<PAGE>
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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
----------------
TOTAL CONTROL PRODUCTS, INC.
(NAME OF SUBJECT COMPANY)
----------------
ORION MERGER CORP.
A WHOLLY OWNED SUBSIDIARY OF
GE FANUC AUTOMATION NORTH AMERICA, INC.
AND
AN INDIRECT MAJORITY OWNED SUBSIDIARY OF
GENERAL ELECTRIC COMPANY
(BIDDERS)
----------------
COMMON STOCK, NO PAR VALUE
(TITLE OF CLASS OF SECURITIES)
----------------
89149V106
(CUSIP NUMBER OF CLASS OF SECURITIES)
----------------
A. E. KNORR, SENIOR VICE PRESIDENT AND GENERAL COUNSEL
GE FANUC AUTOMATION NORTH AMERICA, INC.
P.O. BOX 8106
CHARLOTTESVILLE, VIRGINIA 22906
(804) 978-5000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
COPY TO
SIDLEY & AUSTIN
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60603
(312) 853-7000
ATTENTION: DENNIS V. OSIMITZ
NOVEMBER 22, 1998
(DATE OF EVENT WHICH REQUIRES FILING STATEMENT ON SCHEDULE 13D)
----------------
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
- ------------------------------------------------------
$115,574,096 $23,115
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- -------------------------------------------------------------------------------
* For the purpose of calculating the fee only, this amount assumes the
purchase of 10,506,736 shares of Common Stock, no par value, of Total
Control Products, Inc. at $11.00 per share. Such number includes all
outstanding shares as of November 20, 1998, and assumes the exercise of all
stock options and warrants to purchase shares of Common Stock and the
exchange for Common Stock of all exchangeable securities which are
outstanding as of such date.
[_]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: FILING PARTY:
FORM OR REGISTRATION NO.: DATE FILED:
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<PAGE>
SCHEDULES 14D-1 AND 13D
Page 2 of 8 Pages
CUSIP NO. 89149V106
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: ORION MERGER CORP.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 54-1919408
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(A)[X]
(B) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS:
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(E) OR 2(F):
[_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION:
ILLINOIS
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
NONE*
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES:
[X]
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7):
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON:
CO
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- --------
* See second paragraph on page 5.
2
<PAGE>
SCHEDULES 14D-1 AND 13D
Page 3 of 8 Pages
CUSIP NO. 89149V106
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: GE FANUC AUTOMATION NORTH AMERICA, INC.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 54-1393332
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(A) [X]
(B) [_]
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS:
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(E) OR 2(F):
[_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION:
DELAWARE
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
1,598,530 SHARES
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES:
[X]
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7):
16.6% OF THE SHARES ISSUED AND OUTSTANDING AS OF NOVEMBER 20, 1998,
ASSUMING EXERCISE OF THE OPTION GRANTED UNDER THE STOCK OPTION AGREEMENT
DESCRIBED IN THIS STATEMENT.*
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10 TYPE OF REPORTING PERSON:
CO
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- --------
* See second and third paragraphs on page 5.
3
<PAGE>
SCHEDULES 14D-1 AND 13D
Page 4 of 8 Pages
CUSIP NO. 89149V106
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: GENERAL ELECTRIC COMPANY
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:14-0689340
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(A)[X]
(B) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS:
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(E) OR 2(F):[X]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION:
NEW YORK
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
1,598,530 SHARES*
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES:
[X]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7):
16.6% OF THE SHARES ISSUED AND OUTSTANDING AS OF NOVEMBER 20, 1998,
ASSUMING EXERCISE OF THE OPTION GRANTED UNDER THE STOCK OPTION AGREEMENT
DESCRIBED IN THIS STATEMENT.
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10 TYPE OF REPORTING PERSON:
CO
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- --------
* See second and third paragraphs on page 5.
4
<PAGE>
Page 5 of 8 Pages
This Statement relates to a tender offer by Orion Merger Corp., an Illinois
corporation (the "Offeror") and a wholly owned subsidiary of GE Fanuc
Automation North America, Inc., a Delaware corporation (the "Parent"), and an
indirect majority owned subsidiary of General Electric Company, a New York
corporation ("General Electric"), to purchase all outstanding shares of common
stock, no par value (the "Shares"), of Total Control Products, Inc., an
Illinois corporation (the "Company"), at a purchase price of $11.00 per Share,
net to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated November 30, 1998 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer"), copies of which are filed as Exhibits (a)(1) and
(a)(2) hereof, respectively, and which are incorporated herein by reference.
This Tender Offer Statement on Schedule 14D-1 also constitutes a Statement on
Schedule 13D with respect to the acquisition by the Offeror and Parent of
beneficial ownership of Shares subject to the Shareholder Agreements and the
Option Agreement. The cover page above and item numbers and responses thereto
below are in accordance with the requirements of Schedule 14D-1.
The Offeror and Parent have entered into a Shareholder Agreement dated
November 22, 1998 (the "Shareholder Agreements"), with certain shareholders of
the Company (the "Tendering Shareholders"), pursuant to which the Tendering
Shareholders have agreed to tender their Shares (as defined herein) (the
"Committed Shares") pursuant to the Offer. Pursuant to the Shareholder
Agreements, the Tendering Shareholders have also agreed that, among other
things, until the termination of the Offer, and, in certain cases, for a
period of 120 days thereafter, to vote such Committed Shares in favor of the
Merger (as defined herein) and against certain competing transactions. The
Offeror and Parent have been advised that the Tendering Shareholders
beneficially own 4,140,158 Shares. The Offeror and Parent disclaim ownership
of the Committed Shares.
The Parent and the Company have entered into a Stock Option Agreement dated
November 22, 1998 (the "Option Agreement"), pursuant to which the Company has
granted Parent an irrevocable option to purchase up to 1,598,530 Shares (or
such other number of Shares as equals 19.9% of the Company's issued and
outstanding Shares at the time of the exercise of such option). Additional
information about the Shareholder Agreements and the Option Agreement is
contained in Section 13 ("The Merger Agreement; the Shareholder Agreements;
the Option Agreement and Certain Other Agreements") of the Offer to Purchase.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Total Control Products, Inc. The
address of the principal executive offices of the Company is set forth in
Section 8 ("Certain Information Concerning the Company") of the Offer to
Purchase and is incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is the Common Stock, no par value, of the Company. The information set
forth in the Introduction to the Offer to Purchase 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) through (d), (g): The information set forth in the Introduction and
Section 9 ("Certain Information Concerning the Offeror, Parent and General
Electric") of the Offer to Purchase, and in Annex I thereto, is incorporated
herein by reference.
(e) and (f): Except as set forth in Section 9 ("Certain Information
Concerning the Offeror, Parent and General Electric") of the Offer to
Purchase, which is incorporated herein by reference, none of the Offeror, the
Parent, General Electric nor, to the best of their knowledge, any of the
persons listed in Annex I of the Offer to Purchase, has during the last five
years (i) been convicted in a criminal proceeding (excluding traffic
violations
5
<PAGE>
Page 6 of 8 Pages
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.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) None.
(b) The information set forth in the Introduction and Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with
the Company") of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b): The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) through (e): The information set forth in the Introduction, Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with
the Company"), Section 12 ("Purpose of the Offer and the Merger; Plans for the
Company") and Section 13 ("The Merger Agreement; the Shareholder Agreements;
the Option Agreement; and Certain Other Agreements") of the Offer to Purchase
is incorporated herein by reference.
(f) and (g): The information set forth in Section 7 ("Certain Effects of the
Transaction") 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 the Introduction, Section 9
("Certain Information Concerning the Offeror, Parent and General Electric")
and Section 13 ("The Merger Agreement; the Shareholder Agreements; the Option
Agreement; and Certain Other Agreements") of the Offer to Purchase is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction and Section 11 ("Background of
the Offer; Past Contacts, Transactions or Negotiations with the Company") and
Section 13 ("The Merger Agreement; the Shareholder Agreements; the Option
Agreement; and Certain Other Agreements") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and 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 9 ("Certain Information Concerning the
Offeror, Parent and General Electric") of the Offer to Purchase is
incorporated herein by reference.
6
<PAGE>
Page 7 of 8 Pages
The incorporation by reference herein of the above-mentioned financial
information does not constitute an admission that such information is material
to a decision by a security holder of the Company as whether to sell, tender
or hold Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 13 ("The Merger Agreement; the
Shareholder Agreements; the Option Agreement; and Certain Other Agreements")
of the Offer to Purchase is incorporated by reference.
(b) and (c) The information set forth in Section 16 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Certain Effects of the
Transaction") of the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated November 30, 1998.
(a)(2) Letter of Transmittal.
(a)(3) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(4) Letter from Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Announcement, dated November 30, 1998.
(a)(8) Press Release issued by the Parent and the Company on November 23,
1998.
(a)(9) Press Release issued by the Parent and the Company on November 30,
1998.
(c)(1) Agreement and Plan of Merger, dated as of November 22, 1998, among
the Parent, the Offeror and the Company.
(c)(2) Stock Option Agreement, dated as of November 22, 1998, between Parent
and the Company.
(c)(3) Shareholder Agreement, dated as of November 22, 1998, among Nicholas
Gihl, the Offeror and Parent.
(c)(4) Shareholder Agreement, dated as of November 22, 1998, among A. B.
Siemer, the Offeror and Parent.
(c)(5) Shareholder Agreement, dated as of November 22, 1998, among Julius
Sparacino, the Offeror and Parent.
(c)(6) Shareholder Agreement, dated as of November 22, 1998, among Neil
Taylor, Merle Taylor, the Offeror and Parent.
(c)(7) Employment Agreement, dated as of November 22, 1998, between Nicholas
Gihl and the Company.
(c)(8) Employment Agreement, dated as of November 22, 1998, between Peter
Nicholson and the Company.
(d) None.
(e) Not applicable.
(f) None.
7
<PAGE>
Page 8 of 8 Pages
SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY THAT
THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
Dated: November 30, 1998
General Electric Company
/s/ Robert E. Healing
By: _________________________________
Name: Robert E. Healing
Title: Corporate Counsel
GE Fanuc Automation North America,
Inc.
/s/ A. E. Knorr
By: _________________________________
Name: A. E. Knorr
Title: Senior Vice President and
General Counsel
Orion Merger Corp.
/s/ A. E. Knorr
By: _________________________________
Name: A. E. Knorr
Title: Vice President
8
<PAGE>
EXHIBIT (A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TOTAL CONTROL PRODUCTS, INC.
AT
$11.00 NET PER SHARE
BY
ORION MERGER CORP.
A WHOLLY OWNED SUBSIDIARY OF
GE FANUC AUTOMATION NORTH AMERICA, INC.
AND
AN INDIRECT MAJORITY OWNED SUBSIDIARY OF
GENERAL ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, DECEMBER 28, 1998,
UNLESS THE OFFER IS EXTENDED.
THIS OFFER (THE "OFFER") IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND
PLAN OF MERGER, DATED AS OF NOVEMBER 22, 1998 (THE "MERGER AGREEMENT"), AMONG
GE FANUC AUTOMATION NORTH AMERICA, INC. ("PARENT"), ORION MERGER CORP. (THE
"OFFEROR") AND TOTAL CONTROL PRODUCTS, INC. (THE "COMPANY"). THE BOARD OF
DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED AND ADOPTED THE MERGER
AGREEMENT, APPROVED THE OFFER AND THE MERGER (AS DEFINED HEREIN), HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY'S SHAREHOLDERS AND RECOMMENDS THAT HOLDERS OF
THE SHARES (AS DEFINED HEREIN) ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
IN CONNECTION WITH THE MERGER AGREEMENT, PARENT AND THE OFFEROR ENTERED INTO
SHAREHOLDER AGREEMENTS DATED NOVEMBER 22, 1998 (THE "SHAREHOLDER AGREEMENTS")
WITH CERTAIN SHAREHOLDERS OF THE COMPANY WHO BENEFICIALLY OWN APPROXIMATELY
41.5% OF THE SHARES THAT ARE OUTSTANDING ON A FULLY DILUTED BASIS. PURSUANT TO
THE SHAREHOLDER AGREEMENTS, SUCH SHAREHOLDERS HAVE AGREED, AMONG OTHER THINGS,
TO TENDER ALL OF THEIR SHARES PURSUANT TO THE OFFER. PARENT AND THE COMPANY
HAVE ALSO ENTERED INTO A STOCK OPTION AGREEMENT DATED NOVEMBER 22, 1998,
PURSUANT TO WHICH, AMONG OTHER THINGS, THE COMPANY HAS GRANTED PARENT AN
IRREVOCABLE OPTION TO PURCHASE (THE "OPTION") UP TO 1,598,530 AUTHORIZED AND
UNISSUED SHARES, OR SUCH OTHER NUMBER OF SHARES AS EQUALS 19.9% OF THE
COMPANY'S ISSUED AND OUTSTANDING SHARES AT THE TIME OF THE EXERCISE OF THE
OPTION, AT A PURCHASE PRICE OF $11.00 PER SHARE, EXERCISABLE UPON THE
OCCURRENCE OF CERTAIN EVENTS.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF
SHARES THAT WOULD CONSTITUTE AT LEAST TWO-THIRDS OF THE SHARES THAT ARE
OUTSTANDING DETERMINED ON A FULLY DILUTED BASIS, (II) ANY WAITING PERIOD UNDER
THE HSR ACT (AS DEFINED HEREIN) APPLICABLE TO THE PURCHASE OF SHARES PURSUANT
TO THE OFFER HAVING EXPIRED OR HAVING BEEN TERMINATED PRIOR TO THE EXPIRATION
OF THE OFFER AND (III) THE SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS.
SEE SECTION 15.
--------------
IMPORTANT
Any shareholder 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 the Letter of
Transmittal with the Shares and all other required documents to the Depositary
(as defined herein) or follow the procedure for book-entry transfer set forth
in Section 3 or (ii) request such shareholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for the
shareholder. Shareholders having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
person if they desire to tender their Shares.
Any shareholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply
with the procedures for book-entry transfer on a timely basis or who cannot
deliver all required documents to the Depositary, in each case prior to the
expiration of the Offer, must 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 address and telephone number set forth on the back cover of this Offer
to Purchase.
--------------
The Information Agent for the Offer is:
MORROW & CO., INC.
November 30, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Introduction............................................................. 1
1. Terms of the Offer................................................. 3
2. Acceptance for Payment and Payment for Shares...................... 5
3. Procedure for Tendering Shares..................................... 6
4. Withdrawal Rights.................................................. 8
5. Certain United States Federal Income Tax Consequences.............. 9
6. Price Range of Shares; Dividends................................... 10
7. Certain Effects of the Transaction................................. 10
8. Certain Information Concerning the Company......................... 11
9. Certain Information Concerning the Offeror, Parent and General
Electric.............................................................. 14
10. Source and Amount of Funds......................................... 17
11. Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company......................................... 17
12. Purpose of the Offer and the Merger; Plans for the Company......... 19
13. The Merger Agreement; the Shareholder Agreements; the Option
Agreement; and Certain Other Agreements.............................. 21
14. Dividends and Distributions........................................ 31
15. Certain Conditions to the Offeror's Obligations.................... 31
16. Certain Legal Matters.............................................. 33
17. Fees and Expenses.................................................. 34
18. Miscellaneous...................................................... 34
Annex I. Certain Information Concerning the Directors and Executive
Officers of General Electric, Parent and the Offeror.................... 35
</TABLE>
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF TOTAL CONTROL PRODUCTS, INC.:
INTRODUCTION
Orion Merger Corp., an Illinois corporation (the "Offeror"), a wholly owned
subsidiary of GE Fanuc Automation North America, Inc., a Delaware corporation
("Parent"), and an indirect majority owned subsidiary of General Electric
Company, a New York corporation ("General Electric"), hereby offers to
purchase all outstanding shares of Common Stock, no par value (the "Shares"),
of Total Control Products, Inc., an Illinois corporation (the "Company"), at a
purchase price of $11.00 per Share, net to the seller in cash, without
interest, 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 holders of Shares will not be obligated to pay brokerage
fees or commissions or, except as set forth in the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by the Offeror pursuant to the
Offer. The Offer is not being made for shares of Class C Exchangeable Common
Stock, no par value (the "Class C Taylor Shares"), of Taylor Industrial
Software, Inc., a corporation organized under the laws of Alberta and a
majority owned subsidiary of the Company ("Taylor"), each of which Class C
Taylor Shares is exchangeable for one Share. To participate in the Offer,
holders of the Class C Taylor Shares must request retraction of the Class C
Taylor Shares for Shares and then tender the Shares received upon retraction
pursuant to the Offer. The Offeror will pay all charges and expenses of
Norwest Bank Minnesota, N.A. (the "Depositary") and Morrow & Co., Inc. (the
"Information Agent") in connection with the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED AND ADOPTED
THE MERGER AGREEMENT (AS DEFINED HEREIN), APPROVED THE OFFER AND THE MERGER
(AS DEFINED HEREIN), HAS DETERMINED THAT TERMS OF THE OFFER AND THE MERGER ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S SHAREHOLDERS AND
RECOMMENDS THAT THE HOLDERS OF THE SHARES ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
Adams, Harkness & Hill, Inc. ("AH&H"), the Company's financial advisor, has
delivered to the Company's Board of Directors its written opinion dated
November 22, 1998 that, as of such date and based upon and subject to certain
matters set forth in such opinion, the consideration to be received by the
holders of Shares pursuant to the Offer and the Merger is fair to such holders
from a financial point of view. A copy of such opinion is contained in the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 which is
being distributed to the Company's shareholders.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH
NUMBER OF SHARES THAT WOULD CONSTITUTE TWO-THIRDS OF THE SHARES THAT ARE
OUTSTANDING DETERMINED ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"),
(II) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED (THE "HSR ACT"), APPLICABLE TO THE PURCHASE OF SHARES
PURSUANT TO THE OFFER HAVING EXPIRED OR HAVING BEEN TERMINATED PRIOR TO THE
EXPIRATION OF THE OFFER AND (III) THE SATISFACTION OF CERTAIN OTHER TERMS AND
CONDITIONS. SEE SECTION 15.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of November 22, 1998 (the "Merger Agreement"), among Parent, the Offeror
and the Company. The Merger Agreement provides that, among other things, after
the purchase of Shares pursuant to the Offer and the satisfaction of the other
conditions set forth in the Merger Agreement and in accordance with the
relevant provisions of the Illinois Business Corporation Act, as amended (the
"IBCA"), the Offeror will be merged with and into the Company (the "Merger").
Following consummation of the Merger, the Company will continue as the
surviving corporation (the "Surviving Corporation") and will be a wholly owned
subsidiary of Parent and an indirect majority owned subsidiary of General
Electric. At the effective time of the Merger (the "Effective Time"), each
Share that is issued and outstanding (other than Shares owned by the Company,
any subsidiary of the Company, Parent, the Offeror, any other subsidiary of
Parent or by shareholders, if any, who are entitled to and who properly
exercise dissenter's rights under the IBCA ("Dissenting Shares")) will be
converted into the right to receive from the
<PAGE>
Surviving Corporation $11.00 (or any higher price that may be paid for each
Share pursuant to the Offer) in cash, without interest thereon (the "Offer
Price"). See Section 5 for a description of certain United States federal
income tax consequences of the Offer and the Merger.
In connection with the Merger Agreement, Parent and the Company entered into
the Stock Option Agreement dated as of November 22, 1998 (the "Option
Agreement"), pursuant to which the Company has granted Parent an irrevocable
option to purchase (the "Option") from time to time up to 1,598,530 authorized
and unissued Shares, or such other number of Shares as equals 19.9% of the
Company's issued and outstanding Shares at the time of the exercise of the
Option (the "Company Option Shares"), at a price of $11.00 per share. In
addition, the Offeror and Parent entered into a Shareholder Agreement dated as
of November 22, 1998 (the "Shareholder Agreements"), with each of the
following shareholders of the Company: Nicholas Gihl, A.B. Siemer, Julius
Sparacino, Merle Taylor and Neil Taylor (the "Tendering Shareholders"),
pursuant to which the Tendering Shareholders have agreed to tender the
3,427,158 Shares owned of record by the Tendering Shareholders and 713,000
Shares issuable to the Tendering Shareholders upon the exercise of options to
purchase Shares held by such Tendering Shareholders and the retraction of
Class C Taylor Shares owned of record by such Tendering Shareholders (the
"Committed Shares"). Pursuant to the Shareholder Agreements, the Tendering
Shareholders have also agreed that, among other things, until the Shareholder
Agreement Termination Date (as defined herein), such Tendering Shareholders
will not transfer the Committed Shares and will vote the Committed Shares in
favor of the Merger and against certain competing transactions. The Committed
Shares represent approximately 41.5% of the Shares that, as of November 20,
1998, were issued and outstanding on a fully diluted basis.
The Merger Agreement, the Option Agreement and the Shareholder Agreements
are more fully described in Section 13.
The Merger Agreement provides that, promptly after the Offeror acquires
Shares which represent at least the Minimum Condition, the Offeror will be
entitled to designate such number of directors on the Board of Directors of
the Company, subject to compliance with Section 14(f) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as will make the
percentage of the Company's directors designated by the Offeror equal to the
percentage of the aggregate voting power of the Shares held by Parent or any
of its subsidiaries and the Company shall, at such time, cause the Offeror's
designees to be so elected by its existing Board of Directors. However, until
the Effective Time, the Board of Directors of the Company shall have at least
three directors who were directors on the date of the Merger Agreement and who
are not officers of the Company. The Company has agreed, at the option of
Parent, either to increase the size of the Board of Directors of the Company
and/or obtain the resignation of such number of directors as is necessary to
enable the Offeror's designees to be elected or appointed to the Board.
If the Minimum Condition and the other conditions to the Offer are satisfied
and the Offer is consummated, the Offeror will own a sufficient number of
Shares to ensure that the Merger will be approved. Under the IBCA, if, after
consummation of the Offer, the Offeror owns at least 90% of the Shares then
outstanding, the Offeror will be able to cause the Merger to occur without a
vote of the Company's shareholders. If, however, after consummation of the
Offer, the Offeror owns less than 90% of the then outstanding Shares, a vote
of the Company's shareholders will be required under the IBCA to approve the
Merger, and a significantly longer period of time will be required to effect
the Merger.
The Company has advised the Offeror that as of November 20, 1998, there were
(a) 8,032,818 Shares issued and outstanding, (b) 865,685 Shares reserved for
issuance upon the exercise of outstanding employee and director stock options,
(c) 15,000 Shares reserved for issuance pursuant to the Company's Employee
Discount Stock Purchase Plan (the "Stock Purchase Plan") for the purchase
period ending November 30, 1998, (d) 100,000 Shares reserved for issuance upon
the exercise of the Warrant dated October 5, 1997 issued to Kurt Priester (the
"Priester Warrant"), (e) 737,112 Shares reserved for issuance upon the
exchange of the Class C Taylor Shares and (f) 235,000 Shares reserved for
issuance upon the payment of certain contingent consideration pursuant to the
acquisition agreement entered into by the Company in connection with its 1997
acquisition of Computer Dynamics, Inc. Based on the foregoing, the Minimum
Condition will be satisfied if at least 6,657,077 Shares, or
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approximately 82.9% of the outstanding Shares as of November 20, 1998
(approximately 66.6% of the Shares on a fully diluted basis), are validly
tendered and not withdrawn prior to the Expiration Date.
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 of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Offeror will accept for payment and thereby purchase all
Shares validly tendered prior to the Expiration Date and not withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 Midnight,
New York City time, on Monday, December 28, 1998, unless the Offeror has
extended the period of time for which the Offer is open, in which event the
term "Expiration Date" will mean the latest time and date at which the Offer,
as so extended by the Offeror, will expire.
If the Offeror decides, in its sole discretion, to increase the
consideration offered in the Offer to holders of Shares and if, at the time
that notice of such increase is first published, sent or given to holders of
Shares in the manner specified below, the Offer is scheduled to expire at any
time earlier than the expiration of a period ending on the tenth business day
from, and including, the date that such notice is first so published, sent or
given, then the Offer will be extended until the expiration of such period of
ten business days. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 Midnight, New York City time.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION, THE
EXPIRATION OR TERMINATION OF ANY WAITING PERIOD UNDER THE HSR ACT APPLICABLE
TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER AND CERTAIN OTHER TERMS AND
CONDITIONS. SEE SECTION 15. THE MERGER AGREEMENT AND THE OFFER MAY BE
TERMINATED BY THE OFFEROR AND PARENT IF CERTAIN EVENTS OCCUR. The Offeror
reserves the right (but is not obligated), in accordance with applicable rules
and regulations of the United States Securities and Exchange Commission (the
"Commission"), subject to the limitations set forth in the Merger Agreement
and described below, to waive or reduce the Minimum Condition or to waive any
other condition to the Offer. If the Minimum Condition or any condition set
forth in Section 15 has not been satisfied by 12:00 Midnight, New York City
time, on December 28, 1998 (or any other time then set as the Expiration
Date), the Offeror may, subject to the terms of the Merger Agreement as
described below, elect to (i) extend the Offer and, subject to applicable
withdrawal rights, retain all tendered Shares until the expiration of the
Offer, as extended, (ii) subject to complying with applicable rules and
regulations of the Commission, accept for payment all Shares so tendered and
not extend the Offer or (iii) terminate the Offer and not accept for payment
any Shares and return all tendered Shares to tendering shareholders. During
any extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer and subject to the right of a tendering shareholder to
withdraw such Shareholder's Shares. See Section 4. Under no circumstances will
the Offeror pay interest on the purchase price for tendered Shares whether or
not it extends the Offer.
Under the terms of the Merger Agreement, the Offeror may not, without the
consent of the Company, reduce the number of Shares subject to the Offer,
reduce the Offer Price, impose any other conditions to the Offer other than
the conditions set forth in Section 15 or modify such conditions (other than
to waive any such conditions to the extent permitted by the Merger Agreement),
extend the Offer (except as described in the next sentence), change the form
of consideration payable in the Offer or amend any other term of the Offer in
any manner adverse to the holders of Shares. Notwithstanding the foregoing,
the Offeror may, without the consent of the Company, (i) extend the Offer, if
at the scheduled or extended expiration date of the Offer any of the
conditions shall not be satisfied or waived, until such time as such
conditions are satisfied or waived, (ii) extend the Offer for any period
required by any rule, regulation, interpretation or position of the Commission
or the Commission staff applicable to the Offer and (iii) if all Offer
conditions are satisfied or waived but the number of Shares tendered is at
least equal to 75%, but less than 90%, of the then outstanding number of
Shares, extend the Offer
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for any reason on one or more occasions for an aggregate period of not more
than 15 business days beyond the latest expiration date that would otherwise
be permitted under clause (ii) in each case subject to the right of Parent,
the Offeror or the Company to terminate the Merger Agreement pursuant to the
terms thereof.
Subject to the limitations set forth in this Offer and the Merger Agreement,
the Offeror reserves the right (but will not be obligated), at any time or
from time to time in its sole discretion, to extend the period 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. There can be
no assurance that the Offeror will exercise its right to extend the Offer.
Subject to the applicable rules and regulations of the Commission and
subject to the limitations set forth in the Merger Agreement, the Offeror
expressly reserves the right, at any time and from time to time, in its sole
discretion, (i) to delay payment for any Shares regardless of whether such
Shares were theretofore accepted for payment, or to terminate the Offer and
not to accept for payment or pay for any Shares not theretofore accepted for
payment or paid for, upon the occurrence of any of the conditions set forth in
Section 15, by giving oral or written notice of such delay or termination to
the Depositary, and (ii) at any time or from time to time, to amend the Offer
in any respect. The Offeror's right to delay payment for any Shares or not to
pay for any Shares theretofore accepted for payment is subject to the
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act, relating to the Offeror's obligation to pay for or
return tendered Shares promptly after the termination or withdrawal of the
Offer.
Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, termination or amendment of the Offer will
be followed, as promptly as practicable, by public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rules 14d-4(c) and 14e-1(d) under the Exchange Act. Without
limiting the obligation of the Offeror under such rule or the manner in which
the Offeror may choose to make any public announcement, the Offeror currently
intends to make announcements by issuing a press release to the Dow Jones News
Service and making any appropriate filing with the Commission.
If, subject to the terms of the Merger Agreement, the Offeror makes a
material change in the terms of the Offer or the information concerning the
Offer, or if it waives a material condition of the Offer (including, with the
consent of the Company, a waiver of the Minimum Condition), the Offeror will
disseminate additional tender offer materials and extend the Offer if and to
the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange
Act or otherwise. The minimum period during which a tender offer must remain
open following material changes in the terms of the Offer or the 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 materiality of the changes. In the Commission's view, an offer should
remain open for a minimum of five business days from the date the material
change is first published, sent or given to Shareholders, and, if material
changes are made with respect to information not materially less significant
that the Offer Price and the percentage of securities sought, a minimum ten
business day period may be required to allow for adequate dissemination to
shareholders and investor response. With respect to a change in price or a
change in percentage of securities sought, a minimum ten business day period
is generally required to allow for adequate dissemination to shareholders and
investor response.
The Company has provided the Offeror with the Company's list of shareholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal
and other relevant materials will be mailed to record holders of Shares and
will be furnished by the Offeror to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the shareholder 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.
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2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Offeror will purchase, by accepting for payment, and will
pay for all, Shares validly tendered and not withdrawn in accordance with
Section 4 prior to the Expiration Date promptly after the later to occur of
(a) the Expiration Date and (b) the satisfaction or waiver of the conditions
set forth in Section 15 related to regulatory matters. Subject to compliance
with Rule 14e-1(c) under the Exchange Act, the Offeror expressly reserves the
right, in its sole discretion, to delay acceptance of, or payment for, Shares
in order to comply in whole or in part with any applicable law. See Sections 1
and 16. In all cases, payment for Shares purchased pursuant to the Offer will
be made only after timely receipt by the Depositary of (i) certificates
representing such Shares or timely confirmation (a "Book-Entry Confirmation")
of a book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility"), pursuant to the
procedures set forth in Section 3, (ii) the appropriate letter of transmittal,
properly completed and duly executed (or a facsimile thereof) with all
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message (as defined below) and (iii) any other documents required by
the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by the 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 that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Offeror may enforce such agreement against the participant.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if and when the Offeror gives oral or written notice to the Depositary of the
Offeror's acceptance of such Shares for payment pursuant to the Offer. In all
cases, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from the Offeror
and transmitting such payment to tendering shareholders. If, for any reason
whatsoever, acceptance for payment of any Shares tendered pursuant to the
Offer is delayed, or the Offeror is unable to accept for payment Shares
tendered pursuant to the Offer, then, without prejudice to the Offeror's
rights under Section 1, the Depositary may, nevertheless, on behalf of the
Offeror, retain tendered Shares, and such Shares may not be withdrawn, except
to the extent that the tendering shareholders are entitled to withdrawal
rights as described in Section 4 below and as otherwise required by Rule 14e-
1(c) under the Exchange Act. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE
PURCHASE PRICE FOR SHARES BE PAID BY THE OFFEROR.
If any tendered Shares are purchased pursuant to the Offer for any reason,
or if certificates are submitted representing more Shares than are tendered,
certificates representing unpurchased or untendered Shares will be returned,
without expense to the tendering shareholder (or, in the case of Shares
delivered by book-entry transfer to the Book-Entry Transfer Facility, such
Shares will be credited to an account maintained within such Book-Entry
Transfer Facility), as promptly as practicable after the expiration,
termination or withdrawal of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, THE OFFEROR INCREASES THE PRICE BEING PAID
FOR SHARES ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER, SUCH INCREASED
CONSIDERATION WILL BE PAID TO ALL SHAREHOLDERS WHOSE SHARES ARE PURCHASED
PURSUANT TO THE OFFER, WHETHER OR NOT SUCH SHARES WERE TENDERED PRIOR TO SUCH
INCREASE IN CONSIDERATION.
The Offeror reserves the right, subject to the provisions of the Merger
Agreement, to transfer or assign, in whole or from time to time in part, to
one or more of its affiliates, the right to purchase all or any portion of the
Shares tendered pursuant to the Offer, but no such transfer or assignment will
relieve the Offeror of its obligations under the Offer or prejudice the rights
of tendering shareholders to receive payment for Shares validly tendered and
accepted for payment.
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3. PROCEDURE FOR TENDERING SHARES.
Valid Tenders. Except as set forth below, for Shares to be validly tendered
pursuant to the Offer, a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), together 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, must be received by
the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase prior to the Expiration Date or the tendering shareholder
must comply with the guaranteed delivery procedure set forth below. In
addition, either (i) certificates representing tendered Shares must be
received by the Depositary along with the Letter of Transmittal or such Shares
must be tendered pursuant to the procedure for book-entry transfer set forth
below, and a Book-Entry Confirmation must be received by the Depositary, in
each case prior to the Expiration Date, or (ii) the guaranteed delivery
procedures set forth below must be complied with. No alternative, conditional
or contingent tenders will be accepted. THE METHOD OF DELIVERY OF
CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT
THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER, AND DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE
CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer.
Any financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of Shares by causing such Book-
Entry Transfer Facility to transfer such Shares into the Depositary's account
at such Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. However, although delivery of
Shares may be effected through book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other required documents, must, in any case, be transmitted
to and received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase prior to the Expiration Date or the
guaranteed delivery procedures described below must be complied with. DELIVERY
OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
Signature Guarantee. Signatures on the Letter of Transmittal must be
guaranteed by a bank, broker, dealer, credit union, savings association or
other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program or by any other bank, broker, dealer, credit union,
savings association or other entity which is an "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Exchange Act
(each of the foregoing constituting an "Eligible Institution"), unless the
Shares tendered thereby are tendered (i) by a registered holder of Shares who
has not completed either the box labeled "Special Delivery Instructions" or
the box labeled "Special Payment Instructions" on the Letter of Transmittal or
(ii) for the account of any Eligible Institution. If the certificates are
registered in the name of a person or persons other than the signer of the
Letter of Transmittal, or if payment is to be made, or delivered 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 duly executed stock powers, in either case 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 to the Letter of Transmittal.
If the certificates are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof)
must accompany each such delivery.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates are not immediately available or
time will not permit all required documents to reach the Depositary prior to
the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such
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Shares may nevertheless be tendered if all of the following guaranteed
delivery procedures are duly complied with:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Offeror, is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(iii) the certificates (or a Book-Entry Confirmation) representing all
tendered Shares, in proper form for transfer together with a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof),
and 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 are received by the Depositary within three trading
days after the date of execution of such Notice of Guaranteed Delivery. The
term "trading day" is any day on which the Nasdaq National Market
("Nasdaq") is open for business.
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 the Notice of Guaranteed
Delivery and a representation that the shareholder on whose behalf the tender
is being made is deemed to own the Shares being tendered within the meaning of
Rule 14e-4 under the Exchange Act.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for, or a Book-Entry
Confirmation with respect to, such Shares, (ii) a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), with all required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message, and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates are received by the Depository or Book-Entry
Confirmations with respect to Shares are received into the Depositary's
account at the Book-Entry Transfer Facility. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
OFFEROR, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING ANY
PAYMENT.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT 31% "BACKUP" FEDERAL
INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES
PURCHASED PURSUANT TO THE OFFER, EACH SHAREHOLDER MUST, SUBJECT TO CERTAIN
EXCEPTIONS, PROVIDE THE DEPOSITARY WITH SUCH SHAREHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER ("TIN") AND CERTIFY THAT SUCH SHAREHOLDER IS NOT SUBJECT
TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9
INCLUDED IN THE LETTER OF TRANSMITTAL. FOREIGN HOLDERS MUST GENERALLY SUBMIT A
COMPLETED FORM W-8 TO AVOID BACKUP WITHHOLDING. THIS FORM MAY BE OBTAINED FROM
THE DEPOSITARY. SEE INSTRUCTIONS 8 AND 9 SET FORTH IN THE LETTER OF
TRANSMITTAL.
Determination of Validity. 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 the Offeror, in its sole
discretion, and its determination will be final and binding on all parties.
The Offeror reserves the absolute right to reject any or all tenders of any
Shares that are determined by it not to be in proper form or the acceptance of
or payment for which may, in the opinion of the Offeror, be unlawful. The
Offeror also reserves the absolute right to waive any of the conditions of the
Offer, subject to applicable law and the limitations set forth in the Merger
Agreement, or any defect or irregularity in the tender of any Shares whether
or not similar defects or irregularities are waived in the case of other
shareholders. The Offeror's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the Instructions to the Letter
of Transmittal) will be final and binding on all parties. No tender of Shares
will be deemed to have been validly made until all defects and irregularities
have been cured or waived. None of the Offeror, Parent, General Electric, the
Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
Other Requirements. By executing the Letter of Transmittal as set forth
above (including through delivery of an Agent's Message), a tendering
shareholder irrevocably appoints designees of the Offeror as such
shareholder's agent, attorneys in fact and proxies, each with full power of
substitution, in the manner set forth in
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the Letter of Transmittal, to exercise all voting and other rights of the
shareholder as each such attorney and proxy or his substitute shall in his
sole judgment deem proper, with respect to all of the Shares tendered by such
shareholder and accepted for payment by the Offeror (and any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after the date of this Offer to Purchase). All such powers of attorney and
proxies will be considered irrevocable and coupled with an interest in the
tendered Shares. This appointment is effective when, and only to the extent
that, the Offeror accepts for payment the Shares in accordance with the terms
of the Offer. Upon acceptance for payment, all prior powers of attorney,
proxies and written consents granted by the shareholder at any time with
respect to such Shares or other securities or rights will, without further
action, be revoked and no subsequent powers of attorney or proxies may be
given or written consent executed by such Shareholder (and, if given or
executed, will not be deemed effective). The designees of the Offeror will,
with respect to the Shares and other securities or rights, be empowered to
exercise all voting and other rights of such shareholder as they in their sole
judgment deem proper in respect of any annual or special meeting of the
Company's shareholders, or any adjournment or postponement thereof, any
actions by written consent in lieu of any such meeting or otherwise. In order
for Shares to be deemed validly tendered, immediately upon the Offeror's
payment for such Shares, the Offeror must be able to exercise full voting and
other rights with respect to such Shares and the other securities or rights
issued or issuable in respect of such Shares, including voting at any meeting
of shareholders (whether annual or special or whether or not adjourned) in
respect of such Shares.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering shareholder's acceptance of the terms and
conditions of the Offer, as well as the tendering shareholder's representation
and warranty that (i) such shareholder has the full power and authority to
tender, sell, assign and transfer the tendered Shares (and any and all other
Shares or other securities issued or issuable in respect of such Shares), and
(ii) when the same are accepted for payment by the Offeror, the Offeror will
acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering shareholder's acceptance of the terms and conditions
of the Offer, as well as the tendering shareholder's representation and
warranty to Purchaser that (a) such shareholder has a net long position in
such Shares being tendered within the meaning of Rule 14e-4 under the Exchange
Act and (b) the tender of such Shares complies with Rule 14e-4 under the
Exchange Act. It is a violation of Rule 14e-4 under the Exchange Act for a
person, directly or indirectly, to tender Shares for such person's own account
unless, at the time of tender, the person so tendering (i) has a net long
position equal to or greater than the amount of (x) Shares tendered or (y)
other securities immediately convertible into or exchangeable or exercisable
for the Shares tendered and such person will acquire such Shares for tender by
conversion, exchange or exercise and (ii) will cause such Shares to be
delivered in accordance with the. terms of the Offer. Rule 14e-4 provides a
similar restriction applicable to the tender or guarantee of a tender on
behalf of another person. The Offeror's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement between the
tendering shareholder and the Offeror upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment pursuant to the Offer, may also be withdrawn
at any time after January 28, 1999. If acceptance of any Shares tendered is
delayed for any reason or if the Offeror is unable to accept for payment or
pay for Shares tendered pursuant to the Offer, then, without prejudice to the
Offeror's rights under the Offer, the Depositary may, on behalf of the
Offeror, retain tendered Shares, and such Shares may not be withdrawn except
to the extent that tendering shareholders are entitled to and duly exercise
withdrawal rights as set forth in this Section 4.
For a withdrawal of Shares tendered pursuant to the Offer to be effective, a
written telegraphic or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth on
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the back cover of this Offer to Purchase. Any notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and (if certificates have been tendered) the
name in which the certificates are registered, if different from that of the
person who tendered the Shares. If certificates have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the shareholder must submit the serial numbers shown on the
certificates evidencing the Shares to be withdrawn to the Depositary and,
unless such Shares have been tendered for the account of an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by
an Eligible Institution. If Shares have been tendered pursuant to the
procedures for book-entry transfer set forth in Section 3, any notice of
withdrawal must also specify the name and number of the account at the Book-
Entry Transfer Facility to be credited with the withdrawn Shares and must
otherwise comply with such Book-Entry Transfer Facility's procedures. All
questions as to the form and validity (including time of receipt) of notices
of withdrawal will be determined by the Offeror, in its sole discretion, and
its determination will be final and binding on all parties. None of the
Offeror, Parent, General Electric, the Depositary, the Information Agent or
any other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be tendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3.
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of certain United States federal income tax
consequences of the Offer and the Merger to beneficial owners of Shares whose
Shares are purchased pursuant to the Offer or whose Shares are converted to
cash in the Merger. The discussion is for general information only and does
not purport to consider all aspects of United States federal income taxation
that might be relevant to beneficial owners of Shares. The discussion is based
on current provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), proposed, temporary and final regulations promulgated thereunder and
administrative and judicial interpretations thereof, all of which are subject
to change possibly on a retroactive basis. The discussion applies only to
beneficial owners of Shares in whose hands Shares are capital assets within
the meaning of Section 1221 of the Code, and may not apply to Shares received
pursuant to the exercise of employee stock options or otherwise as
compensation, or to certain types of beneficial owners of Shares (such as
insurance companies, tax-exempt organizations, mutual funds and broker-
dealers) who might be subject to special rules. This discussion does not
discuss the United States federal income tax consequences to a beneficial
owner of Shares who, for United States federal income tax purposes, is a non-
resident alien individual, a foreign corporation, a foreign partnership or a
foreign estate or trust, nor does it consider the effect of any foreign, state
or local tax laws.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH BENEFICIAL OWNER OF SHARES
SHOULD CONSULT SUCH BENEFICIAL OWNER'S OWN TAX ADVISOR TO DETERMINE THE
APPLICABILITY OF THE RULES DISCUSSED BELOW TO SUCH BENEFICIAL OWNER AND THE
PARTICULAR TAX EFFECTS TO SUCH BENEFICIAL OWNER OF THE OFFER AND THE MERGER,
INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for United States federal income tax purposes. In general,
for United States federal income tax purposes, a beneficial owner of Shares
will recognize gain or loss equal to the difference (if any) between the
beneficial owner's adjusted tax basis in the Shares sold pursuant to the Offer
or converted to cash in the Merger and the amount of cash received therefor.
In general, such gain or loss will be capital gain or loss and will be long-
term capital gain or loss if the beneficial owner held the Shares for more
than one year as of the date of sale (in the case of the Offer) or the
Effective Time (in the case of the Merger). The excess of net long-term
capital gains over net short-term capital losses is currently taxed at a
maximum rate of 20% for noncorporate taxpayers.
Payments in connection with the Offer or the Merger might be subject to
"backup withholding" at a rate of 31%, unless a beneficial owner of Shares (a)
is a corporation or comes within certain exempt categories and, when required,
demonstrates this fact or (b) provides a correct TIN to the payor, certifies
as to no loss of
9
<PAGE>
exemption from backup withholding and otherwise complies with applicable
requirements of the backup withholding rules. A beneficial owner who does not
provide a correct TIN may be subject to penalties imposed by the Internal
Revenue Service. Any amount paid as backup withholding does not constitute an
additional tax and will be creditable against the beneficial owner's United
States federal income tax liability. Each beneficial owner of Shares should
consult with his or her own tax advisor as to his or her qualification for
exemption from backup withholding and the procedure for obtaining such
exemption. Those tendering their Shares in the Offer may prevent backup
withholding by completing the Substitute Form W-9 included in the Letter of
Transmittal. See Section 3. Similarly, those who convert their Shares into
cash in the Merger may prevent backup withholding by completing a Substitute
Form W-9 and submitting it to the paying agent for the Merger.
In general, cash received in respect of Dissenting Shares will result in the
recognition of capital gain or loss to the beneficial owner of such Shares.
Any such beneficial owner should consult such owner's tax advisor in that
regard.
Parent and the Offeror will be entitled to deduct and withhold from the
consideration otherwise payable pursuant to the Merger Agreement to any holder
of Shares such amounts as Parent or the Offeror is required to deduct and
withhold with respect to the making of such payment. To the extent that
amounts are so withheld by Parent or the Offeror, such withheld amounts shall
be treated for all purposes of the Merger Agreement as having been paid to the
holder of the Shares in respect of which such deduction and withholding was
made by Parent or the Offeror.
6. PRICE RANGE OF SHARES; DIVIDENDS.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1998, the Shares are traded on Nasdaq under the symbol TCPS.
The following table sets forth for the periods indicated the reported high and
low sales prices for the Shares for the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
Fiscal Year Ended March 31, 1998:
First Quarter............................................ $ 8.75 $ 7.00
Second Quarter........................................... 15.00 8.25
Third Quarter............................................ 15.50 11.63
Fourth Quarter........................................... 12.25 9.00
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
Fiscal Year Ended March 31, 1999:
First Quarter............................................ $11.00 $ 8.50
Second Quarter........................................... 10.00 5.75
Third Quarter (through November 27, 1998)................ 11.50 5.50
</TABLE>
On November 20, 1998, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, according to publicly
available sources, the reported closing price per Share on Nasdaq was $9.50.
On November 27, 1998, the last full day of trading prior to the commencement
of the Offer, according to publicly available sources, the reported closing
price per Share on Nasdaq was $10.75. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE SHARES.
The Company has not declared or paid any dividends on the Shares since its
initial public offering on March 14, 1997.
7. CERTAIN EFFECTS OF THE TRANSACTION.
The purchase of the Shares by the Offeror pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and will reduce the
number of holders of Shares, and could adversely affect the liquidity and
market value of the remaining Shares held by the public. The Company has
advised the Offeror that, as of November 20, 1998, there were approximately 60
holders of record and approximately 1,500 beneficial owners of the Shares. The
Offeror can not predict whether the reduction in the number of Shares that
might otherwise
10
<PAGE>
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 therefor.
Nasdaq Quotation. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued inclusion
in Nasdaq. According to published guidelines, the Shares would not be eligible
for continued inclusion if the Shares fail to substantially meet, among other
things, the following standards: (i) 200,000 publicly held Shares, (ii) market
value of publicly held Shares of $1 million, and (iii) 400 holders of Shares
or 300 holders of Shares of round lots. If these standards are not met, the
Shares might nevertheless continue to be included in the Nasdaq Small Cap
Market, but if, among other things, the number of holders of Shares falls
below 300, or if the number of publicly held Shares falls below 100,000, or if
the aggregate market value of such publicly held Shares falls below $200,000
or if there are not at least two market makers (one of which may be a market
maker entering a stability bid), Nasdaq rules provide that the Shares would no
longer qualify for inclusion in Nasdaq and Nasdaq would cease to provide any
quotations. Shares held, directly or indirectly, by an officer or director of
the Company, or by any beneficial owner of more than 10% of the Shares,
ordinarily will not be considered as being publicly held for this purpose.
If the Shares are no longer eligible for Nasdaq quotation, quotations might
still be available from other sources. The extent of the public market for the
Shares and the availability of such quotations would, however, depend upon the
number of holders of such Shares remaining at such time, the interest in
maintaining a market in such Shares on the part of securities firms, the
possible termination of registration of such Shares under the Exchange Act as
described below and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the Commission if there are fewer than 300 record holders of the
Shares. It is the intention of the Offeror to seek to cause an application for
such termination to be made as soon after consummation of the Offer as the
requirements for termination of registration of the Shares are met. If such
registration were terminated, the Company would no longer legally be required
to disclose publicly in proxy materials distributed to shareholders the
information which it now must provide under the Exchange Act or to make public
disclosure of financial and other information in annual, quarterly and other
reports required to be filed with the Commission under the Exchange Act; the
Company would no longer be subject to Rule 13e-3 under the Exchange Act
relating to "going private" transactions; and the officers, directors and 10%
shareholders of the Company would no longer be subject to the "short-swing"
insider trading reporting and profit recovery provisions of the Exchange Act.
Furthermore, if such registration were terminated, the ability of "affiliates"
of the Company and persons holding "restricted securities" of the Company to
dispose of such securities under Rule 144 or Rule 144A promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), may be impaired,
or, with respect to certain persons, eliminated.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will no longer be eligible for Nasdaq quotation and the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Merger.
Margin Regulations. 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 for the
purpose of buying, carrying or trading in securities ("Purpose Loans").
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Shares would
no longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for Purpose Loans made by brokers. If registration of Shares
under the Exchange Act were terminated, such Shares would no longer be "margin
securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth herein, the information concerning the Company
contained in this Offer to Purchase, including financial information, has been
furnished by the Company or has been taken from or based
11
<PAGE>
upon publicly available documents and records on file with the Commission and
other public sources. Although none of the Offeror, Parent or General Electric
has any knowledge that would indicate that statements contained herein based
upon such documents are untrue, none of the Offeror, Parent or General
Electric assume any responsibility for the accuracy or completeness of the
information concerning the Company or for any failure by the Company to
disclose events which may have occurred or may affect the significance or
accuracy of any such information but which are unknown to the Offeror, Parent
or General Electric.
The Company is an Illinois corporation with its principal executive offices
located at 2001 North Janice Avenue, Melrose Park, Illinois 60160. The Company
designs, develops and markets products and technology for the control segment
of the industrial automation market. The Company's products are used to
define, monitor and maintain the operation, sequencing and safety of
industrial equipment and machinery on the factory floor. These products
include closed architecture control and PLC operator interface devices,
industrial computers and flat panel monitors and open architecture control
software and systems, and are sold primarily through an international network
of independent distributors.
Set forth below is certain summary consolidated financial data with respect
to the Company excerpted or derived from financial information contained in
the Company's Annual Report on Form 10-K for the fiscal year ended March 31,
1998 and the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998. More comprehensive financial information is included in
such reports and other documents filed by the Company with the Commission, and
the following summary is qualified in its entirety by reference to such
reports and such other documents and all the financial information (including
any related notes) contained therein. Such reports and other documents should
be available for inspection and copies thereof should be obtainable in the
manner set forth below.
12
<PAGE>
TOTAL CONTROL PRODUCTS, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED MARCH 31, SEPTEMBER 30,
------------------------------------- ------------------------
1996 1997 1998 1997 1998
----------- ----------- ----------- ----------- -----------
(AUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales................... $25,742,519 $40,820,717 $60,642,026 $24,910,858 $37,832,077
Cost of goods sold.......... 15,369,820 20,663,482 27,846,159 10,910,759 18,125,405
----------- ----------- ----------- ----------- -----------
Gross profit............ 10,372,699 20,157,235 32,795,867 14,000,099 19,706,672
----------- ----------- ----------- ----------- -----------
Operating expenses:
Sales and marketing....... 4,988,962 9,118,421 13,047,932 6,009,795 7,161,690
Research and development.. 1,951,515 3,893,155 5,340,714 2,478,525 3,424,742
General and
administrative........... 1,578,607 3,749,021 4,700,221 2,041,207 2,845,991
Amortization of goodwill.. 23,000 320,000 1,156,316 280,800 1,144,743
Charge for purchased
research and
development.............. -- 4,893,000 200,000 -- --
Charge for restructuring.. -- -- 1,336,812 -- --
----------- ----------- ----------- ----------- -----------
Income (loss) from
operations............. 1,830,615 (1,816,362) 7,013,872 3,189,772 5,129,506
----------- ----------- ----------- ----------- -----------
Other income (expenses):
Interest, net............. (189,864) (582,911) (462,887) (66,240) (589,417)
Earnings in foreign joint
venture.................. -- 79,425 97,489 45,289 92,355
Other income (expense),
net...................... 21,489 (57,303) (21,450) 5,700 43,732
----------- ----------- ----------- ----------- -----------
Income (loss) before
income taxes and
minority interest...... 1,662,240 (2,377,151) 6,627,024 3,174,521 4,676,176
Provision for income taxes.. 665,000 1,040,000 2,940,000 1,372,000 2,021,000
----------- ----------- ----------- ----------- -----------
Income (loss) before
minority interest...... 997,240 (3,417,151) 3,687,024 1,802,521 2,655,176
Minority interest in loss of
subsidiary................. -- 1,852,711 379,956 133,899 281,620
----------- ----------- ----------- ----------- -----------
Net income.............. 997,240 (1,564,440) 4,066,980 $ 1,936,420 $ 2,936,796
=========== ===========
Accretion to redemption
value of common stock...... (1,606,204) (9,061,037) --
----------- ----------- -----------
Net income (loss)
available
to common shareholders.. $ (608,964) (10,625,477) $ 4,066,980
=========== =========== ===========
Basic net income per share.. $ (0.13) $ (2.15) $ 0.55 $ 0.28 $ 0.37
=========== =========== =========== =========== ===========
Diluted net income per
share...................... $ (0.13) $ (2.15) $ 0.49 $ 0.25 $ 0.33
=========== =========== =========== =========== ===========
Weighted average number of
common and common
equivalent shares
outstanding:...............
