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Exhibit 99.6
[LOGO] GE ENERGY MANAGEMENT SERVICES
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STEPHEN R. BOLZE GENERAL ELECTRIC COMPANY
PRESIDENT AND GENERAL MANAGER 4200 WILDWOOD PARKWAY, ATLANTA, GA 30339 USA
TEL: 770.859.7408
FX: 770.859.6941
EMAIL: [email protected]
October 9, 2000
To optionholders of
Smallworldwide plc
We are pleased to announce that last week General Electric Company
("GE"), through one of its wholly owned subsidiaries, acquired approximately
98% of the outstanding shares of Smallworldwide plc ("Smallworld") pursuant
to its tender offer, which commenced on August 24, 2000 (the "Offer"). As a
result of GE's purchase of these shares, all stock options outstanding under
Smallworld's share option schemes ("Company Options") have vested and are now
exercisable. This letter addresses what you can do next to either rollover
your options or accept the Offer and cash-out your Company Options.
OPTION ROLLOVER OFFER
As you know, GE is offering each Smallworld optionholder the right to
rollover his or her Company Options into options to purchase GE common stock
("Rollover Options"). The terms and conditions of the Rollover Options will be
as follows:
o NUMBER OF SHARES. The number of shares of GE common stock that
may be purchased upon the exercise of Rollover Options will be
equal to the number of ordinary shares of Smallworld covered
by the Company Options rolled over MULTIPLIED BY 0.342
(rounding the result up to the nearest whole number). This
number, 0.342, is the option ratio specified in the
acquisition agreement between GE and Smallworld.
o EXERCISE PRICE. The exercise price of the Rollover Options
will be an amount equal to the exercise price of the Company
Options rolled over DIVIDED BY 0.342.
o EXAMPLE. If you rollover Company Options to purchase 100
ordinary shares of Smallworld at an exercise price of US$6.50
per share, your Rollover Options will be to purchase 35 shares
of GE common stock (i.e. 100 X 0.342 = 34.20, rounded up to
the nearest whole number) at an exercise price equal to
US$19.01 (i.e. US$6.50 DIVIDED BY 0.342).
o VESTING SCHEDULE. Rollover Options will have the same vesting
schedule as the Company Options rolled over. Company Options
vested prior to October 3, 2000 that are rolled over into
Rollover Options will remain exercisable.
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o GOVERNING PLANS. If your Company Options were issued under an
Inland Revenue approved Smallworld plan, any Rollover Options
issued to you will be subject to the terms and conditions of
the relevant approved Smallworld plan. If your Company Options
were issued under an unapproved Smallworld plan, any Rollover
Options issued to you will be subject to the terms and
conditions of GE's 1990 Long-Term Incentive Plan (the "GE
Plan"), a copy of which was provided to you in the rollover
plan binder. For additional information regarding Rollover
Options subject to the GE Plan, please see the example
highlight sheet attached as Exhibit A to this letter.
o ELECTION DEADLINE. To elect to rollover any of your Company
Options, you must submit the election form attached as Exhibit
B to this letter to Ian McShane, GE Smallworld, Elizabeth
House, 1 High Street, Chesterton, Cambridge CB4 1WR by no
later than 9:30 a.m., New York City time and 2:30 p.m., London
time, on October 31, 2000.
o NEXT STEPS. To receive Rollover Options:
- Please complete the election form attached to this
letter as Exhibit B and return it to Ian McShane at
the address set forth above by no later than 9:30
a.m., New York City time and 2:30 p.m., London time,
on October 31, 2000;
- Please deliver with your completed election form the
option certificates representing the Company Options
you want to rollover; and
- Within approximately four to six weeks after October
31, 2000, provided GE has received your completed
election form, you will be issued a new option
certificate representing the Rollover Options.
Your election form will constitute a binding agreement by you (whether
or not you deliver the related option certificates, which will thereafter be
deemed void) to rollover the Company Options specified by you.
ACCEPTANCE OF THE OFFER
If you do not wish to rollover all of your Company Options, you may
effect a concurrent cashless exercise and tender of the ordinary shares subject
to your Company Options during the subsequent offer period. The subsequent offer
period commenced on October 3, 2000 and will expire at 9:30 a.m., New York City
time and 2:30 p.m., London time, on October 31, 2000. The terms of accepting the
Offer in this manner are as follows:
o WHAT YOU RECEIVE. If you properly accept the Offer, you will
receive, in respect of each ordinary share of Smallworld
subject to Company Options tendered pursuant to the Offer,
an amount in cash equal to US$20 less the applicable
exercise price and any withholding taxes required by the
laws of the jurisdiction in which you are tax-resident.
