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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
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SYNTRO CORPORATION
(NAME OF SUBJECT COMPANY)
MALLINCKRODT VETERINARY ACQUISITIONS, INC.
A WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT VETERINARY, INC.
AND
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT GROUP INC.
(BIDDERS)
COMMON STOCK, $0.01 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
871629101
(CUSIP NUMBER OF CLASS OF SECURITIES)
ROGER A. KELLER
VICE PRESIDENT, SECRETARY AND
GENERAL COUNSEL
MALLINCKRODT GROUP INC.
7733 FORSYTH BLVD.
ST. LOUIS, MISSOURI 63105
(314) 854-5200
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
COPIES TO
THOMAS L. FARQUER DENNIS V. OSIMITZ
VICE PRESIDENT, LAW SIDLEY & AUSTIN
MALLINCKRODT VETERINARY, INC. ONE FIRST NATIONAL PLAZA
421 HAWLEY STREET CHICAGO, ILLINOIS 60603
MUNDELEIN, ILLINOIS 60060 (312) 853-7748
(708) 949-3733
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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$45,018,001 $9,004
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* For the purpose of calculating the fee only, this amount assumes the
purchase of 12,681,127 shares of Common Stock of Syntro Corporation at
$3.55 per share. Such number of shares includes all outstanding shares as
of September 22, 1995, and assumes the exercise of all outstanding stock
options issued pursuant to the 1984 Incentive Stock Option Plan, the 1988
Executive Stock Option Plan, the 1988 Stock Option Plan and the 1994 Stock
Option Plan, and agreements with certain consultants, of the Company.
[_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: FILING PARTY:
FORM OR REGISTRATION NO.: DATE FILED:
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This Statement relates to a tender offer by Mallinckrodt Veterinary
Acquisitions, Inc., a Delaware corporation (the "Offeror") and a wholly owned
subsidiary of Mallinckrodt Veterinary, Inc., a Delaware corporation
("Mallinckrodt Veterinary"), and an indirect wholly owned subidiary of
Mallinckrodt Group Inc., a New York corporation ("Mallinckrodt Group"), to
purchase all outstanding shares of common stock, par value $0.01 per share (the
"Shares"), of Syntro Corporation, a Delaware corporation (the "Company"), at a
purchase price of $3.55 per Share, net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated September 29, 1995 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which together constitute the "Offer"), copies
of which are filed as Exhibits (a)(1) and (a)(2) hereof, respectively, and
which are incorporated herein by reference.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Syntro Corporation. The address of the
principal executive offices of the Company is set forth in Section 8 ("Certain
Information Concerning the Company") of the Offer to Purchase and is
incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is the Common Stock, par value $0.01 per share, of the Company. The
information set forth in the Introduction to the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) through (d), (g): The information set forth in the Introduction and
Section 9 ("Certain Information Concerning Mallinckrodt Group, Mallinckrodt
Veterinary and the Offeror") of the Offer to Purchase, and in Annex I thereto,
is incorporated herein by reference.
(e) and (f): None of the Offeror, Mallinckrodt Veterinary or Mallinckrodt
Group, nor, to their knowledge, any of the persons listed in Annex I of the
Offer to Purchase, has during the last five years (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) None.
(b) The information set forth in the Introduction and Section 11 ("Background
of the Offer; Past Contacts, Transactions or Negotiations with the Company") of
the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b): The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) through (e): The information set forth in the Introduction, Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company"), Section 12 ("Purpose of the Offer and the Merger; Plans for the
Company") and Section 13 ("The Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
(f) and (g): The information set forth in Section 7 ("Effect of the Offer on
Market for Shares, Stock Quotation and Registration under the Exchange Act") of
the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b): The information set forth in the Introduction and Section 9
("Certain Information Concerning Mallinckrodt Group, Mallinckrodt Veterinary
and the Offeror") of the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 11 ("Background of the
Offer; Past Contacts, Transactions or Negotiations with the Company") and
Section 13 ("The Merger Agreement") of the Offer to Purchase is incorporated
herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and in Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning
Mallinckrodt Group, Mallinckrodt Veterinary and the Offeror") of the Offer to
Purchase is incorporated herein by reference.
The incorporation by reference herein of the above-mentioned financial
information does not constitute an admission that such information is material
to a decision by a security holder of the Company as whether to sell, tender or
hold Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) and (c) The information set forth in Section 16 ("Certain Legal Matters")
of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Effect of the Offer on Market
for Shares, Stock Quotation and Registration under the Exchange Act") of the
Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
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ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S> <C>
(a)(1) Offer to Purchase, dated September 29, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Letter from Goldman, Sachs & Co., as Dealer Managers to
Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(4) Letter from Brokers, Dealers, Commercial Banks, Trust Com-
panies and Other Nominees to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Announcement, dated September 29, 1995.
(a)(8) Press Release issued by Mallinckrodt Group and the Company
on September 25, 1995.
(a)(9) Press Release issued by Mallinckrodt Group on September
29, 1995.
(c) Agreement and Plan of Merger, dated as of September 25,
1995, among Mallinckrodt Veterinary, the Offeror and the
Company.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: September 29, 1995
Mallinckrodt Group Inc.
/s/ Roger A. Keller
By: _________________________________
Name: Roger A. Keller
Title:Vice President, Secretary
and General Counsel
Mallinckrodt Veterinary, Inc.
/s/ Paul D. Cottone
By: _________________________________
Name: Paul D. Cottone
Title:President
Mallinckrodt Veterinary
Acquisitions, Inc.
/s/ Paul D. Cottone
By: _________________________________
Name: Paul D. Cottone
Title:President
5
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EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SYNTRO CORPORATION
AT
$3.55 NET PER SHARE
BY
MALLINCKRODT VETERINARY ACQUISITIONS, INC.
A WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT VETERINARY, INC.
AND
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT GROUP INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, OCTOBER 27, 1995, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN THAT NUMBER OF SHARES OF
COMMON STOCK OF SYNTRO CORPORATION (THE "COMPANY") REPRESENTING AT LEAST A
MAJORITY OF THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS, (ii) RECEIPT BY
THE OFFEROR (AS DEFINED HEREIN) OF ALL NECESSARY GOVERNMENTAL APPROVALS AND
(iii) SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 15.
THE OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER
DATED AS OF SEPTEMBER 25, 1995, AMONG MALLINCKRODT VETERINARY, INC.,
MALLINCKRODT VETERINARY ACQUISITIONS, INC. AND THE COMPANY. THE BOARD OF
DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER AND THE MERGER
AGREEMENT, HAS DETERMINED THAT THE TERMS OF EACH OF THE OFFER AND THE MERGER
AND THE TERMS OF THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF
THE COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.
IMPORTANT
Any stockholder desiring to tender Shares (as defined herein) should either
(i) complete and sign the Letter of Transmittal or a facsimile thereof in
accordance with the instructions in the Letter of Transmittal and deliver the
Letter of Transmittal with the Shares and all other required documents to the
Depositary, or follow the procedure for book-entry transfer set forth in
Section 3 or (ii) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for the stockholder. A
stockholder having Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such person if
such stockholder desires to tender his Shares.
Any stockholder who desires to tender Shares and cannot deliver such Shares
and all other required documents to the Depositary prior to the expiration of
the Offer must tender such Shares pursuant to the guaranteed delivery procedure
set forth in Section 3.
Questions and requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
or the Dealer Managers at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase.
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
September 29, 1995
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TABLE OF CONTENTS
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PAGE
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Introduction............................................................. 1
1. Terms of the Offer................................................. 2
2. Acceptance for Payment and Payment for Shares...................... 4
3. Procedure for Tendering Shares..................................... 5
4. Withdrawal Rights.................................................. 7
5. Certain Federal Income Tax Consequences............................ 8
6. Price Range of Shares; Dividends................................... 8
7. Effect of the Offer on Market for Shares, Stock Quotation and
Registration under the Exchange Act............................... 9
8. Certain Information Concerning the Company......................... 10
9. Certain Information Concerning Mallinckrodt Group, Mallinckrodt
Veterinary and the Offeror........................................ 13
10. Source and Amount of Funds......................................... 14
11. Background of the Offer; Past Contacts, Transactions or 15
Negotiations with the Company.....................................
12. Purpose of the Offer and the Merger; Plans for the Company......... 16
13. The Merger Agreement............................................... 18
14. Dividends and Distributions........................................ 26
15. Certain Conditions to the Offeror's Obligations.................... 27
16. Certain Legal Matters.............................................. 29
17. Fees and Expenses.................................................. 30
18. Miscellaneous...................................................... 31
Annex I. Certain Information Concerning the Directors and Executive
Officers of Mallinckrodt Group, Mallinckrodt Veterinary and the
Offeror.......................................................... A-1
</TABLE>
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TO THE HOLDERS OF COMMON STOCK OF
SYNTRO CORPORATION
INTRODUCTION
Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of Mallinckrodt Veterinary, Inc., a
Delaware corporation ("Mallinckrodt Veterinary"), and an indirect wholly owned
subsidiary of Mallinckrodt Group Inc., a New York corporation ("Mallinckrodt
Group"), hereby offers to purchase all outstanding shares of Common Stock, par
value $0.01 per share (the "Shares"), of Syntro Corporation, a Delaware
corporation (the "Company"), at a purchase price of $3.55 per Share, net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal
(which together constitute the "Offer"). Tendering holders of Shares will not
be obligated to pay brokerage fees or commissions or, except as set forth in
the Letter of Transmittal, transfer taxes on the purchase of Shares by the
Offeror pursuant to the Offer. The Offeror will pay all charges and expenses of
Goldman, Sachs & Co. (the "Dealer Managers"), First Chicago Trust Company of
New York (the "Depositary") and Georgeson & Company Inc. (the "Information
Agent") in connection with the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, THE MERGER (AS
HEREINAFTER DEFINED) AND THE MERGER AGREEMENT (AS HEREINAFTER DEFINED), HAS
DETERMINED THAT THE TERMS OF EACH OF THE OFFER, THE MERGER AND THE MERGER
AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS,
AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES IN THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH WILL REPRESENT NOT LESS THAN A MAJORITY OF THE SHARES OUTSTANDING
ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"). THE
OFFER IS ALSO CONDITIONED UPON THE OFFEROR OBTAINING THE NECESSARY GOVERNMENTAL
APPROVALS. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION
15.
Piper Jaffray Inc. ("Piper Jaffray"), the Company's financial advisor, has
delivered to the Company's Board of Directors its written opinion that the
consideration to be received by the stockholders of the Company pursuant to the
Offer and the Merger is fair to such stockholders from a financial point of
view. A copy of such opinion is contained in the Company's Statement on
Schedule 14D-9 which is being distributed to the Company's stockholders.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of September 25, 1995 (the "Merger Agreement"), among Mallinckrodt
Veterinary, the Offeror and the Company. The Merger Agreement provides that,
among other things, as soon as practicable after the purchase of Shares
pursuant to the Offer and the satisfaction of the other conditions set forth in
the Merger Agreement and in accordance with the relevant provisions of the
General Corporation Law of the State of Delaware, as amended (the "DGCL"), the
Offeror will be merged with and into the Company (the "Merger"). See Section
12. Following consummation of the Merger, the Company will continue as the
surviving corporation (the "Surviving Corporation") and will be a wholly owned
subsidiary of Mallinckrodt Veterinary. At the effective time of the Merger (the
"Effective Time"), each issued and outstanding Share (other than Shares owned
by the Company as treasury stock, Shares owned by any subsidiary of the
Company, Shares owned by Mallinckrodt Veterinary or the Offeror or any
subsidiary thereof, or Shares with respect to which appraisal rights are
properly exercised under Delaware law ("Dissenting Shares")), will be converted
into and represent the right to receive $3.55 (or any higher price that may be
paid for each Share pursuant to the Offer) in cash, without interest thereon
(the "Offer Price"). See Section 5 for a description of certain tax
consequences of the Offer and the Merger.
<PAGE>
The Merger Agreement provides that, promptly upon the purchase of Shares
pursuant to the Offer, Mallinckrodt Veterinary will be entitled to designate
for election to the Board of Directors of the Company a number of directors
(rounded up to the next whole number) equal to that number of directors which
equals the product of (i) the total number of directors on such Board and (ii)
the percentage that the aggregate number of Shares purchased by the Offeror
bears to the total number of outstanding Shares. The Company has agreed, upon
the request by Mallinckrodt Veterinary, to promptly increase the size of the
Board of Directors of the Company and/or use its reasonable best efforts to
secure the resignations of such number of directors as is necessary to enable
Mallinckrodt Veterinary's designees to be elected to the Board and to cause
Mallinckrodt Veterinary's designees to be so elected.
The Company has advised the Offeror that as of September 22, 1995, there were
(a) 11,454,185 Shares issued and outstanding, and (b) outstanding stock options
to purchase an aggregate of 1,226,942 Shares. As of the date hereof, neither
the Offeror, Mallinckrodt Veterinary nor Mallinckrodt Group beneficially owns
any Shares. If the Offeror acquires at least 6,340,564 Shares in the Offer, it
will control a majority of the outstanding Shares on a fully diluted basis.
Accordingly, the Offeror would have sufficient voting power to approve the
Merger without the affirmative vote of any other stockholder. If the Offeror
acquires 90% or more of the outstanding Shares through the Offer, the Offeror
would be able to effect the Merger pursuant to the short form merger provisions
of the DGCL, without prior notice to, or any action by, any other stockholder
of the Company.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Offeror will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 Midnight, New
York City time, on Friday, October 27, 1995, unless the Offeror shall have
extended the period of time for which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date at which the Offer,
as so extended by the Offeror, shall expire.
If the Offeror shall decide, in its sole discretion, to increase the
consideration offered in the Offer to holders of Shares and if, at the time
that notice of such increase is first published, sent or given to holders of
Shares in the manner specified below, the Offer is scheduled to expire at any
time earlier than the expiration of a period ending on the tenth business day
from, and including, the date that such notice is first so published, sent or
given, then the Offer will be extended until the expiration of such period of
ten business days. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or a federal holiday, and consists of the time
period from 12:01 a.m. through 12:00 Midnight, New York City time.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION AND THE
OFFEROR OBTAINING CERTAIN GOVERNMENTAL APPROVALS. THE MERGER AGREEMENT AND THE
OFFER MAY BE TERMINATED BY THE OFFEROR AND MALLINCKRODT VETERINARY IF CERTAIN
EVENTS OCCUR. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE
SECTION 15. The Offeror reserves the right (but shall not be obligated), in
accordance with applicable rules and regulations of the United States
Securities and Exchange Commission (the "Commission"), subject to the
limitations set forth in the Merger Agreement and described below, to waive or
reduce the Minimum Condition or to waive any other condition to the Offer. If
the Minimum Condition or any of the other conditions set forth in Section 15,
have not been satisfied, by 12:00 Midnight, New York City time, on Friday,
October 27, 1995 (or any other time then
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set as the Expiration Date), the Offeror may, subject to the terms of the
Merger Agreement as described below, elect to (1) extend the Offer and, subject
to applicable withdrawal rights, retain all tendered Shares until the
expiration of the Offer, as extended, (2) subject to complying with applicable
rules and regulations of the Commission, accept for payment all Shares so
tendered and not extend the Offer, or (3) terminate the Offer and not accept
for payment any Shares and return all tendered Shares to tendering
stockholders. Under the terms of the Merger Agreement, the Offeror may not
(except as described in the next sentence), without prior written consent of
the Company, waive the Minimum Condition, reduce the number of Shares subject
to the Offer, reduce the price per Share to be paid pursuant to the Offer,
extend the Offer if all of the Offer conditions are satisfied or waived, change
the form of consideration payable in the Offer, or amend, add or waive any term
or condition of the Offer in any manner that would adversely affect the Company
or its stockholders. Notwithstanding the foregoing, the Offeror may, without
the consent of the Company, extend the Offer (i) if, at the then scheduled
Expiration Date of the Offer, any of the conditions shall not have been
satisfied or waived, (ii) for any period required by any rule, regulation,
interpretation or position of the Commission or the Commission staff applicable
to the Offer or (iii) if all Offer conditions are satisfied or waived but the
number of Shares tendered is less than 90% of the then outstanding number of
Shares for an aggregate period of not more than 15 business days (for all such
extensions) beyond the latest expiration date that would be permitted under
clause (i) or (ii) of this sentence.
Subject to the limitations set forth in the Merger Agreement and described
below, the Offeror reserves the right (but will not be obligated), at any time
or from time to time in its sole discretion, to extend the period during which
the Offer is open by giving oral or written notice of such extension to the
Depositary and by making a public announcement of such extension. There can be
no assurance that the Offeror will exercise its right to extend the Offer.
Subject to the applicable rules and regulations of the Commission and subject
to the limitations set forth in the Merger Agreement, the Offeror also
expressly reserves the right, at any time and from time to time, in its sole
discretion, (i) to delay payment for any Shares regardless of whether such
Shares were theretofore accepted for payment, or to terminate the Offer and not
to accept for payment or pay for any Shares not theretofore accepted for
payment or paid for, upon the occurrence of any of the conditions set forth in
Section 15, by giving oral or written notice of such delay or termination to
the Depositary, and (ii) at any time or from time to time, to amend the Offer
in any respect. The Offeror's right to delay payment for any Shares or not to
pay for any Shares theretofore accepted for payment is subject to the
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
relating to the Offeror's obligation to pay for or return tendered Shares
promptly after the termination or withdrawal of the Offer.
Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, termination or amendment of the Offer will
be followed, as promptly as practicable, by public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of
Rules 14d-4(c) and 14e-1(d) under the Exchange Act. Without limiting the
obligation of the Offeror under such rule or the manner in which the Offeror
may choose to make any public announcement, the Offeror currently intends to
make announcements by issuing a press release to the Dow Jones News Service and
making any appropriate filing with the Commission.
If the Offeror makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer (including a waiver of the Minimum Condition), the Offeror will
disseminate additional tender offer materials and extend the Offer if and to
the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange
Act or otherwise. The minimum period during which a tender offer must remain
open following material changes in the terms of the
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offer or the information concerning the offer, other than a change in price or
a change in percentage of securities sought, depends upon the facts and
circumstances, including the relative materiality of the terms or information
changes. 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 investor response.
The Company has provided the Offeror with the Company's list of stockholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the Letter of Transmittal will be
mailed to record holders of the Shares and will be furnished to brokers,
dealers, commercial banks, trust companies and persons whose names, or the
names of whose nominees, appear on the list of stockholders 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. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Offeror will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 promptly after the later to occur of (a) the
Expiration Date and (b) subject to compliance with Rule 14e-1(c) under the
Exchange Act, the satisfaction or waiver of the conditions set forth in Section
15. Subject to compliance with Rule 14e-1(c) under the Exchange Act, the
Offeror expressly reserves the right to delay payment for Shares in order to
comply in whole or in part with any applicable law. See Sections 1 and 16. In
all cases, payment for Shares accepted for payment pursuant to the Offer will
be made only after timely receipt by the Depositary of (i) certificates for
such Shares or timely confirmation (a "Book-Entry Confirmation") of a book-
entry transfer of such Shares into the Depositary's account at The Depository
Trust Company, the Midwest Securities Trust Company or the Philadelphia
Depository Trust Company (collectively, the "Book-Entry Transfer Facilities"),
pursuant to the procedures set forth in Section 3, (ii) a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof) with all required signature guarantees or, in the case of a book-entry
transfer, an Agent's Message (as defined below) and (iii) any other documents
required by the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Offeror may enforce such agreement against the participant.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if and when the Offeror gives oral or written notice to the Depositary of the
Offeror's acceptance of such Shares for payment. In all cases, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price with the Depositary, which will act as agent for tendering stockholders
for the purpose of receiving payment from the Offeror and transmitting such
payment to tendering stockholders. If, for any reason whatsoever, acceptance
for payment of any Shares tendered pursuant to the Offer is delayed, or the
Offeror is unable to accept for payment Shares tendered pursuant to the Offer,
then, without prejudice to the Offeror's rights under Section 1, the Depositary
may, nevertheless, on behalf of the Offeror, retain tendered Shares, and such
Shares may not be withdrawn, except to the extent that the tendering
stockholders are entitled to withdrawal rights as described in Section 4 below
and as otherwise required by Rule 14e-1(c) under the Exchange Act. Under no
circumstances will interest be paid by the Offeror because of any delay in
making such payment.
4
<PAGE>
If any tendered Shares are not accepted for payment pursuant to the terms and
conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased or untendered
Shares will be returned, without expense to the tendering stockholder (or, in
the case of Shares delivered by book-entry transfer to a Book-Entry Transfer
Facility, such Shares will be credited to an account maintained within such
Book-Entry Transfer Facility), as promptly as practicable after the expiration,
termination or withdrawal of the Offer.
If, prior to the Expiration Date, the Offeror increases the price being paid
for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer, whether or not such Shares were tendered prior to such
increase in consideration.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tenders. For Shares to be validly tendered pursuant to the Offer, (i) a
properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof), with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, 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 certificates representing such
Shares must be received by the Depositary at such address or such Shares must
be tendered pursuant to the procedure for book-entry transfer set forth below,
and a Book-Entry Confirmation must be received by the Depositary, in each case
prior to the Expiration Date, or (ii) the tendering stockholder must comply
with the guaranteed delivery procedures set forth below. No alternative,
conditional or contingent tenders will be accepted. DELIVERY OF DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at each Book-Entry Transfer Facility 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's system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. Although delivery of Shares may be
effected through book-entry at a Book-Entry Transfer Facility prior to the
Expiration Date, (i) the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
any other required documents, must, in any case, be transmitted to and received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase or (ii) the guaranteed delivery procedures described below
must be complied with.
Signature Guarantee. Signatures on the Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, or by any other bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Exchange Act (each of the
foregoing being referred to as an "Eligible Institution" and, collectively, as
"Eligible Institutions"), unless the Shares tendered thereby are tendered (i)
by a registered holder of Shares who has not completed either the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of any
Eligible Institution. If the certificates evidencing Shares are registered in
the name of a person or persons other than the signer of the Letter of
Transmittal, or if payment is to be made, or delivered to, or certificates for
unpurchased Shares are to be issued or returned to, a person other than the
registered owner or owners, then the tendered certificates must be endorsed or
accompanied by duly executed stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed by an
Eligible Institution as provided in the Letter of Transmittal. See Instructions
1 and 5 to the Letter of Transmittal.
5
<PAGE>
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the
Depositary prior to the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares may nevertheless be
tendered if all of the following guaranteed delivery procedures are duly
complied with:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Offeror, is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), and any required signature guarantees, or, in the case of a book-
entry transfer, an Agent's Message, and any other documents required by the
Letter of Transmittal are received by the Depositary within three trading
days after the date of such Notice of Guaranteed Delivery. A "trading day"
is any day on which the National Association of Securities Dealers
Automated Quotation ("Nasdaq") National Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or 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 the Notice of
Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY
IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares or a Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), with all required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
(iii) any other documents required by the Letter of Transmittal.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT "BACKUP" FEDERAL INCOME TAX
WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES PURCHASED
PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH
STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFY THAT
SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL.
FOREIGN HOLDERS MUST SUBMIT A COMPLETED IRS FORM W-8 TO AVOID 31% BACKUP
WITHHOLDING. THIS FORM MAY BE OBTAINED FROM THE DEPOSITARY. SEE INSTRUCTIONS 8
AND 9 SET FORTH IN THE LETTER OF TRANSMITTAL.
Determination of Validity. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by the Offeror, in its sole discretion,
and its determination will be final and binding on all parties. The Offeror
reserves the absolute right to reject any or all tenders of any Shares that are
determined by it not to be in proper form or the acceptance of or payment for
which may, in the opinion of the Offeror, be unlawful. The Offeror also
reserves the absolute right to waive any of the conditions of the Offer,
subject to the limitations set forth in the Merger Agreement, or any defect or
irregularity in the tender of any Shares. The Offeror's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and the
Instructions to the Letter of Transmittal) will be final and binding on all
parties. No tender of Shares will be deemed to have been validly made until all
defects and irregularities have been cured or waived. None of the Offeror,
Mallinckrodt Veterinary, Mallinckrodt Group, the Dealer Managers, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
6
<PAGE>
Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the Offeror 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 right with respect to the Shares tendered by such stockholder and
accepted for payment by the Offeror (and any and all other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
September 22, 1995). All such proxies shall be considered coupled with an
interest in the tendered Shares. This appointment is effective when, and only
to the extent that, the Offeror accepts for payment the Shares deposited with
the Depositary. Upon acceptance for payment, all prior proxies given by the
stockholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent proxies may be given or
written consent executed (and, if given or executed, will not be deemed
effective). The designees of the Offeror will, with respect to the Shares and
other securities or rights, be empowered to exercise all voting and other
rights of such stockholder as they in their sole judgment deem proper in
respect of any opinion or special meeting of the Company's stockholders, or any
adjournment or postponement thereof. The Offeror reserves the right to require
that, in order for Shares to be deemed validly tendered, immediately upon the
Offeror's payment for such Shares, the Offeror must be able to exercise full
voting and other rights with respect to such Shares and the other securities or
rights issued or issuable in respect of such Shares, including voting at any
meeting of stockholders (whether annual or special or whether or not adjourned)
in respect of such Shares.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment pursuant to the Offer, may also be withdrawn
at any time after Monday, November 27, 1995. If purchase of or payment for
Shares is delayed for any reason or if the Offeror is unable to purchase or pay
for Shares for any reason, then, without prejudice to the Offeror's rights
under the Offer, tendered Shares may be retained by the Depositary on behalf of
the Offeror and may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as set forth in this Section 4,
subject to Rule 14e-1(c) under the Exchange Act, which provides that no person
who makes a tender offer shall fail to pay the consideration offered or return
the securities deposited by or on behalf of security holders promptly after the
termination or withdrawal of the Offer.
For a withdrawal of Shares tendered pursuant to the Offer to be effective, a
written, telegraphic or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth on 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 in which the certificates representing such Shares
are registered, if different from that of the person who tendered the Shares.
If certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted
to the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by
an Eligible Institution. All questions as to the form and validity (including
time of receipt) of notices of withdrawal will be determined by the Offeror, in
its sole discretion, and its determination will be final and binding on all
parties. None of the Offeror, Mallinckrodt Veterinary, Mallinckrodt Group, the
Dealer Managers, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to
the Expiration Date by following any of the procedures described in Section 3.
7
<PAGE>
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the principal United States federal income tax
consequences of the Offer and the Merger to holders whose Shares are purchased
pursuant to the Offer or whose Shares are converted to cash in the Merger
(including pursuant to the exercise of appraisal rights). The discussion
applies only to holders of Shares in whose hands Shares are capital assets, and
may not apply to Shares received pursuant to the exercise of employee stock
options or otherwise as compensation, or to holders of Shares who are in
special tax situations (such as insurance companies, tax-exempt organizations
or dealers in securities). This discussion does not discuss the federal income
tax consequences to a holder of Shares who, for United States federal income
tax purposes, is a non-resident alien individual, a foreign corporation, a
foreign partnership or a foreign estate or trust.
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR GENERAL
INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE INDIVIDUAL
CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S
OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED BELOW TO
SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS TO SUCH STOCKHOLDER OF THE
OFFER AND THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND
OTHER INCOME 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 also may be a taxable
transaction under applicable state, local and other income tax laws). In
general, for federal income tax purposes, a holder of Shares will recognize
gain or loss equal to the difference between his or her adjusted tax basis in
the Shares sold pursuant to the Offer or converted to cash in the Merger and
the amount of cash received therefor. Gain or loss must be determined
separately for each block of Shares (i.e., Shares acquired at the same cost in
a single transaction) sold pursuant to the Offer or converted to cash in the
Merger. Such gain or loss will be capital gain or loss and will be long-term
gain or loss if the Shares were held for more than one year on the date of sale
(in the case of the Offer) or the Effective Time of the Merger (in the case of
the Merger). The receipt of cash for Shares pursuant to the exercise of
appraisal rights will generally be taxed in the same manner as described above.
Long-term capital gain of individuals currently is taxed at a maximum rate of
28%. Legislative proposals are pending that would decrease the tax rate
applicable to an individual's long-term capital gains. It is not known whether
any such proposal will be enacted, and, if enacted, what the new rate will be
(if it is changed) and when any new rate will become effective.
Payments in connection with the Offer or the Merger may be subject to "backup
withholding" at a rate of 31%, unless a stockholder (a) is a corporation or
comes within certain exempt categories and, when required, demonstrates this
fact or (b) provides a correct TIN, certifies as to no loss of exemption from
backup withholding and otherwise complies with applicable requirements of the
backup withholding rules. A stockholder who does not provide a correct TIN may
be subject to penalties imposed by the Internal Revenue Service. Any amount
paid as backup withholding will be creditable against the stockholder's tax
liability. Each stockholder should consult with his or her own tax advisor as
to his or her qualification for exemption from backup withholding and the
procedure for obtaining such exemption. Stockholders tendering their Shares in
the Offer may prevent backup withholding by completing the Substitute Form W-9
included in the Letter of Transmittal. See Section 3. Similarly, stockholders
who convert their Shares into cash in the Merger may prevent backup withholding
by completing a Substitute Form W-9 and submitting it to the paying agent for
the Merger.
6. PRICE RANGE OF SHARES; DIVIDENDS.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1994 (the "1994 10-K"), the Shares are principally traded
on the Nasdaq National Market. The following table sets forth for the periods
indicated the high and low sales prices per Share on the Nasdaq National
8
<PAGE>
Market as reported by the Company in the 1994 10-K with respect to the years
ended September 30, 1993 and September 30, 1994, and as reported by published
financial sources with respect to periods after September 30, 1994.
<TABLE>
<CAPTION>
HIGH LOW
----- ----
<S> <C> <C>
FISCAL 1993:
First Quarter................................................ $6.00 3.75
Second Quarter............................................... 5.38 4.13
Third Quarter................................................ 4.88 3.38
Fourth Quarter............................................... 3.88 3.00
FISCAL 1994:
First Quarter................................................ 4.25 2.75
Second Quarter............................................... 3.25 2.25
Third Quarter................................................ 3.13 1.88
Fourth Quarter............................................... 2.88 2.00
FISCAL 1995:
First Quarter................................................ 2.63 1.75
Second Quarter............................................... 2.25 1.00
Third Quarter................................................ 2.63 1.25
Fourth Quarter (through September 28, 1995).................. 3.44 1.75
</TABLE>
On September 22, 1995, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the closing price per
Share as reported on the Nasdaq National Market was $2.50. On September 28,
1995, the last full day of trading prior to the commencement of the Offer, the
closing price per Share as reported on the Nasdaq National Market was $3.38.
Stockholders are urged to obtain current market quotations for the Shares.
The Company has not paid any dividends since its inception. Under the terms
of the Merger Agreement, the Company is prohibited from paying any dividends.
7. EFFECT OF THE OFFER ON MARKET FOR SHARES, STOCK QUOTATIONS AND REGISTRATION
UNDER THE EXCHANGE ACT.