Basic shares.............. 4,647,896 4,947,323 7,389,697 6,916,000 8,006,000
Plus dilutive effect of
stock options and Class C
Exchangeable common stock
of subsidiary............ -- -- 947,412 932,000 842,000
----------- ----------- ----------- ----------- -----------
Diluted shares............ 4,647,896 4,947,323 8,337,109 7,848,000 8,848,000
=========== =========== =========== =========== ===========
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
MARCH 31,
----------------------------------- SEPTEMBER 30,
1996 1997 1998 1998
----------- ----------- ----------- -------------
(AUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total current assets.... $11,670,509 $17,565,807 $27,674,701 $34,195,995
Property and equipment,
net.................... 1,435,254 2,393,137 3,885,919 4,621,599
Goodwill................ 1,959,523 5,118,212 24,134,357 29,816,694
Total assets............ $15,983,321 $31,462,367 $60,799,339 $73,910,966
=========== =========== =========== ===========
Total current
liabilities............ $ 4,279,694 $ 6,943,723 $11,475,412 $12,908,078
Total long-term
liabilities............ 6,299,290 3,090,778 13,757,735 21,158,514
Total shareholders'
equity................. $ 1,843,470 $19,906,577 $34,424,859 $38,984,661
=========== =========== =========== ===========
</TABLE>
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith 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
interests of such persons in transactions with the Company. Such reports,
proxy statements and other information may be inspected at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may also be obtained at prescribed
rates from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission also maintains a World Wide Web
site on the Internet at http://www.sec.gov that contains reports and other
information regarding registrants that file electronically with the
Commission. Such material may also be inspected at the offices of the National
Association of Securities Dealers, Inc., at 1735 K Street, N.W., Washington,
D.C. 20006.
9. CERTAIN INFORMATION CONCERNING THE OFFEROR, PARENT AND GENERAL ELECTRIC.
The Offeror is a newly incorporated Illinois corporation. To date, the
Offeror has not conducted any business other than that incident to its
formation, the execution and delivery of the Merger Agreement and the
commencement of the Offer. Accordingly, no meaningful financial information
with respect to the Offeror is available. The Offeror is a wholly owned
subsidiary of Parent. The principal executive office of the Offeror is located
at Route 29 North and Route 606, Charlottesville, Virginia 22911.
Parent, a Delaware corporation, has its principal executive office at Route
29 North and Route 606, Charlottesville, Virginia 22911. Parent is owned by a
joint venture between General Electric and FANUC Ltd of Japan. Parent designs,
manufactures and sells products, including industrial computers and software,
and services required to integrate, manage and control manufacturing, in
applications ranging from single machines and individual manufacturing cells
to complete production lines.
General Electric Company, a New York corporation, has its principal
executive offices at 3135 Easton Turnpike, Fairfield, Connecticut 06431.
General Electric and its consolidated affiliates comprise one of the largest
and most diversified industrial corporations in the world. From the time of
its incorporation in 1892, General Electric has engaged in developing,
manufacturing and marketing a wide variety of products for the generation,
transmission, distribution, control and utilization of electricity. Over the
years, development and application of related and new technologies have
broadened considerably the scope of activities of General Electric and its
affiliates. General Electric's products include lamps and other lighting
products; major appliances for the home; industrial automation products and
components; motors; electrical distribution and control equipment;
locomotives; power generation and delivery products; nuclear reactors, nuclear
power support services and fuel assemblies; commercial and military aircraft
jet engines; materials, including plastics, silicones and superabrasive
industrial diamonds; and a wide variety of high-technology products, including
products used in medical diagnostic applications.
14
<PAGE>
General Electric also offers a wide variety of services, including product
support services; electrical product supply houses; electrical apparatus
installation, engineering, repair and rebuilding services; and computer-
related information services. The National Broadcasting Company, Inc., a
wholly-owned subsidiary, is engaged principally in furnishing network
television services, in operating television stations, and in providing cable
programming and distribution services in the United States, Europe, and Asia.
Through another wholly-owned subsidiary, General Electric Capital Services,
Inc. ("GECS"), and its two principal subsidiaries, General Electric offers a
broad array of financial services including consumer financing, commercial and
industrial financing, real estate financing, asset management and leasing,
mortgage services, consumer savings and insurance services, specialty
insurance and reinsurance. Other services offered by GECS include satellite
communications furnished by its subsidiary, GE Americom, Inc. General Electric
also licenses patents and provides technical services related to products it
has developed, but such activities are not material to General Electric.
Set forth below are certain summary consolidated financial data with respect
to General Electric excerpted or derived from financial information contained
in General Electric's Annual Report on Form 10-K for the year ended December
31, 1997 and General Electric's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998. More comprehensive financial information is included
in such reports and other documents filed by General Electric with the
Commission, and the following summary is qualified in its entirety by
reference to such reports and such other documents and all the financial
information (including any related notes) contained therein.
15
<PAGE>
GENERAL ELECTRIC COMPANY
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------------------------- ---------------------
1993 1994 1995 1996 1997 1997 1998
--------- --------- --------- --------- --------- --------- ---------
(AUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
GENERAL ELECTRIC COMPANY
AND CONSOLIDATED
AFFILIATES
Revenues............... $ 55,701 $ 60,109 $ 70,028 $ 79,179 $ 90,840 $ 64,145 $ 71,832
Earnings from
continuing
operations............ 4,184 5,915 6,573 7,280 8,203 5,853 6,625
Earnings (loss) from
discontinued
operations............ 993 (1,189) -- -- -- -- --
Effect of accounting
change................ (862) -- -- -- -- -- --
Net earnings........... 4,315 4,726 6,573 7,280 8,203 5,853 6,625
Dividends declared..... 2,229 2,546 2,838 3,138 3,535 2,555 2,933
Earned on average share
owners' equity........ 17.5% 18.1% 23.5% 24.0% 25.0% 24.0% 24.6%
PER SHARE
Earnings from
continuing operations-
basic................. $ 1.22 $ 1.73 $ 1.95 $ 2.20 $ 2.50 $ 1.79 $ 2.03
Earnings (loss) from
discontinued
operations............ 0.29 (0.35) -- -- -- -- --
Effect of accounting
change................ (0.25) -- -- -- -- -- --
Net earnings-basic..... 1.26 1.38 1.95 2.20 2.50 1.79 2.03
Net earnings-diluted... 1.25 1.37 1.93 2.16 2.46 1.75 1.99
Dividends declared..... 0.6525 0.745 0.845 0.95 1.08 0.78 0.90
Total assets of
continuing operations.. 166,413 185,871 228,035 272,402 304,012 285,354 334,575
Long-term borrowings... 28,194 36,979 51,027 49,246 46,603 47,501 57,436
Shares outstanding--
average
(in thousands)........ 3,415,958 3,417,476 3,367,624 3,307,394 3,274,692 3,277,217 3,268,260
</TABLE>
General Electric is subject to the informational requirements of the
Exchange Act and in accordance therewith files periodic reports and other
information with the Commission relating to its business, financial condition
and other matters. Such reports and other information are 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 8. Such material may also be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
Except as described below, during the past five years, General Electric has
not been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors), nor has it 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 or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws. In April, 1994, a U.K. subsidiary of General Electric, IGE Medical
Systems Limited ("IGEMS") discovered the loss of a radioactive barium source
at the Radlett, England facility. The lost source, used to calibrate nuclear
camera detectors, emits a very low level of radiation. IGEMS immediately
reported the loss as required by the U.K. Radioactive Substances Act. An
ensuing investigation, conducted in cooperation with government authorities,
failed to locate the source. On July 21, 1994, Her Majesty's Inspectorate of
Pollution ("HMIP") charged IGEMS with violating the Radioactive Substances Act
by failing to comply with a condition of registration. Such Act provides that
a registrant like IGEMS, which "does not comply with a limitation or condition
subject to which [it] is so registered ... shall be guilty of [a criminal]
offense." Condition 7 of IGEMS' registration states that it "shall so far as
is reasonably practicable prevent ... loss of any registered source."
At the beginning of trial on February 24, 1995, IGEMS entered a guilty plea
and agreed to pay of fine of (Pounds)5,000 and assessed costs of
(Pounds)5,754. The prosecutor's presentation focused primarily on the 1991
change in internal IGEMS procedures and, in particular, the source logging
procedure. The prosecutor complimented IGEMS' investigation and efforts to
locate the source and advised the court that IGEMS had no previous violations
of the Radioactive Substances Act. He also told the court that the Radlett
plant had been highlighted
16
<PAGE>
as an exemplary facility to HMIP inspectors as part of their training. In
mitigation, IGEMS emphasized the significant infrastructure and expense
undertaken by IGEMS to provide security for radiation sources and the
significant effort and expense incurred in attempting to locate the missing
source.
The name, citizenship, business address, present principal occupation and
material positions held during the past five years of each of the directors
and executive officers of General Electric, Parent and the Offeror are set
forth in Annex I to this Offer to Purchase. Except as expressly noted in Annex
I to this Offer to Purchase, each such executive officer and director is a
citizen of the United States of America. During the past five years, none of
the executive officers or directors has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), or 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
or mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
Except as described in this Offer to Purchase, none of the Offeror, Parent,
General Electric, or to the best knowledge of the Offeror, Parent or General
Electric, any of the persons listed in Annex I hereto, owns or has any right
to acquire any Shares and none of them has effected any transaction in the
Shares during the past 60 days.
Except as set forth in this Offer to Purchase, none of the Offeror, Parent,
General Electric or, to the best knowledge of the Offeror, Parent or General
Electric, any of the persons listed in Annex I hereto, 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 such securities, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss or the giving or
withholding of proxies. Except as set forth in this Offer to Purchase, there
have been no contacts, negotiations or transactions between the Offeror,
Parent or General Electric, or, to the best of their knowledge, any of the
persons listed in Annex I hereto, 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 the Offeror, Parent, General
Electric or, to the best knowledge of Parent, the Offeror or General Electric,
any of the persons listed in Annex I hereto, has had any transaction with the
Company or any of its executive officers, directors or affiliates that would
require disclosure under the rules and regulations of the Commission
applicable to the Offer.
10. SOURCE AND AMOUNT OF FUNDS.
The Offeror estimates that the total amount of funds required to purchase
pursuant to the Offer the Shares that are outstanding on a fully diluted basis
and to pay fees and expenses related to the Offer and the Merger will be
approximately $116 million. The Offeror currently anticipates obtaining
approximately 60% of such funds from Parent with the balance being borrowed
from an affiliate of Parent, GE Fanuc Automation Europe, S.A. Parent currently
intends to provide the funds to be provided by it from cash on hand. The loan
from the affiliate of Parent will be unsecured and on arms-length terms.
While the foregoing represents the current intention of Parent and the
Offeror with respect to the financial arrangements for such funds, such
financial arrangements may change depending upon such factors as Parent and
the Offeror may deem appropriate.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
From time to time following the Company's initial public offering in March,
1997, the Company has discussed potential business combinations with various
third parties.
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In early September, 1998, Nicholas Gihl, Chairman of the Board, President
and Chief Executive Officer of the Company, requested that John Ricketson of
Michael Blitzer & Associates, Inc. contact representatives of Parent with the
intention of exploring strategic alliances beyond an input-output dual
licensing agreement that Parent and the Company entered into in August, 1998.
Mr. Ricketson spoke with John Kroon, the Vice President--Corporate Planning
and Development of Parent, and both agreed that the parties should meet to
discuss strategic alternatives.
In mid-September, 1998, the Company and Parent exchanged mutual non-
disclosure agreements for the purpose of furthering discussions. On October 14
and 15, 1998, Mr. Gihl and Peter A. Nicholson, Senior Vice President and Chief
Financial Officer of the Company, met at the Charlottesville, Virginia
headquarters of Parent with Joseph Hogan, President and Chief Executive
Officer of Parent, Mr. Kroon and other representatives of Parent regarding a
potential merger of the companies. During these meetings, Mr. Hogan indicated
that Parent might have an interest in acquiring the Company.
On October 16, 1998, the Company informally retained Adams, Harkness & Hill,
Inc. to provide financial advice with respect to the potential transaction
with Parent. At a meeting of the Company's Board of Directors (the "Company's
Board") on October 28, 1998, Adams, Harkness & Hill, Inc. made a presentation
on the steps necessary to consider any possible offer by Parent, as well as a
detailed analysis of pricing considerations, and the Company's Board voted to
formally retain Adams, Harkness & Hill, Inc. as its financial advisor. At this
meeting, Mr. Gihl informed the Company's Board that Parent made a preliminary
expression of interest regarding a potential purchase of the Company.
On November 9, 1998, Parent delivered a non-binding indication of interest
(the "Indication") to the Company, together with a draft letter of intent. The
Indication was not an offer and outlined many significant conditions to the
consummation of any transaction between Parent and the Company. The Indication
stated that, based on publicly available information, Parent indicated a
valuation for the Company of $11.00 per share. Among other things, the
Indication proposed that Parent: (i) begin business, legal and accounting due
diligence, and (ii) begin to negotiate a mutually satisfactory definitive
merger agreement with the Company.
On November 10, 1998, the Company's Board held a special meeting by
conference telephone to discuss the negotiations with Parent. At the meeting,
Mr. Gihl described his conversations with representatives of Parent and
informed the Company's Board that Parent was willing to pay $11 per share for
each of the Company's outstanding Shares, based upon certain assumptions
relating to outstanding shares and indebtedness. This meeting was also
attended by representatives of Adams, Harkness & Hill, Inc., and the Company's
legal advisors. At the conclusion of the meeting, the Company's Board (i)
approved the engagement letter between the Company and Adams, Harkness & Hill,
Inc. as the Company's financial advisor in connection with any potential
transaction, and (ii) instructed Mr. Gihl to continue discussions with Parent.
The Company's Board also authorized Adams, Harkness & Hill, Inc. to continue
to make inquiries of certain third parties to determine if they had any
interest in exploring a potential business combination with the Company.
On November 13, 1998, the Company's Board held a special meeting by
conference telephone to discuss the status of negotiations with Parent and to
authorize the Company to enter into a nonsolicitation agreement with Parent.
Later that same day, Parent and the Company agreed upon a form of
nonsolicitation agreement whereby the Company agreed not to actively solicit
offers relating to a sale of its business until December 4, 1998. At this
time, the parties agreed to dispense with negotiations of a letter of intent
and direct their efforts to the preparation of a mutually satisfactory merger
agreement. Following execution of the nonsolicitation agreement, the Company
ceased, and directed its representatives to cease, all communications with
third parties regarding a potential strategic alliance.
After the execution of the nonsolicitation agreement, on November 16, 1998,
Parent's representatives began an extensive business and legal due diligence
review of the Company, which included reviewing non-public information. Such
investigation continued until November 21, 1998.
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On Tuesday, November 17, 1998, Parent's counsel delivered to the Company and
its representatives an initial draft of the Merger Agreement, Stock Option
Agreement and form of Shareholder Agreement. The next day, the Company's Board
held a special meeting by conference telephone to discuss the status of
negotiations with Parent. Commencing on November 18, 1998, the Company's legal
and financial advisors met with Parent's representatives and legal advisors to
discuss various issues involving the Merger Agreement and related documents.
Negotiations between the parties continued until November 22, 1998.
On November 20 and November 21, 1998, the Company's Board held special
meetings by conference telephone. At these meetings, the Company's management
reviewed the status of the negotiations of the Merger Agreement and related
documentation. The Company's Board, the Company's management and the Company's
advisors also discussed the proposed transaction. On the evening of November
21, 1998, the Company was presented with forms of employment agreements for
each of Messrs. Gihl and Nicholson that Parent was requiring be signed at the
time of execution of the Merger Agreement and to be effective with the
consummation of the Offer.
In the afternoon of November 22, 1998, after completion of the negotiations
over the proposed Merger Agreement and related documentation, the Company's
Board held a special meeting by conference telephone to review, with the
advice and assistance of the Company's financial and legal advisors, the
proposed Merger Agreement and the transaction contemplated thereby, including
the Offer and the Merger, and the terms of the employment agreements with Mr.
Gihl and Mr. Nicholson. At the meeting, Mr. Gihl described the outcome to the
Company's Board of the final negotiations with Parent with respect to the
substantive terms of the proposed Merger Agreement. Adams, Harkness & Hill,
Inc. delivered its written opinion to the Company's Board to the effect that,
as of such date and based upon and subject to certain matters stated in such
opinion, the cash consideration of $11.00 per Share to be received by holders
of Shares in the Offer and the Merger was fair, from a financial point of
view, to such holders. Following a number of questions from, and discussions
among, the directors, the Company's Board (i) approved the Merger Agreement
and the transactions contemplated thereby and authorized the execution and
delivery thereof, (ii) determined that the Offer and the Merger are fair to,
and in the best interests of, the Company and its shareholders, and (iii)
recommended that the Company's shareholders accept the Offer and tender their
Shares to the Offeror. On November 22, 1998, the Board of Directors of Parent
and of the Offeror also approved the Merger Agreement and the transactions
contemplated thereby.
Parent, the Offeror, the Company and certain shareholders and employees of
the Company, as applicable, executed the Merger Agreement, the Option
Agreement, the Shareholder Agreements and the Employment Agreements on
November 22, 1998. On November 23, 1998, prior to the opening of trading, the
Company announced the transaction and shortly thereafter, Parent separately
announced the transaction. On November 30, 1998, the Offeror commenced the
Offer.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
The purpose of the Offer, the Merger, the Merger Agreement and the other
transactions contemplated thereby, is to enable Parent to acquire control of,
and the entire equity interest in, the Company.
Pursuant to the IBCA and the Articles of Incorporation (the "Charter") of
the Company, adoption by the Board of Directors of the Company and the
affirmative vote of the holders of two-thirds of all votes entitled to be cast
by all shares entitled to vote is required to approve the Merger Agreement.
The Board of Directors of the Company has unanimously approved and adopted the
Merger Agreement and approved the terms of the Offer and the Merger, and,
unless the Merger is consummated pursuant to the short form merger provisions
under the IBCA as described below, the only remaining required corporate
action of the Company is the approval of the Merger Agreement by the
affirmative vote of the holders of two-thirds of the outstanding Shares. If
the Offeror acquires, through the Offer or otherwise two-thirds of the
combined voting power of the outstanding Shares (which would be the case if
the Minimum Condition were satisfied and the Offeror were to accept for
payment
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Shares tendered pursuant to the Offer), it would have sufficient voting power
to effect the Merger without the vote of any other shareholder of the Company.
Pursuant to the Merger Agreement, the Company has agreed that, as soon as
practicable following the expiration of the Offer, it will duly call, give
notice of, convene and hold a meeting of shareholders for the purpose of
obtaining the shareholders' approval of the Merger Agreement. Parent has
agreed that all Shares owned by the Offeror or any other subsidiary of Parent
will be voted in favor of approval of the Merger Agreement. The shareholders
meeting shall be held as soon as practicable following the purchase of Shares
pursuant to the Offer. If the Offeror acquires two-thirds of the Shares
through the Offer or otherwise, approval of the Merger Agreement can be
obtained without the affirmative vote of any other shareholder of the Company.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, shareholders of the Company will
have certain rights under the IBCA to dissent and demand appraisal of, and to
receive payment in cash for the fair value of, their Shares. Such rights to
dissent, if the shareholder does not vote in favor of the Merger and complies
with certain statutory procedures, could lead to a judicial determination of
the fair value of the Shares (excluding any appreciation or depreciation in
anticipation of the Merger unless such exclusion would be inequitable)
required to be paid in cash to such dissenting holders of their Shares. Such
value could be less than, equal to, or more than the Offer Price. In addition,
such dissenting shareholders may be entitled to receive payment of interest
from the date of consummation of the Merger on the amount determined to be the
fair value of their Shares. In determining the fair value of the Shares, an
Illinois court would be required to take into account all relevant factors.
Accordingly, such determination could be based upon considerations other than,
or in addition to, the market value of the Shares, including, among other
things, asset values and earning capacity.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may,
under certain circumstances, be applicable to the Merger or another business
combination in which the Offeror seeks to acquire the remaining Shares not
held by it following the purchase of Shares pursuant to the Offer. The Offeror
believes, however, that Rule 13e-3 will not be applicable to the Merger if the
Merger is consummated within one year after the termination of the Offer at
the Offer Price. If applicable, Rule 13e-3 requires, 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 shareholders in such transaction be filed with the
Commission and disclosed to shareholders prior to consummation of the
transaction.
Plans for the Company. Parent will continue to evaluate the business and
operations of the Company during the pendency of the Offer and after the
consummation of the Offer and the Merger. Parent intends to seek additional
information about the Company during this period. Thereafter, Parent intends
to review such information as part of a comprehensive review of the Company's
business, operations, capitalization and management with a view to optimizing
the Company's potential contribution to Parent's business.
Except as indicated in this Offer to Purchase, Parent does not have any
current plans or proposals which relate to or would result in any of the
following: an extraordinary corporate transaction, 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 change in the present Board of Directors or
management of the Company; any material change in the Company's present
capitalization or dividend policy; or any other material change in the
Company's corporate structure or business. Notwithstanding the foregoing,
promptly after the Offeror acquires two-thirds of the Shares, the Offeror will
be entitled to designate such number of directors on the Board of Directors of
the Company as will make the percentage of the Company's directors designated
by the Offeror equal to the percentage of the aggregate voting power of the
Shares held by Parent or any of its Subsidiaries. In addition, assuming the
designation of directors as aforesaid and so long as there are holders of
Shares other than Parent or any of its subsidiaries, Parent expects that the
Board of Directors would not declare dividends on the Shares.
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13. THE MERGER AGREEMENT; THE SHAREHOLDER AGREEMENTS; THE OPTION AGREEMENTS;
AND CERTAIN OTHER AGREEMENTS.
The following summary of certain provisions of the Merger Agreement, the
Shareholder Agreements, the Option Agreements and certain employment agreements
between the Company and certain of its officers, copies of which are filed as
exhibits to the Schedule 14D-1, is qualified in its entirety by reference to
the text of such agreements.
The Merger Agreement
The Offer. The Offeror commenced the Offer in accordance with the terms of
the Merger Agreement. Each of the Company, Parent and the Offeror have agreed
to use its reasonable best efforts to take, or cause to be taken, all actions
necessary to comply promptly with all legal requirements that may be imposed on
itself with respect to the Offer and the Merger and shall promptly cooperate
with and furnish information to each other in connection with any such
requirements imposed upon any of them in connection with the Offer and the
Merger. Each of the Company, Parent and the Offeror shall, and shall cause its
subsidiaries to, use its reasonable best efforts to take all reasonable actions
necessary to obtain (and shall cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any exemption by, any
governmental entity or other public or private third party required to be
obtained or made by Parent, the Offeror or the Company or any of their
subsidiaries in connection with the Offer and the Merger or the taking of any
action contemplated thereby or by the Merger Agreement, except that no party
need waive any substantial rights or agree to any substantial limitation on its
operations or to dispose of any assets.
The Merger. The Merger Agreement provides that, upon the terms and subject to
the conditions of the Merger Agreement, and in accordance with the IBCA, the
Offeror shall be merged with and into the Company at the Effective Time.
Following the Merger, the separate corporate existence of the Offeror shall
cease and the Company shall continue as the Surviving Corporation and shall
succeed to and assume all the rights and obligations of the Offeror and the
Company in accordance with the IBCA. At the Effective Time, the Charter and the
By-laws of the Company shall be the Charter and By-Laws of the Surviving
Corporation, and the directors of the Offeror shall become the directors of the
Surviving Corporation and the officers of the Company shall become the officers
of the Surviving Corporation.
Conversion of Securities. As of the Effective Time, by virtue of the Merger
and without any action on the part of the Offeror, the Company or the holders
of any securities of the Offeror or the Company, each Share (other than Shares
owned by the Company, any subsidiary of the Company, Parent, the Offeror, any
other subsidiary of Parent or by shareholders, if any, who are entitled to and
who properly exercise dissenter's rights under the IBCA) shall be converted
into the right to receive from the Surviving Corporation, in cash, without
interest, the Offer Price. Each share of stock of the Offeror issued and
outstanding immediately prior to the Effective Time shall, at the Effective
Time, by virtue of the Merger and without any action on the part of the holder
of any shares of stock of the Offeror, be converted into and become one fully
paid and nonassessable share of common stock, no par value, of the Surviving
Corporation.
Representations and Warranties. In the Merger Agreement, the Company has made
customary representations and warranties to Parent and the Offeror. The
representations and warranties of the Company relate, among other things, to
its organization, good standing and corporate power; capital structure;
authority to enter into the Merger Agreement and the Option Agreement and to
consummate the transactions contemplated thereby; required consents and
approvals and no violations; filings made by the Company with the Commission
under the Securities Act and the Exchange Act (including financial statements
included in the documents filed by the Company under these acts); information
supplied by the Company; the absence of certain events since March 31, 1998;
permits and compliance with laws; tax matters; actions and proceedings; certain
agreements; benefit plans and employees and employment practices; compliance
with worker safety laws; liabilities; products; certain labor matters;
intellectual property matters and Year 2000 compliance; title to assets; state
takeover statutes; required votes; accounts receivable; inventories;
environmental matters; suppliers and customers; insurance; accuracy of certain
information; transactions with affiliates; and brokers.
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The Offeror and Parent have also made customary representations and
warranties to the Company. Representations and warranties of the Offeror and
Parent relate, among other things, to: their organization and authority to
enter into the Merger Agreement, the Option Agreement and the Shareholder
Agreements and to consummate the transactions contemplated thereby; required
consents and approvals and no violations; information supplied; operations of
the Offeror; brokers; and ownership of Shares.
Covenants Relating to the Conduct of Business. During the period from the
date of the Merger Agreement to the Effective Time, the Company has agreed as
to itself and its subsidiaries that, except as otherwise expressly contemplated
or permitted by the Merger Agreement or except to the extent Parent shall
otherwise consent in writing (such consent, in the case of clauses (f), (g),
(i), (j), (n), (o) and (p) below, not to be unreasonably withheld or delayed):
(a) the Company shall, and shall cause each of its subsidiaries to, in
all material respects carry on its business in the ordinary course of its
business as currently conducted and, to the extent consistent therewith,
use reasonable best efforts to preserve intact its current business
organizations, keep available the services of its current officers and
employees and preserve its relationships with customers, suppliers and
others having business dealings with it;
(b) the Company shall not, and shall not permit any of its subsidiaries
to, (i) other than dividends paid by wholly-owned subsidiaries, declare,
set aside or pay any dividends on, or make any other actual, constructive
or deemed distributions in respect of, any of its capital stock, or
otherwise make any payments to its shareholders in their capacity as such,
(ii) other than in the case of any subsidiary, 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 other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;
(c) the Company shall not, and shall not permit any of its subsidiaries
to, issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options (including options under the Company stock option plans) to acquire
any such shares, voting securities, equity equivalent or convertible
securities, other than (i) the issuance of Shares upon the exercise of
Company stock options outstanding on the date of the Merger Agreement in
accordance with their current terms, (ii) the issuance of Shares in
exchange for Class C Taylor Shares, (iii) the issuance of Shares upon
exercise of the Priester Warrant, (iv) the issuance of Shares pursuant to
the Option Agreement, (v) the issuance of Shares in satisfaction of certain
contingent payment obligations, and (vi) the issuance of shares under the
Stock Purchase Plan for the purchase period ending November 30, 1998;
(d) the Company shall not, and shall not permit any of its subsidiaries
to, amend its charter or by-laws;
(e) the Company shall not, and shall not permit any of its subsidiaries
to, acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of or equity in, or by any
other manner, any business or any corporation, limited liability company,
partnership, association or other business organization or division
thereof;
(f) the Company shall not, and shall not permit any of its subsidiaries
to, sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets, other than sales of inventory that
are in the ordinary course of business consistent with past practice and
sales of assets having an aggregate fair market value of up to $100,000;
(g) except as otherwise disclosed by the Company to Parent on the date of
the Merger Agreement, the Company shall not, and shall not permit any of
its subsidiaries to, incur any indebtedness for borrowed money, guarantee
any such indebtedness or make any loans, advances or capital contributions
to, or other investments in, any other person, other than (i) in the
ordinary course of business consistent with past practices and, in the case
of indebtedness and guarantees, in an amount not to exceed $500,000 and
(ii) indebtedness, loans, advances, capital contributions and investments
between the Company and any of its
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subsidiaries or between any of such subsidiaries, in each case in the
ordinary course of business consistent with past practices;
(h) the Company shall not, and shall not permit any of its subsidiaries
to, alter (through merger, liquidation, reorganization, restructuring or in
any other fashion) the corporate structure or ownership of the Company or
any subsidiary;
(i) except as otherwise disclosed by the Company to Parent on the date of
the Merger Agreement, the Company shall not, and shall not permit any of
its subsidiaries to, enter into or adopt any, or amend any existing,
severance plan, agreement or arrangement or enter into or amend any Company
Plan (as defined in the Merger Agreement) or employment or consulting
agreement;
(j) except as otherwise disclosed by the Company to Parent on the date of
the Merger Agreement, the Company shall not, and shall not permit any of
its subsidiaries to, increase the compensation payable or to become payable
to its directors, officers or employees (except for increases in the
ordinary course of business consistent with past practice in salaries or
wages of employees of the Company or any of its subsidiaries who are not
officers of the Company or any of its subsidiaries) or grant any severance
or termination pay to, or enter into any employment or severance agreement
with, any director or officer of the Company or any of its subsidiaries, or
establish, adopt, enter into, or, except as may be required to comply with
applicable law, amend in any material respect or take action to enhance in
any material respect or accelerate any rights or benefits under, any labor,
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer or employee;
(k) the Company shall not, and shall not permit any of its subsidiaries
to, knowingly violate or knowingly fail to perform any obligation or duty
imposed upon it or any subsidiary by any applicable material federal, state
or local law, rule, regulation, guideline or ordinance;
(l) the Company shall not, and shall not permit any of its subsidiaries
to, make any change to accounting policies or procedures (other than
actions required to be taken by generally accepted accounting principles);
(m) the Company shall not, and shall not permit any of its subsidiaries
to, prepare or file any tax return inconsistent with past practice or, on
any such tax return, take any position, make any election, or adopt any
method that is inconsistent with positions taken, elections made or methods
used in preparing or filing similar tax returns in prior periods;
(n) the Company shall not, and shall not permit any of its subsidiaries
to, settle or compromise any federal, state, local or foreign income tax
dispute in excess of $100,000 or make any tax election;
(o) the Company shall not, and shall not permit any of its subsidiaries
to, settle or compromise any claims or litigation in excess of $100,000 or
commence any litigation or proceedings;
(p) the Company shall not, and shall not permit any of its subsidiaries
to, enter into or amend any agreement or contract (i) having a remaining
term in excess of 12 months or (ii) which involves or is expected to
involve future payments of $500,000 or more during the term thereof; or
purchase any real property, or make or agree to make any new capital
expenditure or expenditures (other than the purchase of real property)
which in the aggregate are in excess of $500,000;
(q) the Company shall not, and shall not permit any of its subsidiaries
to, pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction of any such claims, liabilities
or obligations, in the ordinary course of business consistent with past
practice or in accordance with their terms; and
(r) the Company shall not, and shall not permit any of its subsidiaries
to, authorize, recommend, propose or announce an intention to do any of the
foregoing, or enter into any contract, agreement, commitment or arrangement
to do any of the foregoing.
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Certain Covenants Relating to the Business. Pursuant to the Merger Agreement,
the Company has agreed to take certain actions relating to outstanding business
relationships and stock rights. Prior to the acceptance for payment of any
Shares by the Offeror pursuant to the Offer, the Company and Parent will enter
into certain product distribution agreements contemplated by the letter
agreement dated November 21, 1998 among the Company, Parent and Digital
Electronics Corporation ("DEC") and (ii) prior to the Effective Time, the
Company will purchase the shares of common stock of Taylor owned by DEC as
contemplated by such letter agreement. Prior to the acceptance for payment of
any Shares by the Offeror pursuant to the Offer, the Company will (i) obtain
the consent of the holders of the Priester Warrant so that after the Company's
obtaining such consent the holders thereof will have no right to purchase
Shares, (ii) obtain the consent of the other parties to certain contingent
payment agreements so that after the Company's obtaining such consent the other
parties to such agreements will have no right to receive Shares as payment of
any contingent amounts thereunder; and (iii) be the holder of all of the issued
and outstanding capital stock of Taylor other than the common stock of Taylor
owned by DEC, and there shall be no options, warrants, calls, rights or
agreements to which the Company or Taylor is a party, or by which any of them
is bound obligating the Company or Taylor to issue, sell, or cause to be
issued, delivered or sold, additional shares of capital stock of Taylor or to
grant, extend or enter into any such option, warrant, call, right or agreement.
No Solicitation. The Company shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any officer, director or
employee of or any financial advisor, attorney or other advisor or
representative of, the Company or any of its subsidiaries to, (i) solicit,
initiate or encourage the submission of, any Takeover Proposal (as defined
below), (ii) enter into any agreement with respect to or approve or recommend
any Takeover Proposal or (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to the Company
or any subsidiary in connection with, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Takeover Proposal; provided, however, that prior to
the acceptance for payment of Shares pursuant to the Offer, if the Board of
Directors of the Company reasonably determines that a Takeover Proposal
constitutes a Superior Proposal (as defined below), then, to the extent
required by the fiduciary obligations of the Board of Directors of the Company,
as determined in good faith by a majority thereof after consultation with
independent counsel, the Company and its representatives may, in response to an
unsolicited request therefor, and subject to compliance with the Merger
Agreement, furnish information with respect to the Company and its subsidiaries
to any person pursuant to a customary confidentiality statement (as determined
by the Company's independent counsel) and participate in discussions or
negotiations with such person. For purposes of the Merger Agreement, "Takeover
Proposal" means any proposal for a merger or other business combination
involving the Company or any of its subsidiaries or any proposal or offer to
acquire in any manner, directly or indirectly, an equity interest in, any
voting securities of, or a substantial portion of the assets of the Company or
any of its subsidiaries, other than the transactions contemplated by the Merger
Agreement and the Option Agreement, and "Superior Proposal" means a bona fide
proposal made by a third party to acquire the Company pursuant to a tender or
exchange offer, a merger, a sale of all or substantially all its assets or
otherwise on terms which a majority of the disinterested members of the Board
of Directors of the Company determines, at a duly constituted meeting of the
Board of Directors or by unanimous written consent, in its reasonable good
faith judgment to be more favorable to the Company's shareholders than the
Merger (after consultation with the Company's independent financial advisor)
and for which financing, to the extent required, is then committed or which, in
the reasonable good faith judgment of a majority of such disinterested members,
as expressed in a resolution adopted at a duly constituted meeting of such
members (after consultation with the Company's independent financial advisor),
is reasonably capable of being obtained by such third party.
The Merger Agreement provides further that, the Company must advise Parent
orally and in writing of (i) any Takeover Proposal or any inquiry with respect
to or which could lead to any Takeover Proposal received by any officer or
director of the Company or, to the knowledge of the Company, any financial
advisor, attorney or other advisor or representative of the Company, (ii) the
material terms of such Takeover Proposal (including a copy of any written
proposal), and (iii) the identity of the person making any such Takeover
Proposal or inquiry no later than 24 hours following receipt of such Takeover
Proposal or inquiry. If the Company intends to furnish
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any person with any information with respect to any Takeover Proposal, the
Company is required to advise Parent orally and in writing of such intention
not less than 24 hours in advance of providing such information. The Company is
further required to keep Parent fully informed of the status and details of any
such Takeover Proposal or inquiry.
Third Party Standstill Agreements. During the period from the date of the
Merger Agreement through the Effective Time, the Company has agreed not to
terminate, amend, modify or waive any provision of any standstill agreement to
which the Company or any of its subsidiaries is a party (other than any
involving Parent). The Company has also agreed to enforce, to the fullest
extent permitted under applicable law, the provisions of any such agreements,
including, but not limited to, obtaining injunctions to prevent any breaches of
such agreements and to enforce specifically the terms and provisions thereof in
any court of the United States or any state thereof having jurisdiction.
Stock Based Compensation. Prior to the purchase of Shares pursuant to the
Offer, the Board of Directors of the Company (or, if appropriate, any committee
thereof) shall adopt appropriate resolutions and take all other actions
necessary or appropriate to (i) cause each option to purchase Shares that was
outstanding as of the date of the Merger Agreement to vest and to be
exercisable immediately prior to the purchase of Shares pursuant to the Offer
and (ii) cause each option to purchase Shares that is outstanding upon the
purchase of Shares pursuant to the Offer to be cancelled as of the purchase of
Shares pursuant to the Offer. In consideration of such cancellation, each
holder of an option to purchase Shares will be entitled to receive from the
Company an amount equal to (A) the product of (1) the number of Shares subject
to such option and (2) the excess, if any, of the Offer Price over the exercise
price per share for the purchase of Shares subject to such option, minus (B)
all applicable federal, state and local taxes required to be withheld in
respect of such payment. The amounts payable pursuant to the Merger Agreement
will be paid as soon as reasonably practicable following the acceptance for
payment by the Offeror pursuant to the Offer. The amount payable to any option
holder will be reduced to the extent necessary to prevent such payment,
together with any other amounts payable to such option holder by the Company,
from constituting a "parachute payment," within the meaning of section 280G of
the Code.
Pursuant to the Merger Agreement, the Company will take all actions necessary
to ensure that the Purchase Period (as defined in the Stock Purchase Plan)
applicable to the options outstanding under the Stock Purchase Plan is
shortened so as to have an Exercise Date (as defined in the Stock Purchase
Plan) that occurs before the acceptance for payment by the Offeror of Shares
pursuant to the Offer; no new Purchase Period shall begin from and after the
date of the Merger Agreement and no holder of an option to purchase Shares
under the Stock Purchase Plan is permitted to increase his or her rate of
payroll deduction under the Stock Purchase Plan from and after the date of the
Merger Agreement.
The Company has also agreed to take all actions necessary to provide that,
effective as of acceptance for payment by the Offeror of Shares pursuant to the
Offer, each of the Company's stock option plans and any similar plan or
agreement of the Company will be terminated, any rights under any other plan,
program, agreement or arrangement to the issuance or grant of any other
interest in respect of the capital stock of the Company or any of its
subsidiaries will be terminated, and no holder of an option to purchase Shares
will have any right to receive any shares of capital stock of the Company or,
if applicable, the Surviving Corporation, upon exercise of any stock option.
Indemnification. Pursuant to the Merger Agreement, Parent and the Offeror
agreed that from and after the Effective Time, Parent will cause the Surviving
Corporation to indemnify and hold harmless all past and present officers and
directors of the Company and of its subsidiaries to the same extent and in the
same manner such persons are indemnified as of the date of the Merger Agreement
by the Company pursuant to the IBCA, the Charter or the Company's By-laws for
acts or omissions occurring at or prior to the Effective Time.
Parent has also agreed to cause the Surviving Corporation to provide, for a
period of not less than three years from the Effective Time, the Company's
current directors and officers an insurance and indemnification policy that
provides coverage for events occurring prior to the Effective Time that is
substantially similar to the
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Company's existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that the Surviving
Corporation will not be required to pay an annual premium for the director's
and officer's insurance in excess of the last annual premium paid prior to the
date of the Merger Agreement but in such case will purchase as much coverage as
possible for such amount.
Effective at the Effective Time, Parent will guarantee the obligations of the
Surviving Corporation under the immediately preceding two paragraphs.
Board Representation. The Merger Agreement provides that promptly after such
time as the Offeror acquires Shares which represent at least the Minimum
Condition, the Offeror will be entitled to designate at its option up to that
number of directors of the Company's Board of Directors, subject to compliance
with Section 14(f) of the Exchange Act, as will make the percentage of the
Company's directors designated by the Offeror equal to the percentage of the
aggregate voting power of the Shares held by Parent or any of its subsidiaries
and the Company shall, at such time cause the Offeror's designees to be so
elected by its existing Board of Directors. However, in the event that the
Offeror's designees are elected to the Board of Directors of the Company, until
the Effective Time, such Board of Directors shall have at least three directors
who are directors on the date of the Merger Agreement and who are not officers
of the Company (the "Independent Directors"). If the number of Independent
Directors shall be reduced below three for any reason whatsoever, the remaining
Independent Directors shall designate a person or persons to fill such vacancy
each of whom shall be deemed to be an Independent Director for purposes of the
Merger Agreement or, if no Independent Directors then remain, the other
directors of the Company as of the date of the Merger Agreement shall designate
three persons to fill such vacancies who shall not be officers or affiliates of
the Company or any of its subsidiaries, or officers or affiliates of Parent or
any of its subsidiaries, and such persons shall be deemed to be Independent
Directors for purposes of the Merger Agreement. In connection with the
foregoing, the Company will promptly, at the option of Parent, either increase
the size of the Company's Board of Directors and/or obtain the resignation of
such number of its current directors as is necessary to enable the Offeror's
designees to be elected or appointed to the Company's Board of Directors as
provided above.
Conditions Precedent. The respective obligations of each party to effect the
Merger shall be subject to the satisfaction (or waiver by each party) prior to
the Effective Time of the following conditions: (i) if required by applicable
law, the shareholders of the Company shall have approved the Merger Agreement;
(ii) no court or other Governmental Entity (as defined in the Merger Agreement)
having jurisdiction over the Company or Parent or any of their respective
subsidiaries shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making the merger illegal; and (iii) the Offeror shall have
previously accepted for payment and paid for Shares pursuant to the Offer.
The obligations of Parent and the Offeror to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
additional conditions: (i) the Company shall have performed in all material
respects each of its agreements contained in the Merger Agreement required to
be performed on or prior to the Effective Time, and the representations and
warranties of the Company contained in the Merger Agreement shall be true and
correct on and as of the Effective Time as if made on and as of such date,
except where the failure to be so true and correct would not have a Material
Adverse Effect (as defined in the Merger Agreement) on the Company, and Parent
shall have received a certificate signed on behalf of the Company by its Chief
Executive Officer and its Chief Financial Officer to such effect, (ii) the
Company shall have obtained the consent or approval of each person or
Governmental Entity whose consent or approval shall be required in connection
with the transactions contemplated by the Merger Agreement under any loan or
credit agreement, note, mortgage, indenture, lease or other agreement or
instrument, except as to which the failure to obtain such consents and
approvals would not, in the reasonable opinion of Parent, individually or in
the aggregate, have a Material Adverse Effect on the Company or Parent or upon
the consummation of the transactions contemplated in the Merger Agreement, the
Option Agreement or the Shareholder Agreements, (iii) in obtaining any approval
or consent required to consummate any of the transactions contemplated herein,
in the Option Agreement or the Shareholder Agreements, no Governmental Entity
shall have imposed or shall have sought to impose any
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condition, penalty or requirement which, in the reasonable opinion of Parent,
individually or in aggregate would have a Material Adverse Effect on the
Company or Parent, and (iv) since the date of the Merger Agreement, there shall
have been no Material Adverse Change (as defined in the Merger Agreement) with
respect to the Company, and Parent shall have received a certificate signed on
behalf of the Company by its Chief Executive Officer and Chief Financial
Officer to such effect.
Termination. The Merger Agreement provides that it may be terminated at any
time prior to the Effective Time, whether before or after the approval of the
terms of the Merger Agreement by the shareholders of the Company: (a) by mutual
written consent of Parent and the Company; (b) by either Parent or the Company:
(i) if (x) as a result of the failure of any of the conditions to the Offer as
set forth in this Offer to Purchase (see Section 15) shall have terminated or
expired in accordance with its terms without the Offeror having accepted for
payment any Shares pursuant to the Offer or (y) the Offeror shall not have
accepted for payment any Shares pursuant to the Offer prior to March 31, 1999
(provided that the right to terminate the Merger Agreement pursuant to this
clause (b)(i) shall not be available to any party whose failure to perform any
of its obligations under the Merger Agreement results in the failure of any
such condition to the Offer or if the failure of such condition results from
facts or circumstances that constitute a breach of any representation or
warranty under the Merger Agreement by such party) or (ii) if any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the acceptance for
payment of, or payment for, Shares pursuant to the Offer and such order, decree
or ruling or other action shall have become final and nonappealable; (c) by
Parent or the Offeror prior to the purchase of Shares pursuant to the Offer in
the event of a breach by the Company of any representation, warranty, covenant
or other agreement contained in the Merger Agreement which (i) would give rise
to the failure of condition (e) or (f) described below in Section 15 and (ii)
cannot be or has not been cured within 30 days after the giving of written
notice to the Company; (d) by Parent or the Offeror if either Parent or the
Offeror is entitled to terminate the Offer as a result of the occurrence of any
event set forth in paragraph (d) described below in Section 15; (e) by the
Company if the Board of Directors of the Company reasonably determines that a
Takeover Proposal constitutes a Superior Proposal and a majority of the Board
of Directors of the Company determines in its reasonable good faith judgment,
after consultation with outside counsel, that failing to terminate the Merger
Agreement would constitute a breach of its fiduciary duties under applicable
law; provided, that it has complied with the notice and other provisions of the
Merger Agreement and it complies with requirements of the Merger Agreement
relating to payment of Expenses and the Termination Fee (each as defined below
under "Fees and Expenses"); and provided further that the Company may not
terminate the Merger Agreement pursuant to this clause (e) unless and until 72
hours have elapsed following the delivery to Parent of a written notice of such
determination by the Board of Directors of the Company; (f) by the Company, if
(i) any of the representations or warranties of Parent or the Offeror set forth
in the Merger Agreement that are qualified as to materiality shall not be true
and correct in any respect or any such representations or warranties that are
not so qualified shall not be true and correct in any material respect or (ii)
Parent or the Offeror shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of Parent or the Offeror to be performed or complied with
by it under the Merger Agreement and such untruth, incorrectness or failure
cannot be or has not been cured within 30 days after the giving of written
notice to Parent or the Offeror, as applicable; or (g) by the Company, if the
Offer has not been timely commenced. In the event of a termination of the
Merger Agreement by either the Company or Parent, the Merger Agreement shall
become void (except for certain specified provisions, including those
pertaining to the payment of certain expenses and fees and except for certain
confidentiality obligations of the parties) and there shall be no liability or
obligation on the part of Parent, the Offeror or the Company or their
respective officers or directors, other than for liability for any willful
breach of a representation or warranty contained in the Merger Agreement or the
breach of any covenant contained in the Merger Agreement.
Fees and Expenses. Except as provided in the Merger Agreement, whether or not
the Merger is consummated, all costs and expenses incurred in connection with
the Offer, the Merger and the Merger Agreement and the transactions
contemplated thereby shall be paid by the party incurring such costs and
expenses.
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The Merger Agreement provides that the Company will pay, or cause to be
paid, in same day funds to Parent the following amounts under the
circumstances and at the times set forth as follows: (i) if Parent or the
Offeror terminates the Merger Agreement in accordance with the provisions
described in clause (d) under "Termination" above, the Company shall pay the
Expenses of Parent and a $4 million termination fee (the "Termination Fee")
upon demand; (ii) if the Company terminates the Merger Agreement in accordance
with the provision described in clause (e) under "Termination" above, the
Company shall pay the Termination Fee within one business day following such
termination and the Expenses of Parent upon demand; and (iii) if Parent or the
Offeror terminates the Merger Agreement under clause (c) under "Termination"
above and, at the time of such termination, a Takeover Proposal shall have
been made (other than a Takeover Proposal made prior to the date of the Merger
Agreement), the Company shall pay the Expenses of Parent, upon demand; in
addition, if concurrently therewith or within 12 months after such
termination, (A) the Company shall enter into a merger agreement, acquisition
agreement or similar agreement (including a letter of intent) with respect to
a Takeover Proposal or a Takeover Proposal is consummated, involving any party
(1) with whom the Company had any discussions with respect to a Takeover
Proposal, (2) to whom the Company furnished information with respect to or
with a view to a Takeover Proposal or (3) who had submitted a proposal or
expressed any interest publicly in a Takeover Proposal, in the case of each of
clauses (1), (2) and (3), prior to such termination, or (B) the Company enters
into a merger agreement, acquisition agreement or similar agreement (including
a letter of intent) with respect to a Superior Proposal, or a Superior
Proposal is consummated, then, in the case of either (A) or (B) above, the
Company shall pay the Termination Fee upon the earlier of the execution of
such agreement or upon consummation of such Takeover Proposal or Superior
Proposal. The Merger Agreement provides that Parent will pay, or cause to be
paid, in same day funds to the Company, the Expenses of the Company if the
Company terminates the Merger Agreement in accordance with the provisions
described in clause (f) or (g) under "Termination" above.
For purposes of the Merger Agreement, "Expenses" means with respect to
Parent or the Company, as the case may be, documented out-of-pocket fees and
expenses incurred or paid by or on behalf of Parent or the Company, as the
case may be, in connection with the Offer, the Merger or the consummation of
any of the transactions contemplated by the Merger Agreement, including all
fees and expenses of law firms, commercial banks, investment banking firms,
accountants, experts and consultants to Parent or the Company, as the case may
be; provided that the Expenses of Parent or the Company shall not exceed $1
million.
Pursuant to the Merger Agreement, the aggregate amount of the Termination
Fee and Expenses payable to Parent shall be reduced to an amount not less than
zero by subtracting from the aggregate amount otherwise payable to Parent the
amount realized or anticipated to be realizable (based on the facts as they
exist on the date such aggregate amount shall become due) by Parent under the
Option Agreement; provided, that if such aggregate amount shall be so reduced
by an amount realizable by Parent and thereafter the Option Agreement shall
terminate without receipt by Parent of such amount, then, to the extent Parent
is entitled to receive such aggregate amount, an additional payment shall be
made to Parent in such amount promptly following such termination.
The Shareholder Agreements
Pursuant to the Shareholder Agreements, each Tendering Shareholder has
agreed that, (a) such Tendering Shareholder shall vote the Shares held by such
Tendering Shareholder in favor of the Merger and the Merger Agreement; (b)
such Tendering Shareholder shall vote his Shares against (i) any other merger
agreement or merger, consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of or
by the Company or any other Takeover Proposal or (ii) any amendment of the
Company's charter or by-laws or other proposal or transaction involving the
Company or any of its subsidiaries, which amendment or other proposal or
transaction would in any manner impede, frustrate, prevent or nullify the
Merger, the Merger Agreement or any of the other transactions contemplated by
the Merger Agreement; (c) such Tendering Shareholder shall not (i) sell,
transfer, pledge, assign or otherwise dispose of, or enter into any
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contract, option or other arrangement (including any profit sharing
arrangement) with respect to the sale, transfer, pledge, assignment or other
disposition of, their Shares to any person other than the Offeror or the
Offeror's designee or (ii) enter into any voting arrangement, whether by proxy,
voting agreement or otherwise, in connection, directly or indirectly, with any
Takeover Proposal; (d) such Tendering Shareholder shall not, and shall not
permit any investment banker, attorney or other adviser or representative of
such Tendering Shareholder to, (i) directly or indirectly solicit, initiate or
encourage the submission of, any Takeover Proposal or (ii) directly or
indirectly participate in any discussions or negotiations regarding, or furnish
to any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Takeover Proposal; and (e) so long as
the Merger Agreement has not been terminated, the Tendering Shareholder shall
tender pursuant to the Offer and not withdraw the Shares owned by such
Tendering Shareholders. In addition, those Tendering Shareholders who hold
Class C Taylor Shares have agreed to take such action as shall be necessary to
request retraction of such Shares and tender the Shares received upon such
retraction.
The Shareholder Agreements terminate upon the earlier of (i) the Effective
Time and (ii) the termination of the Merger Agreement in accordance with its
terms; provided, however, that the Shareholder Agreements will not terminate
until 120 days after termination pursuant to clause (ii) immediately above if
(A) the Merger Agreement is terminated by Parent or the Offeror pursuant to
clause (d) of "Termination" above, (B) the Merger Agreement is terminated by
the Company pursuant to clause (e) under "Termination" above or (C) unless the
Company has terminated the Merger Agreement pursuant to clause (f) or clause
(g) under "Termination" above, prior to the termination, a Takeover Proposal
shall have been commenced or the Company shall have entered into an agreement
with respect to, approved or recommended or taken any action to facilitate, a
Takeover Proposal (the "Shareholder Agreement Termination Date").
Option Agreement
Pursuant to the Option Agreement, the Company has granted Parent an
irrevocable option (the "Option") to purchase from time to time the Company
Option Shares at a price of $11.00 per share, which may be exercised, in whole
or from time to time in part, at any time after the date of the Option
Agreement and prior to the termination of the Option. Parent may exercise the
Option if neither Parent nor the Offeror shall have breached any of its
material obligations under the Merger Agreement and no preliminary or permanent
injunction or other order issued by any federal or state court of competent
jurisdiction in the United States invalidating the grant or prohibiting the
exercise of the Option shall be in effect and if one or more of the following
events shall have occurred on or after the date of the Option Agreement: (i)
any person, corporation, partnership, limited liability company or other entity
or group (such person, corporation, partnership, limited liability company or
other entity or group being referred to hereinafter, singularly or
collectively, as a "Person"), acquires or becomes the beneficial owner of 20%
or more of the outstanding Shares (other than a person who, as of the date
hereof, is the beneficial owner of 20% or more of the outstanding Shares (a
"20% Holder")); (ii) any 20% Holder increases his beneficial ownership of
Shares by more than 1%; (iii) any group (other than a group which includes or
may reasonably be deemed to include Parent or any of its affiliates) is formed
which beneficially owns 20% or more of the outstanding Shares; (iv) any Person
(other than Parent or its affiliates) shall have commenced a tender or exchange
offer for 20% or more of the then outstanding Shares or publicly proposed any
bona fide merger, consolidation or acquisition of all or substantially all the
assets of the Company, or other similar business combination involving the
Company; (v) the Company enters into, or announces that it proposes to enter
into, an agreement, including, without limitation, an agreement in principle,
providing for a merger or other business combination involving the Company or a
"significant subsidiary" (as defined in Rule 1.02(v) of Regulation S-X as
promulgated by the Commission) of the Company or the acquisition of a
substantial interest in, or a substantial portion of the assets, business or
operations of, the Company or a significant subsidiary (other than the
transactions contemplated by the Merger Agreement); (vi) any Person (other than
Parent or its affiliates) is granted any option or right, conditional or
otherwise, to acquire or otherwise become the beneficial owner of Shares which,
together with all Shares beneficially owned by such Person, results or would
result in such Person being the beneficial owner of 20% or more of the
outstanding Shares; or (vii) there is a public announcement
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with respect to a plan or intention by the Company, other than Parent or its
affiliates, to effect any of the foregoing transactions. For purposes of the
Option Agreement, the terms "group" and "beneficial owner" are defined by
reference to Section 13(d) of the Exchange Act.
