<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
CHIPS AND TECHNOLOGIES, INC.
(NAME OF SUBJECT COMPANY)
INTEL CORPORATION
INTEL ENTERPRISE CORPORATION
(BIDDERS)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
170021109
(CUSIP NUMBER OF CLASS OF SECURITIES)
F. THOMAS DUNLAP, JR.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
INTEL CORPORATION
2200 MISSION COLLEGE BOULEVARD
SANTA CLARA, CALIFORNIA 95052
408-765-1125
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZING TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF BIDDER)
COPIES TO:
RICHARD M. RUSSO, ESQ.
GIBSON, DUNN & CRUTCHER LLP
1801 CALIFORNIA STREET, SUITE 4100
DENVER, COLORADO 80121
(303) 298-5700
<TABLE>
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CALCULATION OF FILING FEE
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Transaction valuation Amount of filing fee
- - ---------------------------------------------------------------------------------------------
$416,292,782* $83,259
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</TABLE>
* For purposes of fee calculation only. The total transaction value is based on
22,043,501 shares of common stock, together with the associated common stock
purchase rights (collectively, the "Shares"), outstanding as of July 27, 1997
plus the number of Shares issuable upon the exercise of outstanding options or
other rights to acquire shares that were vested on that date, multiplied by
the offer price of $17.50 per Share.
The amount of the filing fee calculated in accordance with Regulation 240.0-11
of the Securities Exchange Act of 1934 equals 1/50 of 1% of the value of the
Shares to be purchased.
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY RULES 0-11(a)(2)
AND IDENTIFY THE FILING WITH WHICH THE OFFSETTING FEE WAS PREVIOUSLY PAID.
IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT NUMBER, OR THE FORM
OR SCHEDULE AND THE DATE OF ITS FILING.
<TABLE>
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Amount previously paid: None Filing party: Not Applicable
Form or registration no.: Not Applicable Date filed: Not Applicable
</TABLE>
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<PAGE> 2
INTRODUCTION
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by Intel Enterprise Corporation, a Delaware corporation ("Purchaser"),
and a wholly owned subsidiary of Intel Corporation, a Delaware corporation
("Intel"), to purchase all outstanding shares of common stock, par value $0.01
per share (the "Common Stock"), of Chips and Technologies, Inc., a Delaware
corporation (the "Company"), and the associated Common Stock purchase rights
(the "Rights" and, together with the Common Stock, the "Shares") issued pursuant
to the Rights Agreement dated as of August 23, 1989, between the Company and
Bank of America, NT & SA, at a price of $17.50 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated as of August 1, 1997 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer"), copies of which
are attached hereto as Exhibits (a)(1) and (a)(2), respectively. The Offer is
being made pursuant to an Agreement and Plan of Merger, dated July 27, 1997, by
and among Intel, Purchaser, and the Company, which provides, among other things,
that as promptly as practicable after the satisfaction or, if permissible,
waiver of the conditions set forth therein (including without limitation, the
purchase of Shares pursuant to the Offer), Purchaser will be merged with and
into the Company (the "Merger"), with the Company continuing as the surviving
corporation, and each issued and outstanding Share (other than any Shares held
in the treasury of the Company or by Intel or any direct or indirect wholly
owned subsidiary of Intel or the Company, and other than Shares held by
stockholders who shall not have voted in favor of the Merger or consented
thereto in writing and who shall have complied with all of the relevant
provisions of Section 262 of the General Corporation Law of the State of
Delaware) will be converted automatically into the right to receive the amount
paid per Share in the Offer, in cash, without interest, upon surrender of the
certificate representing the Share.
Purchaser is acting with the consent of the Company on behalf of Intel in
making the Offer. The making of the Offer is the responsibility of Intel under
the Merger Agreement and the making of the Offer by Purchaser is not intended to
in any way reduce Intel's obligations, duties and liabilities under the Merger
Agreement.
The information contained in this Statement concerning the Company,
including, without limitation, information concerning the deliberations,
approvals and recommendations of the Board of Directors of the Company in
connection with the transaction, the opinion of the financial advisor to such
Board of Directors, and the Company's capital structure and financial
information, was supplied by the Company. Purchaser takes no responsibility for
the accuracy of such information.
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION
(a) The name of the subject company is Chips and Technologies, Inc., a
Delaware corporation, which has its principal executive offices at 2950 Zanker
Road, San Jose, California 95134.
(b) The class of equity securities being sought is the Company's Common
Stock and the associated Rights. The information set forth in the Offer to
Purchase under the caption "INTRODUCTION" is incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in the Offer to Purchase under the caption "THE TENDER
OFFER--6. Price Range of the Shares" is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(d), (g) This Statement is filed by Purchaser and Intel. The
information concerning the name, state or other place of organization, principal
business and address of the principal office of Purchaser and Intel, and the
name, business address, present principal occupation or employment (including
the name, principal business and address of any corporation or other
organization in which such employment or occupation is conducted), material
occupations, positions, offices or employment during the last five years and
citizenship of each of the executive officers and directors of Purchaser and
Intel are set forth in the Offer to Purchase under
2
<PAGE> 3
the captions "INTRODUCTION," and "THE TENDER OFFER--8. Certain Information
Concerning Purchaser and Intel," and in Schedule I to the Offer to Purchase, are
incorporated herein by reference.
(e) and (f) During the last five years, neither Purchaser, Intel, nor, to
the knowledge of Purchaser or Intel, any person listed in Schedule I to the
Offer to Purchase has been (i) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violations of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS
(a) The information set forth in the Offer to Purchase under the captions
"INTRODUCTION," "THE TENDER OFFER--8. Certain Information Concerning Purchaser
and Intel," and "THE TENDER OFFER--10. Certain Transactions between Intel and
the Company" is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase under the captions
"INTRODUCTION," "THE TENDER OFFER--8. Certain Information Concerning Purchaser
and Intel," "THE TENDER OFFER--10. Certain Transactions between Intel and the
Company," and "THE TENDER OFFER--11. Contacts with the Company; Background of
the Offer and the Merger" is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATIONS
(a) and (b) The information set forth in the Offer to Purchase under the
caption "THE TENDER OFFER--9. Source and Amount of Funds" is incorporated herein
by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSAL OF THE BIDDER
(a) - (e) The information set forth in the Offer to Purchase under the
captions "INTRODUCTION" and "THE TENDER OFFER -- 12. Purpose of the Offer; The
Merger Agreement" is incorporated herein by reference.
(f) and (g) The information set forth in the Offer to Purchase under the
caption "THE TENDER OFFER--14. Effects of the Offer on the Market for Shares;
Nasdaq National Market and Exchange Act Registration" is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a) and (b) The information set forth in the Offer to Purchase under the
captions "THE TENDER OFFER--10. Certain Transactions Between Intel and the
Company" and "THE TENDER OFFER--12. Purpose the Offer; The Merger Agreement" is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES
The information set forth in the Offer to Purchase under the captions "THE
TENDER OFFER--10. Certain Transactions Between Intel and the Company" and "THE
TENDER OFFER -- 12. Purpose of the Offer; The Merger Agreement" is incorporated
herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The information set forth in the Offer to Purchase under the caption "THE
TENDER OFFER--17. Fees and Expenses" is incorporated herein by reference.
3
<PAGE> 4
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The information set forth in the Offer to Purchase under the caption "THE
TENDER OFFER--8. Certain Information Concerning Purchaser and Intel" is
incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION
(a) The information set forth in the Offer to Purchase under the caption
"THE TENDER OFFER--12. Purpose of the Offer; The Merger Agreement" is
incorporated herein by reference.
(b) and (c) The information set forth in the Offer to Purchase under the
caption "THE TENDER OFFER--16. Certain Legal Matters; Regulatory Approvals" is
incorporated herein by reference.
(d) The information set forth in the Offer to Purchase under the caption
"THE TENDER OFFER--14. Effects of the Offer on the Market for Shares; Nasdaq
National Market and Exchange Act Registration" is incorporated herein by
reference.
(e) The information set forth in the Offer to Purchase under the caption
"THE TENDER OFFER--18. Miscellaneous" is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, to the extent not otherwise incorporated by reference, is
incorporated herein by reference
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
(a)(1) Offer to Purchase, dated August 1, 1997
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
(a)(7) Form of Summary Advertisement, dated August 1, 1997
(a)(8) Press Releases, dated July 28, 1997 and August 1, 1997 issued by
Intel
(b) None
(c) Agreement and Plan of Merger, dated as of July 27, 1997, among the
Company, Purchaser and Intel
(d) None
(e) Not Applicable
(f) None
4
<PAGE> 5
SIGNATURE
After due inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: August 1, 1997
INTEL ENTERPRISE CORPORATION
By /s/ CARY I. KLAFTER
Cary I. Klafter
President
SIGNATURE
After due inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: August 1, 1997
INTEL CORPORATION
By /s/ F. THOMAS DUNLAP, JR.
F. Thomas Dunlap, Jr.
Vice-President, General Counsel
and Secretary
5
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT INDEX PAGE
- - ------- ----------------------------------------------------------------------- ------------
<S> <C> <C>
(a)(1) Offer to Purchase, dated August 1, 1997
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
(a)(7) Form of Summary Advertisement, dated August 1, 1997
(a)(8) Press Releases, dated July 28, 1997 and August 1, 1997 issued by Intel
(b) None
(c) Agreement and Plan of Merger, dated as of July 27, 1997, among the
Company, Purchaser and Intel
(d) None
(e) Not Applicable
(f) None
</TABLE>
<PAGE> 1
EXHIBIT (a)(1)
OFFER TO PURCHASE
DATED AUGUST 1, 1997
<PAGE> 2
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CHIPS AND TECHNOLOGIES, INC.
AT
$17.50 NET PER SHARE
BY
INTEL ENTERPRISE CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
INTEL CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, AUGUST 28, 1997 (THE "EXPIRATION DATE"), UNLESS THE OFFER IS
EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN A NUMBER OF SHARES WHICH
REPRESENT AT LEAST A MAJORITY OF SHARES ON A FULLY-DILUTED BASIS (THE "MINIMUM
CONDITION") AND (2) THE SATISFACTION OR WAIVER OF CERTAIN CONDITIONS TO THE
OBLIGATIONS OF PURCHASER AND THE COMPANY TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING RECEIPT BY PURCHASER AND THE
COMPANY OF CERTAIN GOVERNMENTAL AND REGULATORY APPROVALS.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER, TAKEN TOGETHER, ARE FAIR TO AND IN THE BEST INTERESTS OF THE
STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND
RECOMMENDS THAT THE STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES
HEREUNDER.
------------------------
IMPORTANT
Any stockholder desiring to tender Shares (as defined herein) should either
(1) complete and sign the Letter of Transmittal, or a facsimile copy thereof, in
accordance with the instructions in the Letter of Transmittal, mail or deliver
it and any other required documents to the Depositary and either deliver the
certificates for such Shares to the Depositary along with the Letter of
Transmittal or tender such Shares pursuant to the procedure for book-entry
transfer set forth in this Offer to Purchase under the caption "THE TENDER
OFFER--2. Procedure for Accepting the Offer and Tendering Shares" or (2) request
such stockholder's broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for the stockholder. Stockholders having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such broker, dealer, commercial bank,
trust company or other nominee if they desire to tender such Shares.
<PAGE> 3
A stockholder who desires to tender Shares and whose certificates for
Shares are not immediately available, or who cannot comply with the procedures
for book-entry transfer described in this Offer to Purchase on a timely basis,
may tender such Shares by following the procedure for guaranteed delivery set
forth in this Offer to Purchase under the caption "THE TENDER OFFER--2.
Procedure for Accepting the Offer and Tendering Shares".
Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials,
may be directed to the Information Agent at its address and telephone numbers
set forth on the back cover of this Offer to Purchase. Holders of Shares may
also contact brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
------------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE FAIRNESS OR MERITS OF THIS TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF
THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
------------------
The Information Agent for the Offer is:
D.F. KING & CO., INC.
The date of this Offer to Purchase is August 1, 1997
2
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
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PAGE
------
<S> <C> <C>
INTRODUCTION.......................................................................... 1
THE TENDER OFFER...................................................................... 3
1. Terms of the Offer; Expiration Date............................................ 3
2. Procedure for Accepting the Offer and Tendering Shares......................... 4
3. Withdrawal Rights.............................................................. 7
4. Acceptance for Payment and Payment for Shares.................................. 8
5. Certain Federal Income Tax Consequences........................................ 8
6. Price Range of the Shares...................................................... 9
7. Certain Information Concerning the Company..................................... 10
8. Certain Information Concerning Purchaser and Intel............................. 11
9. Source and Amount of Funds..................................................... 13
10. Certain Transactions Between Intel and the Company............................. 13
11. Contacts with the Company; Background of the Offer and the Merger.............. 13
12. Purpose of the Offer; The Merger Agreement..................................... 14
13. Dividends and Distributions.................................................... 20
14. Effects of the Offer on the Market for Shares; Nasdaq National Market and
Exchange Act Registration...................................................... 20
15. Certain Conditions of the Offer................................................ 21
16. Certain Legal Matters; Regulatory Approvals.................................... 22
17. Fees and Expenses.............................................................. 24
18. Miscellaneous.................................................................. 24
SCHEDULE I............................................................................ I-1
ANNEX A............................................................................... A-1
</TABLE>
<PAGE> 5
To the Holders of Common Stock of Chips and Technologies, Inc.:
INTRODUCTION
Intel Enterprise Corporation, a Delaware corporation ("Purchaser"), which
is a wholly owned subsidiary of Intel Corporation, a Delaware corporation
("Intel"), hereby offers to purchase all outstanding shares of common stock, par
value $0.01 per share (the "Common Stock"), of Chips and Technologies, Inc., a
Delaware corporation (the "Company"), and the associated common stock purchase
rights (the "Rights" and, together with the Common Stock, the "Shares") issued
pursuant to the Rights Agreement dated as of August 23, 1989 between the Company
and Bank of America, NT & SA (the "Rights Agreement"), upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which together constitute the "Offer"), at the purchase
price of $17.50 per Share (the "Offer Price"), net to the tendering stockholder
in cash.
The Offer is being made pursuant to the terms of the Agreement and Plan of
Merger, dated as of July 27, 1997 (the "Merger Agreement"), by and among the
Company, Purchaser and Intel. The Merger Agreement provides, among other things,
for the making of the Offer, and further provides that, following the purchase
of Shares pursuant to the Offer and promptly after the satisfaction or waiver of
certain other conditions, Purchaser will be merged with and into the Company
(the "Merger"). The Company will continue as the surviving corporation after the
Merger (the "Surviving Corporation"). Purchaser is acting with the consent of
the Company on behalf of Intel in making the Offer. The making of the Offer is
the responsibility of Intel under the Merger Agreement and the making of the
Offer by Purchaser is not intended to in any way reduce Intel's obligations,
duties and liabilities under the Merger Agreement. At the effective time of the
Merger, each outstanding Share (except for Shares owned by Intel, the Company or
any subsidiary of Intel or the Company and Shares held by stockholders
exercising their appraisal rights under the Delaware General Corporation Law
(the "DGCL")) will be converted into the right to receive the Offer Price, net
to the holder in cash, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") HAS UNANIMOUSLY
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, TAKEN TOGETHER, ARE FAIR TO AND IN THE BEST
INTERESTS OF THE STOCKHOLDERS OF THE COMPANY, HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER, AND RECOMMENDS THAT THE STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES HEREUNDER.
HAMBRECHT & QUIST LLC ("HAMBRECHT & QUIST"), FINANCIAL ADVISOR TO THE
COMPANY, HAS DELIVERED A WRITTEN OPINION TO COMPANY'S BOARD, DATED JULY 27, 1997
(THE "HAMBRECHT & QUIST OPINION"), TO THE EFFECT THAT, AS OF THAT DATE, THE
CONSIDERATION TO BE RECEIVED BY THE STOCKHOLDERS OF THE COMPANY PURSUANT TO THE
MERGER AGREEMENT WAS FAIR FROM A FINANCIAL POINT OF VIEW TO SUCH STOCKHOLDERS.
THE FULL TEXT OF THE HAMBRECHT & QUIST OPINION IS ATTACHED TO THE COMPANY'S
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 WHICH IS BEING MAILED TO
STOCKHOLDERS OF THE COMPANY HEREWITH. STOCKHOLDERS ARE URGED TO READ SUCH
OPINION CAREFULLY AND IN ITS ENTIRETY FOR ASSUMPTIONS MADE, MATTERS CONSIDERED
AND LIMITS OF THE REVIEW OF HAMBRECHT & QUIST.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OR
WAIVER OF CERTAIN CONDITIONS TO THE OBLIGATIONS OF PURCHASER, INTEL AND THE
COMPANY TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT,
INCLUDING (I) THERE BEING VALIDLY TENDERED BY THE EXPIRATION DATE AND NOT
WITHDRAWN A NUMBER OF SHARES WHICH REPRESENTS AT LEAST A MAJORITY OF THE SHARES
ON A FULLY-DILUTED BASIS (THE "MINIMUM CONDITION") AND (II) RECEIPT BY
PURCHASER, INTEL AND THE COMPANY OF CERTAIN GOVERNMENTAL AND REGULATORY
APPROVALS. SEE "THE TENDER OFFER--15. CERTAIN CONDITIONS OF THE OFFER."
<PAGE> 6
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
THE COMPANY'S STOCKHOLDERS. ANY SUCH SOLICITATION WOULD BE MADE ONLY PURSUANT TO
SEPARATE PROXY MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT").
The Offer will expire at MIDNIGHT, New York City time, on Thursday, August
28, 1997, unless extended.
Tendering stockholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to Instruction 6 of the Letter of Transmittal,
stock transfer taxes on the purchase of Shares pursuant to the Offer. However,
any tendering stockholder or other payee who fails to complete and sign the
Substitute Form W-9 that is included in the Letter of Transmittal may be subject
to a required backup federal income tax withholding of 31% of the gross proceeds
payable to such stockholder or other payee pursuant to the Offer. See "THE
TENDER OFFER--5. Certain Federal Income Tax Consequences." Purchaser will pay
all charges and expenses of Citibank, N.A., as Depositary (in such capacity, the
"Depositary"), and D.F. King & Co., Inc., as Information Agent (in such
capacity, the "Information Agent"), incurred in connection with the Offer. For a
description of the fees and expenses to be paid by Purchaser, see "THE TENDER
OFFER--17. Fees and Expenses."
Consummation of the Merger is subject to a number of conditions, including
approval by the stockholders of the Company if such approval is required by
applicable law. See "THE TENDER OFFER--16. Certain Legal Matters; Regulatory
Approvals." If Intel acquires a majority of the outstanding Shares, it will have
sufficient voting power to approve and adopt the Merger Agreement and the Merger
without the vote of any other stockholder of the Company. If Intel acquires at
least 90% of the outstanding Shares, Intel intends to approve and consummate the
Merger without any action by, or any further prior notice to, the other
stockholders of the Company pursuant to the short-form merger provisions of the
DGCL. In addition, under certain circumstances, when Intel has not acquired 90%
of the outstanding Shares, the Company has granted Intel an option to purchase
up to that number of authorized and unissued Shares which equals 19.99% of the
then outstanding Shares.
The Company has informed Intel that as of July 27, 1997 there were
22,043,501 Shares issued and outstanding and 3,983,598 Shares reserved for
issuance upon the exercise of outstanding stock options and warrants. As of the
date hereof, Intel and its affiliates beneficially own no Shares. Based on the
foregoing, Intel believes that the Minimum Condition will be satisfied if at
least 13,013,550 Shares are validly tendered and not withdrawn prior to the
Expiration Date.
The information contained in this Offer to Purchase concerning the Company
was supplied by the Company. Purchaser takes no responsibility for the
completeness or accuracy of such information. The information contained in this
Offer to Purchase concerning the Offer, the Merger, Intel and Purchaser was
supplied by Purchaser. The Company takes no responsibility for the completeness
or accuracy of such information.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER. ALSO SEE "THE TENDER OFFER--18. MISCELLANEOUS" FOR
INFORMATION REGARDING CERTAIN ADDITIONAL DOCUMENTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") IN CONNECTION WITH THE OFFER.
References herein to Intel shall, unless the context indicates otherwise,
include Intel and all of its subsidiaries including Purchaser.
2
<PAGE> 7
THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and pay for all Shares validly
tendered on or prior to the Expiration Date and not theretofore withdrawn in
accordance with the provisions set forth in this Offer to Purchase under the
caption "TENDER OFFER--3. Withdrawal Rights." The term "Expiration Date" shall
mean Midnight, New York City time, on Thursday, August 28, 1997, unless and
until Purchaser, subject to restrictions contained in the Merger Agreement,
shall from time to time have extended the period of time during which the Offer
is open, in which event the term "Expiration Date" shall mean the latest time
and date at which the Offer, as so extended by Purchaser, shall expire.
Pursuant to the Merger Agreement, Intel may increase the Offer Price and
may make any other changes in the terms and conditions of the Offer, provided
that, unless previously approved by the Company in writing, Intel may not (i)
decrease the Offer Price, (ii) change the form of consideration payable in the
Offer, (iii) decrease the number of Shares sought pursuant to the Offer, (iv)
add additional conditions to the Offer, (v) amend the conditions to the Offer
set forth in Annex A to the Merger Agreement to broaden their scope, (vi) amend
the Minimum Condition, (vii) extend the Offer except as permitted by the terms
of the Merger Agreement or (viii) make any other changes in the terms or
conditions of the Offer which are adverse to holders of Shares.
Intel may, without the consent of the Company's Board of Directors, (i)
from time to time extend the Offer if at the scheduled Expiration Date of the
Offer any conditions to the Offer shall not have been satisfied or waived, (ii)
extend the Offer for any period required by any rule, regulation, interpretation
or position of the Securities and Exchange Commission (the "Commission")
applicable to the Offer, and (iii) extend the Offer for any reason on one or
more occasions for an aggregate period of not more than twenty business days
beyond the latest Expiration Date that would otherwise be permitted under
clauses (i) or (ii) of this sentence if on such Expiration Date there shall not
have been tendered at least 90% of the outstanding Shares. In addition, if at
any scheduled Expiration Date any of the conditions to the Offer have not been
satisfied or waived by Intel, but are capable of being satisfied, Intel shall
from time to time extend the Offer until such conditions are satisfied or
waived, provided that Intel shall not be required to extend the Offer beyond
October 31, 1997. As used in this Offer to Purchase, "business day" means with
respect to the Merger Agreement any day, other than a day on which banks in the
State of California are authorized to close or the Nasdaq National Market is
closed. Purchaser confirms that its right to delay payment for Shares that it
has accepted for payment is limited by Rule 14e-1(c) under the Exchange Act,
which requires that a tenderer pay the consideration offered or return the
tendered securities promptly after the termination or withdrawal of a tender
offer.
Subject to the applicable rules and regulations of the Commission, Intel
expressly reserves the right, subject to the terms and conditions of the Merger
Agreement, at any time and from time to time, upon the failure to be satisfied
of any of the conditions to the Offer, to (i) terminate or amend the Offer, (ii)
extend the Offer and postpone acceptance for payment of any Shares, or (iii)
waive any condition, by giving oral or written notice of such termination,
amendment, extension or waiver to the Depositary. During any such extension all
Shares previously tendered and not properly withdrawn will remain subject to any
such extension and will remain subject to the Offer, subject to the right of a
tendering stockholder to withdraw such stockholder's Shares. In the event that
Intel waives any of the conditions set forth in this Offer to Purchase under the
caption "THE TENDER OFFER--15. Certain Conditions of the Offer," the Commission
may, if the waiver is deemed to constitute a material change to the information
previously provided to the stockholders, require that the Offer remain open for
an additional period of time and/or that Purchaser disseminate information
concerning such waiver.
If Purchaser extends the Offer, or if Purchaser (whether before or after
its acceptance for payment of Shares) is delayed in its payment for Shares or is
unable to pay for Shares pursuant to the Offer for any reason, then, without
prejudice to Purchaser's rights under the Offer, the Depositary may retain
tendered Shares on behalf of Purchaser, and such Shares may not be withdrawn
except to the extent tendering
3
<PAGE> 8
stockholders are entitled to withdrawal rights as described in this Offer to
Purchase under the caption "THE TENDER OFFER--3. Withdrawal Rights." However, as
described above, the ability of Purchaser to delay payment for Shares that
Purchaser has accepted for payment is limited by Rule 14e-1(c) under the
Exchange Act.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
Purchaser will disseminate additional tender offer materials (including by
public announcement as set forth above) and extend the Offer to the extent
required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. Such
rules generally provide that the minimum period during which a tender offer must
remain open following a material change in the terms of the offer or information
concerning the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the changes in the terms or information. In the
Commission's view, an offer should remain open for a minimum of five business
days from the date a material change is first published, sent or given to
securityholders, and, if material changes are made with respect to information
that approaches the significance of price and share levels, a minimum of ten
business days may be required to allow for adequate dissemination and investor
response. With respect to a change in price or a change in percentage of
securities sought, a minimum ten-business day period is generally required to
allow for adequate dissemination to stockholders and for investor response.
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement in accordance with the public
announcement requirements of Rule 14e-1(d) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change) and without limiting the manner in which Purchaser may choose to make
any public announcement, Purchaser shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service.
The Company has provided Purchaser with the Company stockholder list, a
nonobjecting beneficial owners list, and security position listings for the
purpose of disseminating the Offer to holders of Shares. This Offer to Purchase
and the Letter of Transmittal and other relevant materials will be mailed to
record holders of Shares and furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES
Valid Tender of Shares
For a stockholder to validly tender Shares pursuant to the Offer, either
(i) a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees, or an Agent's Message
(as defined herein) in connection with a book-entry delivery of Shares, and any
other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase, and either
certificates ("Share Certificates") for tendered Shares must be received by the
Depositary at one of such addresses or such tendered Shares must be delivered
pursuant to the procedure for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined herein) received by the Depositary), in each
case prior to the Expiration Date, or (ii) the tendering stockholder must comply
with the guaranteed delivery procedures set forth below.
Book-Entry Transfers
The Depositary will establish an account with respect to the Shares at The
Depository Trust Company and the Philadelphia Depository Trust Company (each
individually, a "Book-Entry Transfer Facility" and, collectively, the
"Book-Entry Transfer Facilities") for purposes of the Offer within two business
days after the date of this Offer to Purchase. Any financial institution that is
a participant in a Book-Entry Transfer Facility
4
<PAGE> 9
may make book-entry delivery of the Shares by causing the book-entry transfer
system to transfer such Shares into the Depositary's account at a Book-Entry
Transfer Facility in accordance with such Book-Entry Transfer Facility's
procedure for such transfer. Although delivery of Shares may be effected through
book-entry transfer at any Book-Entry Transfer Facility, a properly completed
and duly executed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees, or an Agent's Message (as defined herein) in
connection with a book-entry transfer, and any other required documents, must,
in any case, be transmitted to, and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering stockholder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of Shares into the Depositary's account at a Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." DELIVERY
OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH ITS BOOK-ENTRY
PROCEDURES DOES NOT CONSTITUTE VALID DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares, that such participant has received the
Letter of Transmittal and agrees to be bound by the terms of the Letter of
Transmittal and that Purchaser may enforce such agreement against such
participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND SOLE RISK OF THE TENDERING STOCKHOLDER
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED AT THE DEPOSITARY.
IF DELIVERY IS BY MAIL, THEN INSURED OR REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
Signature Guarantees
No signature guarantee on the Letter of Transmittal is required if (i) the
Letter of Transmittal is signed by the registered holder of the Shares (which
term, for purposes of this Section, includes any participant in a Book-Entry
Transfer Facility system whose name appears on a security position listing as
the owner of the Shares) tendered therewith and such registered holder has not
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" on such Letter of Transmittal, or (ii)
such Shares are tendered for the account of a bank, broker, dealer, credit
union, savings association or other entity that is a member in good standing of
the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution"). In all other cases, all signatures on the
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instructions 1 and 5 to the Letter of Transmittal. If the Share Certificates are
registered in the name of a person other than the signer of the Letter of
Transmittal, or if payment is to be made to, or Share Certificates not validly
tendered, not accepted for payment or not purchased are to be issued or returned
to, a person other than the registered holder of the Share Certificates, the
tendered Share Certificates must be endorsed in blank or accompanied by
appropriate stock powers, signed exactly as the name of the registered holder
appears on the Share Certificates with the signature on such Share Certificates
or stock powers guaranteed by an Eligible Institution. See Instructions 1 and 5
to the Letter of Transmittal.
Guaranteed Delivery
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's Share Certificates are not immediately available or the procedures
for book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, such
5
<PAGE> 10
Shares may nevertheless be tendered provided that all of the following
guaranteed delivery procedures are duly complied with:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail, telegram or facsimile
transmission) on or prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form
provided by Purchaser; and
(c) the Share Certificates representing all tendered Shares, in proper
form for transfer (or Book-Entry Confirmation with respect to such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) and any other documents required by the Letter of
Transmittal, are received by the Depositary within three Nasdaq trading
days after the date of such Notice of Guaranteed Delivery. A "Nasdaq
trading day" is any day on which securities are traded on the Nasdaq
National Market.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by telegram, facsimile transmission or mail, to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) Share Certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), or, in the case of
book-entry transfer, an Agent's Message, and (iii) any other documents required
by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at
different times depending upon when Share Certificates, Book-Entry Confirmations
and such other documents are actually received by the Depositary. Under no
circumstances will interest be paid by Purchaser on the purchase price of the
Shares to any tendering stockholders, regardless of any extension of the Offer
or any delay in making such payment.
Determination of Validity
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by Purchaser in its sole discretion, which determination will be final and
binding. Purchaser reserves the absolute right to reject any or all tenders of
any Shares that it determines are not in proper form or the acceptance for
payment of or payment for which may, in the opinion of Purchaser's counsel, be
unlawful. Purchaser also reserves the absolute right to waive any of the
conditions of the Offer or any defect or irregularity in the tender of any
Shares with respect to any particular stockholder, whether or not similar
defects or irregularities are waived in the case of other stockholders. None of
Purchaser, Intel, the Depositary, the Information Agent or any other person will
be under any duty to give notice of any defects or irregularities in tenders or
incur any liability for failure to give any such notice. Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
Other Requirements
By executing the Letter of Transmittal as set forth herein, a tendering
stockholder irrevocably appoints designees of Purchaser as such stockholder's
proxies, each with full power of substitution, in the manner set forth in the
Letter of Transmittal, to the full extent of such stockholder's rights with
respect to the Shares tendered by such stockholder and accepted for payment by
Purchaser (and with respect to any and all other Shares or other securities or
rights issued or issuable in respect of such Shares on or after July 27, 1997),
effective when, if and to the extent that Purchaser accepts such Shares for
payment pursuant to the Offer. All such proxies shall be considered coupled with
an interest in the tendered Shares. Upon such acceptance for payment, all prior
proxies given by such stockholder with respect to such Shares accepted for
payment or other securities or rights will, without further action, be revoked,
and no subsequent proxies may be given. Such designees of Purchaser will, with
respect to such Shares for which the appointment is effective, be empowered
6
<PAGE> 11
to exercise all voting and other rights of such stockholder as they in their
sole discretion may deem proper in respect of any annual or special meeting of
the Company's stockholders or any adjournment or postponement thereof, by
written consent in lieu of any such meeting or otherwise. Purchaser reserves the
right to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser's payment for such Shares, Purchaser must be able to
exercise full voting rights with respect to such Shares.
Purchaser's acceptance for payment of Shares tendered pursuant to any of
the procedures described herein will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the conditions
of the Offer.