The purchase of the Shares by the Offeror pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and will reduce the
number of holders of Shares, which will adversely affect the liquidity and
market value of the remaining Shares held by stockholders other than the
Offeror. The Company has advised the Offeror that, as of September 22, 1995,
there were approximately 600 stockholders of record and approximately 4,900
beneficial owners of the Shares.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the National Association of
Securities Dealers, Inc. ("NASD") for continued inclusion in the Nasdaq
National Market (the top tier market of The Nasdaq Stock Market), which
require, among other things, that an issuer have at least 200,000 publicly held
shares, held by at least 400 shareholders or 300 shareholders of round lots,
with a market value of $1,000,000, and have net tangible assets of at least
either $1,000,000, $2,000,000 or $4,000,000, depending on profitability levels
during the issuer's four most recent fiscal years. If these standards are not
met, the Shares might nevertheless continue to be included in The Nasdaq Stock
Market with quotations published in the Nasdaq "additional list" or in one of
the "local lists", but if the number of holders of Shares were to fall below
300, or if the number of publicly held Shares were to fall below 100,000 or
there were not at
9
<PAGE>
least two registered and active market makers for the Shares, the NASD's rules
provide that the Shares would no longer be "qualified" for reporting by The
Nasdaq Stock Market and The Nasdaq Stock Market would cease to provide any
quotations. Shares held directly or indirectly by directors, officers or
beneficial owners of more than 10% of the Shares are not considered as being
publicly held for this purpose. If, as a result of the purchase of Shares
pursuant to the Offer or otherwise, the Shares no longer meet the requirements
of the NASD for continued inclusion in the Nasdaq National Market or in any
other tier of The Nasdaq Stock Market, and the Shares are no longer included in
the Nasdaq National Market or in any other tier of The Nasdaq Stock Market, the
market for Shares could be adversely affected.
In the event that the Shares no longer meet the requirements of the NASD for
continued inclusion in any tier of The Nasdaq Stock Market, it is possible that
Shares would continue to trade in the over-the-counter market and that price
quotations would be reported by other sources. The extent of the public market
for the Shares and the availability of such quotations would, however, depend
upon the number of holders of Shares remaining at such time, the interest in
maintaining a market in Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act, as described
below, and other factors.
The Shares are currently registered under the Exchange Act. Such registration
may be terminated upon application by the Company to the Commission if there
are fewer than 300 record holders of Shares. It is the intention of the Offeror
to seek to cause an application for such termination to be made as soon after
consummation of the Offer as the requirements for termination of registration
of the Shares are met. If such registration were terminated, the Company would
no longer legally be required to disclose publicly in proxy materials
distributed to stockholders the information which it now must provide under the
Exchange Act or to make public disclosure of financial and other information in
annual, quarterly and other reports required to be filed with the Commission
under the Exchange Act; and the officers, directors and 10% stockholders of the
Company would no longer be subject to the "short-swing" insider trading
reporting and profit recovery provisions of the Exchange Act. Furthermore, if
such registration were terminated, persons holding "restricted securities" of
the Company may be deprived of their ability to dispose of such securities
under Rule 144 promulgated under the Securities Act of 1933, as amended (the
"Securities Act").
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 the Shares. Depending upon factors similar to those
described above regarding listing and market quotations, it is possible that,
following the Offer, the Shares would no longer constitute "margin securities"
for the purposes of the margin regulations of the Federal Reserve Board and
therefore could no longer be used as collateral for loans made by brokers. If
registration of Shares under the Exchange Act were terminated, the Shares would
no longer be "margin securities".
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth herein, the information concerning the Company
contained in this Offer to Purchase, including financial information, has been
furnished by the Company or has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources. Although neither the Offeror, Mallinckrodt Veterinary nor Mallinckrodt
Group has any knowledge that would indicate that statements contained herein
based upon such documents are untrue, neither the Offeror, Mallinckrodt
Veterinary, Mallinckrodt Group nor the Dealer Managers assume any
responsibility for the accuracy or completeness of the information concerning
the Company, furnished by the Company or contained in such documents and
records, or for any failure by the Company to disclose events which
10
<PAGE>
may have occurred or may affect the significance or accuracy any such
information but which are unknown to the Offeror, Mallinckrodt Veterinary or
Mallinckrodt Group.
The Company is a Delaware corporation with its principal executive offices
located at 9669 Lackman Road, Lenexa, Kansas 66219. The Company is engaged in
biotechnology research and in the development, manufacture and
commercialization of innovative vaccines for the animal health market.
Set forth below is certain summary consolidated financial data with respect
to the Company excerpted or derived from financial information contained in the
Company's Annual Report on Form 10-K for the year ended September 30, 1994, and
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1995. More comprehensive financial information is included in such reports and
other documents filed by the Company with the Commission, and the following
summary is qualified in its entirety by reference to such reports and such
other documents and all the financial information (including any related notes)
contained therein. Such reports and other documents should be available for
inspection and copies thereof should be obtainable in the manner set forth
below.
SYNTRO CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEAR ENDED
JUNE 30, SEPTEMBER 30,
---------------------- ----------------------------------
1995 1994 1994 1993 1992
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Net product sales..... $2,427,555 $2,427,266 $3,333,640 $2,719,454 $2,555,722
Collaborative research
& contract services.. 2,184,146 2,502,818 3,334,119 3,234,786 2,463,268
License and
distribution fees.... 200,000 -- -- 50,000 157,929
Interest and other
income............... 360,612 313,710 426,973 464,707 312,527
Realization of a fully
reserved note........ -- -- -- -- 300,315
Revenues from sale of
technology........... -- -- -- -- 383,335
---------- ---------- ---------- ---------- ----------
Total revenues...... 5,172,313 5,243,794 7,094,732 6,468,947 6,173,096
Costs and expenses:
Costs of goods sold... 1,313,154 1,329,407 1,831,352 1,454,613 1,378,863
Research and
development costs.... 2,543,875 2,367,530 3,259,173 3,050,419 2,129,063
Selling, general and
administrative
expenses............. 1,952,889 1,703,192 2,294,530 1,929,282 1,907,339
Interest expense...... -- -- -- 5,016 48,123
---------- ---------- ---------- ---------- ----------
Total costs and
expenses........... 5,809,918 5,400,129 7,385,055 6,439,330 5,463,388
---------- ---------- ---------- ---------- ----------
Income (loss) before
equity in income (loss)
of Syntro Zeon......... (637,605) (156,335) (290,323) 29,617 709,708
Equity in income (loss)
of Syntro Zeon......... 13,675 (6,168) 15,164 (5,927) --
---------- ---------- ---------- ---------- ----------
Net income (loss)....... $ (623,930) $ (162,503) $ (275,159) $ 23,690 $ 709,708
Net income (loss) per
share.................. $ (.05) $ (.01) $ (.02) $ .00 $ .06
Shares used in computing
income (loss) per
share, including common
stock equivalents in
fiscal 1993 and 1992... 11,394,010 11,382,471 11,383,374 11,983,410 11,140,459
========== ========== ========== ========== ==========
</TABLE>
11
<PAGE>
SYNTRO CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AT JUNE 30, AT SEPTEMBER 30,
1995 1994 1993
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents........ $ 1,407,524 $ 780,069 $ 529,479
Short-term investments........... 3,832,383 5,259,539 5,573,889
Trade receivables................ 492,331 422,552 171,666
Contract and license receivables. 328,206 -- --
Inventories...................... 684,761 839,519 886,879
Prepaid expenses and other....... 331,824 274,579 190,798
------------ ------------ ------------
Total current assets........... 7,077,029 7,576,258 7,352,711
Long-term investments, at cost... 374,689 1,048,286 1,508,384
Property and equipment, net...... 3,442,955 3,502,366 3,606,610
Patents and licenses, net........ 1,658,957 1,323,440 1,013,490
Investments and other assets..... 77,981 64,931 362,463
------------ ------------ ------------
$12,631,611 $ 13,515,281 $ 13,843,658
============ ============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable................. $ 236,189 $ 175,870 $ 230,097
Accrued compensation............. 216,999 200,352 181,009
Accrued royalties................ 149,012 137,784 114,125
Accrued rent..................... 141,158 132,749 114,335
Other accrued expenses........... 305,236 399,881 204,260
Research contract and other
advances........................ -- 270,023 531,401
------------ ------------ ------------
Total current liabilities...... 1,048,594 1,316,659 1,375,227
Stockholders' equity:
Common stock, $0.01 par value;
25,000,000 shares authorized;
11,397,184, 11,386,084 and
11,378,814 shares issued,
respectively...................... 113,972 113,861 113,788
Preferred stock, $1.00 par value,
225,000 shares authorized; no
shares issued..................... -- -- --
Additional paid-in capital......... 33,020,686 33,012,472 33,007,195
Accumulated deficit................ (21,551,641) (20,927,711) (20,652,552)
------------ ------------ ------------
Total stockholders' equity..... 11,583,017 12,198,622 12,468,431
------------ ------------ ------------
$ 12,631,611 $ 13,515,281 $ 13,843,658
============ ============ ============
</TABLE>
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files periodic reports, proxy statements and other
information with the Commission relating to its business, financial condition
and other matters. The Company is required to disclose in such proxy statements
certain information, as of particular dates, concerning the Company's directors
and officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities and any material interests of such persons
in transactions with the Company. Such reports, proxy statements and other
information may be inspected at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street (Suite 400), Chicago, Illinois 60661.
12
<PAGE>
9. CERTAIN INFORMATION CONCERNING MALLINCKRODT GROUP, MALLINCKRODT VETERINARY
AND THE OFFEROR.
The Offeror is a newly incorporated Delaware corporation. To date, the
Offeror has not conducted any business other than that incident to its
formation, the execution and delivery of the Merger Agreement and the
commencement of the Offer. Accordingly, no meaningful financial information
with respect to the Offeror is available. The Offeror is a wholly owned
subsidiary of Mallinckrodt Veterinary and an indirect wholly owned subsidiary
of Mallinckrodt Group. The principal executive office of the Offeror is located
at 421 East Hawley Street, Mundelein, Illinois 60060.
Mallinckrodt Veterinary, a Delaware corporation, has its principal executive
office at 421 East Hawley Street, Mundelein, Illinois 60060. Mallinckrodt
Veterinary is a wholly owned subsidiary of Mallinckrodt Group and the direct
owner of the Offeror. Mallinckrodt Veterinary is one of the world's largest
branded animal health and nutrition companies, with approximately 1,000
products sold in more than 100 countries. Products include pharmaceuticals,
livestock and pet vaccines, pesticides, surgical supplies, anesthetics and
mineral feed ingredients.
Mallinckrodt Group, a New York corporation, has its principal executive
office at 7733 Forsyth Boulevard, St. Louis, Missouri 63105. Mallinckrodt Group
is a provider of specialty chemicals and human and animal health products
worldwide through three technology-based businesses: Mallinckrodt Chemical,
Inc., Mallinckrodt Medical, Inc., and Mallinckrodt Veterinary. Mallinckrodt
Chemical, Inc. is a producer of pharmaceutical and specialty industrial
chemicals. It is also a joint venture partner in a worldwide flavors business.
Mallinckrodt Chemical, Inc. is the world's largest producer of acetaminophen
and a major producer of medicinal narcotics and laboratory chemicals.
Mallinckrodt Medical, Inc. is a provider of technologically advanced, cost-
effective products and services to five medical specialties: anesthesiology,
cardiology, critical care, nuclear medicine and radiology.
Set forth below is certain summary consolidated financial data with respect
to Mallinckrodt Group and Mallinckrodt Veterinary excerpted or derived from
financial information contained in Mallinckrodt Group's Annual Report on Form
10-K for the year ended June 30, 1995. More comprehensive financial information
is included in such reports and other documents filed by Mallinckrodt Group
with the Commission, and the following summary is qualified in its entirety by
reference to such reports and such other documents and all the financial
information (including any related notes) contained therein.
MALLINCKRODT GROUP INC.
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN MILLIONS)
<TABLE>
<CAPTION>
AS OF AND FOR THE
YEAR ENDED JUNE 30,
----------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales....................................... $2,212.1 $1,940.1 $1,796.3
Earnings (loss) from continuing operations...... 184.1 107.4 (113.8)
Loss from discontinued operations............... (3.8) (3.6) (6.0)
Cumulative effect of accounting changes......... (80.6)
Net earnings (loss)............................. 180.3 103.8 (200.4)
BALANCE SHEET DATA:
Total assets.................................... $2,720.6 $2,433.5 $2,177.6
Working capital................................. 271.8 261.3 203.7
Total debt...................................... 699.0 669.8 617.0
Shareholders' equity............................ 1,171.5 1,015.9 910.5
</TABLE>
13
<PAGE>
MALLINCKRODT VETERINARY, INC.
SUMMARY FINANCIAL DATA
(IN MILLIONS)
<TABLE>
<CAPTION>
AS OF AND FOR THE
YEAR ENDED JUNE 30,
---------------------
1995 1994 1993
------ ------ -------
<S> <C> <C> <C>
Net Sales............................................... $623.8 $591.7 $ 618.1
Earnings (Loss) from Continuing Operations Before Income
Taxes.................................................. 61.0 32.6 (242.5)
Identifiable Assets..................................... 745.5 709.5 698.0
</TABLE>
Mallinckrodt Group is subject to the informational requirements of the
Exchange Act and in accordance therewith files periodic reports and other
information with the Commission relating to its business, financial condition
and other matters. Such reports and other information are available for
inspection and copying at the offices of the Commission in the same manner as
set forth with respect to the Company in Section 8.
The name, citizenship, business address, present principal occupation, and
material positions held during the past five years of each of the directors and
executive officers of Mallinckrodt Group, Mallinckrodt Veterinary and the
Offeror are set forth in Annex I hereto.
None of the Offeror, Mallinckrodt Veterinary, Mallinckrodt Group, or, to
their knowledge, any of the persons listed in Annex I hereto, owns or has any
right to acquire any Shares and none of them has effected any transaction in
the Shares during the past 60 days.
Except as set forth in this Offer to Purchase, none of Mallinckrodt Group,
Mallinckrodt Veterinary or the Offeror, or, to their knowledge, any of the
persons listed in Annex I hereto, has any contract, arrangement, understanding
or relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies. Except as set forth in this Offer to Purchase, there have been no
contacts, negotiations or transactions between Mallinckrodt Group, Mallinckrodt
Veterinary or the Offeror, or, to their knowledge, any of the persons listed in
Annex I hereto, on the one hand, and the Company or its affiliates, on the
other hand, concerning a merger, consolidation or acquisition, a tender offer
or other acquisition of securities, an election of directors, or a sale or
other transfer of a material amount of assets. Except as described in this
Offer to Purchase, none of Mallinckrodt Group, Mallinckrodt Veterinary or the
Offeror, or, to their knowledge, any of the persons listed in Annex I hereto,
has had any transaction with the Company or any of its executive officers,
directors or affiliates that would require disclosure under the rules and
regulations of the Commission applicable to the Offer.
10. SOURCE AND AMOUNT OF FUNDS.
This Offer is not conditioned upon any financing arrangements. The total
amount of funds required by the Offeror to consummate the Offer and the Merger
and to pay related fees and expenses is expected to be approximately
$45,750,000. The Offeror expects to receive these funds from capital
contributions or loans to the Offeror by Mallinckrodt Veterinary. Mallinckrodt
Veterinary, in turn, expects to receive the funds to loan or contribute to the
Offeror from capital contributions or loans to Mallinckrodt Veterinary from
Mallinckrodt Group. Mallinckrodt Group anticipates obtaining the funds through
internally generated cash or its issuance of privately placed commercial paper.
14
<PAGE>
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
Beginning in mid-1994, the Company initiated an evaluation of its competitive
position and outlook in the biotechnology and animal health industries. At the
Company's annual meeting of stockholders on February 9, 1995, the Company
announced that it was exploring strategic alternatives for the Company. After
assessing various strategic alternatives, the Company focused on the
possibility of forming an alliance with a corporate partner that would provide
the resources and complementary expertise necessary to commercialize new
products based on the Company's technology. In early 1995, the Company
approached, or was contacted by, a number of companies on a confidential basis
to discuss their interest in a strategic transaction with the Company.
Shortly after the Company's stockholders meeting, James L. Bittle, a director
of the Company, contacted an officer of Mallinckrodt Veterinary to advise him
of the Company's interest in such an alliance. Thereafter, Paul D. Cottone, the
President and Chief Executive Officer of Mallinckrodt Veterinary, discussed
with J. Donald Todd, the President and Chief Executive Officer of the Company,
Mallinckrodt Veterinary's possible interest in a strategic transaction with the
Company.
On March 27, 1995, Mallinckrodt Veterinary entered into a confidentiality
agreement with the Company, and thereafter the Company provided certain
confidential information to Mallinckrodt Veterinary.
The Company engaged Piper Jaffray as the Company's financial advisor with
respect to a possible sale of the Company. Between late March 1995 and late
June 1995, the Company, with the assistance of Piper Jaffray, continued
discussions with a limited number of companies, in addition to Mallinckrodt
Veterinary.
On April 19, 1995, Piper Jaffray sent a letter to senior management of
Mallinckrodt Veterinary inviting Mallinckrodt Veterinary to make an offer for
the purchase of the Company and setting forth the process to be followed in
connection with such an offer. In late April, May and early June 1995,
Mallinckrodt Veterinary continued its review of the Company, both through
meetings with representatives of the Company and pursuant to the review of
documents provided by the Company.
On June 8, 1995, Mr. Cottone sent a letter to Dr. Todd expressing possible
interest in a merger transaction, in which a newly created subsidiary of
Mallinckrodt Veterinary would be merged into the Company, at a purchase price
in the range of $2.35 to $2.45 per Share in cash, subject to execution of a
definitive agreement, completion of due diligence and other conditions. On June
9, 1995, Dr. Todd indicated to Mr. Cottone that such range was not acceptable.
On June 12, 1995, a representative of Piper Jaffray contacted senior management
of Mallinckrodt Veterinary and indicated that although the price contained in
Mallinckrodt Veterinary's proposal was, in the Company's view, inadequate, the
Company wished to keep the lines of communication between the Company and
Mallinckrodt Veterinary open. On June 23, 1995, Mr. Cottone sent a letter to
Dr. Todd indicating that Mallinckrodt Veterinary might be willing to increase
the purchase price range over that contained in the June 8, 1995 letter.
On July 11, 1995, the Company's Board of Directors received an update from
Dr. Todd on the progress of discussions with Mallinckrodt Veterinary. Following
this update, Mallinckrodt Veterinary was informed by the Company that a
substantial increase in Mallinckrodt Veterinary's proposed purchase price would
be necessary before further discussions could proceed. Mallinckrodt Veterinary
indicated that it would not be able to do so unless it was permitted to perform
additional due diligence on the Company. The Company agreed to permit this and
in late July and August 1995, representatives of Mallinckrodt Veterinary
conducted due diligence with respect to the Company, with the cooperation of
the Company and its advisors.
15
<PAGE>
On August 28, 1995, Mr. Cottone sent a letter to Dr. Todd expressing interest
in a possible merger transaction at a purchase price of $3.25 per Share in
cash, subject to certain conditions, including completion of final due
diligence. During a telephone conversation on August 29, 1995, Mr. Cottone
indicated to Dr. Todd that Mallinckrodt Veterinary was willing to increase the
proposed purchase price to $3.55 per Share.
On August 29, 1995, the Board of Directors of the Company convened by
telephone to consider the latest proposal from Mallinckrodt Veterinary. After
discussions with Piper Jaffray and the Company's legal advisors, the Board of
Directors of the Company authorized management to proceed to negotiate a merger
agreement with Mallinckrodt Veterinary at $3.55 per Share, subject to final
board approval.
On September 6, 1995, Mallinckrodt Veterinary sent an initial draft merger
agreement to the Company and its advisors. On September 13, 1995, legal
advisors for the Company and Mallinckrodt Veterinary discussed the draft
agreement. On September 20, 1995, Mallinckrodt Group's Board of Directors
approved the merger agreement, subject to certain conditions. Also on that
date, the Company's Board of Directors met to consider the draft agreement.
Following presentations relating to, among other things, the Company's
operations, developments in the biotechnology and animal health industries, the
Company's various strategic options and the terms of the proposed transaction,
and a presentation by representatives of Piper Jaffray relating to the
financial aspects of the draft agreement, the Company's Board of Directors
unanimously authorized the Company's officers to pursue a transaction
substantially as set forth in the draft agreement, subject to negotiation of
certain provisions.
On September 23, 1995, representatives of the Company and Mallinckrodt
Veterinary and their respective legal counsel met to negotiate the final terms
of the merger agreement, including termination rights, termination fee, payment
of expenses and offer conditions. A revised merger agreement was delivered to
the directors of the Company and of Mallinckrodt Veterinary early on September
24, 1995.
On September 24, 1995, the Company's Board of Directors convened by telephone
call. The Company's Board reviewed the revised agreement. Piper Jaffray
delivered its opinion as to the fairness, from a financial point of view, of
the cash consideration to be received by the Company's stockholders under the
terms of the Merger Agreement. After significant discussion, the Company's
Board of Directors unanimously approved the Merger Agreement and the Offer and
Merger contemplated by the Merger Agreement. The Merger Agreement was executed
and delivered on September 25, 1995. Public disclosure of the Merger Agreement
was made on the morning of September 25, 1995, prior to the opening of trading
of the Shares on the Nasdaq National Market.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
The purpose of the Offer, the Merger and the Merger Agreement is to enable
Mallinckrodt Veterinary to acquire control of, and the entire equity interest
in, the Company. The Company is a leader in technology based vaccine and
vaccine vector development. The acquisition of the Company will bring state of
the art capabilities in gene vectoring to Mallinckrodt Veterinary, a technology
which will replace less desirable chemical therapeutics currently used in the
industry. The acquisition will also bring talented scientists and a bank of
proprietary genetic materials to Mallinckrodt Veterinary which, in combination
with the gene vectoring technology, will enable Mallinckrodt Veterinary to
accelerate its focus on genetic immunization.
Under the DGCL, the approval of the Board of Directors of the Company and 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. The Board of Directors of the
Company has approved the Offer, the Merger and the Merger Agreement and the
transactions contemplated thereby, and, unless the Merger is consummated
pursuant to the short form merger
16
<PAGE>
provisions under the DGCL described below, the only remaining required
corporate action of the Company is the approval and adoption of the Merger
Agreement and the transactions contemplated thereby by the affirmative vote of
the holders of a majority of the Shares. If the Minimum Condition is satisfied,
the Offeror 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.
In the Merger Agreement, the Company has agreed to take all action necessary
to convene a 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 by the DGCL. Mallinckrodt Veterinary has agreed that, subject to
applicable law, all Shares owned by the Offeror or any other subsidiary of
Mallinckrodt Veterinary will be voted in favor of the Merger Agreement and the
transactions contemplated thereby.
Short Form Merger. Under the DGCL, if the Offeror acquires at least 90% of
the outstanding Shares, the Offeror will be able to approve the Merger without
a vote of the Company's stockholders. In such event, the Offeror anticipates
that it will take all necessary and appropriate action to cause the Merger to
become effective as soon as reasonably practicable after such acquisition
without a meeting of the Company's stockholders. If the conditions to the
Offeror's obligation to purchase Shares in the Offer are satisfied prior to the
tender of 90% of the outstanding Shares into the Offer, the Offeror may,
subject to certain limitations set forth in the Merger Agreement, delay its
purchase of the Shares tendered to it in the Offer. See Section 1. If the
Offeror does not acquire at least 90% of the outstanding Shares pursuant to the
Offer or otherwise, a significantly longer period of time may be required to
effect the Merger, because a vote of the Company's stockholders would be
required under the DGCL. Pursuant to the Merger Agreement, the Company has
agreed to take all action necessary under the DGCL and its Certificate of
Incorporation and Bylaws to convene a meeting of its stockholders promptly
following consummation of the Offer to consider and vote on the Merger, if a
stockholders' vote is required. If the Offeror owns a majority of the
outstanding Shares, approval of the Merger can be obtained without the
affirmative vote of any other stockholder of the Company.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company will
have certain rights under the DGCL to dissent and demand appraisal of, and to
receive payment in cash for the fair value of, their Shares. Such rights to
dissent, if the statutory procedures are complied with, could lead to a
judicial determination of the fair value of the Shares (excluding any element
of value arising from the accomplishment or expectation of the Merger) required
to be paid in cash to such dissenting holders for their Shares. 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, a Delaware court would be required to take into account all
relevant factors. Accordingly, such determination could be based upon
considerations other than, or in addition to, the market value of the Shares,
including, among other things, asset values and earning capacity. In Weinberger
v. UOP, Inc., the Delaware Supreme Court stated, among other things, 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. Therefore, the value so determined in
any appraisal proceeding could be different from the price being paid in the
Offer.
In addition, several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has
a fiduciary duty to other stockholders which requires that the merger be fair
to such other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of consideration to be received by the stockholders and whether there
was fair dealing among
17
<PAGE>
the parties. The Delaware Supreme Court stated in Weinberger and Rabkin v.
Philip A. Hunt Chemical Corp. that although the remedy ordinarily available to
minority stockholders in a cash-out merger is the right to appraisal described
above, a damages remedy or injunctive relief may be available if a merger is
found to be the product of procedural unfairness, including fraud,
misrepresentation or other misconduct.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer or otherwise
in which the Offeror seeks to acquire the remaining Shares not held by it. The
Offeror believes, however, that Rule 13e-3 will not be applicable to the Merger
if the Merger is consummated within one year after the termination of the Offer
at the same per Share price as paid in the Offer. If applicable, Rule 13e-3
requires, among other things, that certain financial information concerning the
Company and certain information relating to the fairness of the proposed
transaction and the consideration offered to minority stockholders in such
transaction, be filed with the Commission and disclosed to stockholders prior
to consummation of the transaction.
Plans for the Company. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business and
operations of the Company will be continued by the Surviving Corporation
substantially as they are currently being conducted. The sole director of the
Offeror will be the initial director of the Surviving Corporation and the
officers of the Offeror and such other persons as are designated by
Mallinckrodt Veterinary will be the initial officers of the Surviving
Corporation. After the purchase of Shares pursuant to the Offer, and prior to
the Effective Time, it is anticipated that the Company will not declare any
dividends on the Shares.
Mallinckrodt Veterinary will continue to evaluate the business and operations
of the Company during the pendency of the Offer and after the consummation of
the Offer and the Merger, and will take such actions as it deems appropriate
under the circumstances then existing. Mallinckrodt Veterinary intends to seek
additional information about the Company during this period. Thereafter,
Mallinckrodt Veterinary intends to review such information as part of a
comprehensive review of the Company's business, operations, capitalization and
management with a view to optimizing exploitation of the Company's potential in
conjunction with Mallinckrodt Veterinary's business.
Except as indicated in this Offer to Purchase, neither Mallinckrodt
Veterinary nor Mallinckrodt Group has any present plans or proposals which
relate to or would result in an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company or any of its
subsidiaries, a sale or transfer of a material amount of assets of the Company
or any of its subsidiaries or any material change in the Company's
capitalization or dividend policy or any other material changes in the
Company's corporate structure or business, or the composition of the Company's
Board of Directors or management.
13. THE MERGER AGREEMENT.
The following summary of certain provisions of the Merger Agreement, a copy
of which is filed as an exhibit to the Schedule 14D-1, is qualified in its
entirety by reference to the text of the Merger Agreement.
The Offer. The Offeror commenced the Offer in accordance with the terms of
the Merger Agreement. Pursuant to the terms and conditions of the Merger
Agreement, Mallinckrodt Veterinary, the Offeror and the Company are required to
use all reasonable best efforts to take all action as may be necessary or
appropriate in order to effectuate the Offer and the Merger as promptly as
possible and to carry out the transactions provided for or contemplated by the
Merger Agreement.
18
<PAGE>
Company Actions. Pursuant to the Merger Agreement, the Company has agreed
that on the date of the commencement of the Offer, it will file with the
Commission and mail to its stockholders, a Solicitation/Recommendation
Statement on Schedule 14D-9 containing the recommendation of the Board of
Directors that the Company's stockholders accept the Offer and approve the
Merger and the Merger Agreement.
The Merger. The Merger Agreement provides that, upon the terms and subject to
the conditions of the Merger Agreement, and in accordance with the DGCL, the
Offeror shall be merged with and into the Company at the Effective Time. Upon
the effectiveness of the Merger, the separate corporate existence of the
Offeror shall cease and the Company shall continue as the Surviving Corporation
and shall succeed to and assume all the rights and obligations of the Offeror
in accordance with the DGCL. At the Effective Time, the Certificate of
Incorporation of the Company shall be amended to change the registered agent
and registered office, reduce the amount of authorized capital stock and to
delete certain provisions regarding interested party transactions. The
Certificate of Incorporation, as so amended, and the By-laws of the Company
shall be the Certificate of Incorporation and By-laws of the Surviving
Corporation. The directors and officers of the Offeror immediately prior to the
Effective Time shall be the directors and officers of the Surviving Corporation
as of the Effective Time.
Conversion of Securities. At the Effective Time, each Share issued and
outstanding immediately prior thereto shall be cancelled and extinguished and
each Share (other than Shares held by the Company as treasury Shares, Shares
owned by any subsidiary of the Company, Shares owned by Mallinckrodt
Veterinary, the Offeror or any other wholly owned subsidiary of Mallinckrodt
Veterinary, and Dissenting Shares) shall, by virtue of the Merger and without
any action on the part of any stockholder of the Company or the Offeror be
converted into and become the right to receive the Offer Price. Each share of
common stock of the Offeror issued and outstanding immediately prior to the
Effective Time shall, at the Effective Time, by virtue of the Merger and
without any action on the part of the Offeror, the Company or the holders of
Shares, be converted into and become one fully paid and nonassessable share of
common stock of the Surviving Corporation.
Dissenting Shares. If required by the DGCL, Shares which are held by holders
who have properly exercised appraisal rights with respect thereto in accordance
with Section 262 of the DGCL will not be exchangeable for the right to receive
the Offer Price, and holders of such Shares will be entitled to receive payment
of the appraised value of such Shares unless such holders fail to perfect or
effectively withdraw or lose their right to appraisal and payment under the
DGCL. If, after the Effective Time, any such holder fails to perfect or
effectively withdraws or loses such right, such Shares will be treated as if
they had been converted into and have become exchanged for the right to receive
the Offer Price, without any interest thereon.
Merger Without a Meeting of Stockholders. In the event that the Offeror shall
acquire at least 90% of the outstanding Shares, the parties agree to take all
necessary and appropriate actions to cause the Merger to become effective
without a meeting of stockholders of the Company, in accordance with Section
253 of the DGCL.
Representations and Warranties. In the Merger Agreement, the Company has made
customary representations and warranties to the Offeror, including, but not
limited to, representations and warranties relating to the Company's
organization and qualification, capitalization, subsidiaries, its authority to
enter into the Merger Agreement and carry out the related actions, filings made
by the Company with the Commission under the Securities Act or the Exchange Act
(including financial statements included in the documents filed by the Company
under these acts), required consents and approvals, compliance with applicable
laws, employee benefit plans, litigation, employment relations, contracts,
intellectual property, title to property, the payment of taxes, environmental
matters and the absence of certain material adverse changes or events.
19
<PAGE>
The Offeror and Mallinckrodt Veterinary have also made customary
representations and warranties to the Company, including, but not limited to,
representations and warranties relating to the Offeror's and Mallinckrodt
Veterinary's organization and qualification, authority to enter into the Merger
Agreement and required consents and approvals.
