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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
(AMENDMENT NO. 1)
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
OPAL, INC.
(Name of Subject Company)
ORION CORP. I
APPLIED MATERIALS, INC.
(Bidders)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
683474-10-0
(CUSIP Number of Class of Securities)
JOSEPH J. SWEENEY, ESQ.
APPLIED MATERIALS, INC.
2881 SCOTT BLVD.
SANTA CLARA, CALIFORNIA 95050
(408) 727-5555
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on behalf of Bidders)
COPY TO:
DAVID FOX, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
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Page 1 of Pages
Exhibit Index is located on Page 4
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This Amendment No. 1 amends the Tender Offer Statement on Schedule 14D-1
filed on November 26, 1996 (the "Schedule 14D-1") by Applied Materials, Inc., a
Delaware corporation, and its wholly owned subsidiary, Orion Corp. I, a Delaware
corporation (the "Purchaser"), relating to the Purchaser's tender offer for all
of the outstanding shares of common stock, par value $.01 per share, of Opal,
Inc., a Delaware corporation. Unless otherwise defined herein, all capitalized
terms used herein shall have the respective meanings given such terms in the
Schedule 14D-1.
Item 11. Material To Be Filed as Exhibits.
Item 11 is hereby amended as follows:
(a)(1) Definitive Offer to Purchase dated November 26, 1996.
SIGNATURES
After due inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: November 27, 1996
ORION CORP. I
BY: /s/ Nancy H. Handel
-------------------------------
Name: Nancy H. Handel
Title: President and Chief
Executive Officer
APPLIED MATERIALS, INC
BY: /s/ Joseph J. Sweeney
-------------------------------
Name: Joseph J. Sweeney
Title: Vice President
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
(a)(1) Definitive Offer to Purchase dated November 26, 1996.
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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
OPAL, INC.
AT
$18.50 NET PER SHARE
BY
ORION CORP. I
A WHOLLY OWNED SUBSIDIARY OF
APPLIED MATERIALS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, DECEMBER 24, 1996,
UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES (AS DEFINED HEREIN) WHICH CONSTITUTES AT LEAST A MAJORITY OF THE
SHARES OUTSTANDING ON A FULLY DILUTED BASIS. THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS. SEE SECTION 14.
THE BOARD OF DIRECTORS OF OPAL, INC. (THE "COMPANY") HAS APPROVED THE
OFFER AND THE MERGER (AS DEFINED HEREIN), HAS DETERMINED THAT THE TERMS OF
THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE
STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
IMPORTANT
Any stockholder desiring to tender all or any portion of his shares of
common stock, par value $.01 per share, of the Company (the "Shares"), should
either (a) complete and sign the Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
mail or deliver it together with the certificate(s) evidencing tendered
Shares, and any other required documents, to the Depositary or tender such
Shares pursuant to the procedures for book-entry transfer set forth in
Section 3 or (b) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such
stockholder. A stockholder whose Shares are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if such
stockholder desires to tender such Shares.
Any stockholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available or who cannot comply
with the procedures for book-entry transfer described in this Offer to
Purchase on a timely basis may tender such Shares by following the procedures
for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Requests for
additional copies of this Offer to Purchase, the Letter of Transmittal, the
Notice of Guaranteed Delivery and other tender offer materials may be
directed to the Information Agent. A stockholder may also contact brokers,
dealers, commercial banks and trust companies for assistance concerning this
Offer.
----------------
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
INCORPORATED
NOVEMBER 26, 1996
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Introduction .............................................................................. 1
1. Terms of the Offer ..................................................................... 3
2. Acceptance for Payment and Payment for Shares .......................................... 4
3. Procedures for Tendering Shares ........................................................ 5
4. Withdrawal Rights ...................................................................... 7
5. Certain Federal Income Tax Consequences ................................................ 8
6. Price Range of Shares; Dividends ....................................................... 8
7. Effect of the Offer on the Market for the Shares; Nasdaq Quotation and Exchange Act
Registration ........................................................................... 9
8. Certain Information Concerning the Company ............................................. 9
9. Certain Information Concerning the Purchaser and Parent ................................ 11
10. Source and Amount of Funds. ........................................................... 12
11. Background of the Offer; Contacts with the Company .................................... 12
12. Purpose of the Offer, Merger, Merger Agreement and Stockholder Agreements ............ 13
13. Dividends and Distributions ........................................................... 22
14. Conditions to the Offer ............................................................... 22
15. Certain Legal Matters ................................................................. 24
16. Fees and Expenses ..................................................................... 28
17. Miscellaneous ......................................................................... 28
Schedule I--Information Concerning Directors and Executive Officers of Parent and the
Purchaser ....................................................................... S-1
</TABLE>
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To the Holders of Common Stock of
OPAL, INC.:
INTRODUCTION
Orion Corp. I, a Delaware corporation (the "Purchaser") and a wholly owned
subsidiary of Applied Materials, Inc., a Delaware corporation ("Parent"),
hereby offers to purchase all outstanding shares of common stock, par value
$.01 per share (the "Shares"), of Opal, Inc., a Delaware corporation (the
"Company"), at $18.50 per Share (the "Offer Price"), net to the seller in
cash, without interest, upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal
(which, as amended or supplemented from time to time, together constitute the
"Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. The Purchaser will pay all fees and expenses of Morgan
Stanley & Co. Incorporated, which is acting as the Dealer Manager (the
"Dealer Manager"), Harris Trust Company of New York, which is acting as the
Depositary (the "Depositary"), and Georgeson & Company, Inc., which is acting
as the Information Agent (the "Information Agent"), incurred in connection
with the Offer. See Section 16.
The Offer is conditioned upon, among other things, there having been
validly tendered and not withdrawn prior to the expiration of the Offer a
number of Shares which constitutes at least a majority of the Shares
outstanding on a fully diluted basis (the "Minimum Condition"). See Section
14.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of November 24, 1996 (the "Merger Agreement"), by and among the Company,
Parent and the Purchaser. The Merger Agreement provides that, among other
things, following the consummation of the Offer and the satisfaction or
waiver of the other conditions set forth in the Merger Agreement, the
Purchaser will be merged with and into the Company (the "Merger"). At the
effective time of the Merger (the "Effective Time"), each outstanding Share
(other than Shares held in the treasury of the Company, owned by Parent, the
Purchaser or any other wholly owned subsidiary of Parent or held by
stockholders who perfect their appraisal rights under Delaware law) will be
converted into the right to receive the per Share price paid in the Offer,
without interest (referred to herein as the "Merger Consideration"). See
Section 12.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER AND THE
MERGER, HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO
AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY AND RECOMMENDS
THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.
Robertson, Stephens & Company LLC, the Company's financial advisor
("Robertson Stephens"), has delivered to the Board of Directors of the
Company (the "Company Board") its written opinion to the effect that, as of
the date of such opinion, the Offer Price is fair to the stockholders of the
Company from a financial point of view. Such opinion is set forth in full as
an exhibit to the Company's Solicitation/Recommendation Statement on Schedule
14D-9, which is being mailed to stockholders of the Company herewith.
The Merger Agreement provides that promptly upon the purchase by Parent or
any of its subsidiaries of Shares pursuant to the Offer that represent at
least a majority of the outstanding Shares on a fully diluted basis, Parent
shall be entitled to designate up to such number of directors, rounded up to
the next whole number, on the Company Board as will give Parent
representation on the Company Board equal to the product of the total number
of directors on the Company Board multiplied by the percentage that the
number of Shares so accepted for payment bears to the total number of Shares
then outstanding. In the Merger Agreement, the Company has agreed to use its
best efforts promptly to cause Parent's designees to be elected as directors
of the Company, including increasing the size of the Company Board or
securing the resignations of incumbent directors or both. Notwithstanding the
foregoing, Parent and the Purchaser have agreed that, until the Effective
Time, the Company Board shall have at least three members who were directors
on the date of the Merger Agreement.
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The consummation of the merger is subject to the satisfaction or waiver of
certain conditions, including, if required by law, the approval and adoption
of the merger agreement by the requisite vote of the stockholders of the
company. see section 12. Under the company's certificate of incorporation and
delaware law, except as otherwise described below, the affirmative vote of
the holders of a majority of the outstanding shares is required to approve
and adopt the merger agreement and the merger. Consequently, if the purchaser
acquires (pursuant to the offer or otherwise) at least a majority of the then
outstanding shares, the purchaser will have sufficient voting power to
approve and adopt the merger agreement and the merger without the vote of any
other stockholder.
Under delaware law, if the purchaser acquires, pursuant to the offer or
otherwise, at least 90% of the then outstanding shares, the purchaser will be
able to approve and adopt the merger agreement and the transactions
contemplated thereby, including the merger, without a vote of the company's
stockholders. In such event, parent, the purchaser and the company have
agreed to take, at the request of the purchaser, all necessary and
appropriate action to cause the merger to become effective as soon as
practicable after such acquisition, without a meeting of the company's
stockholders. If, however, the purchaser does not acquire at least 90% of the
then outstanding shares pursuant to the offer or otherwise and a vote of the
company's stockholders is required under delaware law, a significantly longer
period of time will be required to effect the merger. see section 12.
The merger agreement provides that, following the satisfaction or waiver
of the conditions to the offer, the purchaser will accept for payment, in
accordance with the terms of the offer, all shares validly tendered pursuant
to the offer as soon as it is permitted to do so pursuant to applicable law,
which could be as early as immediately following 12:00 midnight, new york
city time, on tuesday, december 24, 1996. The merger agreement provides that
the purchaser may under certain circumstances, from time to time, extend the
expiration date of the offer beyond the time it would otherwise be required
to accept validly tendered shares for payment. The offer will not remain open
following the time shares are accepted for payment.
In connection with the execution of the merger agreement, parent and the
purchaser entered into separate stockholder agreements, dated as of november
24, 1996 (collectively, the "stockholder agreements"), with each of rafi
yizhar, the company's chief executive officer and president and the
beneficial owner of an aggregate of 253,922 shares, israel niv, the company's
general manager and executive vice president of sales and marketing and the
beneficial owner of an aggregate of 101,878 shares, clal electronics
industries ltd., the beneficial owner of an aggregate of 2,692,327 shares
("clal "), and orbotech ltd., the beneficial owner of an aggregate of
1,241,650 shares (each, a "selling stockholder" and, collectively, the
"selling stockholders"). The selling stockholders beneficially own an
aggregate of 4,289,777 shares or approximately 47% of the company's
outstanding shares on a fully diluted basis. Pursuant to the stockholder
agreements, the selling stockholders have agreed to validly tender pursuant
to the offer and not withdraw all shares which are beneficially owned by the
selling stockholders prior to the expiration date (as hereinafter defined).
Each of the stockholder agreements provides that parent has an irrevocable
option to acquire from the selling stockholder, at the offer price, all of
such selling stockholder's shares if (i) the offer is terminated, abandoned
or withdrawn by parent or purchaser (whether due to the failure of any of the
conditions to the offer or otherwise), other than at a time when parent or
the purchaser is in material breach of the terms of the merger agreement, or
(ii) the merger agreement is terminated in accordance with its terms, other
than as a result of certain material breaches by parent or the purchaser in
the terms of the merger agreement. Subject to certain conditions specified in
each of the stockholder agreements, such options are exercisable in whole but
not in part for the 60 day period following the first to occur of the
foregoing events. The stockholder agreements are more fully described in
section 12.
According to the company, as of november 24, 1996 there were 8,743,583
shares outstanding, 351,050 shares reserved for issuance upon the exercise of
outstanding vested employee stock options and up to 40,000 shares issuable in
respect of outstanding employee contributions under the company's employee
stock purchase plan for the period ending december 31, 1996. For purposes of
the offer, "fully diluted basis" assumes that such vested employee stock
options are exercised for shares and that all of such 40,000 shares are
issued pursuant to the company's employee stock purchase plan. Based upon the
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foregoing information, the minimum condition would be satisfied if 4,567,318
shares were validly tendered. assuming the valid tender into the offer of the
4,289,777 shares beneficially owned by the selling stockholders, the
purchaser will need to purchase an additional 277,541 shares to satisfy the
minimum condition.
THIS 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.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension
or amendment), the Purchaser will accept for payment and pay for all Shares
which are validly tendered prior to the Expiration Date and not withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 Midnight,
New York City time, on Tuesday, December 24, 1996, unless and until the
Purchaser, in its sole discretion (but subject to the terms of the Merger
Agreement), shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall mean to the latest time
and date at which the Offer, as so extended by the Purchaser, shall expire.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition. See Section 14, which sets forth in full the conditions to
the Offer. If the Minimum Condition is not satisfied or any or all of the
other events set forth in Section 14 shall have occurred or shall be
determined by the Purchaser to have occurred prior to the Expiration Date,
the Purchaser reserves the right (but shall not be obligated) to (i) decline
to purchase any of the Shares tendered in the Offer and terminate the Offer
and return all tendered Shares to the tendering stockholders, (ii) waive any
or all conditions to the Offer, to the extent permitted by applicable law and
the provisions of the Merger Agreement, and, subject to complying with
applicable rules and regulations of the Securities and Exchange Commission
(the "Commission"), purchase all Shares validly tendered, (iii) extend the
Offer and, subject to the right of stockholders to withdraw Shares until the
Expiration Date, retain the Shares which have been tendered during the period
or periods for which the Offer is extended or (iv) subject to the terms of
the Merger Agreement, amend the Offer. The Merger Agreement provides that the
Purchaser will not, without the consent of the Company, decrease the Offer
Price, decrease the numbers of Shares sought in the Offer, amend or waive the
Minimum Condition, or amend any other condition of the Offer in any manner
adverse to the holders of Shares, except that if on the initial expiration
date all conditions to the Offer shall not have been satisfied or waived, the
Offer may be extended from time to time and, if certain required regulatory
approvals have not been obtained, the Offer will be extended for up to twenty
business days. The Merger Agreement provides that if, immediately prior to
the expiration date of the Offer, the Shares tendered and not withdrawn
pursuant to the Offer equal less than 90% of the outstanding Shares, the
Purchaser may extend the Offer for a period not to exceed thirty business
days.
