SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 29, 1995
Commission file no. 1-7713
AMDAHL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-1728548
(State of incorporation) (I.R.S. Employer
Identification No.)
1250 East Arques Avenue
Sunnyvale, California 94088-3470
(Address of principal executive offices) (Zip code)
Registrant's telephone number: (408) 746-6000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X]
No [ ]
Number of shares of common stock, $.05 par value, outstanding at
November 3, 1995: 119,115,554.
<PAGE>
PART I. FINANCIAL INFORMATION
AMDAHL CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following unaudited consolidated financial statements
reflect, in the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present
fairly the financial position as of the dates and results of
operations for the periods indicated.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to the Securities and Exchange Commission rules and
regulations. Amdahl Corporation (the Company) believes the
information included in the following report on Form 10-Q, when
read in conjunction with the financial statements and related
notes included in the Company's 1994 Annual Report to
Stockholders, not to be misleading.
The results of operations for the nine months ended September 29,
1995, are not necessarily indicative of results for the entire
year ending December 29, 1995.
<PAGE>
<TABLE>
<CAPTION>
AMDAHL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 29, 1995 AND DECEMBER 30, 1994
----------------------------------------
(Dollars in thousands)
1995 1994
----------- ----------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 212,751 $ 358,006
Short-term investments 568,887 340,600
Receivables, net of allowances 252,341 309,927
Inventories -
Purchased materials 46,216 45,561
Systems in process 170,309 135,408
Finished goods 94,174 102,112
Prepaid expenses and deferred tax benefit 67,499 54,874
----------- -----------
Total current assets 1,412,177 1,346,488
----------- -----------
Long-term receivables and other assets 28,487 34,908
----------- -----------
Property and equipment, at cost:
Leased systems 30,179 30,238
System spares 385,465 384,685
Production and data processing equipment 365,936 410,557
Office furniture, equipment, and improvements 154,795 156,195
Land and buildings 110,783 137,429
----------- -----------
1,047,158 1,119,104
Less - Accumulated depreciation and amortization (777,659) (781,465)
----------- -----------
Property and equipment, net 269,499 337,639
----------- -----------
$ 1,710,163 $ 1,719,035
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Notes payable and short-term debt $ 20,167 $ 8,816
Accounts payable 65,212 69,603
Accounts payable - stockholder (Fujitsu Limited) 51,762 71,214
Accrued liabilities 421,122 511,706
----------- -----------
Total current liabilities 558,263 661,339
----------- -----------
Long-term debt - stockholder (Fujitsu Limited) 80,000 80,000
----------- -----------
Long-term liabilities 45,810 49,674
----------- -----------
Deferred income taxes 58,326 51,767
----------- -----------
Stockholders' equity:
Common stock, $.05 par value -
Authorized - 200,000,000 shares
Outstanding - 118,898,000 shares in 1995
and 116,636,000 shares in 1994 5,945 5,832
Additional paid-in capital 539,536 519,856
Retained earnings 409,361 342,468
Cumulative translation adjustments 9,960 8,861
Unrealized holding gains (losses) on securities 2,962 (762)
----------- -----------
Total stockholders' equity 967,764 876,255
----------- -----------
$ 1,710,163 $ 1,719,035
=========== ===========
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMDAHL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(In thousands, except per common share amounts)
FOR THE THREE MONTHS ENDED
SEPTEMBER 29, 1995 SEPTEMBER 30, 1994
------------------ ------------------
<S> <C> <C>
REVENUES
Equipment sales $ 191,848 $ 218,941
Service, software and other 158,168 145,269
-------------- --------------
350,016 364,210
-------------- --------------
COST OF REVENUES
Equipment sales 113,292 149,604
Service, software and other 94,255 76,461
-------------- --------------
207,547 226,065
-------------- --------------
Gross margin 142,469 138,145
-------------- --------------
OPERATING EXPENSES
Engineering and development 35,756 49,068
Marketing, general and administrative 91,432 77,943
-------------- --------------
127,188 127,011
-------------- --------------
Income from operations 15,281 11,134
-------------- --------------
INTEREST
Income 13,010 7,032
Expense (2,584) (2,673)
-------------- --------------
10,426 4,359
-------------- --------------
Income before provision for income taxes 25,707 15,493
PROVISION FOR INCOME TAXES 5,650 1,200
-------------- --------------
NET INCOME $ 20,057 $ 14,293
============== ==============
NET INCOME PER SHARE $ .17 $ .12
============== ==============
Average outstanding shares 120,603 119,234
============== ==============
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMDAHL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(In thousands, except per common share amounts)
FOR THE NINE MONTHS ENDED
SEPTEMBER 29, 1995 SEPTEMBER 30, 1994
------------------ ------------------
<S> <C> <C>
REVENUES
Equipment sales $ 624,468 $ 708,379
Service, software and other 475,740 431,531
------------- -------------
1,100,208 1,139,910
------------- -------------
COST OF REVENUES
Equipment sales 396,764 493,665
Service, software and other 267,389 238,517
------------- -------------
664,153 732,182
------------- -------------
Gross margin 436,055 407,728
------------- -------------
OPERATING EXPENSES
Engineering and development 114,403 155,851
Marketing, general and administrative 266,073 225,824
------------- -------------
380,476 381,675
------------- -------------
Income from operations 55,579 26,053
------------- -------------
INTEREST
Income 38,048 16,915
Expense (7,884) (7,199)
------------- -------------
30,164 9,716
------------- -------------
Income before provision for income taxes 85,743 35,769
PROVISION FOR INCOME TAXES 18,850 1,850
------------- -------------
NET INCOME $ 66,893 $ 33,919
============= =============
NET INCOME PER SHARE $ .56 $ .29
============= =============
Average outstanding shares 120,267 118,851
============= =============
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
AMDAHL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(In thousands)
FOR THE NINE MONTHS ENDED
SEPTEMBER 29, 1995 SEPTEMBER 30, 1994
------------------ ------------------
<S> <C> <C>
Cash and cash equivalents at beginning of period $358,006 $149,484
-------------- -------------
Cash flows from operating activities:
Net income 66,893 33,919
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 88,191 106,204
Deferred income tax provision 6,551 (19,652)
Gain on dispositions of assets (330) (4,688)
Decrease in receivables 61,001 54,673
(Increase) decrease in inventories (17,265) 211,859
(Increase) decrease in prepaid expenses and
deferred tax benefit (13,035) 12,389
Decrease in long-term receivables
and other assets 6,242 6,157
Increase (decrease) in accounts payable (22,755) 42,624
Decrease in accrued liabilities (96,142) (62,605)
Decrease in long-term liabilities (3,689) (5,999)
-------------- -------------
Net cash provided by operating activities 75,662 374,881
-------------- -------------
Cash flows from investing activities:
Purchases of available-for-sale
short-term investments (292,223) (18,033)
Purchases of held-to-maturity
short-term investments (277,065) (132,163)
Proceeds from sales and maturities of
available-for-sale short-term investments 15,482 12,555
Proceeds from maturities of held-to-maturity
short-term investments 329,437 69,793
Capital expenditures:
Leased systems (11,668) (15,091)
System spares (12,787) (2,804)
Other property and equipment (50,830) (34,556)
Proceeds from property and equipment sales 44,154 47,944
-------------- -------------
Net cash used for investing activities (255,500) (72,355)
-------------- -------------
Cash flows from financing activities:
Increase in notes payable and short-term debt 11,642 11,958
Repayments of borrowings under revolving
credit agreement - (130,000)
Long-term borrowings - 80,000
Sale of common stock and exercise of options 19,793 8,076
-------------- -------------
Net cash provided by (used for)
financing activities 31,435 (29,966)
-------------- -------------
Effect of exchange rate changes on cash 3,148 2,963
-------------- -------------
Net increase (decrease) in cash
and cash equivalents (145,255) 275,523
-------------- -------------
Cash and cash equivalents at end of period $212,751 $425,007
============== =============
See accompanying notes.
</TABLE>
<PAGE>
AMDAHL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The accompanying interim financial statements and related notes
should be read in conjunction with the financial statements and
related notes included in the Company's 1994 Annual Report to
Stockholders.
RELATIONSHIP WITH FUJITSU LIMITED
During the third quarter of 1995 the Company recognized equipment
sales to Fujitsu Limited (Fujitsu) under distributorship
arrangements which contributed $14,023,000 and $8,425,000 to
equipment sales and gross margin, respectively, compared to
$6,049,000 and $2,602,000 in the third quarter of 1994
($35,144,000 and $16,650,000 for the first nine months of 1995
and $24,575,000 and $9,279,000 for the first nine months of
1994).
In the second quarter of 1995 the Company entered into a contract
manufacturing agreement with HaL Computer Systems, Inc. (HaL), a
wholly-owned subsidiary of Fujitsu, whereby Amdahl agreed to
manufacture high end open system workstations for HaL. This
agreement contributed $868,000 and ($84,000) to equipment sales
and gross margin, respectively, in the third quarter of 1995, and
$5,190,000 and $1,692,000 to equipment sales and gross margin,
respectively, in the first nine months of 1995.
Amounts due from Fujitsu and HaL included in receivables were
$19,402,000 and $21,097,000 as of September 29, 1995 and December
30, 1994, respectively.
At September 29, 1995 and December 30, 1994, $80,000,000 was
outstanding under the loan agreement with Fujitsu. Interest
expense associated with the loan was $1,460,000 and $1,284,000 in
the third quarters of 1995 and 1994, respectively ($4,459,000 and
$2,888,000 for the first nine months of 1995 and 1994,
respectively).
SUPPLEMENTARY CASH FLOW DISCLOSURE
Income taxes of $26,158,000 and $585,000 were paid by the Company
in the first nine months of 1995 and 1994, respectively.
Interest paid on all borrowings was $7,866,000 and $6,394,000 for
the first nine months of 1995 and 1994, respectively.
Noncash Investing Activities
Transfers of Amdahl-manufactured systems from net property, plant
and equipment to inventories were $12,071,000 in the first nine
months of 1995 and $40,722,000 in the first nine months of 1994.
SUBSEQUENT EVENT
On September 27, 1995 Amdahl Canada Acquisition Inc. ("Amdahl
Acquisition Sub"), an indirect wholly-owned subsidiary of Amdahl
Corporation, commenced a cash tender offer for all outstanding
shares of DMR Group Inc. ("DMR"), a Canadian corporation. As of
October 31, 1995, Amdahl Acquisition Sub had purchased or entered
into irrevocable agreements to purchase shares that represent
over 54% of all outstanding shares of DMR, at a purchase price of
$12.50 Canadian per share (approximately $9.28 U.S. per share,
translated at the September 29, 1995 foreign exchange rate).
Amdahl Acquisition Sub has extended its tender offer to November
15, 1995, after which it intends to exercise a statutory right
under the Canada Business Corporations Act to acquire all shares
not then owned by it for a purchase price of approximately $12.50
Canadian per share (approximately $9.28 U.S. per share,
translated at the September 29, 1995 foreign exchange rate), or
if that statutory right is not available, to acquire such shares
by other means available under applicable law. The total bid for
all DMR shares is approximately $189 million Canadian
(approximately $140 million U.S., translated at the September 29,
1995 foreign exchange rate). The acquisition will be accounted
for in the fourth quarter of 1995 using the purchase method of
accounting.
<PAGE>
AMDAHL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis should be read
in conjunction with the Management's Discussion and Analysis
included in the Company's 1994 Annual Report to Stockholders.
Results of Operations
Third quarter and first nine months of 1995 compared to third
quarter and first nine months of 1994:
Revenues decreased 4% to $350,016,000 in the third quarter of
1995 from $364,210,000 in the third quarter of 1994, and
decreased 3% in the first nine months of 1995 as compared to the
first nine months of 1994. Equipment sales revenues decreased
12% in the third quarter and first nine months of 1995 from the
third quarter and first nine months of 1994. Revenues from
storage product equipment sales decreased 73% in the third
quarter of 1995 when compared to the same period of 1994 as a
result of pricing and volume declines associated with delays in
the introduction of new storage products. Revenues from
equipment sales of 5995M mainframe systems decreased 1% in the
third quarter of 1995 from the third quarter of 1994. Equipment
sales of the older lines of mainframe computers also decreased.
Equipment sales of high performance servers acquired under OEM
arrangements with Sun Microsystems, which were 9% and 3% of total
equipment sales revenues in the third quarters of 1995 and 1994,
respectively, increased 160% or $11 million from the third
quarter of 1994 to the third quarter of 1995.
Service, software and other revenues increased 9% in the third
quarter of 1995 from the third quarter of 1994 and increased 10%
in the first nine months of 1995 from the first nine months of
1994, reflecting increased maintenance revenues from a larger
customer installed base as well as increased consulting services
revenues.
Third quarter and first nine months 1995 revenues were also
favorably impacted by approximately $5 million and $31 million,
respectively, by a weakened U.S. dollar, as international
revenues denominated in foreign currencies translated into more
dollars in 1995, when compared to the same periods of 1994.
The gross margin was 41% and 40% of revenues in the third quarter
and first nine months of 1995, respectively, and 38% and 36% in
the third quarter and first nine months of 1994, respectively.
The gross margin percentage on equipment sales increased from 32%
in the third quarter of 1994 to 41% in the third quarter of 1995
and increased from 30% in the first nine months of 1994 to 36% in
the first nine months of 1995, reflecting lower manufacturing
costs and a higher percentage of sales of 5995M processor
upgrades, which yield better gross margins than sales of complete
new systems. The gross margin percentage on service, software
and other revenues decreased from 47% in the third quarter of
1994 to 40% in the third quarter of 1995 due primarily to lower
gross margins on revenues from the new Multi Vendor Enterprise
Services business. The gross margin percentage on year-to-date
service, software and other revenues decreased from 45% in the
first nine months of 1994 to 44% in the first nine months of
1995.
Third quarter 1995 engineering and development expenses decreased
$13 million or 27% when compared to the third quarter of 1994
and decreased $41 million or 27% when compared to the first nine
months of 1994, primarily due to the agreement with Fujitsu for
the joint development of the next generation of IBM compatible
systems. Third quarter 1995 marketing, general and
administrative expenses increased $13 million or 17% when
compared to the third quarter of 1994 and increased $40 million
or 18% when compared to the first nine months of 1994, due to
increased marketing efforts directed toward the Company's newer
lines of business.
Third quarter 1995 net interest income increased $6,067,000 from
the third quarter of 1994 and increased $20,448,000 from the
first nine months of 1994 to the first nine months of 1995 due
primarily to increased interest income from higher average cash
levels.
The effective income tax rate was 22% in the third quarter and
first nine months of 1995. The rate was lower than the statutory
federal rate because the Company utilized deferred tax assets
consisting primarily of domestic reserves. In the first nine
months of 1994 the Company utilized deferred tax assets
consisting primarily of domestic and foreign net operating loss
carryforwards, which resulted in an effective income tax rate of
8% in the third quarter of 1994 and 5% in the first nine months
of 1994.
Factors That May Affect Future Operating Results
As indicated in its Annual Report, market conditions for the
Company's existing storage products have become increasingly
difficult because of increased competition in the storage
marketplace. The Company has new product offerings under
development which will not be available in volume until the
second quarter of 1996. Should any delays in current development
schedules occur, the Company's future operating results would be
further adversely affected.
The market for the Company's current mainframe systems has
entered a product transition period in light of recent
announcements by Amdahl and its competitors of new product
offerings expected to be available in mid-1996. Product
transition periods are traditionally characterized by decreased
demand and increased pressure for short-term leases for existing
products. Because the new products involve the use of lower cost
CMOS technologies which will reduce the cost of mainframe
computing to end users, these factors will be more acute during
the current transition and could result in significant declines
in existing mainframe prices and gross margins. The Company also
expects that gross margins will decrease due to a shift in the
mix of processor sales from sales of upgrades to sales of new
systems.
The Company anticipates that the write-off of in-process
engineering and development expenses associated with the
acquisition of DMR Group Inc. will result in a significant charge
to earnings in the fourth quarter of 1995 (see the Notes to the
Consolidated Financial Statements).
The Company expects that its effective tax rate will increase in
1996 due to its decreased ability to utilize deferred tax assets.
Financial Condition
September 29, 1995, compared to December 30, 1994:
The Company's net cash and investment position (cash and short-
term investments minus total debt, excluding capitalized lease
obligations) improved by $72 million, from $611 million at
December 30, 1994 to $683 million at September 29, 1995, due to
an increase in cash, cash equivalents and short-term investments
of $83 million.
Receivables decreased $58 million primarily due to decreased
revenues from the fourth quarter of 1994 to the third quarter of
1995.
Inventories increased $28 million due to a shift in the mix of
processor sales, with customers purchasing upgrades rather than
complete new systems in the first nine months of 1995.
Net property and equipment decreased $68 million due in part to
sales of buildings and retirements of production and data
processing equipment and because depreciation exceeded capital
spending in the first nine months of 1995.
Accrued liabilities decreased $91 million due to decreased
payroll-related and other accruals, and decreased income taxes
payable, deferred revenues, and reserves for future engineering
changes. Charges against accrued restructuring costs resulted in
a decrease in the balance from $88 million at December 30, 1994
to $69 million at September 29, 1995.
At September 29, 1995 and at December 30, 1994, $80,000,000 was
outstanding under the Fujitsu loan agreement and was classified
as long-term debt (see Notes to the Consolidated Financial
Statements).
Liquidity
The Company believes that existing cash and borrowings under its
loan agreement with Fujitsu will be adequate to finance
continuing operations; investments in property and equipment,
inventories and spare parts; and the Company's commitment to
purchase all outstanding shares of DMR Group Inc.(see the Notes
to the Consolidated Financial Statements) through 1997.<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings:
Not applicable.
Item 2. Changes in Securities:
Not applicable.
Item 3. Defaults upon Senior Securities:
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders:
Not applicable.
Item 5. Other information:
Not applicable.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
2(a) Offer to Purchase Class A and Class B shares
of DMR Group Inc. by Amdahl Canada Acquisition Inc. dated
September 27, 1995
2(b) Notice of Change and Variation dated October
19, 1995 to the Offers to Purchase Class A and Class B shares of
DMR Group Inc. by Amdahl Canada Acquisition Inc. dated September
27, 1995
2(c) Notice of Change and Variation dated November
1, 1995 to the Offers to Purchase Class A and Class B shares of
DMR Group Inc. by Amdahl Canada Acquisition Inc. dated September
27, 1995
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the
quarter ended September 29, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AMDAHL CORPORATION
Date: November 10, 1995 By: /s/ E. JOSEPH ZEMKE
----------------- --------------------
E. Joseph Zemke
President and
Chief Executive Officer
Date: November 10, 1995 By: /s/ ERNEST B. THOMPSON
----------------- ----------------------
Ernest B. Thompson
Vice President and
Controller
(Principal Accounting
Officer)
<PAGE>
EXHIBIT INDEX
Item Description
- ----- ------------
2(a) Offer to Purchase Class A and Class B shares of
DMR Group Inc. by Amdahl Canada Acquisition Inc.
dated September 27, 1995
2(b) Notice of Change and Variation dated October 19,
1995 to the Offers to Purchase Class A and Class B
shares of DMR Group Inc. by Amdahl Canada
Acquisition Inc. dated September 27, 1995
2(c) Notice of Change and Variation dated November 1,
1995 to the Offers to Purchase Class A and Class B
shares of DMR Group Inc. by Amdahl Canada
Acquisition Inc. dated September 27, 1995
Exhibit 2(a)
This document is important and requires your immediate attention.
If you are in any doubt as to how to deal with it you should
consult your investment dealer, stockbroker, bank manager, lawyer
or other professional advisor.
OFFERS TO PURCHASE
all of the Class A Subordinate Voting Shares
and all of the Class B Shares
of
DMR GROUP INC.
at a price of
Cdn. $8.25 in cash per share
by Amdahl Canada Acquisition Inc., a wholly-owned subsidiary of
AMDAHL CANADA LIMITED
Each of the Offers will be open for acceptance until 8:00 p.m.,
Montreal time, on Thursday, October 19, 1995, unless withdrawn or
extended.
The Class A Offer is conditional upon the Offeror acquiring Class
B Shares pursuant to the Class B Offer. See section 5 of the
Offers to Purchase. The Class B Offer is conditional upon, among
other things, there being validly deposited under the respective
Offers and not withdrawn such number of Class A Shares
(calculated on a diluted basis) and Class B Shares as are
required by the Offeror to ensure successful authorization of an
amalgamation, statutory arrangement or other transaction
involving the Offeror and/or an affiliate and DMR that is a
"going private transaction" (as defined in Policy Q-27 of the
Quebec Securities Commission and in Policy Statement No. 9.1 of
the Ontario Securities Commission) being (i) two-thirds of each
of the Class A Shares (calculated on a diluted basis) and the
Class B Shares then outstanding and (ii) a majority of each of
the Class A Shares (calculated on a diluted basis) and Class B
Shares then outstanding, excluding the Shares which are held by
or on behalf of the Offeror, its affiliates and associates and
the Shares which are subject to the terms of the Deposit
Agreements. See section 6 of the Offers to Purchase. Pursuant to
the Deposit Agreements, shareholders holding an aggregate of
1,607,800 Class A Shares and 3,556,088 Class B Shares have agreed
to deposit and not withdraw such Shares under the Class A Offer
and Class B Offer, respectively. See "Arrangements with
Controlling Shareholders and DMR" in the Offering Circular.
A holder of Class A Shares or Class B Shares wishing to accept
the Class A Offer or the Class B Offer, respectively, must
deposit the certificates representing such holder's Shares
together with the Letter of Acceptance and Transmittal or a
facsimile thereof, properly completed and duly executed, prior to
the expiry of the Offers at one of the offices of Montreal Trust
Company of Canada (the "Depositary") or the New York City office
of The Bank of Nova Scotia Trust Company of New York (the
"Forwarding Agent") specified in the Letter of Acceptance and
Transmittal, in accordance with the instructions in the Letter of
Acceptance and Transmittal. Each of the Offers may also be
accepted by a holder by following the procedures for guaranteed
delivery set out herein. A holder whose Shares are held in the
name of a nominee should request such holder's broker, dealer,
bank, trust company or other nominee to effect the transaction
for such holder.
The Dealer Manager for the Offers:
in Canada in the United States
RBC Dominion Securities Inc. RBC Dominion Securities Corporation
September 27, 1995
<PAGE>
NOTICE TO U.S. SHAREHOLDERS
These tender offers are made for the securities of a foreign
issuer and while the Offers are subject to disclosure
requirements of the country in which the subject company is
incorporated or organized, investors should be aware that these
requirements are different from those of the United States.
The enforcement by investors of civil liabilities under the
federal securities laws may be affected adversely by the fact
that the subject company is located in a foreign country and that
some or all of its officers and directors are residents of a
foreign country.
Investors should be aware that the Offeror or its
affiliates, directly or indirectly, may bid for or make purchases
of DMR's securities subject to the Offers or of DMR's related
securities during the period of the Offers, as permitted by
applicable Canadian laws or provincial laws or regulations.
Questions and requests for assistance may be directed to the
Dealer Manager for the Offers, RBC Dominion Securities Inc. in
Canada and RBC Dominion Securities Corporation in the United
States, or the Depositary or the Forwarding Agent. Additional
copies of this document and the Letter of Acceptance and
Transmittal and the Notice of Guaranteed Delivery may be obtained
without charge on request from the Depositary or the Forwarding
Agent at their respective addresses shown in the Letter of
Acceptance and Transmittal.