Covenants Relating to the Conduct of Business. The Company has agreed that it
will, and will cause its subsidiaries to, in all material respects, carry on
their respective businesses in, and not enter into any material transaction
other than in accordance with, the regular and ordinary course and, to the
extent consistent therewith, use their reasonable best efforts to preserve
intact their current business organizations, keep available the services of
their current officers and employees and preserve their relationships with
customers, suppliers and others having business dealings with them. The Company
has agreed that, except as contemplated by the Merger Agreement, it shall not,
and shall not permit any of its subsidiaries to, without the prior written
consent of Mallinckrodt Veterinary:
(a) (x) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to stockholders of the
Company in their capacity as such, other than dividends payable to the
Company declared by any of the Company's subsidiaries, (y) split, combine
or reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock or (z) except as disclosed by the Company to
Mallinckrodt Veterinary pursuant to the Merger Agreement, purchase, redeem
or otherwise acquire any shares of capital stock of the Company or any of
its subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(b) issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities or equity equivalent (other than, in the case of the Company,
the issuance of Shares during the period from the date of the Merger
Agreement through the Effective Time upon the exercise of certain
outstanding stock options of the Company issued pursuant to the Company's
1984 Incentive Stock Option Plan, 1988 Executive Stock Option Plan, 1988
Stock Option Plan and 1994 Stock Option Plan (collectively, the "Stock
Plans") and outstanding on the date of the Merger Agreement in accordance
with their current terms);
(c) amend its charter or bylaws;
(d) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of or equity in, or by any
other manner, any business or any corporation, partnership, limited
liability company, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets, in each case
that are material, individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole;
(e) sell, lease or otherwise dispose of or agree to sell, lease or
otherwise dispose of, any of its assets that are material, individually or
in the aggregate, to the Company and its subsidiaries, taken as a whole,
except for sales of inventory or other assets in the ordinary course of
business;
(f) incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any debt
securities of others, except for borrowings or guarantees incurred in the
ordinary course of business consistent with past practice, or except as
disclosed by the Company to Mallinckrodt Veterinary pursuant to the Merger
Agreement, make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any wholly
owned subsidiary of the Company and other than in the ordinary course of
business consistent with past practice;
(g) alter through merger, liquidation, reorganization, restructuring or
in any other fashion the corporate structure or ownership of any subsidiary
of the Company;
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(h) enter into or adopt, or amend any existing severance plan, agreement
or arrangement or, other than in the ordinary course of business, enter
into or amend any employee benefit plan (including without limitation the
Stock Plans of the Company) or employment or consulting agreement except,
(i) with respect to employees that are not executive officers or directors,
compensation increases associated with promotions and regular reviews in
the ordinary course of business consistent with past practices, (ii)
agreements with consultants of the Company of less than $20,000 to any
individual consultant and less than $75,000 in the aggregate to all
consultants, and (iii) after December 31, 1995, increases of not more than
10% to the base salary of executive officers of the Company;
(i) waive, amend or allow to lapse any term or condition of any
confidentiality or "standstill" agreement to which the Company is a party;
(j) settle or compromise any suit, proceeding or claim or threatened
suit, proceeding or claim for an amount that is more than $20,000 in the
case of any individual suit, proceeding or claim or $100,000 for all suits,
proceedings or claims;
(k) knowingly violate or fail to perform any obligation or duty imposed
upon it by any applicable federal, state or local law, rule, regulation,
guideline or ordinance;
(l) change its credit policies, procedures or practices, or commit or
renew a prior commitment to lend money, purchase assets, issue a letter of
credit, guarantee or similar instrument or otherwise extend credit to any
person in a manner not in the ordinary course or in a manner inconsistent
with past practice;
(m) (i) modify, amend or terminate any contract, (ii) waive, release,
relinquish or assign any contract (including any insurance policy) or other
right or claim, (iii) prepay any indebtedness or (iv) cancel or forgive any
indebtedness owed to it, other than in each case in a manner in the
ordinary course of business consistent with past practice and which is not
material to the business of the Company and its subsidiaries;
(n) make any tax election or change any method of accounting for tax
purposes, in each case except to the extent required by law, or settle or
compromise any tax liability;
(o) change any of the accounting principles or practices used by it
except as required by the Commission or the Financial Accounting Standards
Board; or
(p) (i) enter into any research and development contract, (ii) enter into
any production contract or "tolling agreement," or (iii) grant any license
relating to its intellectual property except as required by existing
agreements of the Company; or
(q) authorize, recommend, announce, propose or agree to take any of the
foregoing actions.
During the period from the date of the Merger Agreement through the Effective
Time, (i) as reasonably requested by Mallinckrodt Veterinary, the Company shall
confer on a regular basis with one or more representatives of Mallinckrodt
Veterinary with respect to material operational matters; (ii) the Company
shall, within 25 days following each fiscal month, deliver to Mallinckrodt
Veterinary financial statements, including an income statement and balance
sheet for such month; and (iii) upon the knowledge of the Company of any
Material Adverse Change (as defined below) in the Company, any material
litigation or material governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the breach in
any material respect of any representation or warranty contained therein, the
Company shall promptly notify Mallinckrodt Veterinary thereof. "Material
Adverse Change" or "Material Adverse Effect" means, when used with respect to
Mallinckrodt Veterinary, the Offeror or the Company, as the case may be, any
change or effect, either individually or in the aggregate, that is or can
reasonably be expected to be materially adverse to the business, assets,
liabilities, properties, condition (financial or otherwise), results of
operations or prospects of all or any material part of Mallinckrodt Veterinary
and its subsidiaries taken as a whole, the Offeror, or the Company and its
subsidiaries taken as a whole, as the case may be, except as agreed.
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During the period from the date of the Merger Agreement through the Effective
Time, the Offeror shall not engage in any activities of any nature except as
provided in or contemplated by the Merger Agreement.
No Solicitation. The Company has agreed in the Merger Agreement that, from
the date of the Merger Agreement until the Effective Time, (a) neither the
Company nor its subsidiaries shall, and the Company shall not authorize or
permit its officers, directors, employees, authorized agents and
representatives (including, without limitation, any investment banker, attorney
or accountant retained by it or any of its subsidiaries) to, initiate, solicit
or encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer (including, without limitation any
proposal or offer to its stockholders) with respect to a merger, acquisition,
consolidation or similar transaction involving, or any purchase of all or any
significant portion of the assets or any equity securities of, the Company or
its subsidiaries (an "Acquisition Proposal"), or engage in any negotiations
concerning, or provide any confidential information or data to, or have any
substantive discussions with, any person relating to an Acquisition Proposal,
or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; (b) it will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties conducted
heretofore and will take the necessary steps to inform such parties of the
obligations undertaken in the Merger Agreement and (c) the Company will notify
Mallinckrodt Veterinary immediately if any such inquiries or proposals are
received by, any such information is requested from, or any such negotiations
or discussions are sought to be initiated or continued with, it, including the
terms of its proposals; provided however, that nothing contained in the Merger
Agreement shall prohibit the Board of Directors of the Company from (i)
furnishing information to or entering into discussions or negotiations with,
any person or entity that indicates an interest in making a Superior Proposal
(as hereinafter defined) if, and only to the extent that (A) the Board of
Directors determines in good faith after consultation with the Company's
outside counsel that such action is required for the Board of Directors to
comply with its fiduciary duties to stockholders imposed by laws and (B) the
Company keeps Mallinckrodt Veterinary informed of the status of any such
discussions or negotiations; and (ii) to the extent applicable, complying with
Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal. If any person or entity makes a Superior Proposal, upon receipt
thereof the Company shall provide written notice (a "Notice of a Superior
Proposal") to Mallinckrodt Veterinary of such Superior Proposal, including the
terms and structure thereof, and if within five business days following the
delivery of the Notice of a Superior Proposal the Superior Proposal does not
continue to be superior in terms of the aggregate value to be received by the
Company's stockholders in light of any improved transaction proposed by
Mallinckrodt Veterinary prior to the expiration of such five-day period, the
Company shall cease all discussions or negotiations with such person or entity.
For purposes of the Merger Agreement, "Superior Proposal" means an unsolicited
bona fide Acquisition Proposal in writing that the Board of Directors
determines in its good faith judgment (based on the advice of a nationally
recognized investment banking firm) provides greater aggregate value to the
Company's stockholders than the transactions contemplated by the Merger
Agreement.
Options. Pursuant to the Merger Agreement, at the Effective Time all
outstanding stock options to purchase Shares heretofore issued under the Stock
Plans or the Company's stock option agreements with consultants that are then
fully exercisable or vested pursuant to the terms of the respective Stock Plan
or the Merger Agreement (a "Vested Company Stock Option"), shall, pursuant to
the terms of the respective Stock Plans pursuant to which they were issued and
upon their surrender to the Company by the holders thereof, be cancelled by the
Company, and the holders thereof shall receive a cash payment from the Company
in an amount (if any) equal to the number of shares of Common Stock subject to
each surrendered option multiplied by the difference (if positive) between the
exercise price per Share covered by the option and the Offer Price. The Company
shall use its best efforts to cause each holder of Vested Company Stock Options
to surrender their Vested Company Stock Options in accordance with the prior
sentence. At the Effective Time, all outstanding stock options to purchase
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Shares issued under the Stock Plans or the stock option agreements with
consultants that are not then exercisable or vested shall be cancelled without
payment to the holders thereof and the Company shall use its best efforts to
cause such stock options to be surrendered to the Company.
Indemnification. For a period of not less than six years from and after the
Effective Time, Mallinckrodt Veterinary agrees to, and to cause the Surviving
Corporation to, indemnify and hold harmless all past and present officers,
directors and employees (the "Indemnified Parties") of the Company and of its
subsidiaries to the full extent such persons may be indemnified by the Company
pursuant to the Company's Certificate of Incorporation and Bylaws as in effect
as of the date of the execution of the Merger Agreement for acts and omissions
occurring at or prior to the Effective Time and shall advance reasonable
litigation expenses incurred by such persons in connection with defending any
action arising out of such acts or omissions, provided that such persons
provide the requisite affirmation and undertaking, as set forth in the
Company's Bylaws in effect at the date of the execution of the Merger
Agreement. Mallinckrodt Veterinary will provide, or cause the Surviving
Corporation to provide, for a period of not less than six years after the
Effective Time, the Company's current directors and officers an insurance and
indemnification policy that provides coverage for events occurring at or prior
to the Effective Time (the "D&O Insurance") that is no less favorable than the
existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that Mallinckrodt
Veterinary and the Surviving Corporation shall not be required to pay an annual
premium for the D&O Insurance in excess of two times the last annual premium
paid prior to the date of the execution of the Merger Agreement, but in such
case shall purchase as much such coverage as possible for such amount.
Employee Benefits. Until September 30, 1996, Mallinckrodt Veterinary has
agreed to maintain employee benefits and programs for officers and employees of
the Company and its subsidiaries that are no less favorable in the aggregate
than those being provided to such officers and employees on the date of the
execution of the Merger Agreement (it being understood that Mallinckrodt
Veterinary will not be obligated to continue any one or more employee benefits
or programs). For purposes of eligibility to participate in and vesting in all
benefits provided to officers and employees, such officers and employees of the
Company and its subsidiaries will be granted their years of service with the
Company and its subsidiaries. Amounts paid before the Effective Time by
officers and employees of the Company under any medical plans of the Company
shall after the Effective Time be taken into account in calculating balances
for deductibles and maximum out-of-pocket limits applicable under the medical
plan of Mallinckrodt Veterinary for the plan year during which the Effective
Time occurs as if such amounts had been paid under such medical plan of
Mallinckrodt Veterinary.
Mallinckrodt Veterinary has agreed to maintain an agreed upon severance
policy for a period of at least twelve months from the Effective Time.
Board Representation. The Merger Agreement provides that promptly upon the
purchase of Shares pursuant to the Offer, Mallinckrodt Veterinary shall be
entitled to designate members of the Board of Directors of the Company, rounded
up to the next whole number, as will give Mallinckrodt Veterinary, subject to
compliance with the provisions of Section 14(f) of the Exchange Act and the
rules and regulations promulgated thereunder, representation on the Board of
Directors of the Company equal to the product of (i) the total number of
directors on such Board and (ii) the percentage that the number of Shares
purchased by Mallinckrodt Veterinary bears to the number of outstanding Shares.
The Company has agreed, upon the request of Mallinckrodt Veterinary, to
promptly increase the size of the Board of Directors of the Company and/or
exercise its reasonable best efforts to secure the resignations of such number
of directors as is necessary to enable Mallinckrodt Veterinary's designees to
be elected to the Board of Directors and shall cause Mallinckrodt Veterinary's
designees to be so elected. The Company has agreed to take, at its expense, all
actions required pursuant to Section 14(f) of the Exchange Act
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and Rule 14f-1 promulgated thereunder to effect any such election, including
the mailing to its stockholders of the information required to be disclosed
pursuant thereto. Mallinckrodt Veterinary 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 Section 14(f) and Rule
14f-1.
Access to Information. The Company has agreed to, and to cause each of its
subsidiaries to, afford to Mallinckrodt Veterinary, and to Mallinckrodt
Veterinary's accountants, counsel, financial advisors and other
representatives, access and permit them to make such inspections as they may
require during normal business hours during the period from the date of the
Merger Agreement through the Effective Time to all their respective properties,
books, contracts, commitments and records and, during such period, the Company
shall, and shall cause each of its subsidiaries to, furnish promptly to
Mallinckrodt Veterinary (i) a copy of each report, schedule, negotiation
statement and other document filed by it during such period pursuant to the
requirements of federal or state laws and (ii) all other information concerning
its business, properties and personnel as Mallinckrodt Veterinary may
reasonably request.
Conditions Precedent. The respective obligations of each party to effect the
Merger shall be subject to the fulfillment at or prior to the Effective Time of
the following conditions: (a) if required by applicable law, the Merger
Agreement shall have been approved by the requisite vote of the holders of the
Shares; and (b) no governmental entity or court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any law, rule,
regulation, executive order, decree or injunction which prohibits or has the
effect of prohibiting the consummation of the Merger; provided, however, that
the Company, Mallinckrodt Veterinary and the Offeror shall use their reasonable
best efforts to have any such order, decree or injunction vacated.
The respective obligations of Mallinckrodt Veterinary and the Offeror to
effect the Merger shall be subject to the fulfillment at or prior to the
Effective Time of the following conditions: (a) the Company shall have
performed in all material respects each of its covenants and agreements
contained in the Merger Agreement required to be performed on or prior to the
Effective Time, and each of the representations and warranties of the Company
contained in the Merger Agreement shall be true and correct in all material
respects except as agreed by the parties pursuant to the Merger Agreement, in
each case, on and as of the Effective Time as if made on and as of such date,
except as contemplated or permitted by the Merger Agreement and except for such
failures to perform or such failures to be true and correct as have not had and
are not reasonably likely to have a Material Adverse Effect on the Company, and
Mallinckrodt Veterinary shall have received a certificate of the Company,
signed by the President or any Vice President of the Company, to that effect;
provided, however, that any references in the Merger Agreement to the phrases
"knowledge of the Company" and "to the best knowledge of the Company," and
variants thereof, shall be disregarded for the purposes of determining whether
the Company shall have breached its representations and warranties hereunder;
and (b) except as disclosed by the Company to Mallinckrodt Veterinary pursuant
to the Merger Agreement, all required authorizations, consents or approvals of
any third party, the failure to obtain which would have a Material Adverse
Effect on the Company (assuming the Merger had taken place) shall have been
obtained.
Termination. The Merger Agreement provides that it may be terminated at any
time prior to the Effective Time, whether prior to or after approval by the
stockholders of the Company: (a) by mutual written consent of Mallinckrodt
Veterinary and the Company, (b) by the Company if: (i) the Offer has not been
timely commenced (except as a result of actions or omissions by the Company);
(ii) there is a Superior Proposal to acquire all of the Shares or substantially
all of the assets of the Company and the Board of Directors of the Company
determines in good faith after consultation with the Company's outside counsel
that the failure to approve such Superior Proposal would be inconsistent with
the fiduciary duties of the Board of Directors of the Company to stockholders
of the Company, provided, however that the right to terminate the Merger
Agreement pursuant to this clause (ii) will not be available (A) if the Company
has breached in any material respect its obligations concerning Acquisition
Proposals, (B) in respect of an offer involving consideration which is not
entirely cash, or does not permit stockholders to receive the payment of the
offered consideration in respect of all Shares at the same time, unless the
Board of Directors of the Company has been furnished with a written opinion of
a
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nationally recognized investment banking firm to the effect that such offer
provides a higher value per Share than the consideration per Share pursuant to
the Offer or the Merger (as increased pursuant to any revised proposal of
Mallinckrodt Veterinary pursuant to its rights in the event of a Superior
Proposal) or (C) if, prior to or concurrently with any purported termination
pursuant to this clause (ii), the Company shall not have paid the Termination
Fee (as defined below); (iii) there has been a breach by Mallinckrodt
Veterinary or the Offeror of any representation or warranty that would have a
material adverse effect on Mallinckrodt Veterinary's or the Offeror's ability
to perform its obligations under the Merger Agreement, and which is not cured
within five business days following receipt by Mallinckrodt Veterinary or the
Offeror of notice from the Company of the breach; or (iv) if Mallinckrodt
Veterinary or the Offeror fails to comply in any material respect with any of
its material obligations or covenants contained in the Merger Agreement,
including, without limitation, the obligation of the Offeror to purchase Shares
pursuant to the Offer, unless such a failure results from a breach by the
Company of any obligation, representation or warranty under the Merger
Agreement, which is not cured within five business days following Mallinckrodt
Veterinary's receipt of notice from the Company of the breach; (c) by
Mallinckrodt Veterinary if (i) the Board of Directors of the Company shall have
failed to recommend, or withdrawn, modified or amended in any material respect
its approval or recommendation of, the Offer or the Merger or shall have
resolved to do any of the foregoing, or shall have failed to reject an
Acquisition Proposal within ten business days after receipt by the Company or
public announcement thereof; or (ii) any of the representations or warranties
made by the Company in the Merger Agreement shall not have been true and
correct in all material respects when made, or shall thereafter ceased to be
true and correct in any material respect as if made as of such later date
(other than representations and warranties made as of a specified date);
provided, however, that all references in the Merger Agreement to the phrases
"knowledge of the Company" and "to the best knowledge of the Company," and
variants thereof, shall be disregarded for the purposes of determining whether
the Company shall have breached its representations and warranties hereunder;
or (iii) the Company shall not in all material respects have performed each
obligation and agreement and complied with each covenant to be performed and
complied with by it under the Merger Agreement, unless such failure results
from a breach of Mallinckrodt Veterinary or the Offeror of any obligation,
representation or warranty hereunder which has not been cured within five
business days following the Company's receipt of notice from Mallinckrodt
Veterinary of the breach; or (iv) the stockholders of the Company do not
approve the Merger at the Stockholder Meeting in accordance with the DGCL, if
such approval is required by the DGCL; or (v) if the Offeror is entitled to
terminate the Offer as a result of the occurrence of any event described below
in Section 15--"Certain Conditions to Offeror's Obligations"; or (d) by either
Mallinckrodt Veterinary or the Company if (i) the Merger has not been effected
on or prior to the close of business on April 30, 1996; provided, however, that
the right to terminate the Merger Agreement pursuant to this clause shall not
be available to any party whose failure to fulfill any obligation under the
Merger Agreement has been the cause of, or resulted in, the failure of the
Merger to have occurred on or prior to the aforesaid date; or (ii) any court of
competent jurisdiction or any other governmental body shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Merger and such order, decree, ruling
or other action shall have become final and non-appealable; or (iii) upon a
vote at a duly held meeting or upon any adjournment thereof, the stockholders
of the Company shall have failed to give any required approval or (iv) as the
result of the failure of any of the conditions to the Offer as set forth in the
Offer to Purchase (see Section 15), the Offer shall have terminated or expired
in accordance with its terms without the Offeror having purchased any Shares
pursuant to the Offer, provided, however, that the right to terminate the
Merger Agreement pursuant to this clause (iv) shall not be available to any
party whose failure to fulfill any of its obligations under the Merger
Agreement results in the failure of any such condition; or (v) Mallinckrodt
Veterinary or the Company shall have reasonably determined that any Offer
condition (other than the Minimum Condition) is not capable of being satisfied
at any time in the future; provided however, that the right to terminate the
Merger Agreement pursuant to this clause (v) shall not be available to any
party whose failure to fulfill any of its obligations under the Merger
Agreement has been the cause of, or resulted in, such Offer condition being
incapable of satisfaction. If the Merger Agreement is terminated, the Merger
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Agreement will become void and there will be no liability or further obligation
on the part of the Offeror, Mallinckrodt Veterinary or the Company or their
respective officers or directors, except for the Company's obligations, under
certain circumstances, to pay the Termination Fee or to reimburse Mallinckrodt
Veterinary for certain expenses and except for the confidentiality obligations
of the parties.
Fees and Expenses. Except as where otherwise provided in the Merger
Agreement, whether or not the Merger is consummated, all costs and expenses
incurred in connection with the Merger Agreement and the transactions
contemplated thereby shall be paid by the party incurring such costs and
expenses. The Company has agreed in the Merger Agreement that, if (i) any
person (other than Mallinckrodt Veterinary or any of its affiliates) shall have
become, prior to the termination of the Merger Agreement, the beneficial owner
of 50% or more of the outstanding Shares, (ii) the Offer shall have expired at
a time when the Minimum Condition shall not have been satisfied and at any time
on or prior to nine months after the date of the expiration of the Offer any
person (other than Mallinckrodt Veterinary or any of its affiliates) shall
acquire beneficial ownership of 50% or more of the outstanding Shares or shall
consummate an Acquisition Proposal at a price per share less than the sum of
the Offer Price plus the amount determined by dividing $1,500,000 by the number
of Shares outstanding immediately prior thereto, (iii) at any time prior to the
termination of the Merger Agreement any person (other than the Offeror or any
of its affiliates) shall publicly announce any Acquisition Proposal and, at any
time on or prior to nine months after the date of the termination of the Merger
Agreement, shall become the beneficial owner of 50% or more of the outstanding
Shares or shall consummate an Acquisition Proposal, or (iv) the Company
terminates the Merger Agreement in accordance with clause (b) (ii) set forth
above under "Termination", then the Company shall, in the case of clause (i),
(ii) or (iii) above, promptly, but in no event later than two business days
after the first of such events to occur, or, in the case of clause (iv), at or
prior to the time of such termination, pay Mallinckrodt Veterinary the sum of
$1,500,000 (the "Termination Fee"). If the Company fails to pay such amount
when due, which failure is finally determined by a court of competent
jurisdiction, Mallinckrodt Veterinary shall be entitled to the payment from the
Company, in addition to any such amount, of any legal fees and expenses
incurred in procuring such judicial determination.
If (i) the Merger Agreement is terminated pursuant to clause (b)(ii) set
forth above under "Termination" or clause (c)(i), (c)(ii) (but only if the
Merger Agreement is terminated because the representations or warranties of the
Company were not true and correct in all material respects when made (other
than those qualified by "knowledge of the Company" or "to the best knowledge of
the Company")), (c)(iii) or (c)(iv) as set forth above under "Termination" or
(ii) at any time prior to the termination of the Merger Agreement, any person
(other than Mallinckrodt Veterinary or any of its affiliates) shall publicly
announce any Acquisition Proposal and, at any time on or prior to six months
after the termination of the Merger Agreement, shall become the beneficial
owner of 50% or more of the outstanding Shares or shall consummate an
Acquisition Proposal, the Company shall reimburse Mallinckrodt Veterinary and
the Offeror (not later than two business days after submission of statements
therefor) for all documented costs and expenses (including without limitation,
all legal, investment banking, printing, depositary and related fees and
expenses) (the "Expenses"); provided, however, that the amount of Expenses to
be paid to Mallinckrodt Veterinary and the Offeror shall not exceed $750,000;
provided, further, that the amount of the Expenses paid shall be credited
against the Termination Fee; and provided, further, that if the Company has
paid the Termination Fee prior to any payment of Expenses, then no Expenses
shall be payable.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will, among other things, prior to the Effective Time (a)(i)
declare, set aside or pay any dividends or make any other actual, constructive
or deemed distributions in respect of any of its capital stock, or otherwise
make
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any payments to stockholders of the Company in their capacity as such, other
than dividends payable to the Company declared by any of the Company's
subsidiaries, (ii) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or (iii) except as
disclosed by the Company to Mallinckrodt Veterinary pursuant to the Merger
Agreement, purchase, redeem or otherwise acquire any shares of capital stock of
the Company or any of its subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities; or
(b) issue, deliver, sell, pledge, dispose of or otherwise encumber any shares
of its capital stock, any other voting securities or equity equivalent or any
securities convertible into, or any rights, warrants or options to acquire, any
such shares, voting securities or convertible securities or equity equivalent
(other than, in the case of the Company, the issuance of Shares during the
period from the date of the Merger Agreement through the Effective Time upon
the exercise of certain outstanding stock options of the Company issued
pursuant to the Stock Plans on the date of the Merger Agreement in accordance
with their current terms).
15. CERTAIN CONDITIONS TO THE OFFEROR'S OBLIGATIONS.
Notwithstanding any other term of the Offer or the Merger Agreement, the
Offeror shall not be required to accept for payment or pay for, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c) of
the Exchange Act, any Shares not theretofore accepted for payment or paid for
and may terminate or amend the Offer as to such Shares unless (i) there shall
have been validly tendered and not withdrawn prior to the expiration of the
Offer that number of Shares which would represent at least a majority of the
outstanding Shares on a fully diluted basis and (ii) any waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), applicable to the purchase of Shares pursuant to the Offer shall have
expired or been terminated. Furthermore, notwithstanding any other term of the
Offer or the Merger Agreement, the Offeror shall not be required to accept for
payment or, subject as aforesaid, to pay for any Shares not theretofore
accepted for payment or paid for, and may terminate or amend the Offer if at
any time on or after the date of the Merger Agreement and before the acceptance
of such Shares for payment or the payment therefor, any of the following
conditions exist or shall occur and remain in effect:
(a) there shall have been instituted or pending any action or proceeding
by any governmental, regulatory or administrative agency or authority,
which (i) seeks to challenge the acquisition by the Offeror of Shares
pursuant to the Offer, restrain, prohibit or delay the making or
consummation of the Offer or the Merger, or obtain any material damages in
connection therewith, (ii) seeks to make the purchase of or payment for
some or all of the Shares pursuant to the Offer or the Merger illegal,
(iii) seeks to impose material limitations on the ability of the Offeror
(or any of its affiliates) effectively to acquire or hold, or to require
Mallinckrodt Veterinary or the Company or any of their respective
affiliates or subsidiaries to dispose of or hold separate, any material
portion of the assets or the business of Mallinckrodt Veterinary and its
affiliates taken as a whole or the Company and its subsidiaries taken as a
whole, or (iv) seeks to impose material limitations on the ability of the
Offeror (or its affiliates) to exercise full rights of ownership of the
Shares purchased by it, including, without limitation, the right to vote
the Shares purchased by it on all matters properly presented to the
stockholders of the Company; or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any state, federal or
foreign government or governmental authority or by any court, domestic or
foreign, any statute, rule, regulation, judgment, decree, order or
injunction, that could reasonably be expected to, in the judgment of
Mallinckrodt Veterinary, directly or indirectly, result in any of the
consequences referred to in clauses (i) through (iv) of subsection (a)
above; or
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United
27
<PAGE>
States, (ii) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) the commencement
of a war, armed hostilities or other international or national calamity
directly or indirectly involving the United States which would reasonably
be expected to have a Material Adverse Effect on the Company or prevent (or
materially delay) the consummation of the Offer, (iv) any limitation
(whether or not mandatory) by any governmental or regulatory authority on,
or any other event which, in the reasonable judgment of Mallinckrodt
Veterinary, has had a material adverse effect on the extension of credit by
banks or other lending institutions in the United States, or (v) from the
date of the Merger Agreement through the date of termination or expiration
of the Offer, a decline of at least 25% in either the Dow Jones Industrial
Average or the Standard & Poor's 500 Index; or
(d) the Company and Mallinckrodt Veterinary shall have reached an
agreement or understanding that the Offer or the Merger Agreement be
terminated or the Merger Agreement shall have been terminated in accordance
with its terms; or
(e) any of the representations and warranties made by the Company in the
Merger Agreement shall not have been true and correct in all material
respects when made, or shall thereafter have ceased to be true and correct
in any material respect as if made as of such later date (other than
representations and warranties made as of a specified date), or the Company
shall not in all material respects have performed each obligation and
agreement and complied with each covenant to be performed and complied with
by it under the Merger Agreement, which failure to be true and correct or
such failure to perform or comply has not been cured within five business
days following the Company's receipt of notice from Mallinckrodt Veterinary
of notice of the breach and such failure to be true and correct or such
failure to perform or comply shall be reasonably expected to have a
Material Adverse Effect on the Company; provided, however, that all
references in the Merger Agreement to the phrases "knowledge of the
Company" and "to the best knowledge of the Company," and variants thereof,
shall be disregarded for the purposes of determining whether the Company
shall have breached its representations, warranties and covenants resulting
in the ability of Mallinckrodt Veterinary to terminate the Merger Agreement
pursuant to this clause (e); or
(f) the Company's Board of Directors shall have modified or amended its
recommendation of the Offer in any manner adverse to Mallinckrodt
Veterinary or shall have withdrawn its recommendation of the Offer, or
shall have recommended acceptance of any Acquisition Proposal or shall have
resolved to do any of the foregoing, or shall have failed to reject any
Acquisition Proposal within ten business days after receipt by the Company
or public announcement thereof; or
(g) (i) any corporation, entity, person or "group" (as defined in Section
13(d)(3) of the Exchange Act) other than Mallinckrodt Veterinary, shall
have acquired beneficial ownership of 50% or more of the outstanding
Shares, or shall have been granted any options or rights, conditional or
otherwise, to acquire a total of 50% or more of the outstanding Shares;
(ii) any new group shall have been formed which beneficially owns 50% or
more of the outstanding Shares; or (iii) any person (other than
Mallinckrodt Veterinary or one or more of its affiliates) shall have
entered into an agreement in principle or definitive agreement with the
Company with respect to a tender or exchange offer for any Shares or a
merger, consolidation or other business combination with or involving the
Company; or
(h) there shall have occurred a Material Adverse Change to the Company.
The foregoing conditions are for the sole benefit of Mallinckrodt Veterinary
and may be asserted by Mallinckrodt Veterinary regardless of the circumstances
giving rise to any such condition and may be waived by Mallinckrodt Veterinary,
in whole or in part, at any time and from time to time, in the sole discretion
of Mallinckrodt Veterinary. The failure by Mallinckrodt Veterinary at any time
to exercise any of the foregoing rights will not be deemed a waiver of any
right, the waiver of such right with respect to
28
<PAGE>
any particular facts or circumstances shall not be deemed a waiver with respect
to any other facts or circumstances, and each right will be deemed an ongoing
right which may be asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be
returned by the Depositary to the tendering stockholders.
16. CERTAIN LEGAL MATTERS.
Except as set forth in this Section, the Offeror is not aware of any approval
or other action by any governmental or administrative agency which would be
required for the acquisition or ownership of Shares by the Offeror as
contemplated herein. Should any such approval or other action be required, it
will be sought, but the Offeror has no current intention to delay the purchase
of Shares tendered pursuant to the Offer pending the outcome of any such
matter, subject, however, to the Offeror's right to decline to purchase Shares
if any of the conditions specified in Section 15 shall have occurred. There can
be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions, or that adverse
consequences might not result to the Company's business or that certain parts
of the Company's business might not have to be disposed of if any such
approvals were not obtained or other action taken.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares under the Offer may be consummated following the
expiration of a 15-day waiting period following the filing by Mallinckrodt
Group of a Notification and Report Form with respect to the Offer, unless
Mallinckrodt Group receives a request for additional information or documentary
material from the Department of Justice, Antitrust Division (the "Antitrust
Division") or the Federal Trade Commission ("FTC") or unless early termination
of the waiting period is granted. Mallinckrodt Group, made such a filing on
September 29, 1995 and, accordingly, the initial waiting period will expire at
11:59 p.m., New York City time, on October 14, 1995. If, within the initial 15-
day waiting period, either the Antitrust Division or the FTC request additional
information or material from Mallinckrodt Group concerning the Offer, the
waiting period will be extended to the tenth calendar day after the date of
substantial compliance by Mallinckrodt Group with such request. Complying with
a request for additional information or material can take a significant amount
of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Offeror's proposed acquisition
of the Company. At any time before or after the Offeror's acquisition of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as either deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger or seeking the divestiture of Shares
acquired by the Offeror or the divestiture of substantial assets of the Company
or its subsidiaries or Mallinckrodt Group or its subsidiaries. Private parties
may also bring legal action under the antitrust laws under certain
circumstances. There can be no assurance that a challenge to the Offer on
antitrust grounds will not be made, or, if such a challenge is made, of the
result thereof.
