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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 8, 1997
KOLLMORGEN CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 1-5562 04-2151861
(STATE OR OTHER (COMMISSION (I.R.S. EMPLOYER
JURISDICTION OF FILE NUMBER) IDENTIFICATION
INCORPORATION) NUMBER)
1601 Trapelo Road, Waltham, Massachusetts, 02154
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (781) 890-5655
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Item 5. Other Events
On December 15, 1997 Kollmorgen Corporation (the "Company") proposed
a business combination (the "Proposed Combination") with Pacific Scientific
Company, a California corporation ("Pacific Scientific"), by delivering a
letter to Lester Hill, the Chief Executive Officer of Pacific Scientific (the
"Proposal Letter"), announcing its intention to commence a tender offer (the
"Offer") for a majority of Pacific Scientific's common shares. On that same
day, Torque Corporation, a wholly owned subsidiary of the Company (the
"Purchaser") commenced the Offer by filing a Tender Offer Statement on
Schedule 14D-1 with the Securities and Exchange Commission (the
"Commission"). The Offer is being made for 6,347,241 shares of Pacific
Scientific shares or such greater or lesser number of shares that, together
with the shares owned by the Company and the Purchaser, would constitute a
majority of the outstanding common shares of Pacific Scientific on a fully
diluted basis at a price of $20.50 per share, net to the seller in cash.
In furtherance of the Proposed Combination, the Company commenced a
consent solicitation (the "Solicitation") by filing a Consent Solicitation
Statement/Preliminary Prospectus with the Commission. The Solicitation is
being made to urge Pacific Scientific shareholders to act by written consent
to call a special meeting of Pacific Scientific shareholders (the "Pacific
Scientific Special Meeting"). At the Pacific Scientific Special Meeting, the
Company will ask the Pacific Scientific Shareholders to: (i) the remove from
office the entire Pacific Scientific Board of Directors (the "Pacific
Scientific Board"); (ii) fill the newly created vacancies on the Pacific
Scientific Board by electing six persons nominated by the Company; and (iii)
repeal any and all provisions of the Pacific Scientific bylaws that have not
been duly filed with the Commission prior to August 11, 1997, including any
and all amendments to the Pacific Scientific Bylaws adopted on or after
December 15, 1997. The Consent Solicitation Statement/Preliminary Prospectus
also constitutes a preliminary prospectus with respect to the Company's common
stock, par value $2.50 per share, that will ultimately be issued in connection
with the Proposed Combination (the "Kollmorgen Common Stock").
In connection with the Proposed Combination, the Company's Board of
Directors (the "Kollmorgen Board") intends to call a special meeting of the
Company's shareholders (the "Kollmorgen Special Meeting"). At the
Kollmorgen Special Meeting, currently expected to be held on or about January
28, 1998, the Company's shareholders will be asked to vote on a proposal to
approve the issuance of shares of Kollmorgen Common Stock to be issued in
connection with the Proposed Combination. The Kollmorgen Board set December
26, 1997 ("the Record Date") as the Record Date to determine the shareholders
entitled to notice of and to vote at the Kollmorgen Special Meeting
(the "Record Date").
On December 15, 1997, the Company also commenced litigation against
Pacific Scientific and the Pacific Scientific Board in the United States
District Court for the Central District of California seeking, among other
things, an order (i) declaring that failure to redeem the Rights or render
the Rights inapplicable to the Offer and the Proposed Merger or to approve
the Offer and the Proposed Merger for purposes of Article Fifth of Pacific
Scientific's Articles of Incorporation ("Article Fifth") would constitute a
breach of the Pacific Scientific Board's fiduciary duties to Pacific
Scientific shareholders under California law, (ii) invalidating the Rights or
compelling the Pacific Scientific Board to redeem the Rights or render the
Rights inapplicable to the Offer and the Proposed Merger, (iii) compelling
the Pacific Scientific Board to approve the Offer and the Proposed Merger for
purposes of Article Fifth and (iv) enjoining the Pacific Scientific Board
from taking any actions to interfere with the Offer, the Solicitation or the
Proposed Merger.
Finally, on December 8, 1997, the Company's Board approved an
amendment to the Company's Bylaws. Attached and incorporated herein by
reference in its entirety as Exhibit 3.1 is a copy of the Amended and
Restated Bylaws as of December 8, 1997.
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Attached and incorporated herein by reference in their entirety as
Exhibits 99.1 and 99.2, respectively, are copies of the press release, dated
December 15, 1997, announcing the commencement of the Offer, and the press
release dated December 15, 1997, announcing the Record Date and the date of
the Kollmorgen Shareholder's meeting.
Item 7(c). Exhibits
3.1 Amended and Restated Bylaws.
99.1 Press Release, dated December 15, 1997 announcing the
commencement of the Offer.
99.2 Press Release, dated December 15, 1997 announcing the
Record Date and the date of the Kollmorgen shareholder's
meeting.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KOLLMORGEN CORPORATION
Registrant
Date: December 15, 1997 /s/ James A. Eder
--------------------------
James A. Eder, Vice President,
Secretary and General Counsel
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Index to Exhibits
EXHIBIT NO. DESCRIPTION
3.1 Amended and Restated Bylaws.
99.1 Press Release, dated December 15, 1997 announcing the
commencement of the Offer.
99.2 Press Release, dated December 15, 1997 announcing the
Record Date and the date of the Kollmorgen shareholder's
meeting.
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EXHIBIT 3.1
KOLLMORGEN CORPORATION
AMENDED AND RESTATED
BY-LAWS
ARTICLE I
Meeting of Shareholders
Section l. Annual Meetings. The annual meeting of shareholders
for the election of directors and for the transaction of such other business as
may properly come before the meeting (as defined in Section 4 herein) shall be
held at the principal office of the Corporation, or at such other place within
or without the State of New York as shall be designated by the Board of
Directors, on the second Wednesday in May of each year at 10 o'clock in the
forenoon of that day. If the day so designated falls on a legal holiday, the
meeting shall be held on the first secular day thereafter. If the election of
directors shall not be held as prescribed above, such election will be held at a
special meeting of shareholders called in accordance with the provisions of
these By-Laws or in the manner provided by law.
Section 2. Special Meetings. Special meetings of the shareholders
may be called at any time by the Chairman of the Board of Directors or the Chief
Executive Officer or by resolution of the Board of Directors, and shall be
called by the Secretary or any other officer when directed by the Chairman of
the Board of Directors or the chief executive officer or requested in writing by
shareholders representing not less than one-half of the outstanding shares of
stock of the Corporation entitled to vote at such meeting, stating the purposes
of the meeting so requested. No business other than that specified in the
notice of the meeting shall be presented to any such special meeting, unless
otherwise prescribed by law.
