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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9/A
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
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INTEK GLOBAL CORPORATION
(NAME OF SUBJECT COMPANY)
INTEK GLOBAL CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
458134 10 3
(CUSIP NUMBER OF CLASS OF SECURITIES)
ROBERT J. SHIVER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
99 PARK AVENUE
NEW YORK, NEW YORK 10016
(212) 949-4200
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICE
AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
WITH A COPY TO:
NANCY H. WOJTAS, ESQ.
MANATT, PHELPS & PHILLIPS, LLP
11355 WEST OLYMPIC BOULEVARD
LOS ANGELES, CALIFORNIA 90064
(310) 312-4000
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This Amendment No. 1 to Schedule 14D-9 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
of Intek Global Corporation, a Delaware corporation (the "Company"), filed with
the Securities and Exchange Commission on June 16, 1999 relating to a tender
offer by IGC Acquisition Corp., a Delaware corporation ("Purchaser") and a
wholly-owned subsidiary of Security Services plc, a public limited company
incorporated under the laws of England and Wales ("Parent"), to purchase all of
the outstanding common stock, par value $.01 per share, of the Company (the
"Shares") at a price of $2.75 per Share (the "Offer Price"), net to the seller
in cash, without interest thereon and less any required transfer and withholding
taxes, upon the terms and subject to the conditions set forth in Purchaser's
Offer to Purchase, dated June 16, 1999 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which together with any amendments or supplements
thereto, collectively constitute the "Offer"). Copies of the Offer to Purchase
and the related Letter of Transmittal were filed as Exhibits 99.5 and 99.6,
respectively, to the Schedule 14D-9. Capitalized terms used and not defined
herein shall have the meaning assigned to such terms in the Schedule 14D-9.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
Item 8 of the Schedule 14D-9 incorporated by reference the information set
forth in the Offer to Purchase under "THE TENDER OFFER -- Certain Legal Matters;
Required Regulatory Approvals". That information, under the sub-heading
"Lawsuits," contained descriptions of two class action lawsuits filed on June 8,
1999 and June 11, 1999, respectively, against the Company, Securicor and the
Company's directors in the Court of Chancery of the State of Delaware. That
information is supplemented as follows:
The filing date for the first lawsuit against the Company, Securicor and
the Company's directors referenced in the Offer to Purchase under "THE TENDER
OFFER -- Certain Legal Matters; Required Regulatory Approvals -- Lawsuits" is
changed from June 8, 1999 to June 7, 1999.
The Company, Securicor and the Company's directors have been named as
defendants in a third class action lawsuit filed on June 17, 1999 in the Court
of Chancery of the State of Delaware. The complaint, including the relief
sought, is virtually identical to the class action complaint filed on June 11,
1999 that is described under "THE TENDER OFFER -- Certain Legal Matters;
Required Regulatory Approvals -- Lawsuits" in the Offer to Purchase.
The plaintiffs in the class action lawsuit originally filed on June 7, 1999
filed an amended complaint on June 21, 1999. As indicated in the related notice
of filing, the amended complaint is "in full substitution" of the prior
complaint. The amended complaint alleges among other things, that the Company,
Securicor and the Company Board suppressed the price of the Shares by, among
other things, suppressing material information, so that Securicor could purchase
the publicly-held Shares at an inadequate price. The amended complaint also
alleges that the defendants breached their fiduciary duties to the Company's
public stockholders and that the Schedule 14D-1 and Schedule 14D-9 relating to
the Offer failed to disclose certain material information. The amended complaint
seeks injunctive relief, unspecified compensatory and/or recissory damages,
attorneys' fees and costs, and other relief relating to the Offer and the
Merger.
On July 8, 1999, counsel to the parties to the three pending class actions
(the "Pending Actions") entered into a Memorandum of Understanding setting forth
an agreement in principle regarding the potential settlement of the Pending
Actions (the "Memorandum of Understanding"). Pursuant to the terms of the
Memorandum of Understanding, the Offer Price and the Merger Consideration will
be increased from $2.75 per Share to $3.0125 per Share. The Memorandum of
Understanding provided that the contemplated settlement was subject to the
plaintiffs in the Pending Actions taking two depositions on or before July 10,
1999. The plaintiffs then had the right to withdraw from the settlement within
96 hours following the completion of the depositions if they discovered material
new facts as a result of the depositions that would, in the reasonable opinion
of the plaintiffs' counsel, render the settlement not fair or adequate under the
circumstances. The referenced depositions were taken on July 7 and July 8, 1999
and, on July 9, 1999, counsel to the plaintiffs informed Securicor that they had
waived their right to withdraw from the settlement.
The Memorandum of Understanding provides that, as promptly as reasonably
practicable, (i) the defendants are to amend the Merger Agreement to reflect the
increase in the Offer Price and the Merger
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Consideration and (ii) the Offer to Purchase is to be amended to reflect the
increased Offer Price and to extend the Expiration Date from midnight on July
14, 1999 to midnight on July 29, 1999 (subsequently agreed by the parties to be
extended to a date during the first week of August). The Memorandum of
Understanding also provides that each of the named plaintiffs in the Pending
Actions will cause all Shares "owned" (as defined in Section 203(c)(9) of the
DGCL) by such plaintiff to be tendered in the Offer.
The Memorandum of Understanding requires that the parties to the Pending
Actions attempt in good faith to agree upon and execute as soon as practicable
(i) an appropriate Stipulation of Settlement (the "Stipulation") of all claims
asserted in the complaints filed in the Pending Actions and all related claims
described in the Memorandum of Understanding, and (ii) such other documentation
as may be required in order to obtain any and all necessary or appropriate court
approvals of the Stipulation, upon and consistent with the terms set forth in
the Memorandum of Understanding. The Stipulation will provide for the dismissal
of all such claims with prejudice. The Stipulation will also provide for the
release of all claims of members of the plaintiff class, whether known or
unknown, against the defendants in the Pending Actions and any of their present
or former officers, directors, employees, agents, attorneys, accountants,
financial advisors, commercial bank lenders, investment bankers,
representatives, affiliates, associates, parents, direct and indirect
subsidiaries, general partners, limited partners, partnerships, heirs,
executors, administrators, successors and assigns (collectively, the
"releasees"), whether under state or federal law, and whether directly,
derivatively, representatively or arising in any other capacity, and in
connection with, or that arise out of any claim that was or could have been
brought against any of the releasees in any of the Pending Actions, and/or that
relates in any way to (i) any claim that any action by any of the releasees, or
any failure of any of the releasees to take any action, affected the price of
the Shares, (ii) the acquisition or ownership of equity securities of the
Company or its affiliates by Securicor or any of the releasees, (iii) or loans
made to the Company or its affiliates by Securicor or any of the releasees, (iv)
the fiduciary duties of any of the releasees to stockholders of the Company, (v)
the announcement made by Securicor on January 19, 1999, (vi) the Offer, (vii)
the Merger, (viii) the negotiation, consideration or formulation of the Offer or
the Merger, (ix) the disclosure obligations of any of the releasees in
connection with the Offer or the Merger, or (x) any other claim, other than
claims for appraisal of shares pursuant to Section 262 of the DGCL, relating in
any way to any of the foregoing.
The settlement contemplated by the Memorandum of Understanding is subject
to "final court approval", which is defined to mean the issuance by the court of
an order approving the settlement in accordance with the Stipulation, with such
order being finally affirmed on appeal or no longer being subject to appeal. The
Memorandum of Understanding expressly acknowledges that, at the sole option of
the defendants, the Merger may be consummated prior to court approval of the
settlement and that it is expected that the Merger will be consummated prior to
final court approval of the settlement.