Backup Federal Income Tax Withholding
To prevent backup federal income tax withholding on payments of cash
pursuant to the Offer, a stockholder tendering Shares in the offer must provide
the Depositary with such stockholder's correct taxpayer identification number
("TIN") on a Substitute Form W-9 and certify under penalties of perjury that
such TIN is correct and that such stockholder is not subject to backup
withholding. If a stockholder does not provide its correct TIN or fails to
provide the certification described herein, under federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payment made to
such stockholder pursuant to the Offer. All stockholders tendering Shares
pursuant to the Offer should complete and sign the Substitute Form W-9 included
as a part of the Letter of Transmittal to provide the information and
certification necessary to avoid backup withholding. Noncorporate foreign
stockholders should complete and sign a Form W-8, Certificate of Foreign Status,
a copy of which may be obtained from the Depositary, in order to avoid backup
withholding. See Instruction 10 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer will be irrevocable, except
that Shares tendered may be withdrawn at any time prior to the Expiration Date,
and, unless theretofore accepted for payment and paid for as provided herein,
may also be withdrawn at any time after September 29, 1997.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn as set forth on such Share
Certificates if different from the name of the person who tendered such Shares.
If Share Certificates have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such Share Certificates, the
serial numbers shown on such Share Certificates must be furnished to the
Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedures
for book-entry transfer set forth in Section 2 above, any notice of withdrawal
must specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with such withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures for withdrawal, in which
case a notice of withdrawal will be effective if delivered to the Depositary by
any method of delivery described in the first sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser in its sole discretion,
and its determination will be final and binding. None of Purchaser, the
Depositary, the Information Agent or any other person will be obligated to give
notice of any defects or irregularities in any notice of withdrawal, nor shall
any of them incur any liability for failure to give any such notice.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by following one of
the procedures described in Section 2 above at any time on or prior to the
Expiration Date.
7
<PAGE> 12
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), Purchaser will accept for payment, and will pay for, any and all
Shares validly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with Section 3 above promptly after the Expiration Date.
Subject to applicable rules of the Commission and the terms and conditions of
the Merger Agreement, Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of, or payment for, Shares in order
to comply in whole or in part with any applicable law.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i) the
Share Certificates (or timely Book-Entry Confirmation of the book-entry transfer
of such Shares into the Depositary's account at a Book-Entry Transfer Facility
pursuant to the procedures set forth under Section 2 above), (ii) the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
together with any required signature guarantees, or an Agent's Message in
connection with a book-entry transfer, and (iii) any other documents required by
the Letter of Transmittal.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to Purchaser and not
properly withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to the
Offer. In all cases, upon the terms and subject to the conditions of the Offer,
payment for Shares so accepted for payment will be made by the deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from Purchaser and
transmitting payment to validly tendering stockholders. UNDER NO CIRCUMSTANCES
WILL INTEREST BE PAID BY PURCHASER ON THE PURCHASE PRICE OF THE SHARES TENDERED
PURSUANT TO THE OFFER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN
MAKING SUCH PATENT. Upon the deposit of funds with the Depositary for the
purpose of making payments to tendering stockholders, Purchaser's obligation to
make such payments shall be satisfied and tendering stockholders must thereafter
look solely to the Depositary for payment of amounts owed to them by reason of
the acceptance for payment of Shares pursuant to the Offer. Purchaser will pay
any stock transfer taxes with respect to the transfer and sale to it or its
order pursuant to the Offer, except as otherwise provided in Instruction 6 of
the Letter of Transmittal, as well as any charges and expenses of the Depositary
and the Information Agent.
If Purchaser is delayed in its acceptance for payment of, or payment for
tendered Shares or is unable to accept for payment or pay for such Shares
pursuant to the Offer for any reason, then, without prejudice to Purchaser's
rights under the Offer (but subject to Purchaser's obligations under Rule
14e-1(c) under the Exchange Act to pay for or return the tendered Shares
promptly after the termination or withdrawal of the Offer), the Depositary may,
nevertheless, retain tendered Shares on behalf of Purchaser, and such Shares may
not be withdrawn except to the extent tendering stockholders are entitled to
exercise, and duly exercise, withdrawal rights as described under Section 3
above.
If any tendered Shares are not purchased pursuant to the Offer because of
an invalid tender or for any reason, Share Certificates for any such Shares will
be returned, without expense, to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility pursuant to the procedures set forth
under Section 2 above, such Shares will be credited to an account maintained at
such Book-Entry Transfer Facility) as promptly as practicable following the
expiration or termination of the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The summary of Federal income tax consequences set forth below is for
general information only and is based on Purchaser's understanding of the law as
currently in effect. The tax consequences to each stockholder will depend in
part upon such stockholder's particular situation. Special tax consequences not
described herein may be applicable to particular classes of taxpayers, such as
financial institutions, broker-dealers, persons who
8
<PAGE> 13
are not citizens or residents of the United States and stockholders who acquired
their Shares through the exercise of an employee stock option or otherwise as
compensation. ALL STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS TO
THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING
THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS AND OF CHANGES IN SUCH TAX LAWS.
The receipt of cash for Shares pursuant to the Offer (or the Merger) will
be a taxable transaction for federal income tax purposes and may also be a
taxable transaction under applicable state, local or foreign tax laws.
Generally, for federal tax purposes, a stockholder who receives cash for Shares
pursuant to the Offer (or the Merger) will recognize gain or loss for federal
income tax purposes equal to the difference between the amount of cash received
in exchange for the Shares sold and such stockholder's adjusted tax basis in
such Shares. Provided that the Shares constitute capital assets in the hands of
the stockholder, such gain or loss will be capital gain or loss, and will be
long term capital gain or loss if the holder has held the Shares for more than
one year at the time of sale. Gain or loss will be calculated separately for
each block of Shares (i.e., a group of Shares with the same tax basis and
holding period) tendered pursuant to the Offer.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals and entities) that
tenders Shares may be subject to 31% backup withholding unless the stockholder
provides its TIN and certifies that such number is correct or properly certifies
that it is awaiting a TIN, or unless an exemption applies. A stockholder who
does not furnish its TIN may be subject to a penalty imposed by the Internal
Revenue Service (the "IRS"). See Section 2.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an appropriate income tax return.
6. PRICE RANGE OF THE SHARES
The Shares are traded on the Nasdaq National Market under the symbol CHPS.
The following table sets forth, for the periods indicated, the high and low
sales prices of the Common Stock as reported on the Nasdaq National Market:
<TABLE>
<CAPTION>
TRADING
------------------
HIGH LOW
------- ------
<S> <C> <C>
Fiscal Year Ended June 30, 1996:
First Quarter............................................................. $ 15.88 $11.88
Second Quarter............................................................ $ 13.88 $ 7.88
Third Quarter............................................................. $ 10.13 $ 8.00
Fourth Quarter............................................................ $ 12.38 $ 8.63
Fiscal Year Ended June 30, 1997:
First Quarter............................................................. $ 14.50 $ 8.88
Second Quarter............................................................ $ 26.50 $12.88
Third Quarter............................................................. $ 22.38 $10.38
Fourth Quarter............................................................ $ 11.88 $ 7.88
Fiscal Year Ending June 30, 1998:
First Quarter (through July 31, 1997)..................................... $ 17.31 $10.25
</TABLE>
On July 25, 1997, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, according to published
sources, the last reported sale price of the Common Stock on the Nasdaq National
Market was $14.00 per Share. On July 31, 1997, the last full day of trading
before the commencement of the Offer, according to published sources, the last
reported sale price of the Common Stock
9
<PAGE> 14
on the Nasdaq National Market was $16.875 per Share. STOCKHOLDERS ARE URGED TO
OBTAIN A CURRENT MARKET QUOTATION FOR THE COMMON STOCK.
7. CERTAIN INFORMATION CONCERNING THE COMPANY
General
The Company is a Delaware corporation with its principal offices located at
2950 Zanker Road, San Jose, California 95134.
The Company is a leading supplier of highly integrated semiconductor and
software solutions to personal computer manufacturers. The Company's solutions
provide enhanced graphics, video and other advanced display capabilities,
primarily for portable computers. The Company is currently the world's leading
supplier of graphics and video controllers for portable computers. Some of the
Company's customers are ACER, Apple Computer, DEC, Hewlett Packard, IBM, NEC and
Toshiba.
Available Information
The Shares are registered under the Exchange Act. Accordingly, the Company
is subject to the informational filing requirements of the Exchange Act and, in
accordance therewith, is required to file periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Certain information, as of particular dates,
concerning the Company's directors and officers (including their remuneration,
stock options granted to them and shares held by them), the principal holders of
the Company's securities, and any material interest of such persons in
transactions with the Company is required to be disclosed in proxy statements
and annual reports distributed to the Company's stockholders and filed with the
Commission. Such reports, proxy statements and other information are available
for inspection and copying at the public reference facilities of the Commission
located in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the regional offices of the Commission located in Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of this material may also
be obtained by mail, upon payment of the Commission's customary fees from the
Commission's principal office at 450 Fifth Street. N.W., Washington, D.C. 20549.
The Commission also maintains an Internet site on the World Wide Web at
<http://www.sec.gov> that contains reports, proxy statements and other
information. In addition, such material should also be available for inspection
at The Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
Summary Financial Information
The following table sets forth certain summary consolidated financial
information with respect to the Company and its consolidated subsidiaries
derived from the audited financial statements contained in the Company's 1996
Annual Report on Form 10-K and the unaudited financial statements contained in
the Company's Quarterly Reports on Form 10-Q dated March 31, 1996 and March 31,
1997. The summary below is qualified by reference to such document (which may be
inspected and obtained as described above under "Available Information"),
including the financial statements and related notes contained therein.
10
<PAGE> 15
THE COMPANY AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEAR ENDED
----------------------- ----------------------------------
MARCH 31, MARCH 31, JUNE 30, JUNE 30, JUNE 30,
1997 1996 1996 1995 1994
--------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Net Sales........................ $ 130,476 $ 111,992 $150,788 $104,731 $ 73,444
Gross margin..................... 61,072 43,776 60,936 39,856 26,480
Operating Income (loss).......... 24,515 13,531 19,495 9,748 (1,077)
Net income....................... 27,474 19,821 25,750 9,388 2,714
Net income per share: (1)........ 1.19 0.91 1.18 0.47 0.16
Shares used in computing net
income per share (1).......... 23,079 21,905 21,791 20,182 16,623
</TABLE>
<TABLE>
<CAPTION>
AT MARCH 31,
----------------------- AT JUNE
1997 1996 30, 1996
--------- --------- --------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and Short-term
investments................... $ 79,771 $51,572 $ 59,345
Current assets..................... 108,083 72,717 84,305
Total assets..................... 141,406 97,978 108,071
Current liabilities.............. 21,202 18,912 23,886
Long-term debt................... 959 1,307 796
Total shareholders' equity....... 119,245 77,759 83,389
Shares outstanding at end of
period........................ 21,953 20,472 20,620
</TABLE>
- - ---------------
(1) Fully diluted earnings per share and shares used in computing fully diluted
earnings per share were not materially different from primary earnings per
share and shares used in computing primary earnings per share.
Except as otherwise noted in this Offer to Purchase, all of the information
with respect to the Company set forth in this Offer to Purchase has been derived
from publicly available information. Although Purchaser has no knowledge that
any such information is untrue, Purchaser takes no responsibility for the
accuracy or completeness of information contained in this Offer to Purchase with
respect to the Company or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information.
Certain Recent Developments
On July 17, 1997, the Company announced that for its fiscal year ended June
30, 1997 ("Fiscal 1997"), it had revenues of $168,000,000 compared to the
$151,000,000 reported for its fiscal year ended June 30, 1996 ("Fiscal 1996").
It also reported Fiscal 1997 net income of $36,200,000 or $1.58 per share
compared to the $25,800,000 or $1.18 per share reported in Fiscal 1996. The
Company reported that Fiscal 1997 results include gains from the sale of shares
of Advanced Micro Devices, Inc. of $3,100,000, or $0.13 per share, in the
quarter ended March 31, 1997 and $3,700,000, or $0.16 per share, in the quarter
ended June 30, 1997.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND INTEL
Purchaser is a Delaware corporation with its principal executive offices
located at 2200 Mission College Boulevard, Santa Clara, California 95052-8119.
Purchaser is a wholly-owned subsidiary of Intel which was organized to acquire
the Company and has not conducted any unrelated activities since its
organization. Purchaser is acting with the consent of the Company on behalf of
Intel in making the Offer. The making of the Offer is Intel's responsibility
under the terms of the Merger Agreement and the making of the Offer by Purchaser
does not in any way reduce Intel's obligations, duties and liabilities under the
Merger Agreement.
11
<PAGE> 16
Intel is a Delaware corporation with its principal office located at 2200
Mission College Boulevard, Santa Clara, California 95052-8119. Intel and its
subsidiaries operate mainly in one industry segment. Intel designs, develops,
manufactures and markets microcomputer components and related products at
various levels of integration. Intel's principal components consist of
silicon-based semiconductors etched with complex patterns of transistors. Each
one of these integrated circuits can perform the functions of thousands--some
even millions--of individual transistors, diodes, capacitors and resistors.
Set forth below is certain selected consolidated financial information with
respect to Intel and its subsidiaries excerpted from the information contained
in Intel's 1996 Annual Report to Stockholders (the "Intel 1996 Annual Report")
and Intel's Quarterly Report on Form 10-Q for the quarter ended March 29, 1997
(the "Intel 1997 10-Q"). More comprehensive financial information is included in
the Intel 1996 Annual Report, the Intel 1997 10-Q and other documents filed by
Intel with the Commission, and the following summary is qualified in its
entirety by reference to the Intel 1996 Annual Report, the Intel 1997 10-Q and
such other documents and all the financial information (including any related
notes) contained therein. The Intel 1996 Annual Report, the Intel 1997 10-Q and
such other documents should be available for inspection and copies thereof
should be obtainable in the manner set forth below under "Available
Information."
INTEL CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
------------------------------------------ -----------------------
DECEMBER 28, DECEMBER 30, DECEMBER 31, MARCH 29, MARCH 30,
1996 1995 1994 1997 1996
------------ ------------ ------------ ----------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Summary of Earnings Data:
Net revenues........................ $ 20,847 $ 16,202 $ 11,521 $ 6,448 $ 4,644
Operating income.................... $ 7,553 $ 5,252 $ 3,387 $ 2,867 $ 1,305
Net income.......................... $ 5,157 $ 3,566 $ 2,288 $ 1,983 $ 894
Earnings per common and common
equivalent share(1).............. $ 2.90 $ 2.02 $ 1.31 $ 1.10 $ 0.51
</TABLE>
<TABLE>
<CAPTION>
AT AT AT
DECEMBER 28, DECEMBER 30, MARCH 29,
1996 1995 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Total assets....................... $ 23,735 $ 17,504 $ 25,102
Total current liabilities.......... $ 4,863 $ 3,619 $ 5,501
Total liabilities.................. $ 6,863 $ 5,364 $ 7,994
Total stockholders' equity......... $ 16,872 $ 12,140 $ 17,108
</TABLE>
- - ---------------
(1) Per share numbers have been restated to reflect a 2 for 1 stock split
effected as a special stock distribution and paid July 13, 1997.
Available Information. Intel is subject to the informational requirements
of the Exchange Act and, in accordance therewith, files reports relating to its
business, financial condition and other matters. Information, as of particular
dates, concerning Intel's directors and officers, their remuneration, stock
options and other matters, the principal holders of Intel's securities and any
material interest of such persons in transactions with Intel is required to be
disclosed in proxy statements distributed to Intel's stockholders and filed with
the Commission. Such reports, proxy statements and other information should be
available for inspection at the Commission and copies thereof should be
obtainable from the Commission in the same manner as is set forth with respect
to the Company in Section 7.
12
<PAGE> 17
The name, business address, citizenship, present principal occupation or
employment and five-year employment history of each of the executive officers of
Intel and Purchaser are set forth in Schedule I hereto.
Except as described in this Offer to Purchase (i) none of Intel or
Purchaser nor, to the best of Intel's and the Purchaser's knowledge, any of the
persons listed in Schedule I hereto, or any associate or majority-owned
subsidiary of Intel or any of the persons so listed, beneficially owns or has
any right to acquire directly or indirectly any Shares or has any contract,
arrangement, understanding or relationship with any other person with respect to
any Shares, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
Shares, joint ventures, loan or option arrangements, puts or calls, guaranties
of loans, guaranties against loss, or the giving or withholding of proxies, and
(ii) none of Intel or Purchaser nor to the best knowledge of Intel and
Purchaser, any of the other persons referred to above, or any of the respective
directors, executive officers or subsidiaries of any of the foregoing, has
effected any transaction in the Shares during the past 60 days.
Except as set forth in this Offer to Purchase, since June 30, 1994, neither
Intel or Purchaser nor, to the best knowledge of Intel and Purchaser, any of the
persons listed on Schedule I hereto, has had any transaction with the Company or
any of its executive officers, directors or affiliates that is required to be
reported under the rules and regulations of the Commission applicable to the
Offer. Except as set forth in this Offer to Purchase, since June 30, 1994 there
have been no contracts, negotiations or transactions between Intel, or any of
its subsidiaries or, to the best knowledge of Intel and Purchaser, any of the
persons listed in Schedule I to this Offer to Purchase, on the one hand, and the
Company or its affiliates, on the other hand, concerning a merger, consolidation
or acquisition; a tender offer for or other acquisition of securities of any
class of the Company; an election of directors of the Company; or a sale or
other transfer of a material amount of assets of the Company or any of its
subsidiaries.
9. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by Purchaser to purchase the Shares will
be approximately $416 million. Purchaser plans to obtain all funds needed for
the Offer through a capital contribution, which will be made by Intel to
Purchaser at the time the Shares tendered pursuant to the Offer are accepted for
payment. Intel intends to use its available cash on hand to make this capital
contribution. Neither the Offer nor the Merger is conditioned on obtaining
financing.
10. CERTAIN TRANSACTIONS BETWEEN INTEL AND THE COMPANY
Intel has been developing a graphics component for the desktop PC market
segment. Under an agreement with Lockheed-Martin Corporation dated May 3, 1996,
the Company is the identified subcontractor for providing 2D and video
engineering elements for that project. The project is expected to be completed
by December, 1997. As consideration for the 2D and video technology being
licensed, Intel agreed to pay a royalty to Lockheed-Martin Corporation for the
products sold under the agreement and Lockheed-Martin Corporation agreed to pay
the Company a portion of those royalties received from Intel as compensation for
the Company's 2D and video technology. Intel is discussing with Lockheed-Martin
Corporation amending the royalty provisions to take on the direct obligation to
pay royalties on the Intel parts to the Company, rather than having those
royalties flow through Lockheed-Martin Corporation.
Intel and the Company have a standing Confidential Non-Disclosure Agreement
(the "CNDA"). As part of normal business practices with independent hardware
vendors to the PC industry, Intel will discuss technology trends so that
PC-system providers are better served. Under the CNDA, Intel has discussed
certain technology trends related to mobile PC systems technology with the
Company.
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER AND THE MERGER
On May 8, 1997, an initial meeting was held in San Jose, California.
Attending the meeting on behalf of Intel were Leslie Vadasz, Senior Vice
President of Corporate Business Development and a member of Intel's Board of
Directors; Arvind Sodhani, Vice President and Treasurer; Stephen Nachtsheim,
Vice President and Larry Palley, Director of Business Development, Platform
Components Division. Jim Stafford, the President and Chief Executive Officer of
the Company, attended the meeting on behalf of the Company. The
13
<PAGE> 18
representatives from each company discussed the plans and goals of their
respective companies in order to determine whether or not the parties had mutual
interests and should proceed with further discussions.
On June 5, 1997, Pat Gelsinger, Vice President; Stephen Nachtsheim, Randy
Tinsley, Assistant Treasurer responsible for Mergers & Acquisitions and Larry
Palley of Intel met with Mr. Stafford, Morris Jones, Chief Technical Officer,
Tim Christofferson, Chief Financial Officer, Jeffery Anne Tatum, General
Counsel, and Larry Roffelson, Vice President of Engineering at the Company's
headquarters in San Jose, California to learn more about the Company's business.
Following this meeting, Messrs. Gelsinger, Tinsley and Palley met with Messrs.
Stafford and Jones to discuss generally the goals and objectives of a possible
acquisition of the Company by Intel and some of the potential general terms and
conditions that might apply to such a transaction.
On June 17, 1997, Randy Tinsley visited Jim Stafford at the Company's
headquarters in San Jose, California and with Pat Gelsinger participating by
telephone discussed in more detail potential terms and conditions of an
acquisition of the Company by Intel.
On June 25, 1997 Pat Gelsinger and Randy Tinsley met with Jim Stafford,
Jeffery Anne Tatum and representatives from Hambrecht & Quist in San Jose,
California to discuss issues surrounding valuation of the Company.
On July 10, 1997, Leslie Vadasz and Randy Tinsley met with Jim Stafford at
the Company's headquarters in San Jose, California to further discuss issues
surrounding valuation of the Company in the context of an acquisition of the
Company by Intel.
On July 15, 1997, Jim Stafford met with Leslie Vadasz, Arvind Sodhani and
Randy Tinsley at Intel's headquarters in Santa Clara, California to further
discuss issues related to valuation and structure of a possible acquisition of
the Company by Intel.
On July 16, 1997, Intel's Board of Directors reviewed the proposed
transaction and granted authority to management to seek to negotiate and execute
a binding agreement within certain guidelines. Following the meeting of the
Board of Directors, Randy Tinsley spoke with Jim Stafford and provided to him
the possible terms and conditions for a potential acquisition of the Company by
Intel. Later that evening, Mr. Stafford informed Mr. Tinsley that the Company's
board had instructed him to inform Intel that such terms and conditions were not
acceptable to the Company.
On July 17 and 18, 1997, representatives of Hambrecht & Quist LLC had
discussions with representatives of Intel.
On July 19, 1997 and July 20, 1997, Leslie Vadasz and Jim Stafford spoke
several times by telephone, discussing the price and structure of a possible
acquisition of the Company by Intel.
On July 21, 1997, Leslie Vadasz, Arvind Sodhani and Randy Tinsley met with
Jim Stafford and Jeffery Anne Tatum to discuss issues surrounding valuation of
the Company in the context of a purchase of the Company by Intel. Late in the
evening of July 21, 1997, Mr. Stafford and Mr. Vadasz spoke by telephone and
concluded that if an acquisition were to occur, it would have to be at a price
of $17.50 per Share.
Beginning July 22, 1997 and until the signing of the Merger Agreement on
July 27, 1997, representatives of Intel and the Company met daily to complete
negotiations of the terms and conditions of an acquisition and to draft an
acquisition agreement.
At a meeting on July 27, 1997, the Board of Directors of the Company
unanimously approved the Offer and the Merger. At the same meeting, the Board
unanimously (a) determined that the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, taken together, are
fair to and in the best interests of the Company's stockholders, (b) adopted and
approved the Merger Agreement and authorized the execution thereof by the
Company, and (c) recommended that the Company's stockholders accept the Offer,
tender their Shares thereunder and, if required by applicable law, adopt and
approve the Merger Agreement.
12. PURPOSE OF THE OFFER; THE MERGER AGREEMENT
Purpose and Structure. The purpose of the Offer is for Intel to acquire the
entire equity interest in the Company. The purpose of the Merger is for Intel to
acquire all of the equity interest in the Company not acquired pursuant to the
Offer. Upon consummation of the Merger, the Company will become a direct,
wholly-owned subsidiary of Intel. The acquisition of the entire equity interest
in the Company has been
14
<PAGE> 19
structured as a cash tender offer followed by a cash merger in order to provide
a prompt transfer of ownership of the equity interest in the Company held by the
Company's stockholders from them to Intel and to provide them with cash for all
of their Shares.
Under the DGCL, the approval of the Board and, under certain circumstances,
the affirmative vote of the holders of a majority of the outstanding Shares are
required to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger. If Intel acquires a majority of the
Shares, it will have sufficient voting power to cause the approval and adoption
of the Merger Agreement and the transactions contemplated thereby without the
affirmative vote of any other stockholder of the Company.
In the Merger Agreement, the Company has agreed to take all action
necessary to convene a special meeting of its stockholders as promptly as
practicable after the consummation of the Offer for the purpose of considering
and taking action on the Merger Agreement and the transactions contemplated
thereby, if such action is required under the DGCL. Intel has agreed that all
Shares owned by it and any of its affiliates will be voted in favor of the
Merger Agreement and the transactions contemplated thereby.
Under the DGCL, if, following consummation of the Offer, Intel owns at
least 90% of the Shares then outstanding, Intel will be able to cause the Merger
to occur without a vote of the Company's stockholders. In such event, Intel and
the Company have agreed to take all necessary and appropriate action to cause
the Merger to become effective as soon as reasonably practicable after
consummation of the Offer without a meeting of the Company's stockholders. If,
following consummation of the Offer, Intel owns less than 90% of the Shares then
outstanding, a vote of the Company's stockholders will be required under the
DGCL to approve the Merger, and a significantly longer period of time will be
required to effect the Merger. See "THE TENDER OFFER--15. Certain Conditions of
the Offer." However, if following consummation of the Offer, Intel owns less
than 90% of the Shares then outstanding, the Company has granted Intel an option
to purchase up to that number of authorized and unissued Shares which equals
19.99% of the Shares outstanding immediately prior to the exercise of such
option. The purchase of Shares pursuant to such Option may, under certain
circumstances, allow Intel to increase its ownership of Shares above 90% in
order to consummate the Merger without a vote of the stockholders of the
Company. In addition, Intel reserves the right to purchase additional Shares in
the open market.
The Merger Agreement
The following summary of certain provisions of the Merger Agreement is
presented only as a summary and is qualified in its entirety by reference to the
Merger Agreement, a copy of which is attached to the Schedule 14D-1.
The Offer. The Merger Agreement provides for the making of the Offer.
Purchaser is acting with the consent of the Company on behalf of Intel in making
the Offer. The making of the Offer is Intel's responsibility under the terms of
the Merger Agreement and the making of the Offer by Purchaser does not in any
way reduce Intel's obligations, duties and liabilities under the Merger
Agreement. Intel's obligation to accept for payment or pay for Shares is subject
to the satisfaction of the conditions that are described in "THE TENDER
OFFER--15. Certain Conditions of the Offer." Pursuant to the Merger Agreement,
Intel expressly reserves the right to waive any of the conditions to the Offer,
to the extent permitted by applicable law, and to make any change in the terms
or conditions of the Offer; provided that, without the written consent of the
Company, Intel may not decrease the Offer Price, modify the Minimum Condition,
change the form of consideration payable, decrease the number of Shares sought,
amend the conditions to the Offer to broaden the scope of such conditions, amend
any other term of the Offer in a manner adverse to the holders of Shares or
extend the Offer (except as permitted by the Merger Agreement) in any manner
that is materially adverse to the holders of Shares. Notwithstanding the
foregoing, Intel may (i) extend the expiration date from time to time if at the
date of the Offer all conditions to the Offer have not been satisfied or waived,
(ii) extend the Offer for any period required by any rule, regulation,
interpretation or position of the Commission applicable to the Offer, and (iii)
extend the Offer for any reason on one or more occasions for an aggregate period
of not more than twenty (20) business days beyond the latest Expiration Date
that would otherwise be permitted as described in clauses (i) or (ii) of this
sentence if on such expiration date there shall not have been tendered at
15
<PAGE> 20
least 90% of the outstanding Shares. If all conditions to the Offer are not
satisfied but are reasonably capable of being satisfied, Intel shall extend the
Offer until the waiver or the satisfaction of such conditions; provided that
Intel shall not be required to extend the Offer beyond October 31, 1997.
The Merger. As soon as practicable after the satisfaction or waiver of the
conditions to the Merger, Purchaser will be merged with and into the Company, as
a result of which the separate corporate existence of Purchaser will cease and
the Company will continue as the Surviving Corporation. The Effective Time will
occur at the date and time that a certificate of merger in such form as is
required by, and executed in accordance with, the relevant provisions of
Delaware Law (the "Certificate of Merger") is filed with the Secretary of State
of the State of Delaware. The Surviving Corporation shall continue its corporate
existence under the laws of the State of Delaware. In the Merger, each
outstanding Share (other than Shares held by Intel, Purchaser or any other
subsidiary of Intel or held in the treasury of the Company or by any subsidiary
of the Company, which will be canceled and retired without any payment with
respect thereto, or Shares with respect to which the holder properly exercises
such holder's dissenters' rights under the DGCL) will be converted into the
right to receive the Offer Price, without interest thereon (the "Merger
Consideration"). Each share of common stock of Purchaser issued and outstanding
immediately prior to the Effective Time will be converted into one share of
common stock of the Surviving Corporation. The Certificate of Incorporation of
the Company at the Effective Time will be the Certificate of Incorporation of
the Surviving Corporation until modified in accordance with applicable law. The
Bylaws of Purchaser in effect at the Effective Time shall be the Bylaws of the
Surviving Corporation. The directors of Purchaser at the Effective Time will be
the directors of the Surviving Corporation until their successors are duly
elected and qualified, and the officers of the Company at the Effective Time
will be the officers of the Surviving Corporation until replaced in accordance
with the Bylaws of the Surviving Corporation.
Stockholders' Meeting. The Merger Agreement provides that, if required by
applicable law, the Company, acting through the Board, will call a meeting of
its stockholders to be held as promptly as practicable following the acceptance
for payment of Shares pursuant to the Offer for the purpose of considering and
voting on the approval of the Merger and adoption of the Merger Agreement. Under
the Merger Agreement, Intel has agreed to vote, or cause to be voted, at any
such meeting all Shares owned by it, Purchaser or any other subsidiary of Intel
in favor of the Merger.
Representations and Warranties. The Merger Agreement contains various
representations and warranties of the parties thereto. These include
representations and warranties of the Company with respect to corporate
existence and power, capitalization, subsidiaries, corporate authorization
relative to the Merger Agreement, governmental consents and approvals,
Commission reports, financial statements, documents relating to the Offer and
the Merger, the Rights Agreement and other matters. Intel and Purchaser have
also made certain representations and warranties with respect to corporate
existence and power, corporate authorization relative to the Merger Agreement,
governmental consents and approvals, documents relating to the Offer and the
Merger, financing of the Offer and the Merger, and other matters.
Conduct of Business Pending the Merger. The Company has agreed that, prior
to the acceptance for payment and purchase of Shares pursuant to the Offer,
unless Intel shall otherwise agree, or as otherwise contemplated in the Merger
Agreement, (i) the business of the Company and its subsidiaries will be
conducted only in the ordinary and usual course, (ii) the Company will not,
among other things, (a) sell or pledge or agree to sell or pledge any stock
owned by it or any of its subsidiaries, (b) amend its Certificate of
Incorporation or Bylaws, or (c) split, combine or reclassify the outstanding
Shares or (d) declare, set aside or pay any dividend payable in cash, stock or
property with respect to the Shares, and (iii) neither the Company nor any of
its subsidiaries will, except under certain circumstances as set forth in the
Merger Agreement, (a) issue or agree to issue any additional shares of, or
rights of any kind to acquire any shares of, its capital stock of any class
other than Shares issuable pursuant to presently outstanding Options, (b)
transfer property or assets, (c) assume the obligations of any other person, (d)
make any loans to any other person, (e) make any capital expenditures in excess
of certain limits, (f) enter into employment agreements except for agreements
with certain employees, (g) enter into or amend any compensation or benefit
plan, (h) change any accounting principles or practices, (j) compromise any
material claims; (k) make a tax election, (l) take any action which would cause
the representations and warranties contained in the Merger Agreement to become
16
<PAGE> 21
untrue, or (m) enter into any contract, agreement, commitment or arrangement
with respect to any of the foregoing.