<PAGE>
TABLE OF CONTENTS
Page
------
SUMMARY 4
OFFERS TO PURCHASE 6
OFFERING CIRCULAR 19
THE OFFEROR 19
DMR GROUP INC 19
BACKGROUND 20
ARRANGEMENTS WITH CONTROLLING SHAREHOLDERS
AND DMR 21
PURPOSE OF THE OFFER AND PLANS FOR DMR 23
SOURCE OF FUNDS FOR PAYMENT 25
BENEFICIAL OWNERSHIP OF AND TRADING IN SHARES 26
PRICE RANGES AND VOLUME OF TRADING OF SHARES 26
DIVIDENDS AND DIVIDEND POLICY 27
EFFECT OF THE OFFER ON MARKETS FOR SHARES AND STOCK EXCHANGE
LISTINGS 27
COMMITMENTS TO ACQUIRE SECURITIES 27
ARRANGEMENTS, AGREEMENTS OR UNDERSTANDINGS 27
REGULATORY MATTERS 27
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS 28
DEPOSITARY AND FORWARDING AGENT ARRANGEMENTS 30
DEALER MANAGER AND SOLICITING DEALER GROUP 30
DIRECTORS' APPROVAL 31
OFFEREES' STATUTORY RIGHTS 31
CONSENT 32
CERTIFICATE 33
<PAGE>
The following is a summary of certain provisions of the
Offers to Purchase and the Offering Circular and is qualified in
its entirety by reference to those documents. The terms used with
initial capitals are as defined in the Offers to Purchase and
Offering Circular.
SUMMARY
THE OFFERS
The Offeror is offering to purchase, upon the respective
terms and subject to the respective conditions described herein
(i) all of the issued and outstanding Class A Shares (including
all Class A Shares issuable upon conversion of the Class B Shares
and on the exercise of existing stock options of DMR) and (ii)
all of the issued and outstanding Class B Shares not already
owned by the Offeror at a price of $8.25 in cash for each Share.
TIME FOR ACCEPTANCE
The Offers are open for acceptance until 8:00 p.m., Montreal
time, on Thursday, October 19, 1995 unless withdrawn or extended.
CONDITIONS TO THE OFFERS
The Offeror reserves the right to withdraw the Class A Offer
and not take up and pay for any Class A Shares deposited under
the Class A Offer unless the condition described in section 5 of
the Offers to Purchase is satisfied. The Class A Offer is
conditional upon the Offeror acquiring Class B Shares pursuant to
the Class B Offer. The Class B Offer is conditional upon, among
other things, there being validly deposited under the respective
Offers and not withdrawn such number of Class A Shares
(calculated on a diluted basis) and Class B Shares as are
required by the Offeror to ensure successful authorization of an
amalgamation, statutory arrangement or other transaction
involving the Offeror and/or an affiliate and DMR that is a
"going private transaction" (as defined in Policy Q-27 and in
Policy No. 9.1) being (i) two-thirds of each of the Class A
Shares (calculated on a diluted basis) and the Class B Shares
then outstanding and (ii) a majority of each of the Class A
Shares (calculated on a diluted basis) and Class B Shares then
outstanding, excluding the Shares which are held by or on behalf
of the Offeror, its affiliates and associates and the Shares
which are subject to the terms of the Deposit Agreements (the
"Minimum Condition"). See section 6 of the Offers to Purchase.
Pursuant to the Deposit Agreements, shareholders of DMR holding
an aggregate of 1,607,800 Class A Shares and 3,556,088 Class B
Shares have agreed to deposit and not withdraw such Shares under
the Class A Offer and Class B offer respectively. See
"Arrangements with Controlling Shareholders and DMR" in the
Offering Circular. Based on the information provided to the
Offeror, the Offeror expects that, assuming no Class B Shares are
converted into Class A Shares, the Minimum Condition will be
satisfied if, other than the Shares subject to the Deposit
Agreements, 6,355,094 Class A Shares and 2,618 Class B Shares are
deposited under the respective Offers and not withdrawn.
MANNER OF ACCEPTANCE
Shareholders of DMR who wish to accept the Class A Offer or
the Class B Offer must deposit the certificate(s) representing
their Class A Shares or their Class B Shares, respectively,
together with the Letter of Acceptance and Transmittal or a
facsimile thereof, properly completed and duly executed, at or
before the Expiry Time, at one of the offices of the Depositary
or the New York City office of the Forwarding Agent specified in
the Letter of Acceptance and Transmittal, in accordance with the
instructions in the Letter of Acceptance and Transmittal. A
holder whose Shares are held in the name of a nominee should
request the broker, dealer, bank, trust company or other nominee
to effect the transaction for such holder. A holder of Class A
Shares or Class B Shares wishing to accept the Class A Offer or
the Class B Offer, respectively, and whose certificates are not
immediately available, may do so by following the procedures for
guaranteed delivery set forth in section 3 of the Offers to
Purchase.
RIGHT TO WITHDRAW DEPOSITED SHARES
All deposits of Shares pursuant to each of the Offers are
irrevocable except as provided in section 7 of the Offers to
Purchase.
PAYMENT
Subject to the terms and conditions of the Offers, the
Offeror will take up and pay for Shares validly deposited under
the Offers and not withdrawn within all time periods prescribed
by applicable securities laws. See section 8 of the Offers to
Purchase.
PURPOSE OF THE OFFERS AND PLANS FOR DMR
The purpose of the Offers is to enable the Offeror to
acquire all of the Shares which are not currently owned by the
Offeror and its affiliates. If the Offers are successful, the
Offeror intends to integrate Amdahl's Business Solutions Group
into the business carried on by DMR.
ACQUISITION OF SHARES NOT DEPOSITED
If within 120 days after the date hereof, each of the Offers
has been accepted by the holders of not less than 90% of either
the issued and outstanding Class A Shares or Class B Shares (or
both), other than the Shares held on the date hereof by or on
behalf of the Offeror and its affiliates and associates (as such
terms are defined in the CBCA), and such Shares have been taken
up and paid for by the Offeror, the Offeror intends to acquire
pursuant to the provisions of section 206 of the CBCA the
remaining Shares of the relevant class, on the same terms as the
Shares acquired under the Offers. If such statutory right of
acquisition is not available or if the Offeror elects not to
pursue such right, the Offeror intends to pursue other means of
acquiring, directly or indirectly, all of the issued and
outstanding Shares in accordance with applicable law, including a
subsequent going private transaction. In order to effect a
subsequent going private transaction, the Offeror may seek to
cause a special meeting of Shareholders of DMR to be called to
consider an amalgamation, statutory arrangement, or other
transaction involving DMR and the Offeror or one or more
affiliates of the Offeror for the purposes of enabling the
Offeror to acquire all of the Shares not acquired under the
Offers. If the Minimum Condition is satisfied, the Offeror will
have acquired sufficient Shares to carry out the acquisition of
all of the remaining Shares. In any amalgamation, statutory
arrangement or other transaction, the holders of Shares may have
the right to dissent under the CBCA and to be paid the fair value
for their Shares, with such fair value to be determined by a
court.
INCOME TAX CONSIDERATIONS
The sale of Shares under the Offers will be a disposition
for tax purposes and will give rise to tax consequences to the
depositing holder of Shares. See "Canadian Federal Income Tax
Consequences" in the Offering Circular.
DEPOSITARY
Montreal Trust Company of Canada (the "Depositary") is
acting as depositary in Canada and the New York City office of
The Bank of Nova Scotia Trust Company of New York (the
"Forwarding Agent") is acting as Forwarding Agent under the
Offers. The Depositary and the Forwarding Agent will receive
deposits of Shares and accompanying documentation at the offices
specified in the Letter of Acceptance and Transmittal. The
Depositary will also be responsible for giving notices, if
required, and for making payment for all Shares purchased by the
Offeror under the Offers.
DEALER MANAGER
The Offeror has retained RBC Dominion Securities Inc. to
serve as Dealer Manager for the Offers in Canada and RBC Dominion
Securities Corporation to serve as Dealer Manager for the Offers
in the United States.
ALL CURRENCY AMOUNTS EXPRESSED HEREIN,
UNLESS OTHERWISE INDICATED, ARE EXPRESSED IN CANADIAN DOLLARS.
<PAGE>
OFFERS TO PURCHASE
TO: Holders of Class A Subordinate Voting Shares and
Class B Shares of DMR Group Inc.
1. THE OFFERS
The Offeror hereby offers to purchase, upon the respective
terms and subject to the respective conditions set forth in the
Offers to Purchase, the attached Offering Circular, the Letter of
Acceptance and Transmittal and the Notice of Guaranteed Delivery,
(i) all of the issued and outstanding Class A Shares (including
all Class A Shares issuable upon conversion of Class B Shares and
upon exercise of existing stock options of DMR) and (ii) all of
the issued and outstanding Class B Shares not already owned by
the Offeror at a price of $8.25 in cash for each Share.
Each of the Offers will be open for acceptance until 8:00
p.m. Montreal time, on Thursday, October 19, 1995, unless
withdrawn or extended at the Offeror's sole discretion.
The Offers are made only for Shares and are not made for any
securities convertible or exercisable into Shares. Any holder of
such securities who wishes to accept the Class A Offer with
respect to Class A Shares issuable upon conversion or exercise of
such securities should exercise such conversion or exercise
rights in order to obtain certificates representing Class A
Shares and then deposit such Class A Shares under the Class A
Offer. Holders of Class B Shares are not required to convert such
shares into Class A Shares in order to accept an Offer.
The price offered is net to the seller in cash. The Offeror
will pay all charges and expenses of the Dealer Manager,
Depositary and Forwarding Agent.
The Offers to Purchase and the Offering Circular which is
incorporated into and forms part of the Offers to Purchase
constitute the take-over bid circular required under Canadian
provincial securities legislation.
All currency amounts expressed herein, unless otherwise
indicated, are expressed in Canadian dollars.
The Offering Circular contains important information and
should be read carefully before making a decision with respect to
the Offers.
2. DEFINITIONS
In the Offers, unless otherwise indicated or the context
otherwise requires:
(a) "Acceptance Alternative" has the meaning set forth in
section 3 of the Offers to Purchase;
(b) "Amdahl" means Amdahl Corporation, a corporation
incorporated under the laws of Delaware;
(c) "Amdahl Canada" means Amdahl Canada Limited, a
corporation governed by the CBCA;
(d) "business day" means any day, other than a Saturday,
Sunday or a Canadian federal holiday or any other day when banks
in Montreal are not open for business;
(e) "CBCA" means the Canada Business Corporations Act;
(f) "Class A Offer" means the offer to purchase Class A
Shares made hereby, the terms and conditions of which are set
forth in the Offers to Purchase, the Offering Circular, the
Letter of Acceptance and Transmittal and the Notice of Guaranteed
Delivery;
(g) "Class B Offer" means the offer to purchase Class B
Shares made hereby, the terms and conditions of which are set
forth in the Offers to Purchase, the Offering Circular, the
Letter of Acceptance and Transmittal and the Notice of Guaranteed
Delivery;
(h) "Class A Shares" means Class A Subordinate Voting
Shares of DMR;
(I) "Class B Shares" means Class B Shares of DMR;
(j) "Controlling Shareholders" means Ducros, Ducros Holdco,
Roy, Roy Holdco and Teachers;
(k) "Dealer Manager" means RBC Dominion Securities Inc. and
RBC Dominion Securities Corporation collectively;
(l) "Deposit Agreements" means the Ducros/Roy Deposit
Agreement and the Teachers' Deposit Agreement;
(m) "Depositary" means Montreal Trust Company of Canada;
(n) "Deposited Securities" means 1,607,800 Class A Shares,
any Class A Shares acquired by Ducros pursuant to the exercise of
his existing options to acquire 84,000 Class A Shares, and
3,556,088 Class B Shares, which the Controlling Shareholders have
agreed to deposit under the Offers and not withdraw pursuant to
the Deposit Agreements;
(o) "diluted basis" means with respect to the number of
Class A Shares, such number calculated assuming that all
outstanding options to purchase Class A Shares are exercised but
assuming that no outstanding Class B Shares are converted into
Class A Shares;
(p) "DMR" means DMR Group Inc., a corporation governed by
the CBCA;
(q) "Ducros" means Pierre Y. Ducros;
(r) "Ducros Holdco" means 114986 Canada Inc., a corporation
controlled by Ducros;
(s) "Ducros/Roy Deposit Agreement" means the agreement
dated September 13, 1995 among Ducros, Ducros Holdco, Roy and Roy
Holdco and Amdahl Canada;
(t) "Eligible Institution" means a Canadian chartered bank,
a trust company in Canada, a commercial bank or trust company
having an office or correspondent in Canada, or a firm which is a
member of the Investment Dealers Association of Canada, a
recognized stock exchange in Canada, a member of a national
securities exchange in the United States of America, or a member
of the National Association of Securities Dealers, Inc.;
(u) "Exclusivity Agreement" means the agreement dated
September 13, 1995 between DMR and Amdahl Canada;
(v) "Expiry Time" means 8:00 p.m., Montreal time, on
Thursday, October 19, 1995, or such later time and date as may be
fixed by the Offeror from time to time pursuant to section 4 of
the Offers to Purchase;
(w) "Forwarding Agent" means the New York City office of
The Bank of Nova Scotia Trust Company of New York specified in
the Letter of Acceptance and Transmittal;
(x) "Letter of Acceptance and Transmittal" means the
accompanying letter of acceptance and transmittal prepared for
use in connection with the Class A Offer and the Class B Offer;
(y) "Minimum Condition" means the condition of the Class B
Offer set out in subsection 6(a) of the Offers to Purchase;
(z) "Notice of Guaranteed Delivery" means the accompanying
notice of guaranteed delivery prepared for use in connection with
the Class A Offer and the Class B Offer;
(aa) "Offer" means either the Class A Offer or the Class B
Offer, and "Offers" means the Class A Offer and Class B Offer
collectively. For greater certainty, each of the Class A Offer
and the Class B Offer is a separate offer to purchase Shares of
each of those classes and either Offer may be extended, varied or
changed or the conditions of either offer to purchase may be
waived without similarly extending, varying or changing the other
Offer or waiving the condition or conditions of the other Offer;
(bb) "Offering Circular" means the attached Offering
Circular;
(cc) "Offeror" means Amdahl Canada Acquisition Inc., a
corporation governed by the CBCA;
(dd) "OSC" means the Ontario Securities Commission;
(ee) "Policy Q-27" means Policy Q-27 of the QSC;
(ff) "Policy 9.1" means Policy Statement No. 9.1 of the OSC;
(gg) "QSC" means the Commission des valeurs mobilieres du
Quebec;
(hh) "Roy" means the Estate of J. Alain Roy;
(ii) "Roy Holdco" means 114988 Canada Inc., a corporation
controlled by Roy;
(jj) "Shares" means the Class A Shares and Class B Shares;
(kk) "Teachers' Deposit Agreement" means the agreement dated
September 13, 1995 between Teachers and Amdahl Canada;
(ll) "Teachers" means the Ontario Teachers' Pension Plan
Board; and
(mm) "Tender Agreement" has the meaning set forth in section
3 of the Offers to Purchase.
3. MANNER AND TIME OF ACCEPTANCE
In order for a holder of Shares to accept the relevant
Offer, the following documents must be received by the Depositary
or the Forwarding Agent at one of their offices specified in the
Letter of Acceptance and Transmittal at or before the Expiry
Time:
(a) the certificate(s) representing the deposited Shares;
(b) a properly completed and duly executed copy of the
Letter of Acceptance and Transmittal in the accompanying form or
a facsimile thereof; and
(c) all other documents required by the Letter of
Acceptance and Transmittal (including, for holders of Shares with
a registered address in the United States, a properly completed
Substitute Form W-9 included in the materials sent to U.S.
shareholders entitled "Withholding Tax Information for U.S.
Shareholders").
Except as otherwise provided in Instruction 2 of the Letter
of Acceptance and Transmittal, the signature on the Letter of
Acceptance and Transmittal must be guaranteed by an Eligible
Institution.
If a Letter of Acceptance and Transmittal is executed by a
person other than the registered holder of deposited Shares, or
if certificates representing Shares for which the Class A Offer
or the Class B Offer has not been accepted are to be issued to a
person other than the registered owner, then the certificates
must be endorsed or accompanied by share transfer powers duly and
properly completed by the registered holder with the signature on
the endorsement or share transfer power guaranteed by an Eligible
Institution.
Holders of Class A Shares or Class B Shares who cannot
comply on a timely basis with the foregoing procedures for
acceptance of the Class A Offer or the Class B Offer respectively
may nevertheless accept the Class A Offer or the Class B Offer
respectively by following the procedures set forth below for
guaranteed delivery.
PROCEDURE FOR GUARANTEED DELIVERY
- ---------------------------------
If a holder wishes to accept the Class A Offer or the Class
B Offer and (i) the Shares are not immediately available or (ii)
such holder cannot deliver the certificates and all other
required documents to one of the offices of the Depositary or the
Forwarding Agent at or before the Expiry Time, such Shares may
nevertheless be deposited under the relevant Offer, provided that
all of the following conditions are met:
(i) such deposit is made only at the principal office of
the Depositary in Montreal by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery in the accompanying form or a facsimile
thereof, is received by the Depositary at its principal office in
Montreal at or before the Expiry Time; and
(iii) the certificates representing such deposited
Shares in proper form for transfer, together with a properly
completed and duly executed Letter of Acceptance and Transmittal
or facsimile thereof covering such Shares with any required
signature guarantees and any other required documents are
received by the Depositary at its principal office in Montreal
prior to 4:30 p.m. Montreal time on the third trading day on the
Montreal Exchange after the Expiry Time. Delivery to any office
of the Depositary other than its principal office in Montreal or
delivery to the Forwarding Agent, does not constitute delivery
for the purpose of satisfying a guaranteed delivery.
The Notice of Guaranteed Delivery may be delivered by hand
or transmitted by telecopier or mailed to the Depositary only at
its principal office in Montreal and must include a guarantee by
an Eligible Institution.
ACCEPTANCE ALTERNATIVE
- ----------------------
Holders who hold Shares indirectly through wholly-owned
holding companies (individually, a "Holdco") incorporated under
the Canada Business Corporations Act will be permitted to
participate in the Offers by selling all of the issued and
outstanding shares of that Holdco (the "Holdco Shares") to the
Offeror for consideration identical to that which the holder
would have been entitled to receive had the Shares owned by the
Holdco been tendered to the Offers (the "Acceptance
Alternative").
Provided the terms and conditions set forth below have been
satisfied and the conditions of the Offers, including those
contained in sections 5 and 6 of the Offers to Purchase with
respect to the Class A Offer and the Class B Offer respectively,
have been satisfied or waived prior to the time by which the
Offeror is obliged to take up and pay for the Shares under the
Class A Offer or the Class B Offer, respectively, the Offeror
will purchase all of the outstanding Holdco Shares from any
holder who has advised the Offeror that it wishes to take
advantage of the Acceptance Alternative on the terms described
below. The Offeror currently intends to wind-up each Holdco whose
shares have been acquired under the Acceptance Alternative into
the Offeror under the voluntary winding-up or dissolution
procedures of the jurisdiction of incorporation of the Holdco, or
to amalgamate the Holdco with the Offeror, thereby directly
holding the Shares previously held by the Holdco.
The Acceptance Alternative will be available to a holder of
Shares provided all the following terms and conditions are
satisfied:
(a) the holder holds its Shares indirectly through a
wholly-owned holding company which is incorporated under the laws
of Canada after September 27, 1995 and before October 10, 1995;
(b) the holder advises the Offeror in writing, with a copy
to the Depositary, at or before 5:00 p.m., Montreal time, on
October 10, 1995, that it wishes to take advantage of the
Acceptance Alternative should it elect to accept, and, if
required by the Offeror, deliver a Letter of Acceptance and
Transmittal in respect of, the Class A Offer or the Class B
Offer;
(c) if required by the Offeror, the holder properly
completes and duly executes a Letter of Acceptance and
Transmittal and deposits the Letter of Acceptance and
Transmittal, together with the certificates representing the
Shares held by such holder's Holdco, with the Depositary at or
before the Expiry Time;
(d) the holder and the holder's Holdco enter into a deposit
agreement (a "Tender Agreement") with the Offeror on terms and
conditions satisfactory to the Offeror including the provision of
representations and warranties concerning Holdco and the Holdco
Shares (including, among other things, that Holdco has no assets
other than its holding of Shares and no liabilities or
obligations of any kind, contingent or otherwise, and that the
sole activity of Holdco is and has always been the holding of the
Shares, together with evidence to the satisfaction of the Offeror
in respect thereof), with such representations and warranties
being effective as of the date of the Tender Agreement, and the
date the Holdco Shares are acquired;
(e) the Offeror determines in its sole discretion that the
purchase of Holdco Shares will not have a material adverse
consequence to the Offeror or DMR, tax or otherwise;
(f) the holder (i) agrees to indemnify the Offeror and its
associates and affiliates, and Holdco, in respect of any
representation and/or warranty contained in the Tender Agreement
which is incorrect or untrue, in respect of certain suits,
proceedings or other actions against those parties and in respect
of any liabilities of that Holdco for taxes of any kind
whatsoever and (ii) either has net assets as reflected on its
audited financial statements for its most recently ended fiscal
year which are satisfactory to the Offeror or provides the
Offeror with security satisfactory to the Offeror in respect of
such indemnification obligations;
(g) if the holder is a non-resident of Canada, such holder
provides to the Offeror at or before the Expiry Time a
certificate under section 116 of the Income Tax Act (Canada) (the
"Tax Act") in form and substance satisfactory to the Offeror or
enters into an agreement with the Offeror in form and substance
satisfactory to the Offeror entitling the Offeror to withhold
certain amounts payable to the holder for the Holdco Shares and,
if a section 116 certificate is not received by an agreed date,
to remit such amounts to the Receiver General of Canada on
account of tax payable by the holder under the Tax Act on the
sale of the Holdco Shares; and
(h) the holder agrees that the rights and obligations of
the Offeror under the Tender Agreement will terminate if the
respective conditions to the Class A Offer or the Class B Offer,
including those contained in sections 5 and 6 of the Offers to
Purchase, respectively, are not satisfied or waived prior to the
time by which the Offeror is obliged to take up and pay for the
Shares under the Class A Offer or the Class B Offer, as the case
may be.
All holders wishing to take advantage of the Acceptance
Alternative are encouraged to discuss such arrangements with the
Offeror at the earliest possible time and in any event within the
time limit set forth in (b) above.
GENERAL
- -------
In all cases, payment for Shares deposited and accepted for
payment pursuant to the Offers will be made only after timely
receipt by the Depositary or the Forwarding Agent of certificates
representing beneficial ownership of Shares, together with a
properly completed and duly executed copy of the Letter of
Acceptance and Transmittal or a facsimile thereof covering such
Shares and other required documents.
A holder of shares whose Shares are registered in the name
of a nominee should contact such holder's broker, dealer, bank,
trust company or other nominee for assistance in depositing such
Shares.
THE METHOD OF DELIVERY OF CERTIFICATES REPRESENTING SHARES
AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE
PERSON DEPOSITING THE SAME. THE OFFEROR RECOMMENDS THAT ALL SUCH
DOCUMENTS BE DELIVERED BY HAND TO THE DEPOSITARY OR THE
FORWARDING AGENT AND A RECEIPT OBTAINED OR, IF MAILED, THAT
REGISTERED MAIL (RETURN RECEIPT REQUESTED) BE USED AND PROPER
INSURANCE OBTAINED.