Special meetings may also be called and held in such cases and in such
manner as may be specifically provided by law.
Section 3. Notice. (a) Notice of every meeting of shareholders
shall be in writing, shall state the place, date and hour of the meeting and,
unless it is the annual meeting, shall indicate that it is being issued by or at
the direction of the person or persons calling the meeting. Additionally,
notice of a special meeting shall also state the purpose or purposes for which
the meeting is called. A copy of such notice shall be served personally or by
mail upon each shareholder of record entitled to vote at such meeting, not less
than ten (10) or more than fifty (50) days before such meeting. If mailed, such
notice shall be directed to each shareholder at his address as it appears on the
stock book of the Corporation, unless he shall have filed with the Secretary a
written request that notices
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intended for him be mailed to some other address, in which case it shall be
mailed to the place designated in such request.
(b) Notice of the time or place of any adjourned meeting need not be
given if the time and place to which the meeting is adjourned are announced at
the meeting at which the adjournment is taken. At the adjourned meeting any
business may be transacted that might have been transacted on the original date
of the meeting.
(c) Notice of any meeting shall be deemed to have been given to any
shareholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the meeting.
Section 4. Notice of Shareholder Business and Nomination of
Directors. (a) At annual or special meetings of the shareholders, only such
business shall be conducted as shall have been brought before the meetings (i)
pursuant to the Corporation's notice of meeting, (ii) by or at the direction of
the Board of Directors, or (iii) by any shareholder of the Corporation who is a
shareholder of record at the time of giving of notice provided for in this
Section 4, who shall be entitled to vote at such meeting, and who complies with
the notice procedures set forth in this Section 4.
(b) Only persons who are nominated in accordance with the procedures
set forth in these By-Laws shall be eligible to serve as directors. Nominations
of persons for election to the Board of Directors may be made at a meeting of
shareholders (i) by or at the direction of the Board of Directors, or (ii) by
any other shareholder of the Corporation who is a shareholder of record at the
time of giving of notice provided for this Section 4, who shall be entitled to
vote for the election of directors at the meeting, and who complies with the
notice procedures set forth in this Section 4.
(c) A shareholder must give timely, written notice to the Secretary
of the Corporation to nominate directors at an annual or special meeting or to
propose business to be brought before an annual or special meeting. To be
timely, a shareholder's notice must be received at the principal executive
offices of the Corporation not more than 120 days nor less than 90 days before
the meeting. Such shareholder's notice shall set forth (i) with respect to each
matter, if any, that the shareholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting and
the reasons for conducting such business at the meeting, (ii) with respect to
each person, if any, whom the shareholder proposes to nominate for election as a
director, all information relating to such person (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director) that is required under the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder, (iii)
the name and address, as they appear on the Corporation's records, of the
shareholder proposing such business or nominating such persons (as the case may
be), and the name and address of the
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beneficial owner, if any, on whose behalf the proposal or nomination is made,
(iv) the class and number of shares of capital stock of the Corporation that are
owned beneficially and of record by such shareholder of record and by the
beneficial owner, if any, on whose behalf the proposal or nomination is made,
and (v) any material interest or relationship that such shareholder of record
and/or the beneficial owner, if any, on whose behalf the proposal or nomination
is made may respectively have in such business or with such nominee. At the
request of the Board of Directors, any person nominated for election as a
director shall furnish to the Secretary of the Corporation the information
required to be set forth in a shareholder's notice of nomination which pertains
to the nominee.
(d) No business shall be conducted, and no person shall be nominated
to serve as a director, at an annual or special meeting of shareholders, except
in accordance with the procedures set forth in this Section 4. The chairman of
the meeting (as appointed by the Chairman of the Board) shall, if the facts
warrant, determine that business was not properly brought before the meeting, or
that a nomination was not made, in accordance with the procedures prescribed by
these By-Laws and, if he shall so determine, he shall so declare to the meeting,
and any such business not properly brought before the meeting shall not be
transacted and any defective nomination shall be disregarded. A shareholder
shall also comply with all applicable requirements of the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder
with respect to the matters set forth in this Section 4.
Section 5. Quorum. At all meetings of shareholders the presence
in person or by proxy of the holders of a majority of the votes entitled to vote
thereat shall be necessary to constitute a quorum except where otherwise
provided by the Certificate of Incorporation, by these By-Laws or by law.
Section 6. Adjournment in Absence of Quorum. Any meeting duly
called and noticed, at which shareholders constituting a quorum shall not be
present in person or by proxy, may be adjourned by a vote of the holders of a
majority of the votes present.
Section 7. Voting. At all meetings of the shareholders, a quorum
being present, all matters, except as otherwise provided by the Certificate of
Incorporation or by law, shall be decided by a majority of the votes cast by the
shareholders present in person or by proxy and entitled to vote.
Section 8. Proxies. Every shareholder entitled to vote at any
meeting of shareholders may vote by proxy. Every proxy must be executed in
writing by the shareholder or his duly authorized attorney. No proxy shall be
valid after the expiration of eleven months from the date of its execution,
unless the shareholder shall have specified therein its duration. Every proxy
shall be revocable at the pleasure of the person executing it or his personal
representatives or assigns except as otherwise provided by law.
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ARTICLE II
Directors
Section 1. Qualifications and General Powers. The business and
affairs of the Corporation, except as otherwise herein provided, shall be
managed under the direction of its Board of Directors. Directors shall be
shareholders. All directors shall be of full age.
The Board of Directors shall in all cases act as a Board, regularly
convened, and in the transaction of business the act of a majority present at a
meeting at which a quorum is present shall be the act of the Board of Directors,
except as otherwise provided by the Certificate of Incorporation, by these
By-Laws or by law. At all meetings of the Board of Directors each director
shall have one vote.
The Board of Directors may adopt such rules and regulations for the
conduct of its meetings, meetings of committees, if any, and the management of
the Corporation as it may deem proper. Such rules and regulations may not be
inconsistent with the Certificate of Incorporation, these By-Laws or law.
The Board of Directors may elect from among its members a Chairman of
the Board. The Chairman of the Board shall act as chairman of, and preside at,
all meetings of shareholders and the Board of Directors. In the Chairman's
absence, any director (or in the case of meetings of shareholders, any director
or officer) appointed by resolution of the Board shall preside at meetings of
shareholders and of the Board. The Chairman of the Board shall inform himself
as to the progress of the Corporation's management in meeting goals established
by the Board and shall be generally responsible for organizing and leading the
Board in performing its role as set forth in the By-Laws. He shall be a member
ex-officio of all committees of the Board. The Chairman shall perform such
other duties and have such additional powers as the Board may, from time to
time, confer on him by resolution of the Board. The Chairman of the Board shall
not, solely by reason of his title and position, be deemed to be an officer of
the Corporation.