Conditions to the Merger. The obligation of each of the Company, Intel and
Purchaser to consummate the Merger is subject to the satisfaction or waiver of
each of the following conditions: (i) the Merger Agreement and the transactions
contemplated thereby shall have been approved and adopted by the requisite vote
of the stockholders, if such vote is required by applicable law, (ii) any
governmental consents or approvals required to consummate the Merger shall have
been obtained (except where the failure to obtain such consents or approvals
would not have a material adverse effect on (a) the Company and its
subsidiaries, taken as a whole, or (b) Intel's ability to consummate the
transactions contemplated by the Merger Agreement), and (iii) no statute, rule,
regulation, decree, order or injunction shall have been promulgated, enacted,
entered or enforced by any United States governmental agency or authority or
court which remains in effect and prohibits, restrains, enjoins or restricts the
consummation of the Merger or makes the acquisition or holding by Intel, its
subsidiaries or affiliates of the Shares or the shares of common stock of the
Surviving Corporation illegal. The obligations of Intel and Purchaser to effect
the Merger are also subject to (i) the representations and warranties of the
Company being true as of the closing date of the Merger, and (ii) the Company
having complied with the obligations to be performed by it under the Merger
Agreement. The obligations of the Company to complete the Merger is also subject
to (i) the representations and warranties of Intel and Purchaser being true as
of the closing date of the Merger, and (ii) each of Intel and Purchaser having
performed its obligations to be performed by it under the Merger Agreement.
Third Party Acquisition. Pursuant to the Merger Agreement, the Company has
agreed it will not initiate, solicit or otherwise encourage or facilitate any
proposal for a Third Party Acquisition (as defined) of the Company. The Company
also agreed not to provide confidential information or engage in discussion with
any person regarding a Third Party Acquisition unless required to do so in order
to comply with the fiduciary duties of the Board of Directors of the Company.
The Company agreed to promptly notify Intel regarding any proposals,
negotiations or inquiries regarding a Third Party Acquisition. The Company may
only accept a proposal regarding a Third Party Acquisition if (i) the Board of
Directors of the Company determines in good faith that it is necessary to do so
in order to comply with its fiduciary duties, (ii) such proposal, among other
things, is reasonably capable of being completed and is more favorable to the
Company's shareholders than the Merger, (iii) the Company has provided written
notice to Intel regarding the material terms of such proposed Third Party
Acquisition, (iv) Intel has not, within five business days of receiving such
notice, made an offer which is as favorable to the Company's stockholders as
such proposal, and (v) the Company has made the first payment to Intel described
in the last sentence of the following paragraph.
Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether before or after stockholder approval thereof, (i) by
the mutual consent of Intel and the Company; (ii) by either Intel or the Company
if any non-appealable order has been entered permanently restraining the Merger;
(iii) by the Company if, (a) prior to the purchase of Shares pursuant to the
Offer, the Company enters into a definitive agreement providing for an
acquisition of the Company by a third party on terms superior to the Offer and
the Company makes the first payment described in the last sentence of this
paragraph, (b) Intel breaches or fails in any material respect to perform or
comply with any of the material covenants and agreements in the Merger Agreement
or breaches its representations and warranties in any material respect and such
failure is not cured prior to the earlier of twenty days after notice of such
breach is given or two days before the Offer expires, or (c) after October 31,
1997, Intel fails to purchase any Shares pursuant to the Offer, provided that
the Company is not in material breach of the Merger Agreement; or (iv) by Intel
if, (a) prior to the purchase of Shares pursuant to the Offer, the Board of
Directors of the Company shall have withdrawn, or modified or changed in a
manner adverse to Intel, its approval or recommendation of the Offer, the Merger
Agreement or the Merger, (b) it shall have terminated the Offer without
purchasing any Shares thereunder, provided that Intel has not failed to purchase
the Shares in the Offer in breach of the terms thereof, (c) there has been a
material breach by the Company of any representation, warranty, covenant or
agreement that is not cured within twenty days after notice of such breach is
given, and (d) after January 15, 1998, the Merger has not been consummated and
no material breach of the Merger Agreement by Intel is the proximate cause of
such failure to consummate the Merger.
17
<PAGE> 22
Upon the termination of the Merger Agreement under certain circumstances where a
proposal for a Third Party Acquisition has been made, the Company shall pay to
Intel $5,000,000 and, if a Third Party Acquisition is consummated, an additional
$8,000,000.
Amendment and Waiver. The Merger Agreement can only be amended by a
written agreement executed by the parties.
Expenses. Except as described below, each party will bear its own expenses
in connection with the Offer and the Merger. Upon termination of the Merger
Agreement, under certain circumstances the Company has agreed to pay Intel
$2,000,000 to reimburse Intel for its costs and expenses in connection with the
Offer and the Merger.
Rights Agreement. The Board of Directors of the Company has made a
determination that the Merger Agreement and the transactions contemplated
thereby are at a price and on terms which are adequate and are otherwise in the
best interests of the Company and its stockholders. Therefore, the Offer is a
Permitted Offer (as defined in the Rights Agreement) and the Rights shall expire
upon the consummation of the Merger.
Interests of Certain Persons in the Merger
Except as described below, each outstanding stock option (an "Option")
granted under the Company's Amended and Restated 1994 Stock Option Plan will be
assumed and converted in accordance with the terms of the Merger Agreement and
the Amended and Restated 1994 Stock Option Plan into options to purchase shares
of common stock of Intel (an "Intel Option"). Each Option to purchase a share
will be converted into an Intel Option to purchase 0.197656 shares of Intel's
common stock and the Option's exercise price will be adjusted so that the
exercise price per share of an Intel Option will equal the current Option's per
share exercise price divided by 0.197656. Unvested Options to purchase 4,922
Shares held by one Director of the Company will not be assumed because the
vesting of such Options will be accelerated in connection with the Merger.
It is anticipated that ten of the Company's executive officers and senior
staff members will enter into employment agreements with Intel. Under these
agreements unvested Options (and possibly vested Options) granted under the
Amended and Restated 1994 Stock Option Plan held by such employees will not be
converted into Intel Options. Instead they will be terminated voluntarily by the
holders thereof at the effective time of the Merger in exchange for the
establishment of non-qualified deferred compensation accounts which will vest on
a schedule corresponding to the vesting schedule of their terminated Options.
The employment agreements will provide for the immediate vesting of such
non-qualified deferred compensation accounts upon the termination for any reason
of such executive's employment. The deferred compensation accounts will be in
amounts in each case equal to the difference between $17.50 and the exercise
price of the executive's Options multiplied by the number of Shares covered by
the executive's Options. The value of the deferred compensation accounts (based
solely upon the value of unvested Options) for the five most highly compensated
executive officers of the Company will be approximately as follows: Mr. Stafford
($1,287,000); Mr. Angelo ($497,023); Mr. Christopher ($452,909); Mr. Jones
($452,917); and Mr. Roffelsen ($497,023).
The Merger Agreement does not provide for the assumption of any options
issued under the Company's Amended and Restated Employee Stock Purchase Plan or
the Company's First Amended 1988 Non-Qualified Stock Option Plan for Outside
Directors. However, the vesting of unvested options issued under the Company's
First Amended 1988 Non-Qualified Stock Option Plan for Outside Directors will be
accelerated prior to the Merger. All options issued and outstanding under the
Company's Amended and Restated Employee Stock Purchase Plan have already vested
according to the terms of such plan. All options issued under the Company's
First Amended 1988 Non-Qualified Stock Option Plan for Outside Directors and the
Company's Amended and Restated Employee Stock Purchase Plan will terminate
unless exercised prior to the Merger.
As noted above, it is anticipated that ten of the Company's executive
officers and senior staff will enter into employment agreements relating to the
period following the Merger. Although these agreements have not yet been
finalized, it is anticipated that they will generally have terms of from six
months to two years, provide
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<PAGE> 23
for transition bonuses and will contain severance provisions providing for
payments of up to one year's salary in connection with certain terminations of
employment. Because the compensation packages historically offered by the
Company and the compensation packages offered by Intel differ in a number of
material respects, comparisons between the compensation paid by the Company and
the compensation paid by Intel are difficult. However, it is anticipated that
the salary components of such packages will be roughly comparable and the
bonuses in the Intel compensation package may, depending on the performance of
Intel, result in increased compensation to such employees.
Pursuant to the Merger Agreement, the Surviving Corporation (or any
successor) will indemnify, defend and hold harmless the present and former
officers and directors of the Company and its subsidiaries against all losses,
claims, damages, liabilities, fees, costs and expenses arising out of actions or
omissions to the full extent permitted under Delaware law, subject to the
Company's Certificate of Incorporation, Bylaws and indemnification agreements,
all as in effect on the date of the Merger Agreement. In addition, for not less
than six years after the Effective Time, Intel or the Surviving Corporation
shall maintain the Company's existing officers' and directors' liability
insurance (subject to certain maximum premium payments) or the Company, subject
to certain limitations, may purchase such insurance prior to the consummation of
the Merger.
Rights Of Stockholders In The Merger
No appraisal rights are available in connection with the Offer. If the
Merger is consummated, however, stockholders of the Company who have not sold
their Shares will have certain rights under the DGCL to dissent and demand
appraisal of, and to receive payment in cash of the fair value of, their Shares.
Stockholders who perfect such rights by complying with the procedures set forth
in Section 262 of the DGCL ("Section 262") will have the fair value of their
Shares (exclusive of any element of value arising from the accomplishment or
expectation of the Merger) determined by the Delaware Court of Chancery and will
be entitled to receive a cash payment equal to such fair value from the
Surviving Corporation. In addition, such dissenting stockholders would be
entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court is required
to take into account all relevant factors. Accordingly, such determination could
be based upon considerations other than, or in addition to, the market value of
the Shares, including, among other things, asset values and earning capacity. In
Weinberger v. UOP, Inc., the Delaware Supreme Court stated that "proof of value
by any techniques or methods which are generally considered acceptable in the
financial community and otherwise admissible in court" should be considered in
an appraisal proceeding. The Weinberger court also noted that under Section 262,
fair value is to be determined "exclusive of any element of value arising from
the accomplishment or expectation of the merger." In Cede & Co. v. Technicolor,
Inc., however, the Delaware Supreme Court stated that, in the context of a
two-step cash merger, "to the extent that value has been added following a
change in majority control before cash-out, it is still value attributable to
the going concern," to be included in the appraisal process. As a consequence of
the foregoing, the fair value determined in any appraisal proceeding could be
the same as or more or less than the Merger Consideration.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SECTION 262 INCLUDED
HEREWITH IN ANNEX A. THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS ARE
CONDITIONED ON STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL.
Going Private Transactions
The Merger would have to comply with any applicable Federal law operating
at the time of its consummation. Rule 13e-3 under the Exchange Act is applicable
to certain "going private" transactions. Purchaser does not believe that Rule
13e-3 will be applicable to the Merger unless the Merger is consummated more
than one year after the Offer. If applicable, Rule 13e-3 would require, among
other things,
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<PAGE> 24
that certain financial information concerning the Company and certain
information relating to the fairness of the Merger and the consideration offered
to minority stockholders be filed with the Commission and disclosed to minority
stockholders prior to the consummation of the Merger.
13. DIVIDENDS AND DISTRIBUTIONS
According to the Company's 1996 Annual Report on Form 10-K, the Company has
not paid cash dividends to date and intends to retain any future earnings for
use in its business. Pursuant to the terms of the Merger Agreement, the Company
will not split, combine or reclassify the outstanding Shares or declare, set
aside or pay any dividend payable in cash, stock or property with respect to the
Shares.
If on or after the date of the Merger Agreement the Company should declare
or pay any cash or stock dividend or other distribution on, or issue any rights
with respect to, the Shares, payable or distributable to stockholders of record
on a date prior to the transfer to the name of Purchaser or its nominees or
transferees on the Company's stock transfer records of the Shares purchased
pursuant to the Offer, then, without prejudice to Purchaser's rights under
Section 15 of this Offer to Purchase, (i) the purchase price per Share payable
by Purchaser pursuant to the Offer may, in the sole discretion of Purchaser, be
reduced by the amount of any such cash dividend or distribution, and (ii) any
non-cash dividend, distribution or right to be received by the tendering
stockholders will (a) be received and held by the tendering stockholders for the
account of Purchaser and will be required to be promptly remitted and
transferred by each tendering stockholder to the Depositary for the account of
Purchaser, accompanied by appropriate documentation of transfer, or (b) at the
direction of Purchaser, be exercised for the benefit of Purchaser, in which case
the proceeds of such exercise will promptly be remitted to Purchaser. Pending
such remittance, Purchaser will be entitled to all rights and privileges as
owner of any such non-cash dividend, distribution or right or such proceeds and
may withhold the entire purchase price or deduct from the purchase price the
amount or value thereof, as determined by Purchaser in its sole discretion.
14. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; NASDAQ NATIONAL MARKET AND
EXCHANGE ACT REGISTRATION
The purchase of Shares by Purchaser pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and the number of holders
of Shares and could thereby adversely affect the liquidity and market value of
the remaining publicly held Shares.
Nasdaq National Market Listing
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the standards for continued inclusion on the Nasdaq
National Market. According to the Nasdaq National Market's current published
guidelines, the Shares would not be eligible to be included for continued
listing if, among other things, the number of publicly held Shares falls below
200,000, the number of holders of Shares falls below 400 or the aggregate market
value of such publicly held Shares falls below $1,000,000. If these standards
are not met, the Shares would no longer be admitted to quotation on the Nasdaq
National Market. In that event, the Shares might continue to be listed on the
Nasdaq SmallCap Market, but if the number of holders of the Shares falls below
300, or if the number of publicly held shares falls below 100,000, or if the
aggregate market value of such publicly held Shares does not exceed $200,000 or
there are not at least two registered and active market makers, one of which may
be a market maker entering a stabilizing bid, the Nasdaq SmallCap Market rules
provide that the securities would no longer qualify for inclusion in the Nasdaq
SmallCap Market and the Nasdaq SmallCap Market would cease to provide any
quotations. Shares held directly or indirectly by an officer or director of the
Company or by a beneficial owner of more than 10% of the Shares will ordinarily
not be considered as being publicly held for purposes of these standards. Nasdaq
has published proposed listing guidelines which, if adopted, would increase the
requirements for listing of securities on the Nasdaq National Market and the
Nasdaq SmallCap Market. In the event the Shares are no longer eligible for the
Nasdaq National Market or Nasdaq SmallCap Market quotation, quotations might
still be available from other sources. However, the extent of the public market
for the Shares and the availability of such quotations would depend upon the
number of holders of such Shares remaining at such time, the interest
20
<PAGE> 25
in maintaining a market in such Shares on the part of securities firms, the
possible termination of registration of such Shares under the Exchange Act, as
described herein and other factors. Based upon the Company's most recent Annual
Report on Form 10-K, as of June 30, 1996, there were approximately 933 holders
of record of the Shares.
Margin Regulations
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of such Shares for the purpose of buying, carrying or trading
in securities ("Purpose Loans"). Depending upon factors similar to those
described above regarding the continued listing, public trading and market
quotations of the Shares, it is possible that, following the purchase of the
Shares pursuant to the Offer, the Shares would no longer constitute "margin
securities" for the purposes of the margin regulations of the Federal Reserve
Board and therefore could no longer be used as collateral for Purpose Loans made
by brokers.
Exchange Act Registration
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if the Shares are not listed on a national securities exchange and there are
fewer than 300 record holders. The termination of the registration of the Shares
under the Exchange Act would substantially reduce the information required to be
furnished by the Company to holders of Shares and to the Commission and would
make certain provisions of the Exchange Act, such as the short-swing profit
recovery provisions of Section 16(b), the requirements of furnishing a proxy
statement in connection with stockholders' meetings and the requirements of Rule
13e-3 under the Exchange Act with respect to "going private" transactions, no
longer applicable to the Shares. In addition, "affiliates" of the Company and
persons holding "restricted securities" of the Company may be deprived of the
ability to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin securities"
or be eligible for Nasdaq National Market or Small Cap Market reporting. Intel
currently intends to seek to cause the Company to terminate the registration of
the Shares under the Exchange Act as soon after consummation of the Offer as the
requirements for termination of registration are met.
15. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer or the Merger Agreement,
and subject to any applicable rules and regulations of the Commission, including
Rule 14e-1(c) relating to Intel's obligation to pay for or return tendered
Shares after termination of the Offer, Intel shall not be required to accept for
payment or pay for any Shares, shall delay the acceptance for payment of any
Shares and if required by Section 1.1(b) of the Merger Agreement, shall extend
the Offer by one or more extensions until October 31, 1997, and may terminate
the Offer at any time after October 31, 1997 if (i) less than a majority of the
outstanding Shares on a fully-diluted basis has been tendered pursuant to the
Offer by the Expiration Date and not withdrawn, (ii) any applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), has not expired or terminated, (iii) approval of all
necessary government officials and agencies (See Section 16) shall not have been
obtained on terms and conditions reasonably satisfactory to Intel, or (iv) at
any time after July 27, 1997 and before acceptance for payment of any Shares,
any of the following events shall occur or shall be determined by Intel in good
faith to have occurred and be continuing on or after October 31, 1997:
(a) there shall have been any action taken, or any statute, rule,
regulation, judgment, order or injunction promulgated, entered, enforced,
enacted, issued or deemed applicable to the Offer or the Merger by any
domestic or foreign governmental regulatory or administrative agency or
authority or court or legislative body or commission which directly or
indirectly (1) prohibits, or imposes any material limitations on, Intel's
ownership or operation (or that of any of its subsidiaries or affiliates)
of all or a material portion of its or the Company's businesses or assets,
or compels Intel or its subsidiaries or
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<PAGE> 26
affiliates to dispose of or hold separate any material portion of the
business or assets of the Company or Intel and its subsidiaries, in each
case taken as a whole, (2) prohibits, or makes illegal, the acceptance for
payment, payment for or purchase of Shares or the consummation of the
Offer, the Merger or the other transactions contemplated by the Merger
Agreement, (3) results in the delay in or restricts the ability of Intel,
or renders Intel unable, to accept for payment, pay for or purchase some or
all of the Shares, (4) imposes material limitations on the ability of Intel
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote the Shares purchased on all matters
properly presented to the Company's stockholders, or (5) otherwise has a
Company Material Adverse Effect (as defined);
(b) (1) the representations and warranties of the Company set forth in
the Merger Agreement shall not be true and correct in any material respect
as of the date of the Merger Agreement and as of consummation of the Offer
as though made on or as of such date, but only if the respects in which the
representations and warranties made by the Company (without giving effect
to any "materiality" limitations or references to "material adverse effect"
set forth therein) are inaccurate would in the aggregate have a Company
Material Adverse Effect, (2) the Company shall have failed to comply with
its covenants and agreements under the Merger Agreement in all material
respects, or (3) there shall have occurred any events or changes which are
likely to have a Company Material Adverse Effect;
(c) it shall have been publicly disclosed or Intel shall have
otherwise learned that (i) any Person or "group" (as defined in Section
13(d)(3) of the Exchange Act) shall have acquired or entered into a
definitive agreement or agreement in principle to acquire beneficial
ownership of more than 20% of the Shares or any other class of Capital
Stock of the Company, through the acquisition of stock, the formation of a
group or otherwise, or shall have been granted any option, right or
warrant, conditional or otherwise, to acquire beneficial ownership of more
than 20% of the Shares, and (ii) such Person or group shall not have
tendered such Shares pursuant to the Offer;
(d) the Board of Directors of the Company shall have withdrawn,
modified or changed in a manner adverse to Intel (including by amendment of
the Schedule 14D-9) its recommendation of the Offer, the Merger Agreement,
or the Merger, or recommended another proposal or offer, or the Board of
Directors of the Company shall have resolved to do any of the foregoing; or
(e) the Merger Agreement shall have terminated in accordance with its
terms; which in the good faith judgment of Intel, in any such case, and
regardless of the circumstances (including any action or inaction by Intel)
giving rise to such condition makes it inadvisable to proceed with the
Offer or the acceptance for payment of or payment for the Shares.
The foregoing conditions (the "Offer Conditions"), other than the Minimum
Condition, are for the sole benefit of Intel and may be waived by Intel, in
whole or in part at any time and from time to time in the sole discretion of
Intel. The failure by Intel 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.
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
General
Except as described below, Intel is not aware of any license or regulatory
permit that appears to be material to the business of the Company and its
subsidiaries, taken as a whole, that might be adversely affected by the
acquisition of Shares pursuant to the Offer, or of any approval or other action
by any governmental, administrative or regulatory agency or authority or public
body, domestic or foreign, that would be required for the acquisition or
ownership of Shares pursuant to the Offer. Should any such approval or other
action be required, it is presently contemplated that such approval or action
would be sought except as described below in this Section under "State Takeover
Statutes." While, except as otherwise expressly described herein, Intel does not
currently intend to delay acceptance for payment of Shares tendered pursuant to
the Offer pending the outcome of any such matter, there can be no assurance that
any such approval or
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<PAGE> 27
other action, if needed, would be obtained without substantial conditions or
that adverse consequences might not result to the Company's business or that
certain parts of the Company's business might not have to be disposed of in the
event that such approvals were not obtained or such other actions were not taken
or in order to obtain any such approval or other action, any of which could
cause Intel to decline to accept for payment or pay for any Shares tendered.
Intel's obligation under the Offer to accept for payment and pay for shares is
subject to the Offer Conditions, including conditions relating to legal matters
discussed in this Section 16.
Antitrust
Under the HSR Act and the rules that have been promulgated thereunder by
the Federal Trade Commission ("FTC"), certain acquisition transactions may not
be consummated unless certain information has been furnished to the Antitrust
Division of the Department of Justice (the "Antitrust Division") and the FTC and
certain waiting period requirements have been satisfied. The acquisition of
Shares pursuant to the Offer is subject to such requirements.
Intel expects to file a Notification and Report Form with respect to the
Offer under the HSR Act as soon as practicable following commencement of the
Offer. The waiting period under the HSR Act with respect to the Offer will
expire at 11:59 p.m. Washington D.C. City time, on the 15th day after the date
such form is filed, unless early termination of the waiting period is granted.
In addition, the Antitrust Division or the FTC may extend such waiting periods
by requesting additional information or documentary material from Intel. If such
a request is made with respect to the Offer, the waiting period related to the
Offer will expire at 11:59 p.m. Washington D.C. time on the 10th day after
substantial compliance by Intel with such request. With respect to each
acquisition, the Antitrust Division or the FTC may issue only one request for
additional information. In practice, complying with a request for additional
information or material can take a significant amount of time. In addition, if
the Antitrust Division or the FTC raises substantive issues in connection with a
proposed transaction, the parties may engage in negotiations with the relevant
governmental agency concerning possible means of addressing those issues and may
agree to delay consummation of the transaction while such negotiations continue.
Expiration or termination of applicable waiting periods under the HSR Act is a
condition to the obligation to accept for payment and pay for Shares tendered
pursuant to the Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed purchase of the Shares
pursuant to the Offer. At any time before or after such purchase, the Antitrust
Division or the FTC could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
transaction or seeking divestiture of the Shares so acquired or divestiture of
substantial assets of Intel or the Company. Litigation seeking similar relief
could be brought by private parties.
Intel does not believe that consummation of the Offer and the other
transactions contemplated by the Merger Agreement will result in violation of
any applicable antitrust laws. However, there can be no assurance that a
challenge to the Offer and the other transactions contemplated by the Merger
Agreement on antitrust grounds will not be made, or if such a challenge is made,
what the result will be. See Section 15 for certain conditions to the purchase
of the Shares, including conditions with respect to litigation and certain
governmental actions.
State Takeover Statutes
The Company is incorporated under the laws of the State of Delaware. In
general, Section 203 of the DGCL prevents an "interested stockholder"
(generally, a person who owns or has the right to acquire 15% or more of a
corporation's outstanding voting stock, or an affiliate or associate thereof)
from engaging in a "business combination" (defined to include mergers and
certain other transactions) with a Delaware corporation for a period of three
years following the date such person became an interested stockholder unless,
among other things, prior to such date the board of directors of the corporation
approved either the business combination or the transaction in which the
interested director became an interested stockholder. Purchaser is not an
interested stockholder. Accordingly, Section 203 is inapplicable to the Offer
and the Merger.
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<PAGE> 28
A number of states have adopted "takeover" statutes that purport to apply
to attempts to acquire corporations that are incorporated in such states, or
whose business operations have substantial economic effects in such states, or
which have substantial assets, security holders, employees, principal executive
offices or places of business in such states.
In Edgar v. MITE Corporation, the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Act, which,
as a matter of state securities law, made takeovers of corporations meeting
certain requirements more difficult. However, in CTS Corp. v. Dynamics Corp. of
America, the Supreme Court held that a state may, as a matter of corporate law
and, in particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquirer from voting on the affairs of a target
corporation without prior approval of the remaining stockholders, provided that
such laws were applicable only under certain conditions, in particular, that the
corporation has a substantial number of stockholders in the state and is
incorporated there.
Based on information supplied by the Company, Intel does not believe that
any state takeover statutes purport to apply to the Offer or the Merger. Neither
Purchaser nor Intel has currently complied with any state takeover statute or
regulation. Intel reserves the right to challenge the applicability or validity
of any state law purportedly applicable to the Offer or the Merger and nothing
in this Offer to Purchase or any action taken in connection with the Offer or
the Merger is intended as a waiver of such right. If it is asserted that any
state takeover statute is applicable to the Offer or the Merger and if an
appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer or the Merger, Intel might be required to file certain
information with, or to receive approvals from, the relevant state authorities,
and Intel might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer, or be delayed in consummating the Offer or the merger. In
such case, Intel may not be obliged to accept for payment or pay for any shares
tendered pursuant to the Offer.
17. FEES AND EXPENSES
Intel has retained D.F. King & Co., Inc. to act as the Information Agent
and Citibank, N.A. to serve as the Depositary in connection with the Offer. The
Information Agent and the Depositary each will receive reasonable and customary
compensation for their services and be reimbursed for certain reasonable out-of-
pocket expenses. Intel has also agreed to indemnify the Information Agent and
the Depositary against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
Intel will not pay any fees or commissions to any broker or dealer or any
other person for soliciting tenders of Shares pursuant to the Offer (other than
to the Information Agent). Brokers, dealers, commercial banks, trust companies
and other nominees will, upon request, be reimbursed by Intel for customary
mailing and handling expenses incurred by them in forwarding offering materials
to their customers.
18. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. Purchaser may, in its discretion,
however, take such action as it may deem necessary to make the Offer in-any
jurisdiction and extend the Offer to holders of Shares in any such jurisdiction.
The Company has informed Intel that a complaint has been filed by a
stockholder, on its own behalf and on behalf of the other stockholders of the
Company, against the Company and its directors in the Court of Chancery of the
State of Delaware in a lawsuit captioned, New York Apple Sales Inc., Profit
Sharing Plan v. Chips and Technologies, Inc., et al. The complaint alleges,
among other things, breaches of the fiduciary duties of the directors of the
Company in connection with the Merger and seeks monetary damages and injunctive
relief.
No person has been authorized to give any information or to make any
representation on behalf of Purchaser not contained herein or in the Letter of
Transmittal and, if given or made, such information or
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<PAGE> 29
representation must not be relied upon as having been authorized. Neither the
delivery of this Offer to Purchase nor any purchase pursuant to the Offer shall,
under any circumstances, create any implication that there has been no change in
the affairs of Purchaser, Intel or the Company since the date as of which
information is furnished or the date of this Offer to Purchase.
Purchaser and Intel have filed with the Commission a Tender Offer Statement
on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 under the
Exchange Act, furnishing certain additional information with respect to the
Offer. In addition, the Company has filed with the Commission a
Solicitation/Recommendation Statement on Schedule 14D-9, together with exhibits,
pursuant to Rule 14d-9 under the Exchange Act, setting forth the recommendations
of the Board with respect to the Offer and the reasons for such recommendations
and furnishing certain additional related information. Such Schedules and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained from the Commission in the manner set forth in Section 7 (except that
they will not be available at the regional offices of the Commission).
INTEL ENTERPRISE CORPORATION
August 1, 1997
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF INTEL AND PURCHASER
The following table sets forth the name, business or residence address,
principal occupation or employment at the present time and during the last five
years, and the name of any corporation or other organization in which such
employment is conducted or was conducted of each executive officer or director
of Intel. Except as otherwise indicated, all of the persons listed below are
citizens of the United States of America. Each occupation set forth opposite a
person's name, unless otherwise indicated, refers to employment with Intel.
Unless otherwise indicated, the principal business address of each director or
executive officer is Intel Corporation, 2200 Mission College Boulevard, Santa
Clara, California 95052.
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
- - ------------------------- -------------------------------- --------------------------------
<S> <C> <C>
Craig R. Barrett......... President and Chief Operating Executive Vice President from
Officer since 1997; 1990- 1997; Chief Operating
Director -- Intel since 1992 Officer since 1993;
Director -- Komag, Incorporated
since 1990
John Browne.............. Managing Director and Group Managing Director -- The British
British Citizenship Chief Executive -- The British Petroleum Company since 1991;
The British Petroleum Petroleum Company since 1995; Director -- SmithKline Beecham
Company p.l.c. Director -- Intel since 1997 since 1996; Trustee -- British
Britannic House Museum
1 Finsbury Circus
London EM2M 7BA
England
Winston H. Chen.......... Chairman -- Paramitas Foundation President, Chief Executive
Paramitas Foundation since 1992; Director -- Intel Officer and
3945 Freedom Circle, since 1993 Chairman -- Solectron
Suite 760 Corporation from 1978 to 1994;
Santa Clara, CA 95054 Member of Board of Trustees --
Stanford University since 1994;
Member of Board of Trustees --
Santa Clara University since
1992; Director -- Edison
International since 1994
Andrew S. Grove.......... Chief Executive Officer and President from 1979 to 1997;
Chairman since 1997; Director -- Chief Executive Officer since
Intel since 1974 1987
D. James Guzy............ President -- The Arbor Company Director -- Cirrus Logic, Inc.
The Arbor Company since 1969; Director -- Intel since 1984; Director -- Micro
295 North Bernardo since 1969 Component Technology, Inc. since
Mountain View, CA 94043 1993; Director -- Novellus
Systems, Inc. since 1990;
Director -- Davis Selected Group
of Mutual Funds since 1981;
Director -- Alliance Capital
Management Technology Fund
</TABLE>
I-1
<PAGE> 31
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
- - ------------------------- -------------------------------- --------------------------------
<S> <C> <C>
Gordon E. Moore.......... Chairman Emeritus -- Intel since Chairman from 1979 to 1997;
1997; Director -- Intel since Director -- Gilead Sciences,
1968 Inc. since 1996;
Director -- Varian Associates,
Inc. since 1983; Chairman, Board
of Trustees -- California
Institute of Technology since
1994; Director -- Conservation
International since 1990
Arthur Rock.............. Principal -- Arthur Rock & Director -- Argonaut Group, Inc.
Arthur Rock & Company Company since 1969; Director -- since 1986; Director -- AirTouch
One Maritime Plaza, Intel since 1968 Communications, Inc. since 1994;
Suite 1220 Director -- Echelon Corporation
San Francisco, CA 94111 since 1989;
Trustee -- California Institute
of Technology since 1988
Jane E. Shaw............. Founder -- The Stable Network President and Chief Operating
1040 Noel Drive, Suite since 1995; Officer -- ALZA Corporation from
107 Director -- Intel since 1993 1987 to 1994; Chairman of the
Menlo Park, CA 94025 Board -- IntraBiotics
Pharmaceuticals since 1996;
Director -- Aviron since 1996;
Director -- McKesson Corporation
since 1994; Director -- Boise
Cascade Corporation since 1994;
Leslie L. Vadasz......... Senior Vice President, Corporate N/A
Business Development since 1991;
Director -- Intel since 1989
David B. Yoffie.......... Professor -- Harvard Business Director -- Evolve Software,
Harvard Business School School since 1981; Inc. since 1996;
Morgan Hall 215 Director -- Intel since 1989 Director -- Physiologica, Inc.