You will receive payment on the next scheduled payroll
date on which you are otherwise paid by GE (or a
subsidiary thereof). Notwithstanding anything to the
contrary in the Offer to Purchase relating to the Offer,
payment will be made in the same currency in which your
salary is currently paid.
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o DELIVERY DEADLINE. To accept the Offer, you must deliver the
documents described above on or before 9:30 a.m., New York
City time and 2:30 p.m., London time, on October 31, 2000.
o NEXT STEPS. To cash-out your Company Options:
- Please complete the election form attached as Exhibit
B and return it to Ian McShane, GE Smallworld,
Elizabeth House, 1 High Street, Chesterton, Cambridge
CB4 1WR by no later than 9:30 a.m., New York City
time and 2:30 p.m., London time, on October 31, 2000;
- Please also deliver your option certificates
representing your Company Options and, if you are
outside the U.S., a properly completed Form of
Acceptance and, if you are in the U.S., a properly
completed Letter of Transmittal; and
- Alternatively, you may deliver your option
certificates representing your Company Options and a
properly completed Form of Acceptance or Letter of
Transmittal to the U.K. Receiving Agent or U.S.
Depositary (as defined in the Offer to Purchase
relating to the Offer), as appropriate; however, we
prefer that you use the delivery method discussed
above.
WHO TO CONTACT FOR MORE INFORMATION
If you have any questions regarding GE's rollover offer, please contact
Ian McShane by telephone at 44-1223-449-359 or by e-mail at
[email protected]. Further information regarding GE's rollover offer
and your ability to cash-out Company Options by accepting the Offer is attached
to this letter as Exhibit C. In addition, Exhibits D and E to this letter
contain certain tax information and an example of the rollover conversion
calculation, respectively.
If you wish to accept the Offer and need additional copies of the Offer
to Purchase, the Form of Acceptance or Letter of Transmittal, please contact
Morrow & Co., Inc., the information agent for the Offer, at: (800) 566-9061 or
(212) 754-8000. If you are outside the U.S., you may call collect.
Very truly yours,
/s/ Stephen R. Bolze
THIS OFFER WILL NOT BE MADE, DIRECTLY OR INDIRECTLY, IN OR INTO, OR BY
USE OF THE MAILS OR OTHER MEANS OR INSTRUMENTALITY (INCLUDING, WITHOUT
LIMITATION, TELEPHONIC OR ELECTRONIC) OF INTERSTATE OR FOREIGN COMMERCE OF, OR
ANY FACILITIES OF A NATIONAL SECURITIES EXCHANGE OF AUSTRALIA AND WILL NOT BE
CAPABLE OF ACCEPTANCE BY SUCH USE, MEANS, INSTRUMENTALITY OR FACILITIES OR FROM
WITHIN AUSTRALIA.
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EXHIBIT A
EXAMPLE
THE FOLLOWING CONTAINS ADDITIONAL INFORMATION FROM THE GE LONG TERM INCENTIVE
PLAN RULES AS IT PERTAINS TO GE STOCK OPTIONS.
o YOU MAY EXERCISE YOUR GE OPTIONS WITHOUT ANY CASH OUTLAY by providing
PaineWebber, the stock broker with whom GE has a special program for
exercising your stock options, with instructions to simultaneously sell
the GE stock that is purchased, and receive a net cash payment.
Alternatively, you may choose to purchase shares at the fixed Option
Exercise Price and receive a GE stock certificate for the shares
acquired
- Details on how to exercise your stock options are more fully
explained in the OptionLine Brochure.
o For individuals subject to U.S. income tax, the gains from your
exercise (defined as the difference between the market price of GE
stock on the exercise date and the Option Exercise Price, multiplied by
the number of options exercised) are taxable to you as ordinary income.
o Regulations governing the tax treatment of stock option awards and
exercises in countries other than the U.S. vary from country to country
and can be complex. Employees subject to taxes in countries other than
the U.S. should consult with their local tax advisor regarding GE stock
options.
o Dividends payable on shares of GE Common Stock are not payable on stock
options.
o Termination of employment with the General Electric Company ("Company")
or any of its affiliates affects the exercisability and expiration of
stock options.
THE CHART BELOW HIGHLIGHTS WHAT HAPPENS TO YOUR STOCK OPTIONS UNDER MOST
EMPLOYMENT TERMINATION SITUATIONS:
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If your service with the Company or OPTIONS EXPIRE IMMEDIATELY.
any of its affiliates ends for any
reason LESS THAN ONE YEAR after the
Grant Date (EXCEPT DUE TO DEATH).