Pursuant to the Memorandum of Understanding, the Stipulation will also
provide that if final court approval of the settlement and dismissal of the
Pending Actions by the court with prejudice has been obtained in accordance with
the Stipulation, the plaintiffs and their counsel of record in the Pending
Actions will jointly apply to the court for an award of attorney's fees and
expenses (including, but not limited to, fees of plaintiffs' counsels' financial
advisor) in an aggregate amount not to exceed $1,432,000. The Memorandum of
Understanding provides that the plaintiffs and their counsel intend to request
that plaintiffs' counsel be permitted to pay $10,000 of the foregoing fees as
special payments to certain of the named plaintiffs (a total of $40,000).
Defendants and their counsel agreed in the Memorandum of Understanding not to
oppose plaintiffs' and plaintiffs' counsels' application for attorneys' fees,
expenses and special payments to plaintiffs, provided that the application does
not exceed the specified amounts. The Memorandum of Understanding further
provides that, subject to certain conditions and any order of the court, any
such attorneys' fees and expenses awarded by the court to plaintiffs and
plaintiffs' counsel shall be paid by the Company (or any successor in interest).
The Memorandum of Understanding, by its terms, will be null and void and of
no force and effect if: (i) the Merger is not effectuated for any reason
whatsoever; or (ii) final court approval of the settlement does not occur for
any reason.
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The Company, each of its directors, and Securicor have denied that they
have engaged in any wrongdoing whatsoever, and have agreed to the settlement to
eliminate the burden and expense of further litigation and to permit the Offer
and the Merger to proceed without the risk of injunctive or other relief.
The foregoing summary of the Memorandum of Understanding is qualified in
its entirety by reference to the Memorandum of Understanding, a copy of which
has been filed as an exhibit to this Amendment No. 1 to the Schedule 14D-9.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
Item 9 is hereby amended by adding the following information:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<C> <S>
99.9 Class Action Complaint, dated June 17, 1999, Civil Action
17240, filed in the Court of Chancery of the State of
Delaware in and for New Castle County.
99.10 Amended Class Action Complaint, dated June 21, 1999, Civil
Action 17207, filed in the Court of Chancery of the State of
Delaware in and for New Castle County.
99.11 Memorandum of Understanding, dated as of July 8, 1999.
99.12 Press Release, dated July 8, 1999, issued by the Company.
99.13 Press Release, dated July 13, 1999, issued by the Company.
</TABLE>
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 1 is true, complete
and correct.
INTEK GLOBEL CORPORATION
By /s/ ROBERT J. SHIVER
----------------------------------------
Robert J. Shiver
Chairman and Chief Executive Officer
Dated: July 13, 1999
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EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGES
- ------- ----------- ------------
<C> <S> <C>
99.9 Class Action Complaint, dated June 17, 1999, Civil Action
17240, filed in the Court of Chancery of the State of
Delaware in and for New Castle County.
99.10 Amended Class Action Complaint, dated June 21, 1999, Civil
Action 17207, filed in the Court of Chancery of the State of
Delaware in and for New Castle County.
99.11 Memorandum of Understanding, dated as of July 8, 1999.
99.12 Press Release, dated July 8, 1999, issued by the Company.
99.13 Press Release, dated July 13, 1999, issued by the Company.
</TABLE>
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Exhibit 99.9
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
MAX MARCUS KATZ, P.C. PENSION AND C.A. No. 17240
PROFIT SHARING PLAN
Plaintiff,
INTEK GLOBAL CORPORATION, SECURICOR
plc, ROBERT J. SHIVER, HOWARD FRANK,
ROBERT B. KELLY, ELI M. NOAM, JOHN
WAREHAM, STEVEN L. WASSERMAN, ROGER
WIGGS AND MICHAEL G. WILKINSON,
Defendants.
CLASS ACTION COMPLAINT
Plaintiff alleges on information and belief, except as to paragraph 2
below which is alleged on knowledge, as follows:
1. This action arises out of an improper scheme and plan by defendant
Securicor plc ("Securicor") to purchase the remaining 33.25% equity interest of
Intek Global Corporation ("Intek" or the "Company"), which it does not already
own for grossly inadequate consideration and without adequate procedural
protections customarily afforded public shareholders under such circumstances.
Plaintiff alleges that, in connection with the proposed transaction, defendants
have engaged and are continuing to engage in acts of self-dealing, unfair
dealing, gross overreaching, and breaches of their fiduciary duties, all in an
effort to enable Securicor to acquire the shares of the Company it does not own
for as little consideration as possible. Plaintiff alleges that he and other
public stockholders of Intek are entitled to injunctive relief, or
alternatively, to recover damages in the event the transaction is consummated.
THE PARTIES
2. Plaintiff Max Marcus Katz, P.C. Pension and Profit Sharing Plan owns
and at all relevant times has owned shares of Intek common stock.
3. Intek is a Delaware corporation with principal executive offices
located at 99 Park Avenue, New York, New York. The Company is an international
provider of spectrum-efficient technology, communications products and services.
Intek also develops,
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manufactures, distributes and licenses wireless communications technology and
products. The Company has approximately 52.6 million shares of common stock
outstanding. Of the 52.6 million, approximately 34.7 million (66%) are owned by
defendant Securicor.
4. Defendant Securicor is an entity existing under the laws of the
United Kingdom and is a wholly-owned subsidiary of Securicor Plc, a U.K.-based
international organization with core businesses in security services, parcel and
freight distribution and fixed and mobile telecommunications.
5. By virtue of its majority stock ownership, defendant Securicor owes
the highest fiduciary duties of good faith, loyalty, fair dealing, due care and
candor to Plaintiff and other members of the Class (defined below). In
connection with its efforts to acquire the Company as described below, Securicor
has fiduciary obligations to Class members, which include the obligation to
offer Class members a fair price and act in a procedurally fair manner.
6. Defendant Roger Wiggs ("Wiggs") is and at all relevant times was a
director of Intek and Chairman and Chief Executive Officer of Securicor.
7. Defendant Michael Wilkinson is and at all relevant times has been a
director of Intek and a director of Securicor.
8. Defendant Robert J. Shiver ("Shiver") is and was at all relevant
times the Chairman and Chief Executive Officer of Intek. Shiver has a lucrative
employment agreement with Intek.
9. Defendant Howard Frank ("Frank") is and was at all relevant times a
director of Intek.
10. Defendant Robert B. Kelly ("Kelly") is and was at all relevant times
a director of Intek and a partner at Squire, Sanders & Dempsey L.L.P., a law
firm which renders legal services to Intek and received $38,000 in 1998. Kelly
is also a 50% shareholder of Kelly & Povich, P.C., a law firm which performs
legal services for Intek and which received fees of $170,000 in 1998.
11. Defendant Eli M. Noam ("Noam") is and has been at all relevant times
a director of Intek.
12. Defendant John Wareham ("Wareham") is and has been at all relevant
times a director of Intek. Wareham is the Chief Executive Officer of Wareham
Associates, Inc., a management consulting firm which provides services to Intek
for which it received $249,000 in 1998.
13. Defendant Steven L. Wasserman ("Wasserman") is and has been at all
relevant times a director of Intek. Wasserman is a partner at Kohrman Jackson &
Krantz P.L.L., a law firm which performs legal services for Intek and which
received fees of $100,000 in 1998.
14. The individual defendants (collectively referred to herein as the
"Individual Defendants") are in a fiduciary relationship with plaintiff and the
public
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stockholders of Intek, and owe plaintiff and the other Intek public stockholders
the highest obligations of good faith, fair dealing, due care, loyalty and full
and candid disclosure.
15. The Individual Defendants owe their positions as directors of Intek
to defendant Securicor, the majority shareholder of Intek, and, therefore,
cannot exercise independent impartial judgment as directors of Intek in dealings
between Securicor and Intek's public shareholders.
CLASS ACTION ALLEGATIONS
16. Plaintiff brings this action for declaratory, injunctive, and other
relief on behalf of itself and as a class action, pursuant to Court of Chancery
Rule 23, on behalf of all common stockholders of Intek and their successors in
interest, who are being harmed by the wrongful acts of the defendants described
herein (the "Class"). Excluded from the Class are defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defendants.