Boston, MA 02163 since 1995; Director -- Bion,
Inc. since 1995
Charles E. Young......... Chancellor Chancellor -- University of
University of California, Emeritus -- University of California, Los Angeles from
Los Angeles California, Los Angeles since 1968 to 1997; Chairman of the
405 Hilgard Avenue 1997; Director -- Intel since Board of Governors Foundation --
Los Angeles, CA 90024 1974 International Exchange of
Scientific and Cultural
Information by
Telecommunications since 1987;
Trustee -- Nicholas-Applegate
Mutual Funds from 1991 to 1997;
Director -- Nicholas-Applegate
Fund, Inc. from 1993 to 1997
Frank C. Gill............ Executive Vice President; Senior Vice President and
5200 N.E. Elam Young General Manager, Internet and General Manager, Intel Products
Parkway Communications Group since 1996 Group from 1991 to 1996; Senior
Hillsboro, OR 97124 Vice President and General
Manager, Microprocessor Products
Group from 1992 to 1994; Vice
President and General Manager,
Microprocessor Products Group
from 1991 to 1992
</TABLE>
I-2
<PAGE> 32
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
- - ------------------------- -------------------------------- --------------------------------
<S> <C> <C>
Paul S. Otellini......... Executive Vice President; Senior Vice President, Director,
Director, Sales and Marketing Sales and Marketing Group from
Group since 1996 1994 to 1996; Senior Vice
President and General Manager,
Microprocessor Products Group
from 1992 to 1994; Vice
President and General Manager,
Microprocessor Products Group
from 1991 to 1992
Gerhard H. Parker........ Executive Vice President and Senior Vice President, General
General Manager, Technology and Manager, Technology and
Manufacturing Group since 1996 Manufacturing Group from 1992 to
1996; Vice President and General
Manager, Technology and
Manufacturing Group from 1990 to
1992
Ronald J. Whittier....... Senior Vice President and Senior Vice President and
General Manager, Content Group General Manager, Intel
since 1995 Architecture Laboratories from
1993 to 1995; Vice President and
General Manager, Software
Technology Group from 1991 to
1992
Albert Y.C. Yu........... Senior Vice President and Vice President and General
General Manager, Microprocessor Manager, Microprocessor Products
Products Group since 1993 Group from 1991 to 1993
Michael A. Aymar......... Vice President and General Vice President and General
Manager; Desktop Products Group Manager, Intel486 Microprocessor
since 1995 Division from 1994 to 1995; Vice
President and General Manager,
Mobile Computing Group from 1991
to 1994
Andy D. Bryant........... Vice President and Chief Vice President, Intel Products
Financial Officer since 1994 Group from 1990 to 1994
Dennis L. Carter......... Vice President, Director, Sales Vice President, Director,
and Marketing Group since 1996 Corporate Marketing Group from
1992 to 1996
F. Thomas Dunlap, Jr..... Vice President, General Counsel N/A
and Secretary since 1987
Patrick P. Gelsinger..... Vice President and General Vice President, Internet and
Manager, Desktop Products Group Communications Group and General
since 1996 Manager ICG Product Development
from 1995 to 1996; Vice
President, Intel Products Group
and General Manager, Personal
Conferencing Division from 1993
to 1995; Vice President, Intel
Products Group and General
Manager, PC Enhancement
Division-Business Communications
from 1992 to 1993; General
Manager, MD 6, Microprocessor
Development from 1991 to 1992
</TABLE>
I-3
<PAGE> 33
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
- - ------------------------- -------------------------------- --------------------------------
<S> <C> <C>
John H. F. Miner......... Vice President and General Vice President, Desktop Products
15520 N.W. Greenbriar Manager, Enterprise Server Group Group and General Manager, OEM
Parkway since 1996 Products and Services Division
Beaverton, OR 97006 from 1995 to 1996; General
Manager, OEM Products and
Services Division from 1993 to
1995; General Manager, OEM
Modules Operation from 1992 to
1993
Stephen P. Nachtsheim.... Vice President and General Vice President and General
Manager, Mobile/Handheld Manager, Mobile & Home Products
Products Group since 1995 Group from 1994 to 1995; Vice
President, European General
Manager from 1992 to 1994;
General Manager of European
Intel Products Group from 1990
to 1992
Ronald J. Smith.......... Vice President and General Vice President Desktop Products
Manager, Computing Enhancement Group and General Manager, PCI
Group since 1996 Components Division from 1995 to
1996; General Manager,
Programmable Logic Device
Operation and General Manager,
Gate Array Operation from 1992
to 1995
Arvind Sodhani........... Vice President and Treasurer N/A
Michael R. Splinter...... Vice President, Assistant Vice President, Components
General Manager, Technology and Manufacturing Group from 1993 to
Manufacturing Group since 1996 1996; Vice President of
Components Manufacturing Group
from 1990 to 1993
</TABLE>
I-4
<PAGE> 34
The following table sets forth the name, business or residence address,
principal occupation or employment at the present time and during the last five
years, and the name of any corporation or other organization in which such
employment is conducted or was conducted of each executive officer or director
of Purchaser. Except as otherwise indicated, all of the person listed below are
citizens of the United States of America. Each occupation set forth opposite a
person's name, unless otherwise indicated, refers to employment with Intel.
Unless otherwise indicated, the principal business address of each director or
executive officer is Intel Corporation, 2200 Mission College Boulevard, Santa
Clara, California 95052.
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
- - ------------------------- -------------------------------- --------------------------------
<S> <C> <C>
Cary I. Klafter.......... Director of Corporate Affairs Partner, Morrison & Foerster
since 1996; President Intel from prior to 1992 to 1996.
Enterprise Corporation since
1997; Director -- Intel
Enterprise Corporation
Suzan A. Miller.......... Senior Attorney since 1991; Vice N/A
President -- Intel Enterprise
Corporation since 1997;
Director -- Intel Enterprise
Corporation
Patrice C. Scatena....... Senior Attorney and Assistant Associate -- Gibson, Dunn &
Secretary since 1994; Crutcher LLP from 1989 to 1994
Secretary -- Intel Enterprise
Corporation since 1997;
Director -- Intel Enterprise
Corporation
Arvind Sodhani........... Vice President and Treasurer; N/A
Treasurer -- Intel Enterprise
Corporation since 1997
</TABLE>
I-5
<PAGE> 35
ANNEX A
TEXT OF SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
262 APPRAISAL RIGHTS. (a) Any stockholder of a corporation of this State
who holds shares of stock on the date of the making of a demand pursuant to
subsection (d) of this section with respect to such shares, who continuously
holds such shares through the effective date of the merger or consolidation, who
has otherwise complied with subsection (d) of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing
pursuant to (sec.) 228 of this title shall be entitled to an appraisal by the
Court of Chancery of the fair value of the stockholder's shares of stock under
the circumstances described in subsections (b) and (c) of this section. As used
in this section, the word "stockholder" means a holder of record of stock in-a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to (sec.) 251 (other than a merger effected pursuant to (sec.)
251(g) of this title), (sec.) 252, (sec.) 254, (sec.) 257, (sec.) 258, (sec.)
263 or (sec.) 264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of (sec.) 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
(secs.) 251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock or depository
receipts in respect thereof at the effective date of the merger or
consolidation will be either listed on a national securities exchange or
designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc.
or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under (sec.) 253 of this title is
not owned by the parent corporation immediately prior to the merger,
appraisal rights shall be available for the shares of the subsidiary
Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate
A-1
<PAGE> 36
of incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsection (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of his shares
shall deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of his shares. Such
demand will be sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to sec.228 or
sec.253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given, provided, that
if the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise
A-2
<PAGE> 37
entitled to appraisal rights, may file a petition in the Court of Chancery
demanding a determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw his demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever is
later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by one or more publications at
least one week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an-appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may-be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
A-3
<PAGE> 38
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of his demand for
an appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of the Court, and
such approval may be conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
A-4
<PAGE> 39
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. Letters of Transmittal and certificates for Shares should be sent or
delivered by each stockholder of the Company or his broker, dealer, commercial
bank or trust company to the Depositary at one of its addresses set forth below:
<TABLE>
<S> <C> <C>
The Depositary for the Offer is:
CITIBANK, N.A.
By Mail: By Overnight Courier: By Hand:
CITIBANK, N.A. CITIBANK, N.A. CITIBANK, N.A.
C/O CITICORP DATA DISTRIBUTION, C/O CITICORP DATA DISTRIBUTION, CORPORATE TRUST WINDOW
INC. INC.
P.O. BOX 7072 404 SETTE DRIVE 111 WALL STREET, 5TH FLOOR
PARAMUS, NEW JERSEY 07653 PARAMUS, NEW JERSEY 07652 NEW YORK, NEW YORK 10043
By Facsimile Transmission: Confirm by Telephone:
(For Eligible Institutions Only) (800) 422-2077
(201) 262-3240
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth below. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may be
directed to the Information Agent or the Depositary. Stockholders may also
contact their brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005-4495
(212) 269-5550 (call collect)
or
CALL TOLL-FREE (800) 758-7358
<PAGE> 1
EXHIBIT (A)(2)
LETTER OF TRANSMITTAL
<PAGE> 2
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CHIPS AND TECHNOLOGIES, INC.
AT
$17.50 NET PER SHARE
PURSUANT TO THE OFFER TO PURCHASE DATED AUGUST 1, 1997
OF
INTEL ENTERPRISE CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
INTEL CORPORATION
- - --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME,
ON THURSDAY, AUGUST 28, 1997, UNLESS THE OFFER IS EXTENDED.
- - --------------------------------------------------------------------------------
The Depositary for the Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data Distribution, c/o Citicorp Data Distribution, Corporate Trust Window
Inc. Inc. 111 Wall Street, 5th Floor
P.O. Box 7072 404 Sette Drive New York, New York 10043
Paramus, New Jersey 07653 Paramus, New Jersey 07652
By Facsimile Transmission: Confirm by Telephone:
(For Eligible Institutions Only) (800)-422-2077
(201) 262-3240
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL
IN THE APPROPRIATE SPACE PROVIDED THEREFOR, WITH SIGNATURE GUARANTEE IF
REQUIRED, AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW. SEE INSTRUCTION
1.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if delivery is to be made by book-entry transfer to the
account maintained by the Depositary at The Depository Trust Company or the
Philadelphia Depository Trust Company (individually, a "Book-Entry Transfer
Facility" and collectively, the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 2 of the Offer to Purchase. Stockholders
whose certificates are not immediately available or who cannot deliver their
certificates or deliver confirmation of the book-entry transfer of their Shares
(as defined below) into the Depositary's account at a Book-Entry Transfer
Facility ("Book-Entry Confirmation") and all other documents required hereby to
the Depositary on or prior to the Expiration Date (as defined in the Offer to
Purchase) must tender their Shares according to the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase. See Instruction 2.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
Holders of Shares will be required to tender one Right (as defined in the
Offer to Purchase) for each Share tendered to effect a valid tender of such
Share. Unless and until the Distribution Date (as defined in the Offer to
Purchase) occurs, the Rights are represented by and transferred with the Shares.
Accordingly, if the Distribution Date does not occur prior to the Expiration
Date, a tender of Shares will constitute a tender of the associated Rights. If,
however, pursuant to the Rights Agreement or otherwise, a Distribution Date does
occur, certificates representing a number of Rights equal to the
<PAGE> 3
number of Shares being tendered must be delivered to the Depositary in order for
such Shares to be validly tendered. If a Distribution Date has occurred, a
tender of Shares without Rights constitutes an agreement by the tendering
stockholder to deliver certificates representing a number of Rights equal to the
number of Shares tendered pursuant to the Offer to the Depositary within three
Nasdaq National Market trading days after the date such certificates are
distributed. The Purchaser reserves the right to require that it receive such
certificates prior to accepting Shares for payment. Payment for Shares tendered
and purchased pursuant to the Offer will be made only after timely receipt by
the Depositary of, among other things, such certificates, if such certificates
have been distributed to holders of Shares. The Purchaser will not pay any
additional consideration for the Rights tendered pursuant to the Offer.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
--------------------------------------------
Check box of Book-Entry Transfer Facility:
--------------------------------
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
------------------------------------------------------------
Transaction Code Number
---------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s):
-------------------------------------------
Window Ticket Number (if any):
--------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------------
Name of Institution that Guaranteed Delivery:
-----------------------------
If Delivered by Book-Entry Transfer, Check box of Book-Entry Transfer
Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
Transaction Code Number
- - -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
- - ---------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- - ---------------------------------------------------------------------------------------------------------
TOTAL NUMBER
SHARE OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)* CERTIFICATE(S) TENDERED**
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
TOTAL SHARES
</TABLE>
- - --------------------------------------------------------------------------------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares being
delivered to the Depositary are being tendered. See Instruction 4.
- - --------------------------------------------------------------------------------
<PAGE> 4
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS.
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Intel Enterprise Corporation, a Delaware
corporation (the "Purchaser"), which is a wholly-owned subsidiary of Intel
Corporation, a Delaware corporation, the above described shares of Common Stock,
par value $.01 per share (the "Common Stock"), of Chips and Technologies, Inc.,
a Delaware corporation (the "Company"), and the associated Rights, as defined in
the Offer to Purchase (collectively, the "Shares"), pursuant to Purchaser's
offer to purchase all of the outstanding Shares upon the terms and subject to
the conditions set forth in the Offer to Purchase dated August 1, 1997 (the
"Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together constitute the "Offer"), at the purchase
price of $17.50 per Share, net to the tendering stockholder in cash.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith in accordance with the terms and subject to the conditions of
the Offer, the undersigned hereby sells, assigns, and transfers to, or upon the
order of, Purchaser all right, title and interest in and to all the Shares that
are being tendered hereby (and any and all other Shares or other securities
issued or issuable in respect thereof on or after July 27, 1997) and irrevocably
constitutes and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and any such
other Shares or securities) with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(a) deliver certificates for such Shares (and any such other Shares or
securities), or transfer ownership of such Shares (and any such other Shares or
securities) on the account books maintained by a Book-Entry Transfer Facility,
together in either such case with all accompanying evidences of transfer and
authenticity, to or upon the order of Purchaser upon receipt by the Depositary,
as the undersigned's agent, of the purchase price (adjusted, if appropriate, as
provided in the Offer to Purchase), (b) present such Shares (and any such other
Shares or securities) for transfer on the books of the Company and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any such other Shares or securities), all in accordance with the
terms of the Offer.
The undersigned hereby irrevocably appoints each designee of Purchaser as
the attorney-in-fact and proxy of the undersigned, each with full power of
substitution, to vote in such manner as each such attorney and proxy or his
substitute shall in his sole discretion deem proper, and otherwise act
(including pursuant to written consent) with respect to all the Shares tendered
hereby which have been accepted for payment by Purchaser prior to the time of
such vote or action (and any and all other Shares or securities issued or
issuable in respect thereof on or after July 27, 1997), which the undersigned is
entitled to vote at any meeting of stockholders (whether annual or special and
whether or not an adjourned meeting) of the Company, or consent in lieu of any
such meeting, or otherwise. This proxy is coupled with an interest in the
Company and in the Shares and is irrevocable and is granted in consideration of,
and is effective upon, the deposit by Purchaser with the Depositary of the
purchase price for such Shares in accordance with the terms of the Offer. Such
acceptance for payment shall revoke all prior proxies granted by the undersigned
at any time with respect to such Shares (and any such other Shares or other
securities) and no subsequent proxies will be given (and if given will be deemed
not to be effective) with respect thereto by the undersigned.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any and all other Shares or other securities issued or
issuable in respect thereof on or after July 27, 1997) and that, when the same
are accepted for payment by Purchaser, Purchaser will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or Purchaser to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby (and any and all
such other Shares or other securities).
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall not be affected by, and shall survive, the death or incapacity
of the undersigned and any obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators and legal
representatives of the undersigned. Except as stated in the Offer to Purchase,
this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price or any certificates for Shares not
tendered or accepted for payment in the name(s) of the undersigned. Similarly,
unless otherwise indicated under "Special Delivery Instructions," please mail
the check for the purchase price or return any certificates for Shares not
tendered or accepted for payment (and accompanying documents, as appropriate) to
the undersigned at the address shown below the undersigned's signature. In the
event that both the Special Delivery
<PAGE> 5
Instructions and the Special Payment Instructions are completed, please issue
the check for the purchase price or any certificates for Shares not tendered or
accepted for payment in the name of, and deliver such check or return such
certificates to the person or persons so indicated. Stockholders delivering
Shares by book-entry transfer may request that any Shares not accepted for
payment be returned by crediting such account maintained at a Book-Entry
Transfer Facility as such stockholder may designate by making an appropriate
entry under "Special Payment Instructions." The undersigned recognizes that
Purchaser has no obligation pursuant to the Special Payment Instructions to
transfer any Shares from the name of the registered holder thereof if Purchaser
does not accept for payment any of the Shares so tendered.
<PAGE> 6
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not purchased
and/or the check for the purchase price of Shares purchased are to be issued in
the name of someone other than the undersigned, or if Shares delivered by
book-entry transfer which are not purchased are to be returned by credit to an
account maintained at a Book-Entry Transfer Facility other than that designated
above.
Issue check and/or certificate to:
Name
-------------------------------------------------------------------------
(PLEASE PRINT)
Address
-------------------------------------------------------------------------
(INCLUDING ZIP CODE)
-------------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
[ ] Credit unpurchased Shares delivered by book-entry transfer to the Book-Entry
Transfer Facility account set forth below.
Check appropriate box.
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
------------------------------------------------------
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not purchased
and/or the check for the purchase price of Shares purchased are to be sent to
someone other than the undersigned, or to the undersigned at an address other
than that shown above.
Issue check and/or certificate to:
Name
-------------------------------------------------------------------------
(PLEASE PRINT)
Address
-------------------------------------------------------------------------
(INCLUDING ZIP CODE)
-------------------------------------------------------------------------
(TAX IDENTIFICATION OF SOCIAL SECURITY NUMBER)
<PAGE> 7
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
X
- - --------------------------------------------------------------------------------
X
- - --------------------------------------------------------------------------------
(SIGNATURE(S) OF OWNER(S))
Dated:
- - --------------------------- , 1997
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information.
See Instructions 1 and 5.)
Name(s) ------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title)
----------------------------------------------------------------
(SEE INSTRUCTION 5)
ADDRESS
--------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number ( )
--------------------------------------------------
Employer Identification or Social Security Number
-------------------------------------------
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
----------------------------------------------------------------
Name --------------------------------------------------------------------------
(PLEASE PRINT)
Title---------------------------------------------------------------------------
Name of Firm
---------------------------------------------------------------------
Address-------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number ( )
-------------------------------------------------
Dated:
- - --------------------------- , 1997
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder of the Shares (which term, for purposes of this document,
shall include any participant in a Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered
herewith, unless such holder has completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
reverse hereof, or (ii) if such Shares are tendered for the account of a bank,
broker, dealer, credit union, savings association or other entity that is a
member in good standing of the Securities Transfer Agents Medallion Program, the
New York Stock Exchange Medallion Signature Guarantee Program or the Stock
Exchange Medallion Program (each an "Eligible Institution"). In all other cases,
all signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed by stockholders either if certificates are to be
forwarded herewith or if tenders of Shares are to be made pursuant to the
procedures for delivery by book-entry transfer set forth in Section 2 of the
Offer to Purchase. Certificates for all physically tendered Shares, or any
Book-Entry Confirmation of Shares, as the case may be, as well as a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), unless
an Agent's Message (as defined in the Offer to Purchase) is utilized, and any
other documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth herein on or prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase). Stockholders
whose certificates for Shares are not immediately available or who cannot
deliver their certificates and all other required documents to the Depositary on
or prior to the Expiration Date may tender their Shares by properly completing
and duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedure set forth in Section 2 of the Offer to Purchase. Pursuant to
such procedure, (i) such tender must be made by or through an Eligible
Institution, (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser, must be received by
the Depositary prior to the Expiration Date, and (iii) the certificates for all
physically tendered Shares or Book-Entry Confirmation of Shares, as the case may
be, together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), unless an Agent's Message is utilized, and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three Nasdaq National Market trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in Section 2 of
the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATE FOR
SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND,
EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 2, THE DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS. (Not applicable to stockholders who tender by
book-entry transfer.) If fewer than all the Shares evidenced by any certificate
submitted are to be tendered, fill in the number of Shares which are to be
tendered in the box entitled "Number of Shares Tendered." In such case, new
certificate(s) for the remainder of the Shares that were evidenced by your old
certificate(s) will be sent to you, unless otherwise provided in the appropriate
box on this Letter of Transmittal, as soon as practicable after the Expiration
Date. All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
<PAGE> 9
If this Letter of Transmittal or any certificates or stock powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or purchased are to be issued to a person other than the registered
owner(s). Signatures on such certificates or stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If payment of the purchase price is to be made to, or if certificates for
Shares not tendered or purchased are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person(s) signing this Letter of
Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered holder or such person) payable on account of the transfer to such
person will be deducted from the purchase price unless satisfactory evidence of
the payment of such taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check or certificates
for unpurchased Shares are to be issued in the name of a person other than the
signer of this Letter of Transmittal or if a check is to be sent or such
certificates are to be returned to someone other than the signer of this Letter
of Transmittal or to an address other than that shown above, the appropriate
boxes on this Letter of Transmittal should be completed. Stockholders tendering
Shares by book-entry transfer may request that Shares not purchased be credited
to such account maintained at a Book-Entry Transfer Facility as such stockholder
may designate hereon. If no such instructions are given, such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility designated above.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to, or additional copies of the Offer to Purchase, this Letter
of Transmittal and the Notice of Guaranteed Delivery may be obtained from, the
Information Agent at its respective address set forth below or from your broker,
dealer, commercial bank or trust company.
9. WAIVER OF CONDITIONS. Subject to the terms of the Merger Agreement (as
defined in the Offer to Purchase), the conditions of the Offer may be waived by
Purchaser, in whole or in part, at any time and from time to time in the
Purchaser's sole discretion, in the case of any Shares tendered.
10. SUBSTITUTE FORM W-9. The tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify whether the stockholder is subject to backup withholding of
Federal income tax. If a tendering stockholder is subject to backup withholding,
the stockholder must cross out item (2) of the Certification box of the
Substitute Form W-9. Failure to provide the information on the Substitute Form
W-9 may subject the tendering stockholder to 31% Federal income tax withholding
on the payment of the purchase price. If the tendering stockholder has not been
issued a TIN and has applied for a number or intends to apply for a number in
the near future, he or she should write "Applied For" in the space provided for
the TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For"
is written in Part I, the Depositary will withhold 31% on all payments of the
purchase price, but such withholdings will be refunded if the tendering
stockholder provides a TIN within 60 days.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares or Rights has been lost, destroyed or stolen, the
stockholder should promptly notify the Depositary. The stockholder will then be
instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
<PAGE> 10
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is his or her social security number. If a tendering
stockholder is subject to backup withholding, he or she must cross out item (2)
of the Certification box on the Substitute Form W-9. If the Depositary is not
provided with the correct TIN, the stockholder may be subject to a $50 penalty
imposed by the Internal Revenue Service. In addition, payments that are made to
such stockholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements may be
obtained from the Depositary. Exempt stockholders, other than foreign
individuals, should furnish their TIN, write "Exempt" on the face of the
Substitute Form W-9 below and sign, date and return the Substitute Form W-9 to
the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of his or her correct TIN by completing the
form below certifying that the TIN provided on the Substitute Form W-9 is
correct (or that such stockholder is awaiting a TIN).
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidelines on which number to
report. If the tendering stockholder has not been issued a TIN and has applied
for a number or intends to apply for a number in the near future, the
stockholder should write "Applied For" in the space provided for the TIN in Part
I, and sign and date the Substitute Form W-9. If "Applied For" is written in
Part I, the Depositary will withhold 31% on all payments of the purchase price,
but such withholdings will be refunded if the tendering stockholder provides a
TIN within 60 days.
<PAGE> 11
<TABLE>
<C> <S> <C>
- - -------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME:
===================================================================================================================
SUBSTITUTE PART I -- Please provide your TIN in the --------------------------------------
FORM W-9 box at right and certify by signing and Social Security Number
dating below. or Employer Identification Number
(if awaiting TIN write "Applied For")
------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART II -- For Payees exempt from backup withholding, see the attached Guidelines
INTERNAL REVENUE SERVICE for Certification of Taxpayer Identification Number on Substitute Form W-9 and
complete as instructed therein.
------------------------------------------------------------------------------------
Certification -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or
a Taxpayer Identification Number has not been issued to me) and either (a) I have
mailed or delivered an application to receive a Taxpayer Identification Number
to the appropriate Internal Revenue Service ("IRS") or Social Security
Administration office or (b) I intend to mail or deliver an application in the
near future. (I understand that if I do not provide a Taxpayer Identification
Number to the Depository, 31% of all reportable payments made to me will be
withheld, but will be refunded if I provided a certified Taxpayer
Identification Number within 60 days); and
(2) I am not subject to backup withholding either because I have not been notified
by the IRS that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or the IRS has notified me that I am no
longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see instructions in the enclosed
Guidelines.)
Signature Date: ________________
PAYOR'S REQUEST FOR
TAXPAYER IDENTIFICATION
NUMBER ("TIN")
- - -------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 WATER STREET, NEW YORK, NY 10005-4495
(212) 269-5550 (CALL COLLECT)
OR
CALL TOLL FREE (800) 758-7358
<PAGE> 1
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
<PAGE> 2
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CHIPS AND TECHNOLOGIES, INC.
TO
INTEL ENTERPRISE CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
INTEL CORPORATION
- - --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME,
ON THURSDAY, AUGUST 28, 1997, UNLESS THE OFFER IS EXTENDED.
- - --------------------------------------------------------------------------------
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates representing shares of common
stock, par value $.01 per share (including the associated Rights, as defined in
the Offer to Purchase) (collectively, the "Shares"), of Chips and Technologies,
Inc., a Delaware corporation, are not immediately available, if the procedure
for Book-Entry transfer cannot be completed on a timely basis, or if time will
not permit all required documents to reach the Depositary (as defined in the
Offer to Purchase) prior to the Expiration Date (as defined in the Offer to
Purchase). Such form may be delivered by hand or transmitted by telegram,
facsimile transmission or mail to the Depositary. See Section 2 of the Offer to
Purchase.
The Depositary for the Offer is:
<TABLE>
<S> <C> <C>
CITIBANK, N.A.
By Mail: By Overnight Courier: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data Distribution, c/o Citicorp Data Distribution, Corporate Trust Window
Inc. Inc.
P.O. Box 7072 404 Sette Drive 111 Wall Street, 5th Floor
Paramus, New Jersey 07653 Paramus, New Jersey 07652 New York, New York 10043
By Facsimile Transmission: Confirm by Telephone:
(For Eligible Institutions Only) (800) 422-2077
(201) 262-3240
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby tenders to Intel Enterprise Corporation, a Delaware
corporation and a wholly owned subsidiary of Intel Corporation, a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase dated August 1, 1997 and the related Letter of Transmittal (which
together constitute the "Offer"), receipt of which is hereby acknowledged, the
number of Shares indicated below pursuant to the guaranteed delivery procedures
set forth in Section 2 of the Offer to Purchase.
<PAGE> 3
Certificate No(s). (if available)
---------------------------------------------
Number of Shares:
-------------------------------------------------------------
Check ONE box if Shares will be tendered by book-entry transfer:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
-----------------------------------------------------------------
Dated _________, 1997
-----------------------------------------------------------------
Name(s) of Record Holder(s)
----------------------------------------------------
(PLEASE TYPE OR PRINT)
Address(es)
--------------------------------------------------------------------
ZIP CODE
Area Code and Tel. No.
---------------------------------------------------------
Signature(s)
-------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity that is a member in good standing of the Securities Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature
Guarantee Program or the Stock Exchange Medallion Program, (a) represents that
the above named person(s) "own(s)" the Shares tendered hereby within the meaning
of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (b) represents that such tender of Shares complies with
Rule 14e-4 under the Exchange Act, and (c) guarantees delivery to the
Depositary, at one of its addresses set forth above, of certificates
representing the Shares tendered hereby in proper form for transfer, or
confirmation of book-entry transfer of such Shares into the Depositary's
accounts at The Depository Trust Company or Philadelphia Depository Trust
Company, in each case with delivery of a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), and any other required documents,
within three Nasdaq National Market trading days after the date hereof.
<TABLE>
<S> <C>
Name of Firm: _______________________________ ___________________________
AUTHORIZED SIGNATURE
___________________________
TITLE
Address: ____________________________________ Name: _____________________
PLEASE TYPE OR PRINT
____________________________________
ZIP CODE
TITLE: ____________________
AREA CODE AND DATED: ______________, 1997
TELEPHONE NUMBER: ___________________________
</TABLE>
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE> 1
EXHIBIT (A)(4)
LETTER TO BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES
<PAGE> 2
D.F. KING & CO., INC.
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CHIPS AND TECHNOLOGIES, INC.
AT
$17.50 NET PER SHARE
BY
INTEL ENTERPRISE CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
INTEL CORPORATION
- - --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, AUGUST 28, 1997 (THE "EXPIRATION DATE"),
UNLESS THE OFFER IS EXTENDED.
- - --------------------------------------------------------------------------------
August 1, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies And Other Nominees:
We have been engaged to act as Information Agent in connection with the
offer by Intel Enterprise Corporation, a Delaware corporation and a wholly owned
subsidiary of Intel Corporation, a Delaware corporation ("Purchaser"), to
purchase all outstanding shares of common stock, par value $.01 per share
(including the associated Rights, as defined in the Offer to Purchase)
(collectively, the "Shares"), of Chips and Technologies, Inc., a Delaware
corporation (the "Company"), at $17.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in Purchaser's Offer to
Purchase dated August 1, 1997 (the "Offer to Purchase") and the related Letter
of Transmittal (which together constitute the "Offer").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OR
WAIVER OF CERTAIN CONDITIONS TO THE OBLIGATIONS OF PURCHASER AND THE COMPANY TO
CONSUMMATE THE OFFER, INCLUDING (1) THERE BEING VALIDLY TENDERED BY THE
EXPIRATION DATE AND NOT WITHDRAWN A NUMBER OF SHARES WHICH REPRESENTS AT LEAST A
MAJORITY OF SHARES ON A FULLY-DILUTED BASIS AND (2) RECEIPT BY PURCHASER AND THE
COMPANY OF CERTAIN GOVERNMENTAL AND REGULATORY APPROVALS.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. Offer to Purchase dated August 1, 1997;
2. Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares;
3. Letter to Clients which may be sent to your clients for whose
account you hold Shares in your name or in the name of your nominees, with
space provided for obtaining such clients' instructions with regard to the
Offer;
<PAGE> 3
4. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available or time will not
permit all required documents to reach the Depositary prior to the
Expiration Date (as defined in the Offer to Purchase) or if the procedures
for book-entry transfer, as set forth in the Offer to Purchase, cannot be
completed on a timely basis;
5. The Letter to Stockholders of the Company from James F. Stafford,
the President and Chief Executive Officer of the Company, accompanied by
the Company's Solicitation/Recommendation Statement on Schedule 14D-9.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to Citibank, N.A., as Depositary.
Upon the terms and subject to the satisfaction or waiver (where applicable)
of the conditions of the Offer, Purchaser will purchase, by accepting for
payment, and will pay for, all Shares validly tendered on or prior to the
Expiration Date promptly after the Expiration Date. For purposes of the Offer,
Purchaser will be deemed to have accepted for payment, and thereby purchased,
tendered Shares if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such Shares for payment. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for Shares or timely
confirmation of a book-entry transfer of such Shares, if such procedure is
available, into the Depositary's account at a Book-Entry Transfer Facility (as
defined in the Offer to Purchase) pursuant to the procedures set forth in
Section 2 of the Offer to Purchase, (ii) the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, or an Agent's Message (as
defined in the Offer to Purchase) and (iii) any other documents required by the
Letter of Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Depositary and the Information Agent as described
in the Offer to Purchase) in connection with the solicitation of tenders of
Shares pursuant to the Offer. However, Purchaser will upon request, reimburse
you for customary mailing and handling expenses incurred by you in forwarding
the enclosed materials to your clients.
Purchaser will pay or cause to be paid any stock transfer taxes payable on
the transfer of Shares to it, except as otherwise provided in Instruction 6 of
the enclosed Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, AUGUST 28, 1997, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary and certificates representing the tendered Shares should be
delivered, or such Shares should be tendered by book-entry transfer, all in
accordance with the instructions set forth in the Letter of Transmittal and the
Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents prior to the expiration
of the Offer, a tender may be effected by following the guaranteed delivery
procedures specified under Section 2 in the Offer to Purchase.