If any applicable waiting period under the HSR Act has not expired or been
terminated prior to the Expiration Date, the Offeror will not be obligated to
proceed with the Offer or the purchase of any Shares not theretofore purchased
pursuant to the Offer. See Section 15.
State Takeover Laws. The Company is incorporated under the laws of the State
of Delaware. In general, Section 203 of the DGCL ("Section 203") prevents an
"interested stockholder" (including a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) from engaging
in a "business combination" (defined to include mergers and certain other
actions) with
29
<PAGE>
a Delaware corporation for a period of three years following the date such
person became an interested stockholder unless, among other things, the
"business combination" is approved by the Board of Directors of such
corporation prior to such date. The Company's Board of Directors has approved
the Offer and the Merger. Accordingly, Section 203 is inapplicable to the Offer
and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects in such states. In Edgar v. MITE Corp., in 1982, the Supreme
Court of the United States (the "U.S. Supreme Court") invalidated on
constitutional grounds the Illinois Business Takeover statute, which, as a
matter of state securities law, made takeovers of corporations meeting certain
requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of
America, the U.S. Supreme Court held that the State of Indiana may, as a matter
of corporate law and, in particular, with respect to those aspects of corporate
law concerning corporate governance, constitutionally disqualify a potential
acquirer from voting on the affairs of a target corporation without the prior
approval of the remaining stockholders. The state law before the U.S. Supreme
Court was by its terms applicable only to corporations that had a substantial
number of stockholders in the state and were incorporated there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. The Offeror does not know whether any of these laws will, by their terms,
apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, the Offeror will take
such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court proceedings.
In the event it is asserted that one or more state takeover laws is applicable
to the Offer or the Merger, and an appropriate court does not determine that it
is inapplicable or invalid as applied to the Offer, the Offeror might be
required to file certain information with, or receive approvals from, the
relevant state authorities. In addition, if enjoined, the Offeror might be
unable to accept for payment any Shares tendered pursuant to the Offer, or be
delayed in continuing or consummating the Offer and the Merger. In such case,
the Offeror may not be obligated to accept for payment any Shares tendered. See
Section 15.
17. FEES AND EXPENSES.
Neither the Offeror, Mallinckrodt Veterinary nor Mallinckrodt Group, nor any
of their officers, directors, stockholders, agents or other representatives,
will pay any fees or commissions to any broker, dealer or other person (other
than the Dealer Managers, the Information Agent and the Depositary) for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers,
commercial banks and trust companies and other nominees will, upon request, be
reimbursed by the Offeror for customary mailing and handling expenses incurred
by them in forwarding materials to their customers.
Goldman, Sachs & Co. ("Goldman Sachs") is acting as Dealer Managers in
connection with the Offer and has provided certain financial advisory services
to Mallinckrodt Veterinary and the Offeror in connection with the proposed
acquisition of the Shares. Pursuant to its engagement letter with Goldman
Sachs, Mallinckrodt Veterinary paid Goldman Sachs a fee of $250,000, $100,000
of which was paid upon the execution of the engagement letter and the remainder
of which was paid upon the delivery to Mallinckrodt Veterinary and Mallinckrodt
Group of an opinion with respect to the consideration to be paid to the
Company's stockholders pursuant to the Offer and the Merger. In addition, the
Offeror has agreed to reimburse Goldman Sachs for certain reasonable out-of-
pocket expenses incurred by Goldman Sachs in connection with the Offer,
including the reasonable fees and disbursements of their counsel, and to
indemnify Goldman Sachs against certain liabilities and expenses. Goldman Sachs
is not receiving any separate fee for acting as Dealer Managers in connection
with the Offer. From time to time, Goldman Sachs performs investment banking
services for Mallinckrodt Group, for which Goldman Sachs is separately
compensated.
30
<PAGE>
The Offeror has retained Georgeson & Company Inc., as Information Agent, and
First Chicago Trust Company of New York, as Depositary, in connection with the
Offer. The Information Agent and the Depositary will receive reasonable and
customary compensation for their services hereunder and reimbursement for their
reasonable out-of-pocket expenses. The Information Agent and the Depositary
will also be indemnified by the Offeror against certain liabilities in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telex, telegraph and personal interviews and may request brokers,
dealers and other nominee stockholders to forward materials relating to the
Offer to beneficial owners of Shares.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the securities, blue sky
or other laws of such jurisdiction. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of the Offeror by the
Dealer Managers or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Offeror other than as contained in this Offer
to Purchase or in the Letter of Transmittal and, if any such information or
representation is given or made, it should not be relied upon as having been
authorized by the Offeror.
The Offeror, Mallinckrodt Veterinary and Mallinckrodt Group have filed with
the Commission the Schedule 14D-1, pursuant to Section 14(d)(1) of the Exchange
Act and Rule 14d-1 promulgated thereunder, furnishing certain information with
respect to the Offer. Such Schedule 14D-1 and any amendments thereto, including
exhibits, may be examined and copies may be obtained at the same places and in
the same manner as set forth with respect to the Company in Section 8 (except
that they will not be available at the regional offices of the Commission).
Mallinckrodt Veterinary
Acquisitions, Inc.
September 29, 1995
31
<PAGE>
ANNEX I
CERTAIN INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF MALLINCKRODT GROUP, MALLINCKRODT VETERINARY AND THE OFFEROR
1. DIRECTORS AND EXECUTIVE OFFICERS OF MALLINCKRODT GROUP. Set forth below
are the name, current business address, citizenship, present principal
occupation or employment and five-year employment history of each director and
executive officer of Mallinckrodt Group. Unless otherwise indicated, each such
person's business address is 7733 Forsyth Boulevard, St. Louis, Missouri 63105.
Except for Herve M. Pinet, who is a citizen of France, all persons listed below
are citizens of the United States.
<TABLE>
<CAPTION>
PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL
POSITIONS HELD DURING PAST FIVE YEARS, AND
NAME AND BUSINESS ADDRESS BUSINESS ADDRESS THEREOF
------------------------- ------------------------------------------
<S> <C>
Barbara A. Abbett................... Vice President, Communications of Mallinc-
krodt Group since April 1994; Vice Presi-
dent and Senior Partner with Fleishman-
Hilliard, Inc., 200 North Broadway, St.
Louis, Missouri 63102, from 1979 to April
1994.
Ashok Chawla........................ Vice President, Strategic Management of
Mallinckrodt Group since July 1991; Vice
President Strategic Planning and Business
Development of Mallinckrodt Veterinary, 421
East Hawley Street, Mundelein, Illinois
60060, from August 1990 to July 1991.
Paul D. Cottone..................... Senior Vice President of Mallinckrodt Group
421 East Hawley Street since October 1994; President and Chief Ex-
Mundelein, Illinois 60060 ecutive Officer and Director of Mallinc-
krodt Veterinary since October 1994; Vice
President, U.S. Operations of the Merck &
Co. AgVet Division, Metropolitan Corporate
Plaza, 485 Rt. 1 South, Building F, Isle,
New Jersey 08830, from 1993 to October
1994; Executive Director, International Op-
erations of the Merck & Co. AgVet Division
from 1987 to 1993.
Bruce K. Crockett................... Vice President, Human Resources of Mallinc-
krodt Group since March 1995; Vice Presi-
dent, Organization Development at Eastern
Enterprises, 9 Riverside Road, Weston, Mas-
sachusetts 02193, from 1990 to February
1995.
C. Ray Holman....................... Chairman of Mallinckrodt Group since Octo-
ber 1994; President, Chief Executive Offi-
cer and Director of Mallinckrodt Group
since December 1992; Vice President of Mal-
linckrodt Group from October 1990 to Decem-
ber 1992; President and Chief Executive Of-
ficer, Mallinckrodt Medical, Inc., 675 Mc-
Donnell Boulevard, St. Louis, Missouri
63134 from January 1989 until December
1992; Director of Laclede Gas Company,
Boatmen's Bancshares, Inc. and Barnes Hos-
pital.
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL
POSITIONS HELD DURING PAST FIVE YEARS, AND
NAME AND BUSINESS ADDRESS BUSINESS ADDRESS THEREOF
------------------------- ------------------------------------------
<S> <C>
Roger A. Keller..................... Vice President, Secretary and General Coun-
sel of Mallinckrodt Group since July 1993;
Senior Vice President and General Counsel
of Mallinckrodt Medical, Inc., 675 McDon-
nell Boulevard, St. Louis, Missouri 63134
from September 1989 to March 1992.
Robert G. Moussa.................... Senior Vice President of Mallinckrodt Group
675 McDonnell Boulevard since October 1993; Vice President of Mal-
St. Louis, Missouri 63134 linckrodt Group from December 1992 to Octo-
ber 1993; President and Chief Executive Of-
ficer of Mallinckrodt Medical, Inc. since
December 1992; Senior Vice President and
Group Executive, Mallinckrodt Medical, Inc.
from September 1992 to December 1992; Group
Vice President, International, Mallinckrodt
Medical, Inc., from January 1989 to Septem-
ber 1992.
Mack G. Nichols..................... Senior Vice President of Mallinckrodt Group
16305 Swingley Ridge Dr. since October 1993; Vice President of Mal-
Chesterfield, Missouri 63017 linckrodt Group from October 1990 to Octo-
ber 1993; President and Chief Executive Of-
ficer of Mallinckrodt Chemical, Inc. since
January 1989.
Michael A. Rocca.................... Senior Vice President, Chief Financial Of-
ficer and Treasurer of Mallinckrodt Group
since April 1994; Corporate Vice President
and Treasurer of Honeywell Inc., Honeywell
Plaza, P.O. Box 5240, Minneapolis, Minne-
sota 55440 from March 1992 to April 1994;
Vice President, Finance for Honeywell Eu-
rope, S.A., 3 Avenue du Bourget, Brussels,
Belgium, from 1990 to 1992.
William B. Stone.................... Vice President and Controller of Mallinc-
krodt Group since November 1990 and Vice
President of Mallinckrodt, Inc. since April
1983; Assistant Controller and Corporate
Staff Vice President of Mallinckrodt Group
from October 1989 to November 1990.
Raymond F. Bentele.................. Director of Mallinckrodt Group since 1990;
Executive Vice President of Mallinckrodt
Group from 1989 until his retirement in De-
cember 1992; President and Chief Executive
Officer of Mallinckrodt, Inc. from 1981 un-
til his retirement in 1992; Director of
Kellwood Company, Leggett & Platt, Inc. and
IMC Global Inc.
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL
NAME AND BUSINESS POSITIONS HELD DURING PAST FIVE YEARS, AND
ADDRESS BUSINESS ADDRESS THEREOF
----------------- ------------------------------------------
<S> <C>
William L. Davis, III... Director of Mallinckrodt Group since Febru-
Emerson Electric Co. ary 1995; Senior Executive Vice President
8000 W. Florissant of Emerson Electric Co. since 1993; Execu-
St. Louis, Missouri tive Vice President of Emerson Electric Co.
63136 from 1988 to 1993.
Ronald G. Evens, M.D.... Director of Mallinckrodt Group since 1990;
Mallinckrodt Institute Director of the Mallinckrodt Institute of
of Radiology Radiology at Washington University, St.
510 South Kingshighway Louis, Missouri; Head of the University's
St. Louis, MO 63110 Department of Radiology and Mallinckrodt
Professor of Radiology of the University's
Medical School; Professor of Medical Eco-
nomics at Olin School of Business; Vice
Chancellor for Financial Affairs of the
University from 1988 to 1990; Director of
The Boatmen's National Bank of St. Louis
and Right Choice of Missouri (formerly,
Blue Cross/Blue Shield of Missouri).
Alec Flamm.............. Director of Mallinckrodt Group since 1986;
Retired Vice Chairman, President and Chief
Operating Officer of Union Carbide Corpora-
tion; held various positions, including di-
rector, at Union Carbide Corporation from
1949 until retirement from board of direc-
tors in 1986.
Roberta S. Karmel....... Director of Mallinckrodt Group since 1980;
Kelley, Drye & Warren Professor of Law and Co-Director, Center
101 Park Avenue for the Study of International Business
New York, New York 10178 Law, Brooklyn Law School since 1985; Of
Counsel, Kelley Drye & Warren, since Janu-
ary 1, 1995; Partner of Kelley Drye & War-
ren from 1987 to 1994; Director of Kemper
National Insurance Companies.
Claudine B. Malone...... Director of Mallinckrodt Group since 1994;
Financial & Management President of Financial & Management Con-
Consulting sulting; Director of Dell Computer Corpora-
7570 Potomac Fall Road tion, Hannaford Bros. Co., Hasbro, Inc.,
McLean, Virginia 22102 Houghton Mifflin Company, Lafarge Corpora-
tion, The Limited Inc., Lowe's Companies,
Inc., Science Applications International
Corporation and The Union Pacific Corpora-
tion.
Morton Moskin........... Director of Mallinckrodt Group since 1973;
White & Case Consultant; Retired partner of White &
1155 Avenue of the Amer- Case; Partner of White & Case from 1962 to
icas 1994.
New York, New York 10036
Herve M. Pinet.......... Director of Mallinckrodt Group since 1973;
c/o Compagnie Bancaire International consultant; Senior Advisor,
5 Avenue Kleber Merrill Lynch & Co., North Tower--31st
75116 Paris, FRANCE Floor, World Financial Center, New York,
New York 10281, from 1984 until May 1991.
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL
POSITIONS HELD DURING PAST FIVE YEARS, AND
NAME AND BUSINESS ADDRESS BUSINESS ADDRESS THEREOF
------------------------- ------------------------------------------
<S> <C>
Brian M. Rushton, Ph. D............. Director of Mallinckrodt Group since 1994;
3366 Bingen Road President of the American Chemical Society;
Bethlehem, PA 18015 Senior Vice President, Research and Devel-
opment of Air Products and Chemicals, Inc.,
7201 Hamilton Boulevard, Allentown, Penn-
sylvania 18195, from 1992 to 1993; Vice
President of Research and Development of
Air Products and Chemicals, Inc. from 1981
to 1992.
Daniel R. Toll...................... Director of Mallinckrodt Group since 1985;
Corona Corporation Corporate and civic director; Director of
135 S. LaSalle St.--Suite 1117 Brown Group, Inc., A.P. Green Industries,
Chicago, IL 60603 Inc., Kemper National Insurance Companies,
Kemper Corporation, Lincoln National Con-
vertible Securities Fund, Inc., Lincoln Na-
tional Income Fund, Inc. and NICOR, Inc.
Anthony Viscusi..................... Director of Mallinckrodt Group since April
Vasomedical, Inc. 1995; President, Chief Executive Officer
150 Motor Parkway, Suite 408 and director of Vasomedical, Inc. since
Hauppauge, New York 11788 June 1994; Senior Vice President, Worldwide
Marketing for Merck & Co., Inc. AgVet Divi-
sion; Metropolitan Corporate Plaza, 485 Rt.
1 South, Building F, Isle, New Jersey
08830, from 1987 to 1993.
</TABLE>
A-4
<PAGE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF MALLINCKRODT VETERINARY. Set forth
below are the name, current business address, citizenship, present principal
occupation or employment and five-year employment history of each director and
executive officer of Mallinckrodt Veterinary. Unless otherwise indicated, each
such person's business address is 421 East Hawley Street, Mundelein, Illinois
60060. Except for Peter W. Baldwin, who is a citizen of the United Kingdom, and
D. Hugh McIntyre, who is a citizen of the United Kingdom and Argentina, all
persons listed below are citizens of the United States.
<TABLE>
<CAPTION>
PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL
POSITIONS HELD DURING PAST FIVE YEARS, AND
NAME AND BUSINESS ADDRESS BUSINESS ADDRESS THEREOF
------------------------- ------------------------------------------
<S> <C>
Edwin J. Andrews, M.D............... Senior Vice President, Science & Technology
of Mallinckrodt Veterinary since 1995; Uni-
versity of Pennsylvania--Dean and Professor
of Pathology, School of Veterinary Medi-
cine, 3800 Spruce Street, Philadelphia,
Pennsylvania 19104, from 1987 to 1994.
Peter W. Baldwin.................... Vice President, Operations of Mallinckrodt
Veterinary since 1993; Director of Opera-
tions, Europe from 1990 to 1993.
David S. Benson..................... Vice President, Asia Pacific of Mallinc-
Mallinckrodt Veterinary Plc. Ltd. krodt Veterinary since 1995; General Manag-
101 Thomson Road er, Asia from 1993 to 1995; Area Manager
#23-01 United Square Northeast Asia from 1991 to 1993; Market
Singapore 1130 Development Manager, Asia from 1989 to
1991.
Paul D. Cottone..................... Senior Vice President of Mallinckrodt Group
since October 1994; President and Chief Ex-
ecutive Officer and Director of Mallinc-
krodt Veterinary since October 1994; Vice
President, U.S. Operations of the Merck
AgVet Division, Metropolitan Corporate Pla-
za, 485 Rt. 1 South, Building F, Isle, New
Jersey 08830, from 1993 to October 1994;
Executive Director, International Opera-
tions of the Merck AgVet Division from 1987
to 1993.
Thomas L. Farquer................... Vice President, Law of Mallinckrodt Veteri-
nary since 1990.
David W. Froesel, Jr................ Vice President, Finance and Administration
of Mallinckrodt Veterinary since 1993; Cor-
porate Controller Mallinckrodt Medical,
Inc., 675 McDonnell Boulevard, St. Louis,
Missouri 63134, from 1991 to 1993; Corpo-
rate Assistant Controller of Mallinckrodt
Medical, Inc. from 1990 to 1991.
Beverley L. Hayes................... Vice President, Human Resources of Mallinc-
krodt Veterinary since 1994; Vice Presi-
dent, Organization and Human Resources of
Mallinckrodt Group from 1990 to 1994.
</TABLE>
A-5
<PAGE>
<TABLE>
<CAPTION>
PRESENT OCCUPATION OR EMPLOYMENT, MATERIAL
POSITIONS HELD DURING PAST FIVE YEARS, AND
NAME AND BUSINESS ADDRESS BUSINESS ADDRESS THEREOF
------------------------- ------------------------------------------
<S> <C>
Thomas S. Lytle..................... Vice President, North America of Mallinc-
krodt Veterinary since 1995; Vice Presi-
dent, Marketing of Pfizer, Inc., One Pfizer
Way, Lee's Summit, Missouri 64081, from
1991 to 1995; Vice President, Marketing of
Lederle Laboratories, One Cyanamid Plaza,
Wayne, New Jersey 07474, from 1989 to 1991.
Kermit E. McCormick................. Senior Vice President, Feed Ingredients of
Mallinckrodt Veterinary since 1995; Vice
President and General Manager, Feed Ingre-
dients from 1992 to 1994; General Manager,
Feed Ingredients from 1991 to 1992; Direc-
tor of Sales, Feed Ingredients from 1985 to
1991.
D. Hugh McIntyre.................... Vice President, Latin America of Mallinc-
Mallinckrodt Veterinary Ltda. krodt Veterinary since 1995; General Manag-
Av. Sir Henry Wellcome, 335 er, South America from 1993 to 1994; Gen-
06700.00 Lotin, SP eral Manager, Pitman-Moore, Brasil from
Brazil 1990 to 1993.
David Morra......................... Senior Vice President, Europe of Mallinc-
Mallinckrodt Limited Europe krodt Veterinary since 1995; Group Vice
Breakspear Road South President, Europe/Australia, New Zealand
Harefield, Urbridge from 1994 to 1995; Vice President and Gen-
Middlesex, UB9 6LS eral Manager, Cardiology, U.S. of Mallinc-
United Kingdom krodt Medical, Inc., 675 McDonnell Boule-
vard St. Louis, Missouri 63134, from 1991
to 1994; General Manager, Cardiology Divi-
sion of Mallinckrodt Medical, Inc. from
1989 to 1991.
</TABLE>
3. DIRECTOR AND EXECUTIVE OFFICERS OF THE OFFEROR. Unless otherwise
indicated, for each person identified below all information concerning the
current business address, present principal occupation or employment and five-
year employment history for such person is the same as the information given
above. Each person was elected in September 1995. Except for Peter W. Baldwin,
who is a citizen of the United Kingdom, all persons listed below are citizens
of the United States.
<TABLE>
<S> <C>
Edwin J. Andrews......................... Vice President of the Offeror.
Peter W. Baldwin......................... Vice President of the Offeror.
Paul D. Cottone.......................... President and Director of the Offeror.
Thomas L. Farquer........................ Secretary of the Offeror.
David W. Froesel, Jr..................... Vice President of the Offeror.
</TABLE>
A-6
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates for Shares and any other required documents should
be sent or delivered by each stockholder of the Company or his broker, dealer,
commercial bank, trust company or other nominee to the Depositary at one of the
addresses set forth below:
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
----------------
By Mail: By Hand or Overnight Delivery:
Tenders & Exchanges Tenders & Exchanges
Suite 4660-SYN Suite 4680-SYN
P.O. Box 2559 14 Wall Street
Jersey City, New Jersey 07303-2559 8th Floor
New York, New York 10005
Facsimile for Eligible Institutions:
(201) 222-4720 or 4721
To confirm receipt of notice of guaranteed delivery:
(201) 222-4707
Any questions or requests for assistance or additional copies of the Offer to
Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery may be
directed to the Information Agent or the Dealer Manager at their respective
telephone numbers and locations listed below. Stockholders may also contact
their broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT: (212) 440-9800
ALL OTHERS CALL TOLL-FREE: (800) 223-2064
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
<PAGE>
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
SYNTRO CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED SEPTEMBER 29, 1995
BY
MALLINCKRODT VETERINARY ACQUISITIONS, INC.
A WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT VETERINARY, INC.
AND
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT GROUP INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 27, 1995,
UNLESS THE OFFER IS EXTENDED.
The Depositary:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Hand or Overnight Courier: By Mail:
Tenders & Exchanges Tenders & Exchanges
Suite 4680-SYN Suite 4660-SYN
14 Wall Street P.O. Box 2559
8th Floor Jersey City, NJ 07303-2559
New York, New York 10005
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OTHER THAN AS SET FORTH
ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders of Syntro
Corporation if certificates are to be forwarded herewith or, unless an Agent's
Message (as defined in the Offer to Purchase) is utilized, if delivery of
Shares (as defined below) is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company, the Midwest Securities
Trust Company or the Philadelphia Depository Trust Company (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3 of the Offer to Purchase (as defined
below).
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their Shares and all other documents required hereby to the
Depositary by the Expiration Date (as defined in the Offer to Purchase), or who
cannot comply with the book-entry transfer procedures on a timely basis, may
nevertheless tender their Shares pursuant to the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase. See Instruction 2.
<PAGE>
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND
ADDRESS(ES)
OF
REGISTERED
HOLDER(S)
(PLEASE
FILL IN, IF SHARES TENDERED
BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------
NUMBER OF
SHARE SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
<S> <C> <C> <C>
TOTAL SHARES
- ------------------------------------------------------
</TABLE>
*Need not be completed by stockholders tendering by book-entry transfer.
**Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution __________________________________________________
Account No. _________________________________________________________________ at
[_] The Depository Trust Company
[_] Midwest Securities Trust Company
[_] Philadelphia Depository Trust Company
Transaction Code No. ___________________________________________________________
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s) ____________________________________________
Date of Execution of Notice of Guaranteed Delivery _____________________________
Window Ticket Number (if any) __________________________________________________
Name of Institution which Guaranteed Delivery __________________________________
If delivery is by book-entry transfer __________________________________________
Name of Tendering Institution ______________________________________________
Account No. _____________________________________________________________ at
[_] The Depository Trust Company
[_] Midwest Securities Trust Company
[_] Philadelphia Depository Trust Company
Transaction Code No. ___________________________________________________________
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Mallinckrodt Veterinary Acquisitions, Inc.
(the "Offeror"), a Delaware corporation and a wholly owned subsidiary of
Mallinckrodt Veterinary, Inc., a Delaware corporation ("Mallinckrodt
Veterinary"), and an indirect wholly owned subsidiary of Mallinckrodt Group
Inc., a New York corporation, the above-described shares of common stock, $0.01
par value per share (the "Shares") of Syntro Corporation, a Delaware
corporation (the "Company"), pursuant to the Offeror's offer to purchase all of
the outstanding Shares at a purchase price of $3.55 per Share, net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated September 29, 1995 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together with the Offer to Purchase constitute the "Offer").
The Offer is being made in connection with the Agreement and Plan of Merger,
dated as of September 25, 1995, among Mallinckrodt Veterinary, the Offeror and
the Company.
Subject to and effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and transfers
to or upon the order of the Offeror all right, title and interest in and to all
the Shares that are being tendered hereby (and any and all other Shares or
other securities issued or issuable in respect thereof on or after September
22, 1995) and appoints the Depositary the true and lawful agent and attorney-
in-fact of the undersigned with respect to such Shares (and all such other
Shares or securities), with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to (a)
deliver certificates for such Shares (and all such other Shares or securities),
or transfer ownership of such Shares (and all such other Shares or securities)
on the account books maintained by any of the Book-Entry Transfer Facilities,
together, in any such case, with all accompanying evidences of transfer and
authenticity, to or upon the order of the Offeror, (b) present such Shares (and
all such other Shares or securities) for transfer on the books of the Company
and (c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares (and all such other Shares or securities), all in
accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Roger A. Keller and Thomas L.
Farquer and each of them, the attorneys and proxies of the undersigned, each
with full power of substitution, to exercise all voting and other rights of the
undersigned in such manner as each such attorney and proxy or his substitute
shall in his sole judgment deem proper, with respect to all of the Shares
tendered hereby which have been accepted for payment by the Offeror prior to
the time of any vote or other action (and any and all other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
September 22, 1995) at any meeting of stockholders of the Company (whether
annual or special and whether or not an adjourned meeting) or otherwise. This
proxy is irrevocable and is granted in consideration of, and is effective upon,
the acceptance for payment of such Shares by the Offeror in accordance with the
terms of the Offer. Such acceptance for payment shall revoke any other proxy or
written consent granted by the undersigned at any time with respect to such
Shares (and all such other Shares or other securities or rights), and no
subsequent proxies will be given or written consents will be executed by the
undersigned (and if given or executed, will not be deemed effective).
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any and all other Shares or other securities or rights issued or
issuable in respect of such Shares on or after September 22, 1995) and that
when the same are accepted for payment by the Offeror, the Offeror will acquire
good and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claims. The undersigned
will, upon request, execute and deliver any additional documents deemed by the
Depositary or the Offeror to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby (and all such other
Shares or other securities or rights).
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and
the Offeror upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated under "Special Payment Instructions," please issue
the check for the purchase price of any Shares purchased, and return any Shares
not tendered or not purchased, in the name(s) of the undersigned. Similarly,
unless otherwise indicated under "Special Delivery Instructions," please mail
the check for the purchase price of any Shares purchased and return any
certificates for Shares not tendered or not purchased (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the purchase price of any Shares purchased and return any Shares
not tendered or not purchased in the name(s) of, and mail said check and any
certificates to, the person(s) so indicated. The undersigned recognizes that
the Offeror has no obligation, pursuant to the "Special Payment Instructions,"
to transfer any Shares from the name of the registered holder(s) thereof if the
Offeror does not accept for payment any of the Shares so tendered.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check
for the purchase price of Shares
purchased or certificates for
Shares not tendered or not
purchased are to be issued in the
name of someone other than the
undersigned.
Issue check and/or certificates to:
Name _______________________________
(Please Print)
Address ____________________________
(Zip Code)
____________________________________
(Taxpayer Identification No.)
(See Substitute Form W-9)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if the check
for the purchase price of Shares
purchased or certificates for
Shares not tendered or not
purchased are to be mailed to
someone other than the undersigned
or to the undersigned at an address
other than that shown below the
undersigned's signature(s).
Mail check and/or certificates to:
Name _______________________________
Address ____________________________
____________________________________
(Zip Code)
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, signatures on
all Letters of Transmittal must be guaranteed by a firm that is a bank, broker,
dealer, credit union, savings association or other entity which is a member in
good standing of the Securities Transfer Agents Medallion Program or by any
other bank, broker, dealer, credit union, savings association or other entity
which is an "eligible guarantor institution," as such term is defined in Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended (each of the
foregoing constituting an "Eligible Institution"), unless the Shares tendered
thereby are tendered (i) by a registered holder of Shares who has not completed
either the box labeled "Special Payment Instructions" or the box labeled
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. See Instruction 5. If the certificates are
registered in the name of a person or persons other than the signer of this
Letter of Transmittal, or if payment is to be made or delivered to, or
certificates evidencing unpurchased Shares are to be issued or returned to, a
person other than the registered owner or owners, then the tendered
certificates must be endorsed or accompanied by duly executed stock powers, in
either case signed exactly as the name or names of the registered owner or
owners appear on the certificates or stock powers, with the signatures on the
certificates or stock powers guaranteed by an Eligible Institution as provided
herein. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal
is to be used either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if the
delivery of Shares is to be made by book-entry transfer pursuant to the
procedures set forth in Section 3 of the Offer to Purchase. Certificates for
all physically delivered Shares, or a confirmation of a book-entry transfer
into the Depositary's account at one of the Book-Entry Transfer Facilities of
all Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof) and any
other documents required by this Letter of Transmittal or an Agent's Message in
the case of a book-entry delivery, must be received by the Depositary at one of
its addresses set forth on the front page of this Letter of Transmittal by the
Expiration Date. Stockholders who cannot deliver their Shares and all other
required documents to the Depositary by the Expiration Date must tender their
Shares pursuant to the guaranteed delivery procedures set forth in Section 3 of
the Offer to Purchase. Pursuant to such procedures: (a) such tender must be
made by or through an Eligible Institution; (b) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Offeror, must be received by the Depositary prior to the Expiration Date;
and (c) the certificates for all tendered Shares, in proper form for tender, or
a confirmation of a book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), and any other documents required by this
Letter of Transmittal must be received by the Depositary within three trading
days after the date of execution of such Notice of Guaranteed Delivery, all as
provided in Section 3 of the Offer to Purchase. A "trading day" is any day on
which the National Association of Securities Dealers Automated Quotation
National Market is open for business.