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If your service ends ONE OR MORE
YEARS after the Grant Date as a
result of:
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RETIREMENT OR TOTAL DISABILITY: If Options become exercisable
(a) you are a participant in the GE immediately and are generally
Pension Plan (U.S.) and service exercisable until 10 years after
with the Company or any of its the Grant Date.
affiliates terminates as a result
of retirement under the GE Pension
Plan, or (b) you are not a
participant in the GE Pension Plan
and service with the Company or any
of its affiliates terminates as a
result of retirement under a
retirement plan or program of the
Company or any of its affiliates ON
OR AFTER AGE 60 AND AFTER 5 OR MORE
YEARS OF COMBINED SERVICE WITH THE
COMPANY and any of its affiliates,
or (c) your service with the
Company or any of its affiliates
terminates as a result of a total
disability, i.e., the inability to
perform any job for which you are
reasonably suited by means of
education, training or experience.
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A BUSINESS DISPOSITION: If your Options become exercisable in the
service with the Company or any of normal manner and are generally
its affiliates terminates as a exercisable until the earlier of 5
result of employment by a successor years after the business
employer to which the Company has disposition or 10 years after the
transferred a business operation. Grant Date.
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A LAYOFF OR PLANT CLOSING: If your First installment of Options, if
service with the Company or any of unexercisable, become exercisable
its affiliates terminates as a upon termination of service. All
result of a layoff or plant exercisable Options are then
closing, each as defined in the generally exercisable until 1 year
Company's Layoff Benefit Plan. after termination of service.
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VOLUNTARY TERMINATION OR OPTIONS EXPIRE IMMEDIATELY.
TERMINATION FOR CAUSE
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If your service with the Company or Options become exercisable
any of its affiliates ends as a immediately and are generally
RESULT OF DEATH. exercisable until 10 years after
the Grant Date.
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o THIS HIGHLIGHT SHEET SUMMARIZES ONLY SOME OF THE PROVISIONS OF THE
MONTH DAY, YEAR GRANT, IT IS NOT INTENDED TO PROVIDE FULL DETAILS. YOU
SHOULD READ THE STOCK OPTION GRANT CERTIFICATE WHICH DESCRIBES THE
TERMS MORE FULLY. The Stock Option Grant Certificate and the GE 1990
Long Term Incentive Plan, together, establish your legal rights under
the Grant. If you have any questions about your Options, please contact
the Corporate Benefits Delivery Inquiry Center on 8*564-7588 or (518)
388-7588.
This document constitutes part of a prospectus covering securities Date
that have been registered under the Securities Act of 1933.
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EXHIBIT B
ELECTION FORM
Please print your name:_________________________
PLEASE CHECK EACH OF THE BOXES SET FORTH BELOW AS APPROPRIATE, FILL IN
THE ADDITIONAL INFORMATION REQUESTED AND SIGN THIS ELECTION FORM. PLEASE BE SURE
TO HAVE YOUR SIGNATURE WITNESSED. PLEASE RETURN THIS ELECTION FORM TO IAN
MCSHANE, GE SMALLWORLD, ELIZABETH HOUSE, 1 HIGH STREET, CHESTERTON, CAMBRIDGE
CB4 1WR BY NO LATER THAN 9:30 A.M., NEW YORK CITY TIME AND 2:30 P.M., LONDON
TIME, ON OCTOBER 31, 2000.
|_| YES, I WANT TO ROLLOVER ALL OR A PORTION OF MY COMPANY
OPTIONS.
If you checked the box above, please complete the following:
Company Options issued under Inland Revenue approved
Smallworld share option schemes I want to rollover:
Number of Date Options Exercise Date Options
Options Granted Price Vest
--------- ------------ -------- ------------
Company Options issued under Inland Revenue unapproved
Smallworld share option schemes I want to rollover:
Number of Date Options Exercise Date Options
Options Granted Price Vest
--------- ------------ -------- ------------
|_| YES, I WANT TO ACCEPT THE OFFER AND RECEIVE CASH FOR THE
ORDINARY SHARES SUBJECT TO ALL OR A PORTION OF MY COMPANY
OPTIONS.
If you checked the box above, please complete the following:
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Company Options issued under Inland Revenue approved
Smallworld share option schemes I want to cash-out:
Number of Date Options Exercise Date Options
Options Granted Price Vest
--------- ------------ -------- ------------
Company Options issued under unapproved Smallworld share
option schemes I want to cash-out:
Number of Date Options Exercise Date Options
Options Granted Price Vest
--------- ------------ -------- ------------
|_| YES, I HAVE LOST SOME OR ALL OF THE OPTION CERTIFICATES
REPRESENTING THE COMPANY OPTIONS THAT I AM ROLLING OVER AND/OR
CASHING OUT.
