<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
(Amendment No. 10)
PACIFIC SCIENTIFIC COMPANY
------------------------------------------------
(Name of Subject Company)
KOLLMORGEN CORPORATION
TORQUE CORPORATION
------------------------------------
(Bidders)
Common Stock, $1.00 par value per share
(Including the Associated Preferred Share Purchase Rights)
------------------------------------------------------------
(Title of Class of Securities)
694806 (Common Stock)
------------------------------------
(CUSIP Number of Class of Securities)
James A. Eder, Esq.
KOLLMORGEN CORPORATION
1601 Trapelo Road
Waltham, Massachusetts 02154
(781) 890-5655
------------------------------------------------------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications on Behalf of Bidders)
Copy to:
Creighton O'M. Condon, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 848-4000
<PAGE>
This Amendment No. 10 to the Tender Offer Statement on Schedule 14D-1, as
previously amended (the "Schedule 14D-1") relates to the offer by Torque
Corporation, a Delaware corporation ("Purchaser") and a wholly owned subsidiary
of Kollmorgen Corporation, a New York corporation ("Parent"), to purchase
6,347,241 shares of common stock, par value $1.00 per share (the "Common
Stock"), of Pacific Scientific Company, a California corporation (the
"Company"), including the associated preferred share purchase rights (the
"Rights" and, together with the Common Stock, the "Shares") or such greater or
lesser number of Shares that, when added to the Shares owned by Parent and
Purchaser, would constitute a majority of the outstanding Shares on a fully
diluted basis (such number of Shares being the "Minimum Number"), at a price of
$23.75 per Share, net to the seller in cash (the "Offer Price"), upon the terms
and subject to the conditions set forth in Purchaser's Offer to Purchase dated
December 15, 1997 (the "Offer to Purchase") a copy of which was attached as
Exhibit (a)(1) to the Schedule 14D-1 filed on December 15, 1997 (the "Schedule
14D-1"), as supplemented by the supplement thereto dated January 30, 1998 (the
"Supplement") and in the related Letters of Transmittal (which, as amended from
time to time, together constitute the "Offer").
Capitalized terms used but not otherwise defined herein have the respective
meanings assigned to such terms in the Offer to Purchase, the Supplement and the
Schedule 14D-1.
2
<PAGE>
ITEM 1. TERMS OF THE OFFER; PRORATION; EXPIRATION DATE
Item 1 is hereby amended and supplemented by reference to Section 1 of the
Supplement, which Section is incorporated herein by reference.
ITEM 6. PRICE RANGE OF SHARES; DIVIDENDS
Item 6 is hereby amended and supplemented by reference to Section 2 of the
Supplement, which Section is incorporated herein by reference.
ITEM 8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT
Item 8 is hereby amended and supplemented by reference to Section 3 of the
Supplement, which Section is incorporated herein by reference.
ITEM 9. FINANCING OF THE OFFER AND THE PROPOSED MERGER
Item 9 is hereby amended and supplemented by reference to Section 4 of the
Supplement, which Introduction and Section are incorporated herein by reference.
ITEM 10. BACKGROUND OF THE OFFER
Item 10 is hereby amended and supplemented by reference to Section 5 of the
Supplement, which Section is incorporated herein by reference.
ITEM 15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS
Item 15 is hereby amended and supplemented by reference to Section 6 of the
Supplement, which is incorporated herein by reference.
ITEM 16. SHAREHOLDER RIGHTS PLAN
Item 16 is hereby amended and supplemented by reference to Section 7 of the
Supplement, which Section is incorporated herein by reference.
ITEM 19. MISCELLANEOUS
Item 19 is hereby amended and supplemented by reference to Section 8 of the
Supplement, which Section is incorporated herein by reference.
3
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
Item 11 is hereby amended to add the following Exhibits:
(a)(21) Form of Supplement to Offer to Purchase dated December 15,
1997.
(a)(22) Form of Revised Letter of Transmittal.
(a)(23) Form of Revised Notice of Guaranteed Delivery.
(a)(24) Form of Revised Letter from Salomon Smith Barney to Brokers,
Dealers, CommercialBanks, Trust Companies and Other Nominees.
(a)(25) Form of Revised Letter from Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees to Clients.
(a)(26) Press Release issued by Parent on January 30, 1998.
(b)(2) Letter Agreement among Salomon Brothers Holding Company Inc and
Parent, dated January 29, 1998.
4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------------- ---------------------------------------------------------------------------------------------------
<S> <C>
*(a)(1) Form of Offer to Purchase dated December 15, 1997.
*(a)(2) Form of Letter of Transmittal.
*(a)(3) Form of Notice of Guaranteed Delivery.
*(a)(4) Form of Letter from Salomon Smith Barney to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
*(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees to
Clients.
*(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
*(a)(7) Summary Advertisement as published in The Wall Street Journal on December 15, 1997.
*(a)(8) Press Release issued by Parent on December 15, 1997.
*(a)(9) Definitive Consent Solicitation Statement/Prospectus filed with the Commission on December 15,
1997.
*(a)(10) Form of Consent.
*(a)(11) Parent Letter to Company Shareholders dated December 15, 1997.
*(a)(12) Form of Press Release dated December 15, 1997, relating to the record date for action by consent of
Pacific Scientific Shareholders.
*(a)(13) Press Release issued by Parent on December 22, 1997.
*(a)(14) Press Release issued by Parent on December 29, 1997.
*(a)(15) Press Release issued by Parent on December 31, 1997.
*(a)(16) Press Release issued by Parent on January 8, 1998.
*(a)(17) Press Release issued by Parent on January 15, 1998.
*(a)(18) Press Release issued by Parent on January 22, 1998.
*(a)(19) Letter to Lester Hill, Chairman, President and Chief Executive Officer of the Company, from Morgan
& Finnegan, L.L.P., patent counsel for Parent, dated January 21, 1998.
*(a)(20) Press Release issued by Parent on January 26, 1998.
(a)(21) Form of Supplement to Offer to Purchase dated December 15, 1997.
(a)(22) Form of Revised Letter of Transmittal.
(a)(23) Form of Revised Notice of Guaranteed Delivery.
(a)(24) Form of Revised Letter from Salomon Smith Barney to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(25) Form of Revised Letter from Brokers, Dealers, Commercial Bank, Trust Companies and Other Nominees
to Clients.
(a)(26) Press Release issued by Parent on January 30, 1998.
*(b)(1) Commitment Letter among Salomon Brothers Inc, Salomon Brothers Holding Company Inc and Parent,
dated December 9, 1997.
(b)(2) Letter Agreement among Salomon Brothers Holding Company Inc and Parent, dated January 29, 1998.
*(c) Not applicable.
*(d) Not applicable.
*(e) Not applicable.
*(f) None.
*(g)(1) Complaint seeking Declaratory and Injunctive Relief filed in the United States District Court for
the Central District of California on December 15, 1997.
</TABLE>
- ------------------------
* Previously filed.
5
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: January 30, 1998
<TABLE>
<S> <C> <C>
TORQUE CORPORATION
BY: /S/ JAMES A. EDER
-----------------------------------------
Name: James A. Eder
Title: Vice President
</TABLE>
6
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: January 30, 1998 KOLLMORGEN CORPORATION
By: /s/ JAMES A. EDER
-----------------------------------------
Name: James A. Eder
Title: Vice President
7
<PAGE>
SUPPLEMENT TO THE OFFER TO PURCHASE DATED DECEMBER 15, 1997
Torque Corporation
a wholly owned subsidiary of
Kollmorgen Corporation
Has Increased the Price of Its
Offer to Purchase for Cash
6,347,241 Shares of Common Stock
(including the associated
Preferred Share Purchase Rights)
of
Pacific Scientific Company
to
$23.75 Net Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M., NEW
YORK CITY
TIME, ON FRIDAY, FEBRUARY 13, 1998, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER 6,347,241 SHARES
OF COMMON STOCK, PAR VALUE $1.00 PER SHARE (THE "COMMON STOCK"), OF PACIFIC
SCIENTIFIC COMPANY (THE "COMPANY"), INCLUDING THE ASSOCIATED PREFERRED SHARE
PURCHASE RIGHTS ISSUED PURSUANT TO THE PREFERRED SHARE PURCHASE RIGHTS PLAN,
DATED AS OF DECEMBER 21, 1997, BETWEEN THE COMPANY AND CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., AS RIGHTS AGENT (THE "RIGHTS" AND, TOGETHER WITH THE COMMON
STOCK, THE "SHARES"), OR SUCH GREATER OR LESSER NUMBER OF SHARES THAT, WHEN
ADDED TO THE NUMBER OF THE SHARES OWNED BY KOLLMORGEN CORPORATION ("PARENT") AND
TORQUE CORPORATION, A WHOLLY OWNED SUBSIDIARY OF PARENT ("PURCHASER"), WOULD
CONSTITUTE A MAJORITY OF THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS, (2)
PARENT AND PURCHASER HAVING OBTAINED, PRIOR TO THE EXPIRATION OF THE OFFER, ON
TERMS SATISFACTORY TO PARENT IN ITS SOLE DISCRETION, SUFFICIENT FINANCING TO
ENABLE CONSUMMATION OF THE OFFER AND THE PROPOSED MERGER DESCRIBED HEREIN (THE
"PROPOSED MERGER"), (3) PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT
THE RIGHTS HAVE BEEN REDEEMED OR INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO
THE OFFER AND THE PROPOSED MERGER, (4) PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE OFFER AND THE PROPOSED MERGER HAVE BEEN APPROVED FOR
PURPOSES OF ARTICLE FIFTH OF THE COMPANY'S ARTICLES OF INCORPORATION (IF
NECESSARY) OR ARTICLE FIFTH OF THE COMPANY'S ARTICLES OF INCORPORATION HAS BEEN
INVALIDATED OR IS OTHERWISE SATISFIED WITH RESPECT TO THE OFFER AND THE PROPOSED
MERGER AND (5) THE APPROVAL BY PARENT'S SHAREHOLDERS OF THE ISSUANCE OF COMMON
STOCK OF PARENT, PAR VALUE $2.50 PER SHARE ("PARENT COMMON STOCK"), IN THE
PROPOSED MERGER. THE OFFER IS ALSO SUBJECT TO THE OTHER TERMS AND CONDITIONS
WHICH ARE CONTAINED IN THE OFFER TO PURCHASE. SEE SECTION 14 OF THE OFFER TO
PURCHASE.
(COVER CONTINUED ON NEXT PAGE)
------------------------------
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
January 30, 1998
<PAGE>
IMPORTANT
Parent and Purchaser intend to continue to seek to negotiate with the
Company with respect to the acquisition of the Company by Parent or Purchaser.
Purchaser reserves the right to amend the Offer (including amending the number
of Shares to be purchased, the purchase price therefor and the proposed merger
consideration) at any time, including upon entering into a merger agreement with
the Company, or to negotiate a merger agreement with the Company not involving a
tender offer pursuant to which Purchaser would terminate the Offer and the
Shares would, upon consummation of such merger, be converted into cash and
Parent Common Stock in such amounts as are negotiated by Parent and the Company;
provided, however, that Parent has no intention of reducing the consideration
paid to the Company's shareholders below that being offered in the Offer and the
Proposed Merger.