Parent's obligation to purchase the Company Option Shares following the
exercise of the Option, and the Company's obligation to deliver the Company
Option Shares, are subject to the conditions that (i) no preliminary or
permanent injunction or other order issued by any federal or state court of
competent jurisdiction in the United States prohibiting the delivery of the
Company Option Shares shall be in effect, (ii) the purchase of the Company
Option Shares will not violate Rule 10b-13 promulgated under the Exchange Act;
and (iii) all applicable waiting periods under the HSR Act, shall have expired
or been terminated.
Prior to the termination of the Option in accordance with the Option
Agreement, if a Put Event (as defined below) has occurred, Parent shall have
the right, upon three business days' prior written notice to the Company, to
require the Company to purchase the Option from Parent (the "Put Right") at a
cash purchase price (the "Put Price") equal to the product determined by
multiplying (i) the number of Company Option Shares as to which the Option has
not yet been exercised by (ii) the Spread (as defined below). As used in the
Option Agreement, the term "Put Event" means the occurrence on or after the
date hereof of any of the following: (i) any Person (other than Parent or its
affiliates) acquires or becomes the beneficial owner of 50% or more of the
outstanding Shares or (ii) the Company consummates a merger or other business
combination involving the Company or a significant subsidiary of the Company or
the acquisition of a substantial interest in, or a substantial portion of the
assets, business or operations of, the Company or a significant subsidiary
(other than the transactions contemplated by the Merger Agreement) and the term
"Spread" means the excess, if any, of (i) the greater of (x) the highest price
(in cash or fair market value of securities or other property) per Share paid
or to be paid within 12 months preceding the date of exercise of the Put Right
for any Shares beneficially owned by any Person who shall have acquired or
become the beneficial owner of 20% or more of the outstanding Shares after the
date of the Option Agreement or (y) the average of the last reported sales
prices quoted on Nasdaq of the Shares during the five trading days immediately
preceding the written notice of exercise of the Put Right over (ii) $11.00.
At any time after the termination of the Option and for a period of 90 days
thereafter, the Company shall have the right, upon three business days' prior
written notice, to repurchase from Parent (the "Repurchase Right"), all (but
not less than all) of the Company Option Shares acquired by Parent pursuant to
the Option Agreement and with respect to which Parent then has beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) at a price per
share equal to the greater of (i) the average of the last reported sales price
quoted on the Nasdaq National Market of Shares during the five trading days
immediately preceding the written notice of exercise of the Repurchase Right
and (ii) the Exercise Price, plus interest at a rate per annum equal to the
costs of funds to Parent at the time of exercise of the Repurchase Right.
In addition, the Option Agreement provides that Parent will have certain
registration rights with respect to any Company Option Shares purchased by
Parent pursuant to the Option Agreement.
Employment Agreements
Concurrently with execution of the Merger Agreement, the Company entered into
an Employment Agreement with Mr. Nicholas Gihl, the President and Chief
Executive Officer of the Company, and Mr. Peter Nicholson, the Chief Financial
Officer of the Company. Such Employment Agreements shall be effective upon the
purchase of the Shares pursuant to the Offer. Mr. Gihl's Employment Agreement
has a term of three years and automatically renews for successive one year
periods unless otherwise terminated. Pursuant to his Employment Agreement, Mr.
Gihl's initial annual salary is $260,000 and his minimum bonus is $40,000, to
be increased based on achieving Company performance objectives. In addition,
Mr. Gihl will receive 5,000 shares of restricted stock of General Electric
(subject to the approval of the General Electric Board of Directors). The
restriction lapse date for 2,500 of such shares will be the last day for the
initial employment term and for the remaining 2,500 shares will be the last day
of the fifth year of Mr. Gihl's employment by the Company.
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Mr. Nicholson's Employment Agreement has a term of two years and
automatically renews for successive one year periods unless otherwise
terminated. Pursuant to his Employment Agreement, Mr. Nicholson's initial
annual salary is $175,000 and his minimum bonus is $50,000. In addition, if Mr.
Nicholson remains employed by the Company for his initial employment term, he
will receive a bonus of $85,000.
Pursuant to their Employment Agreements, in the event that Mr. Gihl or Mr.
Nicholson is terminated for a reason other than cause or terminates his
employment for good reason, as set forth in the applicable Employment
Agreement, he will receive a payment from the Company in one lump sum of an
amount equal to twenty-four times the greater of his monthly salary as of the
date of termination or his highest monthly salary during the prior twelve month
period, plus two times the bonus paid to him for the fiscal year immediately
prior to the date of such termination. In addition, the Company will continue
his medical insurance benefits for a period of twelve months or until he is
eligible for medical coverage under a plan of a successive employer and will
reimburse him for any excise taxes payable under the "excess parachute payment"
provisions of the Code.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will, among other things, from the date of the Merger Agreement
through the Effective Time, (x) declare, set aside or pay any dividends on, or
make any other actual, constructive or deemed distributions in respect of any
of its capital stock, other than dividends paid by a wholly owned subsidiary of
the Company, (y) 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 (z) purchase, redeem or
otherwise acquire any shares of its capital stock or any other securities
thereof or any rights, warrants or options to acquire any such shares or other
securities.
15. CERTAIN CONDITIONS TO THE OFFEROR'S OBLIGATIONS.
Notwithstanding any other term of the Offer or the Merger Agreement, the
Offeror shall not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act (relating to the Offeror's obligation to pay for or
return tendered Shares after the termination or withdrawal of the Offer), to
pay for any Shares tendered pursuant to the Offer unless (i) there shall have
been validly tendered and not withdrawn prior to the expiration of the Offer
such number of Shares that would constitute at least two-thirds of the Shares
that in the aggregate are outstanding determined on a fully diluted basis
(assuming the exercise of all options to purchase common stock of the Company,
and the conversion or exchange of all securities convertible or exchangeable
into, Shares outstanding upon the expiration of the Offer) ("Minimum
Condition") and (ii) any waiting period under the HSR Act applicable to the
purchase of Shares pursuant to the Offer shall have expired or been terminated,
and any other applicable filing or approval requirement of any nation or region
applicable to the purchase of Shares pursuant to the Offer shall have been
satisfied, prior to the expiration date of the Offer (the "HSR Condition").
Furthermore, notwithstanding any other term of the Offer or this Agreement, the
Offeror shall not be required to accept for payment or, subject as aforesaid,
to pay for any Shares not theretofore accepted for payment or paid for, and may
terminate the Offer if, at any time on or after the date of the Merger
Agreement and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exists (other than as a result of any
action or inaction of Parent or any of its subsidiaries that constitutes a
breach of the Merger Agreement):
(a) there shall be threatened or pending by any Governmental Entity any
suit, action or proceeding (i) challenging the acquisition by Parent or the
Offeror of any Shares under the Offer, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger or the performance of any
of the other transactions contemplated by the Merger Agreement or the
Shareholder Agreements (including the voting provisions thereunder), or
seeking to obtain from the Company, Parent or the Offeror any damages that
would have a Material Adverse Effect on the Company, (ii) seeking to
prohibit or materially limit the ownership or operation by the Company,
Parent or any of their respective subsidiaries of a material portion of the
business or assets of the Company and its subsidiaries, taken as a whole,
or Parent and its subsidiaries, taken as a whole, or to compel the Company
or Parent to dispose of or hold separate any material portion
31
<PAGE>
of the business or assets of the Company and its subsidiaries, taken as a
whole, or Parent and its subsidiaries, taken as a whole, as a result of the
Offer or any of the other transactions contemplated by the Merger Agreement
or the Shareholder Agreements, (iii) seeking to impose material limitations
on the ability of Parent or the Offeror to acquire or hold, or exercise
full rights of ownership of, any Shares to be accepted for payment pursuant
to the Offer, including the right to vote such Shares on all matters
properly presented to the shareholders of the Company, (iv) seeking to
prohibit Parent or any of its subsidiaries from effectively controlling in
any material respect any material portion of the business or operations of
the Company or its subsidiaries or (v) which otherwise is reasonably likely
to have a Material Adverse Effect on the Company; or there shall be pending
by any other person any suit, action or proceeding which is reasonably
likely to have a Material Adverse Effect on the Company;
(b) there shall be enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger by any Governmental Entity any
statute, rule, regulation, judgment, order or injunction, other than the
application to the Offer or the Merger of applicable waiting periods under
the HSR Act, that is reasonably likely to result, directly or indirectly,
in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above;
(c) there shall have occurred any Material Adverse Change (as defined in
the Merger Agreement) with respect to the Company;
(d) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or the
Offeror its approval or recommendation of the Offer, the Merger or the
Merger Agreement, or approved or recommended any Takeover Proposal or (ii)
the Board of Directors of the Company or any committee thereof shall have
resolved to take any of the foregoing actions;
(e) any of the representations and warranties of the Company set forth in
the Merger Agreement (other than certain representations and warranties
relating to corporate authority and capital structure) shall not be true
and correct, in each case at the date of the Merger Agreement and at the
scheduled or extended expiration of the Offer, except where the failure of
such representations, individually or in the aggregate, to be so true and
correct would not have a Material Adverse Effect on the Company, and any of
the representations and warranties of the Company excluded from the
foregoing shall not be true and correct in any material respect in each
case at the date of the Merger Agreement and at the scheduled or extended
expiration of the Offer;
(f) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under the Merger Agreement;
(g) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on a
national securities exchange in the United States (excluding any
coordinated trading halt triggered solely as a result of a specified
decrease in a market index), (ii) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States or
(iii) any limitation (whether or not mandatory) by any Governmental Entity
on the extension of credit by banks or other lending institutions which, in
the reasonable judgment of Parent, makes it inadvisable to proceed with the
Offer or the Merger;
(h) the Shareholder Agreements shall not be in full force and effect or
any Shareholder (as defined therein) that is a party thereto shall be in
material breach thereof or have indicated such Shareholder's intention not
to perform such Shareholder's obligations thereunder; or
(i) the Merger Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of Parent and the Offeror
and may, subject to the terms of the Merger Agreement, be waived by Parent and
the Offeror in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or the Offeror at any time to exercise any of
the foregoing rights 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 that may be asserted at any time
and from time to time.
32
<PAGE>
16. CERTAIN LEGAL MATTERS.
Except as set forth in this Section, the Offeror is not aware of any approval
or other action by any governmental or administrative agency which would be
required for the acquisition or ownership of Shares by the Offeror as
contemplated herein. Should any such approval or other action be required, it
will be sought, but the Offeror has no current intention to delay the purchase
of Shares tendered pursuant to the Offer pending the outcome of any such
matter, subject, however, to the Offeror's right to decline to purchase Shares
if any of the conditions specified in Section 15 shall have occurred. 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 adverse
consequences might not result to the Company's business or that certain parts
of the Company's business might not have to be disposed of if any such
approvals were not obtained or other action taken.
U.S. Antitrust. Under the provisions of the HSR Act applicable to the Offer,
the acquisition of Shares under the Offer may be consummated following the
expiration of a 15-day waiting period following the filing by Parent of a
Premerger Notification and Report Form with respect to the Offer, unless Parent
receives a request for additional information or documentary material from the
Department of Justice, Antitrust Division (the "Antitrust Division") or the
Federal Trade Commission ("FTC") or unless early termination of the waiting
period is granted. Parent expects to make such a filing in early December. If,
within the initial 15-day waiting period, either the Antitrust Division or the
FTC requests additional information or documentary material concerning the
Offer, the waiting period will be extended through the tenth day after the date
of substantial compliance by all parties receiving such requests. Complying
with a request for additional information or documentary material can take a
significant amount of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Offeror's proposed acquisition
of the Company. At any time before or after the Offeror's acquisition of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as either deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger, or seeking the divestiture of Shares
acquired by the Offeror or the divestiture of substantial assets of the Company
or its subsidiaries or Parent or its subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Offer, the consummation of the
Merger, the sale of the Shares pursuant to the Option Agreement or the
agreements set forth in the Shareholder Agreements on antitrust grounds will
not be made, or, if such a challenge is made, of the result thereof.
If any applicable waiting period under the HSR Act applicable to the Offer
has not expired or been terminated prior to the Expiration Date, the Offeror
will not be obligated to proceed with the Offer or the purchase of any Shares
not theretofore purchased pursuant to the Offer. See Section 15.
State Takeover Laws. The Company is incorporated under the laws of the State
of Illinois. In general, Section 11.75 of the IBCA ("Section 11.75") prevents
an "interested shareholder" (including a person who owns or has the right to
acquire 15% or more of the outstanding voting shares of a corporation) from
engaging in a "business combination" (defined to include mergers and certain
other actions) with an Illinois corporation for a period of three years
following the date such person became an interested shareholder unless, among
other things, the "business combination" is approved by the Board of Directors
of such corporation prior to such date. The Company's Board of Directors has
approved the Offer and the Merger. Accordingly, Section 11.75 is inapplicable
to the Offer and the Merger.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. The Offeror does not know whether any of these laws will, by their terms,
apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, the Offeror will take
such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court proceedings.
In the event it is asserted that one or more state takeover laws is applicable
to the Offer or the Merger, and an
33
<PAGE>
appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer, the Offeror might be required to file certain information
with, or receive approvals from, the relevant state authorities. In addition,
if enjoined, the Offeror might be unable to accept for payment any Shares
tendered pursuant to the Offer, or be delayed in continuing or consummating the
Offer and the Merger. In such event, the Offeror may not be obligated to accept
for payment any Shares tendered. See Section 15.
17. FEES AND EXPENSES.
Neither the Offeror nor Parent, nor any officer, director, shareholder, agent
or other representative of the Offeror or Parent will pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by the Offeror
for customary mailing and handling expenses incurred by them in forwarding
materials to their customers.
The Offeror has retained Morrow & Co., Inc. as Information Agent and Norwest
Bank Minnesota, N.A. as Depositary in connection with the Offer. The
Information Agent and the Depositary will receive reasonable and customary
compensation for their services hereunder and reimbursement for their
reasonable out-of-pocket expenses. The Depositary will also be indemnified by
the Offeror against certain liabilities in connection with the Offer. The
Information Agent may contact holders of Shares by mail, telex, telegraph and
personal interviews and may request brokers, dealers and other nominee
shareholders to forward materials relating to the Offer to beneficial owners of
Shares.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the securities, blue sky
or other laws of such jurisdiction. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of the Offeror by one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Offeror other than as contained in this Offer
to Purchase or in the Letter of Transmittal and, if any such information or
representation is given or made, it should not be relied upon as having been
authorized by the Offeror or Parent.
The Offeror, Parent and General Electric have filed with the Commission the
Schedule 14D-1, pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-3
promulgated thereunder, furnishing certain information with respect to the
Offer. The Schedule 14D-1 and any amendments thereto, including exhibits, may
be examined and copies may be obtained at the same places and in the same
manner as set forth with respect to the Company in Section 8 (except that they
will not be available at the regional offices of the Commission).
Orion Merger Corp.
November 30, 1998
34
<PAGE>
ANNEX I
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF GENERAL ELECTRIC, PARENT AND THE OFFEROR
DIRECTORS AND EXECUTIVE OFFICERS OF GENERAL ELECTRIC. Set forth below are the
name, current business address, citizenship, present principal occupation or
employment history (covering a period of not less than five years) of each
executive officer and Director of General Electric. Unless otherwise indicated,
each such person's business address is 3135 Easton Turnpike, Fairfield
Connecticut 06431-0001. Each person is a citizen of the United States, except
for Mr. Gonzalez, Mr. Fresco and Mr. Malm, who are citizens of Mexico, Italy
and Sweden, respectively.
DIRECTORS
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ---------------- ----------------------------------------------
<S> <C> <C>
J.I. Cash, Jr........... Harvard Business School Professor of Business
Baker Library 187 Administration-Graduate
Soldiers Field School of Business Administration,
Boston, MA 02163 Harvard University
S.S. Cathcart........... 222 Wisconsin Avenue Retired Chairman,
Suite 103 Illinois Tool Works
Lake Forest, IL 60045
D.D. Dammerman.......... Senior Vice President--Finance,
General Electric Company
P. Fresco............... Fiat SpA Chairman of the Board,
Via Nizza 250 Fiat SpA since 1998;
10126 Torino, Vice Chairman of the
Italy Board and Executive Officer,
General Electric Company
C.X. Gonzalez........... Kimberly-Clark de Mexico, Chairman of the Board
S.A. de C.V. and Chief Executive Officer,
Jose Luis Lagrange 103, Kimberly-Clark de Mexico,
Tercero Piso S.A. de C.V.
Colonia Los Morales
Mexico, D.F. 11510, Mexico
Andrea Jung............. Avon Products, Inc. President and
1345 Avenue of the Americas Chief Executive
New York, NY 10001 Officer, Avon
Products, Inc.
G.G. Michelson.......... Federated Department Stores Former Member of the
151 West 34th Street Board of Directors,
New York, NY 10001 Federated Department Stores
E.F. Murphy............. Vice Chairman of the Board and
Executive Officer
S. Nunn................. King & Spalding Partner, King & Spalding since
191 Peachtree Street, N.E. January 1997; prior to that time
Atlanta, Georgia 30303 Mr. Nunn was a United States Senator
J.D. Opie............... Vice Chairman of the
Board and Executive Officer
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND MATERIAL POSITIONS HELD
NAME BUSINESS ADDRESS DURING PAST FIVE YEARS
- ---- ---------------- --------------------------------------
<S> <C> <C>
R.S. Penske............. Penske Corporation Chairman of the Board and
13400 Outer Drive, West President,
Detroit, MI 48239-4001 Penske Corporation
F.H.T. Rhodes........... Cornell University President Emeritus
3104 Snee Building Cornell University
Ithaca, NY 14853
A.C. Sigler............. Champion International Retired Chairman of the
Corporation Board and CEO and
1 Champion Plaza former Director,
Stamford, CT 06921 Champion International Corporation
D.A. Warner III......... J. P. Morgan & Co., Inc. Chairman of the Board,
& Morgan Guaranty Trust Co. President, and Chief
60 Wall Street Executive Officer,
New York, NY 10260 J.P. Morgan & Co. Incorporated and
Morgan Guaranty Trust Company
J.F. Welch, Jr.......... Chairman of the Board
and Chief Executive Officer,
General Electric Company
EXECUTIVE OFFICERS
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND MATERIAL POSITIONS HELD
NAME BUSINESS ADDRESS DURING PAST FIVE YEARS
- ---- ---------------- --------------------------------------
<S> <C> <C>
J.F. Welch, Jr.......... Chairman of the Board and
Chief Executive Officer
P.D. Ameen.............. Vice President and Comptroller
J.R. Bunt............... Vice President and Treasurer
D.L. Calhoun............ Senior Vice President--GE Lighting
W.J. Conaty............. Senior Vice President--Human Resources
D.M. Cote............... Senior Vice President--GE Appliances
D.D. Dammerman.......... Senior Vice President--Finance
L.S. Edelheit........... Senior Vice President--Corporate
Research and Development
B.W. Heineman, Jr....... Senior Vice President--General
Counsel and Secretary
J.R. Immelt............. Senior Vice President--GE Medical
Systems
G.S. Malm............... Senior Vice President--Asia
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ---------------- ----------------------------------------------
<S> <C> <C>
W.J. McNerney, Jr....... Senior Vice President--GE Aircraft
Engines
E.F. Murphy............. Vice Chairman of the Board and
Executive Officer
R.L. Nardelli........... Senior Vice President--GE Power
Systems
R.W. Nelson............. Vice President--Corporate Financial
Planning and Analysis
J.D. Opie............... Vice Chairman of the Board
and Executive Officer
G.M. Reiner............. Senior Vice President--Chief
Information Officer
J.G. Rice............... Vice President--GE Transportation
Systems
G.L. Rogers............. Senior Vice President--GE Plastics
L.G. Trotter............ Senior Vice President--GE Industrial Systems
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. Set forth below are the name,
current business address, citizenship, present principal occupation or
employment history (covering a period of not less than five years) of each
executive officer and director of Parent. Unless otherwise indicated, each
such person's business address is Route 29 North and Route 606,
Charlottesville, Virginia 22911. All persons listed below are citizens of the
United States of America, except for Dr. Inaba and Mr. Oyama, who are citizens
of Japan, and Mr. Mendes, who is a citizen of Brazil.
DIRECTORS
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ---------------- ----------------------------------------------
<S> <C> <C>
Dr. Eng. Seiuemon FANUC Ltd. Chairman and Chief Executive
Inaba.................. Oshino-Mura Officer of FANUC Ltd.
Iamanashi Prefecture
Ogama 401-05, Japan
Lloyd G. Trotter........ General Electric Company Senior Vice President--GE Industrial Systems
41 Woodford Avenue
Plainville, CT 06062
Joseph M. Hogan......... President and Chief Executive Officer of Parent
Robert W. Breihan....... Senior Vice President--CNC & PowerMotion(R)
H.V. Mendes............. Vice President--Services Business
Shigeaki Oyama.......... Executive Vice President of Parent.
Prior to joining Parent in 1997, Mr. Oyama was
the Senior Executive Vice President of FANUC Ltd.
Larry E. Pearson........ Senior Vice President--Finance of Parent
</TABLE>
37
<PAGE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ---------------- ----------------------------------------------
<S> <C> <C>
Joseph M. Hogan......... President and Chief Executive Officer
Shigeaki Oyama.......... Executive Vice President.
Prior to joining Parent in 1997, Mr. Oyama was
the Senior Executive Vice President of FANUC Ltd.
Robert W. Breihan....... Senior Vice President--CNC & PowerMotion(R)
Larry E. Pearson........ Senior Vice President--Finance
David A. Friesman....... Senior Vice President--Manufacturing. Prior to
joining Parent in 1995, Mr. Friesman was the
Operations Manager--Power and RF Components
for Martin Marrieta Materials Inc.
A.E. Knorr.............. Senior Vice President--General Counsel
Donald C. Borwhat....... Senior Vice President--Human Resources
Vince L. Tullo.......... Senior Vice President--Controller & I/O Business
L.A. Sollecito.......... Senior Vice President--CIMPLICITY Business
Dr. John C. Kroon....... Vice President--Corporate Planning and Development
H.V. Mendes............. Vice President--Services Business
James Berlin............ Vice President--Product Development
DIRECTORS AND EXECUTIVE OFFICERS OF OFFEROR. Set forth below are the name,
current business address, citizenship, present principal occupation or
employment history (covering a period of not less than five years) of each
executive officer and director of the Offeror. Unless otherwise indicated,
each such person's business address is Route 29 North and Route 606,
Charlottesville, Virginia 22911. All persons listed below are citizens of the
United States of America.
DIRECTORS
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ---------------- ----------------------------------------------
<S> <C> <C>
Joseph M. Hogan......... President and Chief Executive Officer of the Offeror
and Parent
Larry E. Pearson........ Senior Vice President--Finance of Parent
Dr. John C. Kroon....... Vice President--Corporate Planning and
Development of Parent
EXECUTIVE OFFICERS
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ---------------- ----------------------------------------------
<S> <C> <C>
Joseph M. Hogan......... President and Chief Executive Officer
A.E. Knorr.............. Vice President
Donald R. Ross.......... General Electric Company Vice President
41 Woodford Avenue
Plainville, CT 06062
</TABLE>
38
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares and any other required documents
should be sent or delivered by each shareholder of the Company or his broker,
dealer, commercial bank, trust company or other nominee to the Depositary at
one of the addresses set forth below:
The Depositary for the Offer is:
NORWEST BANK MINNESOTA, N.A.
By Hand or Overnight Delivery: By Mail:
Norwest Bank Minnesota, N.A. Norwest Bank Minnesota, N.A.
P.O. Box 64858 161 North Concord Exchange
St. Paul, MN 55264-0858 South St. Paul, MN 55075
Attn: Shareowner Services
Facsimile for Eligible Institutions only:
(651) 450-4163
To confirm receipt of Notice of Guaranteed Delivery:
(651) 450-4110
If you require additional information, please call Norwest Bank Minnesota,
National Association at
(800) 468-9716 or (612) 450-4064
Any questions or requests for assistance or additional copies of the Offer
to Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery
may be directed to the Information Agent at its telephone number and location
listed below. Shareholders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Toll Free: (800) 566-9061
Call Collect: (212) 754-8000
Banks and Brokerage Firms, please call:
Toll Free: (800) 662-5200
<PAGE>
EXHIBIT(A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
TOTAL CONTROL PRODUCTS, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED NOVEMBER 30, 1998
BY
ORION MERGER CORP.
A WHOLLY OWNED SUBSIDIARY OF
GE FANUC AUTOMATION NORTH AMERICA, INC.
AND
AN INDIRECT MAJORITY OWNED SUBSIDIARY OF
GENERAL ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, DECEMBER 28, 1998, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
NORWEST BANK MINNESOTA, N.A.
By Hand or Overnight Courier: By Mail:
Norwest Bank Minnesota, N.A. Norwest Bank Minnesota, N.A.
P.O. Box 64858 161 North Concord Exchange
St. Paul, MN 55264-0858 South St. Paul, MN 55075
Attn: Shareowner Services
Facsimile for Eligible Institutions only: (651) 450-4163
To confirm receipt of notice of Guaranteed Delivery: (651) 450-4110
If you require additional information, please call Norwest Bank Minnesota,
National Association at
(800) 468-9716 or (612) 450-4064
---------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE, TO A NUMBER OTHER THAN AS SET FORTH ABOVE, DOES
NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. YOU MUST SIGN THIS LETTER
OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE
THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
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 completed by shareholders of Total
Control Products, Inc., an Illinois corporation (the "Company"), if
certificates for Shares (as defined below) are to be forwarded herewith or,
unless an Agent's Message (as defined in the Offer to Purchase dated November
30, 1998 (the "Offer to Purchase")) is utilized, if delivery of Shares is to
be made by book-entry transfer to an account maintained by Norwest Bank
Minnesota, N.A. (the "Depositary") at The Depositary Trust Company ("DTC")
(the "Book-Entry Transfer Facilities") pursuant to the procedures set forth in
Section 3 of the Offer to Purchase (as defined below). DELIVERY OF DOCUMENTS
TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
<PAGE>
Shareholders whose certificates for Shares are not immediately available or
who cannot deliver their Shares and all other documents required hereby to the
Depositary prior to the Expiration Date (as defined in the Offer to Purchase),
or who cannot comply with the book-entry transfer procedures on a timely
basis, must tender their Shares pursuant to the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase. See Instruction 2.
DESCRIPTION OF SHARES TENDERED
<TABLE>
- ----------------------------------------------------
<CAPTION>
NAME(S) AND
ADDRESS(ES)
OF
REGISTERED
HOLDER(S)
(PLEASE
FILL IN, IF SHARES TENDERED
BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ----------------------------------------------------
NUMBER OF
SHARE SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
- ----------------------------------------------------
- ----------------------------------------------------
- ----------------------------------------------------
- ----------------------------------------------------
- ----------------------------------------------------
<S> <C> <C> <C>
Total Shares
- ----------------------------------------------------
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
**Unless otherwise indicated, it will be assumed that all Shares
represented by any certificates delivered to the Depositary are being
tendered. See Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE 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 ______________________________________________
Name of Book-Entry Transfer Facility _______________________________________
Account No. ________________________________________________________________
Transaction Code No. _______________________________________________________
[_]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 Tendering Shareholder(s) ________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Window Ticket Number (if any) ______________________________________________
Name of Institution which Guaranteed Delivery ______________________________
If delivery is by book-entry transfer:
Name of Tendering Institution _____________________________________________
Name of Book-Entry Transfer Facility ______________________________________
Account No. _______________________________________________________________
Transaction Code No. _______________________________________________________
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Orion Merger Corp. (the "Offeror"), an
Illinois corporation, a wholly owned subsidiary of GE Fanuc Automation North
America, Inc., a Delaware corporation (the "Parent"), and an indirect majority
owned subsidiary of General Electric Company, a New York corporation ("General
Electric"), the above-described shares of common stock, no par value (the
"Shares"), of Total Control Products, Inc., an Illinois corporation (the
"Company"), pursuant to the Offeror's offer to purchase all of the outstanding
Shares at a purchase price of $11.00 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in
the Offer to Purchase, receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which, together with the Offer to Purchase, and any
amendments or supplements hereto or thereto, collectively constitute the
"Offer"). The Offer is being made in connection with the Agreement and Plan of
Merger, dated as of November 22, 1998 (the "Merger Agreement"), among the
Parent, the Offeror, and the Company.
Subject to and effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and transfers
to or upon the order of the Offeror 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) 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 any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of the Offeror, (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.
The undersigned hereby irrevocably appoints each designee of the Offeror as
the agent, attorney-in-fact and proxy 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 his substitute shall in his
sole judgment deem proper, with respect to all of the Shares tendered hereby
which have been accepted for payment by the Offeror prior to the time of any
vote or other action (and any and all other Shares or other securities or
rights issued or issuable in respect of such Shares) at any meeting of
shareholders of the Company (whether annual or special and whether or not an
adjourned meeting), any actions by written consent in lieu of any such meeting
or otherwise. This proxy is irrevocable, is coupled with an interest in the
Shares and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Offeror in accordance with the
terms of the Offer. Such acceptance for payment shall revoke any other power
of attorney, proxy or written consent granted by the undersigned at any time
with respect to such Shares (and all such other Shares or other securities or
rights), and no subsequent powers of attorney or proxies will be given or
written consents will be executed by the undersigned (and if given or
executed, will not be deemed effective). The undersigned understands that in
order for Shares to be deemed validly tendered, immediately upon the
acceptance for payment of such Shares, the Offeror or its designee must be
able to exercise full voting rights with respect to such Shares and other
securities, including voting at any meeting of shareholders.
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 or rights issued or
issuable in respect of such Shares) and that when the same are accepted for
payment by the Offeror, the Offeror 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, upon request, will
execute and deliver any additional documents deemed by the Depositary or the
Offeror to be necessary or desirable to complete the sale, assignment and
transfer of the Shares tendered hereby (and all such other Shares or other
securities or rights).
All authority herein conferred or agreed to be conferred 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 and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
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 an agreement between the undersigned and
the Offeror upon the terms and subject to the conditions of the Offer.
3
<PAGE>
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares accepted for payment, and
return any Shares not tendered or not accepted for payment, in the name(s) of
the undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price of any Shares
accepted for payment and return any certificates for Shares not tendered or
not accepted for payment (and accompanying documents, as appropriate) to the
undersigned at the address 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 Shares not tendered or not purchased in
the name(s) of, and deliver said check and any certificates to, the person(s)
so indicated. Shareholders tendering Shares by book-entry transfer may request
that any Shares not accepted for payment be returned by crediting such account
maintained at such Book-Entry Transfer Facility as such shareholder may
designate by making an appropriate entry under "Special Payment Instructions."
The undersigned recognizes that the Offeror has no obligation, pursuant to the
"Special Payment Instructions," to transfer any Shares from the name of the
registered holder(s) thereof if the Offeror does not accept for payment any of
the Shares so tendered.
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
To be completed ONLY if the check for the purchase price of Shares
for the purchase price of Shares purchased or certificates for
purchased or certificates for Shares not tendered or not
Shares not tendered or not purchased are to be mailed to
purchased are to be issued in the someone other than the undersigned
name of someone other than the or to the undersigned at an address
undersigned or if Shares tendered other than that shown below the
hereby and delivered by book-entry undersigned's signature(s).
transfer which are not accepted for
payment are to be returned by Mail check and/or certificates to:
credit to an account at one of the
Book-Entry Transfer Facilities
other than designated above.
Name _______________________________
(Please Print)
Address ____________________________
Issue [_] Check [_] Certificate to: ------------------------------------
(Zip Code)
Name _______________________________ ------------------------------------
(Please Print) (Taxpayer Identification or Social
Security No.)
(See Substitute Form W-9)
Address ____________________________
------------------------------------
(Zip Code)
------------------------------------
(Taxpayer Identification or Social
Security No.)
(See Substitute Form W-9)
[_]Credit Shares delivered by book-
entry transfer and not purchased
to the account set forth below
Name of Book-Entry Transfer
Facility ________________________
4
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, signatures
on all Letters of Transmittal must be guaranteed by a firm that is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of the Securities Transfer Agents Medallion Program or
by any other bank, broker, dealer, credit union, savings association or other
entity which is an "eligible guarantor institution," as such term is defined
in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each of
the foregoing constituting an "Eligible Institution"), unless the Shares
tendered thereby are tendered (i) by a registered holder of Shares who has not
completed either the box labeled "Special Payment Instructions" or the box
labeled "Special Delivery Instructions" on the Letter of Transmittal or (ii)
for the account of an Eligible Institution. See Instruction 5. If the
certificates are registered in the name of a person or persons other than the
signer of this Letter of Transmittal, or if payment is to be made or delivered
to, or certificates evidencing unpurchased Shares are to be issued or returned
to, a person other than the registered owner or owners, then the tendered
certificates must be endorsed or accompanied by duly executed stock powers, in
either case signed exactly as the name or names of the registered owner or
owners appear on the certificates or stock powers, with the signatures on the
certificates or stock powers guaranteed by an Eligible Institution as provided
herein. 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 (as defined in the Offer to Purchase) is utilized, if the
delivery of Shares is to be made by book-entry transfer pursuant to the
procedures set forth in Section 3 of the Offer to Purchase. Certificates for
all physically delivered Shares, or a confirmation of a book-entry transfer
into the Depositary's account at one of the Book-Entry Transfer Facilities of
all Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof) and any other
documents required by this Letter of Transmittal, or an Agent's Message in the
case of a book-entry delivery, must be received by the Depositary at one of
its addresses set forth on the front page of this Letter of Transmittal prior
to the Expiration Date. Shareholders who cannot deliver their Shares and all
other required documents to the Depositary prior to the Expiration Date must
tender their Shares pursuant to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase. Pursuant to such procedures: (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 the Offeror, must be received by the Depositary prior to
the Expiration Date; and (c) the certificates for all tendered Shares, in
proper form for tender, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all
Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three trading days after the date of execution of such
Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to
Purchase. The term "trading day" is any day on which the Nasdaq Stock Market
is open for business.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY TRANSFER FACILITY,
IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE
CASE OF A BOOK-ENTRY TRANSFER, BY A CONFIRMATION OF A BOOK-ENTRY TRANSFER). IF
DELIVERY IS 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 a facsimile thereof), the tendering shareholder 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 and any other required
information should be listed on a separate schedule attached hereto and
separately signed on each page thereof in the same manner as this Letter of
Transmittal is signed.
4. Partial Tenders (not applicable to shareholders 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
5
<PAGE>
the appropriate box marked "Special Payment Instructions" and/or "Special
Delivery Instructions" on this Letter of Transmittal, as promptly as
practicable following the Expiration Date. 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 are held of record by two or more
persons, all such persons 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), in which case the certificate(s)
for such Shares tendered hereby 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 certificate for such Shares. 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, the certificate 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 the Offeror of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. The Offeror will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any 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 returned in
the name of, any person other than the registered holder(s), then 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.
7. Special Payment and Delivery Instruction. 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. Shareholders 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 shareholder 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. Substitute Form W-9. Under U.S. Federal income tax law, a tendering
shareholder whose Shares are accepted for payment is required to provide the
Depositary with such shareholder's correct taxpayer identification number
("TIN") on Substitute Form W-9, which is provided below, unless an exemption
applies. Failure to provide the information on the Substitute Form W-9 may
subject the tendering shareholder to a $50 penalty and to 31% federal income
tax backup withholding on the payment of the purchase price for the Shares.
6
<PAGE>
9. Foreign Holders. Foreign holders must submit a completed IRS Form W-8 to
avoid 31% backup withholding. IRS Form W-8 may be obtained by contacting the
Depositary at one of the addresses on the face of this Letter of Transmittal.
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.
11. Waiver of Conditions. The conditions of the Offer may be waived by the
Offeror (subject to certain limitations in the Merger Agreement), in whole or
in part, at any time or from time to time, in the Offeror's sole discretion.
12. Lost, Destroyed, Mutilated, or Stolen Certificates. If any
certificate(s) representing Shares has been lost, destroyed, mutilated, or
stolen, the shareholder should promptly notify the Depositary. The shareholder
will then be instructed as to the steps to 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, destroyed, mutilated or
stolen certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE COPY HEREOF (TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
shareholder's correct TIN on the Substitute Form W-9. If such shareholder is
an individual, the TIN is such shareholder's Social Security Number. If the
Depositary is not provided with the correct TIN, the shareholder may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments that are made to such shareholder with respect to Shares purchased
pursuant to the Offer may be subject to backup withholding.
Certain shareholders (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, that shareholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements may be
obtained from the Depositary. All exempt recipients (including foreign persons
wishing to qualify as exempt recipients) should see the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the shareholder. 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 backup withholding results in an
overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding on payments that are made
to a shareholder with respect to Shares purchased pursuant to the Offer, the
shareholder is required to notify the Depositary of such shareholder's correct
TIN by completing the form certifying that the TIN provided on the Substitute
Form W-9 is correct.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the Social Security
Number or Employer Identification Number of the record owner of the Shares. If
the Shares are in more than one name or are 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 guidelines on
which number to report.
7
<PAGE>
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 BELOW)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Signature(s) of Owner(s)
Name(s) ______________________________________________________________________
------------------------------------------------------------------------------
Capacity (full title) ________________________________________________________
Address ______________________________________________________________________
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------------------------
Area Code and Telephone Number _______________________________________________
Taxpayer Identification or Social Security Number ____________________________
(See Substitute Form W-9)
Dated: _______________________________________________________________________
(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 the 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 set forth full title
and see Instruction 5).
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized signature(s) ______________________________________________________
Name _________________________________________________________________________
Name of Firm _________________________________________________________________
Address ______________________________________________________________________
------------------------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------------------------
Area Code and Telephone Number _______________________________________________
Dated: _______________________________________________________________________
8
<PAGE>
PAYER'S NAME: [ ]
- -------------------------------------------------------------------------------
SUBSTITUTE Part I -- PLEASE TIN: _____________________
FORM W-9 PROVIDE YOUR TIN IN Social Security Number or
DEPARTMENT OF THE THE BOX AT RIGHT AND Employer Identification
TREASURY, CERTIFY BY SIGNING Number
AND DATING BELOW
INTERNAL REVENUE ---------------------------------------------------------
SERVICE Part II -- For Payees exempt from backup
PAYER'S REQUEST withholding, see the enclosed Guidelines for
FOR Certification of Taxpayer Identification Number on
TAXPAYER Substitute Form W-9 and complete as instructed
IDENTIFICATION therein.
NUMBER ("TIN")
AND CERTIFICATION ---------------------------------------------------------
Certification -- Under penalties of
perjury, I certify that:
(1) The number shown on this form is my correct TIN
(or I am waiting 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 ("IRS") that I am subject to backup
withholding as a result of a failure to report
all interest or dividend, or (c) the IRS has
notified me that I am no longer subject to backup
withholding.
---------------------------------------------------------
SIGNATURE: DATE: ____
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have
been notified by the IRS that you are subject to backup withholding because of
under reporting interest or dividends on your 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 were no longer subject to
backup withholding, do not cross out item (2). (Also see the instructions in
the enclosed Guidelines.)
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 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 ARE AWAITING YOUR
TIN.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a TIN has not been issued to me,
and either (1) I have mailed or delivered an application to receive a TIN to
the appropriate IRS Center or Social Security Administration Officer or (2) I
intend to mail or deliver an application in the near future. I understand
that if I do not provide a TIN by the time of payment, 31% of all payments
pursuant to the Offer made to me thereafter will be withheld until I provide
a number.
SIGNATURE: _________________________________________________ DATE: __________
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Toll Free: (800) 566-9061
Call Collect: (212) 754-8000
Banks and Brokerage Firms, please call:
Toll Free: (800) 662-5200
9
<PAGE>
EXHIBIT (A)(3)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TOTAL CONTROL PRODUCTS, INC.
AT
$11.00 NET PER SHARE
BY
ORION MERGER CORP.
A WHOLLY OWNED SUBSIDIARY OF
GE FANUC AUTOMATION NORTH AMERICA, INC.
AND
AN INDIRECT MAJORITY OWNED SUBSIDIARY OF
GENERAL ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, DECEMBER 28, 1998, UNLESS THE OFFER IS EXTENDED.
November 30, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Orion Merger Corp., an Illinois corporation (the
"Offeror"), a wholly owned subsidiary of GE Fanuc Automation North America,
Inc., a Delaware corporation ("Parent"), and an indirect majority owned
subsidiary of General Electric Company, a New York corporation ("General
Electric"), to act as Information Agent in connection with the Offeror's offer
to purchase all outstanding shares of common stock, no par value (the
"Shares"), of Total Control Products, Inc., an Illinois corporation (the
"Company"), at a purchase price of $11.00 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated November 30, 1998 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer") enclosed herewith.
The Offer is being made in connection with the Agreement and Plan of Merger,
dated as of November 22, 1998, among Parent, the Offeror and the Company (the
"Merger Agreement"). Holders of Shares whose certificates for such Shares (the
"Certificates") are not immediately available or who cannot deliver their
Certificates and all other required documents to Norwest Bank Minnesota, N.A.
(the "Depositary") or complete the procedures for book-entry transfer prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase) must
tender their Shares according to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated November 30, 1998.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
<PAGE>
3. A letter to shareholders of the Company from Nicholas Gihl, the
President and CEO of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company and mailed to the
shareholders of the Company.
4. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if Certificates and all other required documents are not immediately
available or cannot be delivered to the Depositary prior to the Expiration
Date (as defined in the Offer to Purchase) or if the procedure for book-
entry transfer cannot be completed prior to the Expiration Date.
5. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name, with space provided for
obtaining such clients' instructions with regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, DECEMBER 28, 1998,
UNLESS THE OFFER IS EXTENDED.
Please note the following:
1. The tender price is $11.00 per Share, net to the seller in cash
without interest.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Monday, December 28, 1998, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer such number
of Shares that would constitute at least two-thirds of the Shares that are
outstanding determined on a fully diluted basis.
5. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.
In order to accept the Offer, (i) a duly executed and properly completed
Letter of Transmittal (or facsimile thereof) and any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message (as
defined in the Offer to Purchase) or other required documents should be sent to
the Depositary and (ii) Certificates representing the tendered Shares on a
timely Book-Entry Confirmation (as defined in the Offer to Purchase) should be
delivered to the Depositary in accordance with the instructions set forth in
the Offer.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender must
be effected by following the guaranteed delivery procedures specified in
Section 3 of the Offer to Purchase.
Neither the Offeror, Parent nor any officer, director, shareholder, agent or
other representative of the Offeror will pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of Shares pursuant to the
Offer. The Offeror will, however, upon request, reimburse you for customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to your clients. The Offeror will pay or cause to be paid any
transfer taxes payable on the transfer of Shares to it, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
2
<PAGE>
Any inquiries you may have with respect to the Offer should be addressed to
Morrow & Co., Inc., the Information Agent for the Offer, 909 3rd Avenue, 20th
Floor, New York, New York 10022 (212-754-8000).
Requests for copies of the enclosed materials may be directed to the
Information Agent at the above address and telephone number.
Very truly yours,
Morrow & Co., Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF PARENT, THE OFFEROR, THE DEPOSITARY, THE
INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM
IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
3
<PAGE>
EXHIBIT (A)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TOTAL CONTROL PRODUCTS, INC.
AT
$11.00 NET PER SHARE
BY
ORION MERGER CORP.
A WHOLLY OWNED SUBSIDIARY OF
GE FANUC AUTOMATION NORTH AMERICA, INC.
AND
AN INDIRECT MAJORITY OWNED SUBSIDIARY OF
GENERAL ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, DECEMBER 28, 1998, UNLESS THE OFFER IS EXTENDED.
November 30, 1998
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated November 30,
1998 (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 Orion Merger Corp., an Illinois
corporation (the "Offeror"), a wholly owned subsidiary of GE Fanuc Automation
North America, Inc., a Delaware corporation (the "Parent"), and an indirect
majority owned subsidiary of General Electric Company, a New York corporation
("General Electric"), to purchase all outstanding shares of common stock, no
par value (the "Shares"), of Total Control Products, Inc., an Illinois
corporation (the "Company"), at a purchase price of $11.00 per Share, net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer. The Offer is being made in connection with
the Agreement and Plan of Merger, dated as of November 22, 1998, among Parent,
the Offeror and the Company (the "Merger Agreement"). This material is being
forwarded to you as the beneficial owner of Shares carried by us in your
account but not registered in your name.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US 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.
Accordingly, we request instructions as to whether you wish to tender any or
all of the Shares held by us for your account, upon the terms and conditions
set forth in the Offer.
Please note the following:
1. The tender price is $11.00 per Share, net to you in cash without
interest.
2. The Board of Directors of the Company unanimously has determined that
the Offer and the Merger (as defined in the Offer to Purchase), are fair to
and in the best interests of, the Company's shareholders, has approved the
Offer and adopted the Merger Agreement and recommends acceptance of the
Offer by the Company's shareholders.
<PAGE>
3. The Offer is being made for all of the outstanding Shares.
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Monday, December 28, 1998, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer such number
of Shares that would constitute at least two-thirds of the Shares that are
outstanding determined on a fully diluted basis.
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.
If you wish to have us tender any or all of the Shares, please so instruct us
by completing, executing, detaching and returning to us the instruction form
contained in this letter. An envelope to return your instruction to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise indicated in such instruction form. PLEASE FORWARD
YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER
YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Offeror by one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TOTAL CONTROL PRODUCTS, INC.
BY
ORION MERGER CORP.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated November 30, 1998 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer") in connection with the offer by
Orion Merger Corp., an Illinois corporation (the "Offeror"), a wholly owned
subsidiary of GE Fanuc Automation North America, Inc., a Delaware corporation,
and an indirect majority owned subsidiary of General Electric Company, a New
York corporation, to purchase all outstanding shares of common stock, no par
value (the "Shares"), of Total Control Products, Inc., an Illinois corporation
(the "Company").
This will instruct you to tender to the Offeror the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to be Tendered:*__
SIGN HERE
-------------------------------------
-------------------------------------
Signature(s)
Account Number: ___________________ -------------------------------------
Date: _____________________________ -------------------------------------
(Print Name(s))
-------------------------------------
-------------------------------------
(Print Address(es))
-------------------------------------
(Area Code and Telephone Number(s))
-------------------------------------
(Taxpayer Identification or
Social Security Number(s))
- --------
*Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<PAGE>
EXHIBIT (A)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
TOTAL CONTROL PRODUCTS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, DECEMBER 28, 1998 UNLESS THE OFFER IS EXTENDED
This form, or one substantially equivalent hereto, must be used to accept the
Offer (as defined below) if certificates for shares of common stock, no par
value (the "Shares"), of Total Control Products, Inc., an Illinois corporation
(the "Company"), are not immediately available or if the procedure for book-
entry transfer cannot be completed on a timely basis or time will not permit
all required documents to reach the Depositary prior to the Expiration Date (as
defined in the Offer to Purchase). Such form may be delivered by hand,
facsimile transmission or mail to the Depositary. See Section 3 of the Offer to
Purchase, dated November 30, 1998 (the "Offer to Purchase").
The Depositary for the Offer is:
NORWEST BANK MINNESOTA, N.A.
By Hand or Overnight Courier: By Mail:
Norwest Bank Minnesota, N.A. Norwest Bank Minnesota, N.A.
P.O. Box 64858 161 North Concord Exchange
St. Paul, MN 55264-0858 South St. Paul, MN 55075
Attn: Shareowner Services
Facsimile for Eligible Institutions only:
(651) 450-4163
To confirm receipt of Notice of Guaranteed Delivery:
(651) 450-4110
If you require additional information, please call Norwest Bank Minnesota,
National Association at
(800) 468-9716 or (612) 450-4064
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR TRANSMISSION
OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT
CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
This Notice of Guaranteed Delivery 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" (as defined in the Offer to Purchase) under the
instructions thereto, such signature guarantee must appear in the applicable
space provided in the signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message and certificates for Shares to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Orion Merger Corp., an Illinois
corporation, upon the terms and subject to the conditions set forth in the
Offer to Purchase, and the related Letter of Transmittal, receipt of which is
hereby acknowledged, the number of Shares of the Company indicated below,
pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase.
Number of Shares: ___________________ SIGN HERE
Name(s) of Record Holder(s):
Certificate No(s) (if available):
-------------------------------------
- -------------------------------------
-------------------------------------
- ------------------------------------- (Please Print)
Address(es): ________________________
If Securities will be tendered by
book-entry transfer: ________________ -------------------------------------
(Zip Code)
Name of Tendering Institution:
Area Code and Telephone No(s):
- -------------------------------------
-------------------------------------
Name of Book Entry Transfer
Facility:
Signature(s): _______________________
- ------------------------------------- -------------------------------------
Account No.: _____________________ at
Dated: ______________________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association or
other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program or a bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended, guarantees the delivery to the Depositary of the Shares tendered
hereby, together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile(s) thereof) and any other required
documents, or an Agent's Message (as defined in the Offer to Purchase) in the
case of a book-entry delivery of Shares, all within three trading days of the
date hereof. A "trading day" is any day on which the Nasdaq Stock Market is
open for business.
Name of Firm: _______________________ Title: ______________________________
- ------------------------------------- Name: _______________________________
(Authorized Signature) (Please Print or Type)
Address: ____________________________ Area Code and Telephone No.: ________
- ------------------------------------- Dated: ______________________________
(zip code)
DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM --CERTIFICATES SHOULD BE
SENT WITH THE LETTER OF TRANSMITTAL
2
<PAGE>
EXHIBIT (A)(6)
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
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if
joint funds, the
first individual
on the account(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult, or if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor
guardian or committee for a or incompetent
designated ward, minor or person(3)
incompetent person
7. a. A revocable savings The grantor-
trust account (in which trustee(1)
grantor is also
trustee)
b. Any "trust" account that The actual
is not a legal or valid owner(1)
trust under State law
8. Sole proprietorship The owner(4)
account
</TABLE>
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
--------
<S> <C>
9. A valid trust, estate or The legal entity
pension trust (Do not furnish
the identifying
number of the
personal
representative or
trustee unless
the legal entity
itself is not
designated in the
account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local governmental 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) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) 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>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Card, or Form SS-
4, Application for Employer Identification Number (for businesses and all
other entities), or Form W-7 for Individual Taxpayer Identification Number
(for alien individuals required to file U.S. tax returns), at an office of the
Social Security Administration or the Internal Revenue Service.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on all payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual re-
tirement plan, or a custodial account under section 403(b)(7).
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any political subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An entity registered at all times during the tax year under the Investment
Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident alien partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. 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.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file a Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR
PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends and patronage dividends that
are not subject to information reporting are also not subject to backup with-
holding. For details, see the regulations under sections 6041, 6041A(a), 6045,
and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, inter-
est, or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identifica-
tion purposes and to help verify the accuracy of your tax return. Payers must
be given the numbers whether or not recipients are required to file tax re-
turns. Payers must generally withhold 31% of taxable interest, dividend and
certain other payments to a payee who does not furnish a taxpayer identifica-
tion number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT (A)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell these securities. The Offer is made only by the Offer to Purchase
and the related Letter of Transmittal and is not being made to (nor will tenders
be accepted from) holders of Shares in any jurisdiction in which the Offer or
the acceptance thereof would not be in compliance with the securities laws of
such jurisdiction. In those jurisdictions where securities laws require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be
made on behalf of the Offeror by one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TOTAL CONTROL PRODUCTS, INC.
AT $11.00 NET PER SHARE
BY
ORION MERGER CORP.
A WHOLLY OWNED SUBSIDIARY OF
GE FANUC AUTOMATION NORTH AMERICA, INC.
AND
AN INDIRECT MAJORITY OWNED SUBSIDIARY OF
GENERAL ELECTRIC COMPANY
Orion Merger Corp., an Illinois corporation (the "Offeror"), a wholly owned
subsidiary of GE Fanuc Automation North America, Inc., a Delaware corporation
(the "Parent"), and an indirect majority owned subsidiary of General Electric
Company, a New York corporation, is offering to purchase all of the shares of
common stock, no par value (the "Shares"), of Total Control Products, Inc., an
Illinois corporation (the "Company"), for $11.00 per Share, net to the seller in
cash without interest, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated November 30, 1998 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer").
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ON 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, DECEMBER 28, 1998, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the expiration of the Offer such number of
Shares that would constitute at least two-thirds of the Shares that are
outstanding determined on a fully diluted basis, (ii) any waiting period under
the HSR Act (as defined in the Offer to Purchase) applicable to the purchase of
Shares pursuant to the Offer having expired or having been terminated prior to
the expiration of the Offer, and (iii) the satisfaction of certain other terms
and conditions.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of November 22, 1998 (the "Merger Agreement") among Parent, the Offeror and
the Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with relevant provisions of the Illinois Business Corporation Act, as
amended (the "IBCA"), the Offeror will be merged with and into the Company (the
"Merger"). At the effective time of the Merger (the "Effective Time"), each
Share issued and outstanding immediately prior to the Effective Time
<PAGE>
(other than Shares held in the treasury of the Company, Shares held by Parent,
the Offeror or any other wholly owned subsidiary of Parent, or Shares which are
held by shareholders, if any, who properly exercise their dissenter's rights
under the IBCA) will be cancelled and converted into the right to receive $11.00
in cash, or any higher price that is paid in the Offer, without interest.