Any inquiries you may have with respect to the Offer or requests for
additional copies of the enclosed materials should be addressed to the
Information Agent at the address and telephone number set forth on the back
cover page of the enclosed Offer to Purchase.
Very truly yours,
D.F. King & Co., Inc.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON AS AN AGENT OF PURCHASER, THE DEPOSITARY OR THE INFORMATION AGENT OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
EXHIBIT (A)(5)
LETTER TO CLIENTS FOR USE BY BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES
<PAGE> 2
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CHIPS AND TECHNOLOGIES, INC.
AT
$17.50 NET PER SHARE
BY
INTEL ENTERPRISE CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
INTEL CORPORATION
- - --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, AUGUST 28, 1997, UNLESS THE OFFER IS
EXTENDED.
- - --------------------------------------------------------------------------------
August 1, 1997
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated August 1,
1997 and the related Letter of Transmittal (which together constitute the
"Offer") relating to an offer by Intel Enterprise Corporation, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Intel Corporation, a
Delaware corporation ("Intel"), to purchase all outstanding shares of common
stock, par value $.01 per share (including the associated Rights, as defined in
the Offer to Purchase) (collectively, the "Shares"), of Chips and Technologies,
Inc., a Delaware corporation (the "Company"), at a purchase price of $17.50 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer. We are the holder of record of Shares held by us for
your account. The Letter of Transmittal is furnished to you for your information
only and cannot be used by you to tender Shares. A tender for such Shares can be
made only by us as the holder of record and pursuant to your instructions.
We request instructions as to whether you wish to tender any or all of such
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The tender price is $17.50 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares.
3. This Offer is being made pursuant to the terms of an Agreement and
Plan of Merger, dated as of July 27, 1997 (the "Merger Agreement") by and
among the Company, Purchaser and Intel. The Merger Agreement provides,
among other things, for the making of the Offer by Purchaser, and further
provides that, following the purchase of Shares pursuant to the Offer and
promptly after the satisfaction or waiver of certain conditions, Purchaser
will be merged with and into the Company (the "Merger"). The Company will
continue as the surviving corporation after the Merger and will be a wholly
owned subsidiary of Intel.
4. The Board of Directors of the Company has approved the Offer, the
Merger and the other transactions contemplated by the Merger Agreement, has
determined that the Offer, the Merger and the other transactions
contemplated by the Merger Agreement are fair to and in the best interests
of the
<PAGE> 3
Company's stockholders and recommends that stockholders of the Company
accept the Offer and tender their Shares.
5. The Offer and withdrawal rights will expire at Midnight, New York
City time, on Thursday, August 28, 1997, unless extended.
6. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE
SATISFACTION OR WAIVER OF CERTAIN CONDITIONS TO THE OBLIGATIONS OF
PURCHASER AND THE COMPANY TO CONSUMMATE THE OFFER, INCLUDING (1) THERE
BEING VALIDLY TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN A NUMBER OF
SHARES WHICH REPRESENTS AT LEAST A MAJORITY OF SHARES ON A FULLY-DILUTED
BASIS AND (2) RECEIPT BY PURCHASER AND THE COMPANY OF CERTAIN GOVERNMENTAL
AND REGULATORY APPROVALS.
7. Stockholders who tender Shares will not be obligated to pay
brokerage commissions or, except as set forth in Instruction 6 of the
Letter of Transmittal, transfer taxes on the purchase of Shares by
Purchaser pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please complete,
sign and return the form set forth on the reverse side of this letter. Your
instructions to us should be forwarded in ample time to permit us to submit a
tender on your behalf prior to the expiration of the Offer.
2
<PAGE> 4
INSTRUCTIONS WITH RESPECT TO THE OFFER
TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF
COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CHIPS AND TECHNOLOGIES, INC.
AT
$17.50 NET PER SHARE
BY
INTEL ENTERPRISE CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
INTEL CORPORATION
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase, dated August 1, 1997, of Intel Enterprise Corporation, a Delaware
corporation and a wholly owned subsidiary of Intel Corporation ("Purchaser"),
and the related Letter of Transmittal, relating to shares of common stock, par
value $.01 per share (including the associated Rights, as defined in the Offer
to Purchase) (collectively, the "Shares"), of Chips and Technologies, Inc., a
Delaware corporation.
This will instruct you to tender to Purchaser the number of Shares
indicated below held by you for the account of the undersigned, on the terms and
subject to the conditions set forth in the Offer to Purchase and Letter of
Transmittal.
NUMBER OF SHARES TO BE TENDERED:
__________________ SHARES
Account Number:
- - -----------------------------------
Dated:
- - ---------------------------------------- , 1997
SIGN HERE
- - -------------------------------------------------------
- - -------------------------------------------------------
Signature(s)
- - -------------------------------------------------------
- - -------------------------------------------------------
Please print name(s) and address(es) here
- - -------------------------------------------------------
Tax Identification or Social Security Number
- - ---------------
* Unless otherwise indicated, it will be assumed that all of your Shares held by
us for your account are to be tendered.
3
<PAGE> 1
EXHIBIT (A)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<C> <S> <C>
- - ---------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
=========================================================
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- - ---------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)
3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian The ward, minor, or
or committee for a designated incompetent
ward, minor, or incompetent person(3)
person
7. a. The usual revocable savings The grantor-
trust account (grantor is trustee(1)
also trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
8. Sole proprietorship account The owner(4)
- - ---------------------------------------------------------
9. A valid trust, estate, or The legal entity
pension trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural program
payments
- - ---------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 3
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for an Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply for
a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under Section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
- any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under Section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
Section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
Section 852).
- Payments described in Section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under Section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments, other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
2
<PAGE> 1
EXHIBIT (A)(7)
SUMMARY ADVERTISEMENT, DATED AUGUST 1, 1997
<PAGE> 2
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated August
1, 1997, and the related Letter of Transmittal and is not being made to (nor
will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF
CHIPS AND TECHNOLOGIES, INC.
AT
$17.50 NET PER SHARE
BY
INTEL ENTERPRISE CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
INTEL CORPORATION
Intel Enterprise Corporation, a Delaware corporation (the "Purchaser") and
a wholly owned subsidiary of Intel Corporation, a Delaware corporation
("Intel"), is offering to purchase all outstanding shares of Common Stock, par
value $.01 per share (the "Shares"), of Chips and Technologies, Inc., a Delaware
corporation (the "Company"), together with the associated rights (the "Rights")
to purchase Common Stock issued pursuant to the Company's Rights Agreement dated
August 23, 1989 (the "Rights Agreement"), at $17.50 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated August 1, 1997 and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"). Unless the context otherwise requires, all references to Shares
include the associated Rights, and all references to the Rights include the
benefits that may inure to holders of the Rights pursuant to the Rights
Agreement.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON
THURSDAY, AUGUST 28, 1997, UNLESS EXTENDED.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the expiration of the Offer such number of
Shares that would constitute at least a majority of the outstanding Shares
(determined on a fully diluted basis) (the "Minimum Condition"), and (ii) any
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, applicable to the purchase of Shares pursuant to the Offer having
expired or been terminated.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of July 27, 1997 (the "Merger Agreement"), among Intel, the Purchaser and the
Company pursuant to which, following the consummation of the Offer, the
Purchaser will be merged with and into the Company (the "Merger"). On the
effective date of the Merger, each outstanding Share (other than Shares owned by
the Company or by any subsidiary of the Company, Intel, the Purchaser or any
other subsidiary of Intel or by stockholders, if any, who are entitled to and
who properly exercise appraisal rights under Delaware Law) will be converted
into the right to receive $17.50, in cash, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER
AND THE MERGER AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE
FAIR TO, AND IN THE BEST INTEREST OF, THE STOCKHOLDERS OF THE COMPANY, AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND
TENDER THEIR SHARES.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not properly withdrawn as, if and when the Purchaser gives oral or written
notice to the Depositary of the Purchaser's acceptance for payment of such
Shares. Upon the terms and subject to the conditions of the Offer, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price therefore with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting payment to tendering stockholders whose Shares have been accepted
for payment. In all cases, payment for Shares purchased pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) certificates for
such Shares or
<PAGE> 3
timely confirmation of book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility (as defined in the Offer to Purchase)
pursuant to the procedures set forth in Section 2 of the Offer to Purchase, (b)
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message (as defined in the Offer to Purchase) and (c) any
other documents required by the Letter of Transmittal. Under no circumstance
will interest be paid by the Purchaser on the purchase price of the Shares to be
paid by the Purchaser, regardless of any extension of the Offer or any delay in
making such payment.
The term "Expiration Date" means midnight, New York City time, on Thursday,
August 28, 1997, unless and until the Purchaser extends the period of time
during which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date on which the Offer, as so extended by the
Purchaser, shall expire. The Purchaser expressly reserves the right, subject to
the terms of the Merger Agreement, at any time or from time to time, and
regardless of whether or not any of the events set forth in Section 15 of the
Offer to Purchase shall have occurred, (i) to extend the period of time during
which the Offer is open and thereby delay acceptance for payment of, and the
payment for, any Shares, by giving oral or written notice of such extension to
the Depositary and (ii) to amend the Offer in any other respect permitted under
the Merger Agreement by giving oral or written notice of such amendment to the
Depositary. The Purchaser shall not have any obligation to pay interest on the
purchase price for tendered Shares, whether or not the Purchaser exercises its
right to extend the Offer. Except as set forth in the Merger Agreement, there
can be no assurance that the Purchaser will extend the Offer. Any such extension
will be followed by a public announcement thereof no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. During any such extension, all Shares previously tendered and
not withdrawn will remain subject to the Offer, subject to the right of a
tendering stockholder to withdraw such stockholder's Shares.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after
September 29, 1997. For a withdrawal to be effective, a written, telegraphic or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase and must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If certificates for Shares have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such certificates, the serial numbers shown on such certificates must
be submitted to the Depositary, and, unless Shares have been tendered by an
Eligible Institution (as defined in Section 2 of the Offer to Purchase), the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution. If shares have been delivered pursuant to the procedures for
book-entry transfer as set forth in Section 2 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not validly tendered for the purposes of the
Offer. However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 2 of the Offer to Purchase at any time prior to
the Expiration Date. All questions as to the form and validity (including time
of receipt) of notices of withdrawal will be determined by the Purchaser, in its
sole discretion, whose determination will be final and binding.
The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and furnished to
brokers, dealers, banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the stockholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Requests for copies of the Offer to Purchase, the Letter of Transmittal and
all other tender offer materials may be directed to the Information Agent, as
set forth below, and copies will be furnished promptly at the Purchaser's
expense.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, New York 10005-4495
(212) 269-5550 (Call Collect)
or
Call Toll-Free (800) 758-7358
August 1, 1997
<PAGE> 1
EXHIBIT (A)(8)
PRESS RELEASES, DATED JULY 28, 1997 AND AUGUST 1, 1997, ISSUED BY INTEL
<PAGE> 2
CONTACT: Gordon Casey
INTEL CORPORATION
(408) 765-1679
FOR IMMEDIATE RELEASE:
INTEL CORPORATION COMMENCES CHIPS AND TECHNOLOGIES, INC.
TENDER OFFER
SANTA CLARA, CA, August 1, 1997--Intel Corporation today commenced its
previously announced tender offer for the purchase of all outstanding shares of
Common Stock of Chips and Technologies, Inc. (Nasdaq: CHPS) not currently owned
by Intel Corporation or its affiliates at a price of $17.50 net per share in
cash. The offer is being made pursuant to the previously announced merger
agreement between Intel Corporation and Chips and Technologies, Inc. under
which, if the tender offer is consummated, Intel Corporation will be obligated
to acquire any remaining Chips and Technologies, Inc. shares in a cash merger at
the same price as paid in the tender offer. Intel Corporation and its affiliates
currently own none of the outstanding shares of Chips and Technologies, Inc.
Common Stock and no options for such stock.
The offer and withdrawal rights will expire at Midnight, New York City
time, on Thursday, August 28, 1997, unless Intel Corporation elects (subject to
the terms of its agreement with Chips and Technologies, Inc.) to extend the
offer. D.F. KING & Co., Inc. ("King") is acting as information agent. King may
be contacted (toll-free) at (800) 758-7358.
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CONTACT: Tom Waldrop (Intel) Bruce LeBoss
(408) 765-8478 (Chips and Technologies)
(408) 541-8744
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INTEL TO ACQUIRE CHIPS AND TECHNOLOGIES, INC.
INVESTS IN ADVANCED GRAPHICS TO
ACCELERATE VISUAL COMPUTING IN MOBILE PCS
SANTA CLARA, Calif., July 28, 1997--Intel Corporation today announced it has
entered into a definitive agreement to acquire Chips and Technologies, Inc.,
based in San Jose, California. The acquisition is aimed at advancing
capabilities for graphics and visual computing in mobile personal computers.
The terms of the agreement provide for Intel to commence a cash tender
offer in the near future for all outstanding shares of Chips and Technologies at
a price of $17.50 per share. The terms further provide for a merger of Chips and
Technologies with a subsidiary of Intel in which all remaining outstanding
shares of Chips and Technologies will be converted into the right to receive
$17.50 per share. The transaction is subject to regulatory approval and other
conditions.
"As we aggressively drive improved visual computing capabilities to the
personal computer, graphics solutions are an increasingly important part of
mobile PC platforms," noted Craig R. Barrett, Intel's president and chief
operating officer. "Intel and Chips and Technologies already share an excellent
working relationship based on our joint efforts in graphics accelerators.
Intel's acquisition of Chips and Technologies will provide us with the ability
to bring strong graphics solutions to the mobile marketplace."
"The need for advanced graphics in mobile systems is significant," stated
Jim Stafford, Chips and Technologies president and chief executive officer. "We
look forward to being a part of Intel and to working together to accelerate the
establishment of advanced graphics technologies and standards for the mobile
industry."
INNOVATORS IN ADVANCED DISPLAY CAPABILITIES FOR MOBILE COMPUTERS
Chips and Technologies is currently the market segment leader for notebook
graphics accelerator chips. The company has industry-leading technology, such as
HiQColor in graphics accelerators for the mobile computing market segment and
flat panel displays. Chips and Technologies is currently sampling graphics
accelerators with integrated memory.
Chips and Technologies will become a wholly owned subsidiary of Intel
Corporation and part of Intel's Graphics Components Division. Jim Stafford,
Chips and Technologies president and chief executive officer, will join Intel as
a vice president of the Company's Desktop Products Group. He will team with
Avtar Saini, vice president and general manager of the Platform Components
Division, to co-manage Intel's Graphics Component Division in Folsom and San
Jose, California.
Current Chips and Technologies employees will become employees of Intel.
Intel does not anticipate any immediate changes to Chips and Technologies
product line, and Chips and Technologies will continue to manufacture and
provide its products to customers under existing arrangements for the
foreseeable future.
Intel, the world's largest chip maker, is also a leading manufacturer of
personal computer, networking, and communications products. Additional
information is available at www.intel.com/pressroom.
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AGREEMENT AND PLAN OF MERGER
AMONG
CHIPS AND TECHNOLOGIES, INC.,
INTEL CORPORATION
AND
INTEL ENTERPRISE CORPORATION
DATED AS OF JULY 27, 1997
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TABLE OF CONTENTS
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ARTICLE I
THE OFFER
1.1. The Offer........................................................................ 1
1.2 Company Actions.................................................................. 2
1.3. Boards of Directors and Committees; Section 14(f)................................ 4
ARTICLE II
THE MERGER; CLOSING; EFFECTIVE TIME
2.1. The Merger....................................................................... 4
2.2. Closing.......................................................................... 5
2.3. Effective Time................................................................... 5
2.4. Options.......................................................................... 5
ARTICLE III
CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE SURVIVING
CORPORATION; OFFICERS AND DIRECTORS OF THE
SURVIVING CORPORATION
3.1. Certificate of Incorporation..................................................... 5
3.2. By-Laws.......................................................................... 5
3.3. Directors........................................................................ 5
3.4. Officers......................................................................... 6
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES FOR MERGER CONSIDERATION
4.1. Effect on Capital Stock.......................................................... 6
(a) Merger Consideration......................................................... 6
(b) Cancellation of Excluded Shares.............................................. 6
(c) Merger Sub................................................................... 6
4.2. Exchange of Certificates for Payment............................................. 6
(a) Exchange Agent............................................................... 6
(b) Exchange Procedures.......................................................... 6
(c) Transfers.................................................................... 7
(d) Termination of Merger Fund................................................... 7
(e) Return of Consideration...................................................... 7
(f) Lost, Stolen or Destroyed Certificates....................................... 7
4.3. Dissenters' Shares............................................................... 7
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of the Company.................................... 7
(a) Organization, Good Standing, Corporate Power and Qualification; Subsidiaries
and Other Interests.............................................................. 7
(b) Capital Structure............................................................ 8
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(c) Corporate Authority; Approval and Fairness................................... 9
(d) Governmental Filings; No Violations.......................................... 9
(e) Company Reports; Financial Statements........................................ 9
(f) Absence of Certain Changes................................................... 10
(g) Litigation and Liabilities................................................... 11
(h) Employee Benefits............................................................ 11
(i) Compliance with Laws......................................................... 12
(j) Takeover Statutes............................................................ 13
(k) Environmental Matters........................................................ 13
(l) Intellectual Property........................................................ 13
(m) Taxes........................................................................ 14
(n) Labor Matters................................................................ 15
(o) Insurance.................................................................... 15
(p) Rights Agreement............................................................. 15
(q) Brokers and Finders.......................................................... 15
(r) Certain Business Practices................................................... 15
(s) Product Warranties........................................................... 15
(t) Suppliers and Customers...................................................... 15
(u) Backlog Information.......................................................... 15
5.2. Representations and Warranties of Parent and Merger Sub.......................... 16
(a) Organization, Good Standing and Qualification................................ 16
(b) Ownership of Merger Sub...................................................... 16
(c) Corporate Authority.......................................................... 16
(d) Governmental Filings; No Violations.......................................... 16
(e) Brokers and Finders.......................................................... 17
(f) Financing.................................................................... 17
ARTICLE VI
COVENANTS
6.1. Interim Operations............................................................... 17
6.2. Third Party Acquisitions......................................................... 18
6.3. Filings; Other Actions; Notification............................................. 20
6.4. Information Supplied............................................................. 21
6.5. Stockholders Meeting............................................................. 21
6.6. Access........................................................................... 21
6.7. Publicity........................................................................ 21
6.8. Status of Company Employees; Company Stock Options; Employee Benefits............ 22
6.9. Expenses......................................................................... 22
6.10. Indemnification; Directors' and Officers' Insurance.............................. 22
6.11. Other Actions by the Company and Parent.......................................... 24
(a) Rights Agreement............................................................. 24
(b) Takeover Statutes............................................................ 24
6.12. Parent Stock Option; Exercise; Adjustments....................................... 24
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ARTICLE VII
CONDITIONS
7.1. Conditions to Each Party's Obligation to Effect Merger........................... 25
(a) Stockholder Approval......................................................... 25
(b) Regulatory Consents.......................................................... 25
(c) Litigation................................................................... 25
7.2. Conditions to Obligations of Parent and Merger Sub............................... 25
(a) Representations and Warranties............................................... 25
(b) Performance of Obligations of the Company.................................... 25
7.3. Conditions to Obligations of the Company......................................... 25
(a) Representations and Warranties............................................... 25
(b) Performance of Obligations of Parent and Merger Sub.......................... 26
ARTICLE VIII
TERMINATION
8.1. Termination Mutual Consent....................................................... 26
8.2. Termination by Either Parent or the Company...................................... 26
8.3. Termination by the Company....................................................... 26
8.4. Termination by Parent and Merger Sub............................................. 26
8.5. Effect of Termination and Abandonment............................................ 27
8.6. Procedure for Termination........................................................ 27
ARTICLE IX
MISCELLANEOUS
9.1. Survival......................................................................... 28
9.2. Certain Definitions.............................................................. 28
9.3. No Personal Liability............................................................ 29
9.4. Modification or Amendment........................................................ 29
9.5. Waiver of Conditions............................................................. 29
9.6. Counterparts..................................................................... 29
9.7. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.................................... 29
9.8. Notices.......................................................................... 30
9.9. Entire Agreement................................................................. 31
9.10. No Third Party Beneficiaries..................................................... 31
9.11. Obligations of the Company and Surviving Corporation............................. 31
9.12. Severability..................................................................... 31
9.13. Interpretation................................................................... 31
9.14. Assignment....................................................................... 31
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SCHEDULES
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SCHEDULE DESCRIPTION
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Schedule 5.1(a) Company Subsidiaries and Other Interests
Schedule 5.1(d) Consents
Schedule 5.1(f) Certain Changes
Schedule 5.1(g) Litigation and Liabilities
Schedule 5.1(h) Outstanding Company Options and Other Benefit Plan Matters
Schedule 5.1(k) Environmental Matters
Schedule 5.1(l)(ii) Outstanding Orders and Judgments on Intellectual Property Rights
Schedule 5.1(l)(iii) Intellectual Property Material Contracts
Schedule 5.1(m) Certain Tax Matters
Schedule 5.1(s) Product Warranties
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"), dated
as of July 27, 1997, among CHIPS AND TECHNOLOGIES, INC., a Delaware corporation
(the "Company"), INTEL CORPORATION, a Delaware corporation ("Parent"), and INTEL
ENTERPRISE CORPORATION, a Delaware corporation and a direct, wholly-owned
subsidiary of Parent ("Merger Sub"; the Company and Merger Sub sometimes being
hereinafter together referred to as the "Constituent Corporations").
RECITALS
WHEREAS, the respective Boards of Directors of each of Parent, Merger Sub
and the Company have approved the merger of Merger Sub with and into the Company
(the "Merger") and approved the Merger upon the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, in furtherance thereof, it is proposed that Parent shall, within
five (5) Business Days after the public announcement hereof, commence a tender
offer (the "Offer") to acquire all of the outstanding shares of common stock,
par value $.01 per share, of the Company (the "Shares"), together with the
associated Rights (as defined in Section 4.1(a)), at a price of $17.50 per
Share, net to the seller in cash, less any required withholding taxes (such
amount, or any greater amount per share paid pursuant to the Offer, being
hereinafter referred to as the "Offer Price"), in accordance with the terms and
subject to the conditions provided herein; and
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
1.1. The Offer.
(a) Provided that this Agreement shall not have been terminated and
subject to the terms hereof, as promptly as practicable, but in no event
later than five (5) Business Days after the public announcement of the
execution hereof by the parties, Parent shall commence (within the meaning
of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), the Offer for any and all of the Shares, at the Offer
Price. The obligation of Parent to accept for payment and to pay for any
Shares tendered shall be subject only to (i) the condition that at least a
majority of Shares on a fully-diluted basis (including for purposes of such
calculation all Shares issuable upon exercise of all vested and unvested
stock options) be validly tendered (the "Minimum Condition"), and (ii) the
other conditions set forth in Annex A. Parent expressly reserves the right
to increase the Offer Price or to make any other changes in the terms and
conditions of the Offer (provided that, unless previously approved by the
Company in writing, no change may be made which (i) decreases the Offer
Price, (ii) changes the form of consideration to be paid in the Offer,
(iii) reduces the maximum number of Shares to be purchased in the Offer,
(iv) imposes conditions to the Offer in addition to those set forth in
Annex A, (v) amends the conditions set forth in Annex A to broaden the
scope of such conditions, (vi) amends any other term of the Offer in a
manner adverse to the holders of the Shares, (vii) extends the Offer except
as provided in Section 1.1(b)), or (viii) amends the Minimum Condition. It
is agreed that the conditions set forth in Annex A are for the sole benefit
of Parent and may be waived by Parent, in whole or in part at any time and
from time to time, in its sole discretion other than the Minimum Condition,
as to which prior written Company approval is required. The failure by
Parent 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
<PAGE> 7
which may be asserted at any time and from time to time. The Company agrees
that no Shares held by the Company or any of its Subsidiaries (as defined
in Section 9.2) will be tendered in the Offer.
(b) Subject to the terms and conditions thereof, the Offer shall
expire at midnight, New York City time, on the date that is twenty (20)
Business Days after the date the Offer is commenced; provided, however,
that without the consent of the Company's Board of Directors, Parent may
(i) from time to time extend the Offer, if at the scheduled expiration date
of the Offer any of the conditions to the Offer shall not have been
satisfied or waived, until such time as such conditions are satisfied or
waived; (ii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange
Commission (the "SEC") or the staff thereof applicable to the Offer; or
(iii) extend the Offer for any reason on one or more occasions for an
aggregate period of not more than twenty (20) Business Days beyond the
latest expiration date that would otherwise be permitted under clause (i)
or (ii) of this sentence if on such expiration date there shall not have
been tendered at least 90% of the outstanding Shares. Parent agrees that if
all of the conditions to the Offer set forth on Annex A are not satisfied
on any scheduled expiration date of the Offer then, provided that all such
conditions are reasonably capable of being satisfied prior to October 31,
1997, Parent shall extend the Offer from time to time until such conditions
are satisfied or waived, provided that Parent shall not be required to
extend the Offer beyond October 31, 1997. Subject to the terms and
conditions of the Offer and this Agreement, Parent shall accept for
payment, and pay for, all Shares validly tendered and not withdrawn
pursuant to the Offer that Parent becomes obligated to accept for payment
and pay for pursuant to the Offer, as promptly as practicable after the
expiration of the Offer.
(c) As soon as practicable on the date the Offer is commenced, Parent
shall file with the SEC a Tender Offer Statement on Schedule 14D-1
(together with all amendments and supplements thereto, and including all
exhibits thereto, the "Schedule 14D-1") with respect to the Offer. The
Schedule 14D-1 shall contain as an exhibit or incorporate by reference the
Offer to Purchase (or portions thereof) and forms of the related letter of
transmittal and summary advertisement. Parent and Merger Sub agree that the
Schedule 14D-1, the Offer to Purchase and all amendments or supplements
thereto (which together constitute the "Offer Documents") shall comply in
all material respects with the Exchange Act and the rules and regulations
thereunder and other applicable Laws (as defined in Section 5.1(i)). Parent
and Merger Sub further agree that the Offer Documents, on the date first
published, sent or given to the Company's stockholders, shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation or warranty is made by Parent or
Merger Sub with respect to information supplied by the Company or any of
its stockholders specifically for inclusion or incorporation by reference
in the Offer Documents. The Company agrees that the information provided by
the Company for inclusion or incorporation by reference in the Offer
Documents shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Each of Parent, Merger Sub and the
Company agrees promptly to correct any information provided by it for use
in the Offer Documents if and to the extent that such information shall
have become false or misleading in any material respect, and Parent and
Merger Sub further agree to take all steps necessary to cause the Schedule
14D-1 as so corrected to be filed with the SEC and the other Offer
Documents as so corrected to be disseminated to the Company's stockholders,
in each case as and to the extent required by applicable federal securities
laws. The Company and its counsel shall be given reasonable opportunity to
review and comment on the Offer Documents prior to the filing thereof with
the SEC. Parent agrees to provide the Company and its counsel in writing
with any comments Parent or its counsel may receive from the SEC or its
staff with respect to the Offer Documents promptly after receipt of such
comments.
1.2. Company Actions.
(a) The Company hereby approves of and consents to the Offer and
represents that its Board of Directors, at a meeting duly called and held,
has, subject to the terms and conditions set forth herein, (i) after
evaluating the Merger in accordance with all of the provisions of Article
Ninth of the Company's
2
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certificate of incorporation, determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, taken
together, are at a price and on terms which are adequate and are otherwise
in the best interests of the Company and its stockholders (other than
Parent and its Affiliates), (ii) approved this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, in
all respects and such approval constitutes approval of the Offer, this
Agreement and the Merger for purposes of (x) Section 203 of the Delaware
General Corporation Law (the "DGCL"), (y) similar provisions of any other
similar state statutes that might be deemed applicable to the transactions
contemplated hereby and (z) the Rights Agreement (as defined in Section
5.1(b)), (iii) resolved to recommend that the stockholders of the Company
accept the Offer, tender their Shares thereunder to Parent and approve and
adopt this Agreement and the Merger, and (iv) in accordance with the
applicable provisions of the Assumed Stock Option Plan (as defined in
Section 2.4), approved the assumption of the Assumed Stock Option Plan by
Parent as contemplated by Section 6.8(c) and the conversion of the options
under the Assumed Stock Option Plan outstanding at the Effective Time of
the Merger. The Company consents to the inclusion of such recommendation
and approval in the Offer Documents. The Company also represents that its
Board of Directors has reviewed the opinion of Hambrecht & Quist LLC,
financial advisor to the Board of Directors (the "Financial Advisor"),
that, as of July 27, 1997, the consideration to be received pursuant to
this Agreement is fair to the stockholders of the Company (other than
Parent and its Affiliates) from a financial point of view (the "Fairness
Opinion"). The Company has been authorized by the Financial Advisor to
permit, subject to the prior review and consent by the Financial Advisor
(such consent not to be unreasonably withheld), the inclusion of the
fairness opinion (or a reference thereto) in the Offer Documents, the
Schedule 14D-9 and the Proxy Statement.
(b) The Company shall file with the SEC, concurrently with the filing
of the Schedule 14D-1, a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto, and including
all exhibits thereto, the "Schedule 14D-9") containing the recommendations
described in Section 1.2(a) and shall mail the Schedule 14D-9 to the
stockholders of the Company promptly after the commencement of the Offer.
The Company agrees that the Schedule 14D-9 shall comply in all material
respects with the Exchange Act and the rules and regulations thereunder and
other applicable Laws. The Company further agrees that Schedule 14D-9, on
the date first published, sent or given to the Company's stockholders,
shall not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation or warranty is
made by the Company with respect to information supplied by the Parent or
Merger Sub specifically for inclusion or incorporation by reference in
Schedule 14D-9. Each of the Company, Parent and Merger Sub agrees promptly
to correct any information provided by it for use in the Schedule 14D-9 or
the Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect, and the Company further
agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and be disseminated to the Company's
stockholders, in each case as and to the extent required by applicable
federal securities laws. Parent and its counsel shall be given reasonable
opportunity to review and comment on the Schedule 14D-9 prior to the filing
thereof with the SEC.
(c) In connection with the Offer, the Company shall, or shall cause
its transfer agent to, promptly furnish Parent with such information,
including updated lists of the stockholders of the Company, mailing labels
and updated lists of security positions, and such assistance as Parent or
its agents may reasonably request in communicating the Offer to the record
and beneficial holders of Shares. Subject to the requirements of applicable
law, and except for such steps as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate the Merger,
Parent and Sub and their agents shall hold in confidence the information
contained in any such labels, listings and files, will use such information
only in connection with the Offer and the Merger and, if this Agreement
shall be terminated, will deliver, and will use their reasonable efforts to
cause their agents to deliver, to the Company all copies and any extracts
or summaries from such information then in their possession or control.
3
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(d) Solely in connection with the tender and purchase of Shares
pursuant to the Offer and the consummation of the Merger, the Company
hereby waives any and all rights of first refusal it may have with respect
to Shares owned by, or issuable to, any Person, other than rights to
repurchase unvested shares, if any, that may be held by Persons following
exercise of employee stock options.