Section 2. Number, Election and Term of Office of Directors. The
Board of Directors shall consist of not less than three (3) nor more than
fifteen (15) directors, as the Board may from time to time determine. Any
action by the Board to increase or decrease the number of directors shall
require the affirmative vote of a majority of the entire Board. No decrease in
the number of directors shall have the effect of shortening the term of any
incumbent director.
The directors shall be divided into two (2) classes, each class to
consist of not
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less than three (3) nor more than four (4) directors. All classes shall be as
nearly equal in number as possible. At each annual meeting of shareholders,
directors shall be elected for a term of two years to replace those directors
whose terms shall then expire.
Any newly-created directorships or any decrease in directorships shall
be so apportioned among the classes of directors as to make all classes as
nearly equal in number as possible.
If the number of directors is increased by the Board of Directors and
any newly-created directorships are filled by the Board, there shall be no
classification of the additional directors until the next annual meeting of
shareholders.
Except as may otherwise be required by the Certificate of
Incorporation or by law, directors shall be elected by a plurality of the votes
cast by the holders of shares entitled to vote in the election.
Each director shall continue in office until his term shall have
expired and until his successor shall have been elected and qualified or until
his prior death, removal or resignation.
Section 3. Resignation. Any director may resign at any time by
giving written notice to the chief executive officer or to the Secretary. Such
resignation shall take effect at the time specified therein. Unless otherwise
specified therein, the acceptance of a resignation shall not be necessary to
make it effective.
Section 4. Vacancies. Vacancies on the Board of Directors,
whether caused by death, resignation, or otherwise, may be filled by the
affirmative vote of the majority of the remaining directors or by the
remaining director if there be only one. Each successor director shall hold
office for the unexpired portion of the term of his predecessor, and until
the election and qualification of his successor.
Section 5. Regular Meetings. The Board of Directors shall meet
for the purpose of organization, election of officers and the transaction of
such other business as may be deemed necessary, as soon as practicable after the
adjournment of the annual meeting of shareholders. Other regular meetings of
the Board of Directors shall be held at such times as may be fixed from time to
time by resolution of the Board. Notice of regular meetings need not be given.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be held whenever called by the Chairman of the Board or by any two
directors. Notice of the time and place of such special meeting shall be mailed
to each director, addressed to him at his residence or regular place of
business, or communicated to him at such place by telegraph, cable or telex, or
delivered to him personally, or by telephone not later than two days prior to
the date fixed for the meeting.
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Section 7. Waiver of Notice. Notice of any meeting shall be
deemed to have been given to any director who submits a signed waiver of notice
whether before or after the meeting. At any meeting at which all of the
directors are present, although such meeting is held without notice, any
business may be transacted which might have been transacted if the meeting had
been duly called.
Section 8. Quorum and Voting By The Directors. If all of the
directors consent in writing to the adoption of a resolution authorizing any
action required or permitted to be taken by the Board of Directors, such action
may be taken without a meeting of the Board of Directors.
At all meetings of the Board of Directors the presence of at least
one-third of the entire Board shall be necessary to constitute a quorum. If at
any meeting a quorum shall not be present, a majority of those directors present
may adjourn the same until a quorum is present. Notice of the time and place of
any adjourned meeting need not be given other than by announcement at the
meeting at which the adjournment is taken.
The participation by any director in a meeting of the Board of
Directors by means of a conference telephone or similar communications
equipment, allowing all persons participating in the meeting to hear each other
at the same time, shall constitute presence in person at such meeting for all
purposes.
Section 9. Place of Meetings. Meetings of the Board of Directors
shall be held at such place or places within or without the State of New York as
may be fixed by the Board, any executive committee, or designated in the notice
of meeting.
Section 10. Committees. At the organization meeting of the Board
in each year, the Board of Directors, by resolution adopted by a majority of
the entire Board, shall appoint from its members an Executive Committee, a
Personnel and Compensation Committee, a Retirement Plans Committee and an
Audit Committee. At the organization meeting or at any other meeting of the
Board of Directors, the Board may appoint, by resolution adopted by a
majority of the entire Board, such other committees as it may deem advisable
for the management of the Corporation's affairs. Each such committee shall
consist of three or more directors. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent
member or members at any meeting of such committee. The committees shall be
comprised of such members of the Board as the Board deems appropriate,
provided that the membership of the Executive Committee shall include the
Chairman of the Board, and the Personnel and Compensation Committee shall be
comprised of directors who are not employees of the Corporation. The
Executive Committee shall have and may exercise all the powers of the Board
of Directors in the direction of the management of the Corporation between
meetings of the Board, except as otherwise provided by the Certificate of
Incorporation, by these By-Laws or by law. The Personnel and Compensation
Committee generally shall be responsible for reviewing all of the
Corporation's compensation policies and practices company-wide, and
specifically for (i) reviewing and recommending to the Board of Directors the
total compensation programs and
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benefit plans (including base salaries and long- and short-term incentive
plans) applicable to the Corporation's key decision makers, other than
retirement plans; and (ii) administering the Corporation's stock option
plans. In addition, this Committee reviews and makes recommendations on the
policies and programs for the development of management personnel throughout
the Corporation. The Retirement Plans Committee shall be responsible for
reviewing and advising the Board and recommending action with respect to
management's selection of trustees under the Corporation's retirement trusts,
reviewing and recommending to the Board action with respect to management's
selection of managers of the Retirement Plan Administration Committee and
Retirement Plan Investment Committee, reviewing and advising the Board and
recommending action with respect to activities of the named fiduciaries of
the Corporation's retirement plans and of trustees of the Corporation's
retirement trust and, where appropriate, recommending termination of their
appointments and reviewing and advising the Board and recommending action
with respect to establishment and amendment of retirement plants and trusts.
The Audit Committee shall be responsible for overseeing and reviewing the
internal and external audit of the Corporation's books and accounts, for
reviewing the audited financial statements of the Corporation, for reviewing
the Corporation's internal control procedures, and for reviewing and
approving the independence of the Corporation's public accountants. The
Personnel and Compensation, Retirement Plans and Audit Committees shall
report to the Board of Directors from time to time, or whenever called upon
to do so, and shall have such powers as may be reasonably necessary in order
to carry out their duties. Each other committee appointed by the Board shall
have such powers and shall perform such duties as are specified in the
resolutions designating it or in subsequent resolutions adopted by a majority
of the entire Board, except as otherwise provided by the Certificate of
Incorporation, by these By-Laws or by law. Each committee shall serve at the
pleasure of the Board. All committees shall make their own rules of
procedures, subject to such rules as may be made by the Board of Directors,
shall keep regular minutes of the transactions at their meetings, and shall
report the same to the Board of Directors at its next meeting.