In connection with the Merger Agreement Parent and the Offeror entered into
Shareholder Agreements dated November 22, 1998 (the "Shareholder Agreements")
with certain shareholders of the Company who currently hold 3,426,373 Shares,
representing approximately 47% of the issued and outstanding Shares. Pursuant to
the Shareholder Agreements, such shareholders have agreed, among other things,
to tender all of their Shares pursuant to the Offer. Parent and the Company have
also entered into the Stock Option Agreement dated November 22, 1998, pursuant
to which, among other things, the Company has granted Parent an irrevocable
option to purchase (the "Option") up to 1,598,530 authorized and unissued
Shares, or such other number of Shares as equals 19.9% of the Company's issued
and outstanding Shares at the time of exercise of the Option, at a purchase
price of $11.00 per share, exercisable upon the occurrence of certain events.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY ADOPTED THE MERGER
AGREEMENT AND APPROVED THE OFFER AND THE MERGER, HAS DETERMINED THAT THE TERMS
OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY'S SHAREHOLDERS, AND RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT
THE OFFER AND TENDER ALL THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased Shares validly tendered and not withdrawn, if and
when the Offeror gives oral or written notice to Norwest Bank Minnesota, N.A.
(the "Depositary") of the Offeror's acceptance of such Shares for payment. In
all cases, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which shall act as agent for
tendering shareholders for the purpose of receiving payment from the Offeror and
transmitting payment to the tendering shareholders. 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 timely confirmation of a book-
entry transfer of such Shares into the Depositary's account at the Book-Entry
Transfer Facility (as defined in the Offer to Purchase) pursuant to the
procedures set forth in the Offer to Purchase, (ii) a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase) and (iii) any other documents
required by the Letter of Transmittal.
If any of the conditions set forth in the Offer to Purchase that relate to
the Offeror's obligations to purchase the Shares are not satisfied by 12:00
Midnight, New York City time, on Monday, December 28, 1998 (or any other time
then set as the Expiration Date), the Offeror may, subject to the terms of the
Merger Agreement, (i) extend the Offer and, subject to applicable withdrawal
rights, retain all tendered Shares until the expiration of the Offer as so
extended, (ii) subject to complying with applicable rules and regulations of the
Securities and Exchange Commission, accept for payment all Shares so tendered
and not extend the Offer, or (iii) terminate the Offer and not accept for
payment any Shares and return all tendered Shares to tendering shareholders.
The term "Expiration Date" shall mean 12:00 Midnight, New York City time, on
Monday, December 28, 1998, unless the Offeror 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 the
Offeror, shall expire.
-2-
<PAGE>
Subject to the limitations set forth in the Offer and the Merger Agreement,
the Offeror reserves the right (but will not be obligated), at any time or from
time to time in its sole discretion, to extend the period 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. There can be no assurance
that the Offeror will exercise its right to extend the Offer. Any extension of
the period during which the Offer is open will be followed, as promptly as
practicable, by public announcement thereof, such announcement to be issued not
later than 9:00 a.m., New York City Time, on the next business day after the
previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the rights of a tendering shareholder to withdraw such shareholder's Shares.
Except as otherwise provided in Section 4 of the Offer to Purchase, tenders
of Shares made pursuant to the Offer are irrevocable, except that Shares
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date, and, unless theretofore accepted for payment, may also be
withdrawn at any time after January 28, 1999. 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 the
Offer to Purchase. Any such notice of withdrawal must specify the name of the
person who tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered holder if different from the name of
the person who tendered the Shares. If certificates for Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then prior to the
physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Shares have
been tendered for the account of an Eligible Institution (as defined in the
Offer to Purchase), the signature on the notice of withdrawal must be guaranteed
by an Eligible Institution. If Shares have been tendered pursuant to the
procedures for book-entry transfer set forth in Section 3 of the Offer to
Purchase, the notice of withdrawal must specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with withdrawn
Shares, in which case a notice of withdrawal will be effective if delivered to
the Depositary by any method of delivery described in this paragraph. All
questions as to the form and validity (including time of receipt) of a notice
of withdrawal will be determined by the Offeror, in its sole discretion, and
its determination shall be final and binding on all parties.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) 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 to the Offeror its lists of shareholders and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letter of Transmittal and other
related materials are being mailed to record holders of Shares and will be
mailed to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the shareholder
lists 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 THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Any questions or requests for assistance or 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 the Offeror's expense. No fees or commissions will be
payable to brokers, dealers or other persons for soliciting tenders of Shares
pursuant to the Offer.
-3-
<PAGE>
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Toll Free: (800) 566-9061
Call Collect: (212) 754-8000
Banks and Brokerage Firms, please call: (800) 662-5200
November 30, 1998
-4-
<PAGE>
EXHIBIT (A)(8)
FOR IMMEDIATE RELEASE
---------------------
November 23, 1998
GE FANUC AUTOMATION AGREES TO ACQUIRE
TOTAL CONTROL PRODUCTS, INC.,
EXPANDS OPEN SYSTEMS SOLUTIONS
CHARLOTTESVILLE, VA - GE Fanuc Automation, Inc. today announced it has signed
definitive agreements to acquire 100% of Total Control Products, Inc. (TCP,
NASDAQ TCPS) shares at $11 per share. Total Control Products, founded in 1983,
designs, develops and markets leading edge open control and display products for
the industrial automation market. The acquisition adds a new dimension to GE
Fanuc's Open Control Initiative, and strengthens its CIMPLICITY(TM) display
product offering, enhancing the companies position in Open Controls and Operator
Interface.
"At GE Fanuc, our mission is to improve our customers' productivity with the
best industrial automation technology, reliability, and services worldwide. This
acquisition significantly strengthens our ability to meet this commitment. Total
Control Products' portfolio of Open Control and Operator Interface products will
greatly expand the systems we offer for the factory floor." Our customers will
now have a complete selection of products and services that range from
traditional PLC and Input/Output systems to Windows based NT/CE Control
Systems," said Joe Hogan, President and CEO of GE Fanuc Automation.
Nic Gihl CEO of Total Control Products said, "As TCP joins with GE Fanuc, we are
extremely excited about our prospects for continued success. The future is even
brighter for both our customers and our employees. The Open Systems supplied by
Total Control Products together with GE Fanuc's expertise in Industrial
Automation will revolutionize the factory floor."
<PAGE>
The transaction will take the form of a tender offer by a subsidiary of GE Fanuc
for all outstanding shares at $11 in cash net per share, followed by a cash
merger for the remaining shares at the same price. The tender offer is subject
to customary terms and conditions, including at least two-thirds of the
outstanding shares on a fully diluted basis being tendered. The tender offer is
expected to commence no later than November 30, 1998.
In connection with the transaction, holders of approximately half of the
outstanding shares of Total Control Products have agreed to tender their shares
pursuant to the offer. Additionally, Total Control Products has granted GE Fanuc
Automation the option to purchase 19.9% of its common stock at $11 per share
under certain circumstances.
Total Control Products' board has unanimously approved the transaction and has
received a fairness opinion from Adams, Harkness and Hill, Inc.
GE Fanuc Automation, Inc. is a global supplier of industrial controls systems
with headquarters in Charlottesville, Virginia, and is a joint venture between
GE and FANUC, Ltd. Japan. GE Fanuc is part of GE Industrial Systems, a global
manufacturer of products and systems used to distribute, protect, control and
operate electrical equipment for commercial, utility and industrial
applications.
Total Control Products, headquartered in Melrose Park, IL, offers a broad range
of products which are used to define, monitor and maintain the operation,
sequencing and safety of industrial equipment and machinery on the factory
floor. These products range from input/output devices to graphic operator
interfaces to open connect hardware and software for factory-wide control
systems.
# # #
CIMPLICITY is a registered trademark of GE Fanuc Automation, Inc.
<PAGE>
[GE FANUC LOGO]
Exhibit (A) (9)
FOR IMMEDIATE RELEASE
---------------------
November 30, 1998
GE Fanuc Automation Commences Tender Offer
For Total Control Products, Inc.
Charlottesville, VA, November 30, 1998 - GE Fanuc Automation North America,
Inc., today announced that a wholly owned subsidiary has commenced its
previously announced tender offer for all of the shares of common stock, no par
value, of Total Control Products, Inc. (TCP, NASDAQ TCPS) at $11 per share, net
to the seller, in cash. TCP, headquartered in Melrose Park, IL, offers a broad
range of products which are used to define, monitor and maintain the operation,
sequencing and safety of industrial equipment and machinery on the factory
floor.
The tender offer is being made pursuant to an Agreement and Plan of Merger dated
as of November 22, 1998. The tender offer will expire at 12:00 midnight, New
York City time, on Monday, December 28, 1998, unless extended.
The offer is conditioned upon, among other things, there being validly tendered
and not withdrawn a number of shares which equals at least two-thirds of the
outstanding shares on a fully diluted basis.
Norwest Bank Minnesota, N.A. is the depositary for the tender offer. Morrow &
Co., Inc. is the information agent.
GE Fanuc Automation North America, Inc. is a global supplier of industrial
control systems with headquarters in Charlottesville, Virginia, and is a joint
venture between GE and FANUC, Ltd. Japan. GE Fanuc is part of GE Industrial
Systems, a global manufacturer of products and systems used to distribute,
protect, control and operate electrical equipment for commercial, utility and
industrial applications.
<PAGE>
EXHIBIT (C)(1)
AGREEMENT AND PLAN OF MERGER
AMONG
GE FANUC AUTOMATION NORTH AMERICA, INC.,
ORION MERGER CORP.
AND
TOTAL CONTROL PRODUCTS, INC.
DATED AS OF NOVEMBER 22, 1998
<PAGE>
TABLE OF CONTENTS
-----------------
AGREEMENT AND PLAN OF MERGER
----------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
THE OFFER............................................... 2
Section 1.1. The Offer................................. 2
Section 1.2. Company Actions........................... 3
ARTICLE II
THE MERGER.............................................. 5
Section 2.1. The Merger................................. 5
Section 2.2. Effective Time............................. 5
Section 2.3. Effects of the Merger...................... 5
Section 2.4. Charter and Bylaws; Directors and Officers. 6
Section 2.5. Conversion of Securities................... 6
Section 2.6. Exchange of Certificates................... 7
(a) Paying Agent..................................... 7
(b) Exchange Procedure............................... 7
(c) No Further Ownership Rights in Shares............ 8
(d) Termination of Payment Fund...................... 8
(e) No Liability..................................... 8
Section 2.7. Merger Without Meeting of Shareholders..... 8
Section 2.8. Further Assurances......................... 9
Section 2.9. Closing.................................... 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB........ 9
Section 3.1. Organization............................... 9
Section 3.2. Authority.................................. 9
Section 3.3. Consents and Approvals; No Violations...... 10
Section 3.4. Information Supplied....................... 11
Section 3.5. Interim Operations of Sub.................. 11
Section 3.6. Brokers.................................... 11
Section 3.7. Ownership of Shares........................ 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY........... 12
Section 4.1. Organization, Standing and Power........... 12
Section 4.2. Capital Structure.......................... 12
Section 4.3. Authority.................................. 13
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 4.4. Consents and Approvals; No Violation....................... 14
Section 4.5. SEC Documents and Other Reports............................ 15
Section 4.6. Information Supplied....................................... 15
Section 4.7. Absence of Certain Changes or Events....................... 16
Section 4.8. Permits and Compliance..................................... 16
Section 4.9. Tax Matters................................................ 17
Section 4.10. Actions and Proceedings.................................... 18
Section 4.11. Certain Agreements......................................... 18
Section 4.12. ERISA...................................................... 19
Section 4.13. Compliance with Worker Safety Laws......................... 21
Section 4.14. Liabilities; Products...................................... 21
Section 4.15. Labor Matters.............................................. 22
Section 4.16. Intellectual Property; Year 2000........................... 22
Section 4.17. Title to and Sufficiency of Assets......................... 23
Section 4.18. State Takeover Statutes.................................... 24
Section 4.19. Required Vote of Company Shareholders...................... 24
Section 4.20. Accounts Receivable........................................ 24
Section 4.21. Inventories................................................ 25
Section 4.22. Environmental Matters...................................... 25
Section 4.23. Suppliers, Customers and Employees......................... 26
Section 4.24. Insurance.................................................. 27
Section 4.25. Accuracy of Information.................................... 27
Section 4.26. Transactions with Affiliates............................... 27
Section 4.27. Broker..................................................... 28
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS................................ 28
Section 5.1. Conduct of Business by the Company Pending the Merger...... 28
Section 5.2. No Solicitation............................................ 30
Section 5.3. Third Party Standstill Agreements.......................... 32
ARTICLE VI
ADDITIONAL AGREEMENTS.................................................... 32
Section 6.1. Shareholder Meeting........................................ 32
Section 6.2. Access to Information...................................... 33
Section 6.3. Directors.................................................. 33
Section 6.4. Fees and Expenses.......................................... 34
Section 6.5. Stock Options.............................................. 35
Section 6.6. Reasonable Best Efforts.................................... 36
Section 6.7. Public Announcements....................................... 37
Section 6.8. DEC Letter; Termination of Stock Rights.................... 37
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 6.9. State Takeover Laws......................................... 38
Section 6.10. Indemnification; Directors and Officers Insurance........... 38
Section 6.11. Notification of Certain Matters............................. 38
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER........................................ 39
Section 7.1. Conditions to Each Party's Obligation to Effect the Merger... 39
Section 7.2. Conditions to Obligations of Parent and Sub to Effect the
Merger...................................................... 39
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER......................................... 40
Section 8.1. Termination.................................................. 40
Section 8.2. Effect of Termination........................................ 41
Section 8.3. Amendment.................................................... 42
Section 8.4. Waiver....................................................... 42
ARTICLE IX
GENERAL PROVISIONS........................................................ 42
Section 9.1. Non-Survival of Representations and Warranties............... 42
Section 9.2. Notices...................................................... 42
Section 9.3. Interpretation............................................... 43
Section 9.4. Counterparts................................................. 44
Section 9.5. Entire Agreement; No Third-Party Beneficiaries............... 44
Section 9.6. Governing Law................................................ 44
Section 9.7. Assignment................................................... 44
Section 9.8. Severability................................................. 44
Section 9.9. Enforcement of this Agreement................................ 45
</TABLE>
-iii-
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, dated as of November 22, 1998 (this
"Agreement"), among GE Fanuc Automation North America, Inc., a Delaware
- ----------
corporation ("Parent"), Orion Merger Corp., an Illinois corporation and a
------
wholly-owned subsidiary of Parent ("Sub"), and Total Control Products, Inc., an
---
Illinois corporation (the "Company") (Sub and the Company being hereinafter
-------
collectively referred to as the "Constituent Corporations").
------------------------
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause
Sub to make a tender offer (as it may be amended from time to time as permitted
under this Agreement, the "Offer") to purchase any and all issued and
-----
outstanding shares of Common Stock, no par value, of the Company (the "Company
-------
Common Stock"; the shares of Company Common Stock being hereinafter referred to
- ------------
as the "Shares") at a purchase price of $11.00 per share (the "Offer Price"),
------ -----------
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in this Agreement; and the Board of Directors of the
Company has adopted resolutions approving the Offer and the Merger (as defined
below) and recommending that holders of Shares accept the Offer and that the
Company's shareholders approve this Agreement;
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved and declared advisable the merger of Sub and the Company
(the "Merger"), upon the terms and subject to the conditions set forth herein,
------
whereby each issued and outstanding Share not owned directly or indirectly by
Parent or the Company will be converted into the right to receive the price per
share paid in the Offer and the respective Boards of Directors of Sub and the
Company have approved and adopted this Agreement; and
WHEREAS, in order to induce Parent and Sub to enter into this
Agreement, concurrently herewith (i) Parent and the Company are entering into
the Stock Option Agreement dated as of the date hereof (the "Stock Option
------------
Agreement") in the form of the attached Exhibit A and (ii) Parent and certain of
- --------- ---------
the shareholders of the Company are entering into Shareholder Agreements dated
as of the date hereof (the "Shareholder Agreements") in the forms of the
----------------------
attached Exhibit B.
---------
NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, the parties agree as follows:
<PAGE>
ARTICLE I
THE OFFER
Section 1.1. The Offer. (a) Subject to the provisions of this
----------
Agreement, as promptly as practicable but in no event later than November 30,
1998, Sub shall, and Parent shall cause Sub to, commence, within the meaning of
Rule 14d-2 under the Securities Exchange Act of 1934, as amended (together with
the rules and regulations promulgated thereunder, the "Exchange Act"), the
------------
Offer. The obligation of Sub to, and of Parent to cause Sub to, commence the
Offer and accept for payment, and pay for, any Shares tendered pursuant to the
Offer shall be subject only to the conditions set forth in the attached Exhibit
-------
C (the "Offer Conditions") (any of which may be waived in whole or in part by
- - ----------------
Sub in its sole discretion, except that Sub shall not waive the Minimum
Condition (as defined in Exhibit C) without the consent of the Company) and
---------
subject to the rights of Parent or Sub to terminate this Agreement as provided
in Section 8.1. Sub expressly reserves the right to modify the terms of the
Offer, except that, without the consent of the Company, Sub shall not (i) reduce
the number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii)
impose any other conditions to the Offer other than the Offer Conditions or
modify the Offer Conditions (other than to waive any Offer Conditions to the
extent permitted by this Agreement), (iv) except as provided in the next
sentence, extend the Offer, (v) change the form of consideration payable in the
Offer or (vi) amend any other term of the Offer in any manner adverse to the
holders of Shares. Notwithstanding the foregoing, Sub may, without the consent
of the Company, (i) extend the Offer, if at the scheduled or extended expiration
date of the Offer any of the Offer Conditions shall not be satisfied or waived,
until such time as such conditions are satisfied or waived, (ii) extend the
Offer for any period required by any rule, regulation, interpretation or
position of the Securities and Exchange Commission (the "SEC") or the staff
---
thereof applicable to the Offer and (iii) if all Offer Conditions are satisfied
or waived but the number of Shares tendered is at least equal to 75%, but less
than 90%, of the then outstanding number of Shares, extend the Offer for any
reason on one or more occasions for an aggregate period of not more than 15
business days beyond the latest expiration date that would otherwise be
permitted under clause (i) or (ii) of this sentence, in each case subject to the
right of Parent, Sub or the Company to terminate this Agreement pursuant to the
terms hereof. Parent and Sub agree that if at any scheduled expiration date of
the Offer, the Minimum Condition, the HSR Condition (as defined in Exhibit C) or
---------
either of the conditions set forth in paragraphs (e) or (f) of Exhibit C shall
---------
not have been satisfied, but at such scheduled expiration date all the
conditions set forth in paragraphs (a), (b), (c), (d) and (g) shall then be
satisfied, at the request of the Company (confirmed in writing), Sub shall
extend the Offer from time to time, subject to the right of Parent, Sub or the
Company to terminate this Agreement pursuant to the terms hereof. Subject to
the terms and conditions of the Offer and this Agreement, Sub shall, and Parent
shall cause Sub to, accept for payment, and pay for, all Shares validly tendered
and not withdrawn pursuant to the Offer that Sub becomes obligated to accept for
payment, and pay for, pursuant to the Offer as soon as practicable after the
expiration of the Offer, and in any event in compliance with the obligations
respecting prompt payment pursuant to Rule 14e-1(c) under the Exchange Act.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-
------------
1") with respect to the
- -
-2-
<PAGE>
Offer, which shall contain an offer to purchase and a related letter of
transmittal and summary advertisement (such Schedule 14D-1 and the documents
included therein pursuant to which the Offer will be made, together with any
supplements or amendments thereto, the "Offer Documents"), and Parent and Sub
---------------
shall cause to be disseminated the Offer Documents to holders of Shares as and
to the extent required by applicable Federal securities laws. Parent, Sub 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 such information shall have
become false or misleading in any material respect, and Parent and Sub further
agree to take all steps necessary to cause the Schedule 14D-1 as so corrected to
be filed with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable Federal securities laws. The Company and its counsel shall be given
reasonable opportunity to review and comment upon the Offer Documents prior to
their filing with the SEC or dissemination to the shareholders of the Company.
Parent and Sub agree to provide the Company and its counsel any comments Parent,
Sub or their counsel may receive from the SEC or its staff with respect to the
Offer Documents promptly after the receipt of such comments and to cooperate
with the Company and its counsel in responding to any such comments.
(c) Parent shall provide or cause to be provided to Sub on a timely
basis the funds necessary to accept for payment, and pay for, any Shares that
Sub becomes obligated to accept for payment, and pay for, pursuant to the Offer.
Section 1.2. Company Actions. (a) The Company hereby approves of
----------------
and consents to the Offer and represents and warrants that the Board of
Directors of the Company, at a meeting duly called and held, at which all
directors were present, duly and unanimously adopted resolutions approving and
adopting this Agreement, approving the Offer, the Merger and the Stock Option
Agreement, taking all action necessary to render the provisions of Sections 7.85
and 11.75 of the IBCA inapplicable to the Offer, the Merger, the Stock Option
Agreement and the Shareholder Agreements, determining that the terms of the
Offer and the Merger are fair to, and in the best interests of, the Company's
shareholders and recommending that holders of Shares accept the Offer and that
the Company's shareholders approve this Agreement and the Merger; provided that
such recommendation and approval may be withdrawn, modified or amended to the
extent the Board of Directors of the Company determines in good faith, after
consultation with independent counsel, that such action is required in the
exercise of such Board's fiduciary duties under applicable law. The Company
represents and warrants that its Board of Directors has received the opinion of
Adams, Harkness & Hill, Inc. that, as of the date of this Agreement and subject
to the matters set forth in such opinion, the proposed consideration to be
received by holders of Shares pursuant to the Offer and the Merger is fair to
such holders from a financial point of view, and a complete and correct signed
copy of such opinion has been delivered by the Company to Parent.
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing the recommendation described in
--------------
paragraph (a) (subject to the right to withdraw, modify or amend such
recommendation as and to the extent provided in Section 1.2(a)), and the Company
-3-
<PAGE>
shall cause to be disseminated the Schedule 14D-9 to holders of Shares as and to
the extent required by applicable Federal securities laws. Each of the Company,
Parent and Sub agrees promptly to correct any information provided by it for use
in the Schedule 14D-9 if and to the extent that such information shall have
become false or misleading in any material respect, and the Company further
agrees to take all steps necessary to amend or supplement the Schedule 14D-9 and
to cause the Schedule 14D-9 as so amended or supplemented to be filed with the
SEC and 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 reasonable opportunity to review and comment upon the Schedule 14D-9 prior
to its filing with the SEC or dissemination to shareholders of the Company. The
Company agrees to provide Parent and its counsel any comments the Company or its
counsel may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments and to cooperate with Parent, Sub
and their counsel in responding to any such comments.
(c) In connection with the Offer and the Merger, the Company shall
direct its transfer agent or agents to furnish Sub promptly with mailing labels
containing the names and addresses of the record holders of Shares as of a
recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of shareholders, security position
listings and computer files and all other information in the Company's
possession or control, to the extent reasonably available to the Company,
regarding the beneficial owners of Shares and any securities convertible into
Shares, and shall furnish to Sub such information and assistance (including
updated lists of shareholders, security position listings and computer files) as
Parent may reasonably request in communicating the Offer to the Company's
shareholders. Subject to the requirements of applicable law, and except for such
steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Merger, Parent and Sub and their agents
shall hold in confidence the information contained in any such labels, listings
and files, will use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated, will, upon request, deliver,
and will use their best efforts to cause their agents to deliver, to the Company
all copies of such information then in their possession or control.
(d) The Company shall cause Taylor Industrial Software, Inc., an
Alberta corporation ("Taylor"), to transmit to each holder of shares of Class C
------
Exchangeable Common Stock, no par value, of Taylor ("Class C Taylor Shares"),
---------------------
contemporaneously with the transmission of the Offer Documents to the holders of
Shares: (i) the Offer Documents; (ii) a letter, in form reasonably satisfactory
to Parent, stating that holders of Class C Taylor Shares who wish to participate
in the Offer must request retraction of such Class C Taylor Shares for shares of
Company Common Stock pursuant to Schedule I to Article 3 of the Articles of
Incorporation, as amended, of Taylor; and (iii) a form of retraction request,
which retraction request shall provide that a holder of Class C Taylor Shares
requests retraction thereof on the date Sub first accepts for payment pursuant
to the Offer and agrees that contemporaneously therewith the shares of Company
Common Stock received upon such retraction shall be deemed validly tendered
pursuant to the Offer. The Company shall cause Taylor to retract such Class C
Taylor Shares in accordance with such retraction request (and the Company
represents and warrants that such retraction can be effected in compliance with
the Business Corporations Act (Alberta)) and
-4-
<PAGE>
the Company shall cause to be issued (for tender as so requested) such number of
shares of Company Common Stock as is necessary to satisfy the retraction under
the Articles of Incorporation, as amended, of Taylor and the related Support
Agreement dated September 26, 1996 between the Company and Taylor (the "Taylor
------
Support Agreement"). In addition, the Company shall cause (x) Taylor to
- -----------------
transmit to the holders of Class C Taylor Shares a recommendation of the Company
and Taylor that such holders retract such shares and tender the shares of
Company Common Stock received on such retraction pursuant to the Offer and (y)
Taylor to furnish Sub promptly with the names and addresses of the record
holders of Class C Taylor Shares as of a recent date and of those persons
becoming record holders subsequent to such date and to furnish to Sub such
information and assistance as Parent or Sub may reasonably request in
communicating the documentation referred to in the first sentence of this
Section 1.2(d) to the holders of Class C Taylor Shares. The Company and Parent
agree that it is their intention that the foregoing transaction with respect to
Class C Taylor Shares be treated as an exchange of Company Common Stock for the
Class C Taylor Shares, rather than as a redemption of the Class C Taylor Shares
by Taylor and agree to modify the procedures described in this Section 1.2(d) as
and to the extent necessary to accomplish such intent.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions
----------
hereof, and in accordance with the Business Corporation Act of 1983 of the State
of Illinois, as amended (the "IBCA"), Sub shall be merged with and into the
----
Company at the Effective Time (as hereinafter defined). Following the Merger,
the separate corporate existence of Sub shall cease and the Company shall
continue as the surviving corporation (the "Surviving Corporation") and shall
---------------------
succeed to and assume all the rights and obligations of Sub in accordance with
the IBCA. Notwithstanding anything to the contrary herein, at the election of
Parent, any direct wholly-owned Subsidiary (as hereinafter defined) of Parent
may be substituted for Sub as a constituent corporation in the Merger. In such
event, the parties agree to execute an appropriate amendment to this Agreement,
in form and substance reasonably satisfactory to Parent and the Company, in
order to reflect such substitution.
Section 2.2 Effective Time. The Merger shall become effective when
--------------
articles of merger (the "Articles of Merger"), executed in accordance with the
------------------
relevant provisions of the IBCA, are filed with the Secretary of State of the
State of Illinois. When used in this Agreement, the term "Effective Time" shall
--------------
mean the date and time at which the Articles of Merger are accepted for record.
The filing of the Articles of Merger shall be made on the date of the Closing
(as defined in Section 2.9).
Section 2.3 Effects of the Merger. The Merger shall have the
---------------------
effects set forth in Section 11.50 of the IBCA.
-5-
<PAGE>
Section 2.4 Charter and Bylaws; Directors and Officers. (a) At the
-------------------------------------------
Effective Time, the Restated and Amended Articles of Incorporation, as amended,
of the Company (the "Company Charter") shall be the Articles of Incorporation of
---------------
the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law. At the Effective Time, the Amended and Restated
Bylaws of the Company, as in effect immediately prior to the Effective Time,
shall be the Bylaws of the Surviving Corporation until thereafter changed or
amended as provided therein or by the Company Charter.
(b) The directors of Sub at the Effective Time of the Merger shall be
the directors of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be. The officers of the Company at the Effective
Time of the Merger shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
Section 2.5 Conversion of Securities. As of the Effective Time, by
------------------------
virtue of the Merger and without any action on the part of Sub, the Company or
the holders of any securities of the Constituent Corporations:
(a) Each issued and outstanding share of common stock, par value $.01
per share, of Sub shall be converted into one validly issued, fully paid
and nonassessable Common Share of the Surviving Corporation.
(b) All Shares that are held in the treasury of the Company or by any
wholly-owned Subsidiary of the Company and any Shares owned by Parent or by
any wholly-owned Subsidiary of Parent shall be canceled and no capital
stock of Parent or other consideration shall be delivered in exchange
therefor.
(c) Each Share issued and outstanding immediately prior to the
Effective Time (other than shares to be canceled in accordance with Section
2.5(b) and other than Dissenting Shares (as defined in Section 2.5(d))
shall be converted into the right to receive from the Surviving Corporation
in cash, without interest, the per share price paid in the Offer (the
"Merger Consideration"). All such Shares, when so converted, shall no
---------------------
longer be outstanding and shall automatically be canceled and retired and
each holder of a certificate representing any such shares shall cease to
have any rights with respect thereto, except the right to receive the
Merger Consideration.
(d) Shares of Dissenting Shareholders. Notwithstanding anything in
----------------------------------
this Agreement to the contrary, any issued and outstanding Shares held by a
person (a "Dissenting Shareholder") who objects to the Merger and complies
----------------------
with all of the provisions of the IBCA concerning the right of holders of
Shares to dissent from the Merger and obtain payment for their Shares
("Dissenting Shares") shall not be converted as described in Section
-------------------
2.5(c), but shall be converted into the right to receive such consideration
as may be determined to be due to such Dissenting Shareholder pursuant to
the IBCA. If, after the Effective Time, such Dissenting Shareholder
withdraws his
-6-
<PAGE>
demand for payment or fails to perfect or otherwise loses his right of
payment, in any case pursuant to the IBCA, the Shares of such Dissenting
Shareholder shall be deemed to be converted as of the Effective Time into
the right to receive the Merger Consideration. The Company shall give
Parent (i) prompt notice of any demands for payment received by the Company
and (ii) the opportunity to participate in and direct all negotiations and
proceedings with respect to any such demands. The Company shall not,
without the prior written consent of Parent, make any payment with respect
to, or settle, offer to settle or otherwise negotiate, any such demands.
Section 2.6. Exchange of Certificates. (a) Paying Agent. Prior to
------------------------- -------------
the Effective Time, Parent shall designate a bank or trust company (or such
other person or persons as shall be reasonably acceptable to Parent and the
Company) to act as paying agent in the Merger (the "Paying Agent"), and at the
------------
Effective Time, Parent shall make available, or cause the Surviving Corporation
to make available, to the Paying Agent cash in the amount necessary for the
payment of the Merger Consideration upon surrender of certificates representing
Shares as part of the Merger pursuant to Section 2.5. Any and all interest
earned on funds made available to the Paying Agent pursuant to this Agreement
shall be paid over to Parent.
(b) Exchange Procedure. As soon as reasonably practicable after the
-------------------
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates that immediately prior to the Effective Time
represented Shares (the "Certificates"), (i) a letter of transmittal (which
------------
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall be in a form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Paying Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor the amount of cash into which the Shares theretofore
represented by such Certificate shall have been converted pursuant to Section
2.5, and the Certificate so surrendered shall forthwith be canceled. In the
event of a transfer of ownership of Shares that is not registered in the
transfer records of the Company, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.6, each Certificate (other than Certificates
representing Dissenting Shares) shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the amount of
cash, without interest, into which the Shares theretofore represented by such
Certificate shall have been converted pursuant to Section 2.5. No interest will
be paid or will accrue on the cash payable upon the surrender of any
Certificate. Parent or the Paying Agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement
such amounts as Parent or the Paying Agent is required to deduct and withhold
with respect to the making of such payment
-7-
<PAGE>
under the Code (as hereinafter defined) or under any provisions of state, local
or foreign tax law. To the extent that amounts are so withheld by Parent or the
Paying Agent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the person in respect of which such deduction
or withholding was made by the Parent or the Paying Agent.
(c) No Further Ownership Rights in Shares. All cash paid upon the
--------------------------------------
surrender of Certificates in accordance with the terms of this Article II shall
be deemed to have been paid in full satisfaction of all rights pertaining to the
Shares theretofore represented by such Certificates. At the Effective Time, the
stock transfer books of the Company shall be closed, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the Shares that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent for any reason, they shall be canceled
and exchanged as provided in this Article II.
(d) Termination of Payment Fund. Any portion of the funds made
---------------------------
available to the Paying Agent to pay the Merger Consideration which remains
undistributed to the holders of Shares for six months after the Effective Time
shall be delivered to Parent, upon demand, and any holders of Shares who have
not theretofore complied with this Article II and the instructions set forth in
the letter of transmittal mailed to such holders after the Effective Time shall
thereafter look only to Parent for payment of the Merger Consideration to which
they are entitled.
(e) No Liability. None of Parent, Sub, the Company or the Paying
-------------
Agent shall be liable to any person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificates shall not have been surrendered prior to seven years after
the Effective Time (or immediately prior to such earlier date on which any
payment pursuant to this Article II would otherwise escheat to or become the
property of any Governmental Entity (as hereinafter defined), the cash payment
in respect of such Certificate shall, to the extent permitted by applicable law,
become the property of the Surviving Corporation, free and clear of all claims
or interests of any person previously entitled thereto.
(f) Lost Certificates. If any Certificate shall have been lost,
-----------------
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent or the Paying Agent, the posting by such person of a bond, in such
reasonable amount as Parent or the Paying Agent may direct as indemnity against
any claim that may be made against them with respect to such Certificate, the
Paying Agent will pay in exchange for such lost, stolen or destroyed Certificate
the amount of cash to which the holders thereof are entitled pursuant to Section
2.5.
Section 2.7 Merger Without Meeting of Shareholders. Notwithstanding
--------------------------------------
the foregoing, if Sub, or any other direct or indirect subsidiary of Parent,
shall acquire at least 90 percent of the outstanding Shares, the parties hereto
agree to take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after expiration of the Offer without a meeting
of shareholders of the Company, in accordance with Section 11.30 of the IBCA.
-8-
<PAGE>
Section 2.8 Further Assurances. If at any time after the Effective
------------------
Time the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either of the Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations, all such
deeds, bills of sale, assignments and assurances and to do, in the name and on
behalf of either Constituent Corporation, all such other acts and things as may
be necessary, desirable or proper to vest, perfect or confirm the Surviving
Corporation's right, title or interest in, to or under any of the rights,
privileges, powers, franchises, properties or assets of such Constituent
Corporation and otherwise to carry out the purposes of this Agreement.
Section 2.9 Closing. The closing of the transactions contemplated by
-------
this Agreement (the "Closing") and all actions specified in this Agreement to
-------
occur at the Closing shall take place at the offices of Sidley & Austin, One
First National Plaza, Chicago, Illinois 60603, at 10:00 a.m., local time, no
later than the second business day following the day on which the last of the
conditions set forth in Article VII shall have been fulfilled or waived (if
permissible) or at such other time and place as Parent and the Company shall
agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
------------------------------------------------
Parent and Sub represent and warrant to the Company as follows:
Section 3.1. Organization. Each of Parent and Sub is a corporation
-------------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now being conducted.
Section 3.2. Authority. On or prior to the date of this Agreement,
----------
the Boards of Directors of Parent and Sub have declared the Offer and the Merger
advisable and the Board of Directors of Sub has approved and adopted this
Agreement in accordance with the IBCA. Each of Parent and Sub has all requisite
corporate power and authority to execute and deliver this Agreement and the
Shareholder Agreements, Parent has all requisite corporate power and authority
to enter into the Stock Option Agreement, and each of Parent and Sub has all
requisite corporate power and authority to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Parent and Sub of this Agreement and the Shareholder Agreements, the execution
and delivery by Parent of the Stock Option Agreement, and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action (including Board action) on the part of Parent
and Sub subject, in the case of this Agreement, to the filing of the Articles of
Merger as required by
-9-
<PAGE>
the IBCA. This Agreement and the Shareholder Agreements have been duly executed
and delivered by Parent and Sub, and the Stock Option Agreement has been duly
executed and delivered by Parent, and (assuming the valid authorization,
execution and delivery of this Agreement and the Stock Option Agreement by the
Company, the valid authorization, execution and delivery of the Shareholder
Agreements by the shareholders who are parties thereto and the validity and
binding effect hereof and thereof on the Company and such shareholders) this
Agreement and the Shareholders Agreements constitute the valid and binding
obligation of each of Parent and Sub enforceable against them in accordance with
its terms and the Stock Option Agreement constitutes the valid and binding
obligation of Parent enforceable against Parent in accordance with its terms.
Section 3.3. Consents and Approvals; No Violations. Assuming that
--------------------------------------
all consents, approvals, authorizations and other actions described in this
Section 3.3 have been obtained and all filings and obligations described in this
Section 3.3 have been made, and the execution and delivery of this Agreement,
the Stock Option Agreement and the Shareholder Agreements do not, and the
consummation of the transactions contemplated hereby and thereby and compliance
with the provisions hereof and thereof will not, result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give to
others a right of termination, cancellation or acceleration of any obligation or
result in the loss of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of Parent or any of its Subsidiaries under, any provision of (i) the
Certificate of Incorporation or the By-Laws of Parent, each as amended to date,
(ii) any provision of the comparable charter or organization documents of any of
Parent's Subsidiaries, (iii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent or any of its Subsidiaries or (iv) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Parent
or any of its Subsidiaries or any of their respective properties or assets,
other than, in the case of clauses (ii), (iii) or (iv), any such violations,
defaults, rights, liens, security interests, charges or encumbrances that,
individually or in the aggregate, would not have a Material Adverse Effect on
Parent, materially impair the ability of Parent or Sub to perform their
respective obligations hereunder or under the Stock Option Agreement or the
Shareholder Agreements or prevent the consummation of any of the transactions
contemplated hereby or thereby. No filing or registration with, or
authorization, consent or approval of, any domestic (federal and state), foreign
or supranational court, commission, governmental body, regulatory agency,
authority or tribunal (a "Governmental Entity") is required by or with respect
-------------------
to Parent or any of its Subsidiaries in connection with the execution and
delivery of this Agreement, the Stock Option Agreement or the Shareholder
Agreements by Parent or Sub or is necessary for the consummation of the Offer,
the Merger and the other transactions contemplated by this Agreement, the Stock
Option Agreement or the Shareholder Agreements, except for (i) in connection, or
in compliance, with the provisions of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and the Exchange Act,
-------
(ii) the filing of the Articles of Merger with the Secretary of State of the
State of Illinois and appropriate documents with the relevant authorities of
other states in which the Company or any of its Subsidiaries is qualified to do
business, (iii) such filings and consents as may be required under any
environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the Offer, the Merger
or by the
-10-
<PAGE>
transactions contemplated by this Agreement, the Stock Option Agreement or the
Shareholder Agreements, (iv) such filings, authorizations, orders and approvals
as may be required by state takeover laws (the "State Takeover Approvals"), (v)
------------------------
applicable requirements, if any, of state securities or "blue sky" laws ("Blue
----
Sky Laws"), (vi) as may be required under foreign laws and (vii) such other
- --------
consents, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not, individually or in the
aggregate, have a Material Adverse Effect on Parent, materially impair the
ability of Parent or Sub to perform its obligations hereunder or under the Stock
Option Agreement or the Shareholder Agreements or prevent the consummation of
any of the transactions contemplated hereby or thereby.
Section 3.4. Information Supplied. None of the information supplied
---------------------
or to be supplied by Parent or Sub specifically for inclusion or incorporation
by reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
information to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the "Information Statement") or
---------------------
(iv) the proxy statement (together with any amendments or supplements thereto,
the "Proxy Statement") relating to any required approval of this Agreement by
---------------
the holders of at least two-thirds of the Shares entitled to vote on the Merger
(the "Company Shareholder Approval"), will (a) in the case of the Offer
----------------------------
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to the Company's
shareholders, or (b) in the case of the Proxy Statement, at the time the Proxy
Statement is first mailed to the Company's shareholders or at the time of the
Shareholder Meeting (as defined in Section 6.1), contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Offer Documents
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by Parent or Sub with respect to statements
made or incorporated by reference therein based on information supplied by the
Company specifically for inclusion or incorporation by reference therein.
Section 3.5. Interim Operations of Sub. Sub was formed solely for
--------------------------
the purpose of engaging in the transactions contemplated hereby, has engaged in
no other business activities and has conducted its operations only as
contemplated hereby.
Section 3.6. 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 Sub.
Section 3.7. Ownership of Shares. As of the date hereof, neither
--------------------
Parent, its Subsidiaries nor any of its Affiliates is an "Interested
Shareholder" as defined in Section 7.85 of the IBCA.
-11-
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to Parent and Sub as follows
(provided that disclosure of any fact or item in any section of the letter dated
- ---------
the date hereof and delivered on the date hereof by the Company to Parent, which
relates to this Agreement and is designated therein as the Company Letter (the
"Company Letter"), shall be deemed to be disclosed with respect to every other
- ---------------
section but only if the level of particularity or manner of disclosure of the
fact or item expressly disclosed in one section of the Company Letter permits a
reasonable person to find such disclosure relevant to another section):
Section 4.1 Organization, Standing and Power. The Company is a
--------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Illinois and has the requisite corporate power and authority to
carry on its business as now being conducted. Each Subsidiary of the Company is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite corporate (in the
case of a Subsidiary that is a corporation) or other power and authority to
carry on its business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power or authority would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company. The Company and each of its Subsidiaries are duly qualified to do
business, and are in good standing, in each jurisdiction where the character of
their properties owned or held under lease or the nature of their activities
makes such qualification necessary, except where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company.
Section 4.2 Capital Structure. As of the date hereof, the authorized
-----------------
capital stock of the Company consists of 22,500,000 Shares and 1,000,000 shares
of Preferred Stock, no par value ("Company Preferred Stock"). At the close of
-----------------------
business on November 20, 1998:
(i) 8,032,818 Shares were issued and outstanding, all of which were
validly issued, fully paid and nonassessable and free of preemptive rights;
(ii) No Shares of Company Preferred Stock were issued and
outstanding;
(iii) No Shares were held in the treasury of the Company or by
Subsidiaries of the Company;
(iv) 737,112 Shares were reserved for issuance upon the exchange of
the Class C Taylor Shares pursuant to the Articles of Incorporation of
Taylor, as amended, and the Taylor Support Agreement, 737,112 of which were
issued and outstanding as of such date;
(v) 1,386,806 Shares were reserved for issuance in the aggregate
upon the exercise of outstanding stock options issued under the Company's
1996 Employee Stock Option
-12-
<PAGE>
Plan, as amended, the Company's 1996 Non-Employee Director Stock Option
Plan or the Company's 1993 Employee Stock Option Plan, as amended,
(collectively, the "Company Stock Option Plans");
--------------------------
(vi) 250,000 Shares were reserved for issuance in the aggregate
pursuant to the Company's Employee Discount Stock Purchase Plan, as amended
(the "Company Stock Purchase Plan"); and
---------------------------
(vii) 100,000 Shares were reserved for issuance upon the exercise of
the Warrant dated October 5, 1997 issued to Kurt Priester (the "Priester
--------
Warrant").
-------
Section 4.2 of the Company Letter contains a correct and complete list as
of the date of this Agreement of each outstanding option to purchase shares of
Company Common Stock issued under the Company Stock Option Plans (collectively,
the "Company Stock Options"), including the holder, date of grant, exercise
---------------------
price and number of shares of Company Common Stock subject thereto and whether
the option is vested and exercisable. Except for the Class C Taylor Shares
Exchange Agreement, the Company Stock Options and the Company Stock Option
Plans, the Company Stock Purchase Plan and the Priester Warrant and the
contingent payment obligations arising under the Asset Purchase Agreement dated
December 31, 1997 pursuant to which the Company acquired substantially all of
the assets of SensorPulse Corp. and the Asset Purchase Agreement dated as of
October 5, 1997 pursuant to which the Company purchased substantially all of the
assets of Computer Dynamics Services, Inc. (collectively, the "Contingent
----------
Payment Agreements"), there are no options, warrants, calls, rights or
- ------------------
agreements 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 of the Company or any of its Subsidiaries or obligating
the Company or any of its Subsidiaries to grant, extend or enter into any such
option, warrant, call, right or agreement. Except as set forth in Section 4.2
of the Company Letter, there are no outstanding contractual obligations of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire any shares
of Company Common Stock or any capital stock of or any equity interests in any
Subsidiary. Each outstanding share of capital stock of each Subsidiary of the
Company that is a corporation is duly authorized, validly issued, fully paid and
nonassessable and, except as set forth in Section 4.2 of the Company Letter,
each such share is owned by the Company or another Subsidiary of the Company,
free and clear of all security interests, liens, claims, pledges, options,
rights of first refusal, agreements, limitations on voting rights, charges and
other encumbrances of any nature whatsoever. The Company does not have any
outstanding bonds, debentures, notes or other obligations the holders of which
have the right to vote (or convertible into or exercisable for securities having
the right to vote) with the shareholders of the Company on any matter. Exhibit
21 to the Company's Annual Report on Form 10-K for the year ended March 31,
1998, as filed with the SEC (the "Company Annual Report"), is a true, accurate
---------------------
and correct statement in all material respects of all of the information
required to be set forth therein by the regulations of the SEC.
Section 4.3 Authority. On or prior to the date of this Agreement,
---------
the Board of Directors of the Company has unanimously approved the Offer and
declared the Merger advisable
-13-
<PAGE>
and fair to and in the best interest of the Company and its shareholders,
approved and adopted this Agreement and the transactions contemplated hereby in
accordance with the IBCA, resolved to recommend the acceptance of the Offer by
the Company's shareholders and directed that this Agreement be submitted to the
Company's shareholders for approval. The Company has all requisite corporate
power and authority to enter into this Agreement and the Stock Option Agreement,
to consummate the transactions contemplated by the Stock Option Agreement and,
subject to approval by the shareholders of the Company of this Agreement, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the Stock Option Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action (including Board
action) on the part of the Company, subject, in the case of this Agreement, to
(x) approval and adoption of this Agreement by the shareholders of the Company
and (y) the filing of the Articles of Merger as required by the IBCA. This
Agreement and the Stock Option Agreement have been duly executed and delivered
by the Company and (assuming the valid authorization, execution and delivery of
this Agreement by Parent and Sub and the Stock Option Agreement by Parent and
the validity and binding effect of this Agreement on Parent and Sub and the
Stock Option Agreement on Parent) constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms. The
issuance of up to 1,598,530 Shares pursuant to the Stock Option Agreement has
been duly authorized by the Company's Board of Directors.
Section 4.4 Consents and Approvals; No Violation. Assuming that all
------------------------------------
consents, approvals, authorizations and other actions described in this Section
4.4 have been obtained and all filings and obligations described in this Section
4.4 have been made, the execution and delivery of this Agreement and the Stock
Option Agreement do not, and the consummation of the transactions contemplated
hereby and thereby and compliance with the provisions hereof and thereof will
not, result in any violation of, or default (with or without notice or lapse of
time, or both) under, or give to others a right of termination, cancellation or
acceleration of any obligation or result in the loss of a material benefit
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company or any of its
Subsidiaries under, any provision of (i) the Company Charter or the Amended and
Restated Bylaws of the Company, (ii) any provision of the comparable charter or
organization documents of any of the Company's Subsidiaries, (iii) 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 (iv) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets, other than, in the
case of clauses (ii), (iii) or (iv), any such violations, defaults, rights,
liens, security interests, charges or encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect on the Company, materially
impair the ability of the Company to perform its obligations hereunder or under
the Stock Option Agreement or prevent the consummation of any of the
transactions contemplated hereby or thereby. No filing or registration with, or
authorization, consent or approval of, any 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 or the Stock Option Agreement by the
Company or is necessary for the consummation of the Offer, the Merger and the
other transactions contemplated by this
-14-
<PAGE>
Agreement or the Stock Option Agreement, except for (i) in connection, or in
compliance, with the provisions of the HSR Act and the Exchange Act, (ii) the
filing of the Articles of Merger with the Secretary of State of the State of
Illinois and appropriate documents with the relevant authorities of other states
in which the Company or any of its Subsidiaries is qualified to do business,
(iii) such filings and consents as may be required under any environmental,
health or safety law or regulation pertaining to any notification, disclosure or
required approval triggered by the Offer, the Merger or by the transactions
contemplated by this Agreement or the Stock Option Agreement, (iv) such filings,
authorizations, orders and approvals as may be required to obtain the State
Takeover Approvals, (v) applicable requirements, if any, of Blue Sky Laws or the
Nasdaq National Market, (vi) as may be required under foreign laws and (vii)
such other consents, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not, individually or
in the aggregate, have a Material Adverse Effect on the Company, materially
impair the ability of the Company to perform its obligations hereunder or under
the Stock Option Agreement or prevent the consummation of any of the
transactions contemplated hereby or thereby.
Section 4.5 SEC Documents and Other Reports. The Company has filed
-------------------------------
all required documents (including proxy statements) with the SEC since March 14,
1997 (the "Company SEC Documents"). As of their respective dates, the Company
---------------------
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, at the respective times they were filed, none of the
Company SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The consolidated financial statements (including, in each
case, any notes thereto) of the Company included in the Company SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with United States generally accepted
accounting principles (except, in the case of the 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 therein or in the notes thereto)
and fairly presented in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as at the respective
dates thereof and the consolidated results of their operations and their
consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein). Except as disclosed in the Company SEC
Documents or as required by generally accepted accounting principles, the
Company has not, since March 14, 1997, made any change in the accounting
practices or policies applied in the preparation of financial statements.
Section 4.6 Information Supplied. None of the information supplied
---------------------
or to be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Information Statement or (iv) the Proxy Statement, will (a) in the case of the
Offer Documents, the Schedule 14D-9 and the Information Statement, at the
respective times the Offer Documents, the Schedule 14D-9 and the Information
Statement are filed with the SEC or first published, sent or given to the
Company's shareholders, or (b) in the
-15-
<PAGE>
case of the Proxy Statement, at the time the Proxy Statement is first mailed to
the Company's shareholders or at the time of the Shareholder Meeting, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Schedule 14D-9, the Information Statement and the Proxy
Statement will comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by
Parent or Sub specifically for inclusion or incorporation by reference therein.
Section 4.7 Absence of Certain Changes or Events. Except as
------------------------------------
disclosed in the Company SEC Documents filed with the SEC prior to the date of
this Agreement or as set forth in the Company Letter, since March 31, 1998, (A)
the Company and its Subsidiaries have not incurred any liability or obligation
(indirect, direct or contingent) that would result in a Material Adverse Effect
on the Company, or entered into any material oral or written agreement or other
transaction that is not in the ordinary course of business or that would result
in a Material Adverse Effect on the Company, (B) the Company and its
Subsidiaries have not sustained any loss or interference with their business or
properties from fire, flood, windstorm, accident or other calamity (whether or
not covered by insurance) that has had a Material Adverse Effect on the Company,
(C) there has been no change in the capital stock of the Company except for the
issuance of shares of the Company Common Stock pursuant to Company Stock Options
or the Company Stock Purchase Plan and no dividend or distribution of any kind
declared, paid or made by the Company on any class of its stock, (D) there has
not been (v) any adoption of a new Company Plan (as hereinafter defined), (w)
any amendment to a Company Plan materially increasing benefits thereunder, (x)
any granting by the Company or any of its Subsidiaries to any executive officer
or other key employee of the Company or any of its Subsidiaries of any increase
in compensation, except in the ordinary course of business consistent with prior
practice or as was required under employment agreements in effect as of the date
of the most recent audited financial statements included in the Company Annual
Report, (y) any granting by the Company or any of its Subsidiaries to any such
executive officer or other key employee of any increase in severance or
termination agreements in effect as of the date of the most recent audited
financial statements included in the Company Annual Report or (z) any entry by
the Company or any of its Subsidiaries into any employment, severance or
termination agreement with any such executive officer or other key employee, (E)
there has not been any material changes in the amount or terms of the
indebtedness of the Company and its Subsidiaries from that described in the
Company SEC Documents filed prior to the date hereof and (F) there has been no
event causing a Material Adverse Effect on the Company.
Section 4.8 Permits and Compliance. Each of the Company and its
----------------------
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
of its Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
---------------
failure to have any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, and no suspension or
cancellation of any of the Company Permits is
-16-
<PAGE>
pending or, to the Knowledge of the Company (as hereinafter defined),
threatened, except where the suspension or cancellation of any of the Company
Permits would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. Neither the Company nor any of its Subsidiaries is in
violation of (A) its charter, by-laws or other organizational documents, (B) any
law, ordinance, administrative or governmental rule or regulation, or (C) any
order, decree or judgment of any Governmental Entity having jurisdiction over
the Company or any of its Subsidiaries, except, in the case of clauses (A), (B)
and (C), for any violations that, individually or in the aggregate, would not
have a Material Adverse Effect on the Company. Except as disclosed in the
Company SEC Documents filed prior to the date of this Agreement, there are no
contracts or agreements of the Company or its Subsidiaries having terms or
conditions which would have a Material Adverse Effect on the Company or having
covenants not to compete that materially impair the ability of the Company to
conduct its business as currently conducted or purport to bind any shareholder
or any Affiliated Person of any shareholder of the Company after the Effective
Time. Except as set forth in the Company SEC Documents filed prior to the date
of this Agreement, no event of default or event that, but for the giving of
notice or the lapse of time or both, would constitute an event of default exists
or, upon the consummation by the Company of the transactions contemplated by
this Agreement or the Stock Option Agreement, will exist under any indenture,
mortgage, loan agreement, note or other agreement or instrument for borrowed
money, any guarantee of any agreement or instrument for borrowed money or any
lease, contractual license or other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any such
Subsidiary is bound or to which any of the properties, assets or operations of
the Company or any such Subsidiary is subject, other than any defaults that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company. "Knowledge of the Company" means the actual knowledge of Nicholas
------------------------
T. Gihl, Peter A. Nicholson, Kevin O'Connor, Frank Wood and James Potach.
Section 4.9 Tax Matters. Except as otherwise set forth in Section
-----------
4.9 of the Company Letter, (i) the Company and each of its Subsidiaries have
filed all federal, and all material state, local, foreign and provincial, Tax
Returns (as hereinafter defined) required to have been filed, and such Tax
Returns are correct and complete, except to the extent that any failure to so
file or any failure to be correct and complete would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company; (ii) all Taxes (as hereinafter defined) shown to be due on such Tax
Returns have been timely paid or extensions for payment have been properly
obtained, or such Taxes are being timely and properly contested; (iii) the
Company and each of its Subsidiaries have complied with all rules and
regulations relating to the withholding of Taxes and the remittance of withheld
Taxes, except to the extent that any failure to comply with such rules and
regulations would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the Company; (iv) neither the Company nor
any of its Subsidiaries has waived any statute of limitations in respect of its
Taxes; (v) any Tax Returns required to have been filed by or with respect to the
Company and each of its Subsidiaries relating to federal and state income Taxes
have been examined by the Internal Revenue Service ("IRS") or the appropriate
---
foreign or state taxing authority or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has expired; (vi) no
issues that have been raised by the relevant taxing authority in connection with
the examination of Tax Returns required to have been filed by or with respect to
the Company and
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<PAGE>
each of its Subsidiaries are currently pending; (vii) all deficiencies asserted
or assessments made as a result of any examination of such Tax Returns by any
taxing authority have been paid in full; and (viii) no withholding is required
under Section 1445 of the Code in connection with the Merger. For purposes of
this Agreement: (i) "Taxes" means any federal, state, local, foreign or
-----
provincial income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, withholding, alternative or added minimum, ad
valorem, value-added, transfer or excise tax, or other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty imposed by any Governmental Entity, and
(ii) "Tax Return" means any return, report or similar statement (including the
----------
attached schedules) required to be filed with respect to any Tax, including any
information return, claim for refund, amended return or declaration of estimated
Tax.