1.3. Boards of Directors and Committees; Section 14(f).
(a) Promptly upon the purchase by Parent of Shares pursuant to the
Offer and from time to time thereafter, if the Minimum Condition has been
met, and subject to the second to last sentence of this Section 1.3(a),
Parent shall be entitled to designate up to such number of directors,
rounded up to the next whole number, on the Board of Directors of the
Company as will give Parent representation on such Board equal to the
product of the number of directors on such Board (giving effect to any
increase in the number of directors pursuant to this Section 1.3) and the
percentage that such number of Shares so purchased bears to the total
number of outstanding Shares on a fully-diluted basis, and the Company
shall use its best efforts to, upon request by Parent, promptly, at the
Company's election, either increase the size of its Board of Directors
(subject to the provisions of Article Sixth of the Company's certificate of
incorporation) or secure the resignation of such number of directors as is
necessary to enable Parent's designees to be elected to such Board and to
cause Parent's designees to be so elected. At such times, and subject to
the second to last sentence of this Section 1.3(a), the Company will use
its best efforts to cause persons designated by Parent to constitute the
same percentage as is on the Company's Board of Directors of (i) each
committee of such Board (other than any committee of such Board established
to take action under this Agreement), (ii) each Board of Directors of each
Subsidiary of the Company and (iii) each committee of each such Board.
Notwithstanding the foregoing, the Company shall use its best efforts to
ensure that three of the members of its Board of Directors as of the date
hereof ("Continuing Directors") shall remain members of such Board until
the Effective Time (as defined in Section 2.3). In the event a Continuing
Director resigns from the Company's Board of Directors, Parent, Merger Sub
and the Company shall permit the remaining Continuing Director or Directors
to appoint the resigning director's successor who shall be deemed to be a
Continuing Director.
(b) The Company's obligation to appoint designees to its Board of
Directors shall be subject to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder. The Company shall promptly take all action
required pursuant to such Section and Rule in order to fulfill its
obligations under this Section 1.3 and shall include in the Schedule 14D-9
such information with respect to the Company and its officers and directors
as is required under such Section and Rule in order to fulfill its
obligations under this Section 1.3. Parent will supply to the Company in
writing and be solely responsible for any information with respect to
itself and its nominees, officers, directors and Affiliates required by
such Section and Rule.
(c) Following the election or appointment of Parent's designees
pursuant to this Section 1.3 and prior to the Effective Time, if there
shall be any Continuing Directors, any amendment of this Agreement, any
termination of this Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of
Parent or any waiver of any of the Company's rights hereunder, will require
the concurrence of a majority of such Continuing Directors.
ARTICLE II
THE MERGER; CLOSING; EFFECTIVE TIME
2.1. The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, at the Effective Time (as defined in Section 2.3) Merger Sub
shall be merged with and into the Company and the separate corporate existence
of Merger Sub shall thereupon cease. The Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
Corporation") and shall continue to be governed by the laws of the State of
Delaware, and the separate corporate existence of the Company with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger, except as set forth in Article III. At the election of Parent, to
the extent that such action would not
4
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cause a failure of a condition to the Offer of the Merger, the Merger may be
structured so that the Company shall be merged with and into Merger Sub with the
result that Merger Sub shall become the "Surviving Corporation." The Merger
shall have the effects specified in the DGCL. Parent, as the sole stockholder of
Merger Sub, hereby approves the Merger and this Agreement.
2.2. Closing. The closing of the Merger (the "Closing") shall take place
(i) at the offices of Gibson, Dunn & Crutcher LLP, One Montgomery Street, San
Francisco, California at 9:00 am., Pacific time, on the first Business Day after
the day on which the last to be fulfilled or waived of the conditions set forth
in Article VII (other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the fulfillment or waiver of those
conditions) shall be satisfied or waived in accordance with this Agreement or
(ii) at such other place and time and/or on such other date as the Company and
Parent may agree in writing (the "Closing Date").
2.3. Effective Time. As soon as practicable following the Closing, the
Company and Parent will cause a Certificate of Merger (the "Delaware Certificate
of Merger") to be executed, acknowledged and filed with the Secretary of State
of Delaware as provided in Section 251 of the DGCL. The Merger shall become
effective at the time when the Delaware Certificate of Merger has been duly
filed with the Secretary of State of Delaware (the "Effective Time").
2.4. Options. At the Effective Time, options under the Company's Amended
and Restated 1994 Stock Option Plan (the "Assumed Stock Option Plan") to
purchase Shares (each, a "Company Option"), which are then outstanding and
unexercised, shall cease to represent a right to acquire Shares and shall be
converted automatically into options to purchase shares of common stock, par
value $.001 per share, of Parent ("Parent Common Stock"), and Parent shall
assume each such Company Option subject to the terms of the Assumed Stock Option
Plan, in each case as heretofore amended or restated, as the case may be, and
the agreements evidencing grants thereunder; provided, however, that from and
after the Effective Time, (i) the number of shares of Parent Common Stock
purchasable upon exercise of such Company Option shall be equal to the number of
Shares that were purchasable under such Company Option immediately prior to the
Effective Time multiplied by the Exchange Ratio (as hereinafter defined), and
rounding to the nearest whole share, and (ii) the per share exercise price under
each such Company Option shall be adjusted by dividing the per share exercise
price of each such Company Option by the Exchange Ratio, and rounding down to
the nearest cent. The terms of each Company Option shall, in accordance with its
terms, be subject to further adjustment as appropriate to reflect any stock
split, stock dividend, recapitalization or other similar transaction with
respect to Parent Common Stock on or subsequent to the Effective Date.
Notwithstanding the foregoing, each Company Option which is intended to be an
"incentive stock option": (as defined in Section 422 of the Internal Revenue
Code of 1986, as amended, (the "Code")) shall be adjusted in accordance with the
requirements of Section 424 of the Code. Accordingly, with respect to any
incentive stock options, fractional shares shall be rounded down to the nearest
whole number of shares and the per share exercise price shall be rounded down to
the nearest cent. The Exchange Ratio is 0.197656.
ARTICLE III
CERTIFICATE OF INCORPORATION AND
BY-LAWS OF THE SURVIVING CORPORATION; OFFICERS AND
DIRECTORS OF THE SURVIVING CORPORATION
3.1. Certificate of Incorporation. The certificate of incorporation of
the Company as in effect immediately prior to the Effective Time shall be the
certificate of incorporation of the Surviving Corporation (the "Charter"), until
duly amended as provided therein or by applicable Law, except that Article
Fourth of the Charter shall be amended to read in its entirety as follows: "The
aggregate number of shares that the Corporation shall have the authority to
issue is 1,000 shares of Common Stock, par value $.01 per share."
3.2. By-Laws. The by-laws of Merger Sub in effect at the Effective Time
shall be the by-laws of the Surviving Corporation (the "By-Laws"), until
thereafter amended as provided therein or by applicable Law.
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3.3. Directors. The directors of Merger Sub at the Effective Time shall,
from and after the Effective Time, be the directors of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the Charter
and By-Laws.
3.4. Officers. The officers of the Company at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the Charter
and By-Laws.
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF
CERTIFICATES FOR MERGER CONSIDERATION
4.1. Effect on Capital Stock. At the Effective Time, as a result of the
Merger and without any action on the part of the holder of any Capital Stock (as
defined in Section 9.2) of the Company:
(a) Merger Consideration. Each Share issued and outstanding
immediately prior to the Effective Time (other than Shares owned by Parent,
Merger Sub or any other direct or indirect Subsidiary of Parent or Shares
that are owned by the Company or any direct or indirect Subsidiary of the
Company (collectively, the "Excluded Shares")) shall be converted into, and
become exchangeable for the Offer Price, without interest (the "Merger
Consideration"). Unless the context otherwise clearly requires, each
reference in this Agreement to the Shares shall include the associated
"Rights" as defined in and issued pursuant to the Rights Agreement (the
"Rights"). At the Effective Time, all Shares shall no longer be outstanding
and shall be canceled and retired and shall cease to exist, and each
certificate (a "Certificate") formerly representing any of such Shares
(other than Excluded Shares) shall thereinafter represent only the right to
receive the Merger Consideration.
(b) Cancellation of Excluded Shares. Each Excluded Share issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, cease to
be outstanding, shall be canceled and retired without payment of any
consideration therefor and shall cease to exist.
(c) Merger Sub. At the Effective Time, each share of Common Stock,
par value $.01 per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into one share of Common
Stock of the Surviving Corporation.
4.2. Exchange of Certificates for Payment.
(a) Exchange Agent. As of the Effective Time, Parent shall deposit,
or shall cause to be deposited, with an exchange agent selected by Parent
(the "Exchange Agent"), for the benefit of the holders of Shares, cash in
U.S. dollars in an amount equal to the Merger Consideration multiplied by
the aggregate outstanding Shares (other than Excluded Shares) to be paid
pursuant to Section 4.1(a) in exchange for outstanding Shares upon due
surrender of the Certificates (or affidavits of loss in lieu thereof)
pursuant to the provisions of this Article IV (such aggregate cash amount
when paid to the Exchange Agent being hereinafter referred to as the
"Merger Fund").
(b) Exchange Procedures. Promptly after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to mail to each holder
of record of Shares (other than holders of Excluded Shares) (i) a letter of
transmittal (which shall, among other matters, specify that delivery of the
Certificates shall be effected, and risk of loss and title to the
Certificates shall pass, only upon actual receipt of the Certificates (or
affidavits of loss in lieu thereof) by the Exchange Agent) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for the Merger Consideration due and payable to such holder. Upon
surrender of a Certificate for cancellation to the Exchange Agent together
with such letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange therefor a check in
the amount (after giving effect to any required tax withholdings) of the
Merger Consideration due and payable in respect of such holder's Shares and
the Certificate so surrendered shall forthwith be canceled. No interest
will be paid or accrued on any amount payable upon
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due surrender of the Certificates. All Merger Consideration paid upon
surrender for exchange of Shares in accordance with the terms of this
Agreement shall be deemed to have been paid in full satisfaction of all
rights pertaining to such Shares. In the event of a transfer of ownership
of Shares that is not registered in the transfer records of the Company, a
check for the amount of cash to be paid upon due surrender of the
Certificate may be delivered to such a transferee if the Certificate
formerly representing such Shares is presented to the Exchange Agent,
accompanied by all documents required by the Exchange Agent to evidence and
effect such transfer and to evidence that any applicable stock transfer
taxes have been paid.
(c) Transfers. After the Effective Time, there shall be no transfers
on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time.
(d) Termination of Merger Fund. Any portion of the Merger Fund
(including the proceeds of any investments thereof) that remains unclaimed
by the stockholders of the Company for 180 days after the Effective Time
shall be paid to Parent. Any stockholders of the Company who have not
theretofore complied with this Article IV shall thereafter look only to
Parent for payment of their Merger Consideration payable pursuant to
Section 4.1 upon due surrender of their Certificates (or affidavits of loss
in lieu thereof), in each case, without any interest thereon.
Notwithstanding the foregoing, neither Parent, the Surviving Corporation,
the Exchange Agent nor any other Person shall be liable to any former
holder of Shares for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws. Any
amounts remaining unclaimed by holders of Shares on the two (2) year
anniversary of the Effective Time (or such earlier date immediately prior
to such time as such amounts would otherwise escheat to or become property
of any Governmental Entity (as defined in Section 5.1(d)) shall, to the
extent permitted by applicable Law, become the property of Parent, free and
clear of any claims or interest of any Person previously entitled thereto.
(e) Return of Consideration. Any portion of the Merger Fund
representing Merger Consideration payable in respect of Dissenters' Shares
(as defined in Section 4.3) for which appraisal rights have been perfected
shall be returned to Parent, upon demand.
(f) Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the Person claiming such Certificate to be
lost, stolen or destroyed and, if required by Parent, the posting by such
Person of a bond in an amount determined by Parent as indemnity against any
claim that may be made against it with respect to such Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration payable pursuant to Section 4.1 upon
due surrender of the Certificate representing such Shares pursuant to this
Agreement.
4.3. Dissenters' Shares. Notwithstanding Section 4.1, Shares outstanding
immediately prior to the Effective Time and held by a holder who has not voted
in favor of the Merger or consented thereto in writing and who has demanded
appraisal for such Shares in accordance with the DGCL ("Dissenters' Shares")
shall not be converted into a right to receive the Merger Consideration, unless
such holder fails to perfect or withdraws or otherwise loses such holder's right
to appraisal. If after the Effective Time such holder fails to perfect or
withdraws or loses such holder's right to appraisal, such Dissenters' Shares
shall be treated as if they had been converted as of the Effective Time into a
right to receive the Merger Consideration. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of Dissenters'
Shares, and Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of the Company. The Company hereby
represents and warrants to Parent and Merger Sub as follows:
(a) Organization, Good Standing, Corporate Power and Qualification;
Subsidiaries and Other Interests.
(i) Each of the Company and its Subsidiaries (x) is a corporation
duly organized, validly existing and in good standing under the laws of
its respective jurisdiction of organization, (y) has all requisite
corporate or similar power and authority to own and operate its
properties and assets and to carry on its business as presently
conducted and (z) is qualified to do business and is in good standing as
a foreign corporation in each jurisdiction where the ownership or
operation of its properties or conduct of its business requires such
qualification, except where the failure to be so qualified or in good
standing, individually or in the aggregate, has not had and is not
reasonably likely to have a Company Material Adverse Effect (as defined
in Section 9.2). The Company has made available to Parent a complete and
correct copy of the Company's and its Subsidiaries' certificates of
incorporation and by-laws (or comparable governing documents), each as
amended to the date hereof. The Company's and its Subsidiaries'
certificates of incorporation and by-laws (or comparable governing
documents) made available are in full force and effect.
(ii) Schedule 5.1(a) contains a correct and complete list of each
of the Company's Subsidiaries, the jurisdiction where each of such
Subsidiaries is organized and the percentage of outstanding Capital
Stock of such Subsidiaries that is directly or indirectly owned by the
Company. The Company or another Subsidiary of the Company owns its
shares of the Capital Stock of each Subsidiary of the Company free and
clear of all Liens except Permitted Liens (as defined in Section 9.2).
Schedule 5.1(a) sets forth a true and complete list of each equity
investment in an amount of $2,000,000 or more or which represents a 5%
or greater ownership interest in the subject of such investment made by
the Company or any of its Subsidiaries in any other Person other than
the Company's Subsidiaries ("Other Interests"). The Other Interests are
owned by the Company, by one or more of the Company's Subsidiaries or by
the Company and one or more of its Subsidiaries, in each case free and
clear of all Liens, except for Permitted Liens and Liens that may be
created by any partnership or joint venture agreements for Other
Interests.
(b) Capital Structure. The authorized Capital Stock of the Company
consists of (i) one hundred million (100,000,000) Shares, of which
22,003,195 were outstanding as of the close of business on July 27, 1997,
and (ii) five million (5,000,000) shares of Preferred Stock, par value $.01
per share (the "Preferred Shares"), none of which is outstanding. All of
the outstanding Shares have been duly authorized and are validly issued,
fully paid and nonassessable. The Company has no Preferred Shares reserved
for issuance. Schedule 5.1(h) contains a correct and complete list as of
July 27, 1997 of each outstanding purchase right or option (each a "Company
Option") to purchase Shares, including all Company Options issued under the
Company's Amended and Restated Employee Stock Purchase Plan, the Company's
Amended and Restated 1994 Stock Option Plan and the Company's First Amended
1988 Nonqualified Stock Option Plan for Outside Directors, in each case as
amended to the date hereof (collectively, the "Stock Option Plans"),
including the holder, date of grant, exercise price and number of Shares
subject thereto. The Stock Option Plans are the only plans under which any
Company Options are outstanding. As of July 27, 1997, other than (1) the
3,983,598 Shares reserved for issuance upon exercise of outstanding Company
Options and (2) Shares reserved for issuance pursuant to the Rights
Agreement, dated as of August 23, 1989, between the Company and Bank of
America, NT & SA, as Rights Agent (the "Rights Agreement"), there are no
Shares reserved for issuance or any commitments for the Company to issue
Shares. Each of the outstanding shares of Capital Stock or other securities
of each of the Company's Subsidiaries directly or indirectly owned by the
Company is duly authorized, validly issued, fully paid and nonassessable
and owned by the Company or by a direct or indirect Subsidiary of the
Company, free and clear of any limitation or restriction (including any
restriction on the
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right to vote or sell the same except as may be provided as a matter of
Law). Except for Company Options, there are no preemptive or other
outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, agreements or
commitments to issue or sell any shares of Capital Stock or other
securities of the Company or any of its Subsidiaries or any securities or
obligations convertible or exchangeable into or exercisable for, or giving
any Person a right to subscribe for or acquire, any shares of Capital Stock
or other securities of the Company or any of its Subsidiaries, and no
securities or obligations evidencing such rights are authorized, issued or
outstanding. The Company does not have outstanding any bonds, debentures,
notes or other obligations the holders of which have the right to vote (or
convertible into or exercisable for securities having the right to vote)
with the stockholders of the Company on any matter ("Voting Debt"). If
Parent takes the actions provided for in Section 6.8(c) hereof, after the
Effective Time, the Surviving Corporation will have no obligation to issue,
transfer or sell any shares of Capital Stock or other securities of the
Surviving Corporation pursuant to the Stock Option Plans. The Shares
constitute the only class of securities of the Company or any of its
Subsidiaries registered or required to be registered under the Exchange
Act.
(c) Corporate Authority; Approval and Fairness.
(i) The Company has all requisite corporate power and authority and
has taken all corporate action necessary in order to execute, deliver
and perform its obligations under this Agreement and to consummate,
subject (if required by law) only to approval of this Agreement by the
holders of a majority of the outstanding Shares (the "Company Requisite
Vote"), the Merger. Assuming due execution and delivery by Parent and
Merger Sub, this Agreement is a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy
laws or creditors' rights generally or by general principles of equity.
(ii) The Board of Directors of the Company has unanimously approved
this Agreement and the Merger and the other transactions contemplated
hereby including, without limitation, the Offer and the assumption
referred to in Section 6.8(c), has received and reviewed the Fairness
Opinion and duly taken all other actions described in Sections 1.2(a),
5.1(j) and 5.1(p).
(d) Governmental Filings; No Violations.
(i) Other than the filings and/or notices (A) pursuant to Section
1.2, (B) with the Delaware Secretary of State, (C) under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act") and the Exchange Act, (D) to comply with state securities or
"blue sky" laws and (E) with the National Association of Securities
Dealers (the "NASD"), no notices, reports or other filings are required
to be made nor are any consents, registrations, approvals, permits or
authorizations (collectively, "Government Consents") required to be
obtained by the Company from any court or other governmental or
regulatory authority, agency, commission, body or other governmental
entity (a "Governmental Entity"), in connection with the execution and
delivery of this Agreement by the Company and the consummation by the
Company of the Merger and the other transactions contemplated hereby,
except those that the failure to make or obtain are not, individually or
in the aggregate, reasonably likely to have a Company Material Adverse
Effect or prevent, materially delay or materially impair the ability of
the Company to consummate the transactions contemplated by this
Agreement.
(ii) The execution, delivery and performance of this Agreement by
the Company does not, and the consummation by the Company of the Merger
and the other transactions contemplated hereby will not, constitute or
result in (A) a breach or violation of or a default under, the
certificate of incorporation or by-laws of the Company or the comparable
governing instruments of any of its Subsidiaries, (B) a breach or
violation of, or a default under, the acceleration of any obligations or
the creation of any Lien on the assets of the Company or any of its
Subsidiaries (with or without notice, lapse of time or both) pursuant
to, any agreement, lease, contract, note, mortgage, indenture or other
obligation (a "Contract") binding upon the Company or any of its
Subsidiaries or any order, writ, injunction, decree of any court or any
Law or governmental or non-governmental permit or
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license to which the Company or any of its Subsidiaries is subject or
(C) any change in the rights or obligations of any party under any
Contract, except, in the case of clause (B) or (C) above, for any
breach, violation, default, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to have a
Company Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Company to consummate the
transactions contemplated by this Agreement. Except as set forth on
Schedule 5.1(d), there are no Contracts of the Company or its
Subsidiaries which are material to the Company and its Subsidiaries,
taken as a whole, pursuant to which consents or waivers are or may be
required prior to consummation of the Offer or the Merger and the other
transactions contemplated by this Agreement.
(e) Company Reports; Financial Statements. The Company has made
available to Parent each registration statement, report, proxy statement or
information statement filed with the SEC by it since June 30, 1996 (the
"Audit Date"), including the Company's Annual Report on Form 10-K for the
year ended June 30, 1996 (the "Company 10-K") in the form (including
exhibits, annexes and any amendments thereto) filed with the SEC
(collectively, including any such reports filed subsequent to the date
hereof, the "Company Reports"). As of their respective dates, the Company
Reports complied, and any Company Reports filed with the SEC after the date
hereof will comply, as to form in all material respects with the applicable
requirements of the Exchange Act and the Securities Act of 1933, as amended
(the "Securities Act"), and the Company Reports did not, and any Company
Reports filed with the SEC after the date hereof will not, at the time of
their filing, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances in which they
were made, not misleading. Each of the consolidated balance sheets included
in or incorporated by reference into the Company Reports (including the
related notes and schedules) fairly presents, or will fairly present, the
consolidated financial position of the Company and its Subsidiaries as of
its date and each of the consolidated statements of income and of changes
in financial position included in or incorporated by reference into the
Company Reports (including any related notes and schedules) fairly
presents, or will fairly present, the results of operations, retained
earnings and changes in financial position, as the case may be, of the
Company and its Subsidiaries for the periods set forth therein (subject, in
the case of unaudited statements, to notes and normal year-end audit
adjustments that will not be material in amount or effect), in each case in
accordance with United States generally accepted accounting principles
("GAAP") consistently applied during the periods involved, except as may be
noted therein. The Company has heretofore made available or promptly will
make available to Parent a complete and correct copy of all amendments or
modifications which are required to be filed with the SEC but have not yet
been filed with the SEC to the Company Reports, agreements, documents or
other instruments which previously had been filed by the Company with the
SEC pursuant to the Exchange Act. For purposes of this Agreement, "Balance
Sheet" means the consolidated balance sheet of the Company as of June 30,
1996 set forth in the Company 10-K. Except as set forth in Company Reports
filed with the SEC prior to the date hereof or as incurred in the ordinary
course of business since the date of the most recent financial statements
included in the Company Reports, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) which would be required under
GAAP to be set forth on a consolidated balance sheet of the Company and its
subsidiaries taken as a whole and which individually or in the aggregate
would have a Company Material Adverse Effect.
(f) Absence of Certain Changes. Except as disclosed in Schedule 5.1(f)
or in the Company Reports filed prior to the date hereof, since the Audit
Date, the Company and its Subsidiaries have conducted their respective
businesses in all material respects only in, and have not engaged in any
material transaction other than according to, the ordinary and usual course
of such businesses consistent with past practices, and there has not been
any (i) change in the financial condition, properties, business or results
of operations of the Company and its Subsidiaries, except for those changes
that, individually or in the aggregate, have not had and are not reasonably
likely to have a Company Material Adverse Effect; (ii) material damage,
destruction or other casualty loss with respect to any material asset or
property owned, leased or otherwise used by the Company or any of its
Subsidiaries, not covered by insurance;
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(iii) declaration, setting aside or payment of any dividend or other
distribution in respect of the Capital Stock of the Company or any of its
Subsidiaries (other than wholly-owned Subsidiaries) or any repurchase,
redemption or other acquisition by the Company or any of its Subsidiaries
of any outstanding shares of Capital Stock or other securities of, or other
ownership interests in, the Company or any of its Subsidiaries; (iv)
amendment of any material term of any outstanding security of the Company
or any of its Subsidiaries; (v) incurrence, assumption or guarantee by the
Company or any of its Subsidiaries of any indebtedness for borrowed money
other than in the ordinary course of business and in amounts and on terms
consistent with past practices; (vi) creation or assumption by the Company
or any of its Subsidiaries of any Lien (other than Permitted Liens) on any
material asset other than in the ordinary course of business consistent
with past practices; (vii) making of any loan, advance or capital
contributions by the Company or any of its Subsidiaries to, or investment
in, any Person other than (x) loans or advances to employees in connection
with business-related travel (y) loans made to employees consistent with
past practices which are not in the aggregate in excess of $250,000, and
(z) loans, advances or capital contributions to or investments in
wholly-owned Subsidiaries, and in each case made in the ordinary course of
business consistent with past practices; (viii) transaction or commitment
made, or any contract or agreement entered into, by the Company or any of
its Subsidiaries relating to its assets or business (including the
acquisition or disposition of any assets) or any relinquishment by the
Company or any of its Subsidiaries of any Contract or other right, in
either case, material to the Company and its Subsidiaries, taken as a
whole, other than transactions and commitments in the ordinary course of
business consistent with past practices and those contemplated by this
Agreement; (ix) labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any employees of the Company or any of its Subsidiaries, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to such employees; or (x) change by the Company or any of its
Subsidiaries in accounting principles, practices or methods. Since the
Audit Date, except as disclosed in the Company Reports filed prior to the
date hereof or increases in the ordinary course of business consistent with
past practices, there has not been any increase in the compensation payable
or that could become payable by the Company or any of its Subsidiaries to
(a) officers of the Company or any of its Subsidiaries or (b) any employee
of the Company or any of its Subsidiaries whose annual cash compensation is
$150,000 or more, or any amendment of any of the Compensation and Benefit
Plans (as defined in Section 5.1(h)).
(g) Litigation and Liabilities. Except as disclosed in Schedule
5.1(g) or in the Company Reports filed prior to the date hereof, and except
for matters which, individually or in the aggregate, have not had and are
not reasonably likely to have a Company Material Adverse Effect or prevent,
delay or impair the ability of the Company to consummate the transactions
contemplated by this Agreement, there are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or
proceedings pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries or (ii) obligations or liabilities,
whether or not accrued, contingent or otherwise and whether or not required
to be disclosed, including those relating to matters involving any
Environmental Law (as defined in Section 5.1(k)) or any other facts or
circumstances of which the Company has knowledge that are reasonably likely
to result in any claims against, or material obligations or liabilities of,
the Company or any of its Subsidiaries.
(h) Employee Benefits.
(i) For purposes of this Agreement, "Compensation and Benefit
Plans" means, collectively, each bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock option, employment,
termination, severance, compensation, medical, health, or other plan,
agreement, policy or arrangement, whether written or oral, that covers
employees or directors of the Company or any of its Subsidiaries, or
pursuant to which former employees or directors of the Company or any of
its Subsidiaries are entitled to current or future benefits. The Company
has made available to Parent copies of all "employee pension benefit
plans" (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (sometimes referred to
herein as "Pension Plans"),
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"employee welfare benefit plans" (as defined in Section 3(1) of ERISA)
and all other Compensation and Benefit Plans maintained, or contributed
to, by the Company or of its subsidiaries or any person or entity that,
together with the Company and its subsidiaries, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Internal Revenue
Code of 1986, as amended (the "Code") (the Company and each such other
person or entity, a "Commonly Controlled Entity") for the benefit of any
current employees, officers or directors of the Company or any of its
subsidiaries. The Company has also made available to Parent true,
complete and correct copies of (1) the most recent annual report on Form
5500 filed with the Internal Revenue Service with respect to each
Compensation and Benefit Plan (if any such report was required), (2) the
most recent summary plan description for each Compensation and Benefit
Plan for which such summary plan description is required and (3) each
trust agreement and group annuity contract related to any Compensation
and Benefit Plan. Except as would not have a material adverse effect on
the Company, each Compensation and Benefit Plan has been administered in
accordance with its terms. Except as would not have a Company Material
Adverse Effect, each of its subsidiaries and all the Compensation and
Benefit Plans are all in compliance with applicable provisions of ERISA
and the Code.
(ii) Except as would not have a Company Material Adverse Effect,
all Pension Plans have been the subject of determination letters from
the Internal Revenue Service to the effect that such Pension Plans are
qualified and exempt from Federal income taxes under Sections 401(a) and
501(a), respectively, of the Code, and no such determination letter has
been revoked nor has any event occurred since the date of its most
recent determination letter or application therefor that would adversely
affect its qualification or materially increase its costs.
(iii) Neither the Company, nor any of its Subsidiaries, nor any
Commonly Controlled Entity has maintained, contributed or been obligated
to contribute to any Benefit Plan that is subject to Title IV of ERISA.
(iv) Schedule 5.1(h) lists all outstanding Stock Options as of July
27, 1997, showing for each such option: (1) the number of shares
issuable, (2) the number of vested shares, (3) the date of expiration
and (4) the exercise price.
(v) All contributions required to be made under the terms of any
Compensation and Benefit Plan as of the date hereof have been timely
made.
(vi) Except as provided by this Agreement or in Schedule 5.1(h), no
employee of the Company or any of its Subsidiaries will be entitled to
any additional compensation or benefits or any acceleration of the time
of payment or vesting of any compensation or benefits under any Benefit
Plan as a result of the transactions contemplated by this Agreement.
(vii) All Compensation and Benefit Plans covering current or former
non-U.S. employees of the Company or any of its Subsidiaries comply in
all material respects with applicable local Laws. The Company and its
Subsidiaries have no unfunded liabilities with respect to any Pension
Plan that covers such non-U.S. employees.
(viii) Each Compensation and Benefit Plan complies in all material
respects with all applicable requirements of (i) the Age Discrimination
in Employment Act of 1967, as amended, and the regulations thereunder
and (ii) Title VII of the Civil Rights Act of 1964, as amended, and the
regulations thereunder and all other applicable laws. All amendments and
actions required to bring each of the Employee Benefit Plans into
conformity with all of the applicable provisions of ERISA and other
applicable laws have been made or taken except to the extent that such
amendments or actions are not required by law to be made or taken until
a date after the Closing Date and are disclosed on Schedule 5.1(h).
(ix) Each group medical plan sponsored by the Company materially
complies with the health care continuation provisions of COBRA and (ii)
the Medicare Secondary Payor Provisions of Section 1826 (b) of the
Social Security Act, and the regulations promulgated thereunder.
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(i) Compliance with Laws. Except as set forth in the Company Reports
filed prior to the date hereof, the businesses of each of the Company and
its Subsidiaries have not been, and are not being, conducted in violation
of any law, ordinance, regulation, judgment, order, injunction, decree,
arbitration award, license or permit of any Governmental Entity
(collectively, "Laws"), except for violations or possible violations that,
individually or in the aggregate, have not had and are not reasonably
likely to have a Company Material Adverse Effect or prevent, materially
delay or materially impair the ability of the Company to consummate the
transactions contemplated by this Agreement. Except as set forth in the
Company Reports filed prior to the date hereof, no investigation or review
by any Governmental Entity with respect to the Company or any of its
Subsidiaries is pending or, to the knowledge of the Company, threatened,
nor has any Governmental Entity indicated an intention to conduct the same,
except for those the outcome of which are not, individually or in the
aggregate, reasonably likely to have a Company Material Adverse Effect or
prevent, materially delay or materially impair the ability of the Company
to consummate the transactions contemplated by this Agreement.
(j) Takeover Statutes. No "fair price," "moratorium," "control share
acquisition" or other similar anti-takeover statute or regulation (each a
"Takeover Statute") is applicable to the Company, the Shares, the Offer,
the Merger or any of the other transactions contemplated by this Agreement.
The Board of Directors of the Company has approved the Offer, the Merger
and this Agreement, and such approval is sufficient to render inapplicable
to the Offer, the Merger, this Agreement, and the transactions contemplated
by this Agreement the provisions of Section 203 of DGCL to the extent, if
any, such Section is applicable to the Offer, the Merger, this Agreement
and the transactions contemplated by this Agreement.
(k) Environmental Matters.
(i) The term "Environmental Laws" means any Federal, state, local
or foreign statute, treaty, ordinance, rule, regulation, policy, permit,
consent, approval, license, judgment, order, decree or injunction
relating to: (A) Releases (as defined in 42 U.S.C. sec. 9601(22) and
California Health and Safety Code sec. 25501(r)) or threatened Releases
of Hazardous Material (as hereinafter defined) into the environment, (B)
the generation, treatment, storage, presence disposal, use, handling,
manufacturing, transportation or shipment of Hazardous Material, (C) the
health or safety of employees in the workplace environment, (D) natural
resources, or (E) the environment, and includes all "Environmental Laws"
as they are defined in any indemnification provision in any contract,
lease, or agreement to which Company is a party. The term "Hazardous
Material" means (1) hazardous substances (as defined in 42 U.S.C. sec.
9601(14)) and California Health and Safety Code sec. 25501(o), including
"hazardous waste" as defined in California Health and Safety Code sec.
25501(p), (2) petroleum, including crude oil and any fractions thereof,
(3) natural gas, synthetic gas and any mixtures thereof, (4) asbestos
and/or asbestos containing materials, (5) PCBs or materials containing
PCBs and (6) any material regulated as a medical waste or infectious
waste but excludes commonly available office and janitorial supplies,
(7) lead containing paint, (8) radioactive materials, and (9) "Hazardous
Substance" or "Hazardous Material" as those terms are defined in any
indemnification provision in any contract, lease, or agreement to which
the Company is a party.
(ii) During the period of ownership or operation by the Company and
its Subsidiaries of any of their current or previously owned or leased
properties, there have been no Releases of Hazardous Material by the
Company or any of its Subsidiaries in, on, under or affecting such
properties or any surrounding site, and neither the Company nor any of
its Subsidiaries has disposed of any Hazardous Material in a manner that
has led, or could reasonably be anticipated to lead to a Release, except
in each case for those which individually or in the aggregate would not
have a Company Material Adverse Effect, and except as disclosed in the
Company Reports. Except as set forth on Schedule 5.1(k), to the
Company's knowledge there have been no Releases of Hazardous Material by
the Company or any of its Subsidiaries in, on, under or affecting such
properties or any surrounding site at times outside of such periods of
ownership, operation, or lease or by any other party except in each case
for those which individually on in the aggregate would not have a
Company Material Adverse Effect. The Company and its Subsidiaries have
not received any written notice of, or entered into
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any order, settlement or decree relating to: (A) any violation of any
Environmental Laws or the institution or pendency of any suit, action,
claim, proceeding or investigation by any Governmental Entity or any
third party in connection with any alleged violation of Environmental
Laws, (B) the response to or remediation of Hazardous Material at or
arising from any of the Company's properties or any Subsidiary's
properties. To the Company's knowledge there have been no violations of
any Environmental Laws which violations individually or in the aggregate
would have a Company Material Adverse Effect.
(l) Intellectual Property.
(i) The Company and its subsidiaries own, or are validly licensed
or otherwise have the right to use all (i) foreign and United States
federal and state patents, trademarks, trade names, service marks and
copyright registrations, (ii) foreign and United States federal and
state patent, trademark, trade name, service mark and copyright
applications for registration, (iii) common law claims to trademarks,
service marks and trade names, (iv) claims of copyright which exist
although no registrations have been issued with respect thereto, (v)
fictitious business name filings with any state or local Governmental
Entity and (vi) inventions, concepts, designs, improvements, original
works of authorship, computer programs, know-how, research and
development, techniques, modifications to existing copyrightable works
of authorship, data and other proprietary and intellectual property
rights (whether or not patentable or subject to copyright, mask work or
trade secret protection), in each case which are material to the conduct
of the business of the Company and its Subsidiaries (collectively, the
"Intellectual Property Rights"). There are no Liens other than Permitted
Liens on the Intellectual Property Rights. There are no outstanding and,
to the Company's knowledge, no threatened disputes or disagreements with
respect to any Contract in respect of the Intellectual Property Rights.
(ii) Neither the Company nor any of its Subsidiaries is, nor has it
during the three (3) years preceding the date of this Agreement been, a
party to any litigation or arbitral or other proceeding, nor, to the
knowledge of the Company, is any such proceeding threatened as to which
there is a reasonable possibility of a determination adverse to the
Company or one of its Subsidiaries, that involved a claim of
infringement by the Company or one of its Subsidiaries or any other
Person (including any Governmental Entity) of any Intellectual Property
Right. No Intellectual Property Right is subject to any outstanding
order, judgment, decree, stipulation or agreement restricting the use
thereof by the Company or any of its Subsidiaries or, in the case of any
Intellectual Property Right owned by the Company or its Subsidiaries
licensed to others, restricting the sale, transfer, assignment or
licensing thereof by the Company or any of its Subsidiaries to any other
Person. Except as set forth on Schedule 5.1(ii), the Company has no
knowledge that would cause it to believe that its or any Subsidiary's
use of any Intellectual Property Right conflicts with, infringes upon or
violates any patent, patent license, trademark, tradename, copyright,
service mark, brand mark or brand name, or any trade secret of any
Person.
(iii) Schedule 5.1(l) (iii) sets forth a complete list of (a) any
material contracts related to the Intellectual Property Rights and (b)
all documents which license or otherwise convey any of the Intellectual
Property Rights owned by the Company or any of its Subsidiaries to a
third party.
(iv) All employees and independent contractors of the Company or
any of its Subsidiaries involved with the development of graphics and
video controllers for portable computers, desktop PC motherboard
products and other products and computer software in connection
therewith (collectively, "Products") for the Company or any of its
Subsidiaries have executed written agreements with the Company or
applicable Subsidiary that assign to the Company or such Subsidiary all
rights to any Intellectual Property Rights and that otherwise
appropriately protect the Intellectual Property Assets.
(m) Taxes. Except as set forth on Schedule 5.1(m), (i) the Company and
its Subsidiaries have timely filed or will timely file all returns and
reports required to be filed by them with any taxing authority with respect
to Taxes for any period ending on or before the date hereof, taking into
account any
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<PAGE> 20
extension of time to file granted to or obtained on behalf of the Company
or any of its Subsidiaries; (ii) all Taxes shown to be payable on such
returns or reports that are due prior to the date hereof have been timely
paid; (iii) as of the date hereof, no deficiency for any amount of Tax has
been asserted or assessed or, to the Company's knowledge, has been
threatened or is likely to be assessed by a taxing authority against the
Company or any of its Subsidiaries other than deficiencies as to which
adequate reserves have been provided for in the Company's consolidated
financial statements; and (iv) the Company has provided in accordance with
GAAP adequate reserves in its consolidated financial statements for any
Taxes that have not been paid, whether or not shown as being due on any
returns. For purposes of this Agreement, "Taxes" means any and all taxes,
fees, levies, duties, tariffs, imposts and other charges of any kind
(together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any
Governmental Entity or other taxing authority, including taxes or other
charges on or with respect to income, franchises, windfall or other
profits, gross receipts, property, sales, use, Capital Stock, payroll,
employment, social security, workers' compensation, unemployment
compensation, or net worth; taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value added or gains taxes;
license, registration and documentation fees; and customers' duties,
tariffs and similar charges. Neither the Company nor any of its
Subsidiaries is subject to any Tax sharing agreement. No payments to be
made to any of the employees of the Company or any of its Subsidiaries
will, as a direct or indirect result of the Offer or the consummation of
the Merger, be subject to the deduction limitations of Section 280G of the
Code.
(n) Labor Matters. Neither the Company nor any of its Subsidiaries is
a party to or otherwise bound by any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor
organization, nor is the Company or any of its Subsidiaries the subject of
any proceeding asserting that the Company or any of its Subsidiaries has
committed an unfair labor practice or is seeking to compel it to bargain
with any labor union or labor organization, nor is there pending or, to the
knowledge of the Company, threatened, any labor strike, dispute, walkout,
work stoppage, slow-down or lockout involving the Company or any of its
Subsidiaries.
(o) Insurance. The Company maintains insurance policies (the
"Insurance Policies") against all risks of a character and in such amounts
as are usually insured against by similarly situated companies in the same
or similar businesses. Each Insurance Policy is in full force and effect
and is valid, outstanding and enforceable, and all premiums due thereon
have been paid in full. None of the Insurance Policies will terminate or
lapse (or be affected in any other materially adverse manner) by reason of
the transactions contemplated by this Agreement. The Company and its
Subsidiaries have complied in all material respects with the provisions of
each Insurance Policy under which it is the insured party. No insurer under
any Insurance Policy has canceled or generally disclaimed liability under
any such policy or, to the Company's knowledge, indicated any intent to do
so or not to renew any such policy. All material claims under the Insurance
Policies have been filed in a timely fashion.
(p) Rights Agreement. The Company has taken all necessary action to
ensure that neither the entering into of this Agreement, the making of the
Offer nor the consummation of the Offer or the Merger will cause the Rights
to become exercisable, cause Parent or Merger Sub to become an "Acquiring
Person" (as defined in the Rights Agreement), or cause there to occur a
"Distribution Date" or a "Section 11(a)(ii) Event" (each as defined in the
Rights Agreement).
(q) Brokers and Finders. Neither the Company nor any of its
Subsidiaries, officers, directors, or employees or other Affiliates has
employed any broker or finder or incurred any liability for any brokerage
fees, commissions or finders' fees in connection with the Offer, the Merger
or the other transactions contemplated by this Agreement, except that the
Company has employed the Financial Advisor, the arrangements with which
have been disclosed to Parent prior to the date hereof.
(r) Certain Business Practices. Neither the Company, any of its
Subsidiaries nor any directors, officers, agents or employees of the
Company or any of its Subsidiaries has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or
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<PAGE> 21
domestic political parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iii) made any other
payment prohibited by applicable Law.
(s) Product Warranties. Schedule 5.1(s) sets forth complete and
accurate copies of the written, and descriptions of all oral, warranties
and guaranties by the Company or any of its Subsidiaries currently in
effect with respect to the Products. There have not been any material
deviations from such warranties and guaranties, and none of the Company's
or any of its Subsidiaries' salesmen, employees, distributors and agents is
authorized to undertake obligations to any customer or to other third
parties in excess of such warranties or guaranties.
(t) Suppliers and Customers. The documents and information supplied
by the Company to Parent, Merger Sub or any of their representatives in
connection with this Agreement with respect to relationships and volumes of
business done with significant suppliers and customers was accurate in all
material respects.
(u) Backlog Information. None of the documents or information
delivered to Parent, Merger Sub or any of their respective counsel,
accountants and other agents and representatives in connection with backlog
and billing contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein not misleading.
5.2. Representations and Warranties of Parent and Merger Sub. Parent and
Merger Sub each hereby represents and warrants to the Company as follows:
(a) Organization, Good Standing and Qualification. Each of Parent and
Merger Sub (i) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, (ii) has all
requisite corporate or similar power and authority to own and operate its
properties and assets and to carry on its business as presently conducted
and (iii) is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the ownership or operation of its
properties or conduct of its business requires such qualification, except
where the failure to be so qualified or in such good standing, when taken
together with all other such failures, has not had and is not reasonably
likely to have a Parent Material Adverse Effect (as defined in Section
9.2). Parent has made available to the Company a complete and correct copy
of Parent's certificate or incorporation and by-laws, as amended to the
date hereof. Parent's certificate of incorporation and by-laws so delivered
are in full force and effect.
(b) Ownership of Merger Sub. All of the issued and outstanding
Capital Stock of Merger Sub is, and at the Effective Time will be, owned by
Parent, and there are no (i) other outstanding shares of Capital Stock or
other voting securities of Merger Sub, (ii) securities of Merger Sub
convertible into or exchangeable for shares of Capital Stock or other
voting securities of Merger Sub or (iii) options or other rights to acquire
from Merger Sub, and no obligations of Merger Sub to issue, any Capital
Stock, other voting securities or securities convertible into or
exchangeable for Capital Stock or other voting securities of Merger Sub.
Merger Sub was formed solely for the purpose of engaging in the
transactions contemplated hereby, has engaged in no other business
activities and has conducted its operations only as contemplated hereby.
(c) Corporate Authority. Each of Parent and Merger Sub has all
requisite corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under
this Agreement and to consummate the Offer and the Merger. Assuming due
execution and delivery by the Company, this Agreement is a valid and
binding agreement of Parent and Merger Sub, enforceable against each of
them in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy laws or creditors' rights generally or by
general principles of equity.
(d) Governmental Filings; No Violations.
(i) Other than the filings and/or notices (A) pursuant to Section
1.2, (B) under the HSR Act and the Exchange Act, (C) to comply with
state securities or "blue sky" laws, and (D) required to be made with
the NASD, no notices, reports or other filings are required to be made
by Parent or Merger Sub with, nor are any Government Consents required
to be obtained by Parent or Merger
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<PAGE> 22
Sub from, any Governmental Entity, in connection with the execution and
delivery of this Agreement by Parent and Merger Sub, the Offer and the
consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby, except those that the failure to make
or obtain are not, individually or in the aggregate, reasonably likely
to have a Parent Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Parent or Merger Sub to consummate
the transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this Agreement by
Parent and Merger Sub do not, and the consummation by Parent and Merger
Sub of the Merger and the other transactions contemplated hereby will
not, constitute or result in (A) a breach or violation of, or a default
under, the certificate or by-laws of Parent or Merger Sub, (B) a breach
or violation of, or a default under, the acceleration of or the creation
of a Lien, on the assets of Parent or any of its Subsidiaries (with or
without notice, lapse of time or both) pursuant to, any Contract binding
upon Parent or any of its Subsidiaries or any Law to which Parent or any
of its Subsidiaries is subject or (C) any change in the rights or
obligations of any party under any such Contract, except, in the case of
clause (B) or (C) above, for any breach, violation, default,
acceleration, creation or change that, individually or in the aggregate,
is not reasonably likely to have a Parent Material Adverse Effect or
prevent, materially delay or materially impair the ability of the Parent
or Merger Sub to consummate the transactions contemplated by this
Agreement.
(e) Brokers and Finders. Neither Parent nor Merger Sub, nor any of
their respective officers, directors, employees or other Affiliates, has
employed any broker or finder or incurred any liability for any brokerage
fees, commissions or finders' fees in connection with the Offer, the Merger
or the other transactions contemplated by this Agreement.
(f) Financing. At the expiration of the Offer and at the Effective
Time, Parent and Merger Sub will have available all the funds necessary for
the acquisition of all Shares pursuant to the Offer and to perform their
respective obligations under this Agreement, including without limitation
payment in full for all Shares validly tendered or outstanding as of the
Effective Time.
ARTICLE VI
COVENANTS
6.1. Interim Operations. The Company covenants and agrees as to itself
and its Subsidiaries that, after the date hereof and prior to the Effective Time
(unless Parent shall otherwise approve in writing, which approval shall not be
unreasonably withheld, and except as otherwise expressly contemplated by this
Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the
ordinary and usual course consistent with past practices and, to the extent
consistent therewith, it and its Subsidiaries shall use commercially
reasonable efforts to preserve its business organization intact and
maintain its existing relations and goodwill with customers, suppliers,
distributors, creditors, lessors, employees and business associates;
(b) it shall not, (i) issue, sell otherwise dispose of or subject to
Lien (other than Permitted Liens) any of its Subsidiaries' Capital Stock
owned by it; (ii) amend its charter, by-laws or, except for any amendment
which will not hinder, delay or make more costly to Parent the Offer or the
Merger; the Rights Agreement; (iii) split, combine or reclassify its
outstanding shares of Capital Stock; (iv) declare, set aside or pay any
dividend payable in cash, stock or property in respect of any Capital Stock
other than the issuance of Rights in connection with the issuance of
Capital Stock upon the exercise of Company Options; (v) repurchase, redeem
or otherwise acquire or permit any of its Subsidiaries to purchase or
otherwise acquire, any shares of its Capital Stock; or any securities
convertible into or exchangeable or exercisable for any shares of its
Capital Stock; or (vi) adopt a plan of complete or partial liquidation or
dissolution, merger or otherwise restructure or recapitalize or consolidate
with any Person other than Merger Sub or another wholly-owned Subsidiary of
Parent;
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(c) neither it nor any of its Subsidiaries shall (i) authorize for
issuance or issue, sell or otherwise dispose of or subject to any Lien
(other than Permitted Liens) any shares of, or securities convertible into
or exchangeable or exercisable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of its Capital
Stock of any class or any Voting Debt (other than Shares issuable pursuant
to Company Options outstanding on the date hereof, the grant of Company
Options to newly hired employees in accordance with a benefit matrix
previously provided to Parent and after notification of Parent and
automatic grants of director stock options as mandated by the Company's
First Amended 1988 Nonqualified Stock Option Plan for Outside Directors);
(ii) other than in the ordinary and usual course of business consistent
with past practices, transfer, lease, license, guarantee, sell or otherwise
dispose of or subject to any Lien (other than Permitted Liens) any other
property or assets or incur or modify any material indebtedness or other
liability (except for additional borrowings in the ordinary course under
lines of credit in existence on the date hereof); (iii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person except
in the ordinary course of business consistent with past practices and
except for obligations of Subsidiaries of the Company incurred in the
ordinary course of business; (iv) make any loans to any other Person (other
than to Subsidiaries of the Company or, customary loans or advances to
employees in connection with business-related travel in the ordinary course
of business consistent with past practices); or (v) make any commitments
for, make or authorize any capital expenditures other than in amounts less
than $150,000 individually and $3,000,000 in the aggregate or, by any
means, make any acquisition of, or investment in, assets or stock of any
other Person;
(d) except as may be required to comply with applicable law or by
existing contractual commitments, neither it nor any of its Subsidiaries
shall (i) enter into any new agreements or commitments for any severance or
termination pay to, or enter into any employment or severance agreement
with, any of its directors, officers or employees or consultants except for
(a) specific arrangements with ten of the Company's employees and one of
its directors which have been previously disclosed to Parent and (b)
reasonable severance payments made to employees in the ordinary course of
business and consistent with past practices, or (ii) terminate, establish,
adopt, enter into, make any new grants or awards under, amend or otherwise
modify, any Compensation and Benefit Plan or increase or accelerate the
salary, wage, bonus or other compensation of any employees or directors
(except for increases occurring in the ordinary and usual course of
business, which shall include normal periodic performance reviews and
related compensation and benefit increases, but not any general
across-the-board increases) or consultants or pay or agree to pay any
pension, retirement allowance or other employee benefit not required by any
existing Compensation and Benefit Plan;
(e) neither it nor any of its Subsidiaries shall, except as may be
required as a result of a change in law or in GAAP, change any of the
accounting principles or practices used by it;
(f) neither it nor any of its Subsidiaries shall revalue in any
respect any of its material assets, including writing down the value of
inventory or writing-off notes or accounts receivable, other than in the
ordinary course of business consistent with past practices;
(g) neither it nor any of its Subsidiaries shall settle or compromise
any material claims or litigation or terminate or materially amend or
modify any of its material Contracts or waive, release or assign any
material rights or claims;
(h) neither it nor any of its Subsidiaries shall make any Tax election
or permit any insurance policy naming it as a beneficiary or loss-payable
payee to be canceled or terminated;
(i) neither it nor any of its Subsidiaries shall take any action or
omit to take any action that would cause any of its representations and
warranties herein to become untrue in any material respect; and
(j) neither it nor any of its Subsidiaries will authorize or enter
into any agreement to do any of the foregoing.
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6.2. Third Party Acquisitions.
(a) The Company agrees that neither it nor any of its Subsidiaries nor
any of its or its Subsidiaries' employees or directors shall, and it shall
direct and use its best efforts to cause its and its Subsidiaries' agents
and representatives (including the Financial Advisor or any other
investment banker and any attorney or accountant retained by it or any of
its Subsidiaries (collectively, "Company Advisors")) not to, directly or
indirectly, initiate, solicit, encourage or otherwise facilitate any
inquiries in respect of, or the making of any proposal for, a Third Party
Acquisition (as defined in Section 6.2(b)). The Company further agrees that
neither it nor any of its Subsidiaries nor any of its or its Subsidiaries'
employees or directors shall, and it shall direct and use its best efforts
to cause all Company Advisors not to, directly or indirectly, engage in any
negotiations concerning, or provide any confidential information or data
to, or have any discussions with, any Third Party (as defined in Section
6.2(b)) relating to the proposal of a Third Party Acquisition, or otherwise
facilitate any effort or attempt to make or implement a Third Party
Acquisition; provided, however, that if at any time prior to the acceptance
for payment of Shares pursuant to the Offer, the Board of Directors of the
Company determines in good faith, after consultation with outside counsel,
that it is necessary to do so in order to comply with its fiduciary duties
to the Company's stockholders under applicable law, the Company may, in
response to an inquiry, proposal or offer for a Third Party Acquisition
which was not solicited subsequent to the date hereof, (x) furnish only
such information with respect to the Company to any such person pursuant to
a customary confidentiality agreement as was delivered to Parent prior to
the execution of this Agreement and (y) participate in the discussions and
negotiations regarding such inquiry, proposal or offer; and further
provided, that nothing contained in this Agreement shall prevent the
Company or its Board of Directors from complying with Rules 14d-9 and 14e-2
promulgated under the Exchange Act with regard to any proposed Third Party
Acquisition. The Company shall immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any Third Parties
conducted heretofore with respect to any of the foregoing. The Company
shall take the necessary steps to promptly inform all Company Advisors of
the obligations undertaken in this Section 6.2(a). The Company agrees to
notify Parent promptly if (i) any inquiries relating to or proposals for a
Third Party Acquisition are received by the Company, any of its
Subsidiaries or any of the Company Advisors, (ii) any confidential or other
non-public information about the Company or any of its Subsidiaries is
requested from the Company, any of its Subsidiaries or any of the Company
Advisors, or (iii) any negotiations or discussions in connection with a
possible Third Party Acquisition are sought to be initiated or continued
with the Company, any of its Subsidiaries or any of the Company Advisors
indicating, in connection with such notice, the principal terms and
conditions of any proposals or offers, and thereafter shall keep Parent
informed in writing, on a reasonably current basis, on the status and terms
of any such proposals or offers and the status of any such negotiations or
discussions. The Company also agrees promptly to request each Person that
has heretofore executed a confidentiality agreement in connection with its
consideration of acquiring the Company or any of its Subsidiaries, if any,
to return all confidential information heretofore furnished to such Person
by or on half of the Company or any of its Subsidiaries.
(b) Except as permitted by this Section 6.2(b), the Board of Directors
of the Company shall not withdraw its recommendation of the Offer or the
Merger and other transactions contemplated hereby or approve or recommend,
or cause the Company to enter into any agreement with respect to, any Third
Party Acquisition. Notwithstanding the preceding sentence, if the Board of
Directors of the Company determines in its good faith judgment, after
consultation with legal counsel, that it is necessary to do so in order to
comply with its fiduciary duties, the Board of Directors may withdraw its
recommendation of the Offer or the Merger and the other transactions
contemplated hereby, or approve or recommend or cause the Company to enter
into an agreement with respect to a Superior Proposal (as defined below),
but in each case only (i) after providing written notice to Parent (a
"Notice of Superior Proposal") advising Parent that the Board of Directors
has received a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal and identifying the Person making such
Superior Proposal and (ii) if Parent does not, within five (5) Business
Days (or within two (2) Business Days with respect to any amendment to any
Superior Proposal which was noticed at least five (5) Business Days prior
to such amendment) after Parent's receipt of the Notice of Superior
Proposal, make an offer which the Board of
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<PAGE> 25
Directors of the Company determines in its good faith judgment (based on
the advice of the Financial Advisor or another financial adviser of
nationally recognized reputation) to be as favorable to the Company's
stockholders as such Superior Proposal; provided, however, that the Company
shall not be entitled to enter into any agreement with respect to a
Superior Proposal unless this Agreement is concurrently terminated by its
terms pursuant to Section 8.3(b). For purposes of this Agreement, "Third
Party Acquisition" means the occurrence of any of the following events: (i)
the acquisition of the Company by merger or otherwise by any Person (which
includes a "person" as such term is defined in Section 13(d)(3) of the
Exchange Act) other than Parent, Merger Sub or any Affiliate thereof (a
"Third Party"); (ii) the acquisition by a Third Party of 20% or more of the
total assets of the Company and its Subsidiaries, taken as a whole (other
than the purchase of the Company's products in the ordinary course of
business); (iii) the acquisition by a Third Party of 20% or more of the
outstanding Shares; (iv) the adoption by the Company of a plan of partial
or complete liquidation or the declaration or payment of an extraordinary
dividend; (v) the repurchase by the Company or any of its Subsidiaries of
20% or more of the outstanding Shares; or (vi) the acquisition by the
Company or any of its Subsidiaries by merger, purchase of stock or assets,
joint venture or otherwise of a direct or indirect ownership interest or
investment in any business whose annual revenues, net income or assets is
equal to or greater than 20% of the annual revenues, net income or assets
of the Company and its Subsidiaries, taken as a whole. For purposes of this
Agreement, a "Superior Proposal" means any bona fide proposal to acquire
directly or indirectly for consideration consisting of cash and/or
securities more than 50% of the Shares then outstanding or all or
substantially all the assets of the Company and its Subsidiaries, taken as
a whole, and otherwise on terms which the Board of Directors of the Company
by a majority vote determines in its good faith judgment (based on
consultation with the Financial Advisor or another financial adviser of
nationally recognized reputation) to be reasonably capable of being
completed (taking into account all legal, financial, regulatory and other
aspects of the proposal and the Person making the proposal, including the
availability of financing therefor) and more favorable to the Company's
stockholders than the Merger.
6.3. Filings; Other Actions; Notification.
(a) If a vote of the Company's stockholders is required by law, the
Company shall promptly, following the acceptance for payment of Shares by
Parent, pursuant to the Offer, prepare and file with the SEC the Proxy
Statement, which shall include the recommendation of the Board of Directors
of the Company that stockholders of the Company vote in favor of the
approval and adoption of this Agreement and the written opinion of the
Financial Advisor that the cash consideration to be received by the
stockholders of the Company pursuant to the Merger is fair to such
stockholders from a financial point of view. The Company shall use all
reasonable efforts to have the Proxy Statement cleared by the SEC as
promptly as practicable after such filing, and promptly thereafter mail the
Proxy Statement to the stockholders of the Company. The Company shall also
use its best efforts to obtain all necessary state securities law or "blue
sky" permits and approvals required in connection with the Merger and to
consummate the other transactions contemplated by this Agreement and will
pay all expenses incident thereto.
(b) Upon and subject to the terms and conditions set forth in this
Agreement, the Company and Parent shall cooperate with each other and use
(and shall cause their respective Subsidiaries to use) all reasonable
efforts to take or cause to be taken all actions, and do or cause to be
done all things, necessary, proper or advisable under this Agreement and
applicable Laws to consummate and make effective the Offer, the Merger and
the other transactions contemplated by this Agreement as soon as
practicable, including preparing and filing as promptly as practicable all
documentation to effect all necessary applications, notices, petitions,
filings and other documents and to obtain as promptly as practicable all
permits, consents, approvals and authorizations necessary or advisable to
be obtained from any third party and/or any Governmental Entity in order to
consummate the Offer, the Merger or any of the other transactions
contemplated by this Agreement; provided, however, that nothing in this
Section 6.3 shall require, or be construed to require, Parent to proffer
to, or agree to, sell or hold separate and agree to sell, before or after
the Effective Time, any material assets, businesses or any interest in any
material assets or
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businesses of Parent, the Company or any of their respective Affiliates (or
to consent to any sale, or agreement to sell, by the Company of any of its
material assets or businesses) or to agree to any material change in or
restriction on the operations of any such assets or businesses; provided
further, that nothing in this Section 6.3 shall require, or be construed to
require, a proffer or agreement that would, in the good faith judgment of
Parent, be likely to have a significant adverse effect on the benefits to
Parent of the transactions contemplated by this Agreement. Subject to
applicable Laws relating to the exchange of information, Parent and the
Company shall have the right to review in advance, and to the extent
practicable each will consult the other on, all the information relating to
Parent or the Company, as the case may be, and any of their respective
Subsidiaries, that appears in any filing made with, or written materials
submitted to, any third party and/or any Governmental Entity in connection
with the Offer, the Merger and the other transactions contemplated by this
Agreement, including the Proxy Statement. In exercising the foregoing
right, the Company and Parent shall act reasonably and as promptly as
practicable.
(c) Each of the Company and Parent shall, upon request by the other,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may be
reasonably necessary or advisable in connection with the Proxy Statement or
any other statement, filing, notice or application made by or on behalf of
Parent, the Company or any of their respective Subsidiaries to any
Governmental Entity or other Person (including the NASD) in connection with
the Offer, the Merger and the other transactions contemplated by this
Agreement.
(d) Each of the Company and Parent shall keep the other apprised of
the status of matters relating to completion of the transactions
contemplated hereby, including promptly furnishing the other with copies of
notices or other communications received by Parent or the Company, as the
case may be, or any of their respective Subsidiaries, from any third party
and/or any Governmental Entity with respect to the Offer, the Merger and
the other transactions contemplated by this Agreement. Each of the Company
and Parent shall give prompt notice to the other of any change that is
reasonably likely to have a Company Material Adverse Effect or a Parent
Material Adverse Effect, respectively.
6.4. Information Supplied. Each of Parent and the Company agrees, as to
information provided by itself and its Subsidiaries, that none of the
information included or incorporated by reference in the proxy statement
delivered by the Company to its stockholders in connection with the Merger and
any amendment or supplement thereto (the "Proxy Statement") will, at the time
the Proxy Statement is cleared by the SEC, at the date of mailing to
stockholders of the Company, and at the time of the Stockholders Meeting (as
defined in Section 6.5),contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
6.5. Stockholders Meeting.
(a) If a vote of the Company's stockholders is required by law, the
Company will, following the acceptance for payment of Shares by Parent
pursuant to the Offer, take, in accordance with applicable Law and its
certificate of incorporation and by-laws, all action necessary to convene a
meeting of holders of Shares (the "Stockholders Meeting") as promptly as
practicable after the Proxy Statement is cleared by the SEC to consider and
vote upon the approval of this Agreement. The Proxy Statement shall,
include a statement that the Board approved this Agreement and recommended
that Stockholders vote in favor of this Merger, and the Company shall use
all reasonable and customary efforts to solicit such approval.
Notwithstanding the foregoing, if Parent, Merger Sub and/or any other
Subsidiary of Parent shall acquire at least 90% of the outstanding Shares,
the parties shall take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after the expiration of
the Offer without a Stockholders Meeting in accordance with Section 253 of
the DGCL.
(b) Parent agrees to cause all Shares purchased pursuant to the Offer
and all other Shares owned by Parent or any Subsidiary of Parent to be
voted in favor of the Merger.
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6.6. Access. Upon reasonable notice, and except as may otherwise be
required by applicable law or relevant contractual provisions contained in such
agreements, the Company shall (and shall cause its Subsidiaries to) (i) afford
Parent's officers, employees, counsel, accountants and other authorized
representatives (collectively, "Representatives") access, during normal business
hours throughout the period prior to the Effective Time, to its properties,
books, contracts and records and, during such period, (ii) furnish promptly to
Parent all information concerning its business, properties and personnel as may
reasonably be requested; provided, however, that no investigation pursuant to
this Section 6.6 shall affect or be deemed to modify any representation or
warranty made by the Company. All requests for information made pursuant to this
Section 6.6 shall be directed to an executive officer of the Company or such
Person as may be designated by its officers. Notwithstanding the foregoing, the
parties shall comply with, and shall cause their respective Representatives to
comply with, all their respective obligations under the Confidentiality
Agreement, dated July 22, 1997, between the Company and Parent.
6.7. Publicity. The initial press release concerning the Merger has been
approved by Parent and the Company and thereafter the Company and its
Subsidiaries, on the one hand, and Parent and Merger Sub, on the other hand,
shall consult with each other prior to issuing any press releases or otherwise
making public announcements with respect to the Merger and the other
transactions contemplated by this Agreement and prior to making any filings with
any Governmental Entity or other Person (including the NASD) with respect
hereto, except as may be required by law or by obligations pursuant to any
listing agreement with the National Market.
6.8. Status of Company Employees; Company Stock Options; Employee
Benefits.
(a) Except as contemplated by this Agreement, Parent agrees that, for
a period of twelve (12) months following the Effective Time, the Surviving
Corporation shall maintain employee benefits plans and arrangements
(directly or in conjunction with Parent) which, in the aggregate, will
provide a level of benefits to Continuing Employees of the Surviving
Corporation and its Subsidiaries similar to those provided under the
Compensation and Benefit Plans as in effect immediately prior to the
Effective Time (other than discretionary benefits); provided, however, that
Parent may cause modifications to be made to such employee benefit plans
and arrangements to the extent necessary to comply with applicable Law or
to reflect widespread adjustments in benefits (or costs thereof) provided
to employees under compensation and benefit plans of Parent and its
Subsidiaries, and no specific Compensation and Benefit Plans need be
provided. Parent shall use Continuing Employee's hire date with Company as
the basis for determining eligibility and vesting of Parent's defined
benefit and Supplemental Employee Retirement Medical Account (SERMA) plans.