Section 11. Compensation. In consideration for his services as a
director, each member of the Board, as well as each honorary or emeritus
director, who is not a regular employee of the Corporation shall be paid (a) an
annual fee of $12,000 payable quarterly at the beginning of each calendar
quarter, (b) an attendance fee of $800 for each meeting of the Board of
Directors which he attends, and for each meeting of any committee of the Board
of which he is a member and which he attends, (c) $800 for each day which he
attends at the Corporation's annual planning meeting, and (d) $800 for each day
he participates in any special assignment requested by the Corporation. All
directors shall be reimbursed for their reasonable out-of-pocket expenses
incurred in connection with their attendance at aforementioned meetings of the
Board of Directors or otherwise in connection with performance of their duties
as directors upon submission of appropriate expense vouchers.
Nothing herein contained shall be construed to preclude any director
from serving the Corporation in any capacity other than as a director and
receiving compensation therefor.
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Section 12. Director Emeritus. The Board of Directors may, from
time to time, appoint any former director of the Corporation who shall have
retired from the Board for reasons of age, health or similar reason, as Director
Emeritus of the Corporation. A Director Emeritus shall be entitled to attend
such meetings of the directors and be compensated therefor as the Board may
determine.
ARTICLE III
Officers
Section 1. Elected and Other Officers. The elected officers of
the Corporation shall be a President, one or more Vice Presidents, a Treasurer,
a Secretary and a Controller. All of such officers shall be elected by the
Board of Directors at its regular meeting following the annual meeting of the
shareholders. Except as otherwise provided by the Certificate of Incorporation
or by these By-Laws, such officers shall hold office until the regular meeting
of the Board of Directors held after the next annual meeting of the shareholders
and until their respective successors have been elected and qualified.
The Board of Directors may elect or appoint one or more Assistant
Secretaries and such additional officers, and the Board of Directors and the
chief executive officer may appoint such agents, as may be deemed necessary for
the conduct of business of the Corporation. Each of such additional officers
and agents shall have such duties and powers, and shall hold office for such
period as the Board of Directors or the chief executive officer, as the case may
be, may determine.
The same person may hold two or more offices, whether elective or
appointive, except that the President may not hold the office of Secretary.
Section 2. Resignation and Removal. Subject to the provisions of
any contract of employment, any officer may resign at any time by giving written
notice to the Chairman of the Board of Directors or to the Secretary, and such
resignation shall take effect at the time and in the manner specified therein.
Any officer may be removed, with or without cause, and his successor may be
elected, at any meeting of the Board of Directors, by a majority vote of the
entire Board.
Section 3. Vacancies. A vacancy in any office, however caused,
may be filled for the unexpired term of office at any meeting of the Board of
Directors.
Section 4. Compensation. The compensation of all elected
officers of the Corporation shall be fixed by the Personnel and Compensation
Committee of the Board of Directors. The compensation of officers and agents of
the Corporation appointed by the Board of Directors or by the chief executive
officer shall be fixed by the body or person appointing them.
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Section 5. Powers and Duties. The officers of the Corporation
shall respectively have such powers and perform such duties in the management of
the property and affairs of the Corporation as may be provided in these By-Laws
or, to the extent not so provided, by the Board of Directors.
Section 6. President. The President shall be the chief executive
officer of the Corporation and shall have the authority and exercise all of the
powers appertaining to a chief executive officer of a Corporation, except where
otherwise provided by law. In the absence or inability of the President to act,
the authority vested in the President shall be exercised during such absence or
inability by the Executive Committee of the Board, unless otherwise determined
by the Board of Directors.
The President shall have general authority to execute and deliver
contracts, deeds, mortgages, bonds and ocher instruments in the name and on
behalf of the Corporation.
Section 7. Vice Presidents. The several Vice Presidents shall
have authority to execute and deliver contracts, deeds, mortgages, bonds and
other instruments in the name and on behalf of the Corporation and shall perform
such duties and have such powers as may be assigned to them from time to time by
the Board of Directors or the chief executive officer.
Section 8. Treasurer. The Treasurer shall have the care and
custody of all the funds of the Corporation, and shall have active control of
and shall be responsible for all matters pertaining to the accounts of the
Corporation and its subsidiaries. He shall deposit the funds of the Corporation
in such banks or other depositories as the Board of Directors, or any officer or
officers, or any officer and agent jointly, duly authorized by the Board of
Directors, shall, from time to time, direct or approve. He shall keep a full
and accurate account of all moneys received and paid on account of the
Corporation, and shall render a statement of his accounts whenever the Board of
Directors shall require. He shall supervise the auditing of all payrolls and
vouchers of the Corporation and its subsidiaries and shall direct the manner of
certifying the same; shall supervise the manner of keeping all vouchers for
payment by the Corporation and its subsidiaries and all other documents relating
to such payments; shall receive, audit and consolidate all operating and
financial statements of the Corporation, its various departments, divisions and
subsidiaries; shall have supervision of the books of account of the Corporation
and its subsidiaries, their arrangement and classification, and shall supervise
the accounting and auditing practices of the Corporation and its subsidiaries.
He shall perform all other necessary acts and duties in connection with the
administration of the financial affairs of the Corporation, and shall generally
perform all the duties usually appertaining to the office of treasurer of a
Corporation. When required by the Board of Directors, he shall give bonds for
the faithful discharge of his duties in such sums and with such sureties as the
Board of Directors shall approve. In the absence of the Treasurer, such person
as shall be designated by the Board of Directors shall perform his duties.
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Section 9. Secretary. The Secretary shall attend all meetings of
the Board of Directors and the shareholders and shall record all votes and the
minutes of all proceedings in a book to be kept for that purpose and shall, when
requested, perform like duties for all committees of the Board of Directors. He
shall attend to the giving of notice of all meetings of the shareholders, and
special meetings of the Board of Directors and committees thereof; he shall have
custody of the corporate seal and, when authorized by the Board of Directors,
shall have authority to affix the same to any instrument and, when so affixed,
it shall be attested by his signature or by the signature of the Treasurer or an
Assistant Secretary or an Assistant Treasurer. He shall keep and account for
all books, documents, papers and records of the Corporation, except those for
which some other officer or agent is properly accountable. He shall have
authority to sign stock certificates, and shall generally perform all the duties
appertaining to the office of secretary of a Corporation. In the absence of the
Secretary, such person as shall be designated by the Board of Directors shall
perform his duties.