The Purchaser expressly reserves the right, in its sole discretion, at any
time or from time to time, subject to the terms of the Merger Agreement and
regardless of whether or not any of the events set forth in Section 14 shall
have occurred or shall have been determined by the Purchaser to have
occurred, (i) to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and the payment for, any Shares, by
giving oral or written notice of such extension to the Depositary and (ii) to
amend the Offer in any respect by giving oral or written notice of such
amendment to the Depositary. The rights reserved by the Purchaser in this
paragraph are in addition to the Purchaser's rights to terminate the Offer
pursuant to Section 14. Any extension, amendment or termination will be
followed as promptly as practicable by public announcement thereof, the
announcement in the case of an extension to be issued no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with Rules 14d-4(c), 14d-6(d) and
14e-1(d) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Without limiting the obligation of the Purchaser under such rules or
the manner in which the Purchaser may choose to make any public announcement,
the Purchaser currently intends to make announcements by issuing a release to
the Dow Jones News Service.
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If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for
any reason, then, without prejudice to the Purchaser's rights under the
Offer, the Depositary may retain tendered shares on behalf of the Purchaser,
and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in Section 4.
However, the ability of the Purchaser to delay the payment for Shares which
the Purchaser has accepted for payment is limited by Rule 14e-1(c) under the
Exchange Act, which requires that a bidder pay the consideration offered or
return the securities deposited by or on behalf of holders of securities
promptly after the termination or withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including the Minimum Condition, subject to the Merger Agreement), the
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information
concerning the Offer, other than a change in price or a change in percentage
of securities sought, will depend upon the facts and circumstances, including
the relative materiality of the terms or information. With respect to a
change in price or a change in percentage of securities sought, a minimum ten
business day period is required to allow for adequate dissemination to
stockholders and investor response. If, prior to the Expiration Date, the
Purchaser should decide to increase the price per Share being offered in the
Offer, such increase will be applicable to all stockholders whose Shares are
accepted for payment pursuant to the Offer. The Merger Agreement provides
that, without the Company's consent, the Purchaser will not decrease the
price or the number of Shares sought in the Offer. As used in this Offer to
Purchase, "business day" has the meaning set forth in Rule 14d-1 under the
Exchange Act.
The Company has provided to the Purchaser its list of stockholders and
security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal and other relevant materials will be mailed 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 stockholder 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.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension
or amendment), the Purchaser will purchase, by accepting for payment, and
will pay for, all Shares validly tendered prior to the Expiration Date (and
not properly withdrawn in accordance with Section 4) promptly after the later
to occur of (i) the Expiration Date and (ii) the satisfaction or waiver of
the conditions set forth in Section 14. Subject to the applicable rules of
the Commission and the terms of the Merger Agreement, the Purchaser expressly
reserves the right to delay acceptance for payment of, or payment for, Shares
in order to comply, in whole or in part, with any applicable law, including
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"). See Sections 14 and 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates
evidencing such Shares ("Stock Certificates") or timely confirmation of a
book-entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company (each, a "Book-Entry Transfer Facility") pursuant to
the procedures set forth in Section 3, (ii) a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) or, in the case of a
book-entry transfer, an Agent's Message (as defined below) and (iii) any
other documents required by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such
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Book-Entry Transfer Facility has received an express acknowledgment from the
participant in such Book-Entry Transfer Facility tendering the Shares that
such participant has received and agrees to be bound by the terms of the
Letter of Transmittal and that the Purchaser may enforce such agreement
against the participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, tendered Shares if, as and when the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares for payment. Payment for Shares accepted pursuant
to the Offer will be made by deposit of the purchase price with the
Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payments from the Purchaser and transmitting payments to
such tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE
PURCHASE PRICE FOR SHARES BE PAID BY THE PURCHASER, REGARDLESS OF ANY DELAY
IN MAKING SUCH PAYMENT.
Upon the deposit of funds with the Depositary for the purpose of making
payments to tendering shareholders, the Purchaser's obligation to make such
payment shall be satisfied and tendering shareholders must thereafter look
solely to the Depositary for payment of amounts owed to them by reason of the
acceptance for payment of Shares pursuant to the Offer.
If any tendered Shares are not accepted pursuant to the Offer for any
reason, or if Stock Certificates are submitted evidencing more Shares than
are tendered, Stock Certificates evidencing Shares not purchased or tendered
will be returned, without expense to the tendering stockholder (or in the
case of Shares tendered by book-entry transfer into the Depositary's account
at a Book-Entry Transfer Facility pursuant to the procedures set forth in
Section 3, such Shares will be credited to an account maintained at such
Book-Entry Transfer Facility), as promptly as practicable after the
expiration, termination or withdrawal of the Offer.
The Purchaser reserves the right to transfer or assign, in whole at any
time or in part from time to time, to Parent or to one or more of its
affiliates, the right to purchase all or a portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
the Purchaser of its obligations under the Offer and will in no way prejudice
the rights of tendering stockholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES
Valid Tender. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message (in
the case of any book-entry transfer), and any other required documents, must
be received by the Depositary at its address set forth on the back cover of
this Offer to Purchase prior to the Expiration Date. In addition, either (i)
the Stock Certificates evidencing Shares must be received by the Depositary
along with the Letter of Transmittal or Shares must be tendered pursuant to
the procedures for book-entry transfer described below and a Book-Entry
Confirmation must be received by the Depositary, in each case prior to the
Expiration Date or (ii) the tendering stockholder must comply with the
guaranteed delivery procedures described below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at each Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in any of the Book-Entry Transfer
Facilities' systems may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. However, although delivery of
Shares may be effected through book-entry transfer at a Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message in connection with a book-entry
delivery of Shares, and any other required documents, must, in any case, be
transmitted to and received by the Depositary at its address set forth on the
back cover of this Offer to Purchase prior to the Expiration Date or the
tendering stockholder must comply with the guaranteed delivery procedures
described 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. Signatures on all Letters of Transmittal must be
guaranteed by a participant in the Security Transfer Agents Medallion Program
(each, an "Eligible Institution"), unless the Shares tendered thereby are
tendered (i) by a registered holder of Shares who has not completed either
the box entitled "Special Delivery Instructions" or the box entitled "Special
Payment Instructions" on the Letter of Transmittal, or (ii) for the account
of an Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If a Stock Certificate is registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or a
Stock Certificate not accepted for payment or not tendered is to be returned,
to a person other than the registered holder(s), then the Stock Certificate
must be endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name(s) of the registered holder(s) appear on the Stock
Certificate, with the signature(s) on such Stock Certificate or stock powers
guaranteed as described above. See Instructions 1 and 5 of the Letter of
Transmittal.
THE METHOD OF DELIVERY OF STOCK CERTIFICATES, THE LETTER OF TRANSMITTAL
AND ANY OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Stock Certificates are not immediately
available or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, or the procedures for book-entry
transfer cannot be completed on a timely basis, such Shares may nevertheless
be tendered if all the following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary prior to the Expiration Date as provided below;
and
(iii) the Stock Certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
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, are received by the Depositary within three Nasdaq
National Market System trading days after the date of execution of the
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares purchased
pursuant to the Offer will in all cases be made only after timely receipt by
the Depositary of (i) Stock Certificates evidencing such Shares or a
Book-Entry Confirmation of the delivery of such Shares, (ii) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and (iii) any other documents required by the
Letter of Transmittal.
BACK-UP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACKUP FEDERAL INCOME
TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE FOR SHARES
PURCHASED PURSUANT TO THE OFFER, EACH TENDERING STOCKHOLDER MUST PROVIDE THE
DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND
CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX
WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF
TRANSMITTAL. IF BACKUP WITHHOLDING APPLIES WITH RESPECT TO A STOCKHOLDER, THE
DEPOSITARY IS REQUIRED TO WITHHOLD 31% OF ANY PAYMENTS MADE TO SUCH
STOCKHOLDER. SEE INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL.
6
<PAGE>
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares pursuant to any of the procedures described above will be
determined by the Purchaser, in its sole discretion, whose determination will
be final and binding on all parties. The Purchaser reserves the absolute
right to reject any or all tenders of any Shares determined by it not to be
in proper form or if the acceptance for payment of, or payment for, such
Shares may, in the opinion of the Purchaser's counsel, be unlawful. The
Purchaser also reserves the absolute right, in its sole discretion, subject
to the Merger Agreement, to waive any of the conditions of the Offer or any
defect or irregularity in any tender with respect to Shares of any particular
stockholder, and the Purchaser's interpretation of the terms and conditions
of the Offer (including the Letter of Transmittal and the Instructions
thereto) will be final and binding. None of the Purchaser, Parent, 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
tenders or will incur any liability for failure to give any such
notification.
Other Requirements. By executing a Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the
Purchaser as the stockholder's attorneys-in-fact and proxies, in the manner
set forth in the Letter of Transmittal, each with full power of substitution,
to the full extent of the stockholder's rights with respect to the Shares
tendered by the stockholder and accepted for payment by the Purchaser (and
any and all other Shares or other securities issued or issuable in respect of
such Shares on or after the date of the Merger Agreement). All such proxies
shall be considered coupled with an interest in the tendered Shares. This
appointment will be effective when, and only to the extent that, the
Purchaser accepts Shares for payment. Upon acceptance for payment, all prior
proxies given by the stockholder with respect to the Shares or other
securities will, without further action, be revoked, and no subsequent
proxies may be given nor any subsequent written consent executed by such
stockholder (and if given or executed, will not be deemed to be effective)
with respect thereto. The designees of the Purchaser will, with respect to
the Shares and other securities, be empowered to exercise all voting and
other rights of such stockholder as they in their sole discretion may deem
proper at any annual, special or adjourned meeting of the Company's
stockholders, by written consent or otherwise. The Purchaser reserves the
right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares, the
Purchaser must be able to exercise full voting and other rights of a record
and beneficial holder, including rights in respect of acting by written
consent, with respect to such Shares.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer. The Purchaser's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement between
the tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable, provided 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 January 24, 1997, or at such
later time as may apply if the Offer is extended.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary
at its address set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name
of the registered holder, if different from that of the person who tendered
such Shares. If Stock Certificates evidencing Shares to be withdrawn have
been delivered or otherwise identified to the Depositary, then, prior to the
physical release of such Stock Certificates, the serial numbers of the
particular Stock Certificates and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution, except in the case of
Shares tendered for the account of an Eligible Institution, must also be
furnished to the Depositary as described above. If Shares have been tendered
pursuant to the procedures for book-entry transfer as set forth in Section 3,
any notice of
7
<PAGE>
withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, Parent, 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 any such notification.
ANY SHARES PROPERLY WITHDRAWN WILL BE DEEMED TO NOT HAVE BEEN VALIDLY
TENDERED FOR PURPOSES OF THE OFFER. However, withdrawn Shares may be
re-tendered by following one of the procedures described in Section 3 at any
time prior to the Expiration Date.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash for Shares pursuant to the Offer (or the Merger) will
be a taxable transaction for federal income tax purposes and may also be a
taxable transaction under applicable state, local or foreign tax laws. The
tax consequences of such receipt pursuant to the Offer (or the Merger) may
vary depending upon, among other things, the particular circumstances of the
stockholder. In general, a stockholder who receives cash for Shares pursuant
to the Offer (or the Merger) will recognize gain or loss for federal income
tax purposes equal to the difference between the amount of cash received in
exchange for the Shares sold and such stockholder's adjusted tax basis in
such Shares. Provided that the Shares constitute capital assets in the hands
of the stockholder, such gain or loss will be capital gain or loss, and will
be long term capital gain or loss if the holder has held the Shares for more
than one year at the time of sale. With respect to the receipt of cash for
Shares pursuant to the Offer, gain or loss will be recognized by the
stockholder in the tax year in which such Shares are accepted for payment
by the Purchaser (even if the cash is not received by such stockholder until
after the close of such tax year). With respect to the receipt of cash for
Shares pursuant to the Merger, gain or loss will be recognized by the
stockholder at the Effective Time of the Merger (even if the cash is not
received until a later time).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF
THE OFFER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE ALTERNATIVE
MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS. IN ADDITION, THE
DISCUSSION SET FORTH ABOVE MAY NOT APPLY TO PARTICULAR CATEGORIES OF
STOCKHOLDERS, INCLUDING STOCKHOLDERS WHO ACQUIRED SHARES PURSUANT TO THE
EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, INDIVIDUALS
WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES AND FOREIGN
CORPORATIONS, OR ENTITIES THAT ARE OTHERWISE SUBJECT TO SPECIAL TAX
TREATMENT.
6. PRICE RANGE OF SHARES; DIVIDENDS
The Shares trade on the Nasdaq National Market System under the symbol
"OPAL." The following table sets forth, for the fiscal quarters indicated,
the high and low sales price per Share on the Nasdaq National Market System.