The execution of a Letter of Acceptance and Transmittal
irrevocably appoints the Depositary and any officer of the
Offeror, and each of them, and any other person designated by the
Offeror in writing, as the true and lawful agent, attorney and
attorney-in-fact and proxy of the holder of the Shares covered by
the Letter of Acceptance and Transmittal with respect to Shares
registered in the name of the holder of such Shares on the books
of DMR and deposited under the Class A Offer or the Class B Offer
and taken up and paid for by the Offeror (the "Purchased Shares")
and with respect to any and all dividends, distributions,
payments, securities, rights, assets or other interests declared,
paid, issued, transferred, made or distributed on or in respect
of the Purchased Shares on or after the date of the Offers
(collectively, "Other Securities"), effective from and after the
date that the Offeror takes up and pays for the Purchased Shares
(the "Effective Date") with full power of substitution, in the
name and on behalf of such holder of Shares (such power of
attorney deemed to be an irrevocable power coupled with an
interest), (a) to register or record, transfer and enter the
transfer of Purchased Shares and any other Securities on the
appropriate register of holders of DMR; and (b) except as may
otherwise be agreed, to exercise any and all of the rights of the
holder of the Purchased Shares and Other Securities, including,
without limitation, to vote, execute and deliver any and all
instruments of proxy, authorizations or consents in respect of
all or any of the Purchased Shares and Other Securities, revoke
any such instrument, authorization or consent given prior to or
after the Effective Date, designate in any such instruments of
proxy, any person or persons as the proxy or the proxy nominee or
nominees of the holder of Shares in respect of such Purchased
Shares and such Other Securities for all purposes including,
without limiting the generality of the foregoing, in connection
with any meeting (whether annual, special or otherwise), of
holders of securities of DMR (or adjournment thereof), and
execute, endorse, and negotiate for and in the name of and on
behalf of the registered holder of Purchased Shares and Other
Securities any and all cheques or other instruments, respecting
any distribution payable to or to the order of such registered
holder. Furthermore, a holder of Purchased Shares or Other
Securities who executes a Letter of Acceptance and Transmittal
agrees, effective from the Effective Date, not to vote any of the
Purchased Shares or Other Securities at any meeting (whether
annual, special or otherwise), of holders of securities of DMR
(or any adjournment thereof) and, except as may otherwise be
agreed, not to exercise any or all of the other rights or
privileges attached to the Purchased Shares or Other Securities
and to designate in any such instruments of proxy the person or
persons specified by the Offeror as the proxy or the proxy
nominee or nominees of the holder of the Purchased Shares or
Other Securities. Upon such appointment, all prior proxies given
by the holder of such Purchased Shares or Other Securities with
respect thereto shall be revoked and no subsequent proxies may be
given by such person with respect thereto. A holder of Purchased
Shares or Other Securities who executes the Letter of Acceptance
and Transmittal covenants to execute, upon request, any
additional documents necessary or desirable to complete the sale,
assignment and transfer of the Purchased Shares and Other
Securities to the Offeror and acknowledges that all authority
therein conferred or agreed to be conferred shall survive the
death or incapacity, bankruptcy or insolvency of the holder and
all obligations of the holder therein shall be binding upon the
heirs, personal representatives, successors and assigns of the
holder.
All questions as to validity, form, eligibility (including
timely receipt) and acceptance of any Purchased Shares or Other
Securities deposited pursuant to the Offers, including the
propriety and effect of the execution of the Letter of Acceptance
and Transmittal will be determined by the Offeror in its sole
discretion, and depositing holders of Purchased Shares or Other
Securities agree that such determination shall be final and
binding. The Offeror reserves the absolute right to reject any
and all deposits which it determines not to be in proper form or
which, in the opinion of counsel, may be unlawful to accept under
the laws of any jurisdiction. The Offeror's interpretation of the
terms and conditions of the Offers to Purchase, the Offering
Circular, the Letter of Acceptance and Transmittal and Notice of
Guaranteed Delivery will be final and binding.
The deposit of Shares pursuant to the procedures herein will
constitute a binding agreement between the depositing shareholder
and the Offeror upon the terms and subject to the conditions of
the Offers, including the depositing shareholder's representation
and warranty that (i) such shareholder has full power and
authority to deposit, sell, assign and transfer the Shares (and
any Other Securities) being deposited, (ii) such shareholder owns
the Shares (and any Other Securities) being deposited within the
meaning of applicable securities laws; (iii) the deposit of such
Shares (and any Other Securities) complies with applicable
securities laws; and (iv) when such Shares are taken up and paid
for by the Offeror, the Offeror will acquire good title thereto
free and clear of all liens, restrictions, charges, encumbrances,
claims and equities.
The Offeror reserves the right to permit holders of Shares
to accept the Offers in a manner other than that set out above.
4. EXTENSION AND VARIATION OF THE OFFERS
The Offers are open for acceptance until, but not after, the
Expiry Time.
The Offeror expressly reserves the right, in its sole
discretion, at any time while an Offer is open for acceptance to
extend the period of time during which such Offer is open or to
vary such Offer, by giving oral or written notice of such
extension or variation to the Depositary at its principal office
in Montreal and by causing the Depositary to provide as soon as
practicable thereafter a copy of such notice to all the holders
of Shares in the manner set forth in section 12. The Offeror
shall, forthwith after giving notice to the Depositary of an
extension or variation, make a public announcement of the
extension or variation and provide a copy of the notice thereto
to the Montreal Exchange and The Toronto Stock Exchange. In the
case of an extension, such announcement shall be made not later
than 9:00 a.m., Montreal time, on the next business day after the
previously scheduled Expiry Time. Any notice of extension or
variation will be deemed to have been given and be effective on
the day on which it is delivered or otherwise communicated to the
Depositary at its principal office in Montreal.
An extension of the Expiry Time shall not in and of itself
constitute a waiver by the Offeror of any of its rights under
sections 5 or 6.
Under applicable Canadian provincial securities legislation,
if there is a variation in the terms of an Offer, other than a
variation consisting solely of the waiver of a condition of such
Offer, the period during which Shares may be deposited pursuant
to such Offer shall not expire before ten days after the notice
of variation has been delivered. If, prior to the Expiry Time,
the Offeror, in its sole discretion, shall increase the
consideration offered to holders of Shares under an Offer, such
increase shall be applicable to all holders whose Shares are
taken up pursuant to such Offer.
Notwithstanding the foregoing, an Offer may not be extended
by the Offeror if all the terms and conditions of such Offer have
been complied with, except those waived by the Offeror, unless
the Offeror first takes up and pays for all Shares validly
deposited under such Offer and not withdrawn.
5. CONDITIONS OF THE CLASS A OFFER
The Class A Offer is conditional upon the Offeror acquiring
any Class B Shares pursuant to the Class B Offer. The Offeror
reserves the right to withdraw the Class A Offer and not take up
and pay for any Class A Shares deposited under the Class A Offer
if the Offeror does not acquire any Class B Shares pursuant to
the Class B Offer. Accordingly, if the conditions to the Class B
Offer are not satisfied or waived, the condition to the Class A
Offer will not be satisfied. For a description of the conditions
to the Class B Offer, see section 6 of the Offers to Purchase.
The foregoing condition is for the exclusive benefit of the
Offeror and may be asserted by the Offeror regardless of the
circumstances (including any action or inaction by the Offeror)
giving rise to such condition or may be waived by the Offeror in
its sole discretion, at any time and from time to time without
prejudice to any of the rights which the Offeror may have under
the Offers. The failure by the Offeror at any time to exercise
such right shall not be deemed a waiver of such right and such
right shall be deemed an ongoing right which may be asserted at
any time and from time to time. Any determination by the Offeror
concerning the condition described in this section 5 will be
final and binding upon all parties.
Any waiver of a condition or the withdrawal of the Class A
Offer shall be effective upon oral or written notice by the
Offeror to that effect to the Depositary at its principal office
in Montreal. The Offeror, forthwith after giving any such notice,
shall make a public announcement of such waiver or withdrawal,
shall cause the Depositary as soon as practicable thereafter to
notify the holders of Class A Shares in the manner set forth in
section 12 of the Offers to Purchase and shall provide a copy of
the notice to the Montreal Exchange and The Toronto Stock
Exchange. If the Class A Offer is withdrawn, the Offeror shall
not be obligated to take up or pay for any Class A Shares
deposited under the Class A Offer and the Depositary will
promptly return all certificates for deposited Class A Shares and
Letters of Acceptance and Transmittal and related documents to
the parties by whom they were deposited.
6. CONDITIONS OF THE CLASS B OFFER
The Offeror reserves the right to withdraw the Class B Offer
and not take up and pay for any Class B Shares deposited under
the Class B Offer unless all of the following conditions are
satisfied:
(a) there being validly deposited under the Offers and not
withdrawn such number of Class A Shares (calculated on a diluted
basis) and Class B Shares as are required by the Offeror, to
ensure successful authorization of an amalgamation, statutory
arrangement or other transaction involving the Offeror and/or an
affiliate and DMR that is a "going private transaction" (as
defined in Policy Q-27 and in Policy 9.1), being (i) two-thirds
of each of the Class A Shares (calculated on a diluted basis) and
the Class B Shares then outstanding and (ii) a majority of each
of the Class A Shares (calculated on a diluted basis) and Class B
Shares then outstanding, excluding the Shares which are held by
or on behalf of the Offeror, its affiliates and associates and
the Shares which are subject to the terms of the Deposit
Agreements (the "Minimum Condition");
(b) the Director of Investigation and Research (the
"Director") appointed under the Competition Act (Canada) shall
have advised the Offeror that the Director shall not oppose or
threaten to oppose the purchase of any of the Shares under the
Offers, nor make or threaten to make an application under Part
VIII of the Competition Act (Canada) in respect of the purchase
of any of the Shares;
(c) any applicable waiting periods under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 (United States) shall
have expired or been earlier terminated;
(d) any required governmental or regulatory approvals
(other than as referred to in subsection (b) and (c) above but
including without limitation those of Investment Canada, any
stock exchanges or other regulatory authorities) shall have been
obtained or waived on terms satisfactory to the Offeror, acting
reasonably, including, without limitation, the Offeror having
received orders of all relevant securities commissions, including
to the effect that any agreements between the Offeror and any
shareholder of DMR contemplated by the Deposit Agreements and the
Exclusivity Agreement are not in breach of the "equivalent
consideration" requirements in respect of take-over bids under
applicable securities legislation;
(e) (i) no act, action, suit or proceeding shall have been
threatened to be taken or taken before or by any domestic or
foreign court or tribunal or governmental agency or other
regulatory authority or administrative agency or commission by
any elected or appointed public official or private person
(including, without limitation, any individual, corporation,
firm, group or other entity) in Canada or elsewhere, whether or
not having the force of law, or (ii) no law, regulation, rule or
policy shall have been proposed, enacted, promulgated or applied:
(A) to cease trade, enjoin, prohibit or impose
material limitations or conditions on the purchase by or the sale
to the Offeror of 100% of the Shares or the right of the Offeror
to own or exercise full rights of ownership of 100% of the
Shares, or
(B) which, in the sole judgment of the Offeror, acting
reasonably in the circumstances, if the Offers were consummated,
would materially and adversely affect DMR and its subsidiaries
considered on a consolidated basis;
(f) there does not exist any prohibition at law against the
Offeror making the Offers or taking up and paying for 100% of the
Shares under the Offers;
(g) from the date of the Offers and except with the prior
written approval of the Offeror, which approval will not be
unreasonably withheld, neither DMR nor any subsidiary of DMR,
shall have authorized or proposed, or shall have entered into any
agreement, arrangement or understanding with respect to:
(i) any take-over bid (other than the Offers), merger,
amalgamation, plan of arrangement, reorganization or other
business combination;
(ii) any acquisition or disposition of assets or
securities in an amount exceeding $3,000,000;
(iii) any change in its capitalization (including,
but not limited to, any increase in its consolidated borrowings
to an amount exceeding $20,000,000);
(iv) any capital expenditures in an amount exceeding
$1,000,000;
(v) any combination of any or all of the transactions
referred to in paragraphs (ii), (iii) and (iv) above which
individually are not material but which in the aggregate are
material;
(vi) declaring or paying any dividend or declaring,
authorizing or making any distribution of or on any of its
securities whether payable in cash, securities or otherwise other
than (A) regular cash dividends in amounts fixed by their terms
or consistent with past practice or (B) any dividend or
distribution by a subsidiary of DMR to DMR;
(vii) entering into, modifying or terminating any
agreements or arrangements with its officers or employees, except
agreements or arrangements (other than agreements or arrangements
in respect of share options or other rights or entitlements to
acquire authorized and unissued Class A Shares or Class B Shares
or relating to severance or termination or other rights related
to a change of control) in the ordinary course of business and
consistent with past practice;
(viii) any release or relinquishment not in the
ordinary course of business of any material contractual rights;
(ix) the amendment of its articles or by-laws, or the
issuance or purchase or other acquisition of any shares of its
capital of any class or securities convertible into, or rights,
warrants or options to acquire, any such shares or other
convertible securities (other than pursuant to DMR's existing
stock purchase plan and stock option plan);
(x) agreeing or committing to the guarantee of payment
of any material indebtedness;
(xi) instituting, cancelling or modifying any pension
plans or other employee benefit arrangements; or
(xii) any other material change in the business,
operations, affairs, assets, capitalization, financial condition,
licenses, permits, rights or privileges, whether contractual or
otherwise, of DMR or any of its subsidiaries considered on a
consolidated basis which, in the sole judgement of the Offeror,
acting reasonably in the circumstances, could individually or in
the aggregate, have a material adverse effect either on the value
of DMR and its subsidiaries considered on a consolidated basis or
on the value of the Shares to the Offeror;
(h) during the time the Offers are outstanding there shall
not have occurred or arisen (or there shall not have been
generally disclosed or discovered, if not previously disclosed in
writing to the Offeror), any change (or any condition, event or
development involving a prospective change) in the business,
operations, affairs, assets, liabilities (including any
contingent liabilities that may arise through outstanding,
pending or threatened litigation or otherwise) capitalization,
financial condition, licenses, permits, rights or privileges,
whether contractual or otherwise, or prospects of DMR or any of
its subsidiaries considered on a consolidated basis which, in the
sole judgment of the Offeror, acting reasonably in the
circumstances, has or may have a material adverse effect either
on the value of DMR or any of its subsidiaries considered on a
consolidated basis or on the value of the Shares to the Offeror;
(i) all representations or warranties of each of the
Controlling Shareholders in the Deposit Agreements and all
representations and warranties of DMR in the Exclusivity
Agreement shall have been, as of the date made, and be, at the
time immediately prior to the taking up of the Shares pursuant to
the Offers, true and correct in all material respects and each of
the Controlling Shareholders and DMR shall have performed in all
material respects all of their respective covenants and complied
with all of their respective agreements to be performed and
complied with by it under the Deposit Agreements or the
Exclusivity Agreement, as the case may be; and
(j) during the time the Offers are outstanding, there shall
not have occurred any change in the general economic, financial,
currency exchange or securities market conditions in Canada or
any part thereof which, in the sole judgment of the Offeror,
acting reasonably in the circumstances, has or may have a
material adverse effect on the value to the Offeror of DMR and
its subsidiaries considered on a consolidated basis.
The foregoing conditions are for the exclusive benefit of
the Offeror and may be asserted by the Offeror regardless of the
circumstances (including any action or inaction by the Offeror)
giving rise to any such condition or may be waived by the Offeror
in its sole discretion, in whole or in part, at any time and from
time to time without prejudice to any of the rights which the
Offeror may have under the Offers. The failure by the Offeror at
any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by the Offeror concerning
the events described in this section 6 will be final and binding
upon all parties.
Any waiver of a condition or the withdrawal of the Class B
Offer shall be effective upon oral or written notice by the
Offeror to that effect to the Depositary at its principal office
in Montreal. The Offeror, forthwith after giving any such notice,
shall make a public announcement of such waiver or withdrawal,
shall cause the Depositary as soon as practicable thereafter to
notify the holders of Shares in the manner set forth in section
12 of the Offers to Purchase and shall provide a copy of the
notice to the Montreal Exchange and The Toronto Stock Exchange.
If the Class B Offer is withdrawn, the Offeror shall not be
obligated to take up or pay for any Class B Shares deposited
under the Class B Offer and the Depositary will promptly return
all certificates for deposited Class B Shares and Letters of
Acceptance and Transmittal and related documents to the parties
by whom they were deposited.
7. RIGHT TO WITHDRAW DEPOSITED SHARES
Except as otherwise stated in this section 7, all deposits
of Shares pursuant to each of the Offers are irrevocable. Any
Shares deposited in acceptance of an Offer may be withdrawn by or
on behalf of the depositing shareholder:
(a) at any time before 12:01 a.m., local time, on Thursday,
October 19, 1995;
(b) at any time before the expiration of the tenth day
after the date upon which either (i) a notice of change relating
to a change which has occurred in the information contained in
the Offers, which change is one that would reasonably be expected
to affect the decision of a holder of Shares to accept or reject
the relevant Offer (other than a change that is not within the
control of the Offeror or of any affiliate of the Offeror) in the
event that such change occurs before the Expiry Time or after the
Expiry Time but before the expiry of all rights of withdrawal in
respect of such Offer, or (ii) a notice of variation concerning a
variation in the terms of such Offer (other than a variation
consisting solely of an increase in the consideration offered for
the Shares pursuant to such Offer where the time for deposit is
not extended for a period greater than 10 days or a variation
consisting solely of a waiver of a condition of such Offer), is
mailed, delivered or otherwise properly communicated, but only if
such deposited Shares have not been taken up by the Offeror at
the time of the notice; and
(c) at any time after Monday, November 13, 1995, if the
Shares have not been taken up and paid for by the Offeror prior
to receipt by the Depositary or the Forwarding Agent of the
notice of withdrawal in respect of such Shares.
Withdrawals of Shares deposited under the Offers must be
effected by notice of withdrawal made by or on behalf of the
depositing shareholder and must be received by the Depositary or
the Forwarding Agent at the place of deposit of the applicable
Shares within the time limits indicated above. Notice of
withdrawal must (i) be in writing (which includes telegraphic
communication or notice by electronic means that produces a
printed copy), (ii) be signed by the person who signed the Letter
of Acceptance and Transmittal accompanying the Shares which are
to be withdrawn and (iii) specify such person's name, the number
of Shares to be withdrawn, the name of the registered holder and
the certificate number shown on each certificate representing the
Shares to be withdrawn. The withdrawal shall take effect upon
receipt of the written notice by the Depositary or the Forwarding
Agent. Any signature on the withdrawal notice must be guaranteed
by an Eligible Institution, except in the case of Shares
deposited for the account of an Eligible Institution. None of the
Offeror, the Depositary, the Forwarding Agent, the Dealer Manager
or any other person will be under any duty to give notice of any
defect or irregularity in any notice of withdrawal or shall incur
any liability for failure to give such notice.
Withdrawals may not be rescinded and any Shares withdrawn
will thereafter be deemed not validly deposited for purposes of
the Offers. However, withdrawn Shares may be redeposited at any
time at or before the Expiry Time by again following one of the
procedures described in section 3 of the Offers to Purchase.
If the Offeror extends the Class A Offer or the Class B
Offer, is delayed in taking up or paying for Shares or is unable
to take up or pay for Shares for any reason, then, without
prejudice to the Offeror's other rights, Shares may not be
withdrawn except to the extent that depositing shareholders are
entitled to withdrawal rights as set forth in this section 7.
In addition to the foregoing rights of withdrawal, holders
of Shares in certain provinces of Canada are entitled to
statutory rights of rescission in certain circumstances. See
"Offerees' Statutory Rights" in the Offering Circular.
All questions as to the validity (including timely receipt)
and forms of notice of withdrawal shall be determined by the
Offeror in its sole discretion, and such determination shall be
final and binding.
8. PAYMENT FOR DEPOSITED SHARES
Upon the terms and subject to the respective conditions of
the Offers (including but not limited to the conditions specified
in sections 5 and 6 of the Offers to Purchase), the Offeror will
take up and pay for Shares validly deposited under the Offers
(and not withdrawn pursuant to section 7 of the Offers to
Purchase) within all time periods prescribed by applicable
securities laws.
Subject to applicable law, the Offeror may, in its
discretion, at any time before the Expiry Time if the applicable
rights to withdraw any deposited Shares have expired, take up and
pay for all such Shares then deposited under the Class A Offer or
the Class B Offer or both Offers provided the Offeror agrees to
take up and pay for all additional Shares validly deposited under
such Offer or Offers thereafter.
Subject to applicable securities laws, the Offeror expressly
reserves the right, in its sole discretion, to delay taking up or
paying for the Class A Shares or to terminate the Class A Offer
and not take up and pay for the Class A Shares if the condition
specified in section 5 of the Offers to Purchase is not satisfied
or waived, by giving written notice thereof to the Depositary.
Subject to applicable securities laws, the Offeror expressly
reserves the right, in its sole discretion, to delay taking up or
paying for any Class B Shares or to terminate the Class B Offer
and not take up and pay for any Class B Shares if any condition
specified in section 6 of the Offers to Purchase is not satisfied
or waived, by giving written notice thereof to the Depositary.
The Offeror also expressly reserves the right, in its sole
discretion, to delay taking up and paying for Shares in order to
comply, in whole or in part, with any applicable law. For the
purposes of an Offer, the Offeror will be deemed to have accepted
for payment Shares validly deposited and not withdrawn as, if and
when the Offeror gives oral or written notice to the Depositary
of its acceptance for payment of such Shares pursuant to such
Offer.
The Offeror will pay for Shares validly deposited under the
Offers, and not withdrawn, by providing the Depositary with
sufficient funds (by bank transfer or other means satisfactory to
the Depositary) for transmittal to holders of Shares. Under no
circumstances will interest be paid by the Offeror to any
shareholder on the purchase price of the Shares purchased by the
Offeror, regardless of any delay in making such payment.
The Depositary will act as the agent of persons who have
deposited Shares under the Offers for the purposes of receiving
payment from the Offeror and transmitting payment to such
persons. Upon delivery of sufficient funds to the Depositary, the
Offeror shall be deemed to have made payment for the Shares
accepted for payment.
Settlement with holders of Shares will be effected by the
Depositary by forwarding a cheque payable in Canadian funds to
each person depositing Shares under the Offers.
Unless otherwise directed in the Letter of Acceptance and
Transmittal, the cheque will be issued in the name of the
registered holder of deposited Shares. Cheques will be forwarded
by first class mail, postage prepaid, to such persons at the
address specified in the Letter of Acceptance and Transmittal. If
no address is specified, a cheque payable in respect of such
Shares will be forwarded to the address of the holder as shown on
the share register maintained by DMR.
9. RETURN OF SHARES
If any deposited Shares are not taken up pursuant to the
terms and conditions of the Class A Offer or the Class B Offer
for any reason or if certificates are submitted for more Shares
than are deposited, certificates for Shares that are not
purchased will be returned, at the expense of the Offeror, to the
depositing shareholder by first class registered or insured mail
to the address of the depositing shareholder specified in the
Letter of Acceptance and Transmittal or, if no such address is
specified, to the address of such shareholder as shown on the
share register maintained by DMR, as promptly as practicable
following the Expiry Time or withdrawal and early termination of
the relevant Offer.
10. MAIL SERVICE INTERRUPTION
Notwithstanding the provisions of the Offers, cheques issued
by the Depositary for the purchase price of Shares purchased
pursuant to the Offers will not be mailed if the Offeror
determines that delivery thereof by mail may be delayed. A person
entitled to a cheque which is not mailed for the foregoing reason
may take delivery thereof at the office of the Depositary or the
Forwarding Agent at which the Shares in respect of which the
cheque is being issued were deposited, upon application to the
Depositary or the Forwarding Agent, until such time as the
Offeror has determined that delivery by mail will no longer be
delayed. Notwithstanding section 8 of the Offers to Purchase,
cheques not mailed for the foregoing reason will be conclusively
deemed to have been delivered on the first day upon which they
are available for delivery to the depositing shareholder at the
appropriate office of the Depositary or the Forwarding Agent.