------------------------
Any shareholder desiring to tender all or any portion of such shareholder's
Shares should either (1) complete and sign one of the Letters of Transmittal
which accompany the Offer to Purchase or this Supplement (or a facsimile
thereof) in accordance with the instructions in the Letters of Transmittal and
mail or deliver one of the Letters of Transmittal (or such facsimile) together
with the certificate(s) evidencing tendered Shares and, if separate, the
certificates representing the associated Rights, and any other required
documents, to the Depositary (as defined herein) or tender such Shares pursuant
to the procedures for book-entry transfer set forth in Section 3 of the Offer to
Purchase or (2) request such shareholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such shareholder.
Any shareholder whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if such shareholder
desires to tender such Shares. Unless and until Purchaser declares that the
Rights Condition (as defined herein) is satisfied, shareholders will be required
to tender one Right for each Share tendered in order to effect a valid tender of
such Share.
A shareholder who desires to tender Shares and whose certificates evidencing
such Shares are not immediately available, or who cannot comply with the
procedure for book-entry transfer on a timely basis, may tender such Shares by
following the procedure for guaranteed delivery set forth in Section 3 of the
Offer to Purchase.
Questions or requests for assistance may be directed to the Information
Agent (as defined herein) or to the Dealer Manager at their respective addresses
and telephone numbers set forth on the back cover of this Supplement. Additional
copies of the Offer to Purchase, this Supplement, the revised Letter of
Transmittal and the revised Notice of Guaranteed Delivery may also be obtained
from the Information Agent or from brokers, dealers, commercial banks or trust
companies.
<PAGE>
To the Holders of Common Stock (including the
associated Preferred Share Purchase Rights) of
Pacific Scientific Company:
INTRODUCTION
The following information amends and supplements the Offer to Purchase dated
December 15, 1997 (the "Offer to Purchase") of Torque Corporation, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Kollmorgen
Corporation, a New York corporation ("Parent"). Pursuant to this Supplement
(this "Supplement"), Purchaser is now offering to purchase 6,347,241 shares of
common stock, par value $1.00 per share (the "Common Stock"), of Pacific
Scientific Company, a California corporation (the "Company"), including the
associated preferred share purchase rights (the "Rights" and, together with the
Common Stock, the "Shares") issued pursuant to the Preferred Share Purchase
Rights Plan, dated as of December 21, 1997 (the "Rights Agreement"), between the
Company and ChaseMellon Shareholder Services, L.L.C., as rights agent (the
"Rights Agent"), or such greater or lesser number of Shares that, together with
the Shares owned by Parent and Purchaser, would constitute a majority of the
outstanding Shares on a fully diluted basis (such number of Shares being the
"Minimum Number") at a price of $23.75 per Share, net to the seller in cash (the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase (the "Offer to Purchase") as amended and supplemented by this
Supplement, and in the related Letters of Transmittal (the "Letters of
Transmittal", which, together with the Offer to Purchase, as each may be amended
from time to time, together constitute the "Offer"). Unless the context
otherwise requires, all references to the Rights shall include the benefits that
may inure to holders of the Rights pursuant to the Rights Agreement.
Except as otherwise set forth in this Supplement, the terms and conditions
previously set forth in the Offer to Purchase remain applicable in all respects
to the Offer, and this Supplement should be read in conjunction with the Offer
to Purchase. Unless the context requires otherwise, terms not defined herein
have the meanings ascribed to them in the Offer to Purchase.
The purpose of the Offer is to acquire control of, and ultimately the entire
equity interest in, the Company. Parent continues to seek to negotiate with the
Company a definitive merger agreement pursuant to which the Company would, as
soon as practicable following consummation of the Offer, consummate a merger or
similar business combination with Parent, Purchaser or another direct or
indirect subsidiary of Parent (the "Proposed Merger"). At the effective time of
the Proposed Merger (the "Effective Time"), each Share then outstanding (other
than Shares held by the Company or any wholly owned subsidiary of the Company
and Shares owned by Parent, Purchaser or any other direct or indirect wholly
owned subsidiary of Parent and Shares held by shareholders of the Company who
shall have demanded and perfected, and who shall not have withdrawn or otherwise
lost, dissenters' rights, if any, under the California General Corporation Law)
would be converted into the right to receive $23.75 of common stock, par value
$2.50 per share, of Parent ("Parent Common Stock"). The exact number of shares
of Parent Common Stock into which each Share will be converted in the Proposed
Merger will be determined by dividing $23.75 by the average, over the 20
consecutive trading days ending five days prior to the meeting of the
shareholders of the Company called for the purpose of voting on the Proposed
Merger, of the daily average of the high and low per share sales prices of
Parent Common Stock (weighted by sales volume). In the event that such average
during such period is less than $15.19 or greater than $18.56, the exchange
ratio would be fixed at 1.564 shares of Parent Common Stock on 1.280 shares of
Parent Common Stock, respectively, per Share. In such event, the Company's
shareholders could receive Parent Common Stock in the Proposed Merger with a
value greater or less than $23.75. See Section 11 of the Offer to Purchase.
<PAGE>
THIS SUPPLEMENT IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF OFFERS TO
BUY ANY SECURITIES THAT MAY BE ISSUED IN ANY MERGER OR SIMILAR BUSINESS
COMBINATION INVOLVING PARENT, PURCHASER OR THE COMPANY. THE ISSUANCE OF SUCH
SECURITIES WOULD BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND SUCH SECURITIES WOULD BE OFFERED ONLY BY MEANS OF A
PROSPECTUS COMPLYING WITH THE REQUIREMENTS OF THE SECURITIES ACT. ON DECEMBER
15, 1997, PARENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION") A REGISTRATION STATEMENT ON FORM S-4 WITH RESPECT TO THE SHARES OF
PARENT COMMON STOCK TO BE ISSUED IN THE PROPOSED MERGER.
Pursuant to a consent solicitation commenced by Parent (the "Consent
Solicitation"), the Company's shareholders called a special meeting of the
Company's shareholders (the "Special Meeting"), to be held on February 13, 1998,
in order to, among other things, remove the entire Board of Directors of the
Company (the "Company Board") and fill the newly created vacancies on the
Company Board by electing six persons named by Parent (the "Parent Nominees").
Parent expects that, if elected, and subject to their fiduciary duties under
applicable law, the Parent Nominees would cause the Company Board to (i) amend
the Rights Agreement or redeem the Rights, or otherwise act to ensure that the
Rights Condition (as defined below) is satisfied, (ii) approve the Offer and the
Proposed Merger for purposes of Article Fifth of the Company's Articles of
Incorporation ("Article Fifth") or otherwise act to ensure that the Article
Fifth Condition (as defined below) is satisfied and (iii) take any other actions
necessary to permit the Offer and the Proposed Merger to be consummated. Parent
is currently soliciting proxies, pursuant to supplemental proxy materials
complying with the requirements of Section 14(a) of the Securities Exchange Act
of 1934, as amended, (the "Exchange Act") and the rules and regulations
promulgated thereunder, for use at the Special Meeting (the "Proxy
Solicitation").
THIS OFFER TO PURCHASE DOES NOT CONSTITUTE A SOLICITATION OF A PROXY,
CONSENT OF AUTHORIZATION FOR OR WITH RESPECT TO THE ANNUAL MEETING OR ANY
SPECIAL MEETING OF, OR ACTION BY WRITTEN CONSENT BY, THE COMPANY'S SHAREHOLDERS.
THE SOLICITATION WILL BE MADE ONLY PURSUANT TO SEPERATE CONSENT SOLICITATION
MATERIALS COMPLYING WITH ALL APPLICABLE REQUIREMENTS OF SECTION 14(a) OF THE
EXCHANGE ACT.
On December 15, 1997, Parent commenced litigation ( the "Litigation")
against the Company and the Company Board by filing a complaint (the
"Complaint") 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 would constitute a breach of the Company Board's fiduciary duties
to the Company's shareholders under California law, (ii) invalidating the Rights
or compelling the Company Board to redeem the Rights or render the Rights
inapplicable to the Offer and the Proposed Merger, (iii) compelling the Company
Board to approve the Offer and the Proposed Merger for purposes of Article
Fifth, and (iv) enjoining the Company Board from taking any actions to interfere
with the Offer, the Proxy Solicitation or the Proposed Merger. On January 5,
1998, the Company filed an answer to the Complaint.
BY TENDERING SHARES IN THE OFFER, PARENT BELIEVES THAT THE COMPANY'S
SHAREHOLDERS EFFECTIVELY WILL EXPRESS TO THE COMPANY BOARD THAT THEY WISH TO BE
ABLE TO ACCEPT THE OFFER AND TO APPROVE THE PROPOSED MERGER WITH PARENT AND ITS
AFFILIATES.
Purchaser reserves the right to amend the Offer (including amending the
number of Shares to be purchased, the purchase prices therefor and the proposed
merger consideration) at any time, including upon entering into a merger
agreement with the Company, or to negotiate a merger agreement with the Company
in connection with a merger not involving a tender offer pursuant to which
Purchaser would terminate the Offer and the Shares would, upon consummation of
such merger, be converted into cash and Parent Common Stock in such amounts as
are negotiated by Parent and the Company, PROVIDED, HOWEVER, that Parent has no
intention of reducing the consideration paid to the Company's shareholders being
offered in the Offer and the Proposed Merger.
2
<PAGE>
The timing of consummation of the Offer and the Proposed Merger will depend
on a variety of factors and legal requirements, the actions of the Company Board
and whether the conditions to the Offer and the Proposed Merger are satisfied or
waived. Consummation of the Offer is subject to the fulfillment of a number of
conditions, including, without limitation, the following:
MINIMUM CONDITION. Consummation of the Offer is conditioned upon there
being validly tendered and not withdrawn prior to the expiration of the Offer at
least the Minimum Number of Shares (the "Minimum Condition"). Purchaser reserves
the right (subject to the applicable rules and regulations of the Commission),
which it currently has no intention of exercising, to waive or reduce the
Minimum Condition and to elect to purchase, pursuant to the Offer, fewer than
the Minimum Number of Shares. See Section 1 and Section 14 of the Offer to
Purchase.
According to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 26, 1997 (the "Company Form 10-Q"), as of September 26,
1997 there were 12,381,595 shares of Common Stock issued and outstanding.
