course of business (which shall include
normal periodic performance reviews and related compensation
and benefit increases), annual reestablishment of Compensation
and Benefit Plans and the provision of individual compensation
or benefit plans and agreements for newly hired non-key
employees of the Company hired in the ordinary course of
business consistent with past practices to replace employees
leaving the Company or except for actions necessary to satisfy
existing contractual obligations under Compensation and
Benefit Plans or agreements existing as of the date hereof;
and
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(iv) it shall not enter into any
transaction involving a merger, consolidation, reorganization,
share exchange, or similar transaction involving, or any
purchase of any assets or any securities of it;
(v) it shall not settle or compromise any
pending or threatened Litigation, other than settlements which
involve solely the payment of money (without admission of
liability) not to exceed $100,000 in any one case;
(vi) it shall not assume, guarantee or
otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other
person;
(vii) it shall not make or forgive any
loans, advances or capital contributions to, or investments
in, any other person in excess of $20,000 in any one case;
(viii) it shall not make any Tax election or
settle any Tax liability;
(ix) it shall not waive, amend or allow to
lapse any term or condition of any confidentiality or
"standstill" agreement to which the Company is a party, unless
such lapse occurs in accordance with such agreements terms;
(x) it shall not grant or amend any stock
related or performance awards except as listed on Schedule
8.1(a)(x);
(xi) it shall not make any material
changes in the type or amount of their insurance coverage or
permit any insurance policy naming the Company or any
Subsidiary as a beneficiary or a loss payee to be canceled or
terminated other than in the ordinary course of business or
except as otherwise provided in this Agreement;
(xii) it shall not make any capital
expenditures in the aggregate for the Company in excess of the
amounts specified in the Company's budget for capital
expenditures, a true and complete copy of which has previously
been delivered to Parent, or otherwise acquire assets not in
the ordinary course of business;
(xiii) it shall not, except as may be
required by law or generally acceptable accounting principles
and with prior written notice to Parent, change any material
accounting principles or practices used by the Company;
(xiv) it shall not enter into any Contracts
for Derivatives;
(xv) it shall not waive, relinquish,
release or terminate any right or claim, including any such
right or claim under any material Contract or
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permit any rights of material value to use any Intellectual
Property to lapse or be forfeited, in each case, except in the
ordinary course of business consistent with the past practice
of the Company;
(xvi) it shall not take any action to cause
the Shares to be delisted from NASDAQ prior to the completion
of the Offer or (if no Offer is made) the Merger; and
(xvii) it will not authorize or enter into
an agreement to do anything prohibited by the foregoing.
8.2. Acquisition Proposals.
8.2.(a) The Company agrees that neither it nor any of
its Subsidiaries nor any of its or its Subsidiaries' officers and directors
shall, and that it shall direct and use its best reasonable efforts to cause its
and its Subsidiaries' employees, agents and other representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) (collectively, "Representatives") not to, directly or indirectly,
initiate, solicit, encourage or otherwise facilitate any inquiries or the making
of any proposal or offer with respect to an Acquisition Proposal. The Company
further agrees that neither it nor any of its Subsidiaries nor any of its or its
Subsidiaries' officers and directors shall, and that it shall direct and use its
reasonable best efforts to cause its and its Subsidiaries' Representatives not
to, directly or indirectly, engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions with, any
Person relating to an Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal; provided, however, that
nothing contained in this Agreement shall prevent either the Company or any of
its representatives or the Board of Directors of the Company from (A) complying
with Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal or otherwise complying with the Exchange Act; (B) providing information
in response to a request therefor by a Person who has made an unsolicited
written Acquisition Proposal; (C) engaging in any negotiations or discussions
with any Person who has made an unsolicited Acquisition Proposal or otherwise
facilitating any effort or attempt to implement an Acquisition Proposal if (i)
the Acquisition Proposal is a Superior Proposal and (ii) the Company's Board of
Directors determines, upon advice from outside legal counsel to the Company,
that the failure to engage in the negotiations or discussions or provide the
information would result in a breach of the fiduciary duties of the Board of
Directors of the Company under applicable law. Any information furnished to any
Person in connection with any Acquisition Proposal shall be provided pursuant to
a confidentiality and standstill agreement on customary terms (including without
limitation prohibitions on unsolicited tender offers, acquisitions of equity
interests in the Company, proposals to acquire stock or assets, formation of
Section 13(d) groups, public request for release from the standstill, actions
that would require the Company to make a public announcement, engaging in proxy
contests, etc.). Subject to all of the foregoing requirements, the Company will
immediately notify Parent orally and in writing if any discussions or
negotiations are sought to be initiated, any inquiry
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or proposal is made, or any information is requested by any Person with respect
to any Acquisition Proposal or which could lead to a Acquisition Proposal and
immediately notify Parent of all material terms of any Acquisition Proposal,
including the identity of the Person making the Acquisition Proposal or the
request for information, if known, and thereafter shall inform Parent on a
timely, ongoing basis of the status and content of any discussions or
negotiations with any Person, including immediately reporting any changes to the
terms and conditions of the Acquisition Proposal.
8.2.(b) In the event the Board of Directors of the
Company has determined that a Acquisition Proposal constitutes a Superior
Proposal, (i) the Company shall promptly notify the Parent thereof and (ii) for
a period of three business days after delivery of such notice, the Company and
its representatives, if requested by Parent, shall negotiate in good faith with
Parent to make such adjustments to the terms and conditions of this Agreement as
would enable the Company to proceed with the transactions contemplated hereby on
such adjusted terms. After such three business day period, the Board of
Directors of the Company may then (and only then) withdraw or modify its
approval or recommendation of the Merger and this Agreement and recommend such
Superior Proposal.
8.2.(c) The Company agrees not to release any Person
from, or waive any provision of, any standstill agreement to which it is a party
or any confidentiality agreement between it and another Person who has made, or
who may reasonably be considered likely to make, a Acquisition Proposal, or who
the Company or any of its Representatives have had discussions with regarding a
proposed, potential or contemplated Company Acquisition Transaction unless the
Company's Board of Directors shall conclude, in good faith, that such action
will lead to a Superior Proposal and after considering applicable provisions of
state law, and upon advice from outside legal counsel to the Company, with
respect to whether such action is required for the Board of Directors to act in
a manner consistent with its fiduciary duties under applicable law.
8.2.(d) For purposes of this Agreement:
(i) "Acquisition Proposal" shall mean, with
respect to the Company, any inquiry, proposal or offer from
any Person relating to any (A) direct or indirect acquisition
or purchase of a business of the Company or any of its
Subsidiaries, that constitutes 25% or more of the consolidated
net revenues, net income or assets of the Company and its
Subsidiaries, (B) direct or indirect acquisition or purchase
of 25% or more of any class of equity securities of the
Company or any of its Subsidiaries whose business constitutes
25% or more of the consolidated net revenues, net income or
assets of the Company and its Subsidiaries, (C) tender offer
or exchange offer that if consummated would result in any
person beneficially owning 25% or more of the capital stock of
the Company, or (D) merger, consolidation, business
combination, recapitalization, liquidation, dissolution or
similar transaction involving the Company or any of its
Subsidiaries whose business constitutes
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25% or more of the consolidated net revenues, net income or
assets of the Company and its Subsidiaries.
(ii) Each of the transactions referred to
in clauses (A)-(D) of the definition of Acquisition Proposal,
other than any such transaction to which Parent or any of its
Subsidiaries is a party, is referred to herein as a "Company
Acquisition Transaction"
(iii) "Superior Proposal" means any bona
fide written offer made by a Person to acquire, directly or
indirectly, for consideration consisting of cash and/or
securities, all of the Shares then outstanding or all or
substantially all the assets of the Company (A) on terms that
the Board of Directors of the Company determines in its good
faith judgment (after consultation with a financial advisor of
nationally recognized reputation and taking into account all
the terms and conditions of the offer deemed relevant by such
Board of Directors, including any break-up fees, expense
reimbursement provisions, conditions to consummation, and the
ability of the party making such proposal to obtain financing
for such offer) are materially more favorable from a financial
point of view to its stockholders than the Merger
Consideration; and (B) that constitutes a transaction that, in
such Board of Directors' judgment, is reasonably likely to be
consummated on the terms set forth, taking into account all
legal, financial, regulatory and other aspects of such
proposal.
8.2.(e) Except as expressly permitted by Section
8.2(c), neither the Board of Directors of the Company nor any committee thereof
shall (i) withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to Parent, the approval or recommendation by such Board of
Directors of this Agreement or the Merger, or (ii) approve or recommend, or
propose publicly to approve or recommend, any Acquisition Proposal or Company
Acquisition Transaction. Nothing contained in this Section 8.2 shall prohibit
the Company from taking and disclosing to its shareholders a position
contemplated by Rule 14e-2 promulgated under the Exchange Act. The Company
agrees that it will immediately cease and cause to be terminated any existing
discussions or negotiations with any parties conducted heretofore with respect
to any Acquisition Proposal.
8.3. Filings; Other Actions; Notification.
8.3.(a) The Company and Parent shall promptly make
their respective filings and thereafter make any other required submissions
under the HSR Act and the Exon-Florio Amendment with respect to the Merger and,
if applicable, the Offer, and cooperate with each other and use (and shall cause
their respective Subsidiaries to use) their respective best reasonable efforts
to take or cause to be taken all actions, and do or cause to be done all things,
necessary, proper or advisable on its part under this Agreement and applicable
Laws to consummate the Offer and make effective the Merger and the other
transactions contemplated by this Agreement as soon as practicable, including
preparing and filing as soon as practicable all documentation to effect all
necessary notices, reports and other filings and to obtain as soon
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as practicable all consents, registrations, approvals, permits and
authorizations necessary or advisable to be obtained from any third party and/or
any Governmental Entity in order to consummate the Offer, the Merger or any of
the other transactions contemplated by this Agreement; provided, however, that
Parent shall not be required by any provision of this Agreement to take any
action, including entering into any consent decree, that requires the
divestiture of a material amount of assets of Parent or any of its Subsidiaries.
Each of Parent and the Company shall use its reasonable best efforts to contest
any proceeding seeking a preliminary injunction or other legal impediment to,
and to resolve any objections as may be asserted by any Governmental Entity with
respect to, the Offer and/or the Merger under the HSR Act, provided that the
foregoing shall not require Parent to take any action that could directly or
indirectly (x) impose limitations on the ability of Parent or Merger Sub (or any
of their affiliates or Subsidiaries) effectively to acquire, operate or hold, or
require Parent, Merger Sub or the Company or any of their respective affiliates
or Subsidiaries to dispose of or hold separate, any material portion of their
respective assets or business, (y) restrict any material future business
activity by Parent, Merger Sub, the Company or any of their affiliates or
Subsidiaries or (z) otherwise materially adversely affect Parent, Merger Sub,
the Company or any of their respective affiliates or Subsidiaries. Subject to
applicable Laws relating to the exchange of information, Parent and the Company
shall have the right to review in advance, and to the extent practicable each
will consult the other on, all the information relating to Parent or the
Company, as the case may be, and any of their respective Subsidiaries, that
appear in any filing made with, or written materials submitted to, any third
party and/or any Governmental Entity in connection with the Merger and the other
transactions contemplated by this Agreement. In exercising the foregoing right,
each of the Company and Parent shall act reasonably and as promptly as
practicable.