Notice of any determination regarding mail service delay or
interruption made by the Offeror shall be given in accordance
with section 12 of the Offers to Purchase.
11. DIVIDENDS AND DISTRIBUTIONS
If, on or after the date of the Offers, DMR should split,
combine or otherwise change any of the Shares or its
capitalization, or disclose that it has taken or intends to take
any such action, then the Offeror may, in its sole discretion,
make such adjustments as it deems appropriate to reflect such
split, combination or other change in the purchase price and the
other terms of the Offers (including, without limitation, the
type of securities offered to be purchased and the amounts
payable therefor.)
Purchased Shares and Other Securities (as defined in section
3 of the Offers to Purchase) acquired pursuant to the Offers
shall be acquired by the Offeror free and clear of all liens,
charges, encumbrances, claims and equities and together with all
rights and benefits arising therefrom including the right to all
dividends, distributions, payments, securities, rights, assets or
other interests which may be declared, paid, issued, distributed,
made or transferred on or after the date of the Offers on, or in
respect of, the Purchased Shares and Other Securities.
If, on or after the date of the Offers, DMR should declare
or pay any cash or stock dividends or declare, make or pay any
other payments or distributions on, or declare, allot, reserve or
issue any securities, rights, assets or other interests with
respect to, the Shares, payable or distributable to holders of
record on a date prior to the transfer of Shares taken up
pursuant to the Offers into the name of the Offeror or its
nominee or transferee on DMR's securities transfer records, then
in the case of such cash dividends, distributions or payments,
the amount of such cash dividends, distributions and payments
shall be received by and held by the depositing shareholder for
the account of the Offeror until the Offeror pays for such
Shares, and the purchase price per Share payable by the Offeror
pursuant to the Offers will be reduced by the amount of any such
cash dividends, distributions or payments retained by such
shareholder.
12. NOTICE AND DELIVERY
Without limiting any other lawful means of giving notices,
any notice which the Offeror, the Depositary or the Forwarding
Agent may give or cause to be given under the Offers will be
deemed to have been properly given to holders of Shares if it is
mailed by prepaid, first class mail to the registered holders of
such Shares at their respective addresses appearing in the share
register maintained by DMR and will be deemed to have been
received on the first business day following the date of mailing.
These provisions apply notwithstanding any accidental omission to
give notice to any one or more holders of Shares and
notwithstanding any interruption of mail service following
mailing. In the event of any interruption of mail service
following mailing, the Offeror intends to make reasonable efforts
to disseminate the notice by other means such as publication. In
the event that post offices are not open for the deposit of mail,
or there is reason to believe there is or could be a disruption
in all or any part of the postal service, any notice which the
Offeror, the Depositary or the Forwarding Agent may give or cause
to be given under the Offers will be deemed to have been properly
given and to have been received by holders of Shares if it is
given to each of the Montreal Exchange and The Toronto Stock
Exchange for dissemination through their facilities or if it is
published in a newspaper or newspapers of general circulation in
Montreal and Toronto or if it is given to the Dow Jones News
Service.
At the Offeror's request, DMR has provided a list of the
names and addresses of the holders of its Shares and securities
exercisable into Shares for the purposes of disseminating the
Offers and any required notices to such holders.
The Offers to Purchase and the Offering Circular and the
Letter of Acceptance and Transmittal and Notice of Guaranteed
Delivery will be mailed to registered holders of Shares (and to
registered holders of securities exercisable into Shares) and the
Offeror will use its reasonable efforts to furnish such documents
to brokers, banks and similar persons whose names, or the names
of whose nominees, appear on the security holder list, or, if
applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmission to
beneficial owners of Shares (and securities exercisable into
Shares) when such list or listing is received. Holders of Shares
with a registered address in the United States will also receive
materials entitled "Withholding Tax Information for U.S.
Shareholders".
Wherever the Offers call for documents to be delivered to
the Depositary or the Forwarding Agent, such documents will not
be considered delivered unless and until they have been received
at one of the offices specified in the Letter of Acceptance and
Transmittal.
13. MARKET PURCHASES
The Offeror has no present intention of acquiring beneficial
ownership of Shares while the Offers are outstanding other than
as described in the Offering Circular or the Offers to Purchase.
However, the Offeror reserves the right to, and may, acquire, or
cause an affiliate to acquire, beneficial ownership of Class A
Shares by making purchases through the facilities of the Montreal
Exchange or The Toronto Stock Exchange, subject to applicable
law, at any time prior to the Expiry Time. In no event will the
Offeror make any such purchases of Class A Shares until the third
business day following the date of the Offers. If the Offeror
should acquire beneficial ownership of Class A Shares by making
purchases through the facilities of either the Montreal Exchange
or The Toronto Stock Exchange while the Offers are outstanding,
the Class A Shares so purchased shall be counted in any
determination as to whether the Minimum Condition to the Class B
Offer has been fulfilled. The aggregate number of Class A Shares
beneficially acquired by the Offeror through the facilities of
the Montreal Exchange and The Toronto Stock Exchange while the
Offers are outstanding shall not exceed 5% of the outstanding
Class A Shares. The payment other than pursuant to the Class A
Offer of an amount for a Class A Share that is greater than the
amount offered pursuant to the Class A Offer would be deemed
under the CBCA to be an amendment to the Class A Offer that
increases the consideration for the Class A Shares and the
Offeror would be required to pay the increased consideration to
all shareholders whose Class A Shares are taken up and paid for
pursuant to the Class A Offer. Should this occur, the Offeror
shall immediately advise all shareholders of DMR of the increased
consideration.
14. OTHER TERMS
NO BROKER, DEALER OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF
THE OFFEROR OTHER THAN AS CONTAINED IN THE OFFERS, AND, IF ANY
SUCH INFORMATION OR REPRESENTATION IS GIVEN OR MADE, IT MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Offeror covenants that, if it pays any amounts to the
Controlling Shareholders pursuant to the Resale Agreements
referred to in "Arrangements with Controlling Shareholders and
DMR" in the Offering Circular in the circumstances contemplated
by the Resale Agreements, it will pay to all other holders of
Shares, whose Shares are taken up and paid for by the Offeror
under the Offers, the same amount per each such Share that is
paid per Share to the Controlling Shareholders under the Resale
Agreements. The Offeror has no current intention of selling any
Shares acquired under the Offers which would result in the
payment described above and accordingly holders of Shares who
deposit Shares under the Offers should not expect to receive
additional compensation beyond the cash price specified in the
Offers.
The Offers and all contracts resulting from the acceptance
thereof shall be governed by and construed in accordance with the
laws of the Province of Quebec and the federal laws of Canada
applicable therein.
The Offers are not being made to (nor will deposits be
accepted from or on behalf of) holders of Shares residing in any
jurisdiction in which the making of the Offers or the acceptance
thereof would not be in compliance with the laws of such
jurisdiction. The Offeror may, in its sole discretion, take such
action as it may deem necessary to make the Offers in any such
jurisdiction and extend the Offers to holders of Shares in any
such jurisdiction.
Dated: September 27, 1995 AMDAHL CANADA ACQUISITION INC.
By: /s/ DENNIS R. ING
------------------
Dennis R. Ing
President & Chief Executive Officer
<PAGE>
OFFERING CIRCULAR
This Offering Circular is furnished in connection with the
Offers to Purchase dated September 27, 1995 by the Offeror
comprising an offer to purchase all of the issued and outstanding
Class A Shares (including Class A Shares issuable upon conversion
of the Class B Shares and upon the exercise of existing stock
options) and a concurrent offer to purchase all of the issued and
outstanding Class B Shares of DMR not already owned by the
Offeror at a price of $8.25 in cash for each Share.
The terms and provisions of the Offers to Purchase are
incorporated into and form part of this Offering Circular and
holders of Shares should refer to the Offers to Purchase for
details of the respective terms and conditions of the Offers,
including details as to payment and withdrawal rights. Defined
terms used in the Offers to Purchase are used in this Offering
Circular with the same meaning unless the context otherwise
requires.
Except as otherwise indicated, the information concerning
DMR contained in the Offers to Purchase and this Offering
Circular has been taken from or based upon publicly available
documents and records on file with Canadian securities
administrators and other public sources. Although the Offeror has
no knowledge that would indicate that any statements contained
herein relating to DMR or taken from or based on such documents
and records are untrue or incomplete, neither the Offeror nor its
officers or directors assumes any responsibility for the accuracy
or completeness of the information relating to DMR or contained
in such documents and records, or for any failure by DMR 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.
THE OFFEROR
The Offeror was incorporated under the CBCA on September 22,
1995 and to date has engaged in no activities other than those
incidental to its organization and the making of the Offers. The
registered office of the Offeror is located at Suite 6600, 1
First Canadian Place, Toronto, M5X 1B8, Canada.
The Offeror is a wholly-owned subsidiary of Amdahl Canada,
which was incorporated on November 8, 1976 under the Business
Corporations Act (Ontario). The registered office of Amdahl
Canada is located at 12 Concorde Place, Suite 100, North York,
Ontario, M3C 3R8, Canada.
Amdahl Canada is a wholly-owned subsidiary of Amdahl, a
corporation incorporated under the laws of Delaware. Amdahl,
whose revenues exceeded U.S. $1.6 billion for the fiscal year
ended December 30, 1994, is a major supplier of mainframe
computers and enterprise servers, data storage subsystems, UNIX
servers and software, applications development and production
software, and a wide range of educational and consulting
services. Its products and services are available in more than 30
countries for use in both IBM-compatible and open systems
computing environments. The corporate headquarters of Amdahl are
located at 1250 East Arques Avenue, Sunnyvale, California 94088-
3470, U.S.A.
DMR GROUP INC.
DMR is a corporation governed by the CBCA. It was formed on
February 26, 1973. The registered and principal office of DMR is
located at 1200 McGill College Avenue, Suite 2300, Montreal,
Quebec, H3B 4G8, Canada. The Class A Shares are currently listed
on the Montreal Exchange and The Toronto Stock Exchange.
DMR is a leading international provider of information
technology services to business and public enterprises, employing
2,800 professionals in Canada, the United States, the Asia-
Pacific region and Europe. DMR's services include information
technology planning, enterprise architecture, knowledge transfer,
outsourcing, and systems development and integration. In the year
ended May 31, 1995, DMR had gross revenues of approximately $299
million.
The authorized capital of DMR consists of an unlimited
number of first class and second class preferred shares, an
unlimited number of Class A Shares and an unlimited number of
Class B Shares. The Class A Shares are entitled to one vote per
share. The Class B Shares are entitled to ten votes per share.
The Class B Shares are convertible into Class A Shares at the
option of the holder on a one for one basis. The Offeror
understands that as at September 22, 1995, no preferred shares
were outstanding, 10,765,215 Class A Shares and 3,561,322 Class B
Shares were outstanding and options to purchase 1,179,125 Class A
Shares were outstanding.
In 1994, Amdahl and DMR entered into a development agreement
for the porting of systems management software tools for client
server platforms. The entity performing the development activity
was Qadrant International Pty. Ltd. ("Qadrant"), a joint venture,
51% owned by DMR and 49% by Qantas Information Technology
Limited. Qadrant received a porting fee of $1.5 million and will
receive royalties upon the sale of licenses. Royalty fees are to
be paid by Antares Alliance Group, a partnership between Amdahl
and Electronic Data Systems Corporation, for a period of five
years.
BACKGROUND
In late 1994, Amdahl's management established a strategy for
growth and diversification that involves pursuing strategic
acquisitions, alliances and internal developments.
Following a review of a number of possible strategic
acquisitions, Amdahl met with representatives of DMR on June 15,
1995 to explore a possible relationship between the two
companies. These discussions continued periodically until August
18, 1995 when an acquisition proposal was tabled by Amdahl with
Pierre Ducros, the President and Chairman of the Board of DMR. On
August 24, 1995 Pierre Ducros and Ron McCulloch, the Executive
Vice-President, Operations of DMR, met with members of senior
management of Amdahl and after discussions agreed to proceed with
negotiations respecting the basis upon which Amdahl Canada would
make the Offers and relating to the ongoing management and
operations of DMR. Negotiation of definitive agreements with the
Controlling Shareholders and their legal counsel commenced August
29 culminating on September 13, 1995 when the Deposit Agreements
and the Exclusivity Agreement were finalized.
The Offeror understands that on September 13, 1995 the Board
of Directors of DMR met and approved the entering into of the
Exclusivity Agreement by DMR. Immediately following the DMR Board
meeting, the Deposit Agreements, the Exclusivity Agreement and
other ancillary documents were entered into by the respective
parties thereto. Prior to the opening of trading on the Montreal
Exchange and The Toronto Stock Exchange on September 14, 1995,
DMR and Amdahl Canada announced the entering into of the Deposit
Agreements and the Exclusivity Agreement and the Offeror's
intention to make the Offers subject to the terms of such
agreements.
On September 14, 1995, representatives of Amdahl Canada
began due diligence relating to DMR at the head office of DMR,
which has continued until the date of the Offers.
On September 21, 1995, prior to the opening of trading on
the Montreal Exchange and The Toronto Stock Exchange, BDM
International, Inc. ("BDM") publicly announced its intention to
acquire all of the Class B Shares, including Class B Shares that
result from the conversion of Class A Shares to Class B Shares,
at a per share price of $9.00 in cash. BDM's proposed offer is
conditioned, among other things, on obtaining sufficient shares
to enable DMR to become a wholly-owned subsidiary of BDM. In its
announcement, BDM suggested that "any holder of Class A Shares
may convert to Class B Shares to participate in the tender
offer". In response to BDM's announcement, DMR publicly announced
after the close of trading on the Montreal Exchange and The
Toronto Stock Exchange on September 21, 1995 that DMR had sought
the advice of its outside legal advisors as to some legal aspects
of BDM's offer. DMR's counsel indicated that the conversion of
the Class A Shares into Class B Shares is not effected by the
making of an offer such as the one announced by BDM for reasons
described in such announcement. Amdahl Corporation also publicly
announced at the same time that it agreed with DMR's
interpretation of DMR's Articles and that as a result of Amdahl
Canada's agreements with the Controlling Shareholders, BDM cannot
consummate its proposed transaction without Amdahl's support
because BDM cannot obtain sufficient shares to complete its
proposed transaction.
On September 22, 1995 BDM issued another press release
reaffirming its proposed offer and its interpretation of the
Articles of DMR. Also on September 22, 1995 Amdahl publicly
announced its understanding that the Articles of DMR provide that
such a conversion of Class A Shares will not occur if an offer
has not been accepted on a pre-conversion basis by holders
representing more than 50% of the voting rights of all Shares.
The Shares that the Controlling Shareholders have agreed to
deposit under the Offers represent approximately 80% of the
voting rights of all outstanding Shares. Accordingly, the
requirement that a BDM offer receive 50% of the votes on a pre-
conversion basis cannot be met. For that reason, the Class A
Shares will not be convertible into Class B Shares.
As a result of the Exclusivity Agreement, Amdahl Canada
obtained access to information concerning the business and
affairs of DMR and certain of its principal subsidiaries. In the
course of its review of such information and discussions between
representatives of DMR and Amdahl Canada, Amdahl Canada and its
agents reviewed certain non-public information related to DMR.
Except as described or referred to in the Offers to Purchase
or in this Offering Circular, the Offeror has no information
which indicates that any material change has occurred in the
affairs of DMR since the date of the last public financial
statements of DMR, being the consolidated statements of earnings
and retained earnings, consolidated balance sheets and
consolidated statements of changes in financial position for the
fiscal year ended May 31, 1995.
ARRANGEMENTS WITH CONTROLLING SHAREHOLDERS AND DMR
Pursuant to the Deposit Agreements and subject to the
conditions set forth therein, Amdahl Canada agreed to make the
Offers or cause a direct or indirect wholly-owned subsidiary to
make the Offers and the Controlling Shareholders irrevocably and
unconditionally agreed to deposit the Deposited Securities under
the Offers and not to withdraw or take any action to withdraw any
of the Deposited Shares notwithstanding any statutory rights or
other rights under the terms of the Offers or otherwise which
they might have unless the Deposit Agreements are terminated in
accordance with their terms prior to taking up of the Deposited
Securities under the Offers.
The Controlling Shareholders have agreed to deposit the
Deposited Securities pursuant to the Offers within seven business
days after the date of the Offers. The Deposited Securities
represent 1,607,800 Class A Shares (being approximately 15% of
the outstanding Class A Shares (14% on a diluted basis)), any
Class A Shares acquired by Ducros upon the exercise of any stock
options of DMR owned by him and 3,556,088 Class B Shares (being
more than 99% of the outstanding Class B Shares) and also
represent approximately 36% of the equity of DMR (34% on a
diluted basis) and 80% of the votes attaching to all outstanding
shares (78% on a diluted basis) as at September 22, 1995.
In the Deposit Agreements the Controlling Shareholders made
representations and warranties in respect of themselves, the
Deposited Securities and, in the case of Ducros and Ducros
Holdco, DMR. In addition to certain customary covenants and
agreements, the Controlling Shareholders agreed, among other
things, that until Amdahl Canada has taken up and paid for the
Shares, abandoned the Offers or the Deposit Agreements have been
terminated (as discussed below) the Controlling Shareholders
would (a) not take any action of any kind which may reduce the
likelihood of success of or delay the completion of the Offers,
including but not limited to any action to solicit, initiate or
encourage offers, participate in any negotiations or provide
information to any person other than Amdahl Canada in respect of
the acquisition or disposition of Shares or any amalgamation,
merger, sale of assets, take-over bid, plan of arrangement,
reorganization, recapitalization, liquidation or winding-up of,
reverse take-over or other business combination or similar
transaction in respect of DMR or its assets; (b) vote the
Deposited Securities in favour of the Offers or a similar
acquisition proposal made by Amdahl Canada; (c) vote the
Deposited Securities against certain proposals not made by Amdahl
Canada, including in respect of any amalgamation, merger, sale of
assets, take-over bid, plan of arrangement, recapitalization,
reorganization, liquidation or winding-up of, reverse take-over
or other business combination or similar transaction in respect
of DMR or those that are likely to delay or prevent successful
completion of the Offers or which result in a material adverse
change in the business, assets, operations or prospects of DMR;
(d) generally not sell, transfer, pledge, encumber or otherwise
convey the Deposited Securities to any person or agree to do any
of the foregoing; (e) not grant or agree to grant any proxy or
otherwise limit the ability of the holder thereof to vote the
Deposited Securities; (f) not convert any Class B Shares owned by
the Controlling Shareholders into Class A Shares without Amdahl
Canada's consent; and in the case of Ducros, Roy, Ducros Holdco
and Roy Holdco, (g) use their best efforts to cause its nominee
directors on the Board of Directors, subject to their fiduciary
duties, to vote in favour of any proposal in furtherance of the
Offers or any other proposal relating to or in furtherance of
Amdahl Canada's acquisition of the Shares or the assets of DMR
and vote against certain other proposals not made by Amdahl
Canada, including those that would compete or interfere with the
Offers or the acquisition by Amdahl Canada of the Shares by
another means; (h) notify Amdahl Canada forthwith upon becoming
aware of any action, proposal or offer referred to in (a) of this
paragraph and inform Amdahl Canada of all information regarding
such proposal or offer; and (i) use their best efforts to assist
Amdahl Canada to successfully complete the Offers.
In the Deposit Agreements, Amdahl Canada covenanted, among
other things, to make and complete the Offers, subject to the
satisfaction or waiver of the conditions precedent to its
obligation to make the Offers and the satisfaction or waiver of
the conditions precedent to Amdahl Canada's obligation to take up
and pay for the Shares validly tendered pursuant to the Offers
(See sections 5 and 6 of the Offers to Purchase.)
The Deposit Agreements may be terminated by the Controlling
Shareholders if the Offers have not been made on or prior to
October 12, 1995, the Offers do not substantially conform with
the terms agreed with the Controlling Shareholders, or Shares
deposited under the Offers have not, for any reason whatsoever
(other than that all the terms and conditions of the Offers have
not been complied with or waived by the Offeror), been taken up
and paid for on or before the expiry of ten days after the expiry
of the Offers. The Offeror may terminate the Deposit Agreements
if the conditions precedent to its obligation to take up and pay
for the Shares pursuant to the Offers are not satisfied or waived
by it on or prior to 21 days after the date on which the Offers
are made.
Pursuant to the Exclusivity Agreement and subject to the
conditions set forth therein, Amdahl Canada agreed to make the
Offers or cause a direct or indirect wholly-owned subsidiary to
make the Offers.
In the Exclusivity Agreement DMR made representations and
warranties in respect of DMR. In addition to certain customary
covenants and agreements with respect to the capital and
operation of the business of DMR throughout the term of the
Exclusivity Agreement, DMR agreed, among other things, that until
Amdahl Canada has taken up and paid for the Shares, abandoned the
Offers or the Exclusivity Agreement or the Deposit Agreements
have been terminated (as discussed herein), DMR would (a) not
take any action of any kind which may reduce the likelihood of
success of or delay the completion of the Offers, including but
not limited to any action to solicit, initiate or encourage
offers, participate in any negotiations or provide information to
any person other than Amdahl Canada in respect of the acquisition
or disposition of Shares or assist any amalgamation, merger, sale
of assets, take-over bid, plan of arrangement, reorganization,
recapitalization, liquidation or winding-up of, reverse take-over
or other business combination or similar transaction in respect
of DMR or its assets; (b) notify Amdahl Canada forthwith upon
becoming aware of any action, proposal or offer referred to in
(a) of this paragraph and inform Amdahl Canada of all information
regarding such proposal or offer; (c) use its best efforts to
assist Amdahl Canada to successfully complete the Offers; (d)
provide lists of shareholders of DMR as required by the Offeror;
and (e) provide Amdahl Canada access to DMR for due diligence and
other purposes. Notwithstanding the foregoing, nothing in the
Exclusivity Agreement requires the directors or officers of DMR
to act otherwise than in accordance with their fiduciary duties
as a director or officer of DMR.
In the Exclusivity Agreement DMR and Amdahl Canada agreed to
a number of matters with respect to the ongoing operations and
management of DMR after the successful conclusion of the Offers,
including: (a) to retain the DMR name in Canada and in
Australia/New Zealand; (b) to maintain the DMR worldwide
headquarters and its research and development facilities in the
Province of Quebec; (c) to maintain present DMR compensation
policies as approved by the DMR Board of Directors; (d) to
implement the severance policy as presented to the DMR Human
Resources Committee of the Board of Directors on April 12, 1995;
(e) to accept the acceleration of certain unvested stock options
and the replacement of any remaining unvested stock options with
options to purchase Amdahl shares with an economic value at least
equivalent to the gain realized on those accelerated DMR stock
options and with conditions at least equivalent to the conditions
of such unvested options; (f) DMR executives will participate in
Amdahl's stock option program commensurate with the level they
hold in DMR after completion of the Offers; (g) the current DMR
Special Executive Long-Term Incentive Plan will be terminated and
Amdahl will consider the possibility of establishing a like plan;
and (h) that shareholders of DMR who are officers of DMR will not
receive consideration or treatment different from other
shareholders under the Offers.