The method of delivery of Shares, the Letter of Transmittal and all other
required documents, including delivery through a Book-Entry Transfer Facility,
is at the option and risk of the tendering stockholder. If delivery is by mail,
registered mail with return receipt requested, properly insured, is
recommended.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal
(or a manually signed facsimile thereof), the tendering stockholder waives any
right to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares Tendered." In
such case, a new certificate for the remainder of the Shares represented by the
old certificate will be sent to the person(s) signing this Letter of
Transmittal unless otherwise provided in the appropriate box on this Letter of
Transmittal, as promptly as practicable following the expiration or termination
of the Offer. All Shares represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
<PAGE>
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made, or
Shares not tendered or not purchased are to be returned, in the name of any
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered
holder(s) of the Shares tendered hereby, the certificate must be endorsed or
accompanied by, appropriate stock powers, in either case, signed exactly as the
name(s) of the registered holder(s) appear(s) on the certificates for such
Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory
to the Offeror of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. The Offeror will pay any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), then the amount of any stock
transfer taxes (whether imposed on the registered holder(s), such other person
or otherwise) payable on account of the transfer to such person will be
deducted from the purchase price unless satisfactory evidence of the payment of
such taxes, or exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. Special Payment and Delivery Instruction. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares not tendered or
not purchased are to be returned, in the name of a person other than the
person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer may request
that Shares not purchased be credited to such account at any of the Book-Entry
Transfer Facilities as such stockholder may designate under "Special Payment
Instructions." If no such instructions are given, any such Shares not purchased
will be returned by crediting the account at the Book-Entry Transfer Facilities
designated above.
8. Substitute Form W-9. The tendering stockholder is required to provide the
Depositary with such stockholder's correct TIN on Substitute Form W-9, which is
provided below, unless an exemption applies. Failure to provide the information
on the Substitute Form W-9 may subject the tendering stockholder to a $50
penalty and to 31% federal income tax backup withholding on the payment of the
purchase price for the Shares.
9. Foreign Holders. Foreign holders must submit a completed IRS Form W-8 to
avoid 31% backup withholding. IRS Form W-8 may be obtained by contacting the
Depositary at one of the addresses on the face of this Letter of Transmittal.
10. Requests for Assistance or Additional Copies. Requests for assistance or
additional copies of the Offer to Purchase and this Letter of Transmittal may
be obtained from the Information Agent or the Dealer Managers at their
respective addresses or telephone numbers set forth below.
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF (TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
THE OFFER TO PURCHASE).
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 the Substitute Form W-9. If such stockholder is an
individual, the TIN is such stockholder's social security number. 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. All exempt recipients (including foreign persons
wishing to qualify as exempt recipients) should see the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the 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 backup withholding results in an
overpayment of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding on payments that are made to
a stockholder with respect to Shares purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of such stockholder's correct
TIN by completing the form certifying that the TIN provided on the Substitute
Form W-9 is correct.
WHAT NUMBER TO GIVE THE DEPOSITARY
The 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.
<PAGE>
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s) of Owner(s)
- --------------------------------------------------------------------------------
Name(s) ________________________________________________________________________
- --------------------------------------------------------------------------------
Capacity (full title) __________________________________________________________
Address ________________________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
Area Code and Telephone Number _________________________________________________
Taxpayer Identification Number _________________________________________________
Dated: __________________________________________________________________ , 1995
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by the person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5).
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY, PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized signature(s) ________________________________________________________
Name ___________________________________________________________________________
Name of Firm ___________________________________________________________________
Address ________________________________________________________________________
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number _________________________________________________
Dated: __________________________________________________________________ , 1995
<PAGE>
PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN: _________________
SUBSTITUTE TIN IN THE BOX AT THE Social Security
RIGHT AND CERTIFY BY
SIGNING AND DATING
BELOW.
Number or Employer
FORM W-9 Identification Number
------------------------------------------------------------
Department of the
Treasury PART 2--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING, SEE THE
Internal Revenue ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
Service IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 AND
COMPLETE AS INSTRUCTED THEREIN.
PAYOR'S REQUEST ------------------------------------------------------------
FOR TAXPAYER CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT
IDENTIFICATION (1) The number shown on this form is my correct TIN (or I
NUMBER ("TIN") am waiting for a number to be issued to me), and (2) I am
AND CERTIFICATION not subject to backup withholding because: (a) I am
exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service ("IRS") that I
am subject to backup withholding as a result of a failure
to report all interest or dividends, or (c) the IRS has
notified me that I am no longer subject to backup
withholding.
Signature: _______________________________________________
Date: ___________________________
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
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 were no longer subject to
backup withholding, do not cross out item (2). (Also see the instructions in
the enclosed Guidelines.)
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR
TIN.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a TIN has not been issued to me,
and either (1) I have mailed or delivered an application to receive a TIN to
the appropriate IRS Center or Social Security Administration Officer or (2)
I intend to mail or deliver an application in the near future. I understand
that if I do not provide a TIN by the time of payment, 31% of all payments
pursuant to the Offer made to me thereafter will be withheld until I provide
a number.
Signature: _______________________________________________________________
Date: _______________________________
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Managers for the Offer are
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
<PAGE>
EXHIBIT (a)(3)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SYNTRO CORPORATION
AT
$3.55 NET PER SHARE
BY
MALLINCKRODT VETERINARY ACQUISITIONS, INC.
A WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT VETERINARY, INC.
AND
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT GROUP INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 27, 1995,
UNLESS THE OFFER IS EXTENDED.
September 29, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Mallinckrodt Veterinary Acquisitions, Inc., a
Delaware corporation (the "Offeror") and a wholly owned subsidiary of
Mallinckrodt Veterinary, Inc., a Delaware corporation ("Mallinckrodt
Veterinary"), and an indirect wholly owned subsidiary of Mallinckrodt Group
Inc., a New York corporation, to act as Dealer Managers in connection with the
Offeror's offer to purchase all outstanding shares of common stock, $0.01 par
value per share (the "Shares"), of Syntro Corporation, a Delaware corporation
(the "Company"), at a purchase price of $3.55 per Share, net to the seller in
cash, without interest, upon the terms and subject to the conditions set forth
in the Offer to Purchase, dated September 29, 1995 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which together constitute the
"Offer") enclosed herewith. The Offer is being made in connection with the
Agreement and Plan of Merger, dated as of September 25, 1995, among
Mallinckrodt Veterinary, the Offeror and the Company (the "Merger Agreement").
Holders of Shares whose certificates for such Shares (the "Certificates") are
not immediately available or who cannot deliver their Certificates and all
other required documents to the Depositary or complete the procedures for book-
entry transfer prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares in your name or in the name of your nominee.
<PAGE>
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated September 29, 1995.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
(with manual signatures) may be used to tender Shares.
3. A letter to stockholders of the Company from J. Donald Todd, the
President and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company and mailed to the
stockholders of the Company.
4. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if neither of the two procedures for tendering Shares set forth in
the Offer to Purchase can be completed on a timely basis.
5. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name, with space provided for
obtaining such clients' instructions with regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS
AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 27, 1995,
UNLESS THE OFFER IS EXTENDED.
Please note the following:
1. The tender price is $3.55 per Share, net to the seller in cash without
interest.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Friday, October 27, 1995, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, there being validly
tendered prior to the expiration of the Offer and not withdrawn a number of
Shares which would constitute at least a majority of the outstanding Shares
on a fully diluted basis. The Offer is also subject to the other terms and
conditions contained in the Offer to Purchase.
5. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof) and
any required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message (as defined in the Offer to Purchase) or other required
documents should be sent to the Depositary and (ii) Certificates representing
the tendered Shares on a timely Book-Entry Confirmation (as defined in the
Offer to Purchase) should be delivered to the Depositary in accordance with the
instructions set forth in the Offer.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration
2
<PAGE>
Date, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
Neither the Offeror, Mallinckrodt Veterinary nor any officer, director,
stockholder, agent or other representative of the Offeror will pay any fees or
commissions to any broker, dealer or other person (other than the Dealer
Managers, the Depositary and the Information Agent as described in the Offer to
Purchase) for soliciting tenders of Shares pursuant to the Offer. The Offeror
will, however, upon request, reimburse you for customary mailing and handling
expenses incurred by you in forwarding any of the enclosed materials to your
clients. The Offeror will pay or cause to be paid any transfer taxes payable on
the transfer of Shares to it, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
Georgeson & Company Inc., the Information Agent for the Offer, Wall Street
Plaza, New York, New York 10005, (212) 440-9800 or Goldman, Sachs & Co., the
Dealer Managers for the Offer, at 85 Broad Street, New York, New York 10004.
Requests for copies of the enclosed materials may be directed to the
Information Agent at the above address and telephone number.
Very truly yours,
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF MALLINCKRODT VETERINARY, THE OFFEROR, THE
DEPOSITARY, THE INFORMATION AGENT, THE DEALER MANAGERS OR ANY AFFILIATE OF ANY
OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY
DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
EXHIBIT (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SYNTRO CORPORATION
AT
$3.55 NET PER SHARE
BY
MALLINCKRODT VETERINARY ACQUISITIONS, INC.
A WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT VETERINARY, INC.
AND
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT GROUP INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 27, 1995,
UNLESS THE OFFER IS EXTENDED.
September 29, 1995
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated September
29, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal
(which together constitute the "Offer") relating to an offer by Mallinckrodt
Veterinary Acquisitions, Inc., a Delaware corporation (the "Offeror") and a
wholly owned subsidiary of Mallinckrodt Veterinary, Inc., a Delaware
corporation ("Mallinckrodt Veterinary"), and an indirect wholly owned
subsidiary of Mallinckrodt Group Inc., a New York corporation, to purchase all
outstanding shares of common stock, par value $0.01 per share (the "Shares") of
Syntro Corporation, a Delaware corporation (the "Company"), at a purchase price
of $3.55 per Share, net to the seller in cash, without interest, upon the terms
and subject to the conditions set forth in the Offer. The Offer is being made
in connection with the Agreement and Plan of Merger, dated as of September 25,
1995, among Mallinckrodt Veterinary, the Offeror and the Company (the "Merger
Agreement"). This material is being forwarded to you as the beneficial owner of
Shares carried by us in your account but not registered in your name.
A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US
FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to tender any or
all of the Shares held by us for your account, upon the terms and conditions
set forth in the Offer.
Please note the following:
1. The tender price is $3.55 per Share, net to you in cash without
interest.
<PAGE>
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Friday, October 27, 1995, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, there being validly
tendered prior to the expiration of the Offer and not withdrawn a number of
Shares which would constitute at least a majority of the outstanding Shares
on a fully diluted basis. The Offer is also subject to the other terms and
conditions contained in the Offer to Purchase.
5. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer.
If you wish to have us tender any or all of the Shares, please so instruct us
by completing, executing, detaching and returning to us the instruction form
contained in this letter. An envelope to return your instruction to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise indicated in such instruction form. PLEASE FORWARD
YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER
YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Offeror by Goldman, Sachs & Co. or by one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SYNTRO CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated September 29, 1995 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer") in connection
with the offer by Mallinckrodt Veterinary Acquisitions, Inc., a Delaware
corporation (the "Offeror") and a wholly owned subsidiary of Mallinckrodt
Veterinary, Inc., a Delaware corporation, and an indirect wholly owned
subsidiary of Mallinckrodt Group Inc., a New York corporation, to purchase all
outstanding shares of common stock, par value $.01 per share ("Shares"), of
Syntro Corporation, a Delaware corporation.
This will instruct you to tender to the Offeror the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to be
Tendered:*
SIGN HERE
-------------------------------------
-------------------------------------
Signature(s)
Account Number:
-------------------------------------
Date:
-------------------------------------
(Print Name(s))
-------------------------------------
-------------------------------------
(Print Address(es))
-------------------------------------
(Area Code and Telephone Number(s))
-------------------------------------
(Taxpayer Identification or
Social Security Number(s))
- --------
*Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE>
EXHIBIT (a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
SYNTRO CORPORATION
This form, or one substantially equivalent hereto, must be used to accept the
Offer (as defined below) if certificates for shares of common stock, $0.01, par
value per share (the "Shares"), of Syntro Corporation, a Delaware corporation
(the "Company"), are not immediately available or if the procedure for book-
entry transfer cannot be completed on a timely basis or time will not permit
all required documents to reach the Depositary on or prior to the Expiration
Date (as defined in the Offer to Purchase). Such form may be delivered by hand,
facsimile transmission, or mail to the Depositary. See Section 3 of the Offer
to Purchase, dated September 29, 1995 (the "Offer to Purchase").
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Hand or Overnight Courier: By Mail:
Tenders & Exchanges Suite 4680--SYN 14 Tenders & Exchanges Suite 4660--SYN
Wall Street 8th Floor New York, New P.O. Box 2559 Jersey City, New Jersey
York 10005 07303-2559
Facsimile for Eligible Institutions only:
(201) 222-4720 or 4721
To confirm receipt of Notice of Guaranteed Delivery:
(201) 222-4707
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR TRANSMISSION
OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT
CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee signatures.
If a signature on a Letter of Transmittal is required to be guaranteed by an
"Eligible Institution" under the instructions thereto, such signature guarantee
must appear in the applicable space provided in the signature box on the Letter
of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message and certificates for Shares to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Mallinckrodt Veterinary Acquisitions, Inc.,
a Delaware corporation, upon the terms and subject to the conditions set forth
in the Offer to Purchase and the related Letter of Transmittal, receipt of
which are hereby acknowledged, Shares of the Company, pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Number of Shares: ___________________ SIGN HERE
Certificate No(s) (if available): Name(s):
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
(Please Print)
If Securities will be tendered by
book-entry transfer: ________________ Address: ____________________________
Name of Tendering Institution: -------------------------------------
(Zip Code)
- -------------------------------------
Area Code and Telephone No:
Account No.: _____________________ at
[_] The Depository Trust Company -------------------------------------
[_] Midwest Securities Trust Company
[_] Philadelphia Depository Trust Company Signature(s): _______________________
-------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association or
other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program or a bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended, guarantees the delivery to the Depositary of the Shares tendered
hereby, together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile(s) thereof) and any other required
documents, or an Agent's Message (as defined in the Offer to Purchase) in the
case of a book-entry delivery of Shares, all within three trading days of the
date hereof. A "trading day" is any day on which the National Association of
Securities Dealers Automated Quotation National Market is open for business.
Name of Firm: _______________________ Title: ______________________________
- ------------------------------------- Name: _______________________________
(Authorized Signature) (Please Print or Type)
Address: ____________________________ Area Code and Telephone No.: ________
DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM--CERTIFICATES SHOULD BE SENT
WITH LETTER OF TRANSMITTAL
Date: ___________________, 1995
2
<PAGE>
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYOR--
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 Payor.
- --------------------------------------- ---------------------------------------
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- -----------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if joint
funds, the first
individual on the
account(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult, or if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee for a or incompetent
designated ward, minor, or person(3)
incompetent person
7. a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual
that is not a legal or owner(4)
valid trust under State
law
</TABLE>
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
----------------------------------------------------
<S> <C>
8. Sole proprietorship The owner(4)
account
9. A valid trust, estate, or Legal entity (Do
pension trust not furnish the
identifying
number of the
personal
representative or
trustee unless
the legal entity
itself is not
designated in the
account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the business
13. Association, club or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local governmental school
district or prison) that
receives agricultural
program payments
</TABLE>
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for 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 interest, dividends,
and broker transaction payments include the following:
.A corporation.
.A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under Section 403(b)(7).
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any political subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An entity registered at all times 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 to 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 un-
der 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 with-
holding. For details, see the regulations under sections 6041, 6041A(a), 6045,
and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, inter-
est, or other payments to give taxpayer identification numbers to payers who
must report the payments to IRS. IRS uses the numbers for identification pur-
poses. Payers must be given the numbers whether or not recipients are required
to file tax returns. Beginning January 1, 1993, 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) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT (A)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell these securities. The Offer is made only by the Offer to Purchase
and the related Letter of Transmittal and is not being made to (nor will
tenders be accepted from) holders of Shares in any jurisdiction in which the
Offer or the acceptance thereof would not be in compliance with the securities
laws of such jurisdiction. In those jurisdictions where securities laws require
the Offer to be made by a licensed broker or dealer, the Offer shall be deemed
to be made on behalf of the Offeror by Goldman, Sachs & Co. or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SYNTRO CORPORATION
AT $3.55 PER SHARE
BY
MALLINCKRODT VETERINARY ACQUISITIONS, INC.
A WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT VETERINARY, INC.
AND
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
MALLINCKRODT GROUP INC.
Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of Mallinckrodt Veterinary, Inc., a
Delaware corporation ("Mallinckrodt Veterinary"), and an indirect wholly owned
subsidiary of Mallinckrodt Group Inc., a New York corporation, hereby offers to
purchase all of the shares of common stock, par value $0.01 per share (the
"Shares"), of Syntro Corporation, a Delaware corporation (the "Company"), for
$3.55 per Share, net to the seller in cash without interest, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated September
29, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal
(which together constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, OCTOBER 27, 1995, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of September 25, 1995 (the "Merger Agreement") among Mallinckrodt Veterinary,
the Offeror and the Company. The Merger Agreement provides that, among other
things, as soon as practicable after the purchase of Shares pursuant to the
Offer and the satisfaction of the other conditions set forth in the Merger
Agreement and in accordance with relevant provisions of Delaware law, the
Offeror will be merged with and into the Company (the "Merger"). At the
effective time of the Merger (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time (other than Shares held in
the treasury of the Company, Shares held by Mallinckrodt Veterinary, the
Offeror or any other wholly owned subsidiary of Mallinckrodt Veterinary, or
Shares which are held by stockholders, if any, who properly exercise their
appraisal rights under Delaware law) will be converted into the right to
receive $3.55 in cash, or any higher price that is paid in the Offer, without
interest.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the expiration of the Offer that number of
Shares representing at least a majority of all outstanding Shares on a fully
diluted basis, and (ii) satisfaction of certain other terms and conditions.
<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT EACH OF
THE OFFER AND THE MERGER IS FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S
STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND MERGER, AND RECOMMENDS THAT THE
COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL THEIR SHARES PURSUANT
THERETO.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased Shares validly tendered and not withdrawn if and
when the Offeror gives oral or written notice to First Chicago Trust Company of
New York (the "Depositary") of the Offeror's acceptance of such Shares for
payment. In all cases, payment for Shares purchased pursuant to the Offer will
be made by deposit of the purchase price with the Depositary, which shall act
as agent for tendering stockholders for the purpose of receiving payment from
the Offeror and transmitting payment to the tendering stockholders. Payment for
Shares accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of certificates for such Shares or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facilities (as defined in the Offer to
Purchase) pursuant to the procedures set forth in the Offer to Purchase and
timely receipt by the Depositary of a properly completed and duly executed
Letter of Transmittal (or manually signed 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 any other documents required
by the Letter of Transmittal.
If any of the conditions set forth in the Offer to Purchase that relate to
the Offeror's obligations to purchase the Shares are not satisfied by 12:00
Midnight, New York City time, on Friday, October 27, 1995 (or any other time
then set as the Expiration Date), the Offeror may, subject to the terms of the
Merger Agreement, (i) extend the Offer and, subject to applicable withdrawal
rights, retain all tendered Shares until the expiration of the Offer as so
extended, (ii) subject to complying with applicable rules and regulations of
the Securities and Exchange Commission, accept for payment all Shares so
tendered and not extend the Offer, or (iii) terminate the Offer and not accept
for payment any Shares and return all tendered Shares to tendering
stockholders. The term "Expiration Date" shall mean 12:00 Midnight, New York
City time, on Friday, October 27, 1995, unless the Offeror shall have extended
the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Offeror, shall expire. The Offeror expressly reserves the
right, in its sole discretion, at any time or from time to time, subject to
applicable law and to the terms of the Merger Agreement, to extend the period
during which the Offer is open by giving oral or written notice of such
extension to the Depositary followed by, as promptly as practicable, 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.
Except as otherwise provided in Section 4 of the Offer to Purchase, tenders
of Shares made pursuant to the Offer are irrevocable, except that Shares
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date, and, unless theretofore accepted for payment, may also be
withdrawn at any time after Monday, November 27, 1995. 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. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder if different from the name of the person who tendered the Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted
to the Depositary and, unless such Shares have been tendered for the account of
an Eligible Institution (as defined in the Offer to Purchase), the signature on
the notice of withdrawal must be guaranteed by an Eligible Institution. All
questions as to
2
<PAGE>
the form and validity (including time of receipt) of a notice of withdrawal
will be determined by the Offeror, in its sole discretion, and its
determination shall be final and binding on all parties.
The information required to be disclosed by Paragraph (e)(1)(vii) of Rule
14d-6 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, is contained in the Offer to Purchase and is incorporated
herein by reference.
The Company has provided to the Offeror its lists of stockholders and
security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal and
other related materials are being mailed to record holders of Shares and will
be mailed to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the 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 OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Requests for copies of the Offer to Purchase and the related Letter of
Transmittal and other tender offer materials may be directed to the Information
Agent or the Dealer Managers as set forth below, and copies will be furnished
promptly at the Offeror's expense. No fees or commissions will be payable to
brokers, dealers or other persons other than the Information Agent, the Dealer
Managers and the Depositary for soliciting tenders of Shares pursuant to the
Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT (212) 440-9800
ALL OTHERS CALL TOLL FREE: 1-800-223-2064
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
3
<PAGE>
Exhibit (a)(8)
[LETTERHEAD OF MALLINCKRODT GROUP APPEARS HERE]
FOR IMMEDIATE RELEASE
Mallinckrodt Group
- ------------------
Media Contact: Barbara Abbett, (314) 854-5230
Investor Contact: Cole Lannum, (314) 854-5370
Syntro Corporation
- ------------------
Media & Investor Contact: Susan H. Strobel, (913) 888-8876
MALLINCKRODT TO MAKE TENDER OFFER
FOR SYNTRO CORPORATION STOCK
ST. LOUIS AND KANSAS CITY, MO, September 25, 1995 -- Mallinckrodt Group Inc.
(NYSE:MKG) and Syntro Corporation (NASDAQ:SYNT) announced today that
Mallinckrodt Group's subsidiary, Mallinckrodt Veterinary, Inc., has entered into
a merger agreement to acquire all of the outstanding shares of Syntro
Corporation, a biotechnology company focused on the development of innovative
vaccines for the animal health market.
A cash tender offer for Syntro's common stock at $3.55 per share will be
made by Mallinckrodt Veterinary Acquisitions, Inc., a subsidiary of Mallinckrodt
Veterinary, under terms of the merger agreement. The agreement has been
unanimously approved by the Boards of Directors of both Syntro and Mallinckrodt
Group. Mallinckrodt Veterinary reserves the right not to purchase any shares in
the tender offer if fewer than a majority of the shares are tendered. It is
expected that the tender offer will commence no later than September 29, 1995.
<PAGE>
Add One -- Mallinckrodt, Syntro Merger
C. Ray Holman, chairman, president and chief executive officer of
Mallinckrodt Group, said, "This an outstanding opportunity for Mallinckrodt
Veterinary to continue expanding its global position in animal vaccines, which
is at the center of the operating company's strategic focus. Under its new
management team led by Paul Cottone, Mallinckrodt Veterinary made an important
contribution to our overall results in fiscal 1995 and this acquisition should
help to ensure the company's continued growth and presence in the animal health
market."
Paul D. Cottone, president and CEO of Mallinckrodt Veterinary, said, "The
Syntro acquisition will give Mallinckrodt Veterinary access to advanced
technology for a number of innovative vaccines for swine and poultry and also
will give us a stronger position in the growing feline and canine segments of
the animal health market. Syntro has achieved an excellent reputation for its
technology research and innovative vaccine development. We look forward to
building on that reputation through integration with our existing and planned
activities in the area of biologicals."
Syntro president and CEO J. Donald Todd, D.V.M., said, "The aligning of
Syntro's platform of recombinant vaccine technologies with Mallinckrodt's
existing vaccine technologies, global commercialization capabilities and
resources represents an ideal strategic fit. The merger recognizes the value of
technology developed by Syntro and opens the door for exciting new
applications."
(more)
<PAGE>
Add Two -- Mallinckrodt, Syntro Merger
Syntro Corporation is a Kansas City and San Diego-based biotechnology
company engaged in technology research and in the development, manufacture and
commercialization of innovative vaccines for the animal health market.
Mallinckrodt Group, a St. Louis-based company with fiscal 1995 sales
of $2.2 billion, provides specialty products to the chemical, medical and animal
health markets worldwide through its three technology-based businesses --
Mallinckrodt Chemical and Mallinckrodt Medical, also headquartered in St. Louis;
and Mallinckrodt Veterinary, headquartered in the Chicago area.
Mallinckrodt Veterinary is one of the world's leading animal health and
nutrition companies, with approximately 1,000 products sold in more than 100
countries. Products include pharmaceuticals, livestock and pet vaccines,
pesticides, surgical supplies, anesthetics and mineral feed ingredients.
###
<PAGE>
Exhibit (a)(9)
FOR IMMEDIATE RELEASE
- ---------------------
Mallinckrodt Group
- ------------------
Media Contact: Barbara Abbett (314) 854-5230
Investor Contact: Cole Lannum (314) 854-5370
MALLINCKRODT ANNOUNCES TENDER OFFER FOR SYNTRO
ST. LOUIS, MO, September 29, 1995--Mallinckrodt Group Inc. (NYSE: MKG) today
announced that pursuant to the previously announced merger agreement between
its subsidiary, Mallinckrodt Veterinary, Inc., and Syntro Corporation
(NASDAQ: SYNT), Mallinckrodt Veterinary Acquisitions, Inc., a wholly-owned
subsidiary of Mallinckrodt Veterinary, Inc., today began a tender offer to
purchase for cash all outstanding shares of Syntro Corporation common stock
at $3.55 per share net. Syntro Corporation is a Kansas City and San Diego
based biotechnology company engaged in technology research and in the
development, manufacture and commercialization of innovative vaccines for
the animal health market.
The offer will expire at 12:00 midnight EDT, on Friday, October 27, 1995,
unless extended.
The offer is conditioned upon, among other things, there being validly
tendered and not withdrawn a number of shares which equals at least a majority
of the outstanding shares on a fully diluted basis.
<PAGE>
The boards of directors of Mallinckrodt Group and Syntro Corporation have
unanimously approved the merger agreement.
Goldman, Sachs & Co. is the Dealer Manager for the offer.
<PAGE>
Exhibit (c)
___________________________________
AGREEMENT AND PLAN OF MERGER
AMONG
MALLINCKRODT VETERINARY, INC.,
MALLINCKRODT VETERINARY ACQUISITIONS, INC.
AND
SYNTRO CORPORATION
DATED AS OF SEPTEMBER 25, 1995
___________________________________
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties and Recitals................................................... 1
ARTICLE I
THE OFFER
Section 1.1 The Offer................................................. 1
Section 1.2 Company Actions........................................... 3
ARTICLE II
THE MERGER
Section 2.1 The Merger................................................ 4
Section 2.2 Effective Time............................................ 5
Section 2.3 Effects of the Merger..................................... 5
Section 2.4 Certificate of Incorporation and Bylaws;
Directors and Officers.................................... 5
Section 2.5 Conversion of Securities.................................. 6
Section 2.6 Exchange of Certificates.................................. 6
Section 2.7 Dissenting Company Common Shares.......................... 8
Section 2.8 Merger Without Meeting of Stockholders.................... 9
Section 2.9 No Further Ownership Rights in Common
Stock..................................................... 9
Section 2.10 Closing of Company Transfer Books........................ 9
Section 2.11 Further Assurances....................................... 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
Section 3.1 Organization, Standing and Power.......................... 10
Section 3.2 Authority; Non-Contravention.............................. 10
Section 3.3 Offer Documents and Proxy Statement....................... 11
Section 3.4 Brokers................................................... 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization, Standing and Power......................... 12
Section 4.2 Capital Structure......................................... 12
Section 4.3 Subsidiaries.............................................. 13
Section 4.4 Other Interests........................................... 14
Section 4.5 Authority; Non-Contravention.............................. 14
Section 4.6 SEC Documents............................................. 15
Section 4.7 Offer Documents and Proxy Statement....................... 16
Section 4.8 Absence of Certain Events................................. 17
Section 4.9 Litigation................................................ 17
Section 4.10 Compliance with Applicable Law........................... 17
Section 4.11 Employee Plans........................................... 18
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 4.12 Employment Relations and Agreement....................... 19
Section 4.13 Contracts................................................ 20
Section 4.14 Intellectual Property.................................... 21
Section 4.15 Title to Property........................................ 22
Section 4.16 State Takeover Statutes.................................. 22
Section 4.17 Taxes.................................................... 22
Section 4.18 Environmental Matters.................................... 24
Section 4.19 Vote Required............................................ 26
Section 4.20 Insurance................................................ 26
Section 4.21 Brokers.................................................. 26
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING SUB
Section 5.1 Organization and Standing................................. 26
Section 5.2 Capital Structure......................................... 27
Section 5.3 Authority; Non-Contravention.............................. 27
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 6.1 Conduct of Business by the Company
Pending the Merger........................................ 27
Section 6.2 Acquisition Proposals..................................... 30
Section 6.3 Conduct of Business of Sub Pending the
Merger.................................................... 31
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Company Stockholder Approval; Proxy
Statement................................................. 32
Section 7.2 Access to Information..................................... 33
Section 7.3 Fees and Expenses......................................... 33
Section 7.4 Company Stock Options..................................... 34
Section 7.5 Reasonable Best Efforts................................... 35
Section 7.6 Public Announcements...................................... 36
Section 7.7 Real Estate Transfer and Gains Taxes...................... 36
Section 7.8 Indemnification; Directors and Officers
Insurance................................................. 36
Section 7.9 Board Representation...................................... 37
Section 7.10 Employee Benefits........................................ 38
Section 7.11 Severance Policy......................................... 38
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VIII
CONDITIONS PRECEDENT
Section 8.1 Conditions to Each Party's Obligation to
Effect the Merger......................................... 39
Section 8.2 Conditions to Obligations of Parent
and Sub................................................... 39
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination............................................... 40
Section 9.2 Effect of Termination..................................... 42
Section 9.3 Amendment................................................. 43
Section 9.4 Waiver.................................................... 43
Section 9.5 Procedure for Termination, Amendment or
Waiver.................................................... 43
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Non-Survival of Representations and
Warranties............................................... 43
Section 10.2 Notices.................................................. 43
Section 10.3 Interpretation........................................... 45
Section 10.4 Counterparts............................................. 45
Section 10.5 Entire Agreement; No Third-Party
Beneficiaries............................................ 45
Section 10.6 Governing Law............................................ 45
Section 10.7 Assignment............................................... 46
Section 10.8 Severability............................................. 46
Section 10.9 Enforcement of this Agreement............................ 46
Section 10.10 Incorporation of Exhibits............................... 46
</TABLE>
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, dated as of September 25, 1995 (this
"Agreement"), among Mallinckrodt Veterinary, Inc., a Delaware corporation
---------
("Parent"), Mallinckrodt Veterinary Acquisitions, Inc., a Delaware corporation
------
("Sub") and a wholly owned subsidiary of Parent, and Syntro Corporation, a
---
Delaware corporation (the "Company") (Sub and the Company being hereinafter
-------
collectively referred to as the "Constituent Corporations").