According to the Company Form 10-Q, as of September 26, 1997, the weighted
average number of shares of Common Stock subject to issuance under the Company's
1995 Stock Option Plan (the "Stock Option Plan Common Stock") during the third
fiscal quarter of 1997 was 313,285. Parent currently owns 100 Shares, and
Purchaser owns 100 Shares, which Parent and Purchaser acquired in open market
transactions. See Schedule II of the Offer to Purchase. Based on the foregoing
and assuming that (i) no shares of Common Stock are issued or acquired by the
Company after September 26, 1997 (other than as described in clause (iii)
below), (ii) no options are granted or expired after September 26, 1997 and
(iii) all 313,285 Shares of the Stock Option Plan Common Stock are issued at or
prior to the consummation of the Offer, there would be 12,694,880 Shares
outstanding immediately following the consummation of the Offer and the Minimum
Number of Shares would be 6,347,241 Shares.
HSR CONDITION. Consummation of the Offer was conditioned upon the
expiration or termination of any applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
(the "HSR Condition"). On December 15, 1997, Parent filed with the Federal Trade
Commission and the Antitrust Division of the Department of Justice Premerger
Notification and Report Forms under the HSR Act with respect to the Offer. The
waiting period under the HSR Act applicable to the Offer expired at 11:59 p.m.,
New York City time, on December 30, 1997. Consequently, the HSR Condition has
been satisfied.
FINANCING CONDITION. Consummation of the Offer is conditioned upon Parent
and Purchaser obtaining, prior to the expiration of the Offer, on terms
satisfactory to Parent in its sole discretion, sufficient financing to enable
consummation of the Offer and the Proposed Merger. Parent, Salomon Smith Barney
and Salomon Brothers Holding Company Inc ("SBHCI"), an affiliate of Salomon
Smith Barney, have entered into a commitment letter dated December 9, 1997 and
amended January 29, 1998 pursuant to which SBHCI has committed, subject to
certain conditions set forth therein (including, without limitation, that all
conditions of the Offer are satisfied and that either (i) Parent has entered
into a definitive merger agreement with the Company or (ii) that the Parent
Nominees shall, or that SBHCI shall otherwise be satisfied that the Parent
Nominees will, upon consummation of the Offer, constitute a majority of the
Company Board), to provide such financing, consisting of a fully secured
financing in the syndicated loan market in the principal amount of $320 million.
See Section 9 of the Offer to Purchase for a description of the proposed
financing of the Offer and the Proposed Merger.
RIGHTS CONDITION. Consummation of the Offer is conditioned upon Purchaser
being satisfied, in its sole discretion, that the Rights have been redeemed or
invalidated or are otherwise inapplicable to the Offer and the Proposed Merger
(the "Rights Condition"). See Section 16 of the Offer to Purchase.
Parent expects that, if elected, and subject to their fiduciary duties under
applicable law, the Parent Nominees would cause the Company Board to amend the
Rights Agreement or redeem the Rights, or otherwise act to ensure that the
Rights Condition is satisfied.
3
<PAGE>
In addition, on December 15, 1997, Parent commenced the Litigation 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 would
constitute a breach of the Company Board's fiduciary duties to the Company's
shareholders under California law and (ii) invalidating the Rights or compelling
the Company Board to redeem the Rights or render the Rights inapplicable to the
Offer and the Proposed Merger.
ARTICLE FIFTH CONDITION. Consummation of the Offer is conditioned upon
Purchaser being satisfied, in its sole discretion, that the Offer and the
Proposed Merger have been approved for purposes of Article Fifth (if necessary)
or Article Fifth has been invalidated or is otherwise satisfied with respect to
the Offer and the Proposed Merger (the "Article Fifth Condition"). See Section
17 of the Offer to Purchase.
Parent expects that, if elected, and subject to their fiduciary duties under
applicable law, the Parent Nominees would cause the Company Board to approve the
Offer and the Proposed Merger for purposes of Article Fifth.
In addition, on December 15, 1997, Parent commenced the Litigation seeking,
among other things, an order (i) declaring that failure to approve the Offer and
the Proposed Merger for purposes of Article Fifth would constitute a breach of
the Company Board's fiduciary duties to the Company's shareholders under
California law and (ii) compelling the Company Board to approve the Offer and
the Proposed Merger for purposes of Article Fifth.
PARENT SHAREHOLDER APPROVAL CONDITION. Consummation of the Offer is
conditioned upon the approval by shareholders of Parent of the issuance of
Parent Common Stock in the Proposed Merger. Pursuant to rules promulgated by the
New York Stock Exchange, Inc. (the "NYSE"), approval by shareholders of Parent
of the issuance of Parent Common Stock in the Proposed Merger prior to the
issuance thereof is required where the present or potential issuance of Parent
Common Stock is or will be equal to or in excess of 20% of the number of shares
of Parent Common Stock outstanding before such issuance of Parent Common Stock.
Parent currently intends to hold a special meeting of its shareholders on
February 10, 1998 for purposes of approving the issuance of Parent Common Stock
to be issued in the Proposed Merger and has set December 26, 1997 as the record
date for determining the holders of Parent Common Stock entitled to notice of,
and to vote at, the special meeting of Parent's shareholders.
THE OFFER IS ALSO SUBJECT TO THE OTHER TERMS AND CONDITIONS WHICH ARE
CONTAINED IN THE OFFER TO PURCHASE AND THIS SUPPLEMENT. SEE SECTION 14 OF THE
OFFER TO PURCHASE, WHICH SETS FORTH IN FULL THE CONDITIONS TO THE OFFER.
THE OFFER TO PURCHASE AND THIS SUPPLEMENT CONTAIN IMPORTANT INFORMATION
WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
1. AMENDED TERMS OF THE OFFER. The Offer is being made for 6,347,241
Shares, or such greater or lesser number of Shares that, when added to the
number of the Shares owned by Parent and Purchaser would constitute a majority
of the outstanding Shares on a fully diluted basis. The price per Share to be
paid pursuant to the Offer has been increased from $20.50 per Share to $23.75
per Share, net to the seller in cash. All Shareholders whose Shares are validly
tendered and not withdrawn and accepted for payment pursuant to the Offer
(including Shares tendered prior to the date of this Supplement) will receive
the increased price.
This Supplement, the revised Letter of Transmittal and other relevant
materials will be mailed to record holders of Shares whose names appear on the
Company's shareholder list and will be furnished, for subsequent transmittal to
beneficial owners of Shares, to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the shareholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing.
4
<PAGE>
2. PRICE RANGE OF SHARES; DIVIDENDS. The discussion set forth in Section 6
of the Offer to Purchase is hereby supplemented as follows.
According to published financial sources, the Company has paid no cash
dividends on the Shares since the date of the Offer to Purchase.
The high and low sales prices per Share on the NYSE as reported by the Dow
Jones News Service for the calendar quarter ended December 31, 1997 were $24 1/8
and $13 1/2, respectively, and the high and low sales prices per Share for the
current calendar quarter through January 29, 1998, were $25 1/8 and $23 1/8,
respectively. On January 29, 1998, the last full trading day prior to the date
of this Supplement, the closing price per Share as reported on the NYSE was
$24.53. Past performance is not necessarily indicative of likely future price
performance.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
3. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT; RECENT
DEVELOPMENTS.
On January 26, 1998, Parent issued a press release reporting its financial
results for the three and the 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), Parent 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, Parent'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 Parent'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 Parent's offer to purchase shares of the Company, 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 the Parent's acquisition of
Servotronix Ltd. and Fritz A. Seidel Electro-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.
Parent 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, Parent issued a press release announcing that it will
receive $27.2 million under a confidential settlement and paid-up licensing
agreement covering certain Parent motion control
5
<PAGE>
patents (the "Settlement"). The settlement amount is expected to be received by
Parent in the first quarter of 1998.
4. FINANCING OF THE OFFER AND THE PROPOSED MERGER. The total amount of
funds required for the purchase of 6,347,241 Shares is approximately $150.7
million. The determination that such number of Shares equals a majority of the
Shares outstanding on a fully diluted basis is based on publicly available
information about the Company, and the actual Minimum Number of Shares, and the
total amount of funds required to purchase such Shares, may differ. Purchaser
will obtain all of such funds from Parent. Parent intends to obtain the funds
from a bank facility (the "Facility") to be arranged by Salomon Smith Barney.
Parent, Salomon Smith Barney and SBHCI have entered into a commitment letter,
dated December 9, 1997, as amended January 29, 1998 (the "Commitment Letter"),
pursuant to which SBHCI has committed, subject to the conditions set forth
therein (including, without limitation, that all conditions of the Offer are
satisfied and that Parent has either (i) entered into a definitive merger
agreement with the Company or (ii) that the Parent Nominees shall, or that SBHCI
shall otherwise be satisfied that the Parent Nominees will upon consummation of
the Offer, constitute a majority of the Company Board), to provide to Parent and
the Company up to $320 million pursuant to a fully secured financing (the
"Financing"), to pay the Offer Price for the Shares to be purchased in the
Offer, to refinance existing indebtedness of Parent and the Company, to provide
funds for general corporate purposes and to pay related fees and expenses. SBHCI
expects to syndicate the Facility in the bank syndicate market.
The Financing consists of two phases. In Phase I there are two nine-month
secured revolving credit facilities available for borrowing, one in an aggregate
principal amount of $175 million (the "Phase I Tender Facility"), available to
Parent and the other in an aggregate principal amount of $125 million, available
to the Company (the "Phase I Company Facility", and together with the Phase I
Tender Facility, the "Phase I Facilities"). The Phase I Facilities may be drawn
on or after the date on which Purchaser accepts the Shares for payment and
consummates the Tender Offer (the "Closing Date") and may be drawn in multiple
drawings. Phase II of the Financing consists of a secured term credit facility
in an aggregate principal amount of $175 million, available to both Parent and
the Company (the "Term Facility") and a secured revolving credit facility in an
aggregate principal amount of $125 million (the "Revolving Credit Facility" and,
together with the Term Facility, the "Phase II Facilities"), a portion of which
may be used for letters of credit. The entire Term Facility must be drawn in a
single drawing on the date on which the Proposed Merger is consummated (the
"Merger Date") and the Revolving Credit Facility is also available on or after
the Merger Date. Amounts borrowed under the Revolving Credit Facility and the
Phase I Facilities that are repaid may be reborrowed. Amounts borrowed under the
Term Facility that are repaid or prepaid may not be reborrowed. Pursuant to the
terms of the January 29, 1998 amendment to the Commitment Letter, the remaining
$20 million of the Financing will be allocated to each of the two phases.
The Facility will be available to Parent and the Company subject to various
conditions precedent including, but not limited to: (i) satisfaction of the
conditions to the Offer; (ii) Parent having entered into a definitive merger
agreement with the Company or Parent Nominees constituting, or that SBHCI shall
otherwise be satisfied that Parent's Nominees will constitute upon consummation
of the Offer, a majority of the Company Board; and (iii) certain other
conditions customary for facilities and transactions of this type.
Parent may borrow funds from the Phase I Facilities at an interest rate
equal to either (i) the London InterBank Offered Rate plus 2% or (ii) the
Alternate Base Rate (defined as the higher of (A) the Prime Rate of the
administrative agent or reference bank and (B) the Federal Funds Effective Rate
plus 1/2 of 1%) plus 0.5%. Such interest shall be calculated on the basis of
actual days elapsed in a year of 360 days (or 365 or 366 days, as the case may
be, in the case of Alternate Base Rate loans based on the Prime Rate) and will
be paid quarterly, in arrears or at the end of an interest period, in arrears.