In the Exclusivity Agreement, DMR agreed that if the Offeror
elects not to take up and pay for any Shares deposited under the
Offers, solely as a result of: any of the conditions of the Class
B Offer contained in subsections 6(a) (with respect to the Class
B Shares only), (g), (h), or (i) of the Offers to Purchase not
being satisfied or fulfilled, any of the Controlling Shareholders
breaching any of their respective obligations in the Deposit
Agreements or DMR breaching any of its obligations in the
Exclusivity Agreement, and if the Offeror is not in material
breach of any of its covenants and agreements contained in the
Deposit Agreements or the Exclusivity Agreement, DMR will
reimburse the Offeror for all reasonable out-of-pocket expenses
payable to counsel, accountants and advisors to the Offeror,
other than financial advisors such as an investment banker or
broker, and all solicitation, printing and mailing costs incurred
by the Offeror in connection with the making of the Offers and
DMR will pay to the Offeror a fee of $3 million. DMR further
agreed that if the Offeror does not make the Offers or does not
take up and pay for any Shares under the Offers solely as a
result of an alternative transaction in which a third party is
proposing, offering or has agreed to acquire (whether by way of
take-over bid, merger, amalgamation, purchase of assets, plan of
arrangement, reverse take-over, other business combination or
purchase transaction or similar transaction) more than 50% of the
business or assets of DMR or any number of Class A Shares and/or
Class B Shares which would result in the Minimum Condition set
forth in subsection 6(a) of the Offers to Purchase not being
satisfied in any way and (a) which is at a price or having a cash
equivalent value greater than the price per share under the
Offers or (b) which the Board of Directors of DMR determines in
good faith, based on the advice of outside legal counsel, it is
required by its fiduciary duties to recommend acceptance of by
the shareholders of DMR based on the advice of its outside
financial advisors that such alternative transaction is
financially more favourable to the shareholders of DMR than the
Offers, DMR shall pay the Offeror, in lieu of all damages that
may otherwise be payable, a termination fee of $7 million and
shall reimburse out-of-pocket expenses of the Offeror as
described above. In separate letter agreements (the "Resale
Agreements") with each of the Controlling Shareholders and with
DMR, the Offeror agreed that if it takes up and pays for
Deposited Securities under the Offers and within 90 days from the
last date on which it takes up and pays for Shares the Offeror
disposes of such Shares pursuant to an alternative transaction of
the type described above, the Offeror will pay to the Controlling
Shareholders in respect of each Deposited Security disposed of an
amount representing 50% of that part of the per share
consideration received by the Offeror pursuant to such
alternative transaction which exceeds $8.25 per Share. In such
circumstances only the out-of-pocket expenses of the Offeror
shall be reimbursed by DMR as described above.
In the Exclusivity Agreement, Amdahl Canada covenanted,
among other things, to make and complete the Offers, subject to
the satisfaction or waiver of the conditions precedent to its
obligation to make the Offers and the satisfaction or waiver of
the conditions precedent to Amdahl Canada's obligation to take up
and pay for the Shares validly tendered pursuant to the Offers.
See sections 5 and 6 of the Offers to Purchase. Amdahl Canada
also agreed that if it is in breach of any of its obligations in
the Exclusivity Agreement, or if any representation and warranty
of Amdahl Canada in the Exclusivity Agreement is not true and
correct, and DMR and the Controlling Shareholders are not in
material breach of any of their respective covenants and
agreements contained in the Exclusivity Agreement and the
Deposits Agreements, as the case may be, Amdahl Canada will
reimburse DMR for all of its reasonable out-of-pocket expenses
and fees incurred by DMR or on its behalf in connection with the
Exclusivity Agreement and will pay to DMR a fee of $3 million.
The Exclusivity Agreement may be terminated by DMR if the
Offers have not been made on or prior to October 12, 1995, the
Offers do not substantially conform with the terms agreed with
DMR, in the circumstances where the Offeror is required to pay a
fee to DMR as described above, or Shares deposited under the
Offers have not, for any reason whatsoever (other than that all
the terms and conditions of the Offers have not been complied
with or waived by the Offeror), been taken up and paid for on or
before the expiry of ten days after the expiry of the Offers. The
Offeror may terminate the Exclusivity Agreement if the conditions
to its obligation to take up and pay for the Shares pursuant to
the Offers are not satisfied or waived by it on or prior to 21
days after the date on which the Offers are made, or in the
circumstances where DMR is required to pay a fee to the Offeror
as described above.
PURPOSE OF THE OFFERS AND PLANS FOR DMR
PURPOSE OF THE OFFERS
The purpose of the Offers is to enable the Offeror to
acquire all of the Shares which are not currently owned by the
Offeror. If the respective conditions of the Offers are satisfied
and the Offeror takes up and pays for the Shares validly
deposited under the Offers, the Offeror intends to acquire any
Shares not deposited under the Offers by statutory right of
acquisition if such statutory right is available to the Offeror.
If such statutory right of acquisition is not available, the
Offeror will seek to cause a special meeting of shareholders of
DMR to be called to consider an amalgamation, statutory
arrangement or other transaction involving the Offeror or one or
more of its affiliates and DMR for the purpose of enabling the
Offeror to acquire all of the Shares not deposited under the
Offers for the cash price of $8.25 in a going private
transaction. If the Minimum Condition is satisfied the Offeror
will own sufficient Shares to effect such a going private
transaction.
PLANS FOR DMR
If the Offers are successful, it is expected that certain
changes may be effected with respect to the composition of the
Board of Directors to allow nominees of the Offeror to be elected
to the Board of Directors. The Offeror intends to retain the DMR
name and, upon the acquisition of all of the Shares, the Offeror
intends to integrate Amdahl's Business Solutions Group into DMR.
If permitted by applicable law, subsequent to the completion of
the Offers, the Offeror intends to delist the Class A Shares from
the Montreal Exchange and The Toronto Stock Exchange and to cause
DMR to cease to be a reporting issuer under Canadian securities
laws.
ACQUISITION OF SHARES NOT DEPOSITED
Compulsory Acquisition
- ----------------------
If within 120 days after the date hereof, each of the Offers
has been accepted by holders of not less than 90% of either the
issued and outstanding Class A Shares or Class B Shares (or
both), other than the Shares held on the date hereof by or on
behalf of the Offeror and its affiliates and associates (as such
terms are defined in the CBCA), and such Shares have been taken
up and paid for by the Offeror, the Offeror intends to acquire
pursuant to the provisions of section 206 of the CBCA the
remaining Shares of the relevant class on the same terms as the
Shares acquired under the Offers.
To exercise such statutory right, the Offeror must give
notice (the "Offeror's Notice") to each holder of Shares who did
not accept the relevant Offer (and each person who subsequently
acquires any such Shares) (in each case, an "Offeree") and to the
Director under the CBCA of such proposed acquisition on or before
the earlier of 60 days from the Expiry Time and 180 days from the
date of the Offers. Within 20 days of giving the Offeror's
Notice, the Offeror must pay or transfer to DMR the consideration
the Offeror would have had to pay or transfer to the Offerees if
they had elected to accept the relevant Offer, to be held in
trust for the Offerees. In accordance with section 206 of the
CBCA, within 20 days after receipt of the Offeror's Notice, each
Offeree must send the certificates representing the Shares held
by such Offeree to DMR, and must elect either to transfer such
Shares to the Offeror on the terms of the relevant Offer or to
demand payment of the fair value of such Shares held by such
holder by so notifying the Offeror. If an Offeree has elected to
demand payment of the fair value of such Shares, the Offeror may
apply to a court having jurisdiction to hear an application to
fix the fair value of such Shares of that Offeree. If the Offeror
fails to apply to such court within 20 days after it made the
payment or transferred the consideration to DMR referred to
above, the Offeree may then apply to the court within a further
period of 20 days to have the court fix the fair value. If there
is no such application made by the Offeree within such period,
the Offeree will be deemed to have elected to transfer such
Shares to the Offeror on the terms of the relevant Offer. Any
judicial determination of the fair value of the Shares could be
more or less than the amount paid pursuant to the Offers. THE
FOREGOING IS A SUMMARY ONLY. REFERENCE IS MADE TO SECTION 206 OF
THE CBCA FOR THE TEXT OF THE RELEVANT STATUTORY PROVISIONS.
Subsequent Acquisition Transactions
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If the Offeror takes up and pays for Shares validly
deposited under the Offers, and the foregoing statutory right of
acquisition is not available or the Offeror elects not to pursue
such right, the Offeror intends to pursue other means of
acquiring, directly or indirectly, all of the issued and
outstanding Shares in accordance with applicable law, including a
subsequent going private transaction. In order to effect a
subsequent going private transaction, the Offeror may seek to
cause a special meeting of Shareholders of DMR to be called to
consider an amalgamation, statutory arrangement or other
transaction involving DMR and the Offeror or one or more
affiliates of the Offeror for the purposes of enabling the
Offeror to acquire all of the Shares not acquired under the
Offers. If the Minimum Condition is satisfied, the Offeror will
have acquired sufficient Shares to carry out the acquisition of
all of the remaining Shares. In any amalgamation, statutory
arrangement or other transaction, the holders of Shares may have
the right to dissent under the CBCA and to be paid the fair value
for their Shares, with such fair value to be determined by a
court.
Each of the methods of acquiring the remaining outstanding
Shares described above, other than the statutory right of
acquisition under the CBCA, would be a "going private
transaction" within the meaning of the regulations under the
Securities Act (Ontario) (the "Regulation"), Policy Q-27 and
Policy 9.1 if such method would result in the interest of a
holder of Shares (the "affected securities") being terminated
without the consent of the holder and without the substitution
therefor of an interest of equivalent value in a participating
security of DMR, a successor to the business of DMR or person who
controls DMR or, in the case of Policy Q-27 and Policy 9.1, a
person who controls a successor to the business of DMR. The
transaction could also be a "related party transaction" for
purposes of Policy Q-27 and Policy 9.1.
Policy Q-27 and Policy 9.1 provide that, unless exempted, a
corporation proposing to carry out a going private transaction is
required to prepare a valuation of the affected securities (and
any non-cash consideration being offered therefor) and provide to
the holders of the affected securities a summary of such
valuation. An exemption from the valuation requirement is
generally available when the price offered to security holders
was arrived at within the 12 months immediately preceding the
date of the going private transaction through an arm's length
negotiation with a selling security holder of a control block of
securities where the selling security holder had full knowledge
and access to information concerning the offeree issuer such that
the underlying value of the offeree issuer was a material factor
considered by the selling security holder in arriving at the
price. The price at which the Offers are made was the result of
such negotiation between Amdahl Canada and the Controlling
Shareholders, which control a majority of the votes attaching to
all of the Shares. The Offeror knows of no non-financial factors
or factors peculiar to the Controlling Shareholders which are
considered by the Controlling Shareholders to be relevant in
assessing the amount agreed in the Deposit Agreements as the
price to be offered pursuant to the Offers. The Offeror intends
to rely on the exemption from the valuation requirement in Policy
Q-27 and Policy 9.1.
Policy Q-27 and Policy 9.1 require that, in addition to any
other required securityholder approval, in order to complete a
going private transaction, the approval of a simple or two-thirds
majority (depending on the nature of the transaction) of the
votes cast by "minority" shareholders of the affected securities
must be obtained. In relation to the Offers and any subsequent
going private transaction, Policy Q-27 and Policy 9.1 provide
that the Offeror may treat Shares acquired pursuant to the
Offers, other than the Deposited Securities, as "minority" Shares
and vote them in favour of such a going private transaction if
the intent to effect a going private transaction was disclosed at
the time of the Offers, if a summary of a valuation was provided
or no valuation was required in respect of the Offers and if the
consideration per security in the going private transaction is at
least equal in value to the consideration paid under the Offers.
Where the consideration offered in the subsequent going private
transaction is payable partly other than in cash, the approval of
a two-thirds majority of the votes cast by "minority" holders of
the affected securities must be obtained. The Offeror intends
that the consideration offered under any going private
transaction proposed subsequent to the Offers would be identical
to the consideration offered under the Offers and, accordingly, a
simple majority of the votes cast by "minority" shareholders
would have to be obtained. In the context of the Offers and any
subsequent going private or related party transactions, holders
of Class A Shares and Class B Shares will be entitled to vote
separately in respect of any vote by "minority" shareholders,
unless the Offeror is granted an exemption from this requirement.
In relation to the Offers and any subsequent going private
transaction, the "minority" shareholders would be, absent
discretionary relief from the QSC and the OSC, the Offeror with
respect to Shares acquired pursuant to the Offers, other than the
Deposited Securities, and with respect to all other Shares, all
holders of Shares, other than the Offeror, its directors and
senior officers, any associate or affiliate of the Offeror or its
directors or senior officers, any person or company acting
jointly or in concert with the Offeror or any of its directors or
senior officers in connection with the Offer or the subsequent
going private transaction, and any person who is a "related
party" of the Offeror as defined by Policy Q-27 and Policy 9.1.
See "Canadian Federal Income Tax Considerations" for a
discussion of the tax consequences to shareholders of DMR in the
event of a going private transaction.
Canadian courts have, in a few instances prior to the
adoption of Policy Q-27 and Policy 9.1, granted preliminary
injunctions to prohibit transactions involving certain going
private transactions. The current trend in both legislation and
in Canadian jurisprudence is toward permitting going private
transactions to proceed subject to compliance with procedural and
substantive fairness to the minority shareholders. On September
22, 1994, the Director appointed under the CBCA released a policy
on going private transactions stating, among other things, that
the Director is of the opinion that going private transactions
are permitted under the CBCA provided that the transaction is not
oppressive or unfairly prejudicial to or does not unfairly
disregard the interests of a person whose interest in a
participating security is being terminated without his or her
consent. In determining whether a going private transaction is
fair, the policy states that compliance with the requirements set
forth in Policy 9.1 or Policy Q-27 will usually be viewed by the
Director as sufficient.
Shareholders should consult their legal advisors for a
determination of their legal rights with respect to a "going
private transaction".
SOURCE OF FUNDS FOR PAYMENT
The Offeror estimates that if it acquires all of the
outstanding Shares under the Offers, including the Class A Shares
issuable upon the exercise of existing stock options, the total
amount of funds required to purchase such Shares will be
approximately $128 million. Amdahl Canada has agreed to provide
or cause to be provided such funds to the Offeror. Amdahl and its
subsidiaries will provide such funding from internal cash
resources.
BENEFICIAL OWNERSHIP OF AND TRADING IN SHARES
Except as disclosed under "Arrangements with Controlling
Shareholders and DMR", neither the Offeror, any associate or
affiliate of the Offeror, nor any director or officer of the
Offeror or any of their associates, beneficially owns, directly
or indirectly, or controls or exercises direction over, any
securities of DMR and to the knowledge of the directors and
officers of the Offeror, after reasonable enquiry, no securities
of DMR are owned or controlled or directed by any person acting
jointly or in concert with the Offeror or by any person or
company who beneficially owns, directly or indirectly, more than
10% of any class of equity securities of the Offeror.
No securities of DMR have been traded during the six month
period preceding the date of the Offers by the Offeror, any
associate or affiliate of the Offeror, any director or officer of
the Offeror or, to the knowledge of the directors and officers of
the Offeror, by associates of the directors or officers of the
Offeror, any person acting jointly or in concert with the Offeror
or any person or company who beneficially owns, directly or
indirectly, more than 10% of any class of equity securities of
the Offeror.
PRICE RANGES AND VOLUME OF TRADING OF SHARES
The Class A Shares are listed and posted for trading on the
Montreal Exchange and The Toronto Stock Exchange. The Montreal
Exchange and The Toronto Stock Exchange are the principal markets
for the Class A Shares. The Class B Shares are not listed on a
stock exchange. The following tables set forth for the periods
indicated, the reported high and low sales prices and the volume
of trading of the Class A Shares on the Montreal Exchange and The
Toronto Stock Exchange.
<TABLE>
<CAPTION>
The Montreal Exchange
High Low Volume
---- --- ------
<S> <C> <C> <C>
1995
January $3.95 $3.60 47,165
February $3.85 $3.50 46,833
March $4.15 $3.70 103,300
April $4.25 $3.85 55,033
May $4.10 $3.80 82,703
June $4.10 $3.80 38,275
July $4.75 $3.80 118,971
August $4.55 $4.10 28,798
September (to September 26) $9.25 $4.15 978,381
</TABLE>
<TABLE>
<CAPTION>
The Toronto Stock Exchange
High Low Volume
---- --- ------
<S> <C> <C> <C>
1995
January $3.95 $3.75 12,400
February $3.80 $3.50 388,950
March $4.15 $3.70 640,632
April $4.25 $3.90 31,400
May $4.00 $3.80 57,150
June $4.05 $3.80 575,487
July $4.65 $3.80 1,275,257
August $4.60 $4.10 166,607
September (to September 26) $9.25 $4.20 3,749,126
</TABLE>
On September 13, 1995, the day prior to the public
announcement of Amdahl Canada's entry into the Deposit Agreements
and its intention to make the Offers, subject to the satisfaction
of certain conditions, the closing price of the Class A Shares on
each of the Montreal Exchange and The Toronto Stock Exchange was
$6.00. The closing price of the Class A Shares on the Montreal
Exchange and The Toronto Stock Exchange on September 26, 1995 was
$8.88.
DIVIDENDS AND DIVIDEND POLICY
No dividends have been declared or paid by DMR since DMR
became a public company in 1986.
EFFECT OF THE OFFERS ON MARKETS FOR SHARES
AND STOCK EXCHANGE LISTINGS
The purchase of Class A Shares by the Offeror pursuant to
the Class A Offer will reduce the number of Shares that might
otherwise trade publicly, as well as the number of holders of
Class A Shares, and, depending on the number of holders
depositing and the number of Class A Shares purchased under the
Class A Offer, could adversely affect the liquidity and market
value of the remaining Class A Shares held by the public.
The rules and regulations of the Montreal Exchange and The
Toronto Stock Exchange establish certain criteria which, if not
met, could lead to the delisting of the Class A Shares from such
exchanges. Among such criteria are the number of holders of Class
A Shares, the number of Class A Shares publicly held and the
aggregate market value of the Class A Shares publicly held.
Depending on the number of Class A Shares purchased pursuant to
the Class A Offer, it is possible that the Class A Shares would
fail to meet the criteria for continued listing on such
exchanges. It is the intention of the Offeror to apply to delist
the Class A Shares from each exchange as soon as practicable
after completion of the Offers.
COMMITMENTS TO ACQUIRE SECURITIES
Except as disclosed above under "Arrangements with
Controlling Shareholders and DMR", to the knowledge of the
director and officers of the Offeror, no securities of DMR are
covered by any commitments made by the Offeror, its associates or
affiliates, or any person acting jointly or in concert with the
Offeror or the director or officers of the Offeror or their
respective associates or by any person or company who
beneficially owns, directly or indirectly, more than 10% of any
class of equity securities of the Offeror, to acquire any equity
securities of DMR.
ARRANGEMENTS, AGREEMENTS OR UNDERSTANDINGS
Except as disclosed above under "Arrangements with
Controlling Shareholders and DMR", there are no arrangements or
agreements made or proposed to be made between the Offeror and
any of the directors or officers of DMR and no payments or other
benefits are proposed to be made or given by way of compensation
for loss of office or as to such directors or officers remaining
in or retiring from office. Except as disclosed above under
"Arrangements with Controlling Shareholders and DMR", there are
no contracts, arrangements or understandings, formal or informal,
between the Offeror and any securityholder of DMR with respect to
the Offers or between the Offeror and any person or company with
respect to any securities of DMR in relation to the Offers.
REGULATORY MATTERS
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 (UNITED
STATES)
Under the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations that have been promulgated thereunder by the Federal
Trade Commission (the "FTC") (collectively, the "HSR Act"),
certain transactions may not be consummated until certain
information and documentary materials have been furnished to the
Antitrust Division of the United States Department of Justice
(the "Antitrust Division") and the FTC and certain waiting period
requirements have been satisfied. The acquisition of Shares
pursuant to the Offers may be subject to such requirements and on
September 25, 1995, Amdahl filed a Pre-Merger Notification and
Report Form with Antitrust Division and the FTC in connection
with the Offers (the "HSR Filing").
Under the provisions of the HSR Act applicable to the
Offers, the acquisition of Shares pursuant to the Offers may not
be consummated until the expiration or early termination by the
FTC and the Antitrust Division of a 15 calendar-day waiting
period following the HSR Filing. The Offeror has requested early
termination of this waiting period; however, there can be no
assurance that the 15-day waiting period will be terminated
early. If, within the 15-day waiting period, either the Antitrust
Division or the FTC issues a request for additional information
or documentary materials (a "Second Request"), the waiting period
will be extended for an additional period of 10 calendar-days
following the date of compliance or explanation of non-compliance
by the Offeror with such Second Request.
If the Offeror's acquisition of Shares is delayed by the
issuance of a Second Request, the Offers may be extended. In any
event, the purchase of and payment for Shares must be deferred
until 10 days after the Offeror complies with such Second Request
or submits a statement of the reasons for any noncompliance or
until the additional waiting period is earlier terminated by the
FTC and the Antitrust Division. Only one extension of the waiting
period pursuant to a Second Request is authorized by the HSR Act
and, thereafter, the waiting period can be extended only by court
order. Under the terms of the HSR Act, the Offeror may not take
up and pay for Shares tendered pursuant to the Offers unless and
until the filing and waiting period requirements of the HSR Act
applicable to the Offers have been satisfied.
The Antitrust Division and the FTC may scrutinize the
legality under U.S. antitrust laws of transactions such as the
Offeror's acquisition of Shares pursuant to the Offers. Any time
before or after the Offeror's purchase of the Shares, 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 consummation of
any such transactions or to require the divestiture of
substantial assets of DMR. Private parties as well as state
attorneys-general may also bring legal actions under U.S.
antitrust laws under certain circumstances.
Based upon an examination of publicly available information
relating to the businesses in which DMR, its subsidiaries and
Amdahl and its subsidiaries are engaged, the Offeror believes
that the Offers do not violate U.S. antitrust laws. Nevertheless,
there can be no assurance that a challenge to the Offers on U.S.
antitrust grounds will not be made or, if such a challenge is
made, of the result.
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Osler, Hoskin & Harcourt, counsel to the
Offeror, the following is a summary of the principal consequences
under the Income Tax Act (Canada) (the "Tax Act") generally
applicable to holders who dispose of their Shares pursuant to the
Offers or pursuant to certain transactions described in "Purpose
of the Offer and Plans for DMR -- Acquisition of Shares Not
Deposited". The summary does not apply to holders who dispose of
shares in a Holdco pursuant to the Acceptance Alternative
described in section 3 of the Offers to Purchase. The summary is
based upon the current provisions of the Tax Act, the regulations
thereunder, all specific proposals to amend the Tax Act and
regulations publicly announced by the Minister of Finance prior
to the date hereof (the "Proposed Amendments") and counsel's
understanding of the current administrative practices of Revenue
Canada, Taxation. The summary does not otherwise take into
account or anticipate changes in the law, whether by way of
judicial decision or legislative action, nor does it take into
account tax legislation of countries other than Canada or any
relevant provincial tax legislation. THE SUMMARY IS NOT INTENDED
TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO
ANY PARTICULAR HOLDER.
Residents of Canada
- -------------------
The following summary is applicable to holders who are
resident in Canada, who hold their Shares as capital property and
who deal at arm's length with Offeror and DMR (a "Holder").
The Offers
- ----------
A Holder whose Shares are taken up and paid for under an
Offer will realize a capital gain (or capital loss) to the extent
that the amount of cash received for the Holder's Shares, net of
any costs of disposition, exceeds (or is less than) the adjusted
cost base of the Shares to the Holder.
A Holder will be required to include in income three-
quarters of the amount of any resulting capital gain and will
generally be entitled to deduct three-quarters of the amount of
any resulting capital loss against taxable capital gains realized
by the Holder.
In the case of a Holder that is a corporation, the amount of
any capital loss otherwise determined resulting from the
disposition of Shares may be reduced by the amount of dividends
previously received to the extent and under the circumstances
prescribed in the Tax Act. Analogous rules apply where a
corporation is a member of a partnership or a beneficiary of a
trust which owns Shares. The Proposed Amendments will extend
these rules to apply where a trust or partnership is a member of
a partnership or beneficiary of a trust that owns Shares.