If you checked the box above, please complete the following:
The option certificates representing Company Options granted
to me on the following dates have been lost or destroyed:
I hereby, for myself, my heirs, executors or administrators,
agree to indemnify Smallworldwide and GE and their respective
affiliates against any and all claims and demands, losses,
expenses and costs that may be made against or suffered by
Smallworldwide and GE and their respective affiliates in
relation to the lost option certificate.
SIGNATURE: THE UNDERSIGNED HAS EXECUTED THIS ELECTION FORM AS OF THE
DATE SET FORTH BELOW:
Witness: Signature:
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Print Name: Print Name:
--------------------- ------------------------
Print Address: Phone Number:
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Date: Date:
--------------------- ------------------------
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EXHIBIT C
GENERAL
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF
YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU ARE RECOMMENDED TO
SEEK YOUR OWN FINANCIAL ADVICE IMMEDIATELY FROM YOUR STOCKBROKER, BANK MANAGER,
SOLICITOR, ACCOUNTANT OR OTHER DULY AUTHORISED INDEPENDENT FINANCIAL ADVISER
AUTHORISED UNDER THE FINANCIAL SERVICES ACT 1986.
This Exhibit sets out further details relating to the terms of the
Option Rollover Offer for Optionholders of:
o the Smallworldwide plc 1996 Unapproved Share Option Scheme
(the "Unapproved Scheme");
o the Smallworldwide Executive Share Option Scheme and the
Smallworldwide Limited Share Option Scheme 1996 (the "Approved
Schemes")
together, the "Share Schemes".
The Directors of Smallworldwide plc ("Smallworld") who have been so advised by
Deutsche Bank AG consider the terms of the Offer to Optionholders under the
Share Schemes to be fair to such Optionholders from a financial point of view
in the context of the Offer.
CHOICE 1: ROLLOVER OF YOUR EXISTING OPTIONS TO PURCHASE ORDINARY SHARES
OF SMALLWORLD ("COMPANY OPTIONS") FOR OPTIONS TO PURCHASE COMMON
STOCK OF GENERAL ELECTRIC COMPANY ("GE") ("ROLLOVER OPTIONS")
We are offering you the opportunity, in accordance with the rules of
the relevant Share Scheme, to release your Company Options in exchange for the
grant of Rollover Options (the "Rollover Offer"). The terms of the exchange
would be
FOR EVERY 100 SMALLWORLD SHARES CURRENTLY 34.20 SHARES OF GE COMMON STOCK
UNDER A COMPANY OPTION UNDER A ROLLOVER OPTION
and so in proportion for any other number of Smallworld shares currently under
option.
The number of shares of GE common stock comprised in your Rollover
Options will be rounded up, if necessary, to the nearest whole number of shares.
The exercise price payable for each share of GE common stock under a Rollover
Option will be different from the price payable for each Smallworld share under
the corresponding Company Option and will be quoted in US dollars. However, the
total amount payable for the shares of GE common stock under each Rollover
Option will be, so far as possible, taking into account exchange rates at the
time of the rollover no more than the total amount payable under the
corresponding Company Options.
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The terms of the Rollover Offer reflect the terms of the Offer. The
future value of your Rollover Options will depend upon the value of the shares
of GE common stock to which they relate.
The letter to which this Exhibit C is attached shows how to calculate
the number of shares of GE common stock which you will acquire on exercise of
your Rollover Options, as well as the applicable exercise price payable for your
GE common stock.
The Rollover Options issued in respect of Company Options granted under
any Approved Scheme will continue to be subject to the rules of the relevant
Share Scheme. Rollover Options issued in respect of Company Options granted
under the Unapproved Scheme, however, will be subject to the rules of the GE
1990 Long-Term Incentive Plan, a copy of which has been provided to you.
If you wish to make this choice 1 in relation to your Company Options,
please complete the appropriate section of the Election Form attached as Exhibit
B to this letter.
CHOICE 2: EXERCISE OF COMPANY OPTIONS AND ACCEPTANCE OF OFFER
You may elect to exercise your Company Options to acquire Smallworld
shares at the exercise price and effect a concurrent cashless exercise and
acceptance of the Offer in respect the Smallworld shares subject to your Company
Options. This means that you will be entitled to receive, in accordance with the
terms of the Offer, US$20 per Smallworld share in cash less the exercise price
of your Company Option and any applicable withholding taxes.