----------- ------------
W I T N E S S E T H:
--------------------
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent pursuant to a
tender offer by Sub for all of the outstanding shares of Common Stock, par value
$.01 per share (the "Common Stock"), of the Company at a price of $3.55 per
------------
share, net to the seller in cash (the "Offer"), followed by a merger (the
-----
"Merger") of Sub with and into the Company upon the terms and subject to the
------
conditions set forth herein;
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving the Offer and the Merger and recommending that the Company's
stockholders accept the Offer; and
WHEREAS, pursuant to the Merger, each issued and outstanding share of
Common Stock not owned directly or indirectly by Parent or the Company will be
converted into the right to receive the per share consideration paid pursuant to
the Offer.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
ARTICLE I
THE OFFER
---------
Section 1.1 The Offer. (a) Subject to the provisions of this
---------
Agreement, as promptly as practicable but in no event later than September 29,
1995, Sub shall, and Parent shall cause Sub to, commence, within the meaning of
Rule 14d-2 under the Exchange Act (as hereinafter defined), the Offer. The
obligation of Sub to, and of Parent to cause Sub to, commence the Offer and
<PAGE>
accept for payment, and pay for, any shares of Common Stock tendered pursuant to
the Offer shall be subject to the conditions set forth in Exhibit A and to the
---------
terms and conditions of this Agreement. The initial expiration date of the
Offer shall be 20 business days following the commencement of the Offer.
Without the prior written consent of the Company, Sub shall not (i) waive the
Minimum Condition (as defined in Exhibit A), (ii) reduce the number of shares of
---------
Common Stock subject to the Offer, (iii) reduce the price per share of Common
Stock to be paid pursuant to the Offer, (iv) extend the Offer if all of the
Offer conditions are satisfied or waived, (v) change the form of consideration
payable in the Offer, or (vi) amend, add or waive any term or condition of the
Offer (including the conditions set forth in Exhibit A) in any manner that would
---------
adversely affect the Company or its stockholders. Notwithstanding the
foregoing, Sub may, without the consent of the Company, extend the Offer (i) if
at the then scheduled expiration date of the Offer any of the conditions to
Sub's obligation to accept for payment and pay for shares of Common Stock shall
not have been satisfied or waived; (ii) for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or its staff applicable to the Offer; or (iii) if all Offer
---
conditions are satisfied or waived but the number of shares of Common Stock
tendered is less than 90% of the then outstanding number of shares of Common
Stock, for an aggregate period of not more than 15 business days (for all such
extensions) beyond the latest expiration date that would otherwise be permitted
under clause (i) or (ii) of this sentence. Subject to the terms and conditions
of the Offer and the Agreement, Sub shall, and Parent shall cause Sub to, pay
for all shares of Common Stock validly tendered and not withdrawn pursuant to
the Offer as soon as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect to the
Offer, which shall contain an offer to purchase and a related letter of
transmittal (such Schedule 14D-1 and the documents therein pursuant to which the
Offer will be made, together with any supplements or amendments thereto, the
"Offer Documents"). The Company and its counsel shall be given an opportunity
---------------
to review and comment upon the Offer Documents prior to the filing thereof with
the SEC. The Offer Documents shall comply as to form in all material respects
with the requirements of the Securities Exchange Act of 1934, as amended
(including the rules and regulations promulgated thereunder, the "Exchange
--------
Act"), and on the date filed with the SEC and on the date first published, sent
- ---
or given to the Company's stockholders, 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, except that no representation is
<PAGE>
made by Parent or Sub with respect to information supplied by the Company for
inclusion in the Offer Documents. Each of Parent, 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 each of Parent and Sub further agrees to
take all steps necessary, and the Company agrees to take all steps reasonably
requested by Parent, to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to holders of shares of Common Stock, in
each case as and to the extent required by applicable federal securities laws.
Parent and Sub agree to provide the Company and its counsel in writing with any
comments Parent, Sub or their counsel may receive from the SEC or its staff with
respect to the Offer Documents promptly after receipt of such comments.
(c) Prior to or concurrently with the expiration of the Offer, Parent
shall provide or cause to be provided to Sub all of the funds necessary to
purchase any shares of Common Stock that Sub becomes obligated to purchase
pursuant to the Offer.
Section 1.2 Company Actions. (a) The Company hereby approves of and
---------------
consents to the Offer and represents that the Board of Directors of the Company
at a meeting duly called and held has unanimously duly adopted resolutions
approving this Agreement, the Offer and the Merger, determining that the Merger
is advisable and that the terms of the Offer and Merger are fair to, and in the
best interests of, the Company's stockholders and recommending that the
Company's stockholders accept the Offer and approve the Merger and this
Agreement. The Company represents that its Board of Directors has received the
written opinion of Piper Jaffray Inc. that the proposed consideration to be
received by the holders of shares of Common Stock pursuant to the Offer and the
Merger is fair to such holders from a financial point of view. The Company
hereby consents to the inclusion in the Offer Documents of the recommendation of
the Board of Directors of the Company described in the first sentence of this
Section 1.2.
- -----------
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing the recommendations described in
--------------
paragraph (a) above and shall mail the Schedule 14D-9 to the stockholders of the
Company. The Company shall cooperate with Parent in mailing or otherwise
disseminating the Schedule 14D-9 with the appropriate Offer Documents to the
Company's stockholders. Parent and its counsel shall be given an opportunity to
review and comment upon the Schedule 14D-9 prior to the filing thereof with the
SEC. The Schedule 14D-9 shall comply as to form in all material respects with
the requirements of the Exchange Act and, on the date filed with the SEC and on
the date first published, sent or given to the Company's
-3-
<PAGE>
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 is made by the Company
with respect to information supplied by Parent or Sub for inclusion in the
Schedule 14D-9. Each of the Company, Parent and Sub agrees promptly to correct
any information provided by it for use in the Schedule 14D-9 if and to the
extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to the holders of shares of Common Stock, in each case as and to
the extent required by applicable federal securities laws. The Company agrees
to provide Parent and Sub and their counsel in writing with any comments the
Company or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Sub with mailing labels containing the names and
addresses of the record holders of Common Stock as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and com puter files and
all other information in the Company's possession or control regarding the
beneficial ownership of Common Stock, and shall furnish to Sub such information
and assistance (including updated lists of stockholders, security position
listings and computer files) as Sub may reasonably request in communicating the
Offer to the Company's stockholders. Subject to the requirements of 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 each
of their affiliates and associates shall hold in confidence the information
contained in any of such labels, lists and files, will use such information only
in connection with the Offer and the Merger, and, if this Agreement is
terminated, will, upon request, deliver to the Company all copies of such
information then in their possession.
ARTICLE II
THE MERGER
----------
Section 2.1 The Merger. Upon the terms and subject to the conditions
----------
hereof, and in accordance with the General Corporation Law of the State of
Delaware, as amended (the "DGCL"), Sub shall be merged with and into the Company
----
at the Effective Time (as hereinafter defined). Upon the effectiveness of the
Merger, the separate corporate existence of Sub shall
-4-
<PAGE>
cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation") and shall succeed to and assume all the rights and
---------------------
obligations of Sub in accordance with the DGCL.
Section 2.2 Effective Time. The Merger shall become effective when
--------------
the Certificate of Merger or, if applicable, the Certificate of Ownership and
Merger (each, the "Certificate of Merger"), executed in accordance with the
---------------------
relevant provisions of the DGCL, are accepted for record by the Secretary of
State of the State of Delaware. When used in this Agreement, the term
"Effective Time" shall mean the later of the date and time at which the
--------------
Certificate of Merger is accepted for record or such later time established by
the Certificate of Merger. The filing of the Certificate of Merger shall be made
as soon as practicable after the satisfaction or waiver of the conditions to the
Merger set forth herein.
Section 2.3 Effects of the Merger. The Merger shall have the
---------------------
effects set forth in the DGCL.
Section 2.4 Certificate of Incorporation and Bylaws; Directors and
------------------------------------------------------
Officers. (a) At the Effective Time:
- --------
(i) Article SECOND of the Certificate of Incorporation of the Company
shall be amended to read in its entirety as follows:
"The registered office of this Corporation in the State of
Delaware is located at Corporation Trust Center, 1209 Orange Street,
in the City of Wilmington, County of New Castle, in the State of
Delaware. The name of its registered agent at such address is The
Corporation Trust Company.";
(ii) Article FOURTH of the Certificate of Incorporation of the Company
shall be amended to read in its entirety as follows:
"The total number of shares of all classes of capital stock which
this Corporation shall have the authority to issue is 1,000 shares of
Common Stock, with a par value of $.01 per share." and
(iii) Paragraph 3 of Article FIFTH of the Certificate of Incorporation
of the Company shall be deleted in its entirety.
As so amended, the Certificate of Incorporation of the Company in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation after such date, and thereafter may
be amended in accordance with the terms of and as provided by applicable law.
-5-
<PAGE>
(b) At the Effective Time the By-Laws of the Company, as in effect
immediately prior to the Effective Time, shall continue as the By-Laws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by the Certificate of Incorporation of the Surviving Corporation or by
applicable law.
(c) The directors and officers of Sub immediately prior to the
Effective Time shall be the directors and officers, respectively, of the
Surviving Corporation as of the Effective Time.
Section 2.5 Conversion of Securities. As of the Effective Time, by
------------------------
virtue of the Merger and without any action on the part of any stockholder of
the Company or Sub:
(a) All shares of Common Stock that are held in the treasury of the
Company or by any wholly owned Subsidiary (as hereinafter defined) of the
Company and any shares of Common Stock owned by Parent, Sub or any other
wholly owned Subsidiary of Parent shall be cancelled and no consideration
shall be delivered in exchange therefor.
(b) Each share of Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares to be cancelled in
accordance with Section 2.5(a) and other than Dissenting Company Common
-------------
Shares (as defined in Section 2.7)) shall be converted into and become the
-----------
right to receive in cash, without interest, the per share consideration in
the Offer (the "Merger Consideration") in accordance with Section 2.6(c).
-------------------- --------------
All such shares of Common Stock, when so converted, shall no longer be
outstanding and shall automatically be cancelled and retired and each
holder of a certificate or certificates (the "Certificates") representing
------------
any such shares shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration.
(c) Each issued and outstanding share of the capital stock of Sub
shall be converted into and become one fully paid and nonassessable share
of Common Stock, par value $.01 per share, of the Surviving Corporation.
Section 2.6 Exchange of Certificates. (a) Paying Agent. Parent
------------------------ ------------
shall designate a commercial bank or trust company that is reasonably acceptable
to the Company to act as paying agent hereunder (the "Paying Agent") for the
------------
payment of the Merger Consideration upon surrender of Certificates. All of the
fees and expenses of the Paying Agent shall be borne by Parent.
-6-
<PAGE>
(b) Parent to Provide Funds. Parent shall deposit or shall cause to
-----------------------
be deposited (by Parent's affiliates other than the Company) in trust with the
Paying Agent prior to the Effective Time cash in an amount necessary to pay for
all of the shares of Common Stock pursuant to Section 2.5 (determined as though
-----------
there are no Dissenting Company Common Shares). Such amount shall hereinafter
be referred to as the "Exchange Fund." If the amount of cash in the Exchange
-------------
Fund is insufficient to pay all of the amounts required to be paid pursuant to
Sections 2.5, or 2.7, Parent from time to time after the Effective Time shall
- ------------ ---
deposit in trust additional cash with the Paying Agent sufficient to make all
such payments.
(c) Exchange Procedures. As soon as practicable after the Effective
-------------------
Time, the Paying Agent shall mail to each holder of record of a Certificate,
other than Parent, the Company and any Subsidiary of Parent or the Company, (i)
a letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon actual
delivery of the Certificates to the Paying Agent and shall be in a form and have
such other provisions as Parent may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for the
Merger Consideration. Upon surrender of a Certificate for cancellation to the
Paying Agent or to such other agent or agents as may be appointed by Parent,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the amount of cash
into which the shares of Common Stock theretofore represented by such
Certificate shall have been converted pursuant to Section 2.5, and the
-----------
Certificates so surrendered shall forthwith be cancelled. No interest will be
paid or will accrue on the cash payable upon the surrender of any Certificate.
If payment is to be made to a person other than the person in whose name the
Certificate so surrendered is registered, it shall be a condition of payment
that such Certificate shall be properly endorsed or otherwise in proper form for
transfer and that the person requesting such payment shall pay any transfer or
other Taxes (as hereinafter defined) required by reason of the delivery of such
payment to a person other than the registered holder of such Certificate or
establish to the satisfaction of Parent that any such Taxes have been paid or
are not applicable. Until surrendered as contemplated by this Section 2.6, each
-----------
Certificate (other than Certificates representing Dissenting Company Common
Shares and Certificates representing any shares of Common Stock owned by Parent,
the Company or any Subsidiary of Parent or the Company) shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the amount of cash, without interest, into which the shares of Common
Stock theretofore represented by such Certificate shall have been converted
pursuant to Section 2.5. Notwithstanding the foregoing, none of the Paying
-----------
Agent, the Surviving Corporation or
-7-
<PAGE>
any party hereto shall be liable to a former stockholder of the Company for any
cash or interest delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws. Any portion of the Exchange Fund that
remains unclaimed by the stockholders of the Company for one year after the
Effective Time shall be repaid to Parent (including, without limitation, all
interest and other income received by the Paying Agent in respect of all such
funds). Thereafter, holders of shares of Common Stock shall look only to Parent
or the Surviving Corporation (subject to the terms of this Agreement and
abandoned property, escheat and other similar laws) as general creditors thereof
with respect to any Merger Consideration that may be payable upon due surrender
of the Certificates held by them. Parent or the Paying Agent shall be entitled
to deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of shares of Common Stock such amounts as Parent or the
Paying Agent is required to deduct and withhold with respect to the making of
such payment under the Code (as hereinafter defined) or under any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
Parent or the Paying Agent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Common Stock in respect of which such deduction and withholding was made by the
Parent or the Paying Agent.
Section 2.7 Dissenting Company Common Shares. Notwithstanding any
--------------------------------
provision of this Agreement to the contrary, if required by the DGCL but only to
the extent required thereby, shares of Common Stock which are issued and
outstanding immediately prior to the Effective Time and which are held by
holders of such shares of Common Stock who have properly exercised appraisal
rights with respect thereto in accordance with Section 262 of the DGCL (the
"Dissenting Company Common Shares") will not be exchangeable for the right to
--------------------------------
receive the Merger Consideration, and holders of such shares of Common Stock
will be entitled to receive payment of the appraised value of such shares of
Common Stock in accordance with the provisions of such Section 262 unless and
until such holders fail to perfect or effectively withdraw or lose their rights
to appraisal and payment under the DGCL. If, after the Effective Time, any such
holder fails to perfect or effectively withdraws or loses such right, such
shares of Common Stock will thereupon be treated as if they had been converted
into and have become exchangeable for, at the Effective Time, the right to
receive the Merger Consideration, without any interest thereon. The Company
will give Parent prompt notice of any demands received by the Company for
appraisals of shares of Common Stock. The Company shall not, except with the
prior written consent of Parent, make any payment with respect to any demands
for appraisal or offer to settle or settle any such demands.
-8-
<PAGE>
Section 2.8 Merger Without Meeting of Stockholders. Notwithstanding
--------------------------------------
the foregoing, in the event that Sub, or any other direct or indirect subsidiary
of Parent, shall acquire at least 90 percent of the outstanding shares of Common
Stock, the parties hereto agree to 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 meeting of stockholders of the Company, in accordance
with Section 253 of the DGCL.
Section 2.9 No Further Ownership Rights in Common Stock. All cash
-------------------------------------------
paid upon the surrender of Certificates in accordance with the terms hereof
shall be deemed to have been paid in full satisfaction of all rights pertaining
to the shares of Common Stock.
Section 2.10 Closing of Company Transfer Books. At the Effective
---------------------------------
Time, the stock transfer books of the Company shall be closed and no transfer of
shares of Common Stock shall thereafter be made. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be cancelled
and exchanged as provided in this Article II.
----------
Section 2.11 Further Assurances. If, at any time after the Effective
------------------
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either of the Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations in the Merger,
all such deeds, bills of sale, assignments and assurances and do, in the name
and on behalf of such Constituent Corporations, all such other acts and things
necessary, desirable or proper to vest, perfect or confirm its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of such Constituent Corporation and otherwise to carry out
the purposes of this Agreement.
-9-
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
----------------------------------------
Parent represents and warrants to the Company as follows:
Section 3.1 Organization, Standing and Power. Parent is a
--------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted.
Section 3.2 Authority; Non-Contravention. Parent has all requisite
----------------------------
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent and the consummation by Parent of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Parent. This Agreement has been duly executed and delivered by Parent and
(assuming the valid authorization, execution and delivery of this Agreement by
the Company) consti tutes a valid and binding obligation of Parent enforceable
against Parent in accordance with its terms. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated hereby
and compliance with the provisions hereof will not, conflict with, or result in
any violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to the loss of a material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Parent or any of its Subsidiaries under, any provision
of (i) the Certificate of Incorporation or Bylaws of Parent or any provision of
the comparable charter or organization documents of any of its Subsidiaries,
(ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise or license applicable
to Parent or any of its Subsidiaries or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Parent or any of its
Subsidiaries or any of their respective properties or assets, other than, in the
case of clauses (ii) or (iii), any such conflicts, violations, defaults, rights,
liens, security interests, charges or encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect (as hereinafter defined) on
Parent, materially impair the ability of Parent or Sub to perform its
obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby. No filing or registration with, or authorization, consent
or approval of, any domestic (federal and state), foreign or supranational
court, commission, governmental body, regulatory or administrative agency,
authority
-10-
<PAGE>
or tribunal (a "Governmental Entity") is required by or with respect to Parent
-------------------
or any of its Subsidiaries in connection with the execution and delivery of this
Agreement by Parent or is necessary for the consummation of the Offer, the
Merger and the other transactions contemplated by this Agreement, except for (i)
in connection, or in compliance, with the Exchange Act, (ii) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in which the
Company is qualified to do business, (iii) such filings and consents, if any, as
may be required under any environmental, health or safety law or regulation
pertaining to any notification, disclosure or required approval triggered by the
Offer, the Merger or the transactions contemplated by this Agreement, (iv) such
filings, if any, as may be required in connection with the Gains Taxes described
in Section 7.7, (v) such filings and approvals as may be required under the
-----------
Hart-Scott-Rodino Improvements Act of 1976, as amended (the "Improvements Act"),
----------------
and (vi) such other consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, have a Material Adverse Effect on Parent,
materially impair the ability of Parent or Sub to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated
hereby.
Section 3.3 Offer Documents and Proxy Statement. None of the
-----------------------------------
information to be supplied by Parent or Sub for inclusion or incorporation by
reference in the Offer Documents, the Schedule 14D-9, the information statement,
if any, filed by the Company in connection with the Offer pursuant to Rule 14f-1
promulgated under the Exchange Act (the "Information Statement"), or the proxy
---------------------
statement (together with any amendments or supplements thereto, the "Proxy
-----
Statement") relating to the Stockholder Meeting (as defined in Section 7.1) will
- --------- -----------
(i) in the case of the Offer Documents, the Schedule 14D-9 and the Information
Statement, at the respective time such documents are filed with the SEC or first
published, sent or given to the Company's stockholders, or (ii) in the case of
the Proxy Statement, at the time of the mailing of the Proxy Statement and at
the time of the Stockholder Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. If at any time prior to the purchase
of shares of Common Stock pursuant to the Offer there shall occur any event with
respect to Parent, its officers and directors or any of its Subsidiaries which
is required to be described in the Offer Documents, such event shall be so
described, and an amendment or supplement shall be promptly filed with the SEC
and, as required by law, disseminated to the stockholders of the Company.
-11-
<PAGE>
Section 3.4 Brokers. No broker, investment banker or other person,
-------
other than Goldman, Sachs & Co., the fees and expenses of which will be paid by
Parent, is entitled to any broker's, finder's or other similar fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Sub.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to Parent and Sub as follows:
Section 4.1 Organization, Standing and Power. The Company and each
--------------------------------
of its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated and
has the requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. The Company and
each of its Subsidiaries is duly qualified to do business, and is in good
standing, in each jurisdiction where the character of its properties owned or
held under lease or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified would not, individually
or in the aggregate, have a Material Adverse Effect on the Company.
Section 4.2 Capital Structure. The authorized capital stock of the
-----------------
Company consists of 25,000,000 shares of Common Stock and 225,000 shares of
Preferred Stock, par value $1.00 per share ("Preferred Stock"). At the close of
---------------
business on September 22, 1995, (i) 11,454,185 shares of Common Stock were
issued and outstanding, (ii) 946,049 shares of Common Stock were reserved for
issuance upon the exercise of outstanding vested and exercisable stock options
issued under the Stock Plans (as hereinafter defined), 273,893 shares of Common
Stock were reserved for issuance upon the exercise of outstanding unvested stock
options issued under the Stock Plans, 3,000 shares of Common Stock were reserved
for issuance pursuant to vested and exercisable stock options granted to
consultants of the Company pursuant to written agreements which are attached to
the Company Disclosure Letter (the "Consultant Option Agreements") and 4,000
----------------------------
shares of Common Stock were reserved for issuance upon the exercise of
outstanding unvested stock options granted to consultants of the Company
pursuant to Consultant Option Agreements and (iii) no shares of Common Stock
were held by the Company in its treasury. As of the date hereof there are no
shares of Preferred Stock outstanding. There are no outstanding stock
appreciation rights. All outstanding shares of capital stock of the Company are
validly issued, fully paid and nonassessable and not subject to preemptive
rights. Except as
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set forth in Section 4.2 of the Company Disclosure Letter and except for
1,219,942 stock options issued under the Company's 1984 Incentive Stock Option
Plan, 1988 Executive Stock Option Plan, 1988 Stock Option Plan and 1994 Stock
Option Plan (collectively, the "Stock Plans"), and 7,000 stock options issued by
-----------
the Company to consultants pursuant to Consultant Option Agreements, there are
no options, warrants, rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or any of its Subsidiaries is a
party or by which any of them is bound obligating the Company or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of the
Company or of any of its Subsidiaries. No shares of the Company's capital stock
have been issued other than pursuant to the exercise of stock options already in
existence on such date since September 1, 1995. The Company has not granted any
stock options for any capital stock of the Company since September 1, 1995. The
Company has not adopted a shareholder's rights or a similar plan.
Section 4.3 Subsidiaries. The Company's Subsidiaries consist of (i)
------------
SyntroVet Incorporated, a Kansas corporation, the authorized capital stock of
which consists of 1,000 shares of common stock, $1.00 par value per share, all
of which are issued and outstanding, (ii) SyntroVenture Corporation, a Kansas
corporation ("SyntroVenture"), the authorized capital stock of which consists of
-------------
1,000 shares of common stock, no par value per share, 100 shares of which are
issued and outstanding, and (iii) Syntro Zeon, L.C., a Kansas limited liability
company ("Syntro Zeon"). Except for Syntro Zeon, fifty percent of the
-----------
membership interest of which is owned by SyntroVenture and fifty percent of the
membership interest of which is owned by Nippon Zeon of America, Inc., all of
the outstanding capital stock or ownership interest of each Subsidiary of the
Company is owned by the Company, directly or indirectly. All of the capital
stock or ownership interest of the Company's Subsidiaries owned by the Company,
directly or indirectly, are owned by the Company free and clear of any security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
charges or other encumbrances of any nature ("Liens") or any other limitation or
-----
restriction (including any restriction on the right to vote or sell the same,
except as may be provided as a matter of law), except as set forth in Section
4.3 of the Company Disclosure Letter. Except as set forth in Section 4.3 of the
Company Disclosure Letter, there are no securities of the Company or any of its
Subsidiaries convertible into or exchangeable for, options or other rights to
acquire from the Company or any of its Subsidiaries, or other contracts,
understandings, arrangements or obligations (whether or not contingent)
providing for the issuance or sale, directly or indirectly, of, any capital
stock or other ownership interests in, or any other securities of, any
Subsidiary of the Company. There are no outstanding contractual obligations of
the Company or any of its Subsidiaries to
-13-
<PAGE>
repurchase, redeem or otherwise acquire any outstanding shares of capital stock
or other ownership interest in any Subsidiary of the Company nor are there any
irrevocable proxies with respect to any shares of the capital stock of any of
the Company's Subsidiaries. All of the shares of capital stock of each
Subsidiary of the Company are validly existing, fully paid and non-assessable.
Except for statutory restrictions, there are no restrictions which prevent or
limit the payment of dividends by any of the Company's Subsidiaries.
Section 4.4 Other Interests. Except for the Company's interest in
---------------
its Subsidiaries and investments in ordinary course consistent with past
practice and except as set forth in Section 4.4 of the Company Disclosure
Letter, neither the Company nor its Subsidiaries owns directly or indirectly any
interest or investment (whether equity or debt) in, nor is the Company or any of
its Subsidiaries subject to any obligation or requirement to provide for or to
make any investment (in the form of a loan, capital contribution or otherwise)
to or in, any corporation, partnership, joint venture, limited liability
company, business, trust or entity.
Section 4.5 Authority; Non-Contravention. The Board of Directors of
----------------------------
the Company has approved the Offer and declared the Merger advisable and the
Company has all requisite power and authority to enter into this Agreement and,
subject to approval of the Merger by the stockholders of the Company (if
required), to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company, subject to such approval
of the Merger by the stockholders of the Company (if required). This Agreement
has been duly executed and delivered by the Company and (assuming the valid
authorization, execution and delivery of this Agreement by Parent and Sub)
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms. Except as set forth in the Company
SEC Documents (as hereinafter defined) and except as set forth in Section 4.5 of
-----------
the Company Disclosure Letter, the execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated hereby and compliance
with the provisions hereof will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to the loss of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company or any of its Subsidiaries under, any provision of (i) the
Certificate of Incorporation or Bylaws of the Company (true and complete copies
of which as of the date hereof have been delivered to Parent) or any provision
of the comparable charter or organization documents
-14-
<PAGE>
of any of its Subsidiaries, (ii) any loan or credit agreement, note, bond,
mortgage or indenture, any lease or other agreement pursuant to which the
Company has paid or received more than $20,000 in the last year, or any
instrument, permit, concession, franchise or license applicable to the Company
or any of its Subsidiaries or (iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets, other than, in the
case of clause (ii) or (iii), any such conflicts, violations, defaults, rights,
liens, security interests, charges or encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect on the Company, materially
impair the ability of the Company to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby. No
filing or registration with, or authorization, consent or approval of, any
Governmental Entity is required by or with respect to the Company or any of its
Subsidiaries in connection with the execution and delivery of this Agreement by
the Company or the consummation by the Company of the transactions contemplated
hereby, except for (i) in connection or in compliance with the provisions of the
Exchange Act, (ii) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do business,
(iii) such filings and consents, if any, as may be required under any
environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the Offer, the Merger
or the transactions contemplated by this Agreement, (iv) such filings, if any,
as may be required in connection with the Gains Taxes described in Section 7.7,
-----------
(v) such filings and approvals as may be required under the Improvements Act,
(vi) such filings as may be required under state securities laws or the rules of
the Nasdaq Stock Market, and (vii) such other consents, orders, authorizations,
registrations, declarations and filings the failure of which to be obtained or
made would not, individually or in the aggregate, have a Material Adverse Effect
on the Company, materially impair the ability of Company to perform its
obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby.
Section 4.6 SEC Documents. (a) Since October 1, 1993, the Company
-------------
has filed all documents with the SEC required to be filed under the Securities
Act of 1933, as amended (including the rules and regulations promulgated
thereunder), or the Exchange Act (the "Company SEC Documents"). As of their
---------------------
respective dates, the Company SEC Documents complied in all material respects as
to form with the requirements of the Securities Act or the Exchange Act, as the
case may be, and none of the Company SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the
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<PAGE>
circumstances under which they were made, not misleading. The financial
statements of the Company included in the Company SEC Documents as at the dates
thereof complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with generally accepted accounting
principles (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated therein or in the notes thereto) and fairly present
the consolidated financial position of the Company and its consolidated
Subsidiaries as at the dates thereof and the consolidated results of their
operations and changes in financial position for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein).
(b) Except as set forth in the Company SEC Documents, neither the
Company nor any of its Subsidiaries has any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise) which would be
required to be reflected on a balance sheet, or in the notes thereto, prepared
in accordance with generally accepted accounting principles, except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since September 30, 1994 which would not,
individually or in the aggregate, have a Material Adverse Effect.
Section 4.7 Offer Documents and Proxy Statement. None of the
-----------------------------------
information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Offer Documents or the Schedule 14D-9, the
Information Statement, if any, the Proxy Statement, if any, or any amendment or
supplement thereto, will (i) in the case of the Offer Documents, the Schedule
14D-9 and the Information Statement, at the respective times such documents are
filed with the SEC or first published, sent or given to the Company's
stockholders, or (ii) in the case of the Proxy Statement, at the time of the
mailing of the Proxy Statement and at the time of the Stockholder Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event with respect
to the Company, its officers and directors or any of its Subsidiaries should
occur which is required to be described in an amendment of, or a supplement to,
the Proxy Statement or the Offer Documents, such event shall be so described,
and such amendment or supplement shall be promptly filed with the SEC and, as
required by law, disseminated to the stockholders of the Company. The Proxy
Statement will comply as to form in all material respects with the requirements
of the Exchange Act.
-16-
<PAGE>
Section 4.8 Absence of Certain Events. Since September 30, 1994, the
-------------------------
Company and its Subsidiaries have operated their respective businesses in the
ordinary course consistent with its historical practices and there has not
occurred (i) any event, occurrence or conditions which, individually or in the
aggregate, has had, or is reasonably likely to have, a Material Adverse Effect
on the Company; (ii) any entry into or any commitment or transaction that,
individually or in the aggregate, has or is reasonably likely to have, a
Material Adverse Effect on the Company; (iii) any change by the Company or any
of its Subsidiaries in its accounting methods, principles or practices; (iv)
except as set forth in Section 4.8 of the Company Disclosure Letter, any
amendments or changes in the Certificate of Incorporation or Bylaws of the
Company; (v) any revaluation by the Company or any of its Subsidiaries of any of
their respective assets, including, without limitation, write-offs of accounts
receivable, other than in the ordinary course of the Company's and each of its
Subsidiaries' businesses consistent with past practices; (vi) any damage,
destruction or loss which resulted in or is reasonably likely to result in a
Material Adverse Effect on the Company; or (vii) any declaration, setting aside
or payment of any dividend or other distribution with respect to any shares of
capital stock of the Company, 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.
Section 4.9 Litigation. Except as set forth in Section 4.9 of the
----------
Company Disclosure Letter, there are no actions, suits or proceedings pending
against the Company or any of its Subsidiaries or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries, at law or in
equity, or before or by any federal or state commission, board, bureau, agency,
regulatory or administrative instrumentality or other Governmental Entity or any
arbitrator or arbitration tribunal, that are reasonably likely to have a
Material Adverse Effect on the Company or would prevent or delay the
consummation of the transactions contemplated hereby.
Section 4.10 Compliance with Applicable Law. The Company and its
------------------------------
Subsidiaries hold, and at all required times have held, all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities
necessary for the lawful conduct of their respective businesses (the "Company
-------
Permits"), except for failures to hold such permits, licenses, variances,
- -------
exemptions, orders and approvals which have not had, and are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
the Company from and after the date of this Agreement. The Company and its
Subsidiaries are, and at all times have been, in compliance with the terms of
the Company Permits, except where the failure so to comply has not had, and is
not reasonably likely to have, a Material Adverse Effect on
-17-
<PAGE>
the Company. The businesses of the Company and its Subsidiaries are not being,
and have not been, conducted in violation of any law, ordinance or regulation of
any Governmental Entity except for violations or possible violations which
individually or in the aggregate do not and will not have a Material Adverse
Effect on the Company. 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, to the knowledge of the Company, has
any Governmental Entity indicated an intention to conduct the same, other than,
in each case, those which the Company reasonably believes will not have a
Material Adverse Effect on the Company. The Company makes no representations in
this Section 4.10 with respect to any Environmental Laws (as hereinafter
------------
defined).