Default interest is paid at the applicable interest rate plus 2%. A commitment
fee of 0.5% per annum will accrue on any unused portion
6
<PAGE>
of the Phase I Facilities. The interest rates and commitment fees applicable to
the Phase II Facilities will be determined at a later date.
The obligations of Parent and the Company under the facilities will be
unconditionally guaranteed by each domestic and certain foreign subsidiaries of
Parent other than the Purchaser. In addition, all borrowings under the Phase I
Company Facility will be guaranteed by Parent. The obligations of both Parent
and Purchaser under the Phase I Tender Facility and the guarantees thereof will
be secured by a perfected first priority security interest in substantially all
of the tangible and intangible assets of Parent, and certain significant
subsidiaries (other than Company Common Stock). The Phase I Company Facility and
the guarantees thereof will be secured by a perfected first priority security
interest in substantially all of the assets of the Company and certain of its
subsidiaries. The Phase II Facilities will be secured by all of the assets of
both the Company and Parent as well as the stock of the Company and its
subsidiaries.
The Phase I Facilities will mature upon the earlier of nine months after the
Closing Date or the Merger Date. The Term Facility will mature seven years after
the Closing Date and will amortize quarterly. The Revolving Credit Facility will
mature on the earlier of (i) seven years after the Closing Date or (ii) the
repayment in full of the Term Facility. Parent must mandatorily prepay
borrowings with a percentage of Excess Cash Flow, 100% of the net cash proceeds
of all non-ordinary-course asset sales or other dispositions of property by
Parent and its subsidiaries (subject to certain exceptions to be agreed upon),
100% of the net proceeds of debt issuances, and 50% of the net proceeds of
certain issuances of equity of Parent and its subsidiaries. Parent may
voluntarily prepay its loans at any time without premium or penalty.
Parent makes customary representations, warranties and covenants for
facilities of this type including, without limitation: (i) financial maintenance
tests consisting of a maximum leverage ratio, a minimum fixed charge coverage
ratio, and a minimum net worth level; (ii) maintenance of corporate existence,
compliance with laws, payment of taxes, and maintenance of properties and
insurance; (iii) maintenance of appropriate interest protection and other
hedging arrangements in respect of, at any time, not less than 50% of the
aggregate principal amount of loans outstanding at such time under the
facilities; and (iv) limitations on cash dividends, capital stock redemptions
and repurchases, indebtedness, liens, loans, investments, capital expenditures,
mergers, acquisitions, asset sales (other than sales of margin securities),
prepayments, repurchases and redemption of debt, and certain changes in Parent's
business. The facilities also include customary events of default including,
without limitation, payment defaults, covenant defaults, cross default, cross
acceleration, bankruptcy, material judgments, certain Employee Retirement Income
Security Act of 1974 events, actual or asserted invalidity of security documents
and a change of control (to be defined in the loan documentation) of Parent.
Parent expects that the definitive documentation with respect to the Financing
will contain conditions that are customary for transactions of this type.
The foregoing is not intended to be a complete description of the terms and
conditions of the Commitment Letter and is qualified in its entirety by
reference to the full text thereof which is incorporated herein by reference and
copies of which have been filed as an exhibit to the Tender Offer Statement on
Schedule 14D-1.
Parent has no current specific plans or arrangements for the repayment or
refinancing of the borrowings under the Facility. Such plans or arrangements,
when made, will be based on Parent's review from time to time of the
advisability of particular actions, as well as on prevailing interest rates and
financial and other economic conditions.
Parent and the Purchaser have not had access to all of the instruments and
agreements under which the Company has existing debt or other obligations
(collectively "Company Debt"). There can be no assurance that the purchase of
the Shares and the Proposed Merger will not result in an event of default, cross
default or other adverse consequences under any or all of the instruments
defining the
7
<PAGE>
rights of the holders of Company Debt. As a result, it is possible that holders
of certain of the Company Debt may have the right to require its immediate
payment and Parent may need to refinance this additional indebtedness. In the
event that the holders of some or all of the Company Debt have the right to
demand its immediate payment upon purchase of the Shares pursuant to the Offer
or consummation of the Proposed Merger, Parent presently intends to seek such
holders' consent to the Purchaser's assumption of the Company Debt pursuant to
the same terms and conditions as such Company Debt presently outstanding or to
refinance such Company Debt through additional borrowings. All capitalized terms
which are used in this section and not otherwise defined shall have the meanings
ascribed to them in the Commitment Letter.
5. BACKGROUND OF THE OFFER SINCE DECEMBER 15, 1997; CONTACTS WITH THE
COMPANY. On December 22, 1997, without having first engaged in discussions with
Parent regarding the Proposed Combination, the Company filed a
Solicitation/Recommendation Statement on Schedule 14D-9 with the Commission
reporting that the Company Board recommended that shareholders of the Company
reject the Offer and not tender their Shares pursuant to the Offer.
On the same day, the Company filed a Preliminary Revocation Solicitation
Statement with the Commission reporting that the Company Board recommended that
shareholders of the Company not provide any consents to Parent pursuant to the
Consent Solicitation.
In addition on that same day, the Company disclosed that on December 21,
1997, the Company Board redeemed the rights issued under the Shareholder
Protection Agreement, dated as of November 7, 1988, as amended, between the
Company and Manufacturers Hanover Trust Company, as successor rights agent. The
Company also entered into the Rights Agreement, pursuant to which new preferred
share purchase rights were issued to shareholders of the Company. Consequently,
on December 24, 1997, Parent amended the Offer such that the Offer is being made
for shares of the Company Common Stock and the associated preferred share
purchase rights.
On December 29, 1997, Parent mailed proxy solicitation materials to Parent
shareholders for a special shareholders meeting that was then scheduled to be
held on January 28, 1998 for the purpose of voting on the issuance of shares of
Parent Common Stock to be issued in the Proposed Merger (including any
adjournments or postponements thereof, the "Parent Special Meeting").
On January 5, 1998, the Company filed an answer to the Complaint.
On January 8, 1998, pursuant to the Consent Solicitation, the shareholders
of the Company called the Special Meeting through the delivery by Parent, to the
Secretary of the Company, of consents from holders of Company Common Stock
significantly in excess of the 10% required to call the Special Meeting,
accompanied by a request that the Company give notice of the Special Meeting to
be held on February 13, 1998 in order to vote on the following proposals:
(i) a proposal to repeal any and all provisions of the Company's bylaws
that have not been duly filed by the Company with the Commission prior to
August 11, 1997, including any and all amendments to the Company's bylaws
adopted on or after December 15, 1997 (the "Bylaw Repeal Proposal");
(ii) a proposal to remove from office the entire Company Board (the
"Removal Proposal"); and
(iii) a proposal to fill the newly created vacancies on the Company
Board with the six persons nominated by Parent (the "Election Proposal").
On January 12, 1998, the Company set January 20, 1998 as the Record Date for
determining the shareholders of the Company entitled to notice of and to vote at
the Special Meeting.
8
<PAGE>
On January 15, 1998, Parent and Purchaser mailed to the Company's
shareholders and filed with the Commission a proxy statement and form of proxy
to vote at the Special Meeting urging shareholders to vote in favor of the Bylaw
Repeal Proposal, the Removal Proposal and the Election Proposal.
Additionally, on January 15, 1998, Parent 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, the Company filed with the Commission a proxy statement in
opposition to the Proxy Statement urging shareholders of the Company not to
sign, or return any proxy cards sent to them by Parent.
On January 21, 1998, Parent reached agreement with a third party on a
confidential settlement and paid-up licensing agreement covering certain Parent
motion control patents. The settlement amount, $27.2 million, is expected to be
received by Parent in the first quarter of 1998. On January 21, 1998, Morgan &
Finnegan, L.L.P., patent counsel to Parent, mailed a letter to Mr. Lester Hill,
Chairman, President and Chief Executive Officer of the Company, regarding
certain of the Company's motion-control products that Parent believes infringe
upon one or more of Parent's patents. On that same day, Parent announced that it
had formally notified the Company of its belief that certain of the Company's
motion-control products, which Parent believes represents a substantial
percentage of the Company's motion-control revenues, infringed on Parent
patents.
Since December 15, 1997, various telephone calls have been initiated by
Parent's legal and financial advisors ("Parent's Advisors") to the Company's
legal and financial advisors (the "Company's Advisors") requesting access to
information regarding the Company which Parent believes is being made available
by the Company to other potential acquirors of the Company and requesting the
Company to enter into merger discussions with Parent. The Company refused to
allow Parent to conduct any due diligence or enter into merger discussions with
the Company without Parent first agreeing to certain conditions described below.
The Company Board has also declined Parent's 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, Parent's Chairman, President and Chief
Executive Officer, telephoned Mr. Hill to suggest that the two companies enter
into merger negotiations. Following that conversation, the Company's Advisors
informed Parent's Advisors that the Company would only enter into merger
discussions if Parent agreed specifically to terminate the Offer, cancel the
special meeting of Company shareholders and agree to a confidentiality agreement
with a "standstill" provision (the "Confidentiality Agreement") which would
prevent Parent from pursuing a business combination with the Company other than
at the invitation of the Company. However, despite Mr. Argov's and Parent's
Advisor's requests, the Company's Advisors have yet to deliver the
Confidentiality Agreement to Parent.
On January 26, 1998, Parent reported preliminary operating results for the
fourth quarter of 1997 and the year ended December 31, 1997 and reaffirmed its
intention to acquire the Company. Also, on January 26, 1998, Parent postponed
the Parent Special Meeting until February 10, 1998.
On January 30, 1998 Parent filed a supplement to the Company proxy
statement. Also on January 30, 1998, Parent filed a supplement to the Parent
proxy solicitation materials.
6. CERTAIN LEGAL MATTERS AND REGULATORY APPROVAL.
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer, the
purchase of Shares pursuant to the Offer could not be consummated until the
expiration of a 15-calendar day waiting period following the applicable filings
by Parent. The waiting period under the HSR Act applicable to the purchase of
Shares pursuant to the Offer expired at 11:59 p.m., New York City time, on
December 30, 1997.
9
<PAGE>
7. SHAREHOLDER RIGHTS PLAN. On December 21, 1997, the Company adopted the
Rights Agreement under which one Right to purchase one one-hundredth of a share
of the Company Series B Junior Participating Preferred Stock was distributed on
each outstanding share of Company Common Stock held of record as of December 21,
1997, and on each such share issued thereafter, at an exercise price of $75,
subject to adjustment. The Rights will trade in tandem with the Company Common
Stock. The Rights detach from the Company Common Stock and become exercisable on
the earlier of (i) 10 days after a person (or its affiliates or associates)
acquires, or obtains the right to acquire, beneficial ownership of 10% or more
of the Company Common Stock or (ii) a minimum of 10 business days following the
commencement or announcement of a tender offer that would result in such person
or group having beneficial ownership of 10% or more of the Company Common Stock.