To make this choice 2 with respect to your Company Options, please
complete the appropriate section of the Election Form. If you make this choice
2, you will also be authorising GE to withhold the exercise price and any
applicable withholding taxes from the consideration due to you under the Offer.
OTHER COURSES OF ACTION
If you do not wish to choose either choice 1 or 2 then technically you
may exercise your Company Options and retain your Smallworld shares. If you wish
to do so, you should NOT use the Election Form. Instead, you should:
o prepare a cheque made payable to "Smallworldwide plc" for the
aggregate exercise price;
o complete the reverse of the option certificate(s); and
o send it/them, together with your cheque, to Ian McShane at
Smallworldwide plc.
If you do this, you may then wish to keep your Smallworld shares, but
you should be aware that GE is entitled to acquire compulsorily any outstanding
Smallworld shares. It is
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therefore likely that your Smallworld shares will be bought by GE on the terms
of the Offer in any event. You may wish to sell your Smallworld shares, but you
should be aware that you may not be able to do so because the Smallworld shares
have been de-listed from the Nasdaq National Market.
GENERAL
Before forwarding the Election Form to Ian McShane at Smallworldwide
please ensure that you have signed the Election Form and, if applicable, the
Form of Acceptance and that the signature has been witnessed.
PLEASE SUPPLY A DAYTIME CONTACT NUMBER, SO THAT YOU CAN BE CONTACTED
YOU QUICKLY IF THERE IS ANY QUERY WITH YOUR FORM.
Option certificates need to be included with the Election Form and, if
applicable, the Form of Acceptance. If any of your certificates have been lost
or destroyed, you must complete the disclaimer in the Election Form. Smallworld
will not be issuing duplicate certificates. Please note that whether you enclose
your option certificate or not, when your Election Form and, if applicable, Form
of Acceptance is processed your certificate will become void and ineffective
immediately.
IF YOU DO NOT TAKE ANY ACTION, YOUR COMPANY OPTIONS WILL, IN DUE
COURSE, LAPSE AND BE WORTHLESS.
Please note that nothing in this Offer document serves to extend the
life of any Company Option which lapses (or has already lapsed) under the rules
of the relevant Share Scheme. You cannot exercise your Company Options or accept
any of the choices for any Company Options which have lapsed.
UK TAX TREATMENT
A key consideration that needs to be included in your decision process
is the tax consequences of the choice that you make.
Summarised below are some of the generally applicable UK tax
consequences which may arise from the choices described in this Exhibit C for
optionholders resident for tax purposes in the UK. The precise consequences for
you will depend on your particular circumstances. If you are in any doubt as to
your tax position, you should consult an independent financial adviser.
CHOICE 1: ROLLOVER OF YOUR EXISTING COMPANY OPTIONS
If you release your Company Options over Smallworld Shares in exchange
for Rollover Options, no tax liability will arise at the time of exchange. When
you exercise your Rollover Options the tax treatment will be the same as for
your existing Company Options, as if the exchange had not occurred.
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CHOICE 2: EXERCISE OF COMPANY OPTIONS AND ACCEPTANCE OF THE OFFER
INCOME TAX
All Company Options granted under the Approved Scheme will be
subject to income tax on exercise if the Company Options are being exercised
within 3 years after the date they were granted or within 3 years of the last
date when you exercised an approved option free from income tax.
All Company Options granted under the Unapproved Scheme will be
subject to income tax on exercise, and, in the case of options granted on or
after 6 April, 1999, national insurance contributions.
Any income tax liability arising on the exercise of Company Options
granted under the Unapproved Scheme will be collected through the PAYE
system. If you are a former employee, tax will be deducted at the basic rate
through PAYE and you will be responsible for any additional tax on your self
assessment tax return. You should include details of any income tax liability
arising on the exercise of Company Options granted under the Approved Scheme
on your self assessment tax return for the relevant year.
If you make this choice 2, you will be authorising GE to deduct the
exercise price and any income tax or other withholdings due from the
consideration due to you under the Offer.
CAPITAL GAINS TAX
Following the exercise of a Company Option, the subsequent sale of
the Smallworld shares acquired is subject to capital gains tax ("CGT") if the
sale proceeds exceed the base cost of your Smallworld shares.
If a liability to income tax arises on the exercise of your Company
Options, the base cost for CGT purposes of the Smallworld shares acquired
will normally be the market value of those shares. Since the market value of
Smallworld shares at the relevant time is unlikely to be significantly less
than the price payable under the Offer, it is unlikely that any material gain
will be made.
