<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION
14(D)(1) OR 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
KOLLMORGEN CORPORATION
(NAME OF SUBJECT COMPANY)
KING DC ACQUISITION CORP.
DANAHER CORPORATION
(NAME OF FILING PERSON--OFFEROR)
COMMON STOCK, PAR VALUE $2.50 PER SHARE
PREFERRED SHARE PURCHASE RIGHTS
(TITLE OF CLASS OF SECURITIES)
500440102
(CUSIP NUMBER OF CLASS OF SECURITIES)
PATRICK W. ALLENDER
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
DANAHER CORPORATION
1250 24TH STREET, N.W.
WASHINGTON, D.C. 20037
TELEPHONE: (202) 828-0850
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF FILING PERSONS)
COPY TO:
TREVOR S. NORWITZ, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
TELEPHONE: (212) 403-1000
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE
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258,851,956 $51,778
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* Based on the offer to purchase all of the outstanding shares of common
stock of Kollmorgen Corporation at a purchase price of $23.00 cash per
share, 10,357,822 shares issued and outstanding, and outstanding options
with respect to 898,350 shares, in each case as of May 2, 2000.
[_]Check the box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: None. Filing Party: Not applicable.
Form or Registration No.: Not applicable.Date Filed: Not applicable.
[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which
the statement relates:
[X]third-party tender offer subject to Rule 14d-1.
[_]issuer tender offer subject to Rule 13e-4.
[_]going-private transaction subject to Rule 13e-3.
[_]amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [_]
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<PAGE>
This Tender Offer Statement on Schedule TO is filed by Danaher
Corporation, a Delaware corporation ("Danaher"), and King DC Acquisition
Corp., a New York corporation and a wholly-owned subsidiary of Danaher (the
"Purchaser"). This Schedule TO relates to the offer by the Purchaser to
purchase all outstanding shares of common stock, par value $2.50 per share,
including associated preferred share purchase rights (the "Shares"), of
Kollmorgen Corporation, a New York corporation ("Kollmorgen") at $23.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated May 12, 2000 (the "Offer to
Purchase") and in the related Letter of Transmittal, copies of which are
attached hereto as Exhibits (a)(1) and (a)(2), respectively (which, together
with any amendments or supplements thereto, collectively constitute the
"Offer"). The information set forth in the Offer to Purchase and in the
related Letter of Transmittal is incorporated herein by reference with respect
to Items 1 through 9 and 11 of this Schedule TO. The Agreement and Plan of
Merger, dated as of May 4, 2000, among Kollmorgen, Danaher and the Purchaser,
a copy of which is attached hereto as Exhibit (d)(1) hereto, the
Confidentiality Agreement, dated as of September 13, 1999, between Danaher and
Kollmorgen, a copy of which is attached as Exhibit (d)(2) hereto, and the
Consulting Agreement, dated as of May 4, 2000, between Mr. Gideon Argov and
Danaher, a copy of which is attached as Exhibit (d)(3) hereto, are
incorporated herein by reference with respect to Items 5 and 11 of Schedule
TO.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
None of Danaher, the Purchaser or, to the best knowledge of such
corporations, any of the persons listed on Schedule I to the Offer of
Purchase, has during the last five years (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been
a party to any judicial or administrative proceeding (except for matters that
were dismissed without sanction or settlement) that resulted in a judgment,
decree or final order enjoining the person from future violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violation of such laws.
ITEM 10. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 12. EXHIBITS.
<TABLE>
<CAPTION>
(a)(1) Offer to Purchase, dated May 12, 2000.
<C> <S>
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Text of press release issued by Danaher dated May 4, 2000.
(a)(7) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(8) Form of summary advertisement dated May 12, 2000.
(d)(1) Agreement and Plan of Merger, dated as of May 4, 2000, between Danaher,
the Purchaser and Kollmorgen.
(d)(2) Confidentiality Agreement, dated as of September 13, 1999, between
Danaher and Kollmorgen.
(d)(3) Consulting Agreement, dated as of May 4, 2000, between Gideon Argov and
Danaher.
(g) None.
(h) Not applicable.
</TABLE>
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Not applicable.
2
<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: May 12, 2000
King DC Acquisition Corp.
By /s/ Daniel L. Comas
-----------------------------------
Name: Daniel L. Comas
Title: Vice President
Danaher Corporation
By /s/ Daniel L. Comas
-----------------------------------
Name: Daniel L. Comas
Title: Vice President
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
(a)(1) Offer to Purchase, dated May 12, 2000.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Text of press release issued by Danaher and Kollmorgen dated May 4,
2000.
(a)(7) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(8) Form of summary advertisement dated May 12, 2000.
(d)(1) Agreement and Plan of Merger, dated as of May 4, 2000, between Danaher,
the Purchaser and Kollmorgen.
(d)(2) Confidentiality Agreement, dated as of September 13, 1999, between
Danaher and Kollmorgen.
(d)(3) Consulting Agreement, dated as of May 4, 2000, between Gideon Argov and
Danaher.
(g) None.
(h) Not applicable.
</TABLE>
4
<PAGE>
EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED
SHARE PURCHASE RIGHTS)
OF
KOLLMORGEN CORPORATION
BY
KING DC ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
DANAHER CORPORATION
AT
$23.00 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED.
A SUMMARY OF THE PRINCIPAL TERMS OF THE OFFER APPEARS ON PAGES (II) THROUGH
(III). YOU SHOULD READ THIS ENTIRE DOCUMENT CAREFULLY BEFORE DECIDING WHETHER
TO TENDER YOUR SHARES.
May 12, 2000
The Dealer Manager for the Offer is:
LEHMAN BROTHERS
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of the Offer....................................................... ii
Introduction............................................................... 1
</TABLE>
<TABLE>
<C> <S> <C>
1. Terms of the Offer.................................................. 2
2. Acceptance for Payment and Payment.................................. 4
3. Procedures for Accepting the Offer and Tendering Shares............. 5
4. Withdrawal Rights................................................... 7
5. Material U.S. Federal Income Tax Consequences....................... 8
6. Price Range of the Shares; Dividends................................ 9
7. Possible Effects of the Offer on the Market for the Shares; NYSE
Listing; Securities Exchange Act Registration; Margin Regulations.. 9
8. Information Concerning Kollmorgen................................... 11
9. Information Concerning Danaher and the Purchaser.................... 11
10. Background of the Offer; Contacts with Kollmorgen................... 12
11. Purpose of the Offer; the Merger Agreement; the Consulting
Agreement; Statutory Requirements; Appraisal Rights; Plans for
Kollmorgen; "Going Private" Transactions........................... 13
12. Source and Amount of Funds.......................................... 22
13. Dividends and Distributions......................................... 23
14. Conditions of the Offer............................................. 23
15. Legal Matters; Required Regulatory Approvals........................ 24
16. Fees and Expenses................................................... 27
17. Miscellaneous....................................................... 27
</TABLE>
Schedule I--Directors and Executive Officers of Danaher and the Purchaser
<PAGE>
SUMMARY OF THE OFFER
PRINCIPAL TERMS
. Danaher Corporation, through its wholly-owned subsidiary, is offering
to buy all outstanding shares of Kollmorgen Corporation common stock.
The tender price is $23.00 per share in cash. Tendering shareholders
will not have to pay brokerage fees or commissions.
. The offer is the first step in our plan to acquire all of the
outstanding Kollmorgen shares, as provided in our merger agreement
with Kollmorgen. If the offer is successful, we will acquire any
remaining Kollmorgen shares in a later merger for $23.00 per share in
cash. The shareholders of Kollmorgen will have appraisal rights in
the merger.
. The initial offering period of the offer will expire at 12:00
midnight, New York City time, on Friday, June 9, 2000, unless we
extend the offer. We do not intend to have a subsequent offering
period.
. If we decide to extend the offer, we will issue a press release
giving the new expiration date no later than 9:00 a.m., New York City
time, on the first business day after the previously scheduled
expiration date of the offer.
KOLLMORGEN BOARD RECOMMENDATION
. The board of directors of Kollmorgen has unanimously determined that
the offer and the merger are fair to and in the best interests of the
shareholders of Kollmorgen, approved and adopted the merger
agreement, and recommends that shareholders of Kollmorgen accept the
offer and tender their Kollmorgen shares.
CONDITIONS
We are not required to complete the offer unless:
. we receive U.S. federal antitrust clearance and approval from certain
foreign antitrust authorities for the offer, and
. at least two-thirds of the outstanding Kollmorgen common shares
(taken together with any other Kollmorgen common shares, directly or
indirectly, owned by us) are validly tendered and not withdrawn prior
to the expiration of the offer.
Other conditions to the offer are described at pages 23 through 24. The
offer is not conditioned on Danaher obtaining financing.
PROCEDURES FOR TENDERING
If you wish to accept the offer, this is what you must do:
. If you are a record holder (i.e., a stock certificate has been issued
to you), you must complete and sign the enclosed letter of
transmittal and send it with your stock certificate to the depositary
for the offer or follow the procedures described in the offer for
book-entry transfer. These materials must reach the depositary before
the offer expires. Detailed instructions are contained in the letter
of transmittal and on pages 5 through 7 of this document.
. If you are a record holder but your stock certificate is not
available or you cannot deliver it to the depositary before the offer
expires, you may be able to tender your shares using the enclosed
notice of guaranteed delivery. Please call our information agent,
D.F. King & Co., Inc., at 888-242-8157 for assistance. See pages 6
through 7 for further details.
. If you hold your Kollmorgen shares through a broker or bank, you
should contact your broker or bank and give instructions that your
Kollmorgen shares be tendered.
ii
<PAGE>
WITHDRAWAL RIGHTS
. If, after tendering your Kollmorgen shares in the offer, you decide
that you do not want to accept the offer, you can withdraw your
Kollmorgen shares by so instructing the depositary in writing before
the offer expires. If you tendered by giving instructions to a broker
or bank, you must instruct the broker or bank to arrange for the
withdrawal of your Kollmorgen shares. See pages 7 through 8 for
further details.
RECENT KOLLMORGEN TRADING PRICES; SUBSEQUENT TRADING
. The closing price for Kollmorgen common shares was:
$16.13 per share on May 3, 2000, the last trading day before we
announced the merger agreement with Kollmorgen, and
$22.69 per share on May 11, 2000, the last trading day before the
printing of these materials.
BEFORE DECIDING WHETHER TO TENDER, YOU SHOULD OBTAIN A CURRENT MARKET QUOTATION
FOR THE SHARES.
. If the offer is successful, we expect the Kollmorgen shares to
continue to be traded on the New York Stock Exchange until the time
of the merger, although we expect trading volume to be below its pre-
offer level.
FURTHER INFORMATION
. If you have questions about the offer, you can call:
Our Information Agent:
D.F. KING & CO., INC.
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (888) 242-8157
Our Dealer Manager:
LEHMAN BROTHERS
Three World Financial Center
200 Vesey Street, 18th Floor
New York, New York 10285
Call Collect: (212) 526-6739 or (415) 274-5442
iii
<PAGE>
To: All Holders of Shares of
Common Stock of Kollmorgen
INTRODUCTION
King DC Acquisition Corp. (the "Purchaser"), a wholly-owned subsidiary of
Danaher Corporation ("Danaher") is offering to purchase all outstanding shares
of common stock of Kollmorgen Corporation ("Kollmorgen"), together with the
associated preferred share purchase rights issued pursuant to the Amended and
Restated Rights Agreement, dated as of December 20, 1988 as amended through
May 4, 2000, between Kollmorgen and Fleet National Bank (formerly known as
Bank Boston, N.A.), as Rights Agent (the "Rights Agreement"), at a purchase
price of $23.00 per share, net to the seller in cash, without interest (the
"Per Share Amount"), on the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer"). "Share" means a share of Kollmorgen common
stock, together with the associated preferred share purchase rights.
You will not be required to pay brokerage fees or commissions or, except as
described in Instruction 6 of the Letter of Transmittal, stock transfer taxes
on the purchase of Shares in the Offer. Shareholders who hold their shares
through bankers or brokers should check with such institutions as to whether
or not they charge any service fee. However, if you do not complete and sign
the Substitute Form W-9 that is included in the Letter of Transmittal, you may
be subject to a required backup U.S. federal income tax withholding of 31% of
the gross proceeds payable to you. See Section 3. We will pay all charges and
expenses of Lehman Brothers Inc., as Dealer Manager ("Lehman Brothers" or the
"Dealer Manager"), SunTrust Bank, as Depositary (the "Depositary"), and D.F.
King & Co., Inc., as Information Agent (the "Information Agent"), incurred in
connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF KOLLMORGEN (THE "KOLLMORGEN BOARD") HAS
UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THE SHAREHOLDERS OF KOLLMORGEN, APPROVED AND ADOPTED THE
MERGER AGREEMENT (AS DEFINED HEREIN) AND RECOMMENDS THAT KOLLMORGEN
SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES.
We are not required to purchase any Shares unless at least two-thirds of
the outstanding Shares (taken together with any other Shares, directly or
indirectly, owned by us and assuming exercise of all outstanding stock
options) are validly tendered and not withdrawn prior to the expiration of the
Offer (the "Minimum Condition"). We reserve the right (subject to the
applicable rules and regulations of the Securities and Exchange Commission
(the "SEC") and to the prior written consent of Kollmorgen), which we
presently have no intention of exercising, to waive or reduce the Minimum
Condition and to elect to purchase a smaller number of Shares. The Offer is
also subject to certain other terms and conditions. See Sections 1, 14 and 15.
We are making the Offer under the Agreement and Plan of Merger, dated as of
May 4, 2000, among Kollmorgen, Danaher and the Purchaser (the "Merger
Agreement"). Following the consummation of the Offer and the satisfaction or
waiver of certain conditions, Kollmorgen will merge with the Purchaser (the
"Merger"), with Kollmorgen continuing as the surviving corporation. In the
Merger, each outstanding Share that is not owned by us (other than Shares held
by Kollmorgen shareholders who perfect their appraisal rights under the
Business Corporation Law of the State of New York (the "BCL")) will be
converted into the right to receive $23.00 net in cash, or any higher price
paid per Share in the Offer (the "Merger Consideration"). Section 11 contains
a more detailed description of the Merger Agreement. Section 5 describes the
principal U.S. federal income tax consequences of the sale of Shares in the
Offer and the Merger.
Salomon Smith Barney Inc., Kollmorgen's financial advisor, has delivered to
the Kollmorgen Board a written opinion dated May 4, 2000, to the effect that,
as of such date, and based upon and subject to certain matters stated in such
opinion, the $23.00 per Share cash consideration to be received in the Offer
and the Merger by holders of Shares (other than Danaher and its affiliates)
was fair, from a financial point of view, to such holders. A copy of Salomon
Smith Barney's opinion is included with Kollmorgen's
Solicitation/Recommendation
<PAGE>
Statement on Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed with
this document and Kollmorgen shareholders are urged to read the opinion in its
entirety for a description of the assumptions made, matters considered and
limitations of the review undertaken by Salomon Smith Barney.
Approval of the Merger requires the affirmative vote of holders of two-
thirds of the outstanding Shares. As a result, if the Minimum Condition and
the other conditions to the Offer are satisfied and the Offer is completed, we
will own a sufficient number of Shares to ensure that the Merger will be
approved by Kollmorgen shareholders. See Section 11.
Kollmorgen has advised us that, to its knowledge, all of its executive
officers and directors intend to tender all Shares that they own of record or
beneficially in the Offer (other than Shares that they have the right to
purchase by exercising stock options and Shares, if any, that, if tendered,
would cause them to incur liability under the short-swing profits provisions
of the Securities Exchange Act of 1934, as amended).
Kollmorgen has informed us that, as of May 2, 2000, there were 10,357,822
Shares issued and outstanding and 1,538,545 Shares reserved for issuance upon
the exercise of outstanding stock options.
THE OFFER IS CONDITIONED UPON THE FULFILLMENT OF THE CONDITIONS DESCRIBED
IN SECTION 14. THE INITIAL OFFERING PERIOD OF THE OFFER WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 9, 2000, UNLESS WE EXTEND IT.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH YOU SHOULD READ CAREFULLY BEFORE YOU MAKE ANY
DECISION WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), we will purchase all Shares validly tendered and not withdrawn in
accordance with the procedures set forth in Section 3 on or prior to the
Expiration Date. "Expiration Date" means 12:00 midnight, New York City time,
on Friday, June 9, 2000, unless we determine, or are required in certain
events specified below, to extend the period of time for which the initial
offering period of the Offer is open, in which case Expiration Date will mean
the time and date at which the initial offering period of the Offer, as so
extended, will expire. We do not intend to have any subsequent offering
period.
Upon the terms and subject to the conditions of the Offer, we will
purchase, as soon as permitted under the terms of the Offer, all Shares
validly tendered and not withdrawn prior to the expiration of the Offer. If,
at the Expiration Date, the conditions to the Offer described in Section 14
have not been satisfied or earlier waived, then, subject to the provisions of
the Merger Agreement, we may extend the Expiration Date for an additional
period or periods of time by giving oral or written notice of the extension to
the Depositary; provided, however, that in the event that (a) the required
waiting periods under U.S. federal antitrust laws or under certain applicable
foreign statutes or regulations have not expired, we are required to extend
the Offer, or (b) the consummation of this Offer is prohibited or is
materially limited pursuant to applicable laws or pending legal actions (as
set forth in paragraphs (a) and (b) of Annex I to the Merger Agreement), we
are required to extend the Expiration Date for additional periods until the
earlier of five business days after the time such limitations no longer exist
or such time at which such limitations have become final. During any such
extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer and subject to your right to withdraw Shares. See Section
4.
Subject to the applicable regulations of the Securities and Exchange
Commission (the "SEC") and the terms of the Merger Agreement, we also reserve
the right, in our sole discretion, at any time or from time to time, to (a)
delay purchase of, or, regardless of whether we previously purchased any
Shares, payment for, any Shares, pending receipt of any regulatory or
governmental approvals specified in Section 15; (b) terminate the Offer
(whether or not any Shares have previously been purchased) if any condition
referred to in Section 14 has not
2
<PAGE>
been satisfied or upon the occurrence of any Event specified (and defined) in
Section 14; and (c) except as set forth in the Merger Agreement, waive any
condition or otherwise amend the Offer in any respect; in each case, by giving
oral or written notice of the delay, termination, waiver or amendment to the
Depositary. We acknowledge (a) that Rule 14e-1(c) under the Securities
Exchange Act requires us to pay the consideration offered or return the Shares
tendered promptly after the termination or withdrawal of the Offer and (b)
that we may not delay purchase of, or payment for (except as provided in
clause (a) of the preceding sentence), any Shares upon the occurrence of any
Event specified in Section 14 without extending the period of time during
which the Offer is open.
The rights we reserve in the preceding paragraph are in addition to our
rights pursuant to Section 14. Any extension, delay, termination or amendment
of the Offer will be followed as promptly as practicable by a public
announcement. An announcement, in the case of an extension, will be made no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. Without limiting the manner in which we
may choose to make any public announcement, subject to applicable law
(including Rules 14d-4(d) and 14d-6(c) promulgated under the Securities
Exchange Act, which require that material changes be promptly disseminated to
holders of Shares), we will have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to the Dow Jones News Service.
As of the date of this Offer to Purchase, the associated preferred share
purchase rights do not trade separately. Accordingly, by tendering Shares, you
are automatically tendering a similar number of preferred share purchase
rights. If, however, the preferred share purchase rights detach and separate
right certificates are issued, tendering shareholders will be required to
deliver rights certificates with the shares.
We do not intend to offer any subsequent offering period in connection with
the Offer unless we come to a written agreement with Kollmorgen which would
provide for such subsequent offering period.
If we make a material change in the terms of the Offer, or if we waive a
material condition to the Offer, we will extend the Offer and disseminate
additional tender offer materials to the extent required by Rules 14d-4(d),
14d-6(c) and 14e-1 promulgated under the Securities Exchange Act. The minimum
period during which a tender offer must remain open following material changes
in the terms of the offer, other than a change in price or a change in
percentage of securities sought, depends upon the facts and circumstances,
including the materiality of the changes. In the SEC's view, an offer should
remain open for a minimum of five business days from the date the material
change is first published, sent or given to shareholders, and, if material
changes are made with respect to information that approaches the significance
of price and the percentage of securities sought, a minimum of ten business
days may be required to allow for adequate dissemination and investor
response. With respect to a change in price, a minimum ten business day period
from the date of the change is generally required to allow for adequate
dissemination to shareholders. Accordingly, if, prior to the Expiration Date,
we decrease the number of Shares being sought, or increase or decrease the
consideration offered pursuant to the Offer, and if the Offer is scheduled to
expire at any time earlier than the period ending on the tenth business day
from the date that notice of the increase or decrease is first published, sent
or given to holders of Shares, we will extend the Offer at least until the
expiration of that period of ten business days. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a U.S. federal
holiday and consists of the time period from 12:01 a.m. through 12:00
midnight, New York City time.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION.
Consummation of the Offer is also conditioned upon expiration or
termination of all waiting periods imposed by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations thereunder (the "HSR
Act"), and the other conditions set forth in Section 14. We reserve the right
(but are not obligated), in accordance with applicable rules and regulations
of the SEC and with the Merger Agreement, to waive any or all of those
conditions. If, by the Expiration Date, any or all of those conditions have
not been satisfied, we may, in the exercise of our good faith judgment, elect
to (a) extend the Offer and, subject to
3
<PAGE>
applicable withdrawal rights, retain all tendered Shares until the expiration
of the Offer, as extended, subject to the terms of the Offer and the Merger
Agreement; (b) waive all of the unsatisfied conditions (other than the Minimum
Condition) and, subject to complying with applicable rules and regulations of
the SEC, accept for payment all Shares so tendered; or (c) terminate the Offer
and not accept for payment any Shares and return all tendered Shares to
tendering Kollmorgen shareholders. In the event that we waive any condition
set forth in Section 14, the SEC may, if the waiver is deemed to constitute a
material change to the information previously provided to Kollmorgen
shareholders, require that the Offer remain open for an additional period of
time and/or that we disseminate information concerning such waiver.
In the Merger Agreement, we have agreed that, upon the terms and subject to
the conditions to the Offer, we will accept for payment and pay for, all
Shares validly tendered and not withdrawn prior to the expiration of the Offer
as promptly as practicable after expiration of the Offer.
Kollmorgen has provided us with its shareholder lists and security position
listings for the purpose of disseminating the Offer to holders of Shares. We
will mail this Offer to Purchase, the related Letter of Transmittal and other
relevant materials to record holders of Shares, and we will furnish the
materials to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the security
holder lists or, if applicable, who are listed as participants in a clearing
agency's security position listing, for forwarding to beneficial owners of
Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if we
extend or amend the Offer, the terms and conditions of the Offer as so
extended or amended), we will purchase, by accepting for payment, and will pay
for, all Shares validly tendered and not withdrawn (as permitted by Section 4)
prior to the Expiration Date promptly after the Expiration Date following the
satisfaction or waiver of the conditions to the Offer set forth in Section 14.
In addition, subject to applicable rules of the SEC, we reserve the right to
delay acceptance for payment of, or payment for, Shares pending receipt of any
regulatory or governmental approvals specified in Section 15.
For information with respect to approvals that we are required to obtain
prior to the completion of the Offer, including under the HSR Act and other
laws and regulations, see Section 15.
In all cases, we will pay for Shares purchased in the Offer only after
timely receipt by the Depositary of (a) certificates representing the Shares
("Share Certificates") or timely confirmation (a "Book-Entry Confirmation") of
the book-entry transfer of the Shares into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 3; (b) the appropriate Letter of Transmittal
(or a facsimile), properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined below) in connection
with a book-entry transfer; and (c) any other documents that the Letter of
Transmittal requires.
"Agent's Message" means a message transmitted by a Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of a Book-
Entry Confirmation, which message states that the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares which are the subject of the Book-Entry
Confirmation that the participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that we may enforce that agreement
against the participant.
For purposes of the Offer, we will be deemed to have accepted for payment,
and purchased, Shares validly tendered and not withdrawn as, if and when we
give oral or written notice to the Depositary of our acceptance of the Shares
for payment pursuant to the Offer. In all cases, upon the terms and subject to
the conditions of the Offer, payment for Shares purchased pursuant to the
Offer will be made by deposit of the purchase price for the
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Shares with the Depositary, which will act as agent for tendering Kollmorgen
shareholders for the purpose of receiving payment from us and transmitting
payment to validly tendering Kollmorgen shareholders.
UNDER NO CIRCUMSTANCES WILL WE PAY INTEREST ON THE PURCHASE PRICE FOR
SHARES.
If we do not purchase any tendered Shares pursuant to the Offer for any
reason, or if you submit Share Certificates representing more Shares than you
wish to tender, we will return Share Certificates representing unpurchased or
untendered Shares, without expense to you (or, in the case of Shares delivered
by book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 3, the Shares will be
credited to an account maintained within the Book-Entry Transfer Facility), as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
IF, PRIOR TO THE EXPIRATION DATE, WE INCREASE THE PRICE OFFERED TO HOLDERS
OF SHARES IN THE OFFER, WE WILL PAY THE INCREASED PRICE TO ALL HOLDERS OF
SHARES THAT WE PURCHASE IN THE OFFER, WHETHER OR NOT THE SHARES WERE TENDERED
BEFORE THE INCREASE IN PRICE.
We reserve the right, subject to the provisions of the Merger Agreement, to
transfer or assign, in whole or from time to time in part, to one or more of
our subsidiaries or affiliates, the right to purchase all or any portion of
the Shares tendered in the Offer, but any such transfer or assignment will not
relieve us of our obligations under the Offer or prejudice your rights to
receive payment for Shares validly tendered and accepted for payment in the
Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares. Except as set forth below, in order for you to
tender Shares in the Offer, the Depositary must receive the Letter of
Transmittal (or a facsimile), properly completed and signed, together with any
required signature guarantees or an Agent's Message in connection with a book-
entry delivery of Shares and any other documents that the Letter of
Transmittal requires at one of its addresses set forth on the back cover of
this Offer to Purchase on or prior to the Expiration Date and either (a) you
must deliver Share Certificates representing tendered Shares to the Depositary
or you must cause your Shares to be tendered pursuant to the procedure for
book-entry transfer set forth below and the Depositary must receive Book-Entry
Confirmation, in each case on or prior to the Expiration Date, or (b) you must
comply with the guaranteed delivery procedures set forth below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT YOUR OPTION AND SOLE RISK, AND DELIVERY
WILL BE CONSIDERED MADE ONLY WHEN THE DEPOSITARY ACTUALLY RECEIVES THE
CERTIFICATES. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, YOU SHOULD ALLOW
SUFFICIENT TIME TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Depositary will make a request to establish
accounts with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the system of the
Book-Entry Transfer Facility may make book-entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer the Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures. However, although Shares may be delivered
through book-entry transfer into the Depositary's account at a Book-Entry
Transfer Facility, the Depositary must receive the Letter of Transmittal (or
facsimile), properly completed and signed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer,
and any other required documents, at one of its addresses set forth on the
back cover of this Offer to Purchase on or before the Expiration Date, or you
must comply with the guaranteed delivery procedure set forth below.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
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Signature Guarantees. A bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program (an "Eligible Institution") must
guarantee signatures on all Letters of Transmittal, unless the Shares tendered
are tendered (a) by a registered holder of Shares who has not completed either
the box labeled "Special Payment Instructions" or the box labeled "Special
Delivery Instructions" on the Letter of Transmittal or (b) for the account of
an Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered Share Certificates
must be endorsed or accompanied by appropriate stock powers, signed exactly as
the name or names of the registered holder or holders appear on the Share
Certificates, with the signatures on the Share Certificates or stock powers
guaranteed by an Eligible Institution as provided in the Letter of
Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.
If the Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile) must
accompany each delivery of Share Certificates.
Guaranteed Delivery. If you want to tender Shares in the Offer and your
Share Certificates are not immediately available or time will not permit all
required documents to reach the Depositary on or before the Expiration Date or
the procedures for book-entry transfer cannot be completed on time, your
Shares may nevertheless be tendered if you comply with all of the following
guaranteed delivery procedures:
(a) your tender is made by or through an Eligible Institution;
(b) the Depositary receives, as described below, a properly completed
and signed Notice of Guaranteed Delivery, substantially in the form made
available by us, on or before the Expiration Date; and
(c) the Depositary receives the Share Certificates (or a Book-Entry
Confirmation) representing all tendered Shares, in proper form for transfer
together with a properly completed and duly executed Letter of Transmittal
(or facsimile), with any required signature guarantees (or, in the case of
a book-entry transfer, an Agent's Message) and any other documents required
by the Letter of Transmittal within three trading days after the date of
execution of the Notice of Guaranteed Delivery.
You may deliver the Notice of Guaranteed Delivery by hand or mail or
transmitted by facsimile transmission to the Depositary. The Notice of
Guaranteed Delivery must include a guarantee by an Eligible Institution in the
form set forth in the Notice of Guaranteed Delivery.
Notwithstanding any other provision of the Offer, we will pay for Shares
only after timely receipt by the Depositary of Share Certificates for, or, of
Book-Entry Confirmation with respect to, the Shares, a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and any other documents required by the appropriate Letter of
Transmittal. Accordingly, payment might not be made to all tendering
Kollmorgen shareholders at the same time, and will depend upon when the
Depositary receives Share Certificates or Book-Entry Confirmation that the
Shares have been transferred into the Depositary's account at a Book-Entry
Transfer Facility.
Backup U.S. Federal Income Tax Withholding. Under the backup U.S. federal
income tax withholding laws applicable to certain Kollmorgen shareholders
(other than certain exempt Kollmorgen shareholders, including, among others,
all corporations and certain foreign individuals), the Depositary may be
required to withhold 31% of the amount of any payments made to those
Kollmorgen shareholders pursuant to the Offer or the Merger. To prevent backup
U.S. federal income tax withholding, you must provide the Depositary with your
correct taxpayer identification number and certify that you are not subject to
backup U.S. federal income tax withholding by completing the Substitute Form
W-9 included in the Letter of Transmittal. See Instruction 9 of the Letter of
Transmittal.
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Appointment as Proxy. By executing the Letter of Transmittal, you
irrevocably appoint our designees, and each of them, as your agents,
attorneys-in-fact and proxies, with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of your rights with
respect to the Shares that you tender and that we accept for payment and with
respect to any and all other Shares and other securities or rights issued or
issuable in respect of those Shares on or after the date of this Offer to
Purchase. All such powers of attorney and proxies will be considered
irrevocable and coupled with an interest in the tendered Shares. This
appointment will be effective when we accept your Shares for payment in
accordance with the terms of the Offer. Upon such acceptance for payment, all
other powers of attorney and proxies given by you with respect to your Shares
and such other securities or rights prior to such payment will be revoked,
without further action, and no subsequent powers of attorney and proxies may
be given by you (and, if given, will not be deemed effective). Our designees
will, with respect to the Shares and such other securities and rights for
which the appointment is effective, be empowered to exercise all your voting
and other rights as they, in their sole discretion, may deem proper at any
annual or special meeting of Kollmorgen shareholders, or any adjournment or
postponement thereof, or by consent in lieu of any such meeting or otherwise.
In order for Shares to be deemed validly tendered, immediately upon the
acceptance for payment of such Shares, we or our designee must be able to
exercise full voting rights with respect to such Shares and other securities,
including voting at any meeting of Kollmorgen's shareholders.
Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for
payment of any tender of Shares will be determined by us, in our sole
discretion, which determination will be final and binding on all parties. We
reserve the absolute right to reject any or all tenders determined by us not
to be in proper form or the acceptance of or payment for which may, in the
opinion of our counsel, be unlawful. We also reserve the absolute right to
waive any of the conditions of the Offer or any defect or irregularity in any
tender of Shares of any particular Kollmorgen shareholder, whether or not
similar defects or irregularities are waived in the case of other Kollmorgen
shareholders.
Our interpretation of the terms and conditions of the Offer will be final
and binding. No tender of Shares will be deemed to have been validly made
until all defects and irregularities with respect to the tender have been
cured or waived by us. None of Danaher, the Purchaser or any of their
respective affiliates or assigns, the Dealer Manager, the Depositary, the
Information Agent or any other person or entity will be under any duty to give
any notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
Our acceptance for payment of Shares tendered pursuant to any of the
procedures described above will constitute a binding agreement between us and
you upon the terms and subject to the conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as described in this Section 4, tenders of Shares made in the Offer
are irrevocable. You may withdraw Shares that you have previously tendered in
the Offer at any time on or before the Expiration Date and, unless theretofore
accepted for payment as provided herein, may also be withdrawn at any time
after July 10, 2000.
If, for any reason, acceptance for payment of any Shares tendered in the
Offer is delayed, or we are unable to accept for payment or pay for Shares
tendered in the Offer, then, without prejudice to our rights set forth in this
Offer to Purchase, the Depositary may, nevertheless, on our behalf, retain
Shares that you have tendered, and you may not withdraw your Shares, except to
the extent that you are entitled to and duly exercise withdrawal rights as
described in this Section 4. Any such delay will be by an extension of the
Offer to the extent required by law.
In order for your withdrawal to be effective, you must deliver a written or
facsimile transmission notice of withdrawal to the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any such
notice of withdrawal must specify your name, the number of Shares that you
want to withdraw, and (if Share Certificates have been tendered) the name of
the registered holder of the Shares as shown on the Share Certificate, if
different from your name. If Share Certificates have been delivered or
otherwise identified to the
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Depositary, then, prior to the physical release of such Share Certificates,
you must submit the serial numbers shown on the particular Share Certificates
evidencing the Shares to be withdrawn and an Eligible Institution must
guarantee the signature on the notice of withdrawal, except in the case of
Shares tendered for the account of an Eligible Institution. If Shares have
been tendered pursuant to the procedures for book-entry transfer set forth in
Section 3, the notice of withdrawal must specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares, in which case a notice of withdrawal will be effective if delivered to
the Depositary by any method of delivery described in the first sentence of
this paragraph. You may not rescind a withdrawal of Shares. Any Shares that
you withdraw will be considered not validly tendered for purposes of the
Offer, but you may tender your Shares again at any time before the Expiration
Date by following any of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by us, in our sole discretion, which
determination will be final and binding. None of Danaher, the Purchaser or any
of their respective affiliates or assigns, the Dealer Manager, the Depositary,
the Information Agent or any other person or entity will be under any duty to
give any notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
5. MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES.
Your receipt of cash for Shares in the Offer or the Merger will be a
taxable transaction for U.S. federal income tax purposes, and may also be a
taxable transaction under applicable state, local, foreign and other tax laws.
For U.S. federal income tax purposes, if you sell or exchange your Shares in
the Offer or the Merger, you would generally recognize gain or loss equal to
the difference between the amount of cash received and your tax basis for the
Shares that you sold or exchanged. That gain or loss will be capital gain or
loss (assuming you hold your Shares as a capital asset), and any such capital
gain or loss will be long term if, as of the date of sale or exchange, you
have held such Shares for more than one year or will be short term if, as of
such date, you have held such Shares for one year or less.
The discussion above may not be applicable to certain types of Kollmorgen
shareholders, including Kollmorgen shareholders who acquired Shares through
the exercise of employee stock options or otherwise as compensation,
individuals who are not citizens or residents of the United States, foreign
corporations, or entities that are otherwise subject to special tax treatment
under the Internal Revenue Code of 1986, as amended (such as insurance
companies, tax-exempt entities and regulated investment companies).
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH
RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE OFFER AND MERGER,
INCLUDING U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES.
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6. PRICE RANGE OF THE SHARES; DIVIDENDS.
The Shares are traded on the New York Stock Exchange, Inc. (the "NYSE")
under the symbol "KOL." The following table sets forth, for the periods
indicated, the reported high and low sale prices for the Shares on the NYSE
during each quarter presented.
KOLLMORGEN CORPORATION
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL 1998
First Quarter............................................... $24.25 $16.00
Second Quarter.............................................. 21.94 17.63
Third Quarter............................................... 21.38 13.75
Fourth Quarter.............................................. 19.38 13.63
FISCAL 1999
First Quarter............................................... $17.25 $11.81
Second Quarter.............................................. 15.00 10.56
Third Quarter............................................... 15.31 10.63
Fourth Quarter.............................................. 12.31 8.88
FISCAL 2000
First Quarter............................................... $15.19 $10.94
Second Quarter (through May 11)............................. 22.75 11.63
</TABLE>
Kollmorgen has declared and paid a dividend of $.02 per Share in each of
the quarterly periods described above. The dividend for second quarter fiscal
2000 was declared by the Kollmorgen Board on May 11, 2000 and is payable on
June 1, 2000 to Kollmorgen shareholders of record as of May 22, 2000. Under
the terms of the Merger Agreement, Kollmorgen is not permitted to declare or
pay dividends with respect to the Shares other than regular quarterly
dividends paid at times and in amounts consistent with past practice.
On May 3, 2000, the last full day of trading prior to the announcement of
the execution of the Merger Agreement, the reported closing price on the NYSE
for the Shares was $16.13 per Share. On May 11, 2000, the last full day of
trading prior to the commencement of the Offer, the reported closing price on
the NYSE for the Shares was $22.69 per Share.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; NYSE LISTING;
SECURITIES EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Possible Effects of the Offer on the Market for the Shares. The purchase of
Shares pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public. The purchase of Shares
pursuant to the Offer can also be expected to reduce the number of holders of
Shares. We cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on
the market price for or marketability of the Shares or whether it would cause
future market prices to be greater or less than the Offer price.
Stock Listing. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements of the NYSE for
continued listing on the NYSE. According to the NYSE's published guidelines,
the NYSE would consider delisting the Shares if, among other things, (a) the
number of record holders should fall below 400, (b) the number of record
holders should fall below 1,200 and the average
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monthly trading volume is less than 100,000 Shares, (c) the number of publicly
held Shares (exclusive of holdings of Danaher and the Purchaser and any other
subsidiaries or affiliates of Danaher and of officers or directors of
Kollmorgen or their immediate families or other concentrated holdings of 10%
or more ("Excluded Holdings")) should fall below 600,000, or (d) the aggregate
market value of such publicly held Shares (exclusive of Excluded Holdings)
should fall below $8,000,000. If, as a result of the purchase of Shares
pursuant to the Offer or otherwise, the Shares no longer meet the requirements
of the NYSE for continued listing and the listing of the Shares is
discontinued, the market for the Shares could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market, and that price or other quotations would be reported by such exchange
or through the National Association of Securities Dealers Automated Quotation
System or other sources. The extent of the public market for the Shares and
the availability of such quotations would depend upon such factors as the
number of shareholders and/or the aggregate market value of the publicly
traded Shares remaining at such time, the interest in maintaining a market in
the Shares on the part of securities firms, the possible termination of
registration under the Securities Exchange Act, as described below, and other
factors. We cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on
the market price for or marketability of the Shares or whether it would cause
future market prices to be greater or less than the Offer price.
Securities Exchange Act Registration. The Shares are currently registered
under the Securities Exchange Act. The purchase of the Shares pursuant to the
Offer may result in the Shares becoming eligible for deregistration under the
Securities Exchange Act. Registration of the Shares may be terminated upon
application by Kollmorgen to the SEC if the Shares are not listed on a
"national securities exchange" and there are fewer than 300 record holders of
Shares. Termination of registration of the Shares under the Securities
Exchange Act would substantially reduce the information that Kollmorgen is
required to furnish to Kollmorgen shareholders and the SEC and would make
certain provisions of the Securities Exchange Act, such as the short-swing
profit recovery provisions of Section 16(b) of the Securities Exchange Act and
the requirements of furnishing a proxy statement in connection with
shareholders' meetings pursuant to Section 14(a) or 14(c) of the Securities
Exchange Act and the related requirement of an annual report, no longer
applicable to Kollmorgen. If the Shares are no longer registered under the
Securities Exchange Act, the requirements of Rule 13e-3 promulgated under the
Securities Exchange Act with respect to "going private" transactions would no
longer be applicable to Kollmorgen. In addition, the ability of "affiliates"
of Kollmorgen and persons holding "restricted securities" of Kollmorgen to
dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended, may be impaired or, with respect to
certain persons, eliminated. If registration of the Shares under the
Securities Exchange Act were terminated, the Shares would no longer be "margin
securities" or eligible for stock exchange listing or NASDAQ reporting. We
believe that the purchase of the Shares pursuant to the Offer may result in
the Shares becoming eligible for deregistration under the Securities Exchange
Act, and it would be our intention to cause Kollmorgen to make an application
for termination of registration of the Shares as soon as possible after
successful completion of the Offer if the Shares are then eligible for such
termination.
If registration of the Shares is not terminated prior to the Merger, then
the registration of the Shares under the Securities Exchange Act and the
listing of the Shares on the NYSE will be terminated following the completion
of the Merger.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System, which
regulations have the effect, among other things, of allowing brokers to extend
credit on the collateral of the Shares for the purpose of buying, carrying or
trading in securities ("Purpose Loans"). Depending upon factors such as the
number of record holders of the Shares and the number and market value of
publicly held Shares, following the purchase of Shares pursuant to the Offer,
the Shares might no longer constitute "margin securities" for purposes of the
Federal Reserve Board's margin regulations and, therefore, could no longer be
used as collateral for Purpose Loans made by brokers. In addition, if
registration of the Shares under the Securities Exchange Act were terminated,
the Shares would no longer constitute "margin securities."
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8. INFORMATION CONCERNING KOLLMORGEN
Kollmorgen is a New York corporation with its principal executive offices
located at Reservoir Place, 1601 Trapelo Road, Waltham, Massachusetts 02451.
Kollmorgen's telephone number is (781) 890-5655.
The following description of Kollmorgen and its business has been taken
from Kollmorgen's Form 10-K for the fiscal year ended December 31, 1999, and
is qualified in its entirety by reference to Kollmorgen's Form 10-K for the
fiscal year ended December 31, 1999:
Kollmorgen is one of the major worldwide manufacturers of high performance
electronic motion control products and systems and has operations in the
industrial and commercial segment as well as in the aerospace and defense
segment.
Kollmorgen files annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any reports,
statements or other information filed at the SEC's public reference room at
450 Fifth Street, N.W., Washington, D.C. 20549, or at the SEC's public
reference rooms in New York, New York and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms.
Kollmorgen's SEC filings are also available to the public from commercial
document retrieval services and at the Internet world wide web site maintained
by the SEC at http://www.sec.gov.
Although we have no knowledge that any such information is untrue, we take
no responsibility for the accuracy or completeness of information contained in
this Offer to Purchase with respect to Kollmorgen or any of its subsidiaries
or affiliates or for any failure by Kollmorgen to disclose events which may
have occurred or may affect the significance or accuracy of any such
information.
9. INFORMATION CONCERNING DANAHER AND THE PURCHASER
Danaher is a Delaware corporation with principal executive offices located
at 1250 24th Street, N.W., Suite 800, Washington, D.C. 20037. Danaher's
telephone number is (202) 828-0850. Danaher designs, manufactures and markets
industrial and consumer products with strong brand names, proprietary
technology and major market positions in two principal businesses:
process/environmental controls and tools and components.
The Purchaser's principal executive offices are located c/o Danaher at 1250
24th Street, N.W., Suite 800, Washington, D.C. 20037. The Purchaser is a newly
formed New York corporation and a wholly-owned subsidiary of Danaher. The
Purchaser has not conducted any business other than in connection with the
Offer and the Merger.
The name, business address, citizenship, present principal occupation and
employment history for the past five years of each of the directors and
executive officers of Danaher and the Purchaser are set forth in Schedule I
hereto.
Danaher is subject to the information and reporting requirements of the
Securities Exchange Act and is required to file periodic reports, proxy
statements and other information with the SEC relating to its business,
financial condition and other matters. Certain information, as of particular
dates, concerning Danaher's business, principal physical properties, capital
structure, material pending legal proceedings, operating results, financial
condition, directors and officers (including their remuneration and stock
options granted to them), principal holders of Danaher's securities, any
material interests of such persons in transactions with Danaher, and certain
other matters is required to be disclosed in proxy statements and annual
reports distributed to Danaher stockholders and filed with the SEC. You may
inspect or copy these reports, proxy statements and other information at the
SEC's public reference facilities and they should also be available for
inspection in the same manner as set forth with respect to Kollmorgen in
Section 8.
Except as set forth elsewhere in this Offer to Purchase or in Schedule I
hereto: (a) neither we nor, to our knowledge, any of the persons listed in
Schedule I hereto or any associate or majority owned subsidiary of ours
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or of any of the persons so listed, beneficially owns or has a right to
acquire any Shares or any other equity securities of Kollmorgen; (b) neither
we nor, to our knowledge, any of the persons or entities referred to in clause
(a) above or any of their executive officers, directors or subsidiaries has
effected any transaction in the Shares or any other equity securities of
Kollmorgen during the past 60 days; (c) neither we nor, to our knowledge, any
of the persons listed in Schedule I hereto, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of Kollmorgen (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the
voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss, or the giving or
withholding of proxies, consents or authorizations); (d) since May 9, 1998,
there have been no transactions which would require reporting under the rules
and regulations of the SEC between us or any of our subsidiaries or, to our
knowledge, any of the persons listed in Schedule I hereto, on the one hand,
and Kollmorgen or any of its executive officers, directors or affiliates, on
the other hand; and (e) since May 9, 1998, there have been no contacts,
negotiations or transactions between us or any of our subsidiaries or, to our
knowledge, any of the persons listed in Schedule I hereto, on the one hand,
and Kollmorgen or any of its subsidiaries or affiliates, on the other hand,
concerning a merger, consolidation or acquisition, a tender offer or other
acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.
10. BACKGROUND OF THE OFFER; CONTACTS WITH KOLLMORGEN
In August 1999, representatives of Lehman Brothers, as financial advisor to
Danaher, contacted Salomon Smith Barney, financial advisor to Kollmorgen, to
indicate an interest in Kollmorgen. Lehman Brothers indicated to Salomon Smith
Barney that a representative of Danaher would be interested in meeting with a
representative of Kollmorgen to discuss a possible business combination.
On September 10, 1999, Mr. George M. Sherman, the President and Chief
Executive Officer of Danaher, met with Mr. Gideon Argov, the Chairman of the
Board, President and Chief Executive Officer of Kollmorgen. At that meeting,
Mr. Sherman indicated that Danaher would be interested in considering a
possible acquisition of Kollmorgen, subject to the satisfactory completion of
due diligence investigations and the negotiation of a definitive merger
agreement. Danaher subsequently signed a confidentiality and standstill
agreement with Kollmorgen on September 13, 1999.
Representatives of Danaher and Kollmorgen met again on September 23, 1999.
The September 23, 1999 meeting was attended by Mr. Argov, other members of
Kollmorgen's senior management and representatives of Salomon Smith Barney,
and Mr. Sherman, other members of Danaher's senior management and
representatives of Lehman Brothers. Kollmorgen made a presentation concerning
its business at this meeting.
Over the period between September 23, 1999 and March 1, 2000,
representatives of Kollmorgen provided information to Danaher regarding its
business.
On March 1, 2000, Mr. Sherman and Mr. Argov met to discuss further the
extent and nature of Danaher's interest in acquiring Kollmorgen. At that
meeting, Mr. Sherman and Mr. Argov agreed to schedule another meeting between
representatives of Danaher and Kollmorgen at which an additional presentation
of the business of Kollmorgen would be made.
On March 8, 2000, Mr. Argov, Mr. Robert J. Cobuzzi, Vice President and
Chief Financial Officer of Kollmorgen, Mr. Keith Jones, Corporate Controller
and Chief Accounting Officer of Kollmorgen and Mr. James A. Eder, Vice
President, Secretary and General Counsel of Kollmorgen and representatives of
Salomon Smith Barney met with Mr. Sherman and other members of Danaher's
senior management and representatives of Lehman Brothers for an in-depth
presentation on the business of Kollmorgen.
On March 30, 2000, Mr. Argov and Mr. Sherman met to discuss a possible
business combination of the two companies.
On April 7, 2000, Mr. Sherman and Mr. Argov again discussed the possible
business combination of the two companies. Mr. Sherman indicated that Danaher
would be willing to consider making an offer for all
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outstanding Shares for a price in the low $20s, subject to satisfactory
completion of due diligence and agreement between Danaher and Kollmorgen on
other aspects of the proposed transaction.
Over the two weeks following the April 7, 2000 meeting, representatives of
Danaher and Kollmorgen spoke periodically, continued discussions regarding the
proposed purchase price and agreed on the overall structure of the
transaction, subject to completion of due diligence and negotiation of other
terms and conditions of the transaction. The companies also agreed on a due
diligence schedule. It was during this period that the possibility of a
Consulting Agreement between Mr. Argov and Danaher was raised.
On April 18, 2000, the Board of Directors of Kollmorgen held a meeting at
which the management of Kollmorgen and representatives of Salomon Smith Barney
updated the Kollmorgen Board concerning the discussions with Danaher. At this
meeting, the Kollmorgen Board indicated Kollmorgen's officers and other
representatives should continue to pursue discussions with Danaher concerning
a possible business combination, provided that the purchase price would be no
less than $23 per Share and satisfactory agreement was reached on other terms
and conditions relating to the transaction, which would be submitted to the
Board for final approval.
On April 21, 2000, the Kollmorgen Board held a meeting at which the
management of Kollmorgen updated the Board concerning the discussions with
Danaher.
On April 24, 2000, representatives of Kollmorgen made another presentation
to representatives of Danaher on the business of Kollmorgen.
Between April 24, 2000 and May 4, 2000, Danaher conducted its due diligence
investigations of Kollmorgen. During that period, Kollmorgen's representatives
and Danaher's representatives negotiated the terms of the Merger Agreement. In
addition, the terms of the Consulting Agreement were also negotiated during
this period.
On May 3, 2000, the Board of Directors of Danaher were presented with a
discussion of the results of due diligence and the terms of the proposed
transaction by Mr. Sherman and other members of Danaher's management. At this
meeting, the Board of Directors of Danaher unanimously approved the Merger
Agreement and Consulting Agreement, subject to satisfactory negotiation of the
final terms of each.
On May 3, 2000 and again on May 4, 2000, the Kollmorgen Board met to
discuss the status of negotiations with Danaher and the terms of the proposed
business combination. At the May 3, 2000 meeting, a form of the Merger
Agreement was presented to and reviewed with the Kollmorgen Board by
Kollmorgen's attorneys. Also at this meeting, Salomon Smith Barney reviewed
with the Kollmorgen Board its financial analysis of the Per Share Amount. At
the May 4, 2000 meeting, the Kollmorgen's Board received an update with
respect to the proposed transactions from Kollmorgen's attorneys and Salomon
Smith Barney delivered to the Board its opinion as to the fairness, from a
financial point of view, of the Per Share Amount to the holders of Shares
(other than Danaher and its affiliates). After full discussion, the Kollmorgen
Board determined that the Offer and the Merger were in the best interests of
Kollmorgen's shareholders and unanimously approved the Per Share Amount, the
Merger Agreement and related transactions.
The Merger Agreement as well as the Consulting Agreement were finalized and
executed, and a press release announcing the proposed Offer and the Merger was
issued, on May 4, 2000.
11. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; THE CONSULTING AGREEMENT;
STATUTORY REQUIREMENTS; APPRAISAL RIGHTS; PLANS FOR KOLLMORGEN; "GOING
PRIVATE" TRANSACTIONS
(a) Purpose. The purpose of the Offer and the Merger is to acquire control
of, and the entire equity interest in, Kollmorgen. The Offer, as the first
step in the acquisition of Kollmorgen, is intended to facilitate the
acquisition of all of the Shares. The purpose of the Merger is to acquire all
capital stock of Kollmorgen not purchased pursuant to the Offer or otherwise.
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(b) The Merger Agreement. The following summary description of the Merger
Agreement is qualified in its entirety by reference to the Merger Agreement
itself, which we have filed as an exhibit to the Tender Offer Statement on
Schedule TO that we have filed with the SEC, which you may examine and copy as
set forth in Section 8 above (except that it will not be available at the
regional offices of the SEC).
THE OFFER. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to prior satisfaction or waiver
of the conditions of the Offer, as set forth in Section 14, the Purchaser will
purchase all Shares validly tendered and not withdrawn pursuant to the Offer.
The Merger Agreement provides that, without the prior written consent of
Kollmorgen, the Purchaser will not (a) decrease the Offer price or change the
form of consideration payable in the Offer, (b) decrease the number of Shares
sought to be purchased in the Offer, (c) impose additional conditions to the
Offer, (d) waive the Minimum Condition or (e) amend any other term of the
Offer in a manner adverse to the holders of Shares. The Purchaser may extend
the Offer, from time to time, if, at the then-scheduled Expiration Date of the
Offer, any of the conditions to the Purchaser's obligation to accept for
payment and pay for all Shares shall not have been satisfied or waived;
provided, however, that in the event that (a) the required waiting periods
under U.S. federal antitrust laws or under certain applicable foreign statutes
or regulations have not expired or terminated, we are required to extend the
Offer, or (b) the consummation of this Offer is prohibited or is materially
limited pursuant to applicable laws or pending legal actions (as set forth in
paragraphs (a) and (b) of Annex I to the Merger Agreement), the Purchaser is
required to extend the Expiration Date for additional periods until the
earlier of five business days after the time such limitations no longer exist
or such time at which such limitations have become final. In addition, if all
conditions to the Offer are satisfied and the number of Shares tendered and
not withdrawn is more than 70%, but less than 90%, of the outstanding number
of Shares on a fully diluted basis, the Purchaser shall have the right, in its
sole discretion, to extend the Offer from time to time for up to a maximum of
seven additional business days in the aggregate beyond the latest Expiration
Date.
RECOMMENDATION. Kollmorgen has represented to Danaher in the Merger
Agreement that the Kollmorgen Board, at a meeting duly called and held, has
(a) determined by unanimous vote that the Offer and the Merger are fair to and
in the best interest of Kollmorgen shareholders, (b) approved the Offer and
the Merger Agreement in accordance with the BCL, (c) recommended acceptance of
the Offer and adoption of the Merger Agreement by Kollmorgen shareholders (if
such adoption is required by applicable law) and (d) taken all other action
necessary to render the rights under the Rights Agreement inapplicable to the
Offer and the Merger; provided, however, that such recommendation and approval
may be withdrawn, modified or amended prior to the acceptance of payment of
Shares only to the extent that the Kollmorgen Board determines in good faith,
after consultation with its outside legal counsel, that failure to take such
action would constitute a breach of the Kollmorgen Board's fiduciary
obligations under applicable law. Kollmorgen further represented that Salomon
Smith Barney delivered to the Kollmorgen Board a written opinion dated May 4,
2000, as to the fairness, from a financial point of view, to the holders of
Shares (other than Danaher and its affiliates) of the Per Share Amount to be
received by such holders pursuant to the Offer and the Merger.
DIRECTORS. The Merger Agreement provides that, subject to compliance with
applicable law, Danaher, promptly upon the payment by the Purchaser for Shares
pursuant to the Offer, and from time to time thereafter, is entitled to
designate that number of directors, rounded up to the next whole number, on
the Kollmorgen Board as is equal to the product of the total number of
directors on the Kollmorgen Board (determined after giving effect to the
directors so elected pursuant to such provisions) multiplied by the percentage
that the aggregate number of Shares beneficially owned by Danaher or its
affiliates bears to the total number of Shares then outstanding. Kollmorgen
shall, upon request of Danaher, promptly take all actions necessary to cause
designees to be so elected, including, if necessary, seeking the resignations
of one or more existing directors; provided, however, that, prior to the time
the Merger becomes effective (the "Effective Time"), the Kollmorgen Board
shall always have at least two members who are not officers, directors,
employees or designees of the Purchaser or any of its affiliates, including
Kollmorgen ("Purchaser Insiders"). If the number of directors who are not
Purchaser Insiders is reduced below two prior to the Effective Time, the
remaining director who is not a Purchaser Insider will be entitled to
designate a person who is not a Purchaser Insider to fill such vacancy.
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Following the election or appointment of Danaher's designees and prior to the
Effective Time, any amendment or termination of the Merger Agreement by
Kollmorgen, any extension by Kollmorgen of the time for performance of any of
the obligations or other acts of Danaher or the Purchaser, any waiver of any
of Kollmorgen's rights under the Merger Agreement or any other actions taken
by Kollmorgen will require the concurrence of a majority of the directors of
Kollmorgen then in office who are not Purchaser Insiders (or, in the case
where there are two or fewer directors who are not Purchaser Insiders, the
concurrence of one director who is not a Purchaser Insider) if that amendment,
termination, extension, or waiver, could be reasonably likely to have an
adverse effect on the minority Kollmorgen shareholders.
THE MERGER. The Merger Agreement provides that, at the Effective Time, the
Purchaser will be merged with and into Kollmorgen. Following the Merger, the
separate corporate existence of the Purchaser will cease and Kollmorgen will
continue as the surviving corporation (the "Surviving Corporation") and a
wholly-owned subsidiary of Danaher.
Kollmorgen has agreed pursuant to the Merger Agreement that, if required by
applicable law in order to consummate the Merger, it will (a) duly call, give
notice of, convene and hold a special meeting of Kollmorgen shareholders as
soon as practicable following the acceptance for payment of and payment for
Shares by the Purchaser pursuant to the Offer for the purpose of adopting the
Merger Agreement; (b) prepare and file with the SEC a preliminary proxy
statement relating to the Merger Agreement, and use its reasonable best
efforts (1) to obtain and furnish the information required to be included by
the SEC in the Proxy Statement (as defined herein) and, after consultation
with Danaher, to respond promptly to any comments made by the SEC with respect
to the preliminary proxy statement and to cause a definitive proxy statement
(the "Proxy Statement") to be mailed to its shareholders and (2) to obtain the
necessary approvals of the Merger and adoption of the Merger Agreement by
Kollmorgen shareholders; and (c) (1) subject to the provisions described under
"Recommendation" above, include in the Proxy Statement the recommendation of
the Kollmorgen Board that Kollmorgen shareholders vote in favor of the
approval of the Merger Agreement and (2) include in the Proxy Statement the
opinion of Salomon Smith Barney. Danaher has agreed in the Merger Agreement
that it will vote, or cause to be voted, all of the Shares then owned by it,
the Purchaser or any of Danaher's other subsidiaries in favor of the approval
of the Merger and the Merger Agreement.
The Merger Agreement further provides that, notwithstanding the foregoing,
if Danaher, the Purchaser or any other of Danaher's subsidiaries acquires at
least 90% of the outstanding Shares pursuant to the Offer or otherwise, the
parties to the Merger Agreement will take all necessary and appropriate action
to cause the Merger to become effective as soon as practicable after the
acceptance for payment of and payment for the Shares by the Purchaser pursuant
to the Offer without a meeting of the Kollmorgen shareholders in accordance
with Section 905 of the BCL.
CHARTER, BY-LAWS, DIRECTORS AND OFFICERS. The Certificate of Incorporation
of the Purchaser, as in effect immediately prior to the Effective Time, will
be the Certificate of Incorporation of the Surviving Corporation, until
amended afterward in accordance with the provisions of the Certificate of
Incorporation of the Surviving Corporation and applicable law; provided,
however, that any such amendments shall be consistent with the rights of
directors and officers to indemnification and insurance as described below
under "Indemnification, Directors' and Officers' Insurance." The By-Laws of
the Purchaser in effect at the Effective Time will be the By-Laws of the
Surviving Corporation, until amended afterward in accordance with the
provisions of the By-Laws of the Surviving Corporation and applicable law.
Subject to applicable law, (a) the directors of the Purchaser immediately
prior to the Effective Time will be the initial directors of the Surviving
Corporation and will hold office until their respective successors are duly
elected and qualified, or their earlier death, resignation or removal, and (b)
the officers of the Purchaser immediately prior to the Effective Time will be
the initial officers of the Surviving Corporation.
CONVERSION OF SECURITIES. By virtue of the Merger and without any action on
the part of the holders of the Shares, at the Effective Time, each Share
issued and outstanding immediately prior to the Effective Time (other than (a)
any Shares held by Danaher, the Purchaser, any wholly-owned subsidiary of
Danaher or the
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Purchaser, in the treasury of Kollmorgen or by any wholly-owned subsidiary of
Kollmorgen, which Shares, by virtue of the Merger and without any action on
the part of the holder of those shares, will be canceled and retired and will
cease to exist with no payment being made with respect thereto and (b) shares
held by a holder who has not voted in favor of the Merger and who has demanded
appraisal for those shares in accordance with the BCL ("Dissenting Shares"))
will be canceled and retired and will be converted into the right to receive
the Consideration, upon surrender of the Share Certificate formerly
representing that Share. At the Effective Time, each share of common stock of
the Purchaser, issued and outstanding immediately prior to the Effective Time
will, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become one validly issued, fully paid and non-
assessable share of common stock, par value $.01 per share, of the Surviving
Corporation.
The Merger Agreement provides that, prior to the Effective Time, the
Kollmorgen Board (or, if appropriate, any committee of the Kollmorgen Board)
will adopt appropriate resolutions and use its reasonable best efforts to
provide for the cancellation or exercise, effective at the Effective Time, of
all the outstanding options granted under any stock option or similar plan of
Kollmorgen (the "Stock Plans"), or under any agreement, without any payment
therefor except as otherwise discussed in this Section 11. Immediately prior
to the Effective Time, all options (whether vested or unvested) will be
canceled (and to the extent exercisable shall no longer be exercisable) and
will entitle each holder of an option, in cancellation and settlement
therefor, to a payment, if any, in cash by Kollmorgen (less any applicable
withholding taxes), at the Effective Time, equal to the product of (a) the
total number of Shares subject to that option and (b) the excess, if any, of
the Merger Consideration (or such greater price as is provided in an
applicable option agreement) over the exercise price per Share subject to that
option.
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement,
Kollmorgen has made customary representations and warranties to Danaher and
the Purchaser with respect to, among other matters, its organization and
qualification, capitalization, subsidiaries, authority, required filings,
consents and approvals, financial statements, public filings, litigation,
compliance with law, employee benefit plans, environmental matters, material
contracts (including government contracts and bids), opinion of financial
advisor, information to be included in the Schedule 14D-9, the Proxy Statement
or the other documents required to be filed with the SEC or any other
governmental authority relating to the Offer and the Merger, intellectual
property, tax status, condition of assets, relationships with customers and
employees and the absence of any material adverse effects on Kollmorgen.
Danaher and the Purchaser have made customary representations and warranties
to Kollmorgen with respect to, among other matters, its organization,
qualifications, authority, required filings, consents and approvals,
information to be included in the Schedule 14D-9, the Proxy Statement or the
other documents required to be filed with the SEC or any other governmental
authority relating to the Offer and the Merger, availability of funds and
ownership and lack of prior activities of Purchaser.
COVENANTS. The Merger Agreement obligates Kollmorgen and its subsidiaries,
from the date of the Merger Agreement until the Effective Time, to conduct
their operations only in the ordinary and usual course of business consistent
with past practice, and obligates Kollmorgen and its subsidiaries to use their
reasonable best efforts to preserve intact their business organizations, to
keep available the services of their present officers and key employees and to
preserve the good will of those having business relationships with them. The
Merger Agreement also contains specific restrictive covenants as to certain
impermissible activities of Kollmorgen prior to the Effective Time, which
provide that Kollmorgen will not (and will not permit any of its subsidiaries
to) take certain actions without the prior written consent of Danaher,
including, among other things, actions related to amendments to the Amended
and Restated Certificate of Incorporation or the By-Laws of Kollmorgen,
issuances or sales of its securities, changes in capital structure, dividends
and other distributions, repurchases or redemptions of securities, material
acquisitions or dispositions, increases in compensation or adoption of new
benefit plans and certain other material events or transactions, subject to
specified exceptions.
ACCESS TO INFORMATION. The Merger Agreement provides that, subject to
applicable law, until the Effective Time, Kollmorgen will give Danaher and the
Purchaser and their representatives full access, during normal business hours,
to the offices and other facilities and to the books and records of Kollmorgen
and its subsidiaries,
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and will provide Danaher and the Purchaser copies of documents filed pursuant
to U.S. federal or state securities laws during this period, and, upon
reasonable request, other information with respect to the business and
operations of Kollmorgen and its subsidiaries.
EFFORTS. Subject to the terms and conditions provided in the Merger
Agreement, each of Kollmorgen, Danaher and the Purchaser will cooperate and
use all reasonable efforts to make or cause to be made all filings necessary
or proper under applicable laws and regulations to consummate and make
effective the transactions contemplated by the Merger Agreement.
Each of the parties to the Merger Agreement also has agreed to use its
reasonable best efforts to obtain, as promptly as practicable, all consents of
any governmental authorities or any other person required in connection with,
and waivers of any violations that may be caused by, the consummation of the
transactions contemplated by the Merger Agreement; provided, however, that
neither Danaher nor Kollmorgen would be required to divest, hold separate or
otherwise materially restrict the operations of any of their businesses or
assets, in order to consummate the transactions contemplated by the Offer and
the Merger Agreement.
PUBLIC ANNOUNCEMENTS. The Merger Agreement provides that Kollmorgen, on the
one hand, and Danaher and the Purchaser, on the other hand, agree to consult
promptly with each other prior to issuing any press release or otherwise
making any public statement with respect to the Offer, the Merger and the
other transactions contemplated by the Merger Agreement, agree to provide to
the other party for review a copy of any such press release or statement, and
agree not to issue any such press release or make any such public statement
prior to such consultation and review, unless required by applicable law or
any listing agreement with a securities exchange.
EMPLOYEE BENEFIT ARRANGEMENTS. With respect to employee benefit matters,
the Merger Agreement provides that, from and after the Effective Time, Danaher
will honor, or Danaher will cause to have honored, obligations under certain
specified employee benefit plans of Kollmorgen. The Merger Agreement also
provides that for the period ending December 31, 2000, the Surviving
Corporation will continue the employee benefit plans of Kollmorgen (other than
those providing equity-based compensation) and thereafter the Surviving
Corporation will provide its employees (and those of its subsidiaries) with
compensation programs and employee benefits which are substantially the same
as or not less favorable in the aggregate than those in effect with respect to
similarly situated employees of Danaher. The Merger Agreement also provides
that through the period ending on the first anniversary of the Effective Time,
severance benefits available to employees of Kollmorgen will be no less
favorable than those severance benefits as in effect on the date of the Merger
Agreement. The Merger Agreement also provides that, from and after the
Effective Time, Danaher will provide, or Danaher will cause to provide, to
persons who are retired salaried employees of Kollmorgen, as of the Effective
Time, retiree medical benefits that are substantially comparable to those
provided to those retired salaried employees of Kollmorgen as of the Effective
Time.
INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. Pursuant to the Merger
Agreement, Danaher has agreed that from and after the Effective Time all
rights to indemnification, defense and advancement of funds existing at the
date of the Merger Agreement in favor of individuals who were directors,
officers, employees or agents of Kollmorgen or any of its subsidiaries at or
prior to the Effective Time as set forth in the Certificate of Incorporation
or By-Laws of Kollmorgen shall survive the Merger and shall continue in full
force and effect, and will not be amended by the Surviving Corporation for a
period of six years from the Effective Time in any manner that would adversely
affect the rights of those individuals, unless such modification is required
by law. Kollmorgen and, following the purchase of any Shares by Purchaser,
Danaher will, regardless of whether the Merger becomes effective, indemnify,
and, after the Effective Time, will cause the Surviving Corporation, to
indemnify those individuals against all claims or liabilities arising out of
actions or omissions occurring on or prior to the Effective Time, subject to
limitations in the Merger Agreement. Danaher also has agreed that it will
maintain the directors' and officers' liability insurance policy in effect as
of the date of the Merger Agreement until the fourth anniversary of the
Effective Time. In the event that Danaher or the Surviving Corporation
consolidates or merges with another person or transfers its assets to another
person, it shall make proper provisions to assure that these obligations are
assumed.
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NOTIFICATION OF CERTAIN MATTERS. Danaher and Kollmorgen have agreed to
promptly notify each other of (a) the occurrence or non-occurrence of any fact
or event which would be reasonably likely (1) to cause any representation or
warranty contained in the Merger Agreement to be untrue or inaccurate in any
material respect at any time prior to the Effective Time or (2) to cause any
covenant, condition or agreement under the Merger Agreement not to be complied
with or satisfied and (b) any failure of Kollmorgen, Danaher or the Purchaser,
as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under the Merger Agreement.
Each of Kollmorgen, Danaher and the Purchaser is also required to give prompt
notice to the other parties of any notice or communication from any third
party alleging that the consent of that third party is or may be required in
connection with the transactions contemplated by the Merger Agreement.
RIGHTS AGREEMENT. Kollmorgen has agreed in the Merger Agreement that it
will not (a) redeem the preferred share purchase rights, (b) amend the Rights
Agreement or (c) take any action which would allow any Person (as defined in
the Rights Agreement) other than Danaher or the Purchaser to acquire
beneficial ownership of 20% or more of the Shares without causing a
Distribution Date or a Triggering Event (as each such term is defined in the
Rights Agreement) to occur.
STATE TAKEOVER LAWS. The Merger Agreement provides that each party will,
upon the request of the other party, take all reasonable steps to assist in
any challenge by that other party to the validity or applicability to the
transactions contemplated by the Merger Agreement, including the Offer and the
Merger, of any state takeover law.
NO SOLICITATION. The Merger Agreement requires Kollmorgen to, and to direct
its affiliates and their respective officers, directors (in their capacity as
such), employees, representatives and agents to, immediately cease any
existing discussions or negotiations with any parties with respect to any
Acquisition Transaction (as defined below). The Merger Agreement further
provides that, prior to the Effective Time, Kollmorgen will not authorize or
permit any of its subsidiaries or any of its or its subsidiaries' directors
(in their capacity as such), officers, employees, agents or representatives,
directly or indirectly, to solicit, initiate, encourage or facilitate, or
furnish or disclose non-public information in furtherance of, any inquiries or
the making of any proposal with respect to any merger, liquidation,
recapitalization, consolidation or other business combination involving
Kollmorgen or its subsidiaries or acquisition of more than 5% of capital stock
or any material portion of the assets of Kollmorgen or of its subsidiaries, or
any combination of the foregoing (an "Acquisition Transaction"), or negotiate
or engage in substantive discussions with any person with respect to any
Acquisition Transaction, or enter into or resolve to enter into any agreement,
arrangement or understanding with respect to any Acquisition Transaction or
requiring it to abandon, terminate or fail to consummate the Merger or any
other transaction contemplated by the Merger Agreement; provided, however,
that Kollmorgen may, prior to the purchase of shares of common stock pursuant
to the Offer, furnish information to, and negotiate or otherwise engage in
substantive discussions with, any person who has delivered a bona fide written
proposal for an Acquisition Transaction if the Kollmorgen Board determines in
good faith following consultation with outside counsel and financial advisors,
that such a transaction is reasonably likely to result in a transaction that
is superior in comparison to the Offer and the Merger and the terms of the
Merger Agreement to Kollmorgen's shareholders from a financial point of view
and to Kollmorgen, taking into account the terms and conditions thereof, the
likelihood of consummation and the time required to complete such transaction
(a "Superior Proposal"), under applicable law, provided that prior to
furnishing non-public information to any such party, (a) Kollmorgen shall have
entered into a confidentiality agreement containing confidentiality terms at
least as favorable to Kollmorgen as those of the letter agreement dated
September 13, 1999 between Danaher and Kollmorgen and (b) shall provide
Danaher or the Purchaser copies of all proposed written arrangements or
understandings, including the forms of any agreements supplied by third
parties, and all applicable financial statements and evidence of any planned
financing with respect to such Superior Proposal (and a description of all
material oral agreements with respect to such Superior Proposal).
The Merger Agreement further provides that, from and after the execution of
the Merger Agreement, Kollmorgen will promptly advise Danaher of any
discussions, negotiations or proposals relating to an Acquisition
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Transaction, identify the offeror and furnish to Danaher a copy of any such
proposal if it is in writing or a written summary of any such proposal
relating to an Acquisition Transaction if it is not in writing, and that
Kollmorgen will promptly advise Danaher of any significant development
relating to any such proposal, including results of any discussions or
negotiations with respect to that proposal.
CONVERTIBLE DEBENTURES. The Merger Agreement provides that Danaher will
enter, as of the Effective Time, into such supplemental indentures as may be
required under the terms of the indenture for the 8.75% Convertible Debentures
due 2009.
CONDITIONS TO CONSUMMATION OF THE MERGER. Pursuant to the Merger Agreement,
the respective obligations of Danaher, the Purchaser and Kollmorgen to
consummate the Merger are subject to the satisfaction or waiver, at or before
the Effective Time, of each of the following conditions: (a) Kollmorgen
shareholders will have duly adopted the Merger Agreement if required by
applicable law; (b) the Purchaser will have accepted for payment and paid for
Shares in an amount sufficient to meet the Minimum Condition and otherwise
pursuant to the Offer in accordance with the terms of the Merger Agreement
provided, however, that this condition shall be deemed to be satisfied with
respect to the obligation of Danaher and the Purchaser to effect the Merger if
Purchaser's failure to accept for payment or pay for Shares constitutes a
violation of the terms of this Offer or of the Merger Agreement; (c)
consummation of the Merger will not have been restrained, enjoined or
prohibited by any order, judgment, decree, injunction or ruling of a court of
competent jurisdiction or any governmental authority and there will not be any
statute, rule or regulation enacted, promulgated or deemed applicable to the
Merger by any governmental authority which prevents the consummation of the
Merger or has the effect of making the acquisition of Shares in the Merger
illegal; and (d) any applicable waiting period will have expired under the HSR
Act or under any material applicable foreign laws.
TERMINATION. The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, notwithstanding approval
thereof by the Kollmorgen shareholders (with any termination by Danaher also
being an effective termination by the Purchaser):
(a) by the mutual written consent of Danaher and Kollmorgen, by action
of their respective Boards of Directors;
(b) by Danaher or Kollmorgen if (1) Purchaser fails to commence the
Offer on or prior to May 15, 2000, or (2) Purchaser will not have accepted
for payment and paid for the Shares pursuant to the Offer in accordance
with the terms of the Offer on or before September 30, 2000, provided,
however, that neither Danaher nor Kollmorgen may terminate the Merger
Agreement pursuant to this paragraph if such failure to accept for payment
and pay for the Shares is due to a material breach of the Merger Agreement
by that terminating party;
(c) by Danaher or Kollmorgen if the Offer expires pursuant to its terms
and the terms of the Merger Agreement without any Shares being purchased
under the Offer other than due to a breach by the terminating party of the
Merger Agreement;
(d) by Danaher or Kollmorgen if any court of competent jurisdiction or
other governmental authority will have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the Merger or the acceptance for payment of, or payment for,
Shares pursuant to the Offer and that order, decree or ruling or other
action will have become final and nonappealable, provided that the party
seeking to terminate the Merger Agreement will have used its reasonable
best efforts to remove or lift such order, decree or ruling;
(e) by Kollmorgen if, prior to the acceptance for payment of Shares
pursuant to the Offer, the Kollmorgen Board will have determined to
recommend a Superior Proposal to its shareholders and to enter into a
binding written agreement concerning that Superior Proposal after making
the determination described under "No Solicitation" above; provided, that
the termination described in this paragraph shall not be permissible unless
and until (1) Kollmorgen shall have provided the Purchaser and Danaher
prior written notice at least five business days prior to such termination
that the Kollmorgen Board has authorized
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and intends to effect the termination of the Merger Agreement pursuant to
this paragraph, including copies of all proposed written agreements,
arrangements, or understandings, including the forms of any agreements
supplied by third parties and all applicable financial statements and
evidence of any planned financing, with respect to such Superior Proposal
(and a description of all material oral agreements with respect thereto),
(2) the Kollmorgen Board shall have determined, in good faith and after
consultation with its legal and financial advisors, that the foregoing
Acquisition Transaction constituted, at the time of such determination to
terminate the Merger Agreement, and still constitutes a Superior Proposal
and (3) prior to such termination Kollmorgen shall have paid to Danaher the
Termination Fee (as defined below) and the Expense Fee (as defined below);
(f) by Danaher, prior to the purchase of the Shares, if the Kollmorgen
Board (1) will have withdrawn or modified (including by amendment of the
Schedule 14D-9) in a manner adverse to the Purchaser its approval or
recommendation of the Offer, the Merger Agreement or the Merger, (2) will
have approved or recommended any Acquisition Transaction, (3) Kollmorgen
will have breached Section 6.8(a) of the Merger Agreement, or (4) will have
resolved to effect any of the foregoing; and
(g) by Danaher, prior to the purchase of the Shares, if the Minimum
Condition will not have been satisfied by the close of business on the
business day immediately preceding September 30, 2000, and an Acquisition
Transaction will have been publicly announced or disclosed.
In the event of the termination of the Merger Agreement in accordance with
its terms, the Merger Agreement will become void and have no effect, without
any liability on the part of any party or its directors, officers or
shareholders, other than certain specified provisions, which shall survive any
such termination; provided, that no party would be relieved from liability for
any willful breach of the Merger Agreement.
FEES AND EXPENSES. Except as provided below, whether or not the Merger is
consummated, all costs and expenses incurred in connection with the Offer, the
Merger Agreement and the transactions contemplated by the Merger Agreement
will be paid by the party incurring those expenses. In the event that the
Merger Agreement is terminated pursuant to paragraph (e) or (f) under
"Termination" above (other than termination pursuant to paragraph (f)(1) under
"Termination" if no Acquisition Proposal shall have been publicly announced)
then Kollmorgen will, within one business day after that termination, pay
Danaher a termination fee of $10,000,000 (the "Termination Fee") plus
Danaher's aggregate expenses not to exceed $1,000,000 (the "Expense Fee"). In
the event that the Merger Agreement is terminated pursuant to such paragraph
(f)(1) (if no Acquisition Proposal shall have been publicly announced) or
paragraph (g) under "Termination" and within such 12 months of the date of
that termination of the Merger Agreement an Acquisition Transaction is
consummated, then Kollmorgen will, prior to or simultaneously with the
consummation of that transaction, pay Danaher the Termination Fee and the
Expense Fee.
AMENDMENT. The Merger Agreement may be amended by Kollmorgen, Danaher and
the Purchaser at any time before or after any approval of the Merger Agreement
by Kollmorgen shareholders but, after any such approval, no amendment will be
made which decreases the price to be paid in the Merger or which adversely
affects the rights of Kollmorgen shareholders thereunder without the approval
of Kollmorgen shareholders.
EXTENSION; WAIVER. Subject to the Merger Agreement, at any time prior to
the Effective Time, the parties to the Merger Agreement may (a) extend the
time for the performance of any of the obligations or other acts of the other,
(b) waive any inaccuracies in the representations and warranties contained
therein of any other party thereto or in any document, certificate or writing
delivered pursuant to the Merger Agreement by any other party to the Merger
Agreement, or (c) waive compliance by any other party with any of the
agreements or conditions in the Merger Agreement.
EFFECTS OF INABILITY TO CONSUMMATE THE MERGER. Pursuant to the Merger
Agreement, following the consummation of the Offer and subject to certain
other conditions, the Purchaser will be merged with Kollmorgen. If, following
the Offer, approval of Kollmorgen shareholders is required by applicable law
in order
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to consummate the Merger of the Purchaser with Kollmorgen, Kollmorgen will
submit the Merger to Kollmorgen shareholders for approval. If the Merger is
submitted to Kollmorgen shareholders for approval, the Merger will require the
approval of the holders of not less than a two-thirds majority of the
outstanding Shares, including the Shares owned by the Purchaser. Provided that
the Minimum Condition is satisfied without being reduced or waived, Danaher
will own sufficient Shares to ensure that the required vote of Kollmorgen
shareholders will be obtained and that the Merger will be consummated.
If the Merger is consummated, Kollmorgen shareholders who elected not to
tender their the Shares in the Offer will receive the same amount of
consideration in exchange for each Share as they would have received in the
Offer.
If, following the consummation of the Offer, the Merger is not consummated,
Danaher, which owns 100% of the Purchaser's common stock, indirectly will
control the number of Shares acquired by the Purchaser pursuant to the Offer.
Under the Merger Agreement, promptly following payment by the Purchaser for
Shares purchased pursuant to the Offer, and from time to time thereafter,
subject to applicable law, Kollmorgen has agreed to take all actions necessary
to cause a majority of the directors of Kollmorgen to consist of persons
designated by Danaher (whether, at the election of Kollmorgen, by means of
increasing the size of the Kollmorgen Board or seeking the resignation of
directors and causing Danaher designees to be elected). As a result of its
ownership of such Shares and right to designate nominees for election to the
Kollmorgen Board, Danaher, indirectly, will be able to influence decisions of
the Kollmorgen Board and the decisions of the Purchaser as a shareholder of
Kollmorgen. This concentration of influence in one shareholder may adversely
affect the market value of the Shares.
If Danaher controls more than 50% of the outstanding Shares following the
consummation of the Offer but the Merger is not consummated, Kollmorgen
shareholders, other than those affiliated with Danaher, will lack sufficient
voting power to elect directors or to cause other actions to be taken which
require majority approval. If, for any reason following completion of the
Offer, the Merger is not consummated, Danaher and the Purchaser reserve the
right to acquire additional Shares through private purchases, market
transactions, tender or exchange offers or otherwise on terms and at prices
that may be more or less favorable than those of the Offer, or, subject to any
applicable legal restrictions, to dispose of any or all Shares acquired by
them.
(c) Consulting Agreements. At the time we entered into the Merger
Agreement, we also entered into a consulting agreement with Gideon Argov,
which consulting agreement would become effective on the date we consummate
the Merger. We also intend to enter into additional consulting agreements with
certain executives of Kollmorgen following consummation of the Merger. We have
informed Kollmorgen of such intention prior to the execution of the Merger
Agreement.
Mr. Argov's consulting agreement provides that he will serve as a
consultant for a period of six years beginning with the consummation of the
Merger. Mr. Argov's primary responsibilities are likely to be assisting in the
transition of Kollmorgen to Danaher management and assisting with intellectual
property claims and a pending acquisition. The consulting agreement also
provides for a non-competition period during the consulting period and for two
years thereafter. Mr. Argov's consulting agreement is not terminable by us for
any reason other than the death or permanent disability of Mr. Argov, or a
continued material breach by Mr. Argov of the provisions of the consulting
agreement, which breach is (if curable) not cured by Mr. Argov within 10 days
after we have delivered to him a written notice setting forth the nature of
that breach in reasonable detail. Pursuant to the consulting agreement, Mr.
Argov will be paid a consulting fee of $1,000,000 at the Effective Time and
$78,991.34 per month thereafter for the duration of the consulting period. Mr.
Argov will also be paid 2% of the value of each settlement or judgment reached
by or awarded to the Surviving Corporation or any of its affiliates at any
time prior to the sixth anniversary of the Effective Time in respect of
certain legal actions initiated by Kollmorgen, as well as a finder's fee of 2%
of the aggregate value of the consideration paid by Kollmorgen in connection
with the consummation of a pending acquisition.
(d) Statutory Requirements. In general, under the BCL a merger of two New
York corporations requires the adoption of a resolution by the board of
directors of each of the corporations desiring to merge approving an
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agreement of merger containing provisions with respect to certain statutorily
specified matters and the approval of such agreement of merger by the
shareholders of each corporation by the affirmative vote of the holders of (1)
for corporations incorporated after February 22, 1998, a majority of all the
outstanding shares of stock entitled to vote on such merger or (2) for
corporations in existence on or prior to February 22, 1998, two-thirds of all
the outstanding shares of stock entitled to vote on such merger, unless
otherwise provided for in that corporation's certificate of incorporation.
Accordingly, a vote of two-thirds of Kollmorgen's shareholders is required in
order to adopt the Merger. The Shares entitle the holders thereof to voting
rights.
The BCL also provides that, if a parent company owns at least 90% of each
class of stock of a subsidiary, the parent company can effect a short-form
merger with that subsidiary without the action of the other shareholders of
the subsidiary as long as a copy of that plan of merger or an outline of that
plan of merger is furnished to the remaining shareholders. Accordingly, if, as
a result of the Offer or otherwise, the Purchaser acquires or controls the
voting power of at least 90% of the Shares, the Purchaser could, and intends
to, effect the Merger without any action by any other Kollmorgen shareholder.
(e) Appraisal Rights. No appraisal rights are available in connection with
the Offer. However, if the Merger is consummated, Kollmorgen shareholders will
have certain rights under Section 910 of the BCL to dissent and demand
appraisal of, and payment in cash of the fair value of, Dissenting Shares.
Such rights, if the statutory procedures were complied with, could lead to a
judicial determination of the fair value (excluding any element of value
arising from the accomplishment or expectation of the Merger) required to be
paid in cash to such dissenting holders for their Dissenting Shares. Any such
judicial determination of the fair value of Dissenting Shares could be based
upon considerations other than, or in addition to, the price paid in the Offer
and the market value of the Dissenting Shares, including asset values and the
investment value of the Dissenting Shares. The value so determined could be
more or less than the purchase price per Share pursuant to the Offer or the
consideration per Share to be paid in the Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING SHAREHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
KOLLMORGEN SHAREHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS.
THE PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT
ADHERENCE TO THE APPLICABLE PROVISIONS OF THE BCL.
(f) Plans for Kollmorgen. In connection with the Offer, Danaher and the
Purchaser have reviewed and will continue to review various possible business
strategies that they might consider in the event that the Purchaser acquires
control of Kollmorgen, whether pursuant to this Offer, the Merger or
otherwise. Such changes could include, among other things, changes in
Kollmorgen's business corporate structure, capitalization and management.
(g) "Going Private" Transactions. The SEC has adopted Rule 13e-3 under the
Securities Exchange Act which is applicable to certain "going private"
transactions and which may, under certain circumstances, be applicable to the
Merger. However, Rule 13e-3 would be inapplicable if (a) the Shares are
deregistered under the Securities Exchange Act prior to the Merger or other
business combination or (b) the Merger or other business combination is
consummated within one year after the purchase of the Shares pursuant to the
Offer and the amount paid per Share in the Merger or other business
combination is at least equal to the amount paid per Share in the Offer. If
applicable, Rule 13e-3 requires, among other things, that certain financial
information concerning the fairness of the proposed transaction and the
consideration offered to minority shareholders in such transaction be filed
with the SEC and disclosed to shareholders prior to the consummation of the
transaction.
12. SOURCE AND AMOUNT OF FUNDS.
The Purchaser estimates that the total amount of funds required to purchase
all outstanding Shares, other securities and rights pursuant to the Offer and
to pay related fees and expenses will be approximately $250 million, plus debt
to be assumed. Danaher will ensure that the Purchaser has sufficient funds to
acquire all of the outstanding Shares pursuant to the Offer and the Merger.
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Danaher has possession of, or has available to it, sufficient funds to
close the Offer and the Merger, and will cause the Purchaser to have
sufficient funds available to close the Offer and the Merger. Danaher intends
to obtain the necessary funds through borrowings under Danaher's existing bank
facilities with various commercial banks. Such financings would be on
customary terms for borrowers of such type. In the event that such financings
were unavailable Danaher will arrange alternate financing.
13. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that, without the prior written consent of
Danaher, Kollmorgen will not, and will not permit any of its subsidiaries to,
prior to the Effective Time, (a) issue, reissue or sell, or authorize the
issuance, reissuance or sale of (1) additional shares of capital stock of any
class, or securities convertible into capital stock of any class, or any
rights, warrants or options to acquire any convertible securities or capital
stock, other than the issuance of Shares (and the related preferred share
purchase rights), in accordance with the terms of the instruments governing
such issuance on May 4, 2000, pursuant to the exercise of options or the 8.75%
Convertible Debentures due 2009 outstanding on that date or (2) any other
securities in respect of, in lieu of, or in substitution for, Shares
outstanding as of May 4, 2000, or (b) make any other changes in its capital
structure, or declare, set aside or pay any dividend or other distribution
(whether in cash, securities or property or any combination thereof) in
respect of any class or series of its capital stock except for regular
quarterly dividends on the Shares declared and paid at times and in an amount
consistent with past practice, other than between Kollmorgen and any of its
wholly owned subsidiaries.
14. CONDITIONS OF THE OFFER.
Conditions to the Offer. Notwithstanding any other provisions of the Offer,
the Purchaser will not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Securities Exchange Act, pay for any tendered Shares,
and may terminate or, subject to the terms of the Merger Agreement, amend the
Offer, if (A) there will not be validly tendered and not properly withdrawn
prior to the Expiration Date for the Offer that number of Shares which, when
added to any Shares already owned by Danaher or any of its subsidiaries,
represents at least two-thirds of the total number of outstanding Shares on a
fully diluted basis on the date of purchase (not taking into account the
related preferred share purchase rights) (the "Minimum Condition"), (B) any
applicable waiting period or approval under the HSR Act or under any
applicable foreign statutes or regulations will not have expired or been
terminated or obtained prior to the Expiration Date, (C) all consents from
third parties will have been obtained except for those the failure of which to
be obtained would not reasonably be expected to have a material adverse effect
on Kollmorgen, or (D) at any time on or after May 4, 2000 and prior to the
time of acceptance for payment for any Shares, any of the following events
(each, an "Event") will occur:
(a) there will be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction enacted, enforced,
promulgated, amended, issued or deemed applicable to the Offer, by any
legislative body, court, government or governmental, administrative or
regulatory authority or agency, domestic or foreign, other than the
application of the waiting period provisions of the HSR Act to the Offer or to
the Merger, that would reasonably be expected to, directly or indirectly: (1)
make illegal or otherwise prohibit consummation of the Offer or the Merger,
(2) prohibit or materially limit the ownership or operation by Danaher or the
Purchaser of all or any material portion of the business or assets of
Kollmorgen or any of its subsidiaries taken as a whole or compel Danaher or
the Purchaser to dispose of or hold separately all or any material portion of
the business or assets of Danaher or the Purchaser or Kollmorgen or any of its
subsidiaries taken as a whole, or seek to impose any material limitation on
the ability of Danaher or the Purchaser to conduct its business or own such
assets, in any such case under this clause (2), which would reasonably be
expected to have a material adverse effect on Danaher or on Kollmorgen, as the
case may be, (3) impose material limitations on the ability of Danaher or the
Purchaser effectively to acquire, hold or exercise full rights of ownership of
the Shares, including, without limitation, the right to vote any Shares
acquired by the Purchaser or Danaher pursuant to the Offer on all matters
properly presented to the Kollmorgen shareholders, (4) require divestiture by
Danaher or the Purchaser of any Shares, or (5) result in a material adverse
effect on Kollmorgen; or
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(b) there will be instituted or pending any action or proceeding by any
governmental entity that would reasonably be expected to result in, any of the
consequences referred to in clauses (1) through (5) of paragraph (a) above or
by any third party for which there is a substantial likelihood of resulting in
any of the consequences referred to in clauses (1) through (5) of paragraph
(a) above; or
(c) since May 4, 2000, any change will have occurred and be continuing in
the business, financial condition or results of operations of Kollmorgen or
any of its subsidiaries that has, or could reasonably be expected to have, a
material adverse effect on Kollmorgen; or
(d) (1) the Kollmorgen Board or any committee of the Kollmorgen Board will
have withdrawn, or will have modified or amended in a manner adverse to
Danaher or the Purchaser, the approval, adoption or recommendation, as the
case may be, of the Offer or the Merger Agreement, or will have approved or
recommended any Acquisition Transaction, (2) a person will have entered into a
definitive agreement or an agreement in principle with Kollmorgen with respect
to an Acquisition Transaction, or (3) the Kollmorgen Board or any committee of
the Kollmorgen Board will have resolved to do or enter into any of the
foregoing; or
(e) Kollmorgen, the Purchaser and Danaher will have reached an agreement
that the Offer or the Merger Agreement be terminated, or the Merger Agreement
will have been terminated in accordance with its terms; or
(f) any of the representations and warranties of Kollmorgen set forth in
the Merger Agreement, when read without any exception or qualification as to
materiality or material adverse effect on Kollmorgen, will not be true and
correct, as if those representations and warranties were made at the time of
such determination (except as to any such representation or warranty which
speaks as of a specific date, which must be untrue or incorrect as of that
specific date), except where the failure to be so true and correct would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on Kollmorgen; or
(g) Kollmorgen will have failed to perform in any material respect or to
comply in any material respect with any of its material obligations, covenants
or agreements under the Merger Agreement; or
(h) there will have occurred, and continue to exist, (1) any general
suspension of, or limitation on prices for, trading in securities on the NYSE
or on the over-the-counter stock market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System, (2) any
decline of at least 25% in either the Dow Jones Average of Industrial Stocks
or the Standard & Poor's 500 Index from the close of business on the last
trading day immediately preceding the date of the Merger Agreement through the
applicable Expiration Date, or (3) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States.
The foregoing conditions (including those set forth in clauses (A), (B) and
(C) of the initial paragraph) are for the benefit of Danaher and the Purchaser
and may be asserted by Danaher or the Purchaser regardless of the
circumstances giving rise to any such conditions, and may be waived by Danaher
or the Purchaser in whole or in part at any time and from time to time, in
each case, in the exercise of the reasonable discretion of Danaher and the
Purchaser and subject to the terms of the Merger Agreement. The failure by
Danaher or the Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to
time.
A public announcement may be made of a material change in, or waiver of,
such conditions and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver.
15. LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
Except as set forth in this Offer to Purchase, based on our review of
publicly available filings by Kollmorgen with the SEC and other information
regarding Kollmorgen, we are not aware of any licenses or regulatory permits
that appear to be material to the business of Kollmorgen and its subsidiaries,
taken as a whole, and that
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might be adversely affected by our acquisition of Shares in the Offer. In
addition, we are not aware of any filings, approvals or other actions by or
with any governmental authority or administrative or regulatory agency that
would be required for our acquisition or ownership of the Shares. Should any
such approval or other action be required, we expect to seek such approval or
action, except as described under "State Takeover Laws." Should any such
approval or other action be required, we cannot be certain that we would be
able to obtain any such approval or action without substantial conditions or
that adverse consequences might not result to Kollmorgen's or its
subsidiaries' businesses, or that certain parts of Kollmorgen's, Danaher's,
the Purchaser's or any of their respective subsidiaries' businesses might not
have to be disposed of or held separate in order to obtain such approval or
action. In that event, we may not be required to purchase any Shares in the
Offer. See Introduction and Section 14 for a description of the conditions to
the Offer.
State Takeover Laws. A number of states (including New York, where
Kollmorgen is incorporated) have adopted takeover laws and regulations that
purport to be applicable to attempts to acquire securities of corporations
that are incorporated in those states or that have substantial assets,
shareholders, principal executive offices or principal places of business in
those states. To the extent that these state takeover statutes purport to
apply to the Offer or the Merger, we believe that those laws conflict with
U.S. federal law and are an unconstitutional burden on interstate commerce. In
1982, the Supreme Court of the United States, in Edgar v. Mite Corp.,
invalidated on constitutional grounds the Illinois Business Takeovers Statute,
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. The reasoning in that decision is
likely to apply to certain other state takeover statutes. In 1987, however, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States
held that the State of Indiana could, as a matter of corporate law and, in
particular, those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of
a target corporation without the prior approval of the remaining shareholders,
as long as those laws were applicable only under certain conditions.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal district
court in Oklahoma ruled that the Oklahoma statutes were unconstitutional
insofar as they apply to corporations incorporated outside Oklahoma because
they would subject those corporations to inconsistent regulations. Similarly,
in Tyson Foods, Inc. v. McReynolds, a federal district court in Tennessee
ruled that four Tennessee takeover statutes were unconstitutional as applied
to corporations incorporated outside Tennessee. This decision was affirmed by
the United States Court of Appeals for the Sixth Circuit. In December 1988, a
federal district court in Florida held, in Grand Metropolitan PLC v.
Butterworth, that the provisions of the Florida Affiliated Transactions Act
and the Florida Control Share Acquisition Act were unconstitutional as applied
to corporations incorporated outside of Florida.
We have not attempted to comply with any state takeover statutes in
connection with the Offer or the Merger. We reserve the right to challenge the
validity or applicability of any state law allegedly applicable to the Offer
or the Merger, and nothing in this Offer to Purchase nor any action that we
take in connection with the Offer is intended as a waiver of that right. In
the event that it is asserted that one or more takeover statutes apply to the
Offer or the Merger, and it is not determined by an appropriate court that the
statutes in question do not apply or are invalid as applied to the Offer or
the Merger, as applicable, we may be required to file certain documents with,
or receive approvals from, the relevant state authorities, and we might be
unable to accept for payment or purchase Shares tendered in the Offer or be
delayed in continuing or consummating the Offer. In that case, we may not be
obligated to accept for purchase, or pay for, any Shares tendered. See Section
14.
Antitrust. Under the HSR Act, and the related rules and regulations that
have been issued by the U.S. Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the FTC and the
Antitrust Division of the U.S. Department of Justice (the "Antitrust
Division") and certain waiting period requirements have been satisfied. These
requirements apply to our acquisition of Shares in the Offer and the Merger.
Under the HSR Act, the purchase of Shares in the Offer may not be completed
until the expiration of a 15-calendar-day waiting period following the filing
of certain required information and documentary material concerning the Offer
with the FTC and the Antitrust Division, unless the waiting period is earlier
terminated by
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the FTC and the Antitrust Division. We filed a Premerger Notification and
Report Form under the HSR Act with the FTC and the Antitrust Division in
connection with the purchase of Shares in the Offer and the Merger on May 11,
2000, and the required waiting period with respect to the Offer and the Merger
will expire at 11:59 p.m., New York City time, on May 26, 2000, unless earlier
terminated by the FTC or the Antitrust Division or we receive a request for
additional information or documentary material prior to that time. If, within
the 15-calendar-day waiting period, either the FTC or the Antitrust Division
requests additional information or documentary material from us, the waiting
period with respect to the Offer and the Merger would be extended for an
additional period of 10 calendar days following the date of our substantial
compliance with that request. Only one extension of the waiting period
pursuant to a request for additional information is authorized by the HSR
rules. After that time, the waiting period could be extended only by court
order or with our consent. The FTC or the Antitrust Division may terminate the
additional 10-calendar-day waiting period before its expiration. In practice,
complying with a request for additional information or documentary material
can take a significant period of time. Although Kollmorgen is required to file
certain information and documentary material with the FTC and the Antitrust
Division in connection with the Offer, neither Kollmorgen's failure to make
those filings nor a request made to Kollmorgen from the FTC or the Antitrust
Division for additional information or documentary material will extend the
waiting period with respect to the purchase of Shares in the Offer and the
Merger.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions, such as our acquisition of Shares in the
Offer and the Merger. At any time before or after our purchase of Shares, the
FTC or the Antitrust Division could take any action under the antitrust laws
that either considers necessary or desirable in the public interest, including
seeking to enjoin the purchase of Shares in the Offer and the Merger, the
divestiture of Shares purchased in the Offer or the divestiture of substantial
assets of Danaher, the Purchaser, Kollmorgen or any of their respective
subsidiaries or affiliates. Private parties as well as state attorneys general
may also bring legal actions under the antitrust laws under certain
circumstances. See Section 14.
Based upon an examination of publicly available information relating to the
businesses in which Kollmorgen is engaged, we believe that the acquisition of
Shares in the Offer and the Merger should not violate the applicable antitrust
laws. Nevertheless, we cannot be certain that a challenge to the Offer and the
Merger on antitrust grounds will not be made, or, if such challenge is made,
what the result will be. See Section 14.
Foreign Approvals. According to publicly available information, Kollmorgen
owns property and conducts business in a number of other foreign countries and
jurisdictions. In connection with the acquisition of the Shares in the Offer
or the Merger, a notification is required by German competition law which
Danaher will make shortly to the Federal Cartel Office. The purchase of Shares
in the Offer may not be completed until the expiration of at least a thirty
day waiting period following the German notification, unless that waiting
period is earlier terminated. The laws of other of those foreign countries and
jurisdictions where Kollmorgen owns property and conducts business may also
require the filing of information with, or the obtaining of the approval or
consent of, governmental authorities in such other countries and
jurisdictions. The governments in those countries and jurisdictions might
attempt to impose additional conditions on the Surviving Corporation's
operations conducted in those countries and jurisdictions as a result of the
acquisition of the Shares in the Offer or the Merger. If such approvals or
consents are found to be required the parties intend to make the appropriate
filings and applications. In the event such a filing or application is made
for the requisite foreign approvals or consents, we cannot be certain that
such approvals or consents will be granted, and, if such approvals or consents
are received, we cannot be certain as to the date of those approvals or
consents. In addition, we cannot be certain that we will be able to cause
Kollmorgen or its subsidiaries to satisfy or comply with those laws or that
compliance or noncompliance will not have adverse consequences for Kollmorgen
or any subsidiary after purchase of the Shares pursuant to the Offer or the
Merger.
Government Approvals. According to publicly available information,
Kollmorgen is engaged in the manufacturing and developing of certain products
that require the licensing and approvals of certain government entities. We
cannot be certain that Kollmorgen or its subsidiaries will receive all
required approvals or licenses or that the failure to do so will not have
adverse consequences for Kollmorgen or any subsidiary after purchase of the
Shares pursuant to the Offer or the Merger.
26
<PAGE>
16. FEES AND EXPENSES.
Lehman Brothers is acting as the Dealer Manager in connection with the
Offer and has provided certain financial advisory services to Danaher in
connection with the Offer and the Merger. We will pay the Dealer Manager
reasonable and customary compensation for such services, plus reasonable
reimbursement of out-of-pocket expenses. We have agreed to indemnify the
Dealer Manager against certain liabilities in connection with its services as
financial advisor to Danaher in connection with the acquisition of Kollmorgen,
including its services as Dealer Manager, and including certain liabilities
under the U.S. federal securities laws. At any time, the Dealer Manager may
trade the Shares for its own account or for the accounts of customers and,
accordingly, may hold a long or short position in the Shares.
We have retained D.F. King & Co., Inc. as Information Agent in connection
with the Offer. The Information Agent may contact holders of Shares by mail,
telephone, telex, telegraph and personal interview and may request brokers,
dealers and other nominee shareholders to forward material relating to the
Offer to beneficial owners of Shares. We will pay the Information Agent
reasonable and customary compensation for these services in addition to
reimbursing the Information Agent for its reasonable out-of-pocket expenses.
We have agreed to indemnify the Information Agent against certain liabilities
and expenses in connection with the Offer, including certain liabilities under
the U.S. federal securities laws.
In addition, we have retained SunTrust Bank as the Depositary. We will pay
the Depositary reasonable and customary compensation for its services in
connection with the Offer, will reimburse the Depositary for its reasonable
out-of-pocket expenses, and will indemnify the Depositary against certain
liabilities and expenses, including certain liabilities under the U.S. federal
securities laws.
Except as set forth above, we will not pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of Shares pursuant to
the Offer. We will reimburse brokers, dealers, commercial banks and trust
companies and other nominees, upon request, for customary clerical and mailing
expenses incurred by them in forwarding offering materials to their customers.
17. MISCELLANEOUS.
We are not aware of any jurisdiction where the making of the Offer is
prohibited by any administrative or judicial action pursuant to any valid
state statute. If we become aware of any valid state statute prohibiting the
making of the Offer or the acceptance of the Shares, we will make a good faith
effort to comply with that state statute. If, after a good faith effort, we
cannot comply with the state statute, we will not make the Offer to, nor will
we accept tenders from or on behalf of, the holders of Shares in that state.
We have filed with the SEC a Schedule TO, together with exhibits,
furnishing certain additional information with respect to the Offer, and may
file amendments to our Schedule TO. Our Schedule TO and any exhibits or
amendments may be examined and copies may be obtained from the SEC in the same
manner as described in Section 8 with respect to information concerning
Kollmorgen, except that copies will not be available at the regional offices
of the SEC.
WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON OUR BEHALF NOT CONTAINED IN THIS OFFER TO PURCHASE OR IN THE
LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, YOU SHOULD NOT RELY ON ANY SUCH
INFORMATION OR REPRESENTATION AS HAVING BEEN AUTHORIZED.
Neither the delivery of the Offer to Purchase nor any purchase pursuant to
the Offer will under any circumstances create any implication that there has
been no change in the affairs of Danaher, the Purchaser, Kollmorgen or any of
their respective subsidiaries since the date as of which information is
furnished or the date of this Offer to Purchase.
King DC Acquisition Corp.
May 12, 2000
27
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF DANAHER AND THE PURCHASER
DIRECTORS AND EXECUTIVE OFFICERS OF DANAHER. The following table sets forth
the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years of each
director and executive officer of Danaher. Unless otherwise indicated below,
each occupation set forth opposite each person refers to employment with
Danaher. Unless otherwise indicated, the business address of each such person
is c/o Danaher, at 1250 24th Street, N.W., Suite 800, Washington, D.C. 20037,
and each such person is a citizen of the United States of America.
1. DIRECTORS OF DANAHER
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND FIVE-YEAR
NAME EMPLOYMENT HISTORY
---- ----------------------------------
<C> <S>
Mortimer M. Caplin............... Senior Member of Caplin & Drysdale, a law
firm in Washington, D.C., for over five
years; Director of Fairchild Corporation
and Presidential Realty Corporation. Caplin
& Drysdale, One Thomas Circle NW, Suite
1100, Washington, DC 20005
Donald J. Ehrlich................ President, Chairman and Chief Executive
Officer of Wabash National Corp. for over
five years; Director of Indiana Secondary
Market for Educational Loans, Inc. and INB
National Bank, N.W. Wabash National Corp.,
1000 Sagamore Parkway South, Lafayette, IN
47905
Walter G. Lohr, Jr. ............. Partner of Hogan & Hartson, a law firm in
Baltimore, Maryland, for over five years.
Hogan & Hartson, 111 S. Calvert Street,
Suite 1600, Baltimore, MD 21202-6191
Mitchell P. Rales................ Principal in a number of private business
entities with interests in manufacturing
companies, media operations and publicly
traded securities. Director of Imo
Industries Inc.
Steven M. Rales.................. Chairman of the Board of Danaher for over
five years; principal in a number of
private business entities with interests in
manufacturing companies, media operations
and publicly traded securities. Director of
Imo Industries Inc.
George M. Sherman................ President and Chief Executive Officer of
Danaher for over five years; director of
Campbell Soup Company.
Alan G. Spoon.................... General partner of Polaris Venture
Partners. Polaris Venture Partners, 1000
Winter Street, Waltham, MA 02451.
A. Emmet Stephenson, Jr. ........ President of Stephenson and Co., a private
investment firm in Denver, Colorado for
more than five years; Chairman of StarTek,
Inc. for more than five years. Stephenson
and Company, 100 Garfield Street, Denver,
CO 80206.
</TABLE>
28
<PAGE>
2. EXECUTIVE OFFICERS OF DANAHER
<TABLE>
<CAPTION>
DATE
BECAME
EXECUTIVE
NAME PRESENT TITLE OFFICER
---- ------------- ---------
<C> <S> <C>
Patrick W. Allender.............. Executive Vice President, Chief 1987
Financial Officer and Secretary
William J. Butler................ Vice President and Group 1999
Executive
Dennis D. Claramunt.............. Vice President and Group 1994
Executive
Daniel L. Comas.................. Vice President--Corporate 1996
Development
H. Lawrence Culp, Jr. ........... Executive Vice President 1995
Mark C. DeLuzio.................. Vice President--Danaher 1996
Business Systems
James H. Ditkoff................. Vice President--Finance and Tax 1991
Thomas S. Gross.................. Vice President and Group 1999
Executive
Elmar P. Illek................... Vice President and Group 1999
Executive
Dennis A. Longo.................. Vice President--Human Resources 1997
Christopher C. McMahon........... Vice President and Controller 1999
Brian M. McNeill................. Executive Vice President 1999
George M. Sherman................ President and Chief Executive 1990
Officer
Steven E. Simms.................. Executive Vice President 1996
Uldis K. Sipols.................. Vice President--Procurement 1999
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years of each
director and executive officer of the Purchaser. Unless otherwise indicated
below, each occupation set forth opposite each person refers to employment
with Danaher. The business address of each such person is c/o Danaher, at 1250
24th Street, N.W., Suite 800, Washington, D.C. 20037, and each such person is
a citizen of the United States of America.
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND FIVE-YEAR
NAME EMPLOYMENT HISTORY
---- ----------------------------------
<C> <S>
Patrick W. Allender.............. Executive Vice President, Chief Financial
Officer and Secretary of
Vice President and Secretary Danaher since November 1999; previously
Senior Vice President, Chief Financial
Officer and Secretary of Danaher.
Daniel L. Comas.................. Vice President--Corporate Development since
1996; previously
Vice President Director--Corporate Development of Danaher
for over five years.
George M. Sherman................ President and Chief Executive Officer of
Danaher for over five
President years.
</TABLE>
29
<PAGE>
Facsimile copies of Letters of Transmittal, properly completed and duly
executed, will be accepted. The appropriate Letter of Transmittal, Share
Certificates and any other required documents should be sent or delivered by
each Kollmorgen shareholder or such Kollmorgen 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:
SUNTRUST BANK
<TABLE>
<S> <C> <C>
Facsimile for Eligible By Mail: By Overnight Courier:
Institutions: SunTrust Bank SunTrust Bank
404-865-5371 Post Office Box 4625 Stock Transfer Department
Atlanta, Georgia 30302 58 Edgewood Avenue
Confirm by Telephone: Room 225, Annex
1-800-568-3476 Atlanta, Georgia 30303
</TABLE>
You may direct questions and requests for assistance to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth below. You may obtain additional copies of this Offer to
Purchase, the Letter of Transmittal and other tender offer materials from the
Information Agent as set forth below, and they will be furnished promptly at
our expense. You may also contact your broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect (212) 269-5550
All Others Call Toll Free (888) 242-8157
The Dealer Manager for the Offer is:
LEHMAN BROTHERS
Three World Financial Center
200 Vesey Street
New York, New York 10285
Call Collect: (212) 526-6739 or (415) 274-5442
<PAGE>
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
KOLLMORGEN CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 12, 2000
BY
KING DC ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
DANAHER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED
The Depositary for the Offer is:
SUNTRUST BANK
Facsimile for By Overnight Courier: Confirm by Telephone:
Eligible SunTrust Bank 1-800-568-3476
Institutions: Stock Transfer
Department
404-865-5371 58 Edgewood Avenue
Room 225, Annex
Atlanta, Georgia
By Mail: 30303
SunTrust Bank
Post Office Box 4625
Atlanta, Georgia
30302
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER 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.
This Letter of Transmittal is to be completed by shareholders, either if
Share Certificates (as defined below) are to be forwarded herewith or, unless
an Agent's Message (as defined in the Offer to Purchase, as referred to below)
is utilized, if tenders of Shares are to be made by book-entry transfer into
the account of SunTrust Bank, as Depositary (the "Depositary"), at The
Depository Trust Company (the "Book-Entry Transfer Facility" or "DTC") pursuant
to the procedures set forth in Section 3 of the Offer to Purchase. This Letter
of Transmittal also covers any tenders of Shares in the Kollmorgen dividend
reinvestment plan ("Dividend Reinvestment Shares") to be made by book-entry
transfer. Shareholders who tender Shares by book-entry transfer are referred to
herein as "Book-Entry Shareholders."
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN IF BLANK,
EXACTLY AS NAME(S) APPEAR(S) SHARE CERTIFICATE(S) AND SHARES TENDERED
ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ----------------------------------------------------------------------------------------
TOTAL NUMBER OF
SHARES
SHARES REPRESENTED NUMBER
CERTIFICATE BY OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
-----------------------------------------------------
<S> <C> <C> <C> <C>
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
DIVIDEND REIN-
VESTMENT
SHARES***
-------------------------------------------------
TOTAL SHARES
- ----------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-Entry Shareholders.
** Unless otherwise indicated, all Shares represented by Share
Certificates delivered to the Depositary will be deemed to have been
tendered. See Instruction 4.
***Enter the number of Dividend Reinvestment Shares from the last
statement received (if applicable).
<PAGE>
Holders of outstanding shares of common stock, par value $2.50 per share,
including associated preferred share purchase rights and any Dividend
Reinvestment Shares ("Shares"), whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary on or prior to
the Expiration Date (as defined in the Offer to Purchase), or who cannot
complete the procedure for book-entry transfer on a timely basis, must tender
their Shares according to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents
to the Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
[_]CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution: __________________________________________
Account Number: _________________________________________________________
Transaction Code Number: ________________________________________________
[_]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 Owner(s): _________________________________________
Window Ticket Number (if any): __________________________________________
Date of Execution of Notice of Guaranteed Delivery: _____________________
Name of Institution that Guaranteed Delivery: ___________________________
Account Number: _________________________________________________________
Transaction Code Number: ________________________________________________
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to King DC Acquisition Corp., a New York
corporation (the "Purchaser"), and a wholly-owned subsidiary of Danaher
Corporation, a Delaware corporation ("Danaher"), the above-described shares of
common stock, par value $2.50 per share and Dividend Reinvestment Shares (the
"Shares"), of Kollmorgen Corporation, a New York corporation ("Kollmorgen"),
at a purchase price of $23.00 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated May 12, 2000 (the "Offer to Purchase"), and in
this Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"). The undersigned understands that the 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.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Purchaser
all right, title and interest in and to all of the Shares that are being
tendered hereby and any and all dividends, distributions, rights, other Shares
or other securities issued, paid or distributed or issuable, payable or
distributable in respect of such Shares on or after May 12, 2000 and prior to
the transfer to the name of the Purchaser (or a nominee or transferee of the
Purchaser) on Kollmorgen's stock transfer records of the Shares tendered
herewith (collectively, a "Distribution"), and appoints the Depositary the
true and lawful agent, attorney-in-fact and proxy of the undersigned with
respect to such Shares (and any Distribution), with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with
an interest) to (a) deliver such Share Certificates (and any Distribution) or
transfer ownership of such Shares (and any Distribution) on the account books
maintained by the Book-Entry Transfer Facility, together, in either case, with
appropriate evidences of transfer, to the Depositary for the account of the
Purchaser, (b) present such Shares (and any Distribution) for transfer on the
books of Kollmorgen and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares (and any Distribution), all in
accordance with the terms and subject to the conditions of the Offer.
The undersigned irrevocably appoints designees of the Purchaser as such
undersigned's agents, attorneys-in-fact and proxies, with full power of
substitution, to the full extent of such shareholder's rights with respect to
the Shares (and any Distribution) tendered by such shareholder and accepted
for payment by the Purchaser. All such powers of attorney and proxies shall be
considered irrevocable and coupled with an interest. Such appointment will be
effective when, and only to the extent that, the Purchaser accepts such Shares
for payment. Upon such acceptance for payment, all prior attorneys, proxies
and consents given by such shareholder with respect to such Shares (and any
Distribution) will be revoked without further action, and no subsequent powers
of attorney and proxies may be given nor any subsequent written consents
executed (and, if given or executed, will not be deemed effective). The
designees of the Purchaser will, with respect to the Shares (and
Distributions) for which such appointment is effective, be empowered to
exercise all voting and other rights of such shareholder as they in their sole
discretion may deem proper at any annual or special meeting of Kollmorgen
shareholders or any adjournment or postponement thereof, by written consent in
lieu of any such meeting or otherwise. The Purchaser reserves the right to
require that, in order for the Shares to be deemed validly tendered,
immediately upon the Purchaser's payment for such Shares, the Purchaser must
be able to exercise full voting rights with respect to such Shares and all
Distributions, including, without limitation, voting at any meeting of
shareholders.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the
undersigned's Shares (and any Distribution) tendered hereby, and (b) when the
Shares are accepted for payment by the Purchaser, the Purchaser will acquire
good, marketable and unencumbered title to the Shares (and any Distribution),
free and clear of all liens, restrictions, charges and encumbrances, and the
same will not be subject to any adverse claim and will not have been
transferred to the Purchaser in violation of any contractual or other
restriction on the transfer thereof. The undersigned, upon request, will
execute and deliver any additional documents deemed by the Depositary or the
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the Shares tendered hereby (and any Distribution). In addition,
the undersigned shall promptly remit and transfer to the Depositary for the
account of the Purchaser any and all Distributions in respect of the Shares
tendered hereby, accompanied by appropriate documentation of transfer, and,
pending such remittance or appropriate assurance thereof, the Purchaser will,
subject to applicable law, be entitled to all rights and privileges as owner
of any such Distribution and may withhold the entire purchase price or deduct
from the purchase price the amount or value thereof, as determined by the
Purchaser, in its sole discretion.
3
<PAGE>
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned and
any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date, and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after July
10, 2000. See Section 4 of the Offer to Purchase.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions set
forth in the Offer, including the undersigned's representation that the
undersigned owns the Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or issue or return any
certificate(s) for Shares not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated herein under "Special
Delivery Instructions," please mail the check for the purchase price and/or
any Share Certificate(s) not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered." In the event that
both the "Special Delivery Instructions" and the "Special Payment
Instructions" are completed, please issue the check for the purchase price
and/or any Share Certificate(s) not tendered or accepted for payment in the
name of, and deliver such check and/or such Share Certificates to, the person
or persons so indicated. Unless otherwise indicated herein under "Special
Payment Instructions," please credit any Shares tendered herewith by book-
entry transfer that are not accepted for payment by crediting the account at
the Book-Entry Transfer Facility designated above. The undersigned recognizes
that the Purchaser has no obligation, pursuant to the Special Payment
Instructions, to transfer any Shares from the name(s) of the registered
holder(s) thereof if the Purchaser does not accept for payment any of the
Shares so tendered.
[_]CHECK HERE IF ANY SHARE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST, STOLEN OR DESTROYED AND SEE INSTRUCTION 11
Number of Shares represented by lost, stolen or destroyed Share
Certificates:
_________________________________________________________
_________________________________________________________
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share
To be completed ONLY if Share Certificate(s) not tendered or not
Certificate(s) not tendered or not accepted for payment and/or the
accepted for payment and/or the check for the purchase price of
check for the purchase price of Shares accepted for payment are to
Shares accepted for payment are to be sent to someone other than the
be issued in the name of someone undersigned or to the undersigned
other than the undersigned or if at an address other than that shown
Shares tendered by book-entry above.
transfer which are not accepted for
payment are to be returned by
credit to an account maintained at
the Book-Entry Transfer Facility
other than that designated above.
Mail: [_] check
[_] certificate(s) to:
Name: ______________________________
(PLEASE PRINT)
Issue [_] check
[_] certificate(s) to: Address: ___________________________
Name: ______________________________ ------------------------------------
(PLEASE PRINT) (INCLUDE ZIP CODE)
Address: ___________________________ ------------------------------------
(TAX I.D. OR SOCIAL SECURITY NO.)
------------------------------------ (SEE SUBSTITUTE FORM W-9)
(INCLUDE ZIP CODE)
____________________________________
(TAX I.D. OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9)
[_]Credit Shares tendered by book-
entry transfer that are not
accepted for payment to DTC to
the account set forth below
------------------------------------
(DTC ACCOUNT NO.)
5
<PAGE>
SIGN HERE
(AND COMPLETE SUBSTITUTE FORM W-9)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF SHAREHOLDER(S))
Date: ______________________, 2000
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by Share Certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others 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 Number _________________________________________________
Tax Identification or Social Security No. ______________________________________
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
(PLEASE PRINT)
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ________________________________________________
Date: ______________________, 2000
SIGN HERE
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered
herewith, unless such holder(s) has completed either the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions," or
(b) if such Shares are tendered for the account of a firm which is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of a recognized Medallion Program approved by the
Securities Transfer Association Inc., including the Securities Transfer Agents
Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the
New York Stock Exchange Medallion Signature Program (MSP) or any other
"eligible guarantor institution" (as defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended) (each of the foregoing, an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5
of this Letter of Transmittal.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
shareholders either if Share Certificates are to be forwarded herewith or,
unless an Agent's Message is utilized, if tenders are to be made pursuant to
the procedure for tender by book-entry transfer set forth in Section 3 of the
Offer to Purchase. Share Certificates evidencing tendered Shares, or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of Shares
into the Depositary's account at the Book-Entry Transfer Facility, as well as
this Letter of Transmittal (or a facsimile hereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message
in connection with a book-entry transfer, and any other documents required by
this Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth herein on or prior to the Expiration Date. Shareholders
whose Share Certificates are not immediately available or who cannot deliver
their Share Certificates and all other required documents to the Depositary on
or 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 by
properly completing and duly executing a Notice of Guaranteed Delivery
pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by
or through an Eligible Institution; (b) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form made available by the
Purchaser, must be received by the Depositary on or prior to the Expiration
Date; and (c) the Share Certificates (or a Book-Entry Confirmation)
representing all tendered Shares in proper form for transfer, in each case,
together with this 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 delivery, an Agent's Message) and any other documents
required by this Letter of Transmittal, must be received by the Depositary
within three New York Stock Exchange trading days after the date of execution
of such Notice of Guaranteed Delivery. If Share Certificates are forwarded
separately in multiple deliveries to the Depositary, a properly completed and
duly executed Letter of Transmittal (or a facsimile thereof) must accompany
each such delivery.
The method of delivery of this Letter of Transmittal, Share Certificates
and all other required documents, including delivery through the 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
(including, in the case of book-entry transfer, by Book-Entry Confirmation).
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. All tendering shareholders, by execution
of this Letter of Transmittal (or a facsimile hereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the Share
Certificate numbers and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. Partial Tenders. (Not Applicable to Book-Entry Shareholders) If fewer
than all the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered" in the "Description of Shares Tendered."
In such cases, new Share Certificates for the Shares that were
7
<PAGE>
evidenced by your old Share Certificates, but were not tendered by you, will
be sent to you, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date. All
Shares represented by Share 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 Certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal. If any of
the tendered Shares are registered in different names on several Share
Certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of Share
Certificates.
If this Letter of Transmittal or any Share Certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Share Certificates or
separate stock powers are required unless payment is to be made to or Share
Certificates for Shares not tendered or not purchased are to be issued in the
name of a person other than the registered holder(s). In such latter case,
signatures on such Share Certificates or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Share Certificate(s) listed, the Share
Certificate(s) must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear
on the Share Certificate(s). Signatures on such certificates or stock powers
must be guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, the Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or if Share
Certificate(s) for Shares not tendered or accepted for payment are to be
registered in the name of, any person other than the registered holder(s), or
if tendered Share Certificate(s) are registered in the name of any person
other than the person(s) signing this Letter of Transmittal, the amount of any
stock transfer taxes (whether imposed on the registered holder(s) or such
person) payable on account of the transfer to such person will be deducted
from the purchase price unless satisfactory evidence of the payment of such
taxes, or an exemption therefrom, is submitted.
EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE
NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATE(S)
LISTED IN THIS LETTER OF TRANSMITTAL.
7. Special Payment and Delivery Instructions. If a check is to be issued in
the name of, and/or Share Certificates for Shares not tendered or not accepted
for payment are to be issued or returned to, a person other than the signer of
this Letter of Transmittal or if a check and/or such Share Certificates are to
be returned to a person other than the person(s) signing this Letter of
Transmittal or to an address other than that shown in this Letter of
Transmittal, the appropriate boxes on this Letter of Transmittal must be
completed. A Book-Entry Shareholder may request that Shares not accepted for
payment be credited to such account maintained at the Book-Entry Transfer
Facility as such Book-Entry Shareholder may designate under "Special Payment
Instructions." If no such instructions are given, such Shares not accepted for
payment will be returned by crediting the account at the Book-Entry Transfer
Facility designated above.
8. Waiver of Conditions. Subject to the terms and conditions of the Merger
Agreement (as defined in the Offer to Purchase), the conditions of the Offer
(other than the Minimum Condition, as defined in the Offer to Purchase) may be
waived by the Purchaser in whole or in part at any time and from time to time
in its sole discretion.
8
<PAGE>
9. 31% Backup Withholding; Substitute Form W-9. Under U.S. federal income
tax law, a shareholder who tenders Shares pursuant to the Offer is required to
provide the Depositary with such shareholder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 and to certify that the TIN provided on
Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN).
If such shareholder is an individual, the TIN is his or her social security
number. If the Depositary is not provided with the correct TIN, such
shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service and payments that are made to such shareholder with respect to Shares
pursuant to the Offer may be subject to backup withholding (see below).
A shareholder who does not have a TIN may check the box in Part 3 of the
Substitute Form W-9 if such shareholder has applied for a number or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
shareholder must also complete the "Certificate of Awaiting Taxpayer
Identification Number" below in order to avoid backup withholding. If the box
is checked, payments made will be subject to backup withholding unless the
shareholder has furnished the Depositary with his or her TIN within 60 days. A
shareholder who checks the box in Part 3 in lieu of furnishing such
shareholder's TIN should furnish the Depositary with such shareholder's TIN as
soon as it is received.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding requirements.
In order for a foreign individual to qualify as an exempt recipient, that
shareholder must submit a statement, signed under penalty of perjury,
attesting to that individual's exempt status (Form W-8). Forms for such
statements can be obtained from the Depositary. Shareholders are urged to
consult their own tax advisors to determine whether they are exempt from these
backup withholding and reporting requirements.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments to be 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 by filing a tax
return with the Internal Revenue Service. The Depositary cannot refund amounts
withheld by reason of backup withholding.
10. Requests for Assistance or Additional Copies. Questions or requests for
assistance may be directed to the Dealer Manager or the Information Agent at
their respective addresses and telephone numbers set forth below. Additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery also may be obtained from the Information Agent or the
Dealer Manager or from brokers, dealers, commercial banks or trust companies.
11. Lost, Destroyed or Stolen Certificates. If any Share Certificate has
been lost, destroyed or stolen, the shareholder should promptly notify the
Depositary. The shareholder then will be instructed as to the steps that must
be taken in order to replace the Share Certificate. This Letter of Transmittal
and related documents cannot be processed until the procedures for replacing
lost or destroyed Share Certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER WITH
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE
NOTICE OF GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST
BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE.
9
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
PAYER'S NAME: SunTrust Bank, as Depositary
- -------------------------------------------------------------------------------
Part 1--PLEASE PROVIDE YOUR Social Security Number
TIN IN THE BOX AT THE RIGHT or Employer
AND CERTIFY BY SIGNING AND Identification Number
DATING BELOW. Part 3--Awaiting
TIN [_]
Part 2--Certification--Under penalties of perjury, I
SUBSTITUTE certify that:
Form W-9 (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
----------------------
Department of the --------------------------------------------------------
Treasury Internal -------------------------
Revenue Service (2) I am not subject to backup withholding because
(a) I am exempt from backup withholding, or (b) I
have not been notified by the Internal Revenue
Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has
notified me that I am no longer subject to backup
withholding.
Payer's Request for Taxpayer Identification Number ("TIN")
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
under-reporting 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 stating
that you are no longer subject to backup withholding,
do not cross out such item (2).
--------------------------------------------------------
SIGNATURE ________________________________________
DATE _____________________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9.
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 (a) 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
(b) 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.
Signature: ______________________________________ ____________________________
Date: _____________
10
<PAGE>
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Bankers and Brokers Call Collect (212) 269-5550
All Others Call Toll Free (888) 242-8157
The Dealer Manager for the Offer is:
LEHMAN BROTHERS
Three World Financial Center
200 Vesey Street, 18th Floor
New York, New York 10285
Call Collect: (212) 526-6739 or (415) 274-5442
May 12, 2000
11
<PAGE>
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
TO
TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
KOLLMORGEN CORPORATION
TO
KING DC ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
DANAHER CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates for Shares
(as defined below) are not immediately available or the certificates for
Shares and all other required documents cannot be delivered to SunTrust Bank
(the "Depositary") on or prior to the Expiration Date (as defined in the Offer
to Purchase) or if the procedure for delivery by book-entry transfer cannot be
completed on a timely basis. This instrument may be delivered by hand or
transmitted by facsimile transmission or mailed to the Depositary. See Section
3 of the Offer to Purchase.
The Depositary for the Offer is:
SUNTRUST BANK
Facsimile for Eligible
Institutions:
By Mail: By Overnight Courier:
404-865-5371
Confirm by Telephone: SunTrust Bank SunTrust Bank
Post Office Box 4625 Stock Transfer Department
1-800-568-3476 Atlanta, Georgia 30302 58 Edgewood Avenue
Room 225, Annex
Atlanta, Georgia 30303
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 IN THE LETTER OF TRANSMITTAL.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tender(s) to King DC Acquisition Corp., a New York
corporation and a wholly-owned subsidiary of Danaher Corporation, a Delaware
corporation, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated May 12, 2000 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"), receipt of which is hereby acknowledged, the number
of shares of common stock, par value $2.50 per share (the "Shares"), of
Kollmorgen Corporation, a New York corporation, indicated below pursuant to
the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase.
Number of Tendered Shares:
------------------------------------
Certificate No.(s) (if available):
------------------------------------
------------------------------------
Check box if Shares will be
tendered by book-entry
transfer: [_]
Name of Tendering Institution:
------------------------------------
Dated: _________________, 2000
Name(s) of Record Holder(s):
------------------------------------
------------------------------------
(PLEASE PRINT)
Address(es): _______________________
------------------------------------
(ZIP CODE)
Area Code and Telephone No.(s): ____
SIGN HERE
Signature(s): ______________________
----------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of a
recognized Medallion Program approved by the Securities Transfer Association
Inc., including the Securities Transfer Agents Medallion Program (STAMP), the
Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange
Medallion Signature Program (MSP) or any other "eligible guarantor
institution" (as such term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended), guarantees to deliver to the Depositary
either the certificates evidencing all tendered Shares, in proper form for
transfer, or a Book-Entry Confirmation (as defined in the Offer to Purchase)
with respect to such Shares, in either case, together with the Letter of
Transmittal (or a 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 trading days
after the date hereof.
The eligible guarantor institution that completes this form must
communicate the guarantee to the Depositary and must deliver the Letter of
Transmittal and Share Certificates to the Depositary within the time period
indicated herein. Failure to do so may result in financial loss to such
eligible guarantor institution.
Name of Firm: ______________________________________________________________
------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Address: ___________________________________________________________________
----------------------------------------------------------------------
(ZIP CODE)
Title: _____________________________________________________________________
Name: ______________________________________________________________________
(PLEASE PRINT OR TYPE)
Area Code and Telephone No.: _______________________________________________
Dated: _________________, 2000
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE CERTIFICATES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE>
EXHIBIT (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
KOLLMORGEN CORPORATION
BY
KING DC ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
DANAHER CORPORATION
AT $23.00 NET PER SHARE IN CASH
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED.
May 12, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by King DC Acquisition Corp., a New York corporation
(the "Purchaser") and a wholly-owned subsidiary of Danaher Corporation, a
Delaware corporation ("Danaher"), to act as Dealer Manager in connection with
the Purchaser's offer to purchase for cash all the outstanding shares of
common stock, par value $2.50 per share (the "Shares"), of Kollmorgen
Corporation, a Delaware corporation ("Kollmorgen"), at a purchase price of
$23.00 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated May 12, 2000 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer") enclosed herewith. Holders of Shares whose certificates for such
Shares (the "Share Certificates") are not immediately available or who cannot
deliver their Share Certificates and all other required documents to the
Depositary (as defined below) on or prior to the Expiration Date (as defined
in the Offer to Purchase), or who cannot complete the procedure for book-entry
transfer on a timely basis, must tender their Shares according to the
guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated May 12, 2000.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if Share Certificates are not immediately available or if such
certificates and all other required documents cannot be delivered to
SunTrust Bank (the "Depositary") on or prior to the Expiration Date or if
the procedure for book-entry transfer cannot be completed by the Expiration
Date.
<PAGE>
4. The letter to shareholders of Kollmorgen from Gideon Argov, President
and Chief Executive Officer of Kollmorgen, accompanied by Kollmorgen's
Solicitation/Recommendation Statement on Schedule 14D-9.
5. A printed form of 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.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
7. A return envelope addressed to SunTrust Bank, as Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 9, 2000, 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 a number of
Shares which represents at least two-thirds of the outstanding Shares on a
fully-diluted basis on the date of purchase, and (2) all applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, or under any applicable foreign statutes or regulations having
expired or been terminated.
The Board of Directors of Kollmorgen has unanimously determined that the
Offer and the Merger are fair to, and in the best interests of, the holders of
the Shares, approved and adopted the Merger Agreement and recommends that the
holders of the Shares accept the Offer and tender their Shares.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of May 4, 2000, among Danaher, the Purchaser and Kollmorgen (as it may be
amended or supplemented from time to time, the "Merger Agreement"). The Merger
Agreement provides, among other things, for the making of the Offer by the
Purchaser, and further provides that, following the completion of the Offer,
upon the terms and subject to the conditions of the Merger Agreement, and in
accordance with the New York Business General Corporation Law (the "BCL"), the
Purchaser will be merged with and into Kollmorgen (the "Merger"). Following
the effective time of the Merger (the "Effective Time"), Kollmorgen will
continue as the surviving corporation and become a wholly-owned subsidiary of
Danaher and the separate corporate existence of the Purchaser will cease.
At the Effective Time, each Share issued and outstanding immediately prior
to the Effective Time (other than (1) Shares held by Danaher, the Purchaser or
any other wholly-owned subsidiary of Danaher or the Purchaser, in the treasury
of Kollmorgen, or by any wholly-owned subsidiary of Kollmorgen, which will be
canceled, and (2) Shares, if any, held by shareholders who have properly
exercised appraisal rights under Section 910 of the BCL) will, by virtue of
the Merger and without any action on the part of the holders of the Shares, be
converted into the right to receive in cash the per Share price paid in the
Offer, payable to the holder thereof, without interest, upon surrender of the
Share Certificate formerly representing such Share, less any required
withholding taxes.
In order to take advantage of the Offer, (1) a duly executed and properly
completed Letter of Transmittal (or a facsimile thereof) and any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry delivery of Shares, and other
required documents should be sent to the Depositary, and (2) either Share
Certificates representing the tendered Shares should be delivered to the
Depositary or such Shares should be tendered by book-entry transfer and a
Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to
such Shares should be delivered to the Depositary, all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
Holders of Shares whose Share Certificates are not immediately available or
who cannot deliver their Share Certificates and all other required documents
to the Depositary on or prior the expiration date of the Offer, or who cannot
complete the procedure for delivery by book-entry transfer on a timely basis,
must tender their Shares according to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase.
2
<PAGE>
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Dealer Manager, the Depositary and D.F. King &
Co., Inc. (the "Information Agent") (as described in the Offer to Purchase))
for soliciting tenders of Shares pursuant to the Offer. The Purchaser will,
however, upon request, reimburse you for customary clerical and mailing
expenses incurred by you in forwarding any of the enclosed materials to your
clients. The Purchaser will pay or cause to be paid any stock transfer taxes
payable on the transfer of Shares to it, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
Inquiries you may have with respect to the Offer should be addressed to
Lehman Brothers Inc., the Dealer Manager, or the Information Agent, at their
respective addresses and telephone numbers set forth on the back cover of the
Offer to Purchase. Additional copies of the enclosed materials may be obtained
from the Information Agent.
Very truly yours,
LEHMAN BROTHERS
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON, THE AGENT OF THE PURCHASER, DANAHER, THE DEALER MANAGER,
THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
EXHIBIT (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
KOLLMORGEN CORPORATION
BY
KING DC ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
DANAHER CORPORATION
AT $23.00 NET PER SHARE IN CASH
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JUNE 9, 2000, UNLESS THE OFFER IS EXTENDED.
May 12, 2000
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated May 12, 2000
(the "Offer to Purchase"), and the related Letter of Transmittal, relating to
an offer by King DC Acquisition Corp., a New York corporation (the
"Purchaser") and a wholly-owned subsidiary of Danaher Corporation, a Delaware
corporation ("Danaher"), to purchase all of the outstanding shares of common
stock, par value $2.50 per share (the "Shares"), of Kollmorgen Corporation, a
New York corporation ("Kollmorgen"), at a purchase price of $23.00 per Share,
net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase and in the
related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer") enclosed herewith. Holders of Shares whose
certificates for such Shares (the "Share Certificates") are not immediately
available or who cannot deliver their Share Certificates and all other
required documents to SunTrust Bank, the Depositary, on or prior to the
Expiration Date (as defined in the Offer to Purchase), or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis, must
tender their Shares according to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase.
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 such Shares held by us for your account, pursuant to the
terms and subject to the conditions set forth in the Offer to Purchase.
Your attention is directed to the following:
1. The Offer price is $23.00 per Share, net to the seller in cash,
without interest thereon.
2. The Offer is made for all of the outstanding Shares.
3. The Board of Directors of Kollmorgen has unanimously determined that
the Offer and the Merger (as defined below), are fair to and in the best
interests of, the holders of the Shares, approved and adopted the Merger
Agreement and recommends that the holders of the Shares accept the Offer
and tender their Shares.
<PAGE>
4. The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of May 4, 2000, among Danaher, the Purchaser and Kollmorgen (as it
may be amended or supplemented from time to time, the "Merger Agreement").
The Merger Agreement provides, among other things, for the making of the
Offer by the Purchaser, and further provides that, following the completion
of the Offer, upon the terms and subject to the conditions of the Merger
Agreement, and in accordance with the New York Business Corporation Law
(the "BCL"), the Purchaser will be merged with and into Kollmorgen (the
"Merger"). Following the effective time of the Merger (the "Effective
Time"), Kollmorgen will continue as the surviving corporation and become a
wholly-owned subsidiary of Danaher and the separate corporate existence of
the Purchaser will cease. At the Effective Time, each Share issued and
outstanding immediately prior to the Effective Time (other than (1) Shares
held by Danaher, Purchaser or any other wholly-owned subsidiary of Danaher
or the Purchaser, in the treasury of Kollmorgen, or by any wholly-owned
subsidiary of Kollmorgen, which will be canceled, and (2) Shares, if any,
held by shareholders who have properly exercised appraisal rights under
Section 910 of the BCL) will, by virtue of the Merger and without any
action on the part of the holders of the Shares, be converted into the
right to receive in cash the per Share price paid in the Offer, payable to
the holder thereof, without interest, upon surrender of the Share
Certificate, less any required withholding taxes.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on June 9, 2000, unless the Offer is extended.
6. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer.
7. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the Expiration Date a number of
Shares which (including any other Kollmorgen common shares, directly or
indirectly, owned by us) represents at least two-thirds of the total number
of outstanding Shares on a fully diluted basis on the date of purchase, and
(2) any applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, or under any applicable foreign
statutes or regulations having expired or been terminated.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal, and is being made to all holders of Shares. The
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 the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute.
If, after such good faith effort, the 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 the
Purchaser by Lehman Brothers Inc., as Dealer Manager, or one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
IF YOU WISH TO HAVE US TENDER ANY OR ALL OF THE SHARES HELD BY US FOR YOUR
ACCOUNT, PLEASE INSTRUCT US BY COMPLETING, EXECUTING AND RETURNING TO US THE
INSTRUCTION FORM CONTAINED IN THIS LETTER. IF YOU AUTHORIZE A TENDER OF YOUR
SHARES, ALL SUCH SHARES WILL BE TENDERED UNLESS OTHERWISE SPECIFIED IN SUCH
INSTRUCTION FORM. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF ON OR PRIOR TO THE EXPIRATION OF
THE OFFER.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
KOLLMORGEN CORPORATION
BY
KING DC ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY
OF
DANAHER CORPORATION
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase dated May 12, 2000 (the "Offer to Purchase"), and the related
Letter of Transmittal, pursuant to an offer by King DC Acquisition Corp., a
New York corporation and a wholly-owned subsidiary of Danaher Corporation, a
Delaware corporation, to purchase all outstanding shares of common stock, par
value $2.50 per share (the "Shares"), of Kollmorgen Corporation, a New York
corporation, at a purchase price of $23.00 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase and the related Letter of Transmittal.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) which are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal
furnished to the undersigned.
Number of Shares to be
Tendered*
------------------------------
Dated: ________________ , 2000
SIGN HERE
----------------------------------------------------------------------------
SIGNATURE(S)
----------------------------------------------------------------------------
PLEASE PRINT
----------------------------------------------------------------------------
ADDRESS
----------------------------------------------------------------------------
AREA CODE AND TELEPHONE
----------------------------------------------------------------------------
TAX IDENTIFICATION, OR SOCIAL SECURITY NUMBER(S)
- -------
* Unless otherwise indicated, it will be assumed that all of your Shares held
by us for your account are to be tendered.
3
<PAGE>
Exhibit 99(a)(6)
[DANAHER CORPORATION LOGO]
FOR IMMEDIATE RELEASE
Contact: Danaher Corporation
Patrick Allender
Chief Financial Officer
(202) 828-0850
DANAHER CORPORATION ANNOUNCES AGREEMENTS TO
ACQUIRE KOLLMORGEN CORPORATION AND WARNER ELECTRIC
MOTION BUSINESSES
Washington, D.C., May 4, 2000 -- Danaher Corporation (NYSE:DHR) announced
---
today that it has entered into a definitive merger agreement with Kollmorgen
Corporation (NYSE:KOL) to acquire all of its outstanding shares at a cash price
of $23 per share. The transaction has a total value of approximately $325
million including assumption of debt. The Directors of both companies have
approved the merger agreement.
Kollmorgen Corporation, headquartered in Waltham, Massachusetts, is a $260
million revenue global leader in providing high performance electronic motion
control equipment, systems and service to industrial, commercial, aerospace and
defense customers worldwide. Motion products include brush and brushless motors,
servo systems, drives and electronic controls. Kollmorgen is also the premier
designer and supplier of advanced submarine periscope systems.
George M. Sherman, President and Chief Executive Officer of Danaher,
stated, "Kollmorgen, with its premier reputation for technology and innovative
solutions for the motion control industry, represents a key addition to our
rapidly growing motion platform. We are excited by the prospects of adding
Kollmorgen's capabilities to those of our existing businesses."
Gideon Argov, Chairman, President and Chief Executive Officer of
Kollmorgen, stated, "We cannot imagine a better strategic partner than Danaher
Corporation, whose leadership in process and environmental controls perfectly
complements Kollmorgen's leadership in high performance electronic motion
control products and systems. We believe this important transaction will not
only deliver significant value to our shareholders but significantly benefit the
customers and employees of both our Industrial & Commercial and Aerospace &
Defense businesses. I personally look forward to working closely with George
Sherman and his colleagues on the Danaher team to complete the transaction and
to achieve a smooth and seamless transition."
Under the merger agreement, Danaher will commence a tender offer for
Kollmorgen's outstanding shares, which will be subject to certain conditions,
including at least a two-thirds majority of Kollmorgen's outstanding shares, on
a fully diluted basis, being tendered without withdrawal prior to the expiration
of the offer, and clearance of the transaction under applicable antitrust laws
and other governmental agencies' regulations being obtained.
<PAGE>
All stockholders should read the tender offer statements concerning the
tender offer that will be filed by Danaher, and the solicitation/recommendation
statements that will be filed by Kollmorgen, with the Securities and Exchange
Commission (SEC) and mailed to stockholders. These statements will contain
important information that stockholders should consider before making any
decision regarding tendering their shares. Stockholders will be able to obtain
these statements in due course, as well as other filings containing information
about Danaher and Kollmorgen, without charge, at the SEC's internet site
(www.sec.gov). Copies of the tender offer and the solicitation/recommendation
statements and other SEC filings can also be obtained, without charge, from
Danaher's Corporate Secretary.
Danaher Corporation also announced today that it has entered into an
agreement to acquire, for cash, the motion control businesses of Warner Electric
Company (Warner) for $144 million. Warner's $160 million revenue motion control
operations include the company's linear products group with principal operations
in Marengo, Illinois and Wolfschlugen, Germany and the company's motors and
controls group based in Bristol, Connecticut and Charlotte, North Carolina.
Warner's motion products include stepper motors, synchronous motors and linear
actuation components and systems serving a wide range of commercial and
industrial markets, including factory automation, material handling and medical
applications. Warner's brake and clutch operations were not part of the
transaction.
The Warner transaction has been unanimously recommended by an independent
committee of Danaher's Board of Directors and is subject to certain closing
conditions and customary regulatory approvals. Warner Electric's principals
include Steven and Mitchell Rales, Danaher's Chairman of the Board and Chairman
of the Executive Committee, respectively.
Mr. Sherman stated, "The Warner motion product offering closely complements
both our motion component and motion solution offerings and provides broader
access to several key targeted markets. With Kollmorgen and Warner Motion, we
will double the size of our strategic motion platform."
Kollmorgen Corporation is one of the major worldwide manufacturers of high
performance electronic motion control products and systems. (www.kollmorgen.com)
Danaher Corporation is a leading manufacturer of Process/Environmental
Controls and Tools and Components. (www.danaher.com).
----------
#######
<PAGE>
EXHIBIT (a)(7)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE
(YOU) TO GIVE THE PAYER.--Social Security numbers have nine digits separated
by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine
digits separated by only one hyphen: i.e. 00-0000000. The table below will
help determine the number to give the payer. All "Section" references are to
the Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue
Service.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF --
- --------------------------------------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals (joint account) The actual owner
of the account
or, if combined
funds, the first
individual on
the account(1)
3. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2)
4. a. The usual revocable savings trust (grantor is also The grantor-
trustee) trustee(1)
b. So-called trust account that is not a legal or valid The actual
trust under state law owner(1)
5. Sole proprietorship The owner(3)
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
- ------------------------------------------------------------------------------
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, estate, The legal
or pension trust entity(4)
8. Corporate The corporation
9. Association, club, religious, charitable, educational, The organization
or other tax-exempt organization account
10. Partnership The partnership
11. A broker or registered nominee The broker or
nominee
12. Account with the Department of Agriculture in the name The public
of a public entity (such as a state or local government, entity
school district, or prison) that receives agriculture
program payments
</TABLE>
- -------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
If only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your
business or "doing business as" name. You may use either your social
security number or your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not
designated in the account title.)
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number, obtain Form SS-5, Appli-
cation for a Social Security Card, at the local Social Security Administration
office, or Form SS-4, Application for Employer Identification Number, by call-
ing 1 (800) TAX-FORM, and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from withholding include:
. An organization exempt from tax under section 501(a), an individual retire-
ment account (IRA), or a custodial account under Section 403(b)(7), if the
account satisfies the requirements of Section 401(f)(2).
. The United States or a state thereof, the District of Columbia, a posses-
sion of the United States, or a political subdivision or wholly-owned
agency or instrumentality of any one or more of the foregoing.
. An international organization or any agency or instrumentality thereof.
. A foreign government and any political subdivision, agency or instrumental-
ity thereof.
Payees that may be exempt from backup withholding include:
. A corporation.
. A financial institution.
. A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
. A real estate investment trust.
. A common trust fund operated by a bank under Section 584(a).
. An entity registered at all times during the tax year under the Investment
Company Act of 1940.
. A middleman known in the investment community as a nominee or a custodian.
. A futures commission merchant registered with the Commodity Futures Trading
Commission.
. A foreign central bank of issue.
. A trust exempt from tax under Section 664 or described in Section 4947.
Payments of dividends and patronage dividends generally exempt from backup
withholding include:
. Payments to nonresident aliens subject to withholding under Section 1441.
. Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
. Payments of patronage dividends not paid in money.
. Payments made by certain foreign organizations.
. Section 404(k) payments made by an ESOP.
Payments of interest generally exempt from backup withholding include:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and you have
not provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
Section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Mortgage or student loan interest paid to you.
Certain payments, other than payments of interest, dividends, and patronage
dividends, that are exempt from information reporting are also exempt from
backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045,
6049, 6050A and 6050N.
EXEMPT PAYEES DESCRIBED ABOVE MUST FILE FORM W-9 OR A SUBSTITUTE FORM W-9 TO
AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER.
FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART I OF THE
FORM, AND RETURN TO THE PAYER IF THE PAYMENTS ARE OF INTEREST, DIVIDENDS, OR
PATRONAGE DIVIDENDS. ALSO SIGN AND DATE THE FORM.
PRIVACY ACT NOTICE.--Section 6109 requires you to provide your correct tax-
payer identification number to payers, who must report the payments to the
IRS. The IRS uses the number for identification purposes and may also provide
this information to various government agencies for tax enforcement or litiga-
tion purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish
a taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail to furnish
your taxpayer identification number to a payer, you are subject to a penalty
of $50 for each such failure unless your failure is due to reasonable cause
and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Willfully falsifying certifi-
cations or affirmations may subject you to criminal penalties including fines
and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE>
Exhibit 99(a)(8)
[FORM OF SUMMARY ADVERTISEMENT]
This announcement is neither an offer to purchase nor a solicitation
of an offer to sell Shares (as defined below). The Offer (as defined below) is
made solely by the Offer to Purchase dated May 12, 2000, and the related Letter
of Transmittal, and any amendments thereto, and is being made to all holders of
Shares. The Purchaser (as defined below) 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 the Purchaser becomes aware of any valid state
statute prohibiting the making of the Offer, the Purchaser will make a good
faith effort to comply with such statute. If, after such good faith effort, the
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 Lehman Brothers Inc. as Dealer
Manager, or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Share Purchase Rights)
of
Kollmorgen Corporation
At
$23.00 Net Per Share in Cash
by
King DC Acquisition Corp.
a wholly-owned subsidiary of
Danaher Corporation
King DC Acquisition Corp., a New York corporation (the "Purchaser")
and a wholly-owned subsidiary of Danaher Corporation, a Delaware corporation
("Danaher"), hereby offers to purchase all of the outstanding shares of common
stock, par value $2.50 per share (the "Shares"), of Kollmorgen Corporation, a
New York corporation ("Kollmorgen"), at a purchase price of $23.00 per Share,
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated May 12, 2000 (the
"Offer to
<PAGE>
Purchase"), and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON JUNE 9, 2000, 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 DATE OF THE OFFER A
NUMBER OF SHARES WHICH REPRESENTS AT LEAST TWO-THIRDS OF THE TOTAL NUMBER OF
OUTSTANDING SHARES (TAKEN TOGETHER WITH ANY OTHER SHARES, DIRECTLY OR
INDIRECTLY, OWNED BY DANAHER) ON A FULLY-DILUTED BASIS ON THE DATE OF PURCHASE,
AND (2) ANY APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED, OR UNDER ANY APPLICABLE FOREIGN STATUTES
OR REGULATIONS SHALL HAVE EXPIRED OR BEEN TERMINATED.
The purpose of the Offer is to acquire control of, and the entire
equity interest in, Kollmorgen. As promptly as practicable following
consummation of the Offer and after satisfaction or waiver of all conditions to
the Merger (as defined below) set forth in the Merger Agreement (as defined
below), the Purchaser intends to acquire the remaining equity interest in
Kollmorgen not acquired in the Offer by consummating the Merger.
The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of May 4, 2000, among Danaher, the Purchaser and Kollmorgen (the
"Merger Agreement"). The Merger Agreement provides, among other things, for the
making of the Offer by the Purchaser, and further provides that, following the
completion of the Offer, upon the terms and subject to the conditions of the
Merger Agreement and in accordance with the New York Business Corporation Law
(the "BCL"), the Purchaser will be merged with and into Kollmorgen (the
"Merger"). Following the effective time of the Merger (the "Effective Time"),
Kollmorgen will continue as the surviving corporation (the "Surviving
Corporation") and become a wholly-owned subsidiary of Danaher, and the separate
corporate existence of the Purchaser will cease. At the Effective Time, each
Share issued and outstanding immediately prior to the Effective Time (other than
(1) Shares held by Danaher, the Purchaser or any other wholly-owned subsidiary
of Danaher or the Purchaser, in the treasury of Kollmorgen or by any wholly-
owned subsidiary of Kollmorgen, and (2) Shares, if any, held by shareholders who
have properly exercised appraisal rights under Section 910 of the BCL) will, by
virtue of the Merger and without any action on the part of the holders of the
Shares be converted into the right to receive in cash the per Share price paid
in the Offer, payable to the holder thereof, without interest, upon surrender of
the certificate or certificates formerly representing such Shares, less any
required withholding taxes. The Merger Agreement is more fully described in
Section 11 of the Offer to Purchase.
THE BOARD OF DIRECTORS OF KOLLMORGEN HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER, AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE
<PAGE>
ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS OF, THE HOLDERS OF THE SHARES,
AND RECOMMENDS THAT THE HOLDERS OF THE SHARES TENDER THEIR SHARES TO THE
PURCHASER PURSUANT TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment (and thereby purchased) Shares validly tendered and not
properly withdrawn as, if and when the Purchaser gives oral or written notice to
SunTrust Bank (the "Depositary") of the Purchaser's acceptance for payment of
such Shares pursuant to the Offer. Upon the terms and subject to the conditions
of the Offer, payment for Shares accepted for payment pursuant to the Offer will
be made by deposit of the purchase price therefor with the Depositary, which
will act as agent for tendering shareholders for the purpose of receiving
payments from the Purchaser and transmitting such payments to shareholders whose
Shares have been accepted for payment. Under no circumstances will interest on
the purchase price for Shares be paid by the Purchaser, regardless of any
extension of the Offer or any delay in making such payment. In all cases,
payment for Shares tendered and accepted for payment pursuant to the Offer will
be made only after timely receipt by the Depositary of (1) certificates
representing such Shares, or timely confirmation of a book-entry transfer of
such Shares into the Depositary's account at the Book-Entry Transfer Facility
(as defined in the Offer to Purchase) pursuant to the procedures set forth in
Section 3 of the Offer to Purchase, (2) the Letter of Transmittal (or a
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 connection with a book-entry transfer, and (3) any other documents
required by the Letter of Transmittal.
Subject to the provisions of the Merger Agreement and the applicable
rules and regulations of the Securities and Exchange Commission (the "SEC"), the
Purchaser reserves the right, in its sole discretion, to waive any or all
conditions to the Offer (other than the Minimum Condition (as defined in the
Offer to Purchase)) and to make any other changes in the terms and conditions of
the Offer. Subject to the provisions of the Merger Agreement and the applicable
rules and regulations of the SEC, if, by the Expiration Date, any or all of the
conditions to the Offer have not been satisfied, the Purchaser reserves the
right (but will not be obligated) to (1) terminate the Offer and return all
tendered Shares to tendering shareholders, (2) waive such unsatisfied conditions
(other than the Minimum Condition) and purchase all Shares validly tendered or
(3) extend the Offer, and, subject to the terms of the Offer (including the
rights of shareholders to withdraw their Shares), retain the Shares which have
been tendered, until the termination of the Offer, as extended.
Subject to the provisions of the Merger Agreement and the applicable
rules and regulations of the SEC, the Purchaser expressly reserves the right, in
its sole discretion, at any time and from time to time, and regardless of
whether or not any of the events set forth in Section 14 of the Offer to
Purchase have occurred or have been determined by the Purchaser to have
occurred, to (1) extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares, by giving
oral or written notice of such extension to the Depositary, and (2) amend the
Offer in any respect permitted by the Merger Agreement by giving oral or written
notice of such amendment to the Depositary; provided, however, that in the event
that the required waiting periods under U.S. federal antitrust laws or under
certain applicable foreign statutes or regulations have not expired, or in the
event of certain other actions (as set forth in the Merger Agreement), the
Purchaser is required to extend the Offer.
<PAGE>
Any extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof to be made no
later than 9:00 A.M., New York City time, on the next business day after the
previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not properly withdrawn will remain subject to the Offer,
subject to the rights of a tendering shareholder to withdraw such shareholder's
Shares. "Expiration Date" means 12:00 Midnight, New York City time, on Friday,
June 9, 2000, unless and until the Purchaser, in its sole discretion (but
subject to the terms and conditions of the Merger Agreement), has extended the
period during which the Offer is open, in which event the term "Expiration Date"
means the latest time and date at which the Offer, as so extended by the
Purchaser, will expire.
Tenders of Shares made pursuant to the Offer are irrevocable, except
that Shares tendered pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date, and, unless theretofore accepted for payment by
the Purchaser pursuant to the Offer, may also be withdrawn at any time after
July 11, 2000. For a withdrawal to be effective, a written, telegraphic, telex
or facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered holder, if different from that of the person who
tendered such Shares. If certificates for the Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of the certificates, the serial numbers shown on such certificates must
be submitted to the Depositary and the signatures on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in the Offer to
Purchase) unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for book-
entry transfer as set forth in Section 3 of the Offer to Purchase, any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares, in which case a
notice of withdrawal will be effective if delivered to the Depositary by any
method of delivery described in the second sentence of this paragraph. All
questions as to the form and validity (including time of receipt) of any notice
of withdrawal will be determined by the Purchaser, in its sole discretion, whose
determination will be final and binding. None of the Purchaser, Danaher, any of
their affiliates or assigns, the Dealer Manager, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability for
failure to give such notification. Withdrawals of Shares may not be rescinded.
Any Shares properly withdrawn will thereafter be deemed not to have been validly
tendered for purposes of the Offer.
<PAGE>
However, withdrawn Shares may be re-tendered at any time prior to the Expiration
Date by following one of the procedures described in Section 3 of the Offer to
Purchase.
The information required to be disclosed by Rule 14d-6(d)(1) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
Kollmorgen has provided the Purchaser with Kollmorgen's shareholder
list and security position listing for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of Transmittal
and, if required, other relevant materials will be mailed by the Purchaser to
record holders of Shares and furnished 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, for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Dealer
Manager or the Information Agent as set forth below. Requests for copies of the
Offer to Purchase and the related Letter of Transmittal and all other tender
offer materials may be directed to the Information Agent, and copies will be
furnished promptly at the Purchaser's expense. The Purchaser will not pay any
fees or commissions to any broker or dealer or any other person (other than the
Dealer Manager and Information Agent) for soliciting tenders of Shares pursuant
to the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
Banks and Brokers, Please Call: (212) 269-5550
All Others Call Toll-free: (888) 242-8157
The Dealer Manager for the Offer is:
Lehman Brothers
3 World Financial Center
200 Vesey Street, 18th Floor
New York, New York 10285
Call Collect: (212) 526-6739 or (415) 274-5442
May 12, 2000
<PAGE>
EXHIBIT 99(d)(1)
AGREEMENT AND PLAN OF MERGER
AMONG
DANAHER CORPORATION
("Parent"),
KING DC ACQUISITION CORP.,
("Purchaser"),
and
KOLLMORGEN CORPORATION
(the "Company")
May 4, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
THE OFFER......................................................................2
Section 1.1 The Offer................................................2
Section 1.2 Company Actions..........................................3
Section 1.3 Directors................................................4
ARTICLE TWO
THE MERGER.....................................................................5
Section 2.1 The Merger...............................................5
Section 2.2 Effective Time...........................................5
Section 2.3 Effects of the Merger....................................5
Section 2.4 Certificate of Incorporation and By-Laws
of the Surviving Corporation...........................6
Section 2.5 Directors................................................6
Section 2.6 Officers.................................................6
Section 2.7 Conversion of Common Shares..............................6
Section 2.8 Conversion of Purchaser Common Stock.....................6
Section 2.9 Options; Stock Plans.....................................7
Section 2.10 Shareholders' Meeting....................................7
Section 2.11 Merger Without Meeting of Shareholders...................8
ARTICLE THREE
DISSENTING SHARES; PAYMENT FOR SHARES..........................................8
Section 3.1 Dissenting Shares........................................8
Section 3.2 Payment for Common Shares................................8
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................9
Section 4.1 Organization and Qualification; Subsidiaries.............9
Section 4.2 Capitalization; Subsidiaries............................10
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<PAGE>
Section 4.3 Authority Relative to this Agreement
and Related Matters...................................11
Section 4.4 No Conflict; Required Filings and Consents..............11
Section 4.5 SEC Reports and Financial Statements....................12
Section 4.6 Environmental Matters...................................13
Section 4.7 Compliance with Applicable Laws.........................15
Section 4.8 Change of Control.......................................16
Section 4.9 Litigation..............................................16
Section 4.10 Information.............................................16
Section 4.11 Certain Approvals.......................................17
Section 4.12 Employee Benefit Plans..................................17
Section 4.13 Intellectual Property...................................20
Section 4.14 Taxes...................................................21
Section 4.15 Absence of Certain Changes..............................22
Section 4.16 Labor Matters...........................................22
Section 4.17 Relationships with Customers, Suppliers,
Distributors and Sales Representatives................23
Section 4.18 Contracts...............................................23
Section 4.19 Rights Agreement........................................24
Section 4.20 Product Recalls.........................................24
Section 4.21 Brokers.................................................24
Section 4.22 Opinion of Financial Advisor............................24
Section 4.23 Year 2000 Compliance....................................24
Section 4.24 Government Contracts....................................24
Section 4.25 Government Contracting Audits...........................27
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER....................27
Section 5.1 Organization and Qualification..........................27
Section 5.2 Authority Relative to this Agreement....................28
Section 5.3 No Conflict; Required Filings and Consents..............28
Section 5.4 Information.............................................29
Section 5.5 Financing...............................................29
Section 5.6 Ownership of Purchaser; No Prior Activities.............29
ARTICLE SIX
COVENANTS.....................................................................30
Section 6.1 Conduct of Business of the Company......................30
Section 6.2 Access to Information...................................32
Section 6.3 Efforts.................................................33
Section 6.4 Public Announcements....................................34
Section 6.5 Employee Benefit Arrangements...........................34
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<PAGE>
Section 6.6 Indemnification.........................................35
Section 6.7 Notification of Certain Matters.........................36
Section 6.8 Rights Agreement........................................36
Section 6.9 State Takeover Laws.....................................36
Section 6.10 No Solicitation.........................................36
Section 6.11 Parent Agreement Concerning Purchaser...................37
Section 6.12 Convertible Debentures..................................38
ARTICLE SEVEN
CONDITIONS TO CONSUMMATION OF THE MERGER......................................38
Section 7.1 Conditions..............................................38
ARTICLE EIGHT
TERMINATION; AMENDMENTS; WAIVER...............................................38
Section 8.1 Termination.............................................38
Section 8.2 Effect of Termination...................................40
Section 8.3 Fees and Expenses.......................................40
Section 8.4 Amendment...............................................40
Section 8.5 Extension; Waiver.......................................41
ARTICLE NINE
MISCELLANEOUS.................................................................41
Section 9.1 Non-Survival of Representations and Warranties..........41
Section 9.2 Entire Agreement; Assignment............................41
Section 9.3 Validity................................................41
Section 9.4 Notices.................................................41
Section 9.5 Governing Law; Jurisdiction.............................42
Section 9.6 Descriptive Headings....................................43
Section 9.7 Counterparts............................................43
Section 9.8 Parties in Interest.....................................43
Section 9.9 Certain Definitions.....................................43
Section 9.10 Specific Performance....................................43
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<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of May 4,
2000, by and among Danaher Corporation, a Delaware corporation ("Parent"), King
DC Acquisition Corp., a New York corporation and a wholly owned subsidiary of
Parent (the "Purchaser"), and Kollmorgen Corporation, a New York corporation
(the "Company").
WHEREAS, the respective Boards of Directors of Parent, the Purchaser
and the Company have approved the acquisition of the Company by Parent on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, pursuant to this Agreement the Purchaser has agreed to
commence a tender offer (the "Offer") to purchase all of the Company's common
stock, par value $2.50 per share (the "Common Shares"), including the associated
preferred share purchase rights (the "Rights") issued pursuant to the Amended
and Restated Rights Agreement, dated as of December 20, 1988, amended and
restated as of March 27, 1990, amended and restated as of October 22, 1998, and
further amended and restated as of December 13, 1999 between the Company and
BankBoston, N.A., as Rights Agent (the "Rights Agreement") (which Rights
together with the Common Shares are hereinafter referred to as the "Shares"), at
a price per Share of $23.00 net to the seller in cash (such amount or any
greater amount per Share paid pursuant to the Offer being hereinafter referred
to as the "Offer Price");
WHEREAS, the Board of Directors of the Company (the "Company Board")
has, on the terms and subject to the conditions set forth herein, unanimously
(i) approved the Offer and the Merger (as hereinafter defined), (ii) adopted
this Agreement and is recommending that the Company's shareholders accept the
Offer, the Merger, tender their Shares to the Purchaser and approve this
Agreement;
WHEREAS, the respective Boards of Directors of the Purchaser and the
Company and Parent as the sole Shareholder of the Purchaser have approved the
merger of the Purchaser with and into the Company with the Company as the
surviving corporation, as set forth below (the "Merger"), in accordance with the
Business Corporation Law of the State of New York (the "BCL"), and upon the
terms and subject to the conditions set forth in this Agreement, whereby each of
the issued and outstanding Common Shares not owned directly or indirectly by
Parent, the Purchaser or the Company will be converted into the right to receive
the Offer Price in cash; and
WHEREAS, Parent, the Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Parent,
the Purchaser and the Company agree as follows:
<PAGE>
ARTICLE ONE
THE OFFER
SECTION 1.1 The Offer.
---------
(a) Provided that this Agreement shall not have been terminated in
accordance with Article Eight hereof and none of the events set forth in Annex I
hereto (the "Tender Offer Conditions") shall have occurred, as promptly as
reasonably practicable, but in no event later than May 15, 2000, Parent shall
cause the Purchaser to commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (including the rules and regulations
promulgated thereunder), the "Exchange Act") an offer to purchase all
outstanding Shares at the Offer Price, shall, upon commencement of the Offer but
after affording the Company a reasonable opportunity to review and comment
thereon, file Schedule TO and all other necessary documents with the Securities
and Exchange Commission (the "SEC") and make all deliveries, mailings and
telephonic notices required by Rule 14d-3 under the Exchange Act, in each case
in connection with the Offer (the "Offer Documents") and shall use its
reasonable best efforts to consummate the Offer, subject to the terms and
conditions thereof. The obligation of the Purchaser to accept for payment or pay
for any Shares tendered pursuant to the Offer will be subject only to the
satisfaction or waiver of the conditions set forth in Annex I hereto.
(b) Without the prior written consent of the Company, the Purchaser
shall not decrease the Offer Price or change the form of consideration payable
in the Offer, decrease the number of Shares sought to be purchased in the Offer,
impose additional conditions to the Offer or amend any other term of the Offer
in any manner adverse to the holders of Common Shares. The Offer shall remain
open until the date that is 20 business days (as such term is defined in Rule
14d-1(c)(6) under the Exchange Act) after the commencement of the Offer (the
"Expiration Date"), unless the Purchaser shall have extended the period of time
for which the Offer is open pursuant to, and in accordance with, the two
succeeding sentences or as may be required by applicable law, in which event the
term "Expiration Date" shall mean the latest time and date as the Offer, as so
extended, may expire. If at any Expiration Date, any of the Tender Offer
Conditions is not satisfied or waived by the Purchaser, the Purchaser may extend
the Offer from time to time; provided, however, that, on the scheduled
-------- -------
expiration date of the Offer, (i) if the waiting period under the HSR Act or
under any material applicable foreign statutes or regulations applicable to the
Merger shall have not expired or been terminated, the Purchaser shall extend the
Offer from time to time until the expiration or termination under the HSR Act or
any other applicable foreign statutes or regulations, (ii) if any of the
conditions set forth in paragraphs (a) or (b) of Annex I hereto shall have
occurred and be continuing, the Purchaser shall extend the Offer from time to
time until the earlier of (A) five business days after the time such condition
shall no longer exist or (B) such time at which the matters described in such
paragraphs (a) or (b) shall have become final and nonappealable; or (iii) if all
of the Tender Offer Conditions are satisfied and more than 70% but less than 90%
of the outstanding Common Shares on a fully diluted basis (excluding Options (as
defined herein) which are not exercisable for 30 days) have been validly
tendered and not withdrawn in the Offer, the Purchaser shall have the right, in
its sole discretion, to extend the Offer from time to time up to a maximum of
seven additional business days in the aggregate. Subject to the terms of the
Offer and this Agreement and the satisfaction of all the Tender Offer Conditions
as of any Expiration Date, the Purchaser will accept for payment and
-2-
<PAGE>
pay for all Shares validly tendered and not validly withdrawn pursuant to the
Offer as soon as practicable after such expiration date of the Offer. Without
the prior written consent of the Company, the Purchaser shall not accept for
payment or pay for any Shares in the Offer if, as a result, Purchaser would
acquire less than the number of Shares necessary to satisfy the Minimum
Condition (as defined in Annex I hereto).
(c) Parent and the Purchaser represent that the Offer Documents will
comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published, sent or given to the Company's shareholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading, except
that no representation is made by Parent or the Purchaser with respect to
information supplied by the Company in writing for inclusion in the Offer
Documents. Each of Parent and the Purchaser, on the one hand, and the Company,
on the other hand, agrees promptly to correct any information provided by it for
use in the Offer Documents if and to the extent that it shall have become false
or misleading in any material respect and the Purchaser further agrees to take
all steps necessary to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to shareholders of the Company, in each
case, as and to the extent required by applicable federal securities laws.
SECTION 1.2 Company Actions.
---------------
(a) The Company shall, after affording Parent a reasonable opportunity
to review and comment thereon, file with the SEC and mail to the holders of
Common Shares, as promptly as practicable on the date of the filing by Parent
and the Purchaser of the Offer Documents, a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any amendments or supplements
thereto, the "Schedule 14D-9") reflecting the recommendation of the Company
Board that holders of Shares tender their Shares pursuant to the Offer and shall
disseminate the Schedule 14D-9 as required by Rule 14d-9 promulgated under the
Exchange Act. The Schedule 14D-9 will set forth, and the Company hereby
represents, that the Company Board, at a meeting duly called and held at which a
quorum was present throughout, has unanimously (i) determined that each of the
transactions contemplated hereby, including each of the Offer and the Merger, is
fair to and in the best interests of the Company and its shareholders, (ii)
approved the Offer and adopted this Agreement in accordance with the BCL, (iii)
recommended acceptance of the Offer and approval of this Agreement by the
Company's shareholders (if such approval is required by applicable law), and
(iv) taken all other action necessary to render the Rights inapplicable to the
Offer and the Merger; provided, however, that such recommendation and approval
-------- -------
may be withdrawn, modified or amended only prior to the acceptance of payment of
Common Shares pursuant to the Offer, and only to the extent that the Company
Board determines in good faith, after consultation with its outside legal
counsel, that failure to take such action would result in a breach of the
Company Board's fiduciary obligations under applicable law. The Company further
represents that, as of the date of this Agreement, Salomon Smith Barney Inc.
("SSB"), the Company's financial advisor, has delivered to the Company Board its
written opinion that, as of the date of this Agreement, the consideration to be
received by the holders of Common Shares (other than Parent or any of its
affiliates) pursuant to the Offer and the Merger is fair to such holders from a
financial point of view, a copy of the written opinion of which such advisor has
consented to include in the Schedule 14D-9. The Company hereby consents to the
inclusion in
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<PAGE>
the Offer Documents of the recommendations of the Company Board described in
this Section 1.2(a).
(b) The Company represents that the Schedule 14D-9 will comply in all
material respects with the provisions of applicable federal securities laws and,
on the date filed with the SEC and on the date first published, sent or given to
the Company's shareholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or the Purchaser in writing for inclusion in the Schedule 14D-9. Each of
the Company, on the one hand, and Parent and the Purchaser, on the other hand,
agree promptly to correct any information provided by either of them for use in
the Schedule 14D-9 if and to the extent that it shall have become false or
misleading, and the Company further agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the holders of Shares, in each case, as and to the extent
required by applicable federal securities law.
(c) In connection with the Offer, the Company will promptly furnish the
Purchaser with mailing labels, security position listings, any available non-
objecting beneficial owner lists and any available listing or computer list
containing the names and addresses of the record holders of the Common Shares as
of the most recent practicable date and shall furnish the Purchaser with such
additional available information (including, but not limited to, updated lists
of holders of Common Shares and their addresses, mailing labels and lists of
security positions and non-objecting beneficial owner lists) and such other
assistance as the Purchaser or its agents may reasonably request in
communicating the Offer to the Company's record and beneficial shareholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent, the Purchaser and their affiliates,
associates, agents and advisors, shall keep such information confidential and
use the information contained in any such labels, listings and files only in
connection with the Offer and the Merger and, should the Offer terminate or if
this Agreement shall be terminated, will deliver to the Company all copies of
such information then in their possession.
SECTION 1.3 Directors.
---------
(a) Subject to compliance with applicable law, promptly upon the payment
by the Purchaser for Shares pursuant to the Offer representing at least such
number of Shares as shall satisfy the Minimum Condition, and from time to time
thereafter, Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Company Board as is equal to the
product of the total number of directors on the Company Board (determined after
giving effect to the directors elected pursuant to this sentence) multiplied by
the percentage that the aggregate number of Common Shares beneficially owned by
Parent or its affiliates bears to the total number of Common Shares then
outstanding, and the Company shall, upon request of Parent, promptly take all
actions necessary to cause Parent's designees to be so elected, including, if
necessary, seeking the resignations of one or more existing directors; provided,
--------
however, that prior to the Effective Time (as defined in Section 2.2), the
- -------
Company Board shall always have at least two members who are not officers,
directors, employees or designees of the Pur-
-4-
<PAGE>
chaser or any of its affiliates, including the Company ("Purchaser Insiders").
If the number of directors who are not Purchaser Insiders is reduced below two
prior to the Effective Time, the remaining director who is not a Purchaser
Insider shall be entitled to designate a person to fill such vacancy who is not
a Purchaser Insider and who shall be a director not deemed to be a Purchaser
Insider for all purposes of this Agreement.
(b) The Company's obligations to appoint Parent's designees to the Board
shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.
The Company shall promptly take all actions required pursuant to such Section
and Rule in order to fulfill its obligations under this Section 1.3 and shall
include in the Schedule 14D-9 such information with respect to the Company and
its officers and directors as is required under such Section and Rule in order
to fulfill its obligations under this Section 1.3. Parent will supply to the
Company any information with respect to itself and its officers, directors and
affiliates required by such Section and Rule.
(c) Following the election or appointment of Parent's designees pursuant
to this Section 1.3 and prior to the Effective Time, any amendment or
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of Parent
or the Purchaser or waiver of any of the Company's rights hereunder, will
require the concurrence of a majority of the directors of the Company then in
office who are not Purchaser Insiders (or in the case where there are two or
fewer directors who are not Purchaser Insiders, the concurrence of one director
who is not a Purchaser Insider) if such amendment, termination, extension or
waiver could be reasonably likely to have an adverse effect on the minority
shareholders of the Company.
ARTICLE TWO
THE MERGER
SECTION 2.1 The Merger. Upon the terms and subject to the
----------
satisfaction or waiver of the conditions hereof, and in accordance with the
applicable provisions of this Agreement and the BCL, at the Effective Time the
Purchaser shall be merged with and into the Company. Following the Merger, the
separate corporate existence of the Purchaser shall cease and the Company shall
continue as the surviving corporation (the "Surviving Corporation"), and shall
continue its corporate existence under the laws of the State of New York.
SECTION 2.2 Effective Time. As soon as practicable after the
--------------
satisfaction or waiver of the conditions set forth in Sections 7.1(a) and
7.1(b), but subject to Sections 7.1(c) and 7.1(d), the Merger shall become
effective as set forth in the certificate of merger which shall be filed with
the Secretary of State of the State of New York. The parties shall take such
other and further actions as may be required by law to make the Merger
effective. The time the Merger becomes effective in accordance with applicable
law is referred to herein as the "Effective Time."
SECTION 2.3 Effects of the Merger. At and after the Effective Time
---------------------
the Merger shall have the effects set forth in Section 906 of the BCL. Without
limiting the generality of the
-5-
<PAGE>
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company and the Purchaser shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and the Purchaser shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 2.4 Certificate of Incorporation and By-Laws of the Surviving
---------------------------------------------------------
Corporation.
- -----------
(a) The Certificate of Incorporation of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended, subject to
the provisions of Section 6.6 of this Agreement, in accordance with the
provisions thereof and hereof and applicable law.
(b) The By-Laws of the Purchaser in effect at the Effective Time shall
be the By-Laws of the Surviving Corporation until amended, subject to the
provisions of Section 6.6 of this Agreement, in accordance with the provisions
thereof and applicable law.
SECTION 2.5 Directors. Subject to applicable law, the directors of the
---------
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal.
SECTION 2.6 Officers. The individuals specified by Parent prior to the
--------
Effective Time shall, subject to applicable law, be the initial officers of the
Surviving Corporation and shall hold office until their respective successors
are duly elected and qualified, or their earlier death, resignation or removal.
SECTION 2.7 Conversion of Common Shares. At the Effective Time, by
---------------------------
virtue of the Merger and without any action on the part of the holders thereof,
each Common Share issued and outstanding immediately prior to the Effective Time
(other than (i) any Common Shares held by Parent, the Purchaser, any wholly
owned subsidiary of Parent or the Purchaser, in the treasury of the Company or
by any wholly owned subsidiary of the Company, which Common Shares, by virtue of
the Merger and without any action on the part of the holder thereof, shall be
cancelled and retired and shall cease to exist with no payment being made with
respect thereto and (ii) Dissenting Shares (as defined in Section 3.1)), shall
be cancelled and retired and shall be converted into the right to receive the
Offer Price in cash (the "Merger Price"), payable to the holder thereof, without
interest thereon, upon surrender of the certificate formerly representing such
Common Share.
SECTION 2.8 Conversion of Purchaser Common Stock. The Purchaser has
------------------------------------
outstanding 10 shares of common stock, par value $.01 per share, all of which
are entitled to vote with respect to approval of this Agreement. At the
Effective Time, each share of common stock of the Purchaser issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and become one validly issued, fully paid and non-assessable share of
common stock, par value $.01 per share, of the Surviving Corporation.
-6-
<PAGE>
SECTION 2.9 Options; Stock Plans. Prior to the Effective Time, the
--------------------
Company Board (or, if appropriate, any committee thereof) shall adopt
appropriate resolutions and take all other actions necessary to provide for the
cancellation or exercise, effective at the Effective Time, of all the
outstanding stock options or similar rights (the "Options") heretofore granted
under any stock option or similar plan of the Company (the "Stock Plans"),
without any payment therefor except as otherwise provided in this Section 2.9.
Immediately prior to the Effective Time, the Company shall accelerate the
vesting of all unvested Options and each then vested Option shall thereafter no
longer be exercisable but shall entitle each holder thereof, in cancellation and
settlement therefor, to a payment in cash by the Company (subject to any
applicable withholding taxes), at the Effective Time, equal to the product of
(i) the total number of Common Shares subject to such vested Option and (ii) the
excess, if any, of the Merger Price (or such greater price as provided in an
applicable option agreement) over the exercise price per Common Share subject to
such vested Option (such amounts payable hereunder being referred to as the
"Cash Payment"). All other Stock Plans and any other plan, program or
arrangement providing for the issuance or grant of any other interest in respect
of the capital stock of the Company or any subsidiary shall terminate as of the
Effective Time. The Company will use its reasonable best efforts to obtain all
necessary consents to ensure that after the Effective Time, holders of Options
will have no rights other than the rights of the holders of vested Options to
receive the Cash Payment in cancellation and settlement thereof.
SECTION 2.10 Shareholders' Meeting.
---------------------
(a) If required by applicable law in order to consummate the Merger, the
Company, acting through the Company Board, shall, in accordance with applicable
law:
(i) duly call, give notice of, convene and hold a special
meeting of its shareholders (the "Special Meeting") as soon as
practicable following the acceptance for payment of and payment for
Common Shares by the Purchaser pursuant to the Offer for the purpose of
considering and taking action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy statement
relating to this Agreement, and use its reasonable efforts (x) to obtain
and furnish the information required to be included by the SEC in the
Proxy Statement (as hereinafter defined) and, after consultation with
Parent, to respond promptly to any comments made by the SEC with respect
to the preliminary proxy statement and cause a definitive proxy
statement (the "Proxy Statement") to be mailed to its shareholders and
(y) to obtain the necessary approvals of the Merger and this Agreement
by its shareholders; and
(iii) subject to Section 1.2(a), include in the Proxy Statement
the recommendation of the Company Board that shareholders of the Company
vote in favor of the approval of this Agreement; and
(iv) include in the Proxy Statement the opinion of SSB referred
to in Section 1.2(a).
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<PAGE>
(b) Parent agrees that it will vote, or cause to be voted, all of the
Common Shares then owned by it, the Purchaser or any of its other subsidiaries
in favor of the approval of the Merger and of this Agreement.
SECTION 2.11 Merger Without Meeting of Shareholders. Notwithstanding
--------------------------------------
Section 2.10, in the event that Parent, the Purchaser or any other subsidiary of
Parent shall acquire at least 90% of the outstanding Common Shares pursuant to
the Offer or otherwise, the parties hereto agree to take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the acceptance for payment of and payment for Common Shares by
the Purchaser pursuant to the Offer without a meeting of shareholders of the
Company, in accordance with Section 905 of the BCL.
ARTICLE THREE
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.1 Dissenting Shares. Notwithstanding Section 2.7, Common
-----------------
Shares outstanding immediately prior to the Effective Time and held by a holder
who has the right to receive payment of the fair value of his shares pursuant to
Section 910 of the BCL and has complied with the provisions of Section 623 of
the BCL ("Dissenting Shares") shall not be converted into a right to receive the
Merger Price, unless such holder fails to perfect or withdraws or otherwise
loses his right to appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses his right to appraisal, such Common Shares shall
be treated as if they had been converted as of the Effective Time into a right
to receive the Merger Price. The Company shall give Parent prompt notice of any
demands received by the Company for appraisal of Common Shares, and Parent shall
have the right to participate in and to control all negotiations and proceedings
with respect to such demands. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to, or settle or offer
to settle, any such demands.
SECTION 3.2 Payment for Common Shares.
-------------------------
(a) From and after the Effective Time, such bank or trust company as
shall be designated by Parent and reasonably acceptable to the Company shall act
as paying agent (the "Paying Agent") in effecting the payment of the Merger
Price in respect of certificates (the "Certificates") that, prior to the
Effective Time, represented Common Shares entitled to payment of the Merger
Price pursuant to Section 2.7. Promptly following the Effective Time, Parent or
the Purchaser shall deposit, or cause to be deposited, with the Paying Agent the
aggregate Merger Price to which holders of Common Shares shall be entitled at
the Effective Time pursuant to Section 2.7.
(b) Promptly after the Effective Time, Parent shall cause the Paying
Agent to mail to each record holder of Certificates that immediately prior to
the Effective Time represented Common Shares a form of letter of transmittal
which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates to
the Paying Agent, and instructions for use in surrendering such Certificates and
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receiving the Merger Price in respect thereof. Upon the surrender of each such
Certificate, the Paying Agent shall pay the holder of such Certificate the
Merger Price multiplied by the number of Common Shares formerly represented by
such Certificate, in consideration therefor, and such Certificate shall
forthwith be cancelled. Until so surrendered, each such Certificate (other than
Certificates representing Common Shares held by Parent or the Purchaser, any
wholly owned subsidiary of Parent or the Purchaser, in the treasury of the
Company or by any wholly owned subsidiary of the Company or Dissenting Shares)
shall represent solely the right to receive the aggregate Merger Price relating
thereto. No interest or dividends shall be paid or accrued on the Merger Price.
If the Merger Price (or any portion thereof) is to be delivered to any person
other than the person in whose name the Certificate formerly representing Common
Shares surrendered therefor is registered, it shall be a condition to such right
to receive such Merger Price that the Certificate so surrendered shall be
properly endorsed or otherwise be in proper form for transfer and that the
person surrendering such Common Shares shall pay to the Paying Agent any
transfer or other similar taxes required by reason of the payment of the Merger
Price to a person other than the registered holder of the Certificate
surrendered, or shall establish to the satisfaction of the Paying Agent that
such tax has been paid or is not applicable.
(c) Promptly following the date which is 180 days after the Effective
Time, the Paying Agent shall deliver to the Surviving Corporation all cash,
Certificates and other documents in its possession relating to the transactions
described in this Agreement, and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate formerly representing a Common Share
may surrender such Certificate to the Surviving Corporation and (subject to
applicable abandoned property, escheat and similar laws) receive in
consideration therefor the aggregate Merger Price relating thereto, without any
interest thereon.
(d) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Common Shares which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates formerly representing Common Shares are presented to the
Surviving Corporation or the Paying Agent, they shall be surrendered and
cancelled in return for the payment of the aggregate Merger Price relating
thereto, as provided in this Article Three.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser as
follows:
SECTION 4.1 Organization and Qualification; Subsidiaries. The
--------------------------------------------
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York. Each of the Company's subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation. The Company and each of its
subsidiaries has the requisite corporate power and authority to own, operate or
lease its properties and to carry on its business as it is now being conducted,
and, except as set forth on Section 4.1 of the Company Disclosure Schedule, is
duly qualified or licensed to do business, and is in good standing, in each
jurisdiction in which the nature of its business or the properties
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owned, operated or leased by it makes such qualification, licensing or good
standing necessary, except where the failure to have such power or authority, or
the failure to be so qualified, licensed or in good standing, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The term "Material Adverse Effect on the
Company," as used in this Agreement, means any change in or effect on the
business, financial condition or results of operations of the Company or any of
its subsidiaries that would reasonably be expected to be materially adverse to
the Company and its subsidiaries taken as a whole; provided, however, that
-------- -------
"Material Adverse Effect on the Company" shall not include any change, effect,
condition, event or circumstance to the extent attributable to (i) changes,
effects, conditions, events or circumstances that generally affect the
industries in which the Company operates, (ii) general economic conditions or
change, effects, conditions or circumstances affecting the U.S. securities
markets generally or (iii) changes, effects, conditions, events or circumstances
arising from the announcement of the execution of this Agreement. The Company
has heretofore provided or made available to Parent and the Purchaser a complete
and correct copy of the Restated Certificate of Incorporation and the By-Laws or
comparable organizational documents, each as amended to the date hereof, of the
Company and each of its United States subsidiaries and has provided a complete
and correct copy of the Rights Agreement as amended to the date hereof.
SECTION 4.2 Capitalization; Subsidiaries. The authorized capital
----------------------------
stock of the Company consists of 25,000,000 Common Shares and 500,000 shares of
preferred stock of a par value of $1.00 per share ("Preferred Stock"). As of the
close of business on May 2, 2000, 10,357,822 Common Shares were issued and
outstanding, all of which are entitled to vote on this Agreement, and 425,711
Common Shares were held in treasury. The Company has no shares of Preferred
Stock issued and outstanding. As of May 4, 2000, there were 1,538,545 Shares
reserved for issuance pursuant to outstanding Options and rights granted under
the Stock Plans. Section 4.2 of the Disclosure Schedule delivered to Parent by
the Company prior to the date hereof (the "Company Disclosure Schedule") sets
forth the holders of all outstanding Options and the number, exercise prices and
expiration dates of each grant to such holders. Since January 1, 2000, the
Company has not issued any shares of capital stock except pursuant to the
exercise of Options outstanding as of such date, except for issuance of director
fee shares in the ordinary course consistent with past practice. All the
outstanding Common Shares are, and all Common Shares which may be issued
pursuant to the exercise of outstanding Options will be, when issued in
accordance with the respective terms thereof, duly authorized, validly issued,
fully paid and nonassessable and are not subject to, nor were they issued in
violation of, any preemptive rights. Except for the 8 3/4% Convertible
Debentures Due 2009 (the "Convertible Debentures"), there are no bonds,
debentures, notes or other indebtedness having general voting rights (or
convertible into securities having such rights) ("Voting Debt") of the Company
or any of its subsidiaries issued and outstanding. Except as set forth in this
Section 4.2, and except for the Rights and the Convertible Debentures, there are
no existing options, warrants, calls, subscriptions or other rights, agreements,
arrangements or commitments of any character to which the Company or any of its
subsidiaries is a party or by which any of them is bound, obligating the Company
or any of its subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or Voting Debt of, or other
equity interest in, the Company or any of its subsidiaries or securities
convertible into or exchangeable for such shares or equity interests or
obligating the Company or any of its subsidiaries to grant, extend or enter into
any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment. Ex-
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cept as contemplated by this Agreement or the Rights Agreement and except for
the Company's obligations in respect of the Options under the Stock Plans, there
are no outstanding contractual obligations of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any Common Shares or the
capital stock of the Company or any of its subsidiaries. Each of the outstanding
shares of capital stock of each of the Company's subsidiaries is duly
authorized, validly issued, fully paid and nonassessable, and, except as set
forth in Section 4.2 of the Company Disclosure Schedule, such shares of the
Company's subsidiaries are owned by the Company or by another subsidiary of the
Company or by a Director as qualifying shares (all of which are owned
beneficially by the Company) in each case free and clear of any lien, claim,
option, charge, security interest, limitation, encumbrance and restriction of
any kind (any of the foregoing being a "Lien"). Set forth in Section 4.2 of the
Company Disclosure Schedule is a complete and correct list of each subsidiary
(direct or indirect) of the Company and each entity in which the Company owns,
directly or indirectly, any equity interest.
SECTION 4.3 Authority Relative to this Agreement and Related Matters.
--------------------------------------------------------
The Company has all necessary corporate power and authority to execute and
deliver this Agreement and, except for any required approval by the Company's
shareholders in connection with consummation of the Merger, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized and approved by the
Company Board and no other corporate proceedings on the part of the Company are
necessary to authorize or approve this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval of this Agreement by the affirmative vote of the holders of two-thirds
of the then outstanding Common Shares entitled to vote thereon, to the extent
required by applicable law and the filing of the certificate of merger pursuant
to the BCL). This Agreement has been duly and validly executed and delivered by
the Company and, assuming the due and valid authorization, execution and
delivery of this Agreement by Parent and the Purchaser, constitutes a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms.
SECTION 4.4 No Conflict; Required Filings and Consents.
------------------------------------------
(a) Assuming (i) the filings required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and any foreign
or supranational antitrust laws are made and the waiting periods thereunder have
been terminated or have expired, (ii) the requirements of the Exchange Act and
any applicable state securities, "blue sky" or takeover law are met, (iii) the
filing of the certificate of merger and other appropriate merger documents, if
any, as required by the BCL, is made, (iv) the requirements under applicable
security and export control regulations are met and (v) with respect to the
Merger, approval of this Agreement by the holders of two-thirds of the
outstanding Common Shares, if required by the BCL, is received, none of the
execution and delivery of this Agreement by the Company, the consummation by the
Company of the transactions contemplated hereby or compliance by the Company
with any of the provisions hereof will (i) conflict with or violate the Restated
Certificate of Incorporation or By-Laws of the Company or the comparable
organizational documents of any of its subsidiaries, (ii) except as disclosed on
Section 4.4(a) of the Company Disclosure Schedule, conflict with or violate in
any material respect any statute, ordinance, rule, regulation, order, judgment,
decree, permit or license applicable to the Company or any of its subsidiaries,
or by which any of them
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or any of their respective properties or assets may be bound or affected, or
(iii) except as disclosed on Section 4.4(a) of the Company Disclosure Schedule,
result in a violation or breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in any loss of any benefit, or the creation of any Lien on any of the
properties or assets of the Company or any of its subsidiaries (any of the
foregoing referred to in clause (ii) or this clause (iii) being a "Violation")
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective properties may be bound or affected,
other than, in the case of clause (ii) or (iii) above, any such Violations that,
individually or in the aggregate, would not (A) reasonably be expected to have a
Material Adverse Effect on the Company, (B) materially impair the ability of the
Company to perform its obligations under this Agreement or (C) prevent or
materially delay consummation of the Offer or the Merger.
(b) Except as set forth in Section 4.4(b) of the Company Disclosure
Schedule, none of the execution and delivery of this Agreement by the Company,
the consummation by the Company of the transactions contemplated hereby or
compliance by the Company with any of the provisions hereof will require any
consent, waiver, approval, authorization or permit of, or registration or filing
with or notification to (any of the foregoing being a "Consent"), any government
or subdivision thereof, domestic, foreign or supranational or any
administrative, governmental or regulatory authority, agency, commission,
tribunal or body, domestic, foreign or supranational (each a "Governmental
Entity"), including, without limitation, the U.S. Departments of Defense, State
and Commerce except for (i) compliance with any applicable requirements of the
Exchange Act, (ii) the filing of the certificate of merger pursuant to the BCL,
(iii) compliance with the HSR Act and any requirements of any foreign or
supranational antitrust laws, and (iv) such filings, authorizations, orders and
approvals as to which failure to obtain or make would not (x) reasonably be
expected to have a Material Adverse Effect on the Company or (y) prevent or
materially delay the consummation of the Offer or the Merger.
SECTION 4.5 SEC Reports and Financial Statements.
------------------------------------
(a) The Company has filed with the SEC all forms, reports, schedules,
registration statements and definitive proxy statements required to be filed by
the Company with the SEC since January 1, 1998 (as they have been amended since
the time of their filing, and including any documents filed as exhibits thereto,
collectively, the "SEC Reports") and complete and correct copies of all such
forms, reports, schedules, registration statements, and proxy statements are
available to Parent through public sources. As of their respective dates, the
SEC Reports (including but not limited to any financial statements or schedules
included or incorporated by reference therein) complied as to form in all
material respects with the requirements of the Exchange Act or the Securities
Act of 1933, as amended (the "Securities Act"), and the rules and regulations of
the SEC promulgated thereunder applicable, as the case may be, to such SEC
Reports, and none of the SEC Reports contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
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<PAGE>
(b) The consolidated balance sheets as of December 31, 1999 and 1998 and
the consolidated statements of income, common shareholders' equity and cash
flows for each of the three fiscal years in the period ended December 31, 1999
(including the related notes and schedules thereto) of the Company contained in
the Company's Form 10-K for the fiscal year ended December 31, 1999 (the "1999
Financial Statements") present fairly in all material respects the consolidated
financial position and the consolidated results of operations and cash flows of
the Company and its consolidated subsidiaries as of the dates or for the periods
presented therein and were prepared in accordance with United States generally
accepted accounting principles ("GAAP") consistently applied during the periods
involved except as otherwise noted therein, including the related notes.
(c) Except as reflected, reserved against or otherwise disclosed in the
1999 Financial Statements or as set forth in Section 4.5(c) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries has any
material liabilities or obligations (absolute, accrued, fixed, contingent or
otherwise) other than liabilities incurred in the ordinary course of business
consistent with past practice since December 31, 1999 which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(d) The Company has heretofore furnished to Parent a complete and
correct copy of any amendments or modifications which have not yet been filed
with the SEC to agreements, documents or other instruments which previously had
been filed by the Company with the SEC pursuant to the Securities Act and the
rules and regulations promulgated thereunder or the Exchange Act and the rules
and regulations promulgated thereunder.
(e) Proper accounting controls are, and since January 1, 1996, have
been, in place to ensure that no portion of any international sales
representative commission or contingent fee or other payment is included,
directly or indirectly, in the contract price of any sale to the United States
Government pursuant to the Foreign Military Sales ("FMS") program, or any sale
to a foreign government financed in whole or in part with funding from the U.S.
Foreign Military Finance ("FMF") program, except as permitted thereunder.
(f) All payments to international sales representatives since January 1,
1996 including commission and contingent fee payments to international sales
representatives or others on FMS and FMF contracts, (i) have been accurately
reported in all material respects on the Company books and records, and (ii)
have been made consistent in all material respects with all applicable United
States and foreign laws and regulations.
SECTION 4.6 Environmental Matters.
---------------------
Except as may be set forth in Section 4.6 of the Company Disclosure
Schedule:
(a) The business and operations of the Company and its subsidiaries
comply with all applicable Environmental Laws; the Company and its subsidiaries
have obtained all Governmental Permits relating to Environmental Laws necessary
for the operation of their businesses; and all such Governmental Permits are in
full force and effect and the Company and its subsidiaries are in compliance
with such permits except, in the case of each of the foregoing, for such events
as would not reasonably be expected to, individually or in the aggregate, have a
Material
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Adverse Effect on the Company. Neither the Company nor any of its subsidiaries
has received written notice of, or, to the knowledge of the Company, is subject
to, any ongoing or currently applicable investigation by, order from or written
claim by any person (including without limitation any Governmental Entity or
prior owner or operator of any of the Company Property) respecting (i) any
Environmental Law, (ii) any Remedial Action or (iii) any claim arising from the
Release or threatened Release of a Contaminant into the environment except as
would not reasonably be expected to individually or in the aggregate, have a
Material Adverse Effect on the Company. Neither the Company nor any of its
subsidiaries has been served with any pending judicial or administrative
proceeding, order, judgment or decree, or entered into a settlement alleging or
addressing a violation of or liability under any Environmental Law, except as
would not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect on the Company.
(b) Neither the Company nor any of its subsidiaries has (i) reported a
Release of a hazardous substance pursuant to Section 103(a) of CERCLA, or any
state equivalent; (ii) filed a notice pursuant to Section 103(c) of CERCLA; or
(iii) filed any notice under any applicable Environmental Law reporting a
violation of any applicable Environmental Law. There is not now with respect to
the operations of the Company or any of its subsidiaries, nor to the knowledge
of the Company has there ever been, on or in any Company Property: (A) any
Release, (B) any treatment, recycling, disposal or storage, other than short
term storage prior to removal by a licensed transporter for off-site disposal,
of any hazardous waste, as that term is defined under RCRA or any state
equivalent, or (C) any underground storage tank or surface impoundment or
landfill or waste pile, except, in the case of each of the foregoing, for such
events which would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
(c) Except as set forth on Section 4.6(c) of the Company Disclosure
Schedule, to the knowledge of the Company, there is not now on or in any Company
Property any polychlorinated biphenyls (PCB) used in the Company's operations in
pigments, hydraulic oils, electrical transformers or other equipment except as
would not have, individually or in the aggregate, a Material Adverse Effect on
the Company.
(d) To the knowledge of the Company, any asbestos-containing material or
presumed asbestos-containing material which is on or part of any Company
Property presently owned, leased or operated by the Company or any of its
subsidiaries, as currently configured and operated, is in good repair according
to the current standards and practices governing such material, and its presence
or condition does not materially violate any currently applicable Environmental
Law. None of the products manufactured, distributed or sold by the Company or
any of its subsidiaries contained asbestos or asbestos-containing material.
(e) For purposes of this Section:
(i) "Company Property" means any real property, plant, building
or facility now or, to the Company's knowledge, previously owned, leased
or operated primarily by the Company or any of its present or, to the
Company's knowledge, past subsidiaries.
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<PAGE>
(ii) "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, in effect as of the Closing Date, and
any regulations promulgated thereunder in effect as of the Closing Date.
(iii) "Contaminant" means any waste, pollutant, hazardous or
toxic substance or waste, petroleum, petroleum-based substance or waste,
special waste, hazardous material or any constituent of any such
substance, waste or material, in each case to the extent regulated by
Environmental Law.
(iv) "Environmental Law" means all foreign, federal, state and
local laws or regulations relating to or addressing the environment or
health and safety as related to Contaminants, including but not limited
to CERCLA, OSHA and RCRA and any foreign or state equivalent thereof.
(v) "Governmental Permits" means any permits, licenses,
certificates, orders, consents, authorizations, and other approvals
from, or required by, any Governmental Entity that are used by, or are
necessary to own and to operate, the business of the Company and its
subsidiaries as currently configured and operated, together with any
applications for the issuance, renewal, modification or extension
thereof and all supporting information and analyses.
(vi) "OSHA" means the Occupational Safety and Health Act, as
amended, and any regulations promulgated thereunder, in each case in
effect as of the Closing Date.
(vii) "RCRA" means the Resource Conservation and Recovery Act,
as amended, and any regulations promulgated thereunder, in each case in
effect as of the Closing Date.
(viii) "Release" means release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration of a Contaminant into the environment, including the movement
of Contaminants through or in the air, soil, surface water or
groundwater of Company Property.
SECTION 4.7 Compliance with Applicable Laws. (a) Except with respect
-------------------------------
to Environmental Laws (which are covered in Section 4.6), and except as set
forth on Section 4.7 of the Company Disclosure Schedule the Company and its
subsidiaries hold all permits, registrations, clearances, licenses, variances,
exemptions, orders and approvals of all Governmental Entities material to the
Company and required for them to own their assets, conduct their business, and
perform their contracts (the "Company Permits"). The Company and its
subsidiaries are in compliance in all material respects with the terms of the
Company Permits. Except with respect to Environmental Laws which are covered in
Section 4.6, the business operations of the Company and its subsidiaries have
been conducted in compliance in all respects material to the Company with all
laws, ordinances and regulations of any Governmental Entity.
(b) The Company and its subsidiaries have not made, directly or
indirectly, any payment or promise to pay, or gift or promise to give or
authorized such a promise or gift, of any money or anything of value, directly
or indirectly, to (i) any foreign official (as such term is defined in the
Foreign Corrupt Practices Act of 1977, as amended (the "FCPA") for the purpose
of
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influencing any official act or decision of such official or inducing him or her
to do or omit to do any act in violation of his or her lawful duty, to affect
any act or decision of such official, or to secure any improper advantage, or
inducing him or her to use his or her influence to affect any act or decision of
a foreign government, or any agency or subdivision thereof or (ii) any foreign
political party or official thereof or candidate for foreign political office
for the purpose of influencing any official act or decision of such party,
official or candidate or inducing him or her to do any act in violation of his
or her lawful duty, or to secure any improper advantage, or inducing such party,
official or candidate to use his, her or its influence to affect any act or
decision of a foreign government or agency or subdivision thereof, in the case
of both clauses (i) and (ii) above in order to assist the Company or any of its
subsidiaries in obtaining or retaining business for or directing business to the
Company or any of its subsidiaries or under circumstances which would subject
the Company or any of its subsidiaries to liability under the FCPA (or any
comparable foreign statute or regulation). To its knowledge, the Company has not
made any bribe, kickback or other illegal payment in violation of any foreign or
domestic law.
SECTION 4.8 Change of Control. Except as set forth on Section 4.4(a)
-----------------
or Section 4.8 of the Company Disclosure Schedules, the transactions
contemplated by this Agreement will not constitute a "change of control" under,
require the consent from or the giving of notice to a third party pursuant to,
permit a third party to terminate or accelerate vesting or repurchase rights or
create any other detriment under the terms, conditions or provisions of any
material note, bond, mortgage, indenture, license, lease, contract, agreement or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which any of them or any of their properties or assets may be
bound.
SECTION 4.9 Litigation. Except as set forth on Section 4.9 of the
----------
Company Disclosure Schedule, there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened, against
the Company or any of its subsidiaries, individually or in the aggregate, which
would reasonably be expected to (i) have a Material Adverse Effect on the
Company and its subsidiaries or (ii) prevent or materially delay the
consummation of the Offer and the Merger. Except as disclosed in the SEC
Reports filed prior to the date of this Agreement, neither the Company nor any
of its subsidiaries is subject to any outstanding order, writ, injunction or
decree which, individually or in the aggregate, would reasonably be expected to
(i) have a Material Adverse Effect on the Company or (ii) prevent or materially
delay the consummation of the Offer and the Merger.
SECTION 4.10 Information. None of the information supplied by the
-----------
Company specifically for inclusion or incorporation by reference in (i) the
Offer Documents, (ii) the Proxy Statement or (iii) any other document to be
filed with the SEC or any other Governmental Entity in connection with the
transactions contemplated by this Agreement (the "Other Filings") will, at the
respective times filed with the SEC or other Governmental Entity and, in
addition, in the case of the Proxy Statement, at the date it or any amendment or
supplement is mailed to shareholders, at the time of the Special Meeting and at
the Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading. The Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder, except that no representation is made by the Company
with respect to any forward-looking information which may
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have been supplied by the Company, whether or not included by Parent or the
Purchaser in any Offer Document or in the Proxy Statement or statements made
therein based on information supplied by Parent or the Purchaser in writing
specifically for inclusion in the Proxy Statement.
SECTION 4.11 Certain Approvals. The Company has taken all necessary
-----------------
action to ensure that Section 912 of the BCL shall not apply to or be triggered
by this Agreement or the consummation of the transactions contemplated hereby.
To the knowledge of the Company, no state takeover statute or similar statute or
regulation applies or purports to apply to the Offer, the Merger or the
transactions contemplated by this Agreement.
SECTION 4.12 Employee Benefit Plans.
----------------------
(a) Section 4.12(a) of the Company Disclosure Schedule includes a
complete list of all material employee benefit plans, programs, and other
arrangements providing incentive compensation or benefits to any employee or
former employee or beneficiary or dependent thereof, whether or not written, and
whether covering one person or more than one person, sponsored or maintained by
the Company or any of its subsidiaries or to which the Company or any of its
subsidiaries contributes or is obligated to contribute ("Plans") except for
Foreign Plans (as hereinafter defined), a complete list of which the Company
shall deliver to Parent within ten business days after the date of this
Agreement. Without limiting the generality of the foregoing, the term "Plans"
includes all employee welfare benefit plans within the meaning of Section 3(1)
of the Employee Retirement Income Security Act of 1974, as amended, and the
regulations thereunder ("ERISA") and all employee pension benefit plans within
the meaning of Section 3(2) of ERISA.
(b) With respect to each material Plan (other than a Foreign Plan), the
Company has, except as set forth on Section 4.12(b) of the Company Disclosure
Schedule, delivered or made available to Parent a true, correct and complete
copy of: (i) each material Plan document and each material document, if any,
prepared in connection with such Plan, including without limitation, benefit
schedules, trust agreements, and insurance contracts and other funding vehicles;
(ii) the most recent Annual Report (Form 5500 Series) and accompanying schedule,
if any; (iii) the current summary plan description, if any; (iv) the most recent
annual financial report, if any; (v) the most recent actuarial report, if any;
and (vi) the most recent determination letter from the Internal Revenue Service
(the "IRS"), if any. Except as set forth on Section 4.12(b) of the Company
Disclosure Schedule, there are no material amendments to any Plan that have been
adopted or approved nor has the Company or any of its subsidiaries undertaken to
make any such amendments.
(c) Section 4.12(c) of the Company Disclosure Schedule identifies each
Plan that is intended to be a "qualified plan" within the meaning of Section
401(a) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder (the "Code") ("Qualified Plans"). Except as set forth on
Section 4.12(b) of the Company Disclosure Schedule, the IRS has issued a
favorable determination letter with respect to each Qualified Plan that has not
been revoked, and to the Company's knowledge there are no existing circumstances
nor any events that have occurred that could reasonably be expected to adversely
affect the qualified status of any Qualified Plan or the related trust. Each
Plan which is intended to meet the requirements of
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Code Section 501(c)(9), meets such requirements and provides no disqualified
benefits (as such term is defined in Code Section 4976(b)).
(d) All material contributions required to be made to any Plan by
applicable law or regulation or by any plan document or other contractual
undertaking, and all material premiums due or payable with respect to insurance
policies funding any Plan, for any period through the date hereof have been
timely made or paid in full or, to the extent not required to be made or paid on
or before the date hereof, have been fully reflected in the financial statements
of the Company included in the SEC Reports to the extent required under
generally accepted accounting principles.
(e) The Company and each of its subsidiaries has complied, and is now in
compliance, in all material respects with all provisions of ERISA, the Code and
all laws and regulations applicable to the Plans. There is not now, nor, to the
Company's knowledge, do any circumstances exist that could give rise to, any
requirement for the posting of material security with respect to a Plan or the
imposition of any material lien on the assets of the Company or any of its
subsidiaries under ERISA or the Code. To the Company's knowledge, no non-exempt
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) has occurred with respect to any Plan that could reasonably be
expected to result in the imposition of any material penalty or tax on the
Company.
(f) With respect to each Plan that is subject to Title IV or Section 302
of ERISA or Section 412 or 4971 of the Code: (i) there does not exist any
accumulated funding deficiency within the meaning of Section 412 of the Code or
Section 302 of ERISA, whether or not waived; (ii) no reportable event within the
meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has
not been waived has occurred during the last six years, and the consummation of
the transactions contemplated by this agreement will not result in the
occurrence of any such reportable event; (iv) all premiums to the Pension
Benefit Guaranty Corporation (the "PBGC") have been timely paid in full; (v) no
liability (other than for premiums to the PBGC) under Title IV of ERISA that
could have a Material Adverse Effect on the Company has been or is to the
Company's knowledge expected to be incurred by the Company or any of its
subsidiaries; and (vi) the PBGC has not instituted proceedings to terminate any
such Plan and, to the Company's knowledge, no condition exists that could
reasonably be expected to result in the institution of proceedings or which
could reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any such
Plan.
(g) Except as set forth on Section 4.12(g) of the Company Disclosure
Schedule, no Plan is a "multiemployer plan" within the meaning of Section
4001(a)(3) of ERISA (a "Multiemployer Plan") or a plan that has two or more
contributing sponsors at least two of which are not under common control, within
the meaning of Section 4063 of ERISA and which is subject to Title IV of ERISA
(a "Multiple Employer Plan"), nor has the Company or any of its subsidiaries, or
any of their respective ERISA Affiliates (as defined in the next sentence), at
any time during the last six years, contributed to or been obligated to
contribute to any Multiemployer Plan or Multiple Employer Plan. An "ERISA
Affiliate" means any entity, trade or business that is a member of a group
described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1)
of ERISA that includes the Company or any of its subsidiaries, or that is a
member of
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the same "controlled group" as the Company or any of its subsidiaries, pursuant
to Section 4001(a)(14) of ERISA. With respect to each Plan that is a
Multiemployer Plan: (i) if the Company or any of its subsidiaries or any of
their respective ERISA Affiliates were to experience a withdrawal or partial
withdrawal from such plan, no material withdrawal liability under Title IV of
ERISA would be incurred; and (ii) none of the Company and its subsidiaries, nor
any of their respective ERISA Affiliates, has received any notification, nor has
any reason to believe, that any such Plan is in reorganization, has been
terminated, is insolvent, or may reasonably be expected to be in reorganization,
to be insolvent, or to be terminated.
(h) There does not now exist, nor to the Company's knowledge do any
circumstances exist that could reasonably be expected to result in, any material
liability under (i) Title IV of ERISA, (ii) Section 302 of ERISA, (iii) Sections
412 and 4971 of the Code, (iv) the continuation coverage requirements of Section
601 et seq. of ERISA and Section 4980B of the Code, or (v) corresponding or
similar provisions of foreign laws or regulations known to the Company, other
than a liability that arises solely out of, or relate solely to, the Plans, that
would be a liability of the Company or any of its subsidiaries following the
Closing. Without limiting the generality of the foregoing, to the Company's
knowledge none of the Company, its subsidiaries nor any ERISA Affiliate of the
Company or any of its subsidiaries has engaged in any transaction described in
Section 4069 or Section 4204 or 4212 of ERISA.
(i) Except as set forth in the SEC Reports or on Section 4.12(i) of the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries has
any liability for life, health, medical or other welfare benefits to former
employees or beneficiaries or dependents thereof, except for health continuation
coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA
and at no expense to the Company and its subsidiaries.
(j) There are no pending or to the Company's knowledge threatened claims
(other than claims for benefits in the ordinary course), lawsuits or
arbitrations which have been asserted or instituted against the Plans, any
fiduciaries thereof with respect to their duties to the Plans or the assets of
any of the trusts under any of the Plans which could reasonably be expected to
result in any material liability of the Company or any of its subsidiaries to
the Pension Benefit Guaranty Corporation, the Department of Treasury, the
Department of Labor or any Multiemployer Plan that could have a Material Adverse
Effect on the Company.
(k) Except as set forth on Section 4.8 or 4.12(k) of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (either alone or
in conjunction with any other event) result in, cause the accelerated vesting,
funding or delivery of, or increase the amount or value of, any payment or
benefit to any employee, officer or director of the Company or any of its
subsidiaries or result in any limitation on the right of the Company or any of
its subsidiaries to amend, merge, terminate or receive a reversion of assets
from any Plan or related trust. Without limiting the generality of the
foregoing, the aggregate amounts paid or payable (whether in cash, in property,
or in the form of benefits) by the Company or any of its subsidiaries in
connection with the transactions contemplated hereby (either solely as a result
thereof or as a result of such transactions in conjunction with any other event)
that will be "excess parachute payments" within the meaning of Section 280G of
the Code, will not exceed the amounts set forth on Section 4.12(k) of the
Company Disclosure Schedule.
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<PAGE>
(l) With respect to employee benefit plans, programs, and other
arrangements providing incentive compensation or other benefits to any employee
or former employee or dependent thereof, which plan, program or arrangement is
subject to the laws of any jurisdiction outside of the United States ("Foreign
Plans"): (i) the Foreign Plans have been maintained in all material respects in
accordance with all applicable requirements, (ii) if they are intended to
qualify for special tax treatment, meet all requirements for such treatment, and
(iii) if they are intended to be funded and/or book-reserved are fully funded
and/or book reserved, as appropriate, based upon reasonable actuarial
assumptions.
SECTION 4.13 Intellectual Property.
---------------------
(a) Set forth on Section 4.13(a) of the Company Disclosure Schedule is a
list of all material patents, patent applications, trademark registrations and
trademark applications, service mark registrations and service mark
applications, certification mark registrations and certification mark
applications, copyright registrations and copyright registration applications,
mask works registrations and mask works registration applications, both domestic
and foreign, which are owned by the Company or any of its subsidiaries. The
assets described on Section 4.13(a) of the Company Disclosure Schedule and all
other material computer software, trade secrets, trademarks, trade names,
service marks, certification marks, copyrights, know-how, methods, processes,
procedures, apparatus, equipment, industrial property, discoveries, inventions,
patent disclosures, designs, drawings, plans, specifications, engineering data,
manuals, development projects, research and development work in progress,
technology or other proprietary rights or confidential information which are
owned by or material to the Company or any of its subsidiaries are referred to
as the "Intellectual Property." The Company and its subsidiaries own all right,
title and interest in and to the Intellectual Property validly and beneficially,
free and clear of all material Liens, with the sole and exclusive right to use
the same, subject to those licenses listed on Section 4.13(b) of the Company
Disclosure Schedule.
(b) Set forth on Section 4.13(b) of the Company Disclosure Schedule is a
list of (i) all material licenses, assignments and other transfers of
Intellectual Property granted to others by the Company or any of its
subsidiaries, and (ii) all material licenses, assignments and other transfers of
patents, trade names, trademarks, service marks, copyrights, mask works
registrations, software, trade secrets, know-how, technology or other
proprietary rights or information granted to the Company or any of its
subsidiaries by others. Except as set forth on Section 4.13(b) of the Company
Disclosure Schedule, none of the material licenses, assignments or other
transfers described above is subject to termination or cancellation or change in
its terms or provisions as a result of this Agreement or the transactions
provided for in this Agreement.
(c) Except as set forth on Section 4.13(c) of the Company Disclosure
Schedule to the best knowledge of the Company, there is no material unauthorized
use, infringement or misappropriation of any Intellectual Property. The
Intellectual Property constitutes all the intellectual property necessary or
appropriate to conduct the business of the Company as presently conducted.
(d) Except as set forth on Section 4.13(d) of the Company Disclosure
Schedule, no material claim with respect to the Intellectual Property has been
asserted or, to the best knowledge of the Company, is threatened by any person
nor does the Company know of any
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<PAGE>
valid ground for any bona fide claims (i) to the effect that the manufacture,
sale or use of any product or process as used (currently or in the past) or
offered or proposed for use or sale by the Company infringes on any copyright,
trade secret, patent, tradename or other intellectual property right of any
person, (ii) against the Company relating to the use of any Intellectual
Property, or (iii) challenging the ownership, validity or effectiveness of any
Intellectual Property. All granted and issued patents and all registered
trademarks and service marks listed in Section 4.13(a) of the Company Disclosure
Schedule and all copyrights held by the Company are valid, enforceable and
subsisting.
(e) No Intellectual Property is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting in any manner the
licensing, assignment or other transfer, use or enforceability thereof by the
Company. The Company has not entered into any agreement to indemnify any other
person against any charge of infringement of any Intellectual Property, except
indemnities agreed to in the ordinary course of business in connection with the
sale, delivery or transfer of Company products and services or included as part
of the Company's license agreements. The Company or its subsidiaries have the
exclusive right to file, prosecute and maintain all applications and
registrations with respect to Intellectual Property owned by the Company or its
subsidiaries.
SECTION 4.14 Taxes.
-----
(a) The Company and each of its subsidiaries has filed all federal,
state, local and foreign income Tax Returns (as hereinafter defined) required to
be filed by it, and all other Tax Returns required to be filed by it. All such
Tax Returns were correct in all material respects. The Company and each of its
subsidiaries has paid or caused to be paid all Taxes (as hereinafter defined)
shown as due and payable on such Tax Returns in respect of the periods covered
by such returns and has made adequate provision in the Company's financial
statements for payment of all Taxes anticipated to be payable in respect of all
taxable periods or portions thereof ending on or before the date hereof. Except
as set forth on Section 4.14(a) of the Company Disclosure Schedule, neither the
Company nor any of its subsidiaries is currently the beneficiary of any
extension of time within which to file any Tax Return. There are no security
interests on any of the assets of Company or any of its subsidiaries that arose
in connection with any failure to pay any Tax. There is no claim or dispute
concerning any material Tax liability of the Company or its subsidiaries either
(i) claimed or raised by any authority in writing or (ii) as to which any of the
directors and officers (and employees responsible for Tax matters) of the
Company and its subsidiaries has knowledge based on personal contact with any
agent of such authority. No issue has been raised in writing in any examination
by any authority with respect to the Company or any subsidiary which, by
application of similar principles, reasonably could be expected to result in a
proposed material deficiency or increase in Tax for any other period not so
examined. Section 4.14 of the Company Disclosure Schedule lists the periods
through which the Tax Returns required to be filed by the Company or any of its
subsidiaries have been examined by the IRS or other appropriate taxing
authority, or the period during which any assessments may be made by the IRS or
other appropriate taxing authority has expired. All material deficiencies and
assessments asserted as a result of such examinations or other audits by
federal, state, local or foreign taxing authorities have been paid, fully
settled or adequately provided for in the Company's
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<PAGE>
financial statements, and no issue or claim has been asserted in writing for
Taxes by any taxing authority for any prior period, other than those heretofore
paid or provided for in the Company's financial statements. There are no
outstanding agreements or waivers extending the statutory period of limitation
applicable to any Tax Return of the Company or any of its subsidiaries. Neither
the Company nor any of its subsidiaries has filed a consent pursuant to Section
341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by the Company or any of its subsidiaries. Neither
the Company nor any of its subsidiaries (i) has been a member of a group filing
consolidated returns for federal income Tax purposes (except for the group of
which the Company is the common parent), (ii) has any liability for the Taxes of
any person (other than the Company and its subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
law), as a transferor or successor, by contract or otherwise, or (iii) except as
set forth on Section 4.14(a) of the Company Disclosure Schedule, is a party to a
Tax sharing or Tax indemnity agreement or any other agreement of a similar
nature involving a material amount of Taxes that remains in effect.
(b) For purposes of this Agreement, the term "Tax" or "Taxes" means all
taxes, charges, fees, levies or other assessments, including, without
limitation, income, gross receipts, excise, property, sales, transfer, license,
payroll, withholding, capital stock and franchise taxes, imposed by the United
States or any state, local or foreign government or subdivision or agency
thereof, including any interest, penalties or additions thereto. For purposes of
this Agreement, the term "Tax Return" means any report, return or other
information or document required to be supplied to a taxing authority in
connection with Taxes.
SECTION 4.15 Absence of Certain Changes. Except as disclosed in the
--------------------------
SEC Reports filed prior to the date of this Agreement and except as set forth on
Section 4.15 of the Company Disclosure Schedule, since December 31, 1999 to the
date of this Agreement, (i) there has not been any Material Adverse Effect on
the Company; and (ii) the businesses of the Company and each of its subsidiaries
have been conducted only in the ordinary course and in a manner consistent with
past practice.
SECTION 4.16 Labor Matters. (a) Except as set forth on Section 4.16
-------------
of the Company Disclosure Schedule, as of the date of this Agreement no
employees of the Company or of any of its subsidiaries are represented by any
labor union or any collective bargaining organization. As of the date of this
Agreement, no labor organization or group of employees of the Company or any of
its subsidiaries has made a pending demand for recognition or certification, and
there are no representation or certification proceedings or petitions seeking a
representation proceeding presently pending or threatened to be brought or
filed, with the National Labor Relations Board or any other labor relations
tribunal or authority. To the Company's knowledge as of the date hereof no facts
or event exists that is likely to give rise to a violation of Section 4.16(a) on
or before the Effective Time.
(b) With respect to employees of and services providers the Company:
(i) The Company complies and has complied materially with all
applicable domestic and foreign laws respecting employment and
employment practices, terms and conditions of employment and wages and
hours, including without limitation any such laws respecting employment
discrimination, workers' compensation, family and medical leave, the
Immigration Reform and Control Act, and occupational safety and health
re-
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<PAGE>
quirements, and no claims or investigations are pending or, to the
Company's knowledge, threatened with respect to such laws, either by
private individuals or by governmental agencies; and all U.S. employees
are at will except as set forth in Section 4.16 of the Company
Disclosure Schedule;
(ii) To the Company's knowledge it is not nor has it been
engaged in any unfair labor practice. There is not now, nor within the
past three years has there been, any unfair labor practice complaint
against the Company pending or, to the Company's knowledge, threatened,
before the National Labor Relations Board or any other comparable
foreign or domestic authority or any workers' council;
(iii) As of the date of this Agreement, no material grievance or
arbitration proceeding arising out of or under collective bargaining
agreements or employment relationships (involving more than one
employee) is pending, and no claims therefor exist or have, to the
Company's Knowledge, been threatened; no labor strike, lock-out,
slowdown, or work stoppage is pending or threatened against or directly
affecting the Company; and, to the Company's knowledge as of the date
hereof, no fact or event exists that is likely to give rise to a
violation of Section 4.16(b)(iii) on or before the Effective Time; and
(iv) All persons who are or were performing services for the
Company and are or were classified as independent contractors do or did
satisfy and have satisfied the requirements of law to be so classified,
and the Company has fully and accurately reported their compensation on
IRS Forms 1099 when required to do so.
SECTION 4.17 Relationships with Customers, Suppliers, Distributors and
---------------------------------------------------------
Sales Representatives. Except as set forth on Section 4.17 of the Company
- ---------------------
Disclosure Schedule, the Company has not received written notice that any
customer, supplier, distributor or sales representative intends to cancel,
terminate or otherwise modify its relationship with the Company or any
subsidiary, which action would reasonably be expected to have a Material Adverse
Effect on the Company.
SECTION 4.18 Contracts. Each material note, bond, mortgage, indenture,
---------
lease, license, contract, agreement or other instrument or obligation to which
the Company or any of its subsidiaries is a party or by which any of them or any
of the properties or assets may be bound including, without limitation, all
contracts in which the Company assumed or retained environmental liabilities in
connection with the sales of companies or properties (the "Material Contracts")
is valid and binding and in full force and effect, except where failure to be
valid and binding and in full force and effect would not have a Material Adverse
Effect on the Company, and there are no defaults by the Company or any of its
subsidiaries or, to the Company's knowledge, any other party thereto, except
those defaults that would not have a Material Adverse Effect on the Company.
None of the Material Contracts with any affiliate of the Company are on terms
less favorable to the Company than those that would be obtained from
unaffiliated third parties. Except as set forth in Section 4.18 of the
Disclosure Schedule, the Company is not party to any Contracts which after the
Effective Time would have the effect of limiting the freedom of parent or its
subsidiaries (other than the Company and its subsidiaries) to compete in any
line of business in any geographic area or to hire any individual or group of
individuals.
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<PAGE>
SECTION 4.19 Rights Agreement. The Company and the Company Board have
----------------
authorized all necessary action to amend the Rights Agreement (without redeeming
the Rights) so that upon execution of such amendment (which will occur promptly
after the date of this Agreement) none of the execution or delivery of this
Agreement, the making of the Offer, the acquisition of Common Shares pursuant to
the Offer or the consummation of the Merger in each case in accordance with the
terms and conditions of this Agreement will (i) cause any Rights issued pursuant
to the Rights Agreement to become exercisable or to separate from the stock
certificates to which they are attached, (ii) cause Parent, the Purchaser or any
of their Affiliates or Associates to be an Acquiring Person (as each such term
is defined in the Rights Agreement) or (iii) trigger other provisions of the
Rights Agreement, including giving rise to a Distribution Date or a Triggering
Event (as each such term is defined in the Rights Agreement), and such amendment
shall be in full force and effect from and after the date hereof.
SECTION 4.20 Product Recalls. The Company is not aware of any pattern
---------------
or series of claims against the Company or any of its subsidiaries which
reasonably could be expected to result in a generalized product recall relating
to products sold by the Company or any of its subsidiaries, regardless of
whether such product recall is formal, informal, voluntary or involuntary.
SECTION 4.21 Brokers. Except for the engagement of SSB, none of the
-------
Company, any of its subsidiaries, or any of their respective officers, directors
or employees has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finder's fees in connection with the transactions
contemplated by this Agreement. The Company has previously delivered to Parent
a copy of the Company's engagement letters with SSB.
SECTION 4.22 Opinion of Financial Advisor. The Company Board has
----------------------------
received the written opinion of SSB to the effect that, as of May 4, 2000, the
consideration to be received by the holders of Common Shares (other than Parent
or any of its affiliates) pursuant to the Offer and the Merger, is fair to such
holders from a financial point of view.
SECTION 4.23 Year 2000 Compliance. Except as could not reasonably be
--------------------
expected to have a Material Adverse Effect on the Company, to the knowledge of
the Company none of the assets or properties owned or utilized by the Company
has failed or will fail to perform because of the Year 2000 Problem. The term
"Year 2000 Problem" means the material inability of any hardware, software or
process to recognize and correctly calculate dates on and after January 1, 2000,
or the failure of computer systems, products or services to perform any of their
intended functions in a proper manner in connection with data containing any
date on or after January 1, 2000.
SECTION 4.24 Government Contracts.
--------------------
(a) The Company Disclosure Schedule sets forth (i) a list of all
material current and open Government Bids to which the Company or any of the
Company's subsidiaries is a party as of the date of this Agreement and (ii) a
list of all Government Contracts for which there are or could reasonably be
expected to be outstanding performance obli-
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<PAGE>
gations, except for non-material Government Contracts with foreign government
entities. With respect to any Government Contract or Government Bid (regardless
whether there is an outstanding performance obligation) and except as set forth
on Section 4.24 of the Company Disclosure Schedule, (A) the Company and its
subsidiaries have complied in all material respects with all material terms and
conditions of each such contract or bid, including clauses, provisions, and
requirements incorporated expressly by reference or by operation of law therein;
(B) the Company and its subsidiaries have complied in all material respects with
all requirements of all applicable laws, regulations, directions, or agreements
pertaining to each Government Contract or Government Bid, and to the Company's
performance on its Government Contracts; and (C) all representations and
certifications executed, acknowledged or set forth in, or pertaining to each
Government Contract or Government Bid were, when given, and are complete and
correct in all material respects as of their effective date, and the Company and
its subsidiaries have complied in all material respects with all such
representations and certifications.
(b) As of the date of this Agreement, and except as set forth on Section
4.24 of the Company Disclosure Schedule, neither the Company nor any of its
subsidiaries has received from a party to a Government Contract or Government
Bid (or any prime contractor, sub-contractor or other Person thereunder) any
written show-cause notice, stop work order, cure notice, notice of convenience
or default termination, or notice of default or violation concerning a
Government Contract.
(c) Neither the Company nor any of its subsidiaries has received from a
party to whom a Government Bid has been submitted any written negative
determination of responsibility concerning a Government Bid.
(d) Except as set forth on Section 4.24 of the Company Disclosure
Schedule, the Company has no knowledge of a request within three years prior to
the date hereof by any Governmental Entity for a contract price adjustment for
any reason, including, without limitation, based upon a claim of defective
pricing or any cost incurred by the Company and its Subsidiaries which has been
questioned, challenged or disallowed or has been the subject of any
investigation, and no money due to the Company or its subsidiaries has been (or
has been attempted to be) withheld or set off with respect to any Government
Contract, which contract price adjustment, withheld or set off amount (i) is
reasonably expected to have a Material Adverse Effect on the Company or (ii) is
not otherwise fully reflected or reserved for in the 1999 Financial Statements.
(e) Except as set forth on Section 4.24 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries nor, to the knowledge
of the Company, any of their respective directors, officers, employees,
consultants or agents is (or during the last three years has been) under
administrative, civil or criminal investigation, indictment or information or
equivalent official governmental charge or allegation by any Governmental Entity
with respect to any alleged irregularity, misstatement or omission or other
matter arising under or relating to any Government Contract. Except as set forth
on Section 4.24 of the Company Disclosure Schedule, since January 1, 1996, the
Company and its subsidiaries have not conducted or initiated any internal
investigation, or made a voluntary disclosure to the U.S. Government, with
respect to any alleged irregularity, misstatement, omission or other matter
arising under or relating to any Government Contract or Government Bid. To the
knowledge of the Company, there is no irregularity, misstatement or omission or
other matter arising under or relating to any Government Contract or Government
Bid that has led or could reasonably be expected to lead, either before or after
the Effective Time, to a Material Adverse Effect.
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<PAGE>
(f) Except as set forth on Section 4.24(f) of the Company Disclosure
Schedule, there exist (i) no outstanding claims, requests for equitable
adjustment or other contractual action for relief against the Company or its
subsidiaries, either by any Governmental Entity or by any prime contractor,
subcontractor, vendor or other Person, arising under or relating to any
Government Contract or Government Bid, and (ii) no disputes between the Company
or its subsidiaries and the U.S. Government under the Contract Disputes Act of
1978, as amended (the "Contract Disputes Act") or any other federal statute or
between the Company or its subsidiaries and any prime contractor, subcontractor,
vendor or other Person arising under or relating to any Government Contract or
Government Bid. The Company has no knowledge of any fact which could reasonably
be expected to result in a claim or a dispute under clause (i) or (ii) of the
immediately preceding sentence. To the knowledge of the Company, the Company and
its subsidiaries have no interest in any pending or potential material claim
under the Contract Disputes Act against the U.S. Government or any prime
contractor, subcontractor or vendor arising under or relating to any Government
Contract or Government Bid.
(g) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any of their respective directors, officers,
employees, consultants or agents is (or during the last three years has been)
suspended or debarred or proposed to be suspended or debarred or declared
ineligible from doing business with any Governmental Entity or is (or during
such period was) the subject of a finding of nonresponsibility or ineligibility
for contracting with any Governmental Entity. To the knowledge of the Company,
no facts or circumstances exist that would warrant the institution of suspension
or debarment proceedings or the finding of nonresponsibility or ineligibility on
the part of the Company and its subsidiaries or any such director, officer,
employee, consultant or agent.
(h) The cost accounting systems with respect to Government Contracts of
the Company and its subsidiaries are in compliance in all material respects with
all applicable laws.
(i) Section 4.24(i) of the Company Disclosure Schedule identifies by
description or inventory number all material Customer Furnished Items. Customer
Furnished Items are defined as all personal property, equipment and fixtures
loaned, bailed or otherwise furnished to the Company or its subsidiaries by or
on behalf of the U.S. Government or any other customer ("Customer Furnished
Items"). Section 4.24(i) of the Company Disclosure Schedule also identifies each
Government Contract or other executory contract pursuant to which each such
Customer Furnished Item is furnished. The Company and its subsidiaries have
complied in all material respects with all of their obligations relating to the
Customer Furnished Items, and, upon the return thereof to the U.S. Government or
other customer who provided such Customer Furnished Item in the condition
thereof on the date hereof, would have no material liability with respect
thereto.
(j) The Company is not in violation of (i) any laws, directives, or
regulations relating to security clearances of the protection of classified
information or (ii) its security agreements relating thereto.
(k) For purposes of this Agreement, (i) the term "Government Bids" shall
mean any written quotations, bids or proposals that, if accepted, would bind any
Person to perform the resultant Government Contract to furnish products or
services to (A) any Governmental Entity,
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(B) any prime contractor of any Governmental Entity, or (C) any
subcontractor, at any tier level, to any contract described in clauses (A) or
(B) above; and (ii) the term "Government Contract" shall mean a written,
mutually binding legal relationship with (A) any Governmental Entity, (B) any
prime contractor of any Governmental Entity, or (C) any subcontractor, at any
tier level, to any contract described in clauses (A) or (B) above which
obligates any Person to furnish products or services.
SECTION 4.25 Government Contracting Audits.
-----------------------------
(a) Section 4.25(a) of the Company Disclosure Schedule sets forth a list
and description of each final audit or investigation, or in the absence thereof,
a draft thereof, received by the Company and its subsidiaries since January 1,
1996 any performed by or for any prime or higher-tiered contractor or
subcontractor, or Governmental Entity, including the Defense Contract Audit
Agency, the Defense Contract Management Command, Defense Contract Administrative
Service Management Area, the Defense Criminal Investigative Service, any
governmental procurement agencies under the supervision of the Secretary of
Defense, any investigative agency, any Inspector General, the Department of
Justice, or the General Accounting Office (other than routine audits by resident
auditors, none of which is material to the business of the Company and its
subsidiaries, taken as a whole). Section 4.25(a) of the Company Disclosure
Schedule also briefly describes the current status of such matters.
(b) Section 4.25(b) of the Company Disclosure Schedule sets forth a list
and description of each settlement agreement concerning Government Contracts or
Government Bids between the Company or any of its subsidiaries and the U.S.
Government which currently has or is expected to have a binding effect on the
Company or its subsidiaries after the Effective Time, and under which the
Company or its subsidiaries have material unperformed obligations with respect
thereto.
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as
follows:
SECTION 5.1 Organization and Qualification. Parent is a corporation
------------------------------
duly organized, validly existing and in good standing under the laws of Delaware
and each material subsidiary of Parent is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York. Parent and each of
its material subsidiaries (including the Purchaser) has the requisite corporate
power and authority to own, operate or lease its properties and to carry on its
business as it is now being conducted, and is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction in which the nature of
its business or the properties owned, operated or leased by it makes such
qualification, licensing or good standing necessary, except where the failure to
have such power or authority, or the failure to be so qualified, licensed or in
good standing, would not have a Ma-
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terial Adverse Effect on Parent. The term "Material Adverse Effect on Parent",
as used in this Agreement, means any change in or effect on the business,
financial condition or results of operations of Parent or any of its
subsidiaries that would be materially adverse to Parent and its subsidiaries
taken as a whole; provided, however, that "Material Adverse Effect on Parent"
-------- -------
shall not include any change, effect, condition, event or circumstance to the
extent attributable to (i) changes, effects, conditions, events or circumstances
that generally affect the industries in which Parent operates, (ii) general
economic conditions or change, effects, conditions or circumstances affecting
the U.S. securities markets generally or (iii) changes, effects, conditions,
events or circumstances arising from the announcement of the execution of this
Agreement.
SECTION 5.2 Authority Relative to this Agreement. Each of Parent and
------------------------------------
the Purchaser has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Parent and the Purchaser and the
consummation by Parent and the Purchaser of the transactions contemplated hereby
have been duly and validly authorized and approved by the respective Boards of
Directors of Parent and the Purchaser and by Parent as sole Shareholder of the
Purchaser and no other corporate proceedings on the part of Parent or the
Purchaser are necessary to authorize or approve this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Parent and the Purchaser and, assuming the due and valid
authorization, execution and delivery by the Company, constitutes a valid and
binding obligation of each of Parent and the Purchaser enforceable against each
of them in accordance with its terms.
SECTION 5.3 No Conflict; Required Filings and Consents.
------------------------------------------
(a) Assuming (i) the filings required under the HSR Act and any foreign
or supranational antitrust laws are made and the waiting periods thereunder have
been terminated or have expired, (ii) the requirements of the Exchange Act and
any applicable state securities, "blue sky" or takeover law are met, (iii) the
requirements under applicable security and export control regulations are met
and (iv) the filing of the certificate of merger and other appropriate merger
documents, if any, as required by the BCL, is made, none of the execution and
delivery of this Agreement by Parent or the Purchaser, the consummation by
Parent or the Purchaser of the transactions contemplated hereby or compliance by
Parent or the Purchaser with any of the provisions hereof will (i) conflict with
or violate the organizational documents of Parent or the Purchaser, (ii)
conflict with or violate in any material respect any statute, ordinance, rule,
regulation, order, judgment, decree, permit or license applicable to Parent or
the Purchaser or any of their subsidiaries, or by which any of them or any of
their respective properties or assets may be bound or affected, or (iii) result
in a Violation pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or the Purchaser or any of their subsidiaries is a party or by
which Parent or the Purchaser or any of their subsidiaries or any of their
respective properties or assets may be bound or affected, which would impair the
ability of Parent or the Purchaser to perform its obligations under this
Agreement, or prevent or materially delay the consummation of the transactions
contemplated hereby.
(b) None of the execution and delivery of this Agreement by Parent and
the Purchaser, the consummation by Parent and the Purchaser of the transactions
contemplated hereby
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or compliance by Parent and the Purchaser with any of the provisions hereof will
require any Consent of any Governmental Entity, except for (i) compliance with
any applicable requirements of the Exchange Act and any state securities "blue
sky" or takeover law, (ii) the filing of a certificate of merger pursuant to the
BCL, and (iii) compliance with the HSR Act and any requirements of any foreign
or supranational antitrust laws.
(c) Neither Parent nor the Purchaser is known to be subject to foreign
ownership, control or influence ("FOCI") as that term is used under Section 3 of
the National Industrial Security Program Operating Manual published by the U.S.
Department of Defense pursuant to Executive Order No. 12829.
SECTION 5.4 Information. None of the information supplied or to be
-----------
supplied by Parent and the Purchaser in writing specifically for inclusion in
(i) the Schedule 14D-9, (ii) the Proxy Statement or (iii) the Other Filings
will, at the respective times filed with the SEC or such other Governmental
Entity and, in addition, in the case of the Proxy Statement, at the date it or
any amendment or supplement is mailed to shareholders, at the time of the
Special Meeting and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
SECTION 5.5 Financing. Parent has possession of, or has available to
---------
it under existing lines of credit, sufficient funds to consummate the
transactions contemplated by this Agreement, and will cause the Purchaser to
have sufficient funds available to consummate the Offer and the Merger and the
transactions contemplated hereby.
SECTION 5.6 Ownership of Purchaser; No Prior Activities.
-------------------------------------------
(a) Purchaser was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement.
(b) As of the Effective Time, all of the outstanding capital stock of
Purchaser will be owned directly by Parent. As of the Effective Time, there will
be no options, warrants or other rights (including registration rights),
agreements, arrangements or commitments to which Purchaser is a party of any
character relating to the issued or unissued capital stock of, or other equity
interests in, Purchaser or obligating Purchaser to grant, issue or sell any
shares of the capital stock of, or other equity interests in, Purchaser, by
sale, lease, license or otherwise. There are no obligations, contingent or
otherwise, of Purchaser to repurchase, redeem or otherwise acquire any shares of
the capital stock of Purchaser.
(c) As of the date hereof and the Effective Time, except for obligations
or liabilities incurred in connection with its incorporation or organization and
the transactions contemplated by this Agreement, Purchaser has not and will not
have incurred, directly or indirectly, through any subsidiary or affiliates, any
obligations or liabilities or engaged in any business activities of any type
whatsoever or entered into any agreements or arrangements with any person.
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<PAGE>
ARTICLE SIX
COVENANTS
SECTION 6.1 Conduct of Business of the Company. Except as required by
----------------------------------
this Agreement or otherwise with the prior written consent of Parent, during the
period from the date of this Agreement to the Effective Time, the Company will,
and will cause each of its subsidiaries to, conduct its operations only in the
ordinary and usual course of business consistent with past practice and will use
its reasonable best efforts, and will cause each of its subsidiaries to use its
reasonable best efforts, to preserve intact the business organization of the
Company and each of its subsidiaries, to keep available the services of its and
their present officers and key employees, and to preserve the good will of those
having business relationships with it, including, without limitation,
maintaining satisfactory relationships with suppliers, distributors, customers,
licensors and others having business relationships with the Company. Without
limiting the generality of the foregoing, and except as otherwise required by
this Agreement or as set forth on Section 6.1 of the Company Disclosure
Schedule, the Company will not, and will not permit any of its subsidiaries to,
prior to the Effective Time, without the prior written consent of Parent:
(a) adopt any amendment to its Certificate of Incorporation or By-Laws
or comparable organizational documents or the Rights Agreement (other than the
amendment contemplated by Section 4.19);
(b) sell, pledge or encumber any stock owned by it in any of its
subsidiaries;
(c) (i) issue, reissue or sell, or authorize the issuance, reissuance or
sale of (A) additional shares of capital stock of any class, or securities
convertible into capital stock of any class, or any rights, warrants or options
to acquire any convertible securities or capital stock, other than the issuance
of Common Shares (and the related Rights), in accordance with the terms of the
instruments governing such issuance on the date hereof, pursuant to the exercise
of Options outstanding on the date hereof or the Convertible Debentures
outstanding on the date hereof pursuant to the terms of the governing instrument
related to such Convertible Debentures (or, if a Triggering Event (as defined in
the Rights Agreement) by a party other than Parent or the Purchaser shall occur,
Rights) or (B) any other securities in respect of, in lieu of, or in
substitution for, Common Shares outstanding on the date hereof, or (ii) make any
other changes in its capital structure;
(d) declare, set aside or pay any dividend or other distribution
(whether in cash, securities or property or any combination thereof) in respect
of any class or series of its capital stock except for regular quarterly
dividends or the Common Shares declared and paid at times and in an amount
consistent with past practices other than between any of the Company and any of
its wholly owned subsidiaries;
(e) split, combine, subdivide, reclassify or redeem, purchase or
otherwise acquire, or propose to redeem or purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities;
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<PAGE>
(f) increase the compensation or fringe benefits payable or to become
payable to its directors, officers or employees (whether from the Company or any
of its subsidiaries), or pay or award any benefit not required by any existing
plan or arrangement to any officer, director or employee (including, without
limitation, the granting of stock options, stock appreciation rights, shares of
restricted stock or performance units pursuant to the Stock Plans or otherwise),
or grant any severance or termination pay to any officer, director or other
employee of the Company or any of its subsidiaries (other than as required by
existing agreements or policies described in the Company Disclosure Schedule),
or enter into any employment or severance agreement with, any director, officer
or other employee of the Company or any of its subsidiaries or establish, adopt,
enter into, amend or waive any performance or vesting criteria or accelerate
vesting, exercisability or funding under any bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, savings,
welfare, deferred compensation, employment, termination, severance or other
employee benefit plan, agreement, trust, fund, policy or arrangement for the
benefit or welfare of any directors, officers or current or former employees of
the Company or its subsidiaries (any of the foregoing being an "Employee Benefit
Arrangement"), except, in each case, to the extent required by applicable law or
regulation or existing term of any such Employee Benefit Arrangement described
in the Company Disclosure Schedule, except for increases in compensation in the
ordinary course consistent with past practice (in timing and magnitude) for
employees other than officers, up to 2% of the payroll for such employees in the
aggregate;
(g) acquire, mortgage, encumber, sell, lease, license or dispose of any
significant assets (including Intellectual Property) or securities, except
pursuant to existing contracts or commitments or the sale or purchase of goods
in the ordinary course of business consistent with past practice, or enter into
any commitment or transaction outside the ordinary course of business consistent
with past practice other than transactions between a wholly owned subsidiary of
the Company and the Company or another wholly owned subsidiary of the Company;
(h) (i) incur, assume or pre-pay any long-term debt or incur or assume
any short-term debt, except that the Company and its subsidiaries may incur,
assume or pre-pay debt in the ordinary course of business in an amount not to
exceed $1,000,000 per day and $5,000,000 in the aggregate and for purposes
consistent with past practice under existing lines of credit, (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person, (iii) pay,
discharge or satisfy any claims, liabilities or obligations (absolute, accrued,
contingent or otherwise), except in the ordinary course of business consistent
with past practice and in accordance with their terms, (iv) make any loans,
advances or capital contributions to, or investments in, any other person,
except for loans, advances, capital contributions or investments between any
wholly owned subsidiary of the Company and the Company or another wholly owned
subsidiary of the Company, (v) authorize or make capital expenditures which are
in excess of $50,000 or $500,000 in the aggregate, (vi) accelerate or delay
collection of notes or accounts receivable in advance of or beyond their regular
due dates or the dates when the same would have been collected in the ordinary
course of business consistent with past practice, (vii) delay or accelerate
payment of any account payable beyond or in advance of its due date or the date
such liability would have been paid in the ordinary course of business
consistent with past practice, or (viii) vary the Company's inventory practices
in any material respect from the Company's past practices;
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<PAGE>
(i) settle or compromise any suit or claim or threatened suit or claim
where the amount involved is greater than $100,000;
(j) other than in the ordinary course of business consistent with past
practice, (i) modify, amend or terminate any contract (and, in any case, only if
the amount involved is less than $200,000), (ii) waive, release, relinquish or
assign any contract (or any of the Company's rights thereunder), right or claim,
or (iii) cancel or forgive any indebtedness owed to the Company or any of its
subsidiaries;
(k) make any tax election inconsistent with past practice that is not
required by law or settle or compromise any tax liability;
(l) permit any insurance policy naming it as a beneficiary or a loss
payable payee to be canceled or terminated without notice to the Purchaser,
except in the ordinary course of business consistent with past practice;
(m) acquire (by merger, consolidation or acquisition of stock or assets)
any corporation, partnership or other business organization or division thereof
or, except in the ordinary course of business consistent with past practice, any
assets;
(n) enter into any contract or agreement other than in the ordinary
course of business consistent with past practice;
(o) except as may be required as a result of a change in law or in
generally accepted accounting principles, make any change in its methods of
accounting, including tax accounting policies and procedures;
(p) agree in writing or otherwise to take any of the foregoing actions
prohibited under this Section 6.1 or any action which would cause any
representation or warranty in this Agreement to be or become untrue or
incorrect; or
(q) make any Government Bid where the amount involved is greater than
$500,000; provided that if the profit margin to be received by the Company on
the bid is less than 5% then such amount shall not be greater than $100,000.
SECTION 6.2 Access to Information. Subject to applicable law, from the
---------------------
date of this Agreement until the Effective Time, the Company will, and will
cause its subsidiaries, and each of their respective officers, directors,
employees, counsel, advisors and representatives (collectively, the "Company
Representatives") to, give Parent and the Purchaser and their respective
officers, employees, counsel, advisors and representatives (collectively, the
"Parent Representatives") full access, during normal business hours, to the
offices and other facilities and to the books and records of the Company and its
subsidiaries and will cause the Company Representatives and the Company's
subsidiaries to furnish Parent, the Purchaser and the Parent Representatives
with such financial and operating data and such other information with respect
to the business and operations of the Company and its subsidiaries as Parent and
the Purchaser may from time to time reasonably request. The Company shall
furnish promptly to Parent and the Purchaser a copy of each report, schedule,
registration statement and other document filed by it or its subsidiaries during
such period pursuant to the requirements of federal or state securities
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<PAGE>
laws. Parent and the Purchaser agree that any information furnished pursuant to
this Section 6.2 will be subject to the provisions of the letter agreement dated
September 13, 1999 between the Parent and the Company (the "Confidentiality
Agreement").
SECTION 6.3 Efforts.
-------
(a) Subject to the terms and conditions provided herein, each of the
Company, Parent and the Purchaser shall, and the Company shall cause each of its
subsidiaries to, cooperate and use all reasonable efforts to make, or cause to
be made, all filings necessary or proper under applicable laws and regulations,
and to take all other actions necessary or advisable to consummate and make
effective the transactions contemplated by this Agreement, including but not
limited to cooperation in the preparation and filing of the Offer Documents, the
Schedule 14D-9 and any actions or filings related thereto, the Proxy Statement,
any required filings under the HSR Act, or other foreign filings and any
amendments to any thereof, and cooperation in obtaining approvals necessary from
Government Entities to continue fully existing operations.
In addition, if at any time prior to the Effective Time any event or
circumstance relating to either the Company or Parent or the Purchaser or any of
their respective subsidiaries should be discovered by the Company or Parent, as
the case may be, which should be set forth in an amendment to the Offer
Documents or Schedule 14D-9, the discovering party will promptly inform the
other party of such event or circumstance. If at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, including the execution of additional instruments, the proper
officers and directors of each party to this Agreement shall take all such
necessary action.
(b) Parent and the Company shall file as soon as practicable (but not
later than five business days in the case of the HSR Act filings) after the date
of this Agreement notifications under the HSR Act or under any material
applicable foreign statutes or regulations applicable to the Merger and shall
respond as promptly as practicable to all inquiries or requests received from
the Federal Trade Commission or the Antitrust Division of the Department of
Justice or such other domestic or foreign antitrust regulatory authority, as
applicable for additional information or documentation and shall respond as
promptly as practicable to all inquiries and requests received from any State
Attorney General or other Governmental Entity in connection with antitrust
matters. The parties shall cooperate with each other in connection with the
making of all such filings or responses, including providing copies of all such
documents to the other party and its advisors prior to filing or responding.
(c) Each of the parties will use its reasonable best efforts to obtain
as promptly as practicable all Consents of any Governmental Entity or any other
person required in connection with, and waivers of any Violations that may be
caused by, the consummation of the transactions contemplated by the Offer and
this Agreement, provided, however, that, notwithstanding any other provision of
-------- -------
this Agreement, the Company shall not, without Parent's prior written consent,
and Parent shall not be obligated to, agree to divest, hold separate or
otherwise materially restrict the use or operation of any business or assets of
Parent or the Company, which divestiture, agreement to hold separate, or other
restriction would reasonably be expected to have a Material Adverse Effect on
Parent or the Company, as the case may be. Danaher represents that it cur-
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rently has no pending acquisitions in the motion controls area (except for those
being announced on the date hereof) and there are no such acquisitions currently
intended in the near term.
SECTION 6.4 Public Announcements. The Company, on the one hand, and
--------------------
Parent and the Purchaser, on the other hand, agree to consult promptly with each
other prior to issuing any press release or otherwise making any public
statement with respect to the Offer, the Merger and the other transactions
contemplated hereby, agree to provide to the other party for review a copy of
any such press release or statement, and shall not issue any such press release
or make any such public statement prior to such consultation and review, unless
required by applicable law or any listing agreement with a securities exchange.
SECTION 6.5 Employee Benefit Arrangements.
-----------------------------
(a) Parent agrees that the Company will honor, and, from and after the
Effective Time, Parent will cause the Surviving Corporation to honor, in
accordance with their respective terms as in effect on the date hereof, the
employment, severance, bonus, supplemental retirement, and split dollar life
insurance agreements and arrangements to which the Company is a party which are
set forth on Section 6.5 of the Company Disclosure Schedule covering current and
former directors, officers and employees, subject to any amendment or
termination that may be permitted by the terms thereof.
(b) Parent agrees that (i) for the period ending December 31, 2000, the
Surviving Corporation shall continue the compensation and employee benefit and
welfare plans and programs of the Company other than those providing equity-
based compensation to the extent practicable as in effect on the date hereof,
and (ii) thereafter the Surviving Corporation shall provide employees of the
Company and its subsidiaries as a whole (A) compensation (including bonus and
incentive awards) programs and plans and (B) employee benefit and welfare plans,
programs, contracts, agreements and policies (including insurance and pension
plans), fringe benefits and vacation policies which are substantially the same
as or not less favorable in the aggregate to such employees than those generally
in effect with respect to similarly situated employees of Parent.
Notwithstanding the forgoing, in no event shall severance benefits available to
employees of the Company or its subsidiaries through the first anniversary of
the Effective Date be less favorable than the severance benefits in effect as of
the date of this Agreement, as set forth on Section 6.5 of the Company
Disclosure Schedule. Without limiting the generality of the foregoing, following
the Effective Time Parent shall provide, or cause to be provided, to persons who
are as of the Effective Time retired salaried employees of the Company and its
subsidiaries retiree medical benefits that are substantially comparable to those
provided to them as of the Effective Time.
(c) For all purposes under the employee benefit plans of Parent and its
affiliates providing benefits to each employee of the Company (a "Company
Employee") after the Effective Time, each Company Employee shall be credited
with his or her years of service with the Company and its affiliates before the
Effective Time, to the same extent as such Company Employee was entitled, before
the Effective Time, to credit for such service for purposes of vesting, service
and benefit accruals under any similar Plans, except to the extent such credit
would result in a duplication of benefits and except for purposes of accrual of
benefits under defined benefit pension plans. In addition, and without limiting
the generality of the foregoing: (i) each Com-
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<PAGE>
pany Employee shall be immediately eligible to participate, without any waiting
time, in any and all employee benefit plans sponsored by Parent and its
affiliates for the benefit of Company Employees (such plans, collectively, the
"New Plans") to the extent coverage under such New Plan replaces coverage under
a comparable Plan in which such Company Employee participated immediately before
the Effective Time (such plans, collectively, the "Old Plan"); and (ii) for
purposes of each New Plan providing medical, dental, pharmaceutical and/or
vision benefits to any Company Employee, Parent shall cause all pre-existing
condition exclusions and actively-at-work requirements of such New Plan to be
waived for such employee and his or her covered dependents to the extent
currently applicable to such persons.
SECTION 6.6 Indemnification.
---------------
(a) The certificate of incorporation and the by-laws of the Surviving
Corporation shall contain the provisions with respect to indemnification and
exculpation from liability set forth in the Company's Restated Certificate of
Incorporation and By-Laws on the date of this Agreement, which provisions shall
not be amended, repealed or otherwise modified for a period of six years from
the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who on or prior to the Effective Time were directors,
officers, employees or agents of the Company, unless such modification is
required by law. Parent shall guarantee the obligations of the Surviving
Corporation with respect to the indemnification provisions contained in the
Surviving Corporation's certificate of incorporation and by-laws.
(b) Parent and the Surviving Corporation shall, until the fourth
anniversary of the Effective Time or such earlier date as may be mutually agreed
upon by Parent, the Surviving Corporation, and the applicable Indemnified Party,
cause to be maintained in effect, to the extent available, the policies of
directors' and officers' liability insurance maintained by the Company and its
subsidiaries as of the date hereof (or policies of at least the same coverage
and amounts containing terms that are not less advantageous to the insured
parties) with respect to claims arising from facts or events that occurred on or
prior to the Effective Time. In lieu of the purchase of such insurance by Parent
or the Surviving corporation, the Surviving Corporation may purchase a six-year
extended reporting period endorsement ("reporting tail coverage") under the
Company's directors' and liability insurance coverage. In no event shall Parent
or the Surviving Corporation be obligated to expend in order to maintain or
procure insurance coverage pursuant to this paragraph (b) any amount per year
(in the case of ongoing annual coverage) in excess of 150% of the aggregate
premiums paid by the Company and the Subsidiaries in the fiscal year ending
December 31, 1999 for directors' and officers' liability insurance, which amount
has been disclosed to Parent.
(c) The Company and, following the purchase of any Shares by Purchaser
pursuant to the Offer, Parent shall, to the fullest extent permitted under
applicable law and regardless of whether the Merger becomes effective,
indemnify, defend and hold harmless, and, from and after the Effective Time,
Parent shall cause the Surviving Corporation to the fullest extent permitted
under applicable law, to indemnify, defend and hold harmless, the present and
former officers, directors, employees and agents of the Company or any of its
subsidiaries in their capacities as such (each an "Indemnified Party") against
all losses, expenses, claims, damages or liabilities arising out of actions or
omissions occurring on or prior to the Effective Time (including, without
limitation, actions or omissions relating to the transactions contemplated
hereby).
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(d) In the event Parent, the Surviving Corporation or any of their
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provisions shall be made so that the successors and assigns of Parent or the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 6.6.
(e) This Section 6.6 shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Indemnified Parties and their
respective heirs, executors and personal representatives, and shall be binding
on all successors and assigns of the Company, Parent and the Surviving
Corporation. This Section 6.6 shall not limit or otherwise adversely affect any
rights any Indemnified Party may have under any agreement with the Company or
any of its subsidiary or the Company's or any such subsidiary's Certificate of
Incorporation or By-Laws.
SECTION 6.7 Notification of Certain Matters. Parent and the Company
-------------------------------
shall promptly notify each other of (a) the occurrence or non-occurrence of any
fact or event which would be reasonably likely (i) to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the Effective Time or (ii)
to cause any covenant, condition or agreement under this Agreement not to be
complied with or satisfied, and (b) any failure of the Company, Parent or
Purchaser, as the case may be, to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder; provided,
--------
however, that no such notification shall affect the representations or
- -------
warranties of any party or the conditions to the obligations of any party
hereunder. Each of the Company, Parent and the Purchaser shall give prompt
notice to the other parties hereof of any notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement.
SECTION 6.8 Rights Agreement. The Company covenants and agrees that
----------------
it will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii) take
any action which would allow any Person (as defined in the Rights Agreement)
other than Parent or the Purchaser to acquire beneficial ownership of 20% or
more of the Common Shares without causing a Distribution Date or a Triggering
Event (as each such term is defined in the Rights Agreement) to occur. The Board
of Directors of the Company shall not make a determination that Parent, the
Purchaser or any of their respective Affiliates or Associates is an "Acquiring
Person" for purposes of the Rights Agreement.
SECTION 6.9 State Takeover Laws. The Company shall, upon the request
-------------------
of the Purchaser, take all reasonable steps to assist in any challenge by the
Purchaser to the validity or applicability to the transactions contemplated by
this Agreement, including the Offer and the Merger, of any state takeover law.
SECTION 6.10 No Solicitation.
---------------
(a) The Company shall, and shall direct its affiliates and their
respective officers, directors, employees, representatives and agents to
immediately cease any existing discussions or negotiations, if any, with any
parties conducted heretofore with respect to any Acquisition
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<PAGE>
Transaction (as hereinafter defined). The Company agrees that, prior to the
Effective Time, it shall not, and shall not authorize or permit any of its
subsidiaries or any of its or its subsidiaries' directors, officers, employees,
agents or representatives, directly or indirectly, to solicit, initiate or
encourage, or furnish or disclose non-public information in furtherance of, any
inquiries or the making of any proposal with respect to any merger, liquidation,
recapitalization, consolidation or other business combination involving the
Company or its subsidiaries or acquisition of more than 5% of capital stock or
any material portion of the assets of the Company or its subsidiaries, or any
combination of the foregoing (other than the Offer and the Merger) (an
"Acquisition Transaction"), or negotiate, explore or otherwise engage in
substantive discussions with any person (other than the Purchaser, Parent or
their respective directors, officers, employees, agents and representatives)
with respect to any Acquisition Transaction or enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the Merger or any other transactions contemplated by this Agreement;
provided that the Company may, prior to the purchase of Common Shares pursuant
to the Offer, furnish information to, and negotiate or otherwise engage in
substantive discussions with, any person who delivers a written proposal for an
Acquisition Transaction if the Company Board determines in good faith by a
majority vote, after consultation with its outside legal counsel and financial
advisors, that such a transaction is reasonably likely to result in a
transaction that is superior in comparison to the Offer and the Merger and the
terms of this Agreement to the Company's shareholders from a financial point of
view and to the Company, taking into account the terms and conditions thereof,
the likelihood of consummation and the time required to complete such
transaction (a "Superior Proposal"), and prior to furnishing non-public
information to any such party, the Company shall have (i) entered into a
confidentiality agreement with such party containing confidentiality terms at
least as favorable to the Company as those of the Confidentiality Agreement and
(ii) shall provide Parent or Purchaser copies of all proposed written
agreements, arrangements, or understandings, including the forms of any
agreements supplied by third parties, and all applicable financial statements
and evidence of any planned financing with respect to such Superior Proposal
(and a description of all material oral agreements with respect thereto).
(b) From and after the execution of this Agreement, the Company shall
immediately advise the Purchaser in writing of the receipt, directly or
indirectly, of any proposal with respect to an Acquisition Transaction, and of
any discussions, negotiations or proposals relating to an Acquisition
Transaction, identify the offeror and furnish to the Purchaser a copy of any
such proposal, if it is in writing, or a written summary of any such proposal
relating to an Acquisition Transaction if it is not in writing. The Company
shall promptly advise Parent of any significant developments relating to such
proposal, including the results of any discussions or negotiations with respect
thereto.
(c) Nothing contained in this Section 6.10 shall prohibit the Company
from taking and disclosing to its shareholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or as otherwise required by law.
SECTION 6.11 Parent Agreement Concerning Purchaser. Parent agrees to
-------------------------------------
cause the Purchaser to comply with its obligations under this Agreement.
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<PAGE>
SECTION 6.12 Convertible Debentures. As of the Effective Time, Parent
----------------------
shall enter into such supplemental indentures as may be required under the terms
of the indenture for the Convertible Debentures.
ARTICLE SEVEN
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1 Conditions. The respective obligations of Parent, the
----------
Purchaser and the Company to consummate the Merger are subject to the
satisfaction, at or before the Effective Time, of each of the following
conditions:
(a) Shareholder Approval. The shareholders of the Company shall have
--------------------
duly approved the transactions contemplated by this Agreement, if required by
applicable law.
(b) Purchase of Common Shares. The Purchaser shall have accepted for
-------------------------
payment and paid for Common Shares in an amount sufficient to meet the Minimum
Condition and otherwise pursuant to the Offer in accordance with the terms
hereof, provided, however, that this condition shall be deemed to be satisfied
-------- -------
with respect to the obligation of Parent and the Purchaser to effect the Merger
if the Purchaser fails to accept for payment or pay for Common Shares pursuant
to the Offer in violation of the terms of the Offer or of this Agreement.
(c) Injunctions; Illegality. The consummation of the Merger shall not be
-----------------------
restrained, enjoined or prohibited by any order, judgment, decree, injunction or
ruling of a court of competent jurisdiction or any Governmental Entity and there
shall not have been any statute, rule or regulation enacted, promulgated or
deemed applicable to the Merger by any Governmental Entity which prevents the
consummation of the Merger, or has the effect of making the acquisition of
Common Shares in the Merger illegal.
(d) Regulatory Approval. Any waiting period (and any extension thereof)
-------------------
under the HSR Act or under any material applicable foreign statutes or
regulations applicable to the Merger shall have expired or terminated.
ARTICLE EIGHT
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.1 Termination. This Agreement may be terminated and the
-----------
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time, notwithstanding approval thereof by the shareholders of the Company (with
any termination by Parent also being an effective termination by the Purchaser):
(a) by the mutual written consent of Parent and the Company, by action
of their respective Boards of Directors;
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<PAGE>
(b) by Parent or the Company if (i) Purchaser fails to commence the
Offer on or prior to May 15, 2000 or (ii) Purchaser shall not have accepted for
payment and paid for the Common Shares pursuant to the Offer in accordance with
the terms hereof and thereof on or before September 30, 2000; provided, however,
-------- -------
that a party may not terminate this Agreement pursuant to this Section 8.1(b) if
such failure to accept for payment and pay for the Common Shares is due to such
party's material breach of this Agreement;
(c) by Parent or the Company if the Offer is terminated or withdrawn
pursuant to its terms and the terms of this Agreement without any Common Shares
being purchased thereunder, other than due to a breach hereof by the terminating
party;
(d) by Parent or the Company if any court of competent jurisdiction or
other Governmental Entity shall have issued an order, decree or ruling or taken
any other action permanently enjoining, restraining or otherwise prohibiting the
acceptance for payment of, or payment for, Common Shares pursuant to the Offer
or the Merger and such order, decree or ruling or other action shall have become
final and nonappealable, provided that the party seeking to terminate this
--------
Agreement shall have used its reasonable best efforts to remove or lift such
order, decree or ruling;
(e) by the Company if, prior to the acceptance for payment of Common
Shares pursuant to the Offer, the Company Board shall have determined to
recommend a Superior Proposal to its shareholders and to enter into a binding
written agreement concerning such Superior Proposal after making the
determination required by Section 6.10(a); provided that the Company may not
--------
exercise its right to terminate under this Section 8.1(e) (and may not enter
into a binding written agreement with respect to any Superior Proposal) unless
and until (i) the Company shall have provided the Purchaser and Parent prior
written notice at least five business days prior to such termination that the
Company Board has authorized and intends to effect the termination of this
Agreement pursuant to this Section 8.1(e), including copies of all proposed
written agreements, arrangements, or understandings, including the forms of any
agreements supplied by third parties, and all applicable financial statements
and evidence of any planned financing with respect to such Superior Proposal
(and a description of all material oral agreements with respect thereto), (ii)
the Company Board shall have determined, in good faith and after consultation
with its legal and financial advisors, that the foregoing Acquisition
Transaction constituted at the time of its determination to terminate this
Agreement and, at the end of the 5-business day period referred to in clause (i)
above still constitutes a Superior Proposal and (iii) prior to such termination,
the Company shall have paid to Parent the Termination Fee and the Expense Fee
described in Section 8.3(b);
(f) by Parent prior to the purchase of Common Shares pursuant to the
Offer, if the Company Board (i) shall have withdrawn or modified (including by
amendment of the Schedule 14D-9) in any manner adverse to the Purchaser or
Parent its approval or recommendation of the Offer, this Agreement or the
Merger, (ii) shall have approved or recommended an Acquisition Transaction,
(iii) or the Company shall have breached Section 6.8, or (iv) shall have
resolved to effect any of the foregoing;
(g) by Parent prior to the purchase of Common Shares pursuant to the
Offer if the Minimum Condition (as defined in Annex I) shall not have been
satisfied by the close of busi-
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<PAGE>
ness on the business day immediately preceding September 30, 2000 and an
Acquisition Transaction shall have been publicly announced or disclosed.
SECTION 8.2 Effect of Termination. In the event of the termination of
---------------------
this Agreement pursuant to Section 8.1, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party or its
directors, officers or shareholders, other than the provisions of the last
sentence of Section 6.2 and the provisions of this Section 8.2 and Section 8.3,
which shall survive any such termination. Nothing contained in this Section 8.2
shall relieve any party from liability for any willful breach of this Agreement.
SECTION 8.3 Fees and Expenses.
-----------------
(a) Whether or not the Merger is consummated, except as otherwise
specifically provided herein, all costs and expenses incurred in connection with
the Offer, this Agreement and the transactions contemplated by this Agreement
shall be paid by the party incurring such costs and expenses.
(b) In the event that this Agreement is terminated pursuant to Section
8.1(e) or Section 8.1(f) (other than Section 8.1(f)(i) if no Acquisition
Proposal shall have been publicly announced or disclosed), then the Company
shall promptly (and in any event within one business day after such termination
or, in the case of any such termination by the Company, prior to such
termination) pay Parent an amount equal to (i) a termination fee of $10,000,000
(the "Termination Fee"), provided that in no event shall more than one
Termination Fee be payable by the Company plus (ii) Parent's aggregate Expenses
not exceeding $1,000,000 (the "Expense Fee"). Parent's "Expenses" shall mean all
documented out-of-pocket fees and expenses incurred or paid by or on behalf of
Parent in connection with or in contemplation of the Merger or the consummation
of any of the transactions contemplated by this Agreement, including all fees
and expenses of counsel, investment banking firms, accountants, experts and
consultants to Parent.
(c) In the event that this Agreement is terminated pursuant to Section
8.1(f)(i) (if no Acquisition Proposal shall have been publicly announced or
disclosed) or Section 8.1(g) hereof and within 12 months of the date of
termination of this Agreement a transaction constituting an Acquisition
Transaction is consummated, the Company shall, prior to or simultaneously with
the consummation of such transaction, pay Parent the Termination Fee and the
Expense Fee; provided, however, that in no event shall the Company be obligated
-------- -------
to pay more than one Termination Fee and Expense Fee pursuant to this Section
8.3.
(d) The prevailing party in any legal action undertaken to enforce this
Agreement or any provision hereof shall be entitled to recover from the other
party the costs and expenses (including attorneys' and expert witness fees)
incurred in connection with such action.
SECTION 8.4 Amendment. Subject to Section 1.3(c), this Agreement may
---------
be amended by the Company, Parent and the Purchaser at any time before or after
any approval of this Agreement by the shareholders of the Company but, after any
such approval, no amendment shall be made which decreases the Merger Price or
which adversely affects the rights of the Company's shareholders hereunder
without the approval of such shareholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of all the parties.
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<PAGE>
SECTION 8.5 Extension; Waiver. Subject to Section 1.3(c), at any time
-----------------
prior to the Effective Time, Parent and the Purchaser, on the one hand, and the
Company, on the other hand, may (i) extend the time for the performance of any
of the obligations or other acts of the other, (ii) waive any inaccuracies in
the representations and warranties contained herein of the other or in any
document, certificate or writing delivered pursuant hereto by the other or (iii)
waive compliance by the other with any of the agreements or conditions. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE NINE
MISCELLANEOUS
SECTION 9.1 Non-Survival of Representations and Warranties. The
----------------------------------------------
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. Notwithstanding the foregoing, the agreements set forth in
Section 3.2 and Section 6.6 shall survive the Effective Time indefinitely
(except to the extent a shorter period of time is explicitly specified therein).
SECTION 9.2 Entire Agreement; Assignment.
----------------------------
(a) This Agreement (including the documents and the instruments referred
to herein, including, without limitation, the Confidentiality Agreement)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
party (except that Parent may assign its rights and the Purchaser may assign its
rights, interest and obligations to any direct or indirect subsidiary of Parent
without the consent of the Company, provided that no such assignment shall
relieve Parent of any liability for any breach by such assignee). Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
SECTION 9.3 Validity. The invalidity or unenforceability of any
--------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
SECTION 9.4 Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or facsimile to the
respective parties as follows:
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<PAGE>
If to Parent or the Purchaser:
Danaher Corporation
1250 24th Street, N.W., Suite 800
Washington, D.C. 20037
Attention: Patrick W. Allender
Facsimile: (202) 828-0860
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Trevor S. Norwitz, Esq.
Facsimile: (212) 403-2000
If to the Company:
Kollmorgen Corporation
Reservoir Place, 1601 Trapelo Road
Waltham, Massachusetts 02451
Attention: James A. Eder, Esq.
Facsimile: (860) 232-4033
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Creighton O'M Condon
Facsimile: (212) 848-7179
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above;
provided that notice of any change of address shall be effective only upon
receipt thereof.
SECTION 9.5 Governing Law; Jurisdiction. This Agreement shall be
---------------------------
governed by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof. In addition, each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated by
this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
and (c) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than a
Federal or state court sitting in the State of Delaware.
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<PAGE>
SECTION 9.6 Descriptive Headings. The descriptive headings herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 9.7 Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
SECTION 9.8 Parties in Interest. Except with respect to Section 6.6
-------------------
(which is intended to be for the benefit of the persons identified therein, and
may be enforced by such persons), this Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
SECTION 9.9 Certain Definitions. As used in this Agreement:
-------------------
(a) the term "affiliate", as applied to any person, shall mean any other
person directly or indirectly controlling, controlled by, or under common
control with, that person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise;
(b) the term "Person" or "person" shall include individuals,
corporations, partnerships, trusts, other entities and groups (which term shall
include a "group" as such term is defined in Section 13(d)(3) of the Exchange
Act); and
(c) the term "Subsidiary" or "subsidiaries" means, with respect to
Parent, the Company or any other person, any corporation, partnership, joint
venture or other legal entity of which Parent, the Company or such other person,
as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, stock or other equity interests the
holders of which are generally entitled to more than 50% of the vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
SECTION 9.10 Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
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<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its respective officer thereunto duly authorized,
all as of the day and year first above written.
DANAHER CORPORATION
By: /s/ Daniel L. Comas
--------------------------------
Name: Daniel L. Comas
Title: Vice President
KING DC ACQUISITION CORP.
By: /s/ Daniel L. Comas
--------------------------------
Name: Daniel L. Comas
Title: Vice President
KOLLMORGEN CORPORATION
By: /s/ Gideon Argov
--------------------------------
Name: Gideon Argov
Title: President
-44-
<PAGE>
ANNEX I
Conditions to the Offer. Notwithstanding any other provisions of the
Offer, the Purchaser shall not be required to accept for payment or, subject to
any applicable rules and regulations of the Commission, including Rule 14e-1(c)
promulgated under the Exchange Act, pay for any tendered Common Shares and may
terminate or, subject to the terms of the Merger Agreement, amend the Offer, if
(i) there shall not be validly tendered and not properly withdrawn prior to the
Expiration Date for the Offer that number of Common Shares which, when added to
any Common Shares already owned by Parent or any of its subsidiaries, represents
at least two-thirds of the total number of outstanding Common Shares on a fully
diluted basis on the date of purchase (not taking into account the Rights) (the
"Minimum Condition"), (ii) any applicable waiting period or approval under the
HSR Act or under any applicable foreign statutes or regulations shall not have
expired or been terminated or obtained prior to the Expiration Date, (iii) all
consents from third parties shall have been obtained except for those the
failure of which to be obtained would not reasonably be expected to have a
Material Adverse Effect on the Company, or (iv) at any time on or after May 4,
2000 and prior to the time of acceptance for payment for any Common Shares, any
of the following events (each, an "Event") shall occur:
(a) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, enforced, promulgated, amended, issued or deemed applicable to
the Offer, by any legislative body, court, government or governmental,
administrative or regulatory authority or agency, domestic or foreign,
other than the application of the waiting period provisions of the HSR
Act to the Offer or to the Merger, that would reasonably be expected to,
directly or indirectly: (i) make illegal or otherwise prohibit
consummation of the Offer or the Merger, (ii) prohibit or materially
limit the ownership or operation by Parent or the Purchaser of all or
any material portion of the business or assets of the Company or any of
its subsidiaries taken as a whole or compel Parent or the Purchaser to
dispose of or hold separately all or any material portion of the
business or assets of Parent or the Purchaser or the Company or any of
its subsidiaries taken as a whole, or seek to impose any material
limitation on the ability of Parent or the Purchaser to conduct its
business or own such assets, in any such case under this clause (ii),
which would reasonably be expected to have a Material Adverse Effect on
Parent or the Company, as the case may be, (iii) impose material
limitations on the ability of Parent or the Purchaser effectively to
acquire, hold or exercise full rights of ownership of the Common Shares,
including, without limitation, the right to vote any Common Shares
acquired by the Purchaser or Parent pursuant to the Offer on all matters
properly presented to the Company's shareholders, (iv) require
divestiture by Parent or the Purchaser of any Common Shares, or (v)
result in a Material Adverse Effect on the Company; or
(b) there shall be instituted or pending any action or
proceeding by any Governmental Entity that would reasonably be expected
to result in, any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above or by any third party for which there is a
substantial likelihood of resulting in any of the consequences referred
to in clauses (i) through (v) of paragraph (a) above; or
<PAGE>
(c) since the date of the Merger Agreement, any change shall
have occurred and be continuing in the business, financial condition or
results of operations of the Company or any of its subsidiaries that
has, or could reasonably be expected to have, a Material Adverse Effect
on the Company; or
(d) (i) the Company Board or any committee thereof shall have
withdrawn or shall have modified or amended in a manner adverse to
Parent or the Purchaser, the approval, adoption or recommendation, as
the case may be, of the Offer or the Merger Agreement, or shall have
approved or recommended any Acquisition Transaction, (ii) a Person shall
have entered into a definitive agreement or an agreement in principle
with the Company with respect to an Acquisition Transaction, or (iii)
the Company Board or any committee thereof shall have resolved to do or
enter into any of the foregoing; or
(e) the Company and the Purchaser and Parent shall have reached
an agreement that the Offer or the Merger Agreement be terminated, or
the Merger Agreement shall have been terminated in accordance with its
terms; or
(f) any of the representations and warranties of the Company set
forth in the Merger Agreement, when read without any exception or
qualification as to materiality or Material Adverse Effect on the
Company, shall not be true and correct, as if such representations and
warranties were made at the time of such determination (except as to any
such representation or warranty which speaks as of a specific date,
which must be untrue or incorrect as of such specific date) except where
the failure to be so true and correct would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
the Company; or
(g) the Company shall have failed to perform in any material
respect or to comply in any material respect with any of its material
obligations, covenants or agreements under the Merger Agreement; or
(h) there shall have occurred, and continue to exist, (i) any
general suspension of, or limitation on prices for, trading in
securities on the New York Stock Exchange or on the over-the-counter
stock market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ"), (ii) any decline
of at least 25% in either the Dow Jones Average of Industrial Stocks or
the Standard & Poor's 500 Index from the close of business on the last
trading day immediately preceding the date of the Merger Agreement
through the applicable Expiration Date, or (iii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in
the United States.
The foregoing conditions (including those set forth in clauses (i),
(ii) and (iii) of the initial paragraph) are for the benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to any such conditions and may be waived by Parent or
the Purchaser in whole or in part at any time and from time to time in their
reasonable discretion, in each case, subject to the terms of the Merger
Agreement. The failure by Parent or the Purchaser at any time to exercise any
of the foregoing rights shall not be
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<PAGE>
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
appended.
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<PAGE>
EXHIBIT 99.(d)(2)
[LOGO OF KOLLMORGEN] Reservoir Place
1601 Trapelo Road
Waltham, MA 02451
781-890-5655 TEL
781-890-7150 FAX
http://www.kollmorgen.com
September 13, 1999
VIA TELECOPY --1-202-828-0860
Mr. Dan Comas
Vice President, Corporate Development
Danaher Corporation
1256 24th Street, N.W.
Suite 800
Washington, D.C. 20037
Dear Mr. Comas:
In connection with your consideration of a possible negotiated transaction
with Kollmorgen Corporation and/or its subsidiaries, affiliates or divisions
(collectively, with such subsidiaries, affiliates and divisions, the
"Company"), the Company is prepared to make available to you certain
information concerning the business, financial condition, operations, assets
and liabilities of the Company. As a condition of such information being
furnished to you and your directors, officers, employees, agents or advisors
(including, without limitation, attorneys, accountants, consultants, bankers
and financial advisors) (collectively, "Representatives"), you agree to treat
any information concerning the Company (whether prepared by the Company, its
advisors or otherwise and irrespective of the form of communication) which is
furnished to you or to your Representatives now or in the future by or on
behalf of the Company therein collectively referred to as the "Evaluation
Material") in accordance with the provisions of this agreement, and to take or
abstain from taking certain other actions hereinafter set forth.
The term "Evaluation Material" also shall be deemed to include all notes,
analyses, compilations, studies, interpretations or other documents prepared by
you or your Representatives which contain, reflect or are based upon, in whole
or in part, the information furnished to you or your Representatives pursuant
hereto. The Term "Evaluation Material" does not include information which (i)
is or becomes generally available to the public other than as a result of a
disclosure by you or your Representatives in violation of this agreement, (ii)
was within you possession prior to its being furnished to you by or on behalf
of the Company pursuant hereto, provided that the source of such information
was not known by you to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company or
any other party with respect to such information; (ii) becomes
1
<PAGE>
Mr. Comas
September 13, 1999
Page 2
available to you as a non-confidential basis from a source other than the
Company or any of its Representatives, provided that such source is not, to
your knowledge, bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company
or any other party with respect to such information or (iv) information that
was or is developed by you independently from the information disclosed by the
Company or any of its Representatives.
You hereby agree that you and your Representatives shall use the Evaluation
Material solely for the purpose of evaluating a possible negotiated
transaction between the Company and you, that the Evaluation Material will be
kept confidential and that you and your Representatives will not disclose any
of the Evaluation Material in any manner whatsoever, provided, however, that
(i) you may make any disclosure of such information to which the Company gives
its prior written consent; and (ii) any such information may be disclosed to
your Representatives who need to know such information for the sole purpose of
evaluating a possible negotiated transaction with the Company, who agree to
keep such information confidential and who are provided with a copy of this
agreement and agree to be bound by the terms hereof to the same extent as if
they were parties hereto. In any event, you shall be responsible for any
breach of this agreement by any of your Representatives and you agree, at your
sole expense, to take all reasonable measures (including but not limited to
court proceedings) to restrain your Representatives from prohibited or
unauthorized disclosure or use of the Evaluation Material.
In addition, you agree that, without the prior written consent of the
Company, you and your Representatives will not disclose to any other person
the fact that the Evaluation Material has been made available to you, that
discussions or negotiations are taking place concerning a possible transaction
involving the Company or any of the terms, conditions or other facts with
respect thereto (including the status thereof), provided that you may make
such disclosure if your General Counsel determines, and advises the Company of
such in writing prior thereto, that such disclosure must be made by you in
order that you not commit a violation of law or stock exchange rules and
regulations. Without limiting the generality of the foregoing, you further
agree that, without the prior written consent of the Company, you will not,
directly or indirectly, enter into any agreement, arrangement or
understanding, or any discussion which might lead to such agreement,
arrangement or understanding, with any person regarding a possible transaction
involving the Company. The term "person" as used in this agreement shall be
broadly interpreted to include the media and any corporation, partnership,
group, individual or other entity.
In the event that you or any of your Representatives are requested or
required (by oral questions, interrogatories, requests for information or
documents in legal proceedings, subpoena, civil investigative demand or other
similar process) to disclose any of the Evaluation Material, you shall provide
the Company with prompt written notice of any such request or requirement so
that the Company may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this
2
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Mr. Comas
September 13, 1999
Page 3
agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the Company, you or any of your Representatives are
nonetheless, in the opinion of your General Counsel, legally compelled to
disclose Evaluation Material to any tribunal or else stand liable for contempt
or suffer other censure or penalty, you or your representatives may, without
liability hereunder, disclose to such tribunal only that portion of the
Evaluation Material which such counsel advises you is legally required to be
disclosed, provided that you exercise your reasonable best efforts to preserve
the confidentiality of the Evaluation Material, including, without limitation,
by cooperation with the Company at the Company's expense to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be awarded the Evaluation Material by such tribunal.
If you decide that you do not wish to proceed with a transaction with the
Company, you will promptly inform the Company of that decision. In that case,
or at any time upon the request of the Company for any reason, you will
promptly deliver to the Company all Evaluation Material (and all copies
thereof) furnished to you or your Representatives by or on behalf of the
Company pursuant hereto. In the event of such a decision or request, all other
Evaluation Material prepared by you or your Representatives shall be destroyed
and no copy thereof shall be retained. Notwithstanding the return or
destruction of the Evaluation Material, you and your Representatives will
continue to be bound by your obligations of confidentiality and other
obligations hereunder for a period of three (3) years after the date this
agreement is signed by you.
You understand and acknowledge that neither the Company nor any of its
Representatives (including the Company's directors, officers, employees or
agents) make any representation or warranty, express or implied, as to the
accuracy or completeness of the Evaluation Material. You agree that neither
the Company nor any of its Representatives (including any of the Company's
directors, officers, employees or agents) shall have any liability to you or
to any of your Representatives relating to or resulting from the use of the
Evaluation Material or any errors therein or omissions therefrom. Only those
representations or warranties which are made in the final definitive agreement
regarding any transactions contemplated hereby, when, as and if executed, and
subject to such limitations and restrictions as may be specified therein, will
have any legal effect.
In consideration of the Evaluation Material being furnished to you, you
hereby agree that, for a period of two (2) years from the date hereof, neither
you nor any of your affiliates will solicit to employ any of the current
officers or employees of the Company with whom you have had contact or who
were specifically identified to you during the period of your investigation of
the Company, so long as they are employed by the Company, without obtaining
the prior written consent of the Company; provided that the foregoing
provision shall not prevent you from employing any such person who contacts
you on his or her own initiative and without any solicitation by you, other
than general solicitations not specifically directed towards employees of the
Company.
3
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Mr. Comas.
September 13, 1999
Page 4
You agree that, for a period of two (2) years from the date of this
agreement, unless such shall have been specifically agreed to in writing by
the Company, neither you nor any of your affiliates (as such term is defined
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), will
in any manner, directly or indirectly, (a) effect or seek, offer or propose
(whether publicly or otherwise) to effect, or cause or participate in or in
any way assist any other person to effect or seek, offer or propose (whether
publicly or otherwise) to effect or participate in, (i) any acquisition of any
securities (or beneficial ownership thereof) of assets of the Company or any
of its subsidiaries; (ii) any tender or exchange offer, merger or other
business combination involving the Company or any of its subsidiaries; (iii)
any recapitalization, restructuring, liquidation, dissolution or other
extraordinary transaction with respect to the Company or any of its
subsidiaries; or (iv) any "solicitation" of "proxies" (as such terms are used
in the proxy rules of the Securities and Exchange Commission) or consents to
vote any voting securities of the Company; (b) form, join or in any way
participate in a "group" (as defined by the 1934 Act); (c) otherwise act,
alone or in concert with others, to seek to control or influence the
management, Board of Directors or policies of the Company; (d) take any action
which might force the Company to make a public announcement regarding any of
the types of matters set forth in (a) above, or (b) enter into any discussions
or arrangements with any third party with respect to any of the foregoing.
You understand and agree that no contract or agreement providing for any
transaction involving the Company shall be deemed to exist between you and the
Company unless and until a final definitive agreement has been executed and
delivered. You also agree that unless and until a final definitive agreement
regarding a transaction between the Company and you has been executed and
delivered, neither the Company nor you will be under any legal obligation of
any kind whatsoever with respect to such a transaction by virtue of this
agreement except for the matters specifically agreed to herein. You further
acknowledge and agree that the Company reserves the right, in its sole
discretion, to reject any and all proposals made by you or any of your
Representatives with regard to a transaction between the Company and you, and
to terminate discussions and negotiations with you at any time. You further
understand that (i) the Company and its Representatives shall be free to
conduct any process for any transaction contemplated by this agreement
involving the Company, if and as they in their sole discretion shall determine
(including, without limitation, negotiating with any other interested parties
and entering into a definitive agreement without prior notice to you or any
other person); and (ii) any procedures relating to such process or transaction
may be changed at any time without notice to you or any other person. Neither
this paragraph nor any other provision in this agreement can be waived or
amended except by written consent of the Company, which consent shall
specifically refer to this paragraph (or such provision) and explicitly make
such waiver or amendment.
It is understood and agreed that no failure of delay by the Company in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude
4
<PAGE>
Mr. Comas
September 13, 1999
Page 5
any other or future exercise thereof or the exercise of any other right, power
or privilege hereunder.
It is further understood and agreed that money damages may not be a
sufficient remedy for any breach of this agreement by you or any of your
Representatives and that the Company shall be entitled to seek equitable
relief, including injunction and specific performance, as a remedy for any
such breach. Such remedies shall not be deemed to be the exclusive remedies
for a breach by you of this agreement but shall be in addition to all other
remedies available at law or equity to the Company. In the event of litigation
relating to this agreement, if a court of competent jurisdiction determines
that there has been a breach of this agreement, then the breaching party shall
pay to the other party the reasonable legal fees incurred by the non-breaching
party in connection with such litigation, including any appeal therefrom.
This agreement shall supersede any prior letter agreement entered into by
or on behalf of the Company and you and your Representatives concerning the
subject matter hereof.
This agreement is for the benefit of the Company and its directors,
officers, shareholders, owners, affiliates, and agents, and shall be governed
by and construed in accordance with the laws of the Commonwealth of
Massachusetts without regard to such jurisdiction's conflict of laws
principles.
Please confirm your agreement with the foregoing by signing and returning
one copy of this letter to the undersigned, whereupon this agreement shall
become a binding agreement between you and the Company.
Very truly yours,
KOLLMORGEN CORPORATION
/s/ James A. Eder
By: _________________________________
James A. Eder
Vice President
Accepted and agreed as of
the date first written above:
DANAHER CORPORATION
/s/ Daniel L. Comas
By __________________________________
Daniel L. Comas
Vice President
5
<PAGE>
EXHIBIT 99(d)(3)
CONSULTING AGREEMENT
AGREEMENT by and between Danaher Corporation, a Delaware corporation (the
"Company"), and Gideon Argov (the "Consultant"), dated as of the 4th day of May,
2000.
WHEREAS, pursuant to that certain Agreement and Plan of Merger (the "Merger
Agreement"), dated as of the date hereof, by and among the Company, King DC
Acquisition Corp., a New York corporation and a subsidiary of the Company (the
"Purchaser"), and Kollmorgen Corporation, a New York corporation ("Kollmorgen"),
Purchaser shall be merged with and into Kollmorgen with Kollmorgen continuing as
the surviving corporation (the "Merger"); and
WHEREAS, prior to consummation of the Merger, the Consultant will continue
to serve as Chairman of the Board, President and Chief Executive Officer of
Kollmorgen; and
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that the Consultant will be removed as Chairman of the Board, President and
Chief Executive Officer of Kollmorgen immediately upon consummation of the
Merger and it is in the best interests of the Company to retain the services of
the Consultant on the terms and conditions set forth below, and the Consultant
is willing to render such services.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Benefits under Existing Agreements. Effective as of the consummation
----------------------------------
of the Merger (the "Effective Time"), the Consultant shall cease to serve as the
Chairman of the Board, President and Chief Executive Officer of Kollmorgen and
his employment with Kollmorgen shall terminate. Such termination of employment
shall be deemed an "Involuntary Termination" under the Retention Agreement,
dated March 17, 1998, between the Consultant and Kollmorgen (the "Retention
Agreement"), and the Company shall cause Kollmorgen to promptly perform all its
obligations under the Retention Agreement to the Consultant arising from such
Involuntary Termination, except that the Consultant shall not be entitled to any
severance payments under Section 3(a) of the Retention Agreement. On the
Effective Time, the Consultant shall deliver to the Company the Release in the
form attached as Exhibit A to the Retention Agreement (as revised to
appropriately reflect this Agreement).
2. Consulting Period. The Consultant shall make himself available to
-----------------
render consulting services, on the terms and conditions set forth in this
Agreement, for the period beginning on the Effective Time, and ending on the
earlier of (i) the sixth anniversary thereof and (ii) the date this Agreement is
terminated by the Company or the Consultant upon 10 business days' advance
written notice (the "Consulting Period"); provided, however, that this Agreement
shall not be terminable by the Company for any reason other than the death or
permanent disability of the Consultant or a material breach by the Consultant of
the provisions hereof, which breach is (if curable) not cured by the Consultant
within 10 business days after delivery to him by the Company of a written notice
setting forth the nature of such breach in reasonable detail.
<PAGE>
3. Consulting Services. During the Consulting Period, the Consultant
-------------------
shall render such services on a part-time basis as may be reasonably requested
from time to time by the Board and/or the Chief Executive Officer of the Company
(taking into account the Consultant's other obligations) including, but not
limited to, assisting with the integration of Kollmorgen into the Company and
assisting with the Intellectual Property Claims and the Pending Acquisition
(each such term as defined below). The Consultant's services shall be performed
at such times and locations as shall be mutually convenient to the Consultant
and the Company; provided, however, that during any month in the Consulting
Period the Consultant shall not be required to perform services hereunder for
more than 20 hours without his consent.
4. Consulting Fee. In consideration of the foregoing, the Company shall
--------------
pay the Consultant a consulting fee in accordance with the following schedule:
$1,000,000 at the Effective Time, and $78,991.34 per month for each month of the
Consulting Period, in arrears.
5. Consequences of Early Termination of the Consulting Period. In the
----------------------------------------------------------
event that the Consulting Period is terminated pursuant to clause (ii) of
Section 2 above, the following shall apply:
(a) if such termination is as a consequence of the Consultant's death or
permanent disability, the Consultant or his estate, as the case may
be, shall (i) be paid a lump sum in cash equal to the sum of any
earned but unpaid Consulting Fees and 12.086% of the Consulting Fee
payments that would have been payable for the remainder of the
Consulting Period if no such termination had occurred and (ii)
continue to be entitled to payments provided in Sections 6 and 7
hereof in accordance with their respective terms;
(b) if such termination is as a consequence of the Consultant's material
breach of Section 10, as finally determined by a Court of competent
jurisdiction, the Consultant shall (i) be paid only earned but unpaid
Consulting Fees and (ii) forfeit the right to receive any future
payments under Section 6 or 7 hereof; and
(c) if such termination is as a consequence of any other material breach
(including a resignation by the Consultant other than as a consequence
of the Company's breach of this Agreement), the Consultant shall (i)
be paid the lump sum cash amount described in Section 6(a)(i) above
and (ii) be subject to Section 6(b)(ii) above.
6. Intellectual Property Claim Payout. The Company shall pay the
----------------------------------
Consultant an amount equal to 2% of the value of each settlement or judgment
reached by or awarded to (as applicable) Kollmorgen or any of its affiliates at
any time prior the sixth anniversary of the Effective Time in respect of the
legal actions initiated by Kollmorgen relating to the infringement of its
intellectual property rights in existence as of the Effective Time (the
"Intellectual Property Claims"), less actual legal expenses and other actual
expenses incurred by Kollmorgen in litigating the relevant Intellectual Property
Claim ("Expenses") but before taxes (the "Success Payment"). If the payment by
the defendants of settlements or judgments relating to such Intellectual
Property Claims (the "Resolution Payment") is in the form of non-cash
2
<PAGE>
consideration, such non-cash consideration shall be valued by an independent
appraiser, who shall be appointed by the Company subject to the approval of the
Consultant, which shall not unreasonably be withheld. If the Resolution Payment
involves the payment of royalty fees, the Consultant shall be entitled to
receive an amount equal to 2% of the royalty fees received throughout the period
during which the royalty fee is paid (after appropriate allocation of the
Expenses). The Consultant understands and agrees that the decision to prosecute
or pursue any Intellectual Property Claims or to settle any such Intellectual
Property Claims, and the terms of any settlement or such claims, shall be at the
Company's sole discretion.
7. Transaction Finders Fee. The Company shall pay the Consultant a
-----------------------
finders fee at the time of the consummation of the "D Acquisition" (the "Pending
Acquisition") in an amount equal to 2% of the aggregate value of the
consideration (including assumption of debt and excluding cash in hand at the
acquired company) paid by Kollmorgen or any of its affiliates in connection
with the consummation of the Pending Acquisition (the "Finders Fee"). The
Consultant understands and agrees that both the decision to effect the Pending
Acquisition and the terms of any such transaction shall be at the Company's sole
discretion. Should a dispute arise between the parties hereto concerning the
value of the consideration relating to the Pending Acquisition and described in
this Section 7, the value of such consideration shall be determined by an
independent appraiser, who shall be appointed by the Company subject to the
approval of the Consultant, which shall not unreasonably be withheld.
8. Restrictive Covenants. (a) During the Consulting Period and at
---------------------
all times thereafter, the Consultant shall not disclose to anyone who is not
employed by the Company or an affiliate thereof (which will include, after the
Effective Time, Kollmorgen), or to any employee of the Company or an affiliate
who, to the knowledge of the Consultant, is not authorized to receive such
information, any confidential or proprietary information of the Company or any
of its affiliates or any confidential information relating to the former or
present customers or potential customers of the Company or any of its affiliates
of which the Consultant became aware during his employment by the Company of any
of its affiliates or of which he becomes aware during the Consulting Period. The
Consultant shall hold in a fiduciary capacity for the benefit of the Company or
any of its affiliates, as applicable, all secret, confidential or proprietary
information, knowledge or data relating to the Company or any of its affiliates
and their respective businesses that the Consultant obtained during his
employment by the Company or any of its affiliates or that he obtains during the
Consulting Period and that is not public knowledge (other than as a result of
the Consultant's violation of this Section 8(a)) ("Confidential Information").
The Consultant shall not communicate, divulge or disseminate Confidential
Information at any time during or after the Consulting Period, except with the
prior written consent of the Company or as otherwise required by law or legal
process. If the Consultant is required by law or legal process to divulge any
Confidential Information, he shall promptly inform the Company and cooperate
with the Company in seeking confidential treatment for such information.
(b) During the Consulting Period and for two years thereafter (the
"Noncompetition Period"), the Consultant shall not, directly or indirectly,
without the prior written consent of the Board, engage in or become associated
with a Competitive Activity anywhere in Europe (including the Middle East) or
North America except as may be required in the course of the Consultant's
performance of services hereunder. For purposes of this Section 8:
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<PAGE>
(i) a "Competitive Activity" means any business or other endeavor that engages
in the electronic motion control business in competition with Kollmorgen, the
Company or any of their respective affiliates or consulting with respect
thereto; and (ii) the Consultant shall be considered to have become "associated
with a Competitive Activity" if he becomes directly or indirectly involved as an
owner, principal, employee, officer, director, independent contractor, agent,
partner, advisor, representative, stockholder, financial backer, lender or in
any other capacity calling for the rendition of the Consultant's personal
services, with any individual, partnership, corporation or other organization
that is engaged in a Competitive Activity (a "Competitor"); provided, however,
that the Consultant shall not be considered "associated with a Competitive
Activity" unless he is directly or indirectly assisting, supporting, advising or
otherwise providing personal services to that portion of a Competitor's business
that is primarily engaged in a Competitive Activity. Notwithstanding the
foregoing, the Consultant may make and retain investments during the
Noncompetition Period in less than five percent of the equity of any entity that
is listed on a national securities exchange or regularly traded in an over-the-
counter market.
(c) During the Noncompetition Period, the Consultant shall not, directly
or indirectly, on behalf of the Consultant or any other person, solicit for
employment by other than the Company or any of its affiliates any person who is
at that time, or has within 12 months of that time been, employed by the Company
or any of its affiliates.
(d) The Consultant acknowledges and agrees that: (i) the purpose of the
foregoing covenants, including without limitation the noncompetition covenant of
Section 8(b), is to protect the goodwill, trade secrets and other confidential
information of the Company (including those of Kollmorgen being acquired in the
Merger); (ii) because of the nature of the business in which the Company and its
affiliates are engaged and because of the nature of the confidential information
to which the Consultant has access, it would be impractical and excessively
difficult to determine the actual damages of the Company and its affiliates in
the event the Consultant breached any of the covenants of this Section 8; and
(iii) remedies at law (such as monetary damages) for any breach of the
Consultant's obligations under this Section 8 would be inadequate. The
Consultant therefore agrees and consents that if he commits any breach of a
covenant under this Section 8 or threatens to commit any such breach, the
Company shall have the right (in addition to, and not in lieu of, any other
right to remedy that may be available to it) to temporary and permanent
injunctive relief from a court of competent jurisdiction, without posting any
bond or other security and without the necessity of proof of actual damage. If
any provision of this Section 8 is finally determined by a court of competent
jurisdiction to be unenforceable, the Consultant and the Company hereby agree
that such court shall have jurisdiction to reform this Agreement or any
provision hereof so that it is enforceable to the maximum extent permitted by
law, and the parties agree to abide by such court's determination. If any of the
covenants of this Section 8 are determined to be wholly or partially
unenforceable in any jurisdiction, such determination shall not be a bar to or
in any way diminish the Company's right to enforce any such covenant in any
other jurisdiction.
(e) Any termination of the Consultant's provision of consulting services
or of this Agreement shall have no effect on the continuing operation and
enforceability of this Section.
4
<PAGE>
9. Successors. (a) This Agreement is personal to the Consultant
----------
and, without the prior written consent of the Company, shall not be assignable
by the Consultant otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Consultant's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
10. Miscellaneous. (a) This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware, without
reference to principles of conflict of laws. In addition, each of the parties
hereto (i) consents to submit itself to the personal jurisdiction of any Federal
court located in the State of Delaware or any Delaware state court in the event
any dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement, (ii) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
(iii) agrees that it will not bring any action relating to this Agreement or any
of the transactions contemplated by this Agreement in any court other than a
Federal or state court sitting in the State of Delaware, and (iv) irrevocably
waives any and all rights to trial by jury in any legal proceeding arising out
of or related to this Agreement or the transactions contemplated hereby.
(b) The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
(c) This Agreement may not be amended or modified except by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.
(d) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(e) The Consultant acknowledges that his services hereunder are to be
rendered as an independent contractor, and that he is solely responsible for the
payment of all Federal, state, local and foreign taxes that are required by
applicable laws or regulations to be paid with respect to the Consulting Fee,
Success Payment (if any) and Finders Fee (if any). Notwithstanding the
preceding sentence, during the Consulting Period the Company may withhold from
amounts payable under this Agreement all federal, state, local and foreign taxes
that are required to be withheld by applicable laws or regulations.
(f) The Consultant and the Company acknowledge that this Agreement
supersedes any other agreement between them concerning the subject matter
hereof; provided, however, that this Agreement shall in no way supersede,
replace, or otherwise affect in any manner any rights which the Consultant has
under any agreements between Consultant and Kollmorgen in respect of his
employment by Kollmorgen, termination of such employment or otherwise.
(g) This Agreement may be executed by either of the parties hereto in
counterparts, each of which shall be deemed to be an original, but all such
counterparts together shall together constitute one and the same instrument.
5
<PAGE>
(h) Notwithstanding any other provision of this Agreement, this
Agreement shall be null and void and of no effect if the Merger is not
consummated.
IN WITNESS WHEREOF, the Consultant has hereunto set his hand and,
pursuant to the authorization of its Board, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
/s/ Gideon Argov
----------------------------------
GIDEON ARGOV
/s/ Daniel L. Comas
----------------------------------
DANAHER CORPORATION
By: /s/ Daniel L. Comas
-------------------------------
Name: Daniel L. Comas
Title: Vice President
6