8.3.(b) The Company and Parent each shall, upon
request by the other, furnish the other with all information concerning itself,
its Subsidiaries, directors, officers and shareholders and such other matters as
may be reasonably necessary or advisable in connection with any statement,
filing, notice or application made by or on behalf of Parent, the Company or any
of their respective Subsidiaries to any third party and/or any Governmental
Entity in connection with the Offer, the Merger and the transactions
contemplated by this Agreement.
8.3.(c) Subject to any confidentiality obligations
and the preservation of any attorney-client privilege, the Company and Parent
each shall keep the other apprised of the status of matters relating to
completion of the transactions contemplated hereby, including promptly
furnishing the other with copies of notices or other communications received by
Parent or the Company, as the case may be, or any of its Subsidiaries, from any
third party and/or any Governmental Entity with respect to the Offer, the Merger
and the other transactions contemplated by this Agreement.
8.3.(d) Without limiting the generality of the
undertakings pursuant to this Section 8.3, each of the Company and Parent agrees
to provide promptly to any and all federal, state, local or foreign courts or
Government Entity with jurisdiction over enforcement of any applicable antitrust
laws ("Government Antitrust Entity") information and documents
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requested by any Government Antitrust Entity or necessary, proper or advisable
to permit consummation of the Offer, the Merger and the transactions
contemplated by this Agreement.
8.4. Access.
Except as may otherwise be required by applicable Law, the
Company shall (and shall cause its Subsidiaries to) afford Parent's officers,
employees, counsel, accountants and other authorized representatives full
access, during normal business hours throughout the period prior to the
Effective Time, to the properties, books, contracts, records, personnel, offices
and other facilities of the Company and its Subsidiaries and their accountants
and accountant's work papers, and permit Parent to make such copies and
inspections thereof as Parent may reasonably request, and, during such period,
the Company shall (and shall cause its Subsidiaries to) furnish promptly to
Parent all information concerning its business, properties and personnel as may
reasonably be requested; provided, that no investigation pursuant to this
Section shall affect or be deemed to modify any representation or warranty made
by the Company and; provided, further, that the foregoing shall not require the
Company to permit any inspection, or to disclose any information, that in the
reasonable judgment of the Company would result in the disclosure of any trade
secrets of third parties or violate any of its obligations with respect to
confidentiality if the Company shall have used reasonable efforts to obtain the
consent of such third party to such inspection or disclosure. All requests for
information made pursuant to this Section shall be directed to an executive
officer of the Company or such Person as may be designated by either of its
executive officers, as the case may be. All such information shall be governed
by the terms of the Confidentiality Agreement.
8.5. Stock Exchange De-listing.
Unless required by the rules of the National Association of
Securities Dealers, subsequent to Merger Sub's payment for Shares and prior to
the Effective Time, the Company shall not take any action to cause the Shares to
be removed from quotation on the NASDAQ National Market System and de-registered
under the Exchange Act.
8.6. Meetings of the Company's Shareholders.
If approval or action in respect of the Merger by the
shareholders of the Company is required by applicable law following expiration
of the Offer and the purchase of Shares thereunder, the Company will promptly
take, consistent with the FBCA and its articles of incorporation and bylaws, all
action necessary to convene a meeting of holders of Shares as promptly as
practicable to consider and vote upon the approval of the Merger and this
Agreement. The record date for the Stockholders Meeting shall be a date
subsequent to the date Parent or Merger Sub becomes a record holder of Shares
purchased pursuant to the Offer. Without limiting the generality of the
foregoing, if required by applicable law, the Company shall immediately
following the purchase of Shares pursuant to the Offer prepare an information or
proxy statement (the "Proxy Statement"), file it with the SEC under the Exchange
Act as promptly as practicable after Merger Sub purchases Shares pursuant to the
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Offer, and use best efforts to have it cleared by the SEC. The Company will
notify Parent of the receipt of any comments from the SEC or its staff and of
any request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply Parent with copies of
all correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. The Company shall give Parent and its counsel the
opportunity to review the Proxy Statement prior to its being filed with the SEC
and shall give Parent and its counsel the opportunity to review all amendments
and supplements to the Proxy Statement and all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC. Each of the Company and Parent agrees to use its best
efforts, after consultation with the other parties hereto, to respond promptly
to all such comments of and requests by the SEC. As promptly as practicable
after the Proxy Statement has been cleared by the SEC, the Company shall mail
the Proxy Statement to the shareholders of the Company as of the record date for
the shareholders' meeting referred to above. If required under applicable law,
the Company and Parent shall prepare the Schedule 13e-3, file it with the SEC
under the Exchange Act as promptly as practicable after Merger Sub purchases
shares pursuant to the Offer and supplement and amend it as shall be required.
The Company will use its best reasonable efforts to obtain and furnish the
information required to be included by it in the Proxy Statement and, after
consultation with Parent, respond promptly to any comments of the SEC relating
to the preliminary proxy or information statement and to cause the definitive
Proxy Statement to be mailed to its shareholders, all at the earliest practical
time. Whenever any event occurs which should be set forth in an amendment or
supplement to the Proxy Statement or any other filing required to be made with
the SEC, each party will promptly inform the other and cooperate in filing with
the SEC and/or mailing to shareholders such amendment or supplement. The Proxy
Statement and all amendments and supplements thereto shall comply with
applicable law in all material respects and be in form and substance
satisfactory to Parent. Subject to fiduciary requirements of applicable Law of
the Board of Directors as advised by Outside Counsel, the Board of Directors of
the Company shall recommend approval of the Merger, referral to which shall be
included in the Proxy Statement and the Company shall take all lawful action to
solicit such approval. The Company's obligations pursuant to the first sentence
of this Section 8.6 shall not be affected by the withdrawal or modification by
the Board of Directors of its recommendation of the Merger in accordance with
the preceding sentence. At any such meeting of the Company all of the Shares
then owned by the Parent Companies will be, subject to applicable laws, voted in
favor of this Agreement. The Proxy Statement with respect to such meeting of
shareholders, at the respective times filed with the SEC and mailed to
shareholders, shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing shall not apply to the
extent that any such untrue statement of a material fact or omission to state a
material fact was made by the Company in reliance upon and in conformity with
written information concerning the Parent Companies furnished to the Company by
Parent for use in the Proxy Statement. Notwithstanding the foregoing, in the
event that Parent or Merger Sub shall acquire at least 80% of the outstanding
shares of each class of capital stock of the Company pursuant to the
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Offer, the parties hereto agree, at the request of Parent, to take all
appropriate and necessary action to cause the Merger to become effective, as
soon as practicable after the expiration or termination of the Offer and the
transactions contemplated hereby, without a meeting of shareholders of the
Company, in accordance with the FBCA.
8.7. Publicity.
The initial press release shall be a joint press release and
thereafter the Company and Parent each shall consult with the other prior to
issuing any press releases or otherwise making public announcements with respect
to the Offer, the Merger and the other transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement without the prior consent of the other party, which consent shall not
be unreasonably withheld or delayed and prior to making any filings with any
third party and/or any Governmental Entity (including any national securities
exchange or national market systems) with respect thereto, except as may be
required by law or by obligations pursuant to any listing agreement with or
rules of any national securities exchange or national market system.
8.8. Benefits.
8.8.(a) Stock Options.
(i) The Company shall take all necessary
actions to cause (including plan amendments) prior to the
Effective Time each outstanding option to purchase Shares
which had not vested immediately prior to such time to become
vested and fully exercisable.
(ii) Prior to the Effective Time, the
Company shall take all necessary actions to cause each then
outstanding option granted under the Stock Plans to purchase
Shares (a "Company Option"), whether vested or unvested, to be
cancelled, with the holder thereof becoming entitled to
receive an amount of cash equal to the product of (x) the
amount, if any, by which the Merger Consideration exceeds the
exercise price per Share subject to such Company Option
(whether vested or unvested) and (y) the number of Shares
issuable pursuant to the unexercised portion of such Option,
less any required withholding of taxes (such amount being
hereinafter referred to as the "Option Consideration") . The
Option Consideration shall be paid as soon as practicable
following the Effective Time, but in any event within five (5)
days following the Effective Time. The cancellation of a
Company Option in exchange for the Option Consideration shall
be deemed a release of any and all rights the holder had or
may have had in respect of such Company Option, and any
required consents received from Company Option holders shall
so provide.
8.8.(b) Employee Benefits. Except for the Company's
Stock Option Plan, Parent agrees that, during the period commencing at the
Effective Time and ending on
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the first anniversary thereof, the employees of the Company and its Subsidiaries
will continue to be provided with benefits under employee benefit plans that are
no less favorable in the aggregate than the Plans currently provided by the
Company and its Subsidiaries to such employees. Following the Effective Time,
Parent shall cause service by employees of the Company and its Subsidiaries (and
any predecessor entities) to be taken into account for all purposes (including,
without limitation, eligibility to participate, eligibility to commence
benefits, vesting, benefit accrual and severance) under any benefit plans of
Parent or its Subsidiaries (including the Surviving Corporation) . From and
after the Effective Time, Parent shall (i) cause to be waived any pre-existing
condition limitations under benefit plans of Parent or its Subsidiaries in which
employees of the Company or its Subsidiaries participate and (ii) cause to be
credited to any deductible or out of pocket expense of Parent's plans any
deductibles and out-of-pocket expenses incurred by such employees and their
beneficiaries and dependents during the portion of the calendar year prior to
participation in the benefit plans provided by Parent and its Subsidiaries.
Parent shall, and shall cause the Surviving Corporation to, honor all employee
benefit obligations to current and former employees under the Compensation and
Benefit Plans and all employee severance plans and all employment or severance
agreements entered into by the Company or adopted by the Board of Directors of
the Company prior to the date hereof.
8.9. Indemnification; Directors' and Officers' Insurance.
8.9.(a) The Articles of Incorporation and Bylaws
shall contain the provisions with respect to indemnification set forth in
Article IV of the bylaws of the Company on the date of this Agreement and shall
provide for indemnification to the fullest extent permitted by and in accordance
with the FBCA, which provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time (or, in the case of
matters known prior to the Effective Time which have not been resolved prior to
the sixth anniversary of the Effective Time, until such matters are finally
resolved) in any manner that would adversely affect the rights thereunder of
individuals who at any time prior to the Effective Time were directors or
officers of the Company in respect of actions or omissions occurring at or prior
to the Effective Time (including, without limitation, the transactions
contemplated by this Agreement) .
8.9.(b) Following the Effective Time, Surviving
Corporation shall indemnify and hold harmless, to the fullest extent permitted
under applicable law (and Surviving Corporation shall also advance expenses as
incurred to the fullest extent permitted under applicable law, provided that the
person to whom the expenses are advanced provides an undertaking to repay such
advance if it is ultimately determined that such person is not entitled to
indemnification), each present and former director, officer of the Company
(collectively, the "Indemnified Parties") against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages or
liabilities (collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to acts or
omissions by them in their capacity as such
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existing or occurring at or prior to the Effective Time, including the
transactions contemplated by this Agreement.
8.9.(c) Any Indemnified Party wishing to claim
indemnification under paragraph (b) of this Section 8.9, upon receiving written
notification of any such claim, action, suit, proceeding or investigation, shall
promptly notify Parent thereof, but the failure to so notify shall not relieve
Parent of any liability it may have to such Indemnified Party if such failure
does not materially and irreversibly prejudice Parent. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) Surviving Corporation shall have the right within
ten days following the notification of Parent by the Indemnified Person of such
claim, action, suit, proceeding or investigation to assume the defense thereof
and Surviving Corporation shall not be liable to such Indemnified Parties for
any legal expenses of other counsel subsequently incurred by such Indemnified
Parties in connection with the defense thereof, except that if Surviving
Corporation elects not to assume such defense, counsel for the Indemnified
Parties advises that there are issues which raise conflicts of interest between
Surviving Corporation and the Indemnified Parties or the Indemnified Parties
have defenses available to them that are not available to Surviving Corporation,
the Indemnified Parties may retain counsel satisfactory to them and reasonably
acceptable to the Surviving Corporation, and Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties,
provided, however, that the Surviving Corporation shall not be obligated to pay
the reasonable fees and expenses of more than one counsel for all Indemnified
Parties in any single Action except to the extent that, in the opinion of
counsel for the Indemnified Parties, two or more of such Indemnified Parties
have conflicting interests in the outcome of such Action. The Surviving
Corporation shall not be liable for any settlement effected without its written
consent, which consent shall not unreasonably be withheld. If such indemnity is
not available with respect to any Indemnified Party, then Surviving Corporation
and the Indemnified Party shall contribute to the amount payable in such
proportion as is appropriate to reflect the relative faults and benefits of the
Company or Surviving Corporation (in the case of Surviving Corporation) and the
Indemnified Parties. No settlements shall be made on behalf of an Indemnified
Party without such Indemnified Party's consent (which consent shall not be
unreasonably withheld) unless such settlement provides for a full release of
such Indemnified Party.
8.9.(d) The Surviving Corporation shall maintain the
Company's existing officers' and directors' liability insurance ("D&O
Insurance") until July 31, 2002 and shall agree to indemnify the directors and
officers of Company to the fullest extent permitted by Florida law for acts or
omissions by them in their capacity as such existing or occurring at or prior to
the Effective Time, including the transactions contemplated by this Agreement.
8.9.(e) If the Surviving Corporation or any of its
successors or assigns (i) shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any individual, corporation or
other entity, then, and in each such case, proper provisions shall be made so
that the
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successors and assigns of the Surviving Corporation shall assume all of the
obligations set forth in this Section 8.9.
8.9.(f) The provisions of this Section are intended
to be for the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs and their representatives and shall be in addition to any
other rights to indemnification (e.g. any assumed indemnification obligations)
listed in the Company Disclosure Letter.
8.10. Takeover Statute.
If any Takeover Statute is or may become applicable to the
Shares, the Offer, the Merger or the other transactions contemplated by this
Agreement, each of Parent and the Company and their respective Board of
Directors shall grant such approvals and take such actions as are reasonably
necessary so that such transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement or by the Merger and
otherwise act to eliminate or minimize the effects of such statute or regulation
on such transactions.
8.11. Expenses.
Parent shall pay all charges and expenses, including those of
the Paying Agent, in connection with the transactions contemplated in Section 5.
Except as otherwise provided in this Agreement, whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement,
the Offer and the Merger and the other transactions contemplated by this
Agreement shall be paid by the party incurring such expense.
9. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger
is subject to the satisfaction or waiver at or prior to the Effective Time of
each of the following conditions:
9.1. Shareholder Approval.
If required by the FBCA, the Merger, this Agreement and the
plan of merger shall have been duly approved by holders of a majority of the
outstanding Shares in accordance with applicable law and the articles of
incorporation and bylaws of the Company.
9.2. HSR.
The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been earlier terminated.
9.3. Litigation.
No court or Governmental Entity of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, law,
ordinance, rule, regulation,
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judgment, decree, injunction or other order that is in effect and permanently
enjoins or otherwise prohibits consummation of the Merger (collectively, an
"Order")
9.4. Tender Offer.
Merger Sub (or one of the Parent Companies) shall have
purchased Shares in an amount equal to at least the Minimum Conditions pursuant
to the Offer.
10. TERMINATION
10.1. Termination by Mutual Consent.
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether before or after the
approval by shareholders of the Company referred to in Section 9.1, by mutual
written consent of the Company, Merger Sub and Parent by action of their
respective Boards of Directors.
10.2. Termination by Either Parent or the Company.
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time by action of the Board of
Directors of either Parent or the Company (i) if any Order restraining,
enjoining or otherwise prohibiting consummation of the Offer and/or the Merger
shall become final and non-appealable after the parties have used their
respective reasonable best efforts to have such Order removed, repealed or
overturned (whether before or after the approval by the shareholders of the
Company) (ii) if the Offer shall have expired or terminated without any Shares
being purchased therein, provided, however, that the right to terminate this
Agreement under this Section 10.2(ii) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Merger Sub to purchase Shares in the Offer; or
(iii) if the Effective Time shall not occur by June 30, 2000, unless the
Effective Time shall not have occurred because of a material breach of this
Agreement by the party seeking to terminate this Agreement.
10.3. Termination by the Company.
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, by action of the Board of
Directors of the Company:
(i) at any time prior to the time Parent, Merger Sub or
any of their affiliates shall purchase Shares pursuant to the Offer, upon three
business days' prior notice to Parent if, as a result of a Superior Proposal,
(A) the Board of Directors shall have concluded in good faith, after considering
applicable provisions of state law and after consultation with outside counsel,
that the failure to accept such Superior Proposal could reasonably be expected
to constitute a breach by its Board of Directors of its fiduciary duties; (B)
the Company shall have complied with all its obligations under Section 8.2; and
(C) during the three business days
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prior to any such termination, the Company shall, and shall cause its respective
financial and legal advisors to, in good faith, seek to negotiate with Parent to
make such adjustment in the terms and conditions of this Agreement as would
enable the Company to proceed with the transactions contemplated herein; or
(ii) if, prior to the purchase of Shares pursuant to the
Offer, there has been a material breach or failure to perform by Parent or
Merger Sub of any of their respective material covenants or agreements contained
in this Agreement, which breach or failure to perform is not curable, or if
curable, has not been cured within five days after written notice of such breach
or failure is given by the Company to the party committing such breach or
failure, except, in any case, such breaches or failures which are not reasonably
likely to materially and adversely affect Parents' or Merger Sub's ability to
consummate the Offer or the Merger.
10.4. Termination by Parent.
10.4.(a) This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by Parent:
(i) if, due to an occurrence that, if
occurring after the commencement of the Offer, would result in
a failure to satisfy any of the conditions set forth in Annex
A hereto, Parent, Merger Sub, or any of their affiliates shall
have failed to commence the Offer on or prior to five business
days following the date of the initial public announcement of
the Offer; provided, that Parent may not terminate this
Agreement pursuant to this Section 10.4(a)(i) if Parent is in
material breach of this Agreement; or
(ii) if, prior to the purchase of Shares
pursuant to the Offer, the Board of Directors of the Company
shall have withdrawn, or modified or changed in a manner
adverse to Parent or Merger Sub its approval or recommendation
of the Offer, this Agreement or the Merger or shall have
recommended a Superior Proposal or shall have resolved to do
either of the foregoing; or
(iii) if, prior to the purchase of Shares
pursuant to the Offer, there has been a material breach or
failure to perform by the Company of any of its material
covenants or agreements contained in this Agreement, which
breach or failure to perform is not curable, or if curable,
has not been cured within five days after written notice of
such breach or failure is given by Parent to the Company.
10.5. Effect of Termination and Abandonment.
10.5.(a) In the event of termination of this
Agreement and the abandonment of the Merger pursuant to this Section 10, written
notice thereof shall forthwith be given to the other party or parties specifying
the provision hereof pursuant to which such
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termination is made; and this Agreement shall become void and of no effect with
no liability on the part of any party hereto (or of any of its directors,
officers, employees, agents, legal and financial advisors or other
representatives) except as provided in 10.5(b); provided, however, (i) no such
termination shall relieve any party hereto of any liability or damages resulting
from any fraud or willful breach of this Agreement and (ii) notwithstanding (i)
above, in the event this Agreement is terminated by Parent because of a willful
breach of a representation or warranty of the Company then Parent may recover
under this Section 10.5(a) (such recovery not to limit any other rights Parent
may have under 10.5(b)) a reimbursement of its out-of-pocket expenses not to
exceed $1,500,000.
10.5.(b) In the event that (I) (a) an Acquisition
Proposal (other than pursuant to this Agreement) shall have been made to the
Company or any Person (other than Parent or any of its Affiliates) shall have
publicly announced an intention (whether or not conditional) to make an
Acquisition Proposal with respect to the Company and thereafter this Agreement
is terminated by the Company under Section 10.3(i) or Parent pursuant to Section
10.4(a)(ii) and (b) the Person making the Acquisition Proposal which was
outstanding at the time of the termination (the "Acquiring Party") has entered
into an agreement with the Company to consummate such Acquisition Proposal
within nine months of such termination, and such Acquisition Proposal is
consummated, or (II) any Person within nine months of termination of this
Agreement has acquired, by purchase, merger, consolidation, sale, assignment,
lease, transfer or otherwise, in one transaction or any related series of
transactions a majority of the voting power of the outstanding securities of the
Company or all or substantially all of the assets of the Company, then, in the
event the circumstances described in (I) or (II) has occurred then the Company
shall promptly, pay Parent a termination fee of $6,000,000 in same day funds to
an account previously designated by Parent to the Company in writing; provided,
however, that in the event the Company has already reimbursed the out-of-pocket
expenses of Parent pursuant to the last sentence of 10.5(a), then, in such
event, the termination fee payable pursuant to this sentence shall be $6,000,000
less the amount of such reimbursement. The Company's payment of this termination
fee shall be the sole and exclusive remedy of Parent and Merger Sub against the
Company and its respective directors, officers, employees, agent, advisors or
other representatives in the event this Agreement is terminated and the
termination fee is payable.
11. MISCELLANEOUS AND GENERAL
11.1. Survival.
This Section 11 and the agreements of the Company, Parent and
Merger Sub contained in Sections 8.6 (De-listing), 8.8 (Benefits), 8.9
(Indemnification; Directors' and Officers' Insurance), and 8.11 (Expenses) shall
survive the consummation of the Merger. This Section 11, the agreements of the
Company, Parent and Merger Sub contained in Section 8.11 (Expenses), Section
10.5 (Effect of Termination and Abandonment) and the Confidentiality Agreement
shall survive the termination of this Agreement. All other representations,
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<PAGE> 49
warranties, covenants and agreements in this Agreement shall not survive the
consummation of the Merger or the termination of this Agreement.
11.2. Modification or Amendment.
Subject to the provisions of the applicable law, at any time
prior to the Effective Time, the parties hereto may modify or amend this
Agreement, by written agreement executed and delivered by duly authorized
officers of the respective parties; provided, that, in the case of the Company
any such modification or amendment must be approved by a majority of the
directors who are not Parent Insiders.
11.3. Waiver of Conditions.
The conditions to each of the parties' obligations to
consummate the Merger are for the sole benefit of such party and may be waived
by such party in whole or in part to the extent permitted by applicable law,
except that the following approval by the shareholders of the Company there
shall be no amendment or supplement which by Law requires further approval by
such shareholders without further approval by the shareholders of the Company;
provided, that, in the case of the Company any such waiver must be approved by a
majority of the directors who are not Parent Insiders.
11.4. Counterparts.
This Agreement may be executed in any number of counterparts,
each such counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same agreement.
11.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAW OF THE STATE OF FLORIDA WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF. The parties hereby irrevocably submit to the jurisdiction of the
Federal courts of the United States of America located in the State of Florida
solely in respect of the interpretation and enforcement of the provisions of
this Agreement and of the documents referred to in this Agreement, and in
respect of the transactions contemplated hereby, and hereby waive, and agree not
to assert, as a defense in any action, suit or proceeding for the interpretation
or enforcement hereof or of any such document, that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that the venue thereof may not be appropriate or that this
Agreement or any such document may not be enforced in or by such courts, and the
parties hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such a State of Florida or Federal
court. The parties hereby consent to and grant any such court jurisdiction over
the person of such parties and over the subject matter of such dispute and agree
that mailing of process or other papers in connection
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<PAGE> 50
with any such action or proceeding in the manner provided in Section 11.6 or in
such other manner as may be permitted by law shall be valid and sufficient
service thereof.
11.6. Notices.
Any notice, request, instruction or other document to be given
hereunder by any party to the others shall be in writing and shall be deemed
delivered if delivered personally or sent by registered or certified mail
(return receipt requested) or nationally recognized overnight courier service
(with proof of service), postage prepaid, or by confirmed facsimile, and such
notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed:
if to Parent or Merger Sub
c/o Oerlikon-Buhrle Holding AG
Hofwiesenstrasse 135
CH-8021 Zurich
Switzerland
Attention: Heinz A. Kundert
Fax: 011-41-1-363-4092
with a copy to
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Allen I. Isaacson, P.C.
Fax: (212) 859-4000
if to the Company
Plasma-Therm, Inc.
10050 16th Street North
St. Petersburg, Florida 33716
Attention:Stacy Wagner
Fax: (727) 577-7035
with a copy to
Foley & Lardner
100 North Tampa Street, Suite 2700
Tampa, Florida 33602
Attention: Martin A. Traber
Fax: (813) 225-4210
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<PAGE> 51
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
11.7. Entire Agreement; NO OTHER REPRESENTATIONS.
This Agreement (including any exhibits hereto), the Company
Disclosure Letter, the Parent Disclosure Letter and the Confidentiality
Agreement (the "Confidentiality Agreement") constitute the entire agreement, and
supersede all other prior agreements, understandings, representations and
warranties both written and oral, among the parties, with respect to the subject
matter hereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER PARENT AND MERGER SUB NOR THE
COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS
ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER
REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE
TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
11.8. No Third Party Beneficiaries.
Except as provided in Section 8.8 (Benefits), and in Section
8.9 (Indemnification; Directors' and Officers' Insurance), this Agreement is not
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
11.9. Obligations of Parent and of the Company.
Whenever this Agreement requires a Subsidiary of Parent to
take any action, such requirement shall be deemed to include an undertaking on
the part of Parent to cause such Subsidiary to take such action. Whenever this
Agreement requires a Subsidiary of the Company to take any action, such
requirement shall be deemed to include an undertaking on the part of the Company
to cause such Subsidiary to take such action and, after the Effective Time, on
the part of the Surviving Corporation to cause such Subsidiary to take such
action.
11.10. Severability.
The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability or the other provisions hereof. If any provision of
this Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable, (a) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
and (b) the remainder of this Agreement
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<PAGE> 52
and the application of such provision to other Persons or circumstances shall
not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
11.11. Interpretation.
The table of contents and headings herein are for convenience
of reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof. Where a
reference in this Agreement is made to a Section or Exhibit, such reference
shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
11.12. Assignment.
This Agreement shall not be assignable by operation of law or
otherwise.
11.13. Enforcement of Agreement.
The parties hereto agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with its specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court, this being in addition to any other remedy to
which they are entitled at law or in equity.
11.14. Glossary of Terms.
The following sets forth the location of definitions of
capitalized terms defined in the body of this Agreement:
<TABLE>
<S> <C> <C>
"1998 Balance Sheet" - Section 6.5.
"Acquiring Party" - Section 10.5.(b)
"Acquisition Proposal" - Section 8.2.(d)(i)
"Ancillary Documents" - Section 6.3.(a)
"Articles" - Section 3.1.
"Articles of Merger" - Section 2.3.
"Audit" - Section 6.12.
"Audit Date" - Section 6.5.
"Bankruptcy and Equity Exception" - Section 6.3.(a)
"Business Day" - Section 1.4.
"Bylaws" - Section 3.2.
"CERCLA" - Section 6.11.
"CERCLIS" - Section 6.11.
</TABLE>
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<PAGE> 53
<TABLE>
<S> <C> <C>
"Certificate" - Section 5.1.(a)
"Closing" - Section 2.2.
"Closing Date" - Section 2.2.
"Company Acquisition Transaction" - Section 8.2.(d)(ii)
"Company Disclosure Letter" - Section 6.
"Company Intellectual Property" - Section 6.14.(b)
"Company Material Adverse Effect" - Section 6.1.
"Company Option" - Section 8.8.(a)(ii)
"Company Reports" - Section 6.5.
"Company Requisite Vote" - Section 6.3.(a)
"Company Stock Plan" - Section 6.2.
"Compensation and Benefit Plans" - Section 6.8.(a)
"Confidentiality Agreement" - Section 11.7.
"Contracts" - Section 6.4.(b)
"Costs" - Section 8.9.(b)
"D&O Insurance" - Section 8.9.(d)
"Department" - Section 2.3.
"Dissenting Shareholders" - Section 5.3.
"Effective Time" - Section 2.3.
"Employees" - Section 6.8.(a)
"Environmental Laws" - Section 6.11.
"Environmental Permits" - Section 6.11.
"ERISA" - Section 6.8.(b)
"ERISA Affiliate" - Section 6.8.(c)
"Exchange Act" - Section 1.2. and Section 6.4.(a)
"Exchange Fund" - Section 5.2.(a)
"Excluded Shares" - Section 5.1.(a)
"Exon-Florio Amendment" - Section 6.4.(a)
"FBCA" - Section 2.1. and Section 6.3.(b)
"Financial Advisor" - Section 6.3.(b)
"Government Antitrust Entity" - Section 8.3.(d)
"Governmental Entity" - Section 6.4.(a)
"HSR Act" - Section 6.4.(a)
"Indemnified Parties" - Section 8.9.(b)
"Information Statement" - Section 6.21.
"Intellectual Property" - Section 6.14.(b)
"IRS" - Section 6.8.(b)
"Knowledge of the Company" - Section 6.7.
"Laws" - Section 6.9.
"Material Contracts" - Section 6.19.
"Merger Consideration" - Section 5.1.(a)
"Offer" - Section 1.1.
"Offer Conditions" - Section 1.1.
"Offer Documents" - Section 1.2.
</TABLE>
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<PAGE> 54
<TABLE>
<S> <C> <C>
"Option Consideration" - Section 8.8.(a)(ii)
"Order" - Section 9.3.
"Outside Counsel" - Section 6.10.
"Parent Disclosure Letter" - Section 7.
"Parent Companies" - Section 5.1.(a)
"Parent Insiders" - Section 4.1.(a)
"Parent Material Adverse Effect" - Section 7.3.
"Paying Agent" - Section 5.2.(a)
"Pension Plan" - Section 6.8.(b)
"Person" - Section 5.2.(b)
"Plans" - Section 6.8.(b)
"Proxy Statement" - Section 8.6.
"Real Property" - Section 6.11.
"Representatives" - Section 8.2.(a)
"Schedule 14D-1" - Section 1.2.
"Schedule 14D-9" - Section 1.3.(b)
"SEC" - Section 1.3.(b) and Section 6.5.
"Share" - Section 5.1.(a)
"Shares" - Section 5.1.(a)
"Subsidiary" - Section 6.1.
"Superior Proposal" - Section 8.2.(d)(iii)
"Surviving Corporation" - Section 2.1.
"Takeover Statute" - Section 6.10.
"Tax" - Section 6.12.
"Tax Return" - Section 6.12.
"Taxable" - Section 6.12.
"Taxes" - Section 6.12.
"Voting Debt" - Section 6.2.
</TABLE>
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<PAGE> 55
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
written above.
COMPANY
By: /s/ Ronald S. Deferrari
-------------------------------------------
Name: Ronald S. Deferrari
-------------------------------------
Title: President
------------------------------------
OERLIKON-BUHRLE USA, INC.
By: /s/ Beat Baumgartner
-------------------------------------------
Name: Beat Baumgartner
-------------------------------------
Title: Chairman and President
------------------------------------
VOLCANO ACQUISITION CORP.
By: /s/ Heinz Kundert
-------------------------------------------
Name: Heinz Kundert
-------------------------------------
Title: Chairman and President
------------------------------------
[Signature Page to Merger Agreement]
<PAGE> 56
ANNEX A
Certain Conditions of the Offer. Notwithstanding any other provision of
the Offer, but subject to the terms of the Merger Agreement, Merger Sub shall
not be required to accept for payment or, subject to any applicable rules and
regulation of the SEC, pay for any Shares, and may terminate or amend (subject
to the last sentence of Section 1.1 of this Agreement) the Offer (i) if prior to
the expiration of the Offer (or, if extended, by the expiration of the Offer, as
so extended) a number of Shares which together with any Shares owned by Parent,
Merger Sub and the Parent Companies, constitutes more than 50% of the
outstanding Shares (on a fully-diluted basis) (the "Minimum Conditions") shall
not have been validly tendered pursuant to the Offer and not properly withdrawn,
(ii) if all applicable waiting periods under the HSR Act or the Exon-Florio
Amendment shall not have expired or been terminated, or (iii) at any time prior
to acceptance for payment for any such Shares, any of the following events shall
occur; provided that in each such case Merger Sub shall not be permitted to
terminate the Offer (except pursuant to paragraph (e)(ii), e(iii) or (g) below)
if prior to the then scheduled expiration of the Offer the Offer shall have been
extended:
(a) there shall have occurred (i) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory), (ii) a formal declaration of war or
national or international calamity directly or indirectly involving the United
States, (iii) any limitation (whether or not mandatory) by any United States
governmental authority on the extension of credit by banks or other financial
institutions that materially affects the extension of credit by banks or other
lending institutions, (iv) any general suspension of, or limitation on prices
for, trading in securities on the NASDAQ National Market or the over the counter
market, or (v) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(b) the Company shall have breached or failed to
perform any of its obligations, covenants or agreements under the Merger
Agreement in a manner permitting Parent to terminate the Merger Agreement, or
any representation or warranty of the Company set forth in the Merger Agreement
shall not have been true and correct in all respects when made, or shall
thereafter have ceased to be true and correct in all respects as if made on such
later date (other than representations and warranties made as of a specified
date); provided that any such representations and warranties that are not
qualified by Material Adverse Effect shall be deemed to be true and correct in
all respects unless the failure of such representations and warranties to be so
true and correct in all respects would have a Company Material Adverse Effect or
would prevent the Company from consummating the transactions contemplated by the
Merger Agreement;
(c) there shall be instituted or pending any action,
litigation, proceeding, investigation or other application (hereinafter, an
"Action") before any court or other Governmental Entity: (i) challenging the
acquisition by Parent or Merger Sub of Shares, seeking to restrain or prohibit
the consummation of the transactions contemplated by the
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<PAGE> 57
Merger Agreement; (ii) seeking to prohibit, or impose any limitations on,
Parent's or Merger Sub's acquisition, ownership or operation of all or any
portion of their or the Company's business or assets (including the business or
assets of their respective affiliates and subsidiaries); (iii) seeking to make
the acceptance for payment, purchase of, or payment for, some or all of the
Shares illegal; (iv) seeking to impose limitations on the ability of Parent or
Merger Sub effectively to acquire or hold or to exercise full rights of
ownership of the Shares including, without limitation, the right to vote the
Shares purchased by them on an equal basis with all other shares on all matters
properly presented to the shareholders; or (v) that, in any event, would have a
Company Material Adverse Effect;
(d) any statute, rule, regulation, order or injunction
shall be enacted, promulgated, entered, enforced or become applicable to the
Offer or the Merger, or any other action shall have been taken by any court or
other Governmental Entity other than the application to the Offer or the Merger
of the waiting period under the HSR Act, that would result in any of the effects
of, or have any of the consequences sought to be obtained or achieved in, any
Action referred to in clauses (i) through (v) of paragraph (c) above;
(e) any person (as such term is defined in Section
13(d) (3) of the Exchange Act (other than Parent or any of its affiliates)) (i)
commences a tender or exchange offer for a majority or more of the outstanding
Shares at a price per Share greater than the Merger Consideration; (ii) shall
have become the beneficial owner of more than 25% of the outstanding Shares
(other than for bona fide arbitrage purposes); or (iii) shall have entered into
a definitive agreement to acquire all or substantially all of the Shares or to
effect a merger, consolidation or other business combination with or involving
the Company;
(f) there shall have occurred an event which has
caused a Company Material Adverse Effect;
(g) the Board of Directors of the Company shall have
amended, modified or withdrawn its recommendation of the Offer or the Merger in
a manner adverse to Parent, or shall have endorsed, approved or recommended any
other Acquisition Proposal, or shall have resolved to do any of the foregoing or
shall have failed to confirm within five business days of the Parent's request
therefore its recommendation of the Offer or the Merger; or
(h) the Merger Agreement shall have been terminated by
the Company or Parent in accordance with its terms;
which, in the reasonable judgment of Parent, in any such case, and regardless of
the circumstances giving rise to any such conditions, makes it reasonably
inadvisable to proceed with the Offer and/or with such acceptance for payment of
or payment for Shares.
The foregoing conditions other than the Minimum Conditions are for the
sole benefit of Parent and may be asserted by Parent or Merger Sub regardless of
the circumstances giving rise to such condition or may be waived by Parent other
than the Minimum Conditions, by
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<PAGE> 58
express and specific action to that effect, in whole or in part at any time and
from time to time in its sole discretion. The failure by the Parent or Merger
Sub at any time to exercise any of the foregoing rights will not be deemed a
waiver of any right, the waiver of such right with respect to any particular
facts or circumstances shall not be deemed a waiver with respect to any other
facts or circumstances, and each right will be deemed an ongoing right which may
be asserted at any time and from time to time.
-3-
<PAGE> 1
EXHIBIT (c)(2)
FORM OF AMENDMENT NO. [ ] TO EMPLOYMENT AGREEMENT
This is an Amendment No. __, dated December ___, 1999 (the "Amendment
No. __"), to an Employment Agreement dated January 22, 1999 (the "Original
Employment Agreement"), between Plasma-Therm, Inc., a Florida corporation (the
"Company"), and ______________ (the "Employee").
BACKGROUND
WHEREAS, the Employee is currently employed by the Company pursuant to
the terms of the Employment Agreement and subsequent amendments dated ______
____, 199_ (collectively the Original Employment Agreement and Amendment No. __
are the "Employment Agreement").
WHEREAS, the Company is currently contemplating entering into an
Agreement and Plan of Merger with an affiliate of Oerlikon-Buhrle Holding AG
and Balzers & Leybold (the "Bidder") pursuant to which the Bidder will make a
tender offer (the "Tender Offer") for certain of the issued and outstanding
shares of the Company (the "Shares"); and
WHEREAS, in connection with the making of the Tender Offer the Bidder
has requested that the Employment Agreement by and between the Company and the
Employee be amended as set forth herein; and
WHEREAS, the Company and the Employee have agreed to amend the
Employment Agreement as set forth herein; provided, however, that this
Amendment shall only become effective if, and as of, the date on which the
Bidder first accepts and pays for any Shares pursuant to the Tender Offer (the
"Tender Offer Closing Date").
NOW, THEREFORE, the parties hereto intending to be legally bound
hereby, and in consideration of the mutual covenants herein contained, agree as
follows:
TERMS
1. The foregoing recitals are true and correct and incorporated herein
by reference. Any capitalized terms used but not defined herein shall have the
same meaning ascribed to them in the Employment Agreement.
2. Section 2 of the Employment Agreement is hereby amended in its
entirety to read as follows:
The term of this Agreement shall be for a period of three (3) years
commencing on the Tender Offer Closing Date, and terminating at 12:00 midnight
on the day immediately preceding the third anniversary of the Tender Offer
Closing Date. Upon expiration of the initial Term and any subsequent terms,
this Agreement shall automatically renew for additional subsequent three (3)
year Terms unless at least ninety (90) days prior to the end of the then
current Term, either Company or Employee has given written notice to the other
of its or his election to terminate the employment at or prior to the end of
such Term.
<PAGE> 2
3. Section 9.1 of the Employment Agreement is hereby amended in its
entirety to read as follows:
Employee hereby acknowledges that Company is one of only a small
number of companies worldwide that designs, manufactures and sells plasma
process thin film etching and deposition equipment. Employee also acknowledges
that pursuant to his prior relationship with Company, and under the terms of
this Agreement, he will gain access to valuable trade secrets of Company and
other valuable confidential business and proprietary information, and will
become aware of and a part of Company's substantial relationships with
customers, potential customers, suppliers, and sources. Accordingly, Employee
hereby covenants that Employee shall not, either directly or indirectly, as a
principal, partner, stockholder, officer, director, agent or employee, or in
any other capacity, enter in to any employment agreement, or accept employment
with or render services for, any company, partnership, person or entity that
competes or attempts to compete, whether directly or indirectly, with Company,
for the term of this Agreement and for a period of two (2) years following the
termination of this Agreement, regardless of the reason for said termination.
4. Except as specifically set forth above, the Employment Agreement
shall remain in full force and effect.
5. This Amendment No. __ may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one document.
6. This Amendment No. __ contains the final, complete, and exclusive
expression of the parties' understanding and agreement concerning the matters
contemplated herein and supersedes any prior or contemporaneous agreement of
representation, oral or written, among them.
7. This instrument shall be binding upon, and shall inure to the
benefit of, each of the parties' respective personal representatives, heirs,
successors, and assigns.
8. This instrument shall be governed by, and construed and enforced in
accordance with the laws of the State of Florida.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties have executed this Amendment No. __ on
the day and year first written above.
PLASMA-THERM, INC.
--------------------------------
Ronald H. Deferrari
Chairman of the Board and
Chief Executive Officer
Employee
--------------------------------
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<PAGE> 1
EXHIBIT (c)(3)
PLASMA-THERM, INC.
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (the "Agreement"), made and entered into
as of this 1st day of September, 1999, by and between Plasma-Therm, Inc., a
corporation organized under the laws of the State of Florida ("PTI" or the
"Company") and Balzers Limited through its Balzers Process System Division, a
corporation organized under the laws of the Principality of Liechtenstein
("BPS").
The parties hereto desire to explore and discuss a possible transaction
or to further a business relationship between them.
In connection therewith, the parties will be given access to
Confidential Information (as defined below) relating to each other's businesses
and affairs;
In consideration of the promises and the mutual covenants and
obligations hereinafter set forth, the parties agree as follows.
SECTION 1. CONFIDENTIAL INFORMATION. Except as set forth below,
"Confidential Information" shall mean and include any financial, operational,
technical and other information relating to the present and future businesses
and affairs of the party disclosing the information (the "Disclosing Party"),
which information is provided to the other party (the "Receiving Party") in
connection with the business relationship provided in written, oral, graphic,
pictorial or recorded form or stored on computer discs, hard drives, magnetic
tape or digital or any other electronic medium (it being understood that oral
communications will be confirmed in writing within three (3) working days). It
is further understood that the term "Confidential Information" does not mean and
include information which:
(a) is or subsequently becomes publicly available without the
Receiving Party's breach of any obligation owed to the
Disclosing Party;
(b) prior to disclosure hereunder is within the possession of the
Receiving Party, and was obtained by the Receiving Party from a
source not under obligation not to disclose such information or
any of its Representatives as defined below.
(c) is lawfully received by the Receiving Party from a third party
(other than the Disclosing Party) having rights to disseminate
without restriction such information and such information is
received by the Receiving Party from such third party without
notice to the Receiving Party of any restriction against its
further disclosure;
(d) is disclosed with the prior written approval of the Disclosing
Party; or
<PAGE> 2
(e) is required to be produced by the receiving party under order of
a court of competent jurisdiction or a valid administrative or
congressional subpoena; PROVIDED, HOWEVER, that upon issuance of
any such order or subpoena, the Receiving Party shall promptly
notify the Disclosing Party and shall provide the Disclosing
Party with an opportunity (if then available) to contest the
propriety of such order or subpoena (or to arrange for
appropriate safeguards against any further disclosure by the
court or administrative or congressional body seeking to compel
disclosure of such Confidential Information).
SECTION 2. OWNERSHIP. The Receiving Party hereby acknowledges and
agrees that all of the Confidential Information of the Disclosing Party is the
exclusive proprietary property of the Disclosing Party, is being disclosed
solely for the purpose of enabling the parties to conduct the discussions
relating to the Transaction is to be used by the Receiving Party only in such
limited manner as is permitted by the provisions of this Agreement.
SECTION 3. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. The Confidential
Information shall (a) be kept confidential by the Receiving Party and not
disclosed to any third party (except as provided in this Section 3) and (b) not
be used by the Receiving Party for any commercial or competitive purpose
whatsoever and may only be used in connection with the discussions relating to
the Transaction. The Receiving Party may, however, disclose the Confidential
Information to its directors, officers, Affiliates (as defined below) or legal
or financial advisors (collectively, "Representatives"), but only if such
Representatives reasonably need to know the Confidential Information for the
purpose of evaluating the Transaction. The Receiving Party will (i) inform each
of its Representatives receiving Confidential Information of the confidential
nature of the Confidential Information and of the existence and the terms of
this Agreement, (ii) direct its Representatives to treat the Confidential
Information confidentially and not to use it other than in connection with an
evaluation of the Transaction, (iii) require that any Representative other than
a director or officer of Disclosing Party or Receiving Party execute a
counterpart of this Agreement prior to any disclosure by the Receiving Party of
Confidential Information to such Representative, which counterpart shall have
annexed thereto a schedule (the "Disclosure Schedule") setting forth in
appropriate detail the Confidential Information that is to be disclosed to such
Representative. For purposes of this Agreement, the term "Affiliate" shall mean
any Person that, directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with, the Person
specified. As used in the foregoing definition, the term "Person" shall mean an
individual, firm, trust, association, corporation, partnership, government
(whether federal, state, local or other political subdivision, or any agency or
bureau of any of them) or other entity.
SECTION 4. CARE AND RETURN OF CONFIDENTIAL INFORMATION. The Receiving
Party and its Representatives hereby agree to use their best efforts to prevent
inadvertent disclosure of Confidential Information to others. The Receiving
Party agrees to treat the Confidential Information with at least the degree of
care that it treats similar materials of its own, or a higher standard of care
if reasonable under the circumstances.
Upon the request of the Disclosing Party, the Receiving Party
will return to the Disclosing Party all documents which contain Confidential
Information of the Disclosing Party, and agree that the Receiving Party and its
Representatives will not retain any copies thereof.
-2-
<PAGE> 3
SECTION 5. NO LICENSES. Neither the execution of this Agreement nor the
furnishing of any Confidential Information pursuant to this Agreement shall be
construed as granting the Receiving Party or its Representatives, either
expressly or by implication, any license or right to use any Confidential
Information for its own benefit or the benefit of any other Person, firm or
entity, and each party hereto expressly agrees not to so use any such
information except as otherwise provided herein.
SECTION 6. NON-DISCLOSURE OF THE TRANSACTION. Neither party hereto
shall publicly announce or otherwise disclose, without the prior written
consent of the other, any proposed terms of or that discussions relating to the
Transaction are taking place except for such disclosure as the party seeking to
make disclosure has been advised by its legal counsel is required by law, in
which case the party seeking to make disclosure shall provide the other party
with as much prior notice of such announcement or disclosure (including the
proposed text of such announcement or disclosure) as is reasonably possible
under the circumstances (and attempt in good faith to obtain such other party's
concurrence with the manner and extent of such disclosure).
SECTION 7. NO LIABILITY. Neither party hereto shall be under any
obligation of any kind with respect to the Transaction, except for the matters
specifically agreed to herein, unless and until a definitive agreement
regarding the Transaction has been executed and delivered by each of the
parties hereto.
SECTION 8. NON-SOLICITATION. The Company and Plasma-Therm agree that,
without the prior written consent of the other, it will not, for a period of
six months after the date of this agreement, solicit, attempt to divert or
entice away or knowingly hire any person who is an employee of the other or any
of its Affiliates on the date of this agreement.
SECTION 9. STANDSTILL AGREEMENT. For a period of six months following
the date of this Agreement, each of the parties and its affiliates (as defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act), will not (and will not assist or encourage others to) directly
or indirectly, without the written consent of the other party:
(a) acquire or agree, offer, seek or propose to acquire, or cause to
be acquired, ownership (including but not limited to, beneficial
ownership as defined in Rule 13d-3 under the Exchange Act) of
any of the other party's assets or businesses or any securities
issued by the other party, or any bank debt, claims or other
obligations of the other party, or any rights or options to
acquire such ownership, directly or from a third party;
(b) seek or propose to influence or control the management or
policies of the other party or to obtain representation on the
other's board of directors, or solicit, participate in the
solicitation of, any proxies or consents with respect to any
securities of the other, or make any public announcement with
respect to any of the foregoing or request permission to do any
of the foregoing;
(c) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to the
foregoing; or
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<PAGE> 4
(d) seek or request permission or participate in any effort to do
any of the foregoing or make or seek permission to make any
public announcement with respect to any of the foregoing.
If at any time during such six months period either party or its
Representatives are approached by any third party with respect to any
of the foregoing, such party shall promptly inform the other of the
nature of such contact and the proposed transaction and shall identify
the parties thereto.
SECTION 10. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of Florida.
SECTION 11. TERM. Except as specified elsewhere herein, the term of
this agreement shall be six months commencing on the date hereof, unless
otherwise agreed in writing by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Confidentiality
Agreement to be executed and delivered by their respective appropriate
officers, thereunto duly authorized, as of the date first written above.
PLASMA-THERM, INC.
By: /s/ Stacy L. Wagner
--------------------------------------
Name: Stacy L. Wagner
Title: Chief Financial Officer & Secretary
BALZERS LIMITED
Balzers Process Systems Division
By: /s/ Martin Bader /s/ Erich Haefeli
-------------------- ---------------
Name: Dr. Martin Bader Erich Haefeli
Title: Division Manager General Counsel
Semiconductors
-4-
<PAGE> 1
EXHIBIT (c)(4)
TERMINATION, NONCOMPETITION AND MUTUAL RELEASE AGREEMENT
THIS AGREEMENT dated December 20, 1999, by and between PLASMA-THERM,
INC., a Florida corporation (the "Employer"), and Rondald S. Deferrari (the
"Employee").
WITNESSETH
WHEREAS, the Employee is employed by the Employer under that certain
Employment Agreement by and between Employer and Employee dated January 22,
1998 and subsequent amendments dated October 1, 1998 and July 19, 1999 (as
amended, the "Employment Agreement") , until the date hereof; and
WHEREAS, the Company is currently contemplating entering into an
Agreement and Plan of Merger (the "Merger Agreement") with an affiliate of
Oerlikon-Buhrle Holding AG and Balzers & Leybold (the "Bidder") pursuant to
which the Bidder will make a tender offer (the "Tender Offer") for certain of
the issued and outstanding shares of the Company (the "Shares"); and
WHEREAS, in connection with the making of the Tender Offer the Bidder
has requested that the Employment Agreement by and between the Employer and the
Employee be terminated as set forth herein; and
WHEREAS, the Employee was heretofore granted the right and option to
purchase 560,000 shares of common stock of the Employer in accordance with
certain Stock Option Agreements by and between Employer and Employee (the
"Stock Options"); and
WHEREAS, the Employee and the Employer have determined that it is in
their mutual best interests to terminate their relationship as employee and
employer as set forth herein; provided, however, that this Agreement shall only
become effective if, and as of, the date on which the Bidder first accepts and
pays for any Shares pursuant to the Tender Offer (the "Tender Offer Closing
Date"); and
WHEREAS, the Employer desires to assure itself of the Employee's
continued noncompetition obligations pursuant to the terms hereof; and
WHEREAS, the Employer and Employee desire to mutually release each
other from any and all of their other obligations to each other (except for the
noncompetition provisions contained in the Terminated Agreement which shall
remain in full force and effect) in full and final settlement pursuant to the
terms hereof.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
covenant and agree as follows:
1. TERMINATION OF EMPLOYMENT RELATIONSHIP. The Employer and the
Employee hereby agree to terminate their employment relationship;
provided, however, that this Agreement shall only become effective
if, and as of, the Tender Offer Closing Date.
2. EXTENSION OF THE NONCOMPETE DURATION. The Employee hereby agrees
that the noncompete provisions of Section 9 of the Employment
Agreement shall remain in full force and is hereby modified such
that the noncompete period shall be for a period of two years from
the Tender Offer Closing Date.
3. TREATMENT OF THE STOCK OPTIONS. Regardless of the terms contained
in any prior stock option grant agreement, all of the Stock
Options shall remain outstanding and shall be treated the same as
all other outstanding stock options of the Company in accordance
with the Merger Agreement.
4. CONSIDERATION. In consideration for the Employee's covenants, the
mutual release contained in this Agreement, the agreement as to
the treatment of the Stock Options and the tendering of his
resignation from any and all positions as an officer or director
of the Employer, the Employer shall pay the Employee a sum of One
million dollars ($1,000,000) payable in one lump sum payment, one
day after the Tender Offer Closing Date.
The Employee acknowledges that any violation by the Employee of
the noncompete obligation as contained in this Agreement, will
constitute a breach as mentioned in paragraph 13 hereinafter, and
such breach will cause immediate and irreparable harm to the
Employer. Therefore, the Employee consents that in connection with
any threatened or actual violation of the Employee's noncompete
obligations contained in this Agreement, the Employer shall be
entitled to immediately stop its payments to the Employees
hereunder and to offset any outstanding payment obligation with
its own claim for damages suffered.
5. GENERAL MUTUAL RELEASE.
a. Employee, on his own behalf and on behalf of his heirs and
representatives, hereby releases and forever discharges
Employer, along with its respective officers, directors,
employees, assigns, successors, and representatives from all
manner of civil actions, contract actions, tort actions,
statutory actions, administrative actions, injuries, damages,
loss of services, constitutional claims, charges of
discrimination and claims for costs, expenses or attorney's
fees which he had, has, or hereafter can, or may have against
the Employer arising out of any event, act or occurrence
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<PAGE> 3
in any way based on the employment of the Employee by the
Employer, including but not limited to any and all claims,
damages or losses, known or unknown, directly or indirectly
sustained by the Employee in connection with any matter arising
out of their employment relationship, including those arising
in connection with the Stock Options or other employee benefit
programs.
b. Employer, on its own behalf and on behalf of its successors and
assigns, hereby releases and forever discharges Employee, along
with his heir, successors, and representatives from all manner
of civil actions, contract actions, tort actions, statutory
actions, administrative actions, injuries, damages, loss of
services, constitutional claims, charges of discrimination and
claims for costs, expenses or attorney's fees which it had,
has, or hereafter can, or may have against the Employee arising
out of any event, act or occurrence in any way based on the
employment of the Employee by the Employer, including but not
limited to any and all claims, damages or losses, known or
unknown, directly or indirectly sustained by the Employer in
connection with any matter arising out of their employment
relationship; provided, however, that Section 9 of the
Employment Agreement shall remain in full force and effect and
is hereby modified such that the noncompete period shall be for
a period of two years from the Tender Offer Closing Date.
6. RETURN OF EMPLOYER'S PROPERTY. Simultaneously upon the
effectiveness of this Agreement on the Tender Offer Closing Date,
the Employee covenants that he will return any and all material
records, designs, patents, business plans, financial statements,
manuals, memoranda, lists, software and other property delivered
to or compiled by the Employee by or on behalf of the Employer or
its representatives, vendors or customers which pertain to the
business of the Employer and acknowledges that such property is
and shall remain the property of the Employer.
7. NOTICE. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall
be deemed to have been duly given when hand-delivered, sent by
telecopier, facsimile transmission or other electronic means of
transmitting written documents (as long as receipt is
acknowledged) or mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed as
follows:
If to Employee:
Ronald S. Deferrari
108 Ozona Drive
Palm Harbor, FL 34683
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<PAGE> 4
If to Employer:
Plasma-Therm, Inc.
10050 16th Street North
St. Petersburg, Florida 33716
Attn: President
Facsimile: (727) 579-0801
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
8. COMPLETE AGREEMENT. Employee has no oral representations,
understandings or agreements with the Employer or any of its
officers, directors or representatives covering the same subject
matter as this Agreement. This written Agreement is the final,
complete and exclusive statement and expression of the agreement
between the Employer and Employee and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented
by evidence of any prior or contemporaneous oral or written
agreements. This written Agreement may not be later modified
except by a further writing signed by a duly authorized officer of
the Employer and Employee, and no term of this Agreement may be
waived except by writing signed by the party waiving the benefit
of such term.
9. EXPENSES INCURRED IN CONNECTION WITH THE ENFORCEMENT OF THIS
AGREEMENT. The Employer and the Employee shall be entitled to
reimbursement for any costs, including legal fees, incurred in
connection with the enforcement of the this Agreement.
10. CHANGE IN CONTROL. Employee understands and acknowledges that the
Employer may be merged, sold, or consolidated with or into another
entity and that such entity shall automatically succeed to the
rights and obligations of the Employer.
11. MISCELLANEOUS. This Agreement shall be binding upon, and inure to
the benefit of, the Employer, its respective successors and
assigns, and the Employee and his heirs, executors, administrators
and legal representatives. The parties agree that if any provision
of this Agreement shall under any circumstances be deemed invalid
or inoperative, the Agreements shall be construed with the invalid
or inoperative provision deleted and the rights and obligations of
the parties shall be construed and enforced accordingly. The
validity, interpretation, construction and performance of this
Agreement shall be governed by the internal laws of the State of
Florida. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but
all of which together will constitute but one and the same
instrument.
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<PAGE> 5
12. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument. This Agreement may be effective upon the
execution and delivery by any party hereto of facsimile copies of
signature pages hereto duly executed by such party.
13. DEFAULT AND CURE PERIOD. In the event of a breach by either party
of the terms of this Agreement, the nonbreaching party will give
prompt written notice of such breach to the other and afford the
breaching party 10 days from receipt of such notice to cure such
breach.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PLASMA-THERM, INC.,
a Florida corporation
("Employer")
By: Stacy L. Wagner
Its: Chief Financial Officer, Treasurer
and Corporate Secretary
/s/ Ronald S. Deferrari
- -----------------------
Ronald S. Deferrari
("Employee")
5
<PAGE> 1
EXHIBIT (C)(5)
TENDER AND VOTING AGREEMENT
TENDER AND VOTING AGREEMENT, dated as of December 20, 1999
(this "Agreement"), between Oerlikon-Buhrle USA, Inc., a Delaware corporation
("Parent"), Volcano Acquisition Corp., a Florida corporation and a wholly owned
subsidiary of Parent ("Merger Sub") and each of the persons listed on Schedule
A hereto (each a "Shareholder" and, collectively, the "Shareholders").
RECITALS
WHEREAS, Parent, Merger Sub and Plasma-Therm, Inc., a Florida
corporation (the "Company") propose to enter into an Agreement and Plan of
Merger dated as of the date hereof (as the same may be amended or supplemented,
the "Merger Agreement") providing for, among other things, the making of the
Offer by Merger Sub for all of the issued and outstanding shares of common
stock, par value $0.01 per share, of the Company (referred to herein as either
the "Shares" or "Common Stock") and the merger of Merger Sub with and into the
Company on the terms and conditions set forth in the Merger Agreement (the
"Merger");
WHEREAS, each Shareholder is the beneficial owner of the
Shares and Company Options set forth opposite such Shareholder's name on
Schedule A hereto (collectively referred to herein as the "Shares" of such
Shareholder); such Shares, as such Shares may be adjusted by stock dividend,
stock split, recapitalization, combination or exchange of shares, merger,
consolidation, reorganization or other change or transaction of or by the
Company, together with Shares issuable upon the exercise of Company Options;
and
WHEREAS, as a condition to their willingness to enter into
the Merger Agreement, Parent and Merger Sub have requested that the
Shareholders enter into this Agreement;
NOW, THEREFORE, to induce Parent and Merger Sub to enter
into, and in consideration of their entering into, the Merger Agreement, and in
consideration of the premises and the representations, warranties and
agreements contained herein, the parties agree as follows:
Section 1. Certain Definitions. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to such terms in the Merger
Agreement.
Section 2. Representations and Warranties of the Shareholders. Each
Shareholder, severally and not jointly, represents and warrants to Parent and
Merger Sub, as of the date hereof, as follows:
<PAGE> 2
(a) The Shareholder is the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of, and has good title to, all of the Shares
(including the Company Options), free and clear of any mortgage, pledge,
hypothecation, rights of others, claim, security interest, charge, encumbrance,
title defect, title retention agreement, voting trust agreement, interest,
option, lien, charge or similar restriction or limitation, including any
restriction on the right to vote, sell or otherwise dispose of the Shares
(each, a "Lien"), except as set forth in this Agreement.
(b) The Shares (including the Company Options) constitute all
of the securities (as defined in Section 3(a)(10) of the Exchange Act), of the
Company beneficially owned, directly or indirectly, by the Shareholder.
(c) Except for the Shares (including the Company Options),
the Shareholder does not, directly or indirectly, beneficially own or have any
option, warrant or other right to acquire any securities of the Company that
are or may by their terms become entitled to vote or any securities that are
convertible or exchangeable into or exercisable for any securities of the
Company that are or may by their terms become entitled to vote, nor is the
Shareholder subject to any contract, commitment, arrangement, understanding,
restriction or relationship (whether or not legally enforceable), other than
this Agreement, that provides for such Shareholder to vote or acquire any
securities of the Company. The Shareholder holds exclusive power to vote the
Shares and has not granted a proxy to any other Person to vote the Shares,
subject to the limitations set forth in this Agreement.
(d) This Agreement has been duly executed and delivered by
the Shareholder and, assuming due authorization, execution and delivery of this
Agreement by Parent and Merger Sub, is a valid and binding obligation of the
Shareholder enforceable against the Shareholder in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally; and (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(e) Neither the execution and delivery of this Agreement nor
the performance by the Shareholder of the Shareholder's obligations hereunder
will conflict with, result in a violation or breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would result in a
default) or give rise to any right of termination, amendment, cancellation, or
acceleration or result in the
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<PAGE> 3
creation of any Lien on any Shares under, (i) any contract, commitment,
agreement, understanding, arrangement or restriction of any kind to which the
Shareholder is a party or by which the Shareholder is bound or (ii) any
injunction, judgment, writ, decree, order or ruling applicable to the
Shareholder; except for conflicts, violations, breaches, defaults,
terminations, amendments, cancellations, accelerations or Liens that would not
individually or in the aggregate be expected to prevent or materially impair or
delay the consummation by such Shareholder of the transactions contemplated
hereby.
(f) Neither the execution and delivery of this Agreement nor
the performance by the Shareholder of the Shareholder's obligations hereunder
will violate any Law applicable to the Shareholder or require any order,
consent, authorization or approval of, filing or registration with, or
declaration or notice to, any court, administrative agency or other
governmental body or authority, other than any required notices or filings
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR Act"),
foreign antitrust or competition laws, the Exon-Florio Amendment or the federal
securities laws.
(g) No investment banker, broker, finder or other
intermediary is, or will be, entitled to a fee or commission from Merger Sub,
Parent or the Company in respect of this Agreement based on any arrangement or
agreement made by or on behalf of such Shareholder in his or her capacity as a
shareholder of the Company.
(h) The Shareholder understands and acknowledges that Parent
is entering into, and causing Merger Sub to enter into, the Merger Agreement in
reliance upon the Shareholder's execution and delivery of this Agreement.
Section 3. Representations and Warranties of Parent and Merger Sub.
Parent and Merger Sub hereby make each of the representations and warranties
contained in Sections 7.3(a), 7.4 and 7.5 of the Merger Agreement, as of the
date hereof, as if such representations were set forth herein.
Section 4. Transfer of the Shares. During the term of this
Agreement, except as otherwise expressly provided herein, each Shareholder
agrees that such Shareholder will not (a) tender into any tender or exchange
offer or otherwise sell, transfer, pledge, assign, hypothecate or otherwise
dispose of, or encumber with any Lien, any of the Shares, (b) acquire any
shares of Common Stock or other securities of the Company (otherwise than in
connection with a transaction of the type described in Section 5 or by
exercising any of the Company Options), (c)
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deposit the Shares into a voting trust, enter into a voting agreement or
arrangement with respect to the Shares or grant any proxy or power of attorney
with respect to the Shares, (d) enter into any contract, option or other
arrangement (including any profit sharing arrangement) or undertaking with
respect to the direct or indirect acquisition or sale, transfer, pledge,
assignment, hypothecation or other disposition of any interest in or the voting
of any Shares or any other securities of the Company, (e) exercise any rights
(including, without limitation, under Section 607.1301 through 607.1320 of the
Florida Business Corporation Act) to demand appraisal of any Shares which may
arise with respect to the Merger, or (f) take any other action that would in
any way restrict, limit or interfere with the performance of such Shareholder's
obligations hereunder or the transactions contemplated hereby or which would
otherwise diminish the benefits of this Agreement to Parent or Merger Sub.
Section 5. Adjustments. (a) In the event (i) of any stock dividend,
stock split, recapitalization, reclassification, combination or exchange of
shares of capital stock or other securities of the Company on, of or affecting
the Shares or the like or any other action that would have the effect of
changing a Shareholder's ownership of the Company's capital stock or other
securities or (ii) a Shareholder becomes the beneficial owner of any additional
Shares of or other securities of the Company, then the terms of this Agreement
will apply to the shares of capital stock held by such Shareholder immediately
following the effectiveness of the events described in clause (i) or such
Shareholder becoming the beneficial owner thereof, as described in clause (ii),
as though they were Shares hereunder.
(b) Each Shareholder hereby agrees, while this Agreement is
in effect, to promptly notify Parent and Merger Sub of the number of any new
Shares acquired by such Shareholder, if any, after the date hereof.
Section 6. Tender of Shares. Each Shareholder hereby agrees that
such Shareholder will validly tender (or cause the record owner of such shares
to validly tender) and sell (and not withdraw) pursuant to and in accordance
with the terms of the Offer not later than the fifth business day after
commencement of the Offer (or the earlier of the expiration date of the Offer
and the fifth business day after such Shares are acquired by such Shareholder
if the Shareholder acquires Shares after the date hereof), or, if the
Shareholder has not received the Offer Documents by such time, within two
business days following receipt of such documents, all of the then outstanding
shares of Common Stock beneficially owned by such Shareholder (including the
shares of Common Stock outstanding as of the date hereof and set forth on
Schedule A hereto opposite such Shareholder's name). Upon the purchase by
Parent of all of such then outstanding shares of Common Stock beneficially
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<PAGE> 5
owned by such Shareholder pursuant to the Offer in accordance with this Section
6, this Agreement will terminate as it relates to such Shareholder. In the
event, notwithstanding the provisions of the first sentence of this Section 6,
any Shares beneficially owned by a Shareholder are for any reason withdrawn
from the Offer or are not purchased pursuant to the Offer, such Shares will
remain subject to the terms of this Agreement. Each Shareholder acknowledges
that Parent's obligation to accept for payment and pay for the shares of Common
Stock tendered in the Offer is subject to all the terms and conditions of the
Offer.
Section 7. Voting Agreement. Each Shareholder, by this Agreement,
does hereby (a) agree to appear (or not appear, if requested by Parent or
Merger Sub) at any annual, special, postponed or adjourned meeting of the
stockholders of the Company or otherwise cause the Shares such Shareholder
beneficially owns to be counted as present (or absent, if requested by Parent
or Merger Sub) thereat for purposes of establishing a quorum and to vote or
consent, and (b) constitute and appoint Parent and Merger Sub, or any nominee
thereof, with full power of substitution, during and for the term of this
Agreement, as his true and lawful attorney and proxy for and in his name, place
and stead, to vote all the Shares such Shareholder beneficially owns at the
time of such vote, at any annual, special, postponed or adjourned meeting of
the stockholders of the Company (and this appointment will include the right to
sign his or its name (as stockholder) to any consent, certificate or other
document relating to the Company that laws of the States of Delaware and
Florida may require or permit), in the case of both (a) and (b) above, (x) in
favor of approval and adoption of the Merger Agreement and approval and
adoption of the Merger and the other transactions contemplated thereby and (y)
against (1) any Acquisition Proposal, (2) any action or agreement that would
result in a breach in any respect of any covenant, agreement, representation or
warranty of the Company under the Merger Agreement and (3) the following
actions (other than the Merger and the other transactions contemplated by the
Merger Agreement): (i) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the Company or
any of its subsidiaries; (ii) a sale, lease or transfer of a material amount of
assets of the Company or any of its subsidiaries, or a reorganization,
recapitalization, dissolution or liquidation of the Company or any of its
Subsidiaries; (iii) (A) any change in a majority of the persons who constitute
the board of directors of the Company or any of its Subsidiaries as of the date
hereof; (B) any change in the present capitalization of the Company or any
amendment of the Company's or any of its Subsidiaries' certificate of
incorporation or bylaws, as amended to date; (C) any other material change in
the Company's or any of its Subsidiaries' corporate structure or business; or
(D) any other action that
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<PAGE> 6
is intended, or could be expected, to impede, interfere with, delay, postpone,
or adversely affect the Offer, the Merger and the other transactions
contemplated by this Agreement and the Merger Agreement. This proxy and power
of attorney is a proxy and power coupled with an interest, and each Shareholder
declares that it is irrevocable until this Agreement shall terminate in
accordance with its terms. Each Shareholder hereby revokes all and any other
proxies with respect to the Shares that such Shareholder may have heretofore
made or granted. For Shares as to which a Shareholder is the beneficial but not
the record owner, such Shareholder shall use his or its best efforts to cause
any record owner of such Shares to grant to Parent a proxy to the same effect
as that contained herein. Each Shareholder hereby agrees to permit Parent and
Merger Sub to publish and disclose in the Offer Documents and the Proxy
Statement and related filings under the securities laws such Shareholder's
identity and ownership of Shares and the nature of his or its commitments,
arrangements and understandings under this Agreement.
Section 8. No Solicitation. Subject to Section 8.2 of the Merger
Agreement, each Shareholder agrees that neither such Shareholder nor any of
such Shareholder's officers, directors, employees, trustees, representatives,
agents or affiliates (including, without limitation, any investment banker,
attorney or accountant retained by any of them) will directly or indirectly
initiate, solicit or encourage (including by way of furnishing non-public
information or assistance), or take any other action to facilitate, any
inquiries or the making or submission of any Acquisition Proposal, or enter
into or maintain or continue discussions or negotiate with any person or entity
in furtherance of such inquiries or to obtain or induce any person to make or
submit an Acquisition Proposal or agree to or endorse any Acquisition Proposal
or assist or participate in, facilitate or encourage, any effort or attempt by
any other person or entity to do or seek any of the foregoing or authorize or
permit any of its officers, directors, employees, trustees or any of its
affiliates or any investment banker, financial advisor, attorney, accountant or
other representative or agent retained by any of them to take any such action.
Each Shareholder shall immediately advise Parent in writing of the receipt of
request for information or any inquiries or proposals relating to an
Acquisition Proposal.
Section 9. Termination. This Agreement will terminate (a) as to any
Shareholder upon the purchase of all the Shares beneficially owned by such
Shareholder pursuant to the Offer in accordance with Section 6, or (b) on the
earlier to occur of (i) the Effective Time or (ii) the date the Merger
Agreement is terminated in accordance with its terms.
Section 10. Fees and Expenses. Except as otherwise expressly provided
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herein or in the Merger Agreement, whether of not the Merger is consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
costs and expenses.
Section 11. Further Assurances. Each party hereto will execute and
deliver all such further documents and instruments and take all such further
action as may be reasonably necessary in order to consummate the transactions
contemplated hereby.
Section 12. Publicity. A Shareholder shall not issue any press
release or otherwise make any public statements with respect to this Agreement
or the Merger Agreement or the other transactions contemplated hereby or
thereby without the consent of Parent and Merger Sub, except as may be required
by Law or applicable stock exchange rules.
Section 13. Shareholder Capacity. No person executing this Agreement
makes any agreement or understanding herein in such Shareholder's capacity as a
director or officer of the Company or any subsidiary of the Company. Each
Shareholder signs solely in such Shareholder's capacity as the beneficial owner
of such Shareholder's Shares and nothing herein shall limit or affect any
actions taken by a Shareholder in such Shareholder's capacity as an officer or
director of the Company or any subsidiary of the Company to the extent
specifically permitted by the Merger Agreement.
Section 14. Enforcement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with its specific terms or was otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any Florida Court, this being
in addition to any other remedy to which they are entitled at law or in equity.
Section 15. Miscellaneous.
(a) All representations and warranties contained herein will
survive for twelve months after the termination hereof. The covenants and
agreements made herein will survive in accordance with their respective terms.
(b) Any provision of this Agreement may be waived at any time
by the party that is entitled to the benefits thereof. No such waiver,
amendment or
7
<PAGE> 8
supplement will be effective unless in writing and signed by the party or
parties sought to be bound thereby. Any waiver by any party of a breach of any
provision of this Agreement will 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 to insist upon strict adherence to
any term of this Agreement or one or more sections hereof will 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.
(c) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements among the parties with respect to such matters. This Agreement
may not be amended, changed, supplemented, waived or otherwise modified, except
upon the delivery of a written agreement executed by the parties hereto.
(d) This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without regard to its rules of
conflict of laws. Each of the Company, Parent and Merger Sub hereby irrevocably
and unconditionally consents to submit to the exclusive jurisdiction of the
Florida Courts for any litigation arising out of or relating to this Agreement
and the transactions contemplated hereby (and agrees not to commence any
litigation relating thereto except in such courts), waives any objection to the
laying of venue of any such litigation in the Florida Courts and agrees not to
plead or claim in any Florida Court that such litigation brought therein has
been brought in an inconvenient forum.
(e) The descriptive headings contained herein are for
convenience and reference only and will not affect in any way the meaning or
interpretation of this Agreement. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders
and words denoting natural persons shall include corporations and partnerships
and vice versa. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be understood to be followed by the words
"without limitation."
(f) All notices and other communications hereunder will be in
writing and will be given (and will be deemed to have been duly given upon
receipt) by delivery in person, by telecopy, or by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
8
<PAGE> 9
If to Parent or Merger Sub to:
c/o Oerlikon-Buhrle Holding AG
Hofwiesenstrasse 135
CH-8021 Zurich
Switzerland
Attention:
---------------------
Fax: (____) ___-______
with copies to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Allen I. Isaacson, P.C.
Telecopy: (212) 859-4000
If to a Shareholder, at the address set forth on Schedule A hereto or
to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
(g) This Agreement may be executed by the parties hereto in
separate counterparts, each of which, when so executed and delivered, shall be
an original. All such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
(h) This Agreement is binding upon and is solely for the
benefit of the parties hereto and their respective successors, legal
representatives and assigns. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement will be assigned by any of the
parties hereto without the prior written consent of the other parties, except
that Parent and Merger Sub will have the right to assign to any direct or
indirect wholly owned subsidiary of Parent or Merger Sub any and all rights and
obligations of Parent or Parent under this Agreement, provided that any such
assignment will not relieve either Parent or Merger Sub from any of its
obligations hereunder.
(i) Any term or provision of this Agreement that is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting
9
<PAGE> 10
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
(j) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity will be
cumulative and not alternative, and the exercise of any thereof by either party
will not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
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<PAGE> 11
IN WITNESS WHEREOF, each of the Parent and Merger Sub has
caused this Agreement to be signed by its officer or director thereunto duly
authorized and each Shareholder has signed this Agreement, all as of the date
first written above.
OERLIKON-BUHRLE USA, INC.
By: /s/ Beat Baumgartner
------------------------------------------------
Name: Beat Baumgartner
Title: Chairman and President
VOLCANO ACQUISITION CORP.
By: /s/ Heinz Kundert
------------------------------------------------
Name: Heinz Kundert
Title: Chief Operating Officer Balzers & Leybold
Chairman and President Volcano Acquisition Corp.
STOCKHOLDERS:
RONALD H. DEFERRARI
/s/ Ronald H. Deferrari
----------------------------------------------------
RONALD H. DEFERRARI REVOCABLE TRUST
By: /s/ Ronald H. Deferrari
------------------------------------------------
Name: Ronald H. Deferrari
Title: Trustee
R & C DEFERRARI FAMILY LIMITED PARTNERSHIP
By: R&C Management Inc., its general partner
By: /s/ Ronald H. Deferrari
------------------------------------------
Name: Ronald H. Deferrari
Title: President
<PAGE> 12
R & S DEFERRARI FAMILY LIMITED PARTNERSHIP
By: R&S Management Inc., its general partner
By: /s/ Ronald H. Deferrari
--------------------------------------------
Name: Ronald H. Deferrari
Title: President
R & D DEFERRARI FAMILY LIMITED PARTNERSHIP
By: R&D Management Inc., its general partner
By: /s/ Ronald H. Deferrari
--------------------------------------------
Name: Ronald H. Deferrari
Title: President
RONALD S. DEFERRARI
/s/ Ronald S. Deferrari
----------------------------------------------------
EDMOND A RICHARDS
/s/ Edmond A. Richards
----------------------------------------------------
STACY L. WAGNER
/s/ Stacy L. Wagner
----------------------------------------------------
<PAGE> 13
SCHEDULE A
<TABLE>
<CAPTION>
Number Number
Shareholder Address of Shares of Options
- ----------- ------- --------- ----------
<S> <C> <C> <C>
Ronald H. Deferrari c/o Plasma-Therm, Inc. 438,300 0
10050 16th Street North
St. Petersburg, Florida 33716
Fax: (727) 577-7035
Ronald H. Deferrari c/o Plasma-Therm, Inc. 500,000 0
Revocable Trust 10050 16th Street North
St. Petersburg, Florida 33716
Fax: (727) 577-7035
R & C Deferrari Family c/o Plasma-Therm, Inc. 390,000 0
Limited Partnership 10050 16th Street North
St. Petersburg, Florida 33716
Fax: (727) 577-7035
R & S Deferrari Family c/o Plasma-Therm, Inc. 390,000 0
Limited Partnership 10050 16th Street North
St. Petersburg, Florida 33716
Fax: (727) 577-7035
R & D Deferrari Family c/o Plasma-Therm, Inc. 320,000 0
Limited Partnership 10050 16th Street North
St. Petersburg, Florida 33716
Fax: (727) 577-7035
Ronald S. Deferrari c/o Plasma-Therm, Inc. 21,892 560,000
10050 16th Street North
St. Petersburg, Florida 33716
Fax: (727) 577-7035
Edmond A Richards c/o Plasma-Therm, Inc. 16,000 265,000
10050 16th Street North
St. Petersburg, Florida 33716
Fax: (727) 577-7035
Stacy L. Wagner c/o Plasma-Therm, Inc. 38,000 180,000
10050 16th Street North
St. Petersburg, Florida 33716
Fax: (727) 577-7035
</TABLE>