Other Acquisition Transactions
- ------------------------------
A Holder whose Shares are acquired by the Offeror pursuant
to the compulsory acquisition provisions of section 206 of the
CBCA will be subject to the same tax consequences as would be
applicable if the Holder disposed of Shares pursuant to the
Offers.
If the Offeror effects a subsequent acquisition transaction,
the Offeror may propose an amalgamation involving DMR pursuant to
which Holders who do not tender their Shares under the Offers
will have their Shares exchanged for redeemable preference shares
("Preference Shares") of the amalgamated corporation, such
Preference Shares to be redeemed forthwith for cash. A Holder
will realize no capital gain or capital loss as a result of such
exchange and the aggregate cost to the Holder of the Preference
Shares received on the exchange will be equal to the aggregate
adjusted cost base to the Holder of the Shares so exchanged.
Upon the redemption of Preference Shares, the Holder thereof
will be deemed to have received a taxable dividend equal to the
amount by which the redemption price of the Preference Shares
exceeds the paid-up capital of those shares. In the case of a
Holder who is an individual, any such dividend will be included
in computing the Holder's income and will be subject to the
gross-up and dividend tax credit rules normally applicable to
dividends from taxable income and will generally be deductible in
computing the corporation's taxable income. A private corporation
and certain other corporations controlled by or for the benefit
of an individual or a related group of individuals will be liable
to pay a 25% (33 1/3% under the Proposed Amendments) refundable
tax under Part IV of the Tax Act in respect of such dividend. In
the case of a corporate Holder, it is possible that, in certain
circumstances, the amount of any such dividend may be treated as
proceeds of disposition and not as a dividend.
Such a Holder will also be regarded as having disposed of
such Preference Shares on the redemption and will realize a
capital gain (or capital loss) per share to the extent that the
paid-up capital per share exceeds (or is less than) the adjusted
cost base thereof to the Holder. The treatment of any such
capital gain (or capital loss) will generally be the same as
described above.
As described under "Purpose of the Offer and Plans for DMR -
- - Acquisition of Shares Not Deposited", a Holder who dissents
with respect to such an amalgamation is entitled to receive the
fair value of such Holder's Shares. Under the current
administrative practice of Revenue Canada, Taxation, such
payments would be treated as proceeds of disposition giving rise
to a capital gain or capital loss. The calculation and tax
treatment of any such capital gain or capital loss would be the
same as described above.
As an alternative to the amalgamation discussed above, the
Offeror may propose an arrangement, consolidation,
reclassification, continuance or other transaction, the tax
consequences of which may differ from those arising on the sale
of Shares under the Offers. No opinion is expressed herein as to
the tax consequences of any such transaction to a Holder.
Non-Residents of Canada
- -----------------------
The following summary is applicable to holders who are
neither residents nor deemed to be residents of Canada, who deal
at arm's length with the Offeror and DMR, who hold their Shares
as capital property, who do not use or hold and are not deemed to
use or hold their Shares in carrying on a business in Canada,
whose Shares do not otherwise constitute "taxable Canadian
property" as defined in the Tax Act and, in the case of person
that carries on an insurance business in Canada and elsewhere
establishes that the Shares are not effectively connected with
its Canadian insurance business. (a "Non-Resident Holder").
Shares will generally not constitute taxable Canadian property to
a Non-Resident Holder unless, at any time during the five-year
period immediately preceding the disposition of the shares, not
less than 25% of the issued shares of any class or series of a
class of capital stock of DMR belonged to the Non-Resident
Holder, to persons with whom the Non-Resident Holder did not deal
at arm's length, or to any combination thereof.
No tax will be payable on any capital gain realized by a
Non-Resident Holder whose Shares are taken up and paid for under
the Offers or are acquired by the Offeror pursuant to the
compulsory acquisition provisions of section 206 of the CBCA.
In the event the Offeror effects an amalgamation involving
DMR as described above, Non-Resident Holders who do not tender
their Shares under the Offers will have their Shares exchanged
for Preference Shares of the amalgamated corporation, such
Preference Shares to be redeemed forthwith for cash. No tax will
be payable by a Non-resident Holder as a result of the
amalgamation. However, upon the redemption of a Preference Share,
the holder thereof will be deemed to have received a taxable
dividend equal to the amount by which the redemption price of the
Preference Shares exceeds their paid-up capital and such dividend
will be subject to non-resident withholding tax at a rate of 25%
or such lower rate as may be provided for under the terms of an
applicable bilateral tax treaty.
Under the current administrative practice of Revenue Canada,
Taxation, the receipt by a Non-Resident Holder who dissents with
respect to the amalgamation of a cash payment equal to the fair
market value of his Shares will be treated as proceeds of
disposition of such Shares.
THE CANADIAN FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE
ARE FOR GENERAL INFORMATION ONLY. HOLDERS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX EFFECTS TO
THEM OF THE OFFERS AND ANY SUBSEQUENT ACQUISITION TRANSACTIONS.
DEPOSITARY AND FORWARDING AGENT ARRANGEMENTS
The Offeror has engaged Montreal Trust Company of Canada to
act as the Depositary for the receipt, either directly or through
the New York City office of The Bank of Nova Scotia Trust Company
of New York as Forwarding Agent, of certificates in respect of
the Shares and Letters of Acceptance and Transmittal and Notices
of Guaranteed Delivery deposited under the Offers and for the
payment for Shares purchased by the Offeror pursuant to the
Offers. The Depositary and the Forwarding Agent will receive
reasonable and customary compensation from the Offeror for their
services in connection with the Offers, will be reimbursed for
certain out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith.
DEALER MANAGER AND SOLICITING DEALER GROUP
The Offeror has engaged the services of RBC Dominion
Securities Inc. to act as Dealer Manager in Canada and to solicit
acceptances of the Offers in Canada. For RBC Dominion Securities
Inc.'s services in managing the solicitation, the Offeror has
agreed to pay RBC Dominion Securities Inc. a fee of $50,000 upon
engagement and an additional fee of $350,000 if at least two-
thirds of each of the Class A Shares (calculated on a diluted
basis) and the then outstanding Class B Shares have been
deposited under the Offers by the Expiry Time. The Dealer Manager
will also be reimbursed by the Offeror for its out-of-pocket
expenses in connection with the Offers and will be indemnified
against certain liabilities. RBC Dominion Securities Inc. has
undertaken to form a soliciting dealer group comprising members
of the Investment Dealers Association of Canada and members of
the stock exchanges in Canada to solicit acceptances of the
Offers. Each member of the Canadian soliciting dealer group,
including RBC Dominion Securities Inc., is referred to herein as
a "Canadian Soliciting Dealer". The Offeror has agreed to pay to
each Canadian Soliciting Dealer whose name appears in the
appropriate space in the Letter of Transmittal accompanying a
deposit of Shares a fee of $0.10 for each such Share deposited
and taken up and paid for by the Offeror under the Offers. The
aggregate amount payable to a Canadian Soliciting Dealer with
respect to any single depositing holder of Shares will be not
less than $75.00 nor more than $1,500.00. Where Shares deposited
and registered in a single name are beneficially owned by more
than one person, the $75.00 minimum and $1,500.00 maximum amounts
will be applied separately in respect of each such beneficial
owner. The Offeror may require each Canadian Soliciting Dealer to
furnish evidence of such beneficial ownership satisfactory to the
Offeror at the time of the deposit.
RBC Dominion Securities Inc. will solicit acceptances of the
Offers in the United States through its registered broker-dealer
affiliate, RBC Dominion Securities Corporation. RBC Dominion
Securities Corporation will receive compensation for its services
in soliciting acceptances of the Offers on a basis which is
comparable to that to be received by the Canadian Soliciting
Dealers.
No fee or commission will be payable by any holder of Shares
who transmits their Shares directly to the Depositary or who
makes use of the facilities of a Soliciting Dealer to accept the
Offers. Except as set forth above, the Offeror will not pay any
fees or commissions to any broker, dealer or other person for
soliciting tenders of Shares pursuant to the Offers. Brokers,
dealers, commercial banks and trust companies and other nominees
will, upon request, be reimbursed by the Offeror for customary
clerical and mailing expenses incurred by them in forwarding
materials to their customers.
Questions and requests for assistance concerning the Offers
should be made directly to the Dealer Manager, the Depositary or
the Forwarding Agent.
DIRECTORS' APPROVAL
The contents of the Offers to Purchase and this Offering
Circular have been approved, and the sending thereof to the
holders of the Shares has been authorized by the board of
directors of the Offeror.
OFFEREES' STATUTORY RIGHTS
Securities legislation in certain of the provinces and
territories of Canada provides security holders of DMR with, in
addition to any other rights they may have at law, rights for
rescission or to damages, or both, if there is a
misrepresentation in a circular or notice that is required to be
delivered to such security holders. However, such rights must be
exercised within prescribed time limits. Security holders should
refer to the applicable provisions of the securities legislation
of their province or territory for the particulars of those
rights or consult with a lawyer
<PAGE>
CONSENT
To: The Directors of Amdahl Canada Acquisition Inc.
We hereby consent to the reference to our opinion contained
under "Canadian Federal Income Tax Considerations" in the
Offering Circular accompanying the Offers to Purchase dated
September 27, 1995 made by Amdahl Canada Acquisition Inc. to the
holders of Class A Subordinate Voting Shares and Class B Shares
of DMR Group Inc.
Dated: September 27, 1995 /s/ OSLER, HOSKIN & HARCOURT
----------------------------
Osler, Hoskin & Harcourt
<PAGE>
CERTIFICATE
September 27, 1995
The foregoing contains no untrue statement of a material
fact and does not omit to state a material fact that is required
to be stated or that is necessary to make a statement not
misleading in the light of the circumstances in which it was
made. In addition, the foregoing does not contain any
misrepresentation likely to affect the value or the market price
of the Shares which are the subject of the Offers.
AMDAHL CANADA ACQUISITION INC.
By: /s/DENNIS R. ING By: /s/JAMES WENDLING
---------------- ------------------
Dennis R. Ing James Wendling
Chief Executive Officer Chief Financial Officer
On behalf of the Board of Directors
By: /s/DONALD C. ROSS By: /s/P. DOUGAL MACDONALD
----------------- ----------------------
Donald C. Ross P. Dougal MacDonald
Director Director
<PAGE>
The Depositary for the Offers is:
---------------------------------
MONTREAL TRUST COMPANY OF CANADA
FOR DELIVERY BY MAIL:
--------------------
1800 McGill College Avenue
8th Floor
Montreal, Quebec
H3A 3K9
FOR DELIVERY BY HAND OR COURIER:
--------------------------------
1800 McGill College Avenue 151 Front Street West
8th Floor 8th Floor
Montreal, Quebec Toronto, Ontario
H3A 3K9 M5J 2N1
Facsimile:(514) 982-7347 Facsimile:(416) 981-9596
Telephone: (514) 982-7555 Telephone: (416) 981-9608
510 Burrard Street
2nd Floor
Vancouver, B.C.
V6C 3B9
Facsimile: (604) 661-9480
Telephone: (604) 661-0283
The Dealer Manager of the Offers:
---------------------------------
RBC DOMINION RBC DOMINION
SECURITIES INC. SECURITIES INC.
Commerce Court South 2000 McGill College
Toronto, Ontario Suite 300
M5L 1A7 Montreal, Quebec
Marianne Anderson (416) 864-4509 H3A 3H5
Shaun Finnie (416) 941-5835 Jeffrey Drummond
(514) 282-5204
Emma Loewen (416) 864-4518
The Forwarding Agent is:
------------------------
THE BANK OF NOVA SCOTIA
TRUST COMPANY OF NEW YORK
One Liberty Plaza
23rd Floor
New York, NY 10006
Facsimile: (212) 225-5438
Telephone: (212) 225-5436
<PAGE>
THE TERMS, CONDITIONS AND DEFINITIONS USED IN THE ACCOMPANYING
OFFERS TO PURCHASE AND OFFERING CIRCULAR ARE INCORPORATED INTO
AND FORM AN INTEGRAL PART OF THIS LETTER OF ACCEPTANCE AND
TRANSMITTAL. YOU SHOULD READ THE INSTRUCTIONS SET OUT IN THIS
LETTER OF ACCEPTANCE AND TRANSMITTAL CAREFULLY BEFORE COMPLETING
IT.
LETTER OF ACCEPTANCE AND TRANSMITTAL
to accompany certificates for
Class A Subordinate Voting Shares or Class B Shares
of
DMR GROUP INC.
to be deposited pursuant to the
Offers to Purchase and Offering Circular
dated September 27, 1995 by
Amdahl Canada Acquisition Inc., a wholly-owned subsidiary of
AMDAHL CANADA LIMITED
EACH OF THE OFFERS WILL BE OPEN FOR ACCEPTANCE UNTIL 8:00
P.M., MONTREAL TIME, ON THURSDAY, OCTOBER 19, 1995, UNLESS
WITHDRAWN OR EXTENDED.
This Letter of Acceptance and Transmittal ("Letter") is to
be completed by holders of Class A Subordinate Voting Shares (the
"Class A Shares") or Class B Shares (the "Class B Shares", and,
together with the Class A Shares, the "Shares") of DMR Group Inc.
("DMR") who wish to deposit their Shares under the offer to
purchase Class A Shares (the "Class A Offer") or the offer to
purchase Class B Shares (the "Class B Offer", and, together with
the Class A Offer, the "Offers"), respectively, set out in the
Offers to Purchase and Offering Circular of Amdahl Canada
Acquisition Inc. (the "Offeror") dated September 27, 1995.
To accept the Class A Offer or the Class B Offer, the
certificate(s) representing Shares to be deposited, together with
a properly completed and duly executed copy of this Letter (or a
facsimile thereof), and all other documents required by this
Letter, must be received by Montreal Trust Company of Canada (the
"Depositary") or The Bank of Nova Scotia Trust Company of New
York (the "Forwarding Agent") at or before the Expiry Time (as
defined in the Offers to Purchase) at the offices listed at the
end of this Letter.
If a holder wishes to accept the relevant Offer and
certificates representing beneficial ownership of the Shares are
not immediately available or time will not permit the
certificates and all required documents to reach one of the
offices of the Depositary or the Forwarding Agent at or before
the Expiry Time, such Shares may nevertheless be deposited under
the relevant Offer by compliance with the procedures for
guaranteed delivery set forth in section 3 of the Offers to
Purchase.
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES DEPOSITED
(if space is insufficient, please attach a signed
list in the form below)
(must be completed)
Class and
Total Number of Number of
Name and Address Certificate Shares Evidenced by Shares
of Registered Holder(s) Number(s) Certificate(s) Deposited*
- ------------------------ ----------- ------------------- ----------
<S> <C> <C> <C>
* Unless otherwise indicated, it will be assumed that all Shares evidenced by any
certificate(s) submitted to the Depositary or the Forwarding Agent are being deposited
under the Offers. See Instruction 6.
GUARANTEED DELIVERY ONLY
[ ] Check here if deposited shares are being delivered pursuant to a Notice of Guaranteed
Delivery previously sent to the Depositary and complete the following:
Name(s) of Registered Holder(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Eligible Institution that Guaranteed Delivery:
</TABLE>
<PAGE>
TO: Amdahl Canada Acquisition Inc.
AND TO: Montreal Trust Company of Canada
The undersigned:
(1) acknowledges receipt of the Offers to Purchase and
Offering Circular dated September 27, 1995;
(2) subject only to the rights of withdrawal under the
Offers, unless otherwise agreed, irrevocably accepts the Class A
Offer or the Class B Offer, as the case may be, on and subject to
its terms and conditions, and deposits, sells, assigns and
transfers to Amdahl Canada Acquisition Inc. all right, title and
interest in and to the Shares deposited under the Class A Offer
or the Class B Offer and taken up and paid for by the Offeror
(the "Purchased Shares") and in and to any and all dividends,
distributions, payments, securities, rights, assets or other
interests declared, paid, issued, transferred, made or
distributed on or in respect of the Purchased Shares on and after
the date of the Offers (collectively, "Other Securities"),
effective from and after the date the Offeror takes up and pays
for the Purchased Shares (the "Effective Date");
(3) agrees and acknowledges that if, on or after the date
of the Offers, DMR should declare or pay any cash or stock
dividends or declare, make or pay any other payments or
distributions on, or declare, allot, reserve or issue any
securities, rights, assets or other interests with respect to the
Shares, payable or distributable to holders of record on a date
prior to the transfer into the name of the Offeror or its nominee
or transferee on DMR's securities transfer records of Shares
taken up pursuant to the Offers, the undersigned will receive and
hold such dividend, distribution or rights for the account of the
Offeror and
(a) in the case of such cash dividends, distributions
or payments, the amount of such cash dividends, distributions and
payments shall be received by and held by the undersigned for the
account of the Offeror until the Offeror pays for such Shares,
the purchase price per Share payable pursuant to the Offers will
be reduced by the amount of any such cash dividends,
distributions or payments retained by the undersigned; and
(b) in the case of non-cash dividends, distributions,
payments, securities, rights, assets or other interests, the
whole of any such non-cash dividends, distributions, payments,
securities, rights, assets or other interests shall be received
and held by the undersigned for the account of the Offeror and
must promptly be remitted and transferred by the undersigned to
the Depositary for the account of the Offeror accompanied by
appropriate documentation of transfer and pending such
remittance, the Offeror shall be entitled to all rights and
privileges as owner of any such non-cash dividends,
distributions, payments, securities, rights, assets or other
interests and may withhold the entire purchase price payable by
the Offeror to the undersigned pursuant to the Offers or deduct
from the purchase price payable by the Offeror pursuant to the
Offers, the amount or value thereof as determined by the Offeror
in its sole discretion;
(4) represents and warrants that (a) the undersigned owns
the Purchased Shares and any Other Securities being deposited
within the meaning of applicable securities laws, (b) the
undersigned has full power and authority to deposit, sell, assign
and transfer the Purchased Shares and any Other Securities to the
Offeror without restriction, (c) the deposit of such Purchased
Shares and any Other Securities complies with applicable
securities laws, and (d) when such Purchased Shares and any Other
Securities are taken up and paid for by the Offeror, the Offeror
will acquire good title free and clear of all liens,
restrictions, charges, encumbrances, claims and equities;
(5) covenants that the undersigned will execute, upon
request, any additional documents necessary or desirable to
complete the sale, assignment and transfer of the Purchased
Shares and Other Securities to the Offeror;
(6) directs the Depositary or the Forwarding Agent (a)
unless otherwise indicated under "Special Payment Instructions",
to issue the cheque for the purchase price and/or any
certificates representing the balance of any Shares not deposited
or purchased in their entirety in the name(s) of the undersigned;
(b) unless otherwise indicated under "Special Delivery
Instructions", to forward by first class mail, postage prepaid,
the cheque for the purchase price and/or any certificates
representing the Shares not deposited or purchased in their
entirety (and accompanying documents, as appropriate) to the
undersigned at the address appearing under "Description of Shares
Deposited", and if no name, address or delivery instructions are
indicated, to the undersigned as it appears on the applicable
share register maintained by DMR; and (c) in the event that both
the Special Delivery Instructions and the Special Payment
Instructions are completed, to issue the cheque for the purchase
price and/or any certificates representing the balance of any
Shares not deposited or purchased in their entirety to or for the
person or persons so indicated;
(7) agrees, from and after the Effective Date, (a) not to
vote any of the Purchased Shares or Other Securities at any
meeting (whether annual, special or otherwise) of holders of
securities of DMR, (b) not to exercise any or all of the other
rights or privileges attached to the Purchased Shares or Other
Securities, (c) to execute and deliver to the Offeror any and all
instruments of proxy, authorizations or consents in respect of
the Purchased Shares or Other Securities, and (d) to designate in
any such instruments of proxy, the person or persons specified by
the Offeror as the proxy or the proxy nominee or nominees of the
holder of the Purchased Shares or Other Securities;
(8) acknowledges that if, on or after the date of the
Offers, DMR should split, combine or otherwise change any of the
Shares or its capitalization, or disclose that it has taken or
intends to take any such action, then the Offeror may, in its
sole discretion, make such adjustments as it deems appropriate to
reflect such split, combination or other change in the purchase
price and other terms of the Offers (including, without
limitation, the type of securities offered to be purchased and
the amounts payable therefor);
(9) irrevocably appoints the Depositary and any officer of
the Offeror, and each of them, and any other person designated by
the Offeror in writing, as the true and lawful agent, attorney
and attorney-in-fact and proxy with respect to the Purchased
Shares and Other Securities, effective from and after the
Effective Date, with full power of substitution, in the name and
on behalf of the undersigned (such power of attorney being deemed
to be an irrevocable power coupled with an interest), (a) to
register or record, transfer and enter the transfer of Purchased
Shares and any Other Securities on the appropriate register of
holders of DMR; and (b) to exercise any and all of the rights of
the undersigned in respect of the Purchased Shares and Other
Securities including, without limitation, to vote, execute and
deliver any and all instruments of proxy, authorizations or
consents in respect of all or any of the Purchased Shares and
Other Securities, revoke any such instrument, authorization or
consent given prior to or after the Effective Date, designate in
any such instruments of proxy any person or persons as the proxy
or the proxy nominee or nominees of the undersigned in respect of
such Purchased Shares and such Other Securities for all purposes
including, without limiting the generality of the foregoing, in
connection with any meeting (whether annual, special or
otherwise) of holders of securities of DMR (or adjournment
thereof), and execute, endorse and negotiate, for and in the name
of and on behalf of the undersigned, any and all cheques or other
instruments, respecting any distribution payable to or to the
order of the undersigned;
(10) hereby revokes any and all other authority, whether as
agent, attorney-in-fact, attorney, proxy or otherwise, conferred
or agreed to be conferred by the undersigned at any time with
respect to the Purchased Shares or Other Securities, and no
subsequent authority, whether as agent, attorney-in-fact,
attorney, proxy or otherwise will be given by the undersigned;
(11) acknowledges that all questions as to validity, form,
eligibility (including timely receipt) and acceptance of any
Purchased Shares or Other Securities, including the propriety and
effect of the execution of this Letter, will be determined by the
Offeror in its sole discretion, and agrees that such
determination shall be final and binding;
(12) acknowledges that the Offeror reserves the absolute
right to reject any and all deposits which it determines not to
be in proper form or which, in the opinion of its counsel, may be
unlawful to accept under the laws of any jurisdiction, that the
Offeror reserves the absolute right to waive any defect or
irregularity in the deposit of any Purchased Shares or Other
Securities, and that there shall be no obligation on the Offeror,
the Dealer Manager, the Depositary, the Forwarding Agent or any
other person to give notice of any defects or irregularities in
any deposit and no liability shall be incurred by any of them for
failure to give any such notice;
(13) acknowledges that if such shareholder has its
registered address in the U.S. (or if the nominee for such
shareholder has its registered address in the U.S.) then such
shareholder must validly complete the Substitute Form W-9
included in the information sent to such U.S. shareholder;
(14) understands that a deposit of Purchased Shares or Other
Securities pursuant to any one of the procedures described in
section 3 of the accompanying Offers to Purchase and the
instructions set out in this Letter will constitute a binding
agreement between the undersigned and the Offeror upon the terms
and subject to the conditions set out in the Offers and this
Letter; and
(15) acknowledges that all authority conferred or agreed to
in or by this Letter shall survive the death or incapacity,
bankruptcy or insolvency of the undersigned and all obligations
of the undersigned in this Letter shall be binding upon the
heirs, personal representatives, successors and assigns of the
undersigned.
By reason of the use by the undersigned of an English
language form of Letter of Acceptance and Transmittal, the
undersigned and each of you shall be deemed to have required that
any contract evidenced by an Offer as accepted through this
Letter of Acceptance and Transmittal, as well as all documents
related thereto, be drawn exclusively in the English language. En
raison de l'usage d'une lettre d'acceptation et d'envoi en langue
anglaise par le soussigne, le soussigne et les destinataires sont
presumes avoir requis que tout contrat atteste par une offre
acceptee par cette lettre d'acceptation et d'envoi, de meme que
tous les documents qui s'y rapportent, soient rediges
exclusivement en langue anglaise.<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 4 and 6)
To be completed ONLY if certificates for Shares not deposited or
not purchased in their entirety and/or the cheque for the
purchase price is to be issued in the name of someone other than
the undersigned.
Issue to:
Name:
-------------------------------------------------
(Please Print)
Address:
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
(Include Postal Code)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4 and 6)
To be completed ONLY if certificates for Shares not deposited or
not purchased in their entirety and/or the cheque for the
purchase price is to be sent to someone other than the
undersigned at an address other than that appearing under
"Description of Shares Deposited".
Send to:
Name:
------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
(Include Postal Code)
SIGN BELOW EXACTLY AS THE SHAREHOLDER NAME
APPEARS ON THE SHARE CERTIFICATE
------------------------------------
------------------------------------
(Signature(s) of Owner(s))
------------------------------------
------------------------------------
Social Insurance Number(s) of Owner(s)
Telephone:
------------------------------------------------
Signature(s) Guaranteed by
(See Instructions 2 and 3)
Authorized Signature
-----------------------------------------
Name of Firm
-------------------------------------------------------
<PAGE>
SOLICITED DEPOSITS
If applicable, the depositing holder of Shares signing above
represents that the member of the Soliciting Dealer Group who
solicited and obtained this deposit is:
Name of Firm
--------------------------------------------------
Name of Individual
--------------------------------------------
Address of Firm
---------------------------------------------
[ ] Check if registered holder represents more than one
beneficial holder and attach list of beneficial holders and
shares held by each.
<PAGE>
TRANSMITTAL AND ACCEPTANCE INSTRUCTIONS
1. DELIVERY OF LETTER OF ACCEPTANCE AND TRANSMITTAL AND
CERTIFICATES. To accept the Class A Offer or the Class B Offer,
certificate(s) representing beneficial ownership of Shares,
together with a properly completed and duly executed copy of this
Letter (or facsimile thereof) and all other documents required by
this Letter, must be received by the Depositary or the Forwarding
Agent at the offices listed below at or before the Expiry Time.
A holder of Shares whose certificate(s) for such shares are not
immediately available or who cannot deliver their certificates
and all other required documents to the Depositary or the
Forwarding Agent at or before to the Expiry Time, may deposit
their Shares by properly completing and executing a Notice of
Guaranteed Delivery pursuant to the procedures for guaranteed
delivery set forth in section 3 of the accompanying Offers to
Purchase. Pursuant to such procedure (i) such deposit must be
made only at the principal office of the Depositary in Montreal
by or through an Eligible Institution; (ii) a properly completed
and duly executed Notice of Guaranteed Delivery, in the
accompanying form (or a facsimile thereof), must be received by
the Depositary at its Montreal office at or prior to the Expiry
Time; and (iii) the certificates representing such deposited
Shares in proper form for transfer, together with a properly
completed and duly executed copy of this Letter (or facsimile
thereof) with any required signature guarantees and any other
documents required by this Letter must be received by the
Depositary at its principal office in Montreal listed in the
Notice of Guaranteed Delivery before 4:30 p.m., Montreal time, on
the third trading day on the Montreal Exchange after the Expiry
Time. Delivery to any offices of the Depositary other than its
principal office in Montreal, or delivery to the Forwarding
Agent, does not constitute delivery for the purpose of satisfying
a guaranteed delivery. See section 3 of the accompanying Offers
to Purchase.
Holders whose Shares are registered in the name of a nominee
should contact their broker, dealer, bank, trust company or other
nominee for assistance in depositing such Shares.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE DEPOSITING
SHAREHOLDER. THE OFFEROR RECOMMENDS THAT SUCH DOCUMENTS BE
DELIVERED BY HAND TO THE DEPOSITARY OR THE FORWARDING AGENT AND A
RECEIPT OBTAINED OR, IF MAILED, THAT REGISTERED MAIL (RETURN
RECEIPT REQUESTED) BE USED AND PROPER INSURANCE OBTAINED.
2. GUARANTEE OF SIGNATURES. No signature guarantee is required
on this Letter (i) if this Letter is signed by the registered
holder(s) of the Shares (unless such holder has completed the box
entitled "Special Payment Instructions") or (ii) if such Shares
are deposited for the account of a Canadian chartered bank, a
trust company in Canada, a commercial bank or trust company
having an office or correspondent in Canada, or a firm which is a
member of the Investment Dealers Association of Canada or a
recognized stock exchange in Canada or a member of a national
securities exchange in the United States of America, or a member
of the National Association of Securities Dealers Inc. (each, an
"Eligible Institution").
In all other cases, all signatures on this Letter must be
guaranteed by an Eligible Institution. See also Instruction 3.
3. SIGNATURES ON LETTER OF ACCEPTANCE AND TRANSMITTAL, POWERS
AND ENDORSEMENTS. If this Letter is signed by the registered
holder(s) of Shares represented by the deposited certificate(s),
the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or
any change whatsoever and the certificate(s) need not be
endorsed.
If this Letter is signed by a person other than the registered
holder(s) of the Shares represented by the deposited
certificates, or if certificates representing Shares for which
the Class A Offer or the Class B Offer has not been accepted are
to be issued to a person other than the registered owner, then
the certificate(s) must be endorsed or accompanied by share
transfer powers duly and properly completed by the registered
holder(s), in either case signed exactly as the name(s) of the
registered holder(s) appears on the certificate(s). The
signature(s) on such certificate(s) or powers must be guaranteed
by an Eligible Institution.
If the deposited Shares are held of record by two or more joint
owners, all such owners must sign this Letter. If any deposited
Shares are registered in different names on similar certificates,
it will be necessary to complete, sign and submit as many
separate copies of this Letter as there are different
registrations of certificates.
If this Letter or any certificates or powers are signed by a
trustee, executor, administrator, guardian, attorney-in-fact,
agent, officer of a corporation or any other person acting in a
fiduciary or representative capacity, such person should so
indicate when signing and proper evidence satisfactory to the
Offeror of their authority so to act must be submitted.
4. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the cheque to
be issued in payment of the purchase price for Shares purchased,
or certificates for the balance of any Shares not deposited or
any Shares not purchased, is to be:
(i) issued in the name of a person(s) other than the
person(s) signing this Letter; or
(ii) sent to someone other than the person(s) signing this
Letter or to the person(s) signing this Letter at an address
other than that appearing under "Description of Shares Deposited"
the boxes entitled "Special Payment Instructions" and "Special
Delivery Instructions", as applicable, should be completed.
5. INADEQUATE SPACE. If the space provided for any information
is inadequate, the required information should be set out on a
separate signed list.
6. PARTIAL DEPOSITS. If fewer than all the Shares evidenced by
any certificate(s) submitted are to be deposited, fill in the
number of Shares that are to be deposited in the box entitled
"Number of Shares Deposited". In such case, a new certificate(s)
for Shares not deposited will be issued and sent to the person(s)
signing this Letter, unless otherwise provided in the boxes
entitled "Special Payment Instructions" or "Special Delivery
Instructions", as soon as practicable after the expiration or
termination of the Offers. All Shares evidenced by a
certificate(s) submitted to the Depositary or the Forwarding
Agent will be deemed to have been deposited unless otherwise
indicated.
7. STOCK TRANSFER TAXES. The Offeror will pay any stock
transfer taxes with respect to the transfer and sale of Shares to
it or its order by the registered holder(s) pursuant to the
Offers. If, however, certificates for Shares not deposited or
purchased are to be registered in the name of any person(s) other
than the registered holder(s), or if certificates for Shares are
registered in the name of any person(s) other than the person(s)
signing this Letter, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such other
person(s) payable on account of the transfer to such person(s))
will be payable by the seller(s) (which may include a deduction
from the purchase price) unless satisfactory evidence of the
payment of such taxes or exemption therefrom is submitted.
Except as provided in this Instruction 7, it will not be
necessary for transfer tax stamps to be affixed to the
certificate(s) for Shares.
8. REQUEST FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Depositary.
Additional copies of the Offers to Purchase and Offering Circular
and this Letter may be obtained on request and without charge
from the Depositary or the Forwarding Agent at the offices listed
below. Holders of Shares may also contact the Dealer Manager, the
Offeror, their local broker, dealer, commercial bank or trust
company for assistance.
9. LOST CERTIFICATES. If a certificate representing Shares has
been lost or destroyed, this Letter should be completed as fully
as possible and forwarded to the Depositary together with a
letter stating the loss. The Depositary will contact you to
advise of the replacement requirements.
10. GOVERNING LAW. The Offers and any agreement resulting from
the acceptance of the Offers will be construed in accordance with
and governed by the laws of the Province of Quebec and the laws
of Canada applicable therein.
<PAGE>
Facsimile copies of this Letter, properly completed and duly
executed in accordance with the instructions in this Letter, will
be accepted. This Letter, certificates for Shares and any other
required documents should be sent or delivered by each holder of
Shares or such holders' investment dealer, stockbroker, bank,
trust company or other nominee to the Depositary or the
Forwarding Agent at the addresses set forth below.
The Depositary for the Offers is:
---------------------------------
MONTREAL TRUST COMPANY OF CANADA
FOR DELIVERY BY MAIL:
---------------------
1800 McGill College Avenue
8th Floor
Montreal, Quebec
H3A 3K9
FOR DELIVERY BY HAND OR COURIER:
--------------------------------
1800 McGill College Avenue 151 Front Street West
8th Floor 8th Floor
Montreal, Quebec Toronto, Ontario
H3A 3K9 M5J 2N1
Facsimile:(514) 982-7347 Facsimile:(416) 981-9596
Telephone: (514) 982-7555 Telephone: (416) 981-9608
510 Burrard Street
2nd Floor
Vancouver, B.C.
V6C 3B9
Facsimile: (604) 661-9480
Telephone: (604) 661-0283
The Dealer Manager of the Offers:
---------------------------------
RBC DOMINION RBC DOMINION
SECURITIES INC. SECURITIES INC.
Commerce Court South 2000 McGill College
Toronto, Ontario Suite 300
M5L 1A7 Montreal, Quebec
Marianne Anderson (416) 864-4509 H3A 3H5
Shaun Finnie (416) 941-5835 Jeffrey Drummond
(514) 282-5204
Emma Loewen (416) 864-4518
The Forwarding Agent is:
------------------------
THE BANK OF NOVA SCOTIA
TRUST COMPANY OF NEW YORK
One Liberty Plaza
23rd Floor
New York, NY 10006
Facsimile: (212) 225-5438
Telephone: (212) 225-5436
<PAGE>
NOTICE OF GUARANTEED DELIVERY
OF
CLASS A SUBORDINATE VOTING SHARES OR CLASS B SHARES
of
DMR GROUP INC.
Pursuant to the Offers to Purchase and
Offering Circular dated September 27, 1995
of
AMDAHL CANADA ACQUISITION INC.,
a wholly-owned subsidiary of
AMDAHL CANADA LIMITED
This Notice of Guaranteed Delivery or a substantially
equivalent form ("Notice") must be used to accept the Class A
Offer or the Class B Offer if certificates representing Class A
Subordinate Voting Shares (the "Class A Shares") or Class B
Shares (the "Class B Shares" and, together with the Class A
Shares, the "Shares") of DMR Group Inc. ("DMR") are not
immediately available or time will not permit all required
documents to reach the Depositary or the Forwarding Agent at or
before the Expiry Time. This Notice may be delivered by hand or
transmitted by facsimile or mailed to the Depositary in Montreal
(at the address listed below) and must be received by the
principal office of the Depositary at or before the Expiry Time.
This Notice must include a guarantee by an Eligible Institution.
See section 3 of the accompanying Offers to Purchase.
The terms and conditions of the Offers are incorporated by
reference in this Notice. Capitalized terms used and not defined
in this Notice which are defined in the Offers shall have the
respective meaning set out in the Offers.
THE DEPOSITARY FOR THE OFFERS IS: MONTREAL TRUST COMPANY OF
CANADA
FOR DELIVERY BY HAND OR COURIER:
Montreal Trust Company of Canada
1800 McGill College Avenue
8th Floor
Montreal, Quebec, Canada
H3A 3K9
FOR DELIVERY BY MAIL:
1800 McGill College Avenue
8th Floor
Montreal, Quebec, Canada
H3A 3K9
FACSIMILE COPY NUMBER:
(514) 982-7347
FOR INFORMATION:
Call collect to Montreal Trust Company of Canada
(514) 982-7555 (Montreal)
This Notice is not to be used to guarantee signatures. If a
signature on any Letter of Acceptance and Transmittal is required
to be guaranteed by an Eligible Institution, such signature
guarantee must appear in the applicable space provided in the
signature box on the Letter of Acceptance and Transmittal.
DELIVERY OF THIS NOTICE TO AN ADDRESS OR FACSIMILE NUMBER
OTHER THAN THOSE ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
The undersigned hereby deposits to AMDAHL CANADA ACQUISITION
INC., upon the terms and subject to the conditions set forth in
the accompanying Offers To Purchase and Offering Circular and
Letter of Acceptance and Transmittal, receipt of which is hereby
acknowledged, Class A Shares and Class B Shares of
DMR pursuant to the guaranteed delivery procedure set forth in
section 3 of the Offers To Purchase.
Class of Shares and
Certificate No. (if available): Name(s) of Holder(s):
- ------------------------------- -------------------------
- ------------------------------- -------------------------
- ------------------------------- -------------------------
- ------------------------------- -------------------------
- ------------------------------- -------------------------
Address:
--------------------------
--------------------------
--------------------------
Area Code and Telephone
Number:
--------------------------
GUARANTEE
The undersigned, a Canadian chartered bank or a trust
company in Canada, a commercial bank or trust company having an
office or correspondent in Canada or a firm which is a member of
the Investment Dealers Association of Canada, a recognized stock
exchange in Canada, a member of a national securities exchange in
the United States of America, or a member of the National
Association of Securities Dealers Inc., guarantees delivery to
the Depositary of the certificates representing the deposited
Shares, in proper form for transfer with a properly completed and
executed Letter of Acceptance and Transmittal (or facsimile
thereof) with any required signature guarantees and any other
required documents, to the principal office of the Depositary in
Montreal, all before 4:30 p.m. (Montreal time) on the third
trading day on the Montreal Exchange after the Expiry Time.
Name of Firm:
------------------- ----------------------
Authorized Signature
Address:
---------------------
---------------------
Name:
------------------------
Please Print
Title:
-------------------------
Area Code and Tel. No.: Dated:
- ---------------------------- -------------------
<PAGE>
AMDAHL
Canada Acquisition Inc.
Suite 6600
1 First Canadian Place
Toronto, Ontario
M5X 1B8
September 27, 1995
Dear Shareholder of DMR Group Inc.,
Amdahl Canada Acquisition Inc., a wholly-owned subsidiary of
Amdahl Canada Limited, is offering to purchase all of the Class A
subordinate voting shares and the Class B shares of DMR Group
Inc. For each of the shares tendered and accepted under the
Offers, you will receive Cdn. $8.25 in cash. The Offers are open
for acceptance until 8:00 p.m. (Montreal time) on Thursday,
October 19, 1995.
We believe that our Offers represent a very attractive
opportunity for DMR's shareholders, and we encourage you to
accept them. The principal shareholders, comprising the Chairman,
President and Chief Executive Officer of DMR, the estate of J.
Alain Roy, and the Ontario Teachers' Pension Plan Board, have
already irrevocably and unconditionally agreed to tender their
shares to these Offers. These parties hold an aggregate of
1,607,800 Class A shares (representing approximately 15% of the
outstanding Class A shares) and 3,556,088 Class B shares
(representing more than 99% of the outstanding Class B shares).
Such shares represent approximately 80% of the voting rights
attached to the outstanding Class A and Class B shares and
approximately 36% of the outstanding capital of DMR.
Accompanying this letter are the following documents:
1. The Offers from Amdahl Canada Acquisition Inc.;
2. An Offering Circular providing information about the
Offers; and
3. Procedures to follow in order to tender your shares.
We urge you to review the enclosed documents carefully and
look forward to your acceptance of our Offers.
Yours truly,
/s/DENNIS R. ING
Dennis R. Ing
President & Chief Executive Officer
Exhibit 2(b)
This document is important and requires your immediate attention.
If you are in any doubt as to how to deal with it you should
consult your investment dealer, stockbroker, bank manager, lawyer
or other professional advisor.
NOTICE OF CHANGE AND VARIATION
OF THE OFFERS TO PURCHASE
all of the Class A Subordinate Voting Shares
and all of the Class B Shares
of
DMR GROUP INC.
at a price of
Cdn. $8.25 in cash per share
by Amdahl Canada Acquisition Inc., a wholly owned subsidiary of
AMDAHL CANADA LIMITED
The Offers, as amended by this Notice of Change and Variation,
are described in the Offers to Purchase and Offering Circular of
Amdahl Canada Acquisition Inc. dated September 27, 1995 and the
Letter of Acceptance and Transmittal and Notice of Guaranteed
Delivery.
THE OFFEROR HEREBY GIVES NOTICE THAT IT IS AMENDING AND VARYING
ITS OFFERS BY WAIVING THE CONDITIONS TO THE CLASS B OFFER AND
EXTENDING THE EXPIRY TIME OF THE OFFERS. THE OFFERS, AS AMENDED
BY THIS NOTICE OF CHANGE AND VARIATION, WILL BE OPEN FOR
ACCEPTANCE, UNLESS FURTHER EXTENDED, UNTIL 6:00 P.M., MONTREAL
TIME, ON TUESDAY, OCTOBER 31, 1995.
Questions and requests for assistance may be directed to the
Dealer Manager for the Offers, RBC Dominion Securities Inc. in
Canada and RBC Dominion Securities Corporation in the United
States, or the Depositary or the Forwarding Agent. Additional
copies of this document, the Offers to Purchase and Offering
Circular dated September 27, 1995 and the Letter of Acceptance
and Transmittal and Notice of Guaranteed Delivery may be obtained
without charge on request from the Depositary or the Forwarding
Agent at their respective addresses shown in the Letter of
Acceptance and Transmittal.
The Dealer Manager for the Offers is
in Canada in the United States
- --------- --------------------
RBC Dominion Securities Inc. RBC Dominion Securities Corporation
October 19, 1995
<PAGE>
TO: Holders of Class A Subordinate Voting Shares and
Class B Shares of DMR Group Inc.
By notice to the Depositary on October 19, 1995, Amdahl
Canada Acquisition Inc. (the "Offeror") has, as set forth in this
Notice of Change and Variation, amended its Offers dated
September 27, 1995 pursuant to which the Offeror is offering to
purchase all of the Class A Shares and Class B Shares of DMR
Group Inc.
Except as otherwise set forth in this Notice of Change and
Variation, the terms and conditions of the Offers continue to be
applicable in all respects and this Notice of Change and
Variation should be read in conjunction therewith. Unless the
context otherwise requires, terms denoted by initial capital
letters and not otherwise defined herein have the respective
meanings set forth in the Offers.
1. WAIVER OF CONDITIONS
The Offeror has waived the conditions to the Class B Offer
set forth in section 6 of the Offers to Purchase.
2. EXTENSION OF EXPIRY TIME
The Expiry Time of the Offers, being the period during which
the Offers are open for acceptance, has been extended to 6:00
p.m., Montreal time, on Tuesday, October 31, 1995.
3. SHARES TAKEN UP AND PAID FOR UNDER THE OFFERS
The Depositary advised the Offeror that, as of 4:55 p.m.,
Montreal time, on the date hereof, a total of 1,670,278 Class A
Shares and 3,556,088 Class B Shares were deposited, and not
withdrawn, under the Offers, of which 1,666,300 Class A Shares
and 3,556,088 Class B Shares were deposited by the Controlling
Shareholders. Prior to extending the Offers, the Offeror advised
the Depositary at its principal office in Montreal that the
Offeror was waiving all of the conditions to the Class B Offer
and instructed the Depositary to take up and pay for all of the
Class B Shares and Class A Shares validly deposited, and not
withdrawn, under the Offers. Such Shares (the "Acquired Shares")
were taken up and paid for by the Offeror on the date hereof. As
a result of taking up and paying for the Class B Shares, the
condition to the Class A Offer was satisfied. The Offeror is now
the direct and indirect beneficial owner of 1,670,278 Class A
Shares, representing approximately 15% of the outstanding Class A
Shares, and 3,556,088 Class B Shares, representing more than 99%
of the outstanding Class B Shares. The Acquired Shares represent
approximately 80% of the voting rights attaching to all currently
outstanding Shares so that the Offeror has now obtained the right
to control DMR.
4. THE BDM OFFER
On September 29, 1995, BDM Alliance Inc. ("BDM") mailed its
offer (and accompanying offering circular) to shareholders of
DMR. BDM's offer, which is subject to certain conditions, is
stated to expire on October 20, 1995, unless extended or
withdrawn.
5. MOTION TO AND DECISION OF THE QUEBEC SUPERIOR COURT
On October 2, 1995, Mr. Pierre Ducros and the Offeror, among
others, filed a motion (the "Principal Motion") with the Quebec
Superior Court for a declaratory judgement asking the court to:
(a) confirm that the Articles provide that any Class A
Shares tendered to an offer made for only the Class B Shares are
not converted into Class B Shares unless the offeror has taken up
and paid for a sufficient number of Class B Shares to five the
offeror more than 50% of the voting rights attaching to all
outstanding Shares prior to giving effect to the conversion; and
(b) declare that, in the present circumstances, considering
the irrevocable tender of the Controlling Shareholders' Shares to
the Offers and the notice referred to in paragraph 4 above, BDM's
offer cannot succeed.
On October 10, 1995, in an oral judgement (subsequently
supported by written reasons signed on October 16, 1995), the
Quebec Superior Court dismissed the Principal Motion and declared
that (i) the offer by BDM constituted an offer as defined in
section 3.4.2.6 of the Articles, (ii) holders of Class A Shares
have a right to convert such shares into Class B Shares for the
purposes of participating in BDM's offer, and (iii) BDM has the
right to take up and pay for the Class B Shares tendered under
its offer (including those resulting from the conversion of Class
A Shares) so long as the number of shares deposited, and not
withdrawn, is sufficient to constitute BDM as a holder, at the
expiry of its offer, of more than 50% of the voting rights
attaching to all outstanding Shares.
Amdahl announced on October 10, 1995 that it would appeal
the decision of the Quebec Superior Court. On October 17, 1995,
an inscription in appeal (the "Inscription in Appeal") of the
judgement of the Quebec Superior Court was filed before the
Quebec Court of Appeal by Amdahl Canada and the Offeror. On
October 18, 1995, the appellants filed a motion to obtain an
early hearing date before the Quebec Court of Appeal. This
motion is scheduled to be heard by the Chief Justice of the
Quebec Court of Appeal on Monday, October 23, 1995.