Each Right entitles its holder to purchase, at the Right's then current exercise
price, that number of units of the Company Series B Junior Participating
Preferred Stock having a value equal to twice such exercise price. In addition,
if the Company is involved in certain business combination transactions, each
Right that has not previously been exercised will entitle its holder to
purchase, at the Right's then current exercise price, shares of common stock of
such other person or surviving company having a value of twice the Right's
exercise price.
8. MISCELLANEOUS. Purchaser has filed with the Commission amendments to
the Schedule 14D-1 pursuant to Rule 14d-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended, furnishing certain
additional information with respect to the Offer, and may file further
amendments thereto. The Schedule 14D-1 and any amendments thereto, including
exhibits, may be inspected at, and copies may be obtained from, the same places
and in the same manner as set forth in Section 7 of the Offer to Purchase
(except that they will not be available at the regional offices of the
Commission).
TORQUE CORPORATION
January 30, 1998
10
<PAGE>
Facsimiles of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates evidencing Shares and any other required documents
should be sent or delivered by each shareholder or his broker, dealer,
commercial bank, trust company or other nominee to the Depositary at one of its
addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY HAND/OVERNIGHT DELIVERY:
WALL STREET STATION RECEIVE WINDOW
P.O. BOX 1023 WALL STREET PLAZA
NEW YORK, NEW YORK 10268-1023 88 PINE STREET, 19TH FLOOR
NEW YORK, NEW YORK 10005
</TABLE>
BY FACSIMILE:
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of this Supplement, the Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from
the Information Agent. A shareholder may also contact brokers, dealers,
commercial banks or trust companies for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[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
THE DEALER MANAGER FOR THE OFFER IS:
SALOMON SMITH BARNEY
SEVEN WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
CALL TOLL-FREE (888) 746-7939
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
PACIFIC SCIENTIFIC COMPANY
AT
$23.75 NET PER SHARE
PURSUANT TO THE OFFER TO PURCHASE
DATED DECEMBER 15, 1997
AND THE SUPPLEMENT THERETO DATED JANUARY 30, 1998
OF
TORQUE CORPORATION
a wholly owned subsidiary of
KOLLMORGEN CORPORATION
- -----------------------------------------------------------------------------
THE OFFER IS EXTENDED. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 8:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 13, 1998,
UNLESS THE OFFER IS FURTHER EXTENDED.
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY HAND/OVERNIGHT DELIVERY:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, New York 10268-1023 88 Pine Street, 19th Floor
New York, New York 10005
</TABLE>
BY FACSIMILE:
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE>
While the previously circulated YELLOW Letter of Transmittal refers to the
Offer to Purchase dated December 15, 1997, stockholders making use thereof to
tender their Shares will nevertheless receive $23.75 per Share for each Share
validly tendered and not withdrawn and accepted for payment pursuant to the
Offer, subject to the conditions of the Offer. STOCKHOLDERS WHO HAVE PREVIOUSLY
VALIDLY TENDERED AND HAVE NOT WITHDRAWN THEIR SHARES PURSUANT TO THE OFFER ARE
NOT REQUIRED TO TAKE ANY FURTHER ACTION TO RECEIVE THE INCREASED TENDER PRICE OF
$23.75 PER SHARE.
This revised YELLOW Letter of Transmittal or the previously circulated BLUE
Letter of Transmittal is to be completed by shareholders either if certificates
evidencing Shares or, if applicable, Rights (as such terms are defined below)
are to be forwarded herewith or if delivery of Shares or, if applicable, Rights,
is to be made by book-entry transfer to the Depositary's account at The
Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company
("PDTC") (each a "Book-Entry Transfer Facility" and, together, the "Book-Entry
Transfer Facilities") pursuant to the book-entry transfer procedures described
in Section 3 of the Offer to Purchase (as defined below). DELIVERY OF DOCUMENTS
TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
As of the date of the Offer to Purchase, the Rights are evidenced by the
certificates evidencing the Shares (the "Share Certificates") and do not trade
separately. Accordingly, by tendering a Share Certificate evidencing Shares, a
shareholder is automatically tendering a similar number of associated Rights.
If, however, pursuant to the Rights Agreement (as defined below) or for any
other reason, the Rights detach and separate certificates evidencing the Rights
("Rights Certificates") are issued, shareholders will be required to tender one
Right for each share of Common Stock tendered in order to effect a valid tender
of such share of Common Stock.
Shareholders whose Share Certificates (or, if applicable, Rights
Certificates) are not immediately available or who cannot deliver their Share
Certificates (or, if applicable, Rights Certificates) and all other documents
required hereby to the Depositary prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase) or who cannot complete the procedure for
delivery by book-entry transfer on a timely basis and who wish to tender their
Shares, must do so pursuant to the guaranteed delivery procedure described in
Section 3 of the Offer to Purchase. See Instruction 2.
<TABLE>
<S> <C>
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE) / / DTC / / PDTC
</TABLE>
Account Number________________________________________
Transaction Code Number________________________________________
<TABLE>
<S> <C>
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY
SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
Window Ticket No. (if any)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution which Guaranteed Delivery
</TABLE>
If delivery is by book-entry transfer, check box of applicable Book-Entry
Transfer Facility:
<TABLE>
<S> <C>
(CHECK ONE) DTC / / / / PDTC
</TABLE>
Account Number________________________________________
Transaction Code Number________________________________________
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
----------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S)
APPEAR(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
<CAPTION>
TOTAL NUMBER
OF
SHARES
SHARE EVIDENCED BY NUMBER OF
CERTIFICATE SHARE SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by shareholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by
each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
DESCRIPTION OF RIGHTS TENDERED*
----------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(S) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S)
APPEAR(S) ON RIGHTS CERTIFICATE(S) AND RIGHT(S) TENDERED
RIGHTS CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
<CAPTION>
TOTAL NUMBER
OF
RIGHTS
RIGHTS EVIDENCED BY NUMBER OF
CERTIFICATE RIGHTS RIGHTS
NUMBER(S)** CERTIFICATE(S)** TENDERED***
<S> <C> <C> <C>
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
TOTAL RIGHTS
- ------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed unless separate Rights Certificates have been issued.
** Need not be completed by shareholders delivering Rights by book-entry
transfer.
*** Unless otherwise indicated, it will be assumed that all Rights evidenced by
each Rights Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
- --------------------------------------------------------------------------------
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Torque Corporation, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Kollmorgen Corporation, a New
York corporation ("Parent"), the above-described shares of common stock, par
value $1.00 per share (the "Common Stock"), of Pacific Scientific Company, a
California corporation (the "Company"), including the associated preferred share
purchase rights (the "Rights" and, together with the Common Stock, the "Shares")
issued pursuant to the Preferred Share Purchase Rights Plan, dated as of
December 21, 1997, as amended (the "Rights Agreement"), between the Company and
ChaseMellon Shareholder Services, L.L.C. as Rights Agent (the "Rights Agent"),
pursuant to Purchaser's offer to purchase 6,347,241 Shares, or such greater or
lesser number of Shares that, together with Shares owned by Parent and
Purchaser, would constitute a majority of the outstanding Shares on a fully
diluted basis (such number of Shares being the "Minimum Number") at a price of
$23.75 per Share, net to the seller in cash (the "Offer Price"), upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated December
15, 1997 (the "Offer to Purchase") as amended and supplemented by the Supplement
thereto dated January 30, 1998 (the "Supplement"), receipt of which is hereby
acknowledged, and in the related Letters of Transmittal (which, as amended from
time to time, and the Offer to Purchase as it may be amended from time to time,
together constitute the "Offer"). The undersigned understands that Purchaser
reserves the right to transfer or assign, in whole or from time to time in part,
to one or more of its affiliates, the right to purchase all or any portion of
the Shares tendered pursuant to the Offer.
<PAGE>
The undersigned understands that, unless the Rights are redeemed prior to
the Expiration Date (as defined in the Offer to Purchase), holders of Shares
will be required to tender one Right for each Share tendered in order to effect
a valid tender of such Share. Unless and until the Distribution Date (as defined
in the Offer to Purchase) occurs, the Rights are represented by and transferred
with the Shares. Accordingly, if the Distribution Date does not occur prior to
the Expiration Date, a tender of Shares will constitute a tender of the
associated Rights. If a Distribution Date has occurred, certificates
representing a number of Rights ("Rights Certificates") equal to the number of
shares of Common Stock being tendered must be delivered to the Depositary in
order for such shares of Common Stock to be validly tendered. If a Distribution
Date has occurred, the undersigned agrees hereby to deliver Rights Certificates
representing a number of Rights equal to the number of shares of Common Stock
tendered herewith to the Depositary within three business days after the date
such Rights Certificates are distributed. Purchaser reserves the right to
require that the Depositary receive such Rights Certificates, or a Book-Entry
Confirmation (as defined in the Offer to Purchase), if available, with respect
to such Rights prior to accepting shares of Common Stock for payment. Payment
for shares of Common Stock tendered and accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of, among other
things, such Rights Certificates, if such certificates have been distributed to
holders of Shares. Purchaser will not pay any additional consideration for the
Rights tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of and subject to the conditions
of the Offer, the undersigned hereby sells, assigns and transfers to, or upon
the order of, Purchaser, all right, title and interest in and to all the Shares
that are being tendered hereby and all dividends, distributions (including,
without limitation, distributions of additional Shares) and rights declared,
paid or distributed in respect of such Shares on or after December 15, 1997,
other than regular quarterly dividends on the Shares declared and paid at times
consistent with past practice in an amount not in excess of $0.03 per Share
(collectively, "Distributions") and irrevocably appoints the Depositary the true
and lawful agent and attorney-in-fact of the undersigned with respect to such
Shares and all Distributions, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(i) deliver Share Certificates evidencing such Shares and all Distributions, or
transfer ownership of such Shares and all Distributions on the account books
maintained by a Book-Entry Transfer Facility, together, in either case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
Purchaser, (ii) present such Shares and all Distributions for transfer on the
books of the Company and (iii) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
<PAGE>
The undersigned hereby irrevocably appoints James A. Eder, Robert J. Cobuzzi
and Gideon Argov, and each of them, as the attorneys and proxies of the
undersigned, each with full power of substitution, to vote in such manner as
each such attorney and proxy or his substitute shall, in his sole discretion,
deem proper and otherwise act (by written consent or otherwise) with respect to
all the Shares tendered hereby which have been accepted for payment by Purchaser
prior to the time of such vote or other action and all Shares and other
securities issued in Distributions in respect of such Shares, which the
undersigned is entitled to vote at any meeting of shareholders of the Company
(whether annual or special and whether or not an adjourned or postponed meeting)
or consent in lieu of any such meeting or otherwise. This proxy and power of
attorney is coupled with an interest in the Shares tendered hereby, is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by Purchaser in accordance with the terms
of the Offer. Such acceptance for payment shall revoke all other proxies and
powers of attorney granted by the undersigned at any time with respect to such
Shares (and all Shares and other securities issued in Distributions in respect
of such Shares), and no subsequent proxy or power of attorney shall be given or
written consent executed (and if given or executed, shall not be effective) by
the undersigned with respect thereto. The undersigned understands that, in order
for Shares to be deemed validly tendered, immediately upon Purchaser's
acceptance of such Shares for payment, Purchaser must be able to exercise full
voting and other rights with respect to such Shares, including, without
limitation, voting at any meeting of the Company's shareholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions, that when such Shares are accepted for payment by
Purchaser, Purchaser will acquire good, marketable and unencumbered title
thereto and to all Distributions, free and clear of all liens, restrictions,
charges and encumbrances, and that none of such Shares and Distributions will be
subject to any adverse claim. The undersigned, upon request, shall execute and
deliver all additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby and all Distributions. In addition, the undersigned shall
remit and transfer promptly to the Depositary for the account of Purchaser all
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and pending such remittance and transfer
or appropriate assurance thereof, Purchaser shall be entitled to all rights and
privileges as owner of each such Distribution and may withhold the entire
purchase price of the Shares tendered hereby, or deduct from such purchase
price, the amount or value of such Distribution as determined by Purchaser in
its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer.