17. This action is properly maintainable as a class action because:
(a) The Class is so numerous that joinder of all members is
impracticable. As of December 18, 1998, there were 602 Intek stockholders of
record.
(b) There are questions of law and fact which are common to the
Class and which predominate over questions affecting any individual class
member. The common questions include, inter alia, the following:
(i) Whether defendants have engaged and are continuing
to engage in a plan and scheme to benefit Securicor at the expense of the
members of the Class;
(ii) Whether the Individual Defendants and Securicor are
capable of fulfilling their fiduciary duties to Plaintiff and the other
members of the Class;
(iii) Whether defendants have disclosed all material
facts in connection with the challenged transaction; and
(iv) Whether Plaintiff and the other members of the
Class would be irreparably damaged were defendants not enjoined from the
conduct described herein.
(c) Defendants have acted and will continue to act on grounds
generally applicable to the Class, thereby making appropriate final injunctive
or corresponding declaratory relief with respect to the Class as a whole.
(d) Plaintiff's claims are typical of the claims of the other
members of the Class in that all members of the Class will be damaged alike by
defendants' actions. Plaintiff has the same interests as the other members of
the Class.
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(e) Plaintiff is committed to the prosecution of this action and
has retained competent counsel experienced in litigation of this nature.
Accordingly, plaintiff is an adequate representative of the Class.
(f) Defendants have acted or refused to act on grounds generally
applicable to the Class, thereby making relief with respect to the Class as a
whole appropriate.
SUBSTANTIVE ALLEGATIONS
18. On or about June 7, 1999, Intek issued a press release announcing
that it had received an offer from Securicor to purchase all of the shares of
Intek which it did not already own (the "Offer").
19. Pursuant to the terms of the Offer, Intek's public shareholders
would received $2.75 per share in cash in a tender offer followed by a merger
for untendered shares.
20. On June 10, 1999, Intek announced that its Board (i.e. the
Individual Defendants) had approved the Offer. The tender offer is scheduled to
commence June 16, 1999.
21. The Offer represents only a modest premium over the current trading
price of Intek which traded as high as $4.00 per share as recently as July 1998,
and currently trades at $21/8 per share.
22. The Offer is timed to take advantage of the significant investments
made by Intek from its inception through 1998. Indeed, commenting on the
Company's performance during 1998, Intek's Chairman and CEO, defendant Shiver
stated that losses incurred by Intek during 1998 "... represent[ed] the kind of
up-front expenditure needed to position Intek Global for profitable growth in a
dynamic industry that will continue to expand well into the next century."
Shiver added that, "[s]upported by this funding, our goals for 1999 are to
secure the benefits from [Intek's] proprietary technology, extensive license
holding and to achieve profitability by fiscal 2000." Accordingly, consummation
of the Offer would allow Securicor to reap the benefits of the investments made
by Intek, to the exclusion of Intek's public shareholders.
23. The Offer is wrongful, unfair, and harmful to Class members and
represents an attempt by Securicor to aggrandize its financial position and
interest and to enrich itself, at the expense of and to the detriment of Class
members. In seeking to consummate the Offer, Securicor has failed to offer a
fair price or afford Class members adequate procedural safeguards.
24. Securicor has breached its fiduciary duties by failing to offer a
fair price to Class members for their Intek shares. The proposed consideration
of $2.75 per share is not the result of arm's-length negotiations, and is not
based upon any independent valuation of the current or projected value of Intek
stock, but was fixed arbitrarily by Securicor, as part of its unlawful plan and
scheme to advance its self interests to the detriment of the Class. The amount
of the Offer is grossly inadequate in view of, among other things, the market
price of Intek's shares prior to the announcement to the offer, the present and
projected value of the
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Company and its securities, and the premiums paid by majority shareholders in
other comparable transactions.
25. Because of the control exercised by Securicor over Intek, no third
party, as a practical matter, will bid for the Company and thus it is unlikely
that other bidders will emerge for Intek.
26. Further, in the announcement of the Offer, for in terrorem purposes,
Intek stated that Securicor has expressed its intent not to raise its offer
price of $2.75 per share.
27. Unless enjoined by this Court, defendants will continue to breach
their fiduciary duties owed to Plaintiff and the Class and Securicor will
consummate the Offer, with the acquiescence of the Individual Defendants who are
unable and unwilling to protect the interests of Class members.
28. Plaintiff and the other members of the Class has no adequate remedy
at law.
WHEREFORE, Plaintiff demands judgment as follows:
(a) declaring this to be a proper class action and designating
Plaintiff as Class representative;
(b) granting preliminary and permanent injunctive relief against
consummation of the Offer;
(c) in the event the Offer is consummated, rescinding the Offer
or awarding rescissory damages to Class members;
(d) ordering defendants, jointly and severally, to account to
Plaintiff and the other members of the Class for all damages suffered and to be
suffered by them as the result of the wrongs complained of herein;
(e) awarding Plaintiff the costs and disbursements of this
action, including Plaintiff's reasonable attorneys' and experts' fees; and
(f) granting such other and further relief as the Court deems
just and proper.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By: /s/ Carmella P. Keener
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Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, Delaware 19899
302/656-4433
Attorneys for Plaintiff
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OF COUNSEL:
Harold B. Obstfeld
HAROLD B. OBSTFELD, P.C.
260 Madison Avenue
New York, NY 10016
(212) 696-1212
Eduard Korsinsky
BEATLE and OSBORN
599 Lexington Avenue
New York, NY 10022
(212) 888-9000
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EXHIBIT 99.10
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
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RICHARD F. SEQUEIRA, KENNETH J. ANDERSON,
JAMES E. RYAN and WILLIAM GOODWIN,
Plaintiffs,
v. Civil Action No. 17207
ROBERT B. KELLY, ELI M. NOAM, HOWARD
FRANK, MICHAEL WILKINSON, ROGER WIGGS,
ROBERT J. SHIVER, STEVEN L. WASSERMAN,
JOHN WAREHAM, INTEK GLOBAL CORPORATION,
IGC ACQUISITION CORP. and SECURICOR PLC,
Defendants.
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AMENDED CLASS ACTION COMPLAINT
Plaintiffs allege upon personal knowledge with respect to themselves,
and upon information and belief as to all other allegations herein, as follows:
NATURE OF THE ACTION
1. This is a class action on behalf of the public stockholders of Intek
Global Corporation ("Intek" or the "Company") seeking injunctive and other
appropriate relief in connection with the attempt by the controlling shareholder
of Intek -- Securicor PLC ("Securicor") -- to purchase the publicly-held shares
of Intek common stock at a grossly inadequate price through unfair dealing and
withholding material information. In light of Securicor's collaboration with
Intek in its business ventures, Securicor is well aware that Intek is poised for
explosive growth in the near future. Moreover, Securicor and its designees on
the Intek Board have colluded in artificially depressing Intek's stock price so
that Intek's publicly-held shares can be purchased well-below their fair value.
2. The consideration that Securicor intends to offer to members of the
Class (as defined below) in the proposed acquisition is unfair and grossly
inadequate because, among other things, the intrinsic value of Intek's common
stock is materially in excess of the current historical
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trading prices of the Company's stock, giving due consideration to the Company's
promising growth and anticipated operating results, net asset value,
intellectual property and profitability.
THE PARTIES
3. Plaintiffs are and at all relevant times have been the owners of
shares of Intek common stock.
4. Intek is a Delaware corporation with its principal executive offices
located at 99 Park Avenue, 18th Floor, New York, New York 10016. Intek (i)
operates advanced wireless voice and data communications systems, (ii) develops,
manufactures, distributes and licenses wireless communications technology and
products and (iii) markets business radio systems and services in the United
States through its "RoameR One" subsidiary.
5. (a) Defendant Securicor's principal executive offices are located at
Sutton Park House, 15 Carshalton Road, Sutton, Surrey, SM1 4LD, United Kingdom.
(b) Securicor and its affiliates hold approximately 25 million
shares, or 61.3% of the outstanding common stock, of Intek. As a consequence,
Securicor and its representatives on the Intek Board effectively control and
dominate Intek's affairs. Securicor, therefore, is the controlling shareholder
of Intek and owes fiduciary obligations of good faith, candor, loyalty and fair
dealing to the public shareholders of Intek.
(c) Moreover, Securicor has the right to convert, at any time,
$12.5 million of debt owed to it by Intek for Intek common shares, at a
conversion price equal to the average closing price of Intek common stock for
the 20 trading days prior to December 16, 1998.
6. Defendant IGC Acquisition Corp. ("IGC") is a Delaware corporation
wholly owned by Securicor and formed to effect the tender offer described below.
7. (a) At all relevant times, defendants Robert B. Kelly, Eli M. Noam,
Howard Frank, Michael Wilkinson ("Wilkinson"), Roger Wiggs ("Wiggs"), Robert J.
Shiver ("Shiver"), John Wareham and Steven L. Wasserman served as directors of
Intek (collectively, the "Individual Defendants").
(b) In addition, at all relevant times, defendant Shiver
served as the Company's Chief Executive Officer and Chairman of Intek's Board of
Directors.
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(c) Defendant Wilkinson and Wiggs are also senior officers
and/or Board members of Securicor and are Securicor's appointees to the Intek
Board of Directors.
8. By virtue of their positions as directors and/or officers of Intek
and/or their exercise of control and dominant ownership over the business and
corporate affairs of Intek, each Individual Defendant and Securicor owed and
owes Intek's public stockholders fiduciary obligations and were and are required
to: use their ability to control and manage Intek in a fair, just and equitable
manner; act in furtherance of the best interests of Intek's public stockholders;
govern Intek in such a manner as to heed the expressed views of its public
shareholders; refrain from abusing their positions of control; and not favor
their own interests at the expense of Intek's public stockholders.
9. As discussed in detail below, Securicor, in concert with the
Individual Defendants, has breached and is breaching its fiduciary duties to
Intek's public stockholders by engaging in a wrongful, self-dealing acquisition
of the publicly-held minority shares of Intek for unfair and inadequate
consideration and without full disclosure.
CLASS ACTION ALLEGATIONS
10. Plaintiffs bring this action pursuant to Rule 23 of the Rules of
this Court, on behalf of themselves and all other shareholders of the Company
(except defendants herein and any persons, firm, trust, corporation, or other
entity related to or affiliated with them) and their successors in interest, who
are or will be threatened with injury arising from defendants' actions, as more
fully described herein (the "Class").
11. This action is properly maintainable as a class action for the
following reasons:
a. The Class is so numerous that joinder of all members is
impracticable. There are in excess of 42 million shares of Intek common stock
which are outstanding, held by hundreds, if not thousands, of beneficial owners
who are members of the Class.
b. Members of the Class are scattered throughout the United
States and are so numerous that it is impracticable to bring them all before
this Court.
c. There are questions of law and fact that are common to the
Class including, inter alia, the following:
i) Whether defendants have engaged in and are
continuing to engage in conduct which unfairly benefits Securicor at the expense
of the members of the Class;
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ii) Whether the Individual Defendants, as officers
and/or directors of the Company, and Securicor, the controlling stockholder of
Intek are violating their fiduciary duties to plaintiffs and the other members
of the Class; and
iii) Whether Securicor is seeking to consummate a
tender offer transaction without making full disclosure; and
iv) Whether plaintiffs and the other members of the
Class would be irreparably damaged were defendants not enjoined from the wrongs
complained of herein.
d. The claims of plaintiffs are typical of the claims of the
other members of the Class in that all members of the Class will be damaged
alike by defendants' actions.
e. Plaintiffs are committed to prosecuting this action and
have retained competent counsel experienced in litigation of this nature.
Accordingly, plaintiffs are adequate representatives of the Class.
f. The prosecution of separate actions by individual members
of the Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for defendants, or adjudications with respect to individual
members of the Class which would as a practical matter be dispositive of the
interests of the other members not parties to the adjudications or substantially
impair or impede their ability to protect their interests.
g. The defendants have acted, or refused to act, on grounds
generally applicable to, and causing injury to, the Class and, therefore,
preliminary and final injunctive relief on behalf of the Class as a whole is
appropriate.
SUBSTANTIVE ALLEGATIONS
A. THE COMPANY IS POISED FOR EXPLOSIVE GROWTH
1. INTEK'S PROPRIETARY LM TECHNOLOGY
12. Intek is an international developer and provider of advanced
spectrum-efficient wireless technology, products and services. The explosive
growth of the global wireless communications industry is testing the limits of
the wireless spectrum, a finite resource. As an effective solution to the
increasingly urgent worldwide problem of spectrum congestion, the Company has
developed Linear Modulation Technology ("LM Technology") -- a proprietary
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technology which delivers up to a six-fold increase in a systems' wireless
capacity. LM Technology is expected to emerge as the principal driver of Intek's
future success.
2. INTEK ENTERS INTO A STRATEGIC ALLIANCE WITH THE NRTC
13. On or about September 21, 1998, Intek entered into an exclusive
strategic alliance and distribution agreement with the 220 MHz Unit of the
National Rural Telecommunications Cooperative ("NRTC"), a national
telecommunications company serving the advanced telecommunications needs of 900
rural utilities and affiliated organizations. A key aspect of the alliance is
NRTC's commitment to Intek's LM Technology-based products. NRTC has targeted $50
million in LM Technology products to be purchased over the next five years.
14. Commenting on the Intek-NRTC alliance, defendant Shiver stated
that:
We're especially fortunate to be associated with as large and
prestigious a telecommunications company as NRTC . . . [t]his
agreement will have unique benefits for both participants.
It's another major step in the commercialization of Intek
Global's spectrum-efficient technology which, we believe, will
give a huge boost to our expanding national Business Radio
airtime network under the RoameR One brand.
3. THE FEDERAL GOVERNMENT AWARDS
INTEK 181 PHASE II LICENSES
15. On or about November 9, 1998, the Federal Communications Commission
("FCC") awarded Intek (a) two 10-channel nationwide licenses, (b) seven
15-channel regional licenses and (c) 172 10-channel "Economic Area," or local,
Business Radio airwave licenses, in connection with the FCC Phase II auction of
new 220 MHz spectrum licenses.
16. Intek stated that the Phase II licenses will enable it to achieve
significant efficiencies by (a) better tailoring construction efforts to match
market requirements, (b) consolidating its Phase I holdings with Phase II areas
of ownership, thus allowing the elimination of substantial costs, (c) employing
channel re-use techniques to improve coverage and capacity, (d) providing
cost-effective "roaming" over wide areas and (e) reselling capacity.
17. Commenting on Intek's success at the FCC auction, defendant Shiver
stated that:
THIS AWARD IS AN ABSOLUTE GRAND SLAM FOR US. It results in a
very powerful combination for our business -- a dramatic
increase in geographically well-positioned spectrum acquired
at a substantially lower cost than previously auctioned
spectrum, coupled with the spectrum-efficiency capabilities of
our
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proprietary LM technology. Not only will we be the low-cost
provider of airtime services in the 220 MHz marketplace, but
we now have the ability to provide customized Business Radio
systems that can meet the unique, specialized requirements of
any type of subscriber, anywhere in the nation.
* * * * *
THE NEW SPECTRUM LICENSES WE'VE ACQUIRED ARE A WATERSHED EVENT
IN INTEK GLOBAL'S FUTURE GROWTH. They've obviously created a
whole new ballgame for our airtime sales force.
* * * * *
With nationwide coverage, virtually unlimited capacity,
proprietary LM-based technology, a full range of service
offerings and a very competitive pricing structure, WE BELIEVE
WE ARE STRONGLY POSITIONED TO BE THE NO. 1 PLAYER IN THE
BOOMING BUSINESS RADIO SECTOR.
(Emphasis added.)
B. DEFENDANTS HAVE ENDEAVORED TO
SUPPRESS THE COMPANY'S STOCK PRICE
18. Despite the fact that the Company is clearly on the road to
success, defendants have acted to suppress the Company's stock price so that
Securicor, the Company's majority, controlling shareholder can purchase Intek's
publicly-held shares at a grossly inadequate price. Recently, the Company's
stock traded in the range of only $1.50 - $3.00. The Individual Defendants and
senior management have taken, or failed to take steps which have caused the
shares to trade at depressed prices including:
(a) Intek management has refused to meet with financial
analysts and other representatives of the financial communities and, indeed,
management has refused offers from various brokers to promote the Company's
stock to institutions. The aforementioned is reflected in the fact that no
analysts follow the Company and that the Company's has an extremely light
trading volume.
(b) Defendants have failed to publish in any meaningful way
any substantive forecasts of revenue, earnings, cash flow projections, licensing
and royalty income and other positive business developments.
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(c) The R&D division of Intek, known as Intek Global
Technologies Limited, has developed technology much improved over the current LM
Technology, yet Intek has failed to effectively market or promote that
technology.
(d) The Company has failed to announce that the Company's
Nokia licensing deal has been modified with increased licensing fees to be paid
to Intek.
(e) John Simmonds, the former Chief Executive Officer of
Intek, who owned approximately 10% of the Company's stock, is in financial
trouble and has dumped large portions of his stock into the open market. The
current Board has done nothing to stem such selling or avert its detrimental
impact on the trading of the shares.
19. Notwithstanding the combined, negative impact of the suppression of
material information and the failure to assure an orderly disposition of
Simmonds' stock, the Individual Defendants and management have knowingly allowed
Intek's stock price to languish at levels which fail to reflect its long-term
intrinsic value. Among other things, the price level of the shares being
maintained at less than $5 per share has prevented the shares from being
marginable, thus further depressing market demand and the price.
C. SECURICOR INDICATES THAT IT INTENDS TO
PURCHASE INTEK'S PUBLICLY-HELD INTEK SHARES
AND MAKES AN OFFER FOR THE SHARES
20. On or about January 19, 1999, Securicor filed a Schedule 13D with
the Securities and Exchange Commission announcing that it and its affiliates are
currently:
considering various alternatives relating to their equity and
debt interests in the Issuer, and have retained a financial
advisor for assisting them in connection therewith. In
connection with such consideration, the Corporations have
requested certain due diligence information from the Issuer,
and have asked the Issuer to appoint a committee of
independent directors to be prepared to review and evaluate
any plan or proposal that the Corporations may make.
In reality, Securicor was planning on implementing a minority squeeze-out on
unfair terms geared to the Company's depressed stock price.
21. In response to the Schedule 13-D, Intek established a special
committee of two purportedly independent directors to consider Securicor's
proposal. That special committee retained Bear, Stearns & Co. Inc. ("Bear
Stearns") as its financial advisor. However, it appears that Bear Stearns is
also representing Intek in general. In this regard, an Intek press release dated
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February 3, 1999, states that Bear Stearns will also "be providing strategic
advice on acquisition, financing and investment programs for Intek Global as it
accelerates implementation of its new `Intek Millennium' growth plan." As a
result, Bear Stearns has become accountable and beholden to Securicor because of
its receipt of consulting and advisory fees. Because of Securicor's power and
influence over the affairs of the Company and because of Bear Stearns'
conflicting influences, the special committee is a sham.
22. On or about June 7, 1999, Intek announced that it had received an
offer from Securicor to purchase Intek's publicly-held shares for a depressed
price of $2 3/4 per share. Securicor stated in its proposal that it did not
intend to increase the price offered.
D. SECURICOR LAUNCHES A TENDER OFFER
FOR INTEK'S PUBLICLY-HELD SHARES
23. On or about June 16, 1999, IGC filed a Schedule 14D-1 Tender Offer
Statement (the "14D-1") with the Securities and Exchange Commission and made a
tender offer directly to the Company's stockholders to acquire the Company's
outstanding shares for $2.75 per share. On the same day, Intek filed its
Schedule 14D-9, announcing its assent to the transaction and its entry into a
merger agreement with Securicor and IGC. Shares not tendered will be converted
in a second-step merger into the right to receive $2.75 per share.
E. THE 14-D-1 AND 14D-9 OMIT MATERIAL INFORMATION
NECESSARY FOR INTEK'S PUBLIC SHAREHOLDERS TO MAKE
AN INFORMED DECISION WHETHER TO TENDER THEIR SHARES
24. In an attempt to cause Intek's public shareholders to tender their
shares, defendants failed to disclose in the 14D-1 and 14D-9 the following
material information:
a. the Company's agreement with Nokia, which previously
covered only Nokia's European business, has recently been expanded to the United
States, and will consequently generate increased revenue and profit for Intek;
b. the Company's agreement to sell LM Technology to ADI, a
Korean radio manufacturer, has been substantially enhanced in the Company's
favor because ADI has incorporated LM Technology into three new products which
it is about to offer for sale, and consequently, Intek can expect greater
revenues and profits from this relationship;
c. the Company has entered into a deal with Grumman to provide
LM Technology for radar defense systems, a deal which defendant Shiver has
privately characterized
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as "enormous" for the Company, in terms of potential profits, and which was to
be publicly announced by March 10, 1999, but there has been no such
announcement;
d. that according to defendant Shiver the Company could be
cash flow positive in two months if he wanted to run it that way and, in any
event, Intek would turn cash flow positive no later than December 1999;
e. In December 1998, defendant Shiver privately stated that
"the only concern" that he had "about the Intek business plan that kept [him] up
at night, was the possibility of not being able to purchase sufficient Phase II
220 MHz licenses at the FCC auction at attractive prices." Thereafter, Shiver
stated that the amount of 220 licenses and the "incredibly inexpensive prices
that we acquired them at" was a high success for Intek. At no time did defendant
Shiver mention disparagingly -- as do the tender offer solicitation materials
- --that Intek "needed significant additional financing to pay the license fees
for the new licenses;"
f. in May 1999, Intek's portable radios were being "beta"
tested by the NRTC and the Boston Transit Authority and, according to Shiver,
their "performance is exceeding our best expectations;"
g. Shiver has privately stated that "if you want to see where
Intek is going, look at Nextel" and that "Intek's cost per site is about 5 times
less than Nextel's and its data transmission is about 5 times as fast;"
h. as recently as May 5, 1999, defendant Shiver privately
stated that Intek's "operating costs are declining and subscriber loading is
increasing;"
i. that the total market for the 220 MHz industry is expected
to be $600 million in annual revenues over the next 10-15 years, and the mobile
unit market is expected to be $2.1 billion in annual revenues, and, according to
industry observers, Intek should account for 50% of this market;
j. Intek's quarterly and annual reports had continuously
disclosed subscriber numbers which were increasing -- until not being disclosed
last quarter; similarly there are no subscriber numbers in the Tender Offer
solicitation materials from which the trends in the business could be discussed;
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k. that Intek expects $84 million in near term revenues from
its relationship with NRTC, which currently has sold 220 MHz spectrum rights in
11 states, and $840 million in revenues once rights to all states are sold;
l. in the Tender Offer materials, Bear Stearns, the
Independent Committee's financial advisor, claims that there are no comparable
companies to Intek so that a comparable companies' analysis was not feasible
thus not providing shareholders a customary method of evaluating the Company and
the proposed transaction. Contrary to Bear Stearns' contentions, the Provester
Plus Company Report of Intek -- dated July 1, 1998 -- contains a list of 35
companies in the communications services industry which are most similar to
Intek's market capitalization and trailing twelve month revenues. Moreover, in
connection with Bear Stearns' discounted cash flow analysis, Bear Stearns
calculated Intek's weighted average cost of capital by using several PCs and
wireless communications companies (i.e., Aerial Communications, Clearnet
Communications, Nextel Communications, Omnipoint Corp., Powertel Inc., United
Stated Cellular Corp., and Western Wireless Corp.). There is no explanation as
to why these companies could not be used by Bear Stearns in a comparable
companies' analysis;
m. defendants have not released any details regarding an offer
for the Company that WorldTeam conveyed on or about June 8, 1999, other than a
statement in the tender offer materials that Intek had received an expression of
interest from WorldTeam -- an entity which has in excess of 30 years senior
management experience from AT&T, Nextel and McCaw Cellular. The WorldTeam
communication reportedly stated that WorldTeam was interested "in beginning due
diligence towards possibly making a more competitive offer;" and the range of
values contemplated by WorldTeam or the structure of the transaction are not
described.
25. The foregoing information is highly material to Intek's public
shareholders' decision as to whether to tender their shares in response to
Securicor's offer or whether to hold their shares and demand appraisal when the
second step merger is accomplished.
F. DEFENDANTS' WRONGFUL CONDUCT
26. Any transaction to acquire the Company at the price being offered
(i.e, based on the Company's current and historical stock prices) does not
represent the true value of the Company and is unfair and grossly inadequate and
constitutes unfair dealing. Among other things:
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(a) according to Intek management, Intek is in a much better
position than Nextel was when Nextel was at the same stage of development;
(b) Intek will be a dominant player in the burgeoning LM
Technology field;
(c) the Company has an improved number of subscribers and
expects greatly increased subscriber growth in the future;
(d) spectrum efficient technology has enormous application to
different products and services;
(e) Intek management has refused to (i) promote the Company's
stock to brokers, analysts and institutions, (ii) publish substantive forecasts
and other positive business developments in a meaningful manner, (iii) promote
certain of its technology which is much improved over the current LM Technology,
(iv) announce certain positive business developments, and (v) stem the wholesale
selling of the Company's stock by John Simmonds, the former CEO of the Company.
Securicor is in a position to and does control the actions of the Company by
which it has allowed the Company's stock to trade at depressed levels; and
(f) as described above, Intek has recently had favorable
developments in its business which will generate enhanced revenues and profits.
27. Securicor, by reason of its 61% ownership of Intek's outstanding
shares, is in a position to ensure effectuation of an acquisition of Intek's
public shares without regard to its fairness or adequacy from the standpoint of
Intek's public shareholders.
28. Because Securicor is in possession of proprietary corporation
information concerning Intek's future financial prospects, the degree of
knowledge and economic power between Securicor and the class members if unequal,
making it grossly and inherently unfair for Securicor to obtain the remaining
Intek shares at the unfair and inadequate price being offered.
29. By offering a grossly inadequate price for Intek's shares and using
its control of Intek to force the consummation of such a transaction, Securicor
will be violating its fiduciary duties as a majority shareholder and its
designees on the Intek Board will similarly be in breach of their duties.
30. Any buy-out of Intek public shareholders by Securicor on the terms
being offered will deny class members their right to share proportionately and
equitably in the true value of
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Intek's valuable and profitable business and future growth in profits and
earnings, at a time when the Company is poised to increase its profitability.
31. Because Securicor controls Intek, no auction or market check can
feasibly be effected to establish Intek's worth through arm's-length bargaining.
Thus, Securicor has the power and is exercising its power to acquire Intek's
minority shares and dictate terms which are in Securicor's best interest,
without competing bids, or the information as to value which a market check
would provide and regardless of the wishes or best interests of the class
members or the intrinsic value of Intek's stock.
32. By reason of the foregoing, defendants have breached and will
continue to breach their duties to the minority public shareholders of Intek and
are engaging in improper, unfair dealing and wrongful and coercive conduct.
33. Unless enjoined by this Court, defendants will continue to breach
their fiduciary duties owed to plaintiffs and the other members of the Class,
and Securicor will consummate the buy-out on unfair and inadequate terms which
will exclude the Class from its fair and proportionate share of Intek's valuable
assets and businesses, to the irreparable harm of the Class.
34. Plaintiffs and the other class members are immediately threatened
by the acts and transactions complained of herein, and lack an adequate remedy
at law.
WHEREFORE, plaintiffs demand judgment against defendants as follows:
A. Declaring that this action is properly maintainable as a
class action, and certifying plaintiffs as class representatives;
B. Enjoining the tender offer or, if the tender offer and
merger are consummated, rescinding them;
C. Requiring full and fair disclosure in connection with the
tender offer;
D. Awarding plaintiffs and the Class compensatory damages
and/or rescissory damages against defendants, jointly and severally;
E. Awarding plaintiffs the costs and disbursements of this
action, including a reasonable allowance for plaintiffs' attorneys' and experts'
fees; and
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F. Granting such other, and further relief as this Court may
deem to be just and proper.
* * * * *
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By:
-----------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiffs
OF COUNSEL:
Steven G. Schulman
U. Seth Ottensoser
MILBERG WEISS BERSHAD
HYNES & LERACH LLP
One Pennsylvania Plaza
New York, NY 10119
(212) 594-5300
June 21, 1999
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Exhibit 99.11
MEMORANDUM OF UNDERSTANDING
WHEREAS, there are now pending three putative class action lawsuits in
the Court of Chancery of the State of Delaware in and for New Castle County (the
"Court") entitled Sequeira v. Kelly, C.A. No. 17207 (the "Sequeira lawsuit"),
Smiland v. Intek Global Corp., C.A. No. 17221 and Max Marus Katz, P.C. Pension
and Profit Sharing Plan v. Intek Global Corporation, C. A. No. 17240
(collectively, the "Actions"), brought on behalf of public stockholders
("Stockholders") of Intek Global Corporation ("Intek" or the "Company");
WHEREAS, the parties have agreed that the Actions shall be consolidated
under the Sequeira caption;
WHEREAS, the Actions challenge a proposed going private transaction in
which IGC Acquisition Corp., a wholly owned subsidiary of Security Services plc,
and whose ultimate parent is Securicor plc (collectively "Securicor"), the
beneficial owner of approximately 61.3% of the Company's outstanding shares of
common stock, would acquire the 38.7% of the Company's stock that it does not
already beneficially own through a tender offer for any and all shares of the
Company at $2.75 per share (the "Tender Offer"), to be followed by a cash-out
merger in which Securicor would acquire any remaining shares of the Company that
it did not beneficially own following the Tender Offer at a price of $2.75 per
share (the "Merger").
WHEREAS, on January 19, 1999, Securicor publicly announced in an
amendment to its Schedule 13D that it was considering various alternatives
relating to its equity and debt interests in the Company, that it had retained a
financial advisor and requested certain due diligence information from the
Company, and that it had asked the Company to appoint an independent
<PAGE> 2
committee of its directors to consider any proposal that Securicor might make
(the "January 19 Announcement");
WHEREAS, on June 7, 1999, Securicor publicly announced that it had made
an offer to the Intek Board of Directors to purchase the 38.7% of the Company's
stock that it did not already own at $2.75 per share;
WHEREAS, the first of the Actions, the Sequeira lawsuit, was filed on
June 7, 1999;
WHEREAS, on June 10, 1999, Securicor and the Company publicly announced
that they had signed an Agreement and Plan of Merger approving the Tender Offer
and agreeing to recommend the Merger to Intek's stockholders, and Securicor
disseminated its Offer to Purchase on June 16, 1999;
WHEREAS, the Complaints in the Actions specifically allege, inter alia,
that (i) Securicor, as a majority shareholder, and the individual defendants, as
directors of the Company, owe fiduciary duties to the public, minority
stockholders of the Company; (ii) the individual defendants and Securicor
breached those fiduciary duties by agreeing to a transaction (the Tender Offer
and Merger) by which Securicor would acquire the shares of the Company that it
did not already own at an unfair and inadequate price that did not represent the
true value of the Company, its business and its prospects;
WHEREAS, on June 21, 1999, plaintiffs in the Sequeira lawsuit filed an
Amended Complaint which reiterated allegations that the price offered in the
Tender Offer and Merger was inadequate, and added claims that the defendants had
failed to disclose certain material information
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in connection with the Tender Offer;
WHEREAS, on June 21, 1999, plaintiffs in the Sequeira lawsuit moved to
expedite proceedings and to schedule a hearing on a motion for a preliminary
injunction addressing plaintiffs' disclosure claims and, upon consent of
defendants, and after a teleconference with the Court, a preliminary injunction
hearing was scheduled for July 12, 1999;
WHEREAS, following filing of the complaints, plaintiffs' counsel
reviewed publicly filed information concerning the Company, retained, inter
alia, a financial advisor to assist them in determining the fairness of the
proposed price to be offered in the Tender Offer and the Merger, reviewed
voluminous documents produced by defendants, Lazard Freres & Co. LLC ("Lazard")
(Securicor's financial advisor in connection with the Tender Offer and the
Merger) and Bear, Stearns & Co., Inc. ("Bear Stearns")(the financial advisor to
the special committee that recommended that the Company accept the Tender Offer
and the Merger), scheduled five depositions and, prior to agreeing to the
settlement in principle of the Actions, took the deposition of a senior
representative of Lazard;
WHEREAS, defendants deny that they have engaged in any wrongdoing
whatsoever, and are agreeing to the Settlement to eliminate the burden and
expense of further litigation and to permit the Tender Offer and the Merger to
proceed without risk of injunctive or other relief; and
WHEREAS, plaintiffs' counsel and counsel to Securicor engaged in
extensive arm's-length negotiations concerning a possible settlement of the
Actions;
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<PAGE> 4
NOW, THEREFORE, counsel for the parties have reached an agreement in
principle providing for the settlement of the Actions (the "Settlement") between
and among plaintiffs, on behalf of themselves and the putative class of persons
on behalf of whom plaintiffs have brought the Actions, and defendants on the
terms and subject to the conditions set forth below:
1. As a result of the commencement, litigation and settlement of the
Actions, the price offered for the stock of the Company in the Tender Offer and
the Merger shall be increased from $2.75 per share to $3.0125 per share, with
payment to each stockholder rounded to the nearest cent. In addition, the
parties' counsel have conferred in good faith concerning additional information
pertaining to certain allegations in the Amended Complaint and supplemental
disclosure in connection with the Tender Offer and/or the Merger, and defendants
shall make any additional disclosure that is mutually agreed upon.
2. As promptly as reasonably practicable following expiration of the 96
Hour Period described in Paragraph 8 hereof, if the plaintiffs have not
withdrawn from the settlement, defendants shall cause the Merger Agreement to be
amended to reflect the increased price to be offered in the Tender Offer and the
Merger.
3. As promptly as reasonably practicable following expiration of the 96
Hour Period described in Paragraph 8 hereof, if the plaintiffs have not
withdrawn from the settlement, Securicor shall amend its Offer to Purchase to
reflect the increased price of its Tender Offer and shall extend the expiration
date of the Tender Offer to July 29, 1999.
4. Each of the named plaintiffs in the Actions will cause to be tendered
to Securicor in the Tender Offer all shares of stock of Securicor owned by such
person, as the term "owned" is defined in 8 Del C. Section 203(c)(9).
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<PAGE> 5
5. Defendants shall be responsible for providing the Notice of the
Settlement to all members of the Class. The reasonable, documented cost of
providing such notice, up to a maximum of $10,000, shall be borne by plaintiffs'
counsel out of such fees and expenses as may be awarded by the Court. Any costs
of providing notice in excess of $10,000 shall be borne by defendants.
6. The parties to the Actions will attempt in good faith to agree upon
and execute as soon as practicable (i) an appropriate Stipulation of Settlement
(the "Stipulation") of all claims asserted in the complaints filed in any of the
Actions and all related claims described hereinafter, and (ii) such other
documentation as may be required in order to obtain any and all necessary or
appropriate Court approvals of the Stipulation, upon and consistent with the
terms set forth in this Memorandum of Understanding, including that in exchange
for the consideration set forth above, the Stipulation shall provide for the
dismissal of all such claims with prejudice and without costs to any party
(except as set forth in Paragraphs 5 and 6(e) herein). The Stipulation will
expressly provide, inter alia:
a. for class certification pursuant to Delaware Chancery Court
Rule 23(b)(1) and (b)(2) of a class consisting of all persons (other than
defendants and their affiliates) who owned stock of the Company on January 19,
1999, and their successors in interest and transferees, immediate and remote,
through and including the closing of the Merger (the "Class");
b. that all defendants have denied, and continue to deny, that
they have committed any violations of law and that they are entering into the
Stipulation solely because the proposed Settlement would eliminate the burden
and expense of further litigation, and would permit the Tender Offer and the
Merger to proceed without risk of injunctive or other relief;
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<PAGE> 6
c. for the release of all claims of Class members, whether known
or unknown, against defendants and any of their present or former officers,
directors, employees, agents, attorneys, accountants, financial advisors,
commercial bank lenders, investment bankers, representatives, affiliates,
associates, parents, direct and indirect subsidiaries, general partners, limited
partners, partnerships, heirs, executors, administrators, successors and assigns
(collectively, the "releasees"), whether under state or federal law, and whether
directly, derivatively, representatively or arising in any other capacity, and
in connection with, or that arise out of any claim that was or could have been
brought against any of the releasees in any of the Actions, and/or that relates
in any way to (i) any claim that any action by any of the releasees, or any
failure of any of the releasees to take any action, affected the price of
Intek's stock, (ii) the acquisition or ownership of equity securities of the
Company or its affiliates by Securicor or any of the releasees, (iii) loans made
to the Company or its affiliates by Securicor or any of the releasees, (iv) the
fiduciary duties of any of the releasees to stockholders of the Company, (v) the
January 19 Announcement, (vi) the Tender Offer, (vii) the Merger, (viii) the
negotiation, consideration or formulation of the Tender Offer or the Merger,
(ix) the disclosure obligations of any of the releasees in connection with the
Tender Offer or the Merger, or (x) any other claim, other than claims for
appraisal of shares pursuant to 8 Del. C. Section 262, relating in any way to
any of the foregoing;
d. that the parties to the Actions will present the Settlement
to the Court for hearing and approval as soon as practicable and, following
appropriate notice to members of the Class, will use their best efforts to
obtain final Court approval of the Settlement, and release and dismissal of the
Actions with prejudice as against plaintiffs and the Class and without awarding
costs to any party (except as provided for in Paragraphs 5 and 6(e) herein). The
parties will use
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<PAGE> 7
their best efforts to secure Court approval of the Settlement as promptly as
practicable; however, it is expressly acknowledged that, at the sole option of
defendants, the Merger may be consummated prior to Court approval of the
Settlement, and that it is expected that the Merger will be consummated prior to
final Court approval of the Settlement. As used in this Memorandum of
Understanding, "final Court approval of the Settlement" means that the Court has
entered an Order approving the Settlement in accordance with the Stipulation,
and that Order is finally affirmed on appeal or is no longer subject to appeal.
e. that if a Stipulation of Settlement has been executed and
final Court approval of the Settlement and dismissal of the Actions by the Court
with prejudice has been obtained in accordance with the Stipulation of
Settlement, plaintiffs and their counsel of record in the Actions will jointly
apply to the Court for an award of attorneys' fees and expenses (including, but
not limited to, fees of plaintiffs' counsels' financial advisor) in an aggregate
amount not to exceed $1,432,000. Plaintiffs and their counsel intend to request
that plaintiffs' counsel be permitted to pay $10,000 of the foregoing fees as
special payments to each of the named plaintiffs in the Sequeira Action (a total
of $40,000). Defendants and their counsel agree not to oppose plaintiffs and
plaintiffs' counsels' application for attorneys' fees, expenses and special
payments to plaintiffs, provided that the application does not exceed these
amounts. Subject to the conditions set forth in this paragraph and any order of
the Court, any such attorneys' fees and expenses awarded by the Court to
plaintiffs and plaintiffs' counsel shall be paid by Intek (or any successor in
interest) on behalf of all defendants to the order of Milberg Weiss Bershad
Hynes & Lerach LLP as the receiving agent for plaintiffs and their counsel,
within ten (10) days after the later of: (i) final Court approval of the
Settlement (as defined in Paragraph 6(d) hereof) and (ii) the Court's final
award of
7
<PAGE> 8
fees and expenses and that in the event that any appeal is taken from any
determination of the Court of the amount of such fees and expenses, Intek (or
any successor in interest) shall pay interest at the prime rate as quoted by
Citibank N.A. on the amount of such fees and expenses that are ultimately
sustained on appeal. All applications for an award of fees and expenses in
connection with the Actions or the settlement of the Actions shall be submitted
to the Court and shall not be filed or pursued in any other Court or forum.
7. This Memorandum of Understanding shall be null and void and of no
force and effect if: (a) the Merger is not effectuated for any reason
whatsoever; or (b) final Court approval of the Settlement does not occur for any
reason, including, without limitation, termination pursuant to Paragraph 8
hereof. In any such event, this Memorandum of Understanding shall not be deemed
to prejudice in any way the respective positions of the parties with respect to
the Actions, and neither the existence of this Memorandum of Understanding nor
its contents shall be admissible in evidence or shall be referred to for any
purpose in the Actions or in any other litigation or judicial proceeding.
8. The Settlement shall be subject to plaintiffs taking the depositions
of (i) Howard Frank and (ii) a representative of Bear Stearns familiar with the
transaction. Such depositions shall be taken at a mutually convenient time prior
to July 10, 1999. If plaintiffs discover material new facts as a result of those
depositions that would, in the reasonable opinion of plaintiffs' counsel, render
the settlement not fair or adequate under the circumstances, plaintiffs may
elect to withdraw from the Settlement. Any withdrawal pursuant to this paragraph
shall be made in a writing delivered by hand or by facsimile to each signatory
to this Memorandum of Understanding within 96 hours following the later of the
two depositions contemplated by this paragraph (the "96
8
<PAGE> 9
Hour Period").
9. Plaintiffs' and plaintiffs' counsel's recommendation to the Court of
the settlement described herein is and shall be separate and independent of any
application for fees for plaintiffs or their counsel. Except as provided in
Paragraph 8 hereof, plaintiffs and their counsel shall continue to recommend the
settlement, regardless of the disposition of their application for fees,
expenses and special payments to plaintiffs.
10. By affixing his signature hereto, each of the undersigned counsel
expressly warrants that he has authority on behalf of each of his clients to
enter into this Memorandum of Understanding, and that his clients have each
agreed to be bound by the provisions herein.
11. This Memorandum of Understanding may be executed in counterpart by
any of the signatories hereto, including by telecopier, and as so executed shall
constitute one agreement.
12. This Memorandum of Understanding and the Settlement contemplated by
it shall be governed by, and construed in accordance with, the laws of the State
of Delaware, without regard to Delaware's conflict of law rules.
13. This Memorandum of Understanding may be modified or amended only by
a writing signed by the signatories hereto.
14. Upon execution by each of the three signatories hereto, this
Memorandum of Understanding shall be binding upon the parties, and thereafter
shall be binding upon and inure to the benefit of the parties and their
respective agents, executors, heirs, successors and assigns.
9
<PAGE> 10
Dated: July 8, 1999
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
/s/ Joseph A. Rosenthal
--------------------------------------
Joseph A. Rosenthal
Norman M. Monhait
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiffs in the
Actions
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Donna L. Culver
--------------------------------------
Kenneth J. Nachbar
Donna L. Culver
1201 N. Market Street
P.O. Box 1347
Wilmington, Delaware 19899
(302) 658-9200
Attorneys for Defendants
Securicor PLC, IGC Acquisition
Corp.,
Roger Wiggs and Michael Wilkinson
RICHARDS, LAYTON & FINGER
/s/ Daniel A. Dreisbach
--------------------------------------
Daniel A. Dreisbach
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19801
(302) 658-6541
Attorneys for Defendants
Intek Global Corporation, Robert B.
Kelly, Eli M. Noam, Howard Frank,
Robert J. Shriver, Steven L.
Wasserman and John Wareham
10
<PAGE> 1
EXHIBIT 99.12
FOR IMMEDIATE RELEASE
Contacts: Robert J. Shiver, Chairman and CEO Joel Pomerantz
Intek Global Corporation The Dilenschneider Group
(212) 949-4200 (212) 922-0900
TENDER OFFER AND MERGER PRICE EXPECTED TO BE INCREASED IN
SETTLEMENT OF SHAREHOLDER LITIGATION
NEW YORK CITY, July 8, 1999--Intek Global Corporation (NASDAQ: IGLC),
an international provider of spectrum-efficient wireless technology, products,
and services, today announced that the tender offer and merger price for the
outstanding shares of Intek Global by Securicor plc is expected to be increased
from $2.75 cash per share to $3.0125 cash per share, as described below.
A Memorandum of Understanding regarding a proposed settlement of three
class action lawsuits related to the tender offer and merger has been entered
into by the parties in these lawsuits. The settlement is subject to the right of
plaintiffs to withdraw following completion of two depositions scheduled to
occur prior to July 10, 1999. If plaintiffs do not withdraw, then the tender
offer price will be increased, a revised merger agreement will be entered into,
and a definitive settlement agreement will be executed subject to court
approval.
The tender offer commenced on June 16 and is currently scheduled to
expire on July 14. If plaintiffs do not withdraw from the settlement, then the
expiration date of the tender offer will be extended, and an amended Offer to
Purchase will be distributed to shareholders.
The Company, each of its directors, and Securicor have denied any
wrongdoing whatsoever, and agreed to the settlement of these class actions to
eliminate the burden and expense of further litigation and to permit the tender
offer and the merger to proceed without risk of injunctive or other relief.
<PAGE> 2
"Safe Harbor" statement under the Private Securities Litigation Reform
Act of 1995: This release contains forward looking statements that are subject
to risks and uncertainties, including, but not limited to, the impact of
competitive products and pricing, product demand and market acceptance, reliance
on key strategic alliances, fluctuations in operating results and other risks
detailed from time to time in the company's filings with the Securities and
Exchange Commission.
###
2
<PAGE> 1
EXHIBIT 99.13
FOR IMMEDIATE RELEASE
Contacts: Robert J. Shiver, Chairman and CEO Joel Pomerantz
Intek Global Corporation The Dilenschneider Group
(212) 949-4200 (212) 922-0900
LAWSUITS AGAINST INTEK GLOBAL WILL BE SETTLED;
TENDER OFFER SHARE PRICE TO BE INCREASED
NEW YORK CITY, July 13, 1999 -- Intek Global Corporation (NASDAQ; IGLC), an
international provider of spectrum-efficient wireless technology, products and
services, today announced that the plaintiffs in three class action lawsuits,
related to a tender offer for the outstanding shares of the company made by
Securicor plc, have elected not to withdraw from the previously announced
proposed settlement.
The tender offer price and merger consideration will be increased from
$2.75 cash per share to $3.0125 cash per share, and a revised merger agreement
will be signed.
The tender offer, which commenced June 16, will now be extended to a
date expected to fall during the first week of August, and an amended Offer to
Purchase from Securicor plc will be distributed to all shareholders.
# # #
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995: This release contains forward looking statements that are subject to risks
and uncertainties, including, but not limited to, the impact of competitive
products and pricing, product demand and market acceptance, reliance on key
strategic alliances, fluctuations in operating results and other risks detailed
from time to time in the company's filings with the Securities and Exchange
Commission.