Section 4.11 Employee Plans. (a) The Company and each of its
--------------
Subsidiaries have complied with all requirements, and performed all obligations,
imposed by or in connection with any Company Benefit Plan (as hereinafter
defined) or any related trust agreement or insurance contract and the
requirements and obligations imposed by applicable law (including, without
limitation, the reporting and disclosure requirements imposed by ERISA or the
Code (each, as hereinafter defined), other than where the failure to so comply
or perform has not had, and is not reasonably likely to have, a Material Adverse
Effect on the Company. All contributions and other payments required by any
Company Benefit Plan or applicable law to be made by the Company or its
Subsidiaries to any Company Benefit Plan have been made or are properly
reflected on their financial statements, other than where the failure to do so
has not had, and is not reasonably likely to have a Material Adverse Effect on
the Company. There is no claim, dispute, grievance, charge, complaint,
restraining or injunctive order, litigation or proceeding pending, or to the
knowledge of the Company, threatened (other than routine claims for benefits)
against or relating to any Company Benefit Plan or against the assets of any
Company Benefit Plan, which has had, or is reasonably likely to have, a Material
Adverse Effect on the Company. Neither the Company nor any of its Subsidiaries
has communicated generally to employees or specifically to any employee
regarding any future increase of benefit levels (or future creations of new
benefits) with respect to any Company Benefit Plan beyond those reflected in the
Company Benefit Plans, which benefit increases or creations, either individually
or in the aggregate, has had or is reasonably likely to have, a Material Adverse
Effect on the Company. Neither the Company nor any of its Subsidiaries
presently sponsors, maintains, contributes to, nor is the Company or its
Subsidiaries required to contribute to, nor has the Company or any of its
Subsidiaries ever sponsored, maintained, contributed to, or been required to
contribute to, any employee pension benefit plan within the meaning of section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), other than the Company's 401(k) Deferred Savings Plan which is
-----
qualified under
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Section 401 of the Code, or any multiemployer plan within the meaning of section
3(37) or 4001(a)(3) of ERISA. Except as set forth in Section 4.11 of the
------------
Company Disclosure Letter, no Company Benefit Plan provides medical or life
insurance coverage for periods after termination of employment other than as
required by Section 601 et. seq. of ERISA.
-------
(b) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby will not result in the imposition of any
federal excise tax with respect to any Company Benefit Plan.
(c) As a result of the transactions contemplated by this Agreement,
none of the Company, any of its Subsidiaries or Parent will be obligated to make
a payment to an individual that would be a "parachute payment" to a
"disqualified individual" as those terms are defined in Section 280G of the
Code, without regard to whether such payment is reasonable compensation for
personal services performed or to be performed in the future.
(d) No entity other than any of the Company's Subsidiaries is,
together with the Company, treated as a single employer under section 414 of the
Code.
(e) (i) "Company Benefit Plan" means any bonus, incentive
--------------------
compensation, deferred compensation, pension, profit sharing, retirement, stock
purchase, stock option, stock ownership, stock appreciation rights, phantom
stock, leave of absence, layoff, vacation, day or dependent care, legal
services, cafeteria, life, health, accident, disability, workers' compensation
or other insurance, severance, separation or other employee benefit plan,
program, practice, policy or arrangement of any kind, including, but not limited
to, any "employee benefit plan" within the meaning of section 3(3) of ERISA,
other than a multiemployer plan within the meaning of section 3(37) or
4001(a)(3) of ERISA, established by the Company or any of its Subsidiaries or to
which the Company or any of its Subsidiaries contributes or has contributed
(including any such plan, program, practice policy or arrangement not now
maintained by the Company or any of its Subsidiaries or to which the Company or
any of its Subsidiaries does not now contribute, but with respect to which the
Company or any of its Subsidiaries has or may have any liability).
Section 4.12 Employment Relations and Agreement. (a) Except as would
----------------------------------
not constitute a Material Adverse Effect on the Company, (i) each of the Company
and its Subsidiaries is, and at all times has been, in compliance in all
material respects with all federal, state or other applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and has not and is not engaged in any unfair labor practice;
(ii) no unfair labor practice complaint against the Company or any of its
Subsidiaries is pending before the
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National Labor Relations Board; (iii) there is no labor strike, dispute,
slowdown or stoppage actually pending or, to the knowledge of the Company,
threatened against or involving the Company or any of its Subsidiaries, (iv) no
representation question exists respecting the employees of the Company or any of
its Subsidiaries; (v) no grievance exists, no arbitration proceeding arising out
of or under any collective bargaining agreement is pending and no claim therefor
has been asserted; (vi) no collective bargaining agreement is currently being
negotiated by the Company or any of its Subsidiaries; and (vii) the Company and
its Subsidiaries taken as a whole have not experienced any material labor
difficulty during the last three years. Since October 1, 1993, no union
organizing or election activities involving employees of the Company or its
Subsidiaries have occurred or, to the knowledge of the Company, been threatened.
There has not been and, to the knowledge of the Company, there will not be, any
change in relations with employees of the Company or any of its Subsidiaries as
a result of the transactions contemplated by this Agreement which could have a
Material Adverse Effect on the Company.
(b) Except for as reflected in the Company SEC Documents or as set
forth in Section 4.12(b) of the Company Disclosure Letter, neither the Company
nor any of its Subsidiaries has any written, or to the knowledge of the Company,
any binding oral (other than oral employment agreements which are binding under
Kansas and California law, all of which are terminable at will by the Company
without penalty arising under terms of the oral employment agreements),
employment or severance agreement with any other person.
Section 4.13 Contracts. Except as set forth in Section 4.13(i) of
---------
the Company Disclosure Letter, neither the Company nor its Subsidiaries is a
party to, or has any obligation under, any contract or agreement, written or
oral, which contains any covenants currently or prospectively limiting the
freedom of the Company, any of its Subsidiaries or any of their respective
affiliates to engage in any line of business or to compete with any entity. All
contracts and agreements to which the Company or any of its Subsidiaries is a
party or by which any of their respective assets is bound are valid and binding,
in full force and effect and enforceable against the parties thereto in
accordance with their respective terms, other than (i) such failures to be so
valid and binding, in full force and effect or enforceable which, either
individually or in the aggregate, has not had, or is not reasonably likely to
have, a Material Adverse Effect on the Company, and (ii) subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity. There is not under any such contract
or agreement any existing default, or event which, after notice or lapse of
time, or both, would constitute a default, by the Company or any of its
Subsidiaries, or to the Company's knowledge, any other party, except as set
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forth in Section 4.13(ii) of the Company Disclosure Letter and except to the
extent such default has not had, or is not reasonably likely to have, a Material
Adverse Effect on the Company. The Company has delivered to Parent true and
complete copies of each of the contracts and agreements (and any and all
amendments thereto) listed in the Company Disclosure Schedule. Neither the
Company nor any of its Subsidiaries has waived any material rights under any of
such contracts or agreements.
Section 4.14 Intellectual Property. (a) Except as would not
---------------------
reasonably be expected to have a Material Adverse Effect on the Company and
except as set forth in Section 4.14 of the Company Disclosure Letter (i) to the
knowledge of the Company, the Company and/or each of its Subsidiaries owns, or
is licensed or otherwise has the right to use (in each case, clear of any liens
or encumbrances of any kind), all Intellectual Property (as hereinafter defined)
used in or necessary for the conduct of its business as currently conducted;
(ii) no claims are pending or, to the knowledge of the Company, threatened that
the Company or any of its Subsidiaries is infringing on or otherwise violating
the rights of any person with regard to any Intellectual Property owned by
and/or licensed to the Company or its Subsidiaries; (iii) to the knowledge of
the Company, no person is infringing on or otherwise violating any right of the
Company or any of its Subsidiaries with respect to any Intellectual Property
owned by and/or licensed to the Company or its Subsidiaries; (iv) all
registrations for copyrights, trademarks, service marks, trade names and patents
of the Company and its Subsidiaries are valid and in force, and all applications
therefor are pending, in good standing, and, to the knowledge of the Company,
without challenge of any kind; and (v) the Company and/or each of its
Subsidiaries has taken reasonable and necessary steps to protect their
Intellectual Property and their rights thereunder, and to the knowledge of the
Company no such rights or Intellectual Property have been lost or are in
jeopardy of being lost through failure to act by the Company or any of its
Subsidiaries. All of the Patents (as hereinafter defined) owned or licensed by
the Company and its Subsidiaries, and any licenses granted by the Company or any
of its Subsidiaries relating thereto, are listed in the Company Disclosure
Letter.
(b) For purposes of this Agreement, "Intellectual Property" means (i)
---------------------
all United States and foreign copyrights, whether registered or unregistered,
and pending applications to register the same, and all copyrightable works,
including, without limitation, software; (ii) all United States, state and
foreign trademarks, service marks and trade names (including all assumed or
fictitious names under which the Company is conducting the business or has
within the previous three years conducted the business), whether registered or
unregistered, and pending applications to register the foregoing; (iii) all
United States and foreign patents, patent applications, continuations,
continuations-in-part, divisions, reissues, patent disclosures,
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inventions (whether or not patentable or reduced to practice) or improvements
thereto ("Patents"); (iv) all confidential ideas, know-how, methods, formulae,
-------
trade secrets, processes, reports, data, customer lists, business plans, or
other proprietary information; (v) all agreements, commitments, contracts, under
standings, licenses, sublicenses, assignments and indemnities which relate or
pertain to any of the intellectual property identified in subsections (i)
through (v) above or to disclosure or use of ideas of third parties.
Section 4.15 Title to Property. The Company or its Subsidiaries has
-----------------
good and, with respect to real property, marketable title to all of the material
assets reflected on the consolidated financial statements of the Company
included in the Company SEC Documents as being owned by it or its Subsidiaries
and all of the material assets thereafter acquired by it or its Subsidiaries
(except to the extent that such assets have thereafter been disposed of in the
ordinary course of business consistent with past practice), subject to no Liens.
Section 4.16 State Takeover Statutes. 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 and this Agreement
and the transactions contemplated by this Agreement the provisions of Section
203 of the DGCL. To the knowledge of the Company (without investigation), no
other state takeover statute or similar statute or regulation applies or
purports to apply to the Offer, the Merger, this Agreement or any of the
transactions contemplated by this Agreement.
Section 4.17 Taxes. (a) (i) Except as provided in the Company
-----
Disclosure Letter, the Company and each of its Subsidiaries have filed (or will
timely file) all Tax Returns required to have been filed on or before the date
hereof or the Effective Time, which returns are true and complete in all
material respects; (ii) all Taxes shown to be due on such Tax Returns have been
timely paid; (iii) all Taxes (whether or not shown on any Tax Return) owed by
the Company or any Subsidiary of the Company and required to be paid on or
before the Effective Time have been (or will be) timely paid or, in the case of
Taxes which the Company or any Subsidiary of the Company is presently contesting
in good faith, the Company or such Subsidiary has established an adequate
reserve for such Taxes on the books of the Company; (iv) neither the Company nor
any Subsidiary has waived any statute of limitations in respect of Taxes; (v)
the Tax Returns referred to in clause (i) relating to federal and state income
Taxes have never been examined by the Internal Revenue Service or the
appropriate state taxing authority; (vi) there is no suit, audit, or assessment
pending with respect to Taxes of the Company or any Subsidiary of the Company;
(vii) all deficiencies asserted or assessments made as a result of any
examination of the Tax Returns referred to in clause (i) by a
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<PAGE>
taxing authority have been paid in full; and (viii) the Company and each of its
Subsidiaries have complied in all material respects with their legal obligations
to withhold and collect Taxes, and such withheld and collected Taxes have been
paid or accrued, reserved against and entered on the books of the Company.
(b) As of September 30, 1994, the "affiliated group" (as defined in
Section 1504(a) of the Code) of which Company is the common parent had
consolidated net operating loss carryforwards for federal income Tax purposes of
not less than $21,200,000 that expire in years 1996 through 2009 (the "NOLs"),
----
and between September 30, 1994 and the Effective Time none of the NOLs will have
been utilized or otherwise reduced. As of the Effective Time, (i) none of the
NOLs are disallowed or limited under the provisions of the Code or regulations
relating to separate return limitation years ("SRLY") or consolidated return
----
changes of ownership ("CRCO"), (ii) none of the NOLs are disallowed or limited
----
under the provisions of the Code and regulations relating to "dual consolidated
losses" (as defined in Section 1503 of the Code or the regulations thereunder),
and (iii) none of the NOLs are disallowed or subject to any limitation by reason
of Sections 269, 382, or 384 of the Code or the regulations thereunder, except
to the extent that the acquisition or right to acquire shares of Common Stock by
Parent, Sub or any of their affiliates results in any such disallowance or
limitation.
(c) As of September 30, 1994, the "affiliated group" (as defined in
Section 1504(a) of the Code) of which Company is the common parent has
consolidated credits described in Section 38(b) of the Code of not less than
$1,100,000 that expire in years 1996 through 2003 (the "Credits"), and between
-------
September 30, 1994 and the Effective Time none of the Credits will have been
utilized or otherwise reduced. The allocation of the total Credits among the
types of credits described in Section 38(b) of the Code is set forth in the
Company Disclosure Letter. As of the Effective Time, none of the Credits are
disallowed or subject to any limitation, including any disallowance or
limitation by reason of Section 269, 381 or 383 of the Code or the regulations
thereunder, except to the extent that the acquisition or right to acquire shares
of Common Stock by Parent, Sub or any of their affiliates results in any such
disallowance or limitation.
(d) For purposes of this Agreement (i) "Tax" (and, with correlative
---
meaning, "Taxes" and "Taxable") means any federal, state, local or foreign
----- -------
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, premium, withholding, alternative or added minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest or penalty, imposed by any Governmental Entity, and (ii) "Tax Return"
----------
means any return,
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report or similar statement required to be filed with respect to any Tax
(including any attached schedules), including, without limitation, any
information return, claim for refund, amended return or declaration of estimated
Tax; and (iii) "Code" means the Internal Revenue Code of 1986, as amended.
----
Section 4.18 Environmental Matters. (a) The Company's and each of
---------------------
its Subsidiaries' past and present operations of its business have complied and
are in compliance with all applicable foreign, federal, state and local laws,
statutes, regulations, codes or ordinances enacted, adopted, issued or
promulgated by any Governmental Entity relating to or addressing the
environment, health or safety as in the effect at the relevant time, including,
but not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act, any amendments thereto, any successor statute and any regulations
promulgated thereunder ("CERCLA"), the Occupational Safety and Health Act, any
------
amendments thereto, any successor statute and any regulations promulgated
thereunder ("OSHA") and the Resource Conservation and Recovery Act, any
----
amendments thereto, any successor statute and any applicable regulations
promulgated thereunder ("RCRA"), and any state equivalent ("Environmental
---- -------------
Laws"), except for such failures to so comply that would not have a Material
Adverse Effect on the Company.
(b) Except as set forth in Section 4.18 of the Company Disclosure
Letter and except for such permits that the failure to so obtain would not have
a Material Adverse Effect on the Company, the Company and each of its
Subsidiaries has obtained all environmental, health and safety permits from
Governmental Entities necessary for the operation of its business, and all such
permits are in good standing and the Company and each of its Subsidiaries is in
compliance with all terms and conditions of such permits except where the
failure to so comply would not have a Material Adverse Effect on the Company.
(c) To the best knowledge of the Company, none of the Company or its
Subsidiaries, nor any of the Company's or its Subsidiaries' properties or its
past or present operations, is subject to any on-going investigation by, order
from or agreement with any person (including without limitation any prior owner
or operator of any property of the Company or its Subsidiaries) respecting (i)
any Environmental Law, (ii) any remedial action or (iii) any claim of losses and
expenses arising from the release or threatened release of any waste, pollutant,
hazardous or toxic substance or waste, petroleum, petroleum-based substance or
waste, special waste, biohazardous material (including genetically
engineered/recombinant material), radioactive material or any constituent of any
such substance or waste ("Contaminant") into the environment.
-----------
(d) Neither the Company nor any of its Subsidiaries is subject to any
judicial or administrative proceeding, order,
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<PAGE>
judgment, decree or settlement alleging or addressing a violation of or
liability under any Environmental Law.
(e) Except as set forth in Section 4.18 of the Company Disclosure
Letter, neither the Company nor any of its Subsidiaries has (i) reported a
release of a hazardous substance pursuant to Section 103(a) of CERCLA, or any
state equivalent; (ii) filed a notice pursuant to Section 103(c) of CERCLA;
(iii) filed notice pursuant to Section 3010 of RCRA, indicating the generation
of any hazardous waste, as that term is defined under 40 CFR Part 261 or any
state equivalent; or (iv) filed any notice under any applicable Environmental
Law reporting a substantial violation of any applicable Environmental Law.
(f) There is not now, nor to the knowledge of the Company has there
even been, on or in any property of the Company or any of its Subsidiaries (i)
any treatment, recycling, storage or disposal of any hazardous waste, as that
term is defined under 40 CFR Part 261 or any state equivalent that requires or
required a permit pursuant to Section 3005 of RCRA or (ii) any underground
storage tank or surface impoundment or landfill or waste pile.
(g) Except as set forth in Section 4.18 of the Company Disclosure
Letter, there is not now on or in any property of the Company or any of its
Subsidiaries any polychlorinated biphenyls (PCBs) used in pigments, hydraulic
oils, electrical transformers or other equipment.
(h) Neither the Company nor any of its Subsidiaries has received any
notice or claim to the effect that it is or may be liable to any person as a
result of, and the Company has no knowledge of any basis for any claim of
liability for, the release or threatened release of a Contaminant into the
environment on any property of the Company or any of its Subsidiaries.
(i) No property of the Company or any of its Subsidiaries has been
listed or, to the knowledge of the Company, proposed for listing on the National
Priorities List pursuant to CERCLA, on the Comprehensive Environmental Response,
Compensation and Liability Information System List or any state list of sites
requiring remedial action.
(j) To the best knowledge of the Company, neither the Company nor any
of its Subsidiaries has sent or arranged for the transport of any Contaminant to
any site listed on the National Priorities List pursuant to CERCLA.
(k) Any asbestos-containing material which is on or part of any
property of the Company or any of its Subsidiaries (excluding any raw materials
used in the manufacture of products or products themselves) is in good repair
according to the current standards and practices governing such material, and
its
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<PAGE>
presence or condition does not violate any currently applicable Environmental
Law.
Section 4.19 Vote Required. The affirmative vote of the holders of a
-------------
majority of the outstanding shares of Common Stock of the Company entitled to
vote with respect to the Merger is the only vote of the holders of any class or
series of the Company's capital stock necessary to approve this Agreement, the
Merger and any transactions contemplated hereby.
Section 4.20. Insurance. The Company and its Subsidiaries maintain
---------
policies of fire and casualty, liability (general, products and other
liability), workers' compensation and other forms of insurance and bonds in such
amounts and against such risks and losses as are insured against by companies
engaged in the same or a similar business. The Company shall keep or cause such
insurance or comparable insurance to be kept in full force and effect through
the Effective Time. The Company and its Subsidiaries have complied with each of
such insurance policies and have not failed to give any notice or present any
claim thereunder in a due and timely manner.
Section 4.21 Brokers. No broker, investment banker or other person,
-------
other than Piper Jaffray Inc., the fees and expenses of which will be paid by
the Company, is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company, which arrangements
provide for the payment to Piper Jaffray Inc. of a fee of $500,000 and expenses
in connection with the transactions contemplated by this Agreement, and do not
bind Parent and its affiliates (including, after consummation of the Offer, the
Company and its Subsidiaries) other than with respect to indemnification and
contribution and the payment of such fees and expenses.
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING SUB
--------------------------------------------
Parent and Sub jointly and severally represent and warrant to the
Company as follows:
Section 5.1 Organization and Standing. Sub is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Sub was organized solely for the purpose of acquiring the Company
engaging in the transactions contemplated by this Agreement and has not engaged
in any business since it was incorporated which is not in connection with the
acquisition of the Company and this Agreement.
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<PAGE>
Section 5.2 Capital Structure. The authorized capital stock of Sub
-----------------
consists of 1,000 shares of common stock, par value $.01 per share, all of which
are validly issued and outstanding, fully paid and nonassessable and are owned
by Parent free and clear of all Liens.
Section 5.3 Authority; Non-Contravention. Sub has the requisite
----------------------------
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement,
the performance by Sub of its obligations hereunder and the consummation of the
transactions contemplated hereby have been duly authorized by its Board of
Directors and Parent as its sole stockholder, and, except for the corporate
filings required by state law, no other corporate proceedings on the part of Sub
are necessary to authorize this Agreement and the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by Sub
and (assuming the due authorization, execution and delivery hereof by the
Company) constitutes a valid and binding obligation of Sub enforceable against
Sub in accordance with its terms.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
-----------------------------------------
Section 6.1 Conduct of Business by the Company Pending the Merger.
-----------------------------------------------------
Except as otherwise expressly contemplated by this Agreement, during the period
from the date of this Agreement through the Effective Time, the Company shall,
and shall cause its Subsidiaries to, in all material respects carry on their
respective businesses in, and not enter into any material transaction other than
in accordance with, the regular and ordinary course and, to the extent
consistent therewith, use its reasonable best efforts to preserve intact their
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers and others having business dealings with them. Without limiting the
generality of the foregoing, and, except as otherwise expressly contemplated by
this Agreement, the Company shall not, and shall not permit any of its
Subsidiaries to, without the prior written consent of Parent:
(a) (x) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to stockholders of the
Company in their capacity as such, other than dividends payable to the
Company declared by any of the Company's Subsidiaries, (y) split, combine
or reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its
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capital stock or (z) except as set forth in Section 4.2 of the Company
Disclosure Letter, purchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its Subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities;
(b) issue, deliver, sell, pledge, dispose of or otherwise encumber
any shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities or equity equivalent (other than, in the case of the Company,
the issuance of Common Stock during the period from the date of this
Agreement through the Effective Time upon the exercise of stock options
issued pursuant to the Stock Plans and outstanding (as set forth in Section
-------
4.2) on the date of this Agreement in accordance with their current terms;
---
(c) amend its charter or bylaws;
(d) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of or equity in, or by
any other manner, any business or any corporation, partnership, limited
liability Company, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets, in each case
that are material, individually or in the aggregate, to the Company and its
Subsidiaries, taken as a whole;
(e) sell, lease or otherwise dispose of or agree to sell, lease or
otherwise dispose of, any of its assets that are material, individually or
in the aggregate, to the Company and its Subsidiaries, taken as a whole,
except for sales of inventory or other assets in the ordinary course of
business;
(f) incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any debt
securities of others, except for borrowings or guarantees incurred in the
ordinary course of business consistent with past practice, or, except as
set forth in Section 4.2 of the Company Disclosure Letter, make any loans,
advances or capital contributions to, or investments in, any other person,
other than to the Company or any wholly owned Subsidiary of the Company and
other than in the ordinary course of business consistent with past
practice;
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<PAGE>
(g) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any
Subsidiary of the Company;
(h) enter into or adopt or amend any existing severance plan,
severance agreement or severance arrangement or, other than in the ordinary
course of business, enter into or amend any Company Benefit Plan (including
without limitation, the Stock Plans) or employment or consulting agreement
except, (i) with respect to employees that are not executive officers or
directors, compensation increases associated with promotions and regular
reviews in the ordinary course of business consistent with past practices,
(ii) agreements with consultants of the Company providing for payments by
the Company of less than $20,000 to any individual consultant and less than
$75,000 in the aggregate to all consultants, and (iii) after December 31,
1995, increases of not more than 10% to the base salary of executive
officers of the Company;
(i) waive, amend or allow to lapse any term or condition of any
confidentiality or "standstill" agreement to which the Company is a party;
(j) settle or compromise any suit, proceeding or claim or threatened
suit, proceeding or claim for an amount that is more than $20,000 in the
case of any individual suit, proceeding or claim or $100,000 for all suits,
proceedings or claims;
(k) knowingly violate or fail to perform any obligation or duty
imposed upon it by any applicable federal, state or local law, rule,
regulation, guideline or ordinance;
(l) change its credit policies, procedures or practices, or commit or
renew a prior commitment to lend money, purchase assets, issue a letter of
credit, guarantee or similar instrument or otherwise extend credit to any
person in a manner not in the ordinary course or in a manner inconsistent
with past practice;
(m) (i) modify, amend or terminate any contract, (ii) waive, release,
relinquish or assign any contract (including any insurance policy) or other
right or claim, (iii) prepay any indebtedness or (iv) cancel or forgive any
indebtedness owed to it, other than in each case in a manner in the
ordinary course of business consistent with past practice and which is not
material to the business of the Company and its Subsidiaries;
(n) make any Tax election or change any method of accounting for Tax
purposes, in each case except to the
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extent required by law, or settle or compromise any Tax liability;
(o) change any of the accounting principles or practices used by it
except as required by the SEC or the Financial Accounting Standards Board;
(p) (i) enter into any research and development contract, (ii) enter
into any production contract or "tolling agreement," or (iii) grant any
license relating to its Intellectual Property, except as required by
existing agreements of the Company, copies of which have been provided to
Parent; or
(q) authorize, recommend, announce, propose or agree to take any of
the foregoing actions.
During the period from the date of this Agreement through the Effective Time,
(i) as reasonably requested by Parent, the Company shall confer on a regular
basis with one or more representatives of Parent with respect to material
operational matters; (ii) the Company shall, within 25 days following each
fiscal month, deliver to Parent financial statements, including an income
statement and balance sheet for such month; and (iii) upon the knowledge of the
Company of any Material Adverse Change (as hereinafter defined) in the Company,
any material litigation or material governmental complaints, investigations or
hearings (or communications indicating that the same may be contemplated), or
the breach in any material respect of any representation or warranty contained
herein, the Company shall promptly notify Parent thereof.
Section 6.2 Acquisition Proposals. From and after the date of this
---------------------
Agreement and prior to the Effective Time, except as provided below, the Company
agrees that (a) neither the Company nor its Subsidiaries shall, and the Company
shall not authorize or permit its officers, directors, employees and authorized
agents and representatives (including, without limitation, any investment
banker, attorney or accountant retained by it or any of its Subsidiaries) to,
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making or implementation of any proposal or offer (including, without
limitation, any proposal or offer to its stockholders) with respect to a merger,
acquisition, consolidation or similar transaction involving, or any purchase of
all or any significant portion of the assets or any equity securities of, the
Company or its Subsidiaries (any such proposal or offer being hereinafter
referred to as an "Acquisition Proposal") or engage in any negotiations
----------- --------
concerning, or provide any confidential information or data to, or have any
substantive discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal; (b) it will immediately cease and cause to be terminated any existing
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activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing and will take the necessary steps to inform
the individuals or entities referred to above of the obligations undertaken in
this Section 6.2; and (c) it will notify Parent immediately if any such
-----------
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated or continued
with, it, including the terms of its proposals; provided, however, that nothing
-------- -------
contained in this Section 6.2 shall prohibit the Board of Directors of the
-----------
Company from (i) furnishing information to or entering into discussions or
negotiations with, any person or entity that indicates an interest in making a
Superior Proposal (as hereinafter defined) if, and only to the extent that (A)
the Board of Directors determines in good faith after consultation with the
Company's outside counsel that such action is required for the Board of
Directors to comply with its fiduciary duties to stockholders imposed by laws
and (B) the Company keeps Parent informed of the status of any such discussions
or negotiations; and (ii) to the extent applicable, complying with Rule 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal. If
any person or entity makes a Superior Proposal, upon receipt thereof the Company
shall provide written notice (a "Notice of a Superior Proposal") to Parent of
-----------------------------
such Superior Proposal, including the terms and structure thereof, and if within
five business days following the delivery of the Notice of a Superior Proposal
the Superior Proposal does not continue to be superior in terms of the aggregate
value to be received by the Company's stockholders in light of any improved
transaction proposed by Parent prior to the expiration of such five-day period,
the Company shall cease all discussions or negotiations with such person or
entity. For purposes of this Agreement, "Superior Proposal" means an
-----------------
unsolicited bona fide Acquisition Proposal in writing that the Board of
Directors determines in its good faith judgment (based on the advice of a
nationally recognized investment banking firm) provides greater aggregate value
to the Company's stockholders than the transactions contemplated by this
Agreement. Subject to Article IX, nothing in this Section 6.2 shall (x) permit
---------- -----------
the Company to terminate this Agreement, (y) permit the Company to enter into
any agreement with respect to an Acquisition Proposal during the term of this
Agreement, or (z) affect any other obligation of any party under this Agreement.
Section 6.3 Conduct of Business of Sub Pending the Merger. During
---------------------------------------------
the period from the date of this Agreement through the Effective Time, Sub shall
not engage in any activities of any nature except as provided in or contemplated
by this Agreement.
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ARTICLE VII
ADDITIONAL AGREEMENTS
---------------------
Section 7.1 Company Stockholder Approval; Proxy Statement. (a) If
---------------------------------------------
approval of the Merger by the stockholders of the Company is required by
applicable law, the Company shall call a meeting of its stockholders (the
"Stockholder Meeting") for the purpose of voting upon the Merger and shall use
-------------------
its best efforts to obtain stockholder approval of the Merger. The Stockholder
Meeting shall be held as soon as practicable following the purchase of shares of
Common Stock pursuant to the Offer and the Company will, through its Board of
Directors but subject to the fiduciary duties of its Board of Directors under
applicable law as determined by the Board of Directors in good faith after
consultation with the Company's outside counsel, recommend to its stockholders
the approval of the Merger and not rescind its declaration that the Merger is
advisable. The record date for the Stockholder Meeting shall be a date
subsequent to the date Parent or Sub becomes a record holder of Common Stock
purchased pursuant to the Offer.
(b) If required by applicable law, the Company will, as soon as
practicable following the expiration of the Offer, prepare and file a
preliminary Proxy Statement with the SEC and will use its best efforts to
respond to any comments of the SEC or its staff and to cause the Proxy Statement
to be cleared by the SEC. The Company will notify Parent of the receipt of any
comments from the SEC or its staff and of any request by the SEC or its staff
for amendments or supplements to the Proxy Statement or for additional
information and will supply Parent with copies of all correspondence between the
Company or any of its representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to the Proxy Statement or the Merger.
The Company shall give Parent and its counsel the opportunity to review the
Proxy Statement prior to its being filed with the SEC and shall give Parent and
its counsel the opportunity to review all amendments and supplements to the
Proxy Statement and all responses to requests for additional information and
replies to comments prior to their being filed with, or sent to, the SEC. Each
of the Company and Parent agrees to use its best efforts, after consultation
with the other parties hereto, to respond promptly to all such comments of and
requests by the SEC. As promptly as practicable after the Proxy Statement has
been cleared by the SEC, the Company shall mail the Proxy Statement to the
stockholders of the Company. If at any time prior to the approval of this
Agreement by the Company's stockholders there shall occur any event that should
be set forth in an amendment or supplement to the Proxy Statement, the Company
will prepare and mail to its stockholders such an amendment or supplement.
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<PAGE>
(c) The Company shall use its best efforts to obtain the necessary
approvals by its stockholders of the Merger, this Agreement and the transactions
contemplated hereby (subject to the fiduciary duties of its Board of Directors
under applicable law as determined by the Board of Directors in good faith after
consultation with the Company's outside counsel).
(d) Parent agrees, subject to applicable law, to cause all shares of
Common Stock purchased pursuant to the Offer and all other shares of Common
Stock owned by Sub or any other Subsidiary of Parent to be voted in favor of the
approval of the Merger.