<PAGE>
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates (or, if applicable, Rights
Certificates) evidencing Shares not purchased or not tendered in the name(s) of
the registered holder(s) appearing above under "Description of Shares Tendered."
Similarly, unless otherwise indicated in the box entitled "Special Delivery
Instructions," please mail the check for the purchase price of all Shares
purchased and all Share Certificates (or, if applicable, Rights Certificates)
evidencing Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates (or, if applicable, Rights Certificates)
evidencing Shares not purchased or not tendered in the name(s) of, and mail such
check and Share Certificates (or, if applicable, Rights Certificates) to, the
person(s) so indicated. The undersigned recognizes that Purchaser has no
obligation, pursuant to the Special Payment Instructions, to transfer any Shares
from the name of the registered holder(s) thereof if Purchaser does not purchase
any of the Shares tendered hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if the check for the purchase price of Shares or
Share Certificates (or, if applicable, Rights Certificates) evidencing
Shares not tendered or not purchased are to be issued in the name of someone
other than the undersigned.
Issue / / check / / Share Certificates (or, if applicable, Rights
Certificates) to:
Name ______________________________________________________________________
PLEASE PRINT
Address ____________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER (SEE SUBSTITUTE FORM W-9
ON REVERSE SIDE)
/ / Credit Shares (or Rights, if applicable) delivered by book-entry
transfer and not purchased to the account set forth below:
Check appropriate box: / / DTC / / PDTC
Account Number: ____________________________________________________________
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates (or, if applicable, Rights Certificates)
evidencing Shares not tendered or not purchased are to be mailed to someone
other than the undersigned, or to the undersigned at an address other than
that shown under "Description of Shares Tendered" (or, if applicable,
"Description of Rights Tendered").
Mail / / check / / Share Certificates (or, if applicable, Rights
Certificates) to:
Name _______________________________________________________________________
PLEASE PRINT
Address ____________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
------------------------------
<PAGE>
IMPORTANT
SHAREHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
------------------------------------------------------------
------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S)
Dated: ________________________________, 1998
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share Certificates (or, if applicable, Rights Certificates) or on a security
position listing by (a) person(s) authorized to become (a) registered
holder(s) by certificates and documents transmitted herewith. If signature
is by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, please provide the following information and see
Instruction 5.)
NAME(S) ____________________________________________________________________
(PLEASE PRINT)
CAPACITY (full title) ______________________________________________________
ADDRESS ____________________________________________________________________
(INCLUDE ZIP CODE)
AREA CODE AND TELEPHONE NO. ( )___________________________________________
TAX IDENTIFICATION OR SOCIAL SECURITY NO. __________________________________
(SEE SUBSTITUTE FORM W-9 ON
REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. FINANCIAL INSTITUTIONS: PLACE
MEDALLION GUARANTEE IN SPACE BELOW.
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of the Medallion Signature
Guarantee Program, or by any other "eligible guarantor institution," as such
term is defined in Rule 17Ad-5 promulgated under the Securities Exchange Act of
1934, as amended (each of the foregoing being referred to as an "Eligible
Institution"), unless (i) this Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this document, shall
include any participant in a Book-Entry Transfer Facility whose name appears on
a security position listing as the owner of Shares) tendered hereby and such
holder(s) has (have) completed neither the box entitled "Special Payment
Instructions" nor the box entitled "Special Delivery Instructions" on the
reverse hereof or (ii) such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES (OR, IF
APPLICABLE, RIGHTS CERTIFICATES). This Letter of Transmittal is to be used
either if Share Certificates (or, if applicable, Rights Certificates) are to be
forwarded herewith or if Shares are to be delivered by book-entry transfer
pursuant to the procedure set forth in Section 3 of the Offer to Purchase. Share
Certificates evidencing all physically tendered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility of all Shares delivered by book-entry transfer, as well as a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or an Agent's Message (as defined below), in
the case of a book-entry delivery, and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the reverse hereof prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase). If a Distribution Date (as
defined in the Offer to Purchase) has occurred, Rights Certificates, or Book-
Entry Confirmation of a transfer of Rights into the Depositary's account at a
Book-Entry Transfer Facility, if available (together with, if Rights are
forwarded separately from Shares, a properly completed and duly executed Letter
of Transmittal (or a facsimile thereof) with any required signature guarantee,
or an Agent's Message in the case of a book-entry delivery, and any other
documents required by this Letter of Transmittal), must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration Date
or, if later, within three business days after the date on which such Rights
Certificates are distributed. If Share Certificates (or, if applicable, Rights
Certificates) are forwarded to the Depositary in multiple deliveries, a properly
completed and duly executed Letter of Transmittal must accompany each such
delivery. Shareholders whose Share Certificates (or, if applicable, Rights
Certificates) are not immediately available, who cannot deliver their Share
Certificates (or, if applicable, Rights Certificates) and all other required
documents to the Depositary prior to the Expiration Date or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis, may tender
their Shares pursuant to the guaranteed delivery procedure described in Section
3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be
made by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made available
by Purchaser, must be received by the Depositary prior to the Expiration Date;
and (iii) the Share Certificates (or, if applicable, Rights Certificates)
evidencing all physically delivered Shares in proper form for transfer by
delivery, or a confirmation of a book-entry transfer into the Depositary's
account at a Book-Entry Transfer Facility of all Shares delivered by book-entry
transfer, in each case together with a Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
any other documents required by this Letter of Transmittal, must be received by
the Depositary within (A) three New York Stock Exchange, Inc. ("NYSE") trading
days after the date of execution of such Notice of Guaranteed Delivery, all as
described in Section 3 of the Offer to Purchase, or (B) three business days
after Rights Certificates are distributed to holders of Shares, as applicable.
<PAGE>
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
(OR, IF APPLICABLE, RIGHTS CERTIFICATES) AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION
AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering shareholders waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate (or, if applicable, Rights
Certificate) numbers, the number of Shares evidenced by such Share Certificates
(or, if applicable, the number of Rights evidenced by such Rights Certificates)
and the number of Shares (or, if applicable, Rights) tendered should be listed
on a separate signed schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any Share Certificate (or,
if applicable, fewer than all the Rights evidenced by any Rights Certificate)
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares (or, if applicable, Rights) which are to be tendered in the box
entitled "Number of Shares Tendered" (or, if applicable, "Number of Rights
Tendered"). In such cases, new Share Certificates (or, if applicable, the
remainder of Rights that were evidenced by the Rights Certificates) evidencing
the remainder of the Shares that were evidenced by the Share Certificates (or,
if applicable, Rights Certificates) delivered to the Depositary herewith will be
sent to the person(s) signing this Letter of Transmittal, unless otherwise
provided in the box entitled "Special Delivery Instructions" on the reverse
hereof, as soon as practicable after the expiration or termination of the Offer.
All Shares (or, if applicable, Rights) evidenced by Share Certificates (or, if
applicable, Rights Certificates) delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates (or, if applicable, Rights Certificates)
evidencing such Shares without alteration, enlargement or any other change
whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates (or, if
applicable, Rights Certificates) or separate stock powers are required, unless
payment is to be made to, or Share Certificates (or, if applicable, Rights
Certificates) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), in which case, the
Share Certificates (or, if applicable Rights Certificates) evidencing the Shares
tendered hereby must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear(s)
on such Share Certificates (or, if applicable Rights Certificates). Signatures
on such Share Certificates (or, if applicable Rights Certificates) and stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificates (or,
if applicable, Rights Certificate(s)) evidencing the Shares tendered hereby must
be endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such Share
Certificates (or, if applicable Rights Certificates). Signatures on such Share
Certificates (or, if applicable Rights Certificates) and stock powers must be
guaranteed by an Eligible Institution.
<PAGE>
If this Letter of Transmittal or any Share Certificate (or, if applicable,
Rights Certificate) or stock power is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing, and proper evidence satisfactory to Purchaser of such
person's authority so to act must be submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificates (or, if applicable Rights Certificates) evidencing Shares not
tendered or not purchased are to be issued in the name of, a person other than
the registered holder(s), the amount of any stock transfer taxes (whether
imposed on the registered holder(s), such other person or otherwise) payable on
account of the transfer to such other person will be deducted from the purchase
price of such Shares purchased, unless evidence satisfactory to Purchaser of the
payment of such taxes, or exemption therefrom, is submitted. Except as provided
in this Instruction 6, it will not be necessary for transfer tax stamps to be
affixed to the Share Certificates (or, if applicable, Rights Certificates)
evidencing the Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificates (or,
if applicable, Rights Certificates) evidencing Shares not tendered or not
purchased are to be issued, in the name of a person other than the person(s)
signing this Letter of Transmittal or if such check or any such Share
Certificate (or, if applicable, Rights Certificate) is to be sent to someone
other than the person(s) signing this Letter of Transmittal or to the person(s)
signing this Letter of Transmittal but at an address other than that shown in
the box entitled "Description of Shares Tendered" (or, if applicable, "Number of
Rights Tendered") on the reverse hereof, the appropriate boxes on the reverse of
this Letter of Transmittal must be completed. Shareholders delivering Shares
tendered hereby by book-entry transfer may request that Shares not purchased be
credited to such account maintained at a Book-Entry Transfer Facility as such
shareholder may designate in the box entitled "Special Payment Instructions" on
the reverse hereof.
8. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Information Agent or the
Dealer Manager at their respective addresses or telephone numbers set forth
below. Additional copies of the Offer to Purchase, the Supplement, this Letter
of Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent or from brokers, dealers, commercial banks or trust companies.
9. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide
the Depositary with a correct taxpayer identification number ("TIN") and other
information on the Substitute Form W-9 which is provided under "Important Tax
Information" below, and to certify whether such shareholder is subject to backup
withholding of federal income tax. If a tendering shareholder has been notified
by the Internal Revenue Service that such shareholder is subject to backup
withholding, such shareholder must cross out item (2) of the Certification box
of the Substitute Form W-9, unless such shareholder has since been notified by
the Internal Revenue Service that such shareholder is no longer subject to
backup withholding. Failure to provide the correct information on the Substitute
Form W-9 may subject the tendering shareholder to a $50 penalty imposed by the
Internal Revenue Service and 31% federal income tax backup withholding on the
payment of the purchase price of all Shares purchased from such shareholder. If
the tendering shareholder has not been issued a TIN and has applied for one or
intends to apply for one in the near future, such shareholder should write
"Applied For" in the space provided for the TIN in Part I of the Substitute Form
W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in
Part I and the Depositary is not provided with a TIN by the time of payment, the
Depositary will withhold 31% on all payments of the purchase price to such
shareholder until a TIN is provided to the Depositary.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Share Certificate(s) or
Rights Certificate(s) (has) (have) been lost, destroyed or stolen, the
shareholder should promptly notify the Depositary. The shareholder will then be
instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF, PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES (OR, IF APPLICABLE, RIGHTS CERTIFICATES) OR CONFIRMATION OF
BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED
AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is such shareholder's social security
number. If the Depositary is not provided with the correct TIN, the shareholder
may be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such shareholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding of 31%. In
addition, if a shareholder makes a false statement that results in no imposition
of backup withholding, and there was no reasonable basis for such statement, a
$500 penalty may also be imposed by the Internal Revenue Service.
Certain shareholders (including, among others, corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a properly completed Form W-8 (or
substitute form), signed under penalties of perjury, attesting to such
individual's exempt status. A Form W-8 can be obtained from the Depositary. See
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional instructions. A shareholder should consult
his or her tax advisor as to such shareholder's qualification for exemption from
backup withholding and the procedure for obtaining such exemption.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained, provided that proper information is
submitted to the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying that the TIN provided on Substitute Form
W-9 is correct (or that such shareholder is awaiting a TIN), and that (i) such
shareholder has not been notified by the Internal Revenue Service that he is
subject to backup withholding as a result of a failure to report all interest or
dividends or (ii) the Internal Revenue Service has notified such shareholder
that such shareholder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report. If the tendering shareholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, the shareholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN by the time of
payment, the Depositary will withhold 31% of all payments of the purchase price
to such shareholder until a TIN is provided to the Depositary.
<PAGE>
PAYER'S NAME: Harris Trust Company of New York
<TABLE>
<C> <S> <C>
SUBSTITUTE PART I--Taxpayer Identification Number--
FORM W-9 For all accounts, enter taxpayer Social Security Number
Department of the Treasury identification number in the box at OR
Internal Revenue Service right. (For most individuals, this is
your social security number. If you do Employer Identification Number
not have a number, see Obtaining a (If awaiting TIN write
Number in the enclosed GUIDELINES). "Applied For")
Certify by signing and dating below.
Note: If the account is in more than one
name, see the chart in the enclosed
GUIDELINES to determine which social
security or employer identification
number to give the payer.
Payer s Request for Taxpayer PART II--For Payees Exempt From Backup Withholding, see the enclosed GUIDELINES
Identification number (TIN) and complete as instructed therein.
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to
me), and
(2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or the IRS
has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are subject to
backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by
the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer
subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed GUIDELINES.)
SIGNATURE DATE , 1998
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31%. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU INDICATED
"APPLIED FOR" IN PLACE OF A TIN IN SUBSTITUTE FORM W-9.
<TABLE>
<S> <C>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN ISSUED
TO ME, AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER
IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE, OR (2) I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF PAYMENT, 31% OF
ALL REPORTABLE PAYMENTS MADE TO ME WILL BE WITHHELD, BUT THAT SUCH AMOUNTS MAY BE REFUNDED TO ME IF
I THEN PROVIDE A TAXPAYER IDENTIFICATION NUMBER WITHIN SIXTY (60) DAYS.
SIGNATURE DATE , 1998
</TABLE>
<PAGE>
Facsimiles of this Letter of Transmittal, properly completed and duly
signed, will be accepted. This Letter of Transmittal, certificates evidencing
Shares and any other required documents should be sent or delivered by each
shareholder or such shareholder's broker, dealer, commercial bank, trust company
or other nominee to the Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY HAND/OVERNIGHT DELIVERY:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, New York 10268-1023 88 Pine Street, 19th Floor
New York, New York 10005
</TABLE>
BY FACSIMILE:
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, the Supplement, this
Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from
the Information Agent. A shareholder may also contact brokers, dealers,
commercial banks or trust companies for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[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
THE DEALER MANAGER FOR THE OFFER IS:
SALOMON SMITH BARNEY
SEVEN WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(888) 746-7939
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
PACIFIC SCIENTIFIC COMPANY
(Not to be Used for Signature Guarantees)
This Notice of Guaranteed Delivery, or one substantially in the form hereof,
must be used to accept the Offer (as defined below) (i) if certificates ("Share
Certificates") evidencing shares of common stock, par value $1.00 per share (the
"Common Stock"), of Pacific Scientific Company, a California corporation (the
"Company"), including the associated preferred share purchase rights (together
with the Common Stock, the "Shares"), are not immediately available, (ii) if
certificates evidencing the Shares and all other required documents cannot be
delivered to Harris Trust Company of New York, as Depositary (the "Depositary"),
prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase
(as defined below)) or (iii) if the procedure for delivery by book-entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand or mail or transmitted by telegram or
facsimile transmission to the Depositary. See Section 3 of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY HAND/OVERNIGHT DELIVERY:
Receive Window
Wall Street Station Wall Street Plaza
P.O. Box 1023 88 Pine Street, 19th Floor
New York, New York 10268-1023 New York, New York 10005
</TABLE>
BY FACSIMILE:
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY TO THE
DEPOSITARY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Torque Corporation, a Delaware corporation
and a wholly owned subsidiary of Parent Corporation, a New York corporation,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated December 15, 1997 (the "Offer to Purchase"), as amended and supplemented
by the Supplement thereto dated January 30, 1998 (the "Supplement"), and the
related Letters of Transmittal (which, as amended from time to time, together
constitute the "Offer"), receipt of each of which is hereby acknowledged, the
number of Shares specified below pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares (including the associated
Preferred Share Purchase Rights):
- -------------------------------------------- --------------------------------------------
--------------------------------------------
Signature(s) of Holder(s)
Share
Certificate Nos. (if available):
Dated: , 1998
- --------------------------------------------
Name(s) of Holders:
- --------------------------------------------
--------------------------------------------
--------------------------------------------
Please Type or Print
Check one box if Shares will be delivered by
book-entry transfer:
--------------------------------------------
Address
/ / The Depository Trust Company
--------------------------------------------
Zip Code
/ / Philadelphia Depository Trust Company
--------------------------------------------
Area Code and Telephone No.
Account No.
</TABLE>
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of the Medallion Signature
Guarantee Program (or is an "eligible guarantor institution", as such term is
defined in Rule 17Ad-5 promulgated under the Securities Exchange Act of 1934, as
amended), guarantees to deliver to the Depositary, at one of its addresses set
forth above, either certificates evidencing the Shares tendered hereby, in
proper form for transfer, or confirmation of book-entry transfer of such Shares
into the Depositary's account at The Depository Trust Company or the
Philadelphia Depository Trust Company, in each case with delivery of a Letter of
Transmittal (or facsimile thereof) properly completed and duly executed with any
required signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in the case of a book-entry delivery, and any other required
documents, all within three New York Stock Exchange, Inc. trading days of the
date hereof.
<TABLE>
<S> <C>
NAME OF FIRM AUTHORIZED SIGNATURE
ADDRESS TITLE
Name:
ZIP CODE PLEASE TYPE OR PRINT
Dated: , 1998
AREA CODE AND TELEPHONE NO.
</TABLE>
DO NOT SEND CERTIFICATES EVIDENCING SHARES WITH THIS NOTICE.
CERTIFICATES EVIDENCING SHARES SHOULD BE SENT WITH
YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
TORQUE CORPORATION
a wholly owned subsidiary of
KOLLMORGEN CORPORATION
has increased the price of its
OFFER TO PURCHASE FOR CASH
6,347,241 SHARES OF COMMON STOCK
(including the associated Preferred Share Purchase Rights)
of
PACIFIC SCIENTIFIC COMPANY
to
$23.75 NET PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M., NEW
YORK CITY TIME, ON FRIDAY, FEBRUARY 13, 1998, UNLESS THE OFFER IS EXTENDED.
January 30, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Torque Corporation, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Kollmorgen Corporation, a New
York corporation ("Parent"), to act as the Dealer Manager in connection with
Purchaser's offer to purchase 6,347,241 shares of common stock, par value $1.00
per share (the "Common Stock"), of Pacific Scientific Company, a California
corporation (the "Company"), including the associated preferred share purchase
rights (the "Rights" and, together with the Common Stock, the "Shares"), or such
greater or lesser number of Shares that, together with the Shares owned by
Parent and Purchaser, would constitute a majority of the outstanding Shares on a
fully diluted basis (such number of Shares being the "Minimum Number") at a
price of $23.75 per Share, net to the seller in cash, upon the terms and subject
to the conditions set forth in Purchaser's Offer to Purchase, dated December 15,
1997 (the "Offer to Purchase"), as amended and supplemented by the supplement
thereto dated January 30, 1998 (the "Supplement") and in the related Letters of
Transmittal (which, as amended from time to time, together constitute the
"Offer") enclosed herewith. Please furnish copies of the enclosed materials to
those of your clients for whose accounts you hold Shares registered in your name
or in the name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THE
MINIMUM NUMBER OF SHARES, (2) PARENT AND PURCHASER HAVING OBTAINED, PRIOR TO THE
EXPIRATION OF THE OFFER, ON TERMS SATISFACTORY TO PARENT IN ITS SOLE DISCRETION,
SUFFICIENT FINANCING TO ENABLE CONSUMMATION OF THE OFFER AND THE PROPOSED MERGER
DESCRIBED BELOW, (3) PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
RIGHTS HAVE BEEN REDEEMED OR INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE
OFFER AND THE PROPOSED MERGER, (4) PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE OFFER AND THE PROPOSED MERGER HAVE BEEN APPROVED FOR
PURPOSES OF ARTICLE FIFTH OF THE COMPANY'S ARTICLES OF INCORPORATION (IF
NECESSARY) OR ARTICLE FIFTH OF THE COMPANY'S ARTICLES OF INCORPORATION HAS BEEN
INVALIDATED OR IS OTHERWISE SATISFIED WITH RESPECT TO THE OFFER AND PROPOSED
MERGER AND (5) THE APPROVAL BY PARENT'S SHAREHOLDERS OF THE ISSUANCE OF COMMON
STOCK, PAR VALUE $2.50 PER SHARE, OF PARENT IN THE PROPOSED MERGER. THE OFFER IS
ALSO SUBJECT TO THE OTHER TERMS AND CONDITIONS WHICH ARE CONTAINED IN THE OFFER
TO PURCHASE.