Section 10. Controller. The Controller shall be responsible for
planning and directing the functions of corporate accounting, internal auditing,
taxes and financial planning and control. He shall also establish policies with
respect to accounting matters and exercise policy direction over the conduct of
accounting throughout the Corporation, and shall perform such other duties as
may be assigned to him by the chief financial officer or the Board of Directors.
Section 11. Absence or Inability to Act. Except as otherwise
provided in these By-Laws, in the case of the absence or inability of any
officer of the Corporation to act and of any person herein authorized to act in
his place, the Board of Directors may delegate the powers or duties of such
officer to any other officer or to any other person.
Section 12. Security. The Board of Directors may require any
officer to give security for the faithful performance of his duties. Such
security may be in the form of a bond in such sum, with such surety or sureties,
and in such form as the Board may approve.
ARTICLE IV
Stock
Section 1. Certificates of Stock. Certificates for shares of
stock of the Corporation shall be in the form adopted by the Board of
Directors, and shall be issued within each class and series, if any, in
numerical order. Each shareholder shall be entitled to a certificate, signed
by the Chairman of the Board of Directors or the President or a Vice
President and the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary, showing the number, class and series, if any, of shares
owned by him, the date of their issue and the par value thereof, and bearing
the corporate seal impressed or reproduced thereon. Where such certificate
is countersigned by a transfer agent or registered by a registrar other than
the Corporation itself or its employee, the signature of any of the
above-named officers an such certificate may be facsimile.
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11
In case any officer who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer before such
certificate is issued, such certificate may nevertheless be issued and delivered
by the Corporation. with the same effect as if he were such officer at the date
of its issue.
Section 2. Transfer of Shares. The Board of Directors may appoint
one or more transfer agents and one or more registrars for any and all classes
of stock and may require all stock certificates to bear the signatures of any
such transfer agent and any such registrar. Transfers of shares of stock shall
be made only on the transfer books of the Corporation by the holder thereof or
by his attorney thereunto duly authorized, and on the surrender of the
certificate or certificates representing such shares properly endorsed. Such
transfer books shall be kept at the main business office of the Corporation or
at the office of any transfer agent. Each certificate so surrendered shall be
marked "Canceled," and the date of cancellation shall be duly noted thereon.
Section 3. Lost or Destroyed Certificates. The Corporation may
issue a new certificate for shares in place of any certificate theretofore
issued and alleged to have been lost or destroyed, upon such proof of such loss
or destruction as the Board of Directors may require. The Board may also
require, as a condition for the issuance of such new certificate, that a bond,
in such form and amount as it shall deem sufficient, be given to the Corporation
and/or to the transfer agent and registrar of the stock represented by such
certificate.
Section 4. Closing of Transfer Books or Taking Records of the
Shareholders. The Board of Directors may prescribe a date not exceeding fifty
(50) days prior to the date of any meeting of shareholders, or prior to the date
on which the consent or dissent of shareholders may be expressed for any purpose
without a meeting, or prior to the date of the payment of any dividend or the
allotment of any right, after which no transfer of stock on the books of the
Corporation may be made.
In lieu of prohibiting the transfer of stock, the Board may fix, in
advance, a date prior to the date of any meeting of shareholders, or prior to
the date on which the consent or dissent of shareholders may be expressed for
any purpose without a meeting, or prior to the date of the payment of any
dividend or the allotment of any right, as the date as of which shareholders
entitled to notice of and to vote at such a meeting, or whose consent or dissent
is required or may be expressed, or who may be entitled to such dividend or
right, as the case may be, shall be determined. Such date shall not be more
than fifty (50) days nor less than ten (10) days prior to the date of such
meeting, nor more than fifty (50) days prior to any other action.
Section 5. Registered Shareholders. Except as may be otherwise
provided by law, the Corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares and to vote as
such owner, and shall not be bound to recognize any equitable or other claim to
or interest in such shares on the part of any other person.
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12
ARTICLE V
Dividends and Finance
Section 1. Dividends. Except as may otherwise be provided by the
Certificate of Incorporation or by law, dividends shall be paid as and when
declared by the Board of Directors out of funds legally available therefor.
Section 2. Deposits. The moneys of the Corporation shall be
deposited in the name of the Corporation in such depositories as the Board of
Directors may designate.
Section 3. Checks, Drafts, etc. All checks, notes, drafts,
acceptances or other demands or orders for the payment of money or evidences of
indebtedness of the Corporation shall be signed by such officer or officers or
person or persons as the Board of Directors may from time to time determine.
All endorsements for deposit shall be made by the Treasurer, or in his name, or
by any executive officer.
ARTICLE VI
Indemnification and Insurance
Section l. Indemnification. Except to the extent expressly
prohibited by the New York Business Corporation Law, the Corporation shall
indemnify each person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that such person or
such person's testator or intestate is or was a director or officer of the
Corporation, or serves or served at the request of the Corporation any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise in any capacity, against judgments, fines (including excise taxes
assessed on a person with respect to an employee benefit plan), penalties,
amounts paid in settlement and reasonable expenses, including attorneys' fees,
actually and necessarily incurred in connection with such action or proceeding,
or any appeal therein, provided that no such indemnification shall be made if a
judgment or other final adjudication adverse to such person establishes that his
conduct did not meet the then applicable statutory standards, and provided
further that no such indemnification shall be required with respect to any
settlement or other nonadjudicated disposition of any threatened or pending
action or proceeding unless the Corporation has given its prior consent to such
settlement or other disposition, which consent shall not be unreasonably
withheld.
The Corporation shall advance or promptly reimburse upon request any
person entitled to indemnification hereunder for all expenses, including
attorneys' fees, reasonably incurred in defending any action or proceeding in
advance of the final disposition thereof upon receipt of an undertaking by or on
behalf of such person to repay such amount if such person is ultimately found
not to be entitled to indemnification or, where indemnification is granted, to
the extent the expenses so advanced or reimbursed exceed the amount to which
such person is entitled, provided, however, that such person shall cooperate in
good faith with any request by the Corporation that common counsel be utilized
by the parties to an
<PAGE>
13
action or proceeding who are similarly situated unless to do so would be
inappropriate due to actual or potential differing interests between or among
such parties.
The right to indemnification and advancement of expenses under this
By-Law is intended to be retroactive and shall be available with respect to any
action or proceeding which relates to events prior to the effective date of this
By-Law.
The Corporation is authorized to enter into agreements with any of its
directors or officers extending rights to indemnification and advancement of
expenses to such person to the fullest extent permitted by applicable law, but
the failure to enter into any such agreement shall not affect or limit the
rights of such person pursuant to this By-Law, it being expressly recognized
hereby that all directors and officers of the Corporation, by serving as such
after the adoption hereof, are acting in reliance hereon and that the
Corporation is estopped to contend otherwise.
In case of any provision in this By-Law shall be determined at any
time to be unenforceable in any respect, the other provisions shall not in any
way be affected or impaired thereby, and the affected provision shall be given
the fullest possible enforcement in the circumstances, it being the intention of
the Corporation to afford indemnification and advancement of expenses to its
directors and officers, acting in such capacities or in the other capacities
mentioned herein, to the fullest extent permitted by law.
No amendment or repeal of this By-Law shall apply to or have any
effect on the indemnification of, or advancement of expenses to, any director
and officer of the Corporation for or with respect to acts or omissions of such
director or officer occurring prior to such amendment or appeal.
The foregoing shall not be exclusive of any other rights to which any
director or officer may be entitled as a matter of law and shall not affect any
rights to indemnification to which corporate personnel other than directors or
officers may be entitled by contract or otherwise.
Section 2. Insurance. To the extent permitted by law, the
Corporation shall purchase and maintain insurance:
To indemnify the Corporation for any obligation which it incurs as a
result of the indemnification of directors and officers;
To indemnify directors and officers in instances in which they may be
indemnified by the Corporation; and
To indemnify director and officers in instances in which they may not
otherwise be indemnified by the Corporation, provided that the contract of
insurance covering such directors and officers provides, in a manner acceptable
to the Superintendent of Insurance of the State of New York, for a retention
amount and for co-insurance.
<PAGE>
14
ARTICLE VII
Miscellaneous
Section 1. Offices. The principal office of the Corporation in
the State of New York shall be located at c/o C T Corporation System, 277 Park
Avenue, New York, New York 10017. The Corporation shall also have such offices
within or without the State of New York as the Board of Directors may from time
to time appoint or as the business of the Corporation may require.
Section 2. Seal. The corporate seal of the Corporation shall
consist of two concentric circles, between which shall be the name of the
Corporation, and in the center shall be inscribed the year of its incorporation
and the words: "Corporate Seal, New York."
Section 3. Fiscal Year. The fiscal year of the Corporation shall
be the calendar year.
ARTICLE VIII
Amendments
Section 1. Amendments by Shareholders. The By-Laws may be
altered, modified, amended or repealed, and new By-Laws may he adopted, by the
shareholders at any annual or special meeting.
Section 2. Amendments by Directors. The Board of Directors shall
have power to alter, modify, amend or repeal the By-Laws, or to adopt new
By-Laws, at any regular or special meeting of the Board; provided, however, that
if any By-Law regulating an impending election of directors is adopted, amended
or repealed by the Board, there shall be set forth in the notice of the next
meeting of shareholders for the election of directors, the By-Law so adopted,
amended or repealed, together with a concise statement of the changes made.
<PAGE>
Contacts: Roy Winnick or Mark Semer
Kekst and Company
212-521-4842 or 4802
KOLLMORGEN CORPORATION ANNOUNCES $20.50 PER SHARE OFFER
FOR PACIFIC SCIENTIFIC COMPANY
-- Transaction Would Establish Combined Enterprise as a Leader
in the Fast-Growing Electronic Motion Control Business --
WALTHAM, Mass., December 15, 1997 -- Kollmorgen Corporation (NYSE: KOL), of
Waltham, Mass., announced that it has proposed a business combination with
Pacific Scientific Company (NYSE: PSX), of Newport Beach, Calif., that values
Pacific Scientific common stock at $20.50 per share. The offer price
represents an approximately 33% premium over Pacific Scientific's closing
market price on Friday, December 12, of $15.44 on the New York Stock Exchange
and a premium of approximately 37% over the average closing price for the
preceding 30 trading days.
As part of the proposed transaction, Kollmorgen will today commence a tender
offer to acquire a majority of Pacific Scientific's common stock outstanding
for $20.50 per share in cash. If more than a majority of Pacific Scientific
shares are tendered into the offer, Kollmorgen will purchase a majority of
the shares outstanding on a pro rata basis. The offer, proration period and
withdrawal rights will expire at 12:00 midnight, New York City time, on
Wednesday, January 14, 1998, unless the offer is extended.
Under Kollmorgen's proposal, following the tender offer, Kollmorgen and
Pacific Scientific would merge, and each remaining share of Pacific
Scientific common stock would be exchanged for Kollmorgen common stock with a
value of $20.50, subject to a collar. Following the merger, Pacific
Scientific's current shareholders would own approximately 43% of the combined
enterprise, based upon Kollmorgen's closing stock price on December 12, 1997
of $16.88.
Kollmorgen believes that the combination would be accretive to the company's
earnings in 1999 and increasingly so thereafter.
In order to ensure that Pacific Scientific's shareholders are permitted to
choose freely to accept its offer, Kollmorgen also is announcing today that
it will solicit consents to call a special meeting of Pacific Scientific's
shareholders to remove the incumbent members of Pacific Scientific's Board of
Directors and elect Kollmorgen's nominees to the Board. Under applicable law,
the holders of 10% of Pacific Scientific's outstanding shares have the power
to call a special meeting. Kollmorgen expects that, if elected and subject
to their fiduciary duties, Kollmorgen's nominees would act to facilitate the
proposed combination, including by redeeming or otherwise making inapplicable
to the
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proposed combination, the Rights outstanding under Pacific Scientific's
shareholder rights plan and approving the proposed business combination (if
required) under Pacific Scientific's "fair price" charter provision.
Kollmorgen also announced that it is commencing litigation against Pacific
Scientific and its Board in the United States District Court for the Central
District of California seeking to assure Pacific Scientific's shareholders
the right to replace the Pacific Scientific Board and an opportunity to
accept Kollmorgen's offer and proposed merger.
Salomon Smith Barney is acting as financial advisor to Kollmorgen.
Kollmorgen has entered into a binding commitment letter with an affiliate of
Salomon Smith Barney, which has committed, subject to certain conditions, to
provide $300 million of secured bank financing for the cash necessary to
consummate the transaction, including amounts necessary to refinance certain
existing indebtedness and to provide a working capital facility for the
combined company.
In announcing the proposed combination, Gideon Argov, Chairman of the Board,
President and Chief Executive Officer of Kollmorgen Corporation, stated: "My
colleagues and I have been disappointed that to date, Pacific Scientific's
management and Board of Directors have declined to negotiate our proposal.
We are firmly convinced that a combination of our two companies offers
compelling strategic and financial benefits. We hope that we will now be
able to engage the Pacific Scientific Board in discussions leading to a
prompt, friendly negotiated transaction."
Mr. Argov noted that "this transaction will bring together two companies with
highly complementary motion control product lines. We are convinced that by
establishing a combined enterprise with a strong customer base, dedicated
employees and a strong balance sheet, the new company will be well-positioned
to aggressively pursue attractive opportunities for external and internal
growth, to realize its revenue and earnings potential, and to build value for
its shareholders, customers and employees."
Consummation of the tender offer is subject to certain conditions, including,
among others, expiration or termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, receipt of
the requisite financing for the transaction, approval by Kollmorgen's
shareholders of the issuance of the Kollmorgen common shares in the proposed
merger, and satisfaction of conditions relating to Pacific Scientific's
shareholder rights plan and "fair price" charter provision, all as more fully
described in Kollmorgen's Offer to Purchase relating to the tender offer.
Copies of the Offer to Purchase and related documents may be obtained from
Georgeson & Company Inc., the information agent for the tender offer.
The Kollmorgen offer was communicated today in a letter from Mr. Argov to
Lester Hill, Chairman, President and Chief Executive Officer of Pacific
Scientific Company. The following is the complete text of Mr. Argov's letter
to Mr. Hill:
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December 15, 1997
Mr. Lester Hill
Chairman of the Board, President
and Chief Executive Officer
Pacific Scientific Company
620 Newport Center Drive, Suite 700
Newport Beach, California 92660
Dear Buck:
In August, you and I met to discuss what we at Kollmorgen believe are the
compelling merits of a strategic business combination of Kollmorgen
Corporation and Pacific Scientific Company. We explored a broad range of
topics related to such a combination, all of which, my colleagues on the
Kollmorgen Board and senior management team firmly believe, lead to the
conclusion that a strategic merger of our two companies offers significant
benefits to our respective shareholders, customers and employees. On
December 9, I again described for you, both over the phone and in my letter
of that date, what we at Kollmorgen believe are some of the compelling
strategic, operational and financial benefits of a business combination of
our two companies and the extraordinary value that combination could
represent for our respective shareholders.
We at Kollmorgen were thus quite disappointed that in August and again in
December you refused to seriously consider our proposal for this business
combination. Accordingly, we have decided to present our offer directly to
the shareholders of Pacific Scientific, and are today publicly announcing
that we will commence a tender offer to acquire half of Pacific Scientific's
outstanding shares for $20.50 per share in cash. Under our proposal,
following completion of the tender offer, Kollmorgen and Pacific Scientific
will merge, and each remaining share of Pacific Scientific stock will be
exchanged for Kollmorgen common stock with a value of $20.50 per share, based
on the average price of Kollmorgen stock during the twenty trading days
ending five days prior to the meeting of Pacific Scientific shareholders
called to vote on the merger, subject to a collar.
Among the key aspects of the transaction we propose are the following:
- - A Premium of 33% -- The purchase price of $20.50 per common share
represents approximately a 33% premium over Pacific Scientific's closing
share price of $15.44 on the New York Stock Exchange on Friday, December
12, 1997, and approximately a 37% premium over the average of the
company's closing share price for the preceding 30 trading days.
- - Immediate Cash Payment for Half of Pacific Scientific's Capital Stock --
Half of Pacific Scientific's outstanding shares will be purchased for a
cash payment of $20.50 per share if the tender offer is successfully
consummated.
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- - Continued Participation in the Future Growth of the Combined Company --
Because Pacific Scientific's shareholders have the ability to receive
Kollmorgen common stock in the proposed merger, they will have the
opportunity to participate in the future growth and success of the
combined enterprise. Upon consummation of the proposed merger, Pacific
Scientific shareholders will hold an equity stake of approximately 43% in
the combined company, based upon an assumed market value for Kollmorgen
common stock of $16.88 per share (the closing price of Kollmorgen common
stock on December 12, 1997).
- - Operating and Revenue Synergies -- Based on public information, Kollmorgen
management believes that the combined company can achieve more than $15
million of annual operating synergies in 1999, rising to more than $20
million in 2000 and increasing thereafter. Management believes these
synergies can be achieved principally from cost savings in selling and
marketing expenses and consolidation of research and development, and
expects to realize additional synergies from cross-selling opportunities,
joint purchasing savings, and reduction in corporate expenses.
- - An Accretive Transaction -- Kollmorgen is confident that the proposed
combination will be accretive to earnings per share in 1999, the first
full year of operations of the combined company, and increasingly so
thereafter, based upon the synergies described above.
- - Committed Financing -- Kollmorgen has entered into a binding commitment
letter with Salomon Smith Barney and its affiliate Salomon Brothers
Holding Company Inc in which Salomon Brothers Holding Company Inc has
committed to provide, subject to certain conditions, what Kollmorgen
believes is a conservatively financed secured bank facility to fully
finance the transaction, including the refinancing of existing
indebtedness and the provision of a working capital facility for the
combined company.
We continue to firmly believe that consolidation in our industry is
inevitable, and that neither Pacific Scientific nor Kollmorgen can sit by
idly while competitors, many of which are much larger than Pacific Scientific
and Kollmorgen, create the international network and broad product offerings
that our customers demand. Kollmorgen believes that this reality, coupled
with the natural fit of our two companies, makes a Kollmorgen/Pacific
Scientific combination compelling. Kollmorgen believes that the combined
company will offer customers superior products and services. Among the many
advantages contributing to the combined company's ability to achieve these
goals would be:
- - Creation of an Industry Leader. A merger of Kollmorgen and Pacific
Scientific will establish the combined enterprise as a leader in high
performance electronic motion control -- one of the fastest-growing
segments of the motors and controls business. In a fragmented industry,
the combined enterprise will be better-positioned to comprehensively serve
the needs of customers and take advantage of consolidation opportunities.
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- - Strategic and Operational Fit. Highly complementary motion control
product lines will enable the combined company to become a full-service
provider. The combined company will be well-positioned to capitalize on
the complementary product lines and differing strengths of Kollmorgen and
Pacific Scientific, enabling it to offer a broader array of products and
support services to an expanded customer base. In addition, the combined
company would take advantage of cost savings and efficiencies resulting
from economies of scale in research and development, marketing, production
and sourcing.
- - Enhanced Capability to Tap Foreign Markets. The increased size and global
scope of the combined company will enable it to more effectively market
its products to customers around the world. Kollmorgen has already
established a local presence in Germany, France, Israel, India, China and
elsewhere. The combined enterprise will be well-positioned to build on
this foundation, particularly in Europe and the Pacific Rim. Kollmorgen
believes that the combined company will be able to expand its customer
base and offer international on-site product support to customers, while
conducting more effective and cost-efficient research and development,
marketing, production and sourcing.
- - Management Team with Proven Track Record. Kollmorgen management has
delivered year over year growth in sales and operating income from
continuing operations from 1994 through 1996, and will do so again in
1997. Kollmorgen has achieved this by focusing on its core operations.
Kollmorgen also believes that its management has maximized its returns
from non-strategic operations. In addition, Kollmorgen's management has
considerable expertise in managing debt, having reduced Kollmorgen's debt
and preferred stock obligations by more than 40% during the past three
fiscal years and transitioned from fully-secured to unsecured credit
arrangements.
- - Enhanced Growth Opportunities. Kollmorgen believes that the combined
enterprise will be well-positioned, strategically, operationally and
financially, to aggressively pursue attractive opportunities for external
and internal growth. Kollmorgen is confident that the combined company's
increased size and scope will enable it to be a leader in the accelerating
consolidation of the motion control industry and raise its visibility in
the business and financial communities.
We believe that the proposed combination is a bold, exciting initiative for
Pacific Scientific, Kollmorgen, and the shareholders, customers and employees
of both companies. We are firmly committed to pursuing this matter and are
convinced that your shareholders will strongly support our proposal.
Although it is clear to us that you have not up to now given adequate
consideration to a Kollmorgen/Pacific Scientific combination, it is our
sincere hope that you will take this opportunity to do so. Your shareholders
deserve no less than your prompt and full consideration of our proposal and
the opportunity to realize the full benefits of this proposed combination.
We are
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certain that once you have undertaken an informed review of our proposal, you
will share in our vision and will support a combination of our two companies.
We continue to be interested in proceeding with this transaction on a
friendly and expeditious basis so that your shareholders, as well as ours,
can begin to receive promptly the benefits of our offer.
In order to ensure that your shareholders are permitted to choose freely to
accept our offer, we are also announcing today our intention to solicit
consents to call a special meeting of Pacific Scientific's shareholders to
remove the incumbent members of Pacific Scientific's Board of Directors and
elect our nominees to the Board. Subject to their fiduciary duties, if
elected we expect our nominees would amend the Pacific Scientific rights plan
or redeem the rights to enable the consummation of the proposed transaction,
approve the proposed transaction if required under Pacific Scientific's
charter, and take all other actions necessary to remove any impediments to
your shareholders' ability to accept our offer. We also intend to submit a
proposal designed to prevent the current Board from taking any actions to
frustrate the ability of Pacific Scientific's shareholders to determine the
future of their company.
We are also today commencing litigation against Pacific Scientific and the
Pacific Scientific Board in the United States District Court for the Central
District of California seeking to assure Pacific Scientific's shareholders
the right to replace the Pacific Scientific Board and an opportunity to
accept our offer and proposed merger.
We urge the Pacific Scientific Board of Directors to facilitate the proposed
transaction and remove all obstacles to the realization of the benefits of
the combination by your shareholders. As indicated above, our preference is
to proceed with the proposed transaction on a friendly basis and with the
support of Pacific Scientific's management and Board of Directors.
Accordingly, we and our advisors remain ready and willing to meet with you
and your advisors at any time to discuss our proposal and commence the
negotiation of definitive documentation for the transaction.
We look forward to hearing from you.
Very truly yours,
/s/ Gideon Argov
Chairman, President and
Chief Executive Officer
cc: Members of the Board of Directors
of Pacific Scientific Company
# # #
Kollmorgen's primary business is in the area of high-performance electronic
motion control. Growth in this business area is fueled by the need for
higher productivity in every industrial, commercial, aerospace, and consumer
market segment. Additional
<PAGE>
7
information can be found on the World Wide Web at http://kollmorgen.com.
This press release contains certain forward-looking statements, including
assumptions as to how Kollmorgen, Pacific Scientific and the combined company
may perform in the future, which are subject to risks and uncertainties, and
there can be no assurance that such statements will prove to be correct.
Actual results may differ materially. For a discussion of such risks and
uncertainties, shareholders are referred to the discussion thereof in the
consent solicitation materials to be filed today by Kollmorgen with the
Securities and Exchange Commission.
# # #
<PAGE>
Contact: Roy Winnick or Mark Semer
Kekst and Company
(212) 521-4842 or 4802
KOLLMORGEN SETS RECORD DATE FOR
SPECIAL MEETING OF KOLLMORGEN SHAREHOLDERS
WALTHAM, Massachusetts, December 15, 1997 -- The Board of Directors of
Kollmorgen Corporation (NYSE: KOL) announced today that it has set a record
date of December 26, 1997 for determining the shareholders of Kollmorgen
entitled to notice of and to vote at a special meeting of Kollmorgen
shareholders expected to be held on January 28, 1997. The special meeting is
being called pursuant to the rules of the New York Stock Exchange in order to
consider and vote upon a proposal to approve the issuance of shares of common
stock of Kollmorgen in connection with the merger between Pacific Scientific
Company (NYSE: PSX) and Kollmorgen proposed by Kollmorgen today.
The proposed business combination between Kollmorgen and Pacific Scientific
consists of a tender offer by Torque Corporation, a wholly owned subsidiary
of Kollmorgen, for a majority of the shares of common stock of Pacific
Scientific outstanding on a fully diluted basis at a price of $20.50 per
share in cash. Successful consummation of the tender offer would be followed
by a merger in which each share of Pacific Scientific common stock then
outstanding (other than shares held by Pacific Scientific or any wholly owned
subsidiary of Pacific Scientific and shares owned by Kollmorgen, Torque or
any other direct or indirect wholly owned subsidiary of Kollmorgen) would be
converted into the right to receive shares of Kollmorgen common stock valued
at $20.50, subject to a collar. The exact number of shares of Kollmorgen
common stock into which each Pacific Scientific common share will be
converted will be determined by dividing $20.50 by the average, over the 20
consecutive trading days ending five days prior to the meeting of Pacific
Scientific shareholders called for the purpose of voting on the proposed
merger, of the daily average high and low per share sales price of Kollmorgen
common stock (weighted by sales volume). In the event that the average
during such period is less than $15.19 or greater than $18.56, the exchange
ratio would be fixed at 1.350 shares of Kollmorgen common stock or 1.104
shares of Kollmorgen common stock, respectively, per Pacific Scientific
common share.
# # #