Section 7.2 Access to Information. The Company shall, and shall
---------------------
cause each of its Subsidiaries to, afford to Parent, and to Parent's
accountants, counsel, financial advisers and other representatives, access and
permit them to make such inspections as they may require during normal business
hours during the period from the date of this Agreement through the Effective
Time to all their respective properties, books, contracts, commitments and
records and, during such period, the Company shall, and shall cause each of its
Subsidiaries to, furnish promptly to Parent (i) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of federal or state laws and (ii) all other
information concerning its business, properties and personnel as Parent may
reasonably request. Except as required by law, Parent will hold, and will cause
its affiliates, associates and representatives to hold, any nonpublic
information in confidence until such time as such information otherwise becomes
publicly available and shall use its best efforts to ensure that such
affiliates, associates and representatives do not disclose such information to
others without the prior written consent of the Company. In the event of
termination of this Agreement for any reason, Parent shall, upon request, return
to the Company all nonpublic documents so obtained from the Company or any of
its Subsidiaries and any copies made of such documents for Parent.
Section 7.3 Fees and Expenses. (a) Except as otherwise provided in
-----------------
this Agreement, whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses.
(b) If (A) any person (other than Parent or any of its affiliates)
shall have become, prior to the termination of this Agreement, the beneficial
owner of 50% or more of the outstanding shares of Common Stock, (B) the Offer
shall have expired at a time when the Minimum Condition (as defined in Exhibit
-------
A) shall not have been satisfied and at any time on or prior to nine months
- -
after the expiration of the Offer any person (other than Parent or any of its
affiliates) shall acquire beneficial
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<PAGE>
ownership of 50% or more of the outstanding shares of Common Stock or shall
consummate an Acquisition Proposal, at a price per share less than the sum of
the Merger Consideration plus the amount determined by dividing $1,500,000 by
the number of shares of Common Stock outstanding immediately prior thereto, (C)
at any time prior to the termination of this Agreement any person (other than
Parent or any of its affiliates) shall publicly announce any Acquisition
Proposal and, at any time on or prior to nine months after the termination of
this Agreement, shall become the beneficial owner of 50% or more of the
outstanding shares of Common Stock or shall consummate an Acquisition Proposal,
or (D) the Company terminates this Agreement pursuant to Section 9.1(b)(ii),
-----------------
then the Company shall, in the case of clause (A), (B) or (C), promptly, but in
no event later than two business days after the first of such events to occur,
or, in the case of clause (D) at or prior to the time of such termination, pay
Parent $1,500,000. If the Company fails to pay such amount when due in
accordance with the immediately preceding sentence, which failure is finally
determined by a court of competent jurisdiction, Parent shall be entitled to the
payment from the Company, in addition to such amount, of any legal fees and
expenses incurred in procuring such judicial determination.
(c) If (i) this Agreement is terminated pursuant to Section 9.1(b)(ii)
------------------
or Section 9.1(c)(i), 9.1(c)(ii) (but only if this Agreement is terminated
----------------- ----------
because the representations or warranties of the Company were not true and
correct in all material respects when made (other than those qualified by
"knowledge of the Company" or "to the best knowledge of the Company")),
9.1(c)(iii) or 9.1(c)(iv) or (ii) at any time prior to the termination of this
- ----------- ----------
Agreement any person (other than Parent or any of its affiliates) shall publicly
announce any Acquisition Proposal and, at any time on or prior to six months
after the termination of this Agreement, shall become the beneficial owner of
50% or more of the outstanding shares of Common Stock or shall consummate an
Acquisition Proposal, the Company shall reimburse Parent and Sub (not later than
two business days after submission of statements therefor) for all documented
costs and expenses (including, without limitation, all legal, investment
banking, printing, depositary and related fees and expenses); provided, however,
-------- -------
that the amount to be paid to Parent and Sub pursuant to this Section 7.3(c)
--------------
shall not exceed $750,000; provided, further, that any amount paid pursuant to
-------- -------
this Section 7.3(c) shall be credited against any amount that may become payable
--------------
pursuant to Section 7.3(b); and provided, further, that if the Company has paid
-------------- -------- -------
$1,500,000 pursuant to Section 7.3(b) prior to any payment pursuant to this
--------------
Section 7.3(c), then no amount shall be payable pursuant to this Section 7.3(c).
- -------------- --------------
Section 7.4 Company Stock Options. (a) The Company shall (i)
---------------------
terminate the Stock Plans immediately prior to the Effective Time without
prejudice to the holders of Vested Company Stock Options (as hereinafter
defined), (ii) grant no additional
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<PAGE>
stock options under the Stock Plans and (iii) accelerate the vesting to the date
of the consummation of the Offer of stock options for (A) 21,734 shares granted
on March 24, 1995 with an exercise price of $1.50 per share currently scheduled
to vest on March 24, 1996 and (B) 21,667 shares granted on December 28, 1993
with an exercise price of $2.938 per share currently scheduled to vest on
December 28, 1995.
(b) At the Effective Time, all outstanding stock options to purchase
shares of Common Stock heretofore issued under the Stock Plans or the Consultant
Option Agreements that are then fully exercisable or vested (including those
options vested pursuant to Section 7.4(a)(iii)) (a "Vested Company Stock
------------------- --------------------
Option"), shall, pursuant to the terms of the respective Stock Plans pursuant to
which they were issued and upon their surrender to the Company by the holders
thereof, be cancelled by the Company, and the holders thereof shall receive a
cash payment from the Company in an amount (if any) equal to the number of
shares of Common Stock subject to each surrendered option multiplied by the
difference (if positive) between the exercise price per share of Common Stock
covered by the option and the Merger Consideration. The Company shall use its
best efforts to cause each holder of Vested Company Stock Options to surrender
their Vested Company Stock Options in accordance with the prior sentence. At the
Effective Time, all outstanding stock options to purchase shares of Common Stock
issued under the Stock Plans or the Consultant Option Agreements that are not
then exercisable or vested shall be cancelled without payment to the holders
thereof and the Company shall use its best efforts to cause such stock options
to be surrendered to the Company.
Section 7.5 Reasonable Best Efforts. Upon the terms and subject to
-----------------------
the conditions set forth in this Agreement, each of the parties agrees to use
its reasonable best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger, and the other
transactions contemplated by this Agreement, including (a) promptly making their
respective filings and thereafter making any other required submission under the
Improvements Act with respect to the Offer and the Merger; (b) diligently
opposing any objections to, appeals from or petitions to reconsider or reopen
any such approval by persons not a party to this Agreement; (c) in addition to
the foregoing, the obtaining of all necessary actions or non-actions, waivers,
consents and approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities) and the taking of all reasonable steps as may be necessary to obtain
an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (d) the obtaining of all necessary consents, approvals or
waivers from third parties, (e) the defending of any lawsuits or other
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<PAGE>
legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated hereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed, and (f) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by this Agreement.
Section 7.6 Public Announcements. Parent and Sub, on the one hand,
--------------------
and the Company, on the other hand, will consult with each other before issuing
any press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange or national automated
interdealer quotation system.
Section 7.7 Real Estate Transfer and Gains Taxes. The Company will
------------------------------------
pay any real property transfer or gains Tax or any similar state or local tax
which is attributable to the transfer of the beneficial ownership of the
Company's or its Subsidiaries' real property, if any (collectively, the "Gains
-----
Taxes"), and any penalties or interest with respect to the Gains Taxes, payable
- -----
following the consummation of the Offer or the Merger. The Company agrees to
cooperate with Sub in the timely filing of any Tax Returns with respect to the
Gains Taxes, including supplying in a timely manner a complete list of all real
property interests held by the Company or its Subsidiaries and any information
with respect to such property that is reasonably necessary to complete such Tax
Returns. The portion of the consideration allocable to the real property of the
Company and its Subsidiaries shall be determined by Sub or Parent in its
reasonable discretion and such allocated amount will be used to determine Gains
Taxes. The stockholders of the Company shall be deemed to have agreed to be
bound by the allocation established pursuant to this Section 7.7 in the
-----------
preparation of any Tax Return with respect to the Gains Taxes.
Section 7.8 Indemnification; Directors and Officers Insurance. (a)
-------------------------------------------------
For a period of not less than six years from and after the Effective Time,
Parent agrees to, and to cause the Surviving Corporation to, indemnify and hold
harmless all past and present officers, directors and employees (the
"Indemnified Parties") of the Company and of its Subsidiaries to the full extent
- --------------------
such persons may be indemnified by the Company pursuant to the Company's
Certificate of Incorporation and Bylaws as in effect as of the date hereof for
acts and omissions occurring at or prior to the Effective Time and shall advance
reasonable litigation expenses incurred by such persons in connection with
defending any action arising out of such acts or omissions, provided that such
persons provide the requisite affirmations and
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<PAGE>
undertaking, as set forth in the Company's Bylaws in effect at the date of this
Agreement.
(b) Any Indemnified Party will promptly notify the Parent and the
Surviving Corporation of any claim, action, suit, proceeding or investigation
for which such party may seek indemnification under this Section; provided,
--------
however, that the failure to furnish any such notice shall not relieve Parent or
- -------
the Surviving Corporation from any indemnification obligation under this Section
except to the extent Parent or the Surviving Corporation is materially
prejudiced thereby. In the event of any such claim, action, suit, proceeding,
or investigation, (x) the Surviving Corporation will have the right to assume
the defense thereof, and the Surviving Corporation will not be liable to such
Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred thereafter by such Indemnified Parties in
connection with the defense thereof, except that all Indemnified Parties (as a
group) will have the right to retain one separate counsel, reasonably acceptable
to such Indemnified Party and Parent, at the expense of the indemnifying party
if the named parties to any such proceeding include both the Indemnified Party
and the Surviving Corporation and the representation of such parties by the same
counsel would be inappropriate due to a conflict of interest between them, (y)
the Indemnified Parties will cooperate in the defense of any such matter, and
(z) the Surviving Corporation will not be liable for any settlement effected
without its prior written consent. In addition, Parent will provide, or cause
the Surviving Corporation to provide, for a period of not less than six years
after the Effective Time, the Company's current directors and officers an
insurance and indemnification policy that provides coverage for events occurring
at or prior to the Effective Time (the "D&O Insurance") that is no less
--- ---------
favorable than the existing policy or, if substantially equivalent insurance
coverage is unavail able, the best available coverage; provided, however, that
-------- -------
Parent and the Surviving Corporation shall not be required to pay an annual
premium for the D&O Insurance in excess of two times the last annual premium
paid prior to the date hereof, but in such case shall purchase as much such
coverage as possible for such amount.
Section 7.9 Board Representation. Promptly upon the purchase of
--------------------
shares of Common Stock pursuant to the Offer, Parent shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors of the Company as will give Parent, subject to compliance
with Section 14(f) of the Exchange Act and the rule and regulations promulgated
thereunder, representation on the Board of Directors equal to the product of (a)
the total number of directors on the Board of Directors and (b) the percentage
that the number of shares of Common Stock purchased by Parent bears to the
number of shares of Common Stock outstanding, and the Company shall, upon
request by Parent, promptly increase the size of the Board of
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<PAGE>
Directors and/or exercise its reasonable best efforts to secure the resignations
of such number of directors as is necessary to enable Parent's designees to be
elected to the Board of Directors and shall cause Parent's designees to be so
elected. The Company shall take, at its expense, all action required pursuant
to Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this
Section 7.9 and shall include in the Schedule 14D-9 or otherwise timely mail to
- -----------
its stockholders such information with respect to the Company and its officers
and directors as is required by Section 14(f) and Rule 14f-1 in order to fulfill
its obligations under this Section 7.9. Parent will supply to the Company in
-----------
writing and be solely responsible for any information with respect to itself and
its or Parent's nominees, officers, directors and affiliates required by Section
14(f) and Rule 14f-1.
Section 7.10 Employee Benefits. (a) Until September 30, 1996 Parent
-----------------
shall maintain employee benefits and programs for officers and employees of the
Company and its Subsidiaries that are no less favorable in the aggregate than
those being provided to such officers and employees on the date hereof (it being
understood that Parent will not be obligated to continue any one or more
employee benefits or programs). For purposes of eligibility to participate in
and vesting in all benefits provided to officers and employees of the Company
and its Subsidiaries, such officers and employees of the Company and its
Subsidiaries will be granted their years of service with the Company and its
Subsidiaries. To the extent officers or employees of the Company or its
Subsidiaries shall be covered by any medical plan of Parent, amounts paid under
any medical plans of the Company during the year such coverage becomes effective
shall be taken into account in calculating deductibles and maximum out-of-pocket
limits applicable under the medical plan of Parent as if such amounts had been
paid under such medical plan of Parent.
(b) The foregoing shall not constitute any commitment, contract,
understanding or guarantee (express or implied) on the part of the Surviving
Corporation of a post-Effective Time employment relationship of any term or
duration or on any terms other than those the Surviving Corporation may
establish. Employment of any of the employees by the Surviving Corporation
shall be "at will" and may be terminated by the Surviving Corporation at any
time for any reason (subject to any legally binding agreement, or any applicable
laws or collective bargaining agreement, or any arrangement or commitment). No
provision of this Agreement shall create any third-party beneficiary with
respect to any employee (or dependent thereof) of the Company or any of its
Subsidiaries in respect of continued employment or resumed employment.
Section 7.11 Severance Policy. Parent shall maintain the severance
----------------
policy set forth in Section 7.11 of the Company
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<PAGE>
Disclosure Letter hereof for a period of at least twelve months from the
Effective Time.
ARTICLE VIII
CONDITIONS PRECEDENT
--------------------
Section 8.1 Conditions to Each Party's Obligation to Effect the
---------------------------------------------------
Merger. The respective obligations of each party to effect the Merger shall be
- ------
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. If approval of the Merger by the holders
--------------------
of the Common Stock is required by applicable law, the Merger shall have
been approved by the requisite vote of such holders.
(b) No Order. No Governmental Entity or court of competent
--------
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any law, rule, regulation, executive order, decree or injunction which
prohibits or has the effect of prohibiting the consummation of the Merger;
provided, however, that the Company, Parent and Sub shall use their
-------- -------
reasonable best efforts to have any such order, decree or injunction
vacated.
Section 8.2 Conditions to Obligations of Parent and Sub. The
-------------------------------------------
respective obligations of each of Parent and Sub to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Performance of Obligations; Representations and Warranties. The
----------------------------------------------------------
Company shall have performed in all material respects each of its covenants
and agreements contained in this Agreement required to be performed on or
prior to the Effective Time, and each of the representations and warranties
of the Company contained in this Agreement shall be true and correct in all
material respects (except as set forth in Section 8.2 of the Company
Disclosure Letter), in each case, on and as of the Effective Time as if
made on and as of such date, except as contemplated or permitted by this
Agreement and except for such failures to perform or such failures to be
true and correct as have not had and are not reasonably likely to have a
Material Adverse Effect on the Company, and Parent shall have received a
certificate of the Company, signed by the President or any Vice President
of the Company, to that effect; provided, however, that any references in
-------- -------
this Agreement to the phrases "knowledge of the Company" and "to the best
knowledge of the Company," and variants thereof, shall be disregarded for
the purposes of determining whether the Company shall have breached its
representations and warranties hereunder.
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<PAGE>
(b) Third Party Consents. Except as set forth in Section 8.2 of the
--------------------
Company Disclosure Letter, all required authorizations, consents or
approvals of any third party, the failure to obtain which would have a
Material Adverse Effect on the Company (assuming the Merger had taken
place) shall have been obtained.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 9.1 Termination. This Agreement may be terminated at any
-----------
time prior to the Effective Time, whether before or after any approval by the
stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by the Company if:
(i) the Offer has not been timely commenced (except as a result
of actions or omissions by the Company) in accordance with Section 1.1(a);
--------------
or
(ii) there is a Superior Proposal to acquire all of the
outstanding shares of Common Stock or substantially all of the assets of
the Company and the Board of Directors of the Company determines in good
faith after consultation with the Company's outside counsel that the
failure to approve such Superior Proposal would be inconsistent with the
fiduciary duties to stockholders of the Board of Directors of the Company;
provided, however, that the right to terminate this Agreement pursuant to
-------- -------
this clause shall not be available (A) if the Company has breached in any
material respect its obligations under Section 6.2, (B) in respect of an
-----------
offer involving consideration that is not entirely cash or does not permit
stockholders to receive the payment of the offered consideration in respect
of all shares at the same time, unless the Board of Directors of the
Company has been furnished with a written opinion of a nationally
recognized investment banking firm to the effect that such offer provides a
higher value per share than the consideration per share pursuant to the
Offer or the Merger (as increased pursuant to any revised proposal of
Parent pursuant to Section 6.2) or (C) if, prior to or concurrently with
-----------
any purported termination pursuant to this clause, the Company shall not
have paid the fee contemplated by Section 7.3(b); or
--------------
(iii) there has been a breach by Parent or Sub of any
representation or warranty that would have a material adverse effect on
Parent's or Sub's ability to perform its obligations under this Agreement
and which breach has not
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<PAGE>
been cured within five business days following receipt by Parent or Sub of
notice from the Company of the breach; or
(iv) Parent or Sub fails to comply in any material respect with
any of its material obligations or covenants contained herein, including,
without limitation, the obligation of Sub to purchase shares of Common
Stock pursuant to the Offer, unless such failure results from a breach of
the Company of any obligation, representation, or warranty hereunder, which
has not been cured within five business days following Parent's receipt of
notice from the Company of the breach;
(c) by Parent if:
(i) the Board of Directors of the Company shall have failed to
recommend, or withdrawn, modified or amended in any material respect its
approval or recommendations of, the Offer or the Merger or shall have
resolved to do any of the foregoing, or shall have failed to reject an
Acquisition Proposal within ten business days after receipt by the Company
or public announcement thereof; or
(ii) any of the representations or warranties made by the Company in
this Agreement shall not have been true and correct in all material
respects when made, or shall thereafter ceased to be true and correct in
any material respect as if made as of such later date (other than
representations and warranties made as of a specified date), which failure
to be true and correct has not been cured within five business days
following the Company's receipt of notice from Parent of the breach and
such failure to be true and correct shall be reasonably expected to have a
Material Adverse Effect on the Company; provided, however, that all
-------- -------
references in this Agreement to the phrases "knowledge of the Company" and
"to the best knowledge of the Company," and variants thereof, shall be
disregarded for the purposes of determining whether the Company shall have
breached its representations and warranties hereunder; or
(iii) the Company shall not in all material respects have performed
each obligation and agreement and complied with each covenant to be
performed and complied with by it under this Agreement, unless such failure
results from a breach of Parent or Sub of any obligation, representation or
warranty hereunder, which has not been cured within five business days
following the Company's receipt of notice from the Parent of the breach; or
(iv) the stockholders of the Company do not approve the Merger at the
Stockholder Meeting in accordance with the DGCL, if such approval is
required by the DGCL; or
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<PAGE>
(v) if Sub is entitled to terminate the Offer as a result of the
occurrence of any event described in Exhibit A; or
---------
(d) by either Parent or the Company if:
(i) the Merger has not been effected on or prior to the close of
business on April 30, 1996; provided, however, that the right to terminate
-------- -------
this Agreement pursuant to this clause shall not be available to any party
whose failure to fulfill any obligation of this Agreement has been the
cause of, or resulted in, the failure of the Merger to have occurred on or
prior to the aforesaid date; or
(ii) any court of competent jurisdiction or any governmental,
administrative or regulatory authority, agency or body shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; or
(iii) upon a vote at a duly held meeting or upon any adjournment
thereof, the stockholders of the Company shall have failed to give any
approval required by applicable law; or
(iv) as the result of the failure of any of the conditions set
forth in Exhibit A hereto, the Offer shall have terminated or expired in
---------
accordance with its terms without Sub having purchased any shares of Common
Stock pursuant to the Offer; provided, however, that the right to terminate
-------- -------
this Agreement pursuant to this Section 9.1(d)(iv) shall not be available
-----------------
to any party whose failure to fulfill any of its obligations under this
Agreement results in the failure of any such condition; or
(v) Parent or the Company shall have reasonably determined that
any Offer condition (other than the Minimum Condition (as defined in
Exhibit A)) is not capable of being satisfied at any time in the future;
---------
provided, however, that the right to terminate this Agreement pursuant to
-------- -------
this clause shall not be available to any party whose failure to fulfill
any obligation of this Agreement has been the cause of, or resulted in,
such Offer condition being incapable of satisfaction.
Section 9.2 Effect of Termination. In the event of termination of
---------------------
this Agreement by either Parent or the Company, as provided in Section 9.1, this
-----------
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of the Company, Parent or Sub or their respective officers or
directors (except as set forth in the last two sentences of Section 7.2 and
-----------
except for Section 7.3, which shall survive the termination); provided, however,
----------- -------- -------
that nothing contained in this Section 9.2
-----------
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<PAGE>
shall relieve any party hereto from any liability for any breach of this
Agreement.
Section 9.3 Amendment. This Agreement may be amended by the parties
---------
hereto, by or pursuant to action taken by their respective Boards of Directors,
at any time before or after any approval of the Merger by the stockholders of
the Company but, after the purchase of shares of Common Stock pursuant to the
Offer, no amendment shall be made which decreases the Merger Consideration or
which in any way materially adversely affects the rights of such stockholders,
without the further approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
Section 9.4 Waiver. At any time prior to the Effective Time, the
------
parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein which may legally be waived. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
Section 9.5 Procedure for Termination, Amendment or Waiver. A
----------------------------------------------
termination of this Agreement pursuant to Section 9.1, an amendment of this
-----------
Agreement pursuant to Section 9.3 or a waiver pursuant to Section 9.4 shall, in
----------- -----------
order to be effective, require (a) in the case of Parent, action by its Board of
Directors or the duly authorized designee of its Board of Directors and (b) in
the case of the Company, action by its Board of Directors.
ARTICLE X
GENERAL PROVISIONS
------------------
Section 10.1 Non-Survival of Representations and Warranties. None of
----------------------------------------------
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time.
Section 10.2 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally, sent by
overnight courier or telecopied (with a confirmatory copy sent by overnight
courier) to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
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<PAGE>
(a) if to Parent or Sub, to:
Mallinckrodt Veterinary, Inc.
421 East Hawley Street
Mundelein, Illinois 60060
Attention: Paul D. Cottone,
President and Chief Executive Officer
Fax: (708) 949-3756
with a copy to:
Mallinckrodt Veterinary, Inc.
421 East Hawley Street
Mundelein, Illinois 60060
Attention: Thomas L. Farquer,
Vice President, Law
Fax: (708) 949-3754
Mallinckrodt Group Inc.
7733 Forsyth Boulevard
St. Louis, Missouri 63105
Attention: Roger A. Keller,
Vice President, Secretary
and General Counsel
Fax: (314) 854-5366
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attn: Dennis V. Osimitz
Fax: (312) 853-7036
(b) if to the Company, to:
Syntro Corporation
9669 Lackman Road
Lenexa, Kansas 66219
Attention: J. Donald Todd
Fax: (913) 894-9373
with a copy to:
Husch & Eppenberger
1200 Main Street, Suite 1700
Kansas City, Missouri 64105
Attention: Mary Anne O'Connell
Fax: (816) 421-0596
The parties hereby agree that all reports, schedules, registration
statements and other documents to be provided to Parent pursuant to Section
-------
7.2(i) shall be delivered only to Thomas L. Farquer, Vice President, Law of
- ------
Parent, at the address listed above.
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<PAGE>
Section 10.3 Interpretation. When a reference is made in this
--------------
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." As used in this Agreement, (a)
"business day" shall have the meaning ascribed thereto in Rule 14d-1(c)(6) under
the Exchange Act, (b) "Material Adverse Change" or "Material Adverse Effect"
----------------------- -----------------------
means, when used with respect to Parent, Sub or the Company, as the case may be,
any change or effect, either individually or in the aggregate, that is or can
reasonably be expected to be materially adverse to the business, assets,
liabilities, properties, condition (financial or otherwise), results of
operations or prospects of all or any material part of Parent and its
Subsidiaries taken as a whole, Sub, or the Company and its Subsidiaries taken as
a whole, as the case may be, except as set forth in Section 8.2 of the Company
Disclosure Letter, (c) "Subsidiary" means any corporation, partnership, limited
----------
liability company, joint venture or other legal entity of which Parent or the
Company, as the case may be (either alone or through or together with any other
Subsidiary), owns, directly or indirectly, 50% or more of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity and (d) "Company Disclosure Letter" means the letter dated
-------------------------
the date hereof from the Company to Parent and Sub.
Section 10.4 Counterparts. This Agreement may be executed in
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 10.5 Entire Agreement; No Third-Party Beneficiaries. This
----------------------------------------------
Agreement, including the Company Disclosure Letter and the other documents and
instruments referred to herein, (a) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof and (b) except for
Sections 7.4 and 7.8, is not intended to confer upon any person other than the
- ------------ ---
parties any rights or remedies hereunder.
Section 10.6 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 10.7 Assignment. Neither this Agreement nor any of the
----------
rights, interests or obligations hereunder shall be assigned by any of the
parties without the prior written consent
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<PAGE>
of the other parties, except that Sub may assign, in its sole discretion, any of
or all its rights, interests and obligations under this Agreement to Parent or
to any direct or indirect wholly owned subsidiary of Parent, but no such
assignment shall relieve Sub of any of its obligations hereunder. Subject to
the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors
and assigns.
Section 10.8 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions be consummated as originally contemplated to the
fullest extent possible.
Section 10.9 Enforcement of this Agreement. The parties agree that
-----------------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
Section 10.10 Incorporation of Exhibits. All Schedules, Exhibits and
-------------------------
Annexes attached hereto and referred to herein are hereby incorporated herein
and made a part hereof for all purposes as if fully set forth herein.
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<PAGE>
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
MALLINCKRODT VETERINARY, INC.
By: /s/ Paul D. Cottone
---------------------------
Name: Paul D. Cottone
Title: President
MALLINCKRODT VETERINARY
ACQUISITIONS, INC.
By: /s/ Paul D. Cottone
---------------------------
Name: Paul D. Cottone
Title: President
SYNTRO CORPORATION
By: /s/ J. Donald Todd
---------------------------
Name: J. Donald Todd
Title: President
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<PAGE>
EXHIBIT A
Notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or pay for, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) of the
Exchange Act, any shares of Common Stock not theretofore accepted for payment or
paid for and may terminate or amend the Offer as to such shares of Common Stock
unless (i) there shall have been validly tendered and not withdrawn prior to the
expiration of the Offer that number of shares of Common Stock which would
represent at least a majority of the outstanding shares of Common Stock on a
fully diluted basis (the "Minimum Condition") and (ii) any waiting period under
-----------------
the Improvements Act applicable to the purchase of shares of Common Stock
pursuant to the Offer shall have expired or been terminated. Furthermore,
notwithstanding any other term of the Offer of this Agreement, Sub shall not be
required to accept for payment or, subject as aforesaid, to pay for any shares
of Common Stock not theretofore accepted for payment or paid for, and may
terminate or amend the Offer if at any time on or after the date of this
Agreement and before the acceptance of such shares of Common Stock for payment
or the payment therefor, any of the following conditions exist or shall occur
and remain in effect:
(a) there shall have been instituted or pending any action or
proceeding by any Governmental Entity, which (i) seeks to challenge the
acquisition by Sub of shares of Common Stock pursuant to the Offer,
restrain, prohibit or delay the making or consummation of the Offer or the
Merger, or obtain any material damages in connection therewith, (ii) seeks
to make the purchase of or payment for some or all of the shares of Common
Stock pursuant to the Offer or the Merger illegal, (iii) seeks to impose
material limitations on the ability of Sub (or any of its affiliates)
effectively to acquire or hold, or to require Parent or the Company or any
of their respective affiliates or subsidiaries to dispose of or hold
separate, any material portion of the assets or the business of Parent and
its affiliates taken as a whole or the Company and its subsidiaries taken
as a whole, or (iv) seeks to impose material limitations on the ability of
Sub (or its affiliates) to exercise full rights of ownership of the shares
of Common Stock purchased by it, including, without limitation, the right
to vote the shares purchased by it on all matters properly presented to the
stockholders of the Company; or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any state, federal or
foreign government or governmental authority or by any court, domestic or
foreign, any statute, rule, regulation, judgment, decree, order or
injunction, that could reasonably be expected to, in the judgment of
Parent, directly or indirectly, result in any of the consequences referred
to in clauses (i) through (iv) of subsection (a) above; or
<PAGE>
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market in the United States, (ii) the
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) the commencement of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States which would reasonably be expected
to have a Material Adverse Effect on the Company or prevent (or materially
delay) the consummation of the Offer, (iv) any limitation (whether or not
mandatory) by any governmental or regulatory authority on, or any other
event which, in the reasonable judgment of Parent, has had a material
adverse effect on the extension of credit by banks or other lending
institutions in the United States, or (v) from the date of this Agreement
through the date of termination or expiration of the Offer, a decline of at
least 25% in either the Dow Jones Industrial Average or the Standard &
Poor's 500 Index; or
(d) the Company and Parent shall have reached an agreement or
understanding that the Offer or this Agreement be terminated or this
Agreement shall have been terminated in accordance with its terms; or
(e) any of the representations and warranties made by the Company in
this Agreement shall not have been true and correct in all material
respects when made, or shall thereafter have ceased to be true and correct
in any material respect as if made as of such later date (other than
representations and warranties made as of a specified date), or the Company
shall not in all material respects have performed each obligation and
agreement and complied with each covenant to be performed and complied with
by it under this Agreement, which failure to be true and correct or such
failure to perform or comply has not been cured within five business days
following the Company's receipt of notice from Parent of the breach and
such failure to be true and correct or such failure to perform or comply
shall be reasonably expected to have a Material Adverse Effect on the
Company; provided, however, that all references in this Agreement to the
-------- -------
phrases "knowledge of the Company" and "to the best knowledge of the
Company," and variants thereof, shall be disregarded for the purposes of
determining whether the Company shall have breached its representations,
warranties and covenants resulting in the ability of Parent to terminate
this Agreement pursuant to this clause (e);
(f) the Company's Board of Directors shall have modified or amended
its recommendation of the Offer in any manner adverse to Parent or shall
have withdrawn its recommendation of the Offer, or shall have recommended
acceptance of any Acquisition Proposal or shall have resolved to do any of
the foregoing, or shall have failed to
-2-
<PAGE>
reject any Acquisition Proposal within ten business days after receipt of
the Company or public announcement thereof;
(g) (i) any corporation, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) ("person"), other than Parent, shall have
acquired beneficial ownership of 50% or more of the outstanding shares of
Common Stock, or shall have been granted any options or rights, conditional
or otherwise, to acquire a total of 50% or more of the outstanding shares
of Common Stock; (ii) any new group shall have been formed which
beneficially owns 50% or more of the outstanding shares of Common Stock; or
(iii) any person (other than Parent or one or more of its affiliates) shall
have entered into an agreement in principle or definitive agreement with
the Company with respect to a tender or exchange offer for any shares of
Common Stock or a merger, consolidation or other business combination with
or involving the Company; or
(h) there shall have occurred a Material Adverse Change to the
Company.
The foregoing conditions are for the sole benefit of Parent and may be
asserted by Parent regardless of the circumstances giving rise to any such
condition 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 will not be deemed a waiver of any
right, the waiver of such right with respect to any particular facts or
circumstances shall not be deemed a waiver with respect to any other facts or
circumstances, and each right will be deemed an ongoing right which may be
asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions,
all tendered shares of Common Stock not theretofore accepted for payment shall
forthwith be returned by the depositary for the Offer to the tendering
stockholders.
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