<PAGE>
If more than the Minimum Number of Shares shall be validly tendered and not
withdrawn prior to the Expiration Date (as defined in the Offer to Purchase),
Purchaser will, upon the terms and subject to the conditions of the Offer,
purchase the Minimum Number of Shares on a pro rata basis (with adjustments to
avoid purchases of fractional Shares) based upon the number of Shares validly
tendered and not withdrawn prior to the Expiration Date.
As of the date of the Offer to Purchase, the Rights are evidenced by the
Share Certificates (as defined below) evidencing the Shares and do not trade
separately. Accordingly, by tendering a Share Certificate evidencing Shares, a
shareholder is automatically tendering a similar number of associated Rights.
If, however, the Rights detach and separate Rights Certificates (as defined
below) are issued, stockholders will be required to tender one Right for each
share of Common Stock tendered in order to effect a valid tender of such share
of Common Stock.
Enclosed for your information and use are copies of the following documents:
1. The Supplement, dated January 30, 1998;
2. The revised YELLOW Letter of Transmittal to be used by holders of
Shares in accepting the Offer and tendering Shares (including Rights);
3. The revised PINK Notice of Guaranteed Delivery to be used to accept
the Offer if the Shares and all other required documents are not immediately
available or cannot be delivered to Harris Trust Company of New York (the
"Depositary") by the Expiration Date or if the procedure for book-entry
transfer cannot be completed by the Expiration Date;
4. A revised letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 8:00 P.M., NEW
YORK CITY TIME, ON FRIDAY, FEBRUARY 13, 1998, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) the certificates
evidencing such Shares (the "Share Certificates") and, if the Rights are at such
time separately traded, certificates representing the Rights associated with
shares of the Common Stock (the "Rights Certificates") (or timely confirmation
of a book-entry transfer of such Shares into the Depositary's account at one of
the Book-Entry Transfer Facilities (as defined in the Offer to Purchase)), a
Letter of Transmittal (or facsimile thereof) properly completed and duly
executed, with any required signature guarantees or, in the case of a book-entry
transfer, an Agent's Message (as defined in the Offer to Purchase), and any
other required documents.
If holders of Shares wish to tender pursuant to the Offer, but cannot
deliver their certificates or other required documents or cannot comply with the
procedure for book-entry transfer prior to the expiration of the Offer, a tender
may be effected by following the guaranteed delivery procedure described in
Section 3 of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Manager, the Depositary and the Information
Agent as described in the Offer to Purchase) in connection with the solicitation
of tenders of Shares pursuant to the Offer. However, Purchaser will reimburse
you for customary mailing and handling expenses incurred by you in forwarding
any of the enclosed materials to your clients. Purchaser will pay or cause to be
paid any stock transfer taxes
2
<PAGE>
payable with respect to the transfer of Shares to it, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
Salomon Smith Barney or Georgeson & Company Inc. (the "Information Agent") at
their respective addresses and telephone numbers set forth on the back cover
page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent, at the address and telephone number set forth on the back
cover page of the Offer to Purchase.
Very truly yours,
SALOMON SMITH BARNEY
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF PARENT, PURCHASER, THE COMPANY, THE DEALER
MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
TORQUE CORPORATION
a wholly owned subsidiary of
KOLLMORGEN CORPORATION
has increased the price of its
OFFER TO PURCHASE FOR CASH
6,347,241 SHARES OF COMMON STOCK
(including the associated Preferred Share Purchase Rights)
of
PACIFIC SCIENTIFIC COMPANY
to
$23.75 NET PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M., NEW
YORK CITY TIME, ON FRIDAY, FEBRUARY 13, 1998, UNLESS THE OFFER IS EXTENDED.
January 30, 1998
To Our Clients:
Enclosed for your consideration are a Supplement, dated January 30, 1998
(the "Supplement"), to the Offer to Purchase, dated December 15, 1997 (the
"Offer to Purchase"), and the revised YELLOW Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") in connection with
the offer by Torque Corporation, a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of Kollmorgen Corporation, a New York corporation
("Parent"), to purchase 6,347,241 shares of common stock, par value $1.00 per
share (the "Common Stock"), of Pacific Scientific Company, a California
corporation (the "Company"), including the associated preferred share purchase
rights (the "Rights" and, together with the Common Stock, the "Shares"), or such
greater or lesser number of Shares that, together with the Shares owned by
Parent and Purchaser, would constitute a majority of the outstanding Shares on a
fully diluted basis (such number of Shares being the "Minimum Number") at a
price of $23.75 per Share, net to the seller in cash, upon the terms and subject
to the conditions contained in the Offer. We are the holder of record of Shares
held by us for your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS
THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $23.75 per Share, net to the seller in cash.
2. The Offer is being made for the Minimum Number of Shares. If more
than the Minimum Number of Shares is validly tendered and not withdrawn
prior to the Expiration Date (as defined in the Offer to Purchase),
Purchaser will, upon the terms and subject to the conditions of the Offer,
purchase the Minimum Number of Shares on a pro rata basis (with adjustments
to avoid purchases of fractional Shares) based upon the number of Shares
validly tendered and not withdrawn prior to the Expiration Date.
<PAGE>
3. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
8:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 13, 1998, UNLESS THE
OFFER IS EXTENDED.
4. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer at
least the Minimum Number of Shares, (2) Parent and Purchaser having
obtained, prior to the expiration of the Offer, on terms satisfactory to
Parent in its sole discretion, sufficient financing to enable consummation
of the Offer and the Proposed Merger (as defined in the Offer to Purchase),
(3) Purchaser being satisfied, in its sole discretion, that the Rights have
been redeemed or invalidated or are otherwise inapplicable to the Offer and
the Proposed Merger, (4) Purchaser being satisfied, in its sole discretion,
that the Offer and the Proposed Merger have been approved for purposes of
Article Fifth of the Company's Articles of Incorporation or Article Fifth of
the Company's Articles of Incorporation (if necessary) has been invalidated
or is otherwise satisfied with respect to the Offer and Proposed Merger and
(5) the approval by Parent's shareholders of the issuance of common stock,
par value $2.50 per share, of Parent in the Proposed Merger. The Offer is
also subject to the other terms and conditions which are contained in the
Offer to Purchase.
5. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes with respect to the purchase of
Shares by Purchaser pursuant to the Offer.
6. As of the date of the Offer to Purchase, the Rights are evidenced by
the certificates evidencing the Shares (the "Share Certificates") and do not
trade separately. Accordingly, by tendering a Share Certificate evidencing
Shares, a shareholder is automatically tendering a similar number of
associated Rights. If, however, the Rights detach and separate certificates
representing the Rights are issued, shareholders will be required to tender
one Right for each share of Common Stock tendered in order to effect a valid
tender of such share of Common Stock.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US WITH AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON
YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase, the Supplement and the
related Letters of Transmittal and is being made to all holders of Shares.
Purchaser is not aware of any state where the making of the Offer is prohibited
by administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good
faith effort to comply with such state statute. If, after such good faith
effort, Purchaser cannot comply with such state statute, the Offer will not be
made to (nor will tenders be accepted from or on behalf of) the holders of
Shares in such state. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of Purchaser by Salomon Smith Barney
or one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
SHARES OF COMMON STOCK
OF
PACIFIC SCIENTIFIC COMPANY
The undersigned acknowledge(s) receipt of your letter and the enclosed
Supplement dated January 30, 1998 to the Offer to Purchase, dated December 15,
1997, and the revised YELLOW Letter of Transmittal (which, as amended from time
to time, together constitute the "Offer") in connection with the offer by Torque
Corporation, a Delaware corporation ("Purchaser") and a wholly owned subsidiary
of Kollmorgen Corporation, a New York corporation ("Parent"), to purchase
6,347,241 shares of common stock, par value $1.00 per share (the "Common
Stock"), of Pacific Scientific Company, a California corporation (the
"Company"), including the associated preferred share purchase rights (together
with the Common Stock, the "Shares"), or such greater or lesser number of Shares
that, together with the Shares owned by Parent and Purchaser, would constitute a
majority of the outstanding Shares on a fully diluted basis, at a price of
$23.75 per Share, net to the seller in cash.
This form will instruct you to tender the number of Shares indicated below
(or, if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
<TABLE>
<CAPTION>
NUMBER OF SHARES TO BE TENDERED:* SIGN HERE
SHARES
(INCLUDING THE ASSOCIATED PREFERRED
SHARE PURCHASE RIGHTS)
--------------------------------------------
<S> <C>
--------------------------------------------
SIGNATURE(S)
Dated: , 1998
-------------------------------------------
-------------------------------------------
PLEASE TYPE OR PRINT NAME(S)
--------------------------------------------
--------------------------------------------
PLEASE TYPE OR PRINT ADDRESS
--------------------------------------------
AREA CODE AND TELEPHONE NUMBER
--------------------------------------------
TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER
</TABLE>
- ------------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<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.
<PAGE>
[Letterhead of Salomon Brothers Holding Company Inc]
January 29, 1998
Kollmorgen Corporation
1601 Trapelo Road
Waltham, MA 02154
Attention:
PROJECT TORQUE
SECURED CREDIT FACILITIES
Ladies and Gentlemen:
Reference is made to the Commitment Letter between you, Salomon Brothers
Holding Company Inc ("SBHCI") and Salomon Brothers Inc ("SBI"), dated as of
December 9, 1997 (the "Commitment Letter"), pursuant to which SBHCI has
committed to provide the Facilities on the terms and subject to the
conditions therein stated. Capitalized terms used herein but not defined
herein are used as defined in the Commitment Letter. You have advised SBHCI
and SBI that (i) you wish to increase the aggregate amount of the Facilities
to $320,000,000 and (ii) you intend to increase the purchase price of your
outstanding offer to purchase shares of common stock of Pacific Scientific
Company, a California corporation (the "Tender Offer"), from $20.50 per share
to $23.75 per share.
Please be advised that SBHCI agrees to the increase in the aggregate
amount of the Facilities to $320,000,000, with the increase being allocated
to the Phase I Tender Facility and to the Revolving Facility under Phase II,
and have no objection to the increase in the per share price of the Tender
Offer as outlined above. In all other respects, the Commitment Letter remains
in full force and effect.
<PAGE>
Please acknowledge the terms of this letter by signing in the
appropriate space below and transmitting to SBHCI the executed copy of this
letter. The terms of this letter shall be effective upon SBHCI's receipt of
the copy of this letter and the additional fee required to be paid to SBHCI
pursuant to the Fee Letter.
Very truly yours,
SALOMON BROTHERS
HOLDING COMPANY INC
By: /s/ Mavis Taintor
----------------------
Name: Mavis Taintor
Title: Managing Director
Acknowledged and agreed to as of this
___ day of ____________, 1998:
Kollmorgen Corporation
By:_______________________
Name:
Title:
