<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 30, 1998
REGISTRATION NO. 333-42229
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
KOLLMORGEN CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
NEW YORK 3621 042151861
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
------------------------
RESERVOIR PLACE
1601 TRAPELO ROAD
WALTHAM, MASSACHUSETTS 02154
(781) 890-5655
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
------------------------------
JAMES A. EDER, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
KOLLMORGEN CORPORATION
968 FARMINGTON AVENUE, ROOM 208
WEST HARTFORD, CONNECTICUT 06107
(860) 232-3121
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
------------------------------
COPIES TO:
CREIGHTON O'M. CONDON, ESQ.
LINDA C. QUINN, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NY 10022
(212) 848-4000
------------------------
Approximate date of commencement of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
AND THE
SATISFACTION OR WAIVER OF THE CONDITIONS TO THE CONSUMMATION OF THE PROPOSED
MERGER DESCRIBED HEREIN.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
AMENDMENT TO REGISTRATION STATEMENT
The Registrant hereby amends the Registration Statement to incorporate the
exhibits filed herewith and to add the following items to Item 21. See
"Incorporation of Certain Documents by Reference" in the Proxy Statement
contained in the Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NO.
- ---------
<S> <C>
23.1 Consent of Coopers & Lybrand L.L.P.
99.13 Supplemental Proxy Materials of Kollmorgen Corporation dated January 30, 1998.
99.14 Form of Proxy to be mailed to Pacific Scientific Shareholders.
99.15 Kollmorgen Letter to Pacific Scientific Shareholders dated January 30, 1998.
99.16 Form of Press Release dated January 30, 1998.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in the City of West
Hartford, State of Connecticut, on January 30, 1998.
KOLLMORGEN CORPORATION
BY: /S/ JAMES A. EDER
-----------------------------------------
Name: James A. Eder
Title: Vice President, Secretary
and General Counsel
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed below on the 30th day of
January, 1998, by the following persons on behalf of the Registrant in the
capacities indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<C> <S>
*
------------------------------------------- Chairman of the Board, President, Chief Executive
Gideon Argov Officer and Director (Principal Executive Officer)
*
------------------------------------------- Senior Vice President, Treasurer, Chief Financial
Robert J. Cobuzzi Officer and Director (Principal Financial Officer)
*
------------------------------------------- Controller and Chief Accounting Officer (Principal
Keith A. Jones Accounting Officer)
*
------------------------------------------- Director
Jerald G. Fishman
*
------------------------------------------- Director
Herbert L. Henkel
*
------------------------------------------- Director
James H. Kasschau
*
------------------------------------------- Director
J. Douglas Maxwell, Jr.
*
------------------------------------------- Director
Robert N. Parker
*
------------------------------------------- Director
Geoffrey S. Rehnert
*
------------------------------------------- Director
George P. Stephan
</TABLE>
*By: /s/ James A. Eder
James A. Eder
Attorney-in-fact
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
23.1 Consent of Coopers & Lybrand L.L.P.
99.13 Supplemental Proxy Materials of Kollmorgen Corporation dated January 30, 1998.
99.14 Form of Proxy to be mailed to Pacific Scientific Shareholders.
99.15 Kollmorgen Letter to Pacific Scientific Shareholders dated January 30, 1998.
99.16 Form of Press Release dated January 30, 1998.
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 2 to the
Registration Statement on Form S-4 dated January 30, 1998 of our report dated
January 27, 1997 on our audits of the consolidated financial statements of
Kollmorgen Corporation as of December 31, 1996 and 1995 and for each of the
three years in the period ended December 31, 1996, which report is included in
Kollmorgen Corporation's 1996 Annual Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 30, 1998
<PAGE>
SUPPLEMENTAL PROXY MATERIALS OF KOLLMORGEN CORPORATION
DATED JANUARY 30, 1998
THIS SUPPLEMENT (THIS "SUPPLEMENT") TO THE PROXY STATEMENT/PRELIMINARY
PROSPECTUS DATED JANUARY 15, 1998 AND INCLUDED ON A REGISTRATION STATEMENT ON
FORM S-4 DATED THAT SAME DAY (THE "PROXY STATEMENT") IS BEING FURNISHED TO
HOLDERS OF SHARES OF PACIFIC SCIENTIFIC COMPANY, A CALIFORNIA CORPORATION
("PACIFIC SCIENTIFIC"), BY KOLLMORGEN CORPORATION, A NEW YORK CORPORATION,
("KOLLMORGEN"), IN CONNECTION WITH THE SOLICITATION OF PROXIES FROM SHAREHOLDERS
OF PACIFIC SCIENTIFIC TO BE USED AT THE SPECIAL MEETING OF SHAREHOLDERS OF
PACIFIC SCIENTIFIC WHICH WILL BE HELD ON FEBRUARY 13, 1998 AT 2:00 P.M.,
CALIFORNIA TIME, AT THE HYATT REGENCY IRVINE HOTEL, 17900 JAMBOREE ROAD, IRVINE,
CALIFORNIA AND AT ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF (THE "SPECIAL
MEETING"). THIS SUPPLEMENT SUPPLEMENTS CERTAIN INFORMATION CONTAINED IN THE
PROXY STATEMENT WITH REGARD TO THE FOLLOWING SHAREHOLDER ACTIONS IN CONNECTION
WITH A PROPOSED BUSINESS COMBINATION (THE "PROPOSED COMBINATION") BETWEEN
KOLLMORGEN AND PACIFIC SCIENTIFIC: THE ADOPTION OF A RESOLUTION WHICH WOULD
REPEAL ANY AND ALL PROVISIONS OF THE PACIFIC SCIENTIFIC BYLAWS (THE "PACIFIC
SCIENTIFIC BYLAWS") THAT HAVE NOT BEEN DULY FILED BY PACIFIC SCIENTIFIC WITH THE
SECURITIES AND EXCHANGE COMMISSION (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 "BYLAW REPEAL PROPOSAL"); THE REMOVAL FROM OFFICE
OF THE ENTIRE PACIFIC SCIENTIFIC BOARD OF DIRECTORS (THE "PACIFIC SCIENTIFIC
BOARD") (THE "REMOVAL PROPOSAL"); AND THE FILLING OF THE NEWLY CREATED VACANCIES
ON THE PACIFIC SCIENTIFIC BOARD BY ELECTING KOLLMORGEN'S NOMINEES TO THE PACIFIC
SCIENTIFIC BOARD (THE "ELECTION PROPOSAL").
EXCEPT AS OTHERWISE SET FORTH IN THIS SUPPLEMENT, THE TERMS AND CONDITIONS
PREVIOUSLY SET FORTH IN THIS SUPPLEMENT AND THE TERMS AND CONDITIONS PREVIOUSLY
SET FORTH IN THE PROXY STATEMENT REMAIN APPLICABLE IN ALL RESPECTS TO THE PROXY
SOLICITATION, AND THIS SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH THE PROXY
STATEMENT. UNLESS THE CONTEXT REQUIRES OTHERWISE, TERMS NOT DEFINED HEREIN HAVE
THE MEANINGS ASCRIBED TO THEM IN THE PROXY STATEMENT.
SIGNIFICANT EVENTS
Kollmorgen has raised its offer for Pacific Scientific to $23.75 per share
from $20.50 per share. Kollmorgen is now offering to acquire a majority of
Pacific Scientific's outstanding common stock for $23.75 per share in cash and
to exchange the remaining outstanding shares for Kollmorgen common stock with a
value of $23.75 per share, subject to a collar. Our increased offer represents a
premium of approximately 54% over the price of Pacific Scientific common stock
prior to the announcement of our original offer on December 15, 1998.
On January 21, 1998, Kollmorgen reached agreement with a third party on a
confidential settlement and paid-up licensing agreement covering certain
Kollmorgen motion control patents. The settlement amount, $27.2 million, is
expected to be received by Kollmorgen in the first quarter of 1998. On January
21, 1998, Morgan & Finnegan, L.L.P., patent counsel to Kollmorgen, mailed a
letter to Mr. Lester Hill, Chairman, President and Chief Executive Officer of
Pacific Scientific, regarding certain of Pacific Scientific's motion-control
products that Kollmorgen believes infringe upon one or more of Kollmorgen's
patents, which Kollmorgen believes represents a substantial percentage of
Pacific Scientific's motion-control revenues.
It has been six weeks since Kollmorgen first publicly announced its proposal
to acquire Pacific Scientific. Pacific Scientific has indicated that it intends
to explore alternatives to maximize shareholder value, including a possible sale
of the company, yet Pacific Scientific has refused to enter into merger
negotiations with Kollmorgen, the only party with a firm proposal on the table,
unless Kollmorgen first withdraws its tender offer, cancels the Special Meeting
and enters into a standstill agreement which would prevent Kollmorgen from
pursuing a business combination with Pacific Scientific other than at the
invitation of Pacific Scientific. Kollmorgen believes that these conditions are
unacceptable and are not conductive to negotiating a mutually beneficial
transaction in an expeditious manner.
The Pacific Scientific Board has also declined our offer to meet with them
and share information about our company and our offer so that they can more
fully inform themselves concerning the merits of our proposal.
<PAGE>
Kollmorgen believes that a negotiated transaction is in the best interests
of both companies and their shareholders. If that does not happen, you will have
the chance to voice your opinion on Kollmorgen's Offer by voting in favor of
Kollmorgen's proposals at the Special Meeting.
THE OFFER AND THE PROPOSED MERGER
In furtherance of the Proposed Combination, Torque Corporation, a wholly
owned subsidiary of Kollmorgen ("Purchaser"), has commenced a tender offer (the
"Offer"), for 6,347,241 shares of the common stock, par value $1.00 per share,
of Pacific Scientific (the "Pacific Scientific Common Stock"), including the
associated preferred share purchase rights (the "Rights" and, together with the
Pacific Scientific Common Stock, the "Pacific Scientific Common Shares"), or
such greater or lesser number of Pacific Scientific Common Shares that, when
added to the number of the Pacific Scientific Common Shares owned by Kollmorgen
and Purchaser, would constitute a majority of the outstanding Pacific Scientific
Common Shares on a fully diluted basis (the "Minimum Number"). On the date
hereof, Kollmorgen has increased the price to be paid in the Offer from $20.50
to $23.75 per Pacific Scientific Common Share, net to the seller in cash.
Consummation of the Offer would be followed by a merger or similar business
combination between Pacific Scientific and Kollmorgen, Purchaser or another
direct or indirect subsidiary of Kollmorgen (the "Proposed 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, Purchaser or any other direct or
indirect wholly owned subsidiary of Kollmorgen) would be converted into the
right to receive $23.75 of common stock, par value $2.50 per share, of
Kollmorgen (the "Kollmorgen Common Stock"), subject to a collar. The purchase
price of $23.75 per common share represents approximately a 54% premium over
Pacific Scientific's closing share price of $15.44 on the New York Stock
Exchange (the "NYSE") on Friday, December 12, 1997, the last full trading day
prior to Kollmorgen's public announcement of the Proposed Combination.
The exact number of shares of Kollmorgen Common Stock into which each
Pacific Scientific Common Share will be converted will be determined by an
exchange ratio (the "Exchange Ratio") calculated by dividing $23.75 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 of the high and low per share sales
prices of Kollmorgen Common Stock (weighted by sales volume) (the "Average
Kollmorgen Share Price"). In the event that the Average Kollmorgen Share Price
during such period is less than $15.19 or greater than $18.56, the Exchange
Ratio would be fixed at 1.564 shares of Kollmorgen Common Stock or 1.280 shares
of Kollmorgen Common Stock, respectively, per Pacific Scientific Common Share.
In such event, the shareholders of Pacific Scientific (the "Pacific Scientific
Shareholders") could receive Kollmorgen Common Stock in the Proposed Merger with
a value greater or less than $23.75.
According to Pacific Scientific's Quarterly Report on Form 10-Q for the
quarter ended September 26, 1997, there are approximately 12,694,880 shares of
Pacific Scientific Common Stock outstanding, assuming the exercise of the
weighted average number of dilutive options outstanding during that quarter, of
which just less than half (or approximately 6,347,439 shares) will be converted
into shares of Kollmorgen Common Stock in the Proposed Merger. Hence, the total
number of shares of Kollmorgen Common Stock to be issued in the Proposed Merger
will be determined by multiplying the Exchange Ratio by the 6,347,439 shares of
Pacific Scientific Common Stock to be converted.
The following table illustrates the calculation of the value of the
Kollmorgen Common Stock to be issued in the Proposed Merger at various assumed
values for the Average Kollmorgen Share Price.
2
<PAGE>
FOR ILLUSTRATIVE PURPOSES ONLY
<TABLE>
<CAPTION>
VALUE OF KOLLMORGEN
HYPOTHETICAL STOCK
AVERAGE ISSUED PER PACIFIC
KOLLMORGEN EXCHANGE SCIENTIFIC COMMON
SHARE PRICE RATIO SHARE
- ------------------- ----------- -------------------
<S> <C> <C>
$ 20.25 1.280x $ 25.92
19.41 1.280 24.84
18.56 1.280 23.75
17.72 1.340 23.75
16.88(1) 1.407 23.75
16.03 1.482 23.75
15.19 1.564 23.75
14.34 1.564 22.43
13.50 1.564 21.11
</TABLE>
- ------------------------
(1) Represents the closing price of shares of Kollmorgen Common Stock on the
NYSE on December 12, 1997, the last full trading date before the
commencement of the Offer. If a hypothetical Average Kollmorgen Share Price
of $18.88 is used (representing the closing price of shares of Kollmorgen
Common Stock on the NYSE on January 29, 1998), the Exchange Ratio would be
1.280 and the value of Kollmorgen Common Stock to be issued for Pacific
Scientific Common Shares would be $24.17.
To the extent a shareholder's Pacific Scientific Common Shares are purchased
in the Offer, such shareholder would not receive Kollmorgen Common Stock for
such purchased shares in the Proposed Merger and consequently such shareholder
would not have the opportunity to participate in the future growth of the
combined company. If more than the Minimum Number of Pacific Scientific Common
Shares is tendered into the Offer, tendered shares will be purchased on a pro
rata basis, resulting in all tendering shareholders receiving a mix of cash and
Kollmorgen Common Stock in the Proposed Combination.
The purchase price of $23.75 per common share represents approximately a 54%
premium over Pacific Scientific's closing share price of $15.44 on the NYSE on
Friday, December 12, 1997, the last full trading day prior to Kollmorgen's
public announcement of the Proposed Combination.
Upon consummation of the Proposed Merger, Pacific Scientific Shareholders
will hold an equity stake of approximately 44.8% to 49.8% in the combined
company, depending on the Exchange Ratio. Based on an assumed market value for
Kollmorgen Common Stock of $18.88 per share (the closing price of Kollmorgen
Common Stock on January 29, 1998), Pacific Scientific Shareholders would hold an
equity stake of approximately 49.8% in the combined company.
BACKGROUND OF THE OFFER SINCE JANUARY 15, 1998
On January 15, 1998 Kollmorgen and Purchaser extended the Expiration Date of
the Offer to 5:00 p.m., New York City time, on Thursday, January 29, 1998.
On January 16, Pacific Scientific filed with the Commission a proxy
statement in opposition to the Kollmorgen proxy statement urging the Pacific
Scientific Shareholders not to sign, or return any proxy cards sent to them by
Kollmorgen.
On January 21, 1998, Kollmorgen reached agreement with a third party on a
confidential settlement and paid-up licensing agreement covering certain
Kollmorgen motion control patents. The settlement amount, $27.2 million, is
expected to be received by Kollmorgen in the first quarter of 1998. On January
21, 1998, Morgan & Finnegan, L.L.P., patent counsel to Kollmorgen, mailed a
letter to Mr. Hill,
3
<PAGE>
regarding certain of Pacific Scientific's motion-control products that
Kollmorgen believes infringe upon one or more of Kollmorgen's patents. On that
same day, Kollmorgen announced that it had formally notified Pacific Scientific
of its belief that certain of Pacific Scientific's motion-control products,
which Kollmorgen believes represents a substantial percentage of Pacific
Scientific's motion-control revenues, infringed on Kollmorgen patents.
Since December 15, 1997, various telephone calls have been initiated by
Kollmorgen's legal and financial advisors ("Kollmorgen's Advisors") to Pacific
Scientific's legal and financial advisors ("Pacific Scientific's Advisors")
requesting access to information regarding Pacific Scientific which Kollmorgen
believes is being made available by Pacific Scientific to other potential
acquirors of Pacific Scientific and requesting Pacific Scientific to enter into
merger discussions with Kollmorgen without Kollmorgen first agreeing to certain
conditions described below. Pacific Scientific refused to allow Kollmorgen to
conduct any due diligence or enter into merger discussions with Pacific
Scientific. The Pacific Scientific Board has also declined our offer to meet
with them and share information about our company and our offer so that they can
more fully inform themselves concerning the merits of our proposal.
On January 23, Mr. Gideon Argov, Kollmorgen's Chairman, President and Chief
Executive Officer, telephoned Mr. Hill to suggest that the two companies enter
into merger negotiations. Following that conversation, Pacific Scientific's
Advisors informed Kollmorgen's Advisors that Pacific Scientific would only enter
into merger discussions if Kollmorgen agreed specifically to terminate the
Offer, cancel the Special Meeting and agree to a confidentiality agreement with
a "standstill" provision (the "Confidentiality Agreement") which would prevent
Kollmorgen from pursuing a business combination with Pacific Scientific other
than at the invitation of Pacific Scientific. However, despite Mr. Argov's and
Kollmorgen's Advisors requests, Pacific Scientific's Advisors have yet to
deliver the Confidentiality Agreement to Kollmorgen.
On January 26, 1998, Kollmorgen reported preliminary operating results for
the fourth quarter of 1997 and the year ended December 31, 1997 and reaffirmed
its intention to acquire Pacific Scientific. Also, on January 26, 1998,
Kollmorgen postponed the Kollmorgen Special Meeting until February 10, 1998.
On January 30, 1998, Kollmorgen filed with the Commission a supplement to
the proxy solicitation materials mailed to the shareholders of Kollmorgen. Also
on January 30, 1998, Kollmorgen filed with the Commission a supplement to the
Offer to Purchase.
SOURCES OF FUNDS
Kollmorgen continues to believe that the Proposed Combination is
conservatively financed. Pursuant to a binding commitment letter, as amended,
with Salomon Smith Barney and its affiliate, Salomon Brothers Holding Company
Inc (the "Commitment Letter"), Salomon Brothers Holding Company Inc has
committed to provide, subject to certain conditions, a secured bank facility in
the amount of $320 million to fully finance the transaction. While Kollmorgen
recognizes that the combined company would have a significant level of
indebtedness, Kollmorgen believes that the financing of the transaction
continues to be conservative and would permit the combined company sufficient
liquidity and financial flexibility to meet operational demands.
TAX MATTERS
On January 23, 1998, the Internal Revenue Service issued Treasury
Regulations effective for transactions occurring after January 28, 1998 which
relaxed the continuity of shareholder interest requirement under U.S. income tax
rules for tax-free reorganization treatment. Treatment of the Offer and Proposed
Merger as a reorganization, however, still requires, among other things, that
less than 60% of the consideration received by shareholders of Pacific
Scientific in exchange for Pacific Scientific Common Shares consists of cash
(including cash received in lieu of fractional shares of Kollmorgen Common Stock
and cash received in respect of dissenters' rights, if any, in the Proposed
Merger) and that the Proposed
4
<PAGE>
Merger, if consummated, qualifies as a merger under applicable state corporation
laws. Thus, while neither Kollmorgen nor Purchaser is obligated to qualify the
transaction as a reorganization and such qualification depends on future events,
the changes made by the newly-issued Treasury Regulations significantly increase
the likelihood that the exchange of Pacific Scientific Common Shares for
Kollmorgen Common Stock in the Proposed Merger ultimately will qualify for
nonrecognition treatment as part of a reorganization. Shareholders of Pacific
Scientific are urged to consult their own tax advisors about the newly-issued
Treasury Regulations.
FORWARD-LOOKING STATEMENTS
This Supplement and the information incorporated by reference herein contain
forward-looking statements which involve risks and uncertainties that could
cause actual results to differ materially from those in the forward-looking
statements. Among other matters, the forward-looking statements include, without
limitation, the information about the business, strategy, plans and objectives,
operations, planned capital expenditures, management, forecasted operating
results and operating statistics and potential financial condition, revenue
enhancements, cost savings and accretion to earnings and pro forma financial
information, with respect to the combined company, and the information
concerning the Proposed Combination.
All discussions of the operations of the combined companies include
forward-looking statements. Forward-looking statements also include, without
limitation, those preceded or followed by or that include the words "may",
"believes", "expects", "anticipates" or the negation thereof, or similar
expressions. All forward-looking statements included in this Supplement and the
information incorporated by reference are based on the information available to
Kollmorgen on the date of this Supplement and in the case of the information
incorporated by reference on the basis of information available to Kollmorgen on
the date of the documents in which such forward-looking statements are
contained. Kollmorgen undertakes no obligation publicly to update or revise any
forward-looking statement, whether as a result of new information, future events
or otherwise.
The forward-looking statements are subject to a number of factors that could
cause actual results to differ materially from Kollmorgen's current expectation,
all of which are difficult to predict accurately and many of which are beyond
the control of Kollmorgen. Certain factors, in addition to other factors not
listed herein or discussed in the information incorporated by reference herein,
could cause the actual results to differ materially from those expressed or
implied in the forward-looking statements made herein. Such factors include:
materially adverse changes in U.S. and international economic conditions, in
Kollmorgen's industry and in the markets served by Kollmorgen and Pacific
Scientific; lower than expected revenues from the sale of its existing products
and services because of changes in product demand and market acceptance; the
effect of competitive products, development of new technologies and pricing from
large, multinational motion technology competitors (both current and emerging),
many of which have greater financial, technical, marketing and other resources;
unanticipated product development costs; moderating growth rates in commercial
lines of business; lack of market acceptance of new products because of lower
than expected levels of customer demand, technological difficulties in these
newly introduced products, or the timeliness of these product introductions;
unanticipated reduction in existing utility customers' requirements for
engineering services; increased working capital needs; unexpected capital
expenditure requirements; difficulty in obtaining favorable financing
arrangements either due to an unfavorable institutional lending environment or
the inability to obtain financing because of leverage; the inability to achieve
expected synergies; fluctuations in foreign currency exchange rates; and a
significant delay in the expected completion of the Proposed Merger. All
subsequent written or oral forward-looking statements attributable to Kollmorgen
or to persons acting on its behalf are qualified in their entirety by the
preceding cautionary statements.
5
<PAGE>
RECENT DEVELOPMENTS
On January 26, 1998, Kollmorgen issued a press release reporting its
financial results for the three and twelve months ended December 31, 1997.
For the year ended December 31, 1997, which was highlighted by a number of
important financial events and special items (detailed below), Kollmorgen
reported that net income rose by 122% to $19.7 million, or $1.90 a share
(diluted), on sales of $222.2 million. These results compare to net income of
$8.9 million, or $0.86 a share (diluted), on sales of $230.4 million in 1997.
Excluding special items, net income for 1997 rose by 18% to $10.5 million, or
$1.02 per share (diluted).
For the fourth quarter, excluding special items, net income rose 17% to $3.8
million, or $0.36 per share (diluted), on sales of $59.2 million, versus net
income of $3.2 million, or $0.32 per share (diluted), on sales of $60.8 million
in the comparable 1996 period. Excluding revenues from the Macbeth division,
which became part of a joint venture at the end of 1996, the Kollmorgen's sales
from ongoing businesses increased by 15% for the fourth quarter and 13% for the
year.
After accounting for a charge of $4.2 million for costs associated with the
Offer, earnings in the fourth quarter were $0.2 million or $0.02 per share
(diluted).
These comparative results were affected by several special items:
- Results for 1997 include a net gain after fees and taxes of $24.4 million
from the sale of the Kollmorgen's share in its GretagMacbeth joint venture
("GretagMacbeth"). GretagMacbeth was brought public on the Swiss Stock
Exchange in June.
- Results for 1997 reflect approximately $4.2 million in costs associated
with Kollmorgen's offer to purchase shares of Pacific Scientific,
announced in December. These costs are included as expenses in the fourth
quarter.
- Results for 1997 include a charge of $11.4 million for acquired research
and development, principally associated with Kollmorgen's acquisitions of
Servotronix Ltd. and Fritz A. Seidel Elektro-Automatik GmbH in the second
quarter.
- Results for 1997 reflect the effect of income taxes, whereas 1996 results
reflect a zero tax rate due to tax loss carry-forwards from earlier years.
Kollmorgen plans to file with the Commission its audited financial
statements for the year ended December 31, 1997 on Form 10-K on or before March
31, 1998.
On January 22, 1998, Kollmorgen issued a press release announcing that it
will receive $27.2 million under a confidential settlement and paid-up licensing
agreement covering certain Kollmorgen motion control patents. The settlement
amount is expected to be received by Kollmorgen in the first quarter of 1998.
COMPARATIVE PER SHARE DATA
Set forth below are income applicable to common shares and book value
applicable to common shares of Kollmorgen and Pacific Scientific on both an
historical and a pro forma combined basis. The pro forma data presented below is
not necessarily indicative of actual results that would have occurred or of
future expected results. Kollmorgen management expects to achieve operating cost
savings and synergies as a result of the Proposed Combination. However, no
adjustment has been included in the unaudited pro forma data for expected
operating cost savings and synergies.
Pro forma combined income applicable to common shares is derived from the
unaudited pro forma combined information, which gives effect to the Proposed
Combination as if the Proposed Combination had occurred at January 1, 1996,
combining the results of Kollmorgen and Pacific Scientific for the periods
6
<PAGE>
presented. Book values applicable to common shares for Pacific Scientific and
for the pro forma combined presentation are based upon outstanding common shares
at the end of the periods presented, adjusted in the case of the pro forma
combined presentation to include the shares of Kollmorgen Common Stock to be
issued in the Proposed Merger. Pro forma book value data is presented as though
the Proposed Combination had occurred at September 30, 1997. The information set
forth below should be read in conjunction with the respective audited and
unaudited historical consolidated financial statements of Kollmorgen and Pacific
Scientific incorporated by reference herein and the "Unaudited Pro Forma
Financial Data" appearing elsewhere herein. Because the number of Pacific
Scientific Common Shares to be converted in the Proposed Merger will not be
known until five days prior to the completion of the Proposed Merger, actual
Pacific Scientific equivalent per share data cannot be computed at this time.
Hypothetical Pacific Scientific equivalent per share data is presented below
using the closing sale price of a share of Kollmorgen Common Stock on January
26, 1998 and a resulting hypothetical exchange ratio of 1.28.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED PACIFIC SCIENTIFIC
SEPTEMBER 30, 1997 KOLLMORGEN/ EQUIVALENTS
---------------------------------- PACIFIC ------------------------
PACIFIC SCIENTIFIC EXCHANGE EXCHANGE
KOLLMORGEN SCIENTIFIC PRO FORMA RATIO OF RATIO OF
COMMON STOCK COMMON STOCK COMBINED .64(B) 1.28(C)
--------------- ----------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Earnings per share.......................... $ 1.87(a) $ 0.73 $ (0.15) $ (0.10) $ (0.19)
Dividends per share, net.................... $ 0.06 $ 0.09 $ 0.10 $ 0.06 $ 0.13
Book value per share at end of period....... $ 4.19 $ 8.31 $ 10.77 $ 6.89 $ 13.79
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED PACIFIC SCIENTIFIC
DECEMBER 31, 1996 KOLLMORGEN/ EQUIVALENTS
---------------------------------- PACIFIC ------------------------
PACIFIC SCIENTIFIC EXCHANGE EXCHANGE
KOLLMORGEN SCIENTIFIC PRO FORMA RATIO OF RATIO OF
COMMON STOCK COMMON STOCK COMBINED .64(B) 1.28(C)
--------------- ----------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Earnings per share.......................... $ 0.86 $ 0.01 $ (0.94) $ (0.60) $ (1.19)
Dividends per share, net.................... $ 0.08 $ 0.12 $ 0.13 $ 0.08 $ 0.17
Book value per share at end of period....... $ 2.23 $ 8.76
</TABLE>
- ------------------------
(a) The earnings per share includes a non-recurring charge for acquired
in-process research and development and non-recurring income related to the
disposition of Kollmorgen's equity interest in a joint venture. Those
amounts have been eliminated from the pro forma presentation.
(b) The hypothetical Pacific Scientific equivalent per share data was calculated
by multiplying the pro forma combined per share data by .64, or half of the
hypothetical exchange ratio of 1.28, to reflect the assumption that half of
the outstanding Pacific Scientific Common Shares will be exchanged for stock
in the Proposed Combination.
(c) The hypothetical Pacific Scientific equivalent per share data was calculated
by multiplying the pro forma combined per share data by the hypothetical
exchange ratio of 1.28, to illustrate the case in which a Pacific Scientific
Shareholder does not tender shares pursuant to the Offer and, accordingly,
receives all stock in the Proposed Combination.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
Set forth below are the unaudited pro forma historical financial information
of Kollmorgen and the unaudited pro forma condensed combined statement of
financial condition combining the historical consolidated balance sheet of
Kollmorgen and Pacific Scientific, giving effect to the Proposed Combination at
the new Offer price of $23.75 in cash per Pacific Scientific Common Share. These
unaudited pro forma condensed combined financial statements are not necessarily
indicative of the operating results and financial position that might have been
achieved had the Proposed Combination occurred as of the beginning of the
earliest period presented nor are they necessarily indicative of operating
results and financial position which may occur in the future.
7
<PAGE>
KOLLMORGEN
PRO FORMA ADJUSTED HISTORICAL CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SEIDEL SERVOTRONIX KOLLMORGEN
JANUARY 1, 1997- JANUARY 1, 1997- PRO FORMA
KOLLMORGEN JUNE 9, 1997 APRIL 1, 1997 PRO FORMA ADJUSTED
HISTORICAL HISTORICAL(A) HISTORICAL(A) ADJUSTMENTS HISTORICAL
----------- ----------------- ----------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues.......................... $ 163,054 $ 9,591 $ 543 $ 173,188
Cost of Revenues.................. 113,590 6,622 329 120,541
----------- ------ ----- -----------
Gross Margin...................... 49,464 2,969 214 52,647
Operating Expenses:
Sales, Marketing, General and
Administrative................ 32,131 1,734 95 33,960
Research and Development........ 7,249 334 125 7,708
Acquired Research and
Development................... 11,391 -- -- $ (11,391)(b) --
Amortization of Goodwill........ 284 -- -- 242(c) 526
----------- ------ ----- ----------- -----------
Operating Income (Loss)........... (1,591) 901 (6) 11,149 10,453
Other Income (Expense), Net....... (2,646) (32) 6 816(d) (1,856)
----------- ------ ----- ----------- -----------
Income (Loss) Before Taxes........ (4,237) 869 -- 11,965 8,597
Provision for Income Taxes........ (1,978) -- -- (335)(e) (3,095)
(782)(e)
----------- ------ ----- ----------- -----------
Net Income (Loss) from Continuing
Operations before Investment in
Joint Venture................... (6,215) 869 -- 10,848 5,502
Joint Venture:
Equity in Earnings.............. 1,430 -- -- (1,430)(d) --
Gain on Sale of Investment, Net of
Taxes........................... 24,321 -- -- (24,321)(d) --
----------- ------ ----- ----------- -----------
Net Income........................ $ 19,536 $ 869 $ $ (14,903) $ 5,502
----------- ------ ----- ----------- -----------
----------- ------ ----- ----------- -----------
Net Income per Share--
Fully Diluted................... $ 1.87 -- -- $ 0.53
Weighted Average Number of Common
Shares Outstanding.............. 10,444 -- -- 10,444
</TABLE>
- ------------------------
Note: The accompanying notes are an integral part of these pro forma adjusted
historical consolidated financial statements.
8
<PAGE>
KOLLMORGEN
PRO FORMA ADJUSTED HISTORICAL CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
KOLLMORGEN'S KOLLMORGEN
MACBETH FRENCH PRO FORMA
KOLLMORGEN SEIDEL SERVOTRONIX DIVISION INSTRUMENT PRO FORMA ADJUSTED
HISTORICAL HISTORICAL(A) HISTORICAL(A) HISTORICAL(F) GROUP(G) ADJUSTMENTS HISTORICAL
----------- ------------- ------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues.................. $ 230,424 $ 19,179 $ 2,566 $ (32,104) $ (932) $ 219,133
Cost of Revenues.......... 152,928 13,346 1,307 (15,819) (848) 150,914
----------- ------------- ------ ------------- ------ -----------
Gross Margin.............. 77,496 5,833 1,259 (16,285) (84) 68,219
Operating Expenses:
Sales, Marketing,
General and
Administrative........ 51,918 4,107 365 (10,027) (822) 45,541
Research and
Development........... 12,143 822 813 (2,744) (364) 10,670
Amortization of
Goodwill.............. -- -- -- -- -- 701(c) 701
----------- ------------- ------ ------------- ------ ------------- -----------
Operating Income (Loss)... 13,435 904 81 (3,514) 1,102 (701) 11,307
Other Income (Expense),
Net..................... (4,531) (133) (81) 120 -- 1,593(d) (3,032)
----------- ------------- ------ ------------- ------ ------------- -----------
Income (Loss) Before
Taxes................... 8,904 771 -- (3,394) 1,102 892 8,275
Provision for Income
Taxes................... -- -- -- -- -- (478)(e) (2,317)
(1,839)(e)
----------- ------------- ------ ------------- ------ ------------- -----------
Net Income (Loss)......... 8,904 771 -- (3,394) 1,102 (1,425) 5,958
Preferred Dividends....... (285) -- -- -- -- (285)
----------- ------------- ------ ------------- ------ ------------- -----------
Income Available to Common
Shareholders............ $ 8,619 $ 771 $ -- $ (3,394) $ 1,102 $ (1,425) $ 5,673
----------- ------------- ------ ------------- ------ ------------- -----------
----------- ------------- ------ ------------- ------ ------------- -----------
Net Income per Share--
Fully Diluted........... $ 0.86 -- -- -- -- -- $ 0.56
Weighted Average Number of
Common Shares
Outstanding............. 10,042 -- -- -- -- -- 10,042
</TABLE>
- ------------------------
Note: The accompanying notes are an integral part of these pro forma adjusted
historical consolidated financial statements.
9
<PAGE>
KOLLMORGEN
NOTES TO PRO FORMA ADJUSTED HISTORICAL CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
A. PRO FORMA BASIS OF PRESENTATION AND ADJUSTMENTS
On April 2, 1997, Kollmorgen acquired Servotronix, a developer and
manufacturer of motion control technology that is headquartered in Israel. On
June 10, 1997, Kollmorgen acquired Seidel, a developer and manufacturer of
motion control technology that is headquartered in Germany. Both acquisitions
were accounted for as purchases and together, resulted in an in-process research
and development charge of $11,391 in 1997.
The pro forma adjusted historical consolidated statements of operations set
forth the results of operations for the nine-month period ended September 30,
1997 and the year ended December 31, 1996, as if the acquisitions by Kollmorgen
of Seidel and Servotronix, and the disposal of Kollmorgen's Macbeth division had
occurred at January 1, 1996.
The pro forma adjusted historical consolidated statements of operations are
intended for information purposes and are not necessarily indicative of actual
results had the transactions occurred as of the dates indicated above, nor do
they purport to indicate the future results of operations.
These pro forma adjusted historical consolidated statements of operations
should be read in conjunction with the financial statements and notes thereto
included in Kollmorgen's Annual Report on Form 10-K for the year ended December
31, 1996, Kollmorgen's Current Report on Form 8-K filed January 31, 1997 and
Kollmorgen's Form 10-Q for the nine-month period ended September 30, 1997. The
pro forma adjusted historical consolidated statements of operations do not give
effect to any potential cost savings and synergies that could result from the
Servotronix and Seidel acquisitions.
B. PRO FORMA ADJUSTMENTS TO PRO FORMA ADJUSTED HISTORICAL CONSOLIDATED
STATEMENTS OF OPERATIONS
(a) These columns represent the unaudited historical results of operations
of Seidel and Servotronix for the period prior to Kollmorgen's acquisition. Upon
acquisition, these operations became part of Kollmorgen's historical financial
statements.
(b) This adjustment eliminates the charge for acquired in-process research
and development costs recognized principally upon the acquisition of Seidel and
Servotronix. Since these amounts are not continuing expenditures of Kollmorgen,
they are deducted from the historical consolidated statement of operations to
arrive at the Kollmorgen pro forma adjusted historical financial statements.
(c) These adjustments reflect the goodwill amortization for the periods,
assuming both acquisitions occurred at January 1, 1996. This goodwill resulting
from the acquisitions of Seidel and Servotronix of $10,509 which reflects the
aggregate excess purchase price over the fair value of net assets acquired and
in-process research and development. Goodwill attributable to these acquisitions
is being amortized over 15 years. For purposes of allocating the acquisition
costs among the various assets acquired, the carrying value of the acquired
assets approximated their fair value, with all the excess of such acquisition
costs being attributed to in-process acquired research and development and
goodwill. It is Kollmorgen's intention to continue to evaluate the acquired
assets and, as a result, the allocation of the acquisition costs among the
tangible and intangible assets acquired may change. All material intercorporate
transactions were eliminated.
10
<PAGE>
KOLLMORGEN
NOTES TO PRO FORMA ADJUSTED HISTORICAL CONSOLIDATED
STATEMENTS OF OPERATIONS (CONTINUED)
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
B. PRO FORMA ADJUSTMENTS TO PRO FORMA ADJUSTED HISTORICAL CONSOLIDATED
STATEMENTS OF OPERATIONS (CONTINUED)
(d) Effective December 31, 1996, Kollmorgen contributed its Macbeth business
to a joint venture for a 48% interest. The investment was accounted for under
the equity method. In the second quarter of 1997, Kollmorgen sold its interest
in the joint venture for a gain of $24,321, which has been eliminated as a pro
forma adjustment. The $1,430 adjustment represents the elimination of
Kollmorgen's proportionate earnings of the joint venture from the beginning of
the period through the time of the sale. Kollmorgen used a portion of the
proceeds from the sale of its interest in the joint venture to repay the
outstanding balance of the $25 million term loan. Accordingly, interest expense
related to this debt of $816 and $1,593, has been excluded from these pro forma
statements of operations for the nine months ended September 30, 1997 and the
nine months ended December 31, 1996, respectively.
(e) These adjustments represent (i) the estimated income tax effect of the
pro forma adjustments at the blended statutory rates of 36% and 28% for 1997 and
1996, respectively, and (ii) an increase in income tax provision that would have
resulted from the full utilization of net operating loss carryforwards had the
gain on sale of investment in Macbeth occurred at January 1, 1996.
(f) This column represents the historical results of operations of Macbeth
for the period prior to December 31, 1996, the effective date of Kollmorgen's
contribution of that business to a joint venture at which point those operations
were accounted for on the equity method of Kollmorgen's historical financial
statements.
(g) In March 1996, Kollmorgen sold a portion of its instrumentation business
located in France for its book value. This column represents the elimination of
the results of this business for 1996.
11
<PAGE>
KOLLMORGEN
PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
KOLLMORGEN
PRO FORMA PACIFIC
ADJUSTED SCIENTIFIC PRO FORMA
HISTORICAL HISTORICAL(A) ADJUSTMENTS PRO FORMA
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues.......................................... $173,188 $227,744 $400,932
Cost of Revenues.................................. 120,541 154,428 274,969
---------- ----------- ---------
Gross Margin...................................... 52,647 73,316 125,963
Operating Expenses:
Sales, Marketing, General and Administrative.... 33,960 47,397 81,357
Research and Development........................ 7,708 9,880 17,588
Amortization of Goodwill........................ 526 -- $ 10,816(b) 11,342
---------- ----------- ----------- ---------
Operating Income.................................. 10,453 16,039 (10,816) 15,676
Other Income (Expense), Net....................... (1,856) (1,630) (10,198)(c) (14,370)
(686)(c)
---------- ----------- ----------- ---------
Income Before Taxes............................... 8,597 14,409 (21,700) 1,306
Benefit (Provision) for Income Taxes.............. (3,095) (5,384) 4,354(d) (4,125)
---------- ----------- ----------- ---------
Net Income from Continuing Operations............. $ 5,502 $ 9,025 $ (17,346) $ (2,819)
---------- ----------- ----------- ---------
---------- ----------- ----------- ---------
Net Income per Share from Continuing Operations --
Fully Diluted................................... $ 0.53 $ 0.73 $ (0.15)
Weighted Average Number of Common Shares
Outstanding..................................... 10,444 12,443 (12,443)(e) 18,772
8,328(e)
</TABLE>
- ------------------------
Note: The accompanying notes are an integral part of these pro forma combined
condensed consolidated financial statements.
12
<PAGE>
KOLLMORGEN
PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
KOLLMORGEN
PRO FORMA PACIFIC
ADJUSTED SCIENTIFIC PRO FORMA
HISTORICAL HISTORICAL(F) ADJUSTMENTS PRO FORMA
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues.......................................... $219,133 $294,779 $513,912
Cost of Revenues.................................. 150,914 203,074 353,988
---------- ----------- ---------
Gross Margin...................................... 68,219 91,705 159,924
Operating Expenses:
Sales, Marketing, General and Administrative.... 45,541 63,569 109,110
Research and Development........................ 10,670 15,974 26,644
Cost of Solium Restructuring and Other.......... -- 7,500 7,500
Amortization of Goodwill........................ 701 -- 14,422(b) 15,123
---------- ----------- ----------- ---------
Operating Income.................................. 11,307 4,662 (14,422) 1,547
Other Income (Expense), Net....................... (3,032) (4,362) (13,597)(c) (21,905)
(914)(c)
---------- ----------- ----------- ---------
Income (Loss) Before Taxes........................ 8,275 300 (28,933) (20,358)
Benefit (Provision) for Income Taxes.............. (2,317) (131) 5,804(d) 3,356
---------- ----------- ----------- ---------
Net Income (Loss)................................. 5,958 169 (23,129) (17,002)
Preferred Dividends............................... (285) -- -- (285)
---------- ----------- ----------- ---------
Income Available to Common Shareholders........... $ 5,673 $ 169 (23,129) (17,287)
---------- ----------- ----------- ---------
---------- ----------- ----------- ---------
Net Income (Loss) per Share -- Fully Diluted...... $ 0.56 $ 0.01 $ (0.94)
Weighted Average Number of Common Shares
Outstanding..................................... 10,042 12,457 (12,457)(e) 18,370
8,328(e)
</TABLE>
- ------------------------
Note: The accompanying notes are an integral part of these pro forma combined
condensed consolidated financial statements.
13
<PAGE>
KOLLMORGEN
PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
PACIFIC PRO FORMA
KOLLMORGEN SCIENTIFIC ADJUSTMENTS PRO FORMA
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents....................... $ 17,881 $ 3,174 $ 21,055
Accounts Receivable, Net........................ 41,367 51,078 92,445
Inventories..................................... 25,486 54,611 80,097
Deferred Income Taxes........................... -- 9,986 9,986
Other Current Assets............................ 6,385 6,946 13,331
---------- ----------- ----------
Total Current Assets............................ 91,119 125,795 216,914
Property and Equipment, Net....................... 26,006 49,411 75,417
Note Receivable................................... -- 8,700 8,700
Investment in Joint Venture....................... 14,483 -- 14,483
Other Assets, Net................................. 10,536 36,894 $ 6,400(c) 53,830
Goodwill, Net..................................... -- -- 216,329(g) 216,329
---------- ----------- ----------- ----------
Total Assets...................................... $142,144 $220,800 $222,729 $585,673
---------- ----------- ----------- ----------
---------- ----------- ----------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Liabilities........ $ 49,759 $ 22,874 $ 72,633
Other Current Liabilities....................... 13,153 13,908 27,061
Reserve for Discontinued Solium Operation....... -- 4,593 4,593
---------- ----------- ----------
Total Current Liabilities....................... 62,912 41,375 104,287
Long-Term Obligations............................. 37,249 76,560 $169,964(c) 283,773
Minority Interest................................. 72 -- -- 72
---------- ----------- ----------- ----------
Total Liabilities................................. 100,233 117,935 169,964 388,132
Shareholders' Equity.............................. 41,911 102,865 155,630(h) 197,541
(102,865)(h)
---------- ----------- ----------- ----------
Total Liabilities and Shareholders' Equity........ $142,144 $220,800 $222,729 $585,673
---------- ----------- ----------- ----------
---------- ----------- ----------- ----------
</TABLE>
- ------------------------
Note: The accompanying notes are an integral part of these pro forma combined
condensed consolidated financial statements.
14
<PAGE>
KOLLMORGEN
NOTES TO PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
A. PRO FORMA BASIS OF PRESENTATION AND ADJUSTMENTS
The pro forma combined condensed consolidated financial statements are
prepared assuming that Kollmorgen has merged with Pacific Scientific, a
manufacturer of high-performance rotating electrical equipment, including
motors, generators and alternators, in exchange for approximately 8,328,000
shares of common stock of Kollmorgen and cash and other costs of approximately
$169,964 with a total estimated purchase price of approximately $325,594. The
shares of Kollmorgen common stock are assumed to be issued at a value of $18.69
per share, which reflects the closing price of Kollmorgen common stock as of
January 26, 1998. The shares assumed to be issued are adjusted for the impact of
the collar. The ultimate number of shares issued to acquire Pacific Scientific
will be in the range of approximately 8,328,000 to 10,175,000 shares, dependent
upon the 20-day average closing price of Kollmorgen Common Stock five days prior
to closing. Kollmorgen has ascribed no value to Pacific Scientific's preferred
stock purchase rights which will be acquired in the Proposed Combination. A
change in the number of shares issued upon final consummation of the proposed
transaction from the amounts assumed above would effect the pro forma net income
per share for the periods presented. The transaction will be accounted for as a
purchase.
The pro forma combined condensed consolidated balance sheet includes the
financial statements of Kollmorgen and Pacific Scientific at September 30, 1997,
as if the Proposed Combination had occurred on that date.
The pro forma combined condensed consolidated statements of operations set
forth the results of operations for the nine-month period ended September 30,
1997 and the year ended December 31, 1996, as if the Proposed Combination had
occurred at January 1, 1996.
The pro forma combined condensed consolidated financial statements are
intended for information purposes and are not necessarily indicative of actual
results had the Proposed Combination occurred as of the dates indicated above,
nor do they purport to indicate the future consolidated financial position or
future results of operations of the combined entity. Pacific Scientific's
historical financial data was derived from Pacific Scientific's Annual Report on
Form 10-K for the year ended December 27, 1996, and Pacific Scientific's Form
10-Q for the nine-month period ended September 26, 1997. For Kollmorgen's pro
forma adjusted historical financial data, see "Pro Forma Adjusted Historical
Consolidated Statement of Operations" for the nine months ended September 30,
1997 and the year ended December 31, 1996 presented elsewhere herein. These
combined condensed consolidated financial statements should be read in
conjunction with the financial statements and notes thereto included in
Kollmorgen's Annual Report on Form 10-K for the year ended December 31, 1996,
Kollmorgen's Form 10-Q for the nine-month period ended September 30, 1997,
Pacific Scientific's Annual Report on Form 10-K for the year ended December 27,
1997 and Pacific Scientific's Form 10-Q for the nine-month period ended
September 26, 1997.
B. PRO FORMA ADJUSTMENTS TO PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(a) Pacific Scientific's statement of operations as presented on Form 10-Q
for the nine months ended September 26, 1997, reflects a Loss from Discontinued
Operations of $13,563, Net Loss of $4,358, Loss per share on Discontinued
Operations of $1.09 and Net Loss per share of $0.36. This pro forma statement
reflects only results from continuing operations.
15
<PAGE>
KOLLMORGEN
NOTES TO PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (CONTINUED)
B. PRO FORMA ADJUSTMENTS TO PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(b) These pro forma adjustments reflect the amortization of goodwill assumed
to be generated in the Proposed Combination over the estimated useful life of
fifteen years on a straight-line basis. The ultimate allocation of the purchase
price to the net assets acquired, goodwill, other intangible assets, liabilities
assumed and incomplete technology is subject to final determination of their
respective fair values. A determination of the fair value of incomplete
technology, if any, is subject to a detailed analysis of the tangible and
intangible assets related to in-process research and development on new products
of Pacific Scientific. The value assigned to in-process research and development
could result in a material charge to operations at consummation of the
transaction and a corresponding reduction in the amounts to be amortized. There
were no intercorporate transactions that required elimination.
(c) The pro forma combined condensed consolidated balance sheet reflects
Kollmorgen's securing a credit facility consisting of a $195,000 term loan and a
$125,000 revolving credit facility (the "Loan") as if the issuance occurred on
September 30, 1997. The Loan is payable over seven years. The Loan accrues
interest at a rate of LIBOR plus 2%. At the date of the Proposed Combination,
this interest rate is estimated to be 8%. The pro forma combined condensed
consolidated statements of operations include the interest expense associated
with the Loan as if the issuance occurred at January 1, 1996 of $10,198 and
$13,597 for the nine months ended September 30, 1997 and the year ended December
31, 1996, respectively. Under applicable pro forma rules, interest income
associated with the proceeds from the Loan, which may partially offset the
interest expense, is not included in the pro forma statements of operations.
Estimated debt issuance costs of $6,400 for credit facility commitment fees have
been included in other long-term assets and are being amortized over the term of
the Loan. Amortization of debt issuance costs on the Loan for the nine months
ended September 30, 1997 and the year ended December 31, 1996 are estimated to
be $686 and $914, respectively.
(d) This adjustment represents the estimated income tax effect of the pro
forma adjustments using a combined U.S. federal and state statutory rate of 40%
for both 1996 and the first nine months in 1997.
(e) The pro forma adjustments reflect the exchange of Pacific Scientific's
weighted average number of common shares outstanding of 12,443,000 and
12,457,000, for the nine months ended September 30, 1997 and the year ended
December 31, 1996, respectively, and the issuance of shares of Kollmorgen Common
Stock to be exchanged in the transaction of 8,328,000 assuming an exchange ratio
of 1.28 shares of Kollmorgen Common Stock for one share of Pacific Scientific
Common Stock for those shares outstanding as of September 26, 1997 not exchanged
for cash.
(f) The Pacific Scientific historical financial statements for 1996 included
in these pro forma combined condensed consolidated financial statements include
the results of operations of Pacific Scientific's Solium business, which was
discontinued in 1997. Had the pro forma financial statements been adjusted to
exclude the Solium business, net sales would have decreased by $2,416, and
pre-tax income would have increased by $14,541.
(g) The pro forma adjustment reflects the excess purchase price over the
fair value of net assets assumed to be acquired of $216,329. Estimated
transaction related costs of $9,000 for investment banker fees, accounting and
legal fees, and other various deal costs have been included in the determination
of goodwill. For purposes of these pro forma financial statements, the fair
value of the assets acquired is
16
<PAGE>
KOLLMORGEN
NOTES TO PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (CONTINUED)
B. PRO FORMA ADJUSTMENTS TO PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
estimated to be equivalent to the historical financial statement balance as of
the date of acquisition. The ultimate allocation of the purchase price to the
net assets acquired, goodwill, other intangible assets, liabilities assumed and
a charge for incomplete technology is subject to final determination of their
respective fair values.
(h) The pro forma combined condensed consolidated balance sheet reflects an
increase for the value of 8,328,000 common shares at $18.69 per share assumed to
be issued by Kollmorgen in the Proposed Merger to Pacific Scientific
Shareholders of $155,630, and an elimination of the net equity of Pacific
Scientific of $102,865.
17
<PAGE>
INCORPORATION BY REFERENCE
A Registration Statement on Form S-4 containing a proxy
statement/preliminary prospectus with respect to the Kollmorgen Common Stock
that will ultimately be issued in the Proposed Combination has been filed with
the Commission (File No. 333-42229) and is hereby incorporated by reference into
this Supplement. Such proxy statement/preliminary prospectus was furnished on or
about January 15, 1998, to all holders of shares of Pacific Scientific eligible
to vote at the Special Meeting.
THE PROXY SOLICITATION IS BEING MADE BY KOLLMORGEN AND NOT ON BEHALF OF THE
BOARD OF DIRECTORS OF PACIFIC SCIENTIFIC.
THE BYLAW REPEAL PROPOSAL, THE REMOVAL PROPOSAL AND THE ELECTION PROPOSAL
WILL BE IMPORTANT STEPS IN ENSURING THE CONSUMMATION OF THE PROPOSED
COMBINATION. HOWEVER, YOU MUST SEPARATELY TENDER YOUR SHARES PURSUANT TO THE
OFFER IF YOU WISH TO PARTICIPATE IN THE OFFER. VOTING IN FAVOR OF THE BYLAW
REPEAL PROPOSAL, THE REMOVAL PROPOSAL AND THE ELECTION PROPOSAL WILL NOT
CONSTITUTE A TENDER OF YOUR SHARES PURSUANT TO THE OFFER OR OBLIGATE YOU TO
TENDER YOUR SHARES PURSUANT TO THE OFFER.
THE INFORMATION CONCERNING PACIFIC SCIENTIFIC CONTAINED IN THIS PROXY
STATEMENT HAS BEEN TAKEN FROM OR IS BASED UPON DOCUMENTS AND RECORDS ON FILE
WITH THE COMMISSION AND OTHER PUBLICLY AVAILABLE INFORMATION. KOLLMORGEN HAS NO
KNOWLEDGE THAT WOULD INDICATE THAT STATEMENTS RELATING TO PACIFIC SCIENTIFIC
CONTAINED IN THIS PROXY STATEMENT IN RELIANCE UPON PUBLICLY AVAILABLE
INFORMATION ARE INACCURATE OR INCOMPLETE. KOLLMORGEN, HOWEVER, WAS NOT INVOLVED
IN THE PREPARATION OF SUCH INFORMATION AND STATEMENTS, AND IS NOT IN A POSITION
TO VERIFY, OR MAKE ANY REPRESENTATION WITH RESPECT TO THE ACCURACY OF, ANY SUCH
INFORMATION OR STATEMENTS.
18
<PAGE>
TIME IS SHORT. PLEASE SEND IN YOUR WHITE PROXY CARD TODAY.
If you have any questions, please call:
[LOGO]
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT
(212) 440-9800
ALL OTHERS CALL TOLL FREE (800) 223-2064
FAX (212) 440-9009
<PAGE>
REVOCABLE PROXY SOLICITED ON BEHALF
OF KOLLMORGEN CORPORATION
The undersigned, a common shareholder of Pacific Scientific Company
("Pacific Scientific"), acting with respect to all of the shares of common
stock, par value $1.00 per share (the "Common Stock"), held by the undersigned,
hereby votes for, against or abstains as specified on the reverse side with
respect to the corporate action to be taken at the February 13, 1998 special
meeting of the Pacific Scientific Shareholders including any postponement or
adjournment thereof (the "Special Meeting"). All capitalized terms used but not
defined herein shall have the meanings ascribed to such terms in the Proxy
Statement furnished herewith (the "Proxy Statement").
FAILURE TO EXECUTE AND RETURN THIS PROXY CARD WILL BE DEEMED TO BE A VOTE TO
ABSTAIN.
Shareholders wishing to approve the actions set forth herein should mark the
"For" box on the reverse side of this proxy card. Those opposing such action
should register their position by marking the "Against", "Abstain" or
"Withhold" box on the reverse side of this proxy card. Unless you otherwise
indicate on this proxy card, this proxy card will be voted as set
forth on the reverse side with respect to all shares of Common Stock held by the
undersigned, and if no choice is indicated but this proxy card is otherwise
completed, you will be deemed to have voted in favor of the action set forth on
the reverse side of this proxy card. If cumulative voting is in effect, the
persons named herein shall have the power to cumulate votes and distribute
them among the nominees listed on the reverse side as they see fit, and to
drop any such nominee, in order to ensure the election of the greatest number
of such nominees. By executing this card the undersigned hereby revokes any
and all prior proxies or revocations of proxies and hereby affirms that the
undersigned has the power to deliver a proxy for the number of shares
represented by this proxy.
SIGNED BUT UNMARKED CARDS WILL BE DEEMED TO VOTE IN FAVOR OF THE ACTIONS SET
FORTH ON THE REVERSE SIDE OF THIS CARD.
Kollmorgen Corporation is soliciting proxies to vote at the Special Meeting
on the following proposals: (i) the approval of a shareholder resolution to
repeal any and all provisions of the bylaws of Pacific Scientific (the "Pacific
Scientific Bylaws") that have not been duly filed by Pacific Scientific with the
Securities and Exchange Commission prior to August 11, 1997, including any and
all amendments to the Pacific Scientific Bylaws adopted on or after December 15,
1997 (the "Bylaw Repeal Proposal"), (ii) the removal from office of the entire
Pacific Scientific Board of Directors (the "Pacific Scientific Board") (the
"Removal Proposal") and (iii) the election of six persons nominated by
Kollmorgen Corporation (the "Kollmorgen Nominees") to fill the vacancies created
thereby (the "Election Proposal").
PLEASE SIGN AND DATE ON THE REVERSE SIDE
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF KOLLMORGEN CORPORATION
/X/ Please mark your votes as indicated in this example
FAILURE TO EXECUTE AND RETURN THIS PROXY CARD WILL BE DEEMED TO BE A VOTE TO
ABSTAIN, AND A VOTE TO ABSTAIN WILL HAVE THE EFFECT OF A VOTE AGAINST EACH OF
THE BYLAW REPEAL PROPOSAL AND THE REMOVAL PROPOSAL, BUT NOT AGAINST THE ELECTION
PROPOSAL.
1. BYLAW REPEAL PROPOSAL to repeal any and all provisions of the Pacific
Scientific Bylaws that have not been duly filed by Pacific Scientific with the
Securities and Exchange Commission prior to August 11, 1997, including any and
all amendments to the Pacific Scientific Bylaws adopted on or after December 15,
1997
/ / FOR / / AGAINST / / ABSTAIN
2. REMOVAL PROPOSAL to remove all members of the Pacific Scientific Board of
Directors
/ / FOR / / AGAINST / / ABSTAIN
3. ELECTION PROPOSAL to elect the Kollmorgen Nominees listed at right to the
Pacific Scientific Board of Directors
<TABLE>
<S> <C> <C> <C>
/ / FOR ALL KOLLMORGEN NOMINEES / / WITHHOLD / / FOR ALL KOLLMORGEN NOMINEES INSTRUCTION: To withhold authority
EXCEPT to vote for any individual nominee
strike a line through the nominee's
name in the list below.
DAVID BERTHELOT
STUART L. KLEIN
DAVID NIERENBERG
WILLIAM J. RECKER
MARK A. SNIDER
ANDRE WEISS
</TABLE>
Please sign exactly as your name
appears hereon. When shares are held
by joint tenants, both must sign.
When signing as attorney-in-fact,
executor, administrator, trustee,
guardian, corporate officer or
partner, please give full title as
such. If a corporation, please sign
in a corporate name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
_____________________________________
Signature Dated
_____________________________________
Signature Dated
<PAGE>
[Kollmorgen LOGO]
Reservoir Place
1601 Trapelo Road
Waltham, MA 02154
(781) 890-5655
January 30, 1998
Dear Pacific Scientific Shareholder:
Today, we at Kollmorgen have raised our offer for Pacific Scientific to
$23.75 per share from $20.50 per share. This means that we are now offering to
acquire a majority of Pacific Scientific's common stock for $23.75 per share in
cash and to exchange the remaining shares for Kollmorgen common stock with a
value of $23.75 per share, subject to a collar. Our increased offer represents a
premium of approximately 54% over the price of Pacific Scientific common stock
prior to the announcement of our original offer.
It has been six weeks since we at Kollmorgen first publicly announced our
offer to acquire Pacific Scientific. Pacific Scientific has indicated that it
intends to explore alternatives to maximize shareholder value, including a
possible sale of the company. Pacific Scientific, however, has refused to enter
into merger negotiations with Kollmorgen, the only party with a firm proposal on
the table, unless Kollmorgen first WITHDRAWS ITS TENDER OFFER, CANCELS THE
SPECIAL MEETING OF PACIFIC SCIENTIFIC SHAREHOLDERS AND ENTERS INTO A STANDSTILL
AGREEMENT which would prevent us from pursuing a business combination with
Pacific Scientific other than at the invitation of Pacific Scientific. We do not
believe that these conditions are in the best interests of you and the other
shareholders of Pacific Scientific.
The Pacific Scientific Board has also declined our offer to meet with them
and share information about our company and our offer so that they can more
fully inform themselves concerning the merits of our proposal.
We continue to hope that the Pacific Scientific Board will sit down with us
to negotiate a merger agreement prior to the February 13, 1998 special meeting
of shareholders. IF THAT DOES NOT HAPPEN, YOU WILL HAVE THE CHANCE TO VOICE YOUR
OPINION ON KOLLMORGEN'S OFFER BY VOTING IN FAVOR OF KOLLMORGEN'S PROPOSALS AT
THE SPECIAL MEETING OF PACIFIC SCIENTIFIC SHAREHOLDERS.
PLEASE BE ADVISED THAT THE TENDER OFFER IS SCHEDULED TO EXPIRE ON FEBRUARY
13, 1998 -- THE DATE OF THE SPECIAL MEETING. WE DO NOT INTEND TO EXTEND THE
TENDER OFFER FURTHER AND WILL WITHDRAW OUR PROPOSAL TO ACQUIRE PACIFIC
SCIENTIFIC, UNLESS KOLLMORGEN AND PACIFIC SCIENTIFIC HAVE PREVIOUSLY ENTERED
INTO A MERGER AGREEMENT OR KOLLMORGEN'S NOMINEES HAVE BEEN ELECTED TO THE
PACIFIC SCIENTIFIC BOARD.
At the special meeting, you will be asked to vote on proposals to:
(i) repeal any and all provisions of the Pacific Scientific bylaws that
have not been duly filed with the Securities and Exchange Commission by
Pacific Scientific prior to August 11, 1997, including any and all
amendments to the Pacific Scientific bylaws adopted on or after December 15,
1997;
(ii) remove from office the entire Pacific Scientific Board of
Directors; and
(iii) fill the vacancies created thereby by electing to the Pacific
Scientific Board six persons nominated by Kollmorgen.
Kollmorgen expects, that if they are elected, the Kollmorgen nominees will
take such actions as may be necessary, subject to their fiduciary duties under
applicable law, to consummate the proposed combination.
KOLLMORGEN IS NOW SEEKING YOUR PROXY TO VOTE FOR THE BYLAW REPEAL PROPOSAL,
THE REMOVAL OF THE ENTIRE PACIFIC SCIENTIFIC BOARD AND THE ELECTION OF THE
KOLLMORGEN NOMINEES TO THE PACIFIC SCIENTIFIC BOARD. WE HAVE PROVIDED YOU WITH A
WHITE FORM OF PROXY FOR USE IN CONNECTION WITH THE SPECIAL MEETING. WE ASK THAT
YOU COMPLETE IT, SIGN IT AND RETURN IT TO US IN THE ENVELOPE PROVIDED. PLEASE
SIGNAL YOUR SUPPORT
<PAGE>
FOR KOLLMORGEN'S OFFER AND SEND YOUR BOARD A POWERFUL MESSAGE BY SIGNING AND
RETURNING YOUR WHITE FORM OF PROXY TODAY.
We have enclosed supplemental proxy materials, along with a WHITE form of
proxy, which describes the proposed combination in detail. In addition, we have
previously supplied you with a proxy statement/ preliminary prospectus. WE URGE
YOU TO READ ALL OF THESE MATERIALS CAREFULLY.
Kollmorgen is not currently soliciting proxies for a vote on the proposed
merger. You may, however, be asked to vote on the proposed merger in the future.
If the tender offer is successful, Kollmorgen will own a majority of the Pacific
Scientific shares outstanding on a fully diluted basis and the affirmative vote
of Pacific Scientific's shareholders on the proposed merger would be assured.
We at Kollmorgen remain excited at the prospect of combining our two fine
companies. We very much appreciate your continued support.
Sincerely,
/s/ Gideon Argov
Gideon Argov
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Kollmorgen Corporation
IF YOUR SHARES ARE HELD BY YOUR BANK OR BROKERAGE FIRM, ONLY THAT FIRM CAN
EXECUTE YOUR FORM OF PROXY. CALL YOUR BANK OR BROKER WITH YOUR INSTRUCTIONS TO
EXECUTE THE FORM OF PROXY.
IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT GEORGESON & COMPANY INC., WHICH IS
ASSISTING US, TOLL FREE AT 1-800-223-2064.
TIME IS SHORT. PLEASE SEND IN YOUR WHITE FORM OF PROXY TODAY.
<PAGE>
Contacts: Roy Winnick or Mark Semer
Kekst and Company
212-521-4842 or 4802
KOLLMORGEN INCREASES OFFER FOR PACIFIC SCIENTIFIC
TO $23.75 PER SHARE
-- "TIME IS SHORT," SAYS KOLLMORGEN CHAIRMAN/CEO GIDEON ARGOV--
WALTHAM, Mass., January 30, 1998--Kollmorgen Corporation (NYSE: KOL) today
increased its offer for Pacific Scientific Company (NYSE: PSX) to $23.75 per
share, but warned that time is running out for Pacific Scientific to accept
the Kollmorgen offer.
Kollmorgen's increased offer represents a premium of approximately 54% over
Pacific Scientific's closing price on December 12, the last trading day prior
to the public announcement of Kollmorgen's offer for Pacific Scientific.
Gideon Argov, Kollmorgen Chairman, President and Chief Executive Officer,
said: "This amended offer reflects our determination to establish a combined
enterprise that will be a leader in electronic motion control, and our
confidence in the benefits of that combination for the shareholders,
customers and employees of both companies.
"We want to emphasize, however, that time is short.
"To demonstrate our good faith and our determination to get this deal done,
we have elected to significantly increase our offer, even though Pacific
Scientific has up to now refused to allow us to conduct any due diligence
unless we agree specifically to terminate our tender offer, abandon our proxy
contest and agree to a `standstill' provision which would prevent us from
pursuing a business combination with Pacific Scientific other than at the
invitation of Pacific Scientific.
"If, however, the incumbent Pacific Scientific board continues to refuse to
negotiate a definitive merger agreement, and if, moreover, the Kollmorgen
slate of nominees to that board is not elected at the special meeting of
Pacific Scientific shareholders on February 13, we intend to withdraw our
proposal to acquire Pacific Scientific."
(more)
<PAGE>
2
Under Kollmorgen's proposal as amended, Kollmorgen is tendering for a
majority of Pacific Scientific's common stock outstanding for $23.75 per
share in cash. 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 $23.75,
subject to a collar.
Additionally, Kollmorgen announced today that it has extended the expiration
date of the tender offer to 8:00 p.m., New York City time, on Friday,
February 13, 1998. The tender offer was previously set to expire at 5:00
p.m., New York City time, on Thursday, January 29, 1998. Kollmorgen stated
that as of the close of business on that date, approximately 52,409 shares of
Pacific Scientific common stock had been tendered into the offer and not
withdrawn.
Kollmorgen is mailing today to Pacific Scientific shareholders copies of a
supplement to the proxy statement dated January 15, 1998, as well as copies
of a supplement to the Offer to Purchase dated December 15, 1997.
Copies of the Proxy Statement, the Supplement to the Proxy Statement, the
Offer to Purchase and the Supplement to the Offer to Purchase may be
obtained from Georgeson & Company Inc., by calling 1-800-223-2064. Banks and
brokers may call collect at 212-440-9800.
Kollmorgen's primary business is in the area of high-performance electronic
motion control. Additional information can be found on the World Wide Web at
www.kollmorgen.com.
Cautionary Statement
- --------------------
With respect to statements about future company performance that may be
deemed to be forward-looking statements under the federal securities laws,
the Company cautions investors and others that numerous factors could cause
actual results to differ materially. Please refer to the "Forward-Looking
Statements" and "Risk Factors" included in the Registration Statement on Form
S-4 dated January 15, 1998.
