<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
LEGENT CORPORATION
--------------------------------------------------------------
(Name of Subject Company)
VR126, INC.
COMPUTER ASSOCIATES INTERNATIONAL, INC.
--------------------------------------------------------------
(Bidder)
COMMON STOCK, $.01 PAR VALUE PER SHARE
--------------------------------------------------------------
(Title of Class of Securities)
52465R109
--------------------------------------------------------------
(CUSIP Number of Class of Securities)
SANJAY KUMAR
VR126, INC.
C/O COMPUTER ASSOCIATES INTERNATIONAL, INC.
ONE COMPUTER ASSOCIATES PLAZA
ISLANDIA, NEW YORK 11788-7000
(516) 342-5224
--------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
COPIES TO:
SCOTT F. SMITH, ESQ.
HOWARD, DARBY & LEVIN
1330 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
TELEPHONE: (212) 841-1000
--------------------------------------------------------------
May 25, 1995
(DATE OF EVENT WHICH REQUIRES
FILING STATEMENT ON SCHEDULE 13D)
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<PAGE> 2
CALCULATION OF FILING FEE
--------------------------------------------------------------
<TABLE>
<S> <C>
============================================================================
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
- ----------------------------------------------------------------------------
$1,718,560,606 $343,813
============================================================================
</TABLE>
* Estimated for purposes of calculating the amount of filing fee only. The
amount assumes the purchase of 35,840,680 shares of common stock, $.01 par
value per share (the "Shares"), at a price per Share of $47.95 in cash. Such
number of Shares represents all of the Shares outstanding as of May 7, 1995
(other than 500,000 Shares owned by Computer Associates International, Inc.).
** Includes a Schedule 13D filing fee of $100.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid: None.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
Page 1 of 9 Pages
Exhibit Index begins on Page 9
<PAGE> 3
14D-1 AND 13D
CUSIP No. 52465R109 Page 2 of 9 Pages
1) Name of Reporting Persons: VR126, Inc.
S.S. or I.R.S. Identification Nos. of Above Person: pending
- -----------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions).
/ / (a)
/ / (b)
- -----------------------------------------------------------------------------
3) SEC Use Only.
- -----------------------------------------------------------------------------
4) Sources of Funds (See Instructions). AF, WC, BK
- -----------------------------------------------------------------------------
5) / / Check if Disclosure of Legal Proceedings is Required pursuant to
Items 2(e) or 2(f).
- -----------------------------------------------------------------------------
6) Citizenship or Place of Organization.
Delaware
- -----------------------------------------------------------------------------
7) Aggregate Amount Beneficially Owned by Each Reporting Person.
4,151,299* **
- -----------------------------------------------------------------------------
8) / / Check if the Aggregate Amount in Row 7 Excludes Certain Shares.
- -----------------------------------------------------------------------------
9) Percent of Class Represented by Amount in Row 7.
Approximately 11.4% as of May 7, 1995* **
- -----------------------------------------------------------------------------
10) Type of Reporting Person (See Instructions).
CO
<PAGE> 4
14D-1 AND 13D
CUSIP No. 52465R109 Page 3 of 9 Pages
1) Names of Reporting Persons: Computer Associates International, Inc.
S.S. or I.R.S. Identification Nos. of Above Person: 13-2857434
- -----------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions).
/ / (a)
/ / (b)
- -----------------------------------------------------------------------------
3) SEC Use Only.
- -----------------------------------------------------------------------------
4) Sources of Funds (See Instructions). WC, BK
- -----------------------------------------------------------------------------
5) / / Check if Disclosure of Legal Proceedings is Required pursuant to
Items 2(e) or 2(f).
- -----------------------------------------------------------------------------
6) Citizenship or Place of Organization.
Delaware
- -----------------------------------------------------------------------------
7) Aggregate Amount Beneficially Owned by Each Reporting Person.
4,151,299* **
- -----------------------------------------------------------------------------
8) / / Check if the Aggregate Amount in Row 7 Excludes Certain Shares.
- -----------------------------------------------------------------------------
9) Percent of Class Represented by Amount in Row 7. Approximately 11.4%
as of May 7, 1995* **
- -----------------------------------------------------------------------------
10) Type of Reporting Person (See Instructions). CO
- ------------------
* On May 25, 1995, VR126, Inc. ("Merger Subsidiary"), a wholly-owned
subsidiary of Computer Associates International, Inc. ("Computer Associates"),
entered into a Stockholder Tender Agreement (the "Stockholder Agreement") with
General Atlantic Group Limited ("General Atlantic"), pursuant to which General
Atlantic agreed to tender pursuant to the tender offer described in this
Statement (the "Offer") all shares of common stock, $.01 par value per share
(the "Shares"), of Legent Corporation (the "Company") owned by it (representing
an aggregate of 3,651,299 Shares, or approximately 10.0% of the Shares
outstanding as of May 7, 1995) (the "Tendered Shares"). Such Tendered Shares
are reflected in Rows 7 and 9 of each of the tables above. The Stockholder
Agreement is described more fully in Section 11 ("Purpose of the Offer; Merger
Agreement; Appraisal Rights; Stockholder Tender Agreement") of the Offer to
Purchase dated June 1, 1995 (the "Offer to Purchase").
** On April 17 and 18, 1995, Computer Associates purchased a total of
500,000 Shares in open market purchases for an aggregate purchase price of
approximately $13.9 million (or an average purchase price per Share of
approximately $27.76) in cash, including commissions. Such purchases are
reflected in Rows 7 and 9 of each of the tables above. Such purchases are more
fully described in Schedule II to the Offer to Purchase.
<PAGE> 5
This Tender Offer Statement on Schedule 14D-1 also constitutes
a Statement on Schedule 13D with respect to the acquisition by Merger
Subsidiary and Computer Associates of beneficial ownership of the Tendered
Shares. The item numbers and responses thereto below are in accordance with
the requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Legent Corporation, a
Delaware corporation (the "Company"), and the address of its principal
executive offices is 575 Herndon Parkway, Herndon, Virginia 22070.
(b) This Statement on Schedule 14D-1 relates to the offer by
Merger Subsidiary (defined below), to purchase all outstanding shares of Common
Stock, $.01 par value per share (the "Shares"), of the Company at $47.95 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase (the "Offer to Purchase") and in the related
Letter of Transmittal, copies of which are attached thereto as Exhibits (a)(1)
and (a)(2) (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). The information set forth in the
Introduction to the Offer to Purchase (the "Introduction") is incorporated
herein by reference.
(c) The information set forth in Section 6 ("Price Range of
Shares; Dividends") of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement on Schedule 14D-1 is filed by
VR126, Inc. ("Merger Subsidiary") and Computer Associates International, Inc.
("Computer Associates"), each of which is a Delaware corporation. Merger
Subsidiary is a wholly-owned subsidiary of Computer Associates. Information
concerning the principal business and the addresses of the principal offices of
Merger Subsidiary and Computer Associates is set forth in Section 8 ("Certain
Information Concerning Merger Subsidiary and Computer Associates") of the Offer
to Purchase, and is incorporated herein by reference. The names, business
addresses, present principal occupations or employments, material occupations,
positions, offices or employment during the last five years and citizenship of
the directors and executive officers of Merger Subsidiary and Computer
Associates are set forth in Schedule I to the Offer to Purchase and are
incorporated herein by reference.
(e) and (f) None of Merger Subsidiary, Computer Associates
or, to the best knowledge of such corporations, any of the persons listed on
Schedule I to the Offer of Purchase, has during the last five years (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, Federal or state
securities laws or finding any violation of such laws.
-4-
<PAGE> 6
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE SUBJECT COMPANY.
(a) and (b) The information set forth in (i) the Introduction
and Section 10 ("Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company") and Section 11 ("Purpose of the Offer; Merger
Agreement; Appraisal Rights; Stockholder Tender Agreement") and Schedule I of
the Offer to Purchase, (ii) the Agreement and Plan of Merger, dated as of May
25, 1995 (the "Merger Agreement"), among the Company, Computer Associates and
Merger Subsidiary, a copy of which is attached as Exhibit (c)(1) hereto, and
(iii) the Stockholder Tender Agreement, dated as of May 25, 1995 (the
"Stockholder Agreement"), between Merger Subsidiary and General Atlantic Group
Limited, a copy of which is attached as Exhibit (c)(2) hereto, respectively, is
incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b) The information set forth in (i) Section 9
("Source and Amount of Funds") of the Offer to Purchase and (ii) the Commitment
Letter dated May 24, 1995 from Credit Suisse to Computer Associates, a copy of
which is attached as Exhibit (b)(1) hereto, respectively, is incorporated
herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS
OF THE BIDDER.
(a)-(e) The information set forth in the Introduction and
Section 11 ("Purpose of the Offer; Merger Agreement; Appraisal Rights;
Stockholder Tender Agreement") of the Offer to Purchase is incorporated herein
by reference.
(f) and (g) The information set forth in Section 12 ("Effect
of the Offer on the Market for the Shares; Stock Quotations, Registration Under
the Exchange Act") of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in (i) the Introduction,
Section 8 ("Certain Information Concerning Merger Subsidiary and Computer
Associates"), Section 10 ("Background of the Offer; Past Contacts, Transactions
or Negotiations with the Company"), Section 11 ("Purpose of the Offer; Merger
Agreement; Appraisal Rights; Stockholder Tender Agreement"), Schedule I and
Schedule II of the Offer to Purchase, (ii) the Merger Agreement, and (iii) the
Stockholder Agreement, respectively, is incorporated herein by reference.
-5-
<PAGE> 7
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATION-
SHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in (i) the Introduction, Section 8
("Certain Information Concerning Merger Subsidiary and Computer Associates"),
Section 10 ("Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company"), Section 11 ("Purpose of the Offer; Merger
Agreement; Appraisal Rights; Stockholder Tender Agreement") and Schedule II of
the Offer to Purchase, (ii) the Merger Agreement, and (iii) the Stockholder
Agreement, respectively, is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 17 ("Fees and Expenses")
of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 8 ("Certain Information
Concerning Merger Subsidiary and Computer Associates") of the Offer to
Purchase, and such information and the consolidated financial statements of
Computer Associates in Computer Associates' Annual Report on Form 10-K for the
fiscal year ended March 31, 1995 are incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 11 ("Purpose of the
Offer; Merger Agreement; Appraisal Rights; Stockholder Tender Agreement") of
the Offer to Purchase is incorporated herein by reference.
(b)-(d) The information set forth in Section 16 ("Certain
Legal Matters; Regulatory Approvals") of the Offer to Purchase is incorporated
herein by reference.
(e) None.
(f) The information set forth in (i) the Offer to
Purchase, (ii) the Letter of Transmittal, (iii) the Merger Agreement, and (iv)
the Stockholder Agreement, respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated June 1, 1995.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
-6-
<PAGE> 8
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(6) Text of joint press release issued by Computer Associates and
the Company dated May 25, 1995.
(a)(7) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(8) Form of summary advertisement dated June 1, 1995.
(b)(1) Commitment Letter dated May 24, 1995 from Credit Suisse to
Computer Associates.
(c)(1) Agreement and Plan of Merger, dated as of May 25, 1995, among
the Company, Computer Associates and Merger Subsidiary.
(c)(2) Stockholder Tender Agreement, dated as of May 25, 1995, among
Merger Subsidiary and General Atlantic Group Limited.
(d) None.
(e) Not applicable.
(f) None.
-7-
<PAGE> 9
SIGNATURE
After due inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: June 1, 1995
VR126, INC.
By/s/ Belden A. Frease
-----------------------------
Name: Belden A. Frease
Title: Vice President and Secretary
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By/s/ Belden A. Frease
------------------------------
Name: Belden A. Frease
Title: Senior Vice President and
Secretary
-8-
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Name
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<S> <C>
(a)(1) Offer to Purchase dated June 1, 1995.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Text of joint press release issued by Computer Associates and the Company
dated May 25, 1995.
(a)(7) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(8) Form of summary advertisement dated June 1, 1995.
(b)(1) Commitment Letter dated May 24, 1995 from Credit Suisse to Computer
Associates.
(c)(1) Agreement and Plan of Merger, dated as of May 25, 1995, among the Company,
Computer Associates and Merger Subsidiary.
(c)(2) Stockholder Tender Agreement, dated as of May 25, 1995, between Merger
Subsidiary and General Atlantic Group Limited.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
-9-
<PAGE> 1
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LEGENT CORPORATION
AT
$47.95 NET PER SHARE
BY
VR126, INC.
A WHOLLY OWNED SUBSIDIARY OF
COMPUTER ASSOCIATES INTERNATIONAL, INC.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, JULY 6, 1995, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN A NUMBER OF SHARES OF COMMON
STOCK, $.01 PAR VALUE PER SHARE (THE "SHARES"), OF LEGENT CORPORATION (THE
"COMPANY") WHICH, TOGETHER WITH THE SHARES THEN OWNED BY VR126, INC. ("MERGER
SUBSIDIARY") AND COMPUTER ASSOCIATES INTERNATIONAL, INC. ("COMPUTER
ASSOCIATES"), WOULD REPRESENT AT LEAST A MAJORITY OF THE TOTAL NUMBER OF
OUTSTANDING SHARES ON A FULLY DILUTED BASIS AND (2) THE EXPIRATION OR
TERMINATION OF ANY APPLICABLE ANTITRUST WAITING PERIODS.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
OFFER AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, HAS UNANIMOUSLY
APPROVED THE OFFER AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT,
AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE
OFFER AND TENDER THEIR SHARES.
---------------------------
Any stockholder desiring to tender Shares should either (i) complete and
sign the Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and deliver it with the
certificate(s) representing such tendered Shares and all other required
documents to the Depositary or follow the procedure for book-entry tender of
Shares set forth in Section 3 or (ii) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. A stockholder having Shares registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such person if such stockholder desires to tender such Shares.
Any stockholder who desires to tender Shares and whose certificate(s)
representing such Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, may tender such
Shares pursuant to the guaranteed delivery procedure set forth in Section 3.
Questions and requests for assistance or additional copies of this Offer to
Purchase or the Letter of Transmittal may be directed to the Information Agent
at its addresses and telephone numbers specified on the back cover of this
Offer to Purchase.
---------------------------
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
June 1, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. Terms of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Acceptance for Payment and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. Procedure for Tendering Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. Withdrawal Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5. Certain Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6. Price Range of Shares; Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7. Certain Information Concerning the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8. Certain Information Concerning Merger Subsidiary and Computer Associates . . . . . . . . . . . . 13
9. Source and Amount of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10. Background of the Offer; Past Contacts, Transactions or Negotiations with the Company . . . . . . 17
11. Purpose of the Offer; Merger Agreement; Appraisal Rights; Stockholder Tender Agreement . . . . . 19
12. Effect of the Offer on the Market for the Shares; Stock Quotations; Registration under the
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13. Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
14. Extension of Tender Period; Termination; Amendment . . . . . . . . . . . . . . . . . . . . . . . 33
15. Certain Conditions of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
16. Certain Legal Matters; Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
17. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
18. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Schedule I Directors and Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Schedule II Beneficial Ownership of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
</TABLE>
<PAGE> 3
To the Holders of Common Stock of
Legent Corporation:
INTRODUCTION
VR126, Inc., a Delaware corporation ("Merger Subsidiary") and a wholly
owned subsidiary of Computer Associates International, Inc., a Delaware
corporation ("Computer Associates"), hereby offers to purchase all outstanding
shares of Common Stock, $.01 par value per share (the "Shares"), of Legent
Corporation, a Delaware corporation (the "Company"), at $47.95 per Share, net
to the seller in cash, upon the terms and subject to the conditions set forth
in this Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements hereto or thereto, collectively
constitute the "Offer"). Tendering stockholders of the Company (the
stockholders of the Company are referred to herein as the "Stockholders") will
not be obligated to pay brokerage fees or commissions or, except as set forth
in the Letter of Transmittal, transfer taxes on the purchase of Shares pursuant
to the Offer. Computer Associates will pay all charges and expenses of IBJ
Schroder Bank & Trust Company (the "Depositary") and D.F. King & Co., Inc. (the
"Information Agent") in connection with the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT
THE OFFER AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT (DEFINED
BELOW) ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY, HAS UNANIMOUSLY APPROVED THE OFFER AND THE TRANSACTIONS CONTEMPLATED
BY THE MERGER AGREEMENT, AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF
THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES.
PURSUANT TO THE MERGER AGREEMENT, THE COMPANY HAS REPRESENTED TO
COMPUTER ASSOCIATES THAT EACH OF LAZARD FRERES & CO., LLC ("LAZARD FRERES") AND
GOLDMAN, SACHS & CO. ("GOLDMAN, SACHS"), THE COMPANY'S FINANCIAL ADVISORS, HAS
DELIVERED TO THE COMPANY'S BOARD OF DIRECTORS ITS WRITTEN OPINION TO THE EFFECT
THAT THE $47.95 PER SHARE TO BE PAID IN THE OFFER AND THE MERGER IS FAIR TO THE
HOLDERS OF THE SHARES FROM A FINANCIAL POINT OF VIEW. THE OPINIONS OF LAZARD
FRERES AND GOLDMAN, SACHS ARE SET FORTH IN FULL IN THE COMPANY'S
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE "SCHEDULE 14D-9"),
BEING MAILED TO STOCKHOLDERS WITH THIS OFFER TO PURCHASE. STOCKHOLDERS ARE
URGED TO READ EACH OPINION IN ITS ENTIRETY.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING
VALIDLY TENDERED BY THE EXPIRATION DATE (DEFINED BELOW) AND NOT WITHDRAWN A
NUMBER OF SHARES WHICH, TOGETHER WITH THE SHARES THEN OWNED BY COMPUTER
ASSOCIATES AND MERGER SUBSIDIARY, WOULD REPRESENT AT LEAST A MAJORITY OF THE
TOTAL NUMBER OF OUTSTANDING SHARES, ASSUMING THE EXERCISE OF ALL OUTSTANDING
OPTIONS, RIGHTS AND CONVERTIBLE SECURITIES (IF ANY) AND THE ISSUANCE OF ALL
SHARES THAT THE COMPANY IS OBLIGATED TO ISSUE (SUCH TOTAL NUMBER OF OUTSTANDING
SHARES BEING HEREINAFTER REFERRED TO AS THE "FULLY DILUTED SHARES") (THE
"MINIMUM CONDITION") AND (2) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE
ANTITRUST WAITING PERIODS. SEE SECTION 15, WHICH SETS FORTH IN FULL THE
CONDITIONS TO THE OFFER.
The Company has represented to Computer Associates that, as of May 7,
1995, there were 36,340,680 Shares issued and outstanding, and 5,712,173 Shares
reserved for issuance upon the exercise of stock options or rights to purchase
outstanding under various employee and director stock
-1-
<PAGE> 4
option plans and under various employee and director stock purchase plans
(including 50,000 Shares reserved for issuance upon the exercise of certain
additional stock options granted by the Company on May 11, 1995). Based upon
the foregoing, as of May 7, 1995, there were approximately 42,052,853 Shares
outstanding on a fully diluted basis (including such additional 50,000 Shares).
Computer Associates beneficially owns 4,151,299 Shares representing (based upon
the foregoing) approximately 9.9% of the Fully Diluted Shares. Of such Shares,
Computer Associates (i) owns of record 500,000 Shares and (ii) has entered into
an agreement with General Atlantic Group Limited, a Stockholder of the Company
("General Atlantic"), pursuant to which General Atlantic has agreed to tender
pursuant to the Offer 3,651,299 Shares, as more specifically described in
Section 11. Accordingly, Computer Associates believes that the Minimum
Condition would be satisfied (based on the foregoing assumptions) if
approximately 16,875,128 Shares (in addition to the Shares referred to in
clause (ii) of the immediately preceding sentence) are validly tendered
pursuant to the Offer and not withdrawn.
Merger Subsidiary and General Atlantic have entered into a Stockholder
Tender Agreement, dated as of May 25, 1995, pursuant to which General Atlantic
has agreed, subject to certain conditions, to tender pursuant to the Offer all
Shares owned by it. Further, General Atlantic has agreed not to withdraw its
Shares, subject to applicable law, unless the Board of Directors of the Company
(or any special committee thereof) withdraws or materially modifies its
approval of the Offer, the Merger or the Merger Agreement. General Atlantic
owns 3,651,299 Shares, constituting, as of May 7, 1995, approximately 10.0% of
the outstanding Shares and 8.7% of the Fully Diluted Shares.
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of May 25, 1995 (the "Merger Agreement"), among the Company, Computer
Associates and Merger Subsidiary, which has been unanimously approved by the
Company's Board of Directors. The Merger Agreement provides, among other
things, that, after consummation of the Offer, and upon the later of (i)
November 6, 1995, provided that as of such date the conditions to the Merger
set forth in the Merger Agreement shall be fulfilled or waived and (ii) the
first business day on which such conditions to the Merger shall be fulfilled or
waived, Merger Subsidiary will be merged into the Company (the "Merger"), with
the Company continuing as the surviving corporation (the "Surviving
Corporation"). Pursuant to the Merger Agreement, at the effective time of the
Merger (the "Effective Time"), each outstanding Share (other than Shares owned
by Computer Associates, Merger Subsidiary or any subsidiary of either of them
or held by the Company as treasury stock (which shall be canceled) or by
Stockholders exercising appraisal rights under Delaware Law (defined below))
will be converted into the right to receive $47.95 in cash or any higher price
paid for each Share in the Offer, without interest. If the Minimum Condition
is satisfied and Merger Subsidiary purchases Shares pursuant to the Offer,
Merger Subsidiary will have the power to approve the Merger without the
affirmative vote of any other Stockholder. In the event that Merger Subsidiary
owns 90% or more of the Shares, the "short-form" merger provisions of the
Delaware General Corporation Law ("Delaware Law") would permit the Merger to
occur without a meeting or a vote of the Stockholders. See Section 11.
Upon acceptance for payment by Merger Subsidiary of such number of
Shares which satisfies the Minimum Condition, Computer Associates is entitled,
pursuant to the Merger Agreement, to designate the number of directors, rounded
up to the next whole number, on the Company's Board
-2-
<PAGE> 5
of Directors that equals the product of (i) the total number of directors on
the Company's Board of Directors and (ii) the percentage that the number of
Shares owned by Computer Associates or Merger Subsidiary (including Shares
accepted for payment) bears to the total number of Shares outstanding, and the
Company shall take all necessary action to cause Computer Associates' designees
to be elected or appointed to the Company's Board of Directors; provided that,
prior to the Effective Time, the Company's Board of Directors shall always have
one member who is neither a designee nor an affiliate of Computer Associates or
Merger Subsidiary nor an employee of the Company (an "Independent Director").
No action proposed to be taken by the Company to amend or terminate the Merger
Agreement or waive any action by Computer Associates or Merger Subsidiary shall
be effective without the approval of the Independent Director.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions set forth in the Offer,
Merger Subsidiary will accept for payment and purchase, at the time and in the
manner set forth in Section 2, all Shares that are validly tendered by the
Expiration Date and not withdrawn as provided in Section 4. The term
"Expiration Date" shall mean 12:00 Midnight, New York City time, on Thursday,
July 6, 1995, unless Merger Subsidiary shall have extended the period of time
for which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by Merger
Subsidiary, shall expire.
The Offer is subject to certain conditions set forth in Section 15,
including satisfaction of the Minimum Condition and expiration or termination
of the waiting period applicable to Merger Subsidiary's acquisition of Shares
pursuant to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"). If any such condition is not satisfied,
Merger Subsidiary may, except as otherwise described below, (i) terminate the
Offer and return all tendered Shares to tendering Stockholders, (ii) extend the
Offer and, subject to withdrawal rights as set forth in Section 4, retain all
such Shares until the expiration of the Offer as so extended, (iii) waive such
condition (except the Minimum Condition) and, subject to any requirement to
extend the period of time during which the Offer is open, purchase all Shares
validly tendered by the Expiration Date and not withdrawn or (iv) delay
acceptance for payment or payment for Shares, subject to applicable law, until
satisfaction or waiver of the conditions to the Offer. Notwithstanding the
foregoing, but subject to Computer Associates' or the Company's ability to
terminate the Merger Agreement (described in Section 11 below), if (i) the
applicable waiting period under the HSR Act shall not have expired or been
terminated as of the date the Offer would otherwise have expired or (ii)
Computer Associates and the Company are litigating or contesting any
administrative or judicial action or proceeding challenging any transaction
contemplated by the Merger Agreement as violative of any antitrust law or any
decree, judgment, injunction or order that is in effect and that prohibits,
prevents or restricts consummation of the Merger or any such other transactions
and any condition to the Offer described in paragraphs (a) or (b) of Section 15
hereof are not satisfied as of the date the Offer would otherwise have expired,
Merger Subsidiary has agreed, pursuant to the Merger Agreement, to extend the
Offer from time to time until the earlier of (x) the consummation of the
-3-
<PAGE> 6
Offer and (y) March 29, 1996. For a description of Merger Subsidiary's right
to extend the period of time during which the Offer is open and to amend, delay
or terminate the Offer, see Section 14. Merger Subsidiary acknowledges that
Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Merger Subsidiary to pay the consideration offered or
return the Shares tendered promptly after the termination or withdrawal of the
Offer.
Pursuant to the Merger Agreement, Computer Associates and Merger
Subsidiary expressly reserve the right to waive any of the conditions to the
Offer (other than the Minimum Condition) and to make any change in the terms or
conditions of the Offer; provided that, without the written consent of the
Company, no change may be made which changes the form of consideration to be
paid in the Offer, decreases the price per Share or the number of Shares being
sought in the Offer, imposes conditions to the Offer in addition to those
expressly set forth in the Merger Agreement, changes or waives the Minimum
Condition, or makes any other change to any condition to the Offer set forth in
the Merger Agreement which is adverse to the holders of Shares.
Any extension, delay in payment, amendment or termination of the Offer
will be followed as promptly as practicable by public announcement thereof,
such announcement in the case of an extension to be made no later than 9:00
a.m., New York City time on the next business day after the previously
scheduled Expiration Date. Without limiting the manner in which Merger
Subsidiary may choose to make any public announcement, subject to applicable
law (including Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act which
require that material changes be promptly disseminated to stockholders in a
manner reasonably designed to inform them of such changes), Merger Subsidiary
shall have no obligation (except as otherwise required by applicable law) to
publicly advertise or otherwise communicate any such public announcement other
than by issuing a release to the Dow Jones News Service.
Subject to the Merger Agreement, if Merger Subsidiary makes any
material change in the terms of the Offer or the information concerning the
Offer, or waives any condition to the Offer that results in a material change
to the circumstances of the Offer, Merger Subsidiary will disseminate
additional tender offer materials and extend the Offer to the extent required
to comply with Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The
Securities and Exchange Commission (the "Commission") has interpreted such
rules to prescribe that the minimum period during which an offer must remain
open following material changes in the terms of the offer or information
concerning the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the terms or information changed. With respect to a
change in price or a change in the percentage of securities sought, a minimum
period of ten business days period may be required to allow for adequate
dissemination to stockholders and investor response. As used in this Offer to
Purchase, "business day" means any day other than a Saturday, Sunday or a
federal holiday and shall consist of the time period from 12:01 a.m. through
12:00 midnight, New York City time.
The Company has provided Merger Subsidiary with the Company's
stockholder lists and security position listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase and the
related Letter of Transmittal will be mailed to record holders of Shares and
will be furnished to brokers, banks and similar persons whose names, or the
names of whose nominees,
-4-
<PAGE> 7
appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Subject to the terms of the Offer and the satisfaction (or waiver to
the extent permitted by the Merger Agreement) of all the conditions to the
Offer, Merger Subsidiary shall accept for payment and pay for all Shares
validly tendered, and not withdrawn, pursuant to the Offer as soon as
practicable after the expiration of the Offer; provided, that Merger Subsidiary
may extend the Offer for a period of time of not more than 20 business days to
meet the objective (but not the condition) that there shall be validly tendered
prior to the Expiration Date (as so extended) and not withdrawn a number of
Shares, which, together with Shares then owned by Computer Associates and
Merger Subsidiary, represents at least 90% of the Fully Diluted Shares. For a
description of Merger Subsidiary's right to terminate the Offer (subject to the
terms of the Merger Agreement) and not accept for payment or pay for Shares or
to delay acceptance for payment or payment for Shares, see Section 14.
For purposes of the Offer, Merger Subsidiary shall be deemed to have
accepted for payment tendered Shares when, as and if Merger Subsidiary gives
oral or written notice to the Depositary of its acceptance of the tenders of
such Shares. In all cases, upon the terms and subject to the conditions of the
Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price with the Depositary, which will act as
agent for the tendering Stockholders for the purpose of receiving payments from
Merger Subsidiary and transmitting such payments to tendering Stockholders.
In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or of a confirmation of a book-entry transfer (a
"Book-Entry Confirmation") of such Shares into the Depositary's account at one
of the Book-Entry Transfer Facilities (defined in Section 3)), (ii) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) or an
Agent's Message (defined below) in connection with a book-entry transfer and
(iii) any other required documents. Accordingly, payment may be made to
tendering Stockholders at different times if delivery of the Shares and other
required documents occur at different times. For a description of the
procedure for tendering Shares pursuant to the Offer, see Section 3. Under no
circumstances will interest be paid by Merger Subsidiary on the consideration
paid for Shares pursuant to the Offer, regardless of any delay in making such
payment.
The term "Agent's Message" means a message, transmitted by a
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a Book-Entry Confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares which are the subject of such
Book-Entry Confirmation, that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that Merger Subsidiary may
enforce such agreement against such participant.
-5-
<PAGE> 8
If Merger Subsidiary increases the consideration to be paid for Shares
pursuant to the Offer, Merger Subsidiary will pay such increased consideration
for all Shares purchased pursuant to the Offer.
Merger Subsidiary reserves the right to transfer or assign, in whole
or from time to time in part, to one or more of Computer Associates or any of
its wholly-owned subsidiaries, the right to purchase Shares tendered pursuant
to the Offer, but any such transfer or assignment will not relieve Merger
Subsidiary of its obligations under the Offer or prejudice the rights of
tendering Stockholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for such unpurchased or untendered Shares will be returned (or, in
the case of Shares tendered by book-entry transfer, such Shares will be
credited to an account maintained at one of the Book-Entry Transfer
Facilities), without expense to the tendering Stockholder, as promptly as
practicable following the expiration or termination of the Offer.
3. PROCEDURE FOR TENDERING SHARES.
To tender Shares pursuant to the Offer, either (i) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), or an
Agent's Message in connection with a book-entry transfer of such Shares, and
any other documents required by the Letter of Transmittal must be received by
the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase and either (a) certificates for such Shares to be tendered
must be received by the Depositary at one of such addresses or (b) such Shares
must be delivered pursuant to the procedures for book-entry transfer described
below (and a Book-Entry Confirmation received by the Depositary), in each case
by the Expiration Date, or (ii) the guaranteed delivery procedure described
below must be complied with.
The Depositary will establish an account with respect to the Shares at
The Depository Trust Company, Midwest Securities Trust Company and Philadelphia
Depository Trust Company (collectively referred to as the "Book-Entry Transfer
Facilities") for purposes of the Offer within two business days after the date
of this Offer to Purchase, and any financial institution that is a participant
in the system of any Book-Entry Transfer Facility may make delivery of Shares
by causing such Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the procedures of such Book-Entry
Transfer Facility. However, although delivery of Shares may be effected through
book-entry transfer, the Letter of Transmittal (or facsimile thereof), or an
Agent's Message in connection with such book-entry transfer, and any other
required documents must, in any case, be received by the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase by the
Expiration Date, or the guaranteed delivery procedure described below must be
complied with. Delivery of the Letter of Transmittal and any other required
documents to a Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
Except as otherwise provided below, all signatures on a Letter of
Transmittal must be guaranteed by a bank, broker, dealer, credit union, savings
association or other entity that is a member of a recognized Medallion Program
approved by The Securities Transfer Association, Inc.
-6-
<PAGE> 9
(an "Eligible Institution"). Signatures on a Letter of Transmittal need not be
guaranteed (i) if the Letter of Transmittal is signed by the registered holder
of the Shares tendered therewith and such holder has not completed the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) if such Shares are tendered
for the account of an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal.
If the certificates representing Shares are registered in the name of
a person other than the signer of the Letter of Transmittal, or if payment is
to be made to, or certificates for unpurchased Shares are to be issued or
returned to, a person other than the registered holder, then the tendered
certificates must be endorsed or accompanied by appropriate stock powers,
signed exactly as the name or names of the registered holder or holders appear
on the certificates, with the signatures on the certificates or stock powers
guaranteed by an Eligible Institution as provided in the Letter of Transmittal.
See Instructions 1 and 5 of the Letter of Transmittal.
If the certificates representing Shares are forwarded separately to
the Depositary, a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) must accompany each such delivery.
If a Stockholder desires to tender Shares pursuant to the Offer and
cannot deliver such Shares and all other required documents to the Depositary
by the Expiration Date, or such Stockholder cannot complete the procedure for
delivery by book-entry transfer on a timely basis, such Shares may nevertheless
be tendered if all of the following conditions are met:
(i) such tender is made by or through an Eligible
Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by Merger
Subsidiary, is received by the Depositary (as provided below) by the
Expiration Date; and
(iii) the certificates for all physically delivered
Shares (or a Book-Entry Confirmation of all Shares delivered
electronically), as well as a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents
required by the Letter of Transmittal, are received by the Depositary
within five trading days on the NASDAQ National Market System after
the date of execution of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in such Notice.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION
AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF CERTIFICATES FOR SHARES ARE
SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE
TIMELY DELIVERY.
-7-
<PAGE> 10
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of the certificates for such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message), and
any other documents required by the Letter of Transmittal.
Under the federal income tax laws, the Depositary will be required to
withhold 31% of the amount of any payments made to certain Stockholders
pursuant to the Offer. In order to avoid such backup withholding, each
tendering Stockholder must provide the Depositary with such Stockholder's
correct taxpayer identification number and certify that such Stockholder is not
subject to such backup withholding by completing the Substitute Form W-9
included in the Letter of Transmittal.
By executing a Letter of Transmittal, a tendering Stockholder
irrevocably appoints designees of Merger Subsidiary as such Stockholder's
proxies in the manner set forth in the Letter of Transmittal to the full extent
of such Stockholder's rights with respect to the Shares tendered by such
Stockholder and accepted for payment by Merger Subsidiary (and any and all
other Shares or other securities issued or issuable in respect of such Shares
on or after May 7, 1995). All such proxies shall be considered coupled with an
interest in the tendered Shares. Such appointment is effective only upon the
acceptance for payment of such Shares by Merger Subsidiary. Upon such
acceptance for payment, all prior proxies and consents granted by such
Stockholder with respect to such Shares and other securities will, without
further action, be revoked, and no subsequent proxies may be given nor
subsequent written consents executed by such Stockholder (and, if given or
executed, will not be deemed to be effective). Such designees of Merger
Subsidiary will be empowered to exercise all voting and other rights of such
Stockholder as they, in their sole discretion, may deem proper at any annual,
special or adjourned meeting of the Company's stockholders, by written consent
or otherwise. Merger Subsidiary reserves the right to require that, in order
for Shares to be validly tendered, immediately upon Merger Subsidiary's
acceptance for payment of such Shares, Merger Subsidiary is able to exercise
full voting rights with respect to such Shares and other securities (including
voting at any meeting of stockholders then scheduled or acting by written
consent without a meeting).
All questions as to the form of documents and the validity,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by Merger Subsidiary, in its sole
discretion, which determination shall be final and binding on all parties.
Merger Subsidiary reserves the absolute right to reject any or all tenders of
Shares determined by it not to be in proper form or the acceptance for payment
of or payment for which may, in the opinion of Merger Subsidiary's counsel, be
unlawful. Merger Subsidiary also reserves the absolute right to waive any
defect or irregularity in any tender of Shares, whether or not similar defects
or irregularities are waived in the case of any other tender of Shares. None
of Merger Subsidiary, Computer Associates, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defect or irregularity in tenders or incur any liability for failure to give
any such notification. Merger Subsidiary's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding.
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<PAGE> 11
The acceptance for payment of Shares tendered pursuant to any one of
the procedures described above will constitute an agreement between the
tendering Stockholder and Merger Subsidiary upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer may be withdrawn at any
time prior to the Expiration Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn on or after July 31, 1995 unless theretofore
accepted for payment as provided in this Offer to Purchase. If Merger
Subsidiary extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Shares or is unable to accept
for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to Merger Subsidiary's rights under the Offer, the Depositary
may, on behalf of Merger Subsidiary, retain all Shares tendered, and such
Shares may not be withdrawn except as otherwise provided in this Section 4.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase and must
specify the name of the person who tendered the Shares to be withdrawn and the
number of Shares to be withdrawn. If the Shares to be withdrawn have been
delivered to the Depositary, a signed notice of withdrawal with (except in the
case of Shares tendered by an Eligible Institution) signatures guaranteed by an
Eligible Institution must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered holder (if different from that of
the tendering Stockholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at one of
the Book-Entry Transfer Facilities to be credited with the withdrawn Shares.
Withdrawals may not be rescinded, and Shares withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by again following one of the procedures described in
Section 3 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt)
of any notice of withdrawal will be determined by Merger Subsidiary, in its
sole discretion, which determination shall be final and binding. None of
Merger Subsidiary, Computer Associates, the Depositary, the Information Agent
or any other person will be under any duty to give notification of any defect
or irregularity in any notice of withdrawal or incur any liability for failure
to give any such notification.
5. CERTAIN TAX CONSEQUENCES.
This summary sets forth material anticipated Federal income tax
consequences to Stockholders of their disposition of Shares pursuant to the
Offer and the Merger. The summary is based on the provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury regulations
promulgated thereunder, and administrative and judicial interpretations
thereof, all as currently in effect. Such laws or interpretations may differ
on the date of the consummation of the Offer or at the Effective Time, and
relevant facts may also differ. The summary does not address any foreign,
state or local tax consequences, nor does it address estate or gift tax
considerations. Neither the consummation of the Offer nor the effectiveness of
the Merger is
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<PAGE> 12
conditioned upon the receipt of any ruling from the Internal Revenue Service or
any opinion of counsel as to tax matters.
This summary is for general information only. The tax treatment of
each Stockholder will depend in part upon his particular situation. Special
tax consequences not described below may be applicable to particular classes of
taxpayers, including financial institutions, pension funds, mutual funds,
broker-dealers, persons who are not citizens or residents of the United States
or who are foreign corporations, foreign partnerships or foreign estates or
trusts, Stockholders who own actually or constructively (under certain
attribution rules contained in the Code) 5% or more of the Shares, Stockholders
who acquired their Shares through the exercise of an employee stock option or
otherwise as compensation, and persons who receive payments in respect of
options to acquire Shares. ALL STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX
ADVISERS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO
THEM, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL AND FOREIGN
TAX LAWS.
Sales of Shares by Stockholders pursuant to the Offer (or the Merger)
will be taxable transactions for Federal income tax purposes and may also be
taxable transactions under applicable state, local, foreign and other tax laws.
In general, a Stockholder will recognize gain or loss equal to the
difference between the tax basis of such Stockholder's Shares and the amount of
cash received in exchange for the Shares. This gain or loss will be capital
gain or loss if the Shares are capital assets in the hands of the Stockholder
and will be long-term capital gain or loss if the holding period for the Shares
is more than 12 months as of the date of the sale of such Shares.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are traded in the over-the-counter market and are quoted on
the National Association of Securities Dealers Automated Quotation System
("NASDAQ") National Market System. The following table sets forth for the
periods indicated the high and low sale prices per Share as reported by the
NASDAQ National Market System and the Dow Jones News Retrieval Service.
<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C> <C>
Fiscal 1993: Third quarter ended June 30, 1993 $41.00 $26.00
Fourth quarter ended September 30, 1993 $36.00 $15.50
Fiscal 1994: First quarter ended December 31, 1993 $25.75 $21.50
Second quarter ended March 31, 1994 $34.75 $22.50
Third quarter ended June 30, 1994 $33.25 $23.50
Fourth quarter ended September 30, 1994 $27.25 $19.00
Fiscal 1995: First quarter ended December 31, 1994 $33.50 $24.50
Second quarter ended March 31, 1995 $37.25 $28.25
Third quarter (through May 31, 1995) $47.00 $26.13
</TABLE>
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<PAGE> 13
On May 24, 1995, the last day of trading prior to the issuance by the
Company and Computer Associates of a joint press release announcing the
execution of the Merger Agreement, the last reported sales price per Share on
the NASDAQ National Market System was $31.25. On May 31, 1995, the last day of
trading prior to the commencement of the Offer, the last reported sales price
per Share on the NASDAQ National Market System was $43.63. STOCKHOLDERS ARE
URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
As reported by the Company, the Company has not paid any dividends on
its Common Stock for the periods presented above. As of May 19, 1995, there
were approximately 2,151 holders of record of outstanding Shares.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive
offices located at 575 Herndon Parkway, Herndon, Virginia 22070.
According to the Company's Annual Report on Form 10-K for its fiscal
year ended September 30, 1994 (the "Company 10-K"), the Company is engaged in
the design, development, marketing and support of a broad range of computer
software products for the management of information systems. According to the
Company 10-K, the Company markets software products which are used to manage
mainframe, midrange, server, workstation and PC systems deployed throughout a
business enterprise. The Company's products and services are designed,
according to the Company 10-K, to improve the efficiency of computer resources
by providing data integrity, managing applications, moving files among users,
providing back-up and security capabilities, enhancing system utilization,
monitoring processing performance and accounting for the usage of system
resources.
The following selected consolidated financial data relating to the
Company and its subsidiaries has been taken or derived from the audited
financial statements contained in the Company 10-K and the unaudited financial
statements contained in the Company's Quarterly Report on Form 10-Q for the six
months ended March 31, 1995 (the "Company 10-Q"). More comprehensive financial
information is included in the Company 10-K and the Company 10-Q and the other
documents filed by the Company with the Commission, and the financial data set
forth below is qualified in its entirety by reference to such reports and other
documents including the financial statements (and any related notes) contained
therein. Such reports and other documents may be examined and copies may be
obtained from the offices of the Commission in the manner set forth below.
-11-
<PAGE> 14
LEGENT CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per share data)
<TABLE>
<CAPTION>
INCOME STATEMENT FISCAL YEAR ENDED Six Months Ended
DATA SEPTEMBER 30, March 31,
------------------------------------- -----------------
1994 1993 1992 1995 1994
---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C>
Total revenues $501,733 $442,193 $426,701 $243,368 $232,926
Total costs and
expenses 420,549 359,309 346,095 196,621 190,961
Operating income 81,184 82,884 80,606 46,747 41,965
Net income 54,342 60,408 27,784 34,971 27,060
Income per share $1.53 $1.72 $0.81 $0.95 $0.78
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET DATA AT SEPTEMBER 30, AT MARCH 31, 1995
------------------------ -------------------
1994 1993 (Unaudited)
---- ----
<S> <C> <C> <C>
Working capital $163,283 $147,406 $168,298
Total assets 712,038 623,962 750,196
Total liabilities 280,362 264,146 272,056
Total stockholders'
equity 431,676 359,816 478,140
</TABLE>
The information concerning the Company contained herein has been taken
from or is based upon reports and other documents on file with the Commission
or otherwise publicly available. Although Computer Associates and Merger
Subsidiary do not have any knowledge that would indicate that any statements
contained herein based upon such reports and documents are untrue, Computer
Associates and Merger Subsidiary do not take any responsibility for the
accuracy or completeness of the information contained in such reports and other
documents or for any failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy of any such information
but that are unknown to Computer Associates or Merger Subsidiary.
The Company is subject to the informational requirements of the
Exchange Act and files periodic reports, proxy statements and other information
with the Commission relating to its business, financial condition and other
matters. The Company is required to disclose in such proxy statements certain
information, as of particular dates, concerning the Company's directors and
officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities and any material interest of such persons
in transactions with the Company. Such reports,
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<PAGE> 15
proxy statements and other information may be inspected at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and should also be available for inspection and
copying at the regional offices of the Commission in New York (Seven World
Trade Center, New York, New York 10048) and Chicago (500 West Madison Street
(Suite 1400), Chicago, Illinois 60661). Copies of such material can also be
obtained from the Public Reference Section of the Commission in Washington,
D.C. 20549, at prescribed rates.
8. CERTAIN INFORMATION CONCERNING MERGER SUBSIDIARY AND COMPUTER ASSOCIATES.
Merger Subsidiary, a Delaware corporation and a wholly owned
subsidiary of Computer Associates, was organized to acquire the Company and has
not conducted any unrelated activities since its organization on May 24, 1995.
Computer Associates, a Delaware corporation, is engaged in the design,
development, marketing and support of standardized computer software products
for use with a broad range of desktop, midrange and mainframe computers from
many different hardware manufacturers. Its products include a broad range of
standardized systems management software (which enables customers to use their
total data processing resources more efficiently), information management
software (which is generally used in connection with database management
systems and applications generators), business management software (which is
used in financial, human resource, manufacturing, distribution and banking
systems applications), and desktop computer software for home use.
The principal executive offices of Computer Associates and Merger
Subsidiary are located at One Computer Associates Plaza, Islandia, New York
11788. The name, business address, principal occupation or employment and
citizenship of each director and executive officer of Merger Subsidiary and
Computer Associates are set forth in Schedule I hereto.
The following selected consolidated financial data relating to
Computer Associates and its subsidiaries has been taken or derived from the
audited financial statements contained in Computer Associates' Annual Report on
Form 10-K for the year ended March 31, 1995. The information set forth below
gives effect to the acquisition of The ASK Group, Inc. in fiscal 1995. More
comprehensive financial information is included in such Annual Report and the
other documents filed by Computer Associates with the Commission, and the
financial data set forth below is qualified in its entirety by reference to
such reports and other documents including the financial statements (and any
related notes) contained therein. Such reports and other documents may be
examined and copies may be obtained from the offices of the Commission in the
same manner as set forth with respect to the Company in Section 7.
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<PAGE> 16
COMPUTER ASSOCIATES INTERNATIONAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per Share data)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
INCOME STATEMENT DATA MARCH 31,
--------------------------------------------------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Total revenue $2,622,922 $2,148,470 $1,841,008
Income before income taxes 696,619 626,972 383,663
Net Income 431,904 401,262 245,544
Net Income per common share $2.57 $2.34 $1.44
Dividends declared per common share $.20 $.14 $.10
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET DATA AT MARCH 31,
-------------------------------------
1995 1994
------ ------
<S> <C> <C>
Working capital $299,673 $450,599
Total assets 3,269,428 2,491,605
Long-term debt (less
current maturities) 50,489 71,381
Stockholders' equity 1,578,125 1,243,133
</TABLE>
Computer Associates is subject to the informational requirements of
the Exchange Act and files periodic reports, proxy statements and other
information with the Commission relating to its business, financial condition
and other matters. Computer Associates is required to disclose in such proxy
statements certain information, as of particular dates, concerning its
directors and officers, their remuneration, stock options granted to them, the
principal holders of its securities and any material interests of such persons
in transactions with Computer Associates. Such reports, proxy statements and
other information should be available for inspection and copying at the offices
of the Commission in the same manner as set forth with respect to the Company
in Section 7.
Except as described in this Offer to Purchase (including in Schedule
II), neither Computer Associates, Merger Subsidiary nor, to their knowledge,
any of the persons listed in Schedule I or any associate or majority-owned
subsidiary of any of the foregoing, beneficially owns or has the right to
acquire any equity securities of the Company, nor has Computer Associates,
Merger Subsidiary or, to their knowledge, any of the persons or entities
referred to above or any of the
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<PAGE> 17
respective executive officers, directors or subsidiaries of any of the
foregoing, effected any transaction in the equity securities of the Company
during the past 60 days.
Except as described in this Offer to Purchase, neither Computer
Associates, Merger Subsidiary nor, to their knowledge, any of the persons
listed in Schedule I, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
securities of the Company, joint ventures, loan or option arrangements, puts or
calls, guaranties of loans, guaranties against loss or the giving or
withholding of proxies.
Except as described in this Offer to Purchase, there have been no
contracts, negotiations or transactions between Computer Associates, Merger
Subsidiary or any other subsidiary of Computer Associates or, to their
knowledge, any of the persons listed in Schedule I, on the one hand, and the
Company or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, a tender offer or other acquisition of
securities, an election of directors, or a sale or other transfer of a material
amount of assets.
Except as described in this Offer to Purchase, none of Computer
Associates, Merger Subsidiary, any other subsidiary of Computer Associates, or,
to their knowledge, any of the persons listed in Schedule I, has had any
business relationship or transaction with the Company or any of its executive
officers, directors or affiliates that would require disclosure pursuant to the
rules and regulations of the Commission.
9. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by Merger Subsidiary to purchase
Shares pursuant to the Offer and to pay related fees and expenses is estimated
to be approximately $1.8 billion. Merger Subsidiary plans to obtain all funds
needed for the Offer and the Merger from Computer Associates by means of a
capital contribution, loan or a combination thereof. Computer Associates will
obtain such funds (i) from its general corporate funds and (ii) by borrowing
under the credit facility described below. As of May 23, 1995, Computer
Associates had approximately $278 million in cash, cash equivalents and
marketable securities. Merger Subsidiary has not conditioned the Offer on
obtaining financing.
Computer Associates has received a commitment letter (the "Commitment
Letter") from Credit Suisse, pursuant to which Credit Suisse has committed to
provide, on specified terms and subject to specified conditions, up to $2
billion in unsecured credit facilities (the "Credit Facility") to Computer
Associates (i) to finance the purchase of the Shares pursuant to the Offer and
the Merger and other related costs and (ii) to provide financing for other
general corporate purposes. Although Credit Suisse has committed to provide
all of the Credit Facility, Credit Suisse expects to act as agent for a
syndicate of financial institutions, which, together with Credit Suisse, will
provide the Credit Facility.
The Commitment Letter contemplates that the Credit Facility will be a
five year revolving, unsecured credit facility with annual reductions of the
commitments thereunder of $250 million. The
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<PAGE> 18
Commitment Letter provides for interest rates on outstanding loans under the
Credit Facility (at Computer Associates' option) of (i) the London interbank
offered rate plus a margin of .425% (as adjusted from time to time based upon a
financial performance test to be mutually agreed upon), or (ii) the higher of
(x) the Credit Suisse base lending rate and (y) the federal funds rate plus a
margin of 0.5%.
Credit Suisse's commitment to provide the Credit Facility is subject
to satisfaction of certain customary conditions, including (a) satisfactory
completion of a due diligence review, (b) absence of any material change in or
material disruption of financial or capital market conditions that in the
reasonable opinion of Credit Suisse materially and adversely affects the
satisfactory syndication of the Credit Facility, (c) absence of a material
adverse change in the consolidated financial position of Computer Associates
and its subsidiaries (after giving effect to the Merger) or in the ability of
Computer Associates to perform its obligations under the definitive
documentation relating to the Credit Facility and (d) the negotiation,
execution and delivery prior to August 15, 1995 of definitive documentation
with respect to the Credit Facility in form and substance satisfactory to
Credit Suisse and its counsel.
In addition, the Commitment Letter provides that initial advances
under the Credit Facility will be conditioned upon, among other things, (i) the
consummation of the Offer pursuant to the terms of the Merger Agreement and
this Offer to Purchase (as the same may be modified from time to time with the
prior written consent of the majority lenders under the Credit Facility), and
(ii) all governmental and other approvals necessary, and all material
governmental and other approvals advisable, in connection with the Offer, the
Merger and the Credit Facility having been obtained and being in full force and
effect, with all waiting periods provided by applicable law having expired
without there being taken or threatened by any competent authority any action
which could reasonably be expected to restrain, prevent or otherwise impose
material adverse conditions on the Merger or the financing thereof.
The definitive documentation with respect to the Credit Facility also
will contain representations, warranties, covenants, events of default and
conditions customary for credit facilities of this size and type. Computer
Associates has agreed to pay certain fees to Credit Suisse with respect to the
Commitment Letter and to Credit Suisse and the other lenders with respect to
the Credit Facility. Computer Associates also has agreed to reimburse certain
expenses of, and provide customary indemnities to, Credit Suisse in connection
with the Commitment Letter and Credit Suisse and (under certain circumstances)
the other lenders in connection with the Credit Facility.
The foregoing summary of the source and amount of funds is qualified
in its entirety by reference to the text of the Commitment Letter, a copy of
which is filed as an exhibit to the Schedule 14D-1 and 13D of Merger Subsidiary
and Computer Associates filed with the Commission in connection with the Offer
(the "Schedule 14D-1") and is incorporated in this Offer to Purchase by
reference and may be inspected in the same manner as set forth with respect to
the Company in Section 7. If and when definitive agreements with respect to
the Credit Facility are executed, copies will be filed as exhibits to
amendments to the Schedule 14D-1.
Although no definitive plan or arrangement for repayment of borrowings
under the Credit Facility has been made, Computer Associates anticipates such
borrowings will be repaid with
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<PAGE> 19
internally generated funds (including, if the Merger is accomplished, those of
the Company) and from other sources which may include the proceeds of future
bank refinancings or the public or private sale of debt or equity securities.
No decision has been made concerning the method Computer Associates will use to
repay the borrowings under the Credit Facility. Such decision will be made
based on Computer Associates' review from time to time of the advisability of
particular actions, as well as prevailing interest rates, financial and other
economic conditions and such other factors as Computer Associates may deem
appropriate.
10. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
In August 1994, through the introduction of a large shareholder of the
Company, Mr. Sanjay Kumar, President and Chief Operating Officer of Computer
Associates, contacted Mr. Steven Denning, a director of the Company, expressing
an interest in a possible transaction with the Company. The Company advised
Mr. Kumar that it was not interested in pursuing the discussions.
On April 26 and 30, 1995, Mr. Kumar and Mr. Jerre Stead, Chairman and
President of the Company, met in Washington, D.C. at Mr. Kumar's request and
discussed the possibility of a combination of the two companies and the range
of valuations for the Company. Mr. Kumar also suggested the possibility of a
stock for stock merger.
On May 1, the Board of Directors of Computer Associates met by
conference call to review the status of the discussions with the Company,
consider price ranges for a possible stock or cash merger with the Company and
consider other factors. The Board authorized Mr. Kumar to continue discussions
with Mr. Stead.
On May 2, Mr. Kumar sent the following letter to Mr. Stead:
Mr. Jerre Stead
President
Legent Corporation
575 Herndon Parkway
Herndon, VA 22070
Dear Jerre:
We are writing to confirm our interest in acquiring Legent
(the "Company") in a transaction in which your stockholders would
receive shares of Computer Associates' common stock in exchange for
their shares of the Company's common stock. We are considering a
value which would represent a substantial premium over your Company's
current stock price. We believe this would represent an extremely
attractive opportunity for your shareholders.
Computer Associates, as you are well aware, is an important
participant in the client/server enterprise software industry, with
annual revenues in excess of $2.62 billion. The combination of our
two companies would create a unique organization that would help
maximize shareholder value, serve our respective clients well, and
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<PAGE> 20
provide tremendous opportunities for the combined employee base. As I
have indicated to you in our earlier conversations, we are keenly
interested in discussing with you opportunities for Computer
Associates to assist the Company in maximizing value for its
shareholders. I have discussed our interest with our Board members,
all of whom share my enthusiasm for pursuing this acquisition.
We hope that you and your Board of Directors will view our
interest as we do - an excellent opportunity for the stockholders of
the Company to realize full value for their shares and to continue to
participate in, and earn the benefits of, our combined enterprise. We
are prepared to enter into immediate discussions with you and your
directors to answer any questions that you may have about our
interest.
We hope that you and your Board of Directors will give our
interest prompt and serious consideration so that we may move forward,
in our preferred course, to a negotiated transaction which can be
presented to your stockholders as the joint effort of Computer
Associates and the Company's Board of Directors and management. I am
looking forward to your prompt reply.
Sincerely,
Sanjay Kumar
President and
Chief Operating Officer
cc: Members of the Board of Directors of Legent
By letter dated May 3, Mr. Stead acknowledged receipt of the letter
and advised Mr. Kumar that the Company intended to consider Computer
Associates' interest in the Company. At Mr. Stead's suggestion, Mr. Kumar
discussed the transaction with Mr. Michael Price of Lazard Freres & Co., LLC,
financial advisor to the Company.
Following meetings of the Company's Board of Directors on May 6 and 7,
Mr. Stead called Mr. Kumar to confirm that the Company was interested in
discussing a possible merger and suggested a further meeting. Mr. Stead and
Mr. Kumar met in Washington, D.C. on May 10 and discussed valuation and other
issues. Mr. Stead also mentioned other parties that he believed might be
interested in a merger with the Company. Mr. Kumar encouraged Mr. Stead to
permit Mr. Kumar to meet with the Company's Board of Directors to describe the
advantages of a merger between the Company and Computer Associates.
On May 14, Mr. Stead and Mr. Kumar met in New York. Mr. Stead raised
several issues that he and the Company's Board of Directors believed would be
an important part of the terms of any merger, including treatment of the
Company's employees. Mr. Kumar also discussed with Mr.
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<PAGE> 21
Stead several issues involved in a stock for stock transaction and the risks
and benefits of such a transaction. Discussions were terminated at the end of
the meeting over valuation differences.
Early in the week of May 14, a large shareholder of the Company, in a
telephone conference on unrelated matters, asked Mr. Kumar about recent
reports in the financial press of a possible transaction between Computer
Associates and the Company. In the conference and in subsequent calls, the
shareholder encouraged Mr. Kumar to continue pursue a transaction with the
Company and offered his support depending on the valuation.
At a regularly scheduled Computer Associates' Board Meeting on May 17,
Mr. Kumar reported on the status of the discussions with the Company and
discussed the relative merits of a potential stock or cash merger. The Board
authorized Mr. Kumar to pursue discussions with the Company.
On May 19, Mr. Kumar contacted Mr. Stead to express his interest in
renewing discussions. On May 21, Mr. Stead and Mr. Kumar again met in New
York and discussed valuation ranges and the merits of a cash tender offer.
Following that meeting and a telephone conference on May 22, Mr. Stead agreed
to permit Computer Associates to commence a due diligence review of the Company
and to negotiate a definitive Merger Agreement and related documents.
Representatives of the Company and Computer Associates, together with their
legal advisors and representatives of Lazard Freres & Co., LLC and Goldman,
Sachs & Co., financial advisors to the Company, met beginning May 23 to review
and negotiate the terms of the Merger Agreement. Computer Associates also
negotiated with representatives of General Atlantic the terms of the
Stockholder Agreement (defined below in Section 11). Representatives of
Computer Associates and its legal advisor also met with representatives of the
Company in Herndon, Virginia to begin the due diligence review.
On May 24, after the close of trading on the New York Stock Exchange,
Computer Associates' Board of Directors unanimously approved the acquisition of
the Company at a price of $47.95 per Share in cash and on the other principal
terms set forth in the Merger Agreement, with the resolution of a few remaining
issues left to be resolved by Mr. Kumar and other representatives of Computer
Associates. The Board of Directors also approved a $2.0 billion credit
facility to be provided by Credit Suisse. Final negotiations continued into
the early morning of May 25. Prior to the open of the New York Stock Exchange
on May 25, after the Company advised Computer Associates that its Board of
Directors had unanimously approved the transaction, the Merger Agreement and
the Stockholder Agreement were executed and the transaction was publicly
announced.
11. PURPOSE OF THE OFFER; MERGER AGREEMENT; APPRAISAL RIGHTS; STOCKHOLDER
TENDER AGREEMENT.
The purpose of the Offer is to acquire control of, and the entire
equity interest in, the Company. Following the Offer, Computer Associates and
Merger Subsidiary intend to acquire any remaining equity interest in the
Company not acquired in the Offer by consummating the Merger.
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<PAGE> 22
The Merger Agreement. The following description of the Merger
Agreement is qualified in its entirety by reference to the text of such
agreement, a copy of which is attached as an exhibit to the Schedule 14D-1 and
is incorporated by reference in this Offer to Purchase.
The Offer. The Merger Agreement provides for the making of the Offer.
The obligation of Merger Subsidiary to accept for payment or pay for Shares is
subject to the satisfaction of the Minimum Condition and certain other
conditions that are described in Section 15 hereof. Pursuant to the Merger
Agreement, Computer Associates and Merger Subsidiary expressly reserve the
right to waive any of the conditions to the Offer (other than the Minimum
Condition) and to make any change in the terms or conditions of the Offer;
provided that, without the written consent of the Company, no change may be
made which changes the form of consideration to be paid, decreases the price
per Share or the number of Shares being sought in the Offer, imposes conditions
to the Offer in addition to those set forth in the Merger Agreement, changes or
waives the Minimum Condition or makes any other change to any condition to the
Offer set forth in the Merger Agreement which is adverse to the holders of
Shares.
In addition, subject to Computer Associates' or the Company's ability
to terminate the Merger Agreement, if (i) the applicable waiting period under
the HSR Act shall not have expired or been terminated as of the date the Offer
would otherwise have expired or (ii) Computer Associates and the Company are
litigating or contesting any administrative or judicial action or proceeding
challenging any transaction contemplated by the Merger Agreement as violative
of any antitrust law or any decree, judgment, injunction or order that is in
effect and that prohibits, prevents or restricts consummation of the Merger or
any such other transactions and any of the condition to the Offer described in
paragraphs (a) or (b) of Section 15 hereof are not satisfied as of the date the
Offer would otherwise have expired, Merger Subsidiary has agreed, pursuant to
the Merger Agreement, to extend the Offer from time to time until the earlier
of (x) the consummation of the Offer and (y) March 29, 1996.
Consideration to be Paid in the Merger. The Merger Agreement provides
that, following the purchase of Shares pursuant to the Offer and upon the terms
(but subject to the conditions) set forth in the Merger Agreement, Merger
Subsidiary will be merged with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation (the "Surviving Corporation").
In the Merger, each outstanding Share not held by Computer Associates, Merger
Subsidiary or any subsidiary of either of them or by the Company as treasury
stock (other than Shares as to which appraisal rights have been exercised
pursuant to Section 262 of the Delaware Law ("Dissenting Shares")) will be
converted into the right to receive $47.95 in cash or any higher price paid for
each Share in the Offer, without interest. Each share of common stock of
Merger Subsidiary issued and outstanding immediately prior to the time of the
Merger will be converted into and become one share of common stock of the
Surviving Corporation, which will thereupon become a wholly-owned subsidiary of
Computer Associates. The Merger Agreement provides that (i) the closing of the
Merger shall take place, after consummation of the Offer, on the later of (a)
November 6, 1995, provided that as of such date the conditions to the Merger
set forth in the Merger Agreement shall be fulfilled or waived and (b) the
first business day on which all of the conditions to the Merger set forth in
the Merger Agreement shall be fulfilled or waived and (ii) as soon as
practicable following the closing of the Merger, the Company and Merger
Subsidiary will file a certificate of merger with the Secretary of State of the
State of Delaware and make all other filings or recordings required by
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<PAGE> 23
Delaware Law in connection with the Merger. The Merger shall become effective
at such time as the certificate of merger is duly filed with the Secretary of
State of the State of Delaware or, with the consent of the Independent Director
referred to below, at such later time as is specified in the certificate of
merger (the "Effective Time").
Board Representation. The Merger Agreement provides that, effective
upon acceptance for payment by Merger Subsidiary of such number of Shares which
satisfies the Minimum Condition, Computer Associates shall be entitled to
designate the number of directors, rounded up to the nearest whole number, on
the Company's Board of Directors that equals the product of (i) the total
number of directors on the Company's Board of Directors and (ii) the percentage
that the number of Shares owned by Computer Associates or Merger Subsidiary
(including Shares accepted for payment) bears to the total number of Shares
outstanding. The Company has agreed that it will take all action necessary to
cause Computer Associates' designees to be elected or appointed to the
Company's Board of Directors, including increasing the number of directors or
seeking and accepting resignations of incumbent directors or both; provided
that, prior to the Effective Time, the Company's Board of Directors shall
always have one member who is neither a designee nor an affiliate of Computer
Associates or Merger Subsidiary nor an employee of the Company (an "Independent
Director"). No action proposed to be taken by the Company to amend or
terminate the Merger Agreement or waive any action by Computer Associates or
Merger Subsidiary shall be effective without the approval of the Independent
Director.
The Merger Agreement provides that, from and after the Effective Time,
the directors and officers of Merger Subsidiary at the Effective Time will be
the initial directors and officers of the Surviving Corporation, each to hold
office until his or her respective successors are duly elected and qualified.
Pursuant to the Merger Agreement, the Certificate of Incorporation (except for
a change in the name of the corporation) and the By-Laws of Merger Subsidiary,
as in effect immediately prior to the Effective Time, will be the Certificate
of Incorporation and By-Laws of the Surviving Corporation.
Stockholder Meeting. The Merger Agreement provides that, if required
by applicable law, the Company will call a meeting of its Stockholders to be
held as soon as reasonably practicable for the purpose of voting on the
approval and adoption of the Merger Agreement and the Merger. Under the Merger
Agreement, at any such meeting, Computer Associates has agreed to make a quorum
and to vote all Shares acquired in the Offer or otherwise beneficially owned by
it in favor of adoption of the Merger Agreement.
If the Minimum Condition is satisfied pursuant to the Offer, Merger
Subsidiary will hold at least a majority of the outstanding Shares on a Fully
Diluted Basis and will be able to assure that the requisite number of
affirmative votes in favor of approval and adoption of the Merger Agreement
will be received, even if no other Stockholder votes in favor thereof. If
Merger Subsidiary obtains at least 90% of the outstanding Shares, it may effect
the Merger without any notice to and without the authorization of the
Stockholders of the Company pursuant to the "short-form" merger provisions of
Delaware Law.
Representations and Warranties. The Merger Agreement contains various
representations and warranties of the parties thereto. These include
representations and warranties of the Company
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<PAGE> 24
with respect to corporate existence and power, corporate authorization,
governmental authorization, non-contravention, capitalization, subsidiaries,
Commission filings, financial statements, absence of certain changes,
undisclosed liabilities, litigation, taxes, employee benefits, brokers,
compliance with laws, contracts and debt instruments, intellectual property and
technology and other matters.
Computer Associates and Merger Subsidiary have also made certain
representations and warranties with respect to corporate existence and power,
corporate authorization, governmental authorization, non-contravention,
brokers, financing and other matters.
Conduct of Business Pending the Merger. The Company has agreed that,
during the period from the date of the Merger Agreement to the Effective Time,
the Company will, and will cause its subsidiaries to, carry on their respective
businesses in the ordinary course in substantially the same manner as
theretofore conducted and, to the extent consistent therewith, use all
reasonable efforts to preserve intact their current business organizations,
keep available the services of their current officers and employees and
preserve their relationships with customers, suppliers, licensors, licensees,
distributors and others having business dealings with them. The Company has
further agreed that, during the period from the date of the Merger Agreement to
the Effective Time, the Company will not, and will not permit any of its
subsidiaries to, without the prior written approval of Computer Associates,
(i)(a) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than dividends and
distributions by any direct or indirect wholly-owned subsidiary of the Company
to its parent, (b) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or (c) purchase, redeem
or otherwise acquire any shares of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any rights, warrants or options
to acquire any such shares or other securities (other than in connection with
the exercise of outstanding company stock options); (ii) issue, deliver, sell,
pledge or otherwise encumber any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities (other than the issuance of Shares upon the exercise of outstanding
company stock options); (iii) amend its certificate of incorporation, by-laws
or other comparable charter or organizational documents; (iv) mortgage or
otherwise encumber or subject to any lien or, except in the ordinary course of
business consistent with past practice and pursuant to existing contracts or
commitments, sell, lease, license, transfer or otherwise dispose of any of the
Company's intellectual property or any other material properties or assets; (v)
make or agree to make any new capital expenditures in excess of $500,000,
except pursuant to commitments outstanding on April 1, 1995; (vi) make any
material tax election (unless required by law) or settle or compromise any
material income tax liability; (vii) pay, discharge or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction, in
the ordinary course of business consistent with past practice and in accordance
with their terms, or subject to the fiduciary duties of the Board of Directors
of the Company as advised in writing by counsel to the Company waive the
benefits of, or agree to modify in any manner, any confidentiality, standstill
or similar agreement to which the Company or any of its subsidiaries is a
party; (viii) commence a lawsuit other than (a) for the routine collection of
bills or (b) in such cases where the Company in good faith determines that the
failure to commence suit would result in a material impairment of a valuable
aspect of the Company's business, provided that the Company consults with
Computer Associates prior to filing such suit; (ix)(a) enter into any
employment
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<PAGE> 25
agreement, (b) enter into any customer sale or license agreement with
non-standard terms or at discounts from list prices in excess of 20%; provided
that such action with respect to a customer sale or license agreement that is
immaterial in amount and term will not be deemed to violate this provision if
the Company has (1) used its best efforts to ensure compliance with this
provision and (2) taken prompt corrective action in the event of a violation
sufficient to ensure that no similar violation will occur in the future, (c)
pay commissions to sales employees except on the basis of executed customer
contracts with respect to products actually delivered to customers, (d) enter
into any contracts or series of related contracts in excess of $250,000, (e)
enter into any customer agreements providing for product replacements or (f)
make any determination as to amounts payable under the Company's Incentive
Compensation Plan; (x) authorize any of, or commit or agree to take any of, the
foregoing actions; or (xi)(a) take or agree or commit to take any action that
would make any representation or warranty of the Company under the Merger
Agreement inaccurate in any material respect at, or as of any time prior to,
the Effective Time or (b) omit or agree or commit to omit to take any action
necessary to prevent any such representation or warranty from being inaccurate
in any material respect at any such time.
The Company has agreed to give Computer Associates and its
representatives full access (during normal business hours and upon reasonable
notice) to the offices, properties, books and records, of the Company and its
subsidiaries, and to furnish Computer Associates with such other information
concerning its business, properties and personnel as Computer Associates may
reasonably request.
Pursuant to the Merger Agreement, each of Computer Associates and the
Company has agreed to (i) promptly make or cause to be made the filings
required of such party or any of its subsidiaries under the HSR Act with
respect to the transactions contemplated by the Merger Agreement, (ii) comply
at the earliest practicable date with any request under the HSR Act for
additional information, documents, or other material received by such party or
any of its subsidiaries from any Governmental Entity (defined below in this
Section) in respect of such filings or such transactions, and (iii) cooperate
with the other party in connection with any such filing and in connection with
resolving any investigation or other inquiry of any such agency or other
Governmental Entity under any Antitrust Laws (defined below) with respect to
any such filing or any such transaction. Each of Computer Associates and the
Company has agreed, pursuant to the Merger Agreement, to promptly inform the
other of any communication with, and any proposed understanding, undertaking,
or agreement with, any Governmental Entity regarding any such filings or any
such transaction. The Merger Agreement prohibits both Computer Associates and
the Company from participating in any meeting with any Governmental Entity in
respect of any such filings, investigation, or other inquiry without giving the
other notice of the meeting and, to the extent permitted by such Governmental
Entity, the opportunity to attend and participate.
Each of Computer Associates and the Company has agreed, pursuant to
the Merger Agreement, to use all reasonable efforts to resolve such objections,
if any, as may be asserted by any Governmental Entity with respect to the
transactions contemplated by the Merger Agreement under the HSR Act, the
Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade
Commission Act, as amended, and any other Federal, state or foreign statutes,
rules, regulations, orders or decrees that are designed to prohibit, restrict
or regulate actions having the purpose or effect of monopolization or restraint
of trade (collectively, "Antitrust Laws"). In connection
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therewith, if any administrative or judicial action or proceeding is instituted
(or threatened to be instituted) challenging any transaction contemplated by
the Merger Agreement as violative of any Antitrust Law, each of Computer
Associates and the Company have agreed, pursuant to the Merger Agreement, to
cooperate and use all reasonable efforts vigorously to contest and resist any
such action or proceeding and to have vacated, lifted, reversed, or overturned
any decree, judgment, injunction or other order, whether temporary, preliminary
or permanent (each an "Order"), that is in effect and that prohibits, prevents,
or restricts consummation of the Merger or any such other transactions, unless
by mutual agreement Computer Associates and the Company decide that litigation
is not in their respective best interests. Notwithstanding the foregoing, the
Merger Agreement provides that Computer Associates shall have no obligation to
litigate or contest any administrative or judicial action or proceeding or any
Order beyond March 29, 1996. Pursuant to the Merger Agreement, each of
Computer Associates and the Company have agreed to use all reasonable efforts
to take such action as may be required to cause the expiration of the notice
periods under the HSR Act or other Antitrust Laws with respect to such
transactions as promptly as possible after the execution of the Merger
Agreement.
Subject to the fiduciary duties of the Board of Directors of the
Company as advised in writing by counsel to the Company, each of Computer
Associates and the Company has agreed, pursuant to the Merger Agreement, to use
all reasonable efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer, the Merger,
and the other transactions contemplated by the Merger Agreement.
Notwithstanding the foregoing, the Merger Agreement provides that (i)
neither Computer Associates nor any of its subsidiaries shall be required to
divest any of their respective businesses, product lines or assets, or to take
or agree to take any other action or agree to any limitation that could
reasonably be expected to have a material adverse effect on the business,
assets, financial condition, results of operations or prospects of Computer
Associates and its subsidiaries taken as a whole or of Computer Associates
combined with the Surviving Corporation after the Effective Time, (ii) neither
the Company nor its subsidiaries shall be required to divest any of their
respective businesses, product lines or assets, or to take or agree to take any
other action or agree to any limitation that could reasonably be expected to
have a Material Adverse Effect (defined below in Section 15), (iii) no party
shall be required to agree to the imposition of, or to comply with, any
condition, obligation or restriction on Computer Associates or any of its
subsidiaries or on the Surviving Corporation or any of its subsidiaries of the
type described in clause (a) or (b) of Section 15 and (iv) neither Computer
Associates nor Merger Subsidiary shall be required to waive any of the
conditions to the Offer described in Section 15 or any of the conditions to the
Merger described in this Section 11.
Agreements with respect to Employee Matters. Computer Associates has
agreed in the Merger Agreement to honor in accordance with their terms all of
the Company's employee benefit plans previously delivered to Computer
Associates and all accrued benefits vested thereunder; provided that nothing in
the Merger Agreement shall prevent Computer Associates from terminating any
such benefit plan in accordance with its terms. Computer Associates has also
agreed to provide employees of the Company and its subsidiaries retained by
Computer Associates with employee
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<PAGE> 27
benefits in the aggregate no less favorable than those benefits provided to
Computer Associates' similarly situated employees; provided that Computer
Associates shall be under no obligation to retain any employee or group of
employees of the Company or its subsidiaries.
In addition, Computer Associates has agreed to provide severance
benefits to any employee of the Company or its subsidiaries who suffers a
qualifying termination of employment prior to July 1, 1996 in an amount equal
to the greater of (i) two months of base salary and (ii) one month of base
salary plus one additional month of base salary for each full year of service
with the Company or its subsidiaries. Pursuant to the Merger Agreement, such
severance benefits shall be offset by any amounts statutorily required to be
paid in lieu of, or following, notice. In the case of any employee of the
Company or its subsidiaries located outside the United States who suffers a
qualifying termination of employment prior to July 1, 1996, Computer Associates
has agreed to provide severance benefits in an amount equal to the greater of
(i) the amount such employee would be entitled to as described in the
immediately preceding sentence and (ii) the amount required to be paid pursuant
to applicable law. Computer Associates has also agreed not to terminate
certain officers of the Company prior to the closing of the Merger and to pay
such executive officers compensation as provided in any employment agreement to
which any such person is a party.
Pursuant to the Merger Agreement, at or immediately prior to the
Effective Time, each outstanding Company Option (defined below) shall be
canceled, and each holder of any such option shall be paid by the Company
promptly after the Effective Time for each such option an amount determined by
multiplying (i) the excess, if any, of $47.95 per Share over the applicable
exercise price of such option by (ii) the number of Shares such holder could
have purchased had such holder exercised such option in full immediately prior
to the Effective Time (as if such Company Option was exercisable in full).
"Company Option" means any option granted, whether or not exercisable, and not
exercised or expired, to a current or former employee, director or independent
contractor of the Company or any of its subsidiaries or any predecessor thereof
to purchase Shares pursuant to any stock option, stock bonus, stock award, or
stock purchase plan, program, or arrangement of the Company or any of its
subsidiaries or any predecessor thereof or any other contract or agreement
entered into by the Company any of its subsidiaries. In addition, the Company
has agreed that, prior to the Effective Time, the Company shall (i) terminate
the Company's Employee Stock Purchase Plan and (ii) amend the Company's
Retirement Security Plan to permit Employer Matching Contributions (defined
therein) in cash.
Other Offers. Pursuant to the Merger Agreement, the Company has
agreed that the Company and its subsidiaries and the officers, directors,
employees or other agents of the Company and its subsidiaries will not,
directly or indirectly, (i) take any action to solicit, initiate or encourage
any Acquisition Proposal (defined below) or (ii) subject to the fiduciary
duties of the Board of Directors under applicable law, as advised in writing by
counsel to the Company, engage in negotiations with, or disclose any nonpublic
information relating to the Company or any of its subsidiaries or afford access
to the properties, books or records of the Company or any of its subsidiaries
to, any person that has advised the Company that it may be considering making,
or that has made, an Acquisition Proposal, provided, nothing herein shall
prohibit the Company's Board of Directors from taking and disclosing to the
Company's stockholders a position with respect to a tender offer pursuant to
Rules 14d-9 and 14e-2 promulgated under the Exchange Act. The Company has
agreed to promptly notify Computer Associates after receipt of any Acquisition
Proposal or any notice that any person is
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<PAGE> 28
considering making an Acquisition Proposal or any request for nonpublic
information relating to the Company or any of its subsidiaries or for access to
the properties, books or records of the Company or any of its subsidiaries by
any person that has advised the Company that it may be considering making, or
that has made, an Acquisition Proposal and will keep Computer Associates fully
informed of the status and details of any such Acquisition Proposal, notice or
request. "Acquisition Proposal" means any offer or proposal for, or any
indication of interest in, a merger or other business combination involving the
Company or any of its subsidiaries or the acquisition of any significant equity
interest in, or a significant portion of the assets of, the Company or any of
its subsidiaries, other than the transactions contemplated by the Merger
Agreement.
Agreement with respect to Director and Officer Indemnification and
Insurance. Pursuant to the Merger Agreement, Computer Associates has agreed,
subject to any limitation imposed from time to time under applicable law, that,
for a period of six years after the Effective Time, it will cause the Surviving
Corporation to indemnify and hold harmless the present and former officers,
directors, employees and agents of the Company in respect of acts or omissions
occurring on or prior to the Effective Time to the extent provided under the
Company's certificate of incorporation and bylaws in effect on the date of the
Merger Agreement. Computer Associates has further agreed that, for six years
after the Effective Time, it will cause the Surviving Corporation to use its
best efforts to provide officers' and directors' liability insurance in respect
of acts or omissions occurring on or prior to the Effective Time covering each
such person currently covered by the Company's officers' and directors'
liability insurance policy on terms substantially similar to those of such
policy in effect on the date of the Merger Agreement, provided that in
satisfying such obligation, Computer Associates is not obligated to cause the
Surviving Corporation to pay premiums in excess of 105% of the amount per annum
the Company paid in its last full fiscal year, and if the Surviving Corporation
is unable to obtain such insurance, it shall obtain as much comparable
insurance as possible for an annual premium equal to such maximum amount.
Computer Associates has also agreed that, in the event any such indemnified
person is or becomes involved in any capacity in any action, proceeding or
investigation in connection with any matter relating to the Merger, the Offer
or the Merger Agreement occurring on or prior to the Effective Time, Computer
Associates will cause the Surviving Corporation to pay as incurred such
indemnified person's reasonable legal and other expenses (including the cost of
any investigation and preparation) incurred in connection therewith.
Other Agreements. Computer Associates has agreed that it will take
all action necessary to cause Merger Subsidiary to perform its obligations
under the Merger Agreement and to consummate the Offer and the Merger on the
terms and conditions set forth in the Merger Agreement. Computer Associates
also made certain agreements regarding confidentiality, including its agreement
to hold, and use its best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence
(subject to certain exceptions), unless compelled to disclose by judicial or
administrative process or by other requirements of law, certain confidential
documents and information concerning the Company and its subsidiaries furnished
to Computer Associates in connection with the transactions contemplated by the
Merger Agreement.
Conditions to the Merger. Pursuant to the Merger Agreement, the
respective obligations of each party to consummate the Merger are subject to
the satisfaction or waiver, where permissible, at or before the Effective Time
of the following conditions: (i) Computer Associates or Merger
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<PAGE> 29
Subsidiary shall have purchased Shares in an amount equal to at least the
Minimum Condition pursuant to the Offer, (ii) the adoption and approval of the
Merger Agreement by the affirmative vote of the Stockholders by requisite vote
in accordance with Delaware Law, if such vote is required by Delaware Law,
(iii) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Merger, (iv)
any applicable waiting period under the HSR Act relating to the Merger shall
have expired, and (v) other than filing the certificate of merger in accordance
with Delaware Law, all consents, approvals, orders or authorizations of, or
registrations, declarations or filings with or exemptions by (collectively,
"Consents") any Federal, state or local government or any court, administrative
or regulatory agency or commission or other governmental authority or agency,
domestic or foreign (a "Governmental Entity") required to consummate the Merger
shall have been filed, occurred or been obtained (other than any such Consents
the failure to occur, obtain or file, in the aggregate, could not reasonably be
expected to (a) have a Material Adverse Effect (defined below in Section 15) or
(b) prevent or materially delay the consummation of the Merger).
Termination. The Merger Agreement may be terminated at any time prior
to the Effective Time (notwithstanding any approval of the Merger Agreement by
the Stockholders) (i) by mutual written consent of the Company and Computer
Associates, (ii) by either the Company or Computer Associates, if the Merger
has not been consummated by November 30, 1995 (or, if the Offer shall have been
extended by Merger Subsidiary in the circumstance described in the third
sentence of the second paragraph of Section 1 of this Offer to Purchase, by the
earlier of (a) the 90th day following the consummation of the Offer and (b)
June 30, 1996) (provided that the party seeking to terminate the Merger
Agreement shall not have breached its obligations under the Merger Agreement in
any material respect), (iii) by either the Company or Computer Associates, if
there shall be any law or regulation that makes consummation of the Merger
illegal or otherwise prohibited or if any judgment, injunction, order or decree
enjoining Computer Associates or the Company from consummating the Merger is
entered and such judgment, injunction, order or decree shall become final and
nonappealable, (iv) by either the Company or Computer Associates, (a) if
Computer Associates shall have failed to commence the Offer within five
business days following the date of the Merger Agreement (provided, however,
that Computer Associates shall not be entitled to terminate the Merger
Agreement in the circumstance described in this sub-clause (a) as a result of
its breach of the Merger Agreement), (b) if Computer Associates or Merger
Subsidiary shall not have purchased any Shares pursuant to the Offer prior to
September 15, 1995 (or, if the Offer shall have been extended by Merger
Subsidiary in the circumstance described in the third sentence of the second
paragraph of Section 1 of this Offer to Purchase, on or prior to March 29,
1996) or (c) if the Offer shall have been terminated without Computer
Associates or Merger Subsidiary having purchased any Shares pursuant to the
Offer, (v) by Computer Associates, upon the occurrence of any Trigger Event
(defined below), or (vi) by the Company, if the Company shall have entered
into, or shall have publicly announced its intention to enter into, an
agreement or an agreement in principle with respect to any Acquisition
Proposal.
Fees and Expenses. Each party to the Merger Agreement has agreed to
pay its own fees and expenses and there are no provisions for payment by the
Company of the fees and expenses of Computer Associates or Merger Subsidiary or
vice versa, if the Merger Agreement is terminated, except as stated below. The
Company has agreed to pay Computer Associates a fee in immediately available
funds, promptly, but in no event later than two business days, after the
termination of the
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<PAGE> 30
Merger Agreement as a result of the occurrence of any of the events set forth
below (a "Trigger Event") in an amount equal to (a) $45,000,000, in the case of
the occurrence of a Trigger Event described in clause (i) or (iii) below and
(b) $20,000,000, in the case of the occurrence of a Trigger Event described in
clause (ii) below: (i) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or an agreement in
principle with respect to any Acquisition Proposal, (ii) any representation or
warranty made by the Company in, or pursuant to, the Merger Agreement that is
qualified as to materiality shall not have been true and correct when made or
at any time prior to the consummation of the Offer as if made at and as of such
time, or any representation or warranty made by the Company in, or pursuant to,
the Merger Agreement that is not so qualified shall not have been true and
correct in all material respects when made or at any time prior to the
consummation of the Offer as if made at and as of such time, or the Company
shall have failed to observe or perform in any material respect any of its
obligations under the Merger Agreement, or (iii) the Board of Directors of the
Company (or a special committee thereof) shall have withdrawn or materially
modified its approval or recommendation of the Offer, the Merger or the Merger
Agreement.
The Company has also agreed that, if the Merger Agreement is
terminated as a result of the occurrence of a Trigger Event, it shall assume
and pay, or reimburse Computer Associates for, all reasonable fees payable and
expenses incurred by Computer Associates (including the fees and expenses of
its counsel and the fees and expenses of institutions that are considering
making or have made a commitment to provide financing for the transactions
contemplated by the Merger Agreement) in connection with the Merger Agreement
and the transactions contemplated by the Merger Agreement, up to a maximum of
$5,000,000.
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 Merger Subsidiary pursuant to the Offer. Although Computer
Associates has agreed to cause the Merger to be consummated on the terms set
forth above, there can be no assurance as to the timing of the Merger.
Computer Associates and Merger Subsidiary reserve the right to acquire
additional Shares following the expiration or termination of the Offer through
open market transactions, private purchases, other tender offers or otherwise,
on terms and at prices that may be the same as, or more or less favorable than,
those of the Offer.
Appraisal Rights. Stockholders do not have dissenters' rights as a
result of the Offer. However, if the Merger is consummated, Stockholders of
the Company at the time of the Merger who do not vote in favor of or consent in
writing to the Merger will have the right under Delaware Law to dissent and
demand appraisal of their Shares in accordance with Section 262 of the Delaware
Law.
Under Delaware Law, dissenting stockholders who comply with the
applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) and to
receive payment of such fair value in cash, together with a fair rate of
interest, if any. Any such judicial determination of the fair value of the
Shares could be based upon considerations other than or in addition to the
price paid in the Offer (or the Merger) and the market value of the Shares.
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<PAGE> 31
Stockholders should recognize that the value so determined could be higher or
lower than the price per Share paid pursuant to the Offer or the Merger.
Moreover, Computer Associates or Merger Subsidiary may argue in an appraisal
proceeding that, for purposes of such a proceeding, the fair value of the
Shares is less than the price paid in the Offer (or the Merger). THE FOREGOING
SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS DOES NOT PURPORT TO BE A
COMPLETE STATEMENT OF PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS DESIRING TO
EXERCISE THEIR DISSENTERS' RIGHTS.
Stockholder Tender Agreement. The following description of the
Stockholder Tender Agreement, dated as of May 25, 1995 (the "Stockholder
Agreement"), among Merger Subsidiary and General Atlantic is qualified in its
entirety by reference to the text of such agreement, a copy of which is
attached as an exhibit to the Schedule 14D-1, and is incorporated by reference
in this Offer to Purchase.
Pursuant to the Stockholder Agreement, General Atlantic has agreed,
subject to the conditions described below, to tender pursuant to the Offer, all
Shares owned by it. Specifically, General Atlantic has agreed that, within
five business days after the commencement of the Offer, it will deliver to the
Depositary (i) a Letter of Transmittal with respect to its Shares complying
with the terms of the Offer together with instructions directing the Depositary
to make payment for such Shares directly to General Atlantic, (ii) the
certificates representing General Atlantic's Shares and (iii) all other
documents or instruments required to be delivered pursuant to the terms of the
Offer. General Atlantic has further agreed that it will not, unless and until
the Board of Directors of the Company (or any special committee thereof) shall
have withdrawn or materially modified its approval or recommendation of the
Offer, the Merger or the Merger Agreement, withdraw the tender of its Shares,
subject to applicable law, and that any withdrawn Shares shall continue to be
held by General Atlantic subject to the terms and conditions of the Stockholder
Agreement. General Atlantic's obligations under the Stockholder Agreement
terminate on the date the Merger Agreement terminates in accordance with its
terms. Steven A. Denning, the Managing General Partner of General Atlantic
Partners ("GAP") and President of General Atlantic Service Corporation
("GASC"), is a member of the Board of Directors of the Company. GAP and GASC
are affiliates of General Atlantic. GAP acts as a general partner in limited
partnerships in which General Atlantic, or one of its affiliates, is a limited
partner. GASC advises and represents General Atlantic with respect to its
investment in the Company.
In the Stockholder Agreement, General Atlantic has represented to
Merger Subsidiary that it beneficially owns an aggregate of 3,651,299 Shares.
Based upon the 500,000 Shares held of record by Computer Associates and
assuming that the Shares that are subject to the Stockholder Agreement are
validly tendered and not withdrawn, approximately 16,875,128 additional Shares
would be required to be tendered under the Offer in order to satisfy the
Minimum Condition (assuming the number of Fully Diluted Shares set forth in the
Introduction).
Merger Subsidiary reserves the right to transfer or assign, in whole
or from time to time in part, to any of its affiliates its rights under the
Stockholder Agreement.
Delaware Law. In addition, the Merger would have to comply with
other applicable procedural and substantive requirements of Delaware Law,
including any duties to other stockholders imposed upon a controlling or, if
applicable, majority stockholder. Several recent decisions by the
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Delaware courts, which may or may not apply to the Merger, have held that a
controlling stockholder of a company involved in a merger has a fiduciary duty
to other stockholders which requires that the merger be "entirely fair" to such
other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of the consideration to be received by the stockholders and whether
there was fair dealing among the parties.
The Company is incorporated under the laws of the State of Delaware,
which has adopted certain laws regarding business combinations. In general,
Section 203 of Delaware Law prevents an "interested stockholder" (generally, a
stockholder owning 15% or more of a corporation's outstanding voting stock or
an affiliate or associate thereof) from engaging in a "business combination"
(defined to include a merger and certain other transactions) with a Delaware
corporation for a period of three years following the date on which such
stockholder became an interested stockholder unless (i) prior to such date the
corporation's board of directors approved either the business combination or
the transaction which resulted in such stockholder becoming an interested
stockholder, (ii) upon consummation of the transaction which resulted in such
stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the corporation's voting stock outstanding at the time
the transaction commenced (excluding shares owned by certain employee stock
plans and persons who are directors and also officers of the corporation) or
(iii) on or subsequent to such date the business combination is approved by the
corporation's board of directors and authorized at an annual or special meeting
of stockholders, and not by written consent, by the affirmative vote of at
least 66 2/3% of the outstanding voting stock not owned by the interested
stockholder. The Board of Directors of the Company has approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and
the Merger, for purposes of Section 203. Accordingly, the restrictions of
Section 203 do not apply to the transactions contemplated by this Offer to
Purchase.
Other Matters. Any merger or other similar business combination
proposed by Computer Associates would also have to comply with any applicable
Federal law. In particular, the Commission has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions.
Computer Associates believes that Rule 13e-3 will not be applicable to the
Merger unless the Merger is consummated more than one year after termination of
the Offer or if an alternative merger transaction were to provide for
stockholders to receive consideration for their Shares in an amount less than
the price per Share paid pursuant to the Offer. If applicable, Rule 13e-3
would require, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such a transaction be filed with the Commission and distributed to such
stockholders prior to consummation of the transaction.
If for any reason the Merger is not consummated, Computer Associates
and Merger Subsidiary will evaluate their alternatives. Such alternatives
could include purchasing additional Shares in the open market, in privately
negotiated transactions, in another tender or exchange offer or otherwise, or
taking no further action to acquire additional Shares. Any additional
purchases of Shares could be at a price greater or less than the price to be
paid for Shares in the Offer and could be for cash or other consideration.
Alternatively, Merger Subsidiary may sell or otherwise dispose of any or all
Shares acquired pursuant to the Offer or otherwise. Such transactions may be
effected
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<PAGE> 33
on terms and at prices then determined by Computer Associates or Merger
Subsidiary, which may vary from the price to be paid for Shares in the Offer.
Computer Associates intends to conduct a detailed review of the
Company and its assets, corporate structure, dividend policy, capitalization,
operations, properties, policies, management and personnel and to consider,
subject to the terms of the Merger Agreement, what, if any, changes would be
desirable in light of the circumstances then existing, and reserves the right
to take such actions or effect such changes as it deems desirable. Such
changes could include changes in the Company's business, operations, corporate
structure, capitalization, Board of Directors, policies, management, personnel
or dividend policy.
Except as otherwise described in this Offer to Purchase, Computer
Associates and Merger Subsidiary have no current plans or proposals that would
relate to, or result in, any extraordinary corporate transaction involving the
Company, such as a merger, reorganization or liquidation involving the Company
or any of its subsidiaries, a sale or transfer of a material amount of assets
of the Company or any of its subsidiaries, any material change in the Company's
capitalization or dividend policy or any other material change in the Company's
business, corporate structure, Board of Directors or management.
12. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATIONS;
REGISTRATION UNDER THE EXCHANGE ACT.
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and may reduce the number of holders
of Shares, which could adversely affect the liquidity and market value of the
remaining Shares held by Stockholders other than Computer Associates or Merger
Subsidiary. Computer Associates cannot predict whether the reduction in the
number of Shares that might otherwise trade publicly would have an adverse or
beneficial effect on the market price for or marketability of the Shares or
whether it would cause future market prices to be greater or less than the
Offer price.
Depending upon the number of Shares purchased pursuant to the Offer,
the Shares may no longer meet the standards for continued inclusion in the
NASDAQ National Market System. If, as a result of the purchase of Shares
pursuant to the Offer, the Shares no longer meet the standards for continued
inclusion in the NASDAQ National Market System, the market for the Shares could
be adversely affected.
The extent of the public market for the Shares and availability of
quotations therefor would, however, depend upon such factors as the number of
holders and/or the aggregate market value of the publicly-held Shares at such
time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act and other factors.
The Shares are currently "margin securities" under the regulations of
the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which has the effect, among other things, of allowing brokers to
extend credit on the collateral of such Shares. Depending upon factors similar
to those described above regarding listing and market quotations, the Shares
might no longer
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<PAGE> 34
constitute "margin securities" for the purposes of the Federal Reserve Board's
margin regulations and, therefore, could no longer be used as collateral for
loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application of the Company to the
Commission if the Shares are not listed on a national securities exchange and
there are less than 300 holders of record. Termination of the registration of
the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to holders of Shares and to the
Commission and would make certain of the provisions of the Exchange Act, such
as the short-swing profit recovery provisions of Section 16(b), the requirement
of furnishing a proxy or information statement in connection with stockholder
action and the related requirement of an annual report to stockholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Shares. Furthermore,
"affiliates" of the Company and persons holding "restricted securities" of the
Company may be deprived of the ability to dispose of such securities pursuant
to Rule 144 or 144A promulgated under the Securities Act of 1933, as amended.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be "margin securities" or eligible for NASDAQ reporting.
Merger Subsidiary intends to seek to cause the Company to terminate
registration of the Shares under the Exchange Act as soon after consummation of
the Offer as the requirements for termination of registration of the Shares are
met.
13. DIVIDENDS AND DISTRIBUTIONS.
If on or after May 7, 1995, the Company should (notwithstanding the
fact that the following actions may be prohibited under the Merger Agreement)
(i) split, combine or otherwise change the Shares or its capitalization, (ii)
acquire or otherwise cause a reduction in the number of outstanding Shares or
(iii) issue or sell any additional Shares (other than Shares issued pursuant to
and in accordance with the terms in effect on May 7, 1995 of employee stock
options or purchase rights outstanding prior to such date and other than 50,000
Shares issued pursuant to and in accordance with the terms in effect on May 11,
1995 of employee stock options granted on such date), shares of any other class
or series of capital stock, other voting securities or any securities
convertible into, or options, rights, or warrants, conditional or otherwise, to
acquire, any of the foregoing, then, without prejudice to Merger Subsidiary's
rights under Section 15, Merger Subsidiary may, in its sole discretion, make
such adjustments in the purchase price and other terms of the Offer as it deems
appropriate including the number or type of securities to be purchased.
If, on or after May 7, 1995, the Company should (notwithstanding the
fact that the following actions are prohibited under the Merger Agreement)
declare or pay any dividend on the Shares or any distribution with respect to
the Shares (including the issuance of additional Shares or other securities or
rights to purchase of any securities) that is payable or distributable to
Stockholders of record on a date prior to the transfer to the name of Merger
Subsidiary or its nominee or transferee on the Company's stock transfer records
of the Shares purchased pursuant to the Offer, then, without prejudice to
Merger Subsidiary's rights under Section 15, (i) the purchase price per Share
payable by Merger Subsidiary pursuant to the Offer may be reduced to the extent
of any such dividend or distribution and (ii) the whole of any such non-cash
dividend or distribution to be received by the tendering Stockholders will (a)
be received and held by the tendering Stockholders for the account
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<PAGE> 35
of Merger Subsidiary and will be required to be promptly remitted and
transferred by each tendering Stockholder to the Depositary for the account of
Merger Subsidiary, accompanied by appropriate documentation of transfer, or (b)
at the direction of Merger Subsidiary, be exercised for the benefit of Merger
Subsidiary, in which case the proceeds of such exercise will promptly be
remitted to Merger Subsidiary. Pending such remittance and subject to
applicable law, Merger Subsidiary will be entitled to all rights and privileges
as owner of any such non-cash dividend or distribution or proceeds thereof and
may withhold the entire purchase price or deduct from the purchase price the
amount or value thereof, as determined by Merger Subsidiary in its sole
discretion.
14. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT.
Merger Subsidiary reserves the right, at any time or from time to
time, in its sole discretion and regardless of whether or not any of the
conditions specified in Section 15 shall have been satisfied (except to the
extent otherwise provided in the Merger Agreement), (i) to extend the period of
time during which the Offer is open by giving oral or written notice of such
extension to the Depositary and by making a public announcement of such
extension or (ii) to amend the Offer in any respect by making a public
announcement of such amendment. There can be no assurance that Merger
Subsidiary will exercise its right to extend or amend the Offer.
Notwithstanding the foregoing, but subject to Computer Associates' or the
Company's ability to terminate the Merger Agreement (described in Section 11),
if (i) the applicable waiting period under the HSR Act shall not have expired
or been terminated as of the date the Offer would otherwise have expired or
(ii) Computer Associates and the Company are litigating or contesting any
administrative or judicial action or proceeding challenging any transaction
contemplated by the Merger Agreement as violative of any antitrust law or any
decree, judgment, injunction or other order that is in effect and that
prohibits, prevents or restricts consummation of the Merger or any such other
transaction and any conditions to the Offer described in paragraphs (a) or (b)
of Section 15 are not satisfied as of the date the Offer would otherwise have
expired, Merger Subsidiary has agreed, pursuant to the Merger Agreement, to
extend the Offer from time to time until the earlier of (x) the consummation of
the Offer and (y) March 29, 1996. Subject to the terms of the Offer and the
satisfaction (or waiver to the extent permitted by the Merger Agreement) of all
the conditions to the Offer, Merger Subsidiary shall accept for payment and pay
for all Shares validly tendered, and not withdrawn, pursuant to the Offer as
soon as practicable after the expiration of the Offer; provided, that Merger
Subsidiary may extend the Offer for a period of time of not more than 20
business days to meet the objective (but not the condition) that there shall be
validly tendered prior to the Expiration Date (as so extended) and not
withdrawn a number of Shares, which, together with Shares then owned by
Computer Associates and Merger Subsidiary, represents at least 90% of the Fully
Diluted Shares.
If Merger Subsidiary shall decide, in its sole discretion, subject to
the terms of the Merger Agreement, to increase the consideration to be paid for
Shares pursuant to the Offer and the Offer is scheduled to expire at any time
before the expiration of a period of 10 business days from, and including, the
date that notice of such increase is first published, sent or given in the
manner specified below, the Offer will be extended until the expiration of such
period of 10 business days. If Merger Subsidiary makes a material change in
the terms of the Offer (other than a change in price or percentage of
securities sought) or in the information concerning the Offer, or waives a
material condition of the Offer, Merger Subsidiary will extend the Offer, if
required by applicable law, for a period sufficient to allow stockholders to
consider the amended terms of the Offer.
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<PAGE> 36
Merger Subsidiary also reserves the right, in its sole discretion,
subject to the terms of the Merger Agreement, in the event any of the
conditions specified in Section 15 shall not have been satisfied and so long as
Shares have not theretofore been accepted for payment, to delay (except as
otherwise required by applicable law and the rules of the Commission including
Rule 14e-1) acceptance for payment of or payment for Shares or to terminate the
Offer and not accept for payment or pay for Shares.
If Merger Subsidiary extends the period of time during which the Offer
is open, is delayed in accepting for payment or paying for Shares or is unable
to accept for payment or pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Merger Subsidiary's rights under the Offer, the
Depositary may, on behalf of Merger Subsidiary, retain all Shares tendered, and
such Shares may not be withdrawn except as otherwise provided in Section 4.
The reservation by Merger Subsidiary of the right to delay acceptance for
payment of or payment for Shares is subject to applicable law, which requires
that Merger Subsidiary pay the consideration offered or return the Shares
deposited by or on behalf of Stockholders promptly after the termination or
withdrawal of the Offer.
Any extension, termination or amendment of the Offer will be followed
as promptly as practicable by a public announcement thereof. In the case of an
extension of the Offer, Merger Subsidiary will make a public announcement of
such extension no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which Merger Subsidiary may choose to make any public
announcement, Merger Subsidiary will have no obligation (except as otherwise
required by applicable law) to publish, advertise or otherwise communicate any
such public announcement other than by making a release to the Dow Jones News
Service.
15. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, Computer Associates
and Merger Subsidiary shall not be required to accept for payment or pay for
any Shares, and may terminate the Offer, if (i) by the expiration of the Offer,
the Minimum Condition shall not have been satisfied, (ii) by the expiration of
the Offer, the applicable waiting period under the HSR Act shall not have
expired or been terminated, or (iii) at any time on or after May 25, 1995 and
prior to the acceptance for payment of Shares, any of the following conditions
exist:
(a) there shall be instituted or pending any action or
proceeding by any Governmental Entity, (i) challenging or seeking to
make illegal, to delay materially or otherwise directly or indirectly
to restrain or prohibit the making of the Offer, the acceptance for
payment of or payment for some of or all the Shares by Computer
Associates or Merger Subsidiary or the consummation by Computer
Associates or Merger Subsidiary of the Merger, seeking to obtain
material damages or otherwise directly or indirectly relating to the
transactions contemplated by the Merger Agreement, the Offer or the
Merger, (ii) seeking to restrain or prohibit Computer Associates' or
Merger Subsidiary's ownership or operation (or that of their
respective subsidiaries or affiliates) of all or any material portion
of the business or assets of the Company and its subsidiaries, taken
as a whole, or of Computer Associates and its subsidiaries, taken as a
whole, or to compel Computer Associates or any
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<PAGE> 37
of its subsidiaries or affiliates to dispose of or hold separate all
or any material portion of the business or assets of the Company and
its subsidiaries, taken as a whole, or of Computer Associates and its
subsidiaries, taken as a whole, (iii) seeking to impose material
limitations on the ability of Computer Associates or any of its
subsidiaries or affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to
vote any Shares acquired or owned by Computer Associates or any of its
subsidiaries or affiliates on all matters properly presented to the
Company's stockholders, (iv) seeking to require divestiture by
Computer Associates or any of its subsidiaries or affiliates of any
Shares, or (v) that otherwise, in the judgment of Computer Associates,
is likely to materially adversely affect the business, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole, or Computer Associates and its
subsidiaries, taken as a whole; or
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Merger Agreement, the
Offer or the Merger, by any Governmental Entity or arbitrator other
than the application of the waiting period provisions of the HSR Act
to the Merger Agreement, the Offer or the Merger, that, in the
judgment of Computer Associates, is likely, directly or indirectly, to
result in any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any
development shall have occurred or been threatened involving a
prospective change) in the business, financial condition or results of
operations of the Company or any of its subsidiaries that, in the
reasonable judgment of Computer Associates, is or is likely to have a
Material Adverse Effect (defined below); or
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York
Stock Exchange or in the NASDAQ over-the-counter market in the United
States, (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States, (iii) any
material limitation (whether or not mandatory) by any Governmental
Entity on the extension of credit by banks or other lending
institutions, (iv) a commencement of a war or armed hostilities or
other national or international calamity directly or indirectly
involving the United States which would reasonably be expected to have
a Material Adverse Effect or prevent (or materially delay) the
consummation of the Offer or (v) in the case of any of the foregoing
existing at the time of commencement of the Offer, a material
acceleration or worsening thereof; or
(e) any Consent (other than the filing of a certificate of
merger or approval by the stockholders of the Company of the Merger
(if required by Delaware Law)) required to be filed, occurred or been
obtained by the Company or any of its subsidiaries or Computer
Associates or any of its subsidiaries (including Merger Subsidiary) in
connection with the execution and delivery of the Merger Agreement,
the Offer and the consummation of the transactions contemplated by the
Merger Agreement shall not have been filed, occurred or been obtained
(other than any such Consents the failure to file, occur or obtain in
the
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<PAGE> 38
aggregate, could not reasonably be expected to (1) have a Material
Adverse Effect or (2) prevent or materially delay the consummation of
the Offer or the Merger); or
(f) the Company shall have breached or failed to perform in
any material respect any of its covenants or agreements under the
Merger Agreement, or any of the representations and warranties of the
Company set forth in the Merger Agreement that is qualified as to
materiality shall not be true when made or at any time prior to
consummation of the Offer as if made at and as of such time, or any of
the representations and warranties set forth in the Merger Agreement
that is not so qualified shall not be true in any material respect
when made or at any time prior to the consummation of the Offer as if
made at and as of such time; or
(g) the Merger Agreement shall have been terminated in
accordance with its terms; or
(h) the Board of Directors of the Company (or a special
committee thereof) shall have withdrawn or materially modified its
approval or recommendation of the Offer, the Merger or the Merger
Agreement; or
(i) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or
agreement in principle with respect to any Acquisition Proposal;
which, in the sole judgment of Computer Associates in any such case, and
regardless of the circumstances (including any action or omission by Computer
Associates or Merger Subsidiary) giving rise to any such condition, makes it
inadvisable to proceed with such acceptance for payment or payment. The term
"Material Adverse Effect" means a material adverse effect on the financial
condition, business, or results of operations of the Company and its
subsidiaries taken as a whole, except that occurrences due solely to a
disruption of the Company's or its subsidiary's businesses solely as a result
of the announcement of the execution of the Merger Agreement and the
transactions proposed to be consummated by the Merger Agreement shall be
excluded from consideration for purposes of the effect of an action or inaction
on the Company and its subsidiaries taken as a whole.
The foregoing conditions are for the sole benefit of Computer
Associates and Merger Subsidiary and may be asserted by Computer Associates in
its sole discretion regardless of the circumstances (including any action or
omission by Computer Associates or Merger Subsidiary) giving rise to any such
condition or may be waived by Computer Associates and Merger Subsidiary in
their sole discretion in whole at any time or in part from time to time. The
failure by Computer Associates or Merger Subsidiary at any time to exercise its
rights under any of the foregoing conditions shall not be deemed a waiver of
any such right; the waiver of any such right with respect to particular facts
and circumstances shall not be deemed a waiver with respect to any other facts
and circumstances, and each such right shall be deemed an ongoing right which
may be asserted at any time or from time to time. Any determination by
Computer Associates concerning the events described in this Section 15 will be
final and binding upon all parties to the Merger Agreement.
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<PAGE> 39
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
General. Except as set forth in this Section 16, based on its
examination of publicly available information filed by the Company with the
Commission and other publicly available information concerning the Company,
Merger Subsidiary is not aware of any license or regulatory permit that appears
to be material to the Company's business that might be adversely affected by
Merger Subsidiary's acquisition of Shares as contemplated herein or of any
approval or other action by any government or governmental authority or agency,
domestic or foreign, that would be required for the acquisition or ownership of
Shares by Merger Subsidiary or Computer Associates as contemplated herein.
Should any such approval or other action be required, it is currently
contemplated that, except as described below under "State Takeover Statutes",
such approval or other action will be sought. Except as described under
"Antitrust", however, there is no current intent to delay the purchase of
Shares tendered pursuant to the Offer pending the outcome of any such matter.
There can be no assurance that any such approval or other action, if needed,
would be obtained or would be obtained without substantial conditions or that
if such approvals were not obtained or such other actions were not taken
adverse consequences might not result to the Company's business or certain
parts of the Company's business might not have to be disposed of, any of which
could cause Merger Subsidiary to elect to terminate the Offer without the
purchase of Shares thereunder. Merger Subsidiary's obligation under the Offer
to accept for payment and pay for Shares is subject to certain conditions. See
Section 15.
State Takeover Statutes. A number of states have adopted laws which
purport, to varying degrees, to apply to attempts to acquire corporations that
are incorporated in, or which have substantial assets, stockholders, principal
executive offices or principal places of business or whose business operations
otherwise have substantial economic effects in, such states. The Company,
directly or through subsidiaries, conducts business in a number of states
throughout the United States, some of which have enacted such laws. Based on
information supplied by the Company, Computer Associates does not believe that
any of these laws will, by their terms, apply to the Offer or the Merger.
In 1982, in Edgar v. MITE Corp., the Supreme Court of the United
States invalidated on constitutional grounds the Illinois Business Takeover
Statute which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987 in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State
of Indiana could, as a matter of corporate law, constitutionally disqualify a
potential acquiror from voting shares of a target corporation without the prior
approval of the remaining stockholders where, among other things, the
corporation is incorporated in, and has a substantial number of stockholders
in, the state. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal
District Court in Oklahoma ruled that the Oklahoma statutes were
unconstitutional insofar as they apply to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a Federal District
Court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee.
This decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a Federal District Court in Florida held in Grand
Metropolitan PLC v. Butterworth, that the provisions of the Florida Affiliated
Transactions Act and the Florida Control
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<PAGE> 40
Share Acquisition Act were unconstitutional as applied to corporations
incorporated outside of Florida.
If any government official or third party should seek to apply any
state takeover law to the Offer or the Merger, Computer Associates will take
such action as then appears desirable, which action may include challenging the
applicability or validity of such statute in appropriate court proceedings. In
the event it is asserted that one or more state takeover statutes is applicable
to the Offer or the Merger and an appropriate court does not determine that it
is inapplicable or invalid as applied to the Offer or the Merger, Computer
Associates or Merger Subsidiary might be required to file certain information
with, or to receive approvals from, the relevant state authorities or holders
of Shares, and Merger Subsidiary might be unable to accept for payment or pay
for Shares tendered pursuant to the Offer, or be delayed in continuing or
consummating the Offer or the Merger. In such case, Merger Subsidiary may not
be obligated to accept for payment or pay for any tendered Shares. See Section
15.
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 Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. The purchase of Shares pursuant to the Offer is subject to
such requirements.
Computer Associates expects to file, and expects the Company to file,
a Notification and Report Form with respect to the Offer with the Antitrust
Division and the FTC on or about June 1, 1995. Assuming a filing date of June
1, 1995, the waiting period applicable to the purchase of Shares pursuant to
the Offer would be scheduled to expire at 11:59 P.M., New York City time, on
Friday, June 16, 1995. However, prior to such time, the Antitrust Division or
the FTC may extend the waiting period by requesting additional information or
documentary material relevant to the Offer from Computer Associates. If such a
request is made, the waiting period will be extended until 11:59 P.M., New York
City time, on the tenth day after substantial compliance by Computer Associates
with such request. Thereafter, such waiting period can be extended only by
court order.
A request will be made for early termination of the waiting period
applicable to the Offer. There can be no assurance, however, that the 15-day
HSR waiting period will be terminated early. Shares will not be accepted for
payment or paid for pursuant to the Offer until the expiration or earlier
termination of the applicable waiting period under the HSR Act. See Section
15. Any extension of the waiting period will not give rise to any withdrawal
rights not otherwise provided for by applicable law. See Section 4. The
Merger Agreement provides that, if by the expiration of the Offer, the
applicable waiting period under the HSR Act shall not have expired or been
terminated, Merger Subsidiary shall extend the Offer from time to time until
the earlier of (i) the consummation of the Offer and (ii) March 29, 1996.
The Merger would not require an additional filing under the HSR Act if
Computer Associates owns 50% or more of the outstanding Shares at the time of
the Merger or if the Merger occurs within one year after the HSR Act waiting
period applicable to the Offer expires or is terminated.
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<PAGE> 41
The Antitrust Division and the FTC frequently scrutinize the legality
under the antitrust laws of transactions such as the acquisition of Shares by
Merger Subsidiary pursuant to the Offer. At any time before or after the
consummation of any such transactions, the Antitrust Division or the FTC could
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 Computer Associates or the Company.
Private parties (including individual States) may also bring legal actions
under the antitrust laws. Computer Associates does not believe that the
consummation of the Offer will result in a violation of any applicable
antitrust laws. However, 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. See Section 15 for certain conditions to the Offer,
including conditions with respect to litigation and certain governmental
actions.
Foreign Approvals. According to the Company 10-K, the Company also
owns property and conducts business in a number of other foreign countries and
jurisdictions including, without limitation, Canada, Germany, Australia,
France, Spain, Japan, Singapore, Italy, the Netherlands and the United Kingdom.
In connection with the acquisition of the Shares pursuant to the Offer, the
laws of certain of those foreign countries and jurisdictions may require the
filing of information with, or the obtaining of the approval of, governmental
authorities in such countries and jurisdictions. The governments in such
countries and jurisdictions might also attempt to impose additional conditions
on Computer Associates' or the Company's operations conducted in such countries
and jurisdictions as a result of the acquisition of the Shares pursuant to the
Offer. There can be no assurance that any such approval can be obtained, that
Computer Associates will be able to cause the Company or its subsidiaries to
satisfy or comply with such laws or that compliance or non-compliance will not
have adverse consequences for Computer Associates or the Company or any
subsidiary of either of them. The Offer is subject to certain conditions,
including conditions relating to the legal matters referred to in this Section
16. See Section 15.
Margin Credit Regulations. Federal Reserve Board Regulations G, T, U
and X (the "Margin Credit Regulations") restrict the extension or maintenance
of credit for the purpose of buying or maintaining margin stock, if the credit
is secured directly or indirectly thereby. The borrowings under the Credit
Facility will not be directly secured by a pledge of the Shares. In addition,
Computer Associates and Merger Subsidiary believe that such borrowings will not
be "indirectly secured" within the meaning of the Margin Credit Regulations, as
interpreted. Accordingly, Computer Associates and Merger Subsidiary believe
that the Margin Credit Regulations are not applicable to the borrowings under
the Credit Facility.
17. FEES AND EXPENSES.
Merger Subsidiary has retained D.F. King & Co., Inc. to act as the
Information Agent and IBJ Schroder Bank & Trust Company to act as the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telegraph and personal interviews
and may request brokers, dealers and other nominee stockholders to forward
materials relating to the Offer to beneficial owners. The Information Agent
and the Depositary each will receive reasonable and customary compensation for
their respective services, will be reimbursed for certain reasonable
out-of-pocket expenses and will be indemnified against certain liabilities in
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<PAGE> 42
connection therewith, including certain liabilities under the federal
securities laws. Edward C. Lord, III, a Senior Vice President of the
Depositary, is a member of the Board of Directors of Computer Associates.
Merger Subsidiary will not pay any fees or commissions to any broker
or dealer or any other person (other than the Information Agent and the
Depositary) for soliciting tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies will, upon request, be reimbursed
by Merger Subsidiary for reasonable and necessary costs and expenses incurred
by them in forwarding materials to their customers.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or
on behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction. However, Merger Subsidiary may, in its discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF MERGER SUBSIDIARY NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Merger Subsidiary has filed with the Commission a Tender Offer
Statement on Schedule 14D-l, together with exhibits, pursuant to Rule 14d-3 of
the General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer. The Schedule 14D-l and any
amendments thereto, including exhibits, may be examined and copies may be
obtained from the offices of the Commission in the manner set forth with
respect to the Company in Section 7 of this Offer to Purchase (except that such
information will not be available at the regional offices of the Commission).
VR126, INC.
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<PAGE> 43
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
COMPUTER ASSOCIATES AND MERGER SUBSIDIARY
1. DIRECTORS AND EXECUTIVE OFFICERS OF COMPUTER ASSOCIATES. The following
table sets forth the name, age, business address and present principal
occupation or employment, and material occupations, positions, offices or
employments for the past five years of each director and executive officer of
Computer Associates. Each such person is a citizen of the United States of
America, except for Sanjay Kumar who is a citizen of Sri Lanka (and a permanent
resident of the United States of America) and Willem F.P. de Vogel who is a
citizen of The Netherlands. Unless otherwise indicated below, the business
address of each person is c/o Computer Associates International, Inc., One
Computer Associates Plaza, Islandia, New York 11788. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with Computer Associates.
DIRECTORS (INCLUDING EXECUTIVE
OFFICERS WHO ARE DIRECTORS)
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
NAME AND OR EMPLOYMENT; MATERIAL POSITIONS
BUSINESS ADDRESS AGE HELD DURING PAST FIVE YEARS
- ---------------- --- ---------------------------------
<S> <C> <C>
Russell M. Artzt 48 Director of Computer Associates since 1980. Executive Vice
President-Research and Development since April 1987 and the
Senior Development Officer since 1976.
Willem F.P. de Vogel 44 Director of Computer Associates since 1991. President of
Three Cities Research, Inc. Three Cities Research, Inc., a private investment
135 East 57th Street management firm in New York City, since 1981. From August
New York, New York 1981 to August 1990, Mr. de Vogel served as a director of
10022 Computer Associates.
</TABLE>
I-1
<PAGE> 44
<TABLE>
<S> <C> <C>
Irving Goldstein 57 Director of Computer Associates since 1990. Director
INTELSAT General and Chief Executive Officer of INTELSAT, an
3400 International Drive, N.W. international satellite telecommunications company, since
Washington, D.C. 20008 February 1992. He was Chairman and Chief Executive Officer
of Communications Satellite Corporation from October 1985
to February 1992 and President from May 1983 to October
1985, and was a director from May 1983 to February 1992.
He also is a director of Security Trust Co., N.A.
Richard A. Grasso 48 Director of Computer Associates since January 1994.
New York Stock Exchange 11 Chairman and Chief Executive Officer of the New York Stock
Wall Street Exchange since 1994. He was Executive Vice Chairman of the
New York, New York New York Stock Exchange from 1991 to 1994 and President and
10005 Chief Operating Officer of the New York Stock Exchange from
1989 to 1994.
Shirley Strum Kenny 60 Director of Computer Associates since July 1994. President
President's Office of State University of New York at Stony Brook since 1994.
State University of She was President of Queens College of the City University
New York at Stony Brook of New York from 1985 to 1994. She is also a director of
Stony Brook, New York Toys "R" Us, Inc.
11794
Sanjay Kumar 33 Director of Computer Associates since January 1994.
President and Chief Operating Officer since January 1994.
He was Senior Vice President--Planning from April 1989 to
December 1992 and Executive Vice President--Operations from
January 1993 to December 1993.
Edward C. Lord, III 44 Director of Computer Associates since 1988. Senior Vice
IBJ Schroder Bank & Trust President of IBJ Schroder Bank & Trust Company, a
Company commercial banking institution in New York City, since 1987
1 State Street and Vice President since 1978. He has managed corporate
New York, New York banking and personal lending activities for more than
10128 twelve years.
Charles B. Wang 50 Director of Computer Associates since 1976. Chief
Executive Officer since 1976 and Chairman of the Board
since April 1980.
</TABLE>
I-2
<PAGE> 45
EXECUTIVE OFFICERS WHO ARE
NOT DIRECTORS
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
NAME AND OR EMPLOYMENT; MATERIAL POSITIONS
BUSINESS ADDRESS AGE HELD DURING PAST FIVE YEARS
- ---------------- --- ---------------------------------
<S> <C> <C>
Belden A. Frease 56 Senior Vice President since April 1985 and Secretary since
May 1991.
Charles P. McWade 40 Senior Vice President--Finance since April 1994. He was
Senior Vice President and Treasurer from 1990 to April
1994.
Peter A. Schwartz 51 Senior Vice President--Finance and Chief Financial Officer
since April 1987.
Ira H. Zar 33 Senior Vice President and Treasurer since April 1994. He
was Vice President--Finance from April 1990 to March 1994
and Assistant Vice President from April 1987 to March 1990.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF MERGER SUBSIDIARY. The following table
sets forth the name and position with Merger Subsidiary of each director and
executive officer of Merger Subsidiary. For further information regarding such
persons, see paragraph 1 above.
<TABLE>
<CAPTION>
NAME POSITION WITH MERGER SUBSIDIARY
- ---- -------------------------------
<S> <C>
Belden A. Frease Director, Vice President and Secretary of Merger Subsidiary
since its incorporation on May 24, 1995.
Sanjay Kumar Director and President of Merger Subsidiary since its
incorporation on May 24, 1995.
Peter A. Schwartz Director, Vice President and Treasurer of Merger Subsidiary
since its incorporation on May 24, 1995.
</TABLE>
I-3
<PAGE> 46
None of the executive officers and directors of Computer Associates or
Merger Subsidiary currently is a director of, or holds any position with, the
Company. Except as described in this Offer to Purchase, none of Computer
Associates' or Merger Subsidiary's directors, executive officers, affiliates or
associates 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 Commission.
I-4
<PAGE> 47
SCHEDULE II
BENEFICIAL OWNERSHIP OF SHARES
Computer Associates beneficially owns 4,151,299 Shares, representing
approximately 9.9% of the Fully Diluted Shares. Of such Shares, Computer
Associates holds of record 500,000 Shares and 3,651,299 Shares are required to
be tendered in the Offer pursuant to the Stockholder Agreement. See Section
11.
TRANSACTIONS IN SHARES IN THE PAST 60 DAYS
During the past 60 days, Computer Associates engaged in the
transactions in the Shares described below.
1. On April 17, 1995, Computer Associates purchased 325,000 Shares in
open market transactions for an aggregate purchase price of $9,060,610 in cash
(or an average purchase price of $27.88 per Share), including commissions.
2. On April 18, 1995, Computer Associates purchased 175,000 Shares in
open market transactions for an aggregate purchase price of $4,817,820 in cash
(or an average purchase price of $27.53 per Share), including commissions.
II-1
<PAGE> 48
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal, certificates for Shares and any other required documents should
be sent to the Depositary at one of the addresses set forth below:
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission (for By Hand or Overnight Delivery:
P.O. Box 84 eligible financial One State Street
Bowling Green Station institutions only): New York, New York 10004
New York, New York 10274-0084 (212) 858-2611 Attn: Securities Processing Window,
Attn: Reorganization Department Sub-cellar One
To Confirm Facsimile
Transmissions Call:
(212) 858-2103
(call collect)
</TABLE>
Questions or requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
at the address and telephone numbers set forth below. Stockholders may also
contact their broker, dealer, commercial bank or trust company for assistance
concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
(212) 269-5550 (Collect)
(800) 290-6430 (Toll Free)
<PAGE> 1
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
LEGENT CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED JUNE 1, 1995
BY
VR126, INC.
a wholly-owned subsidiary of
COMPUTER ASSOCIATES INTERNATIONAL, INC.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, JULY 6, 1995, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission (for By Hand or Overnight Delivery:
P.O. Box 84 eligible financial One State Street
Bowling Green Station institutions only): New York, New York 10004
New York, New York 10274-0084 (212) 858-2611 Attn: Securities Processing Window,
Attn: Reorganization Department Sub-cellar One
To Confirm Facsimile
Transmissions Call:
(212) 858-2103
(call collect)
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates
representing Shares (defined below) are to be forwarded with this Letter of
Transmittal or, unless an Agent's Message (defined in Section 2 of the Offer to
Purchase) is utilized, if delivery of Shares is to be made by book-entry
transfer to the Depositary's account at The Depository Trust Company, Midwest
Securities Trust Company or Philadelphia Depository Trust Company (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedure set forth in Section 3 of the Offer to Purchase.
Stockholders who cannot deliver certificates for their Shares or who
cannot deliver confirmation of the book-entry transfer of their Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities (a
"Book-Entry Confirmation") and all other documents required by this Letter of
Transmittal to the Depositary by the Expiration Date (defined in Section 1 of
the Offer to Purchase) must tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2. Delivery of documents to a Book-Entry Transfer Facility does
not constitute delivery to the Depositary.
<PAGE> 2
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s)
(Please fill in, if blank, exactly as name(s) appear(s) Shares Tendered
on certificate(s)) (Attach additional signed list if necessary)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Certificate Total Number of Total
Number(s) Shares Number
(1) Represented of Shares
by Tendered(2)
Certificate(s)
(1)
- --------------------------------------------------------------------------------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
Total Shares
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Need not be completed by stockholders tendering by book-entry transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares described
above are being tendered. See Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
-------------------------------------
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number
----------------------------------------------------
Transaction Code Number
-------------------------------------------
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Owner(s):
-----------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------
Name of Institution that Guaranteed Delivery:
---------------------
-2-
<PAGE> 3
If delivery is by book-entry transfer, Check box of Book-Entry
Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number
----------------------------------------------------
Transaction Code Number
-------------------------------------------
Ladies and Gentlemen:
The undersigned hereby tenders to VR126, Inc., a Delaware
corporation ("Merger Subsidiary") and a wholly-owned subsidiary of Computer
Associates International, Inc., a Delaware corporation ("Computer Associates"),
the above described shares of Common Stock, $.01 par value per share (the
"Shares"), of Legent Corporation, a Delaware corporation (the "Company"),
pursuant to Merger Subsidiary's offer to purchase all outstanding Shares at a
price of $47.95 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated June 1, 1995
(the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which, together with any amendments or supplements
thereto or hereto, collectively constitute the "Offer"). Merger Subsidiary
reserves the right to transfer or assign, in whole or from time to time in
part, to one or more of Computer Associates or any of its wholly-owned
subsidiaries the right to purchase Shares tendered pursuant to the Offer.
Subject to and effective upon acceptance for payment of the
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and transfers
to, or upon the order of, Merger Subsidiary all right, title and interest in
and to all the Shares that are being tendered hereby (and any and all other
Shares or other securities issued or issuable in respect thereof on or after
May 7, 1995) and irrevocably constitutes and appoints the Depositary the true
and lawful agent and attorney-in-fact of the undersigned with respect to such
Shares (and all such other Shares or securities), with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (a) deliver certificates for such Shares (and all
such other Shares or securities), or transfer ownership of such Shares (and all
such other Shares or securities) on the account books maintained by any of the
Book-Entry Transfer Facilities, together, in either such case with all
accompanying evidences of transfer and authenticity, to or upon the order of
Merger Subsidiary, (b) present such Shares (and all such other Shares or
securities) for transfer on the books of the Company and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and all such other Shares or securities), all in accordance with the
terms of the Offer.
If, on or after May 7, 1995, the Company should declare or pay
any cash or stock dividend or other distribution on or issue any rights with
respect to the Shares, payable or distributable to stockholders of record on a
date before the transfer to the name of Merger Subsidiary or its nominee or
transferee on the Company's stock transfer records of the Shares accepted for
payment pursuant to the Offer, then, subject to the provisions of the Offer to
Purchase, (i) the purchase price per Share payable by Merger Subsidiary
pursuant to the Offer will be reduced by the amount of any such cash dividend
or
-3-
<PAGE> 4
cash distribution and (ii) the whole of any such non-cash dividend,
distribution or right will be received and held by the tendering stockholder
for the account of Merger Subsidiary and shall be required to be promptly
remitted and transferred by each tendering stockholder to the Depositary for
the account of Merger Subsidiary, accompanied by appropriate documentation of
transfer. Pending such remittance, Merger Subsidiary will be entitled to all
rights and privileges as owner of any such non-cash dividend, distribution or
right and may withhold the entire purchase price or deduct from the purchase
price the amount of value thereof, as determined by Merger Subsidiary in its
sole discretion.
The undersigned hereby irrevocably appoints Mr. Sanjay Kumar,
Mr. Peter A. Schwartz and Mr. Belden A. Frease, and each of them, and any other
designees of Merger Subsidiary as the attorneys and proxies of the undersigned,
each with full power of substitution, to exercise all voting and other rights
of the undersigned in such manner as each such attorney and proxy or its
substitute shall in its sole discretion deem proper with respect to, to execute
any written consent concerning any matter as each such attorney and proxy or
its substitute shall in its sole discretion deem proper with respect to, and to
otherwise act as such attorney and proxy or its substitute shall in its sole
discretion deem proper with respect to, all of the Shares tendered hereby which
have been accepted for payment by Merger Subsidiary prior to the time of any
vote or other action (and any and all other Shares or other securities issued
or issuable in respect thereof on or after May 7, 1995), at any meeting of
stockholders of the Company (whether annual or special and whether or not an
adjourned meeting), by written consent or otherwise. This proxy is irrevocable
and is granted in consideration of, and is effective upon, the acceptance for
payment of such Shares by Merger Subsidiary in accordance with the terms of the
Offer. Such acceptance for payment shall revoke any other proxy or written
consent granted by the undersigned at any time with respect to such Shares (and
all such other Shares or securities), and no subsequent proxies will be given
or written consents will be executed by the undersigned (and if given or
executed, will not be deemed to be effective). The undersigned acknowledges
that in order for Shares to be deemed validly tendered, immediately upon the
acceptance for payment of such Shares, Merger Subsidiary or Merger Subsidiary's
designee must be able to exercise full voting and other rights of a record and
beneficial holder with respect to such Shares.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby (and any and all other Shares or other securities
issued or issuable in respect thereof on or after May 7, 1995), that the
undersigned own(s) the Shares tendered hereby within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that such tender of Shares complies with Rule 14e-4 under the
Exchange Act, and that when the same are accepted for payment by Merger
Subsidiary, Merger Subsidiary will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claims. The undersigned will, upon request, execute and
deliver any additional documents deemed by the Depositary or Merger Subsidiary
to be necessary or desirable to complete the sale, assignment and transfer of
the Shares tendered hereby (and all such other Shares or securities).
All authority herein conferred or agreed to be conferred in
this Letter of Transmittal shall not be affected by, and shall survive, the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives,
successors, assigns, administrators, trustees in bankruptcy, personal and legal
representatives of the undersigned. Except as stated in the Offer, this tender
is irrevocable, provided that Shares tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date.
The undersigned understands that tenders of Shares pursuant to
any one of the procedures described in Section 3 of the Offer to Purchase and
in the instructions hereto will constitute a binding
-4-
<PAGE> 5
agreement between the undersigned and Merger Subsidiary upon the terms and
subject to the conditions of the Offer. The undersigned recognizes that under
certain circumstances set forth in the Offer to Purchase, Merger Subsidiary may
not be required to accept for payment any Shares tendered hereby.
Unless otherwise indicated under "Special Payment
Instructions", please issue the check for the purchase price of any Shares
purchased, and/or return any certificates for Shares not tendered or not
accepted for payment, in the name(s) of the registered holder(s) appearing
under "Description of Shares Tendered" (and, in the case of Shares tendered by
book-entry transfer, by credit to the account at the Book-Entry Transfer
Facility designated above). Similarly, unless otherwise indicated under
"Special Delivery Instructions", please mail the check for the purchase price
of any Shares purchased and any certificates for Shares not tendered or not
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered" shown below the undersigned's signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares
purchased and return any certificates for Shares not tendered or not accepted
for payment (and accompanying documents, as appropriate) in the name(s) of, and
mail said check and any certificates (and accompanying documents, as
appropriate) to, the person(s) so indicated. The undersigned recognizes that
Merger Subsidiary has no obligation, pursuant to the "Special Payment
Instructions", to transfer any Shares from the name of the registered holder(s)
thereof if Merger Subsidiary does not accept for payment any of the Shares so
tendered.
-5-
<PAGE> 6
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if the check for the purchase To be completed ONLY if the check for the purchase
price of Shares purchased or certificates for price of Shares purchased or certificates for
Shares not tendered or not purchased are to be Shares not tendered or not purchased are to be
issued in the name of someone other than the mailed to someone other than the undersigned or to
undersigned, or if Shares tendered by book-entry the undersigned at an address other than that
transfer that are not purchased are to be returned shown above.
by credit to an account at one of the Book-Entry
Transfer Facilities other than that designated Mail check and/or certificates to:
above.
Name
--------------------------------------------
Issue check and/or certificates to: (Please Print)
Address
-------------------------------------------
Name
----------------------------------------------
(Please Print)
---------------------------------------------------
Address (Include Zip Code)
-------------------------------------------
</TABLE>
- ---------------------------------------------------
(Include Zip Code)
- ---------------------------------------------------
(Taxpayer Identification or
Social Security No.)
/ / Credit unpurchased Shares
tendered by book-entry transfer
to the account set forth below:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number
---------------------------------
-6-
<PAGE> 7
IMPORTANT
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
- -----------------------------------------------------------------------------
Signature(s) of Holder(s) of Shares
- -----------------------------------------------------------------------------
Dated: , 1995
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information.
See Instruction 5.)
Name(s)
-----------------------------------------------------------------------
(Please Print)
- -------------------------------------------------------------------------------
Capacity (full title) (See Instruction 5)
--------------------------------------
Address
-----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.
----------------------------------------------------
Tax Identification or Social Security No.:
-------------------------------------
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED - SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
----------------------------------------------------------
Name
---------------------------------------------------------------------------
Name of Firm
------------------------------------------------------------------
Address
------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.
----------------------------------------------------
Dated: , 1995
-7-
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a bank, broker,
dealer, credit union, savings association or other entity that is a member of a
recognized Medallion Program approved by The Securities Transfer Association,
Inc. (an "Eligible Institution"). Signatures on this Letter of Transmittal
need not be guaranteed (a) if this Letter of Transmittal is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in one of the Book-Entry Transfer Facilities
whose name appears on a security position listing as the owner of Shares)
tendered herewith and such holder(s) have not completed the instruction
entitled "Special Payment Instructions" on this Letter of Transmittal or (b) if
such Shares are tendered for the account of an Eligible Institution. In all
other cases, all signatures on this Letter of Transmittal must be guaranteed by
an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith
or, unless an Agent's Message is utilized, if delivery of Shares is to be made
by book-entry transfer pursuant to the procedure set forth in Section 3 of the
Offer to Purchase. Certificates for all physically delivered Shares, or a
Book-Entry Confirmation of all Shares delivered electronically, as the case may
be, as well as a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) or, in connection with a book-entry transfer, an Agent's
Message, and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth on the front
page of this Letter of Transmittal by the Expiration Date. If a stockholder's
certificate for Shares is not immediately available or time will not permit all
required documents to reach the Depositary by the Expiration Date or the
procedure for book-entry transfer cannot be completed on a timely basis, such
stockholder's Shares may nevertheless be tendered pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant
to such procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by Merger Subsidiary must be
received by the Depositary by the Expiration Date and (c) the certificates for
all physically delivered Shares, or a Book-Entry Confirmation, as well as a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) (or, in the case of a book-entry delivery, an Agent's Message) and any
other documents required by this Letter of Transmittal, must be received by the
Depositary within five trading days on the NASDAQ National Market System after
the date of execution of such Notice of Guaranteed Delivery, all as provided in
Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION
AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF CERTIFICATES FOR SHARES ARE
SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE
TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and
no fractional Shares will be purchased. By executing this Letter of
Transmittal (or facsimile thereof), the tendering stockholder waives any right
to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
-8-
<PAGE> 9
4. Partial Tenders (not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares which are to be tendered in the box entitled "Number of Shares
Tendered". In such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as promptly as practicable following the expiration or
termination of the Offer. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby is held of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names
on different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made, or
Shares not tendered or not purchased are to be returned, in the name of any
person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificates for such Shares. Signature(s) on any such certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Merger Subsidiary of the authority of such
person so to act must be submitted.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6,
Merger Subsidiary will pay any stock transfer taxes with respect to the sale
and transfer of purchased Shares to it or its order pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or Shares not tendered
or not purchased are to be registered in the name of, any person other than the
registered holder(s), or if tendered certificates are registered in the name of
any person other than the person(s) signing this Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
-9-
<PAGE> 10
7. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares not
tendered or not purchased are to be returned, in the name of a person other
than the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer may request
that Shares not purchased be credited to such account at any of the Book-Entry
Transfer Facilities as such Stockholder may designate under "Special Payment
Instructions". If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facilities designated above.
8. Waiver of Conditions. Subject to the terms of the Offer, Merger
Subsidiary reserves the absolute right in its sole discretion to waive any of
the specified conditions of the Offer (other than the Minimum Condition), in
whole or in part, in the case of any Shares tendered.
9. 31% Backup Withholding; Substitute Form W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary
is not provided with the correct TIN, the Internal Revenue Service may subject
the stockholder or other payee to a $50 penalty. In addition, payments that
are made to such stockholder or other payee with respect to Shares purchased
pursuant to the Offer may be subject to 31% backup withholding.
Certain stockholders (including among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, the stockholder must submit a Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
more instructions.
If backup withholding applies, the Depositary is required to withhold
31% of any such payments made to the stockholder or other payee. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld.
If withholding results in an overpayment of taxes, a refund may be obtained
from the Internal Revenue Service, provided that the required information is
given to the Internal Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is
checked, the stockholder or other payee must also complete the Certificate of
Awaiting Taxpayer Identification Number below in order to avoid backup
withholding. Notwithstanding that the box in Part 3 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Depositary will withhold 31% on all payments made prior to the time a properly
certified Taxpayer Identification Number is provided to the Depository.
However, such amounts will be refunded to such Stockholder if a Taxpayer
Identification Number is provided to the Depositary within 60 days.
The stockholder is required to give the Depositary the TIN (e.g.,
social security number or employer identification number) of the record owner
of the Shares or of the last transferee appearing on the transfers attached to,
or endorsed on, the Shares. If the Shares are in more than one name or are
-10-
<PAGE> 11
not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
10. Requests for Assistance or Additional Copies. Requests for assistance
or additional copies of the Offer to Purchase and this Letter of Transmittal
may be obtained from the Information Agent at its address or telephone number
set forth below. Questions may be directed to the Information Agent.
11. Lost, Destroyed or Stolen Certificates. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This
Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost or destroyed certificates have been followed.
12. Acceptance of Tendered Shares. Upon the terms and subject to the
conditions of the Offer, Merger Subsidiary will have accepted for payment (and
thereby purchased) Shares validly tendered and not withdrawn when, as and if
Merger Subsidiary gives oral or written notice to the Depositary of its
acceptance of the tenders of such Shares pursuant to the Offer.
13. Withdrawal Rights. Tendered Shares may be withdrawn only pursuant to
the procedure set forth in Section 4 of the Offer to Purchase.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE COPY HEREOF OR,
IN THE CASE OF A BOOK-ENTRY DELIVERY, AN AGENT'S MESSAGE (TOGETHER WITH
CERTIFICATES FOR, OR A BOOK-ENTRY CONFIRMATION WITH RESPECT TO, TENDERED SHARES
WITH ANY REQUIRED SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS) MUST
BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY, BY THE EXPIRATION DATE.
-11-
<PAGE> 12
PAYER'S NAME: IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C>
PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT Social Security Number or
SUBSTITUTE AND CERTIFY BY SIGNING AND DATING BELOW. Employer Identification Number
FORM W-9
-------------------------------------
PART 2--Certification--Under penalties of perjury, I certify that:
Department of the Treasury (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting
Internal Revenue Service for a number to be issued to me) and
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or
(b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to
Payer's Request for backup withholding as a result of a failure to report all interest or dividends, or (c) the
Taxpayer Identification IRS has notified me that I am no longer subject to backup withholding.
Number ("TIN") Certification Instructions--You must cross out Item (2) above if you have been notified by
the IRS that you are currently subject to backup withholding because of under-reporting
interest or dividends on you tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out such Item (2).
Part 3
-----------
SIGNATURE DATE , 1995
-------------------------- -----------------------------
Awaiting TIN / /
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office,
or (2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by
the time of payment, 31% of all reportable payments made to me will be
withheld, but that such amounts will be refunded to me if I then provide
a Taxpayer Identification Number within sixty (60) days.
Signature Date , 1995
--------------------------- --------------------------
-12-
<PAGE> 13
The Depositary for the Offer is
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission (for By Hand or Overnight Delivery:
P.O. Box 84 eligible financial One State Street
Bowling Green Station institutions only): New York, New York 10004
New York, New York 10274-0084 (212) 858-2611 Attn: Securities Processing Window,
Attn: Reorganization Department Sub-cellar One
To Confirm Facsimile
Transmissions Call:
(212) 858-2103
(call collect)
</TABLE>
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (Collect)
(800) 290-6430 (Toll Free)
-13-
<PAGE> 1
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
LEGENT CORPORATION
This Notice of Guaranteed Delivery, or one substantially in
the form hereof, must be used to accept the Offer (defined below) if (i)
certificates representing shares of Common Stock, $.01 par value per share (the
"Shares") of Legent Corporation, a Delaware corporation (the "Company"), are
not immediately available, (ii) the procedure for book-entry transfer cannot be
completed on a timely basis or (iii) time will not permit all required
documents to reach IBJ Schroder Bank & Trust Company (the "Depositary") prior
to the expiration of the Offer. This Notice of Guaranteed Delivery may be
delivered by hand, facsimile transmission or mail to the Depositary. See
Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission (for By Hand or Overnight Delivery:
P.O. Box 84 eligible financial One State Street
Bowling Green Station institutions only): New York, New York 10004
New York, New York 10274-0084 (212) 858-2611 Attn: Securities Processing Window,
Attn: Reorganization Department Sub-cellar One
To Confirm Facsimile
Transmissions Call:
(212) 858-2103
(call collect)
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA
FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE APPROPRIATE LETTER OF
TRANSMITTAL.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to VR126, Inc., a Delaware
corporation ("Merger Subsidiary") and a wholly-owned subsidiary of Computer
Associates International, Inc., a Delaware corporation, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated June 1,
1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any supplements or amendments thereto, collectively constitute
the "Offer"), receipt of which is hereby acknowledged, _____________ shares of
Common Stock, $.01 par value per share (the "Shares"), of Legent Corporation, a
Delaware corporation, pursuant to the guaranteed delivery procedure set forth
in Section 3 of the Offer to Purchase.
<TABLE>
<S> <C>
Certificate No(s).: Name(s) of Record Holder(s):
(if available)
- --------------------------------------------------- ---------------------------------------------------
- --------------------------------------------------- ---------------------------------------------------
(Please type or print)
(Check one box if Shares will be Address(es):
tendered by book-entry transfer) ----------------------------------------
---------------------------------------------------
/ / The Depository Trust Company (Zip Code)
/ / Midwest Securities Trust Company ---------------------
/ / Philadelphia Depository Trust Company Area Code and Tel. No.:
----------------------------
(Daytime telephone number)
Account Number: Signature(s):
------------------------------------ --------------------------------------
Dated: , 1995
--------------------------------------- ---------------------------------------------------
</TABLE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an Eligible Institution (defined in Section 3
of the Offer to Purchase), hereby (i) represents that the tender of shares
effected hereby complies with Rule 14e-4 under the Securities Exchange Act of
1934, as amended and (ii) guarantees delivery to the Depositary, at one of its
addresses set forth above, of certificates representing the Shares tendered
hereby, in proper form for transfer, or a confirmation of a book-entry transfer
of such Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (defined in Section 3 of the Offer to Purchase), in either case
together with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) or, in the case of a book-entry transfer, an Agent's Message
(defined in Section 2 of the Offer to Purchase), together with any other
documents required by the Letter of Transmittal, all within five trading days
on the NASDAQ National Market System after the date hereof.
<TABLE>
<S> <C>
Name of Firm:
-------------------------------------- ---------------------------------------------------
(Authorized Signature)
Address:
-------------------------------------------
Name:
----------------------------------------------
(Please type or print)
- ---------------------------------------------------
(Zip Code) Title:
---------------------------------------------
Area Code and Tel. No.: Date: , 1995
---------------------------- ---------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
Exhibit (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LEGENT CORPORATION
AT
$47.95 NET PER SHARE
BY
VR126, INC.
a wholly owned subsidiary of
COMPUTER ASSOCIATES INTERNATIONAL, INC.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, JULY 6, 1995, UNLESS THE OFFER IS EXTENDED.
June 1, 1995
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We are enclosing the material listed below in connection with
the offer by VR126, Inc., a Delaware corporation ("Merger Subsidiary") and a
wholly-owned subsidiary of Computer Associates International, Inc., a Delaware
corporation, to purchase all outstanding shares of Common Stock, $.01 par value
per share (the "Shares"), of Legent Corporation, a Delaware corporation (the
"Company"), at $47.95 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in Merger Subsidiary's Offer to Purchase,
dated June 1, 1995 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, together with any supplements or amendments thereto,
collectively constitute the "Offer").
For your information and for forwarding to your clients for
whom you hold Shares registered in your name or in the name of your nominee, we
are enclosing the following documents:
1. Offer to Purchase;
2. Letter of Transmittal for your use and for the
information of your clients;
3. Notice of Guaranteed Delivery to be used to accept
the Offer if the Shares and all other required
documents cannot be delivered to the Depositary by
the Expiration Date (defined in Section 1 of the
Offer to Purchase) or if the procedure for book-entry
transfer cannot be completed by the Expiration Date;
<PAGE> 2
4. A form of letter which may be sent to your clients
for whose accounts you hold Shares registered in your
name or in the name of your nominee, with space
provided for obtaining such clients' instructions
with regard to the Offer;
5. Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9
providing information relating to backup federal
income tax withholding; and
6. Return envelope addressed to IBJ Schroder Bank &
Trust Company, the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON THURSDAY, JULY 6, 1995, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, (i) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) or an
Agent's Message (defined in Section 2 of the Offer to Purchase) in connection
with a book-entry delivery of Shares, and all other required documents should
be sent to the Depositary, and (ii) either certificates representing the
tendered Shares should be delivered to the Depositary, or such Shares should be
tendered by book-entry transfer into the Depositary's account maintained at one
of the Book-Entry Transfer Facilities (described in Section 3 of the Offer to
Purchase), all in accordance with the instructions set forth in the Letter of
Transmittal and the Offer to Purchase.
Merger Subsidiary will not pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent and the
Depositary as described in the Offer to Purchase) for soliciting tenders of
Shares pursuant to the Offer. Merger Subsidiary will, however, upon request,
reimburse brokers, dealers, commercial banks and trust companies for reasonable
and necessary costs and expenses incurred by them in forwarding materials to
their customers. Merger Subsidiary will pay all stock transfer taxes
applicable to its purchase of Shares pursuant to the Offer, subject to
Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be
addressed to, and additional copies of the enclosed materials may be obtained
from, the Information Agent at the addresses and telephone numbers set forth on
the back cover of the Offer to Purchase.
Very truly yours,
VR126, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE
AGENT OF VR126, INC., COMPUTER ASSOCIATES INTERNATIONAL, INC., THE INFORMATION
AGENT OR THE DEPOSITARY OR ANY AFFILIATE OF ANY OF THEM OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM
IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
-2-
<PAGE> 1
Exhibit (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LEGENT CORPORATION
AT
$47.95 NET PER SHARE
BY
VR126, INC.
a wholly owned subsidiary of
COMPUTER ASSOCIATES INTERNATIONAL, INC.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, JULY 6, 1995, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase,
dated June 1, 1995 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer") relating to an offer by VR126, Inc., a
Delaware corporation ("Merger Subsidiary") and a wholly-owned subsidiary of
Computer Associates International, Inc., a Delaware corporation ("Computer
Associates"), to purchase all outstanding shares of Common Stock, $.01 par
value per share (the "Shares"), of Legent Corporation, a Delaware corporation
(the "Company"), at a purchase price of $47.95 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer.
Holders of Shares whose certificates for such Shares are not immediately
available or who cannot deliver their Certificates and all other required
documents to the Depositary, or complete the procedure for book-entry transfer
set forth in Section 3 of the Offer to Purchase, prior to the Expiration Date
(defined in Section 1 of the Offer to Purchase) must tender their Shares
according to the guaranteed delivery procedures set forth in Section 3 in the
Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US
FOR YOUR ACCOUNT.
<PAGE> 2
We request instructions as to whether you wish us to tender
any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $47.95 per Share, net to you in
cash without interest thereon, upon the terms and subject to the conditions set
forth in the Offer.
2. The Board of Directors of the Company has unanimously
determined that the Offer and the transactions contemplated by the Merger
Agreement (defined in the Introduction to the Offer to Purchase) are fair to,
and in the best interests of, the stockholders of the Company, has unanimously
approved the Offer and the transactions contemplated by the Merger Agreement,
and unanimously recommends that the stockholders of the Company accept the
Offer and tender their Shares.
3. The Offer and withdrawal rights expire at 12:00
Midnight, New York City time, on Thursday, July 6, 1995, unless the Offer is
extended. In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or a confirmation of a book-entry transfer of
such Shares as described in Section 2 of the Offer to Purchase), (ii) a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) or an Agent's Message (defined in Section 2 of the Offer to Purchase)
in connection with a book-entry transfer and (iii) any other documents required
by the Letter of Transmittal.
4. The Offer is conditioned upon, among other things,
(i) there being validly tendered by the Expiration Date and not withdrawn a
number of Shares which, together with the Shares then owned by Merger
Subsidiary and Computer Associates, would represent at least a majority of the
Fully Diluted Shares (defined in the Introduction to the Offer to Purchase) and
(ii) the expiration or termination of any applicable antitrust waiting periods.
5. Merger Subsidiary will pay any stock transfer taxes
applicable to the sale of Shares to Merger Subsidiary pursuant to the Offer,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares,
please so instruct us by completing, executing, detaching and returning to us
the instruction form on the detachable part hereof. An envelope to return your
instructions to us is enclosed. If you authorize tender of your Shares, all
such Shares will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded promptly to permit us to submit
a tender on your behalf by the expiration of the Offer. If you do not instruct
us to tender your Shares, they will not be tendered.
The Offer is not being made to, nor will tenders be accepted
from or on behalf of, holders of Shares in any jurisdiction in which the making
of the Offer or acceptance thereof would not be in compliance with the laws of
such jurisdiction.
-2-
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LEGENT CORPORATION
The undersigned acknowledge(s) receipt of your letter and the
enclosed Offer to Purchase, dated June 1, 1995, and the related Letter of
Transmittal, relating to the offer by VR126, Inc., a Delaware corporation and a
wholly-owned subsidiary of Computer Associates International, Inc., a Delaware
corporation, to purchase all outstanding shares of Common Stock, $.01 par value
per share (the "Shares"), of Legent Corporation.
This will instruct you to tender the number of Shares
indicated below held by you for the account of the undersigned, upon the terms
and subject to the conditions set forth in such Offer to Purchase and the
related Letter of Transmittal.
<TABLE>
<S> <C>
Dated: _________________, 1995
----------------------------------------
Number of Shares
to be Tendered ----------------------------------------
_____ Shares* (Signature)
----------------------------------------
Please Print Names(s)
----------------------------------------
Address
---------------------------------
----------------------------------------
Include Zip Code
Area Code and
Telephone No.
---------------------------
Taxpayer Identification
or Social Security No.
------------------
----------------------------------------
</TABLE>
- -------------------------
* Unless otherwise indicated, it will be assumed that all Shares
held by us for your account are to be tendered.
-3-
<PAGE> 1
Exhibit (a)(6)
Contact: Douglas Robinson - CA Investor Relations, (516) 342-2745
Bob Gordon - CA Public Relations, (516) 342-2391
Kathleen Janson - Legent, (703) 708-3890
COMPUTER ASSOCIATES TO ACQUIRE LEGENT CORPORATION
IN LARGEST SOFTWARE DEAL IN HISTORY
AGREEMENT BROADENS CA'S CLIENT/SERVER PORTFOLIO
WHILE EXTENDING ENTERPRISE PRODUCT OFFERINGS
ISLANDIA, NY, May 25, 1995--In the largest software company acquisition in
history, Computer Associates International, Inc. (NYSE: CA) and Legent
Corporation (NASDAQ: LGNT) have entered into a definitive agreement providing
for CA's acquisition of Legent Corporation through a cash tender offer. A
wholly-owned subsidiary of CA will offer to purchase all outstanding shares of
Legent Corporation's common stock at $47.95 per share.
The definitive agreement has been unanimously approved by the Boards of
Directors of both Legent Corporation and CA. General Atlantic, the largest
shareholder of Legent Corporation which holds approximately 10 percent of the
outstanding shares, has pledged its support for the transaction.
A portion of the funds for the acquisition will come from a $2.0 billion credit
facility underwritten by Credit Suisse. Credit Suisse expects to act as agent
for an expanded syndicate of financial institutions to provide on-going support
for the transaction.
"The acquisition of Legent will accelerate the momentum we've built in
client/server computing over the past few years," said CA Chairman and CEO
Charles B. Wang. "We can now offer clients a greater breadth of solutions to
meet their distributed computing challenges. CA's strengths in client/server
technology through such leading products as CA-Unicenter, CA-OpenIngres and
CA-OpenRoad, our extensive distribution channels and Legent's large enterprise
client base provide tremendous opportunities for further growth. We look forward
to integrating Legent's products and resources into the CA family."
"This is a win/win for our shareholders and clients," said Legent Chairman and
CEO Jerre Stead. "We're delighted that our clients can take advantage of CA's
substantial resources and unparalleled track record in delivering
mission-critical solutions. CA's unique client/server product set and global
organization offer outstanding synergistic benefits."
The tender offer, which will commence shortly, will involve the offer to
purchase an amount of shares such that, upon consummation, CA will own at least
a majority of the outstanding shares. It will also be subject to the expiration
or termination of any applicable antitrust waiting period and the receipt of all
regulatory approvals.
<PAGE> 2
Following completion of the tender offer, it is expected that the subsidiary of
CA will be merged into the Legent Corporation and all of the Legent
Corporation's shares not owned by CA will be converted into the right to receive
$47.95 per share in cash.
Computer Associates International, Inc. (NYSE: CA) leads the world in
client/server software. Guided by CA90s open architecture, 7,600 dedicated
employees in 33 countries develop, license and support more than 300 integrated
products that include systems and database management, application development,
financial and manufacturing applications and consumer solutions. The world's
major industrial, government and research organizations depend on CA, whose
fiscal year 1995 revenues exceeded $2.6 billion.
Legent Corporation, headquartered in Herndon, Virginia, is a worldwide supplier
of software and services for the management of distributed computing across the
enterprise.
###
All referenced product names are trademarks of their respective companies.
<PAGE> 1
Exhibit (a)(7)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO
GIVE THE PAYER. -- Social Security numbers have nine digits separated by two
hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits
separated by only one hyphen: i.e. 00-0000000. The table below will help
determine the number to give the payer.
<TABLE>
<CAPTION>
- ---------------------------------------------------------- -----------------------------------------------------------------
Give the SOCIAL SECURITY Give the EMPLOYER IDENTIFICATION
For this type of account: number of -- For this type of account: number of --
- ---------------------------------------------------------- -----------------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 6. A valid trust, estate, or The legal entity (Do not furnish
pension trust the identifying number of the
2. Two or more individuals The actual owner of the personal representative or
(joint account) account or, if combined trustee unless the legal entity
funds, any one of the itself is not designated in the
individuals(1) account title.)(4)
3. Custodian account of a The minor(2)
minor (Uniform Gift to 7. Corporate account The corporation
Minors Act)
8. Religious, charitable, The organization
or educational
4. (a) The usual revocable The grantor-trustee(1) organization account
savings trust account
(grantor is also 9. Partnership The partnership
trustee)
The actual owner(1) 10. Association, club, or The organization
(b) So-called trust other tax-exempt
account that is not a organization
legal or valid trust
under State law 11. A broker or registered The broker or nominee
The owner(3) nominee
5. Sole proprietorship
account 12. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a State
or local government,
school district, or
prison) that receives
agricultural program
payments
- ---------------------------------------------------------- -----------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security
number.
(3) Show the name of the owner. You may also enter your business name.
You may use your Social Security Number or Employer Identification
Number.
(4) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
<TABLE>
<S> <C>
OBTAINING A NUMBER . Payments of tax-exempt interest (including
exempt-interest dividends under section
If you don't have a taxpayer identification number 852).
or you don't know your number, obtain Form SS-5, . Payments described in section 6049(b)(5)
Application for a Social Security Number Card, or to non-resident aliens.
Form SS-4, Application for Employer Identification . Payments on tax-free covenant bonds under
Number, at the local office of the Social Security section 1451.
Administration or the Internal Revenue Service and . Payments made by certain foreign
apply for a number. organizations.
PAYEES EXEMPT FROM BACKUP WITHHOLDING Exempt payees described above should file Form W-9
to avoid possible erroneous backup withholding.
Payees specifically exempted from backup FILE THIS FORM WITH THE PAYER, FURNISH YOUR
withholding on ALL payments include the following: TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON
THE FACE OF THE FORM, AND RETURN IT TO THE PAYER.
. A corporation. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR
. A financial institution. PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
. An organization exempt from tax under
section 501(a), or an individual Certain payments other than interest, dividends,
retirement plan. and patronage dividends, that are not subject to
. The United States or any agency or information reporting, are also not subject to
instrumentality thereof. backup withholding. For details, see the
. A State, the District of Columbia, a regulations under sections 6041, 6041A(a), 6045,
possession of the United States, or any and 6050A.
subdivision or instrumentality thereof.
. A foreign government, a political PRIVACY ACT NOTICE -- Section 6109 requires most
subdivision of a foreign government, or recipients of dividend, interest, or other
any agency or instrumentality thereof. payments to give taxpayer identification numbers
. An international organization or any to payers who must report the payments to IRS.
agency, or instrumentality thereof. IRS uses the numbers for identification purposes.
. A registered dealer in securities or Payers must be given the numbers whether or not
commodities registered in the U.S. or a recipients are required to file tax returns.
possession of the U.S. Payers must generally withhold 31% of taxable
. A real estate investment trust. interest, dividend, and certain other payments to
. A common trust fund operated by a bank a payee who does not furnish a taxpayer
under section 584(a). identification number to a payer. Certain
. An exempt charitable remainder trust, or a penalties may also apply.
non-exempt trust described in section
4947(a)(1). PENALTIES
. An entity registered at all times under
the Investment Company Act of 1940. (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER
. A foreign central bank of issue. IDENTIFICATION NUMBER -- If you fail to furnish
your taxpayer identification number to a payer,
Payments of dividends and patronage dividends not you are subject to a penalty of $50 for each such
generally subject to backup withholding include failure unless your failure is due to reasonable
the following: cause and not to willful neglect.
. Payments to nonresident aliens subject to (2) CIVIL PENALTY FOR FALSE INFORMATION WITH
withholding under section 1441. RESPECT TO WITHHOLDING -- If you make a false
. Payments to partnerships not engaged in a statement with no reasonable basis which results
trade or business in the U.S. and which in no imposition of backup withholding, you are
have at least one nonresident partner. subject to a penalty of $500.
. Payments of patronage dividends where the
amount received is not paid in money. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION
. Payments made by certain foreign -- Falsifying certifications or affirmations may
organizations. subject you to criminal penalties including fines
and/or imprisonment.
Payments of interest not generally subject to
backup withholding include the following: FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
. Payments of interest on obligations issued
by individuals. Note: You may be subject
to backup withholding if this interest is
$600 or more and is paid in the course of
the payer's trade or business and you have
not provided your correct taxpayer
identification number to the payer.
</TABLE>
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<PAGE> 1
Exhibit (a)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated June 1,
1995 and the related Letter of Transmittal and any amendments or supplements
thereto and is being made to all holders of Shares. The Offer is not being made
to, nor will tenders be accepted from or on behalf of, holders of Shares in any
jurisdiction in which the making of the Offer or acceptance thereof would not be
in compliance with the laws of such jurisdiction. In any jurisdiction where the
securities, blue sky or other laws require that the Offer be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of Merger
Subsidiary by one or more registered brokers licensed under the laws of such
jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LEGENT CORPORATION
AT
$47.95 NET PER SHARE
BY
VR126, INC.
A WHOLLY-OWNED SUBSIDIARY OF
COMPUTER ASSOCIATES INTERNATIONAL, INC.
VR126, Inc., a Delaware corporation ("Merger Subsidiary") and a
wholly-owned subsidiary of Computer Associates International, Inc., a Delaware
corporation ("Computer Associates"), is offering to purchase all outstanding
shares of Common Stock, $.01 par value per share (the "Shares"), of Legent
Corporation, a Delaware corporation (the "Company"), at $47.95 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated June 1, 1995 (the "Offer to Purchase") and in the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"). Tendering
stockholders of the Company will not be obligated to pay brokerage fees
-2-
<PAGE> 2
or commissions or, except as set forth in the Letter of Transmittal, transfer
taxes on the purchase of Shares pursuant to the Offer.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
THURSDAY, JULY 6, 1995, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE
BEING VALIDLY TENDERED BY THE EXPIRATION OF THE OFFER AND NOT WITHDRAWN A NUMBER
OF SHARES WHICH, TOGETHER WITH THE SHARES THEN OWNED BY COMPUTER ASSOCIATES AND
MERGER SUBSIDIARY, WOULD REPRESENT AT LEAST A MAJORITY OF THE TOTAL NUMBER OF
OUTSTANDING SHARES ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION") AND (2)
THE EXPIRATION OR TERMINATION OF ANY APPLICABLE ANTITRUST WAITING PERIODS.
The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of May 25, 1995 (the "Merger Agreement"), among the Company,
Computer Associates and Merger Subsidiary, which has been unanimously approved
by the Company's Board of Directors. The Merger Agreement provides, among other
things, that, after consummation of the Offer, and upon the later of (i)
November 6, 1995, provided that as of such date the conditions to the Merger set
forth in the Merger Agreement shall be fulfilled or waived and (ii) the first
business day on which such conditions to the Merger shall be fulfilled or
waived, Merger Subsidiary will be merged into the Company (the "Merger"), with
the Company continuing as the surviving corporation (the "Surviving
Corporation"). Pursuant to the Merger Agreement, at the effective time of the
Merger (the "Effective Time"), each outstanding Share (other than Shares owned
by Computer Associates, Merger Subsidiary or any subsidiary of either of them or
held by the Company as treasury stock (which shall be canceled) or by
stockholders exercising appraisal rights under the Delaware General Corporation
Law) will be converted into the right to receive $47.95 in cash or any higher
price paid for each Share in the Offer, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY
DETERMINED THAT THE OFFER AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER
AGREEMENT ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY, HAS UNANIMOUSLY APPROVED THE OFFER AND THE TRANSACTIONS CONTEMPLATED BY
THE MERGER AGREEMENT, AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE
COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES.
Merger Subsidiary and General Atlantic Group Limited ("General
Atlantic") have entered into a Stockholder Tender Agreement, dated as of May 25,
1995, pursuant to which General Atlantic has agreed, subject to certain
conditions, to tender pursuant to the Offer all Shares owned by it. Further,
General Atlantic has agreed not to withdraw its Shares, subject to applicable
law, unless the Board of Directors of the Company (or any special committee
thereof) withdraws or materially modifies its approval of the Offer, the Merger
or the Merger Agreement. General Atlantic owns 3,651,299 Shares, constituting,
as of May 7, 1995, approximately 10.0% of the outstanding Shares and 8.7% of the
outstanding Shares on a fully diluted basis.
Merger Subsidiary reserves the right, at any time or from time
to time, in its sole discretion and regardless of whether or not any of the
conditions to the Offer have been satisfied (except to the extent otherwise
provided in the Merger Agreement), to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
-2-
<PAGE> 3
Depositary (defined below). Any such extension will be followed as promptly as
practicable by public announcement thereof.
For purposes of the Offer, Merger Subsidiary shall be deemed to
have accepted for payment tendered Shares when, as and if Merger Subsidiary
gives oral or written notice to IBJ Schroder Bank & Trust Company (the
"Depositary") of its acceptance of the tenders of such Shares. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares (or
of a confirmation of a book-entry transfer of such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities (defined in the Offer to
Purchase)), (ii) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) or an Agent's Message (defined in the Offer to Purchase)
in connection with a book-entry transfer and (iii) any other required documents.
Tenders of Shares made pursuant to the Offer may be withdrawn
at any time prior to the expiration of the Offer. Thereafter, such tenders are
irrevocable, except that they may be withdrawn on or after July 31, 1995 unless
theretofore accepted for payment as provided in the Offer to Purchase. If Merger
Subsidiary extends the period of time during which the Offer is open, is delayed
in accepting for payment or paying for Shares or is unable to accept for payment
or pay for Shares pursuant to the Offer for any reason, then, without prejudice
to Merger Subsidiary's rights under the Offer, the Depositary may, on behalf of
Merger Subsidiary, retain all Shares tendered, and such Shares may not be
withdrawn except as otherwise provided in the Offer to Purchase. For a
withdrawal to be effective, a written or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth in the Offer to Purchase and must specify the name of the person who
tendered the Shares to be withdrawn and the number of Shares to be withdrawn. If
the Shares to be withdrawn have been delivered to the Depositary, a signed
notice of withdrawal with (except in the case of Shares tendered by an Eligible
Institution (defined in the Offer to Purchase)) signatures guaranteed by an
Eligible Institution must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered holder (if different from that of
the tendering stockholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at one of
the Book-Entry Transfer Facilities to be credited with the withdrawn Shares.
Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by again following one of the procedures described in the Offer to
Purchase at any time prior to the expiration of the Offer.
The information required to be disclosed by paragraph
(e)(1)(vii) of Rule 14d-6 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
The Company has provided Merger Subsidiary with the Company's
stockholder list and security position listings for the purpose of disseminating
the Offer to holders of Shares. The Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares and will be furnished to
brokers, banks and similar persons whose names, or the names of
-3-
<PAGE> 4
whose nominees, appear on the stockholder list or, if applicable, who are listed
as participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Requests for copies of the Offer to Purchase and the related
Letter of Transmittal and other tender offer materials may be directed to the
Information Agent as set forth below, and copies will be furnished promptly at
Merger Subsidiary's expense. No fees or commissions will be payable by Merger
Subsidiary to brokers, dealers or other persons (other than the Information
Agent) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent is:
D.F. KING & CO., INC.
77 Water Street
New York, New York
10005
(212) 269-5550 (Collect)
1-800-290-6430 (Toll Free)
June 1, 1995
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<PAGE> 1
Exhibit (b)(1)
May 24, 1995
Computer Associates International, Inc.
One Computer Associates Plaza
Islandia, New York 11788
Attention: Mr. Peter Schwartz
Senior Vice President and Chief
Financial Officer
Re: $2 Billion Credit Facility
Commitment Letter
Ladies and Gentlemen:
Computer Associates International, Inc. (the "Borrower") has
advised Credit Suisse ("Credit Suisse") that it intends, directly or indirectly,
to acquire all of the issued and outstanding capital stock of Legent Corporation
(the "Target") pursuant to a merger agreement which has not yet been reviewed by
us, for aggregate consideration of approximately $1.8 billion. We understand
that such acquisition will take the form of a tender offer (the "Tender Offer")
by the Borrower or a wholly-owned subsidiary thereof ("AcquisitionCo") for all
of the issued and outstanding shares of the common stock of the Target (all of
such common stock collectively, the "Shares") and the purchase of the portion of
the Shares tendered pursuant to the Tender Offer (the "Tendered Shares"), which
purchase shall be subject to the condition that not less than a majority of the
Shares (on a fully diluted basis) be tendered pursuant to the Tender Offer. You
have informed us that the Board of Directors of the Target is prepared to
recommend to shareholders of the Target that they tender their Shares pursuant
to the Tender Offer. We further understand that, following the consummation of
the Tender Offer and the acquisition of the Tendered Shares, AcquisitionCo (if
it is not itself the Borrower) will be merged with and into the Target, with the
Target surviving as a wholly owned direct subsidiary of the Borrower (the
"Merger"; collectively with the Tender Offer, the "Acquisition"). You have asked
that Credit Suisse provide up to $2 billion in senior, unsecured credit
facilities (the "Credit Facility") to the Borrower to finance the Acquisition
and to provide financing for other general corporate purposes.
Credit Suisse is pleased to advise you that it commits to
provide the Credit Facility. Although Credit Suisse is committing to provide all
of the Credit Facility on the terms set forth in the Term Sheet described below,
Credit Suisse expects to act as agent for a
<PAGE> 2
syndicate of financial institutions (together with Credit Suisse, the "Lenders")
to provide all or a portion of the Credit Facility.
Attached as Exhibit A to this letter is a Statement of Terms
and Conditions (the "Term Sheet") setting forth the principal terms and
conditions on and subject to which Credit Suisse is willing to make the Credit
Facility available.
It is agreed that Credit Suisse will act as the sole
administrative agent for, and sole arranger and syndication manager of, the
Credit Facility and that no additional agents or co-agents or arrangers will be
appointed without the prior written consent of Credit Suisse. Credit Suisse
does, however, anticipate that a limited number of co-agents will be designated
by Credit Suisse. In addition, Credit Suisse reserves the right to employ the
services of CS First Boston Corporation ("CSFB") in providing the services
contemplated by this letter.
You agree to assist Credit Suisse in forming any such syndicate
and to provide Credit Suisse and the other Lenders, promptly upon request, with
all information reasonably requested by them to complete successfully the
syndication, including, but not limited to, (a) an information package for
delivery to potential syndicate members and participants and (b) all information
and projections prepared by you or your advisers relating to the transactions
described herein. You agree to coordinate any other financings by the Borrower
or any of its affiliates (other than up to $50 million of working capital lines
of credit) with the Lenders' syndication effort and to refrain from any such
financings during such syndication process unless otherwise agreed to by Credit
Suisse. You also agree to use your best efforts to ensure that Credit Suisse's
syndication efforts benefit from your existing lending relationships. You
further agree to make appropriate senior officers and representatives of the
Borrower and its subsidiaries available to participate in information meetings
for potential syndicate members and participants at such times and places as
Credit Suisse may reasonably request. You further agree that Credit Suisse shall
have a reasonable period of time to syndicate the Credit Facility and, in any
event, shall not be obligated to make any advances under the Credit Facility
until the date which is at least 25 business days following the effectiveness of
a definitive merger agreement with respect to the Acquisition (or, in the event
that the information package described above is not distributed to prospective
Lenders within seven days following such effectiveness, the date which is 20
business days following such distribution).
You represent and warrant and covenant that:
(1) all information which has been or is hereafter made
available to Credit Suisse by you or any of your representatives in
connection with the transactions contemplated hereby is and will be
complete and correct in all material respects and does not and will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under
which such statements are made; and
- 2 -
<PAGE> 3
(2) all financial projections that have been or are hereafter
prepared by you and made available to Credit Suisse or any other
participants in the Credit Facility have been or will be prepared in
good faith based upon reasonable assumptions.
You agree to supplement the information and projections referred to in clauses
(1) and (2) above from time to time until completion of the syndication so that
the representations and warranties in the preceding sentence remain correct. In
arranging and syndicating the Credit Facility, Credit Suisse will use and rely
on such information and projections without independent verification thereof.
In connection with the syndication of the Credit Facility,
Credit Suisse may, in its discretion, allocate to other Lenders portions of any
fees payable to Credit Suisse in connection with the Credit Facility. You agree
that no Lender will receive any compensation of any kind for its participation
in the Credit Facility, except as expressly provided for in this letter or in
the Fee Letter referred to below.
We have reviewed certain historical and pro forma financial
statements of the Borrower and the Target. We and our counsel have not had the
opportunity to complete our review of the assets and liabilities (including
contingent liabilities) of the Target and its subsidiaries, their business and
operations and the proposed organization and capital structure of the Borrower
and its subsidiaries after giving effect to Acquisition. Our willingness to
provide the financing described in this letter is subject to our satisfactory
completion of such review and our continuing satisfaction therewith. Our
willingness to provide such financing is further subject to review of the merger
agreement, tender offer documents and other documents relating to the
Acquisition and to our reasonable satisfaction with the terms and conditions
thereof. If our continuing review of materials about the Borrower and its
subsidiaries or the Target and its Subsidiaries discloses information, or we
otherwise discover information not previously disclosed to us, which has had or
could reasonably be expected to have a material adverse effect on the
consolidated financial position of the Borrower and its subsidiaries (after
giving effect to the Merger) or the ability of the Borrower to perform its
obligations under the definitive documentation with respect to the Credit
Facility, we may (in our sole discretion) suggest alternative financing amounts
or structures or decline to participate in the proposed financing. In any such
event, Credit Suisse shall not be responsible or liable for any damages which
may be alleged as a result of its failure, in accordance with the terms of this
letter, to provide the Credit Facility.
Credit Suisse's commitment hereunder is subject to the
condition, among others, that after the date hereof there shall not have
occurred any material change in or material disruption of financial or capital
market conditions that in the reasonable opinion of Credit Suisse materially and
adversely affects the satisfactory syndication of the Credit Facility. In
addition, Credit Suisse's commitment is subject to the negotiation, execution
and delivery prior to August 15, 1995 of definitive documentation with respect
to the Credit Facility satisfactory in form and substance to Credit Suisse and
its counsel. Such documentation shall contain the terms and conditions set forth
in the Term Sheet and such other indemnities, covenants, representations and
warranties, events of default, conditions
- 3 -
<PAGE> 4
precedent and other terms and conditions as shall be satisfactory in all
respects to Credit Suisse. Except to the extent mutually agreed upon or
otherwise set forth herein or in the Term Sheet, the material terms and
conditions of Credit Suisse's commitment hereunder and of the Credit Facility
will be consistent with those contained in the existing Credit Agreement, dated
as of June 21, 1994, of the Borrower.
The reasonable costs and expenses (including, without
limitation, the reasonable fees and expenses of counsel to Credit Suisse and
Credit Suisse's syndication and other reasonable out-of-pocket expenses) arising
in connection with the preparation, execution and delivery of this letter and
the definitive financing agreements shall be for your account. You further agree
to indemnify and hold harmless each Lender (including Credit Suisse) and each
director, officer, employee, affiliate (including, without limitation, CSFB) and
agent thereof (each, an "indemnified person") against, and to reimburse each
indemnified person, upon its demand, for, any losses, claims, damages,
liabilities or other expenses ("Losses") to which such indemnified person may
become subject insofar as such Losses arise out of or in any way relate to or
result from the Acquisition, this letter or the financing contemplated hereby,
including, without limitation, Losses consisting of legal or other expenses
incurred in connection with investigating, defending or participating in any
legal proceeding relating to any of the foregoing (whether or not such
indemnified person is a party thereto); provided that the foregoing will not
apply to any Losses to the extent they result are found by a final decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such indemnified person. Your obligations under this
paragraph shall remain effective whether or not definitive financing
documentation is executed and notwithstanding any termination of this letter.
Neither Credit Suisse nor any other indemnified person shall be responsible or
liable to any other person for consequential damages which may be alleged as a
result of this letter or the financing contemplated hereby.
You acknowledge that Credit Suisse may share with CSFB and such
other affiliates as to which the Borrower may from time to time consent (such
consent not to be unreasonably withheld) any confidential or other information
relating to the Borrower, the Target and their respective subsidiaries and
affiliates. You further acknowledge that any such affiliate of Credit Suisse may
share with Credit Suisse any such information. In either such case, any
confidential information shall remain subject to the customary treatment of
confidential information by Credit Suisse.
You should be aware that Credit Suisse or its affiliates may
from time to time provide financing or other services to parties whose interests
may conflict with yours; however, in accordance with its long-standing policies
to hold in confidence the affairs of our customers, Credit Suisse and its
affiliates will not furnish information obtained from you to any of our other
customers.
The provisions of this letter are supplemented as set forth in
a separate fee letter dated the date hereof from us to you (the "Fee Letter")
and are subject to the terms of such Fee Letter. By executing this letter, you
acknowledge that this letter and the Fee Letter
- 4 -
<PAGE> 5
are the only agreements between you and Credit Suisse with respect to the Credit
Facility and set forth the entire understanding of the parties with respect
thereto. Neither this letter nor the Fee Letter may be changed except pursuant
to a writing signed by each of the parties hereto. This letter shall be governed
by, and construed in accordance with, the laws of the State of New York.
By your acceptance hereof, you agree that neither this letter,
the Fee Letter, nor any of their terms or substance, shall be disclosed,
directly or indirectly, to any other person except to your employees, agents and
advisers who are directly involved in the consideration of this matter or as
disclosure may be compelled to be disclosed in a judicial or administrative
proceeding or as otherwise required by law; provided that you may freely
disclose this letter (but not the Fee Letter), and its terms and substance, at
any time following your acceptance hereof and payment of the any fees specified
in the Fee Letter to be due and payable upon such acceptance.
If you are in agreement with the foregoing, please sign and
return to Credit Suisse the enclosed copies of this letter and the Fee Letter,
together with the acceptance fee referred to therein, no later than 5:00 p.m.,
New York time, on May 26, 1995. This offer shall terminate at such time unless
prior thereto we shall have received signed copies of such letters and payment
of such fee.
We look forward to working with you on this transaction.
Very truly yours,
CREDIT SUISSE
By: /s/ Peter R. Nardin
-----------------------------------
Title: Member of Senior Management
By: /s/ Kristina Catlin
-----------------------------------
Title: Associate
Accepted and agreed to as of
the date first above written:
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By: /s/ Peter A. Schwartz
----------------------------
Title: Senior Vice President
- 5 -
<PAGE> 6
Exhibit A
$2,000,000,000 CREDIT FACILITIES
Statement of Terms and Conditions
May 24, 1995
I. AMOUNT AND TERMS OF THE FACILITY.
Type of Facility: Unsecured, reducing, revolving credit
facility (the "Credit Facility").
Amount: Up to $2 billion at any one time outstanding.
Borrower: Computer Associates International, Inc. (the
"Borrower").
Administrative Agent: Credit Suisse (in such capacity, the
"Administrative Agent").
Availability: Loans (the "Loans") may be made under the
Credit Facility at any time during the period
between the date upon which the definitive
documents with respect to the Credit Facility
are executed (the "Closing Date") and the
fifth anniversary thereof (the "Termination
Date").
The availability of Loans shall be subject to
a minimum drawing amount of $25 million and to
a maximum of 8 Eurodollar tranches at any one
time outstanding.
Maturity: The Termination Date, with annual reductions
of the commitments to provide the Credit
Facility by $250 million on each anniversary
of the Closing Date.
Purpose: To finance (a) the acquisition by the
Borrower or a wholly-owned subsidiary thereof
("AcquisitionCo") of the common stock (the
"Shares") of Legent Corporation (the "Target")
which has been validly tendered pursuant to
the tender offer by AcquisitionCo for all of
the Shares for aggregate consideration of
approximately $1.8 billion (the "Tender
Offer") and the merger of AcquisitionCo with
and into the Target (the "Merger";
collectively with the Tender Offer, the "
Acquisition") and (b) for other general
corporate purposes.
<PAGE> 7
2
II. GENERAL PROVISIONS.
Interest Rate Options: The Borrower may elect that all or a portion
of the Loans bear interest at a rate per annum
equal to:
(a) The higher of (1) the rate of
interest publicly announced by Credit Suisse
as its base lending rate for commercial loans
in US Dollars in the United States and (2) the
federal funds rate from time to time plus 0.5%
(such highest rate, the "Base Rate"; the base
lending rate is not intended to be the lowest
rate charged by Credit Suisse to its
borrowers); or
(b) The rate (grossed-up for reserve
requirements as described herein) at which
eurodollar deposits for one, two, three, six,
nine or twelve months (as selected by the
Borrower) are offered by certain reference
banks (to be mutually agreed upon) to prime
banks in the interbank eurodollar market in
the approximate amount of such reference
bank's share of the relevant loan (the "
Eurodollar Rate") plus the Applicable Margin.
For purposes hereof, the term "Applicable
Margin" initially shall be 42.5 b.p. and,
thereafter, shall be adjusted from time
to time to a margin to be mutually agreed
upon based upon a financial performance test
to be mutually agreed upon.
Interest Payment Dates: In the case of Loans bearing interest based
upon the Base Rate, quarterly in arrears and
on each date principal is due.
In the case of Loans bearing interest based
upon the Eurodollar Rate, on the last day of
each relevant interest period and, in the case
of any interest period longer than three
months on each successive date three months
after the first day of such interest period.
Default Rate: During the continuance of an Event of
Default, outstanding Loans will bear interest
at the rate which is 2% over the rate
otherwise applicable thereto.
Reserve Requirements;
Yield Protection: The rate quoted as the Eurodollar Rate will
be grossed-up for the maximum reserve
requirements prescribed for eurocurrency
liabilities. In addition, the financing
agreements will contain customary provisions
relating to
<PAGE> 8
3
increased costs, capital adequacy protection,
withholding and other taxes and illegality.
Facility Fees: Fees: Initially, 20 b.p. per annum on the
average daily amount of the Credit Facility
(whether or not utilized), subject to
adjustment from time to time to a rate to be
mutually agreed upon based upon a financial
performance test to be mutually agreed upon.
Such facility fees shall be payable quarterly
in arrears.
Rate and Fee Basis: 360 days for actual days elapsed, in the case
of calculation of the Eurodollar Rate and any
rate based upon the Federal Funds Rate;
otherwise, 365/6 days for actual days elapsed.
Optional Prepayments: Without premium or penalty (but subject to
Eurodollar breakage indemnities), in minimum
amounts of $10,000,000.
Reduction of
Commitments: The Borrower will be permitted to reduce
permanently the unutilized portion of the
Credit Facility from time to time in minimum
amounts of $50,000,000. Additionally, the
Borrower shall reduce permanently the
unutilized portion of the Credit Facility to
the extent described above opposite the title
"Maturity".
III. CERTAIN CONDITIONS
Conditions Precedent
to Initial Advances: The availability of the Credit Facilities
will be conditioned upon, among other things,
satisfaction of the following conditions
precedent:
A. The Borrower and its subsidiaries
shall have executed and delivered definitive
financing agreements and related documentation
(including, without limitation, secretary's
certificates, incumbency certificates and
compliance certificates) with respect to the
Credit Facilities satisfactory in form and
substance to the Lenders.
B. The Tender Offer shall have been
consummated pursuant to a merger agreement
(which shall be in full force and effect) and
an offer to purchase and related documentation
satisfactory in form and substance to the
Administrative Agent, and no provision
<PAGE> 9
4
thereof shall have been amended, supplemented,
waived or otherwise modified without the prior
written consent of the Majority Lenders.
C. Not less than a majority (or such
higher number as shall be necessary to permit
the consummation of the Merger without the
affirmative vote of any other shareholder) of
the issued and outstanding Shares (on a fully
diluted basis) shall have been validly
tendered pursuant to the Tender Offer and
accepted for payment by AcquisitionCo.
D. The aggregate price for the Shares
and the fees and expenses of the Borrower in
connection with the transactions contemplated
hereby shall not exceed approximately $1.8
billion.
E. The Lenders shall have received a
satisfactory pro forma balance sheet of the
Borrower and its subsidiaries as at the
Closing Date and after giving effect to the
Acquisition and the financings contemplated
hereby, which pro forma balance sheet shall be
substantially in conformity with that
delivered to the Lenders during syndication.
F. The Lenders shall have received
projected cash flows and income statements for
the period of five years following the Closing
Date, which projections shall be (i) based
upon reasonable assumptions made in good
faith, (ii) reasonably satisfactory to the
Lenders and (iii) substantially in conformity
with those projections delivered to the
Lenders during syndication.
G. The Lenders shall not have become
aware of any materially adverse information
(except to the extent previously disclosed to
the Lenders in writing and consented to
thereby) with respect to (i) the Acquisition,
(ii) the consolidated financial position of
the Borrower and its subsidiaries (after
giving effect to the Merger), or (iii) the
ability of the Borrower to perform its
obligations under the definitive documentation
with respect to the Credit Facility.
H. All governmental and other
approvals necessary, and all material
governmental and other approvals advisable, in
connection with the Acquisition and the Credit
Facility (including, without limitation, any
<PAGE> 10
5
Hart-Scott-Rodino Act procedures) shall have
been obtained and be in full force and effect,
with all waiting periods provided by law
having expired without there being taken or
threatened by any competent authority any
action which could reasonably be expected to
restrain, prevent or otherwise impose material
adverse conditions on the Merger or the
financing thereof.
I. There shall be no litigation,
inquiry, injunction or restraining order
pending, entered or threatened with respect to
the Acquisition or the financing thereof which
could reasonably be expected to have a
material adverse effect on the consolidated
financial position of the Borrower and its
subsidiaries (after giving effect to the
Merger) or the ability of the Borrower to
perform its obligations under the credit
documents with respect to the Credit Facility.
J. The Lenders shall have received
satisfactory legal opinions from counsel to
the Borrower.
K. The Lenders shall have received all
fees and expenses required to be paid or
delivered on or before the Closing Date.
Conditions Precedent to
Subsequent Advances: The making of each extension of credit
(including, without limitation, the initial
advances) will be conditioned upon
satisfaction of the following conditions
precedent:
A. All representations and warranties
in the credit documentation shall be true and
correct in all material respects;
B. There shall be no default or event
of default in existence at the time of, or
after giving effect to the making of, such
advance;
C. The making of such advance shall
not cause the aggregate amount of Loans to
exceed the aggregate amount of the Credit
Facility then in effect.
D. The Administrative Agent shall have
received such other approvals, opinions or
documents as the Administrative Agent or the
Majority Lenders reasonably may request.
<PAGE> 11
6
IV. CERTAIN REPRESENTATIONS, COVENANTS AND EVENTS OF DEFAULT.
The documentation relating to the Credit Facilities will include,
representations and warranties, affirmative and negative covenants and events
of default customary for financings of this type and other terms deemed
appropriate by the Lenders, including, without limitation:
Representations and
Warranties: Due organization and existence; due
authorization of credit documents;
governmental approvals, no conflicts;
enforceability of credit documents; title to
property; compliance with law; no litigation;
no events of default; disclosure of
subsidiaries; accuracy of financial
statements; absence of material adverse
change; compliance with margin and similar
regulations; ERISA plans; not an investment
company; payment of taxes.
Affirmative Covenants: Payment of Taxes and other charges;
maintenance of insurance; preservation of
corporate existence; compliance with laws;
inspection rights; maintenance of books and
records; maintenance of properties; delivery
of quarterly, unaudited financial statements
and annual audited financial statements;
delivery of certain notices and other
information; use of proceeds; consummation of
Merger within 180 days following consummation
of Tender Offer upon the terms of the merger
agreement approved by the Administrative
Agent.
Financial Covenants: Minimum net worth and maximum leverage, with
ratios to be mutually agreed upon.
Negative Covenants: Limitation on liens, guarantees, mergers,
consolidations, sales of assets, capital
leases, indebtedness which is senior
to the Credit Facility; limitation on material
changes in business, fiscal year and
Acquisition documents; limitation on certain
ERISA events; limitation on dividends.
The negative covenants described above shall
be subject to exceptions and "baskets" to be
mutually agreed upon, including, among other
things, to permit receivables financings (with
the proceeds therefrom being applied to reduce
the commitments to provide the Credit
Facility) and to ensure compliance with
Regulation U.
Events of Default: Nonpayment of principal, interest, fees or
other amounts; inaccuracy of representations
and warranties; violation of
<PAGE> 12
7
covenants; cross-default; material judgments;
bankruptcy; appropriation; suspension of
business; invalidity of credit documents;
change of control.
V. CERTAIN OTHER TERMS
Transfer Provisions: The Lenders may at any time with the consent
of the Borrower (which consent shall not be
unreasonably withheld) sell, assign or
otherwise transfer all or any part of, their
Loans, commitments and other rights and duties
to one or more other financial institutions,
subject to a minimum hold and (other than in
the case of an assignment to an existing
Lender) a minimum assignment amount of $10
million. Participations shall be permitted
without restrictions (other than customary
limitations on voting rights of participants),
and participants will have the same benefits
as the Lenders with respect to yield
protection and increased cost provisions.
Governing Law: The State of New York (including submission
to New York jurisdiction and waiver of jury
trial).
Indemnity: The Borrower will indemnify, pay and hold
harmless the Administrative Agent and the
Lenders (and their respective directors,
officers, employees and agents) against any
loss, liability, cost or expense incurred in
respect of the financing contemplated hereby
or the use or the proposed use of proceeds
thereof.
Confidentiality: No Lender shall disclose non-public
information provided to it pursuant to the
credit documents which has been marked
"confidential."
Documentation: To be prepared by Simpson Thacher & Bartlett,
as counsel to the Administrative Agent.
Commitment Termination
Date: Definitive financing agreements and related
documentation must have been entered into by
August 15, 1995.
<PAGE> 1
Exhibit (c)(1)
================================================================================
AGREEMENT AND PLAN OF MERGER
dated as of
May 25, 1995
among
COMPUTER ASSOCIATES INTERNATIONAL, INC.,
VR126, INC.
and
LEGENT CORPORATION
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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ARTICLE I
THE OFFER
<S> <C>
SECTION 1.1. The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Company Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.3. Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
THE MERGER
SECTION 2.1. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.2. Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3. Surrender and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4. Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.5. Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.1. Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.2. Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.3. Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(a) Organization, Standing and Corporate Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(b) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Authority; Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(e) SEC Documents; Financial Statements; No Undisclosed
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(f) Disclosure Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(g) Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(h) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
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<TABLE>
<CAPTION>
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<S> <C>
(i) Absence of Changes in Stock or Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(j) Participation and Coverage in Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(k) ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(l) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(m) State Takeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(n) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(o) Permits; Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(p) Contracts; Debt Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(q) Interests of Officers and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(r) Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(s) Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.2. Representations and Warranties of Parent and Merger Subsidiary . . . . . . . . . . . . . . . . . . . . . . 18
(a) Organization, Standing and Corporate Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Authority; Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Disclosure Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(d) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(e) Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(f) Delaware Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.1. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.2. Stockholder Meeting; Proxy Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.3. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.4. Other Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.5. Fair Price Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VI
COVENANTS OF PARENT
SECTION 6.1. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.2. Obligations of Merger Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.3. Voting of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.4. Director and Officer Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.5. Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
-ii-
<PAGE> 4
<TABLE>
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ARTICLE VII
COVENANTS OF PARENT AND THE COMPANY
<S> <C>
SECTION 7.1. HSR Act Filings; Reasonable Efforts; Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.2. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.1. Conditions to the Obligations of Each Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE IX
TERMINATION
SECTION 9.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 9.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10.2. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 10.3. Amendments; No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 10.4. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 10.5. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 10.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 10.7. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
-iii-
<PAGE> 5
AGREEMENT AND PLAN OF MERGER dated as of May 25, 1995 among
Legent Corporation, a Delaware corporation (the "Company"),
Computer Associates International, Inc., a Delaware corporation
("Parent"), and VR126, Inc., a Delaware corporation and a
wholly owned subsidiary of Parent ("Merger Subsidiary").
The parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1. The Offer. (a) Provided that nothing shall
have occurred that would result in a failure to satisfy any of the conditions
set forth in Annex I hereto, Merger Subsidiary shall, as promptly as practicable
after the date hereof, but in no event later than five business days following
the public announcement of the terms of this Agreement, commence an offer (the
"Offer") to purchase all of the outstanding shares of common stock, $.01 par
value per share (the "Shares"), of the Company at a price of $47.95 per Share,
net to the seller in cash. The Offer shall be subject to the condition that
there shall be validly tendered in accordance with the terms of the Offer prior
to the expiration date of the Offer and not withdrawn a number of Shares which,
together with the Shares then owned by Parent and Merger Subsidiary, represents
at least a majority of the total number of outstanding Shares, assuming the
exercise of all outstanding options, rights and convertible securities (if any)
and the issuance of all Shares that the Company is obligated to issue (such
total number of outstanding Shares being hereinafter referred to as the "Fully
Diluted Shares") (the "Minimum Condition") and to the other conditions set forth
in Annex I hereto. Parent and Merger Subsidiary expressly reserve the right to
waive the conditions to the Offer (other than the Minimum Condition) and to make
any change in the terms or conditions of the Offer; provided that,
without the written consent of the Company, no change may be made which changes
the form of consideration to be paid, decreases the price per Share or the
number of Shares sought in the Offer, imposes conditions to the Offer in
addition to those set forth in Annex I, changes or waives the Minimum Condition,
or makes any other change to any condition to the Offer set forth in Annex I
which is adverse to the holders of Shares. The initial expiration date of the
Offer shall be July 6, 1995. Subject to the terms of the Offer in this Agreement
and the satisfaction (or waiver to the extent permitted by this Agreement) of
all the conditions of the Offer set forth in Annex I hereto as of any expiration
date, Merger Subsidiary shall accept for payment and pay for all Shares validly
tendered and not withdrawn pursuant to the Offer as soon as practicable after
such expiration of the Offer, provided that Merger Subsidiary may extend the
Offer for a period of time of not more than 20 business days to meet the
objective (but not the condition) that there be validly tendered, in accordance
with the terms of the Offer, prior to the expiration date of the Offer (as so
extended) and not withdrawn a number of Shares, which together with Shares then
owned by Parent and Merger Subsidiary, represents at least 90% of the Fully
Diluted Shares. Subject to Section 9.1, if (x) the condition set forth in clause
(ii) of the first paragraph of Annex I is not satisfied as of the date the Offer
would otherwise have expired or (y) Parent and the Company are litigating or
contesting any
<PAGE> 6
administrative or judicial action or proceeding or any Order (defined below in
Section 7.1(b)) pursuant to Section 7.1(b) and any conditions set forth in
paragraph (a) or (b) of Annex I are not satisfied as of the date the Offer would
otherwise have expired, Merger Subsidiary shall extend the Offer from time to
time until the earlier of (i) the consummation of the Offer and (ii) March 29,
1996.
(b) As soon as practicable on the date of commencement of the
Offer, Parent and Merger Subsidiary shall (i) file with the SEC (defined below
in Section 4.1(a)) a Tender Offer Statement on Schedule 14D-l with respect to
the Offer which will contain the offer to purchase and form of the related
letter of transmittal (together with any supplements or amendments thereto,
collectively the "Offer Documents") and (ii) cause the Offer Documents to be
disseminated to holders of Shares. Parent, Merger Subsidiary and the Company
each agrees promptly to correct any information provided by it for use in the
Offer Documents if and to the extent that it shall have become false or
misleading in any material respect. Parent and Merger Subsidiary agree to take
all steps necessary to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws. The Company and its
counsel shall be given an opportunity to review and comment on the Schedule
14D-l prior to its being filed with the SEC.
SECTION 1.2. Company Action. (a) The Company hereby
consents to the Offer and represents that its Board of Directors, at a meeting
duly called and held, has (i) unanimously determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger (defined
below in Section 2.1), are fair to and in the best interest of the Company's
stockholders, (ii) unanimously approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, which approval
satisfies in full the requirements of Section 203 of the General Corporation Law
of the State of Delaware (the "Delaware Law"), and (iii) unanimously resolved to
recommend acceptance of the Offer and approval and adoption of this Agreement
and the Merger by its stockholders. The Company further represents that Lazard
Freres & Co. and Goldman, Sachs & Co. have delivered to the Company's Board of
Directors their opinions that the consideration to be paid in the Offer and the
Merger is fair to the holders of Shares from a financial point of view. The
Company has been advised that all of its directors and executive officers
presently intend either to tender their Shares pursuant to the Offer or to vote
in favor of the Merger. The Company will promptly furnish Parent and Merger
Subsidiary with a list of its stockholders, mailing labels and any available
listing or computer file containing the names and addresses of all record
holders of Shares and lists of securities positions of Shares held in stock
depositories, in each case as of the most recent practicable date, and will
provide to Parent and Merger Subsidiary such additional information (including,
without limitation, updated lists of stockholders, mailing labels and lists of
securities positions) and such other assistance as Parent or Merger Subsidiary
may reasonably request in connection with the Offer.
(b) As soon as practicable on the day that the Offer is
commenced the Company will file with the SEC and disseminate to holders of
Shares a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9") which shall reflect the recommendations of the Company's Board of
Directors referred to above, subject to the fiduciary duties of the Board of
Directors of the Company as advised in writing by Wachtell, Lipton, Rosen &
Katz, counsel to the Company. The Company, Parent and Merger Subsidiary each
agrees promptly to correct any information provided
-2-
<PAGE> 7
by it for use in the Schedule 14D-9 if and to the extent that it shall have
become false or misleading in any material respect. The Company agrees to take
all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Parent and its counsel
shall be given an opportunity to review and comment on the Schedule 14D-9 prior
to its being filed with the SEC.
SECTION 1.3. Directors. (a) Effective upon the acceptance for
payment by Merger Subsidiary of a majority of the Shares pursuant to the Offer,
Parent shall be entitled to designate the number of directors, rounded up to the
next whole number, on the Company's Board of Directors that equals the product
of (i) the total number of directors on the Company's Board of Directors (giving
effect to the election of any additional directors pursuant to this Section) and
(ii) the percentage that the number of Shares owned by Parent or Merger
Subsidiary (including Shares accepted for payment) bears to the total number of
Shares outstanding, and the Company shall take all action necessary to cause
Parent's designees to be elected or appointed to the Company's Board of
Directors, including, without limitation, increasing the number of directors, or
seeking and accepting resignations of incumbent directors, or both; provided
that prior to the Effective Time (defined below in Section 2.1) the Company's
Board of Directors shall always have one member who is neither a designee nor an
affiliate of Parent or Merger Subsidiary nor an employee of the Company (an
"Independent Director"). If the number of Independent Directors is reduced below
one for any reason prior to the Effective Time the departing Independent
Director shall be entitled to designate a person to fill such vacancy. No action
proposed to be taken by the Company to amend or terminate this Agreement or
waive any action by Parent or Merger Subsidiary shall be effective without the
approval of the Independent Director. At such times, the Company will use its
best efforts to cause individuals designated by Parent to constitute the same
percentage as such individuals represent on the Company's Board of Directors of
(x) each committee of the Board, (y) each board of directors of each subsidiary
(defined below in Section 4.1(a)) and (z) each committee of each such board.
(b) The Company's obligations to appoint designees to the Board
of Directors shall be subject to Section 14(f) of the Exchange Act (defined
below in Section 4.1(d)) and Rule 14f-l promulgated thereunder. The Company
shall promptly take all actions required pursuant to Section 14(f) and Rule
14f-l in order to fulfill its obligations under this Section 1.3 and shall
include in the Schedule 14D-9 such information with respect to the Company and
its officers and directors as is required under Section 14(f) and Rule 14f-l to
fulfill its obligations under this Section 1.3. Parent will supply to the
Company in writing and be solely responsible for any information with respect to
itself and its nominees, officers, directors and affiliates required by Section
14(f) and Rule 14f-1.
ARTICLE II
THE MERGER
SECTION 2.1. The Merger. (a) At the Effective Time, Merger
Subsidiary shall be merged (the "Merger") with and into the Company in
accordance with Delaware Law, whereupon
-3-
<PAGE> 8
the separate existence of Merger Subsidiary shall cease, and the Company shall
be the surviving corporation (the "Surviving Corporation").
(b) The closing of the Merger (the "Closing") shall take place
on the later of (i) November 6, 1995, provided that as of which date the
conditions set forth in Article VIII hereof shall be fulfilled or waived in
accordance with this Agreement and (ii) the first business day on which all of
the conditions set forth in Article VIII hereof shall be fulfilled or waived in
accordance with this Agreement. As soon as practicable following the Closing,
the Company and Merger Subsidiary will file a certificate of merger with the
Secretary of State of the State of Delaware and make all other filings or
recordings required by Delaware Law in connection with the Merger. The Merger
shall become effective at such time as the certificate of merger is duly filed
with the Secretary of State of the State of Delaware or, with the consent of the
Independent Director, at such later time as is specified in the certificate of
merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and franchises and
be subject to all of the restrictions, disabilities and duties of the Company
and Merger Subsidiary, all as provided under Delaware Law.
SECTION 2.2. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or owned
by Parent, Merger Subsidiary or any subsidiary of either of them
immediately prior to the Effective Time shall be canceled, and no
payment shall be made with respect thereto;
(b) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and
become one share of common stock of the Surviving Corporation with the
same rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the
Surviving Corporation; and
(c) each Share outstanding immediately prior to the Effective
Time shall, except as otherwise provided in Section 2.2(a) or as
provided in Section 2.4 with respect to Shares as to which appraisal
rights have been exercised, be converted into the right to receive
$47.95 in cash or any higher price paid for each Share in the Offer,
without interest (the "Merger Consideration").
SECTION 2.3. Surrender and Payment. (a) Prior to the
Effective Time, Parent shall appoint a bank or trust company (the "Exchange
Agent") for the purpose of exchanging certificates representing Shares for the
Merger Consideration. Parent will make available to the Exchange Agent, as
needed, the Merger Consideration to be paid in respect of the Shares (the
"Exchange Fund"). For purposes of determining the Merger Consideration to be
made available, Parent shall assume that no holder of Shares will perfect his
right to appraisal of his Shares. Promptly after the Effective Time, Parent will
send, or will cause the Exchange Agent to send, to each holder of Shares at the
Effective Time a letter of transmittal for use in such exchange (which shall
specify that the delivery shall be effected, and risk of loss and title shall
pass, only upon proper delivery of the certificates representing Shares to the
Exchange Agent). The Exchange Agent shall, pursuant to
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irrevocable instructions, make the payments provided in this Section 2.3. The
Exchange Fund shall not be used for any other purpose, except as provided in
this Agreement.
(b) Each holder of Shares that have been converted into a right
to receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares. Until so
surrendered, each such certificate shall, after the Effective Time, represent
for all purposes, only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to
a person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. For purposes of
this Agreement, "person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or any agency or instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time, certificates
representing Shares are presented to the Surviving Corporation, they shall be
canceled and exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this Article II.
(e) Any portion of the Exchange Fund made available to the
Exchange Agent pursuant to Section 2.3(a) that remains unclaimed by the holders
of Shares six months after the Effective Time shall be returned to Parent, upon
demand, and any such holder who has not exchanged his Shares for the Merger
Consideration in accordance with this Section 2.3 prior to that time shall
thereafter look only to Parent for payment of the Merger Consideration in
respect of his Shares. Notwithstanding the foregoing, Parent shall not be liable
to any holder of Shares for any amount paid to a public official pursuant to
applicable abandoned property laws.
(f) Any portion of the Merger Consideration made available to
the Exchange Agent pursuant to Section 2.3(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to Parent, upon demand.
SECTION 2.4. Dissenting Shares. Notwithstanding Section
2.2, Shares outstanding immediately prior to the Effective Time and held by a
holder who has not voted in favor of the Merger or consented thereto in writing
and who has demanded appraisal for such Shares in accordance with Delaware Law
shall not be converted into a right to receive the Merger Consideration, unless
such holder fails to perfect or withdraws or otherwise loses his right to
appraisal. If after the Effective Time such holder fails to perfect or withdraws
or loses his right to appraisal, such Shares shall be treated as if they had
been converted as of the Effective Time into a right to receive the Merger
Consideration. The Company shall give Parent prompt notice of any
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demands received by the Company for appraisal of Shares, and Parent shall have
the right to participate in all negotiations and proceedings with respect to
such demands. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, any such
demands.
SECTION 2.5. Stock Options. (a) Subject to Section
2.5(c), at or immediately prior to the Effective Time, each outstanding Company
Option (defined below) shall be canceled, and each holder of any such option
shall be paid by the Company promptly after the Effective Time for each such
option an amount determined by multiplying (i) the excess, if any, of $47.95 per
Share over the applicable exercise price of such option by (ii) the number of
Shares such holder could have purchased had such holder exercised such option in
full immediately prior to the Effective Time (as if such Company Option was
exercisable in full). "Company Option" means any option granted, whether or not
exercisable, and not exercised or expired, to a current or former employee,
director or independent contractor of the Company or any of its subsidiaries or
any predecessor thereof to purchase Shares pursuant to any stock option, stock
bonus, stock award, or stock purchase plan, program, or arrangement of the
Company or any of its subsidiaries or any predecessor thereof (collectively, the
"Stock Plans") or any other contract or agreement entered into by the Company or
any of its subsidiaries.
(b) Prior to the Effective Time, the Company shall use its best
efforts to (i) obtain any consents from holders of Company Options and (ii) make
any amendments to the terms of such stock option or compensation plans or
arrangements that, in the case of either clauses (i) or (ii), are necessary to
give effect to the transactions contemplated by Section 2.5(a). Notwithstanding
any other provision of this Section 2.5, payment may be withheld in respect of
any Company Option until necessary consents are obtained.
(c) Prior to the Effective Time, the Company shall terminate
the Company's Employee Stock Purchase Plan. Prior to the Effective Time, the
Company shall amend the Company's Retirement Security Plan to permit Employer
Matching Contributions (defined therein) in cash.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.1. Certificate of Incorporation. The certificate of
incorporation of Merger Subsidiary in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law, except that the name of the Surviving
Corporation shall be changed to the name of the Company.
SECTION 3.2. Bylaws. The bylaws of Merger Subsidiary in effect
at the Effective Time shall be the bylaws of the Surviving Corporation until
amended in accordance with applicable law.
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SECTION 3.3. Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and qualified in
accordance with applicable law, (i) the directors of Merger Subsidiary at the
Effective Time shall be the directors of the Surviving Corporation, and (ii) the
officers of the Merger Subsidiary at the Effective Time shall be the officers of
the Surviving Corporation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties of the Company. The
Company represents and warrants to Parent and Merger Subsidiary as follows:
(a) Organization, Standing and Corporate Power. Each of
the Company and each of its Significant Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate power
and authority to carry on its business as now being conducted. Each of the
Company and each of its Significant Subsidiaries is duly qualified or licensed
to do business and is in good standing in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed (individually or in the aggregate) could
not reasonably be expected to have a material adverse effect on the financial
condition, business, or results of operations of the Company and its
subsidiaries taken as a whole except that occurrences due solely to a disruption
of the Company's or its subsidiary's businesses solely as a result of the
announcement of the execution of this Agreement and the transactions proposed to
be consummated by this Agreement shall be excluded from consideration for
purposes of the effect of an action or inaction on the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"). The Company has
delivered to Parent complete and correct copies of its Certificate of
Incorporation and By-Laws and the certificates of incorporation and by-laws of
its Significant Subsidiaries which are incorporated in the United States, in
each case as amended to the date of this Agreement. For purposes of this
Agreement, a "subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person; and a "Significant Subsidiary" means any subsidiary of a person that
constitutes a significant subsidiary of such person within the meaning of Rule
1-02 of Regulation S-X of the Securities and Exchange Commission (the "SEC").
(b) Subsidiaries. Section 4.1(b) of the disclosure
schedule delivered by the Company to Parent and Merger Subsidiary prior to the
execution of this Agreement (the "Disclosure Schedule") lists each subsidiary of
the Company and its respective jurisdiction of incorporation and indicates
whether such subsidiary is a Significant Subsidiary. All the outstanding shares
of capital stock of each such Significant Subsidiary have been validly issued
and are fully paid and nonassessable and are owned by the Company, by another
subsidiary of the Company or by the Company and another such subsidiary, free
and clear of all pledges, claims, liens, charges,
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encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens") and free of any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such capital stock). Except for the capital stock of its subsidiaries, the
Company does not own, directly or indirectly, over $500,000 of capital stock or
other ownership interest in any person except as disclosed in Section 4.1(b) of
the Disclosure Schedule.
(c) Capital Structure. The authorized capital stock of the
Company consists of 100,000,000 Shares and 10,000,000 shares of Preferred Stock,
$.01 par value per share. As of May 7, 1995, (i) 36,340,680 Shares were issued
and outstanding, (ii) no Shares were held by the Company in its treasury or by
any of the Company's subsidiaries, and (iii) 5,662,173 Shares were reserved for
issuance pursuant to the outstanding Company Options. Except as set forth above,
at the time of execution of this Agreement, no shares of capital stock or other
voting securities of the Company are issued, reserved for issuance or
outstanding, except for Shares issued pursuant to outstanding Company Options
and a grant of 50,000 Company Options on May 11, 1995. All outstanding shares of
capital stock of the Company are, and all shares which may be issued pursuant to
the Stock Plans will be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. There are not any
bonds, debentures, notes or other indebtedness or securities of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which shareholders of the Company
may vote. Except as set forth above and in Section 4.1(c) of the Disclosure
Schedule, there are not any securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company or any of its subsidiaries is a party or by which any of them is bound
obligating the Company or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or of any of its subsidiaries or
obligating the Company or any of its subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. There are no outstanding rights,
commitments, agreements, arrangements or undertakings of any kind obligating the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock or other voting securities of the Company or any of
its subsidiaries or any securities of the type described in the two immediately
preceding sentences.
(d) Authority; Noncontravention. The Company has the requisite
corporate power and authority to enter into this Agreement and, except for any
required approval by the Company's stockholders in connection with the
consummation of the Merger, to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate action on the part of the
Company, except for any required approval by the Company's stockholders in
connection with the consummation of the Merger. This Agreement has been duly
executed and delivered by the Company and, assuming this Agreement constitutes a
valid and binding agreement of Parent and Merger Subsidiary, constitutes a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any
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obligation or to loss of a material benefit under, or result in the creation of
any Lien upon any of the properties or assets of the Company or any of its
subsidiaries under, (i) the Certificate of Incorporation or By-Laws of the
Company or the comparable charter or organizational documents of any of its
Significant Subsidiaries, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to the Company or any of its subsidiaries or
their respective properties or assets or (iii) subject to the governmental
filings and other matters referred to in the following sentence, any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to the
Company or any of its subsidiaries or their respective properties or assets
other than, in the case of clause (ii) or (iii) above, any such conflicts,
violations, defaults, rights or Liens that individually or in the aggregate
could not reasonably be expected to (A) have a Material Adverse Effect, (B)
impair the ability of the Company to perform its obligations under this
Agreement or (C) prevent or materially delay consummation of any of the
transactions contemplated by this Agreement. No consent, approval, order or
authorization of, or registration, declaration or filing with or exemption by
(collectively, "Consents") any Federal, state or local government or any court,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity"), is required
by or with respect to the Company or any of its subsidiaries in connection with
the execution and delivery of this Agreement by the Company or the consummation
by the Company of the transactions contemplated by this Agreement, except for
(i) the filing of a certificate of merger in accordance with Delaware Law and
appropriate documents with the relevant authorities of other states in which the
Company is qualified to do business, (ii) the filing of a premerger notification
and report form by the Company under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"), (iii) compliance with any applicable
requirements of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder (the "Exchange Act"), (iv) such notices, filings and
consents as may be required under relevant state property transfer or
environmental laws, and (v) such other consents, approvals, orders,
authorizations, registrations, declarations and filings as (A) may be required
under the laws of any foreign country in which the Company or any of its
subsidiaries conducts any business or owns any property or assets or (B) as to
which the failure to obtain or make could not reasonably be expected to (x) have
a Material Adverse Effect or (y) prevent or materially delay the consummation of
any of the transactions contemplated by this Agreement.
(e) SEC Documents; Financial Statements; No Undisclosed
Liabilities. The Company has filed all required reports, schedules, forms,
statements and other documents with the SEC since October 1, 1991 (the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a 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. The financial
statements of the Company included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates
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thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth in the Company Filed SEC
Documents or on the Disclosure Schedule, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) and there is no existing condition, situation
or set of circumstances which are required by generally accepted accounting
principles to be set forth on a consolidated balance sheet of the Company and
its consolidated subsidiaries or in the notes thereto, except for liabilities
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(f) Disclosure Documents. (i) Each document required to be
filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"), including,
without limitation, the Schedule 14D-9, the proxy or information statement of
the Company (the "Company Proxy Statement"), if any, to be filed with the SEC in
connection with the Merger, and any amendments or supplements thereto will, when
filed, comply as to form in all material respects with the applicable
requirements of the Exchange Act.
(ii) At the time the Company Proxy Statement or any amendment
or supplement thereto is first mailed to stockholders of the Company, at the
time such stockholders vote on adoption of this Agreement and at the Effective
Time, the Company Proxy Statement, as supplemented or amended, if applicable,
will not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. At the
time of the filing of any Company Disclosure Document other than the Company
Proxy Statement and at the time of any distribution thereof, such Company
Disclosure Document will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties contained in this Section
4.1(f)(ii) will not apply to statements or omissions included in the Company
Disclosure Documents based upon information furnished to the Company in writing
by Parent or Merger Subsidiary specifically for use therein.
(iii) The information with respect to the Company or any
subsidiary that the Company furnishes to Parent or Merger Subsidiary in writing
specifically for use in the Offer Documents will not, at the time of the filing
thereof, at the time of any distribution thereof and at the time of the
consummation of the Offer, 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 made therein, in the light of the circumstances
under which they were made, not misleading.
(g) Absence of Certain Changes or Events. Except as disclosed
in the SEC Documents filed and publicly available prior to the date of this
Agreement (the "Company Filed SEC Documents") or in Section 4.1(g) of the
Disclosure Schedule, since December 31, 1994, the Company has conducted its
business only in the ordinary course consistent with past practice, and there
has not been (i) any event, occurrence or development of a state of
circumstances which has had or could reasonably be expected to have a Material
Adverse Effect, (ii) any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with
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respect to any of the Company's capital stock or any repurchase, redemption or
other acquisition by the Company or any of its subsidiaries of any outstanding
shares of capital stock or other securities of the Company or any of its
subsidiaries, (iii) any split, combination or reclassification of any of its
capital stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, (iv) (A) any granting by the Company or any of its subsidiaries
to any current or former director, officer or employee of the Company or any of
its subsidiaries of any material increase in compensation or benefits, except in
the ordinary course of business consistent with past practice or as was required
under employment agreements in effect as of December 31, 1994, (B) any granting
by the Company or any of its subsidiaries to any such director, officer or
employee of any increase in severance or termination pay (including the
acceleration in the exercisability of Company Options or in the vesting of
Shares (or other property) or the provision of any tax gross-up), except as was
required under employment, severance or termination agreements or plans in
effect as of December 31, 1994 which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect, or (C) any entry by
the Company or any of its subsidiaries into any employment, deferred
compensation, severance or termination agreement with any such current or former
director, officer or employee, except in the ordinary course of business
consistent with past practice, (v) any damage, destruction or loss, whether or
not covered by insurance, that has had or could have a Material Adverse Effect,
(vi) any change in accounting methods, principles or practices by the Company or
any of its subsidiaries, except insofar as may have been required by a change in
generally accepted accounting principles, (vii) any amendment of any material
term of any outstanding security of the Company or any of its subsidiaries,
(viii) any incurrence, assumption or guarantee by the Company or any of its
subsidiaries of any material indebtedness for borrowed money, (ix) any creation
or assumption by the Company or any of its subsidiaries of any Lien on any asset
other than in the ordinary course of business consistent with past practice, but
in no event in the amount of more than $1,000,000 for any one transaction or
$5,000,000 in the aggregate, (x) any making of any loan, advance or capital
contributions to or investment in any person other than made in the ordinary
course of business consistent with past practice, but in no event in the amount
of more than $1,000,000 for any one transaction or $5,000,000 in the aggregate
and other than investments in cash equivalents made in the ordinary course of
business consistent with past practice, (xi) any transaction or commitment made,
or any contract or agreement entered into, by the Company or any of its
subsidiaries relating to its assets or business (including the acquisition or
disposition of any assets or the merger or consolidation with any person) or any
relinquishment by the Company or any of its subsidiaries of any contract or
other right, in either case, material to the Company and its subsidiaries taken
as a whole, other than transactions and commitments in the ordinary course of
business consistent with past practice and those contemplated by the Agreement,
but in no event representing commitments on behalf of the Company or any of its
subsidiaries of more than $1,000,000 for any transaction or $5,000,000 for any
series of transactions, (xii) any material labor dispute, other than routine
individual grievances, or any material activity or proceeding by a labor union
or representative thereof to organize any employees of the Company or any of its
subsidiaries, which employees were not subject to a collective bargaining
agreement at September 30, 1994, or any material lockouts, strikes, slowdowns,
work stoppages or threats thereof by or with respect to such employees or (xiii)
any agreement, commitment, arrangement or undertaking by the Company or any of
its subsidiaries to perform any action described in clauses (i) through (xii).
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(h) Litigation. Except as disclosed in the Company Filed SEC
Documents or in Section 4.1(h) of the Disclosure Schedule, there is no suit,
action or proceeding pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its subsidiaries that, individually
or in the aggregate, could reasonably be expected to (i) have a Material Adverse
Effect, (ii) impair the ability of the Company to perform its obligations under
this Agreement or (iii) prevent or materially delay the consummation of the
Offer, the Merger or any of the other transactions contemplated by this
Agreement, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company or any of its
subsidiaries having, or which, insofar as reasonably can be foreseen, in the
future would have, any such effect. Section 4.1(h) of the Disclosure Schedule
sets forth, with respect to any pending suit, action or proceeding to which the
Company or any its subsidiaries is a party and which involves claims which could
reasonably be expected to exceed $2,000,000, the forum, the parties thereto, the
subject matter thereof and the amount of damages claimed.
(i) Absence of Changes in Stock or Benefit Plans. Except as
disclosed in Section 4.1(i) of the Disclosure Schedule or in the Company Filed
SEC Documents, since December 31, 1994, there has not been (i) any acceleration,
amendment or change of the period of exercisability or vesting of any Company
Options or restricted stock, stock bonus or other awards under the Stock Plans
(including any discretionary acceleration of the exercise periods or vesting by
the Company's Board of Directors or any committee thereof or any other persons
administering a Stock Plan) or authorization of cash payments in exchange for
any Company Options or restricted stock, stock bonus or other awards granted
under any of such Stock Plans or (ii) any adoption or amendment by the Company
or any of its subsidiaries of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, stock appreciation
right, retirement, vacation, severance, disability, death benefit,
hospitalization, medical, worker's compensation, disability, supplementary
unemployment benefits, or other plan, arrangement or understanding (whether or
not legally binding) or any employment agreement providing compensation or
benefits to any current or former employee, officer, director or independent
contractor of the Company or any of its subsidiaries or any beneficiary thereof
or entered into, maintained or contributed to, as the case may be, by the
Company or any of its subsidiaries (collectively, "Benefit Plans") which
individually or in the aggregate would have a Material Adverse Effect.
(j) Participation and Coverage in Benefit Plans. Except as
disclosed in writing to Parent prior to the date hereof, there has been no
adoption of, or amendment to, or change in employee participation or coverage
under, any Benefit Plans which would increase materially the expense of
maintaining such Benefit Plans above the level of the expense incurred in
respect thereof for the fiscal year ended on September 30, 1994 in a manner that
would have a Material Adverse Effect.
(k) ERISA Compliance. (i) Section 4.1(k) of the Disclosure
Schedule or the Company Filed SEC Documents contains a list of all "employee
pension benefit plans" (defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), "employee welfare benefit
plans" (defined in Section 3(l) of ERISA) and all other Benefit Plans
maintained, or contributed to, by the Company or any of its subsidiaries or
ERISA affiliates (defined below) for the benefit of any current or former
employees, officers or directors of the Company or
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any of its subsidiaries or ERISA affiliates or under which the Company or any of
its subsidiaries or ERISA affiliates has any liability except where a failure to
list such Benefit Plans would not have a Material Adverse Effect. For purposes
of this Agreement, "ERISA affiliate" of the Company means any person which,
together with the Company or any of its subsidiaries, would be treated as a
single employer under Section 414 of the Internal Revenue Code of 1986, as
amended (the "Code"). The only Benefit Plans which individually or collectively
would constitute an "employee pension benefit plan" defined in Section 3(2) of
ERISA (the "Pension Plans") are identified as such in Section 4.1(k) of the
Disclosure Schedule.
(ii) Each Benefit Plan has been maintained and administered in
compliance in all material respects with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and regulations,
and is, to the extent required by applicable law or contract, fully funded
without having any deficit or unfunded actuarial liability, except where failure
to be so fully funded would not have a Material Adverse Effect. Any Benefit Plan
intended to be qualified under Section 401(a) of the Code has been determined by
the Internal Revenue Service to be so qualified and nothing has occurred to
cause the loss of such qualified status.
(iii) Except as disclosed in the Company Filed SEC Documents,
no Benefit Plan is covered by Title IV of ERISA or Section 412 of the Code.
Neither the Company nor any of its subsidiaries has incurred or expects to incur
any liability under Title IV of ERISA or any liability or penalty under Section
4975 or 4980B of the Code or Section 502(i) of ERISA which in either case would
have a Material Adverse Effect.
(iv) There are no pending or anticipated claims against or
otherwise involving any of the Benefit Plans and no suit, action or other
litigation (excluding claims for benefits incurred in the ordinary course of
Benefit Plan activities) has been brought against or with respect to any Benefit
Plan, in each case, which could reasonably be expected to have a Material
Adverse Effect.
(v) All material contributions, reserves or premium payments,
required to be made as of the date hereof to or with respect to the Benefit
Plans have been made or provided for.
(vi) Except as disclosed in the Company Filed SEC Documents or
as required by law and except for benefits payable to certain former officers
which do not exceed in the aggregate for all such persons $500,000 per year,
neither the Company nor any of its subsidiaries has any obligations for
post-retirement or post-termination health and life benefits under any Benefit
Plan.
(l) Taxes. As used in this Agreement, "tax" or "taxes" shall
include all Federal, state, local and foreign income, property, sales, excise
and other taxes, tariffs or governmental charges or assessments of any nature
whatsoever as well as any interest, penalties and additions thereto. Except as
disclosed in Section 4.1(l) of the Disclosure Schedule:
(i) The Company and each of its subsidiaries have timely filed
all tax returns, statements, reports and forms (collectively, "Returns")
required to be filed with any tax authority and in accordance with all
applicable laws, except where failure to file such Returns, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect. All such Returns are correct and complete except where a failure to be
so could not reasonably be expected to have
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a Material Adverse Effect. All taxes owed by the Company and any of its
subsidiaries (whether or not shown on any tax return) have been paid, except
where failure to pay any such taxes, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. There are no material
Liens on any of the assets of the Company or any of its subsidiaries that arose
in connection with any failure (or alleged failure) to pay any tax.
(ii) The Company and each of its subsidiaries has withheld and
timely paid all taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party except where a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(iii) Except as disclosed in the Company's Form 10-Q for the
quarter ended March 31, 1995, neither the Company nor any of its subsidiaries
expects any authority to assess any additional material taxes against the
Company or any of its subsidiaries for any period for which tax returns have
been filed. No dispute or claim concerning any tax liability of the Company or
any of its subsidiaries which would have a Material Adverse Effect has been
proposed or claimed in writing by any authority.
(iv) Neither the Company nor any of its subsidiaries has waived
any statute of limitations in respect of taxes or agreed to any extension of
time with respect to a tax assessment or deficiency, except where any such
waivers, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(v) Neither the Company nor any of its subsidiaries has filed a
consent pursuant to Section 341(f) of the Code concerning collapsible
corporations. Neither the Company nor any of its subsidiaries is a party to any
tax allocation or sharing agreement which could reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its subsidiaries has any
material liability for the taxes of any person (other than the Company and any
of its subsidiaries that is currently a member of the Company's affiliated group
filing a consolidated federal income tax return) under Treas. Reg. Section
1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.
(vi) Neither the Company nor any of its subsidiaries is
required to include in income any adjustment pursuant to Section 481(a) of the
Code (or similar provisions of other law or regulations) in its current or in
any future taxable period by reason of a change in accounting method; nor does
the Company or any of its subsidiaries have any knowledge that the Internal
Revenue Service (or other taxing authority) has proposed or is considering
proposing, any such change in accounting method, except for any such adjustments
or changes which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. Except as disclosed in Section
4.1(l)(vi) of the Disclosure Schedule or in the Company Filed SEC Documents,
neither the Company nor any of its subsidiaries is a party to any agreement,
contract, or arrangement that, individually or collectively, could give rise to
the payment of any amount (whether in cash or property, including Company Stock)
that would not be deductible pursuant to the terms of Sections 162(a)(1),
162(m), 162(n) or 280G of the Code and could reasonably be expected to have a
Material Adverse Effect.
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<PAGE> 19
(m) State Takeover Statutes. The Board of Directors of the
Company has approved the Offer, the Merger and this Agreement, and such approval
is sufficient to render inapplicable to the Offer, the Merger, this Agreement,
and the transactions contemplated hereby, the provisions of Section 203 of
Delaware Law. To the best of the Company's knowledge, no other "fair price",
"moratorium", "control share acquisition", or other anti-takeover statute or
similar statute or regulation, applies or purports to apply to the Offer, the
Merger, this Agreement, or any of the transactions contemplated hereby.
(n) Brokers. No broker, investment banker, financial advisor or
other person, other than Lazard Freres & Co. and Goldman, Sachs & Co., the fees
and expenses of which will be paid by the Company (and copies of whose
engagement letters and a calculation of the fees that would be due thereunder
has been provided to Parent), is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company or any of its subsidiaries. No such engagement letters obligate the
Company to continue to use their services or pay fees or expenses in connection
with any future transaction.
(o) Permits; Compliance with Laws. Each of the Company and its
subsidiaries has in effect all Federal, state, local and foreign governmental
approvals, authorizations, certificates, filings, franchises, licenses, notices,
permits and rights ("Permits") necessary for it to own, lease or operate its
properties and assets and to carry on its business as now conducted, and there
has occurred no default under any such Permit, except for the absence of Permits
and for defaults under Permits which absence or defaults, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
The Company and its subsidiaries have been, and are, in compliance in all
respects with all applicable statutes, laws, ordinances, regulations, rules,
judgments, decrees or orders of any Governmental Entity, and neither the Company
nor any of its subsidiaries has received any notice from any Governmental Entity
or any other person that either the Company or any of its subsidiaries is in
violation of, or has violated, any applicable statutes, laws, ordinances,
regulations, rules, judgments, decrees or orders, except for noncompliances and
violations, which individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(p) Contracts; Debt Instruments. (i) Except as otherwise
disclosed in Section 4.1(p)(i)(A)-(F) of the Disclosure Schedule, neither the
Company nor any of its subsidiaries is a party to or subject to:
(A) any union contract, or any employment consulting,
severance, termination, or indemnification agreement, contract or
arrangement providing for future payments, written or oral, with any
current or former officer, consultant, director or employee which (1)
exceeds $300,000 per annum or (2) requires aggregate annual payments or
total payments over the life of such agreement, contract or arrangement
to such current or former officer, consultant, director or employee in
excess of $300,000 or $600,000, respectively, and is not terminable by
it or its subsidiary on 30 days' notice or less without penalty or
obligation to make payments related to such termination;
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<PAGE> 20
(B) any joint venture contract or arrangement or any other
agreement which has involved or is expected to involve a sharing of
revenues of $2,000,000 per annum or more with other persons;
(C) any lease for real or personal property in which the
amount of payments which the Company is required to make on an annual
basis exceeds $2,000,000;
(D) any material agreement, contract, policy, license,
Permit, document, instrument, arrangement or commitment which has not
been terminated or performed in its entirety and not renewed which may
be, by its terms, terminated, impaired or adversely affected by reason
of the execution of this Agreement, the closing of the Offer or the
Merger, or the consummation of the transactions contemplated hereby;
(E) any agreement, contract, policy, license, Permit,
document, instrument, arrangement or commitment that materially limits
the freedom of the Company or any subsidiary of the Company to compete
in any line of business or with any person or in any geographic area or
which would so materially limit the freedom of the Company or any
subsidiary of the Company after the Effective Time; or
(F) any other agreement, contract, policy, license,
Permit, document, instrument, arrangement or commitment not made in the
ordinary course of business which is material to the Company and its
subsidiaries taken as a whole.
(ii) Neither the Company nor any subsidiary of the Company is in
default in any material respect under the terms of any exclusive license or
distribution agreement or arrangement that, by its terms, provides for payments
to the Company or any of its subsidiaries of $1,000,000 or more per annum or any
other material license or distribution agreement or arrangement. To the
knowledge of the Company, none of the parties to any of the contracts identified
pursuant to the immediately proceeding sentence, in Section 4.1(p)(i)(A)-(F) of
the Disclosure Schedule or otherwise disclosed in the Company Filed SEC
Documents has terminated, or in any way expressed an intent to materially reduce
or terminate the amount of, its business with the Company or any of its
subsidiaries in the future.
(iii) Set forth in Section 4.1(p)(iii) of the Disclosure Schedule is
(A) a list of all loan or credit agreements, notes, bonds, mortgages, indentures
and other agreements and instruments pursuant to which any indebtedness of the
Company or any of its subsidiaries in an aggregate principal amount in excess of
$2,500,000 is outstanding or may be incurred and (B) the respective principal
amounts currently outstanding thereunder. For purposes of this Section
4.1(p)(iii), "indebtedness" shall mean, with respect to any person, without
duplication, (A) all obligations of such person for borrowed money, or with
respect to deposits or advances of any kind to such person, (B) all obligations
of such person evidenced by bonds, debentures, notes or similar instruments, (C)
all obligations of such person upon which interest charges are customarily paid,
(D) all obligations of such person under conditional sale or other title
retention agreements relating to property purchased by such person, (E) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding obligations of such person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary course of
such person's business),
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<PAGE> 21
(F) all capitalized lease obligations of such person, (G) all obligations of
others secured by any Lien on property or assets owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (H)
all obligations of such person under interest rate or currency swap transactions
(valued at the termination value thereof), (I) all letters of credit issued for
the account of such person (excluding letters of credit issued for the benefit
of suppliers to support accounts payable to suppliers incurred in the ordinary
course of business), (J) all obligations of such person to purchase securities
(or other property) which arises out of or in connection with the sale of the
same or substantially similar securities or property, and (K) all guarantees and
arrangements having the economic effect of a guarantee of such person of any
indebtedness of any other person.
(q) Interests of Officers and Directors. None of the Company's
or any of its subsidiaries' officers or directors has any interest in any
property, real or personal, tangible or intangible, including inventions,
patents, copyrights, trademarks, trade names, trade secrets or know-how, used in
or pertaining to the business of the Company or that of its subsidiaries, or any
supplier, distributor or customer of the Company or any of its subsidiaries,
except for the normal rights of a stockholder and rights under existing employee
benefit plans and except for any such interest which would not be required to be
disclosed under the Exchange Act.
(r) Technology. (i) The Company exclusively owns, or is
licensed to use, without restriction, the rights to all material patents,
trademarks, trade names, service marks, copyrights and any applications
therefor, maskworks, net lists, schematics, inventories, technology, trade
secrets, source codes, know-how, computer software programs or applications and
tangible or intangible proprietary information or material that in any material
respect are used or proposed to be used in the business of the Company and any
of its subsidiaries as currently conducted or proposed to be conducted (the
"Company Intellectual Property Rights"). Section 4.1(r)(i) of the Disclosure
Schedule lists: (A) all material patents, trademarks, trade names, service
marks, registered and unregistered copyrights, and any applications therefor
included in the Company Intellectual Property Rights, together with a list of
all of the Company's currently marketed software products and a list of which,
if any, of such products have been registered for copyright protection with the
United States Copyright Office; and (B) all licenses and other agreements to
which the Company or any of its subsidiaries is a party and pursuant to which
the Company or any of its subsidiaries is authorized to use any Company
Intellectual Property Right, including the identities of the parties thereto.
Neither the Company nor any of its subsidiaries is, or as a result of the
execution, delivery or performance of the Company's obligations hereunder will
be, in violation of, or lose any rights pursuant to, any license or agreement
described in Section 4.1(r)(i) of the Disclosure Schedule.
(ii) Except as disclosed in the Company Filed SEC Documents or
in Section 4(r)(ii) of the Disclosure Schedule, no material claims with respect
to the Company Intellectual Property Rights have been asserted or, to the
knowledge of the Company, are threatened by any person nor does the Company or
any subsidiary of the Company know of any valid grounds for any bona fide claims
(A) to the effect that the manufacture, sale or use of any product or process as
now used or offered or proposed for use or sale by the Company or any subsidiary
of the Company infringes on any copyright, trade secret, patent, tradename or
other intellectual property right of any person, (B) against the use by the
Company or any subsidiary of the Company of any Company Intellectual Property
Rights, or (C) challenging the ownership, validity or effectiveness of any of
the Company Intellectual Property Rights. To the Company's knowledge, all
granted and issued patents
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and all registered trademarks and service marks listed in Section 4.1(r)(i) of
the Disclosure Schedule and all copyrights held by the Company or any of its
subsidiaries are valid, enforceable and subsisting. To the Company's knowledge,
there has not been and there is not any material unauthorized use, infringement
or misappropriation of any of the Company Intellectual Property Rights by any
third party, employee or former employee.
(iii) No material Company Intellectual Property Right is
subject to any outstanding order, judgment, decree, stipulation or agreement
restricting in any manner the licensing thereof by the Company or any of its
subsidiaries. Neither the Company nor any of its subsidiaries has entered into
any agreement to indemnify any other person against any charge of infringement
of any Company Intellectual Property Right, except standard infringement
indemnities agreed to in the ordinary course of business included as part of the
Company's license agreements. Neither the Company nor any of its subsidiaries
has entered into any agreement granting any third party the right to bring
infringement actions with respect to, or otherwise to enforce rights with
respect to, any Company Intellectual Property Right. The Company and its
subsidiaries have the exclusive right to file, prosecute and maintain all
applications and registrations with respect to material Company Intellectual
Property Rights.
(s) Change of Control. Except as disclosed in the Company Filed
SEC Documents or in Section 4.1(s) of the Disclosure Schedule, the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and thereby will not (i) result in any payment (including severance,
unemployment compensation, tax gross-up, bonus or otherwise) becoming due to any
current or former director, employee or independent contractor of the Company or
any of its subsidiaries, from the Company or any of its subsidiaries under any
Stock Plan, Benefit Plan, agreement or otherwise, (ii) materially increase any
benefits otherwise payable under any Stock Plan, Benefit Plan, agreement or
otherwise or (iii) result in the acceleration of the time of payment, exercise
or vesting of any such benefits, in each case, that could reasonably be expected
to have a Material Adverse Effect.
SECTION 4.2. Representations and Warranties of Parent and
Merger Subsidiary. Parent and Merger Subsidiary represent and warrant to the
Company as follows:
(a) Organization, Standing and Corporate Power. Each of Parent
and Merger Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the requisite
corporate power and authority to carry on its business as now being conducted.
(b) Authority; Noncontravention. Parent and Merger Subsidiary
have all requisite corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated by this Agreement. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of Parent and Merger Subsidiary. This Agreement has
been duly executed and delivered by Parent and Merger Subsidiary and, assuming
this Agreement constitutes a valid and binding agreement of the Company,
constitutes a valid and binding obligation of such party, enforceable against
such party in accordance with its terms. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated by this
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Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the properties or
assets of Parent or any of its subsidiaries under, (i) the certificate of
incorporation or by-laws of Parent or Merger Subsidiary or the comparable
charter or organizational documents of any other subsidiary of Parent, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable to
Parent or Merger Subsidiary or their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to Parent, Merger Subsidiary or any other subsidiary of
Parent or their respective properties or assets, other than, in the case of
clause (ii) or (iii), any such conflicts, violations, defaults, rights or Liens
that individually or in the aggregate would not (A) have a material adverse
effect on Parent and its subsidiaries taken as a whole, (B) impair the ability
of Parent and Merger Subsidiary to perform their respective obligations under
this Agreement or (C) prevent the consummation of any of the transactions
contemplated by this Agreement. No Consent is required by or with respect to
Parent, Merger Subsidiary or any other subsidiary of Parent in connection with
the execution and delivery of this Agreement or the consummation by Parent or
Merger Subsidiary, as the case may be, of any of the transactions contemplated
by this Agreement, except for (i) the filing of a certificate of merger in
accordance with Delaware Law and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do business,
(ii) the filing of a premerger notification and report form under the HSR Act,
(iii) compliance with any applicable requirements of the Exchange Act, (iv) such
notices, filings and consents as may be required under relevant state property
transfer or environmental laws and (v) such other consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
the laws of any foreign country in which the Company or any of its subsidiaries
conducts any business or owns any property or assets.
(c) Disclosure Documents. (i) The information with respect to
Parent and its subsidiaries that Parent furnishes to the Company in writing
specifically for use in any Company Disclosure Document will not contain, any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading (A) in the case of the Company Proxy
Statement at the time the Company Proxy Statement or any amendment or supplement
thereto is first mailed to stockholders of the Company, at the time the
stockholders vote on adoption of this Agreement and at the Effective Time, and
(B) in the case of any Company Disclosure Document other than the Company Proxy
Statement, at the time of the filing thereof and at the time of any distribution
thereof.
(ii) The Offer Documents, when filed, will comply as to form in
all material respects with the applicable requirements of the Exchange Act and
will not at the time of the filing thereof, at the time of any distribution
thereof or at the time of consummation of the Offer, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading, provided, that this representation and warranty
will not apply to statements or omissions in the Offer
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<PAGE> 24
Documents based upon information furnished to Parent or Merger Subsidiary in
writing by the Company specifically for use therein.
(d) Brokers. No broker, investment banker, financial advisor or
other person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Parent or Merger
Subsidiary.
(e) Financing. Parent will provide or cause to be provided to
Merger Subsidiary the funds necessary to consummate the Offer and the Merger in
accordance with their terms and the terms of this Agreement.
(f) Delaware Law. As of the date of this Agreement, neither
Parent nor any of its subsidiaries is an "interested stockholder", as such term
is defined in Section 203 of Delaware Law.
ARTICLE V
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 5.1. Conduct of Business. During the period from the
date of this Agreement to the Effective Time, the Company shall, and shall cause
its subsidiaries to, carry on their respective businesses in the ordinary course
in substantially the same manner as heretofore conducted and, to the extent
consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them. Without limiting the generality of the foregoing, during the
period from the date of this Agreement to the Effective Time, the Company shall
not, and shall not permit any of its subsidiaries to, without the prior written
approval of Parent:
(a) (i) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, other than
dividends and distributions by any direct or indirect wholly owned subsidiary of
the Company to its parent, (ii) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock or (iii) purchase,
redeem or otherwise acquire any shares of capital stock of the Company or any of
its subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities (other than in connection
with the exercise of Company Options);
(b) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities (other than the issuance of
Shares upon the exercise of Company Options);
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(c) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents;
(d) mortgage or otherwise encumber or subject to any Lien or,
except in the ordinary course of business consistent with past practice and
pursuant to existing contracts or commitments, sell, lease, license, transfer or
otherwise dispose of any of the Company Intellectual Property Rights or any
other material properties or assets;
(e) make or agree to make any new capital expenditures in
excess of $500,000, except pursuant to commitments outstanding on April 1, 1995;
(f) make any material tax election (unless required by law) or
settle or compromise any material income tax liability;
(g) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice and in accordance with their
terms, or subject to the fiduciary duties of the Board of Directors of the
Company as advised in writing by Wachtell, Lipton, Rosen & Katz, counsel to the
Company, waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which the Company or any of
its subsidiaries is a party;
(h) commence a lawsuit other than (i) for the routine
collection of bills or (ii) in such cases where the Company in good faith
determines that the failure to commence suit would result in a material
impairment of a valuable aspect of the Company's business, provided that the
Company consults with Parent prior to filing such suit;
(i) (i) enter into any employment agreement, (ii) enter into
any customer sale or license agreement with non-standard terms or at discounts
from list prices in excess of 20%; provided that such action with respect to a
customer sale or license agreement that is immaterial in amount and term will
not be deemed to violate this provision if the Company has (A) used its best
efforts to ensure compliance with this provision and (B) taken prompt corrective
action in the event of a violation sufficient to ensure that no similar
violation will occur in the future, (iii) pay commissions to sales employees
except on the basis of executed customer contracts with respect to products
actually delivered to customers, (iv) enter into any contracts or series of
related contracts in excess of $250,000, (v) enter into any customer agreements
providing for product replacements or (vi) make any determination as to amounts
payable under the Company's Incentive Compensation Plan;
(j) authorize any of, or commit or agree to take any of, the
foregoing actions; or
(k) (i) take or agree or commit to take any action that would
make any representation or warranty of the Company hereunder inaccurate in any
material respect at, or as of any time prior to, the Effective Time or (ii) omit
or agree or commit to omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any material respect at any
such time.
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SECTION 5.2. Stockholder Meeting; Proxy Material. The Company
shall cause a meeting of its stockholders (the "Company Stockholder Meeting") to
be duly called and held as soon as reasonably practicable for the purpose of
voting on the approval and adoption of this Agreement and the Merger unless a
vote of stockholders of the Company is not required by Delaware Law. The
Directors of the Company shall, subject to their fiduciary duties as advised in
writing by Wachtell, Lipton, Rosen & Katz, counsel to the Company, recommend
approval and adoption of this Agreement and the Merger by the Company's
stockholders. In connection with such meeting, the Company (i) will promptly
prepare and file with the SEC, will use its best efforts to have cleared by the
SEC and will thereafter mail to its stockholders as promptly as practicable the
Company Proxy Statement and all other proxy materials for such meeting, (ii)
subject to the fiduciary duties of the Board of Directors of the Company as
advised in writing by Wachtell, Lipton, Rosen & Katz, counsel to the Company,
will use its best efforts to obtain the necessary approvals by its stockholders
of this Agreement and the transactions contemplated hereby and (iii) will
otherwise comply with all legal requirements applicable to such meeting.
SECTION 5.3. Access to Information. From the date hereof until
the Effective Time, the Company will give Parent, its counsel, financial
advisors, auditors and other authorized representatives full access (during
normal business hours and upon reasonable notice) to the offices, properties,
books and records of the Company and the subsidiaries, will furnish to Parent,
its counsel, financial advisors, auditors and other authorized representatives
such financial and operating data and other information as such persons may
reasonably request and will instruct the Company's employees, counsel and
financial advisors to cooperate with Parent in its investigation of the business
of the Company and the subsidiaries; provided that no investigation pursuant to
this Section 5.3 shall affect any representation or warranty given by the
Company to Parent hereunder.
SECTION 5.4. Other Offers. Until the termination of this
Agreement, the Company and its subsidiaries and the officers, directors,
employees or other agents of the Company and its subsidiaries will not, directly
or indirectly, (i) take any action to solicit, initiate or encourage any
Acquisition Proposal (defined below) or (ii) subject to the fiduciary duties of
the Board of Directors under applicable law, as advised in writing by Wachtell,
Lipton, Rosen & Katz, counsel to the Company, engage in negotiations with, or
disclose any nonpublic information relating to the Company or any of its
subsidiaries or afford access to the properties, books or records of the Company
or any of its subsidiaries to, any person that has advised the Company that it
may be considering making, or that has made, an Acquisition Proposal, provided,
nothing herein shall prohibit the Company's Board of Directors from taking and
disclosing to the Company's stockholders a position with respect to a tender
offer pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act. The
Company will promptly notify Parent after receipt of any Acquisition Proposal or
any notice that any person is considering making an Acquisition Proposal or any
request for nonpublic information relating to the Company or any of its
subsidiaries or for access to the properties, books or records of the Company or
any of its subsidiaries by any person that has advised the Company that it may
be considering making, or that has made, an Acquisition Proposal and will keep
Parent fully informed of the status and details of any such Acquisition
Proposal, notice or request. For purposes of this Agreement, "Acquisition
Proposal" means any offer or proposal for, or any indication of interest in, a
merger or other business combination involving the Company or any of its
subsidiaries or the acquisition of any significant equity interest in, or a
significant portion
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of the assets of, the Company or any of its subsidiaries, other than the
transactions contemplated by this Agreement.
SECTION 5.5. Fair Price Structure. If any "fair price",
"control share acquisition" or "moratorium" statute or other similar statute or
regulation or any state "blue sky" statute shall become applicable to the
transactions contemplated hereby, the Company and the members of the Board of
Directors of the Company shall grant such approvals and take such actions as are
necessary so that the transactions contemplated hereby and thereby may be
consummated as promptly as practicable on the terms contemplated hereby and
thereby and otherwise act to minimize the effects of such statute or regulation
on the transactions contemplated hereby or thereby.
ARTICLE VI
COVENANTS OF PARENT
Parent agrees that:
SECTION 6.1. Confidentiality. Prior to the Effective Time and
after any termination of this Agreement Parent will hold, and will use its best
efforts to cause its officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence, unless compelled to
disclose by judicial or administrative process or by other requirements of law,
all confidential documents and information concerning the Company and its
subsidiaries furnished to Parent in connection with the transactions
contemplated by this Agreement, including, without limitation, the stockholder
lists furnished by the Company pursuant to Section 1.2, except to the extent
that such information can be shown to have been (i) previously known on a
nonconfidential basis by Parent, (ii) in the public domain through no fault of
Parent or (iii) later lawfully acquired by Parent from sources other than the
Company; provided that Parent may disclose such information to its officers,
directors, employees, accountants, counsel, consultants, advisors and agents in
connection with the transactions contemplated by this Agreement and to its
lenders in connection with obtaining the financing for the transactions
contemplated by this Agreement so long as such persons are informed by Parent of
the confidential nature of such information and are directed by Parent to treat
such information confidentially. Parent's obligation to hold any such
information in confidence shall be satisfied if it exercises the same care with
respect to such information as it would take to preserve the confidentiality of
its own similar information. If this Agreement is terminated, Parent will, and
will use its best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to, destroy or deliver to
the Company, upon request, all documents and other materials, and all copies
thereof, obtained by Parent or on its behalf from the Company in connection with
this Agreement that are subject to such confidence.
SECTION 6.2. Obligations of Merger Subsidiary. Parent will take
all action necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Offer and the Merger on the terms and
conditions set forth in this Agreement.
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SECTION 6.3. Voting of Shares. Parent agrees to make a quorum
and vote all Shares acquired in the Offer or otherwise beneficially owned by it
in favor of adoption of this Agreement at the Company Stockholder Meeting.
SECTION 6.4. Director and Officer Liability. For six years
after the Effective Time, Parent will cause the Surviving Corporation to
indemnify and hold harmless the present and former officers, directors,
employees and agents of the Company (the "Indemnified Parties") in respect of
acts or omissions occurring on or prior to the Effective Time to the extent
provided under the Company's certificate of incorporation and bylaws in effect
on the date hereof; provided that such indemnification shall be subject to any
limitation imposed from time to time under applicable law. For six years after
the Effective Time, Parent will cause the Surviving Corporation to use its best
efforts to provide officers' and directors' liability insurance in respect of
acts or omissions occurring on or prior to the Effective Time covering each such
person currently covered by the Company's officers' and directors' liability
insurance policy on terms substantially similar to those of such policy in
effect on the date hereof, provided that in satisfying its obligation under this
Section, Parent shall not be obligated to cause the Surviving Corporation to pay
premiums in excess of 105% of the amount per annum the Company paid in its last
full fiscal year, which amount has been disclosed to Parent and if the Surviving
Corporation is unable to obtain the insurance required by this Section 6.4, it
shall obtain as much comparable insurance as possible for an annual premium
equal to such maximum amount. Without limitation of the foregoing, in the event
any such Indemnified Party is or becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter relating to the
Merger, the Offer or this Agreement occurring on or prior to the Effective Time,
Parent shall cause the Surviving Corporation to pay as incurred such Indemnified
Party's reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith.
SECTION 6.5. Employees. (a) Parent agrees to honor in
accordance with their terms all Benefit Plans previously delivered to Parent and
all accrued benefits vested thereunder; it being understood and agreed that
nothing in this Section 6.5(a) shall prevent Parent from terminating any such
Benefit Plan in accordance with its terms. For purposes of this Section 6.5(a),
any Benefit Plan that is a Company Filed SEC Document shall be deemed to have
been delivered to Parent.
(b) Parent agrees to provide employees of the Company and its
subsidiaries retained by Parent with employee benefits in the aggregate no less
favorable than those benefits provided to Parent's similarly situated employees;
provided that Parent shall be under no obligation to retain any employee or
group of employees of the Company or its subsidiaries.
(c) Parent agrees to provide severance benefits to any employee
of the Company or its subsidiaries who suffers a qualifying termination of
employment prior to July 1, 1996 in an amount equal to the greater of (i) two
months of base salary and (ii) one month of base salary plus one additional
month of base salary for each full year of service with the Company or its
subsidiaries. Such severance benefits shall be offset by any amounts statutorily
required to be paid in lieu of, or following, notice. In the case of any
employee of the Company or its subsidiaries located outside the United States
who suffers a qualifying termination of employment prior to July 1, 1996, Parent
agrees to provide severance benefits in an amount equal to the greater of (i)
the
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amount such employee would be entitled to pursuant to the immediately preceding
sentence and (ii) the amount required to be paid pursuant to applicable law.
(d) Parent agrees not to terminate the employees of the Company
listed on Section 6.5 of the Disclosure Schedule hereto prior to the Closing and
pay such employees compensation as provided in any employment agreement to which
they are a party. To the extent that any such employee would be entitled to
receive severance benefits in accordance with Section 6.5(c), the amount of such
severance benefits shall be reduced by the total salary received by such
employee during the period from the date a notice of termination is given to the
employee to the date following the Effective Time on which the employee's
employment is terminated.
(e) The provisions of this Section 6.5 (other than Section
6.5(b)) are intended to be for the benefit of the individuals or classes of
individuals named therein and shall be enforceable by them.
ARTICLE VII
COVENANTS OF PARENT AND THE COMPANY
The parties hereto agree that:
SECTION 7.1. HSR Act Filings; Reasonable Efforts; Notification.
(a) Each of Parent and the Company shall (i) promptly make or cause to be made
the filings required of such party or any of its subsidiaries under the HSR Act
with respect to the transactions contemplated by this Agreement, (ii) comply at
the earliest practicable date with any request under the HSR Act for additional
information, documents, or other material received by such party or any of its
subsidiaries from the Federal Trade Commission or the Department of Justice or
any other Governmental Entity in respect of such filings or such transactions,
and (iii) cooperate with the other party in connection with any such filing and
in connection with resolving any investigation or other inquiry of any such
agency or other Governmental Entity under any Antitrust Laws (defined below)
with respect to any such filing or any such transaction. Each party shall
promptly inform the other party of any communication with, and any proposed
understanding, undertaking, or agreement with, any Governmental Entity regarding
any such filings or any such transaction. Neither party shall participate in any
meeting with any Governmental Entity in respect of any such filings,
investigation, or other inquiry without giving the other party notice of the
meeting and, to the extent permitted by such Governmental Entity, the
opportunity to attend and participate.
(b) Each of Parent and the Company shall use all reasonable
efforts to resolve such objections, if any, as may be asserted by any
Governmental Entity with respect to the transactions contemplated by this
Agreement under the HSR Act, the Sherman Act, as amended, the Clayton Act, as
amended, the Federal Trade Commission Act, as amended, and any other Federal,
state or foreign statutes, rules, regulations, orders or decrees that are
designed to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade (collectively, "Antitrust Laws"). In
connection therewith, if any administrative or judicial action or proceeding is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative
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of any Antitrust Law, each of Parent and the Company shall cooperate and use all
reasonable efforts vigorously to contest and resist any such action or
proceeding and to have vacated, lifted, reversed, or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or permanent
(each an "Order"), that is in effect and that prohibits, prevents, or restricts
consummation of the Merger or any such other transactions, unless by mutual
agreement Parent and the Company decide that litigation is not in their
respective best interests. Notwithstanding the provisions of the immediately
preceding sentence, it is expressly understood and agreed that Parent shall have
no obligation to litigate or contest any administrative or judicial action or
proceeding or any Order beyond March 29, 1996. Each of Parent and the Company
shall use all reasonable efforts to take such action as may be required to cause
the expiration of the notice periods under the HSR Act or other Antitrust Laws
with respect to such transactions as promptly as possible after the execution of
this Agreement.
(c) Subject to the fiduciary duties of the Board of Directors
of the Company as advised in writing by Wachtell, Lipton, Rosen & Katz, counsel
to the Company, each of the parties agrees to use all reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Offer, the Merger, and the other transactions
contemplated by this Agreement, including (i) the obtaining of all other
necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all other necessary registrations and
filings (including other filings with Governmental Entities, if any), (ii) the
obtaining of all necessary consents, approvals or waivers from third parties,
(iii) the preparation of the Company Disclosure Documents and the Offer
Documents, and (iv) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by, and to fully carry out
the purposes of, this Agreement.
(d) Notwithstanding anything to the contrary in Section 7.1(a),
(b) or (c), (i) neither Parent nor any of its subsidiaries shall be required to
divest any of their respective businesses, product lines or assets, or to take
or agree to take any other action or agree to any limitation that could
reasonably be expected to have a material adverse effect on the business,
assets, financial condition, results of operations or prospects of Parent and
its subsidiaries taken as a whole or of Parent combined with the Surviving
Corporation after the Effective Time, (ii) neither the Company nor its
subsidiaries shall be required to divest any of their respective businesses,
product lines or assets, or to take or agree to take any other action or agree
to any limitation that could reasonably be expected to have a Material Adverse
Effect, (iii) no party shall be required to agree to the imposition of, or to
comply with, any condition, obligation or restriction on Parent or any of its
subsidiaries or on the Surviving Corporation or any of its subsidiaries of the
type referred to in clause (a) or (b) of Annex I and (iv) neither Parent nor
Merger Subsidiary shall be required to waive any of the conditions to the Offer
set forth in Annex I or any of the conditions to the Merger set forth in Section
VIII.
(e) The Company shall give prompt notice to Parent of (i) any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate in any respect or (ii) the failure by it to comply with or
satisfy in any respect any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement; provided, however, that no such
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<PAGE> 31
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
(f) The Company shall give prompt notice to Parent, and Parent
or Merger Subsidiary shall give prompt notice to the Company, of:
(i) any notice or other communication from any person
alleging that the consent of such person is or may be required in
connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any
Governmental Entity in connection with the transactions contemplated by
this Agreement; and
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge threatened
against, relating to or involving or otherwise affecting it or any of
its subsidiaries which, if pending on the date of this Agreement would
have been required to have been disclosed pursuant to Section 4.1(g),
4.1(h), 4.1(k) or 4.1(l) or which relate to the consummation of the
transactions contemplated by this Agreement.
SECTION 7.2. Public Announcements. Parent and Merger
Subsidiary, on the one hand, and the Company, on the other hand, will consult
with each other before issuing, and provide each other the opportunity to review
and comment upon, any press release or other public statements with respect to
the transactions contemplated by this Agreement and the Stockholder Tender
Agreement dated as of May 25, 1995 (the "Stockholder Agreement") among certain
stockholders of the Company and Merger Subsidiary, including the Offer and the
Merger, and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
law, court process or by obligations pursuant to any listing agreement with any
national securities exchange or with the NASD. The parties agree that the
initial press release to be issued with respect to the transactions contemplated
by this Agreement and the Stockholder Agreement will be in the form previously
agreed to by the parties.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following conditions:
(i) if required by Delaware Law, this Agreement shall have been
adopted by the stockholders of the Company in accordance with such Law;
(ii) any applicable waiting period under the HSR Act relating
to the Merger shall have expired;
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(iii) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation
of the Merger;
(iv) Parent or Merger Subsidiary shall have purchased Shares in
an amount equal to at least the Minimum Condition pursuant to the
Offer; and
(v) other than the filing of the certificate of merger in
accordance with Delaware Law, all Consents required to permit the
consummation of the Merger including those set forth in Sections 4.1(d)
and 4.2(b) shall have been filed, occurred or been obtained (other than
any such Consents the failure to file, occur or obtain, in the
aggregate, could not reasonably be expected to (i) have a Material
Adverse Effect or (ii) prevent or materially delay the consummation of
the Merger).
ARTICLE IX
TERMINATION
SECTION 9.1. Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(i) by mutual written consent of the Company and
Parent;
(ii) by either the Company or Parent, if the Merger
has not been consummated by November 30, 1995 (or, if the Offer shall
have been extended by Merger Subsidiary pursuant to the last sentence
of Section 1.1(a), by the earlier of (i) the 90th day following the
consummation of the Offer and (ii) June 30, 1996) (provided that the
party seeking to terminate the Agreement shall not have breached its
obligations under this Agreement in any material respect);
(iii) by either the Company or Parent, if there shall
be any law or regulation that makes consummation of the Merger illegal
or otherwise prohibited or if any judgment, injunction, order or decree
enjoining Parent or the Company from consummating the Merger is entered
and such judgment, injunction, order or decree shall become final and
nonappealable;
(iv) by either the Company or Parent, (x) if Parent
shall have failed to commence the Offer within five business days
following the date of this Agreement (provided, however, that Parent
shall not be entitled to terminate this Agreement pursuant to this
sub-clause (x) as a result of its breach of this Agreement), (y) if
Parent or Merger Subsidiary shall not have purchased any Shares
pursuant to the Offer prior to September 15, 1995 (or, if the Offer
shall have been extended by Merger Subsidiary pursuant to the last
sentence of Section 1.1(a), on or prior to March 29, 1996) or (z) if
the Offer shall have been terminated without Parent or Merger
Subsidiary having purchased any Shares pursuant to the Offer;
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(v) by Parent, upon the occurrence of any Trigger Event
described in clauses (i) through (iii) of Section 10.4(b); or
(vi) by the Company, upon the occurrence of any Trigger
Event described in clause (i) of Section 10.4(b).
SECTION 9.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 9.1, this Agreement shall become void and of no
effect with no liability on the part of any party hereto or their respective
officers and directors, except that the agreements contained in Sections 6.1,
10.4 and 10.6 shall survive the termination hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy or
similar writing) and shall be given,
if to Parent or Merger Subsidiary, to:
Computer Associates International, Inc.
One Computer Associates Plaza
Islandia, New York 11788-7000
Telecopy: (516) 342-3300
Attention: Sanjay Kumar
President and Chief Operating Officer
with a copy to: Scott F. Smith
Howard, Darby & Levin
1330 Avenue of the Americas
New York, New York 10019
Telecopy: (212) 841-1010
if to the Company, to:
Legent Corporation
575 Herndon Parkway
Herndon, Virginia 22070-5226
Telecopy: (703) 708-3900
Attention: Jerre Stead
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<PAGE> 34
with a copy to: Barry A. Bryer
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Telecopy: (212) 403-2000
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective when delivered at the address specified
in this Section.
SECTION 10.2. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement except for the
representations, warranties and agreements set forth in Sections 6.1, 10.4 and
10.6.
SECTION 10.3. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company, Parent and Merger Subsidiary or in the case of a waiver, by the
party against whom the waiver is to be effective; provided that after the
adoption of this Agreement by the stockholders of the Company, no such amendment
or waiver shall, without the further approval of such stockholders, alter or
change (i) the amount or kind of consideration to be received in exchange for
any shares of capital stock of the Company, (ii) any term of the certificate of
incorporation of the Surviving Corporation or (iii) any of the terms or
conditions of this Agreement if such alteration or change would adversely affect
the holders of any shares of capital stock of the Company.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 10.4. Fees and Expenses.
(a) Except as otherwise provided in this Section, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
(b) The Company agrees to pay the Parent a fee in immediately
available funds, promptly, but in no event later than two business days, after
the termination of this Agreement as a result of the occurrence of any of the
events set forth below (a "Trigger Event") in an amount equal to (x)
$45,000,000, in the case of the occurrence of a Trigger Event described in
clause (i) or (iii) below and (y) $20,000,000, in the case of the occurrence of
a Trigger Event described in clause (ii) below:
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(i) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or an
agreement in principle with respect to any Acquisition Proposal;
(ii) any representation or warranty made by the Company
in, or pursuant to, this Agreement that is qualified as to materiality
shall not have been true and correct when made or at any time prior to
the consummation of the Offer as if made at and as of such time, or any
representation or warranty made by the Company in, or pursuant to, this
Agreement that is not so qualified shall not have been true and correct
in all material respects when made or at any time prior to the
consummation of the Offer as if made at and as of such time, or the
Company shall have failed to observe or perform in any material respect
any of its obligations under this Agreement; or
(iii) the Board of Directors of the Company (or a special
committee thereof) shall have withdrawn or materially modified its
approval or recommendation of the Offer, the Merger or this Agreement.
(c) If this Agreement is terminated as a result of the
occurrence of a Trigger Event, the Company shall assume and pay, or reimburse
Parent for, all reasonable fees payable and expenses incurred by Parent
(including the fees and expenses of its counsel and the fees and expenses of
institutions that are considering making or have made a commitment to provide
financing for the transactions contemplated hereby) in connection with this
Agreement and the transactions contemplated hereby, up to a maximum of
$5,000,000.
SECTION 10.5. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto except that Merger
Subsidiary may transfer or assign, in whole or from time to time in part, to one
or more of Parent or any of its wholly-owned subsidiaries, the right to purchase
Shares pursuant to the Offer, but any such transfer or assignment will not
relieve Merger Subsidiary of its obligations under the Offer or prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
SECTION 10.6. Governing Law. This Agreement shall be construed
in accordance with and governed by the law of the State of New York, except that
the consummation and effectiveness of the Merger shall be governed by, and
construed in accordance with, Delaware Law.
SECTION 10.7. Counterparts; Effectiveness; Interpretation. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each party
hereto shall have received counterparts hereof signed by all of the other
parties hereto. When a reference is made in this Agreement to a Section, such
reference shall be to a Section of this Agreement unless otherwise indicated.
The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or
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<PAGE> 36
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
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<PAGE> 37
The parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
LEGENT CORPORATION
By /s/ Jerre Stead
-------------------------------------
Title:
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By /s/ Sanjay Kumar
-------------------------------------
Title:
VR126, INC.
By /s/ Sanjay Kumar
-------------------------------------
Title:
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<PAGE> 38
ANNEX I
Notwithstanding any other provision of the Offer, Parent and
Merger Subsidiary shall not be required to accept for payment or pay for any
Shares, and may terminate the Offer, if (i) by the expiration of the Offer, the
Minimum Condition shall not have been satisfied, (ii) by the expiration of the
Offer, the applicable waiting period under the HSR Act shall not have expired or
been terminated, or (iii) at any time on or after May 25, 1995 and prior to the
acceptance for payment of Shares, any of the following conditions exist:
(a) there shall be instituted or pending any action or
proceeding by any Governmental Entity, (i) challenging or seeking to
make illegal, to delay materially or otherwise directly or indirectly
to restrain or prohibit the making of the Offer, the acceptance for
payment of or payment for some of or all the Shares by Parent or Merger
Subsidiary or the consummation by Parent or Merger Subsidiary of the
Merger, seeking to obtain material damages or otherwise directly or
indirectly relating to the transactions contemplated by this Agreement,
the Offer or the Merger, (ii) seeking to restrain or prohibit Parent's
or Merger Subsidiary's ownership or operation (or that of their
respective subsidiaries or affiliates) of all or any material portion
of the business or assets of the Company and its subsidiaries, taken as
a whole, or of Parent and its subsidiaries, taken as a whole, or to
compel Parent or any of its subsidiaries or affiliates to dispose of or
hold separate all or any material portion of the business or assets of
the Company and its subsidiaries, taken as a whole, or of Parent and
its subsidiaries, taken as a whole, (iii) seeking to impose material
limitations on the ability of Parent or any of its subsidiaries or
affiliates effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote any Shares
acquired or owned by Parent or any of its subsidiaries or affiliates on
all matters properly presented to the Company's stockholders, (iv)
seeking to require divestiture by Parent or any of its subsidiaries or
affiliates of any Shares, or (v) that otherwise, in the judgment of
Parent, is likely to materially adversely affect the business,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, or Parent and its subsidiaries, taken
as a whole; or
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to this Agreement, the Offer
or the Merger, by any Governmental Entity or arbitrator other than the
application of the waiting period provisions of the HSR Act to this
Agreement, the Offer or the Merger, that, in the judgment of Parent, is
likely, directly or indirectly, to result in any of the consequences
referred to in clauses (i) through (v) of paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any
development shall have occurred or been threatened involving a
prospective change) in the business, financial condition or results of
operations of the Company or any of its subsidiaries that, in the
reasonable judgment of Parent, is or is likely to have a Material
Adverse Effect; or
<PAGE> 39
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York
Stock Exchange or in the NASDAQ over-the-counter market in the United
States, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any material
limitation (whether or not mandatory) by any Governmental Entity on the
extension of credit by banks or other lending institutions, (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States which would reasonably be expected to have a Material Adverse
Effect or prevent (or materially delay) the consummation of the Offer
or (v) in the case of any of the foregoing existing at the time of
commencement of the Offer, a material acceleration or worsening
thereof; or
(e) any Consent (other than the filing of a certificate of
merger or approval by the stockholders of the Company of the Merger (if
required by Delaware Law)) required to be filed, occurred or been
obtained by the Company or any of its subsidiaries or Parent or any of
its subsidiaries (including Merger Subsidiary) in connection with the
execution and delivery of this Agreement, the Offer and the
consummation of the transactions contemplated by this Agreement shall
not have been filed, occurred or been obtained (other than any such
Consents the failure to file, occur or obtain in the aggregate, could
not reasonably be expected to (i) have a Material Adverse Effect or
(ii) prevent or materially delay the consummation of the Offer or the
Merger); or
(f) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under this
Agreement, or any of the representations and warranties of the Company
set forth in this Agreement that is qualified as to materiality shall
not be true when made or at any time prior to consummation of the Offer
as if made at and as of such time, or any of the representations and
warranties set forth in this Agreement that is not so qualified shall
not be true in any material respect when made or at any time prior to
the consummation of the Offer as if made at and as of such time; or
(g) this Agreement shall have been terminated in accordance
with its terms; or
(h) the Board of Directors of the Company (or a special
committee thereof) shall have withdrawn or materially modified its
approval or recommendation of the Offer, the Merger or this Agreement;
or
(i) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or agreement in
principle with respect to any Acquisition Proposal;
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<PAGE> 40
which, in the sole judgment of Parent in any such case, and regardless
of the circumstances (including any action or omission by Parent or
Merger Subsidiary) giving rise to any such condition, makes it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Parent and Merger
Subsidiary and may be asserted by Parent in its sole discretion regardless of
the circumstances (including any action or omission by Parent or Merger
Subsidiary) giving rise to any such condition or may be waived by Parent and
Merger Subsidiary in their sole discretion in whole at any time or in part from
time to time. The failure by Parent or Merger Subsidiary at any time to exercise
its rights under any of the foregoing conditions shall not be deemed a waiver of
any such right; the waiver of any such right with respect to particular facts
and circumstances shall not be deemed a waiver with respect to any other facts
and circumstances, and each such right shall be deemed an ongoing right which
may be asserted at any time or from time to time. Any determination by Parent
concerning the events described in this Section will be final and binding upon
all parties.
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<PAGE> 1
Exhibit (c)(2)
STOCKHOLDER TENDER AGREEMENT
AGREEMENT dated as of May 25, 1995 among VR126, INC., a
Delaware corporation ("Buyer"), and the holders (the "Stockholders") of the
shares of Common Stock, par value $.01 per share (the "Shares"), of LEGENT
CORPORATION, a Delaware corporation (the "Company"), listed on the signature
pages hereof.
In order to induce Buyer and Computer Associates International,
Inc., a Delaware corporation ("Parent") and the owner of 100% of the outstanding
capital stock of Buyer, to enter into an Agreement and Plan of Merger with the
Company (the "Merger Agreement"), Buyer has requested the Stockholders, and the
Stockholders have agreed, to enter into this Agreement.
The parties hereto agree as follows:
ARTICLE I
TENDER OFFER
SECTION 1.1. Tender of Shares. (a) Each Stockholder hereby
agrees, pursuant to the terms and subject to the conditions set forth herein, to
tender in the Offer (defined in the Merger Agreement) all Shares currently owned
by such Stockholder as set forth on the signature pages hereto and any
additional Shares acquired by such Stockholder (whether by purchase or
otherwise) after the date of this Agreement (such "Stockholder's Shares" and,
collectively, the "Stockholder Shares").
(b) Within five business days of the commencement of the Offer
and within one business day of any acquisition by each Stockholder of any
additional Shares, each Stockholder shall deliver to the depositary (the
"Depositary") designated in the Offer (i) a letter of transmittal with respect
to such Stockholder's Shares complying with the terms of the Offer together with
instructions directing the Depositary to make payment for such Shares directly
to the Stockholder, (ii) a certificate or certificates representing such
Stockholder's Shares and (iii) all other documents or instruments required to be
delivered pursuant to the terms of the Offer (such documents in clauses (i)
through (iii) collectively being hereinafter referred to as the "Tender
Documents").
(c) Unless and until the Board of Directors of the Company or
any special committee thereof shall have withdrawn or materially modified its
approval or recommendation of the Offer, the Merger (defined in the Merger
Agreement) or the Merger Agreement, no Stockholder shall, subject to applicable
law, withdraw any tender effected in accordance with Section 1.1(b). Any
Stockholder desiring to withdraw such Stockholder's Shares shall give prior
written notice thereof to the Buyer and any withdrawn Shares shall continue to
be held by such Stockholder subject to the terms and conditions of this
Agreement.
<PAGE> 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
Each of the Stockholders severally represents and warrants to
Buyer that:
SECTION 2.1. Valid Title. Such Stockholder is the sole, true,
lawful and beneficial owner of such Stockholder's Shares with no restrictions on
such Stockholder's rights of disposition pertaining thereto.
SECTION 2.2. Authority; Noncontravention. Such Stockholder has
the requisite power and authority to enter into this Agreement and to consummate
the transactions contemplated by this Agreement. The execution and delivery of
this Agreement by such Stockholder and the consummation by such Stockholder of
the transactions contemplated by this Agreement have been duly authorized by all
necessary action (including any consultation, approval or other action by or
with any other person). This Agreement has been duly executed and delivered by
such Stockholder and constitutes a valid and binding obligation of such
Stockholder, enforceable against such Stockholder in accordance with its terms.
The execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to loss of a material benefit under, or result in the creation of any lien
upon any of the properties or assets of such Stockholder under, any provision of
applicable law or regulation or of any agreement, judgment, injunction, order,
decree, or other instrument binding on such Stockholder or result in the
imposition of any lien on any asset of such Stockholder. No consent, approval,
order or authorization of, or registration, declaration or filing with or
exemption by any Federal, state or local government or any court, administrative
or regulatory agency or commission or other governmental authority or agency,
domestic or foreign, is required by or with respect to such Stockholder in
connection with the execution and delivery of this Agreement by such Stockholder
or the consummation by such Stockholder of the transactions contemplated by this
Agreement, except for applicable requirements, if any, of Sections 13 and 16 of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder. If this Agreement is being executed in a representative or fiduciary
capacity, the person signing this Agreement has full power and authority to
enter into and perform such Agreement.
SECTION 2.3. Total Shares. The number of Shares set forth on
the signature pages hereto are the only Shares beneficially owned by such
Stockholder and, except as set forth on such signature pages, the beneficial
owner or owners of such Stockholder's Shares owns or own no options to purchase
or rights to subscribe for or otherwise acquire any securities of the Company
and has or have no other interest in or voting rights with respect to any
securities of the Company.
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<PAGE> 3
SECTION 2.4. Finder's Fees. No investment banker, broker or
finder is entitled to a commission or fee from Buyer or the Company in respect
of this Agreement based upon any arrangement or agreement made by or on behalf
of such Stockholder.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF BUYER
Buyer represents and warrants to each of the Stockholders that:
SECTION 3.1. Corporate Power and Authority. Buyer has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement have been duly authorized by all necessary corporate action on
the part of Buyer. This Agreement has been duly executed and delivered by Buyer
and constitutes a valid and binding obligation of Buyer, enforceable against it
in accordance with its terms.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
SECTION 4.2. Conduct of Stockholders. Such Stockholder will not
(a) take, agree or commit to take any action that would make any representation
and warranty of such Stockholder hereunder inaccurate in any respect as of any
time prior to the termination of this Agreement or (b) omit, or agree or commit
to omit, to take any action necessary to prevent any such representation or
warranty from being inaccurate in any respect at any such time.
SECTION 4.3. Specific Performance. The parties hereto agree
that Buyer may be irreparably damaged if for any reason any Stockholder failed
to tender in the Offer, and to not withdraw, such Stockholder's Shares in
accordance with the terms of this Agreement or to perform any of its other
obligations under this Agreement, and that Buyer would not have an adequate
remedy at law for money damages in such event. Accordingly, Buyer shall be
entitled to specific performance and injunctive and other equitable relief to
enforce the performance of this Agreement by each Stockholder. This provision is
without prejudice to any other rights that Buyer may have against any
Stockholder for any failure to perform its obligations under this Agreement.
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<PAGE> 4
SECTION 4.4. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be deemed given
if delivered personally or sent by overnight courier (providing proof of
delivery) or by telecopy (with copies by overnight courier) to such party at its
address set forth on the signature page hereto or to such other address as such
party may have furnished to the other parties in writing in accordance herewith.
SECTION 4.5. Amendments; Termination. This Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. This Agreement
may be terminated by any of the parties hereto upon written notice to the other
parties hereto on or after the earlier of (a) the date that Shares are accepted
for payment in the Offer and (b) the date that the Merger Agreement terminates
in accordance with its terms.
SECTION 4.6. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that Buyer may assign its
rights and obligations to any affiliate of Buyer and provided, further, that no
Stockholder may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of Buyer.
SECTION 4.7. Governing Law. This Agreement shall be construed
in accordance with and governed by the law of New York without giving effect to
the principles of conflicts of laws thereof.
SECTION 4.8. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
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<PAGE> 5
The parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
VR126, INC.
By: /s/ Sanjay Kumar
---------------------
Title: President
c/o Computer Associates International, Inc.
One Computer Associates Plaza
Islandia, New York 11788-7000
Attention: Sanjay Kumar
Fax: (516) 342-3300
with a copy to:
Howard, Darby & Levin
1330 Avenue of the Americas
New York, New York 10019
Attention: Scott F. Smith
Fax: (212) 841-1010
GENERAL ATLANTIC GROUP LIMITED
Class of Shares
Stock Owned
------- ------
common 3,651,299 By: /s/ Craig R. Mayor
-----------------------
Title: Treasurer
Washington Mall II
Church Street
Hamilton 5, Bermuda
Attention:
Fax:
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