Parent shall use Effective Time as the basis for determining eligibility
under the Parent's sabbatical plan and for determining benefit accruals
under Parent's defined benefit and SERMA plans. For purposes of determining
eligibility and vesting with respect to all other benefits maintained by
Parent, Parent shall use Continuing Employee's hire date with the Company.
Nothing in this Section 6.8(a) shall be construed or applied to restrict
the ability of the Surviving Corporation and its Subsidiaries to establish
such types and levels of compensation and benefits as they determine to be
appropriate.
(b) From and after the date hereof, the Company agrees that, except
with respect to grants in connection with offers of employment outstanding
on July 22, 1997, it will not grant additional stock options under the
Assumed Stock Option Plan and its Board of Directors will take all actions
necessary to provide that all options outstanding under the Assumed Stock
Option Plan can be assumed by Parent.
(c) The Board of Directors of Parent will adopt a resolution assuming
on behalf of Parent the obligations and rights of the Company under all
options outstanding under the Assumed Stock Option Plan.
6.9. Expenses. The Surviving Corporation shall pay all charges and
expenses, including those of the Exchange Agent, in connection with the
transactions contemplated in Article IV. Except as otherwise provided in
Sections 8.5, whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the Merger and the other
transactions contemplated by this Agreement shall be paid by the party incurring
such expense.
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6.10. Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless each person who is now, or has been at
any time prior to the date of this Agreement or who becomes prior to the
Effective Time a director or officer of the Company or any of its
Subsidiaries (when acting in such capacity) (the "Indemnified Parties"),
against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, demands, liabilities, damages or
liabilities (collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal or
administrative arising out of matters existing or occurring prior to or
after the Effective Time, whether asserted or claimed prior to, at or after
the Effective Time, which is based in whole or in part on, or arising in
whole or in part out of the fact that such person is or was a director or
officer of the Company or any of its Subsidiaries including, without
limitation, all losses, claims, damages, costs, expenses, liabilities,
judgments or settlement amounts based in whole or in part on, or arising in
whole or in part out of, or pertaining to this Agreement or the
transactions contemplated hereby to the fullest extent that the Company
would have been permitted under the DGCL and its certificate of
incorporation, by-laws and other agreements in effect on the date hereof to
indemnify such individual.
(b) Any Indemnified Party wishing to claim indemnification under
subsection (a) of this Section 6.10, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Parent and
the Surviving Corporation thereof (but the failure so to notify the
Surviving Corporation shall not relieve it from any liability which it may
have under this Section 6.10 except to the extent such failure materially
prejudices such party). In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the Effective
Time), (i) the Surviving Corporation shall have the right to assume the
defense thereof and the Surviving Corporation shall not be liable to any
such Indemnified Party for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Party in connection with
the defense thereof, (ii) the Indemnified Party will cooperate in all
respects as requested by the Surviving Corporation in the defense of any
such matter and (iii) the Surviving Corporation shall not be liable for any
settlement effected without its prior written consent which consent shall
not be unreasonably withheld; provided, however, that the Surviving
Corporation shall not have any obligation hereunder to any Indemnified
Party if and when a court shall ultimately determine, and such
determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by Law.
(c) Parent and the Surviving Corporation shall maintain the Company's
and its Subsidiaries' existing officers' and directors' liability insurance
("D&O Insurance") for a period of six (6) years after the Effective Time so
long as the annual premium therefor is not in excess of 150% of the last
annual premium paid prior to the date hereof (the "Current Premium");
provided, however, that if the existing D&O Insurance expires, is
terminated or canceled during such six-year period, the Surviving
Corporation will use its commercially reasonable efforts to obtain as much
D&O Insurance as can be obtained for the remainder of such period for a
premium not in excess (on an annualized basis) of 150% of the Current
Premium; provided further, that, in lieu of maintaining such existing D&O
Insurance as provided above, Parent may cause coverage to be provided under
any policy maintained for the benefit of Parent or any of its Subsidiaries,
so long as the terms are no less advantageous to the intended beneficiaries
thereof than the existing D&O Insurance. In lieu of the purchase of such
insurance by Parent or the Surviving Corporation, the Company may purchase
a six-year extended reporting period endorsement ("reporting tail
coverage") under its existing directors' and liability insurance coverage,
provided that the total cost of the reporting tail coverage shall not
exceed $350,000, and provided that such reporting tail coverage shall
extend the director and officer liability coverage in force as of the date
hereof for a period of six (6) years from the Effective Time for any claims
based upon, arising out of, directly or indirectly resulting from, in
consequence of, or in any way involving wrongful acts or omissions
occurring on or prior to the Effective Time, including without limitation
all claims based upon, arising out of, directly or indirectly resulting
from, in consequence of, or in any way involving the Offer, the Merger and
any and all related transactions or related events.
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(d) The provisions of this Section 6.10 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties
and their respective heirs and estates. Nothing in this Section 6.10 shall
limit in any way any other rights to indemnification that any current or
former director or officer of the Company may have by contract or
otherwise.
(e) From and after the Effective Time, the Surviving Corporation shall
fulfill, assume and honor in all respects the obligations of the Company
pursuant to the Company's Certificate of Incorporation, Bylaws and any
indemnification agreement between the Company and any of the Company's
directors and officers existing and in force as of the Effective Time. The
Company agrees that the indemnification obligations set forth in the
Company's Certificate of Incorporation and Bylaws, in each case as of the
date of this Agreement, shall survive the Merger (and, as of or prior to
the Effective Time, Parent shall cause the Bylaws of Sub to reflect such
previsions) and shall not be amended, repealed or otherwise modified for a
period of six (6) years after the Effective Time in any manner that would
adversely affect the rights thereunder of the Indemnified Parties.
(f) If the Surviving Corporation or any of its successors or assigns
(i) shall consolidate with or merge into any other Person and shall not be
the continuing or surviving corporation or Person of such consolidation or
merger or (ii) shall transfer all or substantially all of its properties
and assets to any Person, then and in each such case, proper provisions
shall be made so that the successors and assigns of the Surviving
Corporation shall assume all of the obligations set forth in this Section
6.10.
6.11. Other Actions by the Company and Parent.
(a) Rights Agreement. Prior to the Effective Time, the Board of
Directors of the Company shall take all necessary action to ensure that the
representation and warranty in Section 5.1(p) is true and correct.
(b) Takeover Statutes. If any Takeover Statute is or may become
applicable to the Merger or the other transactions contemplated by this
Agreement, each of Parent and the Company and their respective Boards of
Directors shall grant such approvals and take such lawful actions as are
necessary so that such transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement or by the Merger
and otherwise act to eliminate or minimize the effects of such statute, and
any regulations promulgated thereunder, on such transactions.
6.12. Parent Stock Option; Exercise; Adjustments.
(a) Subject to the terms and conditions set forth herein, the Company
hereby grants to Parent an irrevocable option (the "Parent Option") to
purchase that number of authorized and unissued shares of Common Stock
equal to 19.99% of the outstanding Shares immediately prior to the exercise
of the Parent Option (the "Option Shares") at a purchase price of $17.50
per Option Share (the "Option Price"). Subject to the conditions set forth
in Subsection (c) below, the Parent Option may be exercised by Parent, in
whole or in part, at any time or from time to time after the date on which
Parent has accepted for payment the Shares tendered pursuant to the Offer
and prior to the termination of this Agreement pursuant to Article VIII. If
Parent wishes to exercise the Parent Option, Parent shall send a written
notice to the Company (the "Exercise Notice") specifying a date (not
earlier than the next Business Day following the date such notice is given)
for the closing of such purchase and containing a representation by Parent
that upon the issuance and delivery of the Option Shares, there will be no
further conditions precedent that need to be satisfied for Parent and
Merger Sub to effect the Merger, and that Parent and Merger Sub will take
all actions required on their respective parts to effect the Merger.
(b) In the event of any change in the number of issued and outstanding
Shares by reason of any stock dividend, stock split, split-up,
recapitalization, merger or other change in the corporate or capital
structure of the Company, the number of Option Shares and the Option Price
shall be appropriately adjusted to restore Parent to its rights hereunder.
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(c) The Company's obligation to issue and deliver the Option Shares
upon exercise of the Parent Option is subject only to the following
conditions:
(i) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United
States prohibiting the delivery of the Option Shares shall be in effect;
(ii) Any applicable waiting periods under the HSR Act, or other
applicable United States or foreign Laws shall have expired or been
terminated; and
(iii) The number of Option Shares plus the number of Shares
accepted for payment by Parent pursuant to the Offer will, upon issuance
of the Option Shares, constitute at least ninety percent (90%) of the
Company's issued and outstanding shares of Common Stock.
(d) Any closing hereunder shall take place on the date specified by
Parent in its Exercise Notice delivered pursuant to subsection (a) above at
9:00 a.m., California time, or the first day thereafter on which all of the
conditions in subsection (c) above are met, at the offices of Parent's
counsel, or at such other time and place as the parties may agree (the
"Option Closing Date"). On the Option Closing Date, the Company will
deliver to Parent a certificate or certificates representing the Option
Shares in the denominations designated by Parent in its Exercise Notice and
Parent will purchase such Option Shares from the Company at a price per
Option Share equal to the Option Price. Any payment made by Parent to the
Company pursuant to this subsection (d) shall be made by certified,
cashier's or bank check or by wire transfer of immediately available funds
to an account designated by the Company. The certificates representing the
Option Shares may bear an appropriate legend relating to the fact that such
Option Shares have not been registered under the Securities Act.
ARTICLE VII
CONDITIONS
7.1. Conditions to Each Party's Obligation to Effect Merger. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Closing of each of the following
conditions:
(a) Stockholder Approval. If required by applicable law this
Agreement shall have been duly approved by holders of the number of Shares
constituting at least the Company Requisite Vote.
(b) Regulatory Consents. The waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated and, other than filing the Delaware Certificate of Merger, all
filings with any Governmental Entity required to be made prior to the
Effective Time by the Company or Parent or any of their respective
Subsidiaries, with, and all Government Consents required to be obtained
prior to the Effective Time by the Company or Parent or any of their
respective Subsidiaries in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
by the Company, Parent and Merger Sub shall have been made or obtained (as
the case may be), except where the failure to so make or obtain will not
result in either a Company Material Adverse Effect or a Parent Material
Adverse Effect.
(c) Litigation. No court or other Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any statute, rule, regulation, judgment, decree, injunction or other order
(whether temporary, preliminary or permanent) that is in effect and
restrains, enjoins or otherwise prohibits consummation of the transactions
contemplated by this Agreement (collectively, an "Order"), and no
Governmental Entity shall have instituted any proceeding or formally
threatened to institute any proceeding seeking any such Order and such
proceeding or threat remains unresolved.
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7.2. Conditions to Obligations of Parent and Merger Sub. The obligations
of Parent and Merger Sub to effect the Merger are also subject to the
satisfaction or waiver by Parent prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an
earlier date) as of the Closing Date as though made on and as of the
Closing Date it being understood that representations and warranties shall
be deemed to be true and correct unless the respects in which the
representations and warranties (without giving effect to any "materiality"
limitations or references to "material adverse effect" set forth therein)
are untrue or incorrect in the aggregate is likely to have a Company
Material Adverse Effect.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date.
7.3. Conditions to Obligations of the Company. The obligation of the
Company to effect the Merger is also subject to the satisfaction or waiver by
the Company prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub set forth in this Agreement shall be
true and correct in all material respects as of the date of this Agreement
and (except to the extent such representations and warranties speak as of
an earlier date) as of the Closing Date as though made on and as of the
Closing Date it being understood that representations and warranties shall
be deemed to be true and correct unless the respects in which the
representations and warranties (without giving effect to any "materiality"
limitations or references to "material adverse effect" set forth therein)
are untrue or incorrect in the aggregate is likely to have a Parent
Material Adverse Effect.
(b) Performance of Obligations of Parent and Merger Sub. Each of
Parent and Merger Sub shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior
to the Closing Date.
ARTICLE VIII
TERMINATION
8.1. Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after its approval by the Company Requisite Vote, by mutual written
consent of the Company (through the Continuing Directors or their designated
successors), Parent and Merger Sub.
8.2. Termination by Either Parent or the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by either Parent or the Company if any Order permanently restraining,
enjoining or otherwise prohibiting the Merger shall be entered (whether before
or after the approval by the stockholders of the Company) and such Order is or
shall have become nonappealable.
8.3. Termination by the Company. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after its approval by the Company Requisite Vote, by the Company if:
(a) after October 31, 1997, Parent shall have failed to pay for Shares
pursuant to the Offer; provided, however, that the right to terminate this
Agreement pursuant to this subsection (a) shall not be available to the
Company if it has breached in any material respects its obligations under
this Agreement that in any manner shall have proximately contributed to the
failure referenced in this clause (a);
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(b) prior to Parent's purchase of Shares pursuant to the Offer, (i)
the Company enters into a binding written agreement concerning a Superior
Proposal after fully complying with the procedures set forth in Section 6.2
and (ii) the Company concurrently with such termination pays to Parent in
immediately available funds all expense reimbursements due Parent pursuant
to Section 8.5(a) and the first installment of the Termination Fee pursuant
to Section 8.5(b); or
(c) there has been a material breach by Parent or Merger Sub of any
representation, warranty, covenant or agreement contained in this Agreement
that is not curable or, if curable, is not cured prior to the earlier of
(i) twenty (20) days after written notice of such breach is given by the
Company to Parent and (ii) two (2) Business Days before the date on which
the Offer expires.
8.4. Termination by Parent and Merger Sub. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after its approval by the Company Requisite Vote, by
Parent and Merger Sub if:
(a) the Merger shall not have been consummated by January 15, 1998;
provided, however, that the right to terminate this Agreement pursuant to
this subsection (a) shall not be available to Parent and Merger Sub if
either of them has breached in any material respect its obligations under
this Agreement in any manner that shall have proximately contributed to the
occurrence of the failure referred to in this subsection;
(b) the Board of Directors of the Company shall have withdrawn or
adversely modified its approval or recommendation of this Agreement;
(c) there has been a material breach by the Company of any
representation, warranty, covenant or agreement contained in this Agreement
that is not curable or, if curable, is not cured within twenty (20) days
after written notice of such breach is given by Parent to the Company and
which is likely to have a Company Material Adverse Effect; or
(d) Parent shall have terminated the Offer in accordance with the
provisions of Annex A; provided, however, that the right to terminate this
Agreement pursuant to this subsection (d) shall not be available to Parent
and Merger Sub if either of them has breached in any material respect its
obligations under this Agreement in any manner that shall have proximately
contributed to the termination of the Offer.
8.5. Effect of Termination and Abandonment.
(a) If this Agreement is terminated and the Merger abandoned pursuant
to this Article VIII, this Agreement (other than as set forth in Section
9.1) shall become void and of no further effect with no liability of any
party hereto (or any of its directors, officers, employees, agents,
stockholders, legal, accounting and financial advisors or other
representatives); provided, however, that, except as otherwise provided
herein, no such termination shall relieve any party hereto of any liability
or damages resulting from any breach of this Agreement; provided further,
that the Company shall reimburse Parent in the amount of $2,000,000 as
reimbursement for all of its costs and expenses in connection with this
Agreement, the Offer and the Merger unless: (i) the Agreement has been
terminated by the parties pursuant to Section 8.1 or by either party
pursuant to Section 8.2; (ii) the Company has terminated this Agreement
pursuant to Sections 8.3(a) or 8.3(c); or (iii) the Parent has terminated
this Agreement pursuant to Section 8.4(a) or Section 8.4(d) and, further,
the Company has not breached in any material respect its obligations under
this Agreement in any manner which proximately contributed to the failure
to close the Merger or Parent's termination of the Offer, respectively.
(b)(i) In lieu of any liability or obligation to pay damages (other
than the obligation to reimburse Parent for expenses pursuant to Section
8.5(a)), if (A) there shall be a proposal by a Third Party for a Third
Party Acquisition existing at the time of termination of the Agreement by
Parent and Merger Sub, and (B) Parent and Merger Sub shall have terminated
this Agreement pursuant to Section 8.4(b) or (c) or (d) and, with respect
to a termination pursuant to Section 8.4(d), the Company has breached in
any material respect its obligations under this Agreement in any manner
which proximately contributed to Parent and Merger Sub's termination of the
Offer, the Company shall pay to Parent (i) within two (2)
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business days after such termination $5,000,000 and (ii) an additional
$8,000,000 upon consummation, if any, of any Third Party Acquisition with a
Person who had proposed a Third Party Acquisition prior to the time of the
termination of this Agreement by the Parent and Merger Sub.
(ii) In lieu of any liability or obligation to pay damages (other
than the obligation to reimburse Parent for expenses pursuant to Section
8.5(a)), (A) if there shall not have been a material breach of any
representation, warranty, covenant or agreement on the part of Parent or
Merger Sub and (B) the Company shall have terminated this Agreement
pursuant to Section 8.3(b), the Company shall pay to Parent (i)
concurrently with such termination $5,000,000 and (ii) an additional
$8,000,000 upon consummation, if any, of either the Superior Proposal
giving right to terminate this Agreement under Section 8.3 (b) or any
Third Party Acquisition with a Person who had proposed a Third party
Acquisition prior to the termination of this Agreement under section
8.3(b). (Such amounts payable pursuant to Section 8.5(b)(i) or this
Section 8.5(b)(ii) are referred to in the aggregate in this Agreement as
the "Termination Fee".)
(c) The Company acknowledges that the agreements contained in Section
8.5 are an integral part of the transactions contemplated by this Agreement
and that, without these agreements, Parent and Merger Sub would not enter
into this Agreement; accordingly, if the Company fails promptly to pay the
amounts required pursuant to Section 8.5 and, in order to obtain such
payment Parent or Merger Sub commences a suit which results in a final
nonappealable judgment against the Company for such amounts, the Company
shall pay to Parent or Merger Sub (i) its costs and expenses (including
attorneys' fees) in connection with such suit and (ii) if (and only if)
this Agreement has been terminated pursuant to Section 8.3(b) or 8.4(c),
interest on the amount at the rate announced by Bank of America, NT & SA as
its "reference rate" in effect on the date such payment was required to be
made.
8.6. Procedure for Termination. A termination of this Agreement pursuant
to this Article VIII shall, in order to be effective, require in the case of
Parent, Merger Sub or the Company, action by its Board of Directors.
ARTICLE IX
MISCELLANEOUS
9.1. Survival. This Article IX and the agreements of the Company, Parent
and Merger Sub contained in Sections 6.8 (Benefits), 6.9 (Expenses) and 6.10
(Indemnification; Directors' and Officers' Insurance) shall survive the
consummation of the Merger. This Article IX and the agreements of the Company,
Parent and Merger Sub contained in Section 6.9 (Expenses) and Section 8.5
(Effect of Termination and Abandonment) shall survive the termination of this
Agreement. All other representations, warranties, agreements and covenants in
this Agreement and in any certificate or schedule delivered pursuant hereto
shall not survive the consummation of the Merger or the termination of this
Agreement.
9.2. Certain Definitions. For the purposes of this Agreement each of the
following terms shall have the meanings set forth below:
(a) "Affiliate" means a Person that, directly or indirectly, through
one or more intermediaries controls, is controlled by or is under common
control with the first-mentioned Person.
(b) "Business Day" means any day other than a day on which banks in
the State of California are authorized to close or the NASDAQ National
Market is closed.
(c) "Capital Stock" means common stock, preferred stock, partnership
interests, limited liability company interests or other ownership interests
entitling the holder thereof to vote with respect to matters involving the
issuer thereof.
(d) "Company Material Adverse Effect" means a material adverse effect
on the financial condition, properties, business or results of operations
of the Company and its Subsidiaries, taken as a whole it being understood
that none of the following shall be deemed by itself or by themselves,
either alone or in
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combination, to constitute a Company Material Adverse Effect: (a) a change
in the market price or trading volume of the Company Common Stock, (b) a
failure by the Company to meet internal earnings or revenue projections or
the revenue or earnings predictions of equity analysts as reflected in the
First Call consensus estimate, or any other revenue or earnings predictions
or expectations, for any period ending (or for which earnings are released)
on or after the date of this Agreement and prior to the Effective Date, (c)
conditions affecting the semi-conductor industry as a whole or the U.S.
economy as a whole, (d) any disruption of customer or supplier
relationships arising primarily out of or resulting primarily from actions
contemplated by the parties in connection with, or which is primarily
attributable to, the announcement of this Agreement and the transactions
contemplated hereby, to the extent so attributable.
(e) "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest, encumbrance, hypothecation, title defect
or adverse claim of any kind in respect of such asset.
(f) "Parent Material Adverse Effect" means a material adverse effect
on the ability of Parent or Merger Sub to conduct the Offer or consummate
the Merger or any of the other material transactions contemplated by this
Agreement
(g) "Permitted Liens" means (i) Liens for Taxes or other governmental
assessments, charges or claims the payment of which is not yet due; (ii)
statutory liens of landlords and liens of carriers, warehousemen,
mechanics, materialmen and other similar Persons and other liens imposed by
applicable Law incurred in the ordinary course of business for sums not yet
delinquent or immaterial in amount and being contested in good faith; (iii)
liens specifically identified as such in the Balance Sheet or the notes
thereto; (iv) liens constituting or securing executory obligations under
any lease that constitutes an "operating lease" under GAAP; and (v) any
other Lien arising in the ordinary course of business, the imposition of
which would not constitute a Company Material Adverse Effect; provided,
however, that, with respect to each of the foregoing clauses (i) through
(iv), to the extent that any such lien arose prior to the Audit Date and
relates to, or secures the payment of, a liability that is required to be
accrued on the Balance Sheet under GAAP, such lien shall not be a Permitted
lien unless accruals for such liability have been established therefor on
the Balance Sheet in conformity with GAAP. Notwithstanding the foregoing,
no lien arising under the Code or ERISA with respect to the operation,
termination, restoration or funding of any Compensation and Benefit Plan
sponsored by, maintained by or contributed to by the Company or any of its
ERISA Affiliates or arising in connection with any excise tax or penalty
tax with respect to such Compensation and Benefit Plan shall be a Permitted
lien.
(h) "Person" means an individual, corporation (including
not-for-profit), partnership, limited liability company, association,
trust, unincorporated organization, joint venture, estate, Governmental
Entity or other legal entity.
(i) "Subsidiary" or "Subsidiaries" of the Company, Parent, the
Surviving Corporation or any other Person means any corporation,
partnership, limited liability company, association, trust, unincorporated
association or other legal entity of which the Company, Parent, the
Surviving Corporation or any such other Person, as the case may be, either
alone or through or together with any other Subsidiary, owns, directly or
indirectly, 50% or more of the Capital Stock, the holders of which are
generally entitled to vote for the election of the Board of Directors or
other governing body of such corporation or other legal entity.
9.3. No Personal Liability. This Agreement shall not create or be deemed
to create any personal liability or obligation on the part of any direct or
indirect stockholder of the Company, Merger Sub or Parent, or any of their
respective officers, directors, employees, agents or representatives.
9.4. Modification or Amendment. Subject to the provisions of applicable
Law, at any time prior to the Effective Time, the parties hereto may modify or
amend this Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties.
9.5. Waiver of Conditions. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable Law. The failure of any party hereto to exercise any right, power or
remedy provided
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under this Agreement or otherwise available in respect hereof at law or in
equity, or to insist upon strict compliance by any other party hereto with its
obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its rights
to exercise any such or other right, power or remedy or to demand such
compliance.
9.6. Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
9.7. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS
SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE
LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. The parties hereby irrevocably submit to the
jurisdiction of the courts of the State of Delaware and the Federal courts
of the United States of America located in the State of Delaware solely in
respect of the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in
respect of the transactions contemplated hereby, and hereby waive, and
agree not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document, that it is
not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in said courts or that the venue thereof may
not be appropriate or that this Agreement or any such document may not be
enforced in or by such courts, and the parties hereto irrevocably agree
that all claims with respect to such action or proceeding shall be heard
and determined in such a Delaware State or Federal court. The parties
hereby consent to and grant any such court jurisdiction over the person of
such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 9.8 or in such other manner as
may be permitted by applicable Law, shall be valid and sufficient service
thereof.
(b) The parties agree that irreparable damage would occur and that the
parties would not have any adequate remedy at law in the event that any of
the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms
and provisions of this Agreement in any Federal court located in the State
of Delaware or in Delaware state court, this being in addition to any other
remedy to which they are entitled at law or in equity.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE INITIAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.7.
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9.8. Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be deemed given if in writing
and delivered personally or sent by registered or certified mail (return receipt
requested) or overnight courier (providing proof of delivery), postage prepaid,
or by facsimile (which is confirmed):
If to Parent or Merger Sub:
Intel Corporation.
2200 Mission College Blvd.
Santa Clara, CA 95052-8119
Attention: General Counsel
Fax: (408) 765-7636
with a copy to:
Richard A. Strong, Esq.
Gibson, Dunn & Crutcher LLP
333 So. Grand Avenue
Los Angeles, CA 90071
Fax: (213) 229-6205
If to the Company:
Chips and Technologies, Inc.
2950 Zanker Road
San Jose, CA 95134
Attention: Jeffery Anne Tatum
Fax: (408) 894-2088
with a copy to:
Bradley J. Rock, Esq.
Gray Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, CA 94301
Fax: (415) 327-3699
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
9.9. Entire Agreement. This Agreement (including any schedules, exhibits
or annexes hereto) and the Confidentiality Agreement hereto constitute the
entire agreement, and supersede all other prior agreements, understandings,
representations and warranties both written and oral, among the parties, with
respect to the subject matter hereof.
9.10. No Third Party Beneficiaries. Except as provided in Section 6.10
(Indemnification; Directors' and Officers' Insurance), this Agreement is not
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
9.11. Obligations of the Company and Surviving Corporation. Whenever this
Agreement requires a Subsidiary of the Company to take any action, such
requirement shall be deemed to include and undertaking on the part of the
Company to cause such Subsidiary to take such action and, after the Effective
Time, on the part of the Surviving Corporation to cause such Subsidiary to take
such action.
9.12. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision hereof shall
not affect the validity or enforceability of any of the other provisions hereof.
If any provision of this Agreement, or the application thereof to any Person or
any circumstance, is illegal, invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to
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other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
9.13. Interpretation. The table of contents and Article, Section and
subsection headings herein are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to limit or
otherwise affect any of the provisions hereof. Where a reference in this
Agreement is made to a Section, Schedule, Annex or Exhibit, such reference shall
be to a Section of, or Schedule, Annex or Exhibit to, this Agreement, unless
otherwise indicated. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation." All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders of
such term. Any agreement, instrument or statute defined or referred to herein or
in any agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns and, in
the case of an individual, to his or her heirs and estate, as applicable.
9.14. Assignment. This Agreement shall not be assignable by operation of
Law or otherwise and any attempted assignment of this Agreement in violation of
this sentence shall be void; provided, however, that Parent may designate, by
written notice to the Company, another wholly-owned, direct subsidiary to be a
Constituent Corporation in lieu of Merger Sub, in the event of which, all
references herein to Merger Sub shall be deemed references to such other
Subsidiary except that all representations and warranties made herein with
respect to Merger Sub as of the date of this Agreement shall be deemed
representations and warranties made with respect to such other Subsidiary as of
the date of such designation.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
duly authorized officers of the parties hereto as of the date hereof.
CHIPS AND TECHNOLOGIES, INC.
By:
------------------------
Name:
Title:
INTEL CORPORATION
By:
------------------------
Name:
Title:
INTEL ENTERPRISE CORPORATION
By:
------------------------
Name:
Title:
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<PAGE> 39
ANNEX A
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer or this Agreement, and
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) relating to Parent's obligation to pay for or return tendered shares
after termination of the Offer, Parent shall not be required to accept for
payment or pay for any Shares tendered pursuant to the Offer, shall delay the
acceptance for payment of any Shares and if required by Section 1.1(b) of this
Agreement, shall extend the Offer by one or more extensions until October 31,
1997, and may terminate the Offer at any time after October 31, 1997 if (i) less
than a majority of the outstanding Shares on a fully-diluted basis (including
for purposes of such calculation all Shares issuable upon exercise of all vested
and unvested options) has been tendered pursuant to the Offer by the expiration
of the Offer and not withdrawn; (ii) any applicable waiting period under the HSR
Act has not expired or terminated; (iii) all necessary Government Consents shall
not have been obtained on terms and conditions reasonably satisfactory to
Parent; or (iv) at any time after the date of this Agreement, and before
acceptance for payment of any Shares, any of the following events shall occur
and be continuing on or after October 31, 1997:
(a) there shall have been any action taken, or any statute, rule,
regulation, judgment, order or injunction promulgated, entered, enforced,
enacted, issued or deemed applicable to the Offer or the Merger by any
domestic or foreign court or other Governmental Entity which directly or
indirectly (i) prohibits, or imposes any material limitations on, Parent's
ownership or operation (or that of any of its Subsidiaries or other
Affiliates) of all or a material portion of their or the Company's
businesses or assets, or compels Parent or any of its Subsidiaries or other
Affiliates to dispose of or hold separate any material portion of the
business or assets of the Company or Parent and its respective
Subsidiaries, in each case taken as a whole, (ii) prohibits, or makes
illegal, the acceptance for payment, payment for or purchase of Shares or
the consummation of the Offer, the Merger or the other transactions
contemplated by this Agreement, (iii) results in the delay in or restricts
the ability of Parent, or renders Parent unable, to accept for payment, pay
for or purchase some or all of the Shares, (iv) imposes material
limitations on the ability of Parent effectively to exercise full rights of
ownership of the Shares, including the right to vote the Shares purchased
by it on all matters properly presented to the Company's stockholders, or
(v) otherwise has a Company Material Adverse Effect;
(b) (i) the representations and warranties of the Company set forth in
this Agreement shall not be true and correct in any material respect as of
the date of this Agreement and as of consummation of the Offer as though
made on or as of such date (except for representations and warranties made
as of a specified date) but only if the respects in which the
representations and warranties made by the Company (without giving effect
to any "materiality" limitations or references to "material adverse effect"
set forth therein) are inaccurate would in the aggregate have a Company
Material Adverse Effect, (ii) the Company shall have failed to comply with
its covenants and agreements contained in this Agreement in all material
respects, or (iii) there shall have occurred any events or changes which
have had or which are likely to have a Company Material Adverse Effect;
(c) it shall have been publicly disclosed or Parent shall have
otherwise learned that (i) any Person or "group" (as defined in Section
13(d)(3) of the Exchange Act) shall have acquired or entered into a
definitive agreement or agreement in principle to acquire beneficial
ownership of more than 20% of the Shares or any other class of Capital
Stock of the Company, through the acquisition of stock, the formation of a
group or otherwise, or shall have been granted any option, right or
warrant, conditional or otherwise, to acquire beneficial ownership of more
than 20% of the Shares and (ii) such Person or group shall not have
tendered such Shares pursuant to the Offer;
(d) the Board of Directors of the Company shall have withdrawn, or
modified or changed in a manner adverse to Parent (including by amendment
of the Schedule 14D-9), its recommendation of the Offer, this Agreement or
the Merger, or recommended another proposal or offer, or the Board of
Directors of the Company, shall have resolved to do any of the foregoing;
or
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(e) this Agreement shall have terminated in accordance with its terms;
which in the good faith judgment of Parent, in any such case, and regardless of
the circumstances (including any action or inaction by Parent) giving rise to
such condition makes it inadvisable to proceed with the Offer or the acceptance
for payment of or payment for the Shares.
The foregoing conditions, other than condition (i) above are for the sole
benefit of Parent and may be waived by Parent, in whole or in part at any time
and from time to time, in the sole discretion of Parent. The failure by Parent
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.
35