All prices set forth below are as reported in published financial sources:
<TABLE>
<CAPTION>
MARKET PRICE
------------------
HIGH LOW
-------- --------
<S> <C> <C>
Year Ended December 31, 1995:
Second Quarter (since May 18) ............. $20.75 $ 14.00
Third Quarter ............................. 25.25 16.25
Fourth Quarter ............................ 20.25 11.00
Year Ended December 31, 1996:
First Quarter ............................. 14.25 10.375
Second Quarter ............................ 19.25 11.75
Third Quarter ............................. 13.25 6.50
Fourth Quarter (through November 26, 1996) 18.375 8.00
</TABLE>
8
<PAGE>
On November 22, 1996 the last full trading day prior to the announcement
of the terms of the Merger Agreement, the reported closing sales price per
Share on the Nasdaq National Market System was $12 1/8. On November 25, 1996
the last full trading day prior to the commencement of the Offer, the
reported closing sales price per Share on the Nasdaq National Market System
was $18 1/8. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR
THE SHARES.
Since the Company became a public company on May 18, 1995 it has not paid
any dividends on its common stock.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ QUOTATION AND
EXCHANGE ACT REGISTRATION
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and the number of holders of
Shares and could adversely affect the liquidity and market value of the
remaining Shares held by the public.
Depending upon the aggregate market value and per share price of any
Shares not purchased pursuant to the Offer, the Shares may no longer meet the
standards for continued inclusion in the Nasdaq National Market System, which
require that an issuer have at least 200,000 publicly held shares with a
market value of $1 million held by at least 400 stockholders or 300
stockholders holding round lots. If these standards were not met, quotations
might continue to be published in the over-the-counter "additional list" or
in one of the "local lists," but if the number of holders of Shares falls
below 300, or if the number of publicly held Shares falls below 100,000, or
there is not at least two market makers for the Shares, the National
Association of Securities Dealers ("NASD") rules provide that the securities
would no longer be "authorized" for Nasdaq reporting and Nasdaq would cease
to provide any quotations. Shares held directly or indirectly by an officer
or director of the Company, or by any beneficial owner of more than 10
percent of the Shares, ordinarily will not be considered as being publicly
held for this purpose. In the event the Shares were no longer eligible for
Nasdaq quotation, quotations might still be available from other sources. The
extent of the public market for the Shares and availability of such
quotations would, however, depend upon the number of holders of Shares
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration under
the Exchange Act, as described below, and other factors.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. Depending upon factors similar
to those described above regarding listing and market quotations, following
the Offer it is possible that the Shares would no longer constitute "margin
securities" for the purposes of the margin regulations of the Federal Reserve
Board and therefore could no longer be used as collateral for loans made by
brokers.
The Shares are currently registered under the Exchange Act. Registration
of the Shares under the Exchange Act may be terminated upon application of
the Company to the Commission if the Shares are not listed on a national
securities exchange or Nasdaq and there are fewer than 300 record holders of
the Shares. Termination of registration of the Shares under the Exchange Act
would reduce substantially the information required to be furnished by the
Company to its stockholders and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement
in connection with stockholders' meetings pursuant to Section 14(a) and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions no longer applicable to the Company. Furthermore, if
the Purchaser acquires a substantial number of Shares or the registration of
the Shares under the Exchange Act were to be terminated, the ability of
"affiliates" of the Company and persons holding "restricted securities" of
the Company to dispose of such securities pursuant to Rule 144 under the
Securities Act of 1933 may be impaired or eliminated. If registration of the
Shares under the Exchange Act were terminated prior to the consummation of
the Merger, the Shares would no longer be "margin securities" or be eligible
for Nasdaq reporting. It is the present intention of the Purchaser to seek to
cause the Company to make an application for termination of registration of
the Shares as soon as possible following the Offer if the requirements for
termination of registration are met.
9
<PAGE>
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The information concerning the Company contained in this Offer to
Purchase, including financial information (other than forecasts of the
Company's results of operations provided below), has been taken from or based
upon publicly available documents and records on file with the Commission and
other public sources. Neither Parent nor the Purchaser assumes any
responsibility for the accuracy or completeness of the information concerning
the Company contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to
Parent or the Purchaser.
The Company is a Delaware corporation with its principal executive offices
located at 3203 Scott Boulevard, Santa Clara, California 95054. The telephone
number of the Company at such offices is (408) 727-6060. The Company is a
supplier of CD-SEM systems for use in semiconductor manufacturing.
Set forth below is a summary of certain consolidated financial information
with respect to the Company, excerpted or derived from the information
contained in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, as well as the Company's Quarterly Report on Form
10-Q for the nine months ended September 30, 1996. More comprehensive
financial information is included in such reports and other documents filed
by the Company with the Commission, and the following summary is qualified in
its entirety by reference to such reports and other documents and all of the
financial information (including any related notes) contained therein. Such
reports and other documents may be inspected and copies may be obtained from
the offices of the Commission in the manner set forth below.
OPAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------------- -------------------------------
1996 1995 1995 1994 1993
--------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues .................... $47,954 $30,992 $44,736 $24,573 $12,384
Income from operations ..... 9,195 5,946 8,519 4,304 1,529
Net income .................. 9,233 6,244 9,074 4,099 1,322
Net income per Share ........ $ 1.01 $ 0.80 $ 1.10 $ 0.61 $ 0.23
Weighted average common
shares and equivalents .... 9,104 7,842 8,250 6,678 5,715
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
AT SEPTEMBER 30, -----------------------------
1996 1995 1994 1993
---------------- --------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital ................ $51,077 $42,292 $ 8,619 $ 7,091
Total assets ................... 67,309 55,252 16,701 11,672
Long-term debt ................. -- -- 475 1,321
Series E Mandatorily Redeemable
Preferred Stock ............... -- -- 1,476 1,405
Stockholders' equity ........... $56,131 $46,508 $ 9,336 $ 5,143
</TABLE>
The Company is subject to the information filing requirements of the
Exchange Act and is required to file reports and other information with the
Commission relating to its business, financial condition and other matters.
Information, as of particular dates, concerning the Company's directors and
officers, their remuneration, options granted to them, the principal holders
of the Company's securities and any material interest of such persons in
transactions with the Company is required to be described in proxy statements
10
<PAGE>
distributed to the Company's stockholders and filed with the Commission.
These reports, proxy statements and other information should be available for
inspection and copying at the Commission's office at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and also should be available for inspection and
copying at the regional offices of the Commission located at Seven World
Trade Center, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this
material may also be obtained by mail, upon payment of the Commission's
customary fees, from the Commission's principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission also maintains an internet web
site at http://www.sec.gov that contains reports, proxy statements and other
information. Copies should also be available at the offices of the NASD, 1735
K Street, N.W. Washington, D.C. 20006.
During the course of the discussions between Parent and the Company that
led to the execution of the Merger Agreement, the Company provided Parent
with certain information about the Company and its financial performance which
is not publicly available. The information provided included forecasts of the
Company's 1996, 1997, 1998, 1999, 2000 and 2001 results of operations as an
independent company (i.e., without regard to the impact to the Company of a
transaction with Parent), which included the following information: total
revenues, $64.2 million, $65.6 million, $97.4 million, $161.3 million, $220.4
million and $290.7 million, respectively; gross profit, $34.2 million, $35.1
million, $52.1 million, $86.3 million, $117.9 million and $155.5 million,
respectively; and income from operations, $12.0 million, $10.8 million, $16.8
million, $32.4 million, $47.2 million and $62.2 million, respectively. The
foregoing forecasts were prepared by the Company in conjunction with its
financial advisor solely for internal use in connection with the transactions
contemplated by the Merger Agreement and not for publication or with a view to
complying with the published guidelines of the Commission regarding projections
or with the guidelines established by the American Institute of Certified Public
Accountants and are included in this Offer to Purchase only because they were
furnished to Parent. The forecasts necessarily reflect numerous assumptions with
respect to industry
performance, general business and economic conditions and other matters, many
of which are inherently uncertain or beyond the Company's control. One cannot
predict whether the assumptions made in preparing the forecasts will be
accurate, and actual results may be materially higher or lower than those
contained in the forecasts. The inclusion of this information should not be
regarded as an indication that Parent, the Purchaser, the Company, or anyone
who received this information considered it a reliable predictor of future
events, and this information should not be relied on as such. None of Parent,
the Purchaser or the Company assumes any responsibility for the validity,
reasonableness, accuracy or completeness of the forecasts and the Company has
made no representation to Parent or the Purchaser regarding the forecasts
described above.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT
The Purchaser is a newly incorporated Delaware corporation and a wholly
owned subsidiary of Parent. To date the Purchaser has not conducted any
business other than in connection with the Offer and the Merger. The
principal executive offices of the Purchaser are located at 3050 Bowers
Avenue, Santa Clara, California 95054.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of the Purchaser and Parent are set forth in Schedule I
hereto.
Parent is a Delaware corporation with its principal office located at 3050
Bowers Avenue, Santa Clara, California 95054. Parent's principal line of
business is the development, manufacture, marketing and servicing of
semiconductor wafer fabrication equipment and related spare parts.
Until immediately prior to the time the Purchaser purchases Shares
pursuant to the Offer, it is not anticipated that the Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions
contemplated by the Offer and the Merger. Because the Purchaser is a newly
formed corporation and has minimal assets and capitalization, no meaningful
financial information regarding the Purchaser is available.
Financial information with respect to Parent and its subsidiaries is
included in Parent's Annual Report on Form 10-K for the fiscal year ended
October 29, 1995, which is incorporated herein by
11
<PAGE>
reference, and other documents filed by Parent with the Commission. Such
reports and other documents should be available for inspection and copies
thereof should be obtainable in the manner set forth below under "Available
Information."
Available Information. Parent is subject to the informational filing
requirements of the Exchange Act and is required to file reports and other
information with the Commission relating to its business, financial condition
and other matters. Information, as of particular dates, concerning Parent's
directors and officers, their remuneration, options granted to them, the
principal holders of Parent's securities and any material interest of such
persons in transactions with Parent is required to be described in proxy
statements distributed to Parent's stockholders and filed with the
Commission. Such reports, proxy statements and other information may be
inspected and copies may be obtained from the offices of the Commission in
the same manner as set forth with respect to information concerning the
Company in Section 8. Such material should also be available at the offices
of the NASD, 1735 K Street, N.W., Washington, D.C. 20006.
Except as set forth in this Offer to Purchase, none of the Purchaser or
Parent (collectively, the "Purchaser Entities"), or, to the best knowledge of
any of the Purchaser Entities, any of the persons listed on Schedule I, has
any contract, arrangement, understanding or relationship with any other
person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangement, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies. Except as
set forth in this Offer to Purchase, none of the Purchaser Entities, or, to
the best knowledge of any of the Purchaser Entities, any of the persons
listed on Schedule I, has had any business relationships or transactions with
the Company or any of its executive officers, directors or affiliates that
would require reporting under the rules of the Commission. Except as set
forth in this Offer to Purchase, there have been no contacts, negotiations or
transactions between the Purchaser Entities, or their respective subsidiaries
or, to the best knowledge of any of the Purchaser Entities, any of the
persons listed on Schedule I, and the Company or its affiliates, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors or a sale or other transfer of a material
amount of assets. Except as set forth in this Offer to Purchase, none of the
Purchaser Entities or, to the best knowledge of any of the Purchaser
Entities, any of the persons listed on Schedule I, beneficially owns any
Shares or has effected any transactions in the Shares in the past 60 days.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase all of the
Shares pursuant to the Offer and to pay related fees and expenses is
approximately $171 million. The Purchaser plans to obtain all funds needed
for the Offer and the Merger through a capital contribution from Parent.
Parent plans to obtain such funds from cash accounts, under available lines
of credit or pursuant to the issuance of debt securities. No final decisions
have been made by Parent concerning the source of funds to be used for
purchase of the Shares. However, the Offer is not conditioned on obtaining
financing.
11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
Between August and November 1995, Mr. Mendy Erad, the Company's Chairman
and the Managing Director of Clal, discussed with Dr. Dan Maydan, the President
of Parent, Clal's view of the strategic opportunities in the metrology and
inspection business (the "M&I Business") in Israel, including the benefit to
the global competitiveness of certain participants that might result from an
industry consolidation. Dr. Maydan joined the Company Board in November 1995.
Since December 1995, Mr. Erad and Mr. Dennis Hunter, Managing Director,
Corporate Development of Parent, discussed from time-to-time the possibilities
of enhancing Clal's and initiating Parent's participation in the M&I Business,
including by forming a joint venture to acquire interests in various companies
(including the company) engaged in the M&I Business principally in Israel.
Discussions continued during the Spring of 1996 regarding various
participation opportunities and the goals of the respective companies. During
July 1996, Mr. James C. Morgan, the Chairman and Chief
12
<PAGE>
Executive Officer of Parent, informed Mr. Erad of Parent's decision to
explore a direct participation in the M&I Business alone rather than through a
joint venture with Clal.
Notwithstanding Parent's July decision, during August and September 1996,
Mr. Erad and legal counsel and a tax advisor met with representatives of
Parent, together with representatives of Parent's financial advisors and
legal counsel, to discuss alternative transaction approaches that would
enable Clal to participate with Parent in the M&I Business, including
through the possible acquisition of the Company. Following these meetings,
Clal determined that the complexity and timing of a collaborative transaction
involving Clal and Parent would not be in the best interests of the Company
and its stockholders, and Parent reaffirmed its conclusion that it would not
be in Parent's best interests to include Clal in its contemplated efforts to
enter the M&I Business.
On October 20, 1996, the Company engaged Robertson Stephens and Evergreen
Capital Markets, Ltd. to assist the Company in its evaluation of any offer
which might be made by Parent.
On October 21, 1996, Parent and the Company entered into a confidentiality
agreement preceding Parent's review of certain confidential information
concerning the Company. Subsequently, there were meetings in the United States
and Israel to review and analyze Company information.
During meetings in late October and early November 1996, representatives
of Parent's financial advisors met with the Company's financial advisors to
discuss valuation parameters of the Company. In addition, a representative
of Parent's legal counsel met with representatives of the Company's legal
counsel to discuss generally the terms and conditions of a possible
transaction between Parent and the Company. At these meetings, Parent's
financial advisors and legal counsel stated that it was an express condition
to Parent's willingness to enter into an agreement to acquire the Company that
there be an agreement along the lines of the Stockholder Agreements.
At a meeting on November 10, 1996, representatives of Parent and the
Company began negotiating the terms of a definitive agreement providing for
Parent's acquisition of the Company. Following further negotiations on
November 11, 1996, representatives of Parent indicated that they would be
prepared to recommend to Parent's Board of Directors that Parent pay a price
of $18.50 per Share in cash to acquire the Company, conditioned upon the
willingness of the Selling Stockholders to sign the Stockholder Agreements
providing for the sale of the Shares owned by each of them to Parent at a
price per Share equal to the price paid in the Offer, through a tender of such
Shares in the Offer or otherwise.
Negotiations between Parent and the Company continued through November 22,
1996, culminating in Parent and the Company agreeing upon a form of Merger
Agreement and a form of the Stockholder Agreements which were presented to
and approved by Parent's Board of Directors at a meeting held on November 22,
1996, subject to the finalization of certain open items.
After completion of final negotiations, a meeting of the Company Board was
held on November 24, 1996, at which Robertson Stephens delivered its opinion
as to the fairness of the Offer Price to the Company's stockholders
from a financial point of view and the definitive Merger Agreement and
Stockholder Agreements were approved by the Company Board, with Dr. Maydan and
Mr. Zvi Lapidot, the Chairman of Orbot Instruments Ltd., a privately-held
Israeli company ("Orbot Instruments"), and Messrs. Rafi Yizhar and Israel Niv,
two of the Selling Stockholders, not participating in the vote of the Company
Board relating to the Merger Agreement and the Stockholder Agreements and the
transactions contemplated thereby. Following this approval, the Merger
Agreement and the Stockholder Agreements were executed, and the transactions
were publicly announced before financial markets opened on November 25, 1996.
In addition, on November 24, 1996, Parent entered into an agreement to
acquire all of the outstanding capital stock of Orbot Instruments for
$110 million. Certain stockholders of the Company have stockholders that are
also stockholders of Orbot Instruments.
12. PURPOSE OF THE OFFER, MERGER, MERGER AGREEMENT AND STOCKHOLDER AGREEMENTS
The purpose of the Offer, the Merger, the Merger Agreement and the
Stockholder Agreements is to enable Parent to acquire control of, and the
entire equity interest in, the Company. Upon consummation of the Merger, the
Company will become a subsidiary of Parent. The Offer and the Stockholder
Agreements are intended to increase the likelihood that the Merger will be
effected.
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MERGER AGREEMENT. The following is a summary of certain provisions of the
Merger Agreement. The summary is qualified in its entirety by reference to
the Merger Agreement which is incorporated herein by reference and a copy of
which has been filed with the Commission as an exhibit to Parent's and the
Purchaser's Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1").
The Merger Agreement may be examined and copies may be obtained at the places
and in the manner set forth in Section 8 of this Offer to Purchase.
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, the Purchaser will purchase all Shares
validly tendered pursuant to the Offer. The Merger Agreement provides that,
without the written consent of the Company, the Purchaser will not decrease
the Offer Price, decrease the number of Shares sought in the Offer, amend or
waive the Minimum Condition, or amend any condition of the Offer in a manner
adverse to the holders of Shares (other than with respect to insignificant
changes or amendments and subject to certain conditions in the Merger
Agreement), except that if on the initial scheduled expiration date all
conditions to the Offer shall not have been satisfied or waived, the
Purchaser may (and under certain circumstances will be required to) extend
the expiration date. The Merger Agreement provides that if, immediately prior
to the expiration date of the Offer, as it may be extended, the Shares
tendered and not withdrawn pursuant to the Offer equal less than 90% of the
Shares outstanding, the Purchaser may extend the Offer for a period not to
exceed 30 business days.
The Merger. Following the consummation of the Offer, the Merger Agreement
provides that, subject to the terms and conditions thereof, and in accordance
with Delaware law, at the Effective Time, the Purchaser will be merged with
and into the Company. As a result of the Merger, the separate corporate
existence of the Purchaser will cease and the Company will continue as the
surviving corporation (the "Surviving Corporation").
The respective obligations of Parent and the Purchaser, on the one hand,
and the Company, on the other hand, to effect the Merger are subject to the
satisfaction on or prior to the Closing Date (as defined in the Merger
Agreement) of each of the following conditions, any and all of which may be
waived in whole or in part, to the extent permitted by applicable law: (i)
the Merger Agreement shall have been approved and adopted by the requisite
vote of the holders of Shares, if required by applicable law, in order to
consummate the Merger; (ii) no law, statute, rule, order, decree or
regulation shall have been enacted or promulgated by any government or any
governmental agency or authority of competent jurisdiction which declares the
Merger Agreement invalid or unenforceable in any material respect or which
prohibits the consummation of the Merger, and all governmental consents,
orders and approvals required for the consummation of the Merger and the
transactions contemplated by the Merger Agreement shall have been obtained
and shall be in effect at the Effective Time; (iii) Parent, the Purchaser or
their affiliates shall have purchased Shares pursuant to the Offer, unless
such failure to purchase is as a result of a breach of Parent's and the
Purchaser's obligations under the Merger Agreement; and (iv) the applicable
waiting period under the HSR Act shall have expired or been terminated.
At the Effective Time of the Merger (i) each issued and outstanding Share
(other than Shares that are owned by the Company as treasury stock, any
Shares owned by Parent, the Purchaser or any other wholly owned subsidiary of
Parent, or any Shares which are held by stockholders exercising appraisal
rights under Delaware law) will be converted into the right to receive the
Merger Consideration and (ii) each issued and outstanding share of the
Purchaser will be converted into one share of common stock of the Surviving
Corporation.
The Company's Board of Directors. The Merger Agreement provides that
promptly after the purchase by Parent of at least a majority of the
outstanding Shares (on a fully diluted basis), Parent will 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 multiplied by the percentage that the number of Shares
so accepted for payment bears to the total number of Shares then outstanding.
The Company will, upon request of the Purchaser, use its best reasonable
efforts promptly to either increase the size of the Company Board or secure
the resignations of such number of its incumbent directors as is necessary to
enable Parent's designees to be elected to the Company Board. In the event
that Parent's designees are elected to the Company Board, until the Effective
Time, the
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Company Board will have at least three directors who are directors on the
date of the Merger Agreement. The Company's obligation to appoint the
Purchaser's designees to the Board of Directors is subject to compliance with
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder.
Stockholders Meeting. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, duly call,
give notice of, convene and hold a special meeting of its stockholders (the
"Special Meeting") as soon as practicable following the acceptance for
payment and purchase of Shares by the Purchaser pursuant to the Offer for the
purpose of considering and taking action upon the Merger Agreement. The
Merger Agreement provides that the Company will, if required by applicable
law in order to consummate the Merger, prepare and file with the Commission a
preliminary proxy or information statement (the "Proxy Statement") relating
to the Merger and the Merger Agreement and use its reasonable efforts (i) to
obtain and furnish the information required to be included by the Commission
in the Proxy Statement and, after consultation with Parent, to respond
promptly to any comments made by the Commission with respect to the
preliminary Proxy Statement and cause a definitive Proxy Statement to be
mailed to its stockholders and (ii) to obtain the necessary approvals of the
Merger and the Merger Agreement by its stockholders. If the Purchaser
acquires at least a majority of the outstanding Shares, the Purchaser will
have sufficient voting power to approve the Merger, even if no other
stockholder votes in favor of the Merger. The Company has agreed, subject to
the provisions described below under "No Solicitation," to include in the
Proxy Statement the recommendation of the Company Board that stockholders of
the Company vote in favor of the approval of the Merger and the adoption of
the Merger Agreement. Parent has agreed that it will vote, or cause to be
voted, all of the Shares then owned by it, the Purchaser or any of its other
subsidiaries and affiliates in favor of the approval of the Merger and the
adoption of the Merger Agreement.
The Merger Agreement provides that in the event that Parent, the Purchaser
or any other subsidiary of Parent acquires at least 90% of the outstanding
Shares, pursuant to the Offer or otherwise, Parent, the Purchaser and the
Company will, at the request of Parent and subject to the terms of the Merger
Agreement, take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after such acquisition, without a
meeting of stockholders of the Company, in accordance with Delaware law.
Options. Pursuant to the Merger Agreement, effective as of the Effective
Time, and subject to the receipt of certain Israeli governmental approvals
and exemptions, Parent and the Company will cause each outstanding unvested
employee stock option to purchase Shares (the "Unvested Options") granted
under the Company's stock option plans (collectively, the "Option Plan") to
be assumed by Parent and converted into an option (or a new substitute option
will be granted) (a "Parent Option") to purchase shares of common stock, par
value $.01 per share (the "Parent Common Stock"), of Parent. Pursuant to the
Merger Agreement (i) the number of shares of Parent Common Stock subject to
each such Parent Option will be determined by multiplying the number of
Shares subject to the Unvested Option to be cancelled by the Option Exchange
Ratio (as defined below), rounding any fractional share up to the nearest
whole share, and (ii) the exercise price per share of such Parent Option will
be determined by dividing the exercise price per share under the Unvested
Option in effect immediately prior to the Effective Time by the Option
Exchange Ratio, and rounding the exercise price thus determined up to the
nearest whole cent, subject to appropriate adjustments for stock splits and
other similar events. See Section 15. Except as provided above, the converted
or substituted Parent Options will be subject to the same terms and
conditions (including, without limitation, expiration date, vesting and
exercise provisions) as were applicable to the Unvested Options immediately
prior to the Effective Time. The issuance of Parent Options as provided above
is subject to, and conditioned upon, obtaining an exemption by the Israeli
Securities Authority from the prospectus delivery requirement under Israeli
securities laws. In the event such exemption is not obtained, unless Parent
elects to comply with the applicable requirements of the Israeli securities
laws, all Unvested Options held by the 35 persons holding the greatest
aggregate amount of Unvested Options will be treated as described above and
exchanged for Parent Options and the remaining Unvested Options will be
treated in the same manner as the Vested Options (as defined below) described
below. For purposes of the Merger Agreement, the "Option Exchange Ratio" is
(x) the Offer Price divided by (y) the average of the closing prices of the
Parent Common Stock on the Nasdaq National Market System during the ten
trading days preceding the fifth trading day prior to the Closing Date.
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Immediately before the Effective Time, each outstanding fully vested
employee stock option to purchase Shares (a "Vested Option," and together
with an Unvested Option, a "Company Option") granted under the Option Plan,
subject to certain limited exceptions and subject to the receipt of certain
Israeli governmental approvals and exemptions, will be surrendered to the
Company and will be cancelled and the Company or the Surviving Corporation
will pay to each holder of a Vested Option, by check, an amount equal to (i)
the product of the number of the Shares which are issuable upon exercise of
such Vested Option, multiplied by the Offer Price, less (ii) the aggregate
exercise price of such Vested Option.
In addition, except as may be otherwise agreed to by Parent or the
Purchaser and the Company, the Option Plan and the Company's 1995 Employee
Stock Purchase Plan (the "Stock Purchase Plan") will terminate as of the
Effective Time and the provisions in 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 of its subsidiaries will be deleted as of
the Effective Time. However, each participant in the Stock Purchase Plan will
be entitled to receive, pursuant to the Stock Purchase Plan, a number of
Shares based upon such participant's contributions in accordance with the
provisions of the Stock Purchase Plan for the Purchase Period (as defined in
the Stock Purchase Plan) ending December 31, 1996, or such part of such
Purchase Period as has been completed at the Effective Time, and at the
applicable purchase price per Share determined in accordance with the
provisions of the Stock Purchase Plan for such Purchase Period, provided that
no such participant will be entitled to increase his or her rate of
contribution after the date of the Merger Agreement, and the Shares so
purchased will immediately be exchanged for cash pursuant to the Merger.
Interim Operations. Pursuant to the Merger Agreement, the Company has
agreed that, except as expressly contemplated or provided by the Merger
Agreement or agreed to in writing by Parent, prior to the time the directors
of the Purchaser constitute a majority of the Company Board, the business of
the Company and its subsidiaries will be conducted only in the ordinary and
usual course and to the extent consistent therewith, each of the Company and
its subsidiaries will use its best efforts to preserve its business
organization intact and maintain its existing relations with customers,
suppliers, employees, creditors and business partners, and (a) the Company
will not, directly or indirectly, (i) sell, transfer or pledge, or agree to
sell, transfer or pledge, any treasury stock of the Company or any capital
stock of any of its subsidiaries beneficially owned by it; (ii) amend its
certificate of incorporation or by-laws or similar organizational documents;
or (iii) split, combine or reclassify the outstanding Shares or preferred
stock or any outstanding capital stock of any of the subsidiaries of the
Company; and (b) neither the Company nor any of its subsidiaries shall (i)
declare, set aside or pay any dividend or other distribution payable in cash,
stock or property with respect to its capital stock; (ii) issue, sell,
pledge, dispose of or encumber any additional shares of, or securities
convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital stock of
any class of the Company or its subsidiaries, other than shares reserved for
issuance on November 24, 1996 pursuant to the exercise of Company Options
outstanding on November 24, 1996 or pursuant to the Stock Purchase Plan;
(iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or
encumber any material assets other than in the ordinary and usual course of
business and consistent with past practice, or incur or modify any material
indebtedness or other liability, other than in the ordinary and usual course
of business and consistent with past practice; (iv) redeem, purchase or
otherwise acquire directly or indirectly any of its capital stock, except
pursuant to stock restriction agreements with employees existing on November
24, 1996; (v) grant any increase in the compensation payable or to become
payable by the Company or any of its subsidiaries to any of its executive
officers or key employees, except inflationary increases given in accordance
with past practice or adopt any new or amend or otherwise increase or
accelerate the payment or vesting of the amounts payable or to become payable
under any existing bonus, incentive compensation, deferred compensation,
severance, profit sharing, stock option, stock purchase, insurance, pension,
retirement or other employee benefit plan, agreement or arrangement
including, without limitation, the Option Plan and the Stock Purchase Plan;
(vi) enter into any employment or severance agreement with, or, except in
accordance with the existing written policies of the Company, grant any
severance or termination pay to any officer, director or employee of the
Company or any of its subsidiaries; (vii) modify, amend or terminate any of
its material contracts or waive, release or assign any material rights or
claims, except in the ordinary course of business and consistent with past
practice; (viii) permit any material insurance policy naming it as a
beneficiary or a loss payable payee to be cancelled or terminated without
notice to Parent, except in the ordinary course of business and consistent
with past practice; (ix)
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incur or assume any long-term debt, or, except in the ordinary course of
business, incur or assume any short-term indebtedness in amounts not
consistent with past practice; (x) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise)
for the obligations of any other person, except in the ordinary course of
business and consistent with past practice; (xi) make any loans, advances or
capital contributions to, or investments in, any other person (other than to
wholly owned subsidiaries of the Company); (xii) enter into any material
commitment or transaction (including, but not limited to, any borrowing,
capital expenditure or purchase, sale or lease of assets or real estate);
(xiii) change any of the accounting methods used by it unless required by
generally accepted accounting principles; (xiv) pay, discharge or satisfy any
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business and consistent with past
practice of claims, liabilities or obligations reflected or reserved against
in, or contemplated by, the consolidated financial statements (or the notes
thereto) of the Company and its consolidated subsidiaries; (xv) adopt a plan
of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any
of its subsidiaries (other than the Merger); (xvi) take, or agree to commit
to take, any action that would or is reasonably likely to result in any of
the conditions to the Offer or any of the conditions to the Merger not being
satisfied, or would make any representation or warranty of the Company
contained in the Merger Agreement inaccurate in any respect at, or as of any
time prior to, the Effective Time, or that would materially impair the
ability of the Company to consummate the Offer or the Merger in accordance
with the terms of the Merger Agreement or materially delay such consummation;
or (xvii) enter into an agreement, contract, commitment or arrangement to do
any of the foregoing, or to authorize, recommend, propose or announce an
intention to do any of the foregoing.
No Solicitation. In the Merger Agreement, the Company has agreed that
neither the Company nor any of its subsidiaries will (and the Company will
use its best efforts to cause its officers, directors, employees,
representatives and agents, including, but not limited to, investment
bankers, attorneys and accountants, not to), directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations
with, or provide any information to, any corporation, partnership, person or
other entity or group (other than Parent, any of its affiliates or
representatives) concerning any proposal or offer to acquire all or a
substantial part of the business and properties of the Company or any of its
subsidiaries or any capital stock of the Company or any of its subsidiaries,
whether by merger, tender offer, exchange offer, sale of assets or similar
transactions involving the Company or any subsidiary, division or operating
or principal business unit of the Company (an "Acquisition Proposal"), except
that the Company and the Company Board are not prohibited from (i) taking and
disclosing to the Company's stockholders a position with respect to a tender
or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act, or (ii) making such disclosure to the
Company's stockholders as, in the good faith judgment of the Board, after
receiving advice from outside counsel, is required under applicable law,
provided that the Company may not, except as described below, withdraw or
modify, or propose to withdraw or modify, its position with respect to the
Offer or the Merger or approve or recommend, or propose to approve or
recommend, any Acquisition Proposal, or enter into any agreement with respect
to any Acquisition Proposal. The Company also agreed to immediately cease any
existing activities, discussions or negotiations with any parties conducted
prior to the date of the Merger Agreement with respect to any of the
foregoing. The Merger Agreement provides that the Company may furnish
information concerning its business, properties or assets to any corporation,
partnership, person or other entity or group pursuant to appropriate
confidentiality agreements, and may negotiate and participate in discussions
and negotiations with such entity or group concerning an Acquisition Proposal
if (i) such entity or group has on an unsolicited basis submitted a bona fide
written proposal to the Company Board relating to any such transaction which
the Company Board determines in good faith represents a superior transaction
to the Offer and the Merger and which is not conditioned upon obtaining
additional financing and (ii) if, in the opinion of the Company Board, only
after receipt of advice from independent legal counsel, the failure to
provide such information or access or to engage in such discussions or
negotiations could reasonably be expected to cause the Company Board to
violate its fiduciary duties to the Company's stockholders under applicable
law (an Acquisition Proposal which satisfies clauses (i) and (ii) is referred
to in the Merger Agreement as a "Superior Proposal"). The Company will
immediately notify Parent of the existence of any proposal or inquiry, and
the identity of the party making such proposal or inquiry which it may
receive in respect of any such transaction.
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Except as provided below, pursuant to the terms of the Merger Agreement,
neither the Company Board nor any committee thereof is permitted to (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Parent or the Purchaser, the approval or recommendation by the Company Board
or any such committee of the Offer, the Merger Agreement or the Merger, (ii)
approve or recommend, or propose to approve or recommend, any Acquisition
Proposal or (iii) enter into any agreement with respect to any Acquisition
Proposal. Notwithstanding the foregoing, prior to the time of acceptance for
payment of Shares in the Offer, the Company Board may (subject to the terms
of this and the following sentence) withdraw or modify its approval or
recommendation of the Offer, the Merger Agreement or the Merger, approve or
recommend a Superior Proposal, or enter into an agreement with respect to a
Superior Proposal, in each case at any time after the second business day
following Parent's receipt of written notice advising Parent that the Company
Board has received a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal and identifying the person making such
Superior Proposal; provided that the Company may not enter into an agreement
with respect to a Superior Proposal unless the Company furnishes Parent with
written notice not later than 12:00 noon one day in advance of any date that
it intends to enter into such agreement and has caused its financial and
legal advisors to negotiate with Parent to make such adjustments in the terms
and conditions of the Merger Agreement as would enable the Company to proceed
with the transactions contemplated herein on such adjusted terms. In
addition, if the Company proposes to enter into an agreement with respect to
any Acquisition Proposal, it will be required to concurrently with entering
into such agreement pay, or cause to be paid, to Parent the termination fee
described below under "Termination Fee."
Indemnification and Insurance. Pursuant to the Merger Agreement, for seven
years after the Effective Time, Parent will, and will cause the Surviving
Corporation (or any successor to the Surviving Corporation) to, (i) retain
all provisions of the Company's Certificate of Incorporation as now in effect
respecting the limitation of liabilities of directors and officers and (ii)
indemnify, defend and hold harmless the present and former officers and
directors of the Company and its subsidiaries with respect to matters
occurring at or prior to the Effective Time to the full extent permitted
under Delaware law, subject to the Company's Certificate of Incorporation and
By-laws. The Merger Agreement also provides that Parent or the Surviving
Corporation will maintain the Company's existing officers' and directors'
liability insurance ("D&O Insurance") for a period of not less than seven
years after the Effective Time, provided that Parent may substitute therefor
policies of substantially similar coverage and amounts containing terms no
less favorable to such former directors or officers. Parent has also agreed
that if the existing D&O Insurance expires, is terminated or cancelled during
such period, Parent or the Surviving Corporation will use all reasonable
efforts to obtain substantially similar D&O Insurance, but in no event will
it be required to pay aggregate premiums for such insurance in excess of 150%
of the aggregate premiums paid in 1995 on an annualized basis for such
purpose (the "1995 Premium"). If Parent or the Surviving Corporation is
unable to obtain substantially similar D&O Insurance, Parent or the Surviving
Corporation has agreed to obtain as much insurance as can be obtained for an
annual premium not in excess of 150% of the 1995 Premium.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and the Purchaser
with respect to, among other things, its organization, capitalization,
financial statements, public filings, conduct of business, employee benefit
plans, intellectual property, employment matters, compliance with laws,
contracts, potential conflicts of interest, tax matters, litigation, title
and condition of properties, vote required to approve the Merger Agreement,
undisclosed liabilities, suppliers and customers, information in the Proxy
Statement and the absence of any material adverse changes in the Company
since December 31, 1995.
Termination; Fees. The Merger Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time, whether before or after
approval of the stockholders of the Company, (a) by mutual consent of the
Board of Directors of Parent or the Purchaser and the Company Board, (b) by
either the Company Board or the Board of Directors of Parent or the Purchaser
(i) if (x) the Offer shall have expired without any Shares being purchased
therein or (y) the Purchaser shall not have accepted for payment any Shares
pursuant to the Offer by August 24, 1997, provided that such right to
terminate will not be available to any party whose failure to fulfill any
obligation under the Merger Agreement was the
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cause of, or resulted in, the failure of Parent or the Purchaser to purchase
the Shares on or before such date; or (ii) if any governmental entity shall
have issued an order, decree or ruling or taken any other action (which
order, decree, ruling or other action the parties will use their best efforts
to lift), in each case permanently restraining, enjoining or otherwise
prohibiting the acceptance for payment of, or payment for, Shares pursuant to
the Offer or the Merger and such order, decree, ruling or other action shall
have become final and non-appealable, (c) by the Company Board (i) if Parent,
the Purchaser or any of their affiliates shall have failed to commence the
Offer on or prior to five business days following the date of the initial
public announcement of the Offer; provided, that the Company may not
terminate the Merger Agreement pursuant to this clause (i) if the Company is
at such time in material breach of its obligations under the Merger
Agreement; (ii) in connection with entering into a definitive agreement with
respect to an Acquisition Proposal; provided it has complied with all of the
provisions, including the notice provisions described above under "No
Solicitation," and that it makes simultaneous payment of the Termination Fee
(as defined below); or (iii) if Parent or the Purchaser shall have breached
in any material respect any of their respective representations, warranties,
covenants or other agreements contained in the Merger Agreement, which breach
cannot be or has not been cured within 30 days after the giving of written
notice to Parent or the Purchaser, as applicable, (d) by the Board of
Directors of Parent or the Purchaser (i) if, due to an occurrence, not
involving a breach by Parent or the Purchaser of their obligations under the
Merger Agreement, which makes it impossible to satisfy any of the conditions
to the Offer, Parent, the Purchaser, or any of their affiliates shall have
failed to commence the Offer on or prior to five business days following the
date of the initial public announcement of the Offer; (ii) if prior to the
purchase of Shares pursuant to the Offer, the Company shall have breached any
representation, warranty, covenant or other agreement contained in the Merger
Agreement which (x) would give rise to the failure of a condition described
in paragraph (f) or (g) under Section 14 and (y) cannot be or has not been
cured within 30 days after the giving of written notice to the Company; or
(iii) if either Parent or the Purchaser is entitled to terminate the Offer as
a result of the occurrence of any event described in paragraph (e) under
Section 14.
In accordance with the Merger Agreement, if (i) the Company Board
terminates the Merger Agreement pursuant to clause (c)(ii) of the immediately
preceding paragraph, (ii) the Board of Directors of Parent or the Purchaser
terminates the Merger Agreement pursuant to clause (d)(iii) of the
immediately preceding paragraph, or (iii) prior to the termination of the
Merger Agreement (other than by the Company Board pursuant to clauses (c)(i)
or (c)(iii) of the immediately preceding paragraph), an Acquisition Proposal
shall have been made and within one year of such termination, the Company
enters into an agreement with respect to, approves or recommends or takes any
action to facilitate an Acquisition Proposal with the person making such
original Acquisition Proposal at a price and on terms at least as favorable
to the stockholders of the Company as the Offer and the Merger and such later
Acquisition Proposal is consummated, the Company has agreed to pay to Parent
(concurrently with such termination, in the case of clauses (i) or (ii)
above, and not later than the consummation of such later Acquisition
Proposal, in the case of clause (iii) above) an amount equal to $4,000,000
(the "Termination Fee"); provided that no Termination Fee will be payable if
the Purchaser or Parent was in material breach of its representations,
warranties or obligations under the Merger Agreement at the time of its
termination.
STOCKHOLDER AGREEMENTS. The following is a summary of the material terms
of the Stockholder Agreements. This summary is qualified in its entirety by
reference to the Stockholder Agreements which are incorporated herein by
reference and a copy of each of which has been filed with the Commission as
an exhibit to the Schedule 14D-1. The Stockholder Agreements may be examined
and a copy of each of them may be obtained at the place and in the manner set
forth in Section 8.
Tender of Shares. In connection with the execution of the Merger
Agreement, Parent and the Purchaser entered into a separate Stockholder
Agreement with each of the Selling Stockholders. Upon the terms and subject
to the conditions of each of such agreements, each of the Selling
Stockholders has agreed to validly tender (and not withdraw) pursuant to and
in accordance with the terms of the Offer, not later than the fifth business
day after commencement of the Offer, the number of Shares owned beneficially
by such Selling Stockholder (or a total of 4,289,777 Shares, representing
approximately 47% of the outstanding Shares on a fully diluted basis).
The Selling Stockholders have also consented to the treatment of the Company
Options held by them as described under "The Merger Agreement--Options" above.
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Stock Option. In order to induce Parent and the Purchaser to enter into
the Merger Agreement, each of the Selling Stockholders has granted to Parent
an irrevocable option (a "Stock Option") to purchase such Selling
Stockholder's Shares (the "Option Shares") at an amount (the "Purchase
Price") equal to the Offer Price. Pursuant to each of the Stockholder
Agreements, if (i) the Offer is terminated, abandoned or withdrawn by Parent
or the Purchaser (whether due to the failure of any of the conditions set
forth in Section 14 or otherwise), other than at a time when Parent or the
Purchaser is in material breach of the terms of the Merger Agreement, or (ii)
the Merger Agreement is terminated in accordance with its terms, other than
as a result of certain material breaches by Parent or the Purchaser in the
terms of the Merger Agreement, the Stock Options will, in any such case,
become exercisable, in whole but not in part, upon the first to occur of any
such event and remain exercisable in whole until the date which is 60 days
after the date of the occurrence of such event (the "60 Day Period"), so long
as: (i) all waiting periods under the HSR Act required for the purchase of
the Option Shares upon such exercise, shall have expired or been waived, (ii)
all other applicable consents of any governmental entity required for the
purchase or sale of the Option Shares upon such exercise shall have been
granted or otherwise satisfied, and (iii) there shall not be in effect any
preliminary or final injunction or other order issued by any court or
governmental entity prohibiting the exercise of the Stock Options pursuant to
the Stockholder Agreements. Each of the Stockholder Agreements provides that
if (i) all HSR Act waiting periods have not expired or been waived, (ii) all
other applicable consents of any governmental entity required for the
purchase or sale of the Option Shares shall not have been granted or
otherwise satisfied, or (iii) or there shall be in effect any such injunction
or order, in each case on the expiration of the 60 Day Period, the 60 Day
Period shall be extended until 5 business days after the later of (A) the
date of expiration or waiver of all HSR Act waiting periods, (B) the grant or
other satisfaction of such required consents, and (C) the date of removal or
lifting of such injunction or order; provided, however, that in no event will
the Stock Option be exercisable after the date which is six months after the
date on which the Stock Option first becomes exercisable; provided, further,
that the Stock Option will terminate if any governmental entity issues an
order, decree or ruling or takes any other action (which order, decree,
ruling or other action the parties to each of the Stockholder Agreements will
use their best efforts to lift), which permanently restrains, enjoins or
otherwise prohibits Parent's exercise of the Stock Option or the sale of the
Option Shares to Parent by the Selling Stockholders.
Resale of the Option Shares. Each of the Stockholder Agreements provides
that if, within 12 months following the acquisition by the Purchaser of the
Option Shares, Parent or its affiliates sell, transfer or otherwise dispose
of any or all of the Option Shares to any third party (other than to another
affiliate of Parent) (a "Subsequent Sale") and realizes a Profit (as defined
below) from such Subsequent Sale, then Parent will pay to the Selling
Stockholder an amount equal to 95% of the Profit, promptly upon receipt of
the proceeds from such Subsequent Sale. "Profit" is defined in each of the
Stockholder Agreements to mean (A) the amount of the excess, if any, of (x)
the aggregate consideration received by Parent or its affiliates in
connection with a Subsequent Sale over (y) the product of (i) the number of
Shares sold, transferred or disposed of multiplied by (ii) the Purchase Price
less (B) any taxes or any other payment of any nature due or payable by
Parent with respect to the amount specified in clause (A), other than
Parent's or the Purchaser's expenses incurred in connection with the
negotiation, execution and delivery of the Stockholder Agreements and the
Merger Agreement. In the event the consideration received by Parent in a
Subsequent Sale is other than cash, each of the Stockholder Agreements
provides that the Selling Stockholder shall be entitled to the same form of
consideration as received by Parent in such Subsequent Sale or, at Parent's
election, an amount in cash equal to the fair market value of such other
consideration that the Selling Stockholder would have been entitled to.
Provisions Concerning the Shares. The Selling Stockholders have agreed
that during the period commencing on the date of each of the Stockholder
Agreements and continuing until the first to occur of the Effective Time or
the termination of the Merger Agreement in accordance with its terms, at any
meeting of the Company's stockholders or in connection with any written
consent of the Company's stockholders, the Selling Stockholders will vote (or
cause to be voted) the Shares held of record or beneficially owned by each of
such Selling Stockholders: (i) in favor of the Merger, the execution and
delivery by the Company of the Merger Agreement and the approval of the terms
thereof and each of the other actions contemplated by the Merger Agreement
and each of the Stockholder Agreements and any
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actions required in furtherance thereof; and (ii) against any Acquisition
Proposal and against any action or agreement that would impede, frustrate,
prevent or nullify each of the Stockholder Agreements or result in a breach
in any respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement or which
would result in any of the conditions to the Offer or to the Merger not being
fulfilled. In addition, each of the Selling Stockholders has appointed
representatives of Parent as proxies to vote such Selling Stockholder's
Shares or grant a consent or approval in respect of such Shares in favor of
the various transactions contemplated by the Merger Agreement and against any
Acquisition Proposal. Each of the Selling Stockholders also agreed not to
transfer such Selling Stockholder's Shares and not to, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation,
partnership, person or other entity or group (other than Parent, any of its
affiliates or representatives) concerning any Acquisition Proposal.
Other Covenants, Representations, Warranties. In connection with each of
the Stockholder Agreements, each of the Selling Stockholders made certain
customary representations and warranties, including with respect to (i)
ownership of the Shares, (ii) the Selling Stockholder's authority to enter
into and perform its or his obligations under the Stockholder Agreement,
(iii) the absence of conflicts and requisite governmental consents and
approvals, and (iv) the absence of encumbrances on and in respect of the
Selling Stockholder's Shares. Parent and the Purchaser have made certain
representations and warranties with respect to Parent and the Purchaser's
authority to enter into the Stockholder Agreements and the absence of
conflicts and requisite governmental consents and approvals.
In each of the Stockholder Agreements, Parent agreed that, in the event
that within three years following Parent's exercise of a Stock Option,
Parent, the Purchaser or any of their subsidiaries acquires any additional
Shares from, or pursuant to an offer made to all of the Company's
stockholders, whether by merger, consolidation, tender offer or other similar
transaction, the price paid per Share would be no less than the Purchase
Price.
CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT. Pursuant to the Confidentiality
and Nondisclosure Agreement entered into on October 21, 1996 by Parent and the
Company (the "Confidentiality Agreement"). The Company and Parent agreed to
provide, among other things, for the confidential treatment of their discussions
regarding the Offer and the Merger and the exchange of certain confidential
information concerning the Company. The Confidentiality Agreement which is
incorporated herein by reference and a copy of which has been filed with the
Commission as an exhibit to the Schedule 14D-1. The Confidentiality Agreement
may be examined and copies may be obtained at the places and in the manner set
forth in Section 8 of this Offer to Purchase.
OTHER MATTERS. Under Delaware law, the affirmative vote of holders of a
majority of the outstanding Shares entitled to vote, including any Shares
owned by the Purchaser, would be required to adopt the Merger. If the
Purchaser acquires, through the Offer or otherwise, voting power with respect
to at least a majority of the outstanding Shares, which would be the case if
the Minimum Condition were satisfied, it would have sufficient voting power
to effect the Merger without the vote of any other stockholder of the
Company. Delaware law 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
merger with the subsidiary without the authorization of the other
stockholders of the subsidiary. Accordingly, if, as a result of the Offer,
the Stockholder Agreements or otherwise, the Purchaser acquires at least 90%
of the outstanding Shares, the Purchaser could, and intends to, effect the
Merger without approval of any other stockholder of the Company.
No appraisal rights are available in connection with the Offer. However,
if the Merger is consummated, stockholders of the Company may have certain
rights under Delaware law to dissent and demand appraisal of, and payment in
cash of the fair value of, their 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
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cash to such dissenting holders for their Shares. Any such judicial
determination of the fair value of Shares could be based upon considerations
other than or in addition to the price paid in the Offer and the market value
of the Shares, including asset values and the investment value of the 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.
In addition, several decisions by Delaware courts have held that, in
certain instances, a controlling stockholder of a corporation involved in a
merger has a fiduciary duty to the other stockholders that requires the
merger to be fair to such other stockholders. In determining whether a merger
is fair to minority stockholders, the Delaware courts have considered, among
other things, the type and amount of consideration to be received by the
stockholders and whether there were fair dealings among the parties. The
Delaware Supreme Court has indicated in recent decisions that in most cases
the remedy available in a merger that is found not to be "fair" to minority
stockholders is the right to appraisal described above or a damages remedy
based on essentially the same principles.
Section 203 of the Delaware General Corporation Law (the "DGCL") prohibits
business combination transactions involving a Delaware corporation and an
"interested stockholder" (defined generally as any person that directly or
indirectly beneficially owns 15% or more of the outstanding voting stock of
the subject corporation) for three years following the date such person
became an "interested stockholder," unless certain exceptions apply,
including that prior to such date the Board of Directors of the company
approved either the business combination or the transaction which resulted in
such person being an interested stockholder. As set forth below, the Company
Board has taken actions to make Section 203 of the DGCL inapplicable to
Parent and the Purchaser in connection with the Offer, the Merger and the
transactions contemplated by the Stockholder Agreements.
In the Merger Agreement, the Company represented that the Company Board
has duly and validly approved the transactions contemplated by the Merger
Agreement and the Stockholder Agreements, including the Offer, the Merger and
the acquisition of Shares pursuant to the foregoing, for purposes of Section
203 of the DGCL, such approval occurring prior to the time the Purchaser
became an "interested stockholder" as defined in Section 203 of the DGCL, so
that the provisions thereof are not applicable to such transactions.
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer in which
the Purchaser seeks to acquire the remaining Shares not held by it. The
Purchaser believes, however, that Rule 13e-3 will not be applicable to the
Merger because it is anticipated that the Merger will be effected within one
year following consummation of the Offer. Rule 13e-3 requires, among other
things, that certain financial information concerning the Company and certain
information relating to the fairness of the proposed transaction and the
consideration offered to minority stockholders in such transaction, be filed
with the Commission and disclosed to stockholders prior to consummation of
the transaction.
The Purchaser or an affiliate of the Purchaser may, following the
consummation or termination of the Offer, seek to acquire additional Shares
through open market purchases, privately negotiated transactions, a tender
offer or exchange offer or otherwise, upon such terms and at such prices as
it shall determine, which may be more or less than the price to be paid
pursuant to the Offer. The Purchaser and its affiliates also reserve the
right to dispose of any or all Shares acquired by them.
Upon the completion of the Offer, Parent intends to conduct a detailed
review of the Company and its assets, corporate structure, dividend policy,
capitalization, operations, properties, policies, management and personnel
and consider what, if any, changes would be desirable in light of the
circumstances which then exist. Such changes could include changes in the
Company's business, corporate structure, charter, by-laws, capitalization,
Board of Directors, management or dividend policy, although Parent has no
current plans with respect to any of such matters.
Except as noted in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets,
involving the Company or any of its subsidiaries, or any material changes in
the Company's corporate structure, business or composition of its management
or personnel.
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13. DIVIDENDS AND DISTRIBUTIONS
As described above, the Merger Agreement provides that, prior to the
Effective Time, the Company will not, except as explicitly permitted by the
Merger Agreement, (i) declare, set aside or pay any dividend or other
distribution payable in cash, stock or property with respect to its capital
stock, (ii) issue, sell, pledge, dispose of or encumber any additional shares
of, or securities convertible into or exchangeable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any shares of capital
stock of any class of the Company or its subsidiaries, other than Shares
reserved for issuance on November 24, 1996 pursuant to the exercise of
Company Options outstanding at November 24, 1996 or pursuant to the Stock
Purchase Plan, as permitted by the Merger Agreement, or (iii) redeem,
purchase or otherwise acquire directly or indirectly any of its capital stock
except pursuant to stock restriction agreements with employees existing as of
November 24, 1996.
14. CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), the Purchaser will not be required to accept for payment or,
subject to any applicable rules and regulations of the Commission, including
Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's obligation
to pay for or return tendered Shares promptly after termination or withdrawal
of the Offer), pay for, and may delay the acceptance for payment of or,
subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate or amend the Offer as to any Shares not then paid
for, if (i) any applicable waiting period under the HSR Act has not expired
or terminated, (ii) the Minimum Condition has not been satisfied, (iii) the
approval of the Offer and the Merger by the Israeli Investments Center shall
not have been obtained, (iv) any applicable waiting period under the Israeli
Restrictive Trade Practices Act of 1988 has not expired or terminated, (v)
the approval of the Offer and the Merger by the Israeli Office of Chief
Scientist shall not have been obtained, (vi) the exemption by the Israeli
Securities Authority from the registration and prospectus delivery
requirements of the Israeli securities laws for the issuance of the Parent
Options shall not have been obtained, or (vii) at any time on or after the
date of the Merger Agreement and before the time of payment for any such
Shares, any of the following events shall occur or shall be determined by the
Purchaser to have occurred:
(a) there shall be threatened or pending any suit, action or proceeding
by any governmental entity against the Purchaser, Parent, the Company or
any subsidiary of the Company (i) seeking to prohibit or impose any
material limitations on Parent's or the Purchaser's ownership or operation
(or that of any of their respective subsidiaries or affiliates) of all or
a material portion of their or the Company's businesses or assets, or to
compel Parent or the Purchaser or their respective subsidiaries and
affiliates to dispose of or hold separate any material portion of the
business or assets of the Company or Parent and their respective
subsidiaries, in each case taken as a whole, (ii) challenging the
acquisition by Parent or the Purchaser of any Shares under the Offer or
pursuant to the Stockholder Agreements, seeking to restrain or prohibit
the making or consummation of the Offer or the Merger or the performance
of any of the other transactions contemplated by the Merger Agreement or
of the Stockholder Agreements (including the voting provisions
thereunder), or seeking to obtain from the Company, Parent or the
Purchaser any damages that are material in relation to the Company and its
subsidiaries taken as a whole, (iii) seeking to impose material
limitations on the ability of the Purchaser, or render the Purchaser
unable, to accept for payment, pay for or purchase some or all of the
Shares pursuant to the Offer and the Merger, (iv) seeking to impose
material limitations on the ability of the Purchaser or Parent effectively
to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's stockholders, or (v) which otherwise
is reasonably likely to have a material adverse affect on the consolidated
financial condition, businesses or results of operations of the Company
and its subsidiaries, taken as a whole;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on
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behalf of a government entity, to the Offer or the Merger, or any other
action shall be taken by any governmental entity, other than the
application to the Offer or the Merger of applicable waiting periods under
HSR Act, that is reasonably likely to result, directly or indirectly, in
any of the consequences referred to in clauses (i) through (iv) of
paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on the New York Stock Exchange or
in the Nasdaq National Market System, for a period in excess of 24 hours
(excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market
conditions), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States (whether or not
mandatory), (iii) a commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States or involving Israel and, in the case of armed hostilities
involving Israel, having, or which could reasonably be expected to have, a
substantial continuing general effect on business and financial conditions
in Israel, (iv) any limitation (whether or not mandatory) by any United
States or Israeli governmental authority on the extension of credit
generally by banks or other financial institutions, or (v) a change in
general financial bank or capital market conditions which materially and
adversely affects the ability of financial institutions in the United
States and in Israel to extend credit or syndicate loans or (vi) in the
case of any of the foregoing existing at the time of the commencement of
the Offer, a material acceleration or worsening thereof;
(d) there shall have occurred any material adverse change (or any
development that, insofar as reasonably can be foreseen, is reasonable
likely to result in any material adverse change) in the consolidated
financial condition, businesses, results of operations or prospects of the
Company and its subsidiaries, taken as a whole, other than any such change
which relates to general conditions in the economy or in the Company's
industry or arises solely from the Company's execution and delivery of the
Merger Agreement;
(e) (i) the Company Board or any committee thereof shall have withdrawn
or modified in a manner adverse to Parent or the Purchaser its approval or
recommendation of the Offer, the Merger or the Merger Agreement, or
approved or recommended any Acquisition Proposal or (ii) the Company shall
have entered into any agreement with respect to any Superior Proposal in
accordance with the terms of the Merger Agreement;
(f) any of the representations and warranties of the Company set forth in
the Merger Agreement that are qualified as to materiality shall not be
true and correct and any such representations and warranties that are not
so qualified shall not be true and correct in any material respect, in
each case (i) as of the date referred to in any representation or warranty
which addresses matters as of a particular date, or (ii) as to all other
representations and warranties, as of the date of the Merger Agreement and
as of the scheduled expiration of the Offer;
(g) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by
it under the Merger Agreement; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms;
which in the reasonable good faith judgment of Parent or the Purchaser, in
any such case, and regardless of the circumstances (including any action or
inaction by Parent or the Purchaser) giving rise to such condition makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
of or payment for Shares.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be waived by Parent or the Purchaser, in whole or in part
at any time and from time to time in the sole discretion of Parent or the
Purchaser. The failure by Parent 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.
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15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings by the Company with the Commission and other publicly
available information concerning the Company, the Purchaser is not aware of
any regulatory license or permit that appears to be material to the business
of the Company and its subsidiaries, taken as a whole, that might be
adversely affected by the acquisition of Shares by the Purchaser pursuant to
the Offer or, except as set forth below, of any approval or other action by
any governmental, administrative or regulatory agency or authority, domestic
or foreign, that would be required prior to the acquisition of Shares by the
Purchaser pursuant to the Offer. Should any such approval or other action be
required, the Purchaser currently contemplates that it will be sought. While
the Purchaser does not currently intend to delay the acceptance for payment
of Shares tendered pursuant to the Offer pending the outcome of any such
matter, there can be no assurance that any such approval or other action, if
needed, would be obtained or would be obtained without substantial conditions
or that adverse consequences might not result to the Company's business or
that certain parts of the Company's business might not have to be disposed of
in the event that such approvals were not obtained or any other actions were
not taken. The Purchaser's obligation under the Offer to accept for payment
and pay for Shares is subject to certain conditions, including conditions
relating to the legal matters discussed in this Section 15. See Section 14.
State Takeover Statutes. A number of states have adopted "takeover"
statutes that purport to apply to attempts to acquire corporations that are
incorporated in such states, or whose business operations have substantial
economic effects in such states, or which have substantial assets, security
holders, employees, principal executive offices or principal places of
business in such states.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
"takeover" statutes. The Purchaser does not know whether any of these
statutes will, by their terms, apply to the Offer, and has not complied with
any such statutes. To the extent that certain provisions of these statutes
purport to apply to the Offer, the Purchaser believes that there are
reasonable bases for contesting such statutes. The Board of Directors of the
Company has approved the acquisition of Shares pursuant to the Offer for
purposes of Section 203 of the DGCL. See Section 12. If any person should
seek to apply any state takeover statute, the Purchaser would take such
action as then appears desirable, which action may include challenging the
validity or applicability of any such statute in appropriate court
proceedings. If it is asserted that one or more takeover statutes apply to
the Offer, and it is not determined by an appropriate court that such statute
or statutes do not apply or are invalid as applied to the Offer, the
Purchaser might be required to file certain information with, or receive
approvals from, the relevant state authorities, and the Purchaser might be
unable to purchase or pay for Shares tendered pursuant to the Offer, or be
delayed in continuing or consummating the Offer. In such case, the Purchaser
may not be obligated to accept for payment or pay for Shares tendered. See
Section 14.
United States Antitrust. The Offer, the Merger and the acquisition of
Shares pursuant to the Stockholder Agreements are subject to the HSR Act,
which provides that certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division of
the Department of Justice (the "Antitrust Division") and the Federal Trade
Commission ("FTC") and certain waiting period requirements have been
satisfied. On November 26, 1996, Parent filed a Notification and Report Form
with respect to the Offer, the Merger and the purchase of Shares pursuant to
each of the Stockholder Agreements.
Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares under the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Parent. Accordingly,
as such filing was made on November 26, 1996, the waiting period with respect
to the Offer will expire at 11:59 p.m., New York City time, on December 11,
1996, unless Parent receives a request for additional information or
documentary material, or the Antitrust Division and the FTC terminate the
waiting period prior thereto. If, within such 15-day period, either the
Antitrust Division or the FTC requests additional information or material
from Parent concerning the Offer, the waiting period will be extended and
would expire at 11:59 p.m., New York City time, on the tenth calendar day
after the
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date of substantial compliance by Parent with such request. Only one
extension of the waiting period pursuant to a request for additional
information is authorized by the HSR Act. Thereafter, such waiting period may
be extended only by court order or with the consent of Parent. The Purchaser
will not accept for payment Shares tendered pursuant to the Offer unless and
until the waiting period requirements imposed by the HSR Act with respect to
the Offer have been satisfied. See Section 14.
The provisions of the HSR Act would similarly apply to any purchase of the
Shares subject to the Stockholder Agreements pursuant to the Stockholder
Agreements (other than purchases effected through a tender pursuant to the
Offer or purchases pursuant to the Stockholder Agreements occurring after the
expiration of the 15-day waiting period connected to the Offer). If, as is
expected, the purchase of Shares permitted by the Stockholder Agreements is
effected through a tender of such Shares pursuant to the Offer or pursuant to
the Stockholder Agreements after the expiration of the 15-day waiting period
connected to the Offer, the HSR requirements applicable to the Offer
described in the prior paragraph would apply.
The Merger would not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the
Merger or if the Merger occurs within one year after the HSR Act waiting
period applicable to the Offer expires or is terminated.
The FTC and the Antitrust Division frequently scrutinize the legality
under the antitrust laws of transactions such as the Purchaser's acquisition
of Shares pursuant to the Offer, the Merger and each of the Stockholder
Agreements. At any time before or after the Purchaser's acquisition of
Shares, the Antitrust Division or the FTC could take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the acquisition of Shares pursuant to the Offer
or otherwise or seeking divestiture of Shares acquired by the Purchaser or
divestiture of substantial assets of Parent or its subsidiaries. Private
parties and state attorneys general may also bring legal action under the
antitrust laws under certain circumstances. Based upon an examination of
publicly available information relating to the businesses in which Parent and
the Company are engaged, Parent and the Purchaser believe that the
acquisition of Shares by the Purchaser will not violate the antitrust laws.
Nevertheless, there can be no assurance that a challenge to the Offer or
other acquisition of Shares by the Purchaser on antitrust grounds will not be
made or, if such a challenge is made, of the result. See Section 14 for
certain conditions to the Offer, including conditions with respect to
litigation and certain governmental actions.
German Antitrust. The Merger is subject to German antitrust law, which
requires the pre-closing approval of any merger or acquisition, where (i) one
party has consolidated worldwide net sales in its most recent financial year
exceeding DM 2 billion or each of at least two parties to such a transaction
has consolidated worldwide net sales exceeding DM 1 billion, and (ii) such
transaction has effects in Germany. Accordingly, a pre-closing notification
must be filed with the German Federal Cartel Office in connection with the
Merger. The German Federal Cartel Office has an initial one-month review
period in which it may either (i) approve the Merger, or (ii) initiate an
investigation to examine the consequences of the Merger, which investigation
cannot last more than a total of four months from the date of the original
notification. On November 25, 1996, Parent filed a notification with the
German Federal Cartel Office in connection with the Merger. Accordingly, the
initial one-month review period will expire on December 27, 1996, unless the
German Federal Cartel Office commences an investigation of the Merger or
approves the Merger prior thereto.
Israeli Restrictive Trade Practices. Concurrently with entering into the
Merger Agreement and the Stockholder Agreements, Parent entered into an
agreement to acquire all of the outstanding capital stock of Orbot
Instruments, which develops, manufactures, markets and services automated
optical inspection systems for use in the production of integrated circuits
by the semiconductor industry. Under Israeli antitrust law, the acquisition
of both the Company and Orbot Instruments by the same acquiror may be deemed
to be a merger which requires that a filing be made with the Israeli
Comptroller of Restrictive Trade Practices (the "Comptroller") and the
expiration of a 30-day waiting period. The Comptroller may either render a
"no-action" letter within such 30-day period, fail to take any action (in
which case upon the expiration of the 30-day period the transaction will be
deemed to have been approved) or (upon
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approval by the Restrictive Trade Practices Court) extend the waiting period
and investigate the transaction.
On November 26, 1996, Parent filed with the Comptroller an
application (i) requesting confirmation that Parent's acquisition of the
Company and Parent's acquisition of Orbot Instruments is not a "Merger"
(as such term is defined in Section 17 of the Restrictive Trade Practices
Law, 1988), or, alternatively, (ii) requesting that the Comptroller approve
such transactions, if such an approval is required. Accordingly, the 30-day
waiting period is expected to expire on December 26, 1996, unless the
Comptroller receives the requisite approval to extend the waiting period
and investigate the transaction or the Comptroller terminates the waiting
period prior thereto.
Israeli Chief Scientist Office. Parent's acquisition of control over the
Company may require the approval of the Office of the Chief Scientist at the
Ministry of Industry and Trade of the State of Israel (the "OCS").
Under the Law for the Encouragement of Industrial Research and
Development, 1984 (the "Research Law"), and the regulations promulgated
thereunder, research and development programs approved by the OCS are
eligible to receive grants, if they meet certain criteria, in exchange for
the payment of royalties from the sale of the products developed in the
course of the OCS-funded research and development programs. Significant
portions of the Company's research and development activities are funded
through OCS grants received by the Company's Israeli subsidiary, Opal
Technologies Ltd. ("Opal Technologies"). The terms of the OCS grants awarded
to Opal Technologies include the obligation to obtain the approval of the OCS
prior to any change of control over Opal Technologies.
The OCS will generally condition its consent on the receipt of the
following:
(i) an undertaking by the new owner to abide by the provisions of the
Research Law, the regulations promulgated thereunder, and the terms of the
relevant grants, including a commitment not to transfer the know-how
developed in the course of the OCS-funded research and development
programs to any other entity without the approval of the OCS, and an
undertaking to pay all royalties as and when due; and
(ii) a commitment that the manufacture of the products developed under
the OCS-funded research and development programs will take place in Israel
and that manufacturing rights will not be transferred to any third party
without the prior consent of the OCS.
On November 26, 1996, Parent and the Company filed with the OCS an
application to obtain the approval of the OCS, to the extent that such
approval is required, to Parent's acquisition of control over the Company.
Israeli Investment Center. The Law for the Encouragement of Capital
Investments, 1959 (the "Investment Law") provides that a capital investment
in eligible facilities may, upon application to the Investment Center of the
Ministry of Industry and Trade of the State of Israel (the "Investment
Center"), be designated as an "Approved Enterprise." Each certificate of
approval for an Approved Enterprise relates to a specific investment program
delineated both by its financial scope, including its capital sources, and by
its physical characteristics, e.g., the equipment to be purchased and
utilized pursuant to the program.
The benefits and obligations which apply to the Approved Enterprise are
set out in the regulations promulgated under the Investment Law and the
specific approval issued by the Investment Center with regard to each
Approved Enterprise. The benefits include government grants, government
guaranteed loans, tax holidays and combinations thereof. Opal Technologies
has four Approved Enterprises, all of which enjoy tax holiday benefits and
one of which also enjoyed government guaranteed loans. The Investment
Center's approval may be required prior to Parent's acquisition of control
over the Company.
On November 26, 1996, Parent and the Company filed with the Investment
Center an application to obtain approval of the Investment Center, to the extent
that such approval is required, to Parent's acquisition of control over the
Company.
Israeli Securities Authority. Under Israeli securities laws, a person may
not offer securities to the public other than pursuant to a prospectus whose
publication has been authorized by the Israeli Securities Authority (the
"ISA"). Pursuant to ISA policy, an offer of securities in Israel to more than 35
offerees is deemed to be an offer to the public. However, the ISA has the
authority to exempt offers to more than 35 offerees from the prospectus
publication requirement under certain circumstances.
As described in Section 12, the Merger Agreement provides that, in the
Merger, the Company's Unvested Options will be assumed by Parent and
converted into Parent Options to purchase shares of
27
<PAGE>
Parent Common Stock. Due to the fact that the Company has approximately 115
holders of Unvested Options in Israel, the conversion of Unvested Options into
Parent Options in the Merger may be deemed to be an offer of securities to the
public subject to the Israeli prospectus publication requirement. The Merger
Agreement provides that the issuance of Parent Options to holders of Unvested
Options is conditioned upon the issuance of an exemption by the ISA from the
prospectus publication requirement under Israeli securities laws. In the event
such exemption is not obtained, the Merger Agreement provides that the Unvested
Options held by the 35 largest holders of Unvested Options will be converted
into Parent Options, as provided above, and that the Unvested Options held by
the remaining holders will be cancelled in exchange for cash payments in the
same manner as Vested Options. See Section 12.
On November 26, 1996, Parent filed an application with the ISA for an
exemption from the prospectus publication requirement under Israeli securities
laws in connection with the treatment of Unvested Options in the Merger.
Israeli Tax Authorities. Grants of Company Options to employees of the
Company who are residents of Israel are governed by the provisions of Section
102 of the Israeli Income Tax Ordinance (the "Section 102 Company Options")
which requires, among other things, that a trustee designated by the Company
(the "Trustee") hold the Section 102 Company Options or the Shares issued
upon exercise of such Section 102 Company Options (the "Section 102 Shares")
for a cumulative minimum period of two years (the "Minimum Holding Period")
prior to any disposition of the Section 102 Company Options or the Section
102 Shares. As of the date of the Merger Agreement, all of the Section 102
Company Options had been held by the Trustee for less than the Minimum Holding
Period and no Section 102 Shares had been issued.
On November 26, 1996, Parent and Opal Technologies requested the Israeli
Tax Authorities to (i) qualify the Parent Options issuable in exchange for
the unvested Section 102 Company Options pursuant to the terms of the Merger
Agreement under Section 102 or another similar provision of the Israeli Income
Tax Ordinance, and to approve such exchange of options as a non-taxable event,
(ii) approve Parent's and Opal Technologies' request that the Minimum Holding
Period with respect to such Parent Options will include the period during
which the unvested Section 102 Company Options were held by the Trustee prior
to the Effective Time, (iii) approve the cancellation in exchange for cash
payments of the vested Section 102 Company Options pursuant to the terms of
the Merger Agreement, and conclude that such cancellation and cash payments
do not violate the terms of the plan pursuant to which such vested Section
102 Company Options were granted, and (iv) approve that,following the
completion of the transaction, Opal Technologies and its employees will be
entitled to all of the rights and benefits under Section 102 that they were
entitled to prior to the completion of the transaction.
16. FEES AND EXPENSES
The Purchaser has retained Morgan Stanley & Co. Incorporated to act as the
Dealer Manager and to provide certain financial advisory services, Georgeson
& Company Inc. to act as the Information Agent and Harris Trust Company of
New York to act as the Depositary in connection with the Offer. The Dealer
Manager and the Information Agent may contact holders of Shares by mail,
telephone, telex, telegraph and personal interview and may request brokers,
dealers, commercial banks, trust companies and other nominees to forward the
Offer material to beneficial owners. The Dealer Manager, the Information
Agent and the Depositary each will receive reasonable and customary
compensation for their services, will be reimbursed for certain reasonable
out-of-pocket expenses and will be indemnified against certain liabilities
and expenses in connection therewith, including certain liabilities under the
federal securities laws. None of the Dealer Manager, the Information Agent or
the Depositary has been retained to make solicitations or recommendations in
connection with the Offer. Neither Parent nor the Purchaser will pay any fees
or commissions to any broker or dealer or other person (other than the Dealer
Manager and the Information Agent) for soliciting tenders of Shares pursuant
to the Offer. Brokers, dealers, commercial banks and trust companies will be
reimbursed by the Purchaser for reasonable expenses incurred by them in
forwarding material to their customers.
17. MISCELLANEOUS
The Purchaser is not aware of any jurisdiction in which the making of the
Offer is not in compliance with applicable law. If the Purchaser becomes
aware of any jurisdiction in which the making of the Offer would not be in
compliance with applicable law, the Purchaser will make a good faith effort
to comply
28
<PAGE>
with any such law. If, after such good faith effort, the Purchaser cannot
comply with any such law, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares residing in such
jurisdiction. In those jurisdictions whose securities or blue sky laws
require the Offer to be made by a licensed broker or dealer, the Offer is
being made on behalf of the Purchaser by the Dealer Manager or one or more
registered brokers or dealers which are licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
The Purchaser has filed with the Commission the Schedule 14D-1 pursuant to
Rule 14d-3 under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. The Schedule
14D-1 and any amendments thereto, including exhibits, may be inspected and
copies may be obtained at the same places and in the same manner as set forth
in Section 8 (except that they will not be available at the regional offices
of the Commission).
ORION CORP. I
November 26, 1996
29
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND THE PURCHASER,
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. 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 Parent. Each such person is a citizen
of the United States of America, and, except as otherwise noted, the business
address of each such person is c/o Parent, 3050 Bowers Avenue, Santa Clara,
California 95054.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- -------------------------------------- --------------------------------------------------------------------
<S> <C>
James C. Morgan (57) ................. Director of Parent since 1977 and Chairman of the Board of Directors
of Parent since 1987 and Chief Executive Officer of Parent since
February 1977. Mr. Morgan also served as President of Parent from
1976 to 1987.
Dan Maydan (60) ...................... Director of Parent since 1992 and President of Parent since December
1993 and a Chairman of Applied Komatsu Technology, Inc. (formerly
Applied Display Technology, Inc.) since December 1991. From 1990 to
December 1993, he was Executive Vice President of Parent. During
1989 and 1990, Mr. Maydan was a Group Vice President of Parent. Dr.
Maydan has been a director of the Company since November 1995.
Michael H. Armacost* (58) ............ Director of Parent since 1993. Mr. Armacost is President of The
The Brookings Institution Brookings Institution, a nonpartisan public policy research
1775 Massachusetts Ave., N.W. organization, since October 1995. From September 1993 through
Washington, DC 20036-2188 September 1995, he was a Distinguished Senior Fellow and Visiting
Professor at the Asia/Pacific Research Center, Stanford University.
From 1989 to 1993, he was the U.S. Ambassador to Japan. Mr. Armacost
is a director of TRW, Inc. and AFLAC Incorporated.
Herbert M. Dwight, Jr.** (65) ........ Director of the Parent since 1981. Mr. Dwight is President, Chairman
Optical Coating Laboratory, Inc. and Chief Executive Officer of Optical Coating Laboratory, Inc., a
2789 Northpoint Parkway manufacturer of optical thin films and components, since August
Department 101-1 1991. From 1988 through 1991, Mr. Dwight was President and Chief
Santa Rosa, CA 95407-7397 Executive Officer of Superconductor Technologies, Inc., a high
temperature superconductor research and development company. Mr.
Dwight is a director of Applied Magnetics Corporation and Trans
Ocean Ltd.
George B. Farnsworth ** (72) ......... Director of the Parent since 1974. Mr. Farnsworth retired in January 19
From September 1981 through January 1986, he was Senior Vice President 86.
and Group Executive, Aerospace Business Group, of General Electric Co.
</TABLE>
- ------------
* Member of Audit Committee
** Member of Stock Option and Compensation Committee
S-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ----------------------------- ----------------------------------------------------------------------
<S> <C>
Philip V. Gerdine* (56) ..... Director of the Parent since 1976. Mr. Gerdine is Executive Director
Siemens AG (Overseas Acquisitions) of Siemens AG, Munich, Germany, a manufacturer
ZFG-4 of electrical and electronic products, since October 1990.
Wittelsbachersplatz, 2
D-8000 Munich 2, Germany
Tsuyoshi Kawanishi (66) ..... Director of the Parent since 1994. Mr. Kawanishi is Senior Adviser to
Toshiba Corporation Toshiba Corporation, a manufacturer of electrical and electronic
1-1-1 Shibaura products, since June 1994. From June 1990 to June 1994, he was Senior
Minato-Ku Executive Vice President and a member of the Board of Directors of
Tokyo 105, Japan Toshiba Corporation.
Paul R. Low* (62)............ Director of the Parent since 1992. Mr. Low is Chief Executive Officer
P.R.L. Associates of P.R.L. Associates, a consulting firm, since July 1992. From July
11 Birchwood Drive 1990 to July 1992, Dr. Low was a Vice President, and General Manager
Greenwich, CT 06831 of Technical Products, of International Business Machines Corporation.
Dr. Low is a director of Network Computing Devices, Inc., Number Nine
Visual Technology Corporation, Solectron Corporation and Veeco
Instruments Inc.
Alfred J. Stein** (63)....... Director of the Parent since 1981. Mr. Stein is Chairman and Chief
VLSI Technology, Inc. Executive Officer of VLSI Technology, Inc., a manufacturer of
1109 McKay Drive semiconductor devices, since March 1982. Mr. Stein is a director of
San Jose, CA 95131 Tandy Corporation.
Sasson Somekh (49)........... Senior Vice President of Parent since December 1993. Dr. Somekh served
as Group Vice President from 1990 to 1993. Prior to that, Dr. Somekh
had been a divisional Vice President. Dr. Somekh joined Applied
Materials in 1980 as a Project Manager.
Gerald F. Taylor (55) ........ Chief Financial Officer of Parent since 1984. Mr. Taylor has also been
a Senior Vice President of the Company since 1991 and was previously
Vice President of Finance from 1984 to 1991.
David N.K. Wang (49) ......... Senior Vice President of Parent since December 1993. Dr. Wang served
as Group Vice President from 1990 to 1993. Prior to that, Dr. Wang had
been a divisional Vice President. Dr. Wang joined Applied Materials in
1980 as a Manager, Process Engineering and Applications.
Keisuke Yawata (61) .......... President and Chief Executive Officer of Applied Materials Japan,
effective January 1, 1995. From 1995 through 1994, Mr. Yawata was a
Vice President, and from 1993 through 1994, he was Executive Advisor
to the Chairman, of LSI Logic Corp. From 1985 through 1992, Mr. Yawata
was President, and from 1992 through 1993, he was Chairman, of LSI
Logic K.K.
</TABLE>
S-2
<PAGE>
2. 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. Each such
person is a citizen of the United States of America and the business address
of each such person is c/o Parent, 3050 Bowers Avenue, Santa Clara,
California 95054.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- -------------------------- --------------------------------------------------------------------
<S> <C>
Nancy H. Handel (45) ..... President and Chief Executive Officer of the Purchaser; Vice
President Corporate Finance and Treasurer of Parent since January
1995. During 1994, Ms. Handel served as Managing Director Corporate
Finance of Parent. Prior to that, Ms. Handel served as Treasurer of
Parent from 1986 to 1994. Ms. Handel joined Parent in March 1985.
Dennis A. Hunter (54) .... Director of the Purchaser since November 1996; Managing Director
Corporate Development of Parent. Mr. Hunter has been head of
Business Development since 1986. Prior to that, he served as
director of Finance and Administration for worldwide marketing and
product development. Mr. Hunter has also served as Corporate
Controller. Mr. Hunter currently serves as a member of the
Shareholders Committee of Applied Komatsu Technologies, Inc.
Joseph J. Sweeney (48) ... Vice President and Secretary of the Purchaser; Vice President of
Parent since December 1993. Previously, Mr. Sweeney was a Managing
Director of Parent. From 1992 to 1993, Mr. Sweeney was a Vice
President of Silicon Graphics, Inc., and from 1988 to 1992 Mr.
Sweeney was a Vice President of MIPS Computer Systems, Inc.
</TABLE>
S-3
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for
Shares and any other required documents should be sent or delivered by each
stockholder of the Company or his broker, dealer, commercial bank or other
nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
By Overnight Courier:
77 Water Street, 4th Floor
New York, New York 10005
By Mail:
Wall Street Station
P.O. Box 1010
New York, New York 10268-1010
By Facsimile Transmission
(for Eligible Institutions only):
Fax: (212) 701-7636
(212) 701-7637
Confirm by telephone:
(212) 701-7618
By Hand:
Receive Window
77 Water Street, 5th Floor
New York, New York
Any questions or requests for assistance may be directed to the Dealer
Manager or the Information Agent at their respective telephone numbers and
locations listed below. Additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained
from the Information Agent at its address and telephone numbers set forth
below. You may also contact your broker, dealer, commercial bank or trust
company or nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: 800-223-2064
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
INCORPORATED
555 California Street
Suite 2200
San Francisco, California 94104
(415) 576-2331