Section 4.10 Actions and Proceedings. There are no outstanding
-----------------------
orders, judgments, injunctions, awards or decrees of any Governmental Entity
against or involving the Company or any of its Subsidiaries, or against or
involving any of the present or former directors, officers, employees,
consultants, agents or shareholders of the Company or any of its Subsidiaries
with respect to the Company or any of its Subsidiaries, any of the properties,
assets or business of the Company or any of its Subsidiaries or any Company Plan
that, individually or in the aggregate, would have a Material Adverse Effect on
the Company or materially impair the ability of the Company to perform its
obligations hereunder or under the Stock Option Agreement. There are no
actions, suits or claims or legal, administrative or arbitrative proceedings or
investigations (including claims for workers' compensation) pending or, to the
Knowledge of the Company, threatened against or involving the Company or any of
its Subsidiaries or any of its or their present or former directors, officers,
employees, consultants, agents or shareholders with respect to the Company or
any of its Subsidiaries, or any of the properties, assets or business of the
Company or any of its Subsidiaries or any Company Plan that, individually or in
the aggregate, would have a Material Adverse Effect on the Company or materially
impair the ability of the Company to perform its obligations hereunder or under
the Stock Option Agreement. There are no actions, suits, labor disputes or
other litigation, legal or administrative proceedings or governmental
investigations pending or, to the Knowledge of the Company, threatened against
or affecting the Company or any of its Subsidiaries or any of its or their
present or former officers, directors, employees, consultants, agents or
shareholders with respect to the Company or its Subsidiaries, or any of the
properties, assets or business of the Company or any of its Subsidiaries
relating to the transactions contemplated by this Agreement and the Stock Option
Agreement.
Section 4.11 Certain Agreements. Except as set forth in Section 4.11
------------------
of the Company Letter, neither the Company nor any of its Subsidiaries is a
party to any oral or written agreement or plan, including any employment
agreement, severance agreement, stock option plan, stock appreciation rights
plan, restricted stock plan or stock purchase plan (collectively, the
"Compensation Agreements"), pension plan (as defined in Section 3(2) of ERISA)
- ------------------------
or welfare plan (as defined in Section 3(1) of ERISA) any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the Stock Option Agreement or the value of any of the benefits of
which will be calculated on the basis of any of the transactions contemplated by
this Agreement or the Stock Option Agreement. No holder of any option to
purchase Shares, or
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<PAGE>
Shares granted in connection with the performance of services for the Company or
its Subsidiaries, is or will be entitled to receive cash from the Company or any
Subsidiary in lieu of or in exchange for such option or shares as a result of
the transactions contemplated by this Agreement or the Stock Option Agreement.
Section 4.11 of the Company Letter sets forth (i) for each officer, director or
employee who is a party to, or will receive benefits under, any Compensation
Agreement as a result of the transactions contemplated herein, the total amount
that each such person may receive, or is eligible to receive, assuming that the
transactions contemplated by this Agreement are consummated on the date hereof,
and (ii) the total amount of indebtedness owed to the Company or its
Subsidiaries from each officer, director or employee of the Company and its
Subsidiaries.
Section 4.12 ERISA. (a) Each material Company Plan is listed in
-----
Section 4.12(a) of the Company Letter. With respect to each Company Plan listed
therein, the Company has made available to Parent a true and correct copy of (i)
the three most recent annual reports (Form 5500) filed with the IRS if
applicable, (ii) each such Company Plan that has been reduced to writing and all
amendments thereto, (iii) each trust agreement, insurance contract or
administration agreement relating to each such Company Plan, (iv) a written
summary of each unwritten Company Plan, (v) the most recent summary plan
description or other written explanation of each Company Plan provided to
participants, (vi) the most recent determination letter and request therefore,
if any, issued by the IRS with respect to any Company Plan intended to be
qualified under section 401(a) of the Code, (vii) any request for a
determination currently pending before the IRS and (viii) all correspondence
with the IRS, the Department of Labor, the SEC or Pension Benefit Guaranty
Corporation relating to any outstanding controversy. Except as would not have a
Material Adverse Effect on the Company, each Company Plan complies in all
respects with the Employee Retirement Income Security Act of 1974, as amended,
the Code and all other applicable statutes and governmental rules and
regulations. Neither the Company nor any ERISA Affiliate currently maintains,
contributes to or has any liability or, at any time during the past six years
has maintained or contributed to any pension plan which is subject to section
412 of the Code or section 302 of the Employee Retirement Income Security Act of
1974, as amended (ERISA) or Title IV of ERISA. Neither the Company nor any
ERISA Affiliate currently maintains, contributes to or has any liability or, at
any time during the past six years has maintained or contributed to any Company
Multiemployer Plan.
(b) Except as listed in Section 4.12(b) of the Company Letter, with
respect to the Company Plans, no event has occurred and, to the Knowledge of the
Company, there exists no condition or set of circumstances in connection with
which the Company or any Subsidiary or ERISA Affiliate or Company Plan fiduciary
could be subject to any liability under the terms of such Company Plans, ERISA,
the Code or any other applicable law which would have a Material Adverse Effect
on the Company. All Company Plans that are intended to be qualified under
Section 401(a) of the Code have been determined by the IRS to be so qualified,
or a timely application for such determination is now pending and the Company is
not aware of any reason why any such Company Plan is not so qualified in
operation. Except as disclosed in Section 4.12(b) of the Company Letter,
neither the Company nor any of its Subsidiaries or ERISA Affiliates has any
liability or obligation under any welfare plan to provide benefits after
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<PAGE>
termination of employment to any employee or dependent other than as required by
Section 4980B of the Code.
(c) As used herein, (i) "Company Plan" means a "pension plan" (as
------------ ------------
defined in Section 3(2) of ERISA (other than a Company Multiemployer Plan)), a
"welfare plan" (as defined in Section 3(1) of ERISA), or any other written or
- -------------
oral bonus, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, restricted stock, stock
appreciation right, holiday pay, vacation, severance, medical, dental, vision,
disability, death benefit, sick leave, fringe benefit, personnel policy,
insurance or other plan, arrangement or understanding, in each case established
or maintained by the Company or any of its Subsidiaries or ERISA Affiliates or
as to which the Company or any of its Subsidiaries or ERISA Affiliates has
contributed or otherwise may have any liability, (ii) "Company Multiemployer
---------------------
Plan" means a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA)
- ----
to which the Company or any of its Subsidiaries or ERISA Affiliates is or has
been obligated to contribute or otherwise may have any liability, and (iii)
"ERISA Affiliate" means any trade or business (whether or not incorporated)
- ----------------
which would be considered a single employer with the Company pursuant to Section
414(b), (c), (m) or (o) of the Code and the regulations promulgated under those
sections or pursuant to Section 4001(b) of ERISA and the regulations promulgated
thereunder.
(d) Section 4.12(d) of the Company Letter contains a list of all (i)
severance and employment agreements with employees of the Company and each
Subsidiary, (ii) severance programs and policies of the Company and each
Subsidiary with or relating to its employees and (iii) plans, programs,
agreements and other arrangements of the Company and each Subsidiary with or
relating to its employees containing change of control or similar provisions.
(e) Except as set forth in Section 4.12(e) of the Company Letter,
neither the Company nor any of its Subsidiaries is a party to any agreement,
contract or arrangement that could result, separately or in the aggregate, in
the payment of any "excess parachute payments" within the meaning of Section
-------------------------
280G of the Code.
(f) Except as set forth in Section 4.12(f) of the Company Letter,
with respect to each Company Plan not subject to United States law (a "Company
-------
Foreign Benefit Plan"), except as would not have a Material Adverse Effect on
- --------------------
the Company, (i) the fair market value of the assets of each funded Company
Foreign Benefit Plan, the liability of each insurer for any Company Foreign
Benefit Plan funded through insurance or the reserve shown on the Company's
consolidated financial statements for any unfunded Company Foreign Benefit Plan,
together with any accrued contributions, is sufficient to procure or provide for
the benefit obligations, as of the Effective Time, with respect to all current
and former participants in such plan according reasonable, country specific
actuarial assumptions and valuations and no transaction contemplated by this
Agreement shall cause such assets or insurance obligations or book reserve to be
less than such benefit obligations; and (ii) each Company Foreign Benefit Plan
required to be registered has been registered and has been maintained in good
standing with the appropriate regulatory authorities.
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<PAGE>
Section 4.13 Compliance with Worker Safety Laws. The properties,
----------------------------------
assets and operations of the Company and its Subsidiaries are in compliance with
all applicable federal, state, local and foreign laws, rules and regulations,
orders, decrees, judgments, permits and licenses relating to public and worker
health and safety (collectively, "Worker Safety Laws"), except for any
------------------
violations that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company. With respect to such properties, assets and
operations currently owned, leased or operated by the Company or any of its
Subsidiaries, and with respect to any properties, assets or operations
previously owned, leased or operated by the Company or any of its Subsidiaries,
to the Knowledge of the Company, during any time such properties, assets and
operations were owned, leased or operated by the Company or any of its
Subsidiaries, there are no past or present events, conditions, circumstances,
activities, practices, incidents, actions or plans of the Company or any of its
Subsidiaries that may interfere with or prevent compliance or continued
compliance with applicable Worker Safety Laws, other than any such interference
or prevention as would not, individually or in the aggregate with any such other
interference or prevention, have a Material Adverse Effect on the Company.
Section 4.14 Liabilities; Products. (a) Except as fully reflected or
---------------------
reserved against in the financial statements included in the Company SEC
Documents filed prior to the date hereof, or disclosed in the footnotes thereto,
since March 31, 1998 the Company and its Subsidiaries have incurred no
liabilities (including Tax liabilities) or obligations of any nature, absolute
or contingent, other than liabilities or obligations that would not,
individually or in the aggregate, have a Material Adverse Effect on the Company
or that would be required by Generally Accepted Accounting Principles ("GAAP")
----
to be reflected or reserved in the financial statements of the Company or in the
footnotes thereto, prepared in accordance with GAAP consistent with past
practices, other than in the ordinary course of business and consistent with
past practices. As of the date hereof, the indebtedness for borrowed money of
the Company and its Subsidiaries does not exceed $22 million.
(b) Except as set forth in Section 4.14(b) of the Company Letter,
since March 31, 1998, to the Knowledge of the Company, neither the Company nor
any Subsidiary has received a material claim for or based upon breach of product
warranty (other than warranty service and repair claims in the ordinary course
of business not material in amount or significance), strict liability in tort,
negligent manufacture of product, negligent provision of services or any other
allegation of liability resulting in product recalls, arising from the
materials, design, testing, manufacture, packaging, labeling (including
instructions for use), or sale of its products or from the provision of
services; and, to the Knowledge of the Company, there is no basis for any such
claim which, if asserted, would likely have a Material Adverse Effect on the
Company. No product sold or delivered or service rendered by the Company or any
Subsidiary is subject to any guaranty, warranty or other indemnity beyond the
applicable standard terms and conditions of sale for products delivered and
services rendered by the Company or any Subsidiary, copies of which have
previously been delivered to Parent.
(c) The Company has provided to Parent a schedule of material
products in development and planned introductions, a copy of which is attached
to the Company Letter. The Company has no reason to believe that the goals set
forth therein will not be achieved in all
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<PAGE>
material respects, except for such deviations as would not have a Material
Adverse Effect on the Company. The product and service engineering,
development, manufacturing and quality control processes which have been and are
being followed by the Company are reasonably designed to produce products and
services which are consistent in all material respects with the claims made
about them in the Company's sales brochures and other statements made about them
by or on behalf of the Company.
Section 4.15 Labor Matters. Except as set forth in Section 4.15 of
-------------
the Company Letter, neither the Company nor any of its Subsidiaries is a party
to any collective bargaining agreement or labor contract with any union.
Neither the Company nor any of its Subsidiaries has engaged in any unfair labor
practice with respect to any persons employed by or otherwise performing
services primarily for the Company or any of its Subsidiaries (the "Company
-------
Business Personnel"), and there is no unfair labor practice complaint or
- ------------------
grievance against the Company or any of its Subsidiaries by any person pursuant
to the National Labor Relations Act or any comparable state or foreign law
pending or threatened in writing with respect to the Company Business Personnel,
except where such unfair labor practice, complaint or grievance would not have a
Material Adverse Effect on the Company. There is no labor strike, dispute,
slowdown or stoppage pending or, to the Knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries which may interfere
with the respective business activities of the Company or any of its
Subsidiaries, except where such dispute, strike or work stoppage would not have
a Material Adverse Effect on the Company.
Section 4.16 Intellectual Property; Year 2000. "Company Intellectual
-------------------------------- --------------------
Property" means all trademarks, trademark registrations, trademark rights and
- --------
renewals thereof, trade names, trade name rights, patents, patent rights, patent
applications, industrial models, inventions, invention disclosures, designs,
utility models, inventor rights, software, computer programs, computer systems,
modules and related data and materials, copyrights, copyright registrations and
renewals thereof, servicemarks, servicemark registrations and renewals thereof,
servicemark rights, trade secrets, applications for trademark and servicemark
registrations, know-how, confidential information and other proprietary rights,
and any data and information of any nature or form used or held for use in
connection with the businesses of the Company and/or the Subsidiaries as
currently conducted or as currently contemplated by the Company, together with
all applications currently pending or in process for any of the foregoing.
Except as disclosed in the Company SEC Documents filed with the SEC prior to the
date hereof, the Company and the Subsidiaries own, or possess adequate licenses
or other valid rights to use (including the right to sublicense to customers,
suppliers or others as needed), all of the Company Intellectual Property that is
necessary, appropriate or desirable for the conduct or contemplated conduct of
the Company's or Subsidiaries' businesses, except where the failure to own,
license or have a right to use such Company Intellectual Property would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
Section 4.16 of the Company Letter lists each material license or other material
agreement pursuant to which the Company or any Subsidiary has the right to use
Company Intellectual Property utilized in connection with any product of, or
service provided by, the Company and the Subsidiaries, the cancellation or
expiration of which would have a Material Adverse Effect on the Company (the
"Company Licenses"). There are no pending, or, to the Knowledge of the Company,
----------------
threatened interferences, re-examinations,
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<PAGE>
oppositions or cancellation proceedings involving any patents or patent rights,
trademarks or trademark rights, or applications therefor, of the Company or any
Subsidiary, except such as would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. There is no breach or violation by the
Company or by any Subsidiary under, and, to the Knowledge of the Company, there
is no breach or violation by any other party to, any Company License that is
reasonably likely to give rise to any termination or any loss of rights
thereunder. To the Knowledge of the Company, there has been no unauthorized
disclosure or use of confidential information, trade secret rights, processes
and formulas, research and development results and other know-how of the Company
or any Subsidiary, except where such disclosure or use of such information would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company. To the Knowledge of the Company, the conduct of the business of the
Company and the Subsidiaries as currently conducted or contemplated does not
infringe upon or conflict with, in any way, any license, trademark, trademark
right, trade name, trade name right, patent, patent right, industrial model,
invention, service mark, service mark right, copyright, trade secret or any
other intellectual property rights of any third party that, individually or in
the aggregate, would have a Material Adverse Effect on the Company. Except as
disclosed in the Company SEC Documents filed with the SEC prior to the date
hereof, to the Knowledge of the Company, there are no infringements of, or
conflicts with, any Company Intellectual Property which, individually or in the
aggregate, would have a Material Adverse Effect on the Company. Except as set
forth in Section 4.16 of the Company Letter, neither the Company nor any
Subsidiary has licensed or otherwise permitted the use by any third party of any
proprietary information or Company Intellectual Property on terms or in a manner
which, individually or in the aggregate, would have a Material Adverse Effect on
the Company. Except as set forth in Section 4.16 of the Company Letter, the
current and previously sold products of the Company and its Subsidiaries and
software, operations, systems and processes (including, to the Knowledge of the
Company, software, operations, systems and processes obtained from third
parties) used in the conduct of the business of the Company and its
Subsidiaries, are Year 2000 Compliant, except where the failure to be Year 2000
Compliant would not, individually or in the aggregate, have a Material Adverse
Effect on the Company, and the Company has delivered to Parent true and correct
copies of any consultant or other third-party reports prepared on behalf of the
Company with respect to such compliance. For purposes of this Agreement, "Year
----
2000 Compliant" means the ability to process (including calculate, compare,
- --------------
sequence, display or store), transmit or receive data or data/time data from,
into and between the twentieth and twenty-first centuries, and the years 1999
and 2000, and leap year calculations without error or malfunction.
Section 4.17 Title to and Sufficiency of Assets. (a) As of the date
----------------------------------
hereof, the Company and the Subsidiaries own, and as of the Effective Time the
Company and the Subsidiaries will own, good and marketable title to all of their
assets (excluding, for purposes of this sentence, assets held under leases),
free and clear of any and all mortgages, liens, encumbrances, charges, claims,
restrictions, pledges, security interests or impositions (collectively,
"Liens"), except as set forth in the Company SEC Documents filed with the SEC
-----
prior to the date hereof or Section 4.17 of the Company Letter and except where
the failure to own such title would not, individually or in the aggregate, have
a Material Adverse Effect on the Company. Such assets, together with all assets
held by the Company and the Subsidiaries under leases, include all tangible and
intangible personal property, contracts and rights necessary or
-23-
<PAGE>
required for the operation of the businesses of the Company as presently
conducted, except for such assets the failure to have would, individually or in
the aggregate, have a Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries owns any Real
Estate. All Real Estate assets held by the Company and the Subsidiaries under
leases are adequate for the operation of the businesses of the Company as
presently conducted, except for such assets the failure to have would,
individually or in the aggregate, have a Material Adverse Effect. The leases to
all Real Estate occupied by the Company and the Subsidiaries which are material
to the operation of the businesses of the Company are in full force and effect
and no event has occurred which with the passage of time, the giving of notice,
or both, would constitute a default or event of default by the Company or any
Subsidiary or, to the Knowledge of the Company, any other person who is a party
signatory thereto, other than such defaults or events of default which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company. For purposes of this Agreement, "Real Estate" means, with respect
-----------
to the Company or any Subsidiary, as applicable, all of the fee or leasehold
ownership right, title and interest of such person, in and to all real estate
and improvement owned or leased by any such person and which is used by any such
person in connection with the operation of its business.
Section 4.18 State Takeover Statutes. The Board of Directors of the
-----------------------
Company has, to the extent such statutes are applicable, taken all action so to
render the provisions of Sections 7.85 and 11.75 of the IBCA inapplicable to the
Offer, the Merger, the Stock Option Agreement and the Shareholder Agreements and
the consummation of the transactions contemplated by this Agreement, the Stock
Option Agreement and the Shareholder Agreements. As of the date hereof, no other
state takeover statute or similar charter or bylaw provisions are applicable to
the Offer, the Merger, this Agreement, the Stock Option Agreement, the
Shareholder Agreements and the transactions contemplated hereby and thereby.
Section 4.19 Required Vote of Company Shareholders. The affirmative
-------------------------------------
vote of the holders of at least two-thirds of Shares entitled to vote is
required to adopt this Agreement. No other vote of the security holders of the
Company is required by law, the Company Charter or the Amended and Restated
Bylaws of the Company or otherwise in order for the Company to consummate the
Merger and the transactions contemplated hereby and in the Stock Option
Agreement.
Section 4.20 Accounts Receivable. All of the accounts and notes
-------------------
receivable of the Company and its Subsidiaries set forth on the books and
records of the Company (net of the applicable reserves reflected on the books
and records of the Company and in the financial statements included in the
Company SEC Documents) (i) represent sales actually made or transactions
actually effected in the ordinary course of business for goods or services
delivered or rendered to unaffiliated customers in bona fide arm's length
transactions, (ii) constitute valid claims, and (iii) are good and collectible
at the aggregate recorded amounts thereof (net of such reserves) without right
of recourse, defense, deduction, return of goods, counterclaim, or offset and
have been or will be collected in the ordinary course of business and consistent
with past
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<PAGE>
experience, except where the failure to collect such receivables in such manner
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company.
Section 4.21 Inventories. Except as set forth in Section 4.21 of the
-----------
Company Letter, all inventories of the Company and its Subsidiaries consist of
items of merchantable quality and quantity usable or salable in the ordinary
course of business, are salable at prevailing market prices that are not less
than the book value amounts thereof or the price customarily charged by the
Company or the applicable Subsidiary therefor, conform to the specifications
established therefor, and have been manufactured in accordance with applicable
regulatory requirements, except to the extent that the failure of such
inventories so to consist, be saleable, conform, or be manufactured would not
have a Material Adverse Effect on the Company. Except as set forth in Section
4.21 of the Company Letter, the quantities of all inventories, materials, and
supplies of the Company and each Subsidiary (net of the obsolescence reserves
therefor shown in the financial statements included in the Company SEC Documents
and determined in the ordinary course of business consistent with past practice)
are not obsolete, damaged, slow-moving, defective, or excessive, and are
reasonable and balanced in the circumstances of the Company and its
Subsidiaries, except to the extent that the failure of such inventories to be in
such conditions would not have a Material Adverse Effect on the Company.
Section 4.22 Environmental Matters.
---------------------
(a) For purposes of this Agreement, the following terms shall have
the following meanings: (i) "Hazardous Substances" means (A) petroleum and
--------------------
petroleum products, by-products or breakdown products, radioactive materials,
asbestos-containing materials and polychlorinated biphenyls, and (B) any other
chemicals, materials or substances regulated as toxic or hazardous or as a
pollutant, contaminant or waste or for which liability or standards of care are
imposed under any applicable Environmental Law; (ii) "Environmental Law" means
-----------------
any law, past, present or future and as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, or common law, relating to pollution or
protection of the environment, health or safety or natural resources, including
those relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Substances; and (iii) "Environmental
-------------
Permit" means any permit, approval, identification number, license or other
- ------
authorization required under any applicable Environmental Law.
(b) Except as disclosed in Section 4.22 of the Company Letter, the
Company and the Subsidiaries are and have been in compliance with all applicable
Environmental Laws, have obtained all Environmental Permits and are in
compliance with their requirements, and have resolved all past non-compliance
with Environmental Laws and Environmental Permits without any pending, on-going
or future obligation, cost or liability, except in each case for the notices set
forth in Section 4.22 of the Company Letter or where such non-compliance would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company.
(c) Except as disclosed in Section 4.22 of the Company Letter,
neither the Company nor any of the Subsidiaries has (i) placed, held, located,
released, transported or
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disposed of any Hazardous Substances on, under, from or at any of the Company's
or any of the Subsidiaries' properties or any other properties, nor caused any
facts or conditions that could give rise to an environmental claim, other than
in a manner that would not, in all such cases taken individually or in the
aggregate, result in a Material Adverse Effect on the Company, (ii) any
Knowledge or reason to know of the presence of any Hazardous Substances on,
under, emanating from, or at any of the Company's or any of the Subsidiaries'
properties or any other property but arising from the Company's or any of the
Subsidiaries' current or former properties or operations, other than in a manner
that would not result in a Material Adverse Effect on the Company, or (iii) any
Knowledge or reason to know, nor has it received any written notice since
January 1, 1993 (A) of any violation of or liability under any Environmental
Laws, (B) of the institution or pendency of any suit, action, claim, proceeding
or investigation by any Governmental Entity or any third party in connection
with any such violation or liability, (C) requiring the investigation of,
response to or remediation of Hazardous Substances at or arising from any of the
Company's or any of the Subsidiaries' current or former properties or operations
or any other properties, (D) alleging noncompliance by the Company or any of the
Subsidiaries with the terms of any Environmental Permit in any manner reasonably
likely to require material expenditures or to result in material liability or
(E) demanding payment for response to or remediation of Hazardous Substances at
or arising from any of the Company's or any of the Subsidiaries' current or
former properties or operations or any other properties, except in each case for
the notices set forth in Section 4.22 of the Company Letter.
(d) Except as disclosed in Section 4.22 of the Company Letter, no
Environmental Law imposes any obligation upon the Company or any of the
Subsidiaries arising out of or as a condition to any transaction contemplated by
this Agreement, including any requirement to modify or to transfer any permit or
license, any requirement to file any notice or other submission with any
Governmental Entity, the placement of any notice, acknowledgment or covenant in
any land records, or the modification of or provision of notice under any
agreement, consent order or consent decree.
(e) The Company and the Subsidiaries has provided or made available
to Parent copies of any Environmental assessment or audit report or other
similar studies or analyses currently in the possession of or available to the
Company or any of the Subsidiaries relating to any real property currently or
formerly owned, leased or occupied by the Company or any of the Subsidiaries.
Section 4.23 Suppliers, Customers and Employees. Except as set
----------------------------------
forth in Section 4.23 of the Company Letter, neither the Company nor any
Subsidiary has received any notice that (a) Digital Electronics Corporation
("DEC") or any other significant supplier will not sell raw materials, supplies,
-----
merchandise and other goods to the Company or any Subsidiary at any time after
the Effective Time on terms and conditions substantially similar to those used
in its current sales to the Company and the Subsidiaries, except where the
failure to sell would not, individually or in the aggregate, have a Material
Adverse Effect on the Company, (b) any significant customer intends to terminate
or limit or alter its business relationship with the Company or any Subsidiary
where such termination, limitation or alteration would have a Material Adverse
Effect on the
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Company, or (c) any Person included in the definition of Knowledge or Bernie
Anger intends to terminate or has terminated his or their employment with the
Company or any Subsidiary.
Section 4.24 Insurance. The Company and its Subsidiaries carry or
---------
are entitled to the benefits of insurance as the Company believes are in such
character and amount at least equivalent to that carried by persons engaged in
similar businesses and subject to the same or similar perils or hazards, except
for any such failures to maintain insurance policies that, individually or in
the aggregate, would not have a Material Adverse Effect on the Company. The
Company and each Subsidiary have made any and all payments required to maintain
such policies in full force and effect, except where the failure to make such
payment would not have a Material Adverse Effect on the Company.
Section 4.25 Accuracy of Information. Neither this Agreement nor any
-----------------------
of the documents listed in or attached to Section 4.25 of the Company Letter,
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained therein not misleading.
Section 4.26 Transactions with Affiliates. (a) For purposes of this
----------------------------
Section 4.26, the term "Affiliated Person" means (i) any holder of 5% or more of
-----------------
the Company Common Stock, (ii) any director or officer of the Company or any
Subsidiary, (iii) any person, firm or corporation that directly or indirectly
controls, is controlled by, or is under common control with, any of the Company
or any Subsidiary or (iv) any member of the immediate family or any of such
persons.
(b) Except as set forth in Section 4.26 of the Company Letter or in
the Company SEC Reports filed with the SEC prior to the date hereof, since March
31, 1998, the Company and the Subsidiaries have not, in the ordinary course of
business or otherwise, (i) purchased, leased or otherwise acquired any material
property or assets or obtained any material services from, (ii) sold, leased or
otherwise disposed of any material property or assets or provided any material
services to (except with respect to remuneration for services rendered in the
ordinary course of business as director, officer or employee of the Company or
any Subsidiary), (iii) entered into or modified in any manner any contract with,
or (iv) borrowed any money from, or made or forgiven any loan or other advance
(other than expenses or similar advances made in the ordinary course of
business) to, any Affiliated Person.
(c) Except as set forth in Section 4.26 of the Company Letter or in
the Company SEC Reports filed with the SEC prior to the date hereof, (i) the
contracts of the Company and the Subsidiaries do not include any material
obligation or commitment between the Company or any Subsidiary and any
Affiliated Person, (ii) the assets of the Company or any Subsidiary do not
include any receivable or other obligation or commitment from an Affiliated
Person to the Company or any Subsidiary and (iii) the liabilities of the Company
and the Subsidiaries do not include any payable or other obligation or
commitment from the Company or any Subsidiary to any Affiliated Person.
(d) To the Knowledge of the Company and except as set forth in
Section 4.26 of the Company Letter or in the Company SEC Reports filed with the
SEC prior to the date
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hereof, no Affiliated Person of any of the Company or any Subsidiary is a party
to any contract with any customer or supplier of the Company or any Subsidiary
that affects in any material manner the business, financial condition or results
of operation of the Company or any Subsidiary.
Section 4.27. Brokers. No broker, investment banker or other person,
-------
other than Adams, Harkness & Hill, Inc. or Michael Blitzer & Associates, Inc.,
the fees and expenses of which will be paid by the Company (as reflected in an
agreement between Adams, Harkness & Hill, Inc. or Michael Blitzer & Associates,
Inc., and the Company, copies of which are attached to Section 4.27 of the
Company Letter), is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
and by the Stock Option Agreement based upon arrangements made by or on behalf
of the Company.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
-----------------------------------------
Section 5.1 Conduct of Business by the Company Pending the Merger.
-----------------------------------------------------
Except as expressly permitted by clauses (i) through (xvii) of this Section 5.1,
during the period from the date of this Agreement through the Effective Time,
the Company shall, and shall cause each of its Subsidiaries to, in all material
respects carry on its business in the ordinary course of its business as
currently conducted and, to the extent consistent therewith, use reasonable best
efforts to preserve intact its current business organizations, keep available
the services of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings with
it. Without limiting the generality of the foregoing, and except as otherwise
expressly contemplated by this Agreement or as set forth in the Company Letter
(with specific reference to the applicable subsection below), the Company shall
not, and shall not permit any of its Subsidiaries to, without the prior written
consent of Parent (provided that with respect to clauses (v), (vi), (viii),
(ix), (xiii), (xiv) and (xv) below, such consent shall not be unreasonably
withheld or delayed):
(i) (A) other than dividends paid by wholly-owned Subsidiaries,
declare, set aside or pay any dividends on, or make any other actual,
constructive or deemed distributions in respect of, any of its capital
stock, or otherwise make any payments to its shareholders in their capacity
as such, (B) other than in the case of any Subsidiary, 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 other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities;
(ii) issue, deliver, sell, pledge, dispose of or otherwise encumber
any shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options (including options under the Company Stock Option Plans) to acquire
any such shares, voting securities, equity equivalent or
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<PAGE>
convertible securities, other than (A) the issuance of shares of Company
Common Stock upon the exercise of Company Stock Options outstanding on the
date of this Agreement in accordance with their current terms, (B) the
issuance of shares of Company Common Stock contemplated by Section 1.2(d),
(C) the issuance of shares of Company Common Stock upon exercise of the
Priester Warrant, (D) the issuance of shares of Company Common Stock
pursuant to the Stock Option Agreement and (E) as set forth in Section
5.1(ii) of the Company Letter;
(iii) amend its charter or by-laws;
(iv) acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the assets of or equity in, or by
any other manner, any business or any corporation, limited liability
company, partnership, association or other business organization or
division thereof;
(v) sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets, other than sales of inventory that
are in the ordinary course of business consistent with past practice and
sales of assets having an aggregate fair market value of up to $100,000;
(vi) incur any indebtedness for borrowed money, guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
other investments in, any other person, other than (A) in the ordinary
course of business consistent with past practices and, in the case of
indebtedness and guarantees, in an amount not to exceed $500,000 and (B)
indebtedness, loans, advances, capital contributions and investments
between the Company and any of its Subsidiaries or between any of such
Subsidiaries, in each case in the ordinary course of business consistent
with past practices;
(vii) alter (through merger, liquidation, reorganization,
restructuring or in any other fashion) the corporate structure or ownership
of the Company or any Subsidiary;
(viii) except as provided in Section 5.1(viii) of the Company Letter
and Section 6.5 hereof, enter into or adopt any, or amend any existing,
severance plan, agreement or arrangement or enter into or amend any Company
Plan or employment or consulting agreement;
(ix) except as provided in Section 5.1(ix) of the Company Letter and
Section 6.5 hereof, increase the compensation payable or to become payable
to its directors, officers or employees (except for increases in the
ordinary course of business consistent with past practice in salaries or
wages of employees of the Company or any of its Subsidiaries who are not
officers of the Company or any of its Subsidiaries) or grant any severance
or termination pay to, or enter into any employment or severance agreement
with, any director or officer of the Company or any of its Subsidiaries, or
establish, adopt, enter into, or, except as may be required to comply with
applicable law, amend in any material respect or take action to enhance in
any material respect or accelerate any rights or
-29-
<PAGE>
benefits under, any labor, collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee;
(x) knowingly violate or knowingly fail to perform any obligation
or duty imposed upon it or any Subsidiary by any applicable material
federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other
than actions required to be taken by generally accepted accounting
principles);
(xii) prepare or file any Tax Return inconsistent with past practice
or, on any such Tax Return, take any position, make any election, or adopt
any method that is inconsistent with positions taken, elections made or
methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) settle or compromise any federal, state, local or foreign
income tax dispute in excess of $100,000 or make any tax election;
(xiv) settle or compromise any claims or litigation in excess of
$100,000 or commence any litigation or proceedings;
(xv) enter into or amend any agreement or contract (i) having a
remaining term in excess of 12 months or (ii) which involves or is expected
to involve future payments of $500,000 or more during the term thereof; or
purchase any real property, or make or agree to make any new capital
expenditure or expenditures (other than the purchase of real property)
which in the aggregate are in excess of $500,000;
(xvi) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction of any such
claims, liabilities or obligations, in the ordinary course of business
consistent with past practice or in accordance with their terms; or
(xvii) authorize, recommend, propose or announce an intention to do
any of the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
Section 5.2 No Solicitation. (a) The Company shall not, nor shall it
---------------
permit any of its Subsidiaries to, nor shall it authorize or permit any officer,
director or employee of or any financial advisor, attorney or other advisor or
representative of, the Company or any of its Subsidiaries to, (i) solicit,
initiate or encourage the submission of, any Takeover Proposal (as hereafter
defined), (ii) enter into any agreement with respect to or approve or recommend
any Takeover Proposal or (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to the Company
or any Subsidiary in connection with, or
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<PAGE>
take any other action to facilitate any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any Takeover
Proposal; provided, however, that nothing contained in this Section 5.2(a) shall
-------- -------
prohibit the Company or its directors from (i) complying with Rule 14e-2
promulgated under the Exchange Act with regard to a tender or exchange offer or
(ii) referring a third party to this Section 5.2(a) or making a copy of this
Section 5.2(a) available to any third party; and provided, further, that prior
-------- -------
to the acceptance for payment of Shares pursuant to the Offer, if the Board of
Directors of the Company reasonably determines that a Takeover Proposal
constitutes a Superior Proposal (as defined below), then, to the extent required
by the fiduciary obligations of the Board of Directors of the Company, as
determined in good faith by a majority thereof after consultation with
independent counsel (who may be the Company's regularly engaged independent
counsel), the Company and its representatives may, in response to an unsolicited
request therefor, and subject to compliance with Section 5.2(b), furnish
information with respect to the Company and its Subsidiaries to any person
pursuant to a customary confidentiality statement (as determined by the
Company's independent counsel) and participate in discussions or negotiations
with such person. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding sentence by any officer
or director of the Company or any of its Subsidiaries or any financial advisor,
attorney or other advisor or representative of the Company or any of its
Subsidiaries, whether or not such person is purporting to act on behalf of the
Company or any of its Subsidiaries or otherwise, shall be deemed to be a breach
of this Section 5.2(a) by the Company. For purposes of this Agreement,
"Takeover Proposal" means any proposal for a merger or other business
- ------------------
combination involving the Company or any of its Subsidiaries or any proposal or
offer to acquire in any manner, directly or indirectly, an equity interest in,
any voting securities of, or a substantial portion of the assets of the Company
or any of its Subsidiaries, other than the transactions contemplated by this
Agreement and the Stock Option Agreement, and "Superior Proposal" means a bona
-----------------
fide proposal made by a third party to acquire the Company pursuant to a tender
or exchange offer, a merger, a sale of all or substantially all its assets or
otherwise on terms which a majority of the disinterested members of the Board of
Directors of the Company determines, at a duly constituted meeting of the Board
of Directors or by unanimous written consent, in its reasonable good faith
judgment to be more favorable to the Company's shareholders than the Merger
(after consultation with the Company's independent financial advisor) and for
which financing, to the extent required, is then committed or which, in the
reasonable good faith judgment of a majority of such disinterested members, as
expressed in a resolution adopted at a duly constituted meeting of such members
(after consultation with the Company's independent financial advisor), is
reasonably capable of being obtained by such third party.
(b) The Company shall advise Parent orally and in writing of (i) any
Takeover Proposal or any inquiry with respect to or which could lead to any
Takeover Proposal received by any officer or director of the Company or, to the
Knowledge of the Company, any financial advisor, attorney or other advisor or
representative of the Company, (ii) the material terms of such Takeover Proposal
(including a copy of any written proposal), and (iii) the identity of the person
making any such Takeover Proposal or inquiry no later than 24 hours following
receipt of such Takeover Proposal or inquiry. If the Company intends to furnish
any Person with any information with respect to any Takeover Proposal in
accordance with Section 5.2(a), the Company shall advise Parent orally and in
writing of such intention not less than 24 hours in
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<PAGE>
advance of providing such information. The Company will keep Parent fully
informed of the status and details of any such Takeover Proposal or inquiry.
Section 5.3 Third Party Standstill Agreements. During the period
---------------------------------
from the date of this Agreement through the Effective Time, the Company shall
not terminate, amend, modify or waive any provision of any standstill agreement
to which the Company or any of its Subsidiaries is a party (other than any
involving Parent). During such period, the Company agrees to enforce, to the
fullest extent permitted under applicable law, the provisions of any such
agreements, including, but not limited to, obtaining injunctions to prevent any
breaches of such agreements and to enforce specifically the terms and provisions
thereof in any court of the United States or any state thereof having
jurisdiction.
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
Section 6.1 Shareholder Meeting. (a) If the Company Shareholder
-------------------
Approval is required by law, the Company will duly call, give notice of, convene
and hold a meeting of shareholders (the "Shareholder Meeting") for the purpose
-------------------
of considering the approval of this Agreement and at such meeting call for a
vote and cause proxies to be voted in respect of the approval and adoption of
this Agreement. The Shareholder Meeting shall be held as soon as practicable
following the purchase of Shares pursuant to the Offer, and the Company will,
through its Board of Directors, recommend to its shareholders the approval of
this Agreement, and shall not withdraw or modify such recommendation. The record
date for the Shareholder Meeting shall be a date subsequent to the date Parent
or Sub becomes a record holder of Company Common Stock pursuant to the Offer.
(b) If the Company Shareholder Approval is required by law, the
Company shall, at Parent's request, as soon as practicable following the
expiration of the Offer, prepare and file a preliminary Proxy Statement with the
SEC and shall use its reasonable best efforts to respond to any comments of the
SEC or its staff and to cause the Proxy Statement to be mailed to the Company's
shareholders as promptly as practicable after responding to all such comments to
the satisfaction of the staff. The Company shall notify Parent promptly of the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff for amendments or supplements to the Proxy Statement or for
additional information and will supply Parent with copies of all correspondence
between the Company or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, with respect to the Proxy Statement or the
Merger. If at any time prior to the Shareholder Meeting there shall occur any
event that should be set forth in an amendment or supplement to the Proxy
Statement, the Company shall promptly prepare and mail to its shareholders such
an amendment or supplement. The Company shall not mail any Proxy Statement, or
any amendment or supplement thereto, to which Parent reasonably objects. Parent
shall cooperate with the Company in the preparation of the Proxy Statement or
any amendment or supplement thereto.
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<PAGE>
(c) Parent agrees to cause all Shares purchased pursuant to the Offer
and all other Shares owned by Parent or any subsidiary of Parent to be voted in
favor of approval of the Merger.
Section 6.2 Access to Information. Subject to currently existing
---------------------
contractual and legal restrictions applicable to the Company or any of its
Subsidiaries, the Company shall, and shall cause each of its Subsidiaries to,
afford to the accountants, counsel, financial advisors and other representatives
of Parent reasonable access to, and permit them to make such inspections as they
may reasonably require of, during the period from the date of this Agreement
through the Effective Time, all of their respective properties, books,
contracts, commitments and records (including engineering records and Tax
Returns and the work papers of independent accountants, if available and subject
to the consent of such independent accountants) and, during such period, the
Company shall, and shall cause each of its Subsidiaries to (i) furnish promptly
to Parent a copy of each report, schedule, registration statement and other
document filed by it during such period pursuant to the requirements of federal
or state securities laws, (ii) furnish promptly to Parent all other information
concerning its business, properties and personnel as Parent may reasonably
request and (iii) promptly make available to Parent all personnel of the Company
and its Subsidiaries knowledgeable about matters relevant to such inspections.
No investigation pursuant to this Section 6.2 shall affect any representation or
warranty in this Agreement of any party hereto or any condition to the
obligations of the parties hereto. All information obtained by Parent pursuant
to this Section 6.2 shall be kept confidential in accordance with the
Confidentiality Agreement dated September 24, 1998 between Parent and the
Company (the "Confidentiality Agreement").
-------------------------
Section 6.3. Directors. Promptly after such time as Sub purchases
----------
Shares pursuant to the Offer which represent at least the Minimum Condition, Sub
shall be entitled, to the fullest extent permitted by law, to designate at its
option up to that number of directors, rounded to the nearest whole number, of
the Company's Board of Directors, subject to compliance with Section 14(f) of
the Exchange Act, as will make the percentage of the Company's directors
designated by Sub equal to the percentage of the aggregate voting power of the
shares of Common Stock held by Parent or any of its Subsidiaries; provided,
--------
however, that in the event that Sub's designees are elected to the Board of
- -------
Directors of the Company, until the Effective Time such Board of Directors shall
have at least three directors who are directors on the date of this Agreement
and who are not officers of the Company (the "Independent Directors"); and
---------------------
provided further that, in such event, if the number of Independent Directors
- -------- -------
shall be reduced below three for any reason whatsoever, the remaining
Independent Directors or Director shall designate a person or persons to fill
such vacancy or vacancies, each of whom shall be deemed to be an Independent
Director for purposes of this Agreement or, if no Independent Directors then
remain, the other directors shall designate three persons to fill such vacancies
who shall not be officers or affiliates of the Company or any of its
subsidiaries, or officers or affiliates of Parent or any of its subsidiaries,
and such persons shall be deemed to be Independent Directors for purposes of
this Agreement. Following the election or appointment of Sub's designees
pursuant to this Section 6.3 and prior to the Effective Time, any amendment, or
waiver of any term or condition, of this Agreement or the Company Charter or the
Amended and Restated By-Laws of the Company, any termination of this Agreement
by the Company, any extension by the Company of
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<PAGE>
the time for the performance of any of the obligations or other acts of Sub or
waiver or assertion of any of the Company's rights hereunder, and any other
consent or action by the Board of Directors of the Company with respect to this
Agreement, will require the concurrence of a majority of the Independent
Directors and no other action by the Company, including any action by and any
other director of the Company, shall be required for purposes of this Agreement.
To the fullest extent permitted by applicable law, the Company shall take all
action requested by Parent that is reasonably necessary to effect any such
election, including mailing to its shareholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, and the Company agrees to make such mailing
with the mailing of the Schedule 14D-9 (provided that Sub shall have provided to
the Company on a timely basis all information required to be included in the
Information Statement with respect to Sub's designees). In connection with the
foregoing, the Company will promptly, at the option of Parent, to the fullest
extent permitted by law, either increase the size of the Company's Board of
Directors and/or obtain the resignation of such number of its current directors
as is necessary to enable Sub's designees to be elected or appointed to the
Company's Board of Directors as provided above.
Section 6.4 Fees and Expenses. (a) Except as provided in this
-----------------
Section 6.4, whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby, including the fees and disbursements of counsel, financial advisors and
accountants, shall be paid by the party incurring such costs and expenses.
(b) The Company shall pay, or cause to be paid, in same day funds
to Parent the following amounts under the circumstances and at the times set
forth as follows:
(i) if Parent or Sub terminates this Agreement under Section
8.1(d), the Company shall pay the Expenses (as defined below) of Parent and
the Termination Fee (as defined below) upon demand;
(ii) if the Company terminates this Agreement under Section 8.1(e),
the Company shall pay the Termination Fee within one business day following
such termination and the Expenses of Parent upon demand;
(iii) if Parent or Sub terminates this Agreement under Section 8.1(c)
and at the time of any such termination, a Takeover Proposal shall have
been made (other than a Takeover Proposal made prior to the date hereof),
(x) the Company shall pay the Expenses of Parent upon demand, and (y) if
concurrently therewith or within twelve months thereafter, (A) the Company
enters into a merger agreement, acquisition agreement or similar agreement
(including a letter of intent) with respect to a Takeover Proposal, or a
Takeover Proposal is consummated, involving any party (1) with whom the
Company had any discussions with respect to a Takeover Proposal, (2) to
whom the Company furnished information with respect to or with a view to a
Takeover Proposal or (3) who had submitted a proposal or expressed any
interest publicly in a Takeover Proposal, in the case of each of clauses
(1), (2) and (3), prior to such termination, or (B)
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<PAGE>
the Company enters into a merger agreement, acquisition agreement or
similar agreement (including a letter of intent) with respect to a Superior
Proposal, or a Superior Proposal is consummated, then, in the case of
either (A) or (B) above, the Company shall pay the Termination Fee upon the
earlier of the execution of such agreement or upon consummation of such
Takeover Proposal or Superior Proposal.
(c) Parent shall pay, or cause to be paid, in same day funds to the
Company, the Expenses of the Company if the Company terminates this Agreement
under Section 8.1(f) or Section 8.1(g).
(d) "Expenses" means with respect to Parent or the Company, as the
--------
case may be, documented out-of-pocket fees and expenses incurred or paid by or
on behalf of Parent or the Company, as the case may be, in connection with the
Offer, the Merger or the consummation of any of the transactions contemplated by
this Agreement, including all fees and expenses of law firms, commercial banks,
investment banking firms, accountants, experts and consultants to Parent or the
Company, as the case may be; provided that the Expenses of Parent payable by the
--------
Company under this Section 6.4 shall not exceed $1 million and the Expenses of
the Company payable by Parent under this Section 6.4 shall not exceed $1
million; and "Termination Fee" means $4 million; provided, however, that the
--------------- -------- -------
aggregate amount of the Termination Fee and Expenses payable to Parent shall be
reduced to an amount not less than zero by subtracting from the aggregate amount
otherwise payable to Parent the amount realized or anticipated to be realizable
(based on the facts as they exist on the date such aggregate amount shall become
due) by Parent under the Stock Option Agreement; provided further that if such
-------- -------
aggregate amount shall be so reduced by an amount realizable by Parent and
thereafter the Stock Option Agreement shall terminate without receipt by Parent
of such amount, then, to the extent Parent is entitled to receive such aggregate
amount, an additional payment shall be made to Parent in such amount promptly
following such termination.
Section 6.5. Stock Options. (a) Prior to the consummation of the
-------------
Offer, the Board of Directors of the Company (or, if appropriate, any committee
thereof) shall adopt appropriate resolutions and take all other actions
necessary or appropriate to (i) cause each Company Stock Option that is
outstanding as of the date hereof to vest and to be exercisable immediately
prior to the consummation of the Offer and (ii) cause each Company Stock Option
that is outstanding upon the consummation of the Offer to be cancelled as of the
consummation of the Offer, in consideration for which the holder thereof (an
"Option Holder") shall be entitled to receive from the Company an amount equal
- --------------
to (A) the product of (1) the number of shares of Company Common Stock subject
to such Option and (2) the excess, if any, of the Offer Price over the exercise
price per share for the purchase of the Company Common Stock subject to such
Option, minus (B) all applicable federal, state and local Taxes required to be
withheld in respect of such payment. The amounts payable pursuant to clause
(ii) of the first sentence of this Section 6.5 shall be paid as soon as
reasonably practicable following the acceptance for payment by Sub pursuant to
the Offer. The amount payable to any Option Holder pursuant to clause (ii) of
the first sentence of this Section 6.5 shall be reduced to the extent necessary
to prevent such payment, together with any other amounts payable to such Option
Holder by the Company, from constituting a "parachute payment," within the
meaning of section 280G of the Code. The
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<PAGE>
surrender of an Option in exchange for the consideration contemplated by clause
(ii) of the first sentence of this Section 6.5 shall be deemed a release of any
and all rights the Option Holder had or may have had in respect thereof.
(b) The Company shall take all actions necessary to ensure that: (i)
the Purchase Period (as defined in the Company Stock Purchase Plan) applicable
to the options outstanding under the Company Stock Purchase Plan (each, a
"Purchase Plan Option") is shortened so as to have an Exercise Date (as defined
- ---------------------
in the Company Stock Purchase Plan) that occurs before the acceptance for
payment by Sub of Shares pursuant to the Offer; (ii) no new Purchase Period
shall begin from and after the date hereof; and (iii) no holder of a Purchase
Plan Option is permitted to increase his or her rate of payroll deduction under
the Company Stock Purchase Plan from and after the date hereof.
(c) The Company shall take all actions necessary to provide that,
effective as of acceptance for payment by Sub of Shares pursuant to the Offer,
(i) each of the Company Stock Option Plans and any similar plan or agreement of
the Company shall be terminated, (ii) any rights under any other plan, program,
agreement or arrangement to the issuance or grant of any other interest in
respect of the capital stock of the Company or any of its Subsidiaries shall be
terminated, and (iii) no Option Holder will have any right to receive any shares
of capital stock of the Company or, if applicable, the Surviving Corporation,
upon exercise of any Company Stock Option.
(d) The Company represents and warrants that it has the power and
authority under the terms of the Company Stock Purchase Plan and each of the
applicable Company Stock Option Plans to comply with this Section 6.5 without
the consent of any Option Holder.
Section 6.6 Reasonable Best Efforts. (a) Upon the terms and subject
-----------------------
to the conditions set forth in this Agreement, each of the parties agrees to use
reasonable best 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 necessary actions or non-actions, waivers, consents and
approvals from all Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities) and the
taking of all reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any Governmental Entity
(including those in connection with the HSR Act and State Takeover Approvals),
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties, (iii) the defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement, the Stock Option
Agreement or the consummation of the transactions contemplated hereby and
thereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (iv)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by this Agreement. No party to this Agreement
shall consent to any voluntary delay of the consummation of the Offer, the
Merger at the behest of any
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<PAGE>
Governmental Entity without the consent of the other parties to this Agreement,
which consent shall not be unreasonably withheld.
(b) Each party shall use all reasonable best efforts to not take any
action, or enter into any transaction, which would cause any of its
representations or warranties contained in this Agreement to be untrue or result
in a breach of any covenant made by it in this Agreement.
(c) Notwithstanding anything to the contrary contained in this
Agreement, in connection with any filing or submission required or action to be
taken by either Parent or the Company to effect the Offer, the Merger and to
consummate the other transactions contemplated hereby, the Company shall not,
without Parent's prior written consent, commit to any divestiture transaction,
and neither Parent nor any of its Affiliates shall be required to divest or hold
separate or otherwise take or commit to take any action that limits its freedom
of action with respect to, or its ability to retain, the Company or any of the
businesses, product lines or assets of Parent or any of its Subsidiaries or that
otherwise would have a Material Adverse Effect on Parent.
Section 6.7 Public Announcements. Parent and the Company will not
--------------------
issue any press release with respect to the transactions contemplated by this
Agreement or otherwise issue any written public statements with respect to such
transactions without prior consultation with the other party, except as may be
required by applicable law or by obligations pursuant to any listing agreement
with any national securities exchange.
Section 6.8 DEC Letter; Termination of Stock Rights. (a) Prior to
---------------------------------------
the acceptance for payment of any Shares by Sub pursuant to the Offer, the
Company and Parent will enter into the agreements contemplated by the letter
agreement dated November 21, 1998 among the Company, Parent and DEC, and prior
to the Effective Time, the Company will purchase the shares of common stock of
Taylor owned by DEC as contemplated by such letter agreement.
(b) Prior to the acceptance for payment of any Shares by Sub pursuant
to the Offer, the Company will obtain the consent, in form and substance
reasonably satisfactory to Parent, of the holders of the Priester Warrant so
that after the Company's obtaining such consent the holders thereof will have no
right to purchase shares of Company Common Stock.
(c) Prior to the acceptance for payment of any Shares by Sub pursuant
to the Offer, the Company will obtain the consent, in form and substance
reasonably satisfactory to Parent, of the other parties to the Contingent
Payment Agreements so that after the Company's obtaining such consent the other
parties to such agreements will have no right to receive shares of Company
Common Stock as payment of any contingent amounts thereunder.
(d) Upon the acceptance for payment of Shares pursuant to the Offer,
the Company will be the holder of all of the issued and outstanding capital
stock of Taylor other than the Common Stock of Taylor owned by DEC and there
shall be no options, warrants, calls, rights or agreements to which the Company
or Taylor is a party, or by which any of them is bound obligating the Company or
Taylor to issue, sell, or cause to be issued, delivered or sold, additional
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<PAGE>
shares of capital stock of Taylor or to grant, extend or enter into any such
option, warrant, call, right or agreement.
Section 6.9 State Takeover Laws. If any "fair price," "business
-------------------
combination" or "control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contemplated hereby or in
the Stock Option Agreement or the Shareholder Agreements, Parent and the Company
and their respective Boards of Directors shall use their reasonable best efforts
to 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 any such statute or regulation on the transactions
contemplated hereby and thereby.
Section 6.10 Indemnification; Directors and Officers Insurance. (a)
-------------------------------------------------
From and after the Effective Time, Parent shall cause the Surviving Corporation
to indemnify and hold harmless all past and present officers and directors of
the Company and of its Subsidiaries to the same extent and in the same manner
such persons are indemnified as of the date of this Agreement by the Company
pursuant to the IBCA, the Company Charter or the Company's Amended and Restated
Bylaws for acts or omissions occurring at or prior to the Effective Time.
(b) Parent shall cause the Surviving Corporation to provide, for an
aggregate period of not less than three years from the Effective Time, the
Company's current directors and officers an insurance and indemnification policy
that provides coverage for events occurring prior to the Effective Time (the
"D&O Insurance") that is substantially similar to the Company's existing policy
- --------------
or, if substantially equivalent insurance coverage is unavailable, the best
available coverage; provided, however, that the Surviving Corporation shall not
-------- -------
be required to pay an annual premium for the D&O Insurance in excess of the last
annual premiums paid prior to the date hereof but in such case shall purchase as
much coverage as possible for such amount.
(c) Parent hereby agrees that, effective at the Effective Time,
Parent will guarantee the obligations of the Surviving Corporation under Section
6.10(a) and (b).
Section 6.11 Notification of Certain Matters. Parent shall use its
-------------------------------
reasonable best efforts to give prompt notice to the Company, and the Company
shall use its reasonable best efforts to give prompt notice to Parent, of: (i)
the occurrence, or non-occurrence, of any event the occurrence, or non-
occurrence, of which it is aware and which would be reasonably likely to cause
(x) any representation or warranty contained in this Agreement and made by it to
be untrue or inaccurate in any material respect or (y) any covenant, condition
or agreement contained in this Agreement and made by it not to be complied with
or satisfied in all material respects, (ii) any failure of Parent or the
Company, as the case may be, to comply in a timely manner with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder or (iii) any change or event which would be reasonably likely to have
a Material Adverse Effect on the Company; provided, however, that the delivery
-------- -------
of any notice pursuant to this Section 6.11 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
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<PAGE>
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
----------------------------------
Section 7.1 Conditions to Each Party's Obligation to Effect the
---------------------------------------------------
Merger. The respective obligations of each party to effect the Merger shall be
- ------
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Shareholder Approval. If required by applicable law, the Company
--------------------
Shareholder Approval shall have been obtained.
(b) Purchase of Shares. Sub shall have previously accepted for
------------------
payment and paid for Shares pursuant to the Offer.
(c) No Order. No court or other Governmental Entity having
--------
jurisdiction over the Company or Parent, or any of their respective
Subsidiaries, shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making the Merger illegal.
Section 7.2 Conditions to Obligations of Parent and Sub to Effect
-----------------------------------------------------
the Merger. The obligations of Parent and Sub to effect the Merger shall be
- ----------
subject to the fulfillment at or prior to the Effective Time of the following
additional conditions:
(a) Performance of Obligations; Representations and Warranties. The
----------------------------------------------------------
Company shall have performed in all material respects each of its agreements
contained in this Agreement required to be performed on or prior to the
Effective Time, and the representations and warranties of the Company contained
in this Agreement shall be true and correct on and as of the Effective Time as
if made on and as of such date, except where the failure to be so true and
correct would not have a Material Adverse Effect on the Company, and Parent
shall have received a certificate signed on behalf of the Company by its Chief
Executive Officer and its Chief Financial Officer to such effect.
(b) Consents. (i) The Company shall have obtained the consent or
--------
approval of each person or Governmental Entity whose consent or approval shall
be required in connection with the transactions contemplated hereby under any
loan or credit agreement, note, mortgage, indenture, lease or other agreement or
instrument, except as to which the failure to obtain such consents and approvals
would not, in the reasonable opinion of Parent, individually or in the
aggregate, have a Material Adverse Effect on the Company or Parent or upon the
consummation of the transactions contemplated in this Agreement, the Stock
Option Agreement or the Shareholder Agreements.
(ii) In obtaining any approval or consent required to consummate any
of the transactions contemplated herein, in the Stock Option Agreement or the
Shareholder Agreements, no Governmental Entity shall have imposed or shall have
sought to impose any condition, penalty
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<PAGE>
or requirement which, in the reasonable opinion of Parent, individually or in
aggregate would have a Material Adverse Effect on the Company or Parent.
(c) Material Adverse Change. Since the date of this Agreement, there
-----------------------
shall have been no Material Adverse Change with respect to the Company. Parent
shall have received a certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company to such effect.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 8.1. Termination. This Agreement may be terminated at any
------------
time prior to the Effective Time, whether before or after approval of this
Agreement by the shareholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if (x) as a result of the failure of any of the Offer
Conditions the Offer shall have terminated or expired in accordance
with its terms without Sub having accepted for payment any Shares
pursuant to the Offer or (y) Sub shall not have accepted for payment
any Shares pursuant to the Offer prior to March 31, 1999; provided,
--------
however, that the right to terminate this Agreement pursuant to this
-------
Section 8.1(b)(i) shall not be available to any party whose failure to
perform any of its obligations under this Agreement results in the
failure of any such condition or if the failure of such condition
results from facts or circumstances that constitute a breach of any
representation or warranty under this Agreement by such party; or
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the acceptance for payment of, or
payment for, Shares pursuant to the Offer and such order, decree or
ruling or other action shall have become final and nonappealable;
(c) by Parent or Sub prior to the purchase of Shares pursuant to the
Offer in the event of a breach by the Company of any representation,
warranty, covenant or other agreement contained in this Agreement which (i)
would give rise to the failure of a condition set forth in paragraph (e) or
(f) of Exhibit C and (ii) cannot be or has not been cured within 30 days
---------
after the giving of written notice to the Company;
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<PAGE>
(d) by Parent or Sub if either Parent or Sub is entitled to terminate
the Offer as a result of the occurrence of any event set forth in paragraph
(d) of Exhibit C to this Agreement;
---------
(e) by the Company if the Board of Directors of the Company
reasonably determines that a Takeover Proposal constitutes a Superior
Proposal and a majority of the members of the Board of Directors
determines, in its reasonable good faith judgment, after consultation with
independent counsel, that failing to terminate this Agreement would
constitute a breach of such Board's fiduciary duties under applicable law,
provided that the Company has complied with all provisions of Section 5.2,
including the notice provisions therein, and that it has complied with the
requirements of Section 6.4(b) relating to the payment (including the
timing of any payment) of the Expenses and the Termination Fee to the
extent required by Section 6.4(b); and provided further that the Company
may not terminate this Agreement pursuant to this Section 8.1(e) unless and
until 72 hours have elapsed following delivery to Parent of a written
notice of such determination by the Board of Directors of the Company;
(f) by the Company, if (i) any of the representations or warranties
of Parent or Sub set forth in this Agreement that are qualified as to
materiality shall not be true and correct in any respect or any such
representations or warranties that are not so qualified shall not be true
and correct in any material respect, or (ii) Parent or Sub shall have
failed to perform in any material respect any material obligation or to
comply in any material respect with any material agreement or covenant of
Parent or Sub to be performed or complied with by it under this Agreement
and such untruth, incorrectness or failure cannot be or has not been cured
within 30 days after the giving of written notice to Parent or Sub, as
applicable; or
(g) by the Company, if the Offer has not been timely commenced in
accordance with Section 1.1.
The right of any party hereto to terminate this Agreement pursuant to
this Section 8.1 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers or directors,
whether prior to or after the execution of this Agreement.
Section 8.2 Effect of Termination. In the event of termination of
---------------------
this Agreement by either Parent or the Company, as provided in Section 8.1, this
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of the Company, Parent, Sub or their respective officers or
directors (except for the last sentence of Section 6.2 and the entirety of
Section 6.4, which shall survive the termination); provided, however, that
-------- -------
nothing contained in this Section 8.2 shall relieve any party hereto from any
liability for any willful breach of a representation or warranty contained in
this Agreement or the breach of any covenant contained in this Agreement.
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<PAGE>
Section 8.3 Amendment. Subject to Section 6.3, this Agreement may be
---------
amended by the parties hereto, by or pursuant to action taken by their
respective Boards of Directors, at any time before or after approval of the
matters presented in connection with the Merger by the shareholders of the
Company, but, after any such approval, no amendment shall be made which by law
requires further approval by such shareholders without such further approval.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
Section 8.4 Waiver. At any time prior to the Effective Time, subject
------
to Section 6.3, the parties hereto may (i) extend the time for the performance
of any of the obligations or other acts of the other parties hereto, (ii) waive
any inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto and (iii) waive compliance with any of
the agreements or conditions contained herein which may legally be waived. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE IX
GENERAL PROVISIONS
------------------
Section 9.1 Non-Survival of Representations and Warranties. The
----------------------------------------------
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall terminate at the Effective Time.
Section 9.2 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given when delivered personally, one day
after being delivered to an overnight courier or when telecopied (with a
confirmatory copy sent by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: President and CEO
Facsimile No.: 804-978-5320
for overnight courier deliveries, to:
GE Fanuc Automation North America, Inc.
Route 29 North and Route 606
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
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<PAGE>
with copies to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
Facsimile No.: 804-978-5320
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Thomas A. Cole
Dennis V. Osimitz
Facsimile No.: 312-853-7036
(b) if to the Company, to:
Total Control Products, Inc.
200 N. Janice Avenue
Melrose Park, Illinois 60160
Attention: Nicholas Gihl
Facsimile No.: 708-345-6792
with a copy to:
D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, IL 60602
Attention: Mark Albert
Facsimile No.: 312-580-0923
Section 9.3 Interpretation. (a) 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 "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
(b) "Subsidiary" means any corporation, partnership, limited
----------
liability company, joint venture or other legal entity of which Parent or the
Company, as the case may be (either alone or through or together with any other
Subsidiary), owns, directly or indirectly, 50% or more of the stock or other
equity interests the holders of which are generally entitled to vote for the
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<PAGE>
election of the board of directors or other governing body of such corporation,
partnership, limited liability company, joint venture or other legal entity.
(c) "Material Adverse Change" or "Material Adverse Effect" means,
----------------------- -----------------------
when used with respect to the Company or Parent, as the case may be, any change
or effect that is or could reasonably be expected (as far as can be foreseen at
the time) to be materially adverse to the business, operations, assets,
liabilities, employee relationships, customer or supplier relationships,
earnings or results of operations, or the business prospects and condition
(financial or otherwise), of the Company and its Subsidiaries, taken as a whole
(other than such changes or effects as are described in Section 9.3(c) of the
Company Letter), or Parent and its Subsidiaries, taken as a whole, as the case
may be.
Section 9.4 Counterparts. This Agreement may be executed in
------------
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 9.5 Entire Agreement; No Third-Party Beneficiaries. This
----------------------------------------------
Agreement, except for the Stock Option Agreement and as provided in the last
sentence of Section 6.2, constitutes the entire agreement, and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof. This Agreement, except for the
provisions of Section 6.10, is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
Section 9.6 Governing Law. Except to the extent that the laws of the
-------------
State of Illinois are mandatorily applicable to the Merger, this Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
Section 9.7 Assignment. Subject to Section 2.1, neither this
----------
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties.
Section 9.8 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
may be consummated as originally contemplated to the fullest extent possible.
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<PAGE>
Section 9.9 Enforcement of this Agreement. The parties hereto agree
-----------------------------
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific wording or
were otherwise breached. It is accordingly agreed that the parties hereto shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof (but any
such proceeding shall be brought exclusively in the U.S. District Court for the
Northern District of Illinois), such remedy being in addition to any other
remedy to which any party is entitled at law or in equity. Each party hereto
waives any right to a trial by jury in connection with any such action, suit or
proceeding and waives any objection based on forum non conveniens or any other
objection to venue thereof.
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<PAGE>
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
GE FANUC AUTOMATION NORTH AMERICA, INC.
By: /s/ Joseph M. Hogan
------------------------------------
Name: Joseph M. Hogan
Title: President and CEO
ORION MERGER CORP.
By: /s/ Joseph M. Hogan
------------------------------------
Name: Joseph M. Hogan
Title: President and CEO
TOTAL CONTROL PRODUCTS, INC.
By: /s/ Nicholas Gihl
------------------------------------
Name: Nicholas Gihl
Title: President and CEO
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<PAGE>
EXHIBIT A
---------
STOCK OPTION AGREEMENT
----------------------
STOCK OPTION AGREEMENT, dated as of November 22, 1998 (the "Agreement"),
between GE Fanuc Automation North America, Inc., a Delaware corporation
("Parent"), and Total Control Products, Inc., an Illinois corporation (the
------
"Company").
-------
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of this Agreement,
Parent, Orion Merger Corp., a newly formed Illinois corporation and a wholly
owned subsidiary of Parent ("Sub"), and the Company are entering into an
---
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
------
Agreement"), which provides for the merger of Sub with and into the Company;
- ---------
WHEREAS, as a condition to Parent's willingness to enter into the Merger
Agreement, Parent has requested that the Company grant to Parent an option to
purchase up to 1,598,530 authorized and unissued shares of Company Common Stock,
upon the terms and subject to the conditions hereof; and
WHEREAS, in order to induce Parent to enter into the Merger Agreement, the
Company has agreed to grant Parent the requested option.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. The Option; Exercise; Adjustments. The Company hereby grants to Parent
---------------------------------
an irrevocable option (the "Option") to purchase from time to time up to
------
1,598,530 authorized and unissued Common Shares, no par value, of the Company
(the "Company Common Stock"), upon the terms and subject to the conditions set
--------------------
forth herein (the "Optioned Shares"). Subject to the conditions set forth in
---------------
Section 2, the Option may be exercised by Parent in whole or from time to time
in part, at any time after the date hereof and prior to the termination of the
Option in accordance with Section 19. In the event Parent wishes to exercise
the Option, after the satisfaction of the conditions set forth in Section 2
Parent shall send a written notice to the Company (the "Stock Exercise Notice")
---------------------
specifying the total number of Optioned Shares it wishes to purchase and a date
(not later than 10 business days and not earlier than two business days from the
date such notice is given) for the closing of such purchase (the "Closing
-------
Date"). Parent may revoke an exercise of the Option at any time prior to the
- ----
Closing Date by written notice to the Company. In the event of any change in
the number of issued and outstanding shares of Company Common Stock by reason of
any stock dividend, stock split, split-up, recapitalization, merger or other
change in the corporate or capital structure of the Company, the number of
Optioned Shares subject to the Option and the Exercise Price (as hereinafter
defined) per Optioned Share shall be appropriately adjusted. In the event that
any additional shares of Company Common Stock are issued after the date of this
Agreement (other than pursuant to an
<PAGE>
event described in the preceding sentence or pursuant to this Agreement), the
number of Optioned Shares subject to the Option shall be adjusted so that, after
such issuance, it equals (but does not exceed) 19.9% of the number of shares of
Company Common Stock then issued and outstanding and 19.9% of the voting power
of shares of capital stock of the Company then issued and outstanding, after
reduction, to the extent necessary to comply with the exception to the
shareholder approval requirements of the Nasdaq National Market ("NASDAQ"), for
------
any shares issued pursuant to the Option.
2. Conditions to Exercise of Option and Delivery of Optioned Shares.
----------------------------------------------------------------
(a) Parent's right to exercise the Option is subject to the following
conditions:
(i) Neither Parent nor Sub shall have breached any of its material
obligations under the Merger Agreement;
(ii) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States
invalidating the grant or prohibiting the exercise of the Option shall be
in effect; and
(iii) One or more of the following events shall have occurred on or
after the date hereof: (A) any person, corporation, partnership, limited
liability company or other entity or group (such person, corporation,
partnership, limited liability company or other entity or group being
referred to hereinafter, singularly or collectively, as a "Person"),
------
acquires or becomes the beneficial owner of 20% or more of the outstanding
shares of Company Common Stock (other than a person who, as of the date
hereof, is the beneficial owner of 20% or more of the outstanding shares of
Company Common Stock (a "20% Holder")); (B) any 20% Holder increases his
----------
beneficial ownership of Company Common Stock by more than 1%; (C) any
group (other than a group which includes or may reasonably be deemed to
include Parent or any of its affiliates) is formed which beneficially owns
20% or more of the outstanding shares of Company Common Stock; (D) any
Person (other than Parent or its affiliates) shall have commenced a tender
or exchange offer for 20% or more of the then outstanding shares of Company
Common Stock or publicly proposed any bona fide merger, consolidation or
acquisition of all or substantially all the assets of the Company, or other
similar business combination involving the Company; (E) the Company enters
into, or announces that it proposes to enter into, an agreement, including,
without limitation, an agreement in principle, providing for a merger or
other business combination involving the Company or a "significant
subsidiary" (as defined in Rule 1.02(v) of Regulation S-X as promulgated by
the Securities and Exchange Commission (the "SEC")) of the Company or the
---
acquisition of a substantial interest in, or a substantial portion of the
assets, business or operations of, the Company or a significant subsidiary
(other than the transactions contemplated by the Merger Agreement); (F) any
Person (other than Parent or its affiliates) is granted any option or
right, conditional or otherwise, to acquire or otherwise become the
beneficial owner of shares of Company Common Stock which, together with all
shares of Company Common Stock beneficially owned by such Person, results
or would result in such Person being the beneficial owner of 20% or more of
the outstanding shares of Company Common Stock; or (G) there is a public
announcement
-2-
<PAGE>
with respect to a plan or intention by the Company, other than Parent or
its affiliates, to effect any of the foregoing transactions. For purposes
of this subparagraph (iii), the terms "group" and "beneficial owner" shall
be defined by reference to Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations
------------
promulgated thereunder.
(b) Parent's obligation to purchase the Optioned Shares following
the exercise of the Option, and the Company's obligation to deliver the Optioned
Shares, are subject to the conditions that:
(i) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States
prohibiting the delivery of the Optioned Shares shall be in effect;
(ii) The purchase of the Optioned Shares will not violate Rule 10b-
13 promulgated under the Exchange Act; and
(iii) All applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), shall have
-------
expired or been terminated.
3. Exercise Price for Optioned Shares. At any Closing Date, the
----------------------------------
Company will deliver to Parent a certificate or certificates representing the
Optioned Shares in the denominations designated by Parent in its Stock Exercise
Notice and Parent will purchase the Optioned Shares from the Company at a price
per Optioned Share equal to $11.00 (the "Exercise Price"), payable in cash.
--------------
Payment made by Parent to the Company pursuant to this Agreement shall be made
by wire transfer of federal funds to a bank designated by the Company or a check
payable in immediately available funds. After payment of the Exercise Price for
the Optioned Shares covered by the Stock Exercise Notice, the Option shall be
deemed exercised to the extent of the Optioned Shares specified in the Stock
Exercise Notice as of the date such Stock Exercise Notice is given to the
Company.
4. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to Parent that (a) the execution and delivery of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company and this Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms; (b) the
Company has taken all necessary corporate action to authorize and reserve the
Optioned Shares for issuance upon exercise of the Option, and the Optioned
Shares, when issued and delivered by the Company to Parent upon exercise of the
Option, will be duly authorized, validly issued, fully paid and nonassessable
and free of preemptive rights; (c) except as otherwise required by the HSR Act,
except for routine filings and subject to Section 7, the execution and delivery
of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby do not require the consent, approval or authorization of, or
filing with, any person or public authority
-3-
<PAGE>
and will not violate or conflict with the Company's Amended and Restated
Articles of Incorporation, as amended, or Amended and Restated Bylaws, or result
in the acceleration or termination of, or constitute a default under, any
indenture, license, approval, agreement, understanding or other instrument, or
any statute, rule, regulation, judgment, order or other restriction binding upon
or applicable to the Company or any of its subsidiaries or any of their
respective properties or assets; (d) the Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois and has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby;
and (e) the Board of Directors of the Company has, to the extent such statutes
are applicable, taken all action so that prior to the execution hereof, the
Board of Directors has approved the Merger and the execution of this Agreement
and the consummation of the transaction contemplated hereby so that the higher
vote requirement for certain business combinations set forth in Section 7.85 of
the Business Corporation Law of the State of Illinois, as amended (the "IBCA"),
----
and the restrictions on certain business combinations set forth in Section 11.75
of the IBCA will not apply with respect thereto or as a result thereof.
5. Representations and Warranties of Parent. Parent represents and
----------------------------------------
warrants to the Company that (a) the execution and delivery of this Agreement by
Parent and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Parent and
this Agreement has been duly executed and delivered by Parent and constitutes a
valid and binding agreement of Parent; and (b) Parent is acquiring the Option
and, if and when it exercises the Option, will be acquiring the Optioned Shares
issuable upon the exercise thereof, for its own account and not with a view to
distribution or resale in any manner which would be in violation of the
Securities Act of 1933, as amended (the "Securities Act"), and will not sell or
--------------
otherwise dispose of the Optioned Shares except pursuant to an effective
registration statement under the Securities Act or a valid exemption from
registration under the Securities Act.
6. The Closing. Any closing hereunder shall take place on the
-----------
Closing Date specified by Parent in its Stock Exercise Notice pursuant to
Section 1 at 10:00 A.M., local time, or the first business day thereafter on
which all of the conditions in Section 2 are met, at the principal executive
office of the Company, or at such other time and place as the parties hereto may
agree.
7. Filings Related to Optioned Shares. The Company will make such
----------------------------------
filings with the SEC as are required by the Exchange Act, and will use its best
efforts to effect all necessary filings by the Company under the HSR Act and to
have the Optioned Shares approved for quotation on NASDAQ.
8. Registration Rights. (a) If the Company effects any
-------------------
registration or registrations of shares of Company Common Stock under the
Securities Act for its own account or for any other stockholder of the Company
at any time after the exercise of the Option (other than a registration on Form
S-4, Form S-8 or any successor forms), it will allow Parent to participate in
such registration or registrations with respect to any or all of the Optioned
Shares acquired upon the exercise of the Option; provided, however, that any
-------- -------
request of Parent pursuant
-4-
<PAGE>
to this Section 8(a) shall be with respect to at least 100,000 Optioned Shares
and provided, further, that if the managing underwriters in such offering advise
-------- -------
the Company that, in their written opinion, the number of Optioned Shares
requested by Parent to be included in such registration exceeds the number of
shares of Company Common Stock which can be sold in such offering, the Company
may exclude from such registration all or a portion, as may be appropriate, of
the Optioned Shares requested for inclusion by Parent.
(b) At any time after the exercise of the Option, upon the request of
Parent, the Company will as promptly as practicable file and use its best
efforts to cause to be declared effective a registration statement under the
Securities Act (and applicable Blue Sky statutes) with respect to any or all of
the Optioned Shares acquired upon the exercise of the Option; provided, however,
-------- -------
that any request of Parent pursuant to this Section 8(b) shall be with respect
to at least 100,000 Optioned Shares and provided, further, that the Company
-------- -------
shall not be required to have declared effective more than two registration
statements hereunder and shall be entitled to delay the effectiveness of each
such registration statement, for a period not to exceed 90 days in the
aggregate, if the commencement of such offering would, in the reasonable good
faith judgment of the Board of Directors of the Company, require premature
disclosure of any material corporate development or otherwise materially
interfere with or materially adversely affect any pending or proposed offering
of securities of the Company. In connection with any such registration
requested by Parent, the costs of such registration shall be borne by the
Company, and the Company and Parent each shall provide the other and any
underwriters with customary indemnification and contribution agreements.
9. Optional Put; Optional Repurchase. (a) Prior to the termination
---------------------------------
of the Option in accordance with Section 19, if a Put Event has occurred, Parent
shall have the right, upon three business days' prior written notice to the
Company, to require the Company to purchase the Option from Parent (the "Put
---
Right") at a cash purchase price (the "Put Price") equal to the product
- ----- ---------
determined by multiplying (A) the number of Optioned Shares as to which the
Option has not yet been exercised by (B) the Spread (as defined below). As used
herein, "Put Event" means the occurrence on or after the date hereof of any of
---------
the following: (i) any Person (other than Parent or its affiliates) acquires or
becomes the beneficial owner of 50% or more of the outstanding shares of Company
Common Stock or (ii) the Company consummates a merger or other business
combination involving the Company or a "significant subsidiary" (as defined in
Rule 1.02(v) of Regulation S-X as promulgated by the SEC) of the Company or the
acquisition of a substantial interest in, or a substantial portion of the
assets, business or operations of, the Company or a significant subsidiary
(other than the transactions contemplated by the Merger Agreement). As used
herein, the term "Spread" shall mean the excess, if any, of (i) the greater of
------
(x) the highest price (in cash or fair market value of securities or other
property) per share of Company Common Stock paid or to be paid within 12 months
preceding the date of exercise of the Put Right for any shares of Company Common
Stock beneficially owned by any Person who shall have acquired or become the
beneficial owner of 20% or more of the outstanding shares of Company Common
Stock after the date hereof or (y) the average of the last reported sales prices
quoted on NASDAQ of the Company Common Stock during the five trading days
immediately preceding the written notice of exercise of the Put Right over (ii)
the Exercise Price.
-5-
<PAGE>
(b) At any time after the termination of the Option granted hereunder
pursuant to Section 19 and for a period of 90 days thereafter, the Company shall
have the right, upon three business days' prior written notice, to repurchase
from Parent (the "Repurchase Right"), all (but not less than all) of the
----------------
Optioned Shares acquired by the Company hereby and with respect to which the
Company then has beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) at a price per share equal to the greater of (i) the average of
the last reported sales price quoted on NASDAQ of the Company Common Stock
during the five trading days immediately preceding the written notice of
exercise of the Repurchase Right and (ii) the Exercise Price, plus interest at a
rate per annum equal to the costs of funds to Parent at the time of exercise of
the Repurchase Right.
10. Expenses. Each party hereto shall pay its own expenses incurred
--------
in connection with this Agreement, except as otherwise provided in Section 8 or
as specified in the Merger Agreement.
11. Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state thereof having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity. Each party hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the Northern District of Illinois in any action, suit or proceeding
arising in connection with this Agreement, and agrees that any such action, suit
or proceeding shall be brought only in such courts (and waives any objection
based on forum non conveniens or any other objection to venue therein). Each
party hereto waives any right to a trial by jury in connection with any such
action, suit or proceeding.
12. Notice. All notices, requests, demands and other communications
------
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended or if sent by
telex or telecopier (and also confirmed in writing) to the person at the address
set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:
-6-
<PAGE>
(a) if to Parent, to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: President and CEO
Facsimile No.: 804-978-5320
for overnight courier deliveries, to:
GE Fanuc Automation North America, Inc.
Route 29 North and Route 606
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
with copies to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
Facsimile No.: 804-978-5320
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Thomas A. Cole
Dennis V. Osimitz
Facsimile No.: 312- 853-7036
(b) if to the Company, to:
Total Control Products, Inc.
200 N. Janice Avenue
Melrose Park, Illinois
Attention: Nicholas Gihl
Facsimile No.: 708-345-6792
-7-
<PAGE>
with a copy to:
D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
Attention: Mark Albert
Facsimile No.: 312-580-0923
13. Parties in Interest. This Agreement shall inure to the benefit
-------------------
of and be binding upon the parties named herein and their respective successors
and assigns. Nothing in this Agreement, expressed or implied, is intended to
confer upon any Person other than Parent or the Company, or their permitted
successors or assigns, any rights or remedies under or by reason of this
Agreement.
14. Entire Agreement; Amendments. This Agreement, together with the
----------------------------
Merger Agreement and the other documents referred to therein, contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.
15. Assignment. No party to this Agreement may assign any of its
----------
rights or delegate any of its obligations under this Agreement (whether by
operation of law or otherwise) without the prior written consent of the other
party hereto, except that Parent may, without a written consent, assign its
rights and delegate its obligations hereunder in whole or in part to one or more
of its direct or indirect wholly owned subsidiaries.
16. Headings. The section headings herein are for convenience only
--------
and shall not affect the construction of this Agreement.
17. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
18. Governing Law. Except to the extent that the laws of the State
-------------
of Illinois are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
19. Termination. This Agreement and the Option shall terminate upon
-----------
the earlier of (i) the Effective Time and (ii) the termination of the Merger
Agreement in accordance with its terms; provided, however, the Option shall not
-------- -------
terminate until 120 days after a termination pursuant to clause (ii) immediately
above if (A) the Merger Agreement is terminated by Parent or
-8-
<PAGE>
Sub pursuant to Section 8.1(d) thereof, (B) the Merger Agreement is terminated
by the Company pursuant to Section 8.1(e) thereof or (C) unless the Company has
terminated the Merger Agreement pursuant to Section 8.1(f) or Section 8.1(g)
thereof, prior to the termination, a Takeover Proposal (as defined in the Merger
Agreement) shall have been commenced or the Company shall have entered into an
agreement with respect to, approved or recommended or taken any action to
facilitate, a Takeover Proposal; provided, further, that this Agreement shall
-------- -------
not terminate with respect to the Repurchase Right set forth in Section 9(b)
until 90 days after the termination of the Option pursuant to the foregoing
proviso. Notwithstanding the foregoing, the provisions of Section 8 shall
survive the termination of this Agreement until such time as Parent or any of
its affiliates ceases to beneficially own at least 100,000 of the Optioned
Shares.
20. Capitalized Terms. Capitalized terms not otherwise defined in
-----------------
this Agreement shall have the meanings set forth in the Merger Agreement.
21. Severability. If any term or other provision of this Agreement
------------
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic and legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order that
the transactions contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
-9-
<PAGE>
IN WITNESS WHEREOF, Parent and the Company have caused this Agreement
to be duly executed and delivered on the day and year first above written.
GE FANUC AUTOMATION NORTH
AMERICA, INC.
By: /s/ Joseph M. Hogan
-----------------------------------
Name: Joseph M. Hogan
Title: President and CEO
TOTAL CONTROL PRODUCTS, INC.
By: /s/ Nicholas Gihl
-----------------------------------
Name: Nicholas Gihl
Title: President and CEO
-10-
<PAGE>
EXHIBIT B
---------
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of November 22,
---------
1998, among GE Fanuc Automation North America, Inc., a Delaware corporation
("Parent"), Orion Merger Corp., an Illinois corporation and a wholly owned
------
subsidiary of Parent ("Sub"), and the undersigned shareholder (the
---
"Shareholder") of Total Control Products, Inc., an Illinois corporation (the
-----------
"Company").
-------
WHEREAS, Parent, Sub and the Company, propose to enter into an
Agreement and Plan of Merger dated as of even date herewith (as the same may be
amended or supplemented, the "Merger Agreement") to provide for the making of a
----------------
cash tender offer (as such offer may be amended from time to time, the "Offer")
-----
by Sub for any and all Common Shares, no par value, of the Company (the "Common
------
Stock") at the Offer Price (as defined in the Merger Agreement) and the merger
- -----
of the Company and Sub (the "Merger");
------
WHEREAS, the Shareholder legally and/or beneficially owns that number
of shares of Common Stock appearing on the signature page hereof (such shares,
as they may be adjusted by any stock dividend, stock split, recapitalization,
combination or exchange of shares, merger, consolidation, reorganization or
other change or transaction of or by the Company (each, an "Adjustment Event")
----------------
being referred to herein as the "Subject Shares"); and
--------------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Sub have requested that the Shareholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent and Sub to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The
-------------------------------------------------
Shareholder hereby represents and warrants to Parent and Sub as follows:
(a) Authority. The Shareholder has all requisite power and authority
---------
to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Shareholder and constitutes a valid and binding obligation
of the Shareholder enforceable in accordance with its terms. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will
not, conflict with, or result in any violation of, or default (with or
without
<PAGE>
notice or lapse of time or both) under any provision of, any trust
agreement, loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise, license,
judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Shareholder or to the Shareholder's property
or assets. Except for the expiration or termination of the waiting period
under the HSR Act and informational filings with the SEC, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic, foreign or supranational, is
required by or with respect to the Shareholder in connection with the
execution and delivery of this Agreement or the consummation by the
Shareholder of the transactions contemplated hereby.
(b) The Shares. The Shareholder has good and marketable title to the
----------
Subject Shares, free and clear of any claims, liens, encumbrances and
security interests whatsoever. The Shareholder owns no shares of Common
Stock other than the Subject Shares.
2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.
------------------------------------------------
(a) Authority. Parent and Sub hereby represent and warrant to the
---------
Shareholder that each of Parent and Sub has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Parent and Sub, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action on the part of Parent and Sub. This Agreement has been duly
executed and delivered by Parent and Sub and constitutes a valid and
binding obligation of Parent and Sub enforceable in accordance with its
terms.
3. COVENANTS OF THE SHAREHOLDER. The Shareholder agrees as follows:
----------------------------
(a) At any meeting of shareholders of the Company called to vote upon
the Merger and the Merger Agreement or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval with
respect to the Merger and the Merger Agreement is sought, the Shareholder
shall vote (or cause to be voted) the Subject Shares in favor of the
Merger, the approval of the Merger Agreement and the approval of the terms
thereof and each of the other transactions contemplated by the Merger
Agreement, provided that the terms of the Merger Agreement shall not have
been amended to adversely affect the Shareholder.
(b) At any meeting of shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Shareholder's vote, consent or other approval is sought, the Shareholder
shall vote (or cause to be voted) the Subject Shares against (i) any merger
agreement or merger (other than the Merger Agreement and the
-2-
<PAGE>
Merger), consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of
or by the Company or any other Takeover Proposal or (ii) any amendment of
the Company's articles of incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement.
(c) The Shareholder agrees not to (i) sell, transfer, pledge, assign
or otherwise dispose of, or enter into any contract, option or other
arrangement (including any profit sharing arrangement) with respect to the
sale, transfer, pledge, assignment or other disposition of, the Subject
Shares to any person other than Sub or Sub's designee or (ii) enter into
any voting arrangement, whether by proxy, voting agreement or otherwise, in
connection, directly or indirectly, with any Takeover Proposal.
(d) The Shareholder shall not, nor shall the Shareholder permit any
investment banker, attorney or other adviser or representative of the
Shareholder to, (i) directly or indirectly solicit, initiate or encourage
the submission of, any Takeover Proposal or (ii) directly or indirectly
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any Takeover Proposal.
(e) So long as the Merger Agreement has not been terminated, the
Shareholder shall tender pursuant to the Offer, and not withdraw, all of
the Subject Shares.
4. FURTHER ASSURANCES. The Shareholder will, from time to time,
------------------
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents and other instruments as
Parent or Sub may reasonably request for the purpose of effectively carrying out
the transactions contemplated by this Agreement.
5. ASSIGNMENT. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to Parent or to any direct or indirect wholly owned
subsidiary of Parent. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns and, in the case of the Shareholder, the
heirs, executors and administrators of the Shareholder.
6. TERMINATION. Except as provided otherwise herein, this Agreement
-----------
shall terminate upon the earlier of (i) the Effective Time (as defined in the
Merger Agreement) and (ii) the termination of the Merger Agreement in accordance
with its terms; provided, however, that this Agreement will not terminate until
-------- -------
120 days after termination pursuant to clause (ii) immediately above if (A) the
Merger Agreement is terminated by Parent or Sub pursuant to
-3-
<PAGE>
Section 8.1(d) thereof, (B) the Merger Agreement is terminated by the Company
pursuant to Section 8.1(e) thereof or (C) unless the Company has terminated the
Merger Agreement pursuant to Section 8.1(f) or Section 8.1(g) thereof, prior to
the termination, a Takeover Proposal (as defined in the Merger Agreement) shall
have been commenced or the Company shall have entered into an agreement with
respect to, approved or recommended or taken any action to facilitate, a
Takeover Proposal.
7. GENERAL PROVISIONS.
------------------
(a) Expenses. Each party hereto shall pay its own expenses incurred
--------
in connection with this Agreement, except as specified in the Merger
Agreement.
(b) Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state thereof having jurisdiction,
this being in addition to any other remedy to which they are entitled at
law or in equity. Each party hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Northern District
of Illinois in any action, suit or proceeding arising in connection with
this Agreement, and agrees that any such action, suit or proceeding shall
be brought only in such courts (and waives any objection based on forum non
conveniens or any other objection to venue therein). Each party hereto
waives any right to a trial by jury in connection with any such action,
suit or proceeding.
(c) Notice. All notices, requests, demands and other communications
------
hereunder shall be deemed to have been duly given and made if in writing
and if served by personal delivery upon the party for whom it is intended
or if sent by telex or telecopier (and also confirmed in writing) to the
person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person:
(i) if to Parent or Sub, to:
GE Fanuc Automation North America, Inc.
Route 29 and Route 606
Charlotttesville, Virginia 22911
Attention: President and CEO
Facsimile No.: 804-978-5320
-4-
<PAGE>
for overnight courier deliveries, to:
GE Fanuc Automation North America, Inc.
Route 29 North and Route 606
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
with copies to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
Facsimile No.: 804-978-5320
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Thomas A. Cole
Dennis V. Osimitz
Facsimile No.: 312- 853-7036
(ii) if to the Shareholder, to:
with a copy to:
(d) Parties in Interest. This Agreement shall inure to the benefit
-------------------
of and be binding upon the parties named herein and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any Person other than Parent, Sub or the
Shareholder, or their permitted successors or assigns, any rights or
remedies under or by reason of this Agreement.
-5-
<PAGE>
(e) Entire Agreement; Amendments. This Agreement contains the entire
----------------------------
agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.
(f) Headings. The section headings herein are for convenience only
--------
and shall not affect the construction of this Agreement.
(g) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which, when executed, shall be deemed to be an
original and all of which together shall constitute one and the same
document.
(h) Governing Law. Except to the extent that the laws of the State of
-------------
Illinois are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(i) Capitalized Terms. Capitalized terms not otherwise defined in
-----------------
this Agreement shall have the meanings set forth in the Merger Agreement.
(j) Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are not affected in
any manner materially adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
8. NO LIMITATIONS ON ACTIONS OF THE SHAREHOLDER AS A DIRECTOR.
----------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement is intended or shall be construed to require the Shareholder to take
or in any way limit any action that the Shareholder may take to discharge the
Shareholder's fiduciary duties as a director of the Company.
-6-
<PAGE>
IN WITNESS WHEREOF, each of Parent, Sub and the Shareholder has caused
this Agreement to be signed by its officer thereunto duly authorized and the
Shareholder has signed this Agreement, all as of the date first written above.
GE FANUC AUTOMATION NORTH
AMERICA, INC.
By: /s/ Joseph M. Hogan
--------------------------
Name: Joseph M. Hogan
Title: President and CEO
ORION MERGER CORP.
By: /s/ Donald A. Ross
--------------------------
Name: Donald A. Ross
Title: Vice President
-7-
<PAGE>
SHAREHOLDER
___________________________________
Number of shares of Common Stock owned by the
Shareholder on the date hereof:
_________
-8-
<PAGE>
EXHIBIT C
---------
CONDITIONS OF THE OFFER
-----------------------
Notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered Shares after the
termination or withdrawal of the Offer), to pay for any Shares tendered pursuant
to the Offer unless (i) there shall have been validly tendered and not withdrawn
prior to the expiration of the Offer such number of Shares that would constitute
at least two-thirds of the Shares that in the aggregate are outstanding
determined on a fully diluted basis (assuming the exercise of all options to
purchase Company Common Stock, and the conversion or exchange of all securities
convertible or exchangeable into, Shares outstanding upon the expiration of the
Offer) ("Minimum Condition") and (ii) any waiting period under the HSR Act
-----------------
applicable to the purchase of Shares pursuant to the Offer shall have expired or
been terminated, and any other applicable filing or approval requirement of any
nation or region applicable to the purchase of Shares pursuant to the Offer
shall have been satisfied, prior to the expiration date of the Offer (the "HSR
---
Condition"). Furthermore, notwithstanding any other term of the Offer or this
- ---------
Agreement, Sub shall not be required to accept for payment or, subject as
aforesaid, to pay for any Shares not theretofore accepted for payment or paid
for, and may terminate the Offer if, at any time on or after the date of this
Agreement and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exists (other than as a result of any
action or inaction of Parent or any of its subsidiaries that constitutes a
breach of this Agreement):
(a) there shall be threatened or pending by any Governmental Entity
any suit, action or proceeding (i) challenging the acquisition by Parent or
Sub of any Shares under the Offer, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger or the performance of any
of the other transactions contemplated by this Agreement or the Shareholder
Agreements (including the voting provisions thereunder), or seeking to
obtain from the Company, Parent or Sub any damages that would have a
Material Adverse Effect on the Company, (ii) seeking to prohibit or
materially limit the ownership or operation by the Company, Parent or any
of their respective subsidiaries of a material portion of the business or
assets of the Company and its subsidiaries, taken as a whole, or Parent and
its subsidiaries, taken as a whole, or to compel the Company or Parent to
dispose of or hold separate any material portion of the business or assets
of the Company and its subsidiaries, taken as a whole, or Parent and its
subsidiaries, taken as a whole, as a result of the Offer or any of the
other transactions contemplated by this Agreement or the Shareholder
Agreements, (iii) seeking to impose material limitations on the ability of
Parent or Sub to acquire or hold, or exercise full rights of ownership of,
any Shares to be accepted for payment pursuant to the Offer, including the
right to vote such Shares on all matters properly presented to the
shareholders of the Company, (iv) seeking to prohibit Parent or any of its
subsidiaries from effectively controlling in any material respect any
material portion of the business or operations of the Company or its
subsidiaries or (v) which otherwise is reasonably likely to have a Material
Adverse Effect on the Company; or there shall be pending by any other
person any suit, action or proceeding which is reasonably likely to have a
Material Adverse Effect on the Company.
<PAGE>
(b) there shall be enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger by any Governmental Entity any
statute, rule, regulation, judgment, order or injunction, other than the
application to the Offer or the Merger of applicable waiting periods under
the HSR Act, that is reasonably likely to result, directly or indirectly,
in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above;
(c) there shall have occurred any Material Adverse Change with
respect to the Company;
(d) (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent or
Sub its approval or recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any Takeover Proposal or (ii) the
Board of Directors of the Company or any committee thereof shall have
resolved to take any of the foregoing actions;
(e) any of the representations and warranties of the Company set
forth in this Agreement (other than Sections 4.2, 4.3, 4.18 and 4.19) shall
not be true and correct, in each case at the date of this Agreement and at
the scheduled or extended expiration of the Offer, except where the failure
of such representations, individually or in the aggregate, to be so true
and correct would not have a Material Adverse Effect on the Company, and
any of the representations and warranties of the Company set forth in
Sections 4.2, 4.3, 4.18 and 4.19 shall not be true and correct in any
material respect in each case at the date of this Agreement and at the
scheduled or extended expiration of the Offer;
(f) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or covenant of the Company to be performed or complied
with by it under this Agreement;
(g) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on a
national securities exchange in the United States (excluding any
coordinated trading halt triggered solely as a result of a specified
decrease in a market index), (ii) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States or
(iii) any limitation (whether or not mandatory) by any Governmental Entity
on the extension of credit by banks or other lending institutions which, in
the reasonable judgment of Parent, makes it inadvisable to proceed with the
Offer or the Merger;
(h) the Shareholder Agreements shall not be in full force and effect
or any Shareholder (as defined therein) that is a party thereto shall be in
material breach thereof or have indicated such Shareholder's intention not
to perform such Shareholder's obligations thereunder; or
(i) this Agreement shall have been terminated in accordance with its
terms.
-2-
<PAGE>
The foregoing conditions are for the sole benefit of Parent and Sub
and may, subject to the terms of this Agreement, be waived by Parent and Sub in
whole or in part at any time and from time to time in their sole discretion.
The failure by Parent or Sub at any time to exercise any of the foregoing rights
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 that may be asserted at any time and from time to time.
Terms used but not defined herein shall have the meanings assigned to such terms
in the Agreement to which this Exhibit C is a part.
---------
-3-
<PAGE>
EXHIBIT (C)(2)
--------------
STOCK OPTION AGREEMENT
----------------------
STOCK OPTION AGREEMENT, dated as of November 22, 1998 (the "Agreement"),
---------
between GE Fanuc Automation North America, Inc., a Delaware corporation
("Parent"), and Total Control Products, Inc., an Illinois corporation (the
------
"Company").
-------
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of this Agreement,
Parent, Orion Merger Corp., a newly formed Illinois corporation and a wholly
owned subsidiary of Parent ("Sub"), and the Company are entering into an
---
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
------
Agreement"), which provides for the merger of Sub with and into the Company;
- ---------
WHEREAS, as a condition to Parent's willingness to enter into the Merger
Agreement, Parent has requested that the Company grant to Parent an option to
purchase up to 1,598,530 authorized and unissued shares of Company Common Stock,
upon the terms and subject to the conditions hereof; and
WHEREAS, in order to induce Parent to enter into the Merger Agreement, the
Company has agreed to grant Parent the requested option.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. The Option; Exercise; Adjustments. The Company hereby grants to Parent
---------------------------------
an irrevocable option (the "Option") to purchase from time to time up to
------
1,598,530 authorized and unissued Common Shares, no par value, of the Company
(the "Company Common Stock"), upon the terms and subject to the conditions set
--------------------
forth herein (the "Optioned Shares"). Subject to the conditions set forth in
---------------
Section 2, the Option may be exercised by Parent in whole or from time to time
in part, at any time after the date hereof and prior to the termination of the
Option in accordance with Section 19. In the event Parent wishes to exercise
the Option, after the satisfaction of the conditions set forth in Section 2
Parent shall send a written notice to the Company (the "Stock Exercise Notice")
---------------------
specifying the total number of Optioned Shares it wishes to purchase and a date
(not later than 10 business days and not earlier than two business days from the
date such notice is given) for the closing of such purchase (the "Closing
-------
Date"). Parent may revoke an exercise of the Option at any time prior to the
Closing Date by written notice to the Company. In the event of any change in
the number of issued and outstanding shares of Company Common Stock by reason of
any stock dividend, stock split, split-up, recapitalization, merger or other
change in the corporate or capital structure of the Company, the number of
Optioned Shares subject to the Option and the Exercise Price (as hereinafter
defined) per Optioned Share shall be appropriately adjusted. In the event that
any additional shares of Company Common Stock are issued after the date of this
Agreement (other than pursuant to an
<PAGE>
event described in the preceding sentence or pursuant to this Agreement), the
number of Optioned Shares subject to the Option shall be adjusted so that, after
such issuance, it equals (but does not exceed) 19.9% of the number of shares of
Company Common Stock then issued and outstanding and 19.9% of the voting power
of shares of capital stock of the Company then issued and outstanding, after
reduction, to the extent necessary to comply with the exception to the
shareholder approval requirements of the Nasdaq National Market ("NASDAQ"), for
------
any shares issued pursuant to the Option.
2. Conditions to Exercise of Option and Delivery of Optioned Shares.
----------------------------------------------------------------
(a) Parent's right to exercise the Option is subject to the following
conditions:
(i) Neither Parent nor Sub shall have breached any of its material
obligations under the Merger Agreement;
(ii) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States
invalidating the grant or prohibiting the exercise of the Option shall be
in effect; and
(iii) One or more of the following events shall have occurred on or
after the date hereof: (A) any person, corporation, partnership, limited
liability company or other entity or group (such person, corporation,
partnership, limited liability company or other entity or group being
referred to hereinafter, singularly or collectively, as a "Person"),
------
acquires or becomes the beneficial owner of 20% or more of the outstanding
shares of Company Common Stock (other than a person who, as of the date
hereof, is the beneficial owner of 20% or more of the outstanding shares of
Company Common Stock (a "20% Holder")); (B) any 20% Holder increases his
----------
beneficial ownership of Company Common Stock by more than 1%; (C) any
group (other than a group which includes or may reasonably be deemed to
include Parent or any of its affiliates) is formed which beneficially owns
20% or more of the outstanding shares of Company Common Stock; (D) any
Person (other than Parent or its affiliates) shall have commenced a tender
or exchange offer for 20% or more of the then outstanding shares of Company
Common Stock or publicly proposed any bona fide merger, consolidation or
acquisition of all or substantially all the assets of the Company, or other
similar business combination involving the Company; (E) the Company enters
into, or announces that it proposes to enter into, an agreement, including,
without limitation, an agreement in principle, providing for a merger or
other business combination involving the Company or a "significant
subsidiary" (as defined in Rule 1.02(v) of Regulation S-X as promulgated by
the Securities and Exchange Commission (the "SEC")) of the Company or the
---
acquisition of a substantial interest in, or a substantial portion of the
assets, business or operations of, the Company or a significant subsidiary
(other than the transactions contemplated by the Merger Agreement); (F) any
Person (other than Parent or its affiliates) is granted any option or
right, conditional or otherwise, to acquire or otherwise become the
beneficial owner of shares of Company Common Stock which, together with all
shares of Company Common Stock beneficially owned by such Person, results
or would result in such Person being the beneficial owner of 20% or more of
the outstanding shares of Company Common Stock; or (G) there is a public
announcement
-2-
<PAGE>
with respect to a plan or intention by the Company, other than Parent or
its affiliates, to effect any of the foregoing transactions. For purposes
of this subparagraph (iii), the terms "group" and "beneficial owner" shall
be defined by reference to Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations
------------
promulgated thereunder.
(b) Parent's obligation to purchase the Optioned Shares following the
exercise of the Option, and the Company's obligation to deliver the Optioned
Shares, are subject to the conditions that:
(i) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States
prohibiting the delivery of the Optioned Shares shall be in effect;
(ii) The purchase of the Optioned Shares will not violate Rule 10b-
13 promulgated under the Exchange Act; and
(iii) All applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), shall have
-------
expired or been terminated.
3. Exercise Price for Optioned Shares. At any Closing Date, the
----------------------------------
Company will deliver to Parent a certificate or certificates representing the
Optioned Shares in the denominations designated by Parent in its Stock Exercise
Notice and Parent will purchase the Optioned Shares from the Company at a price
per Optioned Share equal to $11.00 (the "Exercise Price"), payable in cash.
--------------
Payment made by Parent to the Company pursuant to this Agreement shall be made
by wire transfer of federal funds to a bank designated by the Company or a check
payable in immediately available funds. After payment of the Exercise Price for
the Optioned Shares covered by the Stock Exercise Notice, the Option shall be
deemed exercised to the extent of the Optioned Shares specified in the Stock
Exercise Notice as of the date such Stock Exercise Notice is given to the
Company.
4. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to Parent that (a) the execution and delivery of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company and this Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms; (b) the
Company has taken all necessary corporate action to authorize and reserve the
Optioned Shares for issuance upon exercise of the Option, and the Optioned
Shares, when issued and delivered by the Company to Parent upon exercise of the
Option, will be duly authorized, validly issued, fully paid and nonassessable
and free of preemptive rights; (c) except as otherwise required by the HSR Act,
except for routine filings and subject to Section 7, the execution and delivery
of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby do not require the consent, approval or authorization of, or
filing with, any person or public authority
-3-
<PAGE>
and will not violate or conflict with the Company's Amended and Restated
Articles of Incorporation, as amended, or Amended and Restated Bylaws, or result
in the acceleration or termination of, or constitute a default under, any
indenture, license, approval, agreement, understanding or other instrument, or
any statute, rule, regulation, judgment, order or other restriction binding upon
or applicable to the Company or any of its subsidiaries or any of their
respective properties or assets; (d) the Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois and has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby;
and (e) the Board of Directors of the Company has, to the extent such statutes
are applicable, taken all action so that prior to the execution hereof, the
Board of Directors has approved the Merger and the execution of this Agreement
and the consummation of the transaction contemplated hereby so that the higher
vote requirement for certain business combinations set forth in Section 7.85 of
the Business Corporation Law of the State of Illinois, as amended (the "IBCA"),
----
and the restrictions on certain business combinations set forth in Section 11.75
of the IBCA will not apply with respect thereto or as a result thereof.
5. Representations and Warranties of Parent. Parent represents and
----------------------------------------
warrants to the Company that (a) the execution and delivery of this Agreement by
Parent and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Parent and
this Agreement has been duly executed and delivered by Parent and constitutes a
valid and binding agreement of Parent; and (b) Parent is acquiring the Option
and, if and when it exercises the Option, will be acquiring the Optioned Shares
issuable upon the exercise thereof, for its own account and not with a view to
distribution or resale in any manner which would be in violation of the
Securities Act of 1933, as amended (the "Securities Act"), and will not sell or
--------------
otherwise dispose of the Optioned Shares except pursuant to an effective
registration statement under the Securities Act or a valid exemption from
registration under the Securities Act.
6. The Closing. Any closing hereunder shall take place on the Closing
-----------
Date specified by Parent in its Stock Exercise Notice pursuant to Section 1 at
10:00 A.M., local time, or the first business day thereafter on which all of the
conditions in Section 2 are met, at the principal executive office of the
Company, or at such other time and place as the parties hereto may agree.
7. Filings Related to Optioned Shares. The Company will make such
----------------------------------
filings with the SEC as are required by the Exchange Act, and will use its best
efforts to effect all necessary filings by the Company under the HSR Act and to
have the Optioned Shares approved for quotation on NASDAQ.
8. Registration Rights. (a) If the Company effects any
-------------------
registration or registrations of shares of Company Common Stock under the
Securities Act for its own account or for any other stockholder of the Company
at any time after the exercise of the Option (other than a registration on Form
S-4, Form S-8 or any successor forms), it will allow Parent to participate in
such registration or registrations with respect to any or all of the Optioned
Shares acquired upon the exercise of the Option; provided, however, that any
-------- -------
request of Parent pursuant
-4-
<PAGE>
to this Section 8(a) shall be with respect to at least 100,000 Optioned Shares
and provided, further, that if the managing underwriters in such offering advise
-------- -------
the Company that, in their written opinion, the number of Optioned Shares
requested by Parent to be included in such registration exceeds the number of
shares of Company Common Stock which can be sold in such offering, the Company
may exclude from such registration all or a portion, as may be appropriate, of
the Optioned Shares requested for inclusion by Parent.
(b) At any time after the exercise of the Option, upon the request of
Parent, the Company will as promptly as practicable file and use its best
efforts to cause to be declared effective a registration statement under the
Securities Act (and applicable Blue Sky statutes) with respect to any or all of
the Optioned Shares acquired upon the exercise of the Option; provided, however,
-------- -------
that any request of Parent pursuant to this Section 8(b) shall be with respect
to at least 100,000 Optioned Shares and provided, further, that the Company
-------- -------
shall not be required to have declared effective more than two registration
statements hereunder and shall be entitled to delay the effectiveness of each
such registration statement, for a period not to exceed 90 days in the
aggregate, if the commencement of such offering would, in the reasonable good
faith judgment of the Board of Directors of the Company, require premature
disclosure of any material corporate development or otherwise materially
interfere with or materially adversely affect any pending or proposed offering
of securities of the Company. In connection with any such registration
requested by Parent, the costs of such registration shall be borne by the
Company, and the Company and Parent each shall provide the other and any
underwriters with customary indemnification and contribution agreements.
9. Optional Put; Optional Repurchase. (a) Prior to the termination
---------------------------------
of the Option in accordance with Section 19, if a Put Event has occurred, Parent
shall have the right, upon three business days' prior written notice to the
Company, to require the Company to purchase the Option from Parent (the "Put
---
Right") at a cash purchase price (the "Put Price") equal to the product
- ----- ---------
determined by multiplying (A) the number of Optioned Shares as to which the
Option has not yet been exercised by (B) the Spread (as defined below). As used
herein, "Put Event" means the occurrence on or after the date hereof of any of
---------
the following: (i) any Person (other than Parent or its affiliates) acquires or
becomes the beneficial owner of 50% or more of the outstanding shares of Company
Common Stock or (ii) the Company consummates a merger or other business
combination involving the Company or a "significant subsidiary" (as defined in
Rule 1.02(v) of Regulation S-X as promulgated by the SEC) of the Company or the
acquisition of a substantial interest in, or a substantial portion of the
assets, business or operations of, the Company or a significant subsidiary
(other than the transactions contemplated by the Merger Agreement). As used
herein, the term "Spread" shall mean the excess, if any, of (i) the greater of
------
(x) the highest price (in cash or fair market value of securities or other
property) per share of Company Common Stock paid or to be paid within 12 months
preceding the date of exercise of the Put Right for any shares of Company Common
Stock beneficially owned by any Person who shall have acquired or become the
beneficial owner of 20% or more of the outstanding shares of Company Common
Stock after the date hereof or (y) the average of the last reported sales prices
quoted on NASDAQ of the Company Common Stock during the five trading days
immediately preceding the written notice of exercise of the Put Right over (ii)
the Exercise Price.
-5-
<PAGE>
(b) At any time after the termination of the Option granted hereunder
pursuant to Section 19 and for a period of 90 days thereafter, the Company shall
have the right, upon three business days' prior written notice, to repurchase
from Parent (the "Repurchase Right"), all (but not less than all) of the
----------------
Optioned Shares acquired by the Company hereby and with respect to which the
Company then has beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) at a price per share equal to the greater of (i) the average of
the last reported sales price quoted on NASDAQ of the Company Common Stock
during the five trading days immediately preceding the written notice of
exercise of the Repurchase Right and (ii) the Exercise Price, plus interest at a
rate per annum equal to the costs of funds to Parent at the time of exercise of
the Repurchase Right.
10. Expenses. Each party hereto shall pay its own expenses incurred
--------
in connection with this Agreement, except as otherwise provided in Section 8 or
as specified in the Merger Agreement.
11. Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state thereof having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity. Each party hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the Northern District of Illinois in any action, suit or proceeding
arising in connection with this Agreement, and agrees that any such action, suit
or proceeding shall be brought only in such courts (and waives any objection
based on forum non conveniens or any other objection to venue therein). Each
party hereto waives any right to a trial by jury in connection with any such
action, suit or proceeding.
12. Notice. All notices, requests, demands and other communications
------
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended or if sent by
telex or telecopier (and also confirmed in writing) to the person at the address
set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:
-6-
<PAGE>
(a) if to Parent, to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: President and CEO
Facsimile No.: 804-978-5320
for overnight courier deliveries, to:
GE Fanuc Automation North America, Inc.
Route 29 North and Route 606
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
with copies to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
Facsimile No.: 804-978-5320
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Thomas A. Cole
Dennis V. Osimitz
Facsimile No.: 312- 853-7036
(b) if to the Company, to:
Total Control Products, Inc.
200 N. Janice Avenue
Melrose Park, Illinois
Attention: Nicholas Gihl
Facsimile No.: 708-345-6792
-7-
<PAGE>
with a copy to:
D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
Attention: Mark Albert
Facsimile No.: 312-580-0923
13. Parties in Interest. This Agreement shall inure to the benefit
-------------------
of and be binding upon the parties named herein and their respective successors
and assigns. Nothing in this Agreement, expressed or implied, is intended to
confer upon any Person other than Parent or the Company, or their permitted
successors or assigns, any rights or remedies under or by reason of this
Agreement.
14. Entire Agreement; Amendments. This Agreement, together with the
----------------------------
Merger Agreement and the other documents referred to therein, contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.
15. Assignment. No party to this Agreement may assign any of its
----------
rights or delegate any of its obligations under this Agreement (whether by
operation of law or otherwise) without the prior written consent of the other
party hereto, except that Parent may, without a written consent, assign its
rights and delegate its obligations hereunder in whole or in part to one or more
of its direct or indirect wholly owned subsidiaries.
16. Headings. The section headings herein are for convenience only
--------
and shall not affect the construction of this Agreement.
17. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
18. Governing Law. Except to the extent that the laws of the State
-------------
of Illinois are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
19. Termination. This Agreement and the Option shall terminate upon
-----------
the earlier of (i) the Effective Time and (ii) the termination of the Merger
Agreement in accordance with its terms; provided, however, the Option shall not
-------- -------
terminate until 120 days after a termination pursuant to clause (ii) immediately
above if (A) the Merger Agreement is terminated by Parent or
-8-
<PAGE>
Sub pursuant to Section 8.1(d) thereof, (B) the Merger Agreement is terminated
by the Company pursuant to Section 8.1(e) thereof or (C) unless the Company has
terminated the Merger Agreement pursuant to Section 8.1(f) or Section 8.1(g)
thereof, prior to the termination, a Takeover Proposal (as defined in the Merger
Agreement) shall have been commenced or the Company shall have entered into an
agreement with respect to, approved or recommended or taken any action to
facilitate, a Takeover Proposal; provided, further, that this Agreement shall
-------- -------
not terminate with respect to the Repurchase Right set forth in Section 9(b)
until 90 days after the termination of the Option pursuant to the foregoing
proviso. Notwithstanding the foregoing, the provisions of Section 8 shall
survive the termination of this Agreement until such time as Parent or any of
its affiliates ceases to beneficially own at least 100,000 of the Optioned
Shares.
20. Capitalized Terms. Capitalized terms not otherwise defined in
-----------------
this Agreement shall have the meanings set forth in the Merger Agreement.
21. Severability. If any term or other provision of this Agreement
------------
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic and legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order that
the transactions contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
-9-
<PAGE>
IN WITNESS WHEREOF, Parent and the Company have caused this Agreement
to be duly executed and delivered on the day and year first above written.
GE FANUC AUTOMATION NORTH
AMERICA, INC.
By: /s/ Joseph M. Hogan
----------------------------
Name: Joseph M. Hogan
Title: President and CEO
TOTAL CONTROL PRODUCTS, INC.
By: /s/ Nicholas Gihl
----------------------------
Name: Nicholas Gihl
Title: President and CEO
-10-
<PAGE>
EXHIBIT (C)(3)
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of November 22,
---------
1998, among GE Fanuc Automation North America, Inc., a Delaware corporation
("Parent"), Orion Merger Corp., an Illinois corporation and a wholly owned
------
subsidiary of Parent ("Sub"), and the undersigned shareholder (the
---
"Shareholder") of Total Control Products, Inc., an Illinois corporation (the
-----------
"Company").
-------
WHEREAS, Parent, Sub and the Company, propose to enter into an
Agreement and Plan of Merger dated as of even date herewith (as the same may be
amended or supplemented, the "Merger Agreement") to provide for the making of a
----------------
cash tender offer (as such offer may be amended from time to time, the "Offer")
-----
by Sub for any and all Common Shares, no par value, of the Company (the "Common
------
Stock") at the Offer Price (as defined in the Merger Agreement) and the merger
- -----
of the Company and Sub (the "Merger");
------
WHEREAS, the Shareholder legally and/or beneficially owns that number
of shares of Common Stock appearing on the signature page hereof (such shares,
as they may be adjusted by any stock dividend, stock split, recapitalization,
combination or exchange of shares, merger, consolidation, reorganization or
other change or transaction of or by the Company (each, an "Adjustment Event")
----------------
being referred to herein as the "Subject Shares"); and
--------------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Sub have requested that the Shareholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent and Sub to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The
-------------------------------------------------
Shareholder hereby represents and warrants to Parent and Sub as follows:
(a) Authority. The Shareholder has all requisite power and authority
---------
to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Shareholder and constitutes a valid and binding obligation
of the Shareholder enforceable in accordance with its terms. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will
not, conflict with, or result in any violation of, or default (with or
without
<PAGE>
notice or lapse of time or both) under any provision of, any trust
agreement, loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise, license,
judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Shareholder or to the Shareholder's property
or assets. Except for the expiration or termination of the waiting period
under the HSR Act and informational filings with the SEC, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic, foreign or supranational, is
required by or with respect to the Shareholder in connection with the
execution and delivery of this Agreement or the consummation by the
Shareholder of the transactions contemplated hereby.
(b) The Shares. The Shareholder has good and marketable title to the
----------
Subject Shares, free and clear of any claims, liens, encumbrances and
security interests whatsoever. The Shareholder owns no shares of Common
Stock other than the Subject Shares.
2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.
------------------------------------------------
(a) Authority. Parent and Sub hereby represent and warrant to the
---------
Shareholder that each of Parent and Sub has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Parent and Sub, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action on the part of Parent and Sub. This Agreement has been duly
executed and delivered by Parent and Sub and constitutes a valid and
binding obligation of Parent and Sub enforceable in accordance with its
terms.
3. COVENANTS OF THE SHAREHOLDER. The Shareholder agrees as follows:
----------------------------
(a) At any meeting of shareholders of the Company called to vote upon
the Merger and the Merger Agreement or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval with
respect to the Merger and the Merger Agreement is sought, the Shareholder
shall vote (or cause to be voted) the Subject Shares in favor of the
Merger, the approval of the Merger Agreement and the approval of the terms
thereof and each of the other transactions contemplated by the Merger
Agreement, provided that the terms of the Merger Agreement shall not have
been amended to adversely affect the Shareholder.
(b) At any meeting of shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Shareholder's vote, consent or other approval is sought, the Shareholder
shall vote (or cause to be voted) the Subject Shares against (i) any merger
agreement or merger (other than the Merger Agreement and the
-2-
<PAGE>
Merger), consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of
or by the Company or any other Takeover Proposal or (ii) any amendment of
the Company's articles of incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement.
(c) The Shareholder agrees not to (i) sell, transfer, pledge, assign
or otherwise dispose of, or enter into any contract, option or other
arrangement (including any profit sharing arrangement) with respect to the
sale, transfer, pledge, assignment or other disposition of, the Subject
Shares to any person other than Sub or Sub's designee or (ii) enter into
any voting arrangement, whether by proxy, voting agreement or otherwise, in
connection, directly or indirectly, with any Takeover Proposal.
(d) The Shareholder shall not, nor shall the Shareholder permit any
investment banker, attorney or other adviser or representative of the
Shareholder to, (i) directly or indirectly solicit, initiate or encourage
the submission of, any Takeover Proposal or (ii) directly or indirectly
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any Takeover Proposal.
(e) So long as the Merger Agreement has not been terminated, the
Shareholder shall tender pursuant to the Offer, and not withdraw, all of
the Subject Shares.
4. FURTHER ASSURANCES. The Shareholder will, from time to time,
------------------
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents and other instruments as
Parent or Sub may reasonably request for the purpose of effectively carrying out
the transactions contemplated by this Agreement.
5. ASSIGNMENT. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to Parent or to any direct or indirect wholly owned
subsidiary of Parent. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns and, in the case of the Shareholder, the
heirs, executors and administrators of the Shareholder.
6. TERMINATION. Except as provided otherwise herein, this Agreement
-----------
shall terminate upon the earlier of (i) the Effective Time (as defined in the
Merger Agreement) and (ii) the termination of the Merger Agreement in accordance
with its terms; provided, however, that this Agreement will not terminate until
-------- -------
120 days after termination pursuant to clause (ii) immediately above if (A) the
Merger Agreement is terminated by Parent or Sub pursuant to
-3-
<PAGE>
Section 8.1(d) thereof, (B) the Merger Agreement is terminated by the Company
pursuant to Section 8.1(e) thereof or (C) unless the Company has terminated the
Merger Agreement pursuant to Section 8.1(f) or Section 8.1(g) thereof, prior to
the termination, a Takeover Proposal (as defined in the Merger Agreement) shall
have been commenced or the Company shall have entered into an agreement with
respect to, approved or recommended or taken any action to facilitate, a
Takeover Proposal.
7. GENERAL PROVISIONS.
------------------
(a) Expenses. Each party hereto shall pay its own expenses incurred
--------
in connection with this Agreement, except as specified in the Merger
Agreement.
(b) Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state thereof having jurisdiction,
this being in addition to any other remedy to which they are entitled at
law or in equity. Each party hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Northern District
of Illinois in any action, suit or proceeding arising in connection with
this Agreement, and agrees that any such action, suit or proceeding shall
be brought only in such courts (and waives any objection based on forum non
conveniens or any other objection to venue therein). Each party hereto
waives any right to a trial by jury in connection with any such action,
suit or proceeding.
(c) Notice. All notices, requests, demands and other communications
------
hereunder shall be deemed to have been duly given and made if in writing
and if served by personal delivery upon the party for whom it is intended
or if sent by telex or telecopier (and also confirmed in writing) to the
person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person:
(i) if to Parent or Sub, to:
GE Fanuc Automation North America, Inc.
Route 29 and Route 606
Charlotttesville, Virginia 22911
Attention: President and CEO
Facsimile No.: 804-978-5320
-4-
<PAGE>
for overnight courier deliveries, to:
GE Fanuc Automation North America, Inc.
Route 29 North and Route 606
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
with copies to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
Facsimile No.: 804-978-5320
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Thomas A. Cole
Dennis V. Osimitz
Facsimile No.: 312- 853-7036
(ii) if to the Shareholder, to:
Nicholas Gihl
433 Hillside
Elmhurst, Illinois 60126
Facsimile No.: 630-617-5327
with a copy to:
D'Ancona & Pflaum
30 North LaSalle - Suite 2900
Chicago, Illinois
Attention: Mark Albert
Facsimile No.: 312-580-0923
(d) Parties in Interest. This Agreement shall inure to the benefit
-------------------
of and be binding upon the parties named herein and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any Person
-5-
<PAGE>
other than Parent, Sub or the Shareholder, or their permitted successors or
assigns, any rights or remedies under or by reason of this Agreement.
(e) Entire Agreement; Amendments. This Agreement contains the entire
----------------------------
agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.
(f) Headings. The section headings herein are for convenience only
--------
and shall not affect the construction of this Agreement.
(g) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which, when executed, shall be deemed to be an
original and all of which together shall constitute one and the same
document.
(h) Governing Law. Except to the extent that the laws of the State of
-------------
Illinois are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(i) Capitalized Terms. Capitalized terms not otherwise defined in
-----------------
this Agreement shall have the meanings set forth in the Merger Agreement.
(j) Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are not affected in
any manner materially adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
8. NO LIMITATIONS ON ACTIONS OF THE SHAREHOLDER AS A DIRECTOR.
----------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement is intended or shall be construed to require the Shareholder to take
or in any way limit any action that the Shareholder may take to discharge the
Shareholder's fiduciary duties as a director of the Company.
-6-
<PAGE>
IN WITNESS WHEREOF, each of Parent, Sub and the Shareholder has caused
this Agreement to be signed by its officer thereunto duly authorized and the
Shareholder has signed this Agreement, all as of the date first written above.
GE FANUC AUTOMATION NORTH
AMERICA, INC.
By: /s/ Joseph M. Hogan
--------------------------
Name: Joseph M. Hogan
Title: President and CEO
ORION MERGER CORP.
By: /s/ Donald A. Ross
--------------------------
Name: Donald A. Ross
Title: Vice President
-7-
<PAGE>
SHAREHOLDER
/s/ Nicholas Gihl
----------------------------
Nicholas Gihl
Number of shares of Common Stock owned by the
Shareholder on the date hereof:
675,000
-8-
<PAGE>
EXHIBIT (C)(4)
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of November 22, 1998,
---------
among GE Fanuc Automation North America, Inc., a Delaware corporation
("Parent"), Orion Merger Corp., an Illinois corporation and a wholly owned
------
subsidiary of Parent ("Sub"), and the undersigned shareholder (the
---
"Shareholder") of Total Control Products, Inc., an Illinois corporation (the
-----------
"Company").
- --------
WHEREAS, Parent, Sub and the Company, propose to enter into an Agreement
and Plan of Merger dated as of even date herewith (as the same may be amended or
supplemented, the "Merger Agreement") to provide for the making of a cash tender
----------------
offer (as such offer may be amended from time to time, the "Offer") by Sub for
-----
any and all Common Shares, no par value, of the Company (the "Common Stock") at
------------
the Offer Price (as defined in the Merger Agreement) and the merger of the
Company and Sub (the "Merger");
------
WHEREAS, the Shareholder legally and/or beneficially owns that number of
shares of Common Stock appearing on the signature page hereof (such shares, as
they may be adjusted by any stock dividend, stock split, recapitalization,
combination or exchange of shares, merger, consolidation, reorganization or
other change or transaction of or by the Company (each, an "Adjustment Event")
----------------
being referred to herein as the "Subject Shares"); and
--------------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Sub have requested that the Shareholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent and Sub to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The
-------------------------------------------------
Shareholder hereby represents and warrants to Parent and Sub as follows:
(a) Authority. The Shareholder has all requisite power and authority
---------
to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Shareholder and constitutes a valid and binding obligation
of the Shareholder enforceable in accordance with its terms. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will
not, conflict with, or result in any violation of, or default (with or
without
<PAGE>
notice or lapse of time or both) under any provision of, any trust
agreement, loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise, license,
judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Shareholder or to the Shareholder's property
or assets. Except for the expiration or termination of the waiting period
under the HSR Act and informational filings with the SEC, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic, foreign or supranational, is
required by or with respect to the Shareholder in connection with the
execution and delivery of this Agreement or the consummation by the
Shareholder of the transactions contemplated hereby.
(b) The Shares. The Shareholder has good and marketable title to the
----------
Subject Shares, free and clear of any claims, liens, encumbrances and
security interests whatsoever. The Shareholder owns no shares of Common
Stock other than the Subject Shares.
2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.
------------------------------------------------
(a) Authority. Parent and Sub hereby represent and warrant to the
---------
Shareholder that each of Parent and Sub has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Parent and Sub, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action on the part of Parent and Sub. This Agreement has been duly
executed and delivered by Parent and Sub and constitutes a valid and
binding obligation of Parent and Sub enforceable in accordance with its
terms.
3. COVENANTS OF THE SHAREHOLDER. The Shareholder agrees as follows:
----------------------------
(a) At any meeting of shareholders of the Company called to vote upon
the Merger and the Merger Agreement or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval with
respect to the Merger and the Merger Agreement is sought, the Shareholder
shall vote (or cause to be voted) the Subject Shares in favor of the
Merger, the approval of the Merger Agreement and the approval of the terms
thereof and each of the other transactions contemplated by the Merger
Agreement, provided that the terms of the Merger Agreement shall not have
been amended to adversely affect the Shareholder.
(b) At any meeting of shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Shareholder's vote, consent or other approval is sought, the Shareholder
shall vote (or cause to be voted) the Subject Shares against (i) any merger
agreement or merger (other than the Merger Agreement and the
-2-
<PAGE>
Merger), consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of
or by the Company or any other Takeover Proposal or (ii) any amendment of
the Company's articles of incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement.
(c) The Shareholder agrees not to (i) sell, transfer, pledge, assign
or otherwise dispose of, or enter into any contract, option or other
arrangement (including any profit sharing arrangement) with respect to the
sale, transfer, pledge, assignment or other disposition of, the Subject
Shares to any person other than Sub or Sub's designee or (ii) enter into
any voting arrangement, whether by proxy, voting agreement or otherwise, in
connection, directly or indirectly, with any Takeover Proposal.
(d) The Shareholder shall not, nor shall the Shareholder permit any
investment banker, attorney or other adviser or representative of the
Shareholder to, (i) directly or indirectly solicit, initiate or encourage
the submission of, any Takeover Proposal or (ii) directly or indirectly
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any Takeover Proposal.
(e) So long as the Merger Agreement has not been terminated, the
Shareholder shall tender pursuant to the Offer, and not withdraw, all of
the Subject Shares.
4. FURTHER ASSURANCES. The Shareholder will, from time to time,
------------------
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents and other instruments as
Parent or Sub may reasonably request for the purpose of effectively carrying out
the transactions contemplated by this Agreement.
5. ASSIGNMENT. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to Parent or to any direct or indirect wholly owned
subsidiary of Parent. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns and, in the case of the Shareholder, the
heirs, executors and administrators of the Shareholder.
6. TERMINATION. Except as provided otherwise herein, this Agreement
-----------
shall terminate upon the earlier of (i) the Effective Time (as defined in the
Merger Agreement) and (ii) the termination of the Merger Agreement in accordance
with its terms; provided, however, that this Agreement will not terminate until
-------- -------
120 days after termination pursuant to clause (ii) immediately above if (A) the
Merger Agreement is terminated by Parent or Sub pursuant to
-3-
<PAGE>
Section 8.1(d) thereof, (B) the Merger Agreement is terminated by the Company
pursuant to Section 8.1(e) thereof or (C) unless the Company has terminated the
Merger Agreement pursuant to Section 8.1(f) or Section 8.1(g) thereof, prior to
the termination, a Takeover Proposal (as defined in the Merger Agreement) shall
have been commenced or the Company shall have entered into an agreement with
respect to, approved or recommended or taken any action to facilitate, a
Takeover Proposal.
7. GENERAL PROVISIONS.
------------------
(a) Expenses. Each party hereto shall pay its own expenses incurred
--------
in connection with this Agreement, except as specified in the Merger
Agreement.
(b) Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state thereof having jurisdiction,
this being in addition to any other remedy to which they are entitled at
law or in equity. Each party hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Northern District
of Illinois in any action, suit or proceeding arising in connection with
this Agreement, and agrees that any such action, suit or proceeding shall
be brought only in such courts (and waives any objection based on forum non
conveniens or any other objection to venue therein). Each party hereto
waives any right to a trial by jury in connection with any such action,
suit or proceeding.
(c) Notice. All notices, requests, demands and other communications
------
hereunder shall be deemed to have been duly given and made if in writing
and if served by personal delivery upon the party for whom it is intended
or if sent by telex or telecopier (and also confirmed in writing) to the
person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person:
(i) if to Parent or Sub, to:
GE Fanuc Automation North America, Inc.
Route 29 and Route 606
Charlotttesville, Virginia 22911
Attention: President and CEO
Facsimile No.: 804-978-5320
-4-
<PAGE>
for overnight courier deliveries, to:
GE Fanuc Automation North America, Inc.
Route 29 North and Route 606
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
with copies to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
Facsimile No.: 804-978-5320
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Thomas A. Cole
Dennis V. Osimitz
Facsimile No.: 312- 853-7036
(ii) if to the Shareholder, to:
A.B. Siemer
Two Bottom Ley Crescent
New Albany, Ohio 43054-8909
Facsimile No.: 614-888-3779
with a copy to:
D'Ancona & Pflaum
30 North LaSalle - Suite 2900
Chicago, Illinois
Attention: Mark Albert
Facsimile No.: 312-580-0923
(d) Parties in Interest. This Agreement shall inure to the benefit
-------------------
of and be binding upon the parties named herein and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any Person
-5-
<PAGE>
other than Parent, Sub or the Shareholder, or their permitted successors or
assigns, any rights or remedies under or by reason of this Agreement.
(e) Entire Agreement; Amendments. This Agreement contains the entire
----------------------------
agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.
(f) Headings. The section headings herein are for convenience only
--------
and shall not affect the construction of this Agreement.
(g) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which, when executed, shall be deemed to be an
original and all of which together shall constitute one and the same
document.
(h) Governing Law. Except to the extent that the laws of the State of
-------------
Illinois are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(i) Capitalized Terms. Capitalized terms not otherwise defined in
-----------------
this Agreement shall have the meanings set forth in the Merger Agreement.
(j) Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are not affected in
any manner materially adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
8. NO LIMITATIONS ON ACTIONS OF THE SHAREHOLDER AS A DIRECTOR.
----------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement is intended or shall be construed to require the Shareholder to take
or in any way limit any action that the Shareholder may take to discharge the
Shareholder's fiduciary duties as a director of the Company.
-6-
<PAGE>
IN WITNESS WHEREOF, each of Parent, Sub and the Shareholder has caused
this Agreement to be signed by its officer thereunto duly authorized and the
Shareholder has signed this Agreement, all as of the date first written above.
GE FANUC AUTOMATION NORTH
AMERICA, INC.
By: /s/ Joseph M. Hogan
--------------------------
Name: Joseph M. Hogan
Title: President and CEO
ORION MERGER CORP.
By: /s/ Donald A. Ross
--------------------------
Name: Donald A. Ross
Title: Vice President
-7-
<PAGE>
SHAREHOLDER
/s/ A.B. Siemer
-----------------------------
A.B. Siemer
Number of shares of Common Stock owned by the
Shareholder on the date hereof:
1,158,652
-8-
<PAGE>
EXHIBIT (C)(5)
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of November 22,
---------
1998, among GE Fanuc Automation North America, Inc., a Delaware corporation
("Parent"), Orion Merger Corp., an Illinois corporation and a wholly owned
------
subsidiary of Parent ("Sub"), and the undersigned shareholder (the
---
"Shareholder") of Total Control Products, Inc., an Illinois corporation (the
-----------
"Company").
-------
WHEREAS, Parent, Sub and the Company, propose to enter into an
Agreement and Plan of Merger dated as of even date herewith (as the same may be
amended or supplemented, the "Merger Agreement") to provide for the making of
----------------
a cash tender offer (as such offer may be amended from time to time, the
"Offer") by Sub for any and all Common Shares, no par value, of the Company (the
-----
"Common Stock") at the Offer Price (as defined in the Merger Agreement) and the
------------
merger of the Company and Sub (the "Merger");
------
WHEREAS, the Shareholder legally and/or beneficially owns that number
of shares of Common Stock appearing on the signature page hereof (such shares,
as they may be adjusted by any stock dividend, stock split, recapitalization,
combination or exchange of shares, merger, consolidation, reorganization or
other change or transaction of or by the Company (each, an "Adjustment Event")
----------------
being referred to herein as the "Subject Shares"); and
--------------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Sub have requested that the Shareholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent and Sub to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The
-------------------------------------------------
Shareholder hereby represents and warrants to Parent and Sub as follows:
(a) Authority. The Shareholder has all requisite power and authority
---------
to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Shareholder and constitutes a valid and binding obligation
of the Shareholder enforceable in accordance with its terms. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will
not, conflict with, or result in any violation of, or default (with or
without
<PAGE>
notice or lapse of time or both) under any provision of, any trust
agreement, loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise, license,
judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Shareholder or to the Shareholder's property
or assets. Except for the expiration or termination of the waiting period
under the HSR Act and informational filings with the SEC, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic, foreign or supranational, is
required by or with respect to the Shareholder in connection with the
execution and delivery of this Agreement or the consummation by the
Shareholder of the transactions contemplated hereby.
(b) The Shares. The Shareholder has good and marketable title to the
----------
Subject Shares, free and clear of any claims, liens, encumbrances and
security interests whatsoever. The Shareholder owns no shares of Common
Stock other than the Subject Shares.
2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.
------------------------------------------------
(a) Authority. Parent and Sub hereby represent and warrant to the
---------
Shareholder that each of Parent and Sub has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Parent and Sub, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action on the part of Parent and Sub. This Agreement has been duly
executed and delivered by Parent and Sub and constitutes a valid and
binding obligation of Parent and Sub enforceable in accordance with its
terms.
3. COVENANTS OF THE SHAREHOLDER. The Shareholder agrees as follows:
----------------------------
(a) At any meeting of shareholders of the Company called to vote upon
the Merger and the Merger Agreement or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval with
respect to the Merger and the Merger Agreement is sought, the Shareholder
shall vote (or cause to be voted) the Subject Shares in favor of the
Merger, the approval of the Merger Agreement and the approval of the terms
thereof and each of the other transactions contemplated by the Merger
Agreement, provided that the terms of the Merger Agreement shall not have
been amended to adversely affect the Shareholder.
(b) At any meeting of shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Shareholder's vote, consent or other approval is sought, the Shareholder
shall vote (or cause to be voted) the Subject Shares against (i) any merger
agreement or merger (other than the Merger Agreement and the
-2-
<PAGE>
Merger), consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of
or by the Company or any other Takeover Proposal or (ii) any amendment of
the Company's articles of incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement.
(c) The Shareholder agrees not to (i) sell, transfer, pledge, assign
or otherwise dispose of, or enter into any contract, option or other
arrangement (including any profit sharing arrangement) with respect to the
sale, transfer, pledge, assignment or other disposition of, the Subject
Shares to any person other than Sub or Sub's designee or (ii) enter into
any voting arrangement, whether by proxy, voting agreement or otherwise, in
connection, directly or indirectly, with any Takeover Proposal.
(d) The Shareholder shall not, nor shall the Shareholder permit any
investment banker, attorney or other adviser or representative of the
Shareholder to, (i) directly or indirectly solicit, initiate or encourage
the submission of, any Takeover Proposal or (ii) directly or indirectly
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any Takeover Proposal.
(e) So long as the Merger Agreement has not been terminated, the
Shareholder shall tender pursuant to the Offer, and not withdraw, all of
the Subject Shares.
4. FURTHER ASSURANCES. The Shareholder will, from time to time,
------------------
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents and other instruments as
Parent or Sub may reasonably request for the purpose of effectively carrying out
the transactions contemplated by this Agreement.
5. ASSIGNMENT. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to Parent or to any direct or indirect wholly owned
subsidiary of Parent. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns and, in the case of the Shareholder, the
heirs, executors and administrators of the Shareholder.
6. TERMINATION. Except as provided otherwise herein, this Agreement
-----------
shall terminate upon the earlier of (i) the Effective Time (as defined in the
Merger Agreement) and (ii) the termination of the Merger Agreement in accordance
with its terms; provided, however, that this Agreement will not terminate until
-------- -------
120 days after termination pursuant to clause (ii) immediately above if (A) the
Merger Agreement is terminated by Parent or Sub pursuant to
-3-
<PAGE>
Section 8.1(d) thereof, (B) the Merger Agreement is terminated by the Company
pursuant to Section 8.1(e) thereof or (C) unless the Company has terminated the
Merger Agreement pursuant to Section 8.1(f) or Section 8.1(g) thereof, prior to
the termination, a Takeover Proposal (as defined in the Merger Agreement) shall
have been commenced or the Company shall have entered into an agreement with
respect to, approved or recommended or taken any action to facilitate, a
Takeover Proposal.
7. GENERAL PROVISIONS.
------------------
(a) Expenses. Each party hereto shall pay its own expenses incurred
--------
in connection with this Agreement, except as specified in the Merger
Agreement.
(b) Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state thereof having jurisdiction,
this being in addition to any other remedy to which they are entitled at
law or in equity. Each party hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Northern District
of Illinois in any action, suit or proceeding arising in connection with
this Agreement, and agrees that any such action, suit or proceeding shall
be brought only in such courts (and waives any objection based on forum non
conveniens or any other objection to venue therein). Each party hereto
waives any right to a trial by jury in connection with any such action,
suit or proceeding.
(c) Notice. All notices, requests, demands and other communications
------
hereunder shall be deemed to have been duly given and made if in writing
and if served by personal delivery upon the party for whom it is intended
or if sent by telex or telecopier (and also confirmed in writing) to the
person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person:
(i) if to Parent or Sub, to:
GE Fanuc Automation North America, Inc.
Route 29 and Route 606
Charlotttesville, Virginia 22911
Attention: President and CEO
Facsimile No.: 804-978-5320
-4-
<PAGE>
for overnight courier deliveries, to:
GE Fanuc Automation North America, Inc.
Route 29 North and Route 606
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
with copies to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
Facsimile No.: 804-978-5320
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Thomas A. Cole
Dennis V. Osimitz
Facsimile No.: 312- 853-7036
(ii) if to the Shareholder, to:
Julius Sparacino
670 Ocean Road
Vero Beach, Florida 32963
Facsimile No.: 561-234-2877
with a copy to:
D'Ancona & Pflaum
30 North LaSalle - Suite 2900
Chicago, Illinois
Attention: Mark Albert
Facsimile No.: 312-580-0923
(d) Parties in Interest. This Agreement shall inure to the benefit
-------------------
of and be binding upon the parties named herein and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any Person
-5-
<PAGE>
other than Parent, Sub or the Shareholder, or their permitted successors or
assigns, any rights or remedies under or by reason of this Agreement.
(e) Entire Agreement; Amendments. This Agreement contains the entire
----------------------------
agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.
(f) Headings. The section headings herein are for convenience only
--------
and shall not affect the construction of this Agreement.
(g) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which, when executed, shall be deemed to be an
original and all of which together shall constitute one and the same
document.
(h) Governing Law. Except to the extent that the laws of the State of
-------------
Illinois are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(i) Capitalized Terms. Capitalized terms not otherwise defined in
-----------------
this Agreement shall have the meanings set forth in the Merger Agreement.
(j) Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are not affected in
any manner materially adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.
8. NO LIMITATIONS ON ACTIONS OF THE SHAREHOLDER AS A DIRECTOR.
----------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement is intended or shall be construed to require the Shareholder to take
or in any way limit any action that the Shareholder may take to discharge the
Shareholder's fiduciary duties as a director of the Company.
-6-
<PAGE>
IN WITNESS WHEREOF, each of Parent, Sub and the Shareholder has caused
this Agreement to be signed by its officer thereunto duly authorized and the
Shareholder has signed this Agreement, all as of the date first written above.
GE FANUC AUTOMATION NORTH
AMERICA, INC.
By: /s/ Joseph M. Hogan
-----------------------------------
Name: Joseph M. Hogan
Title: President and CEO
ORION MERGER CORP.
By: /s/ Donald A. Ross
-----------------------------------
Name: Donald A. Ross
Title: Vice President
-7-
<PAGE>
SHAREHOLDER
/s/ Julius Sparacino
-----------------------------------
Julius Sparacino
Number of shares of Common Stock owned by the
Shareholder on the date hereof:
1,728,721
---------
-8-
<PAGE>
EXHIBIT (C)(6)
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of November 22,
---------
1998, among GE Fanuc Automation North America, Inc., a Delaware corporation
("Parent"), Orion Merger Corp., an Illinois corporation and a wholly owned
------
subsidiary of Parent ("Sub"), and the undersigned shareholders (collectively,
---
the "Shareholder") of Total Control Products, Inc., an Illinois corporation (the
-----------
"Company").
-------
WHEREAS, Parent, Sub and the Company, propose to enter into an
Agreement and Plan of Merger dated as of even date herewith (as the same may be
amended or supplemented, the "Merger Agreement") to provide for the making of a
----------------
cash tender offer (as such offer may be amended from time to time, the "Offer")
-----
by Sub for any and all Common Shares, no par value, of the Company (the "Common
------
Stock") at the Offer Price (as defined in the Merger Agreement) and the merger
- -----
of the Company and Sub (the "Merger");
------
WHEREAS, the Shareholder legally and/or beneficially owns that number
of shares of Common Stock and shares of Class C Exchangeable Common Stock, no
par value ("Class C Shares"), of Taylor Industrial Software, Inc. ("Taylor")
-------------- ------
appearing on the signature page hereof (such shares, as they may be adjusted by
any stock dividend, stock split, recapitalization, combination or exchange of
shares, merger, consolidation, reorganization or other change or transaction of
or by the Company or Taylor, as the case may be (each, an "Adjustment Event"),
----------------
collectively, being referred to herein as the "Subject Shares");
--------------
WHEREAS, the Shareholder has the right to request retraction of the
Class C Shares and receive shares of Common Stock as payment of the retraction
price; and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Sub have requested that the Shareholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent and Sub to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The
-------------------------------------------------
Shareholder hereby represents and warrants to Parent and Sub as follows:
(a) Authority. The Shareholder has all requisite power and authority
---------
to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Shareholder and constitutes a valid and binding obligation
of the Shareholder enforceable in accordance with its terms. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms
<PAGE>
hereof will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under any provision of,
any trust agreement, loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise, license, judgment, order, notice, decree, statute, law,
ordinance, rule or regulation applicable to the Shareholder or to the
Shareholder's property or assets. Except for the expiration or termination
of the waiting period under the HSR Act and informational filings with the
SEC, no consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or other governmental authority or instrumentality, domestic, foreign or
supranational, is required by or with respect to the Shareholder in
connection with the execution and delivery of this Agreement or the
consummation by the Shareholder of the transactions contemplated hereby.
(b) The Shares. The Shareholder has good and marketable title to the
----------
Subject Shares, free and clear of any claims, liens, encumbrances and
security interests whatsoever. The Shareholder owns no shares of Common
Stock or Class C Shares other than the Subject Shares.
2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.
------------------------------------------------
(a) Authority. Parent and Sub hereby represent and warrant to the
---------
Shareholder that each of Parent and Sub has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Parent and Sub, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action on the part of Parent and Sub. This Agreement has been duly
executed and delivered by Parent and Sub and constitutes a valid and
binding obligation of Parent and Sub enforceable in accordance with its
terms.
3. COVENANTS OF THE SHAREHOLDER. The Shareholder agrees as follows:
----------------------------
(a) At any meeting of shareholders of the Company called to vote upon
the Merger and the Merger Agreement or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval with
respect to the Merger and the Merger Agreement is sought, the Shareholder
shall vote (or cause to be voted) the Subject Shares having a right to vote
with respect thereto in favor of the Merger, the approval of the Merger
Agreement and the approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement, provided that the terms
of the Merger Agreement shall not have been amended to adversely affect the
Shareholder.
(b) At any meeting of shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Shareholder's vote, consent or other approval is sought, the Shareholder
shall vote (or cause to be voted) the Subject Shares
-2-
<PAGE>
having a right to vote with respect thereto against (i) any merger
agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the
Company or any other Takeover Proposal or (ii) any amendment of the
Company's articles of incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement.
(c) The Shareholder agrees not to (i) sell, transfer, pledge, assign
or otherwise dispose of, or enter into any contract, option or other
arrangement (including any profit sharing arrangement) with respect to the
sale, transfer, pledge, assignment or other disposition of, the Subject
Shares to any person other than Sub or Sub's designee or (ii) enter into
any voting arrangement, whether by proxy, voting agreement or otherwise, in
connection, directly or indirectly, with any Takeover Proposal.
(d) The Shareholder shall not, nor shall the Shareholder permit any
investment banker, attorney or other adviser or representative of the
Shareholder to, (i) directly or indirectly solicit, initiate or encourage
the submission of, any Takeover Proposal or (ii) directly or indirectly
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any Takeover Proposal.
(e) So long as the Merger Agreement has not been terminated, the
Shareholder shall tender pursuant to the Offer, and not withdraw, all of
the Subject Shares and, in connection therewith, shall, with respect to the
Class C Shares, take such action as shall be necessary to request
retraction of such shares and tender of the shares of Common Stock received
upon such retraction pursuant to the Offer.
4. FURTHER ASSURANCES. The Shareholder will, from time to time,
------------------
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents and other instruments as
Parent or Sub may reasonably request for the purpose of effectively carrying out
the transactions contemplated by this Agreement.
5. ASSIGNMENT. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to Parent or to any direct or indirect wholly owned
subsidiary of Parent. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns and, in the case of the Shareholder, the
heirs, executors and administrators of the Shareholder.
-3-
<PAGE>
6. TERMINATION. Except as provided otherwise herein, this Agreement
-----------
shall terminate upon the earlier of (i) the Effective Time (as defined in the
Merger Agreement) and (ii) the termination of the Merger Agreement in accordance
with its terms; provided, however, that this Agreement will not terminate until
-------- -------
120 days after termination pursuant to clause (ii) immediately above if (A) the
Merger Agreement is terminated by Parent or Sub pursuant to Section 8.1(d)
thereof, (B) the Merger Agreement is terminated by the Company pursuant to
Section 8.1(e) thereof or (C) unless the Company has terminated the Merger
Agreement pursuant to Section 8.1(f) or Section 8.1(g) thereof, prior to the
termination, a Takeover Proposal (as defined in the Merger Agreement) shall have
been commenced or the Company shall have entered into an agreement with respect
to, approved or recommended or taken any action to facilitate, a Takeover
Proposal.
7. GENERAL PROVISIONS.
------------------
(a) Expenses. Each party hereto shall pay its own expenses incurred
--------
in connection with this Agreement, except as specified in the Merger
Agreement.
(b) Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state thereof having jurisdiction,
this being in addition to any other remedy to which they are entitled at
law or in equity. Each party hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Northern District
of Illinois in any action, suit or proceeding arising in connection with
this Agreement, and agrees that any such action, suit or proceeding shall
be brought only in such courts (and waives any objection based on forum non
conveniens or any other objection to venue therein). Each party hereto
waives any right to a trial by jury in connection with any such action,
suit or proceeding.
(c) Notice. All notices, requests, demands and other communications
------
hereunder shall be deemed to have been duly given and made if in writing
and if served by personal delivery upon the party for whom it is intended
or if sent by telex or telecopier (and also confirmed in writing) to the
person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person:
-4-
<PAGE>
(i) if to Parent or Sub, to:
GE Fanuc Automation North America, Inc.
Route 29 and Route 606
Charlotttesville, Virginia 22911
Attention: President and CEO
Facsimile No.: 804-978-5320
for overnight courier deliveries, to:
GE Fanuc Automation North America, Inc.
Route 29 North and Route 606
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
with copies to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, Virginia 22911
Attention: Senior Vice President and General Counsel
Facsimile No.: 804-978-5320
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Thomas A. Cole
Dennis V. Osimitz
Facsimile No.: 312- 853-7036
(ii) if to the Shareholder, to:
Neil Taylor
Merle Taylor
7711-139 Street
Edmonton, Alberta, Canada T5R OE9
Facsimile No.: 403-481-9859
-5-
<PAGE>
with a copy to:
D'Ancona & Pflaum
30 N. LaSalle St., Suite 2900
Chicago, Illinois 60602
Attention: Mark Albert
Facsimile No.: (312) 850-0923
(d) Parties in Interest. This Agreement shall inure to the benefit
-------------------
of and be binding upon the parties named herein and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any Person other than Parent, Sub or the
Shareholder, or their permitted successors or assigns, any rights or
remedies under or by reason of this Agreement.
(e) Entire Agreement; Amendments. This Agreement contains the entire
----------------------------
agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought.
(f) Headings. The section headings herein are for convenience only
--------
and shall not affect the construction of this Agreement.
(g) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which, when executed, shall be deemed to be an
original and all of which together shall constitute one and the same
document.
(h) Governing Law. Except to the extent that the laws of the State of
-------------
Illinois are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(i) Capitalized Terms. Capitalized terms not otherwise defined in
-----------------
this Agreement shall have the meanings set forth in the Merger Agreement.
(j) Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are not affected in
any manner materially adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original
-6-
<PAGE>
intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated by this Agreement may be
consummated as originally contemplated to the fullest extent possible.
8. NO LIMITATIONS ON ACTIONS OF THE SHAREHOLDER AS A DIRECTOR.
----------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement is intended or shall be construed to require the Shareholder to take
or in any way limit any action that the Shareholder may take to discharge the
Shareholder's fiduciary duties as a director of the Company.
-7-
<PAGE>
IN WITNESS WHEREOF, each of Parent, Sub and the Shareholder has caused
this Agreement to be signed by its officer thereunto duly authorized and the
Shareholder has signed this Agreement, all as of the date first written above.
GE FANUC AUTOMATION NORTH
AMERICA, INC.
By: /s/ Joseph M. Hogan
-----------------------------------
Name: Joseph M. Hogan
Title: President and CEO
ORION MERGER CORP.
By: /s/ Donald A. Ross
-----------------------------------
Name: Donald A. Ross
Title: Vice President
-8-
<PAGE>
SHAREHOLDER
/s/ Neil Taylor
-----------------------------------
Neil Taylor
/s/ Merle Taylor
-----------------------------------
Merle Taylor
Number of Class C Shares owned by
the Shareholder on the date hereof:
Neil Taylor: 513,966
Merle Taylor: 61,368
Options to purchase Common Stock held by the
Shareholder on the date hereof:
Neil Taylor: 13,666
-9-
<PAGE>
EXHIBIT (C)(7)
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of November 22, 1998
by and between Nicholas Gihl (the "Executive") and Total Control Products, Inc.,
an Illinois corporation (the "Company").
R E C I T A L S:
A. Concurrently herewith, GE Fanuc Automation North America, Inc.
("GE Fanuc"), Orion Merger Corp. and the Company are entering into an Agreement
and Plan of Merger (the "Merger Agreement"), pursuant to which Orion Merger
Corp. will be commencing a tender offer (the "Offer") for the common stock of
the Company and, following the consummation of such Offer, merging (the
"Merger") with and into the Company, whereupon the Company will become a wholly-
owned subsidiary of GE Fanuc.
B. The Executive is the beneficial owner of certain shares of common
stock of the Company and intends to tender such shares to Orion Merger Corp.
pursuant to the Tender Offer.
C. The Company and the Executive have entered into an Employment
Agreement, dated as of December 19,1996 (the "Prior Agreement") pursuant to
which the Executive is employed as an executive officer of the Company.
D. Commencing upon the consummation of the Offer, the Company
desires to continue the employment of the Executive as an executive officer of
the Company and the Executive agrees to be so bound, all on the terms and
subject to the conditions set forth herein, and the Company and the Executive
desire to terminate the Prior Agreement.
E. The Company desires to bind the Executive to certain restrictive
covenants and the Executive agrees to be so bound, all on the terms and subject
to the conditions set forth herein.
A G R E E M E N T:
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. EFFECT OF AGREEMENT; TERMINATION OF PRIOR AGREEMENT. This
Agreement shall become effective upon the consummation of the Offer and shall
terminate and be of no further force or effect if the Merger Agreement shall be
terminated prior to the consummation of the Offer. Upon consummation of the
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Offer, the Prior Agreement shall terminate and shall be of no further force or
effect whatsoever.
2. TERM. Subject to the terms and conditions set forth herein and
unless sooner terminated as hereinafter provided, the Company shall employ the
Executive and the Executive agrees to serve as an employee of the Company during
the period beginning at the consummation of the Offer and ending on the third
anniversary thereof (the "Employment Term"). After the expiration of the
Employment Term, the Executive's employment hereunder shall automatically renew
for successive one-year periods (each, a "Renewal Term") unless either party
hereto delivers written notice to the other party hereto, at least ninety (90)
days prior to the expiration of the Employment Term or any Renewal Term thereof,
as the case may be, of his or its desire to terminate the Executive's employment
with the Company. The Employment Term and any Renewal Term thereof are
collectively referred to herein as the "Term."
3. EMPLOYMENT DUTIES. During the Term, the Executive shall serve as
the President & CEO of the Company. The Executive shall faithfully, diligently
and competently perform such duties and responsibilities as are commensurate
with his position and such other duties as are commensurate with his position
that may from time to time be assigned to him by the Board of Directors of the
Company (the "Board").
4. COMPENSATION. As compensation for the services to be performed
and the duties and responsibilities to be assumed by the Executive during the
Term, the Company shall pay to the Executive the following compensation:
(a) A salary (the "Salary") in an amount equal to $260,000 per annum. The
Company shall review the Salary annually during the Term and any increases in
Salary shall be made at the sole discretion of the Company. The Salary shall be
payable to the Executive in accordance with the Company's ordinary payment
practices for salaried employees.
(b) The Executive shall be entitled to participate in the Company's
executive bonus plan (a "Bonus") on the same terms as the participation of other
executives of the Company; provided, however, that, during the Employment Term,
the Executive shall earn a Bonus of not less than $40,000 per year, but shall be
eligible to earn a larger Bonus based on achieving Company performance
objectives. In no event shall any Bonus be paid to the Executive for any
calendar year of the Company unless the Executive is employed throughout the
entire calendar year by the Company or any of its Affiliates (as defined below).
The Bonus shall be determined from the Company's internal accounting records,
which shall be finally approved by the Board of Directors of the Company (the
"Board") or any compensation committee thereof. The Bonus awarded to the
Executive in respect of any particular calendar year shall be paid at the same
time as bonuses are paid to other executives of the Company.
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(c) The Executive shall receive a grant of 5,000 restricted shares of
stock of General Electric Company (subject to the approval of the General
Electric Company Board of Directors). The restriction lapse date for 2,500 of
such shares shall be the last day of the Employment Term and for the remaining
2,500 shares shall be the last day of the fifth year of the Term. Such shares
shall be granted subject to the terms of the GE 1990 Long Term Incentive Plan.
As used herein, an "Affiliate" shall mean and include any person or entity
which controls a party, which such party controls or which is under common
control with such party. "Control" means the power, direct or indirect, to
direct or cause the direction of the management and policies of a person or
entity through voting securities, contract or otherwise.
5. VACATIONS. The Executive shall be entitled to reasonable
vacations in accordance with the Company's policies applicable to its senior
executives generally, but in no event less than three weeks annually, which
shall be taken at such time or times as shall be mutually determined by the
Company and the Executive.
6. BENEFITS.
(a) During the Term, the Executive shall be entitled to participate in
such employee benefit plans and programs as are maintained by the Company, to
the extent that his position, service, compensation, age, health and other
qualifications make him eligible to participate. The Company does not promise
the adoption or continuance of any particular plan or program during the Term,
and the Executive's (and his eligible dependents') participation in any such
plan or program shall be subject to the provisions, rules, regulations and laws
applicable thereto.
(b) During the Term, the Executive shall be entitled to such other fringe
benefits as are provided to employees of the Company with comparable positions,
service and compensation as the Executive.
7. REIMBURSEMENT OF EXPENSES. During the Term, the Executive shall
be entitled to prompt reimbursement for ordinary, necessary and reasonable out-
of-pocket trade or business expenses which the Executive incurs in connection
with performing his duties under this Agreement. The reimbursement of all such
expenses shall be made upon presentation of evidence reasonably satisfactory to
the Company of the amounts and nature of such expenses and shall be subject to
the reasonable approval of the Board.
8. RESTRICTIVE COVENANTS. The Executive acknowledges and agrees that
(a) through his continuing services to the Company, he will learn valuable trade
secrets and other proprietary information relating to the Company's business;
(b) the Executive's services to the Company are unique in nature; (c) the
Company's business is national in scope; and (d) the Company would be
irreparably damaged if the Executive
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were to provide services to any person or entity in violation of the
restrictions contained in this Agreement. Accordingly, as an inducement to the
Company to enter into this Agreement, the Executive agrees that during the Term
and for two years thereafter (such period being referred to herein as the
"Restricted Period"), the Executive shall not, directly or indirectly, either
for himself or for any other person or entity, without the prior written consent
of the Board of Directors of GE Fanuc:
(a) anywhere in the United States, engage or participate in, or assist,
advise or be connected with (including as an employee, owner, partner,
shareholder, officer, director, advisor, consultant, agent or (without
limitation by the specific enumeration of the foregoing) otherwise), or permit
his name to be used by or render services for, any person or entity engaged in,
or making plans to engage in, a business that competes with the business
conducted by, or proposed to be conducted by, GE Fanuc or any of its
subsidiaries (a "Competing Business");
(b) take any action which might divert from GE Fanuc or any of its
subsidiaries any opportunity (each, an "Opportunity") which would be within the
scope of the business then conducted by GE Fanuc or any of its subsidiaries and
shall offer each Opportunity to GE Fanuc, which GE Fanuc may, in its sole
discretion, decide to pursue or not;
(c) solicit, attempt to solicit, aid in the solicitation of or accept any
orders from any person or entity who is or has been a customer of GE Fanuc or
any of its subsidiaries, at any time during the period beginning one year prior
to the date of termination of his employment through the Restrictive Period, to
purchase products or services from any person or entity which products or
services could have been supplied or performed, as the case may be, by GE Fanuc
or any of its subsidiaries (other than from GE Fanuc or any of its
subsidiaries);
(d) solicit, attempt to solicit or aid in the solicitation of any person
or entity who is or has been a customer, supplier, licensor, licensee or person
or entity having any other business relationship with GE Fanuc or any of its
subsidiaries, at any time during the period beginning one year prior to the date
of termination of his employment through the Restrictive Period, to cease doing
business with or alter its business relationship with GE Fanuc or any of its
subsidiaries; or
(e) solicit or hire any person or entity who is a director, officer or
employee of GE Fanuc or any of its subsidiaries to perform services for any
person or entity other than GE Fanuc or any of its subsidiaries or to terminate
his or her employment with GE Fanuc or any of its subsidiaries.
9. DISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive recognizes
that he will occupy a position of trust and confidence with the Company as to
Confidential Information (as herein defined) pertaining to the Company and its
Affiliates. As an inducement for the Company to enter into this Agreement, the
Executive therefore agrees that:
4
<PAGE>
(a) for the longest period permitted by law from the date of this
Agreement, the Executive shall hold in the strictest confidence and shall not,
other than as required by law, without the prior written consent of the Board of
Directors of GE Fanuc, use for his own benefit or that of any third party or
disclose to any person, firm or corporation (except the Company, an Affiliate of
the Company or employees of the Company and its Affiliates) any Confidential
Information. For purposes of this Agreement, "Confidential Information" shall
mean any (i) trade secret or other confidential or secret information of the
Company or of any of its Affiliates or (ii) other technical, business,
proprietary or financial information of the Company or any of its Affiliates not
available to the public generally or to the competitors of the Company or any of
its Affiliates.
(b) The Executive (and if deceased, the Executive's personal
representative) shall promptly following a request therefor from GE Fanuc return
to the Company, without retaining copies, all tangible items which are or which
contain Confidential Information. The Executive shall also surrender all
computer print-outs, laboratory books, floppy disks and other such media for
storing software and information, work papers, files, client lists, telephone
and/or address books, rolodex cards, internal memoranda, appointment books,
calendars, keys and other tangible things entrusted to the Executive by the
Company or any of its Affiliates or authored in whole or in part by the
Executive within the scope of his duties to the Company even if such things do
not contain Confidential Information; and
(c) at the request of GE Fanuc made at any time or from time to time
hereafter, the Executive (and if deceased, the Executive's personal
representative) shall make, execute and deliver all applications, papers,
assignments, conveyances, instruments or other documents and shall perform or
cause to be performed such other lawful acts as GE Fanuc may reasonably deem
necessary or desirable to implement any of the provisions of this Agreement, and
shall give testimony and cooperate with the Company, its Affiliates or their
respective representatives in any controversy or legal proceedings involving the
Company, its Affiliates or their respective representatives with respect to any
Confidential Information, the reasonable expenses of such testimony and
cooperation to be paid by the Company.
10. INVENTIONS. The Executive acknowledges that in his capacity as an
executive officer of the Company, he will be involved in (i) the conception of
making of improvements, discoveries, inventions or the like (whether patentable
or unpatentable and whether or not reduced to practice), (ii) the authorship of
copyrightable works and (iii) the development of trade secrets relating to the
Company or any of its Affiliates. The Executive acknowledges that all such
intellectual property developed in connection with his employment with the
Company is the exclusive property of the Company. The Executive hereby waives
any rights he may have in or to such intellectual property, and the Executive
hereby assigns to the Company all right, title and interest in and to such
intellectual property. At the request of GE Fanuc and at no expense to the
Executive, the Executive shall execute and deliver all such papers, including,
without limitation, any
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<PAGE>
assignment documents, and shall provide such cooperation as may be necessary or
desirable, or as GE Fanuc may reasonably request, in order to enable the Company
to secure and exercise its rights to such intellectual property.
11. SPECIFIC PERFORMANCE. The Executive agrees that any violation by
him of Sections 8, 9, or 10 of this Agreement would be highly injurious to the
Company and its Affiliates and would cause irreparable harm to the Company and
its Affiliates. By reason of the foregoing, the Executive consents and agrees
that if he violates any provision of Sections 8, 9 or 10 of this Agreement, the
Company and its Affiliates shall be entitled, in addition to other rights and
remedies that they may have, to apply to any court of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce, or
prevent any continuing violation of, the provisions of such section. In the
event the Executive breaches a covenant contained in this Agreement, the
Restricted Period applicable to the Executive with respect to such breached
covenant shall be extended for the period of such breach. The Executive also
recognizes that the territorial, time and scope limitations set forth in
Sections 8 and 9 are reasonable and are properly required for the protection of
the Company and its Affiliates and in the event that any such territorial, time
or scope limitation is deemed to be unreasonable by a court of competent
jurisdiction, the Company and the Executive agree, and the Executive submits, to
the reduction of any or all of said territory, time or scope limitations to such
an area, period or scope as said court shall deem reasonable under the
circumstances. The Executive represents, warrants and acknowledges that he has
available to him sufficient other means of support so that observance of the
covenants contained in Sections 8, 9 and 10 shall not deprive him of his ability
to earn a livelihood or support his dependents.
12. TERMINATION FOR CAUSE. During the Term, the Executive's
employment with the Company may be terminated by the Board "for cause," which
shall include (a) the Executive's conviction for, or plea of nolo contendere to,
a felony or a crime involving moral turpitude; (b) the Executive's commission of
an act involving personal dishonesty or fraud involving personal profit in
connection with the Executive's employment with the Company; (c) the Executive's
commission of an act involving willful misconduct or gross negligence on the
part of the Executive in the conduct of his duties hereunder; (d) the
Executive's breach of any material provision of this Agreement where such breach
continues for a period of twenty (20) days after the Executive's receipt of
written notice of such breach from the Company; or (e) willful violation of the
Parent's integrity policies as set forth in the booklet "The Spirit and Letter,"
a copy of which has been provided to the Employee. In the event of termination
under this Section 12, the Company's obligations under this Agreement shall
cease and the Executive shall forfeit all his rights to receive any compensation
or benefits under this Agreement, except that the Executive shall be entitled to
his Salary and benefits for services already performed as of the date of
termination of the Executive's employment hereunder.
13. GOOD REASON. The Executive shall be entitled to terminate his
employment hereunder at any time for Good Reason. For the purposes of this
Agreement, the Executive shall have "Good Reason" to terminate his employment
hereunder (i) upon a
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significant demotion or material adverse change in his duties and
responsibilities; (ii) upon a reduction in Salary, Bonus or in fringe benefits
provided to him of 10% or more; (iii) upon a material breach by the Company of
its agreements and covenants set forth herein; (iv) upon a requirement to
relocate, except for office relocations that would not increase the Executive's
one-way commute distance by more than fifty (50) miles from the most recent
principal residence selected by the Executive prior to notice of relocation; or
(v) if General Electric Company no longer controls the Company, directly or
indirectly, or all or substantially all of the assets of the Company are
purchased by any person who is not controlled directly or indirectly by General
Electric Company.
14. DEATH OR DISABILITY.
(a) This Agreement shall terminate upon the Executive's death.
(b) If the Executive becomes permanently disabled (determined as provided
below) during the Term, his employment with the Company shall terminate as of
the date such permanent disability is determined. The Executive shall be
considered to be permanently disabled for purposes of this Agreement if he is
unable by reason of accident or illness (including mental illness) to perform
the material duties of his regular position with the Company and is (i) not
expected to recover from his disability within a period of six (6) months from
the commencement of the disability; or (ii) not expected to be able to perform
his material duties of his regular position with the Company for a period of six
(6) months in any consecutive twelve (12) month period as a result of the same
disability. If at any time the Executive claims or is claimed to be permanently
disabled, a physician acceptable to both the Executive, or his personal
representative, and the Company (which acceptances shall not be unreasonably
withheld) shall be retained by the Company and shall examine the Executive. The
Executive shall cooperate fully with the physician. If the physician determines
that the Executive is permanently disabled, the physician shall deliver to the
Company a certificate certifying both that the Executive is permanently disabled
and the date upon which the condition of permanent disability commenced. The
determination of the physician shall be conclusive.
(c) The Executive's right to his compensation and benefits under this
Agreement shall cease upon his death or disability, except that the Executive
(or his estate or heirs) shall be entitled to his Salary and a pro rata portion
of his Bonus and benefits for services already performed as of the date of his
death or disability.
15. EFFECT OF TERMINATION.
(a) If the Company terminates the Executive's employment hereunder for any
reason (including, without limitation, the Company's failure to renew the term
of this Agreement at the end of the Employment Term or any Renewal Term thereof,
as applicable) other than for cause, death or disability during the Term or the
Executive terminates this Agreement for Good Reason during the Term, provided
the Executive (or the Executive's executor or other legal representative in the
case of the Executive's death
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or Disability) executes the Release (as defined in Section (f) below), (i) the
Company shall pay the Executive in one lump sum an amount equal to (A) twenty-
four times the greater of (I) his monthly Salary as of the date of termination
or (II) his highest monthly Salary during the prior twelve month period; plus
(B) two times the bonus paid to the Executive for the fiscal year immediately
prior to the date of such termination under the bonus plan of the Company and
(ii) the Company shall continue the Executive's medical insurance benefits for a
period equal to twelve months or until the Executive is eligible for medical
coverage under a plan of a successive employer.
(b) If the Executive terminates his employment with the Company for any
reason whatsoever other than for Good Reason, the Company's obligations under
this Agreement shall cease and the Executive shall forfeit all his rights to
receive any compensation or benefits under this Agreement, except that the
Executive shall be entitled to his Salary and benefits for services already
performed as of the date of termination of this Agreement.
(c) Any amounts payable to the Executive pursuant to this Section 15 shall
be paid in full in a lump sum not more than sixty (60) days following the date
of termination of the Executive's employment hereunder.
(d) The Executive shall not be required to mitigate the amount of any
payment contemplated by this Section 15 (whether by seeking new employment or in
any other manner), nor shall any such payment be reduced by any earnings that
the Executive may receive from any other source.
(e) The transfer of the Executive's employment from the Company to an
Affiliate of the Company and the assumption of this Agreement by such Affiliate
shall not constitute a termination of employment for purposes of this Section
15.
(f) Notwithstanding anything to the contrary contained in this Agreement,
no amount shall be payable to the Executive (or the Executive's executor or
other legal representative in the case of the Executive's death or Disability)
pursuant to this Section 15 unless and until the Executive (or the Executive's
executor or other legal representative in the case of the Executive's death or
Disability) executes a general release in the form of Exhibit A attached hereto
(the "Release").
16. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) If it shall be determined that any payment or distribution by the
Company or its affiliated companies to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 4) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code, or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
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referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Tax Reimbursement Payment") in an amount equal
to the Excise Tax imposed upon the Payments. The Company will pay the Tax
Reimbursement Payment to the Executive not less than five days prior to the date
on which the Executive must pay such excise tax.
(b) Subject to the provisions of Section 4(c), all determinations
required to be made under this Section 4, including whether and when a Tax
Reimbursement Payment is required and the amount of such Tax Reimbursement
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by the Company's public accounting firm (the "Accounting Firm")
which shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the Executive
that there has been a Payment, or such earlier time as is requested by the
Company. All fees and expenses of the Accounting Firm shall be borne solely by
the Company. If the Accounting Firm determines that no Excise Tax is payable by
the Executive, it shall furnish the Executive with a written opinion that
failure to report the Excise Tax on the Executive's applicable federal income
tax return would not result in the imposition of a negligence or similar
penalty. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Tax Reimbursement Payments which will not have
been made by the Company should have been made ("Underpayment"), consistent with
the calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 4(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Tax Reimbursement Payment. Such notification shall be given
as soon as practicable but no later than 10 business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:
(1) give the Company any information reasonably requested by the
Company relating to such claim,
(2) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without
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limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company,
(3) cooperate with the Company in good faith in order effectively to
contest such claim, and
(4) permit the Company to participate in any proceedings relating to
such claim;
provided, however, that the Company shall bear and pay directly all costs and
- -------- -------
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 4(c), the Executive becomes entitled to receive,
and receives, any refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of Section 4(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Section 4(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Tax Reimbursement Payment
required to be paid.
17. MISCELLANEOUS.
(a) All notices required or permitted to be given hereunder shall be in
writing and shall be deemed given (i) when delivered in person at the time of
such delivery or by telecopy with receipt of transmission indicating the date
and time (provided, however, that notice delivered by telecopy shall only be
effective if such notice is also delivered by hand or deposited in the United
States mail, postage prepaid, registered or certified mail, on or before two (2)
business days after its delivery by telecopy), (ii) when received if given by a
nationally recognized overnight courier service or (iii) two (2) business days
after being deposited in the United States mail, postage prepaid, registered or
certified mail, addressed as follows:
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if to the Executive:
Nicholas Gihl
433 Hillside
Elmhurst, Illinois 60126
Fax: (630) 617-5327
with a copy to:
D'Ancona & Pflaum
30 N. LaSalle Street
Suite 2900
Chicago, Illinois 60602
Attention: Mark Albert
Fax: (312) 580-0932
if to the Company:
Total Control Products, Inc.
2001 N. Janice Avenue
Melrose Park, Illinois 60160
Attn: Chief Financial Officer
Fax: (708) 345-5670
with a copy to:
GE Fanuc Automation North America, Inc.
P.O. Box 198
Charlottesville, VA 22906
Attn: General Counsel
Fax: (804) 978-6200
and/or to such other address or addresses as may be designated by notice given
in accordance with the provisions hereof.
(b) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors and permitted assigns. As
to the Executive, this Agreement is a personal service contract and shall not be
assignable by the Executive, but all obligations and agreements of the Executive
hereunder shall be binding upon and enforceable against the Executive and the
Executive's personal representatives, heirs, legatees and devisees.
(c) The parties adopt the Recitals to this Agreement and agree and affirm
that construction of this Agreement shall be guided thereby; this Agreement
contains all of
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the agreements between the parties with respect to the subject matter hereof;
and this Agreement supersedes all other agreements, oral or written, between the
parties hereto with respect to the subject matter hereof.
(d) No change or modification of this Agreement shall be valid unless the
same shall be in writing and signed by all of the parties hereto. No waiver of
any provisions of this Agreement shall be valid unless in writing and signed by
the waiving party. No waiver of any of the provisions of this Agreement shall
be deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver, unless so provided
in the waiver.
(e) If any provisions of this Agreement (or portions thereof) shall, for
any reason, by invalid or unenforceable, such provisions (or portions thereof)
shall be ineffective only to the extent of such invalidity or unenforceability,
and the remaining provisions of this Agreement (or portions thereof) shall
nevertheless be valid, enforceable and of full force and effect.
(f) The section or paragraph headings or titles herein are for convenience
of reference only and shall not be deemed a part of this Agreement.
(g) This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original and all of which taken together shall
constitute a single instrument.
(h) Notwithstanding anything to the contrary contained herein, the
Executive's rights and obligations under Sections 8, 9, 10, 11 and 15 shall
survive the expiration or termination of this Agreement (other than a
termination pursuant to Section 1).
(i) This Agreement shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other respects by
the laws of the State of Illinois applicable to contracts made in that State
(other than any conflict of laws rule which might result in the application of
the laws of any other jurisdiction).
(j) The Executive hereby expressly submits and consents in advance to the
jurisdiction of the federal and state courts of the State of Illinois for all
purposes in connection with any action or proceeding arising out of or relating
to this Agreement.
(k) The Company shall require any successor (whether direct or indirect
and either by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and/or assets, by an
agreement in substance and form satisfactory to the Executive, to assume this
Agreement and to agree expressly to perform this Agreement in the same manner
and to the same extent as the Company would be required to perform it in the
absence of a succession. Regardless of such assumption, the Company shall remain
liable for performance of this Agreement if the successor corporation fails to
perform this Agreement.
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(l) All costs, including any legal fees and other expenses incurred
(including all such fees and expenses incurred by the Executive in contesting or
disputing any termination under this Agreement or in seeking to obtain or
enforce any of his rights or benefits under this Agreement), shall be paid by
the Company. All costs, including legal fees and other expenses incurred in
defending or asserting the validity and enforceability of this Agreement against
challenge by any person in any forum shall be paid by the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
/s/ Nicholas Gihl
-----------------------------------
NICHOLAS GIHL
TOTAL CONTROL PRODUCTS, INC.
By: /s/ Peter A. Nicholson
-------------------------------
Name: Peter A. Nicholson
Title: CFO
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EXHIBIT A
Date of Notification:_________________
GENERAL RELEASE
This is a General Release (this "Release") executed by _______________
(the "Executive") pursuant to Section 15 of the Employment Agreement dated as of
__________, 1998 (the "Employment Agreement") between Total Control Products,
Inc., an Illinois corporation (the "Company"), and the Executive.
WHEREAS, the employment of the Executive will be terminated by the
Company;
WHEREAS, the Company and the Executive intend that the terms and
conditions of the Employment Agreement and this Release shall govern all issues
related to the Executive's employment and termination of employment by the
Company;
WHEREAS, the Executive has had at least 45 days to consider the form
of this Release;
WHEREAS, the Company advised the Executive in writing to consult with
a lawyer before signing this Release;
WHEREAS, the Executive has represented and hereby reaffirms that the
Executive has disclosed to the Company any information in the Executive's
possession concerning any conduct involving the Company, __________, a ________
corporation (the "Parent"), or their affiliates that the Executive has any
reason to believe involves any false claims to the United States or is or may be
unlawful or violates the policies of the Company or the Parent in any respect;
WHEREAS, the Executive acknowledges that the consideration to be
provided to the Executive under the Employment Agreement is sufficient to
support this Release;
WHEREAS, the Executive represents that the Executive has not filed any
charges, claims or lawsuits against the Company or the Parent involving any
aspect of the Executive's employment which have not been terminated as of the
date of this Release; and
WHEREAS, the Executive understands that the Company regards the
representations by the Executive as material and that the Company is relying on
these representations in paying amounts to the Executive pursuant to the
Employment Agreement.
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THE EXECUTIVE THEREFORE AGREES AS FOLLOWS:
1. The Executive's employment with the Company shall terminate on
_______________ (the "Termination Date").
2. The Executive shall receive the termination payments set forth in
Section 15 of the Employment Agreement.
3. The Employee Innovation and Proprietary Information Agreement
with the Company remains in effect in accordance with its terms.
4. The Executive, on behalf of the Executive and anyone claiming
through the Executive, including the Executive's heirs, assigns and agents,
releases and discharges the Company, the Parent and their respective directors,
officers, employees, subsidiaries, affiliates and agents, and the predecessors,
successors and assigns of any of them (the "Released Parties"), from each and
every claim, action or right of any sort, in law or in equity, known or unknown,
asserted or unasserted, foreseen or unforeseen, arising on or before the
Effective Date (as set forth in Section 11 hereof).
(a) This Release includes, but is not limited to: any claim of
discrimination on the basis of race, sex, religion, marital status, sexual
orientation, national origin, handicap or disability, age, veteran status,
special disabled veteran status or citizenship status; any other claim based on
a statutory prohibition or common law doctrine; any claim arising out of or
related to the Executive's employment with the Company, the terms and conditions
thereof or the termination or cessation thereof; any express or implied
employment contract, any other express or implied contract affecting terms and
conditions of the Executive's employment or the termination or cessation
thereof, or a covenant of good faith and fair dealing; any tort claims and any
personal gain with respect to any claim arising under the qui tam provisions of
the False Claims Act, 31 U.S.C. 3730.
(b) The Executive represents that the Executive understands this
Release, that rights and claims under the Age Discrimination in Employment Act
of 1967, as amended, the Civil Rights Act of 1964, as amended, the Civil Rights
Act of 1991, the Civil Rights Act of 1866, the Older Workers' Benefit Protection
Act, the Family and Medical Leave Act, the Americans With Disabilities Act, the
Employee Retirement Income Security Act of 1974 and the Wisconsin Fair
Employment Act are among the rights and claims against the Released Parties the
Executive is releasing, and that the Executive understands that the Executive is
not releasing any rights or claims arising after the Effective Date.
(c) The Executive further agrees never to sue the Released Parties or
cause the Released Parties to be sued regarding any matter within the scope of
this Release. If the Executive violates this Release by suing any of the
Released Parties or
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causing any of the Released Parties to be sued, the Executive agrees to pay all
costs and expenses of defending against the suit incurred by the Released
Parties, including reasonable attorneys' fees.
(d) The Executive expressly represents and warrants that the
Executive is the sole owner of the actual or alleged claims, demands, rights,
causes of action and other matters that are released herein, that the same have
not been transferred or assigned or caused to be transferred or assigned to any
other person, firm, corporation or other entity, and that the Executive has the
full right and power to grant, execute and deliver this Release.
5. The Executive acknowledges that the Executive is bound by the
provisions of Section 4 of the Employment Agreement.
6. The Executive understands that any and all Company covenants
which relate to Company obligations to the Executive after the Termination Date,
including but not limited to the payments set forth in Section 3 of the
Employment Agreement, are contingent on the Executive's satisfaction of the
Executive's obligations under this Release.
7. The Executive agrees that, for the period commencing on the
Termination Date and ending on the second anniversary of the Termination Date,
the Executive will be reasonably available to the Company and the Parent to
respond to requests by the Company or the Parent for information pertaining to
or relating to the Company, the Parent and their affiliates, subsidiaries,
agents, officers, directors or employees which may be within the knowledge of
the Executive. The Executive will cooperate fully with the Company in
connection with any and all existing or future litigation or investigations
brought by or against the Company, the Parent or any of their affiliates,
agents, officers, directors or employees, whether administrative, civil or
criminal in nature, in which and to the extent the Company deems the Executive's
cooperation necessary. The Executive understands that the Company will
reimburse the Executive for reasonable out-of pocket expenses incurred as a
result of such cooperation. Nothing herein shall prevent the Executive from
communicating with or participating in any government investigation. The
Executive will act in good faith to furnish the information and cooperation
required by this Section 7 and the Company will act in good faith so that the
requirement to furnish such information and cooperation does not create a
hardship for the Executive.
8. The Executive agrees, subject to any obligations the Executive
may have under applicable law, that the Executive will not make or cause to be
made any statements that disparage, are inimical to, or damage the reputation of
the Company, the Parent or any of their affiliates, subsidiaries, agents,
officers, directors or employees. In the event such a communication is made to
anyone, including but not limited to the media, public interest groups and
publishing companies, it will be considered a material breach of the terms of
the Employment Agreement and this Release and the Executive will be
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required to reimburse the Company for any and all payments made under the terms
of the Employment Agreement and all commitments to make additional payments to
the Executive will be null and void.
9. The Company is not obligated to offer employment to the Executive
(or to accept services or the performance of work from the Executive directly or
indirectly) now or in the future.
10. The Executive may revoke this Release in writing within seven
days of signing it. This Release will not take effect until the Effective Date.
If the Executive revokes this Release, all of its provisions and the provisions
of Section 3 of the Employment Agreement shall be void and unenforceable.
11. The Termination Date of the Executive's employment will be
__________. The Effective Date shall be the day after the end of the revocation
period described in Section 10 hereof.
12. The Executive shall keep strictly confidential all the terms and
conditions, including amounts, in the Employment Agreement and this Release and
shall not disclose them to any person other than the Executive's spouse, the
Executive's legal or financial advisor or United States governmental officials
who seek such information in the course of their official duties, unless
compelled by law to do so. If a person not a party to the Employment Agreement
requests or demands, by subpoena or otherwise, that the Executive disclose or
produce the Employment Agreement or this Release or any terms or conditions
thereof, the Executive shall immediately notify the Company and shall give the
Company an opportunity to respond to such notice before taking any action or
making any decision in connection with such request or subpoena.
13. The Employment Agreement and this Release constitute the entire
understanding between the parties. The Executive has not relied on any oral
statements that are not included in the Employment Agreement or this Release.
14. This Release shall be construed, interpreted and applied in
accordance with the law of the State of [Illinois] (other than conflict of laws
principles).
EXECUTIVE
___________________________________
Date: _____________________________
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Exhibit (c)(8)
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of November 22, 1998
by and between Peter Nicholson (the "Executive") and Total Control Products,
Inc., an Illinois corporation (the "Company").
R E C I T A L S:
A. Concurrently herewith, GE Fanuc Automation North America, Inc. ("GE
Fanuc"), Orion Merger Corp. and the Company are entering into an Agreement and
Plan of Merger (the "Merger Agreement"), pursuant to which Orion Merger Corp.
will be commencing a tender offer (the "Offer") for the common stock of the
Company and, following the consummation of such Offer, merging (the "Merger")
with and into the Company, whereupon the Company will become a wholly-owned
subsidiary of GE Fanuc.
B. The Executive is the beneficial owner of certain shares of common stock
of the Company and intends to tender such shares to Orion Merger Corp. pursuant
to the Offer.
C. The Company and the Executive have entered into an Employment
Agreement, dated as of December 31,1997 (the "Prior Agreement") pursuant to
which the Executive is employed as an executive officer of the Company.
D. Commencing upon consummation of the Offer, the Company desires to
continue the employment of the Executive as an executive officer of the Company
and the Executive agrees to be so bound, all on the terms and subject to the
conditions set forth herein, and the Company and the Executive desire to
terminate the Prior Agreement.
E. The Company desires to bind the Executive to certain restrictive
covenants and the Executive agrees to be so bound, all on the terms and subject
to the conditions set forth herein.
A G R E E M E N T:
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. EFFECT OF AGREEMENT; TERMINATION OF PRIOR AGREEMENT. This Agreement
shall become effective upon the consummation of the Offer and shall terminate
and be of no further force or effect if the Merger Agreement shall be terminated
prior to the consummation of the Offer. Upon consummation of the Offer, the
Prior Agreement shall terminate and shall be of no further force or effect
whatsoever.
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2. TERM. Subject to the terms and conditions set forth herein and unless
sooner terminated as hereinafter provided, the Company shall employ the
Executive and the Executive agrees to serve as an employee of the Company during
the period beginning at the consummation of the Offer and ending on the second
anniversary thereof (the "Employment Term"). After the expiration of the
Employment Term, the Executive's employment hereunder shall automatically renew
for successive one-year periods (each, a "Renewal Term") unless either party
hereto delivers written notice to the other party hereto, at least ninety (90)
days prior to the expiration of the Employment Term or any Renewal Term thereof,
as the case may be, of his or its desire to terminate the Executive's employment
with the Company. The Employment Term and any Renewal Term thereof are
collectively referred to herein as the "Term."
3. EMPLOYMENT DUTIES. During the Term, the Executive shall serve as the
Senior Vice President & CFO of the Company. The Executive shall faithfully,
diligently and competently perform such duties and as are commensurate with his
position and such other duties as are commensurate with his position that may
from time to time be assigned to him by the President & CEO of the Company.
4. COMPENSATION. As compensation for the services to be performed and the
duties and responsibilities to be assumed by the Executive during the Term, the
Company shall pay to the Executive the following compensation:
(a) A salary (the "Salary") in an amount equal to $175,000 per annum. The
Company shall review the Salary annually during the Term and any increases in
Salary shall be made at the sole discretion of the Company. The Salary shall be
payable to the Executive in accordance with the Company's ordinary payment
practices for salaried employees.
(b) The Executive shall be entitled to participate in the Company's
executive bonus plan (a "Bonus") on the same terms as the participation of other
executives of the Company; provided, however, that, during the Employment Term,
the Executive shall receive an annual Bonus of not less than $50,000. In no
event shall any Bonus be paid to the Executive for any calendar year of the
Company unless the Executive is employed throughout the entire calendar year by
the Company or any of its Affiliates (as defined below). The Bonus shall be
determined from the Company's internal accounting records, which shall be
finally approved by the Board of Directors of the Company (the "Board") or any
compensation committee thereof. The Bonus awarded to the Executive in respect
of any particular calendar year shall be paid at the same time as bonuses are
paid to other executives of the Company.
(c) If the Executive remains employed by the Company for the entire
Employment Term he shall be entitled to a bonus in the amount of $85,000 at the
end of such Employment Term.
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As used herein, an "Affiliate" shall mean and include any person or entity
which controls a party, which such party controls or which is under common
control with such party. "Control" means the power, direct or indirect, to
direct or cause the direction of the management and policies of a person or
entity through voting securities, contract or otherwise.
5. VACATIONS. The Executive shall be entitled to reasonable vacation in
accordance with the Company's policies applicable to its senior executives
generally, but in no event less than three weeks annually, which shall be taken
at such time or times as shall be mutually determined by the Company and the
Executive.
6. BENEFITS.
(a) During the Term, the Executive shall be entitled to participate in such
employee benefit plans and programs as are maintained by the Company, to the
extent that his position, service, compensation, age, health and other
qualifications make him eligible to participate. The Company does not promise
the adoption or continuance of any particular plan or program during the Term,
and the Executive's (and his eligible dependents') participation in any such
plan or program shall be subject to the provisions, rules, regulations and laws
applicable thereto.
(b) During the Term, the Executive shall be entitled to such other fringe
benefits as are provided to employees of the Company with comparable positions,
service and compensation as the Executive.
7. REIMBURSEMENT OF EXPENSES. During the Term, the Executive shall be
entitled to prompt reimbursement for ordinary, necessary and reasonable out-of-
pocket trade or business expenses which the Executive incurs in connection with
performing his duties under this Agreement. The reimbursement of all such
expenses shall be made upon presentation of evidence reasonably satisfactory to
the Company of the amounts and nature of such expenses and shall be subject to
the reasonable approval of the Board.
8. RESTRICTIVE COVENANTS. The Executive acknowledges and agrees that (a)
through his continuing services to the Company, he will learn valuable trade
secrets and other proprietary information relating to the Company's business;
(b) the Executive's services to the Company are unique in nature; (c) the
Company's business is national in scope; and (d) the Company would be
irreparably damaged if the Executive were to provide services to any person or
entity in violation of the restrictions contained in this Agreement.
Accordingly, as an inducement to the Company to enter into this Agreement, the
Executive agrees that during the Term and for two years thereafter (such period
being referred to herein as the "Restricted Period"), the Executive shall not,
directly or indirectly, either for himself or for any other person or entity,
without the prior written consent of the Board of Directors of GE Fanuc:
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(a) anywhere in the United States, engage or participate in, or assist,
advise or be connected with (including as an employee, owner, partner,
shareholder, officer, director, advisor, consultant, agent or (without
limitation by the specific enumeration of the foregoing) otherwise), or permit
his name to be used by or render services for, any person or entity engaged in,
or making plans to engage in, a business that competes with the business
conducted by, or proposed to be conducted by, GE Fanuc or any of its
subsidiaries (a "Competing Business");
(b) take any action which might divert from GE Fanuc or any of its
subsidiaries any opportunity (each, an "Opportunity") which would be within the
scope of the business then conducted by GE Fanuc or any of its subsidiaries and
shall offer each Opportunity to GE Fanuc, which GE Fanuc may, in its sole
discretion, decide to pursue or not;
(c) solicit, attempt to solicit, aid in the solicitation of or accept any
orders from any person or entity who is or has been a customer of GE Fanuc or
any of its subsidiaries, at any time during the period beginning one year prior
to the date of termination of his employment through the Restrictive Period, to
purchase products or services from any person or entity which products or
services could have been supplied or performed, as the case may be, by GE Fanuc
or any of its subsidiaries (other than from GE Fanuc or any of its
subsidiaries);
(d) solicit, attempt to solicit or aid in the solicitation of any person or
entity who is or has been a customer, supplier, licensor, licensee or person or
entity having any other business relationship with GE Fanuc or any of its
subsidiaries, at any time during the period beginning one year prior to the date
of termination of his employment through the Restrictive Period, to cease doing
business with or alter its business relationship with GE Fanuc or any of its
subsidiaries; or
(e) solicit or hire any person or entity who is a director, officer or
employee of GE Fanuc or any of its subsidiaries to perform services for any
person or entity other than GE Fanuc or any of its subsidiaries or to terminate
his or her employment with GE Fanuc or any of its subsidiaries.
9. DISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive recognizes that
he will occupy a position of trust and confidence with the Company as to
Confidential Information (as herein defined) pertaining to the Company and its
Affiliates. As an inducement for the Company to enter into this Agreement, the
Executive therefore agrees that:
(a) for the longest period permitted by law from the date of this
Agreement, the Executive shall hold in the strictest confidence and shall not,
other than as required by law, without the prior written consent of the Board of
Directors of GE Fanuc, use for his own benefit or that of any third party or
disclose to any person, firm or corporation (except the Company, an Affiliate of
the Company or employees of the Company and its Affiliates) any Confidential
Information. For purposes of this Agreement, "Confidential
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Information" shall mean any (i) trade secret or other confidential or secret
information of the Company or of any of its Affiliates or (ii) other technical,
business, proprietary or financial information of the Company or any of its
Affiliates not available to the public generally or to the competitors of the
Company or any of its Affiliates.
(b) The Executive (and, if deceased, the Executive's personal
representative) shall promptly following a request therefor from GE Fanuc return
to the Company, without retaining copies, all tangible items which are or which
contain Confidential Information. The Executive shall also surrender all
computer print-outs, laboratory books, floppy disks and other such media for
storing software and information, work papers, files, client lists, telephone
and/or address books, rolodex cards, internal memoranda, appointment books,
calendars, keys and other tangible things entrusted to the Executive by the
Company or any of its Affiliates or authored in whole or in part by the
Executive within the scope of his duties to the Company even if such things do
not contain Confidential Information; and
(c) at the request of GE Fanuc made at any time or from time to time
hereafter, the Executive (and, if deceased, the Executive's personal
representative) shall make, execute and deliver all applications, papers,
assignments, conveyances, instruments or other documents and shall perform or
cause to be performed such other lawful acts as GE Fanuc may reasonably deem
necessary or desirable to implement any of the provisions of this Agreement, and
shall give testimony and cooperate with the Company, its Affiliates or their
respective representatives in any controversy or legal proceedings involving the
Company, its Affiliates or their respective representatives with respect to any
Confidential Information, the reasonable expenses of such testimony and
cooperation to be paid by the Company.
10. INVENTIONS. The Executive acknowledges that in his capacity as an
executive officer of the Company, he will be involved in (i) the conception of
making of improvements, discoveries, inventions or the like (whether patentable
or unpatentable and whether or not reduced to practice), (ii) the authorship of
copyrightable works and (iii) the development of trade secrets relating to the
Company or any of its Affiliates. The Executive acknowledges that all such
intellectual property developed in connection with his employment with the
Company is the exclusive property of the Company. The Executive hereby waives
any rights he may have in or to such intellectual property, and the Executive
hereby assigns to the Company all right, title and interest in and to such
intellectual property. At the request of GE Fanuc and at no expense to the
Executive, the Executive shall execute and deliver all such papers, including,
without limitation, any assignment documents, and shall provide such cooperation
as may be necessary or desirable, or as GE Fanuc may reasonably request, in
order to enable the Company to secure and exercise its rights to such
intellectual property.
11. SPECIFIC PERFORMANCE. The Executive agrees that any violation by him
of Sections 8, 9, or 10 of this Agreement would be highly injurious to the
Company and its Affiliates and would cause irreparable harm to the Company and
its Affiliates. By
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reason of the foregoing, the Executive consents and agrees that if he violates
any provision of Sections 8, 9 or 10 of this Agreement, the Company and its
Affiliates shall be entitled, in addition to other rights and remedies that they
may have, to apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any continuing violation of, the provisions of such section. In the event the
Executive breaches a covenant contained in this Agreement, the Restricted Period
applicable to the Executive with respect to such breached covenant shall be
extended for the period of such breach. The Executive also recognizes that the
territorial, time and scope limitations set forth in Sections 8 and 9 are
reasonable and are properly required for the protection of the Company and its
Affiliates and in the event that any such territorial, time or scope limitation
is deemed to be unreasonable by a court of competent jurisdiction, the Company
and the Executive agree, and the Executive submits, to the reduction of any or
all of said territory, time or scope limitations to such an area, period or
scope as said court shall deem reasonable under the circumstances. The Executive
represents, warrants and acknowledges that he has available to him sufficient
other means of support so that observance of the covenants contained in Sections
8, 9 and 10 shall not deprive him of his ability to earn a livelihood or support
his dependents.
12. TERMINATION FOR CAUSE. During the Term, the Executive's employment
with the Company may be terminated by the Board "for cause," which shall include
(a) the Executive's conviction for, or plea of nolo contendere to, a felony or a
crime involving moral turpitude; (b) the Executive's commission of an act
involving personal dishonesty or fraud involving personal profit in connection
with the Executive's employment with the Company; (c) the Executive's commission
of an act involving willful misconduct or gross negligence on the part of the
Executive in the conduct of his duties hereunder; (d) the Executive's breach of
any material provision of this Agreement where such breach continues for a
period of twenty (20) days after the Executive's receipt of written notice of
such breach from the Company; or (e) willful violation of the Parent's integrity
policies as set forth in the booklet "The Spirit and Letter," a copy of which
has been provided to the Employee. In the event of termination under this
Section 12, the Company's obligations under this Agreement shall cease and the
Executive shall forfeit all his rights to receive any compensation or benefits
under this Agreement, except that the Executive shall be entitled to his Salary
and benefits for services already performed as of the date of termination of the
Executive's employment hereunder.
13. GOOD REASON. The Executive shall be entitled to terminate his
employment hereunder at any time for Good Reason. For the purposes of this
Agreement, the Executive shall have "Good Reason" to terminate his employment
hereunder (i) upon a significant demotion or material adverse change in his
duties and responsibilities; (ii) upon a reduction in Salary, Bonus or in fringe
benefits provided to him of 10% or more; (iii) upon a material breach by the
Company of its agreements and covenants set forth herein; (iv) upon a
requirement to relocate, except for office relocations that would not increase
the Executive's one-way commute distance by more than fifty (50) miles from the
most recent principal residence selected by the Executive prior to notice of
relocation; or (v) if General Electric Company no longer controls the Company,
directly or indirectly, or all or
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substantially all of the assets of the Company are purchased by any person who
is not controlled directly or indirectly by General Electric Company.
14. DEATH OR DISABILITY.
(a) This Agreement shall terminate upon the Executive's death.
(b) If the Executive becomes permanently disabled (determined as provided
below) during the Term, his employment with the Company shall terminate as of
the date such permanent disability is determined. The Executive shall be
considered to be permanently disabled for purposes of this Agreement if he is
unable by reason of accident or illness (including mental illness) to perform
the material duties of his regular position with the Company and is (i) not
expected to recover from his disability within a period of six (6) months from
the commencement of the disability; or (ii) not expected to be able to perform
his material duties of his regular position with the Company for a period of six
(6) months in any consecutive twelve (12) month period as a result of the same
disability. If at any time the Executive claims or is claimed to be permanently
disabled, a physician acceptable to both the Executive, or his personal
representative, and the Company (which acceptances shall not be unreasonably
withheld) shall be retained by the Company and shall examine the Executive. The
Executive shall cooperate fully with the physician. If the physician determines
that the Executive is permanently disabled, the physician shall deliver to the
Company a certificate certifying both that the Executive is permanently disabled
and the date upon which the condition of permanent disability commenced. The
determination of the physician shall be conclusive.
(c) The Executive's right to his compensation and benefits under this
Agreement shall cease upon his death or disability, except that the Executive
(or his estate or heirs) shall be entitled to his Salary and a pro rata portion
of his Bonus and benefits for services already performed as of the date of his
death or disability.
15. EFFECT OF TERMINATION.
(a) If the Company terminates the Executive's employment hereunder for any
reason (including, without limitation, the Company's failure to renew the term
of this Agreement at the end of the Employment Term or any Renewal Term thereof,
as applicable), other than for cause, death or disability during the Term or the
Executive terminates this Agreement for Good Reason during the Term, provided
that the Executive (or the Executive's executor or other legal representative in
the case of the Executive's death or Disability) executes the Release (as
defined in Section (f) below), (i) the Company shall pay the Executive in one
lump sum an amount equal to (A) twenty-four times the greater of (I) his monthly
Salary as of the date of termination or (II) his highest monthly Salary during
the prior twelve month period; plus (B) two times the bonus paid to the
Executive for the fiscal year immediately prior to the date of such termination
under the bonus plan of the Company and (ii) the Company shall continue the
Executive's
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medical insurance benefits for a period equal to twelve months or until the
Executive is eligible for medical coverage under a plan of a successive
employer.
(b) If the Executive terminates his employment with the Company for any
reason whatsoever other than for Good Reason, the Company's obligations under
this Agreement shall cease and the Executive shall forfeit all his rights to
receive any compensation or benefits under this Agreement, except that the
Executive shall be entitled to his Salary and benefits for services already
performed as of the date of termination of this Agreement.
(c) Any amounts payable to the Executive pursuant to this Section 15 shall
be paid in full in a lump sum not more than sixty (60) days following the date
of termination of the Executive's employment hereunder.
(d) The Executive shall not be required to mitigate the amount of any
payment contemplated by this Section 15 (whether by seeking new employment or in
any other manner), nor shall any such payment be reduced by any earnings that
the Executive may receive from any other source.
(e) The transfer of the Executive's employment from the Company to an
Affiliate of the Company and the assumption of this Agreement by such Affiliate
shall not constitute a termination of employment for purposes of this Section
15.
(f) Notwithstanding anything to the contrary contained in this Agreement,
no amount shall be payable to the Executive (or the Executive's executor or
other legal representative in the case of the Executive's death or Disability)
pursuant to this Section 15 unless and until the Executive (or the Executive's
executor or other legal representative in the case of the Executive's death or
Disability) executes a general release in the form of Exhibit A attached hereto
(the "Release").
16. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) If it shall be determined that any payment or distribution by the
Company or its affiliated companies to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 4) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code, or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Tax Reimbursement Payment") in an amount equal
to the Excise Tax imposed upon the Payments. The Company will pay the Tax
Reimbursement Payment for the Executive not less than five days prior to the
date on which the Executive must pay such excise tax.
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(b) Subject to the provisions of Section 4(c), all determinations required
to be made under this Section 4, including whether and when a Tax Reimbursement
Payment is required and the amount of such Tax Reimbursement Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
the Company's public accounting firm (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the Company. All fees and
expenses of the Accounting Firm shall be borne solely by the Company. If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion that failure to report the
Excise Tax on the Executive's applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that Tax
Reimbursement Payments which will not have been made by the Company should have
been made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 4(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Tax Reimbursement Payment. Such notification shall be given as
soon as practicable but no later than 10 business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:
(1) give the Company any information reasonably requested by the Company
relating to such claim,
(2) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(3) cooperate with the Company in good faith in order effectively to
contest such claim, and
(4) permit the Company to participate in any proceedings relating to such
claim;
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provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 4(c), the Executive becomes entitled to receive, and
receives, any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 4(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 4(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Tax Reimbursement Payment required to be
paid.
17. MISCELLANEOUS.
(a) All notices required or permitted to be given hereunder shall be in
writing and shall be deemed given (i) when delivered in person at the time of
such delivery or by telecopy with receipt of transmission indicating the date
and time (provided, however, that notice delivered by telecopy shall only be
effective if such notice is also delivered by hand or deposited in the United
States mail, postage prepaid, registered or certified mail, on or before two (2)
business days after its delivery by telecopy), (ii) when received if given by a
nationally recognized overnight courier service or (iii) two (2) business days
after being deposited in the United States mail, postage prepaid, registered or
certified mail, addressed as follows:
if to the Executive:
Peter Nicholson
16800 S. Lee Street
Orland Park, Illinois 60462
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with a copy to:
D'Ancona & Pflaum
30 N. LaSalle Street
Suite 2900
Chicago, Illinois 60602
Attention: Mark Albert
Fax: (312) 580-0932
if to the Company:
Total Control Products, Inc.
2001 Janice Avenue
Melrose Park, Illinois 60160
Attn: President
Fax: (708) 345-5670
with a copy to:
GE Fanuc Automation North America, Inc.
P.O. Box 8106
Charlottesville, VA 22906
Attn: General Counsel
Fax: (804) 978-5320
and/or to such other address or addresses as may be designated by notice given
in accordance with the provisions hereof.
(b) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors and permitted assigns. As
to the Executive, this Agreement is a personal service contract and shall not be
assignable by the Executive, but all obligations and agreements of the Executive
hereunder shall be binding upon and enforceable against the Executive and the
Executive's personal representatives, heirs, legatees and devisees.
(c) The parties adopt the Recitals to this Agreement and agree and affirm
that construction of this Agreement shall be guided thereby; this Agreement
contains all of the agreements between the parties with respect to the subject
matter hereof; and this Agreement supersedes all other agreements, oral or
written, between the parties hereto with respect to the subject matter hereof.
(d) No change or modification of this Agreement shall be valid unless the
same shall be in writing and signed by all of the parties hereto. No waiver of
any provisions of this Agreement shall be valid unless in writing and signed by
the waiving party. No waiver
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of any of the provisions of this Agreement shall be deemed, or shall constitute,
a waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver, unless so provided in the waiver.
(e) If any provisions of this Agreement (or portions thereof) shall, for
any reason, by invalid or unenforceable, such provisions (or portions thereof)
shall be ineffective only to the extent of such invalidity or unenforceability,
and the remaining provisions of this Agreement (or portions thereof) shall
nevertheless be valid, enforceable and of full force and effect.
(f) The section or paragraph headings or titles herein are for convenience
of reference only and shall not be deemed a part of this Agreement.
(g) This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original and all of which taken together shall
constitute a single instrument.
(h) Notwithstanding anything to the contrary contained herein, the
Executive's rights and obligations under Sections 8, 9, 10, 11 and 15 shall
survive the expiration or termination of this Agreement (other than a
termination pursuant to Section 1).
(i) This Agreement shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other respects by
the laws of the State of Illinois applicable to contracts made in that State
(other than any conflict of laws rule which might result in the application of
the laws of any other jurisdiction).
(j) The Executive hereby expressly submits and consents in advance to the
jurisdiction of the federal and state courts of the State of Illinois for all
purposes in connection with any action or proceeding arising out of or relating
to this Agreement.
(k) The Company shall require any successor (whether direct or indirect
and either by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and/or assets, by an
agreement in substance and form satisfactory to the Executive, to assume this
Agreement and to agree expressly to perform this Agreement in the same manner
and to the same extent as the Company would be required to perform it in the
absence of a succession. Regardless of such assumption, the Company shall
remain liable for performance of this Agreement if the successor corporation
fails to perform this Agreement.
(l) All costs, including any legal fees and other expenses incurred
(including all such fees and expenses incurred by the Executive in contesting or
disputing any termination under this Agreement or in seeking to obtain or
enforce any of his rights or benefits under this Agreement), shall be paid by
the Company. All costs, including legal fees and other expenses incurred in
defending or asserting the validity and enforceability of
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this Agreement against challenge by any person in any forum shall be paid by
the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
________________________________
PETER NICHOLSON
TOTAL CONTROL PRODUCTS, INC.
By:_______________________________
Name:
Title:
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EXHIBIT A
Date of Notification:_________________
GENERAL RELEASE
This is a General Release (this "Release") executed by Peter Nicholson
(the "Executive") pursuant to Section 15 of the Employment Agreement dated as of
__________, 1998 (the "Employment Agreement") between [Orion], an Illinois
corporation (the "Company"), and the Executive.
WHEREAS, the employment of the Executive will be terminated by the
Company;
WHEREAS, the Company and the Executive intend that the terms and
conditions of the Employment Agreement and this Release shall govern all issues
related to the Executive's employment and termination of employment by the
Company;
WHEREAS, the Executive has had at least 45 days to consider the form
of this Release;
WHEREAS, the Company advised the Executive in writing to consult with
a lawyer before signing this Release;
WHEREAS, the Executive has represented and hereby reaffirms that the
Executive has disclosed to the Company any information in the Executive's
possession concerning any conduct involving the Company, __________, a ________
corporation (the "Parent"), or their affiliates that the Executive has any
reason to believe involves any false claims to the United States or is or may be
unlawful or violates the policies of the Company or the Parent in any respect;
WHEREAS, the Executive acknowledges that the consideration to be
provided to the Executive under the Employment Agreement is sufficient to
support this Release;
WHEREAS, the Executive represents that the Executive has not filed any
charges, claims or lawsuits against the Company or the Parent involving any
aspect of the Executive's employment which have not been terminated as of the
date of this Release; and
WHEREAS, the Executive understands that the Company regards the
representations by the Executive as material and that the Company is relying on
these representations in paying amounts to the Executive pursuant to the
Employment Agreement.
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THE EXECUTIVE THEREFORE AGREES AS FOLLOWS:
1. The Executive's employment with the Company shall terminate on
_______________ (the "Termination Date").
2. The Executive shall receive the termination payments set forth in
Section 15 of the Employment Agreement.
3. The Employee Innovation and Proprietary Information Agreement
with the Company remains in effect in accordance with its terms.
4. The Executive, on behalf of the Executive and anyone claiming
through the Executive, including the Executive's heirs, assigns and agents,
releases and discharges the Company, the Parent and their respective directors,
officers, employees, subsidiaries, affiliates and agents, and the predecessors,
successors and assigns of any of them (the "Released Parties"), from each and
every claim, action or right of any sort, in law or in equity, known or unknown,
asserted or unasserted, foreseen or unforeseen, arising on or before the
Effective Date (as set forth in Section 11 hereof).
(a) This Release includes, but is not limited to: any claim of
discrimination on the basis of race, sex, religion, marital status, sexual
orientation, national origin, handicap or disability, age, veteran status,
special disabled veteran status or citizenship status; any other claim based on
a statutory prohibition or common law doctrine; any claim arising out of or
related to the Executive's employment with the Company, the terms and conditions
thereof or the termination or cessation thereof; any express or implied
employment contract, any other express or implied contract affecting terms and
conditions of the Executive's employment or the termination or cessation
thereof, or a covenant of good faith and fair dealing; any tort claims and any
personal gain with respect to any claim arising under the qui tam provisions of
the False Claims Act, 31 U.S.C. 3730.
(b) The Executive represents that the Executive understands this
Release, that rights and claims under the Age Discrimination in Employment Act
of 1967, as amended, the Civil Rights Act of 1964, as amended, the Civil Rights
Act of 1991, the Civil Rights Act of 1866, the Older Workers' Benefit Protection
Act, the Family and Medical Leave Act, the Americans With Disabilities Act, the
Employee Retirement Income Security Act of 1974 and the Wisconsin Fair
Employment Act are among the rights and claims against the Released Parties the
Executive is releasing, and that the Executive understands that the Executive is
not releasing any rights or claims arising after the Effective Date.
(c) The Executive further agrees never to sue the Released Parties or
cause the Released Parties to be sued regarding any matter within the scope of
this Release. If the Executive violates this Release by suing any of the
Released Parties or
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causing any of the Released Parties to be sued, the Executive agrees to pay all
costs and expenses of defending against the suit incurred by the Released
Parties, including reasonable attorneys' fees.
(d) The Executive expressly represents and warrants that the
Executive is the sole owner of the actual or alleged claims, demands, rights,
causes of action and other matters that are released herein, that the same have
not been transferred or assigned or caused to be transferred or assigned to any
other person, firm, corporation or other entity, and that the Executive has the
full right and power to grant, execute and deliver this Release.
5. The Executive acknowledges that the Executive is bound by the
provisions of Section 4 of the Employment Agreement.
6. The Executive understands that any and all Company covenants
which relate to Company obligations to the Executive after the Termination Date,
including but not limited to the payments set forth in Section 3 of the
Employment Agreement, are contingent on the Executive's satisfaction of the
Executive's obligations under this Release.
7. The Executive agrees that, for the period commencing on the
Termination Date and ending on the second anniversary of the Termination Date,
the Executive will be reasonably available to the Company and the Parent to
respond to requests by the Company or the Parent for information pertaining to
or relating to the Company, the Parent and their affiliates, subsidiaries,
agents, officers, directors or employees which may be within the knowledge of
the Executive. The Executive will cooperate fully with the Company in
connection with any and all existing or future litigation or investigations
brought by or against the Company, the Parent or any of their affiliates,
agents, officers, directors or employees, whether administrative, civil or
criminal in nature, in which and to the extent the Company deems the Executive's
cooperation necessary. The Executive understands that the Company will
reimburse the Executive for reasonable out-of pocket expenses incurred as a
result of such cooperation. Nothing herein shall prevent the Executive from
communicating with or participating in any government investigation. The
Executive will act in good faith to furnish the information and cooperation
required by this Section 7 and the Company will act in good faith so that the
requirement to furnish such information and cooperation does not create a
hardship for the Executive.
8. The Executive agrees, subject to any obligations the Executive
may have under applicable law, that the Executive will not make or cause to be
made any statements that disparage, are inimical to, or damage the reputation of
the Company, the Parent or any of their affiliates, subsidiaries, agents,
officers, directors or employees. In the event such a communication is made to
anyone, including but not limited to the media, public interest groups and
publishing companies, it will be considered a material breach of the terms of
the Employment Agreement and this Release and the Executive
will be
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required to reimburse the Company for any and all payments made under the terms
of the Employment Agreement and all commitments to make additional payments to
the Executive will be null and void.
9. The Company is not obligated to offer employment to the Executive
(or to accept services or the performance of work from the Executive directly or
indirectly) now or in the future.
10. The Executive may revoke this Release in writing within seven
days of signing it. This Release will not take effect until the Effective Date.
If the Executive revokes this Release, all of its provisions and the provisions
of Section 3 of the Employment Agreement shall be void and unenforceable.
11. The Termination Date of the Executive's employment will be
__________. The Effective Date shall be the day after the end of the revocation
period described in Section 10 hereof.
12. The Executive shall keep strictly confidential all the terms and
conditions, including amounts, in the Employment Agreement and this Release and
shall not disclose them to any person other than the Executive's spouse, the
Executive's legal or financial advisor or United States governmental officials
who seek such information in the course of their official duties, unless
compelled by law to do so. If a person not a party to the Employment Agreement
requests or demands, by subpoena or otherwise, that the Executive disclose or
produce the Employment Agreement or this Release or any terms or conditions
thereof, the Executive shall immediately notify the Company and shall give the
Company an opportunity to respond to such notice before taking any action or
making any decision in connection with such request or subpoena.
13. The Employment Agreement and this Release constitute the entire
understanding between the parties. The Executive has not relied on any oral
statements that are not included in the Employment Agreement or this Release.
14. This Release shall be construed, interpreted and applied in
accordance with the law of the State of [Illinois] (other than conflict of laws
principles).
EXECUTIVE
___________________________________
Date: _____________________________
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