For the reasons outlined in the Inscription in Appeal, the
Offeror continues to believe that both the intent and the wording
of the Articles provide that a conversion of the Class A Shares
into Class B Shares is not permitted to occur if the Controlling
Shareholders reject an offer made only for Class B Shares. The
Offeror believes that the right of conversion for the Class A
Shares in the Articles should be interpreted as a normal "coat
tail" provision, which permits the Class A Shares to participate
in an offer made only for the Class B Shares if, but only if, the
Controlling Shareholders who own the Class B Shares have accepted
that offer and so caused a change of control of DMR. If the
Controlling Shareholders do not accept that offer, the Class A
Shares may not participate in it by converting into Class B
Shares. The effect of the judgment of the Quebec Superior Court
is to grant the minority Class A Shareholders the ability to sell
control of DMR to an offer made only for the Class B Shares
without the Controlling Shareholders' consent, thereby divesting
the Controlling Shareholders of their control. The Offeror does
not believe that this was the intention of DMR or its
shareholders when the Articles were approved. The wording of the
Articles can and should be interpreted as providing a normal
"coat tail" agreement.
6. THE IBM OFFER
Following the release of the judgment of the Quebec Superior
Court, IBM Canada Ltd. announced that it would be making an
offer for all of the Class B Shares (including Class B Shares
issued on conversion of Class A Shares) at $11.00 cash per Class
B Share. On October 13, 1995, IBM Canada Services Corp. ("IBM"),
a wholly-owned subsidiary of IBM Canada Ltd., mailed its offer (
and accompanying offering circular) to shareholders of DMR.
IBM's offer, which is subject to certain conditions, is stated to
expire on November 3, 1995, unless extended or withdrawn.
IBM's offer is conditional upon, among other things, there
being validly deposited under its offer and not withdrawn 90% of
the Class B Shares outstanding upon the completion of its offer.
The Offeror is the direct and indirect beneficial owner of a
sufficient number of Class B Shares to prevent the satisfaction
of this condition to IBM's offer.
7. RIGHT TO WITHDRAW DEPOSITED SHARES
Holders of Shares have the right to withdraw Deposited
Shares under the circumstances and in the manner described in
section 7 of the Offers to Purchase under "Right to Withdraw
Deposited Share".
8. PAYMENT FOR DEPOSITED SHARES
The Offeror will take up and pay for all Shares validly
deposited, and not withdrawn, under the Offers after the date
hereof as provided in section 8 of the Offers. Under applicable
securities laws, such Shares must be taken up and paid for with
10 days of their deposit.
9. AMENDMENTS TO OFFERS TO PURCHASE, OFFERING CIRCULAR, LETTER
OF ACCEPTANCE AND TRANSMITTAL AND NOTICE OF GUARANTEED DELIVERY
The Offers to Purchase, the Offering Circular and the Letter
of Acceptance and Transmittal and Notice of Guaranteed Delivery
are hereby amended mutatis mutandis to reflect he amendments
contemplated by this Notice of Change and Variance.
10. DIRECTOR'S APPROVAL
The contents of this Notice of Change and Variation have
been approved, and the sending, communication or delivery thereof
to the holders of the Shares has been authorized, by the board of
directors of the Offeror.
11. OFFEREES' STATUTORY RIGHTS
Securities legislation in certain of the provinces and
territories of Canada provides security holders of DMR with, in
addition to any other rights they may have at law, rights of
rescission or damages, or both, if there is a misrepresentation
in a circular or notice that is required to be delivered to such
security holders. However, such rights must be exercised within
prescribed time limits. Security holders should refer to the
applicable provisions of the securities legislation of their
province or territory for the particulars of those rights or
consult with a lawyer.
<PAGE>
CERTIFICATE
October 19, 1995
The foregoing contains no untrue statement of a material
fact and does not omit to state a material fact that is required
to be stated or that is necessary to make a statement not
misleading in the light of the circumstances in which it was
made. In addition, the foregoing does not contain any
misrepresentation likely to affect the value or the market price
of the Shares which are the subject of the Offers, as amended by
this Notice of Change and Variation.
AMDAHL CANADA ACQUISITION, INC.
By: /s/DENNIS R. ING By: /s/JAMES WENDLING
----------------- ------------------
Dennis R. Ing James Wendling
Chief Executive Officer Chief Financial Officer
On behalf of the Board of Directors
By: /s/DONALD C. ROSS By: /s/P. DOUGAL MACDONALD
---------------- ----------------------
Donald C. Ross P. Dougal MacDonald
Director Director
<PAGE>
The Depositary for the Offers is:
---------------------------------
MONTREAL TRUST COMPANY OF CANADA
FOR DELIVERY BY MAIL:
--------------------
1800 McGill College Avenue
8th Floor
Montreal, Quebec
H3A 3K9
FOR DELIVERY BY HAND OR COURIER:
--------------------------------
1800 McGill College Avenue 151 Front Street West
8th Floor 8th Floor
Montreal, Quebec Toronto, Ontario
H3A 3K9 M5J 2N1
Facsimile:(514) 982-7347 Facsimile:(416) 981-9596
Telephone: (514) 982-7555 Telephone: (416) 981-9608
510 Burrard Street
2nd Floor
Vancouver, B.C.
V6C 3B9
Facsimile: (604) 661-9480
Telephone: (604) 661-0283
The Dealer Manager of the Offers:
---------------------------------
RBC DOMINION RBC DOMINION
SECURITIES INC. SECURITIES INC.
Commerce Court South 2000 McGill College
Toronto, Ontario Suite 300
M5L 1A7 Montreal, Quebec
Marianne Anderson (416) 864-4509 H3A 3H5
Shaun Finnie (416) 941-5835 Jeffrey Drummond
(514) 282-5204
Emma Loewen (416) 864-4518
The Forwarding Agent is:
------------------------
THE BANK OF NOVA SCOTIA
TRUST COMPANY OF NEW YORK
One Liberty Plaza
23rd Floor
New York, NY 10006
Facsimile: (212) 225-5438
Telephone: (212) 225-5436
Exhibit 2(c)
This document is important and requires your immediate attention.
If you are in any doubt as to how to deal with it you should
consult your investment dealer, stockbroker, bank manager, lawyer
or other professional advisor.
NOTICE OF CHANGE AND VARIATION
OF THE OFFERS TO PURCHASE
all of the Class A Subordinate Voting Shares
and all of the Class B Shares
of
DMR GROUP INC.
by Amdahl Canada Acquisition Inc., a wholly owned subsidiary of
AMDAHL CANADA LIMITED
The Offers are described in the Offers to Purchase and Offering
Circular of Amdahl Canada Acquisition Inc. dated September 27,
1995 and the Letter of Acceptance and Transmittal and Notice of
Guaranteed Delivery (the "Original Offers"), as amended by the
Notice of Change and Variation dated October 19, 1995 and as
further amended by this Notice of Change and Variation.
THE OFFEROR HEREBY GIVES NOTICE THAT IT IS AMENDING AND VARYING
THE ORIGINAL OFFERS, AS AMENDED BY THE NOTICE OF CHANGE AND
VARIATION DATED OCTOBER 19, 1995 (THE "OFFERS"), TO INCREASE THE
CASH CONSIDERATION OFFERED FOR EACH SHARE VALIDLY DEPOSITED AND
NOT WITHDRAWN UNDER THE OFFERS TO $12.50 AND TO EXTEND THE EXPIRY
TIME OF THE OFFERS. THE OFFERS, AS AMENDED BY THIS NOTICE OF
CHANGE AND VARIATION, WILL BE OPEN FOR ACCEPTANCE, UNLESS FURTHER
EXTENDED, UNTIL 6:00 P.M., MONTREAL TIME, ON WEDNESDAY, NOVEMBER
15, 1995.
Questions and requests for assistance may be directed to the
Dealer Manager for the Offers, RBC Dominion Securities Inc. in
Canada and RBC Dominion Securities Corporation in the United
States, or the Depositary or the Forwarding Agent. Additional
copies of this document, the Offers to Purchase and Offering
Circular dated September 27, 1995, the Letter of Acceptance and
Transmittal, the Notice of Guaranteed Delivery and the Notice of
Change and Variation dated October 19, 1995 may be obtained
without charge on request from the Depositary or the Forwarding
Agent at their respective addresses shown in the Letter of
Acceptance and Transmittal.
The Dealer Manager for the Offers is:
in Canada: in the United States:
RBC Dominion Securities Inc. RBC Dominion Securities Corporation
November 1, 1995
<PAGE>
TO: Holders of Class A Subordinate Voting Shares and
Class B Shares of DMR Group Inc.
By notice to the Depositary on October 31, 1995, Amdahl
Canada Acquisition Inc. (the "Offeror") has, as set forth in this
Notice of Change and Variation, amended its Original Offers dated
September 27, 1995, as amended by the Notice of Change and
Variation dated October 19, 1995 (the "Offers"), pursuant to
which the Offeror is offering to purchase all of the Class A
Shares and Class B Shares of DMR Group Inc.
Except as otherwise set forth in this Notice of Change and
Variation, the terms and conditions of the Offers continue to be
applicable in all respects and this Notice of Change and
Variation should be read in conjunction therewith. Unless the
context otherwise requires, terms denoted by initial capital
letters and not otherwise defined herein have the respective
meanings set forth in the Offers.
1. INCREASE IN OFFERED CONSIDERATION
The Offeror has amended the Offers to increase the cash
consideration offered for each Share validly deposited and not
withdrawn under the Offers to $12.50. The Offeror will pay such
increased consideration to each person or company whose Shares
have already been taken up pursuant to the Offers in compliance
with all applicable securities laws.
2. EXTENSION OF EXPIRY TIME
The Expiry Time of the Offers, being the period during which
the Offers are open for acceptance, has been extended to 6:00
p.m., Montreal time, on Wednesday, November 15, 1995.
3. ADDITIONAL SHARES TAKEN UP AND PAID FOR UNDER THE OFFERS
The Depositary advised the Offeror that, as of 4:00 p.m.,
Montreal time, on October 31, 1995, a total of 97,037 additional
Class A Shares were deposited, and not withdrawn, under the
Offers. Prior to further amending the Offers, the Offeror
instructed the Depositary to take up and pay for all of the
additional Class A Shares validly deposited, and not withdrawn,
under the Offers. Such Shares were taken up and paid for by the
Offeror on October 31, 1995. The Offeror is now the direct and
indirect beneficial owner of 1,767,315 Class A Shares,
representing approximately 15% of the outstanding Class A Shares,
and 3,556,088 Class B Shares, representing more than 99% of the
outstanding Class B Shares. Such Shares represent approximately
80% of the voting rights attaching to all currently outstanding
Shares.
4. LOCK-UP OF ADDITIONAL CLASS A SHARES
On October 31, 1995, the Offeror entered into deposit
agreements ("Agreements") with Oppenheimer & Co., Inc., Bear
Sterns & Co., Inc. and Highbridge Capital Management, which are
the holders ("Shareholders") of an aggregate of 2,885,800 Class A
Shares (the "Locked-up Shares"), whereby such Shareholders agreed
to irrevocably and unconditionally deposit their Locked-up Shares
to the Offers and not to withdraw or take any action to withdraw
their Locked-up Shares on the condition that, prior to 6:00 p.m.,
Montreal time, on October 31, 1995, the Offeror amend the Offers
to increase the cash consideration offered for each Share validly
deposited and not withdrawn under the Offers to $12.50. By its
notice to the Depositary on October 31, 1995, as described
herein, the Offeror satisfied this condition. Under the terms of
the Agreements, the Locked-up Shares must be deposited to the
Offers on or before November 3, 1995. The Locked-up Shares
represent approximately 26.31% of the outstanding Class A Shares
(24.96% on a diluted basis).
In the Agreements, the Shareholders made representations and
warranties in respect of themselves and their Locked-up Shares.
In addition, each Shareholder agreed, among other things, that,
until the Offeror has taken up and paid for their Locked-up
Shares, the Shareholder will (a) not sell, transfer, pledge,
encumber or otherwise convey the Shareholder's Locked-up Shares
to any person or agree to do any of the foregoing or otherwise
take any action of any kind which may reduce the likelihood of
success of or delay the completion of the Offers or impair the
ability of the Offeror to control DMR; and (b) in the event any
vote of the shareholders of DMR is required, cause the voting
rights attaching to the Shareholder's Locked-up Shares to be
exercised in favour of any proposal regarding or in furtherance
of the Offers or any other similar proposal relating to or in
furtherance of the Offeror's acquisition of the Shares or the
assets of DMR.
In the Agreements, the Offeror covenanted, among other
things, to amend the Offers, as described herein.
The Locked-up Shares, together with the Shares already taken
up under the Offers, represent more than 54% of the outstanding
Shares (on a diluted basis) and more than 85% of the votes
attaching to all outstanding Shares.
5. OTHER RECENT DEVELOPMENTS
On October 20, 1995, BDM Alliance Inc. ("BDM") extended the
expiry of its offer, which is subject to certain conditions, to
11:59 p.m., Montreal Time, on October 30, 1995, unless further
extended. On October 30, 1995, BDM announced that its offer would
not be further extended. BDM's offer expired on October 30, 1995.
The appeal by Amdahl and the Offeror of the decision of the
Quebec Superior Court rendered on October 10, 1995 regarding the
right of conversion attaching to the Class A Shares is scheduled
to be heard by the Quebec Court of Appeal on November 20, 1995.
Following the release of the decision of the Quebec Superior
Court, IBM Canada Ltd. announced that it would be making an offer
for all of the Class B Shares (including Class B Shares issued on
conversion of Class A Shares) at $11.00 cash per Class B Share.
On October 13, 1995, IBM Canada Services Corp. ("IBM"), a wholly-
owned subsidiary of IBM Canada Ltd., mailed its offer (and
accompanying offering circular) to shareholders of DMR. IBM's
offer, which is subject to certain conditions, stated that it
would expire on November 3, 1995, unless extended or withdrawn.
IBM's offer, as mailed on October 13, 1995, was conditioned upon,
among other things, there being validly deposited under its offer
and not withdrawn 90% of the Class B Shares outstanding upon the
completion of its offer. On October 25, 1995, the Board of
Directors of DMR decided not to make a recommendation to the
shareholders in connection with IBM's offer, even though the
Board concluded that the consideration of $11.00 per Class B
Share offered thereunder was fair, because IBM's offer included a
number of conditions which created uncertainty, including board
approval by IBM Corp. scheduled for October 30, 1995 and a
condition to the effect that 90% of all Class B Shares be
deposited. The Board of Directors of DMR indicated that these
conditions were outside the control of its minority shareholders
and, if not satisfied or waived prior to the expiry of IBM's
offer, would cause the consideration of $11.00 per Class B Share
to be unavailable to the minority shareholders of DMR. On October
26, 1995, IBM Canada Ltd. announced that IBM's offer had been
revised to reduce the 90% deposit condition described above to a
condition that 70% of the Class B Shares outstanding at the
completion of the offer be deposited to the offer. On October 31,
1995, IBM Canada Ltd. announced that IBM's offer had been
approved by the board of IBM Corp. and that it had satisfactorily
completed its due diligence review of DMR.
6. RIGHT TO WITHDRAW DEPOSITED SHARES
Holders of Shares have the right to withdraw Deposited
Shares under the circumstances and in the manner described in
section 7 of the Offers to Purchase under "Right to Withdraw
Deposited Shares".
7. PAYMENT FOR DEPOSITED SHARES
The Offeror will take up and pay for all Shares validly
deposited, and not withdrawn, under the Offers after the date
hereof as provided in section 8 of the Offers. Under applicable
securities laws, such Shares must be taken up and paid for within
10 days of their deposit. The Offeror estimates that if it
acquires all of the outstanding Shares under the Offers,
including the Class A Shares issuable upon the exercise of
existing stock options, the total amount of funds required to
purchase such Shares will be approximately $189 million. Amdahl
and its subsidiaries will provide such funding from internal cash
resources.
8. ACQUISITION OF SHARES NOT DEPOSITED
The Offering Circular under the heading "Purpose of the
Offers and Plans for DMR -- Acquisition of Shares Not Deposited -
- - Subsequent Acquisition Transactions" in describing the approval
required of "minority" shareholders to effect a subsequent going
private transaction states in the fourth paragraph under such
heading:
"Policy Q-27 and Policy 9.1 require that, in addition to any
other required securityholder approval, in order to complete
a going private transaction, the approval of a simple or
two-thirds majority (depending on the nature of the
transaction) of the votes cast by 'minority' shareholders of
the affected securities must be obtained. In relation to the
Offers and any subsequent going private transaction, Policy
Q-27 and Policy 9.1 provide that the Offeror may treat
Shares acquired pursuant to the Offers, other than the
Deposited Securities, as 'minority' Shares and vote them in
favour of such a going private transaction if the intent to
effect a going private transaction was disclosed at the time
of the Offers, if a summary of a valuation was provided or
no valuation was required in respect of the Offers and if
the consideration per security in the going private
transaction is at least equal in value to the consideration
paid under the Offers."
and, further in the same paragraph under such heading:
"In relation to the Offers and any subsequent going private
transaction, the 'minority' shareholders would be, absent
discretionary relief from the QSC and the OSC, the Offeror
with respect to Shares acquired pursuant to the Offers,
other than the Deposited Securities, and with respect to all
other Shares, all holders of Shares, other than the Offeror,
its directors and senior officers, any associate or
affiliate of the Offeror or its directors or senior
officers, any person or company acting jointly or in concert
with the Offeror or any of its directors or senior officers
in connection with the Offer or the subsequent going private
transaction, and any person who is a 'related party' of the
Offeror as defined by Policy Q-27 and Policy 9.1."
Like the Deposited Securities, the Locked-up Shares taken up
and paid for by the Offeror pursuant to the Offers will not be
included in the "minority" in relation to the Offers and any
subsequent going private transaction for the purposes of Policy
Q-27 and Policy 9.1.
Therefore, the provisions of the Offering Circular quoted
above are hereby amended to read as follows:
"Policy Q-27 and Policy 9.1 require that, in addition to any
other required securityholder approval, in order to complete
a going private transaction, the approval of a simple or
two-thirds majority (depending on the nature of the
transaction) of the votes cast by 'minority' shareholders of
the affected securities must be obtained. In relation to the
Offers and any subsequent going private transaction, Policy
Q-27 and Policy 9.1 provide that the Offeror may treat
Shares acquired pursuant to the Offers, other than the
Deposited Securities and the Locked-up Shares, as 'minority'
Shares and vote them in favour of such a going private
transaction if the intent to effect a going private
transaction was disclosed at the time of the Offers, if a
summary of a valuation was provided or no valuation was
required in respect of the Offers and if the consideration
per security in the going private transaction is at least
equal in value to the consideration paid under the Offers."
and
"In relation to the Offers and any subsequent going private
transaction, the 'minority' shareholders would be, absent
discretionary relief from the QSC and the OSC, the Offeror
with respect to Shares acquired pursuant to the Offers,
other than the Deposited Securities and the Locked-up
Shares, and with respect to all other Shares, all holders of
Shares, other than the Offeror, its directors and senior
officers, any associate or affiliate of the Offeror or its
directors or senior officers, any person or company acting
jointly or in concert with the Offeror or any of its
directors or senior officers in connection with the Offer or
the subsequent going private transaction, and any person who
is a 'related party' of the Offeror as defined by Policy Q-
27 and Policy 9.1."
9. AMENDMENTS TO OFFERS TO PURCHASE, OFFERING CIRCULAR, LETTER
OF ACCEPTANCE AND TRANSMITTAL AND NOTICE OF GUARANTEED DELIVERY
The Offers to Purchase, the Offering Circular and the Letter
of Acceptance and Transmittal and Notice of Guaranteed Delivery,
as amended by the Notice of Change and Variation dated October
19, 1995, are hereby further amended mutatis mutandis to reflect
the amendments contemplated by this Notice of Change and
Variation.
10. DIRECTOR'S APPROVAL
The contents of this Notice of Change and Variation have
been approved, and the sending, communication or delivery thereof
to the holders of the Shares has been authorized, by the board of
directors of the Offeror.
11. OFFEREES' STATUTORY RIGHTS
Securities legislation in certain of the provinces and
territories of Canada provides security holders of DMR with, in
addition to any other rights they may have at law, rights of
rescission or damages, or both, if there is a misrepresentation
in a circular or notice that is required to be delivered to such
security holders. However, such rights must be exercised within
prescribed time limits. Security holders should refer to the
applicable provisions of the securities legislation of their
province or territory for the particulars of those rights or
consult with a lawyer.<PAGE>
CERTIFICATE
November 1, 1995
The Original Offers, as amended by the Notice of Change and
Variation dated October 19, 1995 and this Notice of Change and
Variation, contain no untrue statement of a material fact and do
not omit to state a material fact that is required to be stated
or that is necessary to make a statement not misleading in the
light of the circumstances in which it was made. In addition, the
Original Offers, as amended by the Notice of Change and Variation
dated October 19, 1995 and this Notice of Change and Variation,
do not contain any misrepresentation likely to affect the value
or the market price of the Shares which are the subject of the
Original Offers, as amended by the Notice of Change and Variation
dated October 19, 1995 and this Notice of Change and Variation.
AMDAHL CANADA ACQUISITION INC.
By: /s/ GREGORY HANDSCHUH By: /s/ DAVID J. SWEEZIE
--------------------- --------------------
Gregory Handschuh David J. Sweezie
Chief Executive Officer Chief Financial Officer
On behalf of the Board of Directors
By: /s/ DONALD C. ROSS By: /s/ P. DOUGAL MACDONALD
------------------ ------------------------
Donald C. Ross P. Dougal MacDonald
Director Director
<PAGE>
The Depositary for the Offers is:
---------------------------------
MONTREAL TRUST COMPANY OF CANADA
FOR DELIVERY BY MAIL:
--------------------
1800 McGill College Avenue
8th Floor
Montreal, Quebec
H3A 3K9
FOR DELIVERY BY HAND OR COURIER:
--------------------------------
1800 McGill College Avenue 151 Front Street West
8th Floor 8th Floor
Montreal, Quebec Toronto, Ontario
H3A 3K9 M5J 2N1
Facsimile:(514) 982-7347 Facsimile:(416) 981-9596
Telephone: (514) 982-7555 Telephone: (416) 981-9608
510 Burrard Street
2nd Floor
Vancouver, B.C.
V6C 3B9
Facsimile: (604) 661-9480
Telephone: (604) 661-0283
The Dealer Manager of the Offers:
---------------------------------
RBC DOMINION RBC DOMINION
SECURITIES INC. SECURITIES INC.
Commerce Court South 2000 McGill College
Toronto, Ontario Suite 300
M5L 1A7 Montreal, Quebec
Marianne Anderson (416) 864-4509 H3A 3H5
Shaun Finnie (416) 941-5835 Jeffrey Drummond
(514) 282-5204
Emma Loewen (416) 864-4518
The Forwarding Agent is:
------------------------
THE BANK OF NOVA SCOTIA
TRUST COMPANY OF NEW YORK
One Liberty Plaza
23rd Floor
New York, NY 10006
Facsimile: (212) 225-5438
Telephone: (212) 225-5436
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-29-1995
<PERIOD-END> SEP-29-1995
<CASH> 212,751
<SECURITIES> 568,887
<RECEIVABLES> 252,341
<ALLOWANCES> 0
<INVENTORY> 310,699
<CURRENT-ASSETS> 1,412,177
<PP&E> 1,047,158
<DEPRECIATION> 777,659
<TOTAL-ASSETS> 1,710,163
<CURRENT-LIABILITIES> 558,263
<BONDS> 80,000
<COMMON> 5,945
0
0
<OTHER-SE> 961,819
<TOTAL-LIABILITY-AND-EQUITY> 1,710,163
<SALES> 624,468
<TOTAL-REVENUES> 1,100,208
<CGS> 396,764
<TOTAL-COSTS> 664,153
<OTHER-EXPENSES> 380,476
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,884
<INCOME-PRETAX> 85,743
<INCOME-TAX> 18,850
<INCOME-CONTINUING> 66,893
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 66,893
<EPS-PRIMARY> 0
<EPS-DILUTED> .56
</TABLE>