If you have already disposed of some of your Smallworld shares,
either by accepting the Offer or otherwise, and within 30 days of doing so
have acquired additional Smallworld shares - for example by exercising your
Company Options - the Smallworld shares which you have previously disposed of
may be identified for capital gains tax purposes with those you have
acquired. You are advised to seek your own independent financial advice
immediately if this applies to you.
Any liability to CGT will arise only on the excess of your total
capital gains (less allowable losses) during the relevant tax year over the
annual exemption amount for each individual (which is (pound)7,200 for the
2000/2001 tax year). If you have already sold any other chargeable assets
(eg. Smallworld shares) in the tax year 2000/2001, any gain which you have
made will use up some or all of your CGT annual exemption for that tax year.
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SELF ASSESSMENT
Under the self assessment rules, taxpayers are required to provide the
Inland Revenue with all the information needed to calculate their total taxable
income (from all sources) and any chargeable gains. The calculation of tax may
then be carried out by either the taxpayer or the Inland Revenue.
Notification of taxable income and chargeable capital gains for the tax
year 2000/2001 must be made to the Inland Revenue by 30 September 2001 if you
wish them to calculate your tax liability or 31 January 2002 if you calculate it
yourself.
If you do not automatically receive a self-assessment return from the
Inland Revenue, you should contact your tax office to obtain one.
U.S. FEDERAL INCOME TAX CONSEQUENCES
The discussion below briefly summarizes United States federal income
tax consequences under present law of the two choices that you can make. This
discussion is only a general summary based on current United States federal
income tax laws, and it is limited to the federal income tax laws applicable to
optionees who are both citizens and residents of the United States. Individual
circumstances may vary these results, and the precise consequences for you will
depend on your particular circumstances. You should rely on your own tax counsel
for advice regarding federal income tax treatment of the two choices and for
information regarding federal estate and gift taxes and state and local income
taxation (which may vary from location to location).
CHOICE 1: ROLLOVER OF YOUR EXISTING OPTIONS
If you elect to rollover your Company Options into Rollover Options, no
tax liability should arise at the time of the rollover.
If you subsequently exercise your Rollover Options, your tax treatment
on the exercise of your Rollover Options should be the same as your tax
treatment would have been if you instead had exercised your Company Options. The
exchange should not affect your tax treatment on exercise.
CHOICE 2: EXERCISE OF OPTIONS AND ACCEPTANCE OF THE OFFER
If you accept the Offer to effect a cashless exercise and tender of the
shares subject to your Company Options, you should recognize ordinary income in
an amount equal to the excess of the fair market value of the shares exercised
over the exercise price.
Your ordinary income will be subject to federal income tax withholding,
and GE will deduct from the consideration paid to you under the Offer your
exercise price and federal income tax or other withholding obligations with
respect to your income.
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The sale to GE of your shares tendered generally will result in
short-term capital gain equal to the difference between the amount realized on
the sale of the shares to GE and the fair market value of the shares at the time
acquired by your cashless exercise. The fair market value of the Smallworld
shares at exercise is unlikely to be significantly less than the $20 per
share price paid by GE under the Offer, so there should be limited capital
gain triggered upon the sale to GE.
DECLARATION
By returning the Election Form and, if applicable, the Form of
Acceptance you hereby:
o warrant that each Company Option in respect of which you make
an election is valid and subsisting and free from all liens,
charges and encumbrances of any nature whatsoever and you
acknowledge that any option certificate in respect of such
Company Option shall become void once that Company Option has
been exercised or cancelled pursuant to your decisions shown
on the Election Form;
o confirm that the decisions which you have made on the Election
Form are irrevocable;
o irrevocably authorise Smallworld and GE, jointly and
severally, and any director or officer of Smallworld or GE or
any agent of such person as your attorney on your behalf to do
all acts and things and to execute any document as may be
necessary or desirable to give effect to or in consequence of
the elections and acceptances you have made on the Election
Form and, if applicable, the Form of Acceptance and you hereby
undertake to execute any further assurances that may be
required in connection with such elections and acceptances;
o confirm that all powers of attorney and authorities under the
terms of the Election Form and, if applicable, the Form of
Acceptance are given by way of security for the performance of
your obligations and are irrevocable in accordance with
Section 4 of the Powers of Attorney Act 1971;
o undertake to confirm and ratify any action properly or
lawfully taken on your behalf by any attorney appointed by or
pursuant to the Election Form; and
o confirm that you have read, understood and agreed to GE's
proposals, the terms and conditions contained in this Offer
document, the Election Form and, if applicable, the Form of
Acceptance and that you have received the Offer document.
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TERMS AND CONDITIONS
The delivery of the Election Form and, if applicable, the Form of
Acceptance duly signed may, if GE determines it appropriate, be as effective as
if it were duly completed and received, notwithstanding that it is not completed
or received strictly in accordance with the Election Form and, if applicable,
the Form of Acceptance, and these terms and conditions. In particular if you
have checked no box for a Company Option or checked more than one box for the
same Company Option, you will be deemed to have elected to cancel that Company
Option for a cash payment.
By checking the box for choice 1 (Acceptance of the Rollover Offer) on
the Election Form you irrevocably agree to release the Company Options specified
in the Election Form and accept the Rollover Offer in respect of those Company
Options. You authorise GE to send to you at the address set out in your Election
Form a Rollover Option certificate for your Rollover Options.
By checking the box for choice 2 (Exercise Option and Accept the Offer)
on the Election Form in respect of a particular Company Option you irrevocably
elect to:
o exercise that Company Option;
o accept the Offer in respect of the Smallworld shares you
acquire on the exercise of that Company Option, on the terms
set out in this Offer document for cash;
o authorise each of Smallworld and GE and any director of either
of them to nominate any person as your attorney to execute on
your behalf a Form of Acceptance having regard to the
instructions in the Election Form, and a form of transfer in
favour of GE in respect of those Smallworld shares and you are
thereby deemed to give the various warranties,
representations, agreements, undertakings and authorities set
forth above in this Exhibit C under "Declaration";
o authorise Smallworld to take all actions necessary for the
acquisition of those shares by GE; and
o you irrevocably elect to authorise Smallworld or GE, as the
case may be, to make all necessary deductions from the sale
proceeds it receives on your behalf by accepting the Offer in
respect of the Smallworld shares acquired on the exercise of
your Company Option including the aggregate exercise price and
any necessary income tax or withholdings.
OTHER
ING Barings Limited, which is regulated in the UK by The Securities and
Futures Authority Limited, and ING Barings LLC, which is registered in the US by
the SEC, are acting for GE and the Offeror (as defined in the Offer to
Purchase relating to the Offer) and no one else, and will not be responsible
to anyone other than GE and
C-7
<PAGE>
the Offeror for providing the protections afforded to customers of ING Barings
Limited and ING Barings LLCor for giving advice in relation to the Offer.
Deutsche Bank AG, which is regulated in the UK by The Securities and
Futures Authority Limited, and Deutsche Bank Securities Inc., which is regulated
in the US by the SEC, are acting for Smallworld in connection with the Offer
and no one else, and will not be responsible to anyone other than Smallworld
for providing the protections afforded to customers of Deutsche Bank AG and
Deutsche Bank Securities Inc., or for giving advice in relation to the Offer.
ING Barings Limited, ING Barings LLC, Deutsche Bank AG and Deutsche
Bank Securities Inc. have each given and not withdrawn their written consent
to the issue of this document with the inclusion of their respective names in
the form and context in which they appear.
The directors of the Offeror and Thomas P. Saddlemire, whose names are
set out in the Offer to Purchase relating to the Offer, accept responsibility
for the information contained in this document, save for the information
relating to the Smallworld Group and the directors of the Smallworld Group. To
the best of the knowledge and belief of the directors of the Offeror and Thomas
P. Saddlemire (who have taken all reasonable care to ensure that such is the
case), the information for which they accept responsibility is in accordance
with the facts and does not omit anything likely to affect the import of such
information.
The directors of Smallworld, whose names are set out in the Offer to
Purchase relating to the Offer, and who remain in office at the date of this
letter, accept responsibility for the information contained in this document
relating to the Smallworld Group and themselves. To the best of the knowledge
and belief of the directors of Smallworld (who have taken all reasonable care to
ensure that such is the case), the information for which they accept
responsibility is in accordance with the facts and does not omit anything likely
to affect the import of such information.
C-8
<PAGE>
EXHIBIT D
SMALLWORLD - TAX REPORTING AND WITHHOLDING OBLIGATIONS BY COUNTRY
<TABLE>
<CAPTION>
HOW PAID:
PAYROLL OR
WITHHOLDING NORTHERN REPORTING
COUNTRY OBLIGATION REGISTER ** REQUIREMENT COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AUSTRALIA (34) P
------------------------------------------------------------------------------------------------------------------------------------
JAPAN (1) P
------------------------------------------------------------------------------------------------------------------------------------
KOREA (3) P No withholding and reporting as long as no chargeback of
compensation element to Korean affiliate employer
------------------------------------------------------------------------------------------------------------------------------------
NEW ZEALAND (10) X P X
------------------------------------------------------------------------------------------------------------------------------------
SINGAPORE (8) P X
------------------------------------------------------------------------------------------------------------------------------------
BELGIUM X* P X* * Reporting and withholding on pre-1999 grants. Commissions
not deductible in computable reportable compensation.
Post-1998 grants are taxed at 60 days from grant. Employer
reporting (no employer withholding) required on exercises
of these post-1998 grants
------------------------------------------------------------------------------------------------------------------------------------
FINLAND (5) X P X
------------------------------------------------------------------------------------------------------------------------------------
FRANCE (2) X P X If "nonqualified" subject to reporting and social taxes
(both employer and employee shares).
------------------------------------------------------------------------------------------------------------------------------------
GERMANY (15) X P X Withholding at optionee's marginal tax rate.
------------------------------------------------------------------------------------------------------------------------------------
GERMANY (70) X P X Withholding at optionee's marginal tax rate.
------------------------------------------------------------------------------------------------------------------------------------
SPAIN (8) X P X Both reporting and withholding (income tax and social tax).
Employer funded social security. Withholding at optionee's
marginal tax rate.
------------------------------------------------------------------------------------------------------------------------------------
SWEDEN X P X
------------------------------------------------------------------------------------------------------------------------------------
THE NETHERLANDS (19) X P X Withholding at optionee's marginal tax rate. Various law
changes make this country quite complex
------------------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM (150) X P X Both reporting and withholding. Various transitional rules
for both NIC and withholding.
------------------------------------------------------------------------------------------------------------------------------------
CANADA (13) X P X Both reporting and withholding
------------------------------------------------------------------------------------------------------------------------------------
U.S. (175) X P X Both reporting and withholding. (Social Security capped)
and Medicare tax uncapped. Both employer and matching
employee contributions). 28% income tax withholding. May
also be State taxable.
------------------------------------------------------------------------------------------------------------------------------------
The foregoing is a summary only of the tax reporting and withholding obligations
for the countries listed above. You should contact your local tax advisor to
review your personal situation regarding the award and exercise of stock options
to ensure that you have properly complied with any local tax requirements. These
requirements can often be quite complex, change frequently and may require the
expertise of a qualified tax specialist
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
** Non-employee option holders will receive payment from either the UK receiving
agent or US depository as appropriate.
<PAGE>
EXHIBIT E
GE SMALLWORLD ROLLOVER CONVERSION EXAMPLE
--------------------------------------------------------------------------------
EXAMPLE: SMALLWORLD OPTIONS = 100 AMOUNTS IN USD
EXERCISE PRICE OF GRANT = $6.50 APPLIES TO VESTED & UNVESTED OPTIONS
--------------------------------------------------------------------------------
STEP 1 -- THE OPTION RATIO CALCULATION * Amount defined in
tender offer
OPTION RATION = $20 * AVG GE STOCK
PRICE **
(c) = $20 $58.48 = 34.2%
--------------------------------------------------------------------------------
STEP 2 -- CALCULATE EXERCISE PRICE OF GE OPTIONS * for individual grant
EXERCISE PRICE OF EXERCISE PRICE OF OPTION RATIO
GE OPTIONS = SMALLWORLD OPTIONS (c)
ON 10/3/00 *
(d) $6.50 34.2% = $19.01
--------------------------------------------------------------------------------
STEP 3 -- CALCULATE NUMBER OF GE OPTIONS * GE Options rounded
up to nearest whole
unit
# OF GE OPTIONS = # OF SMALLWORLD X OPTION RATIO
(a) * OPTIONS (c)
100 X 34.2% = 35
--------------------------------------------------------------------------------
STEP 4 -- CALCULATE ROLLOVER VALUE OF YOUR GE OPTIONS
VALUE OF GE # OF GE X AVG GE - EXERCISE PRICE
OPTIONS @ OPTIONS STOCK PRICE OF GE OPTIONS
ROLLOVER = (a) (d)
35 X ($58.48 - $19.01) = $1,381
100 X ($20.00 - $ 6.50) USD
--------------------------------------------------------------------------------
**AVERAGE GE STOCK PRICE = AVERAGE HIGH AND LOW TRADING PRICES FOR GE COMMON
STOCK ON NYSE FOR 5 CONSECUTIVE DAYS PRIOR TO PURCHASE DATE (5 DAYS PRIOR TO
AND INCLUDING OCTOBER 2, 2